<PAGE> 1
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HOTCHKIS AND
WILEY FUNDS
------------------
------------------
Equity Fund For Insurance Companies
SEMI-ANNUAL REPORT
---------------------------
December 31, 1998
725 South Figueroa Street
Suite 4000
Los Angeles, CA 90017-5400
(213) 430-1000
Investment Advisor
Hotchkis and Wiley
Distributor
Princeton Funds Distributor, Inc.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A PROSPECTUS.
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<PAGE> 2
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
We are pleased to present to you the semi-annual report of Hotchkis and Wiley
Equity Fund for Insurance Companies for the six months ended December 31, 1998.
Investment commentary follows.
The last six months of 1998 were a time of great volatility and dramatic events
in the marketplace. July began strongly for a narrow group of the largest growth
companies. Underneath this narrow group, the erosion of stock prices, which
began in April, continued with value underperforming dramatically.
On July 17, the whole U.S. market began collapsing, culminating in a selling
crescendo in the last three trading days in August. During the sell-off, a
pronounced shift in investor preference began to emerge, as investors refocused
on underlying valuation support and were drawn to truly over-sold opportunities
within the market. From August 26 through October 8, the more value-oriented
stocks performed well relative to the stocks in the S&P 500 Index. The Fund held
up well during this period. From August 16 through October 8, the Fund generated
a -3.7% return while the S&P 500 Index returned -11.1% and the Russell 1000
Value Index returned -8.1%. However, during the last full six months of 1998,
the Fund lagged these indexes, returning -2.2% versus 9.3% for the S&P 500 and
3.1% for the Russell 1000 Value.
The correction ended in early October when the Federal Reserve ignited the
market with three interest rate cuts in quick succession. Investors crowded into
a handful of the largest, most liquid names. The S&P 500 Index produced
sensational returns, but in a relatively narrow group of large-cap stocks. The
wide disparity in performance between growth and value stocks continued, as did
that between mega-cap stocks and all the others--large-, mid-, and small-cap.
Returns in the Fund came predominantly from telephone companies, as the dynamics
of new strategic initiatives became apparent, and electric companies. Also
contributing to returns were paper companies, with continuing consolidation;
Fannie Mae, which benefited from a refinancing boom driven by falling rates; and
Philip Morris, which moved steadily upward on the multi-state tobacco litigation
settlement. The Fund's returns were hampered by holdings in the energy sector,
which suffered from historically low oil prices. Returns also suffered from lack
of exposure to technology and drug companies, which were among the best
performing sectors and continued to trade at what we believed were excessive
valuation levels.
The difference in prices between value and growth stocks has become exaggerated.
The divergence has been with us for over three years and has widened to record
levels. Our research supports the current value orientation of the Fund, and we
intend to stick to our disciplines of focusing on financially strong companies
with above-average current yield and below-average price-to-earnings ratios.
TOTAL RETURNS FOR PERIODS ENDED 12/31/98*
<TABLE>
<CAPTION>
Fund S&P 500 Index
- ----------------------------------------------------
<S> <C> <C>
Six Months................ -2.2% 9.3%
One Year.................. 6.5% 28.8%
Five Years................ 17.2% 24.2%
Since Inception
(1/29/93)............... 16.3% 21.8%
</TABLE>
* Average annual total return for the periods greater than one year.
Past performance is no guarantee of future performance.
As always, we appreciate the trust you place in us. We thank you for your
continued support and look forward to reporting to you again in six months.
Sincerely,
[SIGS]
NANCY D. CELICK SIG
Nancy D. Celick
President
HOTCHKIS AND WILEY FUNDS
<PAGE> 3
MARKET INDEXES
RUSSELL 1000 VALUE INDEX measures the performance of those Russell 1000
companies with lower price-to-book value ratios and lower forecasted growth
values. (The Russell 1000 Index measures the performance of the 1,000 largest
companies in the Russell 3000 Index, which is comprised of the 3,000 largest
U.S.-domiciled publicly-traded common stocks by market capitalization
representing approximately 98% of the U.S. publicly-traded equity market.)
STANDARD & POOR'S 500 INDEX is a capital-weighted index representing the
aggregate market value of the common equity of 500 stocks primarily traded on
the New York Stock Exchange.
The opinions expressed on the previous page are as of December 31, 1998. The
Fund is actively managed and may not continue to hold any specific securities
mentioned.
Total returns and average annual total returns for the Fund are net of all
charges and fees and assume reinvestment of capital gains distributions and
shareholder dividends at net asset value. Investment return and principal will
vary so that shares, when redeemed, may be worth more or less than their
original cost. Past performance is no guarantee of future performance.
The cited market indexes are unmanaged. It is not possible to invest directly in
an index.
<PAGE> 4
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS--99.3% SHARES VALUE
- ------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE--4.8%
Lockheed Martin Corporation............................ 8,000 $ 678,000
Northrop Grumman Corporation........................... 13,000 950,625
Rockwell International Corporation..................... 6,000 291,375
-----------
1,920,000
-----------
APPAREL & TEXTILES--0.8%
Russell Corporation.................................... 15,300 310,781
-----------
AUTO PARTS--2.1%
Dana Corporation....................................... 15,500 633,562
Meritor Automotive, Inc. .............................. 1 21
TRW Inc. .............................................. 3,400 191,038
-----------
824,621
-----------
AUTOS & TRUCKS--6.2%
Ford Motor Company..................................... 21,400 1,255,912
General Motors Corporation............................. 17,000 1,216,562
-----------
2,472,474
-----------
BANKS--7.6%
Bank One Corporation................................... 19,600 1,000,825
First Union Corporation................................ 7,370 448,188
Fleet Financial Group, Inc. ........................... 12,000 536,250
KeyCorp................................................ 14,200 454,400
Washington Mutual, Inc. ............................... 15,624 596,642
-----------
3,036,305
-----------
BEVERAGES--1.2%
Anheuser-Busch Companies, Inc. ........................ 7,000 459,375
-----------
BUILDING & FOREST PRODUCTS--2.5%
Georgia-Pacific (Timber Group)......................... 10,900 259,556
Weyerhaeuser Company................................... 14,500 736,781
-----------
996,337
-----------
CHEMICALS--3.6%
The Dow Chemical Company............................... 7,600 691,125
duPont (E.I.) de Nemours & Company..................... 6,000 318,375
Eastman Chemical Company............................... 8,100 362,475
Millennium Chemicals, Inc. ............................ 2,214 44,003
-----------
1,415,978
-----------
</TABLE>
See Notes to the Financial Statements.
1
<PAGE> 5
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
CONGLOMERATES--2.0%
Tenneco, Inc. ......................................... 23,300 $ 793,656
-----------
CONSUMER PRODUCTS--0.5%
Tupperware Corporation................................. 11,500 189,031
-----------
DRUGS--1.1%
American Home Products Corporation..................... 8,000 450,500
-----------
ENGINEERING & CONSTRUCTION--0.7%
Harsco Corporation..................................... 9,300 283,069
-----------
FINANCIAL SERVICES--3.1%
Associates First Capital Corporation--Class A.......... 4,642 196,705
Household International, Inc. ......................... 16,119 638,715
Transamerica Corporation............................... 3,300 381,150
-----------
1,216,570
-----------
HOUSEHOLD FURNISHINGS & APPLIANCES--1.9%
Whirlpool Corporation.................................. 14,000 775,250
-----------
INSURANCE--5.7%
American General Corporation........................... 6,087 474,786
Lincoln National Corporation........................... 6,300 515,419
Safeco Corporation..................................... 14,000 601,125
St. Paul Companies, Inc. .............................. 9,400 326,650
TIG Holdings, Inc. .................................... 22,600 351,713
-----------
2,269,693
-----------
LEISURE/TOYS--0.8%
Fortune Brands, Inc. .................................. 10,000 316,250
-----------
MACHINERY--1.4%
New Holland N.V........................................ 41,000 561,188
-----------
MEDICAL PRODUCTS & SUPPLIES--1.1%
Baxter International, Inc. ............................ 6,700 430,894
-----------
METALS & MINING--3.0%
Alcoa, Inc. ........................................... 8,300 618,869
Phelps Dodge Corporation............................... 3,200 162,800
Reynolds Metals Company................................ 8,100 426,769
-----------
1,208,438
-----------
NATURAL GAS--1.5%
Eastern Enterprises.................................... 13,600 595,000
-----------
</TABLE>
See Notes to the Financial Statements.
2
<PAGE> 6
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
OIL--DOMESTIC--6.7%
Atlantic Richfield Company............................. 5,900 $ 384,975
Occidental Petroleum Corporation....................... 35,200 594,000
Phillips Petroleum Company............................. 20,300 865,288
Texaco Inc. ........................................... 1,000 52,875
USX-Marathon Group, Inc. .............................. 14,800 445,850
Ultramar Diamond Shamrock Corporation.................. 13,300 322,525
-----------
2,665,513
-----------
PAPER--3.0%
Georgia-Pacific Group.................................. 4,900 286,956
International Paper Company............................ 12,000 537,750
Union Camp Corporation................................. 5,700 384,750
-----------
1,209,456
-----------
PHOTOGRAPHY & OPTICAL--1.7%
Eastman Kodak Company.................................. 9,400 676,800
-----------
POLLUTION CONTROL--2.0%
Browning-Ferris Industries, Inc. ...................... 10,072 286,422
Waste Management, Inc. ................................ 10,530 490,961
-----------
777,383
-----------
RAILROADS--1.7%
CSX Corporation........................................ 1,900 78,850
Norfolk Southern Corporation........................... 19,100 605,231
-----------
684,081
-----------
RETAIL--3.9%
Intimate Brands, Inc. ................................. 9,700 289,788
J.C. Penney Company, Inc. ............................. 8,800 412,500
May Department Stores Company.......................... 8,400 507,150
Sears, Roebuck & Company............................... 8,000 340,000
-----------
1,549,438
-----------
SAVINGS & LOANS--2.3%
Fannie Mae............................................. 12,300 910,200
-----------
STEEL--1.6%
USX-U.S. Steel Group, Inc. ............................ 27,800 639,400
-----------
TOBACCO--4.3%
Philip Morris Companies, Inc. ......................... 32,200 1,722,700
-----------
TRUCKING--0.5%
Ryder System, Inc. .................................... 8,000 208,000
-----------
</TABLE>
See Notes to the Financial Statements.
3
<PAGE> 7
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS, CONTINUED
December 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
UTILITY--ELECTRIC--11.4%
CMS Energy Corporation................................. 12,000 $ 581,250
Central & South West Corporation....................... 7,000 192,063
DTE Energy Company..................................... 4,000 171,500
Edison International................................... 7,100 197,912
Entergy Corporation.................................... 7,400 230,325
GPU, Inc. ............................................. 5,400 238,612
Illinova Corporation................................... 27,200 680,000
PECO Energy Company.................................... 12,900 536,963
P P & L Resources, Inc. ............................... 12,937 360,619
PacifiCorp............................................. 6,600 139,013
Public Service Enterprises Group, Inc. ................ 11,000 440,000
SCANA Corporation...................................... 13,200 425,700
Texas Utilities Company................................ 5,502 256,875
USEC, Inc. ............................................ 7,400 102,675
-----------
4,553,507
-----------
UTILITY--TELEPHONE--8.6%
AT&T Corporation....................................... 13,600 1,023,400
ALLTEL Corporation..................................... 13,600 813,450
Bell Atlantic Corporation.............................. 11,980 634,940
GTE Corporation........................................ 1,400 91,000
SBC Communications, Inc. .............................. 16,090 862,826
-----------
3,425,616
-----------
Total common stocks (cost $29,850,158)................. 39,547,504
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
VARIABLE RATE DEMAND NOTES*--0.6% AMOUNT
- --------------------------------------------------------------------------------------
<S> <C> <C>
General Mills, Inc., 5.2337% $156,318 156,318
Pitney Bowes, Inc., 5.2337% 73,634 73,634
-----------
Total variable rate demand notes (cost $229,952) 229,952
-----------
Total investments--99.9% (cost $30,080,110) 39,777,456
Other assets in excess of liabilities--0.1% 54,444
-----------
TOTAL NET ASSETS--100.0%............................... $39,831,900
===========
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Variable rate demand notes are considered short-term
obligations and are payable on demand. Interest rates change
periodically on specified dates. The rates listed are as of
December 31, 1998.
</TABLE>
See Notes to the Financial Statements.
4
<PAGE> 8
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
December 31, 1998
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $30,080,110)............... $39,777,456
Dividends and interest receivable...................... 96,722
Receivable for investments sold........................ 64,042
Prepaid expenses....................................... 1,663
-----------
Total assets...................................... 39,939,883
-----------
LIABILITIES:
Payable to Advisor..................................... 844
Payable for investments purchased...................... 81,647
Accrued expenses and other liabilities................. 25,492
-----------
Total liabilities................................. 107,983
-----------
Net assets........................................ $39,831,900
===========
NET ASSETS CONSIST OF:
Paid in capital........................................ $29,684,645
Undistributed net investment income.................... 17,265
Undistributed net realized gains on investments........ 432,644
Net unrealized appreciation on investments............. 9,697,346
-----------
Net assets........................................ $39,831,900
===========
CALCULATION OF NET ASSET VALUE PER SHARE:
Shares outstanding (unlimited shares of no par value
authorized)........................................... 2,470,539
Net asset value per share (offering and redemption
price)................................................ $ 16.12
===========
</TABLE>
See Notes to the Financial Statements.
5
<PAGE> 9
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
Six Months Ended December 31, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Income *
Dividends.............................................. $ 553,179
Interest............................................... 4,734
-----------
Total income...................................... 557,913
-----------
Expenses
Advisory fee........................................... 100,346
Legal and auditing fees................................ 3,100
Custodian fees and expenses............................ 5,155
Accounting fee......................................... 6,509
Administration fee..................................... 2,075
Trustees' fees and expenses............................ 1,710
Reports to shareholders................................ 2,000
Other expenses......................................... 1,134
-----------
Total expenses.................................... 122,029
Less, expense reimbursement............................ (21,683)
-----------
Net expenses...................................... 100,346
-----------
Net investment income..................................... 457,567
-----------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized gain on securities transactions........... 972,662
Net change in unrealized depreciation of securities.... (2,301,284)
-----------
Net loss on investments........................... (1,328,622)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ (871,055)
===========
- ---------------
* Net of Foreign Taxes withheld............................. $ 50
===========
</TABLE>
See Notes to the Financial Statements.
6
<PAGE> 10
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
DECEMBER 31, 1998 YEAR ENDED
(UNAUDITED) JUNE 30, 1998
----------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income................................ $ 457,567 $ 857,023
Net realized gain on securities transactions......... 972,662 3,890,091
Net change in unrealized appreciation (depreciation)
of securities...................................... (2,301,284) 3,049,489
----------- -----------
Net increase (decrease) in net assets resulting
from operations............................... (871,055) 7,796,603
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income................................ (440,612) (862,305)
Net realized gain on securities transactions......... (3,955,702) (2,201,788)
----------- -----------
Total dividends and distributions............... (4,396,314) (3,064,093)
----------- -----------
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold........................ 0 0
Shares issued in connection with payment of dividends
and distributions.................................. 4,396,314 3,064,093
Cost of shares redeemed.............................. (22,500) (30,000)
----------- -----------
Net increase in net assets from Fund share
transactions.................................. 4,373,814 3,034,093
----------- -----------
Total increase (decrease) in net assets................... (893,555) 7,766,603
NET ASSETS:
Beginning of year.................................... 40,725,455 32,958,852
----------- -----------
End of year*......................................... $39,831,900 $40,725,455
=========== ===========
*Including undistributed net investment income of:........ $ 17,265 $ 310
=========== ===========
CHANGES IN SHARES OUTSTANDING:
Shares sold.......................................... 0 0
Shares issued in connection with payment of dividends
and distributions.................................. 276,038 178,122
Shares redeemed...................................... (1,349) (1,656)
----------- -----------
Net increase.................................... 274,689 176,466
=========== ===========
</TABLE>
See Notes to the Financial Statements.
7
<PAGE> 11
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
December 31, 1998
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. The sole shareholder of the Fund is The Prudential Insurance
Company of America. The Fund seeks to provide current income and long-
term growth of income, accompanied by growth of capital. In addition
to the Fund, the Trust also offers the Balanced Fund, the Small Cap
Fund, the Equity Income Fund, the International Fund, the Low Duration
Fund, the Short-Term Investment Fund, the Total Return Bond Fund, the
Mid-Cap Fund, and the Global Equity Fund (collectively, the "Funds").
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 Stock
Market ("NSM") 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
NSM. Unlisted securities that are not included in NSM 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 otherwise
available are valued at fair value as determined in good faith by
Hotchkis and Wiley (the "Advisor") under procedures established by 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.
FEDERAL INCOME TAXES: It is the Fund's policy to meet the
requirements of the Internal Revenue Code applicable to regulated
investment companies and the Fund intends to distribute substantially
all of its investment company net taxable income and net capital gains
to its shareholders. Therefore, no federal income tax provision is
required.
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.
8
<PAGE> 12
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
December 31, 1998
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.
DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are declared and paid quarterly. Distributions of net realized
capital gains, if any, will be declared at least annually.
OTHER: Security and shareholder transactions are recorded on
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 daily net assets, and 0.50% of the
average daily 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,
1998, the Advisor paid $21,683 of operating expenses on behalf of the
Fund.
As permitted under Rule 10f-3 of the Investment Company Act of
1940, the Board of Trustees of the Funds has adopted procedures which
allow the Fund, under certain conditions described in the Rule, to
acquire newly-issued securities from a member of an underwriting group
in which an affiliated underwriter participates.
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, 1998 were $2,877,466 and $2,464,125, respectively.
There were no purchases or sales of long-term U.S. government
securities.
At December 31, 1998 (for financial reporting and federal income
tax purposes), net unrealized appreciation aggregated $9,697,346, of
which $11,778,787 related to appreciated securities and $2,081,441
related to depreciated securities. At December 31, 1998, the cost of
investments for book and federal income tax purposes was $30,080,110.
9
<PAGE> 13
HOTCHKIS
AND WILEY Equity Fund for Insurance Companies
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1998 ----------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994
----------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year.............. $18.55 $16.32 $13.51 $11.53 $ 9.89 $10.31
------ ------ ------ ------ ------ ------
Income from Investment Operations:
Net investment income....................... 0.20 0.41 0.39 0.34 0.41 0.40
Net realized and unrealized gain (loss) on
investments............................... (0.64) 3.31 3.30 2.26 1.59 (0.24)
------ ------ ------ ------ ------ ------
Total from investment operations............ (0.44) 3.72 3.69 2.60 2.00 0.16
------ ------ ------ ------ ------ ------
Less Distributions:
Dividends (from net investment income)...... (0.20) (0.41) (0.40) (0.40) (0.34) (0.38)
Distributions (from realized gains)......... (1.79) (1.08) (0.48) (0.22) (0.02) (0.20)
------ ------ ------ ------ ------ ------
Total distributions......................... (1.99) (1.49) (0.88) (0.62) (0.36) (0.58)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Year.................... $16.12 $18.55 $16.32 $13.51 $11.53 $ 9.89
====== ====== ====== ====== ====== ======
Total Return.................................... (2.17%)++ 23.69% 28.20% 22.93% 20.62% 1.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (millions).............. $ 39.8 $40.7 $33.0 $24.6 $17.4 $10.5
Ratio of expenses to average net assets:
Before expense reimbursement................ 0.63%+ 0.73% 0.75% 0.76% 1.05% 1.20%
After expense reimbursement................. 0.52%+ 0.52% 0.53% 0.54% 0.58% 0.60%
Ratio of net investment income to average net
assets:
Before expense reimbursement................ 2.25%+ 2.06% 2.50% 2.78% 3.58% 3.32%
After expense reimbursement................. 2.36%+ 2.27% 2.72% 3.00% 4.03% 3.91%
Portfolio turnover.............................. 6% 21% 22% 21% 29% 26%
</TABLE>
+ Annualized
++ Not Annualized
See Notes to the Financial Statements.
10
