<PAGE>
CRABBE HUSON FUNDS
1995 ANNUAL REPORT
REPORT
The Oregon Municipal Bond Fund, Inc.
The Crabbe Huson Special Fund, Inc.
The Crabbe Huson
Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
The Crabbe Huson Income Fund, Inc.
The Crabbe Huson U.S. Government
Income Fund, Inc.
The Crabbe Huson U.S. Government
Money Market Fund, Inc.
The Crabbe Huson Real Estate
Investment Fund, Inc.
October 31, 1995
This report has been prepared for the shareholders and may only be
distributed
to others if preceded or accompanied by a current prospectus.
[PHOTO]
<PAGE>
[PHOTO]
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S>
<C>
To our Shareholders
Page 1
Schedule of Investments
The Oregon Municipal Bond Fund, Inc.
Page 14
The Crabbe Huson Special Fund, Inc.
Page 16
The Crabbe Huson Asset Allocation Fund, Inc.
Page 18
The Crabbe Huson Equity Fund, Inc.
Page 20
The Crabbe Huson Income Fund, Inc.
Page 22
The Crabbe Huson U.S. Government Income Fund, Inc.
Page 23
The Crabbe Huson U.S. Government Money Market Fund, Inc.
Page 24
The Crabbe Huson Real Estate Investment Fund, Inc.
Page 25
Statements of Assets & Liabilities
Page 26
Statements of Operations
Page 28
Statements of Changes in Net Assets
Page 30
Notes to Financial Statements
Page 32
Financial Highlights
Page 39
Independent Auditors' Report
Page 55
</TABLE>
<PAGE>
November 30, 1995
To Our Shareholders:
The stock and bond markets posted extraordinary gains for the
fiscal year
ending October 31, 1995. The Crabbe Huson Funds posted worthwhile
returns in
most instances. The Funds' returns were influenced by their
investment
objectives and the nature of the securities in which they were
invested. Later
in this report we will discuss in more detail each Fund's return
and progress
during the year; however, here are the results in summary form.
Please note
the Funds' returns assume all dividends and capital gains (if any)
were
reinvested. For more detailed information on each Fund and its
performance and
share prices, please refer to the appropriate section of this
annual report.
Also, listed below are various market indices to give you some feel
for
comparative returns. There are some substantial differences that
should be
mentioned however. Indices are un-managed "baskets" of securities
that do not
reflect fees or other expenses, while Fund performance is stated
after the
expenses outlined in this report. Additionally, one cannot invest
"directly"
in an index, although it may be possible to emulate one by
investing in an
index fund. The Crabbe Huson Funds do not attempt to emulate an
index in any
respect. This may result in substantial differences in Fund
performance versus
the indices from time to time.
<PAGE>
<TABLE>
<CAPTION>
Fiscal-Year
Ending: 10/31/95
<S>
<C>
FUND'S TOTAL RETURN<F1>
The Crabbe Huson U.S. Government Money Market Fund, Inc.<F2>
5.30%
The Crabbe Huson U.S. Government Income Fund, Inc.<F3>
9.12%
The Oregon Municipal Bond Fund, Inc.
10.66%
The Crabbe Huson Income Fund, Inc.
11.92%
The Crabbe Huson Asset Allocation Fund, Inc.
13.00%
The Crabbe Huson Real Estate Investment Fund, Inc.
8.31%
The Crabbe Huson Equity Fund, Inc.
13.37%
The Crabbe Huson Special Fund, Inc.
1.78%
STOCK MARKET INDICES
Standard & Poor's 500 Index<F4>
26.43%
Dow Jones Industrials<F4>
25.00%
Russell 2000 Index<F4>
18.33%
Standard & Poor's 400 Mid-cap Index<F4>
21.19%
NASDAQ/OTC Composite<F4>
33.26%
Morgan Stanley REIT Index<F5>
10.88%
BOND AND MONEY MARKET INDICES
(c)IBC/Donoghue's
MONEY FUND REPORT AVERAGES(tm) - All Taxable<F6>
5.42%
Ryan Lab's Three Year Treasury Index<F5>
10.96%
Lehman Brothers' Government/Corporate Bond Index<F4>
16.16%
Lehman Brothers' Municipal Bond Index<F5>
14.85%
CONSUMER PRICE INDEX
2.74%
<FN>
<F1> Data quoted represents past performance. Future returns and
principal
value will fluctuate so that an investor's shares, when redeemed,
may be worth
more or less than the original cost.
<F2> Although the Fund intends to maintain a constant one dollar
per share net
asset value, there is no assurance the Fund will be able to do so.
An
investment in the Fund is neither insured nor guaranteed by the
U.S.
Government.
<F3> An investment in the Fund is neither insured nor guaranteed by
the U.S.
Government.
<F4> Source: SEI Funds Evaluation Service
<F5> Source: Bloomberg Ltd.
<F6> Source: IBC/Donoghue's MONEY FUND REPORT(tm), a service of
IBC/Donoghue,
Inc. Holliston, MA 01746
</FN>
</TABLE>
<PAGE>
INVESTMENT OUTLOOK
During the course of the fiscal year ended October 31, 1995,
economic
conditions evolved quite nicely for the stock and bond markets. If
you recall
the 12 months preceding October 1994, the increase in interest
rates had
restricted the performance of the stock market and led to a decline
in the bond
market. This was not the case in fiscal 1995: interest rates have
declined
throughout most of the year. (Chart 1)
In 1994, in order to forestall an increase in inflation pressures,
the Federal
Reserve (the Fed) embarked on a program to slow the economy by
increasing
short-term interest rates. Due, in part, to the anticipation of
the success of
the Fed's program, the bond market rallied through most of fiscal
'95. And, as
a result of this strength in bond prices, rates on 30-year U.S.
Treasury bonds
declined from about 8.0% to about 6.3%<F1>. (Chart 1)
Also, in July 1995 the Fed indicated an easing of its stance by
dropping the
Federal (Fed) Funds rate<F2> from 6.00% to 5.75%. Participants in
the
financial markets became less concerned about higher interest rates
and more
nervous about future economic trends: mainly, was the economy set
on a
recessionary course? And while this seems to be a recurrent fear
of many
investors throughout the year, economic conditions so far have
tracked quite
nicely with subdued inflation (Chart 2), lower interest rates, and
moderately
paced business activity (Chart 3).
The bond market was strong, but stock investors found plenty to
like as well
through their own interpretation of the economic scenario. With
interest rates
down, relatively low inflation, and continuing economic growth,
what's not to
like? It seems 1995 was the best of both worlds for stock and bond
investing.
[GRAPH] [GRAPH] [GRAPH]
<F1> Although many of our clients are well aware of the principles
of bond
investing, we are asked frequently why this price/interest rate
relationship
exists. Our reply can be steeped in higher mathematics, or it can
be logical
and intuitive. For example, if you own a bond that pays 8% and the
current
rate for new bonds is 6%, then you will likely want a premium price
if someone
comes to buy your bond. Moreover, the longer your bond pays 8%,
the more money
you will want for giving up this high rate of interest.
Conversely, if you own
a bond that pays 6% and the current interest rate on new bonds is
8%, you will
get a lower price for your 6% bond should you decide to sell it.
Additionally,
if under the terms of the bond you are stuck with a 6% return for
20 years, you
will get a lower price than if this below-market-rate (6%) were
going to
persist for only 1 or 2 years.
<F2> Federal (Fed) Funds are funds in excess of bank reserve
requirements that
commercial banks deposit in Federal Reserve Banks. Member banks
may lend Fed
Funds to one another on an overnight basis. The Fed controls the
Fed Funds
rate by buying or selling excess funds which, in turn, raises or
lowers
interest rates.
<PAGE>
We guess it is a characteristic of the breed that investors, when
things are
going well, begin to worry about the next trend which may not be
quite so
favorable. It seems that investors, unlike Satchel Paige, are
constantly
looking over their shoulder to see who or what may be gaining on
them.
Presently, there are those worried that the decline in long-term
interest rates
is signaling a recession in 1996. They point to the declining
trends in
consumer spending and weak economic conditions in Europe, Canada,
Mexico, and
Japan as leading us into a consumer and export led recession.
Additionally,
the Fed has reinforced these concerns by indicating that it would
not be quick
to lower the Fed Funds rate until Congress and the administration
work out a
budget agreement.
Our view, if we may add our voice to the cacophony of predictions
one receives
around this time of year, is that the economy will continue to
muddle through
the current uncertainty. Slow growth to be sure, but growth
nevertheless.
Business activity may be subdued in the first part of 1996 as the
consumer
remains tentative. However, the current low level of inflation and
interest
rates will likely stimulate growth as the year progresses, first in
housing and
then in consumer durables such as automobiles. Regardless of the
precise
pattern, our working assumption is that a recession is unlikely in
1996.
After the strength in 1995 the stock market may have to pause to
catch its
breath in 1996. However, some areas of the market may do well.
The economic
environment we foresee may lead to a shift by investors into stocks
of
companies whose operations are sensitive to the business cycle.
These are
commonly known as cyclical stocks and include, among others, steel,
auto, and
airline stocks. Investors have shunned many of the cyclicals over
the past
several months preferring, instead, those stocks that have
defensive
characteristics such as those of beverage, drug, and household
products
companies. This is a natural path to take if one is concerned
about future
economic growth. If this concern dissipates, as we believe it
will, then many
cyclicals may return to favor.
If our business cycle forecast is correct, the bond market may run
into some
trouble as the year progresses. Higher than expected economic
growth may lead
to a modest up-tick in inflation which may make bond investors
nervous. We may
take action in our bond portfolios to hedge against such a
development some
time in 1996. Generally, this is done by selling some of the
longer maturing
bonds and replacing them with those of shorter maturities (see
footnote 1 on
page 2).
It seems that any view of the short- or long-term outlook for the
economy and
financial markets also has to incorporate likely political
developments.
President Clinton and the Republican dominated Congress are
presently locked in
a struggle on the best way to balance the Federal budget. We find
it
encouraging that both participants agree that the task needs to be
accomplished. Whether it happens in the seven years Congress wants
or the ten
<PAGE>
years the President wants is of less concern than whether or not it
happens at
all. We believe one of the reasons for the market's strength in
1995 has been
the anticipation that a compromise will ultimately be reached
leading to a
balanced budget at some time in the future. They seem serious,
although we
have been tricked before (remember Gramm-Rudman).
All in all, we see a reasonably benign economic environment for
stocks in 1996
and, to a lesser extent, for bonds. However, the markets often
respond to
stimuli that are unforeseen, so one cannot say conclusively that it
will be a
good year for returns. Unfortunately, we will not know until we
get there.
Such is the way of investing. But, the likely political and
economic
developments appear to be favorable for the long-term health of the
markets.
We mentioned earlier that one of the driving forces for the stock
market has
been the drop in long- term interest rates. As interest rates
decline,
investors seek higher prospective rates of return elsewhere. In
this case
there is probably not a market participant out there that is
unaware of the
studies showing that stocks have outperformed bonds and U.S.
Treasury Bill
holdings over the long pull and for the last ten years:
<TABLE>
<CAPTION>
1926 to 1994 1985 to 1994
<S> <C> <C>
Stocks 10.1% 14.2%
Bonds 5.0% 12.1%
T-Bills 3.8% 5.9%
Inflation 3.1% 3.6%
</TABLE>
Source: Ned Davis Research, Inc. Returns are annualized for the
period
This long-term relationship has prompted investors to look
favorably on stock
investing. We believe one proxy for investor attitudes is cash
flows into
equity mutual funds (Chart 4).
[GRAPH]
As Willy Sutton would say, "That's where the money is." In our
opinion,
long-term money will likely continue to flow into equity mutual
funds.
Demographic patterns, such as the retirement of the "baby boom"
generation,
which will begin roughly in about 15 years and last through the
year 2030,
suggest the need for additional savings accumulation. Our friend,
Dr. Arnold
Moskowitz of Moskowitz Capital, has done a back-of-the-envelope
calculation and
has come up with a number showing this added savings at $11
trillion. Even if
we give or take a few trillion, any way you slice it, the pie is
very large
indeed. And, if we assume financial assets, primarily stocks and
bonds, get
their share of the pie, the long-term outlook is quite good.
<PAGE>
"Long-term" is, however, an important modifier. We suspect
short-term flows
into the market can be quite volatile. Chart 4 above shows that
when the
market dips inflows dip as well. Unless the stock market is a
one-way street
heading higher, which we doubt, we will likely see periods when
cash flows
actually turn negative. It is during such periods of market
volatility that
investors are at risk of making the wrong move at the wrong time.
One way to
guard against this risk is to structure your portfolio of funds to
reflect your
tolerance for price fluctuations. This may involve the use of bond
oriented
funds or money market funds along with stock funds or the use of a
balanced or
asset allocation type fund.
Generally speaking, in determining risk tolerance one should take
the following
factors into account. These are not all inclusive, but we proffer
them only to
emphasize the importance of a properly designed investment program.
Age: Those with longer investment horizons generally can
tolerate wider
fluctuations in price. There are a couple of reasons for this.
One is that,
historically at least, the stock and bond markets have recovered
over time
after experiencing a setback. This enables long term investors to
recoup any,
hopefully, temporary losses as long as they "hang in there."
Usually those
with longer horizons (over 10 years) may want a higher
concentration in equity
oriented (stock) funds.
Cash Flow Needs: If investors expect to draw down a significant
portion of
their investment on a regular or even sporadic basis it might be
better to have
a less volatile portfolio to reduce the chances of having to make
a withdrawal
during a period of significantly lower prices. Also, there is a
tendency for
portfolios that include bond and money market funds to earn a
higher level of
dividend and interest income making it somewhat easier to meet
withdrawal
needs.
Pucker Factor: There is no other way to say it. Some folks may
be just too
nervous regardless of withdrawal needs or investment horizon, to
ever be
comfortable with a potentially volatile portfolio. If you check
the paper
every day to price your funds, if you constantly agonize over the
likely impact
of current events on the markets, if your hands turn sweaty when
the price of
one of your funds declines 5% and you run screaming into the hall
if it
declines 10%, then perhaps you are a candidate for a potentially
more stable
portfolio. In our opinion this may be the most important element
in designing
an investment program. Unfortunately, investment temperaments are
difficult to
analyze or predict.
INVESTMENT PHILOSOPHY
Since many reading this report are new investors in Crab be Huson
Funds, we
would like to review our investment philosophy. This philosophy
influences
nearly all investment decisions made in the Funds.
<PAGE>
We are contrarian investors. Our observation is that most
investors consider
an asset rising in price as becoming more attractive, while an
asset declining
in price is viewed as becoming less attractive. In the perverse
world of
contrarian investing, we must take the opposite mind-set: that is,
we must view
an asset rising in price as one which will eventually become
over-valued and be
sold, while one declining in price, at some point will become
under-valued and
therefore, an attractive purchase. The key in this process is to
remember the
majority of investors are correct much of the time, market
up-trends and
down-trends could not otherwise be established; however, at turning
points, the
majority is incorrect.
We implement this philosophy with all the care and skill we can
bring to bear.
Since the nature of this approach at times inclines us to go
against the crowd,
you may see holdings and/or strategies in the portfolios that
seemingly do not
match generally accepted investment trends. Nevertheless, this
approach has
worked well for our clients over the years as can many philosophies
if applied
with skill, diligence, and perseverance.
FUND REVIEW AND OUTLOOK
As expected, the Funds' results were influenced by their investment
objectives.
With this in mind, we use the chart on the following page to help
you position
your investment along a risk reward scale.
As indicated by the "risk/return" chart, income oriented Funds at
the left side
generally have a greater degree of safety, but also, perhaps, lower
reward
expectations. This, of course, is a premise for all investing:
lower potential
risk suggests lower potential reward, and higher potential risk
suggests higher
potential reward. As far as we are aware, no one has been able to
consistently
surmount this basic maxim over the long pull. Therefore, as your
Fund managers
we need to do two things: improve the equation as much as possible
by applying
investment skills and maintain the integrity of each Fund by
managing them
according to their objectives.
As investors, your responsibility is to be aware of your
objectives, invest in
the appropriate vehicle, and take a long enough view to allow your
selected
investment vehicles to meet your objectives. With this as a
backdrop, let us
discuss the progress of the individual Funds for the past year, as
well as
their current portfolio position.
[GRAPH]
[PHOTO]
Garth R. Nisbet, CFA
Funds Managed:
The Crabbe Huson U.S. Government Money Market Fund, Inc.
The Crabbe Huson U.S. Government Income Fund, Inc.
The Crabbe Huson Income Fund, Inc.
The Oregon Municipal Bond Fund, Inc.
<PAGE>
The Crabbe Huson U.S. Government Money Market Fund, Inc.
This Fund consists of U.S. Treasury securities and obligations
issued by
agencies of the U.S. Government. These latter securities are not,
in all
cases, obligations of the U.S. Government but are generally
regarded as among
the highest grade securities available. This Fund is the most
conservative in
our family of Funds. All securities within the Fund must have a
maturity of
less than one year from the date of purchase, and the average
maturity of the
portfolio shall not exceed 90 days. Currently, the Fund has a
relatively long
(for a money market fund) average maturity of 77 days.
This Fund is most appropriate for investors who cannot tolerate
principal risk,
want immediate access to their funds, and are willing to accept
lower returns
than potentially achievable in our other Funds. The fact that the
Fund is
substantially exempt from state income tax enhances its
attractiveness to
investors subject to state income tax.
While long-term rates fell significantly during the year,
short-term rates were
mixed. Three-month U.S. Treasury bill yields increased 30 basis
points to
5.5%, while one-year U.S. Treasury bills yields fell 60 basis
points to 5.5%.
If evidence of consumer based economic weakness continues to mount,
the Fed
will be persuaded to reduce short term rates, perhaps as early as
their next
Federal Open Market Committee meeting on December 19th. For the
fiscal year
ended October 31, 1995, this Fund earned 5.30%.
The Crabbe Huson U.S. Government Income Fund, Inc.
The U.S. Government Income Fund invests only in bonds of the U.S.
Government,
its agencies, and its instrumentalities. Under terms of the
prospectus, 75% of
the holdings of this Fund must have maturities of five years or
less. At
fiscal year-end, the average maturity of the Fund was 8.6 years.
The limited
flexibility of this Fund should likely result in lower price
volatility and
lower returns over time. Therefore, we position it towards the
lower end of
our risk spectrum.
The Fund returned 9.12% for the fiscal year ended October 31, 1995,
compared
with the Ryan Labs Three- year Treasury Index which returned
10.96%. These
returns reflect the dramatic decline in interest rates. For
example, rates on
3-year Treasuries fell from 7.00% at the end of fiscal 1994 to
5.75% at the end
of fiscal 1995. The Fund's under performance was due to our
relatively
conservative approach to interest rate risk during the first half
of the year:
our average maturity was less than the index. During the last five
months of
the year, however, our strategic posture changed; and as rates
continued to
fall, the Fund outperformed the Ryan Labs index by about 0.70%
during this
time.
The Fund's results in 1996 will again reflect what happens in the
shorter-term
areas of the U.S. yield curve. This Fund continues to be
appropriate for
investors who seek the possibility of a somewhat higher return than
money
market funds with a limited degree of price volatility.
<PAGE>
The Crabbe Huson Income Fund, Inc.
This Fund can invest in a broad cross-section of investments
including, but not
limited to: bonds of the U.S. Government, its agencies and
instrumentalities;
corporate bonds; mortgage-backed bonds; convertible bonds;
convertible
preferred stock; and foreign bonds. Unlike the U.S. Government
Income Fund,
the Income Fund can also own bonds that are rated less than AAA and
even less
than BBB in limited amounts. Furthermore, there are no maturity
restrictions
in this Fund. As a result of the greater investment latitude
allowed, this
Fund is appropriate for those investors seeking to invest in a more
aggressive
portfolio of fixed income securities.
1995 has been a good year for bonds and bond funds as interest
rates have
declined by about 2 percentage points, causing bond prices to
increase. This
drop in interest rates has been a result of two things. The first
is optimism
concerning an ultimate resolution to the U.S. federal budget
deficit. The
second is a significant change in market expectations concerning
economic
growth and inflation.
In an attempt to slow down 1994's robust economy, the Fed increased
short-term
interest rates last year from 3% to 6%. As a result, signs of
weakness began
to appear in the housing, auto and retail sectors. Consumer debt
levels
remained relatively high and by mid-year unemployment claims
increased as the
growth in new jobs began to decline. The current situation is a
slow growth
resulting from a softer consumer and government sector while offset
somewhat by
strength in the manufacturing and export side of the economy.
Additionally,
the majority of the inflation news has been positive, with most
indicators in
the 1% to 3% range and declining. However, potential factors of
concern
include potential wage pressures (e.g., labor negotiations) and
continued signs
of life in the manufacturing and housing sectors.
[GRAPH] [GRAPH]
For the fiscal year ended October 31, 1995, the Fund returned
11.92%. While
this return is high relative to historical bond market results
(about 6%), it
is below the Lehman Brothers Govt/Corp Bond Index return of 16.16%.
The Fund's
under performance was due to our relatively conservative approach
to interest
rate risk during the first half of the year: our average maturity
was less than
the index. During the last five months of the year, however, our
strategic
posture changed; and as rates continued to fall, the Fund
outperformed the
Lehman index by about 1.50%.
<PAGE>
The Oregon Municipal Bond Fund, Inc.
This Fund is a diversified portfolio of municipal bonds which are
exempt from
federal and, in most cases, state income tax. The Fund generally
invests only
in bonds issued by the state of Oregon and political subdivisions
within the
state. Occasionally the Fund will also invest in municipal bonds
issued
outside of the state that are also exempt from federal and state
income tax.
Typically, the only taxable income the Fund earns is overnight
interest on
temporary cash. The Fund can invest in bonds of any maturity and,
therefore,
can show greater price fluctuations and should show higher returns
over time
than our Money Market Fund and Government Income Fund. This
potential longer
maturity and the narrow investment focus (mostly in state municipal
bonds) lead
us to classify this Fund in the same position along our risk
spectrum as our
Income Fund.
The Fund's average maturity has remained stable at approximately 9
years.
While this would equate to an average maturity in the taxable bond
market, it
is actually relatively intermediate compared to the majority of
municipal
indices. Because of this intermediate bias, the fund will
outperform in a
difficult increasing rate environment, but lag during any
significant drop in
rates. The quality of the Fund continues to remain high with 60%
of the bonds
we own being either AAA rated or pre-refunded in U.S. Treasury
obligations.
These characteristics make the Fund appropriate for taxable
investors seeking a
high quality, tax-exempt Oregon Bond Fund which currently has an
intermediate-term maturity.
For the fiscal year ended October 31, 1995, the Fund returned
10.66%, which
includes both income (federal and state tax-free) and the change in
the value
of the shares. This compares to the Lehman Bros. Municipal Bond
Index return
of 14.85%.
[GRAPH]
The Oregon municipal bond market continues to experience a
relatively quiet
period with light new issuance and modest demand from muni bond
buyers. While
the politically based discussions of a federal flat tax continue to
provide a
source of conversation and concern for some market participants, we
are not as
pessimistic (especially given current relative yields of 80% of
taxable
alternatives) about the future of the Oregon municipal market.
Once the
numbers are "crunched," political rhetoric will eventually return
to fiscal
reality.
<PAGE>
[PHOTO]
Richard S. Huson, CFA
Funds Managed:
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
[PHOTO]
John E. Maack, Jr., CFA
Funds Managed:
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
[PHOTO]
Marian L. Kessler
Funds Managed:
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
[PHOTO]
Robert E. Anton
Funds Managed:
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
The Crabbe Huson Asset Allocation Fund, Inc.
By its nature, this Fund will, at all times, contain some mix of
stocks, bonds,
and short-term reserves. As the portfolio manager, we will shift
this mix to
reflect our view of changing economic and market conditions.
However, this
Fund may not invest more than 75% of its assets in common stocks.
On the other
hand, it will usually not contain less that 20% in stocks.
On February 1, 1996, the adviser Crabbe Huson Group, Inc. will
remove the
annual expense limit of 1.50%. This is in order to allow the Fund
to take
advantage of certain expense reduction opportunities such as
directed
brokerage, and securities lending to directly offset Fund expenses.
We are
committed to continue reducing the overall expense ratio of the
Fund.
The Fund returned 13.0% for the fiscal year ended October 31, 1995.
This is
not as well as we would have liked, and we believe this was because
of three
factors. First, the equity portion of the Fund under-performed the
S&P 500.
For the year, the stock portion of the Fund was up about 20.7%
versus 26.4% for
the S&P. While we always hope to compare favorably to the market,
the sad fact
is that our contrarian approach does not work in all market
environments.
<PAGE>
Actually, we are not aware of any philosophy that masters all
market
circumstances; however in our case, a sharply rising stock market
has tended to
be the most difficult for our style. Fortunately, this kind of
environment is
not the norm.
The second reason we see for the portfolio lagging the market was
our
conservative bond policy. The rapidity and magnitude of the long-
term
interest rate decline surprised us. And, while we owned some
longer maturity
bonds, in retrospect we should have owned considerably more.
The final reason we would cite is our asset allocation mix. While
correct in
terms of direction, it was far too conservative for the environment
that
actually developed.
[GRAPH]
During the course of the fiscal year, the Fund's mix followed the
approximate
pattern below:
<TABLE>
<CAPTION>
Fixed Income Common and
(Bonds) Preferred Stock Reserves
<S> <C> <C> <C>
10/31/94 36.2% 47.8% 16.0%
01/31/95 35.9% 53.7% 10.4%
04/30/95 34.8% 44.5% 20.7%
10/31/95 50.5% 46.5% 3.0%
</TABLE>
For most of the year we owned more stocks than bonds. This was
good. Stocks
out-performed bonds over the year. Beginning around the third
quarter we began
to increase the bond weighting in the portfolio. This reflected
our thinking
that, while both stocks and bonds had return possibilities greater
than
reserves, bonds would have provided us with nearly as much return
as stocks
with perhaps less risk. Currently, bonds comprise about 50% of the
Fund's
investments. Also, anticipating a further decrease in interest
rates, more
bonds of longer maturities were purchased. The average maturity of
the bond
portion of the portfolio at the close of the fiscal-year was about
13 years.
We are optimistic that our current asset allocation strategy will
work better
for us in 1996. We do not expect the stock market to be as strong
in the
coming year; and if any setbacks occur, the higher bond weighting
may provide
us with some price cushion. And, while we do not plan it over the
short run,
we may once again become somewhat more cautious in the bond portion
of the
portfolio as the year progresses.
<PAGE>
The Crabbe Huson Equity Fund, Inc.
This Fund may have up to 100% of its assets invested in stocks. We
seek to
provide shareholders with potential long-term capital appreciation
by investing
in a diversified portfolio of medium to large companies. As in all
of our
portfolios with stocks, the hallmark of our approach to investing
is our
contrarian style covered earlier in this report. While our bias in
this Fund
is towards a significant position in stocks, we may from
time-to-time invest up
to 35% of the assets in reserves. Because most of this Fund's
assets will be
in equities, we put it farther out on the risk spectrum than our
Funds that
contain bonds.
On February 1, 1996, the adviser Crabbe Huson Group, Inc. will
remove the
annual expense limit of 1.50%. This is in order to allow the Fund
to take
advantage of certain expense reduction opportunities such as
directed
brokerage, and securities lending to directly offset Fund expenses.
We are
committed to continue reducing the overall expense ratio of the
Fund.
The final quarter of fiscal 1995 was a difficult one for The Equity
Fund, with
returns falling 2.63% versus the S&P's rise of 4.06%. For the
fiscal year
ended October 31, 1995, the Fund rose 13.37%--an acceptable return
on an
absolute basis; but clearly lagging the market index, the S&P 500,
appreciation
of 26.43%. Our contrarian approach to investing proved problematic
this year
as we aggressively sold into market sectors whose momentum carried
them into
what we believed were excessive valuations. The problem is that
momentum often
carries certain sectors into uncharted territory as liquidity
accelerates and
as mutual fund managers indulge in a little window dressing to
preserve
quarterly or annual performance. In the first nine months of the
fiscal year,
these sectors (most notably technology and financial stocks)
continued their
upward trend as investors sought a safe haven from a seemingly
slowing domestic
economy, deflationary pricing, and political turmoil regarding a
balanced
budget. The last three months of the year followed the same
pattern but with a
rotation into traditional growth stocks in the final quarter.
Most of the stocks that we determined fit our contrarian style, and
we believed
were values, languished in the final months of the year. However,
as we look
forward, the prospects for these (in many cases is cyclical
companies) appear
to be quite good.
[GRAPH]
One of the reasons for the Fund lagging the averages was the amount
of cash the
portfolio held during the year. The average cash reserves were
about 18%, and
in a sharply rising market this tends to lower results. Going into
the year,
we were encouraged over the prospects for the stock market but two
elements
surprised us. The first surprise was the magnitude of the market's
rise. A
26.43% gain in the Standard & Poor's 500 index qualifies for most
years as
extraordinary performance. Even more surprising, however, was the
lack of any
significant setbacks along the way, and it is during such interim
declines that
we find a wider selection of attractive stocks in which to employ
our reserves.
<PAGE>
At year-end cash reserves, consisting of short term investments,
comprised
approximately 14% of the Fund. On balance, our outlook for the
stock market in
1996 continues to be a positive one. But, we don't believe the
market strength
in 1995 is likely to be repeated in 1996. There will remain
uncertainty in the
economy, interest rates will likely trend higher as the year
unfolds, and
corporate profits will not likely be up the estimated 21% gain they
experienced
in 1995. These factors will likely temper stock market results,
and they may
lead to a few setbacks where we may choose to employ our reserves
at more
optimistic prices.
[PHOTO] [PHOTO}
James E. Crabbe John W. Johnson
Fund Managed: Fund Managed:
The Crabbe Huson Special Fund, Inc. The Crabbe Huson Special
Fund, Inc.
The Crabbe Huson Special Fund, Inc.
This Fund invests, for the most part, in stocks of
small- to medium-size companies. Stocks of these companies are
generally more
volatile, but we believe provide attractive potential long-term
returns. This
Fund may invest up to 100% of its assets in stocks. Because of
these factors,
we view it as having the greatest degree of potential risk and, we
hope,
long-term returns as well.
On February 1, 1996, the adviser Crabbe Huson Group, Inc. will
remove the
annual expense limit of 1.50%. This is in order to allow the Fund
to take
advantage of certain expense reduction opportunities such as
directed
brokerage, and securities lending to directly offset Fund expenses.
We are
committed to continue reducing the overall expense ratio of the
Fund.
After substantially outperforming all the broad based market
indices in fiscal
year 1994, the Special Fund's fiscal year ending October 31, 1995,
was not so
stellar relative to the same indices. The Fund was up 1.78% for
fiscal year
1995. This compares to 21.19% for the S & P Midcap 400 Index and
33.26% for
the NASDAQ/OTC Composite.
We would cite two distinct reasons for this under-performance. The
first was
our posture on the technology stocks; and the second was the
under-performance
of the stocks and industry groups that we invested in during the
course of the
fiscal year.
<PAGE>
After technology stocks had contributed to the Fund's performance
in fiscal
1994, we determined that many of them had reached their peak-- in
fact, we
believed they were over-priced (even giving full credit for the
highly
optimistic forecasts for 1995). Considering this over-valuation,
we decided to
take advantage of this phenomenon. We hedged the portfolio by
selling
short<F3> a number of these tech stocks believing that their prices
would
likely fall from their high levels. With hind-sight being 20/20,
it seems we
were a bit premature in our hedging strategy. Rather than
declining, the
technology stocks continued to advance during fiscal 1995. This
continued rise
resulted in losses for those stocks we had sold short. We have
reduced the
portfolio's short position from about 25% to about 15% of the
Fund's total net
assets. We continue to see this as a positive position for the
Fund, and we
believe the necessary changes in investor's attitudes that will
allow us to
recognize profits on these short position are on the horizon.
[GRAPH]
The market in general was not particularly conducive to contrarian
investing.
It's advance seemed to be earnings-driven in nature, and most
out-of-favor
stocks suffer from near-term earnings problems. During the year,
the
concentration of performance was in established growth companies,
technology
and banking groups. These companies had already experienced
substantial price
advances in the previous year and were not candidates for purchase
or retention
by a true contrarian. Rather than being carried along with the
strength of
these leading groups, the shares of those companies that were not
showing
near-term earnings momentum, by and large, did not participate in
the market
advance and were subjected to substantial institutional
liquidation. As the
Special Fund repositioned itself after a highly successful fiscal
1994, many of
these out-of-favor groups were bought by the Fund. These groups
included
retail, health care providers, and energy stocks.
While we are never pleased by under-performance, we believe we have
transitioned the Special Fund during fiscal 1995 to a position
where once again
we can enjoy the long-term benefits of investing in undervalued
securities. We
do not see the market moving substantially higher without
broadening to include
consumer related companies and other undervalued sectors. On the
other hand,
the technology stocks will be hard pressed to duplicate their
performance of
1995 and our short position could prove to be an effective hedge
against any
serious market correction.
<F3> Selling short is a hedging technique whereby stocks are
borrowed and then
sold at current market value to be subsequently purchased at a
lower price.
This would be done if it is believed that prices on the securities
are going to
decline. If they do decline, the securities would be purchased at
that lower
price resulting in a gain. If prices were to subsequently rise,
the security
would have to be purchased at the higher price resulting in a loss.
<PAGE>
[PHOTO]
Jay L. Willoughby, CFA
Aldrich, Eastman & Waltch, L.P.
Fund Managed:
The Crabbe Huson Real Estate Investment Fund, Inc.
The Crabbe Huson Real Estate Investment Fund, Inc.
This Fund is a diversified Fund that invests primarily in equity
securities of
real estate investment trusts (REITs) and other real estate
industry companies.
Under normal circumstances, at least 75% of the Fund will be
invested in such
shares. The goal of the Fund is to provide current income and
potential
capital appreciation to its shareholders. The Fund provides
investors the
ability to invest in large real estate companies and to diversify
their bond
and stock positions by adding this real estate option to their
holdings. The
guiding principals of our contrarian philosophy will be
incorporated into the
day-to-day management of this Fund just as they are incorporated
into our other
Funds.
<PAGE>
On September 6, 1995, the shareholders of The Crabbe Huson Real
Estate
Investment Fund approved a Sub-advisory Agreement among the
Adviser, the Real
Estate Investment Fund and Aldrich, Eastman & Waltch, L.P. ("AEW").
Pursuant
to the Sub-advisory Agreement, AEW will be responsible for the
day-to-day
investment management of the Real Estate Investment Fund, subject
to the
overall supervision of the Adviser and the Real Estate Investment
Fund's Board
of Directors.
In the long-run, we expect REIT stocks, and this Fund, will perform
in line
with real estate in general. However, they may both be more
sensitive to
interest rate movements and the direction of stock prices in the
short-run.
This may lead to greater share price volatility than would be
experienced in a
direct real estate investment.
The REIT market, as measured by the Morgan Stanley REIT Index,
performed about
as expected for the year ended October 31, 1995, gaining 10.88%.
The Crabbe
Huson Real Estate Investment Fund returned 8.31% The primary
reason for our
underperformance was our overweighted positions in the
higher-yielding slower
growing REITs in general and retail REITs in particular. The very
poor retail
environment, along with a couple of individual REIT company
announcements, have
combined to put significant downward pressure on this group of
stocks. In
spite of their price declines, the retail REITs have posted
earnings that are
generally in line with expectations.
[GRAPH]
As tax loss selling abates, we expect some of these stocks to
recover quickly.
We expect to pare back our exposure on this strength and shift a
greater
percentage of the portfolio into selected multifamily, industrial,
and self
storage REITs where the real estate fundamentals look stronger.
In absolute terms, we are reasonably pleased with performance of
REITs over the
last year. While some have found relative performance of REITs
quite
disappointing, in fact, we are more sanguine. We have maintained,
for some
time, the new REIT market (since 1992) would ultimately produce
returns that
were increasingly correlated with property markets, confounding
those who
believe they act like small- cap stocks. We understand that it
will take years
to bear out our assertion, but offer the following as an indication
of
short-term movements.
There are those who will say that REITs are correlated with stocks
on the
downside but just do not go up with them. We fundamentally
disagree (Chart 5).
Over the one, three, and five years periods ended September 30,
1995, non-
health care equity REITs as measured by NAREIT returned 10.25%,
12.00%, and
15.88% versus S&P 500 returns of 29.67%, 14.98%, and 17.24%. The
stock and
bond markets have been in a 14-year bull market with very few
interruptions.
The duration of the move has been extraordinary while the magnitude
has been
more normal. The bull market for these asset classes may not be
over, but it
is surely nearer the end than the beginning. A broad market
correction or
shift in sentiment could encourage some portfolio managers to seek
more
defensive stocks. Any resulting portfolio shift would likely
improve the
relative performance of REITs.
<PAGE>
On the other hand, the institutional commercial property markets
have been in a
bear market since about 1987. The inability of some of America's
finest real
estate companies to secure traditional financing in the early
1990's is in fact
what forced them into the public markets, very near the bottom of
the real
estate cycle. The gains in 1992 and 1993 reflected only the
initial recovery
stage in our opinion. With a new public market discipline now
being exerted on
the real estate markets, we think a longer upturn has begun. This
new
discipline will likely cause future real estate cycles to be longer
and less
volatile. The rewards will be shared by those who think critically
about the
demand for space and how best to maximize a property's cash flow.
Development
will be discouraged, except where warranted, as professional
managers are
forced to allocate scarce capital to projects with the most
attractive
long-term returns. Gone (at least for now) are the days 100%- plus
financing
for speculators.
[GRAPH]
The net results will be a longer period of more stable REIT returns
in our
opinion, averaging 10% to 12% per year, that are not highly
correlated with the
stock and bond markets. Current yields of about 8%, coupled with
trend growth
of 3% to 5%, should make REITs increasingly attractive to a growing
number of
investors. Gains over the last year are in line with our broader
expectations.
In this sense, we are pleased with the absolute returns generated
by REITs, and
look forward to what we believe will be an extended real estate
cycle.
We appreciate the opportunity to continue to participate in your
effort to
achieve your financial goals.
Sincerely,
/s/ Richard S. Huson
President
<PAGE>
THE OREGON MUNICIPAL BOND FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
FIXED INCOME SECURITIES - 98.3%
<S> <C>
<C>
PRE-REFUNDED BONDS - 18.7%*
$ 40,000 Multnomah County
School District #1
9.200% 12/15/95 ..........................
$ 40,255
1,000,000 Multnomah County
School District #1
9.300% 12/15/95 ..........................
1,006,490
295,000 Metropolitan Service District
5.750% 7/01/99 ...........................
314,912
270,000 Metropolitan Service District
6.600% 7/01/99 ...........................
295,987
250,000 Clackamas & Washington County
School District #003
7.200% 10/01/99 ..........................
275,937
200,000 Clackamas & Washington County
School District #003
7.250% 10/01/99 ..........................
221,000
400,000 Metropolitan Service District
7.000% 1/01/00 ...........................
446,000
353,000 Deschutes County (St.
Charles Medical Center)
6.750% 1/01/00 ...........................
390,947
100,000 Oregon State Department
General Services
7.200% 1/15/00 ...........................
112,500
150,000 Clackamas County School
District #12 6.500%
06/01/00 ..................................
163,312
310,000 Emerald Peoples Utility
District 6.300%
11/01/00 ..................................
339,450
125,000 Oregon Economic Development
Dept-Ser B 6.350%
1/01/01 ...................................
137,500
250,000 Washington County School District
# 48J 6.200% 9/01/01 ...................
272,187
250,000 Emerald Peoples Utility
District 6.500%
11/01/01 ..................................
276,563
270,000 Port of Morrow (Pollution
Control) 6.375%
04/01/02 ..................................
297,000
125,000 Marion & Polk County School
District #24J 5.700% 10/01/02 ............
133,438
225,000 Marion & Polk County
School District #24-J
6.000% 10/01/02 ..........................
244,125
250,000 Oregon State Revenue
Series B 6.250%
1/01/08 ...................................
273,750
5,241,353
INSURED BONDS - 43.8%
200,000 Jackson County School District
6.000% 6/01/01 (FSA) .....................
215,250
250,000 Clackamas County Hospital
Facility Revenue 5.800%
3/01/02 (MBIA) ............................
266,563
<CAPTION>
Face
Market
Value Securities Description
Value
<S> <C>
<C>
$ 1,000,000 Portland Hospital Facility
Legacy Health System
6.400% 5/01/02 (AMBAC) ................... $
1,105,000
200,000 Yamhill County
School District #29J
4.800% 6/01/02 (FSA) .....................
201,250
1,240,000 Hood River County Oregon
School District 6.000%
6/01/03 (AMBAC)............................
1,346,950
250,000 Emerald Peoples Utility
District 5.450%
11/01/03 (AMBAC)...........................
263,750
500,000 Deschutes/Jefferson County
School Dist. 5.300%
6/01/04 (MBIA).............................
519,375
260,000 Hood River County Oregon
School Dist. 6.000%
6/01/04 (AMBAC) ..........................
282,100
545,000 Jefferson County School District
#509J 6.500%
6/15/04 (FSA) ............................
609,038
400,000 University Puerto Rico Ser
5.100% 6/01/05 (MBIA).......................
406,500
350,000 Portland Oregon Sewer System
(Revenue) 5.750%
10/01/05 (FGIC) ..........................
377,125
500,000 Washington County Sewer System
(Revenue) 5.800%
10/01/05 (AMBAC) .........................
532,500
1,015,000 Crook County Oregon School
District 4.700%
2/01/06 (FSA)..............................
984,550
400,000 Oregon State Facility
Series A 6.100%
9/01/06 (AMBAC) ..........................
429,500
350,000 Washington County Sewer System
(Revenue) 5.900%
10/01/06 (AMBAC) .........................
373,625
1,065,000 McMinnville Sewer System
(Revenue) 4.700%
2/01/07 (FGIC) ...........................
1,043,700
335,000 Jackson County School District
5.200% 6/01/07 (FSA) .....................
340,025
1,000,000 Salem Keizer School
District #24-J 5.500%
6/01/07 (FGIC) ...........................
1,028,750
1,100,000 Multnomah County S.D. Park Rose
5.600% 12/01/07 (FGIC)....................
1,153,625
350,000 Portland Sewer System
6.000% 10/01/12 (FGIC)....................
366,188
500,000 McMinnville Sewer System
(Revenue) 5.000%
2/01/14 (FGIC) ..........................
472,500
12,317,864
CERTIFICATE OF PARTICIPATION BONDS - 1.0%
250,000 City of Portland
6.950% 04/01/99 ..........................
272,813
<FN>
*Dates reflect pre-refunded dates.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE OREGON MUNICIPAL BOND FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
STATE OF OREGON
<S> <C>
<C>
General Obligation - 9.4%
$ 240,000 State of Oregon G. O.
7.700% 03/01/02...........................
$ 253,800
100,000 State of Oregon G. O.
9.000% 04/01/03 .........................
126,750
205,000 State of Oregon G.O.
8.200% 07/01/04...........................
254,969
150,000 State of Oregon G.O.
7.200% 07/01/04...........................
176,250
110,000 State of Oregon G.O.
6.000% 08/01/04...........................
119,625
200,000 State of Oregon G. O.
9.000% 10/01/04 ..........................
230,500
345,000 State of Oregon G.O.
6.750% 05/01/05...........................
395,025
250,000 State of Oregon G. O.
(Veterans) 7.250% 07/01/06 ................
299,063
200,000 State of Oregon G. O.
(Veterans) 8.250% 01/01/07 ................
254,000
200,000 State of Oregon G. O.
(Veterans) 7.250% 01/01/07 ...............
239,750
100,000 State of Oregon G.O. (Alt Energy)
6.400% 01/01/08 ..........................
106,125
130,000 State of Oregon G.O.
9.200% 04/01/08 ..........................
178,588
2,634,445
Revenue Bonds - 2.7%
545,000 Oregon State Light Rail
7.000% 06/01/04 ..........................
627,431
125,000 Oregon State Fair & Expo
Revenue 7.375% 10/01/06 ...................
128,154
755,585
OTHER BONDS
General Obligation - 12.7%
225,000 City of Portland Water G.O.
3.700% 12/01/00 ..........................
230,062
330,000 Puerto Rico G.O.
7.125% 07/01/02 ..........................
350,625
445,000 Washington & Clackamas School
District 5.250% 6/01/03 ..................
460,019
300,000 Deschutes G.O. School
District #1 5.800% 02/01/04 ..............
316,875
400,000 Washington & Clackamas School
District 5.250 6/01/05 ..................
407,000
200,000 Clackamas Community College
5.100% 12/01/05 ...........................
203,750
1,000,000 Tri-Met Light Rail
5.900% 07/01/06 ..........................
1,053,750
300,000 Salem Oregon Series A
5.875% 1/01/07 ...........................
310,875
230,000 Lane County Area Education District
4.850% 6/01/08 ...........................
224,825
3,557,781
<CAPTION>
Face
Market
Value Securities Description
Value
<S> <C>
<C>
Other Revenue Bonds - 10.0%
$ 200,000 City of Portland (Hydro Electric
Power) 6.500% 10/01/97 ....................
$ 201,780
335,000 Central Lincoln PUD
6.500% 01/01/02 ..........................
367,662
600,000 Clackamas County Hospital (Sisters
of Providence) 6.200% 10/01/02 ............
646,500
350,000 City of Portland (Urban Renewal)
5.700% 06/01/04 ..........................
370,125
420,000 Multnomah County School District
5.000% 3/01/07 ...........................
417,375
765,000 Salem Educational Facility (Revenue)
6.000% 04/01/10 ...........................
797,512
2,800,954
Total Investments - 98.3%
27,580,795
(Cost $26,215,041)**
Other Assets and (Liabilities), Net - 1.7%
489,576
TOTAL NET ASSETS - 100.0% $
28,070,371
<FN>
**Aggregate cost for Federal income tax purposes is identical.
</FN>
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
Portfolio Allocation Table:
<S> <C>
Education.................................... 43.7%
General Obligation........................... 10.6
General Services............................. 8.2
Hospital..................................... 8.7
Public Utility............................... 5.2
Transportation............................... 6.0
Economic Development......................... 3.8
Water & Sewer................................ 12.1
Total Investments............................ 98.3%
</TABLE>
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Market
Shares Securities Description
Value
<S> <C>
<C>
CONVERTIBLE PREFERRED - 0.5%
50,000 Olympic Financial Ltd .......................
$ 4,237,500
COMMON STOCK - 74.5%
CONSUMER CYCLICALS
Automotive - 0.5%
91,800 Exide Corp ..................................
4,027,725
Consumer Products - 2.9%
783,100 * General Instrument Corp......................
14,878,900
745,500 Juno Lighting, Inc ..........................
10,809,750
25,688,650
Retail - 7.6%
1,275,600 * Ann Taylor ..................................
14,031,600
1,536,900 * Bombay Co, Inc ..............................
9,029,288
1,122,100 * Burlington Coat Factory .....................
12,483,363
753,100 Cato Corp CL A ..............................
4,612,738
1,496,000 Phillips-Van Heusen .........................
15,147,000
631,600 Ross Stores, Inc ............................
9,908,225
220,700 * Sports & Recreation Inc .....................
1,627,663
66,839,877
CONSUMER STAPLES - 5.0%
771,900 * Fred Meyer Inc ..............................
14,376,638
679,200 Hudson Foods Inc CL A .......................
9,593,700
592,400 * Paragon Trade Brands, Inc ...................
9,404,350
1,870,400 * Payless Cashways, Inc .......................
10,754,800
44,129,488
BASIC MATERIALS & INDUSTRIAL
Building Materials -1.4%
164,900 Fleetwood Enterprises .......................
3,380,450
1,393,900 Morrison Knudsen Corp .......................
9,060,350
12,440,800
Chemicals -1.1%
781,200 Crompton & Knowles Corp ...................
9,862,650
Equipment & Machinery - 3.4%
810,800 Giddings & Lewis, Inc .......................
13,074,150
1,341,500 MK Rail Corp ................................
9,558,188
213,500 Stewart & Stevenson Serv ....................
4,857,125
89,800 Wabash National Corp ........................
2,278,675
29,768,138
Forest Products & Packaging - 1.9%
783,900 Longview Fibre Co ...........................
11,366,550
332,800 TJ International, Inc .......................
5,761,600
17,128,150
Metals & Mining - 5.0%
791,600 Battle Mountain Gold ........................
6,035,950
504,600 Huntco, Inc .................................
6,559,800
817,500 Oregon Steel Mills Inc ......................
11,649,375
182,200 * Pegasus Gold Inc ............................
2,004,200
1,757,500 Sante Fe Pacific Gold Co ....................
17,355,313
43,604,638
Pollution Control - 2.0%
5,167,800 * Rollins Environmental Services ..............
17,441,325
ENERGY - 5.5%
189,600 Anadarko Petroleum Corp .....................
8,223,900
98,400 Asarco, Inc .................................
3,173,400
18,300 Devon Energy Corp ...........................
398,025
<CAPTION>
Market
Shares Securities Description
Value
<S> <C>
<C>
ENERGY - (continued)
916,900 * Forcenergy Gas Exploration ..................
$ 8,939,775
589,500 Holly Corp ..................................
12,821,625
432,500 * Oryx Energy Corp ............................
4,973,750
983,400 Snyder Oil Corp .............................
10,079,850
48,610,325
FINANCIAL - 8.4%
347,000 American Financial Group Inc.................
9,716,000
544,200 * Citation Insurance Group ....................
2,414,888
795,000 John Alden Financial Corp....................
16,496,250
112,600 * Olympic Financial Ltd .......................
2,054,950
620,700 * Risk Capital Holdings Inc ...................
13,655,400
739,300 * 20th Century Industries .....................
12,290,863
581,900 * Zurich Reinsurance Centre ...................
16,729,625
73,357,976
HEALTHCARE - 12.7%
288,100 * Cor Therapeutices ...........................
2,989,038
1,452,800 * Coventry Corp ...............................
28,511,200
330,500 * Grancare Inc ................................
4,833,563
291,700 Grupo Casa Autrey - ADR .....................
3,719,175
918,100 Integrated Health Services ..................
21,001,538
756,500 * Perrigo Co ..................................
9,267,125
252,400 * Scherer R.P. Corp ...........................
11,231,800
720,800 * Sofamor Danek Group, Inc ....................
17,659,600
1,073,100 * Sun Healthcare Group, Inc ....... ...........
12,743,063
111,956,102
REAL ESTATE INVESTMENT TRUST - 2.9%
1,626,600 * Catellus Development Corp ...................
8,946,300
317,700 Crown American Realty .......................
2,422,463
629,600 Prime Residential, Inc ......................
11,018,000
217,000 Prime Retail, Inc ...........................
2,631,125
25,017,888
TECHNOLOGY - 5.1%
1,014,800 * 3D0 Co ......................................
10,909,100
1,108,800 * Cray Research ...............................
23,007,600
1,271,700 * Zenith Electronics Corp .....................
10,650,480
44,567,180
TRANSPORTATION - 9.1%
1,154,300 Airborne Freight Corp .......................
30,300,375
906,600 * Alaska Air Group ............................
13,485,675
268,600 Hunt (JB) Transportation Serv ...............
4,163,300
698,500 * Landstar System Inc .........................
18,335,625
308,900 Teekay Shipping Corp ........................
7,181,925
115,900 TNT Freightways Corp ........................
2,086,200
359,900 Yellow Corp .................................
4,723,688
80,276,788
Total Common Stocks
654,717,700
OPTIONS - 2.5%
Put Options
70,000 Cypress Semiconductor Corp
@ 45, expiring 12/15/95 .....................
691,250
14,269,400 Morgan Stanley High Tech Index
@ 350, expiring 6/21/96 .....................
4,913,240
15,804,800 Morgan Stanley High Tech Index
@ 316, expiring 6/21/96 .....................
2,985,527
15,384,615 Morgan Stanley High Tech Index
@ 325, expiring 6/21/96 .....................
3,380,000
45,839,300 Morgan Stanley High Tech Index
@ 327, expiring 6/21/96 .....................
10,483,448
22,453,465
<FN>
*Non-income producing
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Shares
or Face
Market
Value Securities Description
Value
SHORT-TERM INVESTMENTS - 9.8% **
<S> <C>
<C>
Treasury Bills -1.3%
U.S. Treasury Bill
$ 5,000,000 5.270% 11/24/95 ...........................
$ 4,983,148
4,000,000 5.160% 12/21/95 ...........................
3,971,333
2,285,000 5.260% 10/17/96 ...........................
2,167,460
11,121,941
Discount Notes - 8.5%
Federal Farm Credit
3,000,000 5.480% 12/15/95 ...........................
2,979,907
3,500,000 5.500% 12/22/95 ...........................
3,472,729
865,000 5.520% 12/07/95 ...........................
860,225
500,000 5.530% 11/28/95 ...........................
497,926
1,000,000 5.550% 11/03/95 ...........................
999,692
4,010,000 5.560% 11/09/95 - 1/04/96 .................
3,984,053
8,660,000 5.570% 11/27/95 - 1/04/96 .................
8,615,496
1,000,000 5.590% 11/17/95 ...........................
997,516
305,000 5.610% 11/13/95 ...........................
304,430
Federal Home Loan
2,000,000 5.470% 1/22/96 ............................
1,975,081
1,590,000 5.480% 12/28/95 ...........................
1,576,204
4,000,000 5.490% 1/30/96 ............................
3,945,100
3,500,000 5.500% 12/29/95 ...........................
3,468,986
3,250,000 5.520% 12/08/95 - 12/13/95 ................
3,230,028
3,155,000 5.540% 11/24/95 - 12/18/95 ................
3,141,414
7,000,000 5.550% 1/02/96 - 1/3/96 ...................
6,932,552
11,450,000 5.560% 11/07/95 - 1/25/96 .................
11,347,657
6,000,000 5.570% 11/06/95 - 1/10/96 .................
5,945,460
4,445,000 5.580% 1/05/96 - 1/08/96...................
4,399,585
1,500,000 5.590% 11/13/95 ...........................
1,497,205
4,465,000 5.620% 11/01/95 - 11/15/95.................
4,463,984
74,635,230
Total Short-Term Investments
85,757,171
Total Investments -87.3%
767,165,836
(Cost 789,902,314)***
Cash - 0.2%
2,028,004
SECURITIES SOLD SHORT - (15.1%)
COMMON STOCKS
Computers - 3.6%
180,700 Computer Associates Intl, Inc ...............
(9,938,500)
107,700 Micro Warehouse Inc .........................
(4,792,650)
222,500 Sun Microsystems, Inc .......................
(17,355,000)
(32,086,150)
</TABLE>
<TABLE>
<CAPTION>
Market
Shares Securities Description
Value
<S> <C>
<C>
Semiconductors - 4.3%
408,150 Alliance Semiconductor ......................
($12,550,611)
410,100 Cypress Semiconductor .......................
(14,456,025)
96,200 Microchip Technology Inc ....................
(3,817,938)
100,000 Micron Technology ...........................
(7,062,500)
(37,887,074)
Software - 7.2%
150,000 Adobe Systems, Inc ..........................
(8,550,000)
93,200 Broderbund Software .........................
(6,465,750)
431,900 Gartner Group Inc CL A ......................
(18,841,638)
854,000 Tellabs, Inc ................................
(29,036,000)
(62,893,388)
Total Securities Sold Short - (15.1%)
(132,866,612)
(Proceeds $116,397,420)****
Other Assets and (Liabilities), Net - 27.6%
242,232,606
TOTAL NET ASSETS - 100.0%
$ 878,559,834
<FN>
**Rates reflect purchase yield to maturity.
***Aggregate cost for Federal income tax purposes is $790,872,568.
****Aggregate proceeds for Federal income tax purposes is
$119,775,124.
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON ASSET ALLOCATION FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
<S> <C>
<C>
FIXED INCOME SECURITIES - 50.2%
GOVERNMENT BONDS - 33.2%
$ 10,765,000 U.S. Treasury Note
6.000% 8/31/97 .................................
$ 10,834,218
7,465,000 U.S. Treasury Note
6.250% 8/31/00 .................................
7,615,046
3,870,000 U.S. Treasury Note
6.500% 8/15/05 .................................
4,005,837
21,300,000 U.S. Treasury Bond
6.875% 8/15/25 .................................
22,861,290
45,316,391
CORPORATE BONDS - 7.4%
600,000 Baxter International
7.500% 5/01/97 .................................
612,000
500,000 GMAC
8.000% 10/01/99 ................................
527,500
550,000 Upjohn Co
5.875% 4/15/00 .................................
539,687
550,000 Pepsico, Inc
5.875% 6/01/00 .................................
543,812
400,000 American Express Credit
6.500% 8/01/00 .................................
404,500
700,000 Ford Motor Credit
6.250% 11/08/00 ................................
696,500
725,000 GMAC
9.000% 10/15/02 ................................
815,625
550,000 IBM Corp
7.250% 11/01/02 ................................
576,812
550,000 Tennessee Valley Authority
6.125% 7/15/03 .................................
540,375
550,000 JP Morgan & Company
7.625% 9/15/04 .................................
585,062
550,000 Pacific Bell
6.250% 3/01/05 .................................
539,687
550,000 Anheuser Busch
7.000% 9/01/05 .................................
566,500
550,000 Bear Stearns Co.
6.875% 10/01/05 ...............................
549,312
600,000 Snap-on, Inc
6.625% 10/01/05 ................................
609,000
600,000 Wal-Mart Stores
8.000% 9/15/06 .................................
672,000
550,000 Eli Lilly
8.375% 12/01/06 ................................
633,187
600,000 AT&T Corp
7.750 3/01/07 ..................................
653,250
AGENCIES - 5.6%
420,000 International Bank Recon.
& Dev. Floater 5.890%**
8/07/97 ........................................
378,415
1,400,000 Federal Home Loan Bank
8.220% 12/22/97 ...............................
1,403,430
1,500,000 SLMA Treasury Ind. Floater
(10-Year Treasury - 180 BP)
4.680% 2/11/98 ................................
1,470,000
<CAPTION>
Shares
or Face
Market
Value Securities Description
Value
<S> <C>
<C>
$ 900,000 Federal National Mortgage Association
6.080% 9/25/00..................................
$ 902,205
1,200,000 Federal National Mortgage Association
8.25% 12/18/00..................................
1,314,960
1,000,000 Federal Home Loan Bank
7.590% 3/10/05 .................................
1,088,060
1,000,000 Federal National Mortgage Association
7.375% 3/28/05 .................................
1,071,160
FHLMC - 2.9%
109,807 FHLMC Pool #281037
9.250% 11/01/16 ................................
114,007
1,067,640 FHLMC Pool #303033
9.000% 4/01/17 .................................
1,103,480
1,400,000 FHLMC Pool #TBA
7.000% 10/01/25 ................................
1,388,406
1,400,000 FHLMC Pool #TBA
7.500% 10/01/25 ................................
1,415,093
4,020,986
CMO - 1.1%
1,645,000 GCA GNMA 1993 - PO 1 - B
1,515,970
Total Fixed Income Securities
68,546,386
CONVERTIBLE PREFERRED - 0.8%
20,000 Delta Air Lines ..................................
1,107,500
COMMON STOCK - 45.3%
CONSUMER CYCLICALS
Automotive - 1.5%
47,300 General Motors Corp ..............................
2,069,375
Consumer Products - 2.2%
23,200 Bausch & Lomb, Inc ...............................
803,300
29,300 Brunswick Corp ...................................
571,350
5,500 Quaker Oats ......................................
187,687
15,000 Rubbermaid, Inc ..................................
391,875
72,800 Sunbeam Corporation ..............................
1,092,000
3,046,212
Retail - 3.4%
8,500 Dayton-Hudson ....................................
584,375
27,600 Limited, Inc .....................................
507,150
41,400 Liz Claiborne, Inc ...............................
1,174,725
68,300 * Price/Costco, Inc ................................
1,161,100
34,500 Wal-Mart Stores, Inc .............................
746,062
34,100 Woolworth Corp ...................................
498,712
4,672,124
BASIC MATERIALS AND INDUSTRIAL
Building Materials - 2.1%
100,000 * USG Corp .........................................
2,912,500
Chemicals -0.2%
34,600 * Uniroyal Chemical Corp ...........................
263,825
Equipment & Machinery - 0.4%
27,100 * Detroit Diesel Corp ..............................
481,025
<FN>
*Non-income producing
**Zero-coupon bonds- rates reflect purchase yield to maturity.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON ASSET ALLOCATION FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Market
Shares Securities Description
Value
COMMON STOCK - (continued)
<S> <C>
<C>
BASIC MATERIALS AND INDUSTRIAL - (continued)
Forest Products & Packaging - 2.3%
56,100 * Domtar, Inc ......................................
$ 511,912
111,400 Louisiana Pacific Corp ...........................
2,659,675
3,171,587
Metals & Mining - 4.1%
107,200 * Bethlehem Steel Corp .............................
1,407,000
79,000 J & L Specialty Steel ............................
1,293,625
135,600 * National Steel Corp - Class B ....................
1,796,700
22,800 Nucor Corp .......................................
1,097,250
5,594,575
ENERGY - 7.1%
35,000 Apache Corp ......................................
$892,500
55,900 Burlington Resources, Inc ........................
2,012,400
62,600 Dresser Industries ...............................
1,298,950
52,100 Enserch Corp .....................................
755,450
84,400 * Enserch Exploration ..............................
833,450
63,300 Occidental Petroleum Corp ........................
1,360,950
25,300 Tenneco, Inc .....................................
1,110,037
24,300 Union Texas Petro Hldgs ..........................
437,400
35,300 Unocal Corp ......................................
926,625
9,627,762
FINANCIAL - 6.4%
56,700 Ahmanson (H.F.) & Co .............................
1,417,500
48,220 Bear Stearns Cos, Inc ............................
958,372
119,500 Equitable Companies ..............................
2,539,375
4,300 * Prudential Reinsurance Hlds ......................
87,612
34,600 Salomon, Inc .....................................
1,249,925
68 * Transport Holdings ...............................
2,669
13,700 Travelers, Inc ...................................
691,850
58,900 U.S. Bancorp .....................................
1,744,929
8,692,232
HEALTHCARE - 2.7%
30,500 Allergan, Inc ....................................
895,937
14,700 * Apria Healthcare Group ...........................
317,887
66,700 * Humana, Inc ......................................
1,409,037
27,600 U S Healthcare ...................................
1,062,600
3,685,461
REAL ESTATE INVESTMENT TRUST - 2.0%
52,100 Debartolo Realty Corp ............................
677,300
38,200 First Industrial Realty Trust ....................
778,325
53,400 Spieker Properties ...............................
1,294,950
2,750,575
TECHNOLOGY - 1.1%
36,400 * Tandem Computers, Inc ............................
409,500
43,100 * Unisys Corp ......................................
242,437
89,900 * Zenith Electronics ...............................
752,912
1,404,849
TELECOMMUNICATIONS - 4.0%
21,800 AT&T Corp ........................................
1,395,200
65,500 Comcast Corp Special Class A .....................
1,170,812
51,703 * Cox Communications, Inc Class A ..................
969,431
22,500 Time Warner, Inc .................................
821,250
80,700 Westinghouse Electric ............................
1,139,887
5,496,580
<CAPTION>
Shares
or Face
Market
Value Securities Description
Value
<S> <C>
<C>
TRANSPORTATION - 5.8%
23,800 * AMR Corp .........................................
$ 1,570,800
13,800 Burlington Northern Santa Fe .....................
1,157,475
79,800 Consolidated Freightways .........................
1,855,350
23,000 Delta Air Lines, Inc .............................
1,509,375
38,900 Ryder System .....................................
938,462
40,707 * Southern Pacific Rail Corp .......................
905,730
7,937,192
Total Common Stocks
61,805,874
SHORT-TERM INVESTMENTS - 0.7%
TREASURY BILLS - 0.7%
1,000,000 U.S. Treasury Bill
5.070% 10/17/96 ................................
948,560
Total Investments - 97.0%
132,408,320
(Cost $127,582,027)***
Cash - 4.6%
6,303,890
Other Assets and (Liabilities), Net - (1.6%)
(2,182,153)
TOTAL NET ASSETS - 100.0%
$ 136,530,057
<FN>
*Non-income producing
***Aggregate cost for Federal income tax purposes is $127,567,346.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Market
Shares Securities Description
Value
COMMON STOCK - 84.0%
<S> <C>
<C>
CONSUMER CYCLICALS
Automotive - 2.7%
240,800 General Motors Corp .........................
$ 10,535,000
Consumer Products - 4.2%
138,900 Bausch & Lomb, Inc ..........................
4,809,413
135,300 Brunswick Corp ..............................
2,638,350
33,700 Quaker Oats .................................
1,150,012
81,900 Rubbermaid, Inc .............................
2,139,637
375,500 Sunbeam Corp ................................
5,632,500
16,369,912
Retail - 6.5%
42,700 Dayton-Hudson Corp ..........................
2,935,625
141,500 Limited, Inc ................................
2,600,063
239,000 Liz Claiborne, Inc ..........................
6,781,625
334,400 * Price/Costco, Inc ...........................
5,684,800
205,200 Wal-Mart Stores, Inc ........................
4,437,450
190,100 Woolworth Corp ..............................
2,780,212
25,219,775
BASIC MATERIALS AND INDUSTRIAL
Building Materials - 3.9%
523,200 * USG Corp ....................................
15,238,200
Chemicals - 0.3%
170,000 * Uniroyal Chemical Corp ......................
1,296,250
Equipment & Machinery - 0.7%
142,600 * Detroit Diesel Corp .........................
2,531,150
Forest Products & Packaging - 4.2%
288,900 * Domtar, Inc .................................
2,636,212
562,200 Louisiana Pacific Corp ......................
13,422,525
16,058,737
Metals & Mining - 7.5%
570,500 * Bethlehem Steel Corp ........................
7,487,812
403,700 J & L Specialty Steel .......................
6,610,587
660,400 * National Steel Corp - Class B ...............
8,750,300
128,400 Nucor Corp ..................................
6,179,250
29,027,949
ENERGY - 13.8%
207,200 Apache Corp .................................
5,283,600
282,600 Burlington Resources, Inc ...................
10,173,600
344,500 Dresser Industries, Inc .....................
7,148,375
282,100 Enserch Corp ................................
4,090,450
472,400 * Enserch Exploration .........................
4,664,950
354,900 Occidental Petroleum Corp ...................
7,630,350
147,700 Tenneco Inc .................................
6,480,339
151,000 Union Texas Petro Hldgs Inc .................
2,718,000
198,200 Unocal Corp .................................
5,202,750
53,392,414
FINANCIAL - 12.2%
337,200 Ahmanson (H.F.) & Co ........................
8,430,000
294,275 Bear Stearns Cos, Inc .......................
5,848,715
605,900 Equitable Companies .........................
12,875,375
24,500 * Prudential Reinsurance Hlds .................
499,187
195,100 Salomon, Inc ................................
7,047,987
327 * Transport Holdings ..........................
12,834
<CAPTION>
Shares
or Face
Market
Value Securities Description
Value
<S> <C> <C>
FINANCIAL - (continued)
65,500 Travelers, Inc .............................. $
3,307,750
311,400 U.S. Bancorp ................................
9,225,225
47,247,073
HEALTHCARE - 4.8%
151,100 Allergan, Inc ...............................
4,438,563
77,000 * Apria Healthcare Group ......................
1,665,125
330,900 * Humana, Inc .................................
6,990,263
142,500 U S Healthcare ..............................
5,486,250
18,580,201
REAL ESTATE INVESTMENT TRUST - 3.5%
255,900 DeBartolo Realty Corp .......................
3,326,700
149,300 First Industrial Realty Trust ...............
3,041,989
294,300 Spieker Properties ..........................
7,136,775
13,505,464
TECHNOLOGY- 1.7%
209,600 * Tandem Computers, Inc .......................
2,358,000
216,500 * Unisys Corp .................................
1,217,812
369,100 * Zenith Electronics Corp .....................
3,091,212
6,667,024
TELECOMMUNICATIONS - 7.6%
123,000 AT&T Corp ...................................
7,872,000
363,600 Comcast Corp Special Class A ................
6,499,350
264,219 * Cox Communications, Inc Class A .............
4,954,110
117,100 Time Warner, Inc ............................
4,274,150
406,800 Westinghouse Electric Corp ..................
5,746,050
29,345,660
TRANSPORTATION - 9.6%
122,500 * AMR Corp ....................................
8,085,000
69,500 Burlington Northern RR, Inc .................
5,829,312
413,100 Consolidated Freightways ....................
9,604,575
59,000 Delta Air Lines, Inc ........................
3,871,875
193,000 Ryder System ................................
4,656,125
223,610 * Southern Pacific Rail Corp ..................
4,975,322
37,022,209
UTILITIES - 0.8%
94,700 BCE Inc .....................................
3,184,289
Total Common Stocks
325,221,307
CONVERTIBLE PREFERRED - 1.3%
92,100 Delta Air Lines .............................
5,100,037
SHORT TERM INVESTMENTS** - 14.4%
Treasury Bills & Notes - 2.3%
U. S. Treasury Note
$ 2,500,000 5.125% 11/15/95 ...........................
$ 2,499,550
5,915,000 5.260% 10/17/96 ...........................
5,610,732
1,000,000 5.330% 12/07/95 ...........................
994,665
9,104,947
Discount Notes - 12.1%
Federal Farm Credit
600,000 5.510% 12/04/95 .............................
596,970
900,000 5.520% 11/28/95 .............................
896,274
415,000 5.530% 11/28/95 .............................
413,279
490,000 5.540% 12/20/95 .............................
486,305
500,000 5.500% 12/22/95 .............................
496,104
100,000 5.560% 11/03/95 .............................
99,969
7,945,000 5.570% 11/01/95 - 12/07/95...................
7,912,672
<FN>
*Non-income producing
**Rates reflect purchase yield to maturity.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
Discount Notes - (continued)
<S> <C>
<C>
Federal Home Loan
$ 1,250,000 5.420% 2/16/96 ..............................
$ 1,229,865
250,000 5.430% 2/20/96 ..............................
245,814
700,000 5.450% 1/22/96 ..............................
691,310
250,000 5.470% 1/22/96 ..............................
246,885
1,950,000 5.480% 12/28/95 - 1/17/96 ...................
1,928,361
1,000,000 5.490% 1/16/96 ..............................
988,410
985,000 5.500% 12/29/95 - 1/10/96 ...................
975,016
675,000 5.520% 12/13/95 .............................
670,653
480,000 5.530% 12/05/95 .............................
477,493
3,645,000 5.540% 11/24/95 - 12/19/95 ..................
3,624,808
7,075,000 5.550% 11/02/95 - 1/29/96 ...................
7,514,523
5,695,000 5.560% 11/02/95 - 1/29/96 ...................
5,668,512
5,470,000 5.570% 11/06/95 - 1/30/96 ...................
6,419,637
500,000 5.580% 1/08/96 ..............................
494,730
2,035,000 5.590% 11/13/95 - 1/09/96 ...................
2,018,367
1,000,000 5.620% 11/15/95 .............................
997,814
1,600,000 5.630% 11/21/95 .............................
1,594,996
46,688,767
Total Short Term Investments
55,793,714
Total Investments - 99.7%
386,115,058
(Cost $371,004,735)***
Cash - 1.1%
4,226,599
Other Assets and (Liabilities), Net - 0.8%
(3,157,577)
TOTAL NET ASSETS - 100.0%
$ 387,184,080
<FN>
***Aggregate cost for Federal income tax purposes is $371,627,627.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON INCOME FUND, INC.
SCHEDULE OF INVESTMENTS
October, 31 1995
<TABLE>
<CAPTION>
Face Market
Value Securities Description Value
<S> <C> <C>
FIXED INCOME SECURITIES - 97.1%
GOVERNMENT BONDS - 52.6%
$ 1,000,000 U.S. Treasury Note 6.000%
8/31/97 ............... $ 1,006,430
1,000,000 U.S. Treasury Bond 7.625%
2/15/25 ............... 1,160,390
1,500,000 U.S. Treasury Bond 6.875%
8/15/25 ............... 1,609,950
3,776,770
CORPORATE BONDS - 20.2%
100,000 Baxter International
7.500% 5/01/97 ........ 102,000
100,000 GMAC
8.000% 10/01/99 ...... 105,500
100,000 Upjohn Company
5.875% 4/15/00 ........ 98,125
100,000 Pepsico, Inc
5.875% 6/01/00 ........ 98,875
100,000 American Express Credit
6.500% 8/01/00 ........ 101,125
100,000 IBM Corp
7.250% 11/01/02 ....... 104,875
100,000 JP Morgan & Company
7.625% 9/15/04 ........ 106,375
100,000 Pacific Bell
6.250% 3/01/05 ........ 98,125
100,000 Anheuser Busch
7.000% 9/01/05 ........ 103,000
100,000 Bear Stearns Co
6.875% 10/01/05 ...... 99,875
100,000 Snap-on, Inc
6.625% 10/01/05 ....... 101,500
100,000 Wal-Mart Stores
8.000% 9/15/06 ........ 112,000
100,000 Eli Lilly
8.375% 12/01/06 ....... 115,125
100,000 AT&T Corp
7.750% 3/01/07 ....... 108,875
1,455,375
INSURED BONDS - 2.2%
160,000 City of Lincoln Oregon
5.800% 6/01/97
(AMBAC) ................ 160,000
<CAPTION>
Face Market
Value Securities Description Value
<S> <C> <C>
AGENCIES - 22.1%
$ 320,000 International Bank Recon &
Dev Floater 6.170%*
8/07/97 ............... $ 288,317
300,000 FHLMC Strips
11/15/99 .............. 235,905
100,000 Tennessee Valley Authority
6.125% 7/15/03 ........ 98,250
81,539 FNMA Pool #30333
9.250% 9/01/16 ....... 85,264
123,549 FHLMC Pool #302029
9.500% 10/01/16 ...... 128,952
183,090 FHLMC Pool #303033
9.000% 4/01/17 ....... 189,236
241,386 FHLMC Pool #301538
10.000% 7/01/17 ...... 259,625
150,000 FHLMC Pool TBA
7.000% 10/01/25 ...... 148,758
150,000 FHLMC Pool TBA
7.500% 10/01/25 ...... 151,617
1,585,924
Total Investments - 97.1% 6,978,069
(Cost $6,754,759)**
Cash - 5.8% 417,578
Other Assets and (Liabilities), Net - (2.9)% (205,522)
TOTAL NET ASSETS - 100.0% $ 7,190,125
<FN>
*Zero-coupon bonds-rates reflect purchase yield to maturity.
**Aggregate cost for Federal income tax purposes is $6,774,069.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON U.S. GOVERNMENT INCOME FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
FIXED INCOME SECURITIES - 98.4%
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY
$ 255,000 International Bank Recon & Dev
Floater 5.390%* 08/07/97 ............ $
229,752
4,655,000 U. S. Treasury Note
6.000% 8/31/97 ......................
4,684,932
150,000 Federal National Mortgage
Assoc. 4.950% 9/30/98 ...............
146,148
1,045,000 U. S. Treasury Note
6.250% 8/31/00 ......................
1,066,005
120,000 Federal National Mortgage
Assoc. Medium Term Note
6.080% 9/25/00 .......................
120,294
100,000 Federal National Mortgage
Assoc. 8.250% 12/18/00 ..............
109,580
50,000 Federal Home Loan Bank
7.590% 3/10/05 .......................
54,403
50,000 Federal National Mortgage
Assoc. 7.375% 3/28/05 ...............
53,558
1,700,000 U. S. Treasury Bond
6.875% 8/15/25 ......................
1,824,610
8,289,282
Total Investments - 98.4%
8,289,282
(Cost $8,185,803)**
Cash - 0.4%
32,860
Other Assets and (Liabilities), Net - 1.2%
104,057
TOTAL NET ASSETS - 100.0% $
8,426,199
</TABLE>
<PAGE>
THE CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Face
Market
Value Securities Description
Value
FIXED INCOME SECURITIES* - 99.6%
<S> <C>
<C>
U.S. GOVERNMENT & AGENCY
Treasury Bills - 10.2%
$ 1,000,000 U. S. Treasury Bill
5.540% 7/25/96 ....................... $
958,912
4,850,000 U. S. Treasury Bill
5.260% 10/17/96 ......................
4,601,268
5,560,180
Discount Notes -89.4%
Federal Farm Credit
400,000 5.510% 12/04/95 ......................
397,980
235,000 5.520% 11/28/95 - 12/07/95 ...........
233,841
585,000 5.530% 11/28/95 ......................
582,574
510,000 5.540% 12/20/95 ......................
506,154
1,890,000 5.560% 11/03/95 - 1/04/96 ............
1,888,023
7,395,000 5.570% 11/01/95 - 1/04/96 ............
7,363,603
695,000 5.610% 11/13/95 ......................
693,700
Federal Home Loan
750,000 5.420% 2/16/96 .......................
737,918
3,250,000 5.430% 1/17/96 - 2/20/96 .............
3,203,279
800,000 5.450% 1/22/96 .......................
790,069
750,000 5.470% 1/22/96 .......................
740,655
1,460,000 5.480% 12/28/95 - 1/17/96 ............
1,445,962
795,000 5.490% 1/16/96 .......................
785,786
2,515,000 5.500% 12/29/95 - 1/10/96 ............
2,488,470
1,075,000 5.520% 12/08/95 - 12/13/95 ...........
1,068,652
2,270,000 5.530% 12/05/95 - 1/18/96 ............
2,249,696
3,200,000 5.540% 11/24/95 - 12/19/95 ...........
3,179,455
7,145,000 5.550% 11/02/95 - 2/01/96 ............
7,077,470
5,225,000 5.560% 11/08/95 - 1/26/96 ............
5,183,831
3,740,000 5.570% 11/16/95 - 1/30/96 ............
3,707,315
2,055,000 5.580% 1/05/96 - 1/08/96 .............
2,033,765
650,000 5.590% 11/22/95 ......................
647,880
535,000 5.620% 11/15/95 ......................
533,831
1,400,000 5.630% 11/21/95 ......................
1,395,621
48,935,530
Total Investments - 99.6%
54,495,710
(Cost $54,495,710)**
Cash - 0.4%
233,521
Other Assets and (Liabilities), Net 0.0%
(15,012)
TOTAL NET ASSETS - 100.0% $
54,714,219
<FN>
*Rates reflect purchase yield to maturity.
**Aggregate cost for Federal income tax purposes is identical.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
THE CRABBE HUSON REAL ESTATE INVESTMENT FUND, INC.
SCHEDULE OF INVESTMENTS
October 31, 1995
<TABLE>
<CAPTION>
Market
Shares Securities Description
Value
COMMON STOCK - 98.1%
REAL ESTATE INVESTMENT TRUST
<S> <C>
<C>
Apartment - 23.5%
20,000 Camden Property Trust ....................... $
415,000
25,000 Pacific Gulf Properties, Inc ................
378,125
20,000 Paragon Group, Inc ..........................
345,000
15,000 Post Properties .............................
450,000
60,000 Prime Residential, Inc ......................
1,050,000
20,000 SouthWest Property Trust ....................
242,500
35,000 Summit Properties, Inc ......................
647,500
73,500 Town & Country Trust ........................
937,125
4,465,250
Industrial - 16.1%
10,000 Cali Realty Corp ............................
195,000
25,900 Carr Realty Corp ............................
492,100
33,500 First Industrial Realty Trust ...............
682,562
19,000 Liberty Property Trust ......................
384,750
17,000 Reckson Associates Realty Corp ..............
456,875
24,000 Spieker Properties, Inc .....................
582,000
10,000 Trinet Corp. Realty Trust ..................
267,500
3,060,787
Lodging - 4.3%
30,000 Starwood Lodging Trust ......................
817,500
Malls - 12.2%
62,100 Crown American Realty .......................
473,512
71,400 DeBartolo Realty Corp .......................
928,200
5,000 Macerich Company ............................
100,625
35,000 Simon Property Group Inc ....................
813,750
2,316,087
Manufactured Housing - 0.9%
10,000 Manufactured Home Communities................
165,000
Outlet Centers - 10.2%
35,200 Factory Stores of America ...................
677,600
15,000 Mills Corp ..................................
256,875
63,000 Prime Retail, Inc ...........................
763,875
10,000 Tanger Factory Outlet Center ................
235,000
1,933,350
Shopping Center - 30.9%
11,200 Burnham Pacific Property, Inc ...............
126,000
28,700 Commercial Net Lease Realty .................
365,925
12,700 Developers Diversified Realty ...............
361,950
5,000 Excel Realty Trust, Inc .....................
94,375
36,100 Federal Realty Investment Trust .............
731,025
44,250 Glimcher Realty Trust .......................
796,500
43,700 JDN Realty Corp .............................
890,387
60,000 Kranzco Realty Trust ........................
915,000
55,000 Malan Realty Investors, Inc .................
770,000
28,750 Mark Centers Trust ..........................
309,064
30,000 Regency Realty Corp .........................
510,000
5,870,226
Total Investments - 98.1%
18,628,200
(Cost $19,605,304)*
Cash - 0.5%
99,391
Other Assets and (Liabilities), Net - 1.4%
257,923
TOTAL NET ASSETS - 100.0%
$ 18,985,514
<FN>
*Aggregate cost for Federal income tax purposes is $19,610,488.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CRABBE HUSON FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1995
<TABLE>
<CAPTION>
THE
OREGON THE THE
MUNICIPAL CRABBE HUSON CRABBE HUSON
BOND SPECIAL ASSET ALLOCATION
FUND,
INC. FUND, INC. FUND, INC.
<S> <C>
<C> <C>
ASSETS:
Investment securities,
at market (cost $26,215,041; $789,902,314;
$127,582,027; $371,004,735; $6,754,759;
$8,185,803; $54,495,710 and $19,605,304
respectively) $
27,580,795 $ 767,165,836 $ 132,408,320
Cash
- ---- 2,028,004 6,303,890
Deposits with brokers for securities sold short
- ---- 184,796,646 ----
Receivables:
Dividends and Interest
509,615 849,007 857,351
Fund shares sold
25,000 4,090,362 405,209
Investment securities sold
- ---- 4,355,170 920,708
Due from distributor (Note 2)
- ---- ---- ----
Due from investment advisor (Note 2)
- ---- ---- ----
Proceeds from securities sold short
- ---- 116,397,420 ----
Organization expenses
- ---- ---- ----
Prepaid Expenses
1,362 44,011 6,508
$
28,116,772 $ 1,079,726,456 $ 140,901,986
LIABILITIES:
Securities sold short,
at market (proceeds $116,397,420)
- ---- 132,866,612 ----
Payables:
Investment securities payable
- ---- 40,952,158 4,284,356
Fund shares redeemed
- ---- 9,144,015 42,751
Short sales closed
- ---- 17,711,422 ----
Payable to affiliates and directors (Note 2)
778 1,027 2,027
Accrued liabilities
45,623 491,388 42,795
46,401 201,166,622 4,371,929
NET ASSETS: $
28,070,371 $ 878,559,834 $ 136,530,057
NET ASSETS CONSIST OF:
Capital shares
2,225 63,670 10,010
Capital paid in
26,699,373 874,136,535 120,240,658
Undistributed accumulated net
investment income
- ---- 11,747,830 ----
Undistributed accumulated net
realized gain (loss) on investments
3,019 31,817,469 11,453,096
Net unrealized appreciation
(depreciation) on investments and short sales(Note 5)
1,365,754 (39,205,670) 4,826,293
$
28,070,371 $ 878,559,834 $ 136,530,057
CAPITAL SHARES, PAR VALUE $.001
Authorized
10,000,000 100,000,000 100,000,000
Outstanding (Note 4)
2,225,010 63,670,184 10,010,125
NET ASSET VALUE PER SHARE $
12.62 $ 13.80 $ 13.64
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE CRABBE HUSON THE CRABBE HUSON
THE THE THE CRABBE HUSON
U.S. GOVERNMENT REAL ESTATE
CRABBE HUSON CRABBE HUSON U.S. GOVERNMENT
MONEY MARKET INVESTMENT
EQUITY FUND, INC. INCOME FUND, INC. INCOME FUND, INC.
FUND, INC. FUND, INC.
<S> <C> <C>
<C> <C>
$ 386,115,058 $ 6,978,069 $ 8,289,282
$ 54,495,710 $ 18,628,200
4,226,599 417,578 32,860
233,521 99,391
---- ---- ----
---- ----
154,250 89,712 88,913
646 110,797
1,109,039 3,376 6,658
---- 7,204
919,085 ---- ----
---- 133,980
60,875 ---- ----
---- ----
---- 7,411 8,384
---- ----
---- ---- ----
---- ----
---- ---- ----
---- 89,606
17,515 359 434
2,612 219
$ 392,602,421 $ 7,496,505 $ 8,426,531
$ 54,732,489 $ 19,069,397
---- ---- ----
---- ----
4,885,161 301,803 ----
---- 74,647
393,222 4,253 ----
---- ----
---- ---- ----
---- ----
2,027 277 277
778 778
137,931 47 55
17,492 8,458
5,418,341 306,380 332
18,270 83,883
$ 387,184,080 $ 7,190,125 $ 8,426,199
$ 54,714,219 $ 18,985,514
21,309 702 790
54,714 1,960
349,459,104 7,146,824 8,468,549
54,659,505 19,720,169
2,666,550 ---- 690
---- 7,309
19,926,794 (180,711) (147,309)
---- 233,180
15,110,323 223,310 103,479
---- (977,104)
$ 387,184,080 $ 7,190,125 $ 8,426,199
$ 54,714,219 $ 18,985,514
100,000,000 100,000,000 100,000,000
2,000,000,000 1,000,000,000
21,309,191 700,892 790,370
54,714,219 1,959,931
$ 18.17 $ 10.26 $ 10.66
$ 1.00 $ 9.69
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
For the year ended October 31, 1995
THE
OREGON THE THE
MUNICIPAL CRABBE HUSON CRABBE HUSON
BOND SPECIAL ASSET ALLOCATION
FUND,
INC. FUND, INC. FUND, INC.
<S>
INVESTMENT INCOME <C>
<C> <C>
Interest $
1,455,231 18,261,908 $ 3,701,179
Dividends (net of foreign taxes withheld of $0; $3,347;
$18,635; $55,166; $0; $0; $0; and $0 respectively)
---- 4,558,333 1,226,139
1,455,231 22,820,241 4,927,318
EXPENSES
Investment advisory fees (Note 2)
134,042 5,398,048 1,183,215
Transfer agent
32,241 953,607 115,803
Printing
10,074 269,190 35,347
Postage
7,606 200,609 25,533
Custody
2,860 54,216 18,637
Legal
3,836 140,115 26,247
Auditing
5,081 43,092 11,792
Insurance
1,254 27,016 5,467
Directors' fees
3,118 8,118 8,113
Registration fees
1,067 203,324 28,117
Amortization of organization expenses
---- ---- ----
Miscellaneous
3,992 194,903 19,119
Distribution fees (Note 2)
61,567 1,701,991 303,887
Administration
16,852 57,617 33,456
Short sales dividends
---- 286,184 ----
283,590 9,538,030 1,814,733
Fees waived by investment advisor (Note 2)
(20,866) (697) (14,567)
Expenses reimbursed by investment advisor (Note 2)
---- ---- ----
NET EXPENSES
262,724 9,537,333 1,800,166
NET INVESTMENT INCOME
1,192,507 13,282,908 3,127,152
REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on investments
3,019 31,170,355 11,435,123
Net change in unrealized appreciation
or depreciation of investments and short sales
1,454,370 (51,415,104) 20,021
NET GAIN (LOSS) ON INVESTMENTS
1,457,389 (20,244,749) 11,455,144
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $
2,649,896 ($ 6,961,841) $ 14,582,296
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE CRABBE HUSON THE CRABBE HUSON
THE THE THE CRABBE
HUSON U.S. GOVERNMENT REAL ESTATE
CRABBE HUSON CRABBE HUSON U.S.
GOVERNMENT MONEY MARKET INVESTMENT
EQUITY FUND, INC. INCOME FUND, INC. INCOME FUND,
INC. FUND, INC. FUND, INC.
<S> <C> <C>
<C> <C>
$ 3,253,320 $ 398,333 $
487,929 $ 2,990,307 $ 20,613
4,154,003 11,688
- ---- ---- 1,139,451
7,407,323 410,021
487,929 2,990,307 1,160,064
2,471,465 49,011
43,576 253,198 190,619
299,262 28,160
27,224 67,713 53,365
79,105 6,057
5,146 25,002 6,313
53,732 3,328
3,200 20,094 4,249
30,335 2,294
1,817 8,789 2,960
57,142 1,938
2,392 10,985 9,089
19,826 3,479
3,688 6,134 4,741
11,152 294
414 2,157 869
8,118 1,118
1,118 3,118 3,118
84,568 19,398
20,464 37,880 20,584
---- ----
- ---- ---- 10,868
80,371 2,827
3,944 19,022 5,085
621,908 16,337
21,788 126,599 47,655
23,057 551
726 4,090 1,603
---- ----
- ---- ---- ----
3,840,041 134,792
135,497 584,781 361,118
---- (49,011)
(43,576) (230,305) (75,190)
---- (33,287)
(26,493) ---- ----
3,840,041 52,494
65,428 354,476 285,928
3,567,282 357,527
422,501 2,635,831 874,136
19,596,449 108,710
7,624 ---- 51,165
9,278,013 304,184
324,469 ---- 565,011
28,874,462 412,894
332,093 ---- 616,176
$ 32,441,744 $ 770,421 $
754,594 $ 2,635,831 $ 1,490,312
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
THE OREGON THE CRABBE HUSON
MUNICIPAL
BOND FUND, INC. SPECIAL FUND, INC.
YEAR ENDED
YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1995
OCTOBER 31, 1994 OCTOBER 31, 1995 OCTOBER 31, 1994
<S> <C> <C>
<C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income $ 1,192,507
$ 1,335,320 $ 13,282,908 $ 396,099
Net realized gain (loss) on investments 3,019
151,835 31,170,355 11,534,530
Net change in unrealized appreciation
or depreciation of investments and short sales 1,454,370
(2,209,050) (51,415,104) 8,747,502
Increase (decrease) in net assets
resulting from operations 2,649,896
(721,895) (6,961,841) 20,678,131
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,192,507)
(1,335,320) (1,107,597) ----
In excess of net investment income ----
(770) ---- ----
From net realized gain on investments (151,835)
(22,243) (11,710,943) (687,990)
In excess of net realized gain on investments ----
---- ---- ----
CAPITAL SHARE TRANSACTIONS, NET (Note 4) (2,280,911)
1,717,846 578,529,362 276,003,800
Total increase (decrease) in net assets (975,357)
(362,382) 558,748,981 295,993,941
FUND NET ASSETS, BEGINNING OF PERIOD 29,045,728
29,408,110 319,810,853 23,816,912
FUND NET ASSETS, END OF PERIOD $ 28,070,371
$ 29,045,728 $ 878,559,834 $319,810,853
<CAPTION>
THE CRABBE HUSON
THE
CRABBE HUSON U.S. GOVERNMENT
INCOME FUND, INC. INCOME FUND, INC.
YEAR ENDED
YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, 1995
OCTOBER 31, 1994 OCTOBER 31, 1995 OCTOBER 31, 1994
<S> <C> <C>
<C> <C>
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS:
Net investment income $ 357,527
$ 288,002 $ 422,501 $ 449,352
Net realized gain on investments 108,710
(283,625) 7,624 (148,628)
Net change in unnrealized appreciation
or depreciation of investments and short sales 304,184
(169,542) 324,469 (480,026)
Increase (decrease) in net assets
resulting from operations 770,421
(165,165) 754,594 (179,302)
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (357,527)
(288,002) (422,501) (449,352)
In excess of net investment income (17,066)
(4,622) (9,331) (3,373)
From net realized gain on investments ----
(156,271) ---- (108,276)
In excess of net realized gain on investments ----
---- ---- ----
CAPITAL SHARE TRANSACTIONS, NET (Note 4) 1,520,890
190,912 (1,145,775) (1,228,397)
Total increase (decrease) in net assets 1,916,718
(423,148) (823,013) (1,968,700)
FUND NET ASSETS, BEGINNING OF PERIOD 5,273,407
5,696,555 9,249,212 11,217,912
FUND NET ASSETS, END OF PERIOD $ 7,190,125
$ 5,273,407 $ 8,426,199 $ 9,249,212
<CAPTION>
THE CRABBE HUSON
THE CRABBE HUSON
ASSET ALLOCATION FUND, INC.
EQUITY FUND, INC.
YEAR ENDED YEAR ENDED
YEAR ENDED YEAR ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
OCTOBER 31, 1995 OCTOBER 31, 1994
<S> <C>
<C> <C>
$ 3,127,152 $ 2,402,334
$ 3,567,282 $ 940,474
11,435,123 4,008,708
19,596,449 2,406,325
20,021 (3,975,212)
9,278,013 1,406,726
14,582,296 2,435,830
32,441,744 4,753,525
(3,090,031) (2,313,253)
(1,413,080) (170,079)
---- ----
---- ----
(4,120,955) (4,683,410)
(2,376,723) (1,800,301)
---- ----
---- ----
19,006,962 29,322,601
205,426,843 115,801,985
26,378,272 24,761,768
234,078,784 118,585,130
110,151,785 85,390,017
153,105,296 34,520,166
$ 136,530,057 $ 110,151,785
$ 387,184,080 $ 153,105,296
<CAPTION>
THE CRABBE HUSON
THE CRABBE HUSON
U.S. GOVERNMENT
REAL ESTATE
MONEY MARKET FUND, INC.
INVESTMENT FUND, INC.
YEAR ENDED YEAR ENDED
YEAR ENDED PERIOD ENDED
OCTOBER 31, 1995 OCTOBER 31, 1994
OCTOBER 31, 1995 OCTOBER 31, 1994*
<S> <C>
<C> <C>
$ 2,635,831 $ 731,382
$ 874,136 $ 598,957
---- ----
51,165 206,890
---- ----
565,011 (1,550,914)
2,635,831 731,382
1,490,312 (745,067)
(2,635,831) (731,382)
(862,995) (373,869)
---- ----
---- ----
---- ----
(240,802) ----
---- ----
---- ----
22,331,667 17,598,059
319,499 19,298,436
22,331,667 17,598,059
706,014 18,179,500
32,382,552 14,784,493
18,279,500 100,000
$ 54,714,219 $ 32,382,552
$ 18,985,514 $ 18,279,500
<FN>
*For period from April 4, 1994 (commencement of operations) to
October 31, 1994.
</FN>
</TABLE>
<PAGE>
NOTE 1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Organization: The Oregon Municipal Bond Fund, Inc. is registered
under the
Investment Company Act of 1940, as amended, as an open-end
non-diversified
investment company. The Crabbe Huson Special Fund, Inc., The
Crabbe Huson
Asset Allocation Fund, Inc., The Crabbe Huson Equity Fund, Inc.,
The Crabbe
Huson Income Fund, Inc., The Crabbe Huson U.S. Government Income
Fund, Inc.,
The Crabbe Huson U.S. Government Money Market Fund, Inc. and The
Crabbe Huson
Real Estate Investment Fund, Inc. are registered under the
Investment Company
Act of 1940, as amended, as open-end diversified investment
companies.
The following is a summary of significant accounting policies
consistently
followed by the Funds in preparation of financial statements.
Security Valuation--The Crabbe Huson U.S. Government Money Market
Fund, Inc.:
The Fund seeks to maintain a constant net asset value of $1.00 and
values its
assets using the amortized cost method by adjusting the cost of
each security
for accretion of discount or amortization of premium.
Security Valuation--Other Funds: Securities listed or traded on a
registered
securities exchange are valued at the last price on the date of the
computation. This includes over-the-counter securities for which
last sale
information is available. Where last sale information is not
available, the
best bid price is used. Securities and assets for which market
quotations are
not readily available are valued at fair market value as determined
in good
faith by or under the direction of the Board of Directors of the
Funds. Cash
equivalents relating to Firm Commitment Purchase Agreements are
segregated by
the custodian and may not be sold while the current commitment is
outstanding.
Security Transactions and Investment Income: Security transactions
are
accounted for on the trade date, the date the order to buy or sell
is executed.
Interest income is recorded daily on the accrual basis. Interest
income
consists of interest accrued plus the accretion of original issue
discount and
minus the amortization of investment premium, both calculated on an
effective
interest basis. Dividend income and distributions to shareholders
are recorded
on the ex-dividend date. Net realized gains and losses on
investments are
computed on the first-in, first-out, method.
Dividends and Distributions: The Oregon Municipal Bond Fund, Inc.
declares
dividends from its net investment income each business day. The
net investment
income for Saturdays, Sundays and holidays is declared as a
dividend on the
next business day. Declared dividends are accrued through the last
business
day of each month and are distributed on that date. Net capital
gains realized
by the Fund, if any, are declared and distributed on an annual
basis, usually
in December.
<PAGE>
The Crabbe Huson Special Fund, Inc. and The Crabbe Huson Equity
Fund, Inc.
expect to declare and distribute to shareholders, once a year in
December,
substantially all of the net investment income and net realized
capital gains,
if any.
The Crabbe Huson Asset Allocation Fund, Inc. and The Crabbe Huson
Real Estate
Investment Fund, Inc. expect to declare and distribute dividends
from net
investment income on the last business day of each fiscal quarter.
Net capital
gains realized by the Funds, if any, are declared and distributed
on an annual
basis, usually in December.
The Crabbe Huson Income Fund, Inc. and The Crabbe Huson U.S.
Government Income
Fund, Inc. declare and distribute dividends from net investment
income on the
last business day of each month. Net capital gains realized by the
Funds, if
any, are declared and distributed on an annual basis, usually in
December.
The Crabbe Huson U.S. Government Money Market Fund, Inc. declares
dividends
from its net investment income each business day. The net
investment income
for Saturdays, Sundays and holidays is declared as a dividend on
the prior
business day. Declared dividends are accrued through the last
business day of
each month and are distributed on that date. Net capital gains
realized by the
Fund, if any, are declared and distributed on an annual basis,
usually in
December.
Short Sales: Crabbe Huson Special Fund during the year sold
securities short.
A short sale is effected when it is believed that the price of a
particular
security will decline, and involves the sale of a security which
the Fund does
not own in the hope of purchasing the same security at a later date
at a lower
price. To make delivery to the buyer, the Fund must borrow the
security. The
Fund is then obligated to return the security to the lender, and
therefore it
must subsequently purchase the same security.
When the Special Fund makes a short sale, it must leave the
proceeds from the
short sale with the broker, and it must deposit with the broker a
certain
amount of cash or government securities to collateralize its
obligation to
replace the borrowed securities which have been sold.
Short Sales - (continued): In addition, the Fund must put in a
segregated
account (with the Fund's custodian) an amount of cash or U.S.
Government
securities equal to the difference between the market value of the
securities
sold short at the time they were sold short and any cash or
government
securities deposited as collateral with the broker in connection
with the short
sale (not including the proceeds from the short sale).
Furthermore, until the
Fund replaces the borrowed security, it must daily maintain the
segregated
account at a level so that (1) the amount deposited in it plus the
amount
deposited with the broker (not including the proceeds from the
short sale) will
equal the current market value of the securities sold short, (2)
the amount
<PAGE>
deposited in it plus the amount deposited with the broker (not
including the
proceeds from the short sale) will not be less than the market
value of the
securities at the time they were sold short. As a result of these
requirements, the Special Fund will not gain any leverage merely by
selling
short, except to the extent that it earns interest on the
immobilized cash or
government securities while also being subject to the possibility
of gain or
loss from the securities sold short. The amount of the Special
Fund's net
assets that will at any time be in the type of deposits described
above (that
is, collateral deposits or segregated accounts) will not exceed
25%.
Options: The Special, Real Estate, Equity, Asset Allocation and
Income Funds
may write call options on securities they own or have the right to
acquire, and
may purchase put and call options on individual securities and
indexes written
by others. The purchase of any of these instruments can result in
the entire
loss on the investment in that particular instrument or, in the
case of writing
covered options, can limit the opportunity to earn a profit on the
underlying
security.
When an option is written (sold), an amount equal to the premium
received is
recorded as a liability. The amount of liability is adjusted daily
to reflect
the current market value of the option written. When an option
written by the
Fund, expires on its stipulated expiration date, the Fund realizes
a gain equal
to the net premium received for the option. When the Fund enters
into a
closing purchase transaction, the Fund realizes a gain or loss
equal to the
difference between the cost of a closing purchase transaction and
the premium
received when the call option was written. In the case of either
expiration of
a written option or a closing purchase transaction, the liability
related to
such option is extinguished.
Call or put options purchased are accounted for in the same manner
as
marketable portfolio securities. When a call or put option is
exercised, the
proceeds from the underlying securities bought or sold are
decreased by the
premium paid in determining the gain or loss.
Options on stock indexes differ from options on securities in that
the exercise
of an option on a stock index does not involve delivery of the
actual
underlying security and are settled in cash only.
During the year the Crabbe Huson Special Fund, Inc. purchased put
options.
Outstanding put options at October 31, 1995 are disclosed in the
schedule of
investments.
Organization Costs: Expenses incurred in connection with the
organization of
the Funds are amortized over a sixty-month period. The
amortization is
calculated based upon the projected growth in net assets of the
Funds. As of
October 31, 1995 organization costs for all Funds except for The
Crabbe Huson
Real Estate Investment Fund, Inc. have been fully amortized. The
Crabbe Huson
Real Estate Investment Fund, Inc. has amortized $10,868 through
October 31,
<PAGE>
1995. The Crabbe Huson Group, Inc., the Fund's investment advisor,
has agreed
that, in the event any of the initial shares are redeemed during
the 60-month
period for amortizing the Fund's organization costs, the Fund will
be
reimbursed by the investment advisor for the unamortized balances
of such costs
in the same proportion as the number of shares reduced bears to the
number of
initial shares outstanding at the time of redemption.
Reorganization Costs: On July 7, 1995 the Board of Directors
approved the
reorganization of the Oregon Municipal Bond Fund, Inc., The Crabbe
Huson
Special Fund, Inc., The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe
Huson Equity Fund, Inc., The Crabbe Huson Income Fund, Inc., The
Crabbe Huson
U.S. Government Income Fund, Inc., The Crabbe Huson U.S. Government
Money
Market Fund, Inc. and The Crabbe Huson Real Estate Investment Fund,
Inc., ("the
Fund") into a single Delaware business trust which will operate as
a series
company. The record date of this reorganization is December 20,
1995 and the
costs related to the reorganization will be incurred by the Funds.
Federal Income Taxes: It is each Fund's policy to distribute
substantially all
of its taxable income to shareholders and otherwise comply with the
provisions
of the Internal Revenue Code applicable to regulated investment
companies.
Therefore, no provision has been made for Federal income tax or
excise taxes.
Federal Income Taxes - (continued): Due to the timing of dividend
distributions and the differences in accounting for income and
realized gains
(losses) for financial statement and federal income tax purposes,
the fiscal
year in which amounts are distributed may differ from the year in
which the
income and realized gains (losses) were recorded by the funds. The
differences
between the income or gains distributed on a book versus tax basis
are shown as
excess distributions of net investment income and net realized gain
on sales of
investments in the Statement of Changes in Net Assets.
On the Statement of Assets and Liabilities, as a result of
permanent
book-to-tax differences, reclassification adjustments have been
made as shown
in Table A.
<PAGE>
NOTE 2. INVESTMENT ADVISOR AND OTHER
TRANSACTIONS WITH AFFILIATES
Investment Advisor: The Funds have entered into an investment
advisory
agreement with The Crabbe Huson Group, Inc. (the "Advisor"), an
affiliated
company. The investment advisory fee of each Fund is accrued
daily and paid
semi-monthly. The annual investment advisory fee for each Fund is
described
below:
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Special Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
The Crabbe Huson Real Estate Investment Fund, Inc.
1.00% of daily net assets up to $100,000,000
.85 of 1% of daily net assets between $100,000,000 and $500,000,000
.60 of 1% of daily net assets over $500,000,000
The Crabbe Huson Income Fund, Inc.
.75 of 1% of daily net assets up to $100,000,000
.60 of 1% of daily net assets up to $500,000,000
.50 of 1% of daily nets assets over $500,000,000
The Crabbe Huson U.S. Government Income Fund, Inc.
The Crabbe Huson U.S. Government Money Market Fund, Inc.
The Oregon Municipal Bond Fund, Inc.
.50 of 1% of daily net assets up to $500,000,000
.45 of 1% of daily net assets between $500,000,000 and
$1,000,000,000
.40 of 1% of daily net assets over $1,000,000,000
The Advisor has voluntarily agreed to waive its management fee
and/or reimburse
each Fund for the amount, if any, by which the total operating and
management
expenses of such Fund (including the Advisor's compensation and any
amounts
paid pursuant to the participating Funds' Rule 12b-1 plan but
excluding
interest, taxes, brokerage fees and commissions, and extraordinary
expenses)
exceed certain annual rates applied to the average daily net assets
of the
Funds.
The annual expense limit for each Fund is listed below:
The Oregon Municipal Bond Fund, Inc. 0.98%
The Crabbe Huson Special Fund, Inc. 1.50%
The Crabbe Huson Asset Allocation Fund, Inc. 1.50%
The Crabbe Huson Equity Fund, Inc. 1.50%
The Crabbe Huson Income Fund, Inc. 0.80%
The Crabbe Huson U.S. Government Income Fund, Inc. 0.75%
The Crabbe Huson U.S. Government Money Market Fund, Inc. 0.70%
The Crabbe Huson Real Estate Investment Fund, Inc. 1.50%
<PAGE>
Distributor: The Funds have entered into a distribution agreement
with Crabbe
Huson Securities, Inc. (the "Distributor"), an affiliated company.
Under the
Distribution Plan, each of the participating Funds may pay up to
1/4 of 1% of
such Fund's average daily net assets to the Distributor as
reimbursement for
its actual expenses incurred in the distribution and promotion of
such Fund's
shares.
Table A
<TABLE>
<CAPTION>
Undistributed
Undistributed
Accumulated
Accumulated Net
Capital Net Investment
Realized Gain on
Paid In Income
Investments
<S> <C> <C> <C>
The Oregon Municipal
Bond Fund, Inc. ----- -----
----
The Crabbe Huson
Special Fund, Inc. $ 79,005 $ (726,118) $
647,113
The Crabbe Huson Asset
Allocation Fund, Inc. (108,605) (37,121)
145,726
The Oregon Equity Fund,
Inc. 29,829 (360,174)
330,345
The Crabbe Huson Income
Fund, Inc. 38,846 17,066
(55,912)
The Crabbe Huson U.S.
Government Income Fund, Inc. (3,715) 10,021
(6,306)
The Crabbe Huson U.S.
Government Money
Market Fund, Inc. ----- -----
-----
The Crabbe Huson Real Estate
Investment Fund, Inc. (182,383) (3,832)
177,416
</TABLE>
Administrator: State Street Bank and Trust Company (the
"Administrator")
serves as administrator of the Funds. The Administrator performs
certain
administrative services for the Funds. The Funds pays the
Administrator a fee
at the rate of 0.06% of the Fund's average net assets up to $500
million, 0.03%
of the next $500 million, and 0.01% of those assets in excess of $1
billion,
plus certain out of pocket costs.
Directors Fees: As of October 31, 1995, fees payable to the
disinterested
directors were $778, $1,027, $2,027, $2,027, $277, $277, $778 and
$778 for The
Oregon Municipal Bond Fund, Inc., The Crabbe Huson Special Fund,
Inc., The
Crabbe Huson Asset Allocation Fund, Inc., The Crabbe Huson Equity
Fund, Inc.,
The Crabbe Huson Income Fund, Inc., The Crabbe Huson U.S.
Government Income
Fund, Inc., The Crabbe Huson U.S. Government Money Market Fund,
Inc. and The
Crabbe Huson Real Estate Investment Fund, Inc., respectively.
<PAGE>
NOTE 3. DISTRIBUTIONS TO SHAREHOLDERS
(Unaudited)
THE OREGON MUNICIPAL BOND FUND, INC. Of the Fund's distributions
paid to
shareholders from net investment income during the fiscal year
ended October
31, 1995, 99.3% was attributable to investments in municipal bonds
issued by
the state of Oregon and its political subdivisions, agencies
authorities and
instrumentalities and other municipal securities.
THE CRABBE HUSON SPECIAL FUND, INC. Of the Fund's net investment
income earned
during the fiscal year ended October 31, 1995, 22.6% was
attributable to
investments in direct or indirect debt obligations of the United
States
Government, or its agencies or instrumentalities.
THE CRABBE HUSON ASSET ALLOCATION FUND, INC. Of the Fund's net
investment
income earned during the fiscal year ended October 31, 1995, 60.1%
was
attributable to investments in direct or indirect debt obligations
of the
United States Government, or its agencies or instrumentalities.
THE CRABBE HUSON EQUITY FUND, INC. Of the Fund's net investment
income earned
during the fiscal year ended October 31, 1995, 40.9% was
attributable to
investments in direct or indirect debt obligations of the United
States
Government, or its agencies or instrumentalities.
THE CRABBE HUSON INCOME FUND, INC. Of the Fund's net investment
income earned
during the fiscal year ended October 31, 1995, 50.4% was
attributable to
investments in direct or indirect debt obligations of the United
States
Government, or its agencies or instrumentalities.
THE CRABBE HUSON U.S. GOVERNMENT INCOME FUND, INC. Of the Fund's
net
investment income earned during the fiscal year ended October 31,
1995, 95.8%
was attributable to investments in direct or indirect debt
obligations of the
United States Government, or its agencies or instrumentalities.
THE CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND, INC. Of the
Fund's net
investment income earned during the fiscal year ended October 31,
1995, 98.2%
was attributable to investments in direct or indirect debt
obligations of the
United States Government, or its agencies or instrumentalities.
THE CRABBE HUSON REAL ESTATE INVESTMENT FUND, INC. Of the Fund's
net
investment income earned during the fiscal year ended October 31,
1995, none
was attributable to investments in direct or indirect debt
obligations of the
United States Government, or its agencies or instrumentalities.
On December 6, 1995 the following distributions were declared from
net
realized capital gains from investment transactions. The dividend
was paid on
December 6, 1995, to shareholders of record on December 5, 1995, as
shown in
Table B.
<PAGE>
Table B
<TABLE>
<CAPTION>
PER SHARE DOLLARS
Short-Term Long-Term Short-Term
Long-Term
Capital Gain Capital Gain Capital Gain
Capital Gain
Distribution Distribution Distribution
Distribution
<F1> <F1>
<S> <C> <C> <C>
<C>
The Oregon Municipal
Bond Fund, Inc. ----- ----- -----
-----
The Crabbe Huson
Special Fund, Inc. 0.3764 0.1983 $23,686,427
$12,479,000
The Crabbe Huson Asset
Allocation Fund, Inc. 0.5232 0.6046 5,306,597
6,131,818
The Crabbe Huson
Equity Fund, Inc. 0.6038 0.3385 13,191,040
7,394,039
The Crabbe Huson
Income Fund, Inc. ----- ----- -----
-----
The Crabbe Huson
U.S. Government
Income Fund, Inc. ----- ----- -----
-----
The Crabbe Huson
Real Estate
Investment Fund, Inc. 0.1225 ----- 238,364
-----
<F1>Short-term capital gains are taxable to shareholders as
ordinary income
dividends.
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 1995
NOTE 4. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
THE OREGON
MUNICIPAL BOND FUND, INC.
SHARES
AMOUNT
Year Year
Year Year
Ended Ended
Ended Ended
October 31, October 31,
October 31, October 31,
1995 1994
1995 1994
<S> <C> <C>
<C> <C>
Shares sold 552,364 858,058
$6,744,052 $ 10,795,284
Shares issued in
reinvestment of dividends 73,838 85,380
906,976 1,057,544
626,202 943,438
7,651,028 11,852,828
Shares redeemed (822,850) (818,671)
(9,931,939) (10,134,982)
Net increase (decrease) (196,648) 124,767
($2,280,911) $ 1,717,846
<CAPTION>
THE CRABBE HUSON
INCOME
FUND, INC.
SHARES
AMOUNT
Year Year
Year Year
Ended Ended
Ended Ended
October 31, October 31,
October 31, October 31,
1995 1994
1995 1994
<S> <C> <C>
<C> <C>
Shares sold 398,837 323,868
$3,890,790 $3,312,857
Shares issued in
reinvestment of dividends 33,473 28,426
329,268 289,053
432,310 352,294
4,220,058 3,601,910
Shares redeemed (274,572) (338,813)
(2,699,168) (3,410,998)
Net increase (decrease) 157,738 13,481
$1,520,890 $ 190,912
<CAPTION>
THE CRABBE
HUSON
SPECIAL FUND,
INC.
SHARES
AMOUNT
Year Year Year
Year
Ended Ended Ended
Ended
October 31, October 31, October 31, October
31,
1995 1994 1995
1994
<S> <C> <C> <C>
65,374,197 23,946,462 $928,135,711
$318,927,086
78,213 51,007 1,030,774
610,047
65,452,410 23,997,469 929,166,485
319,537,133
(24,491,886) (3,303,144) (350,637,123)
(43,533,333)
40,960,524 20,694,325 $578,529,362
$276,003,800
<CAPTION>
THE CRABBE
HUSON
U.S.
GOVERNMENT
INCOME FUND,
INC.
SHARES
AMOUNT
Year Year Year
Year
Ended Ended Ended
Ended
October 31, October 31, October 31, October
31,
1995 1994 1995
1994
<S> <C> <C> <C>
320,552 318,425 $3,315,281
$3,370,107
33,757 46,002 351,187
488,454
354,309 364,427 3,666,468
3,858,561
(464,645) (480,229) (4,812,243)
(5,086,958)
(110,336) (115,802) ($1,145,775)
($1,228,397)
<CAPTION>
THE CRABBE HUSON ASSET
ALLOCATION FUND, INC.
SHARES
AMOUNT
Year Year
Year Year
Ended Ended
Ended Ended
October 31, October 31,
October 31, October 31,
1995 1994
1995 1994
<S> <C> <C>
<C> <C>
Shares sold 3,651,020 4,625,388
$47,567,984 $60,156,367
Shares issued in
reinvestment of dividends 213,856 460,871
2,807,183 5,964,138
3,864,876 5,086,259
50,375,167 66,120,505
Shares redeemed (2,415,859) (2,842,271)
(31,368,205) (36,797,904)
Net increase (decrease) 1,449,017 2,243,988
$19,006,962 $29,322,601
<CAPTION>
THE CRABBE HUSON
U.S. GOVERNMENT
MONEY MARKET FUND, INC.
SHARES
AMOUNT
Year Year
Year Year
Ended Ended
Ended Ended
October 31, October 31,
October 31, October 31,
1995 1994
1995 1994
<S> <C> <C> <C>
<C>
Shares sold 166,147,604 99,391,599 $
166,147,604 $99,391,599
Shares issued in
reinvestment of dividends 1,738,682 391,037
1,738,682 391,037
167,886,286 99,782,636
167,886,286 99,782,636
Shares redeemed (145,554,619) (82,184,578)
(145,554,619) (82,184,578)
Net increase (decrease) 22,331,667 17,598,058 $
22,331,667 $17,598,058
<FN>
*For the period from April 4, 1994 (commencement of operations) to
October 31, 1994.
</FN>
<CAPTION>
THE CRABBE
HUSON
EQUITY FUND,
INC.
SHARES
AMOUNT
Year Year Year
Year
Ended Ended Ended
Ended
October 31, October 31, October 31, October
31,
1995 1994 1995
1994
<S> <C> <C> <C>
16,135,368 8,303,990 $277,119,565
$134,306,739
79,947 105,277 1,237,639
1,635,783
16,215,315 8,409,267 278,357,204
135,942,522
(4,218,957) (1,243,034) (72,930,361)
(20,140,537)
11,996,358 7,166,233 $205,426,843
$115,801,985
<CAPTION>
THE CRABBE
HUSON
REAL
ESTATE
INVESTMENT FUND,
INC.
SHARES
AMOUNT
Year Period Year
Period
Ended Ended Ended
Ended
October 31, October 31, October 31, October
31,
1995 1994* 1995
1994*
<S> <C> <C> <C>
821,200 2,006,502 $7,937,889
$20,250,921
36,962 33,284 357,391
323,473
858,162 2,039,786 8,295,280
20,574,394
(822,760) (125,257) (7,975,781)
(1,275,958)
35,402 1,914,529 $ 319,499
$19,298,436
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (continued)
October 31, 1995
NOTE 5. INVESTMENT TRANSACTIONS
For the year ended October 31, 1995, The Crabbe Huson U.S.
Government Money
Market Fund, Inc. had aggregate security purchases and sales
(including
maturities) of $443,976,883 and $424,658,448, respectively.
Aggregate
purchases, sales and maturities for the year ended October 31, 1995
(excluding
short-term securities) for the remaining funds, are as follows:
<TABLE>
<CAPTION>
THE
OREGON THE CRABBE
MUNICIPAL HUSON
BOND SPECIAL
FUND,
INC. FUND, INC.
<S> <C>
<C>
Purchases:
$5,984,368 $959,620,834
Sales and Maturities:
8,735,890 572,783,341
</TABLE>
Gross unrealized appreciation and depreciation on securites held by
the Funds
at October 31, 1995 are as follows:
<TABLE>
<CAPTION>
Unrealized Appreciation (Depreciation):
<S> <C>
<C>
For book purposes
Appreciation
1,399,431 65,671,560
Depreciation
(33,677) (104,877,230)
Net unrealized appreciation (depreciation)
$1,365,754 ($ 39,205,670)
Unrealized Appreciation (Depreciation):
For Federal income tax purposes
Appreciation
1,399,431 64,232,281
Depreciation
(33,677) (107,785,909)
Net unrealized appreciation (depreciation)
$1,365,754 ($ 43,553,628)
<CAPTION>
THE CRABBE THE CRABBE
HUSON ASSET HUSON
ALLOCATION EQUITY
FUND, INC. FUND, INC.
<S> <C>
$ 274,278,333 $397,589,397
248,155,111 200,246,630
6,773,143 27,705,429
(1,946,850) (12,595,106)
$ 4,826,293 $ 15,110,323
6,797,897 27,259,001
(1,956,923) (12,771,570)
$ 4,840,974 $ 14,487,431
<CAPTION>
THE CRABBE THE
THE
CRABBE HUSON U.S. CRABBE HUSON
HUSON GOVERNMENT REAL ESTATE
INCOME INCOME INVESTMENT
FUND,
INC. FUND, INC. FUND, INC.
<S> <C>
<C> <C>
Purchases:
$34,477,754 $19,009,336 $11,936,969
Sales and Maturities:
32,908,584 20,219,537 10,862,375
</TABLE>
Gross unrealized appreciation and depreciation on securites held by
the Funds
at October 31, 1995 are as follows:
<TABLE>
<CAPTION>
Unrealized Appreciation (Depreciation):
<S> <C>
<C> <C>
For book purposes
Appreciation
223,991 107,717 636,791
Depreciation
(681) (4,238) (1,613,895)
Net unrealized appreciation (depreciation) $
223,310 $ 103,479 ($977,104)
Unrealized Appreciation (Depreciation):
For Federal income tax purposes
Appreciation
204,681 106,764 634,056
Depreciation
(681) (4,238) (1,616,344)
Net unrealized appreciation (depreciation) $
204,000 $ 102,526 ($982,288)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C>
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
(b) Computed on an annualized basis.
The following information should be read in conjunction with the
financial (c) Commencement of operations - 4/9/87.
statements and notes thereto appearing elsewhere in this Annual
Report. (d) Commencement of operations - 1/31/89.
The calculations are based on average number of shares outstanding
for each period. (e) Commencement of operations - 4/4/94.
(a) The Fund's Fiscal Year was changed from 9/30 to 10/31,
effective 10/31/87,
which represents a conformed 12-month period.
</TABLE>
<TABLE>
<CAPTION>
THE OREGON MUNICIPAL BOND FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$11.99 $12.80 $12.20 $12.14
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.5480 0.5418 0.5683 0.6168
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
0.6998 (0.8001) 0.6880 0.1521
TOTAL FROM INVESTMENT OPERATIONS
1.2478 (0.2583) 1.2563 0.7689
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.5480 0.5419 0.5647 0.6168
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0003 0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.0698 0.0090 0.0916 0.0921
TOTAL DISTRIBUTIONS
0.6178 0.5512 0.6563 0.7089
NET ASSET VALUE, END OF PERIOD
$12.62 $11.99 $12.80 $12.20
TOTAL RETURN
10.66% -2.06% 10.71% 6.51%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$28,070,371 $29,045,728 $29,408,110 $20,295,896
RATIO OF EXPENSES TO AVERAGE NET ASSETS
0.98% 0.98% 1.05% 1.11%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.45% 4.37% 4.51% 5.04%
PORTFOLIO TURNOVER RATE
22.91% 20.58% 11.62% 25.30%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.08% 1.08% 1.09% 1.13%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.35% 4.26% 4.46% 5.01%
<CAPTION>
YEAR YEAR YEAR YEAR
YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 10/31/88
10/31/87 (a) 9/30/87 9/30/86
<S> <C> <C> <C>
<C> <C> <C>
$11.74 $11.72 $11.72 $11.08
$12.15 $11.93 $10.43
0.6385 0.6316 0.6794 0.6386
0.7311 0.7319 0.7720
0.4831 0.0522 0.0842 0.6411
(0.9983) (0.8051) 1.5265
1.1216 0.6838 0.7636 1.2797
(0.2672) (0.0732) 2.2985
0.6562 0.6401 0.6711 0.6386
0.7311 0.7319 0.7720
0.0000 0.0000 0.0000 0.0000
0.0000 0.0000 0.0000
0.0654 0.0237 0.0925 0.0000
0.0760 0.0760 0.0255
0.7216 0.6638 0.7636 0.6386
0.8071 0.8079 0.7975
$12.14 $11.74 $11.72 $11.72
$11.08 $11.05 $11.93
9.85% 6.00% 6.67% 12.02%
-1.95% -0.95% 22.83%
$18,382,636 $18,766,449 $19,173,145 $20,058,295
$14,276,600 $14,165,161 $8,861,258
1.21% 1.38% 1.04% 1.21%
1.14% 1.31% 1.06%
5.36% 5.41% 5.82% 5.53%
5.66% 6.43% 6.34%
53.40% 58.52% 45.25% 31.44%
19.18% 18.73% 24.20%
1.24% 1.55% 1.16% 1.32%
---- ---- ----
5.34% 5.23% 5.71% 5.42%
---- ---- ----
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON SPECIAL FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$14.08 $11.82 $ 8.36 $12.05
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME (LOSS)
0.2704 0.0513 (0.0774) (0.0211)
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
(0.2894) 2.3026 3.5374 (1.6211)
TOTAL FROM INVESTMENT OPERATIONS
(0.0190) 2.3539 3.4600 (1.6422)
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.0226 0.0000 0.0000 0.0260
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0892 0.0000 2.0218
DISTRIBUTIONS FROM CAPITAL GAINS
0.2384 0.0000 0.0000 0.0000
TOTAL DISTRIBUTIONS
0.2610 0.0892 0.0000 2.0478
NET ASSET VALUE, END OF PERIOD
$13.80 $14.08 $11.82 $ 8.36
TOTAL RETURN
1.78% 22.40% 41.39% 8.11%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$878,559,834 $319,810,853 $23,816,912 $5,857,434
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.40% 1.44% 1.57% 1.74%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
1.95% 0.39% -0.73% -0.25%
PORTFOLIO TURNOVER RATE
122.97% 146.44% 73.29% 102.27%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.40% 1.54% 1.59% 2.18%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
1.95% 0.29% -0.75% -0.69%
<CAPTION>
YEAR YEAR YEAR YEAR
PERIOD
ENDED ENDED ENDED ENDED
ENDED
10/31/91 10/31/90 10/31/89 10/31/88
10/31/87 (c)
<S> <C> <C> <C>
<C>
$8.78 $11.49 $9.69 $8.13
$10.00
0.0353 0.1546 0.2100 (0.0515)
(0.0409)
4.0155 (1.4317) 1.5900 1.6115
(1.8300)
4.0508 (1.2771) 1.8000 1.5600
(1.8709)
0.1453 0.2240 0.0000 0.0000
0.0000
0.6355 1.2089 0.0000 0.0000
0.0000
0.0000 0.0000 0.0000 0.0000
0.0000
0.7808 1.4329 0.0000 0.0000
0.0000
$12.05 $8.78 $11.49 $9.69
$8.13
49.58% -10.90% 18.68% 19.63%
-30.32%(b)
$3,541,797 $2,926,457 $3,356,417 $4,392,920
$1,892,038
1.92% 2.00% 2.00% 3.94%
2.60%(b)
0.32% 1.55% 1.96% 3.34%
0.05%(b)
256.68% 314.73% 275.62% 155.12%
3.90%
2.40% 2.86% 2.44%(b) ----
----
-0.15% 0.70% 1.53%(b) ----
----
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON ASSET ALLOCATION FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$12.87 $13.52 $11.68 $11.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.3361 0.2990 0.2323 0.3468
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
1.2090 (0.0817) 2.0889 0.8175
TOTAL FROM INVESTMENT OPERATIONS
1.5451 0.2173 2.3212 1.1643
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.3321 0.2879 0.2373 0.3463
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0000 0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.4430 0.5829 0.2439 0.1380
TOTAL DISTRIBUTIONS
0.7751 0.8708 0.4812 0.4843
NET ASSET VALUE, END OF PERIOD
$13.64 $12.87 $13.52 $11.68
TOTAL RETURN
13.00% 2.66% 20.93% 11.25%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$136,530,057 $110,151,785 $85,390,017 $55,098,981
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.48% 1.44% 1.46% 1.52%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
2.57% 2.30% 1.85% 3.02%
PORTFOLIO TURNOVER RATE
225.70% 149.19% 116.10% 155.26%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.49% 1.52% 1.54% 1.62%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
2.56% 2.22% 1.77% 2.92%
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 (d)
<S> <C> <C>
$9.24 $10.69 $10.00
0.4143 0.4561 0.3990
1.8208 (1.1200) 0.2910
2.2351 (0.6639) 0.6900
0.4335 0.7159 0.0000
0.0000 0.0000 0.0000
0.0415 0.0702 0.0000
0.4750 0.7861 0.0000
$11.00 $9.24 $10.69
24.55% -6.40% 9.30%(b)
$23,892,664 $13,173,923 $12,577,962
1.76% 1.90% 1.91%(b)
3.97% 4.51% 5.02%(b)
157.89% 161.72% 88.14%
1.79% 1.93% 1.93%(b)
3.94% 4.49% 5.00%(b)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON EQUITY FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$16.44 $16.08 $13.03 $12.57
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.2223 0.1900 0.0981 0.1980
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
1.7438 0.5668 3.4476 0.9186
TOTAL FROM INVESTMENT OPERATIONS
1.9661 0.7568 3.5457 1.1166
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.0880 0.0344 0.1099 0.0937
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0000 0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.1481 0.3638 0.3858 0.5629
TOTAL DISTRIBUTIONS
0.2361 0.3982 0.4957 0.6566
NET ASSET VALUE, END OF PERIOD
$18.17 $16.44 $16.08 $13.03
TOTAL RETURN
13.37% 7.89% 29.90% 12.48%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$387,184,080 $153,105,296 $34,520,166 $13,429,315
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.40% 1.45% 1.49% 1.55%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
1.30% 1.18% 0.67% 1.57%
PORTFOLIO TURNOVER RATE
92.43% 106.49% 114.38% 180.72%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.40% 1.56% 1.64% 1.93%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
1.28% 1.06% 0.52% 1.18%
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 (d)
<S> <C> <C>
$8.54 $10.50 $10.00
0.1861 0.2533 0.3146
4.1511 (1.6764) 0.1854
4.3372 (1.4231) 0.5000
0.3072 0.3918 0.0000
0.0000 0.0000 0.0000
0.0000 0.1451 0.0000
0.3072 0.5369 0.0000
$12.57 $8.54 $10.50
52.44% -14.97% 6.72%(b)
$5,929,590 $2,944,344 $5,018,337
1.84% 1.93% 1.69%(b)
1.60% 2.56% 3.98%(b)
171.82% 265.25% 90.54%
2.41% 2.66% 1.97%(b)
1.03% 1.83% 3.68%(b)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON INCOME FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$9.71 $10.75 $10.90 $10.63
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.5329 0.4995 0.4637 0.6583
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
0.5754 (0.7669) 0.3265 0.3569
TOTAL FROM INVESTMENT OPERATIONS
1.1083 (0.2674) 0.7902 1.0152
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.5329 0.4995 0.4879 0.6588
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0254 0.0080 0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.0000 0.2710 0.4523 0.0864
TOTAL DISTRIBUTIONS
0.5583 0.7785 0.9402 0.7452
NET ASSET VALUE, END OF PERIOD
$10.26 $9.71 $10.75 $10.90
TOTAL RETURN
11.92% -2.71% 7.73% 9.74%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$7,190,125 $5,273,407 $5,696,555 $5,634,372
RATIO OF EXPENSES TO AVERAGE NET ASSETS
0.80% 0.80% 0.81% 0.90%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
5.47% 4.92% 4.34% 6.09%
PORTFOLIO TURNOVER RATE
543.15% 306.79% 260.22% 227.45%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.95% 2.16% 1.96% 1.94%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.32% 3.56% 3.19% 5.06%
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 (d)
<S> <C> <C>
$10.01 $10.27 $10.00
0.7038 0.6869 0.5545
0.6218 (0.2407) 0.2761
1.3256 0.4462 0.8306
0.7056 0.6840 0.5606
0.0000 0.0000 0.0000
0.0000 0.0222 0.0000
0.7056 0.7062 0.5606
$10.63 $10.01 $10.27
13.51% 4.43% 10.43%(b)
$5,485,830 $2,123,203 $1,356,008
0.98% 1.51% 1.15%(b)
6.82% 6.89% 7.23%(b)
115.76% 73.76% 86.60%
2.42% 3.07% 4.56%(b)
5.38% 5.33% 3.81%(b)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON U.S. GOVERNMENT INCOME FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$10.27 $11.04 $10.91 $10.69
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.5097 0.4648 0.4755 0.5801
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
0.4013 (0.6515) 0.2159 0.2921
TOTAL FROM INVESTMENT OPERATIONS
0.9110 (0.1867) 0.6914 0.8722
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.5097 0.4647 0.4848 0.5839
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0113 0.0035 0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.0000 0.1120 0.0766 0.0683
TOTAL DISTRIBUTIONS
0.5210 0.5802 0.5614 0.6522
NET ASSET VALUE, END OF PERIOD
$10.66 $10.27 $11.04 $10.91
TOTAL RETURN
9.12% -1.78% 6.71% 8.70%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$8,426,199 $9,249,212 $11,217,912 $8,958,757
RATIO OF EXPENSES TO AVERAGE NET ASSETS
0.75% 0.75% 0.75% 0.80%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.85% 4.39% 4.33% 5.35%
PORTFOLIO TURNOVER RATE
230.43% 76.09% 81.74% 105.52%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.46% 1.47% 1.26% 1.52%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.14% 3.66% 3.81% 4.63%
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 (d)
<S> <C> <C>
$10.24 $10.28 $10.00
0.6722 0.6768 0.5637
0.4542 (0.0326) 0.2852
1.1264 0.6442 0.8489
0.6746 0.6736 0.5689
0.0000 0.0000 0.0000
0.0018 0.0106 0.0000
0.6764 0.6842 0.5689
$10.69 $10.24 $10.28
11.17% 6.40% 11.15%(b)
$3,748,244 $2,069,435 $1,717,128
0.96% 1.42% 1.14%(b)
6.44% 6.72% 7.35%(b)
114.81% 87.71% 40.42%
2.15% 2.84% 3.40%(b)
5.25% 5.31% 5.09%(b)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND, INC.
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93 10/31/92
<S> <C>
<C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD
$1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.0512 0.0339 0.0250 0.0332
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
0.0000 0.0000 0.0000 0.0000
TOTAL FROM INVESTMENT OPERATIONS
0.0512 0.0339 0.0250 0.0332
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.0512 0.0339 0.0250 0.0332
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0000 0.0000 0.0000
TOTAL DISTRIBUTIONS
0.0512 0.0339 0.0250 0.0332
NET ASSET VALUE, END OF PERIOD
$1.00 $1.00 $1.00 $1.00
TOTAL RETURN
5.30% 3.28% 2.53% 3.36%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$54,714,219 $32,382,552 $14,784,493 $12,395,326
RATIO OF EXPENSES TO AVERAGE NET ASSETS
0.70% 0.70% 0.70% 0.75%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
5.21% 3.39% 2.51% 3.32%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.16% 1.29% 1.32% 1.09%
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS
4.75% 2.81% 1.88% 2.98%
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/91 10/31/90 10/31/89 (d)
<S> <C> <C>
$1.00 $1.00 $1.00
0.0576 0.0737 0.0633
0.0000 0.0000 0.0000
0.0576 0.0737 0.0633
0.0576 0.0737 0.0633
0.0000 0.0000 0.0000
0.0576 0.0737 0.0633
$1.00 $1.00 $1.00
13.76% 7.62% 10.05%(b)
$14,906,733 $21,405,713 $10,735,032
0.81% 0.80% 0.60%(b)
5.76% 7.57% 8.43%(b)
1.18% 1.33% 1.34%(b)
5.38% 7.04% 7.69%(b)
</TABLE>
<PAGE>
CRABBE HUSON FUNDS
FINANCIAL HIGHLIGHTS
(Continued)
<TABLE>
<CAPTION>
THE CRABBE HUSON REAL ESTATE INVESTMENT FUND, INC.
YEAR PERIOD
ENDED ENDED
10/31/95 10/31/94(e)
<S> <C>
<C>
NET ASSET VALUE, BEGINNING OF PERIOD
$9.50 $10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME
0.4436 0.3664
NET REALIZED & UNREALIZED
GAIN (LOSS) ON SECURITIES
0.3065 (0.6394)
TOTAL FROM INVESTMENT OPERATIONS
0.7501 (0.2730)
LESS DISTRIBUTIONS
DISTRIBUTIONS FROM NET INVESTMENT INCOME
0.4379 0.2287
DISTRIBUTIONS IN EXCESS OF NET INVESTMENT INCOME
0.0000 0.0000
DISTRIBUTIONS FROM CAPITAL GAINS
0.1222 0.0000
TOTAL DISTRIBUTIONS
0.5601 0.2287
NET ASSET VALUE, END OF PERIOD
$9.69 $9.50
TOTAL RETURN
8.31% -3.25%
RATIOS/SUPPLEMENTAL DATA
NET ASSETS, END OF PERIOD
$18,985,514 $18,279,500
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.50% 1.01%(b)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSET
4.59% 6.30%(b)
PORTFOLIO TURNOVER RATE
59.53% 43.30%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
RATIO OF EXPENSES TO AVERAGE NET ASSETS
1.89% 2.03%(b)
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSET
4.20% 5.28%(b)
</TABLE>
<PAGE>
Independent Auditors' Report
The Shareholders and Boards of Directors
Crabbe Huson Funds -
The Oregon Municipal Bond Fund, Inc.
The Crabbe Huson Special Fund, Inc.
The Crabbe Huson Asset Allocation Fund, Inc.
The Crabbe Huson Equity Fund, Inc.
The Crabbe Huson Income Fund, Inc.
The Crabbe Huson U.S. Government Income Fund, Inc.
The Crabbe Huson U.S. Government Money Market Fund, Inc.
The Crabbe Huson Real Estate Investment Fund, Inc.:
We have audited the accompanying statements of assets and
liabilities,
including the schedules of investments of each of the Crabbe Huson
Funds, as of
October 31, 1995, and the related statements of operations for the
year then
ended, the statements of changes in net assets for The Oregon
Municipal Bond
Fund, Inc., The Crabbe Huson Special Fund, Inc., The Asset
Allocation Fund,
Inc., The Crabbe Huson Equity Fund, Inc., The Crabbe Huson Income
Fund, Inc.,
The Crabbe Huson U.S. Government Fund, Inc. and The Crabbe Huson
U.S.
Government Money Market Fund, Inc. for each of the two years then
ended, and
for The Real Estate Investment Fund, Inc. for the year ended
October 31, 1995
and for the period from April 4, 1994 (commencement of operations)
to October
31, 1994, and the financial highlights for The Oregon Municipal
Bond Fund, Inc.
and The Crabbe Huson Special Fund, Inc. for each of the seven years
ended
October 31, 1995, The Crabbe Huson Asset Allocation Fund, Inc., The
Crabbe
Huson Equity Fund, Inc., The Crabbe Huson Income Fund, Inc., The
Crabbe Huson
U.S. Government Income Fund, Inc. and The Crabbe Huson U.S.
Government Money
Market Fund, Inc. for each of the six years ended October 31, 1995
and for the
period from January 31, 1989 (commencement of operations) to
October 31, 1989
and for the Crabbe Huson Real Estate Investment Fund, Inc. for the
year ended
October 31, 1995 and for the period from April 4, 1994
(commencement of
operations) to October 31, 1994. These financial statements and
financial
highlights are the responsibility of the management of the Crabbe
Huson Funds.
Our responsibility is to express an opinion on these financial
statements and
financial highlights based upon our audits. The financial
highlights for The
Oregon Municipal Bond Fund, Inc. and The Crabbe Huson Special Fund,
Inc. for
the periods ended October 31, 1988 and prior were audited by other
auditors
whose reports expressed unqualified opinions on the financial
highlights.
We conducted our audits in accordance with generally accepted
auditing
standards. Those standards require that we plan and perform the
audit to
obtain reasonable assurance about whether the financial statements
and
financial highlights are free of material misstatement. An audit
includes
examining, on a test basis, evidence supporting the amounts and
disclosures in
the financial statements and financial highlights. Our procedures
included
verification of securities owned as of October 31, 1995, by
examination and
other appropriate audit procedures. An audit also includes
assessing the
accounting principles used and significant estimates made by
management, as
well as evaluating the overall financial statement presentation.
We believe
that our audits provide a reasonable basis for our opinion.
<PAGE>
In our opinion, the financial statements and financial highlights
referred to
above present fairly, in all material respects, the financial
position of each
of the Crabbe Huson Funds as of October 31, 1995, the results of
their
operations, the changes in their net assets and their financial
highlights for
the periods indicated above, in conformity with generally accepted
accounting
principles.
KPMG PEAT MARWICK LLP
Portland, Oregon
December 8, 1995
<PAGE>
At a Special Meeting of the shareholders on September 6, 1995, the
shareholders of the Real Estate Fund approved a Subadvisory
Agreement among the Adviser, the Real Estate Fund and Aldrich,
Eastman & Waltch, L.P. ("AEW"). Pursuant to the Subadvisory
Agreement, AEW will be responsible for the day-to-day investment
management of the Real Estate Fund, subject to the overall
supervision of the Adviser and the Real Estate Fund's Board of
Directors. The voting results of the meeting were as follows:
FOR-1,292,274.882; AGAINST-1,350.279; ABSTAIN-48,772.304.
<PAGE>
MAILING ADDRESS
Crabbe Huson Funds
P.O. Box 8413
Boston, MA 02266-8413
INVESTMENT ADVISOR
The Crabbe Huson Group, Inc.
121 S.W. Morrison, Suite 1400
Portland, OR 97204
DISTRIBUTOR
Crabbe Huson Securities, Inc.
121 S.W. Morrison, Suite 1410
Portland, OR 97204
LEGAL COUNSEL
Davis Wright Tremaine
1300 S.W. Fifth Avenue, Suite 2300
Portland, OR 97201
INDEPENDENT AUDITORS
KPMG Peat Marwick
1211 S.W. Fifth Avenue, Suite 2000
Portland, OR 97204
TRANSFER AGENT &
INVESTOR SERVICES
State Street Bank and Trust Company
P.O. Box 8413
Boston, MA 02266-8413
FUND DIRECTORS
William W. Wyatt, Jr.
Louis Scherzer
Richard P. Wollenberg
Bob L. Smith
Gary L. Capps
Richard S. Huson
James E. Crabbe
Craig P. Stuvland
[CRABBE HUSON LOGO]
