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[_]
Bartlett
Semi-Annual Report
June 30, 2000
BARTLETT
BASIC VALUE FUND
BARTLETT
VALUE INTERNATIONAL FUND
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mutual funds
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[_]
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BARTLETT & CO. PROFILE
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Bartlett Mutual Funds
Bartlett & Co., headquartered in Cincinnati, Ohio, is an asset management firm
which manages $2.7 billion for individuals, family groups and institutions.
Established in 1898, Bartlett & Co. has built a reputation among individual and
institutional investors of strong performance and superior client service for
over a century.
Bartlett & Co. offers its clients a diversity of investment products and
services as follows:
. Custom-Tailored Investment Portfolio Management
. Consulting - Asset Allocation and Multi-Manager
. Retirement Plan Services
. Trust and Financial Planning Services
Our tradition of excellence, the breadth of our services, and the depth of our
experience give Bartlett &Co. the capabilities to serve as your financial
advisor.
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CONTENTS
Pages
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Bartlett & Co. Profile Inside Cover
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President's Letter 2
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Reports to Shareholders
Bartlett Basic Value Fund 3
Bartlett Value International Fund 8
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Growth of a $10,000 Investment 11
Bartlett Basic Value Fund 12
Bartlett Value International Fund 14
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Industry Diversification 16
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Statements of Net Assets
Bartlett Basic Value Fund 17
Bartlett Value International Fund 21
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Statements of Operations 25
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Statements of Changes in Net Assets
Bartlett Basic Value Fund 26
Bartlett Value International Fund 27
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Financial Highlights
Bartlett Basic Value Fund 28
Bartlett Value International Fund 30
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Notes to Financial Statements 32
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Trustees and Officers Back Cover
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This report is for the information of shareholders of the Bartlett
Mutual Funds. It may be used as sales literature if preceded or
accompanied by a current prospectus of the Bartlett Mutual Funds.
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PRESIDENT'S LETTER
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Dear Shareholder,
We are pleased to provide you with the semi-annual report for the Bartlett
Capital Trust, comprised of the Bartlett Basic Value Fund and the Bartlett Value
International Fund, covering the six months ended June 30, 2000.
The Board of Trustees approved the following dividends and distributions per
share, which were payable to shareholders of record on June 7th and June 14th,
respectively:
Class A Class C Class Y
Basic Value:
Ordinary Income Dividend $0.03 $ -- $0.04
Long-Term Capital Gain
Distribution $0.79 $0.79 $0.79
Value International:
Ordinary Income Dividend $0.02 $ -- $0.03
The past six months have been very volatile ones for stock markets in the U.S.
and abroad. On the following pages, Pete Sorrentino and Jim Miller discuss Basic
Value's investment performance and their views of the U.S. stock market.
Following those comments, Madelynn Matlock discusses Value International's
investment performance and her views on the outlook for markets overseas.
As always, we appreciate your support and welcome your comments or questions.
Sincerely,
/s/ Edward A. Taber, III
----------------------------
Edward A. Taber, III
President
2
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================================================================================
BARTLETT BASIC VALUE FUND REPORT
================================================================================
Three Months Six Months
Ended Ended
6/30/00 6/30/00
-------- --------
Basic Value Fund/1/ -0.47% +3.58%
S&P 500 Index (large-cap) -2.66% -0.42%
BARRA Value Index/2/ -4.29% -4.07%
BARRA Mid-Cap Value Index -2.66% +3.45%
Russell 2000 Value Index (small-cap) +1.95% +5.85%
[LOGO]
The first six months of the year could best be summed up as an equity market
seeking direction -- rising interest rates impacting stock valuations, but
generally good earnings growth keeping investors' attention. The net result:
greater volatility and a generally flat stock market with bonds outperforming
stocks.
The second quarter stands in stark contrast to the first quarter of 2000 in
terms of market action and performance leadership. The attention afforded those
companies issuing negative earnings pre-announcements would have you believe the
end is near. Looking at the actual reports and comparing this year with any of
the last four, this year was actually an improvement. As reported by I/B/E/S,
the number of earnings pre-announcements declined for the second quarter of 2000
versus the same period in 1999. Of those companies pre-announcing, only 60% were
negative as compared with 80% during last year's second quarter. The implication
is that, in general, the overall quality of corporate earnings is quite good and
earnings expectations are very much in line with corporate operating results.
Volatility in the market is escalating and routinely setting new highs. The
stock-specific risk in the market is growing greater as market liquidity
continues to decline. In addition, the influx of new money buying on price dips
has given way to exodus stampedes at the first sign of trouble.
As value investors, we count as one of our strengths the belief that we
provide lower volatility returns and suffer less price erosion during market
--------------------
/1/ Reflects returns on Class A shares, excluding the 4.75% maximum sales charge
effective July 21, 1997. Return information for the other share classes may
be found on page 13.
/2/ The BARRA Value Index is a capitalization-weighted index constructed by
dividing the stocks in the S&P 500 Index into two components (growth or
value) according to book-to-price ratios. The BARRA Value Index is comprised
of companies with higher book-to-price ratios, lower price-to-earnings
ratios, higher dividend yields, and lower historical and predicted earnings
growth.
3
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BARTLETT BASIC VALUE FUND REPORT
(CONTINUED)
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corrections. The first half of the year clearly qualified as a period where both
conditions were manifest. The Basic Value Fund met the challenge during this
time and delivered performance superior to the benchmark with less volatility.
Performance was driven by exceptional returns from our exposure in the
technology and health care sectors. In technology, a group that has had mixed
performance this year, Intel posted a 62% gain and Nortel followed with a 35%
gain. Both companies continue to exhibit very strong fundamentals in an area
that has started to show signs of weakness. Health care, the best performing
sector in the S&P 500 this year, was led by strong performances from Pharmacia
Corporation (+46%) and Abbott Laboratories (+23%). The health care sector was
shunned earlier this year, but as market volatility picked up and political
risks appeared to diminish, investors began to appreciate the group's steady
growth characteristics again.
Our largest overweight, the financial services sector, helped performance,
as Citigroup (+8%), Charter One Financial (+20%) and Chateau Communities (+9%)
all helped relative performance. Of special note was the 19% rise in the value
of Kansas City Southern Industries, the parent of the Janus and Berger mutual
fund families. The finalization of the Stillwell Financial spin-off generated
renewed interest in this top ten holding and aided our returns. Stillwell now
resides in the financial services sector of the S&P 500.
Regrettably, there were holdings in the Fund that detracted from this
quarter's results, including: AT&T (-38%); Broadwing (-30%) and McDonald's (-
18%). We continue to be optimistic on the prospects for these issues, but are
monitoring their performance carefully.
The changes during the past six months were a continuation of the
initiatives that started during the fourth quarter of 1999. Partial sales were
done in Charter One Financial, Marshall & Ilsley and Chateau Communities, with
the intent of further reducing our overweight in financial sector stocks. We
took partial profits in Disney and Merck, and completely liquidated our holding
in Cintas. These stocks had performed beyond our near-term expectations and we
believed it prudent to reduce our exposure by taking profits.
4
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Our approach to investing in the areas of technology and health care was
validated during the quarter as well. Our goal is to invest in companies that
possess the capability of funding their growth independent of the capital
markets. This practice provided a measure of insulation from the carnage that
took place in much of the technology group. As the market is swept by
countervailing winds of optimism and despair, we patiently await the opportunity
to enhance our portfolio with truly outstanding companies from all corners of
the global economy.
Looking ahead, the portfolio is well positioned to continue its recent
relative outperformance and we take comfort with the quality of the stocks in
the portfolio as well as our current sector positioning.
/s/ Peter A. Sorrentino, CFA /s/ James A. Miller
------------------------------- -------------------------
Peter A. Sorrentino, CFA James A. Miller, CFA
5
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Measuring Both Risk and Return
Bartlett Basic Value Fund vs. Standard & Poor's 500 Index
May 31, 1983 to June 30, 2000
[CHART APPEARS HERE]
This chart compares the historical average annual total return and the risk (as
measured by the standard deviation) of the Bartlett Basic Value Fund and the
Standard & Poor's 500 Index from May 31, 1983 to June 30, 2000. The S&P 500
Index is an unmanaged index of common stocks widely used as a measure of stock
market activity. The return for the Index does not include any expenses or
transaction costs. The return for the Fund includes such expenses and costs.
Standard deviation is a statistical measure of volatility often used as a
measure of risk. In general, the greater the standard deviation, the greater the
tendency to vary from the average annual total return. By comparing the
magnitude of the standard deviations, the relative volatility of each investment
can be determined. A lower standard deviation reflects lower volatility.
The average annual total return figures for both the Fund and the Index assume
the reinvestment of dividends.
Of course, past performance is no guarantee of future results. The principal
value and investment returns of the Fund fluctuate so that upon redemption, you
may receive more or less than your original investment.
--------------------------------------------------------------------------------
*Reflects return on Class A shares, excluding the 4.75% maximum sales charge
effective July 21, 1997. Return information for the other share classes may be
found on page 13.
6
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Largest Industry Allocations
Bartlett Basic Value Fund vs. Standard & Poor's 500 Index
June 30, 2000
[GRAPH APPEARS HERE]
Percent of Total Portfolio
--------------------------
Fund S&P 500
---------- -----------
Financial 20% 13%
Technology 19 33
Health 12 12
Consumer Staples 11 10
Basic Industry 10 10
Communication Services 8 7
7
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BARTLETT VALUE INTERNATIONAL
FUND REPORT
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Three Months Six Months
Ended Ended
6/30/00 6/30/00
------- -------
Value International Fund/1/ +2.49% -3.51%
MSCI EAFE Index/2/ -3.96% -4.06%
MSCI All-Country ex-U.S. Index/3/ -4.13% -3.08%
Bartlett Mutual Funds
In the market race for the second quarter of 2000, the New Economy rabbit
stopped to catch his breath, while the Old Economy turtle broke into a trot. The
reason for the change has much more to do with valuation than outlook. The
rabbit just got too far ahead, with technology-related stock valuations implying
earnings growth of 14% or more over the next ten years, while more mundane
cyclical and consumer stocks discounted growth of only 2% to 3%. This spread
made no sense, given that the Old Economy companies are the New Economy
companies' customers. The resulting shuffle has left the overall EAFE (Europe,
Australia and Far East) index lower for the first half of the year, but the
return gaps have opened opportunities to add value in the portfolio during the
second quarter.
The portfolio benefited from exposure to pharmaceutical stocks like
Pharmacia and Aventis, as well as food industry issues like Danone and Diageo.
Despite the weaker technology sector, telecom equipment stocks Alcatel and
Nortel also boosted the portfolio. Bank stock Allied Irish, along with Invensys,
a U.K. capital equipment maker, and CNH Global, failed to keep pace. The very
strong performance and heavy index weight of the telecommunications stocks made
the index a difficult bogey to beat over
_________________
/1/ Reflects returns on Class A shares, excluding the 4.75% maximum sales charge
effective July 21, 1997. Return information for the other share classes may
be found on page 15.
/2/ The Morgan Stanley Capital International Europe, Australia, Far East (MSCI
EAFE) Index is an unmanaged index of common stocks of foreign companies. The
returns for the Index do not include any transaction costs associated with
buying and selling securities in the Index or other administrative expenses.
The returns for the Fund include such expenses.
/3/ The Morgan Stanley Capital International (MSCI) All-Country ex-U.S. Index is
composed of 21 developed markets countries, 26 emerging markets countries
and the countries of Israel and Luxembourg. The Index does not include the
United States.
8
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the last year, but the Fund's recent performance has been helped by having
little exposure to the industry, as the prices on these stocks have dropped.
The regional exposure of the portfolio was relatively unchanged, with
investments in Europe and the Pacific roughly equaling their overall proportions
of global gross domestic production. The performance of both regions was very
similar over the quarter and so far in 2000, keeping the focus on the investment
in various sectors of the world economy as the differentiating factor in
investment performance.
The gap between the growth expectations for the "New" and "Old" companies
remains fairly wide, which means there are probably more disappointments in
store for the technology and telecommunications area, while industrial and
consumer companies may continue to do better than expected. The recovery in both
Japan and the rest of Asia is moving along, which should improve the relative
performance of stocks in this region after a rough time over the last several
years. European economic growth is healthy, but the weak euro and wide
variations in growth and inflation expectations across the region could
negatively impact stock valuations. We continue to search for opportunities in
the resulting misvaluations.
/s/ Madelynn M. Matlock
Madelynn M. Matlock, CFA
Portfolio Manager
9
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BARTLETT VALUE INTERNATIONAL
FUND REPORT (CONTINUED)
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Portfolio Composition
Bartlett Value International Fund vs.
MSCI EAFE Index*
June 30, 2000
[GRAPH APPEARS HERE]
Percent of Total Portfolio
--------------------------
Fund EAFE Index
---------- ------------
Americas 9% 0%
Latin America 1 0
Canada 4 0
Cash Equivalents 4 0
Europe 58 67
Pacific 33 33
Japan 17 27
*The Morgan Stanley Capital International Europe, Australia, Far East (MSCI
EAFE)Index is an unmanaged index of common stocks of foreign companies.
10
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GROWTH OF A $10,000 INVESTMENT
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Bartlett mutual funds
The following graphs compare each Fund's total return against that of a
closely matched, broad-based securities market index.
These performance tables and charts represent past performance and are no
guarantee of future results. The investment return and principal value of the
Funds will fluctuate so that upon redemption, you may receive more or less than
your original cost.
The charts illustrate the cumulative total return of an initial $10,000
investment in each Fund for the periods indicated. The returns reflected in the
chart for Class A shares reflect the maximum sales charge of 4.75% (the Average
Annual Total Return table within each Class A chart provides information both
including and excluding the effect of the maximum sales charge). A contingent
deferred sales charge may be imposed under certain circumstances on Class A and
C shares. Please refer to the prospectus for details. The performance tables and
charts assume all dividends and distributions are reinvested at the net asset
value on the reinvestment date and reflect the periodic absorption of some Fund
expenses through the waiver of management fees. Had a portion of these fees not
been waived, the Funds' total returns would have been slightly lower.
The lines representing the securities market indices (which is, in each case, an
unmanaged index) do not include any transaction costs or other administrative
expenses associated with buying and selling securities in the index.
11
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------------------------------------------
GROWTH OF A $10,000 INVESTMENT
(CONTINUED)
------------------------------------------
[GRAPH APPEARS HERE]
Bartlett Basic Value Fund Class A Shares
June 30, 1990 through June 30, 2000
_________________________________________
Average Annual Total Returns
For periods ended June 30, 2000
_________________________________________
1 Year 3 Years 5 Years 10 Years
_________________________________________
(4.28)%* 5.51%* 11.71%* 10.82%*
(8.84)% 3.80% 10.62% 10.29%
_________________________________________
S&P 500 Basic Value
Index Class A Shares
6/30/90 10,000 9,525**
6/30/91 10,739 9,551
6/30/92 12,180 11,136
6/30/93 13,840 12,115
6/30/94 14,035 12,812
6/30/95 17,693 15,303
6/30/96 22,294 18,331
6/30/97 30,032 22,662
6/30/98 39,087 27,919
6/30/99 47,982 27,806
6/30/00 51,460 26,616
*This line reflects return information on Class A shares excluding the maximum
4.75% sales charge which became effective July 21, 1997. The second line in the
table reflects return information including the sales charge.
**The initial investment for Basic Value Fund Class A shares is net of the 4.75%
sales charge.
The Standard & Poor's 500 Index is a broad-based, unmanaged index of common
stocks commonly used to measure general stock market activity.
12
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Bartlett Basic Value Fund Class C Shares
September 12, 1997 through June 30, 2000
[GRAPH APPEARS HERE]
_______________________________________
Average Annual Total Returns
For periods ended June 30, 2000
_______________________________________
1 Year Life of Class
(since 9/12/97)
_______________________________________
(5.07)% 1.89%
_______________________________________
S&P 500 Basic Value
Index* Class C Shares
9/12/97 10,000 10,000
9/30/97 10,547 10,381
12/31/97 10,850 10,607
3/31/98 12,363 11,654
6/30/98 12,773 11,224
9/30/98 11,505 9,501
12/31/98 13,953 10,921
3/31/99 14,649 10,485
6/30/99 15,682 11,101
9/30/99 14,700 9,672
12/31/99 16,887 10,218
3/31/00 17,274 10,611
6/30/00 16,814 10,538
* Index returns are for the periods beginning August 31, 1997.
The Standard & Poor's 500 Index is a broad-based, unmanaged index of common
stocks commonly used to measure general stock market activity.
Bartlett Basic Value Fund Class Y Shares
August 15, 1997 through June 30, 2000
[GRAPH APPEARS HERE]
______________________________________
Average Annual Total Returns
For periods ended June 30, 2000
______________________________________
1 Year Life of Class
(since 8/15/97)
______________________________________
(4.06)% 3.80%
______________________________________
S&P 500 Basic Value
Index* Class Y Shares
8/18/97 10,000 10,000
9/30/97 9,957 10,651
12/31/97 10,243 10,922
3/31/98 11,670 12,022
6/30/98 12,058 11,623
9/30/98 10,861 9,860
12/31/98 13,172 11,359
3/31/99 13,829 10,937
6/30/99 14,804 11,605
9/30/99 13,876 10,136
12/31/99 15,941 10,733
3/31/00 16,306 11,179
6/30/00 15,872 11,134
*Index returns are for the periods beginning July 31, 1997.
The Standard & Poor's 500 Index is a broad-based, unmanaged index of common
stocks commonly used to measure general stock market activity.
13
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GROWTH OF A $10,000 INVESTMENT
(CONTINUED)
----------------------------------------------
[GRAPH APPEARS HERE]
Bartlett Value International Fund Class A Shares
June 30, 1990 through June 30, 2000
Average Annual Total Returns
For periods ended June 30, 2000
-----------------------------------------------------
1 Year 3 Years 5 Years 10 Years
-----------------------------------------------------
13.88%* 4.00%* 9.72%* 8.02%*
8.45% 2.33% 8.66% 7.50%
MSCI EAFE International Fund
Index Class A Shares
6/30/90 10,000 9,525**
6/30/91 8,847 8,460
6/30/92 8,789 10,480
6/30/93 10,572 10,312
6/30/94 12,369 12,350
6/30/95 12,573 12,958
6/30/96 14,244 14,801
6/30/97 16,072 18,314
6/30/98 17,052 17,135
6/30/99 18,351 18,092
6/30/00 21,499 20,603
*This line reflects return information on Class A
shares excluding the maximum 4.75% sales charge
which became effective July 21, 1997. The second
line in the table reflects return information
including the sales charge.
**The initial investment for Value International Fund
Class A shares is net of the 4.75% sales charge.
The Morgan Stanley Capital International Europe,
Australia, Far East (MSCI EAFE) Index is a broad-
based, unmanaged index composed of select common
stocks of companies based outside the United States
and including Europe, Australia, and the Far East. It
is often used to measure international stock market
activity.
14
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[GRAPH APPEARS HERE]
Bartlett Value International Fund Class C Shares
July 23, 1997 through June 30, 2000
Average Annual Total Returns
For periods ended June 30, 2000
-----------------------------------------------------
1 Year Life of Class
(since 7/23/97)
-----------------------------------------------------
13.08% 2.72%
Value International
MSCI EAFE Fund Class C
Index Shares
7/23/97 10,000 10,000
9/30/97 9,772 10,070
12/31/97 9,006 8,913
3/31/98 10,331 9,601
6/30/98 10,441 9,130
9/30/98 8,957 7,618
12/31/98 10,807 8,588
3/31/99 10,957 8,755
6/30/99 11,236 9,568
9/30/99 11,729 10,101
12/31/99 13,721 11,254
3/31/00 13,706 10,575
6/30/00 13,163 10,820
* Index returns are for the periods beginning July
31, 1997.
Bartlett Value International Fund Class Y Shares
August 15, 1997 through June 30, 2000
Average Annual Total Returns
For periods ended June 30, 2000
-----------------------------------------------------
1 Year Life of Class
(since 8/15/97)
-----------------------------------------------------
14.19% 3.62%
MSCI EAFE Value International
Index Fund Class Y
8/15/97 10,000 10,000
9/30/97 9,772 10,045
12/31/97 9,006 8,906
3/31/98 10,331 9,621
6/30/98 10,441 9,173
9/30/98 8,957 7,671
12/31/98 10,807 8,670
3/31/99 10,957 8,860
6/30/99 11,236 9,701
9/30/99 11,729 10,268
12/31/99 13,721 11,466
3/31/00 13,706 10,808
6/30/00 13,163 11,078
*Index returns are for the periods beginning July 31,
1997.
The Morgan Stanley Capital International Europe,
Australia, Far East (MSCI EAFE) Index is a broad-
based, unmanaged index composed of select common
stocks of companies based outside the United States
and including Europe, Australia, and the Far East. It
is often used to measure international stock market
activity.
15
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----------------------------------------
INDUSTRY DIVERSIFICATION
----------------------------------------
Bartlett Value International Fund
June 30, 2000 (Unaudited)
% of Net Assets Market Value
--------------------------------------------------------------------------------
(000)
Automotive 3.3% $ 1,340
Banking 13.0 5,316
Chemicals 3.9 1,590
Computer Services 3.0 1,211
Construction 5.0 2,046
Consumer Durable Goods 13.3 5,460
Diversified 9.0 3,715
Electronics 6.6 2,707
Investment Companies 2.1 873
Media/Broadcast 1.9 768
Metals & Mining 4.6 1,880
Miscellaneous Services 3.3 1,354
Oil & Gas 5.9 2,436
Pharmaceuticals 3.4 1,386
Retail Sales 2.6 1,087
Telecommunications 8.9 3,667
Transportation 5.8 2,371
Short-Term Investments 3.2 1,300
----------- ----------
Total Investment Portfolio 98.8 40,507
Other Assets Less Liabilities 1.2 511
----------- ----------
Net Assets 100.0% $41,018
=========== ==========
16
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---------------------------------
STATEMENT OF NET ASSETS
---------------------------------
Bartlett Basic Value Fund
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Shares/Par Market Value
------------------------------------------------------------------------------
Common Stocks and Equity Interests-- 99.7%
------------------------------------------------------------------------------
Basic Materials-- 2.7%
Construction and Building Materials-- 2.7%
Martin Marietta Materials, Inc. 38 $ 1,537
------------------------------------------------------------------------------
Capital Goods-- 7.5%
Electrical Equipment-- 2.5%
Emerson Electric Co. 24 1,449
------------------------------------------------------------------------------
Machinery (Diversified)-- 2.7%
Dover Corporation 38 1,541
------------------------------------------------------------------------------
Manufacturing (Diversified)-- 2.3%
Tyco International Ltd. 28 1,327
------------------------------------------------------------------------------
Communications Services-- 7.8%
Telecommunications (Long Distance)-- 2.0%
AT&T Corporation 37 1,170
------------------------------------------------------------------------------
Telephone-- 5.8%
Broadwing Inc. 46 1,193/A/
WorldCom, Inc. 47 2,156/A/
-------
3,349
------------------------------------------------------------------------------
Consumer Cyclicals-- 6.1%
Auto Parts and Equipment-- 0.1%
Visteon Corporation 7 79/A/
------------------------------------------------------------------------------
Automobiles-- 3.7%
Ford Motor Company 50 2,150
------------------------------------------------------------------------------
Retail (Discounters)-- 2.3%
Family Dollar Stores, Inc. 67 1,311
------------------------------------------------------------------------------
Consumer Staples-- 11.1%
Beverages (Alcoholic) -- 2.6%
Anheuser-Busch Companies, Inc. 20 1,494
------------------------------------------------------------------------------
Entertainment-- 4.5%
The Walt Disney Company 30 1,164
Time Warner, Inc. 19 1,444
-------
2,608
------------------------------------------------------------------------------
17
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---------------------------------
STATEMENT OF NET ASSETS
---------------------------------
Bartlett Basic Value Fund (Continued)
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Shares/Par Market Value
------------------------------------------------------------------------------
Restaurants-- 2.4%
McDonald's Corporation 41 $ 1,351
------------------------------------------------------------------------------
Retail (Drug Stores)-- 1.6%
CVS Corporation 23 920
------------------------------------------------------------------------------
Energy-- 7.3%
Oil and Gas (Exploration and Production)-- 2.6%
Unocal Corporation 45 1,491
------------------------------------------------------------------------------
Oil and Gas (Refining and Marketing)-- 4.7%
Total Fina Elf 35 2,688
------------------------------------------------------------------------------
Financials-- 19.7%
Banks (Major Regional)-- 3.1%
Mellon Financial Corporation 50 1,822
------------------------------------------------------------------------------
Financial (Diversified)-- 14.0%
Chateau Communities, Inc. 94 2,655
Citigroup Inc. 42 2,531
Fannie Mae 55 2,870
-------
8,056
------------------------------------------------------------------------------
Savings and Loan Companies-- 2.6%
Charter One Financial, Inc. 65 1,495
------------------------------------------------------------------------------
Health Care-- 11.7%
Health Care (Diversified)-- 7.4%
Abbott Laboratories 60 2,674
Johnson & Johnson 16 1,599
-------
4,273
------------------------------------------------------------------------------
Health Care (Drugs/Major Pharmaceuticals)-- 4.3%
Merck & Co., Inc. 17 1,303
Pharmacia Corporation 23 1,189
-------
2,492
------------------------------------------------------------------------------
18
<PAGE>
Shares/Par Market Value
------------------------------------------------------------------------------
Technology-- 18.9%
Communications Equipment-- 4.9%
Lucent Technologies, Inc. 24 $ 1,422
Nortel Networks Corporation 21 1,406
-------
2,828
------------------------------------------------------------------------------
Computers (Hardware)-- 6.7%
Dell Computer Corporation 35 1,701/A/
International Business Machines Corporation 20 2,169
-------
3,870
------------------------------------------------------------------------------
Computers (Software/Services)-- 3.5%
Microsoft Corporation 25 2,000/A/
------------------------------------------------------------------------------
Electronics (Semiconductors)-- 3.8%
Intel Corporation 16 2,166
------------------------------------------------------------------------------
Transportation-- 6.9%
Railroads-- 6.9%
Kansas City Southern Industries, Inc. 30 2,661
Union Pacific Corporation 35 1,301
-------
3,962
------------------------------------------------------------------------------
Total Common Stocks and
Equity Interests $57,429
------------------------------------------------------------------------------
(Identified Cost-- $41,934)
------------------------------------------------------------------------------
Total Investments-- 99.7% 57,429
------------------------------------------------------------------------------
(Identified Cost-- $41,934)
------------------------------------------------------------------------------
Other Assets Less Liabilities--0.3% 179
------------------------------------------------------------------------------
Net Assets Consisting of:
Capital shares 34,648
Distributions in excess of net investment income (128)
Accumulated net realized gain/(loss)
on investments and currency transactions 7,593
Net unrealized appreciation/(depreciation)
of investments and currency transactions 15,495
------------------------------------------------------------------------------
Net Assets-- 100.0% $57,608
------------------------------------------------------------------------------
19
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---------------------------------
STATEMENT OF NET ASSETS
---------------------------------
Bartlett Basic Value Fund (Continued)
June 30, 2000 (Unaudited)
(Amounts in Thousands)
--------------------------------------------------------------------------------
Net asset value and redemption price per share--
Class A ($56,406 / 4,047 shs) $13.94
================================================================================
Maximum offering price per share-- Class A (net
asset value plus sales charge of 4.75% of offering price) $14.64
================================================================================
Net asset value, offering price and redemption price
per share-- Class C ($832 / 61 shs) $13.71
================================================================================
Net asset value, offering price and redemption price
per share-- Class Y ($370 / 26 shs) $13.92
================================================================================
/A/Non-income producing.
See notes to financial statements.
20
<PAGE>
---------------------------------
STATEMENT OF NET ASSETS
---------------------------------
Bartlett Value International Fund
June 30, 2000 (Unaudited)
(Amounts in Thousands)
Shares/Par Market Value
------------------------------------------------------------------------------
Common Stocks and Equity Interests-- 94.2%
------------------------------------------------------------------------------
Argentina-- 1.0%
Telecom Argentina Stet - France Telecom SA ADR 15 $ 413
------------------------------------------------------------------------------
Australia-- 7.7%
Brambles Industries Limited 39 1,204
National Australia Bank Limited ADR 14 1,177
The News Corporation Limited ADR 14 768
------
3,149
------------------------------------------------------------------------------
Canada-- 2.3%
Nortel Networks Corporation 14 955
------------------------------------------------------------------------------
France-- 15.7%
Alcatel SA ADR 20 1,330
Aventis SA ADR 18 1,312
Cie de Saint Gobain 6 863
Compagnie Generale des Etablissements Michelin 27 869
Groupe Danone 46 1,239
Total Fina Elf 11 830
------
6,443
------------------------------------------------------------------------------
Germany-- 7.3%
Buderus AG 67 1,067
DaimlerChrysler AG 15 775
Deutsche Lufthansa AG 51 1,167
------
3,009
------------------------------------------------------------------------------
Hong Kong-- 1.8%
Jardine Strategic Holdings Limited 250 747
------------------------------------------------------------------------------
India-- 0.5%
Morgan Stanley Dean Witter India Investment Fund 17 208/A/
------------------------------------------------------------------------------
Ireland-- 2.3%
Allied Irish Banks plc ADR 54 951
------------------------------------------------------------------------------
Italy-- 2.6%
San Paolo - IMI SpA ADR 30 1,054
------------------------------------------------------------------------------
21
<PAGE>
------------------------------
STATEMENT OF NET ASSETS
------------------------------
Bartlett Value International Fund (Continued)
June 30, 2000 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
Shares/Par Market Value
------------------------------------------------------------------------------
<S> <C> <C>
Japan-- 17.5%
Canon, Inc. 22 $ 1,095
Fujitsu Limited 35 1,211
Ito-Yokado Co., Ltd. ADR 6 353
Matsumotokiyoshi 7 734
Matsushita Electric Industrial Company Ltd. 43 1,114
Rohm Company Ltd. 4 1,022
Secom Co., Ltd. 14 1,023
Terumo Corporation 18 609
--------
7,161
-----------------------------------------------------------------------------
Netherlands-- 3.2%
CNH Global N.V. 79 728
Koninklijke (Royal) Philips Electronics N.V. 12 570
--------
1,298
-----------------------------------------------------------------------------
Norway-- 0.7%
Norsk Hydro ASA ADR 7 278
-----------------------------------------------------------------------------
Portugal-- 2.1%
Banco Comercial Portugues, SA ADR 34 867
-----------------------------------------------------------------------------
Singapore-- 2.0%
Natsteel Ltd. 280 386
Singapore Telecomm 300 439
--------
825
-----------------------------------------------------------------------------
South Korea-- 2.5%
Korea Electric Power Corporation ADR 18 332
Korea Fund, Inc. 20 283/A/
Pohang Iron & Steel Company Ltd. ADR 17 410
--------
1,025
-----------------------------------------------------------------------------
Spain-- 3.9%
Endesa SA ADR 40 780
Repsol YPF, SA ADR 42 826
--------
1,606
-----------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Maturity
Rate Date Shares/Par Market Value
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sweden-- 3.0%
Cardo AB 26 $ 455
Pharmacia Corporation 15 777
--------
1,232
------------------------------------------------------------------------------
Switzerland-- 3.1%
Novartis AG 1 1,267/A/
------------------------------------------------------------------------------
Taiwan-- 0.9%
Taiwan Fund Inc. 20 383
------------------------------------------------------------------------------
United Kingdom-- 14.1%
British Telecommunications plc ADR 4 529
Cadbury Schweppes plc ADR 45 1,181
Diageo plc ADR 30 1,075
Invensys plc 263 988
Rio Tinto plc ADR 17 1,083
Tomkins plc ADR 71 914
--------
5,770
------------------------------------------------------------------------------
Total Common Stocks and
Equity Interests 38,641
------------------------------------------------------------------------------
(Identified Cost-- $31,110)
------------------------------------------------------------------------------
Convertible Bonds-- 1.4%
------------------------------------------------------------------------------
Canada-- 1.4%
Magna International Inc. 5% 10/15/02 $550 566
------------------------------------------------------------------------------
Total Convertible Bonds 566
------------------------------------------------------------------------------
(Identified Cost-- $677)
------------------------------------------------------------------------------
Repurchase Agreements-- 3.2%
------------------------------------------------------------------------------
State Street Bank & Trust Company
3.50%, dated 6/30/00, to be repurchased
at $1,300 on 7/3/00 (Collateral: $1,440
Federal Home Loan Bank Note, 5.823%,
due 5/6/09, value $1,343) 1,300
------------------------------------------------------------------------------
Total Repurchase Agreements 1,300
------------------------------------------------------------------------------
(Identified Cost-- $1,300)
------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
------------------------------
STATEMENT OF NET ASSETS
------------------------------
Bartlett Value International Fund (Continued)
June 30, 2000 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
Market Value
----------------------------------------------------------------------------
<S> <C>
Total Investments-- 98.8% $40,507
(Identified Cost-- $33,087)
----------------------------------------------------------------------------
Other Assets Less Liabilities-- 1.2% 511
----------------------------------------------------------------------------
Net Assets Consisting of:
Capital shares 30,785
Distributions in excess of net investment income (1,280)
Accumulated net realized gain/(loss)
on investments and currency transactions 4,094
Net unrealized appreciation/(depreciation)
of investments and currency transactions 7,419
----------------------------------------------------------------------------
Net Assets-- 100.0% $41,018
============================================================================
Net asset value and redemption price per
share-- Class A ($34,427 / 2,463 shs) $ 13.98
============================================================================
Maximum offering price per share -- Class A (net
asset value plus sales charge of 4.75% of
offering price) $ 14.68
============================================================================
Net asset value, offering price and redemption
price per share-- Class C ($3,537 / 258 shs) $ 13.69
============================================================================
Net asset value, offering price and redemption
price per share-- Class Y ($3,054 / 219 shs) $ 13.94
============================================================================
</TABLE>
/A/ Non-income producing.
See notes to financial statements.
24
<PAGE>
------------------------------
STATEMENTS OF OPERATIONS
------------------------------
For the Six Months Ended June 30, 2000 (Unaudited)
(Amounts in Thousands)
<TABLE>
<CAPTION>
Bartlett Value
Bartlett Basic International
Value Fund Fund
-------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
-------------------------------------------------------------------------------
Dividends $ 546 $ 540
Less foreign taxes withheld (5) (60)
Interest 7 60
-------------------------------------------------------------------------------
Total Investment Income 548 540
-------------------------------------------------------------------------------
Expenses:
-------------------------------------------------------------------------------
Investment advisory fees 240 264
Distribution and service fees 83 62
Custodian fees 33 60
Legal and audit fees 12 23
Trustees' fees 16 16
Registration fees 23 19
Reports to shareholders 10 10
Transfer agent and shareholder
servicing expense 7 10
Other expenses 1 1
Less expenses waived (55) (75)
-------------------------------------------------------------------------------
Total Expenses 370 390
-------------------------------------------------------------------------------
Net Investment Income/(Loss) 178 150
-------------------------------------------------------------------------------
Net Realized and Unrealized
Gain/(Loss):
Realized gain/(loss) on:
Investments sold 7,285 4,296
Foreign currency transactions -- (79)
Change in unrealized appreciation of:
Investments (5,499) (6,310)
Assets and liabilities denominated
in foreign currencies -- (1)
-------------------------------------------------------------------------------
Net Realized and Unrealized Gain/(Loss) 1,786 (2,094)
-------------------------------------------------------------------------------
Change in Net Assets Resulting
From Operations $1,964 $(1,944)
-------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
25
<PAGE>
---------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
---------------------------------------
Bartlett Basic Value Fund
(Amounts in Thousands)
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
6/30/00 12/31/99
(Unaudited)
----------------------------------------------------------------------------
<S> <C> <C>
From operations:
----------------------------------------------------------------------------
Net investment income/(loss) $ 178 $ 782
Net realized gain/(loss) on investments and
foreign currency transactions 7,285 15,221
Change in unrealized appreciation/(depreciation)
of investments and assets and liabilities
denominated in foreign currencies (5,499) (21,827)
----------------------------------------------------------------------------
Change in net assets resulting
from operations 1,964 (5,824)
----------------------------------------------------------------------------
Distributions to shareholders:
----------------------------------------------------------------------------
From net investment income:
Class A shares (122) (1,297)
Class C shares -- (3)
Class Y shares (1) (27)
From net realized gains on security transactions:
Class A shares (3,039) (12,107)
Class C shares (45) (231)
Class Y shares (20) (148)
----------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (3,227) (13,813)
----------------------------------------------------------------------------
Change in net assets from Fund share
transactions (15,016) (30,726)
----------------------------------------------------------------------------
Change in net assets (16,279) (50,363)
Net assets:
Beginning of period 73,887 124,250
----------------------------------------------------------------------------
End of period $ 57,608 $ 73,887
----------------------------------------------------------------------------
Under/(over) distributed net investment
income $ (128) $ (183)
============================================================================
</TABLE>
See notes to financial statements.
26
<PAGE>
--------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Bartlett Value International Fund
(Amounts in Thousands)
Six Months Year
Ended Ended
6/30/00 12/31/99
(Unaudited)
-----------------------------------------------------------------------------
From operations:
-----------------------------------------------------------------------------
Net investment income/(loss) $ 150 $ 787
Net realized gain/(loss) on investments and
foreign currency transactions 4,217 4,092
Change in unrealized appreciation/(depreciation)
of investments and assets and liabilities
denominated in foreign currencies (6,311) 7,987
-----------------------------------------------------------------------------
Change in net assets resulting
from operations (1,944) 12,866
-----------------------------------------------------------------------------
Distributions to shareholders:
-----------------------------------------------------------------------------
From net investment income:
Class A shares (50) (1,809)
Class C shares -- (148)
Class Y shares (6) (176)
-----------------------------------------------------------------------------
Decrease in net assets from distributions
to shareholders (56) (2,133)
-----------------------------------------------------------------------------
Change in net assets from Fund share
transactions (5,767) (19,130)
-----------------------------------------------------------------------------
Change in net assets (7,767) (8,397)
Net assets:
Beginning of period 48,785 57,182
-----------------------------------------------------------------------------
End of period $ 41,018 $ 48,785
-----------------------------------------------------------------------------
Under/(over) distributed net investment
income $ (1,280) $ (1,374)
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
See notes to financial statements.
27
<PAGE>
--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
Bartlett Basic Value Fund
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Investment Operations Distributions
--------------------------------------- --------------------------------------
Net Asset Net Net Realized Total From From Net Asset
Value, Investment and Unrealized From Net Net Value,
Beginning Income/ Gains/(Losses) Investment Investment Realized Total End of
of Period (Loss) on Investments Operations Income Gains Distributions Period
=========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares
Six Months Ended
June 30, 2000* $14.24 $0.02B $0.50 $0.52 $(0.03) $(0.79) $(0.82) $13.94
Years Ended Dec. 31,
1999 18.34 0.18B (1.25) (1.07) (0.26) (2.77) (3.03) 14.24
1998 18.95 0.20B 0.48 0.68 (0.14) (1.15) (1.29) 18.34
Nine Months Ended
Dec. 31, 1997/A/ 18.33 0.19B 5.59 5.78 (0.22) (4.94) (5.16) 18.95
Years Ended March 31,
1997 17.94 0.22 1.82 2.04 (0.26) (1.39) (1.65) 18.33
1996 15.39 0.30 3.32 3.62 (0.24) (0.83) (1.07) 17.94
=========================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
----------------------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return/E/ Net Assets Net Assets Rate (in thousands)
============================================================================================================
<S> <C> <C> <C> <C> <C>
Class A Shares
Six Months Ended
June 30, 2000* 3.58%/H/ 1.15%/B,I/ 0.57%/B,I/ 31%/I/ $ 56,406
Years Ended Dec. 31,
1999 (5.73)% 1.15%/B/ 0.93%/B/ 46% 71,843
1998 3.76% 1.08%B 1.05%/B/ 28% 119,626
Nine Months Ended
Dec. 31, 1997/A/ 33.14%/H/ 1.13%/B,I/ 1.15%/B,I/ 42%/I/ 133,076
Years Ended March 31,
1997 11.30% 1.16% 1.18% 23% 119,208
1996 24.05% 1.17% 1.79% 25% 125,636
============================================================================================================
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
Investment Operations Distributions
---------------------------------------- ---------------------------------------
Net Asset Net Net Realized Total From From Net Asset
Value, Investment and Unrealized From Net Net Value,
Beginning Income/ Gains/(Losses) Investment Investment Realized Total End of
of Period (Loss) on Investments Operations Income Gains Distributions Period
==============================================================================================================================
<S> <C> <C> <C> <C> <C>
Class C Shares
Six Months Ended
June 30, 2000* $14.05 $(0.06)/C/ $0.51 $0.45 $ -- $(0.79) $(0.79) $13.71
Years Ended Dec. 31,
1999 18.03 0.02/C/ (1.20) (1.18) (0.03) (2.77) (2.80) 14.05
1998 18.75 0.10/C/ 0.41 0.51 (0.08) (1.15) (1.23) 18.03
1997/F/ 22.84 0.24/C/ 0.88 1.12 (0.27) (4.94) (5.21) 18.75
Class Y Shares
Six Months Ended
June 30, 2000* $14.21 $(0.01)/D/ $0.55 $0.54 $(0.04) $(0.79) $(0.83) $13.92
Years Ended Dec. 31,
1999 18.31 0.21/D/ (1.24) (1.03) (0.30) (2.77) (3.07) 14.21
1998 18.87 0.25/D/ 0.47 0.72 (0.13) (1.15) (1.28) 18.31
1997/G/ 21.92 0.18/D/ 1.94 2.12 (0.23) (4.94) (5.17) 18.87
==============================================================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return/E/ Net Assets Net Assets Rate (in thousands)
============================================================================================================
<S> <C> <C> <C> <C> <C>
Class C Shares
Six Months Ended
June 30, 2000* 3.13%/H/ 1.90%/C,I/ (0.19)%/C,I/ 31%/I/ $ 832
Years Ended Dec. 31,
1999 (6.44)% 1.90%/C/ 0.18%/C/ 46% 1,181
1998 2.96% 1.90%/C/ 0.29%/C/ 28% 2,228
1997/F/ 6.07%/H 1.90%/C,I/ 1.11%/C,I/ 42%/I/ 395
Class Y Shares
Six Months Ended
June 30, 2000* 3.74%/H/ 0.89%/D,I/ 0.45%/D,I/ 31%/I/ $ 370
Years Ended Dec. 31,
1999 (5.51)% 0.90%/D/ 1.14%/D/ 46% 863
1998 3.99% 0.82%/D/ 1.31%/D/ 28% 2,396
1997/G/ 10.97%/H/ 0.86%/D,I/ 1.51%/D,I/ 42%/I/ 2,387
============================================================================================================
</TABLE>
/A/ The year end for Bartlett Basic Value Fund was changed from March 31 to
December 31.
/B/ Net of fees waived pursuant to a voluntary expense limitation of 1.15%.
If no fees had been waived, the annualized ratio of expenses to average
daily net assets for each period would have been as follows: 2000, 1.32%;
1999, 1.23%; 1998, 1.20%; 1997, 1.19%.
/C/ Net of fees waived pursuant to a voluntary expense limitation of 1.90%.
If no fees had been waived, the annualized ratio of expenses to average
daily net assets for each period would have been as follows: 2000, 2.12%;
1999, 2.06%; 1998, 2.02%; 1997, 2.00%.
/D/ Net of fees waived pursuant to a voluntary expense limitation of 0.90%.
If no fees had been waived, the annualized ratio of expenses to average
daily net assets for each period would have been as follows: 2000, 1.05%;
1999, 0.98%; 1998, 0.94%; 1997, 0.96%.
/E/ Excluding sales charge on Class A shares.
/F/ For the period September 12, 1997 (commencement of operations of this
class) to December 31, 1997.
/G/ For the period August 15, 1997 (commencement of operations of this class)
to December 31, 1997.
/H/ Not annualized.
/I/ Annualized.
/*/ Unaudited.
See notes to financial statements.
29
<PAGE>
FINANCIAL HIGHLIGHTS
Bartlett Value International Fund
For a Share Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Investment Operations Distributions
--------------------------------------- ---------------------------------------------------
Net Asset Net Net Realized Total From In Excess From
Value, Investment and Unrealized From Net of Net Net
Beginning Income/ Gains/(Losses) Investment Investment Investment Realized Total
of Period (Loss) on Investments Income Income Operations Gains Distributions
====================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares
Six Months Ended
June 30, 2000* $14.51 $ 0.04/C/ $(0.55) $(0.51) $(0.02) $ -- $ -- $(0.02)
Years Ended Dec. 31,
1999 11.50 0.21/B,C/ 3.36 3.57 (0.56) -- -- (0.56)
1998 12.45 (0.02)/C/ (0.35) (0.37) (0.20) -- (0.38) (0.58)
Nine Months Ended
Dec. 31, 1997/A/ 13.64 0.05/C/ 0.31 0.36 (0.17) -- (1.38) (1.55)
Years Ended March 31,
1997 12.59 0.08 1.81 1.89 (0.08) (0.01) (0.75) (0.84)
1996 11.64 0.13 1.33 1.46 (0.13) (0.01) (0.37) (0.51)
====================================================================================================================================
<CAPTION>
Net Asset
Value,
End of
Period
==================================
<S> <C>
Class A Shares
Six Months Ended
June 30, 2000* $13.98
Years Ended Dec. 31,
1999 14.51
1998 11.50
Nine Months Ended
Dec. 31, 1997A 12.45
Years Ended March 31,
1997 13.64
1996 12.59
==================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return/F/ Net Assets Net Assets Rate (in thousands)
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares
Six Months Ended
June 30, 2000* (3.51)%/I/ 1.80%/C,J/ 0.76%/C,J/ 24%/J/ $34,427
Years Ended Dec. 31,
1999 32.02% 1.80%/C/ 1.69%/C/ 23% 41,292
1998 (2.88)% 1.73%/C/ 0.37%/C/ 27% 47,856
Nine Months Ended
Dec. 31, 1997A 2.79%/I/ 1.78%/C,J/ 0.49%/C,J/ 44%/J/ 68,648
Years Ended March 31,
1997 15.45% 1.81% 0.62% 31% 83,973
1996 12.76% 1.83% 1.06% 38% 72,041
-------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
Investment Operations Distributions
--------------------------------------- ----------------------------------------------------
Net Asset Net Net Realized Total From In Excess From
Value, Investment and Unrealized From Net of Net Net
Beginning Income/ Gains/(Losses) Investment Investment Investment Realized Total
of Period (Loss) on Investments Operations Income Operations Gains Distributions
================================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class C Shares
Six Months Ended
June 30, 2000* $14.24 $(0.31)/D/ $(0.24) $(0.55) $ -- $ -- $ -- $ --
Years Ended Dec. 31,
1999 11.34 0.15/B,D/ 3.27 3.42 (0.52) -- -- (0.52)
1998 12.30 0.10/D/ (0.55) (0.45) (0.13) -- (0.38) (0.51)
1997/G/ 15.70 0.08/D/ (1.82) (1.74) (0.28) -- (1.38) (1.66)
Class Y Shares
Six Months Ended
June 30, 2000* $14.46 $ 0.18/E/ $(0.67) $(0.49) $(0.03) $ -- $ -- $(0.03)
Years Ended Dec. 31,
1999 11.46 0.24/B,E/ 3.34 3.58 (0.58) -- -- (0.58)
1998 12.33 (0.37)/E/ 0.04 (0.33) (0.16) -- (0.38) (0.54)
1997/H/ 15.27 (0.11)/E/ (1.21) (1.32) (0.24) -- (1.38) (1.62)
================================================================================================================================
Net Asset
Value,
End of
Period
===============================================
Class C Shares
Six Months Ended
June 30, 2000* $13.69
Years Ended Dec. 31,
1999 14.24
1998 11.34
1997/G/ 12.30
Class Y Shares
Six Months Ended
June 30, 2000* $13.94
Years Ended Dec. 31,
1999 14.46
1998 11.46
1997/H/ 12.33
===============================================
</TABLE>
<TABLE>
<CAPTION>
Ratios/Supplemental Data
---------------------------------------------------------------------
Net
Investment Net Assets,
Expenses Income (Loss) Portfolio End of
Total to Average to Average Turnover Period
Return/F/ Net Assets Net Assets Rate (in thousands)
======================================================================================================
<S> <C> <C> <C> <C> <C>
Class C Shares
Six Months Ended
June 30 2000* (3.86)%/I/ 2.55%/D,J/ 0.02%/D,J/ 24%/J/ $ 3,537
Years Ended Dec. 31,
1999 31.04% 2.55%/D/ 1.00%/D/ 23% 4,063
1998 (3.64)% 2.55%/D/ (0.55)%/D/ 27% 3,916
1997/G/ (10.87)%/I/ 2.55%/D,J/ (1.68)%/D,J/ 44%/J/ 895
Class Y Shares
Six Months Ended
June 30, 2000* (3.38)%/I/ 1.55%/E,J/ 1.02%/E,J/ 24%/J/ $ 3,054
Years Ended Dec. 31,
1999 32.25% 1.55%/E/ 1.79%/E/ 23% 3,430
1998 (2.65)% 1.47%/E/ 0.61%/E/ 27% 5,410
1997/H/ (8.38)%/I/ 1.44%/E,J/ (0.75)%/E,J/ 44%/J/ 13,084
======================================================================================================
</TABLE>
/A/ The year end for Bartlett Value International Fund was changed from March
31 to December 31.
/B/ Net income per share is calculated using monthly average shares.
/C/ Net of fees waived pursuant to a voluntary expense limitation of 1.80%. If
no fees had been waived, the annualized ratio of expenses to average daily
net assets for each period woul
/D/ have been as follows: 2000, 2.16%; 1999, 2.01%; 1998, 1.87%; 1997, 1.95%. D
Net of fees waived pursuant to a voluntary expense limitation of 2.55%. If
no fees had been waived, the annualized ratio of expenses to average daily
net assets for each period would have been as follows: 2000, 2.92%; 1999,
2.76%; 1998, 2.69%; 1997, 2.70%.
/E/ Net of fees waived pursuant to a voluntary expense limitation of 1.55%. If
no fees had been waived, the annualized ratio of expenses to average daily
net assets for each period would have been as follows: 2000, 1.86%; 1999,
1.74%; 1998, 1.61%; 1997, 1.59%.
/F/ Excluding sales charge.
/G/ For the period July 23, 1997 (commencement of operations of this class) to
December 31, 1997. H For the period August 15, 1997 (commencement of
operations of this class) to December 31, 1997. I Not annualized.
/J/ Annualized.
* Unaudited.
See notes to financial statements.
31
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
================================================================================
June 30, 2000 (Unaudited)
(Amounts in Thousands)
1 Significant Accounting Policies
Bartlett Capital Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as a diversified, open-end management
investment company. Bartlett Capital Trust was established as a Massachusetts
business trust under a Declaration of Trust dated October 31, 1982. The
Declaration of Trust, as amended, permits the Trustees to issue an unlimited
number of shares of the Bartlett Basic Value Fund and Bartlett Value
International Fund (each a "Fund").
Each Fund consists of three classes of shares: Class A, offered since 1983
for Basic Value and since 1989 for Value International; Class C, offered since
1997 for both Basic Value Fund and Value International Fund; and Class Y,
offered to certain institutional investors since 1997 for both Basic Value Fund
and Value International Fund.
The income and expenses of each of these Funds are allocated
proportionately to the three classes of shares based on daily net assets, except
for Rule 12b-1 distribution fees, which are charged only on Class A and Class C
shares, and transfer agent and shareholder servicing expenses, which are
determined separately for each class.
The following is a summary of the investment objectives followed by the
Funds:
Bartlett Basic Value Fund seeks capital appreciation by investing primarily
in common stocks or securities convertible into common stocks that are believed
by Bartlett & Co. ("Adviser") to be attractively priced relative to their
intrinsic value. Income is a secondary consideration.
Bartlett Value International Fund seeks capital appreciation by investing
primarily in foreign equity securities believed by the Adviser to be
attractively priced relative to their intrinsic value. Income is a secondary
consideration.
The following is a summary of the significant accounting policies of
Bartlett Capital Trust:
Security Valuation - Securities owned by each Fund for which market
quotations are readily available are valued at current market value. In the
absence of readily available market quotations, securities are valued at fair
value as determined by Bartlett, under authority delegated by the Board of
Trustees.
Equity securities and options listed on exchanges are valued at the last
sale price as of the close of business on the day the securities are
32
<PAGE>
being valued. Listed securities not traded on a particular day and securities
traded in the over-the-counter market are valued at the mean between the closing
bid and ask prices quoted by brokers or dealers that make markets in the
securities. Portfolio securities which are traded both in the over-the-counter
market and on an exchange are valued according to the broadest and most
representative market.
Fixed income securities generally are valued by using market quotations or
independent pricing services that use prices provided by market makers or
estimates of market values. Fixed income securities having a maturity of less
than 60 days are valued at amortized cost.
Foreign Currency Translation - The books and records of the Funds are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars on the following basis:
(i) market value of investment securities, assets and liabilities at the
closing daily rate of exchange; and
(ii) purchases and sales of investment securities, interest income and
expenses at the rate of exchange prevailing on the respective dates of
such transactions.
The effect of changes in foreign exchange rates on realized and unrealized
security gains or losses is reflected as a component of such gains or losses.
Investment Income and Distributions to Shareholders - Interest income and
expenses are recorded on the accrual basis. Bond premiums are amortized for
financial reporting and federal income tax purposes. Bond discounts, other than
original issue and zero-coupon bonds, are not amortized for financial reporting
and federal income tax purposes. Dividend income and distributions to
shareholders are allocated at the class level and are recorded on the
ex-dividend date. Dividends from net investment income, if available, will be
paid quarterly by the Funds. Net capital gain distributions, which are
calculated at the composite level, are declared and paid after the end of the
tax year in which the gain is realized. Distributions are determined in
accordance with federal income tax regulations, which may differ from those
determined in accordance with generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Funds' capital
accounts to reflect income and gains available for distribution under federal
income tax regulations.
33
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
Security Transactions - Security transactions are recorded on the trade
date. Realized gains and losses from security transactions are reported on an
identified cost basis for both financial reporting and federal income tax
purposes.
At June 30, 2000, there were no receivables for securities sold or payables
for securities purchased for either Fund.
Federal Income Taxes - No provision for federal income or excise taxes is
required since each Fund intends to continue to qualify as a regulated
investment company and distribute substantially all of its taxable income to its
shareholders. Value International has unused capital loss carryforwards for
federal income tax purposes of $41 which will expire in 2006.
Use of Estimates - Preparation of the financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
2 Investment Transactions
For the six months ended June 30, 2000, investment transactions (excluding
short-term securities) were as follows:
Basic Value
Value International
--------------------------------------------------------------------------
Purchases of investment securities $ 9,731 $4,715
--------------------------------------------------------------------------
Proceeds from sales and maturities
of investment securities $25,548 $9,853
--------------------------------------------------------------------------
34
<PAGE>
At June 30, 2000, cost, aggregate gross unrealized appreciation and gross
unrealized depreciation based on the cost of securities for federal income tax
purposes for each Fund were as follows:
Basic Value
Value International
-------------------------------------------------------------------------------
Unrealized appreciation $16,393 $11,844
Unrealized depreciation (898) (4,425)
-------------------------------------------------------------------------------
Net unrealized appreciation/(depreciation) $15,495 $ 7,419
-------------------------------------------------------------------------------
Federal income tax cost of investments $41,934 $33,087
-------------------------------------------------------------------------------
3 Repurchase Agreements
All repurchase agreements are fully collateralized by obligations issued by
the U.S. Government or its agencies, and such collateral is in the possession of
the Funds' custodian. The value of such collateral includes accrued interest.
Risks arise from the possible delay in recovery or potential loss of rights in
the collateral should the issuer of the repurchase agreement fail financially.
The Funds' investment adviser reviews the value of the collateral and the
creditworthiness of those banks and dealers with which the Funds enter into
repurchase agreements to evaluate potential risks.
4 Financial Instruments
Emerging Market Securities - Value International Fund may invest in
securities denominated in the currencies of emerging market countries, as well
as in securities issued by companies located in emerging market countries.
Future economic or political developments could adversely affect the liquidity
or value, or both, of such securities.
35
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
Forward Foreign Currency Contracts - Forward foreign currency contracts are
marked-to-market daily using foreign currency exchange rates supplied by an
independent pricing service. The change in a contract's market value is recorded
by a Fund as an unrealized gain or loss. When the contract is closed or delivery
is taken, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's securities, but it does
establish a rate of exchange that can be achieved in the future. These forward
foreign currency contracts involve market risk in excess of amounts reflected in
the financial statements. Although forward foreign currency contracts used for
hedging purposes limit the risk of loss due to a decline in the value of the
hedged currency, they also limit any potential gain that might result should the
value of the currency increase. In addition, the Funds could be exposed to risks
if the counterparties to the contracts are unable to meet the terms of their
contracts. Each Fund's adviser will enter into forward foreign currency
contracts only with parties approved by the Board of Trustees because there is a
risk of loss to the Funds if the counterparties do not complete the transaction.
For the six months ended June 30, 2000, the Funds had not entered into any
forward currency contracts.
5 Line of Credit
The Funds, along with certain funds distributed by Legg Mason Wood Walker,
Incorporated ("LMWW") an affiliate of the Adviser, participate in a $200 million
line of credit ("Credit Agreement") to be utilized as an emergency source of
cash in the event of unanticipated, large redemption requests by shareholders.
Pursuant to the Credit Agreement, each participating Fund is liable only for
principal and interest payments related to borrowings made by that Fund.
Borrowings under the Credit Agreement bear interest at prevailing short-term
interest rates. For the six months ended June 30, 2000, the Funds had no
borrowings under the Credit Agreement.
36
<PAGE>
6 Transactions With Affiliates and Related Parties
The officers of the Trust are shareholders or employees of the Adviser or
LMWW. LMWW is affiliated with the Adviser through their common parent company,
Legg Mason, Inc. The Adviser became a wholly owned subsidiary of Legg Mason,
Inc. in January 1996. Bartlett Capital Trust's investments were managed by the
Adviser under the terms of a Management Agreement that was effective through
July 20, 1997, wherein the Adviser paid all Fund expenses except brokerage,
taxes, interest and extraordinary expenses. As compensation for investment
advisory services and the agreement to pay the above Fund expenses, each Fund
paid the Adviser a fee computed and accrued daily and paid monthly. The fee for
Basic Value was computed at an annual rate of 2.00% of the average daily net
assets of the Fund up to and including $10,000, 1.50% of such assets from
$10,000 up to and including $30,000, and 1.00% of such assets in excess of
$30,000. The fee for Value International was computed at an annual rate of 2.00%
of the average daily net assets of the Fund up to and including $20,000, 1.75%
of such assets from $20,000 up to and including $200,000, and 1.25% of such
assets in excess of $200,000.
On July 15, 1997, the shareholders of the Trust approved an Investment
Management and Administration Agreement, under which the Adviser receives for
its services an advisory fee from each Fund, computed daily and payable monthly,
at annual rates of each Fund's average daily net assets.
The Adviser has agreed to waive its fees in any month to the extent the
Funds' expenses for each class (exclusive of taxes, interest, brokerage and
extraordinary expenses) exceed during that month the expense limitations shown
in the following chart:
Basic Value
Value International
----------------------------------------------------------------------------
Advisory Fee 0.75% 1.25%
----------------------------------------------------------------------------
Expense Limitation
Class A 1.15% 1.80%
Class C 1.90% 2.55%
Class Y 0.90% 1.55%
----------------------------------------------------------------------------
37
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
================================================================================
Fees in excess of these limits will be waived through April 30, 2001. For
all classes of the Funds, advisory fees waived for the six months ended June 30,
2000, and amounts due to the Adviser at June 30, 2000, were as follows:
Basic Value
Value International
------------------------------------------------------------------------
Advisory Fees Waived $51 $65
------------------------------------------------------------------------
Advisory Fees Payable $29 $31
------------------------------------------------------------------------
LM Financial Partners, Inc., distributor of the Funds and an affiliate of
the Adviser, receives from each Fund an annual service fee of 0.25% of the
average daily net assets of each Fund's Class A shares and distribution and
service fees at an annual rate of 0.75% and 0.25%, respectively, of average
daily net assets of each Fund's Class C shares. These fees are calculated daily
and paid monthly. At June 30, 2000, distribution and service fees waived were $4
and $10 for Basic Value and Value International, respectively.
LMWW has an agreement with the funds' transfer agent to assist it with some
of its duties. For this assistance, the transfer agent paid LMWW the following
amounts for the six months ended June 30, 2000: Basic Value, $2 and Value
International, $4.
7 Fund Share Transactions
The Trust is authorized to issue an unlimited number of shares of
beneficial interest of separate series, all without par value. Shares of two
series, consisting of the Funds, have been authorized. The shares of beneficial
interest of each Fund are divided into three classes, designated Class A, Class
C and Class Y shares. Share transactions are shown on the following page.
38
<PAGE>
<TABLE>
<CAPTION>
Reinvestment
Sold of Distributions Repurchased Net Change
--------------- ---------------- ----------------- -------------------
Shares Amount Shares Amount Shares Amount Shares Amount
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Basic Value
-- Class A Shares
Six Months Ended
June 30, 2000* 83 $1,176 218 $ 3,081 (1,298) $(18,455) (997) $(14,198)
Year Ended
December 31, 1999 289 4,669 898 13,049 (2,667) (46,524) (1,480) (28,806)
-- Class C Shares
Six Months Ended
June 30, 2000* 2 $ 21 3 $ 45 (28) $ (399) (23) $ (333)
Year Ended
December 31, 1999 28 497 17 232 (84) (1,393) (39) (664)
-- Class Y Shares
Six Months Ended
June 30, 2000* 0 $ 0 1 $ 21 (36) $ (506) (35) $ (485)
Year Ended
December 31, 1999 2 29 12 175 (84) (1,460) (70) (1,256)
Value International
-- Class A Shares
Six Months Ended
June 30, 2000* 549 $7,397 3 $ 47 (935) $(12,614) (383) $ (5,170)
Year Ended
December 31, 1999 398 4,823 127 1,538 (1,840) (21,988) (1,315) (15,627)
-- Class C Shares
Six Months Ended
June 30, 2000* 10 $ 138 -- $ -- (37) $ (495) (27) $ (357)
Year Ended
December 31, 1999 40 499 12 146 (112) (1,350) (60) (705)
-- Class Y Shares
Six Months Ended
June 30, 2000* -- $ -- N.M. $ 4 (18) $ (244) (18) $ (240)
Year Ended
December 31, 1999 93 38 10 123 (248) (2,959) (235) (2,798)
----------------------------------------------------------------------------------------------------
</TABLE>
* Unaudited.
N.M. - Not meaningful.
39
<PAGE>
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<PAGE>
--------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lorrence T. Kellar Chairman of the Board and Trustee
Edward A. Taber, III President and Trustee
A. John W. Campbell Trustee
Edmund J. Cashman, Jr. Trustee
Henri Deegenaar Trustee
Ian F. H. Grant Trustee
William P. Sheehan Trustee
Prinz Wolfgang Ysenburg Trustee
Marie K. Karpinski, CPA Vice President, Treasurer and Secretary
Madelynn M. Matlock, CFA Vice President
James A. Miller, CFA Vice President
Donna M. Prieshoff Vice President
James B. Reynolds, CFA Vice President
Woodrow H. Uible, CFA Vice President
Thomas A. Steele, CPA Assistant Treasurer and Assistant Secretary
--------------------------------------------------------------------------------
Investment Adviser Bartlett & Co.
Cincinnati, Ohio
Custodian State Street Bank & Trust Company
Boston, Massachusetts
Transfer Agent Boston Financial Data Services
Boston, Massachusetts
Independent Accountants PricewaterhouseCoopers LLP
Baltimore, Maryland
Legal Counsel Kirkpatrick &Lockhart LLP
Washington, DC
--------------------------------------------------------------------------------
Bartlett & Co.
------------------------------
REGISTERED INVESTMENT ADVISORS
36 East Fourth Street, Cincinnati, OH 45202-3896 . 513-345-6212 . 800-800-3609
.FAX 513-621-6462
