<PAGE> 1
================================================================================
============================================================
HOTCHKIS AND
WILEY FUNDS
============================================================
Equity Fund For Insurance Companies
SEMI-ANNUAL REPORT
------------------------------------------------------------------------
December 31, 1996
800 West 6th Street, Fifth Floor
Los Angeles, CA 90017
(213) 362-8900
Investment Advisor: HOTCHKIS AND WILEY
================================================================================
<PAGE> 2
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
Dear Shareholders:
The Equity Fund for Insurance Companies' total return for the six months ended
December 31, 1996 was 10.1% compared to the S&P 500 Index return of 11.8%. The
year 1996 was clearly a challenging time for value investors. Stocks followed
what appeared to be an endless liquidity-driven advance, as record levels of
inflows poured into mutual fund investments. Large capitalization,
growth/momentum issues were the primary beneficiaries of these cash flows which
indiscriminately elevated the valuations of many issues to questionable levels
(e.g. Intel +131%, IBM + 68%). The market clearly favored high P/E over low P/E
names. Furthermore, large companies outperformed smaller companies, which
greatly advantaged the performance of the cap-weighted versus equal-weighted
measure of the S&P 500 (cap weighted +23.1%, equal weighted +19.3%). As most
active managers tend to adhere to a more equal-weighted strategy, the
cap-weighted S&P 500 was an extremely formidable benchmark in 1996.
We are unsure as to how long the stampede will continue, but one thing is
certain, intrinsic value (what a company is worth) has little to do with either
liquidity or momentum. Furthermore, investors' emphasis on these characteristics
has created some opportunities from a valuation perspective. For example, the
relative dividend yield of the electric utility sector is currently at a
sixteen-year high. Additionally, there are some wonderfully positioned global
companies that are selling at very reasonable multiples of the criteria that
ultimately does determine value -- earnings and dividend growth.
It is important to recognize that a bullish herd cannot run on forever at high
speed. When the momentum of this strong market dissipates or even reverses,
investors will once again focus on fundamentals. We believe the Fund's portfolio
is well-situated to take advantage of this market change. We are paying less for
earnings (12.9x vs. 17.3x) and receiving more in dividends (3.3% vs. 2.0%) than
the S&P 500 Index. These key portfolio characteristics help to control risk in a
volatile market and provide a platform for outperformance when investors refocus
on fundamental value. We continue to manage the portfolio by strict adherence to
our investment disciplines, which emphasize these lower risk characteristics.
Sincerely,
Gail Bardin
Portfolio Manager
<PAGE> 3
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS--95.5% SHARES VALUE
- -------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE--2.2%
Northrop Grumman Corporation........................... 3,000 $ 248,250
Rockwell International Corporation..................... 6,000 365,250
-----------
613,500
-----------
AUTO-RELATED--1.3%
Dana Corporation....................................... 11,000 358,875
-----------
AUTOS & TRUCKS--5.0%
Ford Motor Company..................................... 24,500 780,938
General Motors Corporation............................. 11,300 629,975
-----------
1,410,913
-----------
BANKS--8.6%
BankAmerica Corporation................................ 3,600 359,100
The Chase Manhattan Corporation........................ 4,500 401,625
First Chicago NBD Corporation.......................... 9,700 521,375
First of America Bank Corporation...................... 3,100 186,387
Fleet Financial Group, Inc. ........................... 5,500 274,312
KeyCorp................................................ 5,800 292,900
NationsBank Corporation................................ 3,200 312,800
Signet Banking Corporation............................. 3,000 92,250
-----------
2,440,749
-----------
BEVERAGES--1.5%
Anheuser-Busch Companies, Inc.......................... 10,400 416,000
-----------
BUILDING & FOREST PRODUCTS--2.8%
Georgia Pacific........................................ 3,700 266,400
Weyerhaeuser Company................................... 11,000 521,125
-----------
787,525
-----------
CHEMICALS--3.8%
The Dow Chemical Company............................... 5,200 407,550
Dupont (E.I.) De Nemours & Company..................... 3,000 283,125
Eastman Chemical Company............................... 2,800 154,700
Millenium Chemicals, Inc. ............................. 2,214 39,298
Olin Corporation....................................... 5,400 203,175
-----------
1,087,848
-----------
</TABLE>
1
<PAGE> 4
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
DIVERSIFIED--4.8%
American Brands, Inc................................... 11,000 $ 545,875
Hanson PLC ADR......................................... 31,000 209,250
Ogden Corporation...................................... 11,500 215,625
Tenneco, Inc. ......................................... 8,800 397,100
-----------
1,367,850
-----------
DRUGS--2.6%
American Home Products Corporation..................... 4,800 281,400
Baxter International, Inc. ............................ 7,200 295,200
Merck & Company, Inc. ................................. 2,000 158,500
-----------
735,100
-----------
ENGINEERING AND CONSTRUCTION--0.9%
Harsco Corporation..................................... 3,700 253,450
-----------
FINANCIAL SERVICES--4.0%
Beneficial Corporation................................. 4,800 304,200
Household International, Inc. ......................... 6,100 562,725
Transamerica Corporation............................... 3,300 260,700
-----------
1,127,625
-----------
HOUSEHOLD FURNISHINGS & APPLIANCES--1.6%
Whirlpool Corporation.................................. 9,600 447,600
-----------
INSURANCE--5.0%
Aetna Life and Casualty Company........................ 3,300 264,000
Aon Corporation........................................ 7,000 434,875
Lincoln National Corporation........................... 5,200 273,000
St. Paul Companies, Inc. .............................. 4,700 275,538
USLIFE Corporation..................................... 5,500 182,875
-----------
1,430,288
-----------
MACHINERY--2.9%
Deere & Company........................................ 9,900 402,188
New Holland NV......................................... 19,600 409,150
-----------
811,338
-----------
METALS & MINING--3.2%
Aluminum Company of America............................ 8,600 548,250
Reynolds Metals Company................................ 6,200 349,525
-----------
897,775
-----------
</TABLE>
2
<PAGE> 5
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
NATURAL GAS--1.7%
Eastern Enterprises.................................... 13,600 $ 481,100
-----------
OIL--DOMESTIC--4.0%
Ashland, Inc........................................... 5,000 219,375
Atlantic Richfield Company............................. 2,200 291,500
Sun Company, Inc....................................... 6,710 163,556
USX-Marathon Group, Inc................................ 13,900 331,863
Ultramar Diamond Shamrock Corporation.................. 4,500 142,312
-----------
1,148,606
-----------
OIL INTERNATIONAL--2.0%
British Petroleum PLC ADR.............................. 2,107 297,877
Chevron Corporation.................................... 4,000 260,000
-----------
557,877
-----------
PAPER--3.3%
International Paper Company............................ 11,600 468,350
Union Camp Corporation................................. 4,200 200,550
Westvaco Corporation................................... 9,000 258,750
-----------
927,650
-----------
PHOTOGRAPHY & OPTICAL--1.7%
Eastman Kodak Company.................................. 6,000 481,500
-----------
POLLUTION CONTROL--1.5%
Browning-Ferris Industries, Inc........................ 16,200 425,250
-----------
PROFESSIONAL SERVICES--0.8%
PHH Corporation........................................ 5,600 240,800
-----------
RAILROADS--1.9%
Conrail, Inc. ......................................... 2,200 219,175
Norfolk Southern Corporation........................... 3,600 315,000
-----------
534,175
-----------
RETAIL--GENERAL--5.1%
J.C. Penney Company, Inc. ............................. 7,700 375,375
Kmart Corporation(+)................................... 16,200 168,075
May Department Stores Company.......................... 11,800 551,650
Sears Roebuck Company.................................. 7,800 359,775
-----------
1,454,875
-----------
</TABLE>
3
<PAGE> 6
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
SAVINGS & LOANS--4.7%
Federal National Mortgage Association.................. 8,000 $ 298,000
Great Western Financial Corporation.................... 15,300 443,700
H.F. Ahmanson & Company................................ 18,000 585,000
-----------
1,326,700
-----------
SHIPBUILDING--0.0%
Newport News Shipbuilding Inc. ........................ 700 10,500
-----------
STEEL--1.5%
USX-U.S. Steel Group, Inc. ............................ 14,000 439,250
-----------
TELECOMMUNICATIONS--0.8%
Harris Corporation..................................... 3,500 240,188
-----------
TOBACCO--2.6%
Philip Morris Companies, Inc. ......................... 6,600 743,325
-----------
TRUCKING--0.8%
Ryder System, Inc. .................................... 8,000 225,000
-----------
UTILITY--ELECTRIC--6.0%
CMS Energy Corporation................................. 12,000 403,500
DTE Energy Company..................................... 4,000 129,500
Edison International................................... 6,000 119,250
Illinova Corporation................................... 13,000 357,500
New York State Electric & Gas Corporation.............. 5,300 114,613
Peco Energy Company.................................... 11,300 285,325
Public Service Enterprises Group, Inc. ................ 11,000 299,750
-----------
1,709,438
-----------
UTILITY--TELEPHONE--6.9%
Alltel Corporation..................................... $ 12,000 376,500
AT & T Corporation..................................... 15,000 652,500
NYNEX Corporation...................................... 6,000 288,750
Pacific Telesis Group.................................. 11,000 404,250
US West, Inc. ......................................... 7,000 225,749
-----------
1,947,749
-----------
Total common stocks (cost $20,875,124)................. 27,080,419
-----------
</TABLE>
4
<PAGE> 7
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
PRINCIPAL
VARIABLE RATE DEMAND NOTES#--4.7% AMOUNT
- --------------------------------------------------------------------------------------
<S> <C> <C>
Lilly (Eli) & Co., 5.4403%............................. $ 80,892 $ 80,892
Pitney Bowes, 5.5075%.................................. 521,914 521,914
Sara Lee Corp., 5.4873%................................ 475,000 475,000
Southwestern Bell, 5.4873%............................. 246,086 246,086
-----------
Total variable rate demand notes (cost $1,323,892)..... 1,323,892
-----------
Total investments--100.2% (cost $22,119,016)................ 28,404,311
Liabilities in excess of other assets--(0.2%)............... (61,135)
-----------
TOTAL NET ASSETS--100.0%............................... $28,343,176
===========
</TABLE>
- ---------------
<TABLE>
<C> <S>
# Variable rate demand notes are considered short-term
obligations and are payable on demand. Interest rate changes
periodically on specified dates. The rate listed is as of
December 31, 1996.
(+) Non-income producing security.
ADR -- American Depository Receipts
</TABLE>
5
<PAGE> 8
HOTCHKIS
AND WILEY FUNDS Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $22,199,016)............... $28,404,311
Dividends and interest receivable...................... 71,454
Receivable for investments sold........................ 32,840
Receivable from Advisor................................ 5,621
Prepaid Expenses....................................... 1,418
-----------
Total assets...................................... 28,515,644
-----------
LIABILITIES:
Payable for investments purchased...................... 149,920
Accrued expenses and other liabilities................. 22,548
-----------
Total liabilities...................................... 172,468
-----------
Net assets........................................ $28,343,176
===========
NET ASSETS CONSIST OF:
Paid in capital........................................ $21,902,906
Undistributed net investment loss...................... (238)
Undistributed net realized gains on investments........ 235,213
Net unrealized appreciation on investments............. 6,205,295
-----------
Net assets........................................ $28,343,176
===========
CALCULATION OF NET ASSET VALUE PER SHARE:
Shares outstanding (unlimited shares of no par value
authorized)........................................... 1,995,711
Net asset value per share (offering and redemption
price)................................................ $ 14.20
===========
</TABLE>
See Notes to the Financial Statements.
6
<PAGE> 9
HOTCHKIS
AND WILEY FUNDS Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
Six months ended December 31, 1996
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends *............................................ $ 411,798
Interest............................................... 24,220
----------
Total income...................................... 436,018
----------
EXPENSES:
Advisory fee........................................... 68,043
Legal and auditing fees................................ 5,100
Custodian fees and expenses............................ 7,007
Accounting fee......................................... 7,716
Administration fee..................................... 3,215
Trustees' fees and expenses............................ 5,929
Registration fees...................................... 969
Other expenses......................................... 3,111
----------
Total expenses.................................... 101,090
Less: expense reimbursement............................ (33,047)
----------
Net expenses...................................... 68,043
----------
NET INVESTMENT INCOME....................................... 367,975
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments....................... 718,553
Net change in unrealized appreciation on investments... 1,422,619
----------
Net gain on investments........................... 2,141,172
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $2,509,147
==========
- ---------------
* Net of Foreign Taxes withheld............................. $ 1,858
==========
</TABLE>
See Notes to the Financial Statements
7
<PAGE> 10
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1996 YEAR ENDED
(UNAUDITED) JUNE 30, 1996
----------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income................................ $ 367,975 $ 645,050
Net realized gain on securities transactions......... 718,553 809,778
Net change in unrealized appreciation of
securities......................................... 1,422,619 2,827,246
----------- -----------
Net increase in net assets resulting from
operations.................................... 2,509,147 4,282,074
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................ (379,319) (688,368)
Net realized gain on securities transactions......... (922,992) (378,446)
----------- -----------
Total dividends and distributions............... (1,302,311) (1,066,814)
----------- -----------
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold........................ 1,200,000 3,000,002
Shares issued in connection with payment of
dividends.......................................... 1,302,311 1,066,814
Cost of shares redeemed.............................. (15,000) (22,500)
----------- -----------
Net increase in net assets from Fund share
transactions.................................. 2,487,311 4,044,316
----------- -----------
Total Increase in Net Assets.............................. 3,694,147 7,259,576
NET ASSETS:
Beginning of year.................................... 24,649,029 17,389,453
----------- -----------
End of year*......................................... $28,343,176 $24,649,029
=========== ===========
*Including undistributed net investment income of:........ $ (238) $ 11,105
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares sold.......................................... 81,633 234,558
Shares issued in connection with payment of
dividends.......................................... 91,335 83,286
Shares redeemed...................................... (1,093) (2,403)
----------- -----------
Net increase.................................... 171,875 315,441
=========== ===========
</TABLE>
See Notes to the Financial Statements.
8
<PAGE> 11
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
December 31, 1996
NOTE 1. ACCOUNTING POLICIES. The Equity Fund for Insurance Companies (the
"Fund") is a series of Hotchkis and Wiley Funds (the "Trust"), an
open-end, management investment company organized as a Massachusetts
business trust on August 22, 1984 and registered under the Investment
Company Act of 1940. The Fund commenced operations on January 29,
1993. In addition to the Fund, the Trust also offers the Balanced
Income Fund, the Small Cap Fund, the Equity Income Fund, the
International Fund, the Low Duration Fund, the Short-Term Investment
Fund, and the Total Return Bond Fund. The assets of each series are
invested in separate, independently managed portfolios. The following
is a summary of significant accounting policies followed by the Fund
in the preparation of the financial statements.
SECURITY VALUATION: Portfolio securities that are listed on a
securities exchange (whether domestic or foreign) or the NASDAQ
National Market System ("System") are valued at the last sale price
as of 4:00 p.m., Eastern time, or, in the absence of recorded sales,
at the average of readily available closing bid and asked prices on
such exchange or such System. Unlisted securities that are not
included in such System are valued at the average of the quoted bid
and asked price in the over-the-counter market. Securities for which
market quotations are not readily available are valued at fair value
as determined in good faith by Hotchkis and Wiley (the "Advisor")
under procedures established by and under the general supervision and
responsibility of the Board of Trustees. Short-term investments which
mature in less than 60 days are valued at amortized cost (unless the
Board of Trustees determines that this method does not represent fair
value), if their original maturity was 60 days or less, or by
amortizing the values as of the 61st day prior to maturity, if their
original term to maturity exceeded 60 days. Investments quoted in
foreign currency are valued daily in U.S. dollars on the basis of the
foreign currency exchange rate prevailing at the time of valuation.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase
agreements with banks or broker-dealers that meet credit guidelines
established by the Board of Trustees. In connection with transactions
in repurchase agreements, it is the Fund's policy that the custodian
take possession of the underlying collateral securities, the value of
which exceeds the principal amount of the repurchase transaction,
including accrued interest. If the seller defaults, and the value of
the collateral declines, realization of the collateral by the Fund
may be delayed or limited.
FEDERAL INCOME TAXES: It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated
investment companies and intends to distribute net investment company
taxable income and net capital gains to its shareholders. Therefore,
no federal income tax provision is required.
9
<PAGE> 12
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
December 31, 1996
USE OF ESTIMATES: The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
EXPENSE ALLOCATION: Common expenses incurred by the Trust are
allocated among the funds based upon (i) relative average net assets,
(ii) as incurred on a specific identification basis, or (iii) evenly
among the Funds, depending on the nature of the expenditure.
OTHER: Security and shareholder transactions are recorded no
later than the first business day after the trade date. Realized
gains and losses on sales of investments are calculated on the
identified cost basis. Dividend income and dividends and
distributions to shareholders are recorded on the ex-dividend date.
Interest income is recognized on the accrual basis. Generally
accepted accounting principles require that permanent financial
reporting and tax differences relating to shareholder distributions
be reclassified to paid in capital.
NOTE 2. INVESTMENT ADVISORY AGREEMENT. The Fund has an investment advisory
agreement with the Advisor. The Advisor receives a fee, computed
daily and payable monthly, at an annual rate of 0.60% of the first
$10 million of the Fund's average net assets, and 0.50% of average
net assets in excess of $10 million.
The Advisor provides continuous supervision of the investment
portfolio and pays all of the operating expenses relating to the Fund
other than the Advisory fee. For the six months ended December 31,
1996, the Advisor paid $33,047 of operating expenses on behalf of the
Fund.
NOTE 3. PURCHASES AND SALES OF SECURITIES. Purchases and sales of investment
securities, other than short-term investments, for the six months
ended December 31, 1996 were $3,827,821 and $2,502,490, respectively.
At December 31, 1996 (for financial reporting and federal income
tax purposes), net unrealized appreciation aggregated $6,205,295, of
which $6,638,905 related to appreciated securities and $(433,610)
related to depreciated securities.
10
<PAGE> 13
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JANUARY 29, 1993+
DECEMBER 31, 1996 YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
(UNAUDITED) JUNE 30, 1996 JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1993
----------------- ------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period.............................. $13.51 $11.53 $ 9.89 $10.31 $10.00
------- ------ ------ ------ -------
Income from Investment Operations:
Net investment income............. 0.20 0.34 0.41 0.40 0.16
Net realized and unrealized gain
(loss) on investments........... 1.17 2.26 1.59 (0.24) 0.30
------- ------ ------ ------ -------
Total from investment
operations...................... 1.37 2.60 2.00 0.16 0.46
------- ------ ------ ------ -------
Less Distributions:
Dividends (from net investment
income)......................... (0.20) (0.40) (0.34) (0.38) (0.15)
Distributions (from capital
gains).......................... (0.48) (0.22) (0.02) (0.20) (0.00)
------- ------ ------ ------ -------
Total Distributions............... (0.68) (0.62) (0.36) (0.58) (0.15)
------- ------ ------ ------ -------
Net Asset Value, End of Period........ $14.20 $13.51 $11.53 $ 9.89 $10.31
======= ====== ====== ====== =======
RATIOS/SUPPLEMENTAL DATA:
Total return.......................... 10.11%## 22.93% 20.62% 1.38% 11.45%#
Net assets, end of period
(millions).......................... $28.3 $24.6 $17.4 $10.5 $7.1
Ratio of expenses to average net
assets:
Before expense reimbursement...... 0.80%# 0.76% 1.05% 1.20% 1.45%#
After expense reimbursement....... 0.54%# 0.54% 0.58% 0.60% 0.60%#
Ratio of net investment income to
average net assets:
Before expense reimbursement...... 2.66%# 2.78% 3.58% 3.32% 2.81%#
After expense reimbursement....... 2.92%# 3.00% 4.03% 3.91% 3.66%#
Portfolio turnover.................... 10% 21% 29% 26% 2%
Average commission rate paid.......... $0.0483
</TABLE>
- ---------------
+ Commencement of operations.
# Annualized.
## Not annualized.
See Notes to Financial Statements.
11
<PAGE> 14
HOTCHKIS
AND WILEY FUNDS Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SHAREHOLDER MEETING RESULTS
A special meeting of shareholders of the Hotchkis and Wiley Funds was held
on September 27, 1996. The following matters were voted on at the meeting:
1. The shareholders of the Trust elected the following nominees to the
Board of Trustees:
<TABLE>
<CAPTION>
% OF % OF
NO. OF SHARES OUTSTANDING SHARES SHARES VOTED
------------- ------------------ ------------
<S> <C> <C> <C>
Robert L. Burch III
Affirmative.............. 35,976,972.658 66.485% 98.955%
Withhold................. 379,792.636 .702% 1.045%
TOTAL.................... 36,356,765.294 67.187% 100.000%
John A.G. Gavin
Affirmative.............. 35,954,199.018 66.443% 98.893%
Withhold................. 402,566.276 .744% 1.107%
TOTAL.................... 36,356,765.294 67.187% 100.000%
Joe Grills
Affirmative.............. 35,584,248.256 65.760% 97.875%
Withhold................. 772,517.038 1.427% 2.125%
TOTAL.................... 36,356,765.294 67.187% 100.000%
John F. Hotchkis
Affirmative.............. 35,963,907.659 66.461% 98.919%
Withhold................. 392,857.635 .726% 1.081%
TOTAL.................... 36,356,765.294 67.187% 100.000%
Robert B. Hutchinson
Affirmative.............. 35,941,772.988 66.420% 98.859%
Withhold................. 414,992.306 .767% 1.141%
TOTAL.................... 36,356,765.294 67.187% 100.000%
Michael L. Quinn
Affirmative.............. 35,525,492.957 65.651% 97.714%
Withhold................. 831,272.337 1.536% 2.286%
TOTAL.................... 36,356,765.294 67.187% 100.000%
</TABLE>
12
<PAGE> 15
HOTCHKIS
AND WILEY FUNDS Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SHAREHOLDER MEETING RESULTS, CONTINUED
<TABLE>
<CAPTION>
% OF % OF
NO. OF SHARES OUTSTANDING SHARES SHARES VOTED
------------- ------------------ ------------
<S> <C> <C> <C>
Merle T. Welshans
Affirmative.............. 35,941,635.914 66.420% 98.858%
Withhold................. 415,129.380 .767% 1.142%
TOTAL.................... 36,356,765.294 67.187% 100.000%
Richard R. West
Affirmative.............. 35,897,399.581 66.338% 98.737%
Withhold................. 459,365.713 .849% 1.263%
TOTAL.................... 36,356,765.294 67.187% 100.000%
</TABLE>
2. The shareholders of the Equity Fund for Insurance Companies approved a
new investment advisory agreement on substantially the same terms as the current
agreement as follows:
<TABLE>
<CAPTION>
% OF % OF
NO. OF SHARES OUTSTANDING SHARES SHARES VOTED
------------- ------------------ ------------
<S> <C> <C> <C>
For......................... 18,236,836 100% 100%
Against..................... -- -- --
Abstain..................... -- -- --
</TABLE>
3. The shareholders of the Trust ratified the selection by the Trustees of
Price Waterhouse LLP, independent accountants, to audit the Trust's financial
statements for the fiscal year ending June 30, 1997.
<TABLE>
<CAPTION>
% OF % OF
NO. OF SHARES OUTSTANDING SHARES SHARES VOTED
------------- ------------------ ------------
<S> <C> <C> <C>
Affirmative................. 35,807,865 66.173% 98.490%
Against..................... 186,438 .344% .513%
Abstain..................... 362,463 .670% .997%
</TABLE>
4. The shareholders of the Trust approved amendments to the Declaration of
Trust that would permit the Trustees to authorize classes of shares of the
Trust, among other things, as follows:
<TABLE>
<CAPTION>
% OF % OF
NO. OF SHARES OUTSTANDING SHARES SHARES VOTED
------------- ------------------ ------------
<S> <C> <C> <C>
Affirmative................. 32,033,308 59.197% 93.461%
Against..................... 1,559,254 2.882% 4.549%
Abstain..................... 682,069 1.260% 1.990%
</TABLE>
13
