<PAGE>
MESSAGE FROM THE CHAIRMAN
DEAR FELLOW SHAREHOLDERS:
What a great year the last six months have been!
From December 31, 1996, through June 30, 1997, the average
general equity mutual fund
[PHOTO]
gained 12.99 percent.* That's a figure investors used to
consider a good ANNUAL RETURN. In fact, it IS higher than the
12.08 percent average annual gain of general
ROGER ENGEMANN
equity funds over the last 35 years.*
Clearly we are experiencing a bull market for equities that has been both
powerful and persistent. All our funds have participated in the extended rally.
(Please see the following discussions on each fund for more complete performance
information.) And as shareholders it would seem that we should be entitled to a
bit of exuberance, albeit not irrational exuberance, of course.
Yet, I know that a number of you are uneasy about the market being too high.
At this level, you're concerned a severe correction may be just around the
corner--something the news media suggests on a regular basis. And you're
wondering if it isn't time to take some profits or maybe pull out of equities
altogether, at least temporarily.
I can't promise you there won't be a correction. In fact, I can almost
guarantee you there will be one-- someday. I don't know when, how big or for how
long. But if you are investing for the long term, it should matter little.
Corrections and volatility have always been part of the market, but they have
not reversed the overall upward movement of stocks on a historical basis.
What I can do is point out why I believe there could be more upside in this
market and why I believe it makes sense to stay on the train.
There are three major factors that influence stock prices: strong corporate
earnings, low inflation and low interest rates. When all three factors are in
place, combined with slow to moderate economic growth, you have an ideal climate
for stocks to flourish. And that's exactly what we have today.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INFLATION CPI SOURCE: ISI GROUP
<S> <C>
69 5.1
5.3
5.6
6.1
5.8
5.8
5.8
6
6
6
5.7
5.9
6.2
5.9
6.1
6
6.3
6.5
6.2
6.2
6.2
6.1
6.6
6.6
71 6.3
6
5.2
5
5.2
4.9
4.9
4.6
4.1
3.9
3.3
3.1
3.3
3.3
3.3
3.3
3.1
2.8
2.8
3
3
3
2.8
3
73 2.5
2.8
3.2
3
3.2
3.2
3.2
3.2
3.8
4.3
4.7
4.7
5.2
5.4
5.8
6.2
7.1
7.9
8.8
9.8
10.2
10.6
11
11.3
75 11.5
11.9
11.3
11.3
10.3
9.8
9.1
8
7.5
7
7
6.7
6.9
6.4
6.6
6.4
6.5
6.3
6.7
6.8
6.8
6.8
6.3
6.1
77 6.1
6.2
6.2
6.3
6.3
6.6
6.3
6.2
6.2
6
6.1
6.5
6.4
6.2
6.3
6.6
6.8
6.9
7.2
7.5
7.9
8.4
8.5
8.5
79 8.6
9.1
9.4
9.3
9.4
9.4
9.6
10
9.9
10.1
10.7
11.3
12
12
12.6
13.1
13.1
13.6
12.4
11.8
12
12.2
12.2
12.2
81 11.3
10.8
9.9
9.4
9.6
9.4
11.1
11.6
11.8
11
10.3
9.5
9.3
9.2
8.7
8.9
8.7
8.5
7.7
7.1
5.9
5.9
5.2
4.5
83 4.6
4.5
4.6
4.1
3.7
3.2
3.2
3.1
3.4
3.6
4.3
4.7
5
4.9
5.1
5.2
5.3
5.3
5.2
5.3
5.3
5.1
4.8
4.9
85 4.5
4.8
4.7
4.5
4.5
4.4
4.2
4.2
4
4
4.4
4.3
4.5
4.2
4.1
4.2
4
3.9
4
4
4.2
4.1
3.8
3.8
87 3.8
3.7
3.8
4.1
4.2
4.1
4.1
4.1
4.2
4.3
4.3
4.3
4.3
4.2
4.4
4.3
4.2
4.5
4.5
4.4
4.5
4.4
4.6
4.6
89 4.6
4.7
4.6
4.5
4.6
4.5
4.5
4.5
4.2
4.4
4.4
4.4
4.4
4.6
4.9
4.8
4.7
5
5.1
5.5
5.5
5.4
5.3
5.3
91 5.6
5.6
5.2
5.1
5.1
5
4.8
4.6
4.6
4.4
4.5
4.4
4
3.7
3.8
3.8
3.9
3.7
3.7
3.5
3.3
3.5
3.5
3.4
93 3.4
3.6
3.4
3.5
3.4
3.4
3.2
3.3
3.2
3
3.1
3.1
2.9
2.8
2.9
2.8
2.8
2.9
2.9
2.9
3
2.9
2.8
2.7
95 3
3
3
3.1
3.1
2.9
3
2.9
3
3.1
3
3
2.9
2.9
2.8
2.7
2.7
2.7
2.7
2.6
2.6
2.5
2.6
2.6
97 2.5
2.5
2.5
2.6
</TABLE>
(*)SOURCE: LIPPER ANALYTICAL
SERVICES, INC.
1
<PAGE>
MESSAGE FROM THE CHAIRMAN (CONTINUED)
Corporate profits in general are increasing nicely, much better in many cases
than Wall Street forecast. Inflation is now under control, and we have the
commitment of the Federal Reserve to keep it that way. Long-term interest rates
are trending lower, and I believe they will be under 5 percent in a few years.
For a long-term perspective of what is normal for both inflation and interest
rates, please see the accompanying charts.
During times of low inflation and interest rates, it is not unusual for the
market to trade between 18 and 22 times earnings. This is consistent with where
the market is currently trading.
As for the economy, the growth rate appears to be moderate. Although we had
strong Gross Domestic Product (GDP) growth of greater than 5 percent in the
first quarter, it appears to have slowed to a more sustainable rate of 2-3
percent in the second quarter.
It seems all important themes for a robust market are playing together in
nearly perfect concert. Thus I am confident about the outlook for the market in
general and for our funds in particular.
Before I write my message to you at year end, Pasadena Capital Corporation,
parent of Roger Engemann Management Co., Inc., manager of the Pasadena Funds,
will be acquired by Phoenix Duff & Phelps Corporation. I am very pleased about
this new association and feel there could be no better partner to help us grow
and prosper.
Our investment style and our investment personnel will stay in place,
unchanged. Together with Phoenix Duff & Phelps, we will continue to emphasize
performance and proceed with plans to provide shareholders with more and better
service at what we expect to be lower operating expenses.
I hope you will share my enthusiasm for the benefits I believe this
relationship will bring. Thank you for your trust and support.
[SIGNATURE]
Roger Engemann
Chairman of the Board and President
July 31, 1997
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INTEREST RATES IN AMERICA -- 1790 THROUGH
1997 SOURCE: SMITH BARNEY RESEARCH
BEFORE 1976-HIGH GRADE CORPORATES
AFTER 1976-TREASURY BOND (30-YEAR)
PERCENT
<S> <C>
5.85
5.54
5.05
5.48
5.9
6.02
6.3
7.4
7.56
7.42
1800 6.94
6.44
6.02
6.16
6.29
6.38
6.14
6.08
5.96
5.85
5.82
5.95
6.12
6.3
7.64
7.3
7.25
5.86
5.78
5.9
5.16
4.93
4.98
5
4.52
4.52
4.56
4.61
4.72
4.77
4.9
4.95
5
4.87
4.87
4.83
4.96
4.95
5.01
5.21
5.07
5.75
6.07
5.03
4.85
5.16
5.5
5.77
5.71
5.31
5.31
5.08
4.98
4.99
5.13
5.16
5.1
5.19
5.03
4.81
5.57
6.45
5.52
4.77
4.83
5.51
5.5
5.34
5.28
5.37
5.44
5.32
5.36
5.58
5.47
5.07
4.59
4.45
4.34
4.22
4.02
3.7
3.62
3.63
3.62
3.98
3.81
3.8
3.69
3.51
3.68
3.84
3.72
3.73
3.62
3.46
3.5
3.33
3.26
3.24
3.31
3.28
3.34
3.55
3.57
3.51
3.65
3.92
3.9
3.78
3.87
3.93
3.95
4.14
4.11
4.18
4.1
4.41
4.82
4.84
5.27
5.16
4.49
4.51
4.51
4.5
4.36
4.18
4.19
4.47
4.31
4.15
4.61
4.19
3.83
3.44
3.11
3.12
2.9
2.77
2.7
2.59
2.66
2.55
2.54
2.54
2.45
2.57
2.82
2.68
2.62
2.9
3.03
3.27
2.97
3.1
3.35
3.93
3.81
4.37
4.39
4.32
4.32
4.23
4.36
4.43
5.13
5.47
6.01
6.78
7.88
7.23
7.06
7.36
8.53
8.66
8.59
8.03
8.96
10.11
11.98
13.65
10.43
11.873
11.49
9.27
7.45
8.95
9
7.976
8.251
7.409
7.396
6.348
7.881
5.955
6.635
1997 6.903
</TABLE>
2
<PAGE>
MESSAGE FROM PORTFOLIO MANAGEMENT
MANAGEMENT BACKGROUND & INVESTMENT APPROACH
Roger Engemann Management Co., Inc. (REMC), manager of The
Pasadena Group of Mutual Funds, is a subsidiary of Roger
Engemann & Associates, Inc.
[PHOTO]
(REA), a leading investment firm. REA was established in 1969
and specializes in the management of private equity portfolios,
generally
JIM MAIR
with account minimums of $100,000. REMC was established in 1985.
JIM MAIR and JOHN TILSON direct the Portfolio Management
[PHOTO]
team for the overall Engemann organization. They have been with
REA since 1983 and have managed each of the funds since their
JOHN TILSON
inception.
Jim and John are both Chartered Financial Analysts and Chartered Investment
Counselors. Together they have more than 50 years of professional investment
experience. They use a consultative team approach to managing our funds,
enabling them to bypass the risk of having all investment decisions made by one
individual as well as the potential delays involved when decisions must be made
by committee consensus. Jim and John spend a significant amount of their time in
face-to-face meetings with management of the companies they follow. As a result,
their investment conclusions are based on timely, direct information.
- ------------
The Pasadena Group of Mutual Funds has a history of investing in stable,
growing businesses. For inclusion in the funds, we favor companies that have
demonstrated the unusual ability to grow their earnings steadily in various
economic environments. We feel this characteristic is attractive to investors,
especially in a slowing economy.
Much of our analysis surrounds fundamental bottom-up scrutiny of the
underlying business. We continually evaluate the competitive and financial
strength of the companies we own and the worldwide events which are likely to
alter demand patterns for the companies' products. Our philosophy is long term
in nature, for we believe a diversified portfolio of strong businesses is likely
to outperform all other asset classes in the long run.
We are extremely pleased with the performance of the stocks in the Pasadena
fund portfolios for the six months ended June 30, 1997. Please see details on
each of the funds in our following Q&A discussions.
[SIGNATURE]
James E. Mair
[SIGNATURE]
John S. Tilson
Managing Directors/Portfolio Management
July 31, 1997
3
<PAGE>
DISCUSSIONS WITH JIM MAIR AND JOHN TILSON, PORTFOLIO MANAGERS OF
THE PASADENA GROUP OF MUTUAL FUNDS
THE PASADENA GROWTH FUND
INVESTMENT OBJECTIVE:
The Pasadena Growth Fund seeks to achieve long-term capital appreciation by
investing in companies with rapidly growing earnings per share. The Fund invests
in companies of various capitalization.
Q: HOW DID THE FUND PERFORM OVER THE SIX-MONTH PERIOD ENDED JUNE 30, 1997?
A: After a very good 1996, the Fund stumbled a bit in the first quarter of 1997,
with the NAV(1) for Class A Shares falling 6.56 percent. However the shares
rebounded sharply in the second quarter, with a 16.98 percent gain, and the
positive performance is continuing into the early weeks of the third quarter.
For the period ended June 30, 1997, the NAV for The Pasadena Growth Fund's
Class A Shares increased 9.30 percent compared to 15.40 percent for the Lipper
Growth Fund Index,(2) and 20.60 percent for the S&P 500 Stock Index.(3) Complete
performance figures are on page 5.
Q: WHAT AFFECTED THE FUND'S PERFORMANCE IN THE FIRST QUARTER?
A: Stocks tumbled in the second half of the first quarter as investors feared an
economic slowdown and rising interest rates. Although the entire market
declined, investors favored the stocks of large-capitalization companies and
shunned many smaller, less liquid stocks. The result was a decline in many of
the Fund's small-and mid-cap issues. For example, the Fund was overweighted in
shares of networking companies, which fared poorly as the industry experienced
several product transitions.
Q: HAVE YOU CHANGED YOUR OUTLOOK FOR NETWORKING STOCKS?
A: We are continuing to focus on the fundamental characteristics of the industry
and the earnings capabilities of the companies, which we believe are
exceptional. We expect networking to be one of the fastest growing segments in
the economy over the next several years. Demand for networking products is
growing rapidly as the computer evolves into a comprehensive communication tool
for business and personal users. In fact, the market began recognizing that many
of these issues were oversold and the stocks rallied strongly in the second
quarter.
Q: WHAT CHANGES DID YOU MAKE IN THE FUND GIVEN THE VOLATILE MARKET ENVIRONMENT?
A: Because the sell-off affected many issues with good earnings prospects, we
took the opportunity to consolidate our holdings and increase our position sizes
in some of our favorite companies at very attractive prices. As a result, the
Fund owns fewer names than it did at the beginning of the year.
Q: WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?
A: We believe the environment for stocks is very favorable. The unusual
combination of good economic growth and low inflation has enabled companies to
consistently improve earnings, and investors have rewarded the most successful
companies with premium valuations relative to the market.
Although this is clearly evident in the large capitalization portion of the
market with many high quality growth companies selling at price/earnings ratios
of two times their growth rates, this is not the case with small- and mid-cap
stocks as many of these companies are selling at price/earnings ratios below
their growth rates. Given the divergence between these two segments of the
market, we believe small- and mid-cap stocks are poised for a comeback.
(1)NET ASSET VALUE
(2)THE LIPPER MUTUAL FUND INDICES ARE EQUALLY WEIGHTED INDICES OF THE LARGEST
MUTUAL FUNDS WITHIN THEIR RESPECTIVE INVESTMENT OBJECTIVES, ADJUSTED FOR THE
REINVESTMENT OF CAPITAL GAINS DISTRIBUTIONS AND INCOME DIVIDENDS. THE INDICES
ARE CALCULATED DAILY, AND ARE NOT AVAILABLE FOR INVESTMENT.
(3)THE S&P 500 STOCK INDEX IS AN UNMANAGED INDEX WHICH ASSUMES REINVESTMENT OF
ALL DIVIDENDS AND DISTRIBUTIONS AND IS GENERALLY CONSIDERED REPRESENTATIVE OF
THE U.S. EQUITY MARKET FOR LARGER CAPITALIZATION STOCKS. THE S&P 500 STOCK INDEX
DOES NOT REFLECT ANY OPERATING EXPENSES AND IS NOT AVAILABLE FOR INVESTMENT.
EDITOR'S NOTE:
FROM JUNE 30, 1997, THROUGH JULY 31, 1997, THE PASADENA GROWTH FUND'S NAV FOR
CLASS A SHARES INCREASED 11.55 PERCENT COMPARED TO 7.82 PERCENT FOR THE S&P 500
STOCK INDEX.
4
<PAGE>
THE PASADENA GROWTH FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (1)
(AS OF 6/30/97)
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
A Shares(2) (Inception: 6/24/86)
NAV 17.12% 21.49% 11.23% 13.62%
POP 10.69% 19.22% 9.97% 12.98%
Since
B Shares (Inception: 1/3/94) Inception
CDSC 11.06% 19.83% - 13.88%
No CDSC 16.06% 20.53% - 14.50%
Since
Inception
C Shares (Inception: 1/3/94) 16.06% 20.53% - 14.50%
(1) Total returns are historical and include
changes in share price and the reinvestment
of both
dividends and capital gains distributions.
(2) POP (Public Offering Price) total returns
include the effect of the maximum front-end
5.50%
sales charge. NAV (Net Asset Value) total
returns do not include the effect of any
sales charge.
All returns represent past performance which
may not be indicative of future performance.
The
investment return and principal value of an
investment will fluctuate so that an
investor's shares,
when redeemed, may be worth more or less than
their original cost.
Sector Holdings (as a percentage of total
assets)
Technology 26%
Health Care 18%
Consumer Discretionary 19%
Consumer Staples 12%
Financial Services 18%
Other 7%
Sector holdings are based on the breakdown of
the Russell 1000 Growth
Index, an unmanaged index of 1000 securities
with a greater than average
growth orientation.
Comparison of Change in Value of a $10,000
Investment-
The Pasadena Growth Fund A Shares(3) and the
S&P 500 Stock Index(4)
Fund After
Maximum
S&P 500
Stock
Sales Load Index
6/24/86 $10,000 $10,000
6/30/86 $9,707 $10,159
7/31/86 $9,218 $9,593
8/31/86 $9,145 $10,303
9/30/86 $8,662 $9,453
10/31/86 $9,017 $9,997
11/30/86 $8,888 $10,236
12/31/86 $8,580 $9,976
1/31/87 $9,844 $11,317
2/28/87 $10,660 $11,757
3/31/87 $10,894 $12,096
4/30/87 $10,145 $11,987
5/31/87 $9,961 $12,089
6/30/87 $10,016 $12,697
7/31/87 $10,304 $13,339
8/31/87 $10,427 $13,835
9/30/87 $9,918 $13,532
10/31/87 $7,309 $10,627
11/30/87 $6,757 $9,754
12/31/87 $7,598 $10,495
1/31/88 $7,868 $10,952
2/28/88 $8,525 $11,210
3/31/88 $8,997 $11,093
4/30/88 $9,126 $11,230
5/31/88 $8,868 $11,301
6/30/88 $9,691 $11,823
7/31/88 $9,580 $11,797
8/31/88 $9,464 $11,379
9/30/88 $10,028 $11,865
10/31/88 $10,133 $12,210
11/30/88 $9,856 $12,016
12/31/88 $10,317 $12,230
1/31/89 $11,176 $13,136
2/28/89 $11,151 $12,793
3/31/89 $11,532 $13,099
4/30/89 $12,508 $13,794
5/31/89 $13,195 $14,319
6/30/89 $12,968 $14,247
7/31/89 $14,330 $15,545
8/31/89 $15,012 $15,829
9/30/89 $14,864 $15,768
10/31/89 $14,085 $15,410
11/30/89 $14,324 $15,707
12/31/89 $14,211 $16,087
1/31/90 $12,740 $15,029
2/28/90 $13,003 $15,198
3/31/90 $13,833 $15,611
4/30/90 $13,556 $15,238
5/31/90 $15,297 $16,683
6/30/90 $15,790 $16,581
7/31/90 $15,223 $16,542
8/31/90 $13,199 $15,035
9/30/90 $11,849 $14,315
10/31/90 $11,599 $14,268
11/30/90 $12,754 $15,168
12/31/90 $13,565 $15,593
1/31/91 $15,132 $16,288
2/28/91 $16,605 $17,425
3/31/91 $17,800 $17,860
4/30/91 $17,753 $17,914
5/31/91 $18,760 $18,652
6/30/91 $17,368 $17,809
7/31/91 $18,760 $18,655
8/31/91 $19,935 $19,071
9/30/91 $19,861 $18,755
10/31/91 $20,009 $19,026
11/30/91 $19,347 $18,241
12/31/91 $22,766 $20,322
1/31/92 $22,970 $19,969
2/29/92 $23,810 $20,207
3/31/92 $22,549 $19,818
4/30/92 $22,075 $20,419
5/31/92 $21,994 $20,490
6/30/92 $21,086 $20,186
7/31/92 $21,818 $21,031
8/31/92 $21,574 $20,580
9/30/92 $21,574 $20,818
10/31/92 $21,967 $20,916
11/30/92 $23,390 $21,599
12/31/92 $23,277 $21,870
1/31/93 $23,057 $22,077
2/28/93 $21,853 $22,356
3/31/93 $21,976 $22,826
4/30/93 $20,114 $22,299
5/31/93 $20,990 $22,859
6/30/93 $20,798 $22,928
7/31/93 $20,292 $22,861
8/31/93 $21,072 $23,701
9/30/93 $21,072 $23,517
10/31/93 $21,524 $24,027
11/30/93 $21,551 $23,771
12/31/93 $21,910 $24,066
1/31/94 $22,403 $24,902
2/28/94 $21,842 $24,206
3/31/94 $20,596 $23,158
4/30/94 $20,883 $23,480
5/31/94 $20,801 $23,828
6/30/94 $20,021 $23,247
7/31/94 $20,719 $24,034
8/31/94 $21,979 $24,994
9/30/94 $21,554 $24,379
10/31/94 $21,842 $24,945
11/30/94 $21,239 $24,019
12/31/94 $21,089 $24,374
1/31/95 $21,650 $25,024
2/28/95 $22,130 $25,980
3/31/95 $22,801 $26,750
4/30/95 $23,143 $27,556
5/31/95 $23,745 $28,618
6/30/95 $24,786 $29,285
7/31/95 $25,841 $30,277
8/31/95 $25,868 $30,332
9/30/95 $26,676 $31,611
10/31/95 $26,238 $31,515
11/30/95 $27,032 $32,869
12/31/95 $26,816 $33,507
1/31/96 $27,790 $34,664
2/29/96 $28,513 $34,966
3/31/96 $28,666 $35,308
4/30/96 $29,820 $35,847
5/31/96 $30,961 $36,733
6/30/96 $30,655 $36,882
7/31/96 $28,652 $35,267
8/31/96 $29,765 $35,998
9/30/96 $32,115 $38,012
10/31/96 $31,698 $39,073
11/30/96 $33,562 $42,003
12/31/96 $32,848 $41,172
1/31/97 $34,644 $43,763
2/28/97 $33,072 $44,087
3/31/97 $30,692 $42,283
4/30/97 $32,234 $44,819
5/31/97 $35,019 $47,513
6/30/97 $35,902 $49,646
(3) This chart illustrates POP returns on
Class A Shares only. Returns on Class B and
Class C Shares will vary due to differing
sales charges.
(4) The S&P 500 Stock Index is an unmanaged
index considered to be representative
of the U.S. stock market and includes
reinvested dividends.
6/24/86 (Fund Inception)
Past performance is not predictive of future
performance.
Ten Largest Holdings at June 30, 1997 (as a
percentage of total assets)
1. The Gillette Company 4.6%
Global manufacturer of razors
2. Pfizer Inc 4.6%
Major producer of pharmaceuticals
3. Green Tree Financial Corporation 3.5%
Diversified financial services company
4. Federal Home Loan Mortgage Corporation 2.7%
Nation's largest provider of residential
mortgages
5. First Data Corporation 2.6%
Provider of electronic commerce and payment
services
6. Federal National Mortgage Association 2.6%
U.S. government sponsored mortgage agency
7. Merck & Co., Inc. 2.5%
Leading manufacturer of pharmaceuticals
8. Microsoft Corporation 2.5%
World's leading computer software company
9. Interpublic Group of Companies, Inc. 2.4%
Leading global advertising firm
10. Philip Morris Companies Inc. 2.4%
Global producer of tobacco and food products
</TABLE>
5
<PAGE>
THE PASADENA NIFTY FIFTY FUND
INVESTMENT OBJECTIVE:
The Pasadena Nifty Fifty Fund seeks to achieve long-term capital appreciation
by investing in approximately 50 companies management considers to have the best
prospects for appreciation potential.
Q: HOW DID THE FUND PERFORM OVER THE FIRST SIX MONTHS OF 1997?
A: The NAV for the Fund's Class A shares increased 14.83 percent, compared to
20.58 percent for the S&P 500 Index and 15.40 percent for the Lipper Growth Fund
Index. Complete performance figures for the Fund are on page 7.
Q: WHAT ACCOUNTED FOR THE FUND'S UNDERPERFORMANCE IN THE FIRST QUARTER?
A: The underperformance for the first half of the year was primarily due to the
first quarter's return of -2.08 percent. While the Fund appreciated strongly
relative to the S&P 500 during the second quarter, the first quarter represented
too wide of a gap to close.
During the first quarter, there were several company-specific issues that
caused the underperformance of the Fund. In the technology area, Cisco Systems
and 3Com were under pressure, as were all the other networking stocks, due to
concerns about deceleration in growth caused by product transitions. However,
these holdings recovered nicely and contributed to the second quarter's gains.
In the consumer cyclical area, AutoZone performed poorly due to weak earnings
growth as a result of start-up expenses related to its expansion plan. The stock
showed signs of recovery by mid year, and we are optimistic about further gains
in the months ahead.
Q: WHAT WERE SOME OF THE FUND'S PORTFOLIO HIGHLIGHTS DURING THE FIRST SIX MONTHS
OF 1997?
A: Individual stock selection contributed to the Fund's performance during the
first six months of this year. Specifically, we were pleased with strong gainers
in the health-care sector such as Pfizer, Merck and Oxford Health Plans. In the
financial services sector MBNA Corporation, American Express, and Freddie Mac
all turned in good performances. Some of our biggest gainers from the previous
year, Microsoft, Oracle, Gillette and Coca-Cola, also contributed strongly to
the Fund's overall performance. We are very comfortable with our holdings in the
various sectors and believe we will see strong gains during the second half of
1997.
Q: WHAT EFFECT DID THE FEDERAL RESERVE'S 25 BASIS POINT RATE HIKE HAVE ON THE
FUND'S FINANCIAL STOCK HOLDINGS?
A: Alan Greenspan's 25 basis point rate hike in early 1997, as a preemptive
measure against future increase in inflation, caused uncertainties in the bond
market and financial stocks in general. As a result, some of our financial
holdings performed poorly during the first quarter due to fears about rising
rates. As the bond market rallied during the second quarter due to favorable
economic data, the financial stocks rallied strongly. Overall, our financial
stocks performed well with the exception of Wells Fargo, which experienced
temporary deceleration in earnings growth due to the costs and challenges
associated with the integration of First Interstate. We believe that the
integration challenges are temporary and the earnings growth will accelerate in
the second half of 1997.
Q: WHAT IS YOUR OUTLOOK FOR THE FUND DURING THE SECOND HALF OF 1997?
A: With continued economic growth and low interest rates, the environment for
stocks is very favorable. The Fund has investments in some of the fastest
growing sectors within the economy and we expect the Fund to perform well during
the second half of 1997. In particular, we are very optimistic about our
investments in the technology area, where fundamentals and valuation are
extremely attractive.
6
<PAGE>
THE PASADENA NIFTY FIFTY FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/97)
Since
A Shares(2) (Inception: 12/17/90) 1 Year 3 Years 5 Years Inception
<S> <C> <C> <C> <C>
NAV 28.69% 25.87% 15.38% 19.72%
POP 21.60% 23.52% 14.08% 18.70%
B Shares (Inception: 1/3/94)
CDSC 22.75% 24.28% - 18.61%
No CDSC 27.75% 24.92% - 19.17%
C Shares (Inception: 1/3/94) 27.75% - - 19.17%
(1) Total returns are historical and include
changes in share price and the reinvestment
of both dividends
and Capital Gains distributions.
(2) POP (Public Offering Price) total returns
include the effect of the maximum front-end
5.50% sales
charge. NAV (Net Asset Value) total returns
and the growth of a $10,000 investment do not
include
the effect of any sales charge.
All returns represent past performance which
may not be indicative of future performance.
The
investment return and principal value of an
investment will fluctuate so that an
investor's shares,
when redeemed, may be worth more or less than
their original cost.
Sector Holdings (as a percentage of total
assets)
Technology 20%
Health Care 22%
Consumer Discretionary 16%
Consumer Staples 15%
Financial Services 20%
Other 7%
Sector holdings are based on the breakdown of
the Russell 1000 Growth
Index, an unmanaged index of 1,000 securities
with a greater than average
growth orientation.
Comparison of Change in Value of a $10,000
Investment-
The Pasadena Nifty Fifty Fund A Shares(3) and
the S&P 500(4) Stock Index
Fund After S&P 500
Maximum Stock
Sales Load Index
12/17/90 $10,000 $10,000
12/31/90 $9,416 $10,143
1/31/91 $10,400 $10,595
2/28/91 $11,260 $11,335
3/31/91 $12,196 $11,618
4/30/91 $12,621 $11,652
5/31/91 $13,633 $12,133
6/30/91 $13,047 $11,585
7/31/91 $13,633 $12,135
8/31/91 $14,285 $12,405
9/30/91 $14,163 $12,199
10/31/91 $14,352 $12,376
11/30/91 $13,926 $11,865
12/31/91 $15,786 $13,219
1/31/92 $15,510 $12,989
2/29/92 $15,729 $13,144
3/31/92 $15,330 $12,891
4/30/92 $15,178 $13,282
5/31/92 $15,263 $13,328
6/30/92 $14,987 $13,130
7/31/92 $15,434 $13,680
8/31/92 $15,273 $13,387
9/30/92 $15,320 $13,542
10/31/92 $15,577 $13,605
11/30/92 $16,366 $14,050
12/31/92 $16,366 $14,226
1/31/93 $16,357 $14,360
2/28/93 $15,843 $14,542
3/31/93 $16,005 $14,848
4/30/93 $14,854 $14,505
5/31/93 $15,615 $14,869
6/30/93 $15,567 $14,914
7/31/93 $15,273 $14,870
8/31/93 $15,929 $15,417
9/30/93 $15,701 $15,297
10/31/93 $16,148 $15,629
11/30/93 $16,262 $15,462
12/31/93 $16,281 $15,654
1/31/94 $16,614 $16,198
2/28/94 $16,281 $15,745
3/31/94 $15,482 $15,064
4/30/94 $15,815 $15,273
5/31/94 $15,862 $15,499
6/30/94 $15,368 $15,121
7/31/94 $16,100 $15,634
8/31/94 $16,766 $16,258
9/30/94 $16,347 $15,858
10/31/94 $16,794 $16,226
11/30/94 $16,423 $15,624
12/31/94 $16,452 $15,855
1/31/95 $17,060 $16,278
2/28/95 $17,422 $16,900
3/31/95 $17,916 $17,400
4/30/95 $18,287 $17,924
5/31/95 $18,839 $18,615
6/30/95 $19,390 $19,049
7/31/95 $19,847 $19,695
8/31/95 $19,695 $19,730
9/30/95 $20,360 $20,562
10/31/95 $20,503 $20,500
11/30/95 $21,292 $21,381
12/31/95 $21,093 $21,795
1/31/96 $22,053 $22,548
2/29/96 $22,557 $22,744
3/31/96 $22,700 $22,967
4/30/96 $22,861 $23,317
5/31/96 $23,584 $23,894
6/30/96 $23,812 $23,990
7/31/96 $22,510 $22,940
8/31/96 $23,137 $23,415
9/30/96 $25,191 $24,726
10/31/96 $25,390 $25,416
11/30/96 $27,150 $27,322
12/31/96 $26,686 $26,777
1/31/97 $28,559 $28,464
2/28/97 $27,953 $28,675
3/31/97 $26,131 $27,502
4/30/97 $27,906 $29,153
5/31/97 $29,628 $30,906
6/30/97 $30,645 $32,293
(3) This chart illustrates POP returns on
Class A Shares only. Returns will vary
on Class B and Class C Shares due to
differing sales charges.
(4) The S&P 500 Stock Index is an unmanaged
index considered to be representative
of the U.S. stock market and includes
reinvested dividends.
12/17/90 (Fund Inception)
Past performance is not predictive of future
performance.
Ten Largest Holdings at June 30, 1997 (as a
percentage of total assets)
1. The Gillette Company 5.3%
Global manufacturer of razors
2. Pfizer Inc 4.5%
Major producer of pharmaceuticals
3. Merck & Co., Inc. 3.9%
Leading manufacturer of pharmaceuticals
4. Wells Fargo & Company 3.0%
Bank holding company
5. Sears, Roebuck and Co. 3.0%
Leading retailer of apparel, home and
automotive products
6. Green Tree Financial Corporation 3.0%
Diversified financial services company
7. Microsoft Corporation 2.9%
World's leading computer software company
8. Boston Scientific Corporation 2.8%
Develops, manufactures and markets medical
devices
9. Intel Corporation 2.7%
Leading manufacturer of microprocessors
10. Johnson & Johnson 2.7%
Comprehensive health-care company
</TABLE>
7
<PAGE>
THE PASADENA BALANCED RETURN FUND
INVESTMENT OBJECTIVE:
The Pasadena Balanced Return Fund seeks to maximize total investment return
consistent with reasonable risk by investing in a mix of high quality growth
stocks and U.S. government securities.
Q: HOW HAS THE FUND PERFORMED SO FAR THIS YEAR?
A: The NAV for The Balanced Return Fund's Class A shares increased 11.40
percent, compared to 10.21 percent for the Lipper Balanced Fund Index and 20.58
percent for the S&P 500 Stock Index, an all stock index.
We were pleased that the Fund ranked number 1 out of 39 balanced funds for the
ten-year period ended June 30, 1997, according to Lipper Analytical Services,
Inc.* The Fund also ranked number 61 out of 87 balanced funds for five years and
number 104 out of 303 balanced funds for one-year period ended June 30, 1997.
Complete performance figures for the Fund are on page 9.
Q: WHAT WERE SOME OF THE NOTABLE THEMES YOU SAW IN THE FIRST HALF?
A: On the positive side, our overweight position in consumer staples and
health-care stocks made a strong contribution to the Fund's performance. Notable
health-care names in the portfolio are Pfizer, Merck, HBO & Company and Johnson
& Johnson. In consumer staples, some of the best performers were
Colgate-Palmolive, Procter & Gamble, PepsiCo and Coca-Cola.
Consumer cyclical investments such as Circus Circus, AutoZone and HFS were the
biggest underperforming holdings during the period. However, we believe these
stocks will perform well as the positive earnings prospects of these companies
come to fruition.
Q: HOW HAS THE FIXED-INCOME PORTION OF THIS FUND PERFORMED OVER THE FIRST HALF?
A: In the first half of 1997, the interest rate on the 30-year Treasury bond
ranged from a low of 6.61 percent to a high of 7.25 percent. However, the yield
changed very little, from 6.68 percent at the beginning of the year to 6.82
percent at June 30. The volatility, in our opinion, was a direct result of
inflationary fears as various economic data led investors to believe the economy
was strengthening.
We still maintain that the economy is slowing. We continue to believe that
inflation is under control and that interest rates will trend downward.
Accordingly, the Fund's fixed-income component was positioned in intermediate
and long-term Treasury bonds throughout the first half of the year. Because the
yield on the 30-year U.S. Treasury bond increased slightly during that period,
the fixed-income component of the Fund was down approximately 1 percent in the
first half.
Q: HAVE THERE BEEN ANY MAJOR SHIFTS IN THE WEIGHTINGS OF ASSET CLASSES OR
ECONOMIC SECTORS IN THE FIRST HALF?
A: In the equity portion of the Fund, we decreased our weighting in financial
services from 14.9 percent to 9.8 percent and used the proceeds to add to the
fast growing technology and health-care positions. The weighting of the
fixed-income portion of the fund stayed constant and remains in intermediate and
long-term maturities.
Q: WHAT IS YOUR OUTLOOK FOR THE REST OF THE YEAR?
A: Our outlook for equities continues to be bright. While we are aware of the
increase in valuations of many of our holdings and the market overall, we
believe the current and prospective economic environment supports these
valuations. With a slowing economy and inflation under control, we believe
equities remain an attractive investment going forward. In addition, we believe
declining interest rates will favor intermediate to longer-term bonds and we do
not plan to reduce the maturities of the fixed-income portion of the Fund.
*LIPPER RANKINGS ARE BASED ON CHANGES
IN NET ASSET VALUE WITH ALL INCOME
REINVESTED AND DO NOT INCLUDE SALES
CHARGES. IF THEY HAD, RESULTS MAY HAVE
BEEN LESS FAVORABLE.
8
<PAGE>
THE PASADENA BALANCED RETURN FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS(1)
(AS OF 6/30/97)
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C>
(Inception:
A Shares(2) 6/8/87)
NAV 20.70% 19.83% 11.91% 15.10%
POP 14.05% 17.60% 10.65% 14.45%
Since
B Shares (Inception: 1/3/94) Inception
CDSC 14.84% 18.13% - 12.90%
No CDSC 19.84% 18.85% - 13.53%
Since
Inception
C Shares (Inception: 1/3/94) 19.80% 18.86% - 13.53%
1 Total returns are historical and include
changes in share price and the reinvestment
of
both dividends and capital gains
distributions.
2 POP (Public Offering Price) total returns
include the effect of the maximum front-end
5.50% sales charge. NAV (Net Asset Value)
total returns do not include the effect of
any sales charge.
All returns represent past performance which
may not be indicative of future performance.
The investment return and principal value of
an investment will fluctuate so that an
investor's shares,
when redeemed, may be worth more or less than
their original cost.
Sector Holdings (as a percentage of total
assets)
Technology 12%
Health Care 19%
Consumer Discretionary 13%
Consumer Staples 16%
Financial Services 10%
U.S. Government Securities 26%
Other 4%
Sector holdings are based on the breakdown of
the Russell 1000 Growth Index,
an unmanaged index of 1,000 securities with a
greater than average growth orientation.
Comparison of Change in Value of a $10,000
Investment-
The Pasadena Balanced Fund A Share(3) and the
S&P 500 Stock Index(4)
Fund After S&P 500
Maximum Stock
Sales Load Index
6/8/87 $10,000 $10,000
6/30/87 $9,490 $10,262
7/31/87 $10,510 $10,781
8/31/87 $10,548 $11,182
9/30/87 $10,605 $10,937
10/31/87 $10,681 $8,589
11/30/87 $10,340 $7,883
12/31/87 $10,870 $8,482
1/31/88 $11,059 $8,851
2/29/88 $11,417 $9,060
3/31/88 $11,388 $8,966
4/30/88 $11,378 $9,077
5/31/88 $11,398 $9,134
6/30/88 $11,794 $9,556
7/31/88 $11,823 $9,534
8/31/88 $11,678 $9,197
9/30/88 $12,190 $9,590
10/31/88 $12,229 $9,868
11/30/88 $12,113 $9,712
12/31/88 $12,328 $9,885
1/31/89 $12,919 $10,617
2/28/89 $12,574 $10,340
3/31/89 $12,910 $10,587
4/30/89 $13,777 $11,148
5/31/89 $14,447 $11,573
6/30/89 $14,604 $11,515
7/31/89 $15,846 $12,564
8/31/89 $15,994 $12,794
9/30/89 $16,112 $12,744
10/31/89 $15,925 $12,454
11/30/89 $16,329 $12,695
12/31/89 $16,393 $13,002
1/31/90 $15,280 $12,147
2/28/90 $15,362 $12,283
3/31/90 $15,713 $12,617
4/30/90 $15,538 $12,315
5/31/90 $17,125 $13,483
6/30/90 $17,610 $13,401
7/31/90 $17,259 $13,370
8/31/90 $15,733 $12,152
9/30/90 $14,744 $11,570
10/31/90 $14,702 $11,532
11/30/90 $15,775 $12,259
12/31/90 $16,329 $12,603
1/31/91 $17,375 $13,164
2/28/91 $18,303 $14,084
3/31/91 $18,933 $14,435
4/30/91 $19,114 $14,478
5/31/91 $20,043 $15,075
6/30/91 $19,040 $14,394
7/31/91 $19,947 $15,078
8/31/91 $21,003 $15,413
9/30/91 $20,982 $15,158
10/31/91 $20,929 $15,378
11/30/91 $20,267 $14,743
12/31/91 $22,679 $16,425
1/31/92 $22,094 $16,139
2/28/92 $22,300 $16,330
2/29/92 $22,300 $16,332
3/31/92 $21,921 $16,017
4/30/92 $21,856 $16,503
5/31/92 $22,148 $16,561
6/30/92 $22,051 $16,315
7/31/92 $22,765 $16,998
8/31/92 $22,700 $16,633
9/30/92 $22,819 $16,826
10/31/92 $22,982 $16,905
11/30/92 $23,631 $17,457
12/31/92 $23,697 $17,676
1/31/93 $23,838 $17,843
2/28/93 $23,533 $18,068
3/31/93 $23,577 $18,449
4/30/93 $22,553 $18,023
5/31/93 $23,119 $18,475
6/30/93 $23,217 $18,531
7/31/93 $22,956 $18,477
8/31/93 $23,751 $19,155
9/30/93 $23,609 $19,007
10/31/93 $24,132 $19,420
11/30/93 $24,121 $19,212
12/31/93 $24,274 $19,451
1/31/94 $24,904 $20,126
2/28/94 $23,976 $19,564
3/31/94 $22,794 $18,717
4/30/94 $23,059 $18,977
5/31/94 $22,915 $19,258
6/30/94 $22,495 $18,789
7/31/94 $23,258 $19,425
8/31/94 $23,711 $20,200
9/30/94 $23,004 $19,704
10/31/94 $23,368 $20,161
11/30/94 $23,059 $19,413
12/31/94 $23,199 $19,700
1/31/95 $23,933 $20,226
2/28/95 $24,509 $20,998
3/31/95 $25,062 $21,620
4/30/95 $25,446 $22,272
5/31/95 $26,587 $23,130
6/30/95 $27,118 $23,669
7/31/95 $27,524 $24,471
8/31/95 $27,490 $24,515
9/30/95 $28,145 $25,549
10/31/95 $28,529 $25,472
11/30/95 $29,354 $26,566
12/31/95 $29,503 $27,081
1/31/96 $30,328 $28,016
2/29/96 $30,618 $28,260
3/31/96 $30,770 $28,537
4/30/96 $30,700 $28,972
5/31/96 $31,455 $29,689
6/30/96 $32,071 $29,809
7/31/96 $31,014 $28,504
8/31/96 $31,246 $29,095
9/30/96 $33,152 $30,722
10/31/96 $33,849 $31,580
11/30/96 $35,487 $33,948
12/31/96 $34,750 $33,277
1/31/97 $36,346 $35,371
2/28/97 $36,024 $35,632
3/31/97 $34,230 $34,174
4/30/97 $36,284 $36,224
5/31/97 $37,745 $38,402
6/30/97 $38,710 $40,125
3 This chart illustrates POP returns on Class
A Shares only.
Returns will vary of Class B and Class C
Shares due to differing sales charges.
4 The S&P 500 Stock Index is an unmanaged
index considered to be a representative of
the U.S.
stock market and includes reinvested
dividends.
6/8/87 (Fund Inception)
Past performance is not predecitve of future
performance.
Ten Largest Holdings at June 30, 1997 (as
percentage of total assets)
1. The Gillette Company 5.1%
Global manufacturer of razors
2. Pfizer Inc 4.6%
Major producer of pharmaceuticals
3. Merck & Co., Inc. 2.9%
Leading manufacturer of pharmaceuticals
4. Microsoft Corporation 2.7%
World's leading computer software company
5. Philip Morris Companies, Inc. 2.7%
Global producer of tobacco and food products
6. PepsiCo, Inc. 2.6%
Worldwide producer of beverages and snack
food
7. Colgate-Palmolive Company 2.4%
Diversified consumer products company
8. Federal Home Loan Mortgage Corporation 2.4%
Nation's largest provider of residential
mortgages
9. Johnson & Johnson 2.4%
Comprehensive health-care company
10. Interpublic Group of Companies, Inc. 2.4%
Leading global advertising firm
</TABLE>
9
<PAGE>
THE PASADENA SMALL & MID-CAP GROWTH FUND
INVESTMENT OBJECTIVE:
The Pasadena Small & Mid-Cap Growth Fund seeks to achieve long-term growth of
capital by investing primarily in a diversified portfolio of equity securities
of companies with market capitalizations below $1.5 billion.
Q: HOW HAS THE FUND PERFORMED SO FAR IN 1997?
A: The Fund turned in good performance by June 30, but it was a bumpy ride along
the way. Through the end of March, the NAV for Class A Shares was down over 8
percent as stocks in general, and technology stocks in particular, experienced a
correction. Fortunately, since most of our companies were meeting our growth
expectations, we held firm and experienced a nice recovery in the second
quarter. In the three months ended June 30, the NAV for Class A shares was up
over 24 percent, and the net result was a gain of 13.87 percent for the first
half.
Q: HOW DID THE FUND'S PERFORMANCE STACK UP ON A RELATIVE BASIS?
A: The Small and Mid-Cap Growth Fund fared well against its key benchmark, the
Russell 2000 Index,* over the first half of the year. The NAV gain of 13.87
percent for Class A Shares exceeded the 10.20 percent gain for the Russell 2000.
The Fund also compared well to its peer group. It ranked number 1 out of 149
mid-cap funds for the two-year period and number 7 out of 188 mid-cap funds for
the one-year period ended June 30, 1997, according to Lipper Analytical
Services, Inc. Complete performance figures are on page 11.
Q: HOW HAVE SMALL- AND MID-CAP STOCKS FARED IN GENERAL SO FAR THIS YEAR?
A: Small- and mid-cap companies remained out of favor relative to large caps as
they have for the past few years. In fact, the last twelve months have been
particularly bad for smaller companies. Since June 30, 1996, the S&P 500 Stock
Index has beaten the Russell 2000 Index by more than 2-to-1 on a total return
basis, or 34.61 percent compared to 16.33 percent. Many theories have been
offered as to why this has happened, but there is little debate that small-and
mid-cap stocks are trading at or near historical lows in relative valuation.
Q: TALK ABOUT SOME OF YOUR WINNERS SO FAR THIS YEAR.
A: We had a nice cross section of winners in the first half, representing
numerous industries. Turning in positive performances were Micrel in technology
and Closure Medical, a new name for us in health care. Two retail stocks that
did well in the first half were Cost Plus and 99 Cents Only Stores.
Q: HOW ABOUT A STOCK THAT DIDN'T WORK OUT.
A: Our biggest loser of the first half of 1997 was IDEXX Laboratories. IDEXX was
an example of an expensive stock with big earnings growth expectations built
into the shares' P/E ratio. When the company announced that growth was less than
forecast, the stock's valuation took a dramatic hit, reflecting reduced
expectations and confidence. When we were unable to determine how long the
company's problems might persist, we decided to take our loss and move on.
Q: WHAT IS YOUR SECOND HALF OUTLOOK?
A: We remain highly confident in the fundamentals of the companies in the Fund's
portfolio and expect them to produce solid earnings growth. In fact, in our
estimates, we are projecting earnings growth for these companies to average at
least 30 percent for the next 3-5 years. In addition, with relative valuations
for small companies near historic lows, we believe the Fund is well positioned
to benefit when small- and mid-cap companies return to favor.
*THE RUSSELL 2000 INDEX CONSISTS OF
THE SMALLEST 2,000 SECURITIES IN THE
RUSSELL 3000 INDEX. THIS INDEX IS
WIDELY REGARDED IN THE INDUSTRY AS THE
PREMIERE MEASURE OF SMALL CAP STOCKS.
10
<PAGE>
THE PASADENA SMALL & MID-CAP GROWTH FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF 6/30/97)
SINCE
1 YEAR INCEPTION
<S> <C> <C>
A Shares (Inception: 10/11/94)
NAV 37.36% 42.72%
POP 29.77% 39.79%
B Shares (Inception: 9/18/96)
CDSC - 22.97%*
No CDSC - 27.97%*
C Shares (Inception: 10/8/96)
CDSC - 15.94%*
No CDSC - 16.94%*
*not annualized
All return figures are historical and include
changes in share price and the reinvestment
of both dividends and capital gains
distributions. The POP (Public Offering
Price) total returns and the Growth of a
$10,000 investment chart include the effect
of the maximum 5.50% sales charge. The NAV
(Net Asset Value) total returns do not
include the effect of any sales charge.
Prior to 9/1/96, the Fund's shares were not
offered to the public and, although the
Fund's portfolio was managed substantially
in accordance with the investment policies
and objectives described in the Prospectus
during that period, some management
differences did occur due primarily to the
Fund's small asset size. Accordingly, the
Fund's performance during periods prior to
9/1/96
may not be relevant to an assessment of such
Fund's performance subsequent to such date.
Additionally, the Manager waived all
management, administrative and service fees
otherwise payable to it by the Fund for the
indicated periods, which had the effect of
increasing the Fund's total return for those
periods.
All returns represent past performance, which
may not be indicative of future performance.
The investment return and principal value
of an investment will fluctuate so that an
investor's shares, when redeemed, may be
worth more or less than their original cost.
Sector Holdings (as a percentage of total
assets)
Technology 27%
Health Care 11%
Consumer Discretionary 31%
Producer Durables 9%
Financial Services 11%
Other 11%
Sector holdings are based on the breakdown of
the Russell 1000 Growth Index,
an unmanaged index of 1,000 securities with a
greater than average growth orientation.
Comparison of Change in Value of a $10,000
Investment-
The Pasadena Small & Growth Fund A Shares(1)
and the
Russell 2000 Growth Index (2)
Fund After
Maximum
Russell
Sales Load 2000 Index
10/11/94 $10,000 $10,000
10/31/94 $9,754 $10,025
11/30/94 $11,304 $9,620
12/31/94 $11,408 $9,877
1/31/95 $11,654 $9,753
2/28/95 $11,805 $10,159
3/31/95 $12,051 $10,332
4/30/95 $12,136 $10,562
5/31/95 $12,278 $10,743
6/30/95 $12,911 $11,301
7/31/95 $13,601 $11,952
8/31/95 $13,951 $12,199
9/30/95 $14,301 $12,418
10/31/95 $13,866 $11,863
11/30/95 $14,130 $12,361
12/31/95 $14,338 $12,687
1/31/96 $14,116 $12,673
2/29/96 $14,405 $13,069
3/31/96 $15,156 $13,335
4/30/96 $17,311 $14,049
5/31/96 $18,812 $14,602
6/30/96 $18,110 $14,002
7/31/96 $16,695 $12,780
8/31/96 $18,668 $13,522
9/30/96 $21,715 $14,051
10/31/96 $21,209 $13,834
11/30/96 $21,962 $14,404
12/31/96 $21,846 $14,782
1/31/97 $22,665 $15,077
2/28/97 $21,488 $14,713
3/31/97 $20,040 $14,018
4/30/97 $20,159 $14,057
5/31/97 $23,925 $15,621
6/30/97 $24,875 $16,291
(1) This chart illustrates POP returns on
Class A Shares only. Returns
will vary on Class B and Class C Shares due
to differing sales charges.
(2) The Russell 2000 consists of the smallest
2,000 securities in the
Russell 3000 Index. The index is widely
regarded in the industry as
a premier measure of small cap stocks.
10/10/94 (Fund Inception)
Past performance is not predictive of future
performance.
Ten Largest Holdings at June 30, 1997 (as a
percentage of total assets)
1. MRV Communications, Inc 3.6%
Supplier of fiber optic communication
equipment
2. Ocwen Asset Investment Corp. 3.3%
Real estate management company
3. 99 Cents Only Stores 3.1%
Operates chain of close-out merchandise
stores
4. Signature Resorts, Inc. 2.8%
Develops and operates time-share resorts
5. BA Merchant Services, Inc. 2.7%
Provides payment processing and related
information, products and services
6. Tecnomatix Technologies Ltd. 2.6%
Makes computer aided production engineering
software
7. Advanced Health Corporation 2.6%
Provides integrated services and clinical
information systems
8. MSC Industrial Direct Co., Inc. 2.4%
Direct marketer of industrial products
9. Ascend Communications, Inc. 2.4%
Develops, manufactures wide area network
products
10. Healthcare Recoveries, Inc. 2.4%
Provides health insurance and recovery
services
</TABLE>
11
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT OBJECTIVE:
The Pasadena Global Growth Fund seeks to achieve long-term growth of capital
by investing in a globally diversified portfolio of equity securities, which may
be traded in securities markets in foreign countries and the United States.
Q: HOW DID THE FUND PERFORM OVER THE SIX-MONTH PERIOD ENDED JUNE 30?
A: The NAV for The Pasadena Global Growth Fund's Class A Shares increased 15.11
percent, compared to 15.09 percent for the MSCI All Country World Index.* The
Fund ranked number 1 out of 104 global funds for the three-year period and
number 14 out of 175 global funds for the one-year period ended June 30, 1997,
according to Lipper Analytical Services. Complete performance figures are shown
on page 13.
Q: WHAT ACCOUNTED FOR THE FUND'S PERFORMANCE?
A: With a significant commitment to the U.S., the Fund continued to benefit from
the strength of the U.S. market during the first of the year. At the same time,
the Fund's relatively low weighting in Japan, which lagged the performance of
the overall benchmark during this period, also helped the Fund's performance.
Overall the Fund's performance can be attributed to several strong performing
stocks, especially among the top ten holdings. Although the Fund had its share
of underperforming stocks, they were generally limited to relatively small
holdings.
Q: GIVE SOME EXAMPLES OF STOCKS THAT PERFORMED WELL.
A: The Fund's best performing stock and one of its top holdings during the
period was Telebras, the Brazilian telecommunications service provider. Telebras
benefited from strong earnings growth and positive investor sentiment over
prospects for privatization of the Brazilian telecommunications sector. Another
top-performer among the Fund's top holdings was Baan, a provider of business
applications software based in the Netherlands. Other significant holdings which
performed well were HSBC Holdings, Ericsson and Telefonica de Espana, all of
which benefited from strong earnings growth.
Q: WHAT ABOUT SOME STOCKS THAT UNDERPERFORMED?
A: A large holding that underperformed during the period was Boston Scientific.
Although the company reported somewhat disappointing earnings, we continue to
believe in its long-term prospects and thus continue to hold the stock. Another
significant holding that underperformed was Wells Fargo whose earnings were
affected by costs of acquiring First Interstate Bank. In addition, a few smaller
holdings such as Italian-Thai Development did not live up to expectations.
Q: WHAT CHANGES HAVE YOU MADE TO THE FUND?
A: We gradually reduced the Fund's weighting in the U.S. from 31 percent at the
end of last year to around 24 percent as of June 30, 1997. The reduction
reflects our view that the U.S. market has become somewhat less attractive than
other markets, especially Europe. Nevertheless, with a weighting of 24 percent,
the Fund continues to have a significant presence in the U.S. Over the first
half of the year, we also reduced the weighting in Asia from 33 percent to 26
percent. Offsetting these reductions was an increase in the European weighting
from 23 percent 37 percent and in the Latin American weighting from 5 percent to
8 percent. The change in regional weightings is generally a function of our
bottom-up stock picking process as opposed to a top-down analysis.
In our top ten holdings we added Novartis and increased positions in Boston
Scientific, Telefonica de Espana and Telebras, making them significant holdings
in the Fund. We reduced our positions somewhat in Intel, Cisco, Hutchison
Whampoa and Reuters. We sold News Corporation and Astra due to concerns
regarding future earnings growth.
Q: WHAT IS YOUR OUTLOOK GOING FORWARD?
A: We feel the economic environment remains very favorable for global investing
right now. Nearly every market around the world is experiencing good economic
growth and at the same time relatively low inflation. We believe this is very
positive for stocks. The trend toward greater political and economic reform
around the world remains in place.
*MSCI AC WORLD (MORGAN STANLEY CAPITAL
INTERNATIONAL ALL COUNTRY WORLD INDEX)
IS AN UNMANAGED INDEX OF OVER 1,460
SECURITIES ON THE STOCK EXCHANGES OF
22 COUNTRIES.
12
<PAGE>
THE PASADENA GLOBAL GROWTH FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS (AS OF 6/30/97)
SINCE
1 YEAR 3 YEARS INCEPTION
<S> <C> <C> <C>
A Shares (Inception: 11/1/93)
NAV 29.38% 27.88% 27.58%
POP 22.26% 25.49% 25.63%
B Shares
CDSC 21.10%*
No CDSC 26.10%*
C Shares
CDSC 22.06%*
No CDSC 23.06%*
*not annualized
All return figures are historical and include
changes in share price and the reinvestment
of both dividends and capital gains
distributions. The POP (Public Offering
Price) total returns include the effect of
the maximum 5.50% sales charge. The NAV
(Net Asset Value) total returns do not
include the effect of any sales charge.
Prior to 9/1/96, the Fund's shares were not
offered to the public and, although the
Fund's portfolio was managed substantially
in accordance with the investment policies
and objective described in the Prospectus
during that period, some management
differences did occur due primarily to the
Fund's small asset size. Accordingly, the
Fund's performance during periods prior to
9/1/96
may not be relevant to an assessment of such
Fund's performance subsequent to such date.
Additionally, the Manager waived all
management, administrative and service fees
otherwise payable to it by the Fund for the
indicated periods, which had the
effect of increasing the Fund's total return
for those periods.
All returns represent past performance, which
may not be indicative of future performance.
The investment return and principal
value of an investment will fluctuate so that
an investor's shares, when redeemed, may be
worth more or less than their original cost.
Diversification by Country (Top 10 Countries
as of 6/30/97)
(as a percentage of total investment in
securities)
United States 23.7%
Hong Kong 11.2%
United Kingdom 10.1%
Switzerland 5.7%
Netherlands 3.7%
Sweden 3.7%
Mexico 3.3%
Brazil 2.8%
Germany 2.8%
Israel 2.6%
Comparison of Change in Value of a $10,000
Investment-
The Pasadena Global Growth Fund A Shares(1)
and the MSCI AC World Index (2)
Fund After
Maximum
MSCI AC
World
Sales Load Index
11/01/93 $10,000 $10,000
11/30/93 $9,773 $9,507
12/31/93 $10,567 $10,059
1/31/94 $10,766 $10,713
2/28/94 $10,813 $10,548
3/31/94 $10,482 $10,071
4/30/94 $10,784 $10,353
5/31/94 $11,068 $10,419
6/30/94 $11,030 $10,370
7/31/94 $11,285 $10,613
8/31/94 $11,607 $10,995
9/30/94 $11,484 $10,765
10/31/94 $12,202 $11,018
11/30/94 $13,365 $10,543
12/31/94 $13,289 $10,586
1/31/95 $13,280 $10,342
2/28/95 $13,582 $10,448
3/31/95 $14,017 $10,924
4/30/95 $14,310 $11,298
5/31/95 $14,896 $11,411
6/30/95 $15,501 $11,410
7/31/95 $16,021 $11,947
8/31/95 $15,898 $11,676
9/30/95 $16,484 $12,005
10/31/95 $16,200 $11,804
11/30/95 $16,550 $12,154
12/31/95 $16,457 $12,518
1/31/96 $17,220 $12,774
2/29/96 $17,439 $12,828
3/31/96 $17,448 $13,033
4/30/96 $17,753 $13,395
5/31/96 $18,182 $13,390
6/30/96 $17,830 $13,470
7/31/96 $16,800 $12,960
8/31/96 $17,591 $13,117
9/30/96 $18,263 $13,597
10/31/96 $18,409 $13,647
11/30/96 $19,891 $14,369
12/31/96 $20,040 $14,158
1/31/97 $21,144 $14,397
2/28/97 $20,986 $14,597
3/31/97 $20,029 $14,311
4/30/97 $20,430 $14,773
5/31/97 $21,954 $15,643
6/30/97 $23,069 $16,451
(1) This chart illustrates POP returns on
Class A Shares only. Returns will vary on
Class B and Class C
Shares due to differing sales charges.
(2) MSCI AC World (Morgan Stanley Capital
International All Country World Index). The
MSCI AC
World is an unmanaged index of over 1,460
securities on the stock exchanges of 22
countries.
11/1/93 (Fund Inception)
Past performance is not predictive of future
performance.
Ten Largest Holdings at June 30, 1997 (as a
percentage of total assets)
1. HSBC Holdings plc (Hong Kong) ADR 3.5%
An international banking group
2. LM Ericsson Corporation (Sweden) ADR 3.1%
An international leader in telecommunications
equipment
3. Roche Holding Ltd. (Switzerland) ADR 2.3%
Swiss manufacturer and distributer of
pharmaceuticals
4. Dr Solomon's Group Spon ADR 2.2%
UK based developer of anti-virus software for
PCs and PC Networks
5. Intel Corporation (United States) 2.1%
Leading manufacturer of microprocessors
6. Coca-Cola Femsa, S.A. de C.V. Spon ADR 2.0%
Leading Coke distributor in Mexico and
Argentina
7. The Gillette Company (United States) 1.9%
Global manufacturer of razors
8. Telefonica de Espana S.A. Spon ADR 1.8%
Leading Spanish telecommunications provider
operating in Spain and Latin America
9. Telecommon Brazil-Telebras Spons ADR 1.8%
Leading Brazilian telecommunications provider
10. Novartis AG CHF20 ADR 1.8%
Swiss-based global manufacturer and
distributor of pharmaceuticals
</TABLE>
13
<PAGE>
THE PASADENA VALUE 25 FUND
INVESTMENT OBJECTIVE:
The Pasadena Value 25 Fund seeks to achieve dividend income and long-term
growth of capital by investing primarily in 25 high yielding stocks on the S&P
500.
Management believes the quantitative investment approach of Value 25 will
challenge the Dogs of the Dow strategy, which buys the 10 highest yielding
stocks on the Dow Jones Industrial Average and replaces them with new Dogs the
following year.
Q: HOW DID THE PASADENA VALUE 25 FUND PERFORM COMPARED TO THE S&P 500 INDEX OVER
THE FIRST HALF OF THE YEAR?
A: The NAV for the Fund's Class A Shares increased 13.12 percent versus 20.58
percent for the S&P 500. Complete performance figures are on page 15.
An analysis of the returns shows that the gains in the S&P in the first half
were led by two sectors not well represented in Value 25, Technology and
Consumer Staples. These industries generally pay lower dividends, if any, and
thus do not generally meet the requirements of Value 25. By contrast, the
primary sectors in which Value 25 is invested include Industrial, Energy and
Basic Materials--all of which were out of favor in the first two quarters of the
year.
Q: HOW HAS THE FUND PERFORMED AGAINST SIMILAR DIVIDEND STRATEGY STYLES SUCH AS
THE DOGS OF THE DOW?
A: Value 25 and the Dogs of the Dow strategy were neck-and-neck for the last six
months. At the end of the second quarter, the Dogs of the Dow stocks had a
slight edge with a 13.57 percent return.
Q: WHAT WERE THE BEST CONTRIBUTORS TO THE FUND'S RETURN OVER THE PAST SIX
MONTHS?
A: Maytag, Paccar and SUPERVALU were among the best performers. All three
companies announced either a raise in dividends, additional stock repurchases,
or both over the last six months. We believe the dividend increases and stock
buybacks are an indication of improved fundamentals for these stocks. Despite
their run-ups, we believe Paccar and SUPERVALU are still undervalued and
continue to meet the Fund's investment criteria.
Q: WHAT STOCKS HAVE NOT PERFORMED UP TO EXPECTATIONS?
A: Unfortunately, the strong economy did not spill over to the automotive
sector, and sales were weaker than expected in the first half for GM and
Chrysler. However, despite the weakness, these companies provided positive
returns. In fact, no stock held in the Fund for the entire six months had a
negative return. We believe all stocks in the Fund have limited downside due to
their high yields and quality of earnings.
Q: WHAT CHANGES DID YOU MAKE TO THE FUND OVER THE PERIOD AND WHY?
A: We replaced seven stocks at the end of the first quarter and five stocks at
the end of the second quarter. Half were replaced because their price had run up
considerably and no longer represented a good value. The other half were
replaced because of weakening earnings quality.
Q: HOW HAS QUARTERLY REBALANCING ADDED TO THE TURNOVER OF THE PORTFOLIO?
A: In the prospectus, we estimated turnover of 200 percent. However, turnover
has been much less than initially expected. At the current pace, the turnover of
the Fund will be closer to 100 percent.
Q: WHAT IS YOUR OUTLOOK FOR VALUE 25 FOR THE REST OF THE YEAR?
A: As mentioned, the Industrial, Energy and Basic Materials sectors were out of
favor during the first half of the year. We realize that an underperforming
sector in one quarter may be the one of the best performing sectors the next. We
are confident about the stocks that currently make up the portfolio and expect a
strong showing from them in the third and fourth quarters.
14
<PAGE>
THE PASADENA VALUE 25 FUND (CONTINUED)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
TOTAL RETURNS(1)
SINCE
INCEPTION
12/17/96
THROUGH
6/30/97
<S> <C>
A Shares(2)
NAV 15.50%*
POP 9.17%*
B Shares (Inception 1/10/97
CDSC 5.86%*
No CDSC 10.86%*
C Shares (Inception 1/10/97)
CDSC 9.89%*
No CDSC 10.89%*
*not annualized
1 Total returns are historical and include
changes in share price and the reinvestment
of both dividends are capital gains
distributions.
2 POP (Public Offering Price) total returns
include the effect of the maxiumum front-end
5.50% sales charge.
NAV (Net Asset Value) total returns do not
include the effect of any sales charge.
All returns represent past performance which
may not be indicative of future performance.
The investment return and principal value of
an investment will fluctuate so that an
investor's
shares, when redeemed, may be worth more or
less than their original cost.
Ten Largest Holdings at June 30, 1997 (as a
percentage of total assets)
1. USX--U.S. Steel Group 4.5%
Integrated steel producer
2. PACCAR Inc. 4.4%
Designs, manufactures, markets commercial and
industrial equipment
3. Ford Motor Company 4.3%
Manufactures and sells automobiles, trucks
and related parts globally
4. Eastman Chemical Company 4.2%
International chemical producer
5. SBC Communications Inc. 4.1%
Telecommunications company
6. Springs Industries, Inc. 4.1%
Produces printed and other fabrics
7. ASARCO Incorporated 4.1%
Producer of nonferrous metals
8. Dana Corporation 4.0%
Manufacturer of auto parts
9. SUPERVALU INC. 4.0%
U.S. food wholesaler and retailer
10. Cooper Industries, Inc. 4.0%
Manufactures electrical, industrial and
automotive products
</TABLE>
15
<PAGE>
THE PASADENA GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS
ADVERTISING - 2.4%
The Interpublic Group of
Companies, Inc.............. 195,000 $ 11,956
-----------
BANKING - 2.2%
Wells Fargo & Company......... 40,000 10,780
-----------
BEVERAGES - 3.1%
The Coca-Cola Company......... 95,000 6,412
PepsiCo, Inc.................. 240,000 9,015
-----------
15,427
-----------
BUSINESS SERVICES - 4.1%
First Data Corporation........ 290,000 12,742
Reuters Holdings PLC ADS B.... 115,000 7,245
-----------
19,987
-----------
COMMERCIAL INFORMATION
SERVICES - 1.6%
America Online, Inc.*......... 140,000 7,787
-----------
COMMUNICATIONS EQUIPMENT - 4.4%
Cisco Systems*................ 170,000 11,411
MRV Communications, Inc.*..... 155,000 4,573
3Com Corp.*................... 120,000 5,400
-----------
21,384
-----------
COMPUTER HARDWARE - 2.1%
COMPAQ Computer*.............. 60,000 5,955
Hewlett-Packard............... 75,000 4,200
-----------
10,155
-----------
COMPUTER SOFTWARE - 8.8%
Legato Systems, Inc.*......... 150,000 2,775
McAfee Associates Inc.*....... 105,000 6,628
Microsoft Corporation*........ 95,000 12,006
Oracle Systems*............... 165,000 8,312
PeopleSoft, Inc.*............. 190,000 10,023
Rational Software
Corporation*................ 200,000 3,363
-----------
43,107
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CONSUMER PRODUCTS - 5.3%
The Gillette Company.......... 240,000 $ 22,740
Luxottica Group S.p.A.
sponsored ADR............... 45,000 3,051
-----------
25,791
-----------
DIVERSIFIED
MANUFACTURING - 0.6%
General Electric.............. 45,000 2,942
-----------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 8.4%
Applied Materials, Inc.*...... 70,000 4,957
Etec Systems, Inc.*........... 65,000 2,787
Intel Corporation............. 70,000 9,927
Linear Technology
Corporation................. 120,000 6,210
Maxim Integrated Products,
Inc.*....................... 70,000 3,981
Texas Instruments
Incorporated................ 120,000 10,088
Xilinx, Inc.*................. 70,000 3,434
-----------
41,384
-----------
FINANCIAL SERVICES - 9.9%
Federal Home Loan Mortgage
Corporation................. 385,000 13,234
Federal National Mortgage
Association................. 290,000 12,651
Green Tree Financial
Corporation................. 480,000 17,100
MBNA Corporation.............. 145,000 5,311
-----------
48,296
-----------
FINANCIAL SERVICES/
BROKERAGE - 1.0%
The Charles Schwab
Corporation................. 120,000 4,883
-----------
GAMING - 0.2%
Circus Circus Enterprises,
Inc.*....................... 45,000 1,108
-----------
HEALTHCARE SERVICES - 3.1%
HBO & Company................. 70,000 4,821
Oxford Health Plans, Inc.*.... 145,000 10,404
-----------
15,225
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
THE PASADENA GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
HOSPITAL COMPANIES - 1.0%
Columbia/HCA Healthcare
Corporation................. 120,000 $ 4,717
-----------
HOUSEHOLD PRODUCTS - 2.0%
Colgate-Palmolive Company..... 93,000 6,068
The Procter & Gamble
Company..................... 25,000 3,531
-----------
9,599
-----------
INVESTMENT MANAGEMENT - 2.1%
AMVESCAP PLC sponsored ADR.... 115,000 6,699
T. Rowe Price Associates,
Inc......................... 70,000 3,614
-----------
10,313
-----------
LEISURE - 4.6%
Carnival Corporation.......... 190,000 7,837
The Walt Disney Company....... 70,000 5,617
HFS, Incorporated*............ 100,000 5,800
Signature Resorts, Inc.*...... 95,000 3,283
-----------
22,537
-----------
MANUFACTURING - CIGARS - 0.6%
General Cigar Holdings,
Inc.*....................... 95,000 2,797
-----------
MEDICAL EQUIPMENT &
SUPPLIES - 4.9%
Boston Scientific
Corporation*................ 175,000 10,752
Johnson & Johnson............. 75,000 4,828
Medtronic, Inc................ 105,000 8,505
-----------
24,085
-----------
PHARMACEUTICALS - 9.2%
Elan Corporation, plc
sponsored ADR*.............. 95,000 4,299
Merck & Co., Inc.............. 120,000 12,420
Pfizer Inc.................... 380,000 22,705
Roche Holdings Ltd. ADR....... 60,000 5,452
-----------
44,876
-----------
RESTAURANTS - 0.4%
McDonald's Corporation........ 45,000 2,174
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RETAIL - APPAREL & ACCESSORY
STORES - 0.5%
Kohl's Corporation*........... 45,000 $ 2,382
-----------
RETAIL - AUTO SUPPLY
STORES - 0.9%
AutoZone, Inc. *.............. 190,000 4,477
-----------
RETAIL - CATALOG - 0.7%
Viking Office Products,
Inc.*....................... 190,000 3,610
-----------
RETAIL - GENERAL
MERCHANDISE - 3.8%
Consolidated Stores
Corporation*................ 75,000 2,606
Dollar General Corporation.... 145,000 5,437
Sears, Roebuck and Company.... 200,000 10,750
-----------
18,793
-----------
RETAIL - HOME FURNITURE,
FURNISHINGS & EQUIPMENT
STORES - 0.5%
Bed Bath & Beyond, Inc.*...... 75,000 2,278
-----------
RETAIL - SPECIALTY - 2.4%
CompUSA Inc.*................. 190,000 4,085
PETsMART, Inc.*............... 200,000 2,300
Staples, Inc.*................ 240,000 5,580
-----------
11,965
-----------
TELECOMMUNICATIONS
EQUIPMENT - 6.0%
Ascend Communications,
Inc.*....................... 250,000 9,844
Pairgain Technologies,
Inc.*....................... 403,000 6,247
Telefonaktiebolaget LM
Ericsson sponsored ADR...... 200,000 7,875
Tellabs, Inc.*................ 95,000 5,308
-----------
29,274
-----------
TELECOMMUNICATIONS
SERVICES - 0.3%
360 DEG. Communications
Company*.................... 95,000 1,627
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
THE PASADENA GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
TOBACCO PRODUCTS - 2.4%
Philip Morris Companies
Inc......................... 260,000 $ 11,538
-----------
TOTAL COMMON STOCKS - 99.5%
(COST $268,539)............. 487,254
-----------
TOTAL INVESTMENT IN
SECURITIES - 99.5%
(COST $268,539)............. $ 487,254
-----------
-----------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
THE PASADENA NIFTY FIFTY FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS
ADVERTISING - 1.8%
The Interpublic Group of
Companies, Inc.............. 80,000 $ 4,905
-----------
BANKING - 3.0%
Wells Fargo & Company......... 30,000 8,085
-----------
BEVERAGES - 4.7%
The Coca-Cola Company......... 100,000 6,750
PepsiCo, Inc.................. 150,000 5,634
-----------
12,384
-----------
BUSINESS SERVICES - 4.6%
Automatic Data Processing,
Inc......................... 50,000 2,350
First Data Corporation........ 150,000 6,591
Reuters Holdings PLC ADS B.... 50,000 3,150
-----------
12,091
-----------
COMMUNICATIONS
EQUIPMENT - 4.3%
Cisco Systems*................ 70,000 4,699
3Com Corp.*................... 150,000 6,750
-----------
11,449
-----------
COMPUTER HARDWARE - 1.8%
COMPAQ Computer*.............. 20,000 1,985
Hewlett-Packard............... 50,000 2,800
-----------
4,785
-----------
COMPUTER SOFTWARE - 4.7%
Microsoft Corporation*........ 60,000 7,583
Oracle Systems*............... 100,000 5,038
-----------
12,621
-----------
CONSUMER PRODUCTS - 5.3%
The Gillette Company.......... 150,000 14,212
-----------
DIVERSIFIED
MANUFACTURING - 1.2%
General Electric.............. 50,000 3,269
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
ELECTRONICS & ELECTRICAL
EQUIPMENT - 7.0%
Intel Corporation............. 50,000 $ 7,091
Linear Technology
Corporation................. 100,000 5,175
Texas Instruments
Incorporated................ 75,000 6,305
-----------
18,571
-----------
FINANCIAL SERVICES - 10.9%
American Express Company...... 65,000 4,842
Federal Home Loan Mortgage
Corporation................. 180,000 6,187
Federal National Mortgage
Association................. 100,000 4,362
Green Tree Financial
Corporation................. 225,000 8,016
MBNA Corporation.............. 150,000 5,494
-----------
28,901
-----------
FINANCIAL SERVICES/BROKERAGE - 1.5%
The Charles Schwab
Corporation................. 100,000 4,069
-----------
GAMING - 1.2%
Circus Circus Enterprises,
Inc.*....................... 125,000 3,078
-----------
HEALTHCARE SERVICES - 2.6%
Oxford Health Plans, Inc.*.... 95,000 6,816
-----------
HOSPITAL COMPANIES - 1.8%
Columbia/HCA Healthcare
Corporation................. 125,000 4,914
-----------
HOUSEHOLD PRODUCTS - 2.5%
Colgate-Palmolive Company..... 100,000 6,525
-----------
INVESTMENT MANAGEMENT - 1.5%
T. Rowe Price Associates,
Inc......................... 75,000 3,872
-----------
LEISURE - 3.5%
Carnival Corporation.......... 75,000 3,094
The Walt Disney Company....... 40,000 3,210
HFS, Incorporated*............ 50,000 2,900
-----------
9,204
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
THE PASADENA NIFTY FIFTY FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
MEDICAL EQUIPMENT &
SUPPLIES - 7.9%
Boston Scientific
Corporation*................ 120,000 $ 7,372
Johnson & Johnson............. 110,000 7,081
Medtronic, Inc................ 80,000 6,480
-----------
20,933
-----------
PHARMACEUTICALS - 10.1%
Merck & Co., Inc.............. 100,000 10,350
Pfizer Inc.................... 200,000 11,950
Roche Holdings Ltd. ADR....... 50,000 4,544
-----------
26,844
-----------
RESTAURANTS - 0.9%
McDonald's Corporation........ 50,000 2,416
-----------
RETAIL - APPAREL &
ACCESSORY STORES - 1.6%
Kohl's Corporation*........... 80,000 4,235
-----------
RETAIL - AUTO SUPPLY STORES - 0.9%
AutoZone, Inc.*............... 100,000 2,356
-----------
RETAIL - GENERAL
MERCHANDISE - 3.0%
Sears, Roebuck and Company.... 150,000 8,062
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RETAIL - SPECIALTY - 3.4%
CompUSA Inc.*................. 200,000 $ 4,300
Staples, Inc.*................ 200,000 4,650
-----------
8,950
-----------
TELECOMMUNICATIONS
EQUIPMENT - 2.2%
Telefonaktiebolaget LM
Ericsson sponsored ADR...... 150,000 5,906
-----------
TOBACCO PRODUCTS - 2.5%
Philip Morris Companies
Inc......................... 150,000 6,656
-----------
TOTAL COMMON STOCKS - 96.4%
(COST $149,438)............. 256,109
-----------
TOTAL INVESTMENT IN
SECURITIES - 96.4%
(COST $149,438)............. $ 256,109
-----------
-----------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
THE PASADENA BALANCED RETURN FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCKS
ADVERTISING - 2.4%
The Interpublic Group of
Companies, Inc.................. 25,000 $ 1,533
---------
BANKING - 2.1%
Wells Fargo & Company............. 5,000 1,348
---------
BEVERAGES - 4.2%
The Coca-Cola Company............. 15,000 1,013
PepsiCo, Inc...................... 45,000 1,690
---------
2,703
---------
BUSINESS SERVICES - 3.4%
Reuters Holdings PLC ADS B........ 17,000 1,071
Automatic Data Processing, Inc.... 10,000 470
First Data Corporation............ 15,000 659
---------
2,200
---------
COMMUNICATIONS EQUIPMENT - 2.1%
Cisco Systems*.................... 20,000 1,343
---------
COMPUTER HARDWARE - 1.2%
Hewlett-Packard................... 14,000 784
---------
COMPUTER SOFTWARE - 4.5%
Microsoft Corporation*............ 14,000 1,769
Oracle Systems*................... 22,500 1,133
---------
2,902
---------
CONSUMER PRODUCTS - 5.2%
The Gillette Company.............. 35,000 3,316
---------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 4.5%
Intel Corporation................. 10,000 1,418
Linear Technology Corporation..... 7,000 362
Texas Instruments Incorporated.... 10,000 841
Xilinx, Inc.*..................... 6,000 294
---------
2,915
---------
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
FINANCIAL SERVICES - 6.0%
Federal Home Loan Mortgage
Corporation..................... 45,000 $ 1,547
Federal National Mortgage
Association..................... 28,000 1,222
Green Tree Financial
Corporation..................... 30,000 1,069
---------
3,838
---------
GAMING - 1.1%
Circus Circus Enterprises,
Inc.*........................... 30,000 739
---------
HEALTHCARE SERVICES - 2.7%
HBO & Company..................... 10,000 689
Oxford Health Plans, Inc.*........ 15,000 1,076
---------
1,765
---------
HOSPITAL COMPANIES - 1.8%
Columbia/HCA Healthcare
Corporation..................... 30,000 1,179
---------
HOUSEHOLD PRODUCTS - 4.0%
Colgate-Palmolive Company......... 24,000 1,566
The Procter & Gamble Company...... 7,000 989
---------
2,555
---------
LEISURE - 5.0%
Carnival Corporation.............. 30,000 1,237
The Walt Disney Company........... 15,000 1,204
HFS, Incorporated*................ 14,000 812
---------
3,253
---------
MEDICAL EQUIPMENT &
SUPPLIES - 5.2%
Boston Scientific Corporation*.... 10,000 614
Johnson & Johnson................. 24,000 1,545
Medtronic, Inc.................... 15,000 1,215
---------
3,374
---------
PHARMACEUTICALS - 8.9%
Merck & Co., Inc.................. 18,000 1,863
Pfizer Inc........................ 50,000 2,987
Roche Holdings Ltd. ADR........... 10,000 909
---------
5,759
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
THE PASADENA BALANCED RETURN FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
RESTAURANTS - 1.5%
McDonald's Corporation............ 20,000 $ 966
---------
RETAIL - AUTO SUPPLY STORES - 1.0%
AutoZone, Inc.*................... 27,000 636
---------
RETAIL - GENERAL
MERCHANDISE - 2.1%
Sears, Roebuck and Company........ 25,000 1,344
---------
TOBACCO PRODUCTS - 2.7%
Philip Morris Companies Inc....... 39,000 1,731
---------
TOTAL COMMON STOCKS - 71.6%
(COST $21,954).................. 46,183
---------
<CAPTION>
FACE
AMOUNT VALUE
--------- ---------
<S> <C> <C>
UNITED STATES TREASURY OBLIGATIONS
United States Treasury Bonds, 6%,
02/15/2026...................... $ 9,300 $ 8,323
United States Treasury Notes,
6.5%, 08/15/2005................ 8,900 8,875
---------
TOTAL UNITED STATES TREASURY
OBLIGATIONS - 26.7%
(COST $17,501).................. 17,198
---------
TOTAL INVESTMENT IN
SECURITIES - 98.3%
(COST $39,455).................. $ 63,381
---------
---------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
THE PASADENA SMALL & MID-CAP GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS
BANKING - 2.2%
Hamilton Bancorp, Inc.*....... 20,000 $ 535
-----------
BEVERAGES - 1.7%
Triarc Companies, Inc.*....... 20,000 408
-----------
BUSINESS SERVICES - 4.5%
MAXIMUS, Inc.*................ 20,000 357
U.S. Rentals, Inc.*........... 30,000 759
-----------
1,116
-----------
COMMUNICATIONS
EQUIPMENT - 3.6%
MRV Communications, Inc.*..... 30,000 885
-----------
COMPUTER SOFTWARE - 20.5%
Abacus Direct Corporation*.... 15,000 488
Arbor Software Corporation*... 5,000 176
Dr Solomon's Group PLC*....... 15,000 381
Fusion Systems Corporation*... 10,000 396
Indus Group, Inc.*............ 10,000 203
Legato Systems, Inc.*......... 20,000 370
McAfee Associates Inc.*....... 7,500 473
New Era of Networks, Inc.*.... 20,000 330
NICE-Systems Ltd. sponsored
ADR*........................ 15,000 450
Rational Software
Corporation*................ 20,000 336
Stratasys, Inc.*.............. 15,000 242
Tecnomatix Technologies
Ltd.*....................... 20,000 650
Vantive Corporation*.......... 10,000 283
Walker Interactive Systems,
Inc.*....................... 20,000 280
-----------
5,058
-----------
CONSUMER SERVICES - 0.6%
Expeditors International of
Washington, Inc............. 5,000 142
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
DIVERSIFIED
MANUFACTURING - 2.4%
Ballantyne of Omaha, Inc.*.... 30,000 $ 540
Optimal Robotics Corp.*....... 15,000 60
-----------
600
-----------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 8.6%
Advanced Lighting
Technologies, Inc.*......... 10,000 253
ANADIGICS, Inc.*.............. 5,000 155
Etec Systems, Inc.*........... 10,000 429
Integrated Process Equipment
Corporation*................ 20,000 506
Micrel, Inc.*................. 5,000 255
Microchip Technology
Incorporated*............... 5,000 149
Photon Dynamics, Inc.*........ 50,000 325
RF Micro Devices Inc.*........ 2,500 48
-----------
2,120
-----------
FINANCIAL SERVICES - 9.0%
ARM Financial Group, Inc.*.... 2,000 40
BA Merchant Services, Inc.*... 35,000 667
Delta Financial
Corporation*................ 25,000 478
The Money Store............... 7,500 215
Ocwen Asset Investment
Corp........................ 40,000 810
-----------
2,210
-----------
FUNERAL SERVICES - 1.4%
The Loewen Group Inc.......... 10,000 348
-----------
HEALTHCARE SERVICES - 7.9%
Advanced Health
Corporation*................ 35,000 643
ArQule, Inc.*................. 25,000 434
Closure Medical
Corporation*................ 15,000 289
Healthcare Recoveries,
Inc.*....................... 30,000 581
-----------
1,947
-----------
INDUSTRIAL/DIRECT MAIL
DISTRIBUTOR - 2.7%
JLK Direct Distribution
Inc.*....................... 2,000 51
MSC Industrial Direct Co.,
Inc.*....................... 15,000 602
-----------
653
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
THE PASADENA SMALL & MID-CAP GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
LEISURE - 6.4%
Regal Cinemas, Inc.*.......... 15,000 $ 495
Signature Resorts, Inc.*...... 20,000 691
Silverleaf Resorts, Inc.*..... 25,000 384
-----------
1,570
-----------
MANUFACTURING - CIGARS - 1.2%
General Cigar Holdings,
Inc.*....................... 10,000 294
-----------
MANUFACTURING -
MISCELLANEOUS - 1.1%
Roper Industries, Inc......... 5,000 259
-----------
MEDICAL EQUIPMENT &
SUPPLIES - 1.8%
Mentor Corporation............ 15,000 444
-----------
PHARMACEUTICALS - 1.1%
Kos Pharmaceuticals, Inc.*.... 10,000 278
-----------
RETAIL - CATALOG - 2.3%
Viking Office Products,
Inc.*....................... 30,000 570
-----------
RETAIL - GENERAL
MERCHANDISE - 6.3%
Cost Plus, Inc.*.............. 20,000 525
Mazel Stores, Inc.*........... 15,000 262
99 Cents Only Stores*......... 25,000 753
-----------
1,540
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RETAIL - SPECIALTY - 4.5%
Barnes & Noble, Inc.*......... 5,000 $ 215
CompUSA Inc.*................. 20,000 430
PETsMART, Inc.*............... 40,000 460
-----------
1,105
-----------
TELECOMMUNICATIONS
EQUIPMENT - 2.4%
Ascend Communications,
Inc.*....................... 15,000 591
-----------
TOTAL COMMON STOCKS - 92.2%
(COST $19,956).............. 22,673
-----------
WARRANTS
ELECTRONICS & ELECTRICAL
EQUIPMENT - 0.8%
Intel Corporation (expires
1998)*...................... 2,000 203
-----------
TOTAL WARRANTS - 0.8%
(COST $188)................. 203
-----------
TOTAL INVESTMENT IN
SECURITIES - 93.0%
(COST $20,144).............. $ 22,876
-----------
-----------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
COMMON STOCKS
ARGENTINA - 0.9%
TELECOMMUNICATIONS
SERVICES - 0.9%
Telecom Argentina STET -
France Telecom S.A.
sponsored ADR............... 1,000 $ 53
Telefonica de Argentina
sponsored ADR............... 1,500 52
-----------
TOTAL ARGENTINA............. 105
-----------
AUSTRALIA - 1.0%
BEVERAGES - 1.0%
Coca-Cola Amatil sponsored
ADR......................... 4,700 121
-----------
BRAZIL - 2.8%
RETAIL - GENERAL
MERCHANDISE - 1.0%
Companhia Brasileira de
Distribuicao sponsored
ADR......................... 5,000 114
-----------
TELECOMMUNICATIONS
SERVICES - 1.8%
Telecomunicacoes Brasileiras
sponsored ADR............... 1,400 212
-----------
TOTAL BRAZIL................ 326
-----------
CHINA - 0.9%
UTILITIES - ELECTRIC - 0.9%
Huaneng Power International,
Inc. sponsored ADR.......... 4,000 102
-----------
CZECH REPUBLIC - 0.8%
MEDIA & BROADCASTING - 0.8%
Central European Media
Enterprises Ltd.*........... 3,700 96
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
FINLAND - 0.9%
TELECOMMUNICATIONS
EQUIPMENT - 0.9%
Nokia Corporation sponsored
ADR......................... 1,400 $ 103
-----------
FRANCE - 1.0%
OFFSHORE DRILLING - 1.0%
Elf Aquitaine sponsored ADR... 2,200 120
-----------
GERMANY - 2.8%
AUTO/TRUCK PARTS &
EQUIPMENT - 0.7%
Bayerische Motoren Werke
Aktiengesellschaft.......... 100 83
-----------
COMPUTER SOFTWARE - 1.1%
SAP Aktiengesellschaft
sponsored ADR*.............. 1,800 125
-----------
MANUFACTURING -
CHEMICALS - 1.0%
Hoechst Aktiengesellschaft.... 2,800 119
-----------
TOTAL GERMANY............... 327
-----------
HONG KONG - 11.4%
BANKING - 3.5%
HSBC Holdings plc sponsored
ADR......................... 1,350 406
-----------
COMPUTER SOFTWARE - 1.0%
Founder Limited............... 160,761 109
-----------
CONGLOMERATE - 1.8%
First Pacific Company Limited
sponsored ADR............... 18,000 115
Hutchison Whampoa Limited
ADR......................... 2,250 97
-----------
212
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CONSUMER PRODUCTS - 2.2%
Amway Asia Pacific Ltd.*...... 3,700 $ 161
Nu Skin Asia Pacific, Inc.*... 3,700 98
-----------
259
-----------
FINANCIAL SERVICES - 0.5%
AEON Credit Service (Asia)
Company Limited*............ 175,000 59
-----------
INFRASTRUCTURE - 0.6%
New World Infrastructure
Limited*.................... 22,000 62
-----------
INSURANCE - 0.7%
National Mutual Asia
Limited..................... 74,000 82
-----------
MEDIA & BROADCASTING - 0.6%
Television Broadcasts
Limited..................... 15,000 67
-----------
PROPERTY DEVELOPMENT - 0.5%
Sun Hung Kai Properties
Limited..................... 5,000 60
-----------
TOTAL HONG KONG............. 1,316
-----------
INDIA - 2.1%
BANKING - 0.7%
State Bank of India GDR*...... 2,900 77
-----------
ENGINEERING & CONSTRUCTION - 0.8%
Larsen & Toubro Limited
GDR*........................ 5,300 91
-----------
INVESTMENT COMPANIES - 0.6%
The India Fund, Inc........... 7,500 72
-----------
TOTAL INDIA................. 240
-----------
INDONESIA - 2.4%
BANKING - 0.9%
PT Bank International
Indonesia*.................. 58,500 51
PT Bank Tiara Asia*........... 38,000 45
-----------
96
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
TELECOMMUNICATIONS
SERVICES - 1.0%
Perusahaan Persero P.T.
Telekom sponsored ADR....... 3,600 $ 117
-----------
TOBACCO PRODUCTS - 0.5%
PT Hanjaya Mandala
Sampoerna*.................. 16,000 61
-----------
TOTAL INDONESIA............. 274
-----------
IRELAND - 1.5%
COMPUTER SOFTWARE - 0.7%
Iona Technologies PLC
sponsored ADR............... 4,200 83
-----------
PHARMACEUTICALS - 0.8%
Elan Corporation, plc
sponsored ADR*.............. 1,900 86
-----------
TOTAL IRELAND............... 169
-----------
ISRAEL - 2.6%
COMPUTER SOFTWARE - 2.6%
NICE-Systems Ltd. sponsored
ADR*........................ 4,400 132
Tecnomatix Technologies
Ltd.*....................... 5,300 172
-----------
TOTAL ISRAEL................ 304
-----------
ITALY - 1.3%
CONSUMER PRODUCTS - 0.9%
Luxottica Group S.p.A.
sponsored ADR............... 1,500 102
-----------
RETAIL - HOME FURNITURE - 0.4%
Industrie Natuzzi S.p.A.
sponsored ADR............... 1,700 44
-----------
TOTAL ITALY................. 146
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
JAPAN - 2.6%
ELECTRONICS & ELECTRICAL
EQUIPMENT - 2.0%
Kyocera Corporation sponsored
ADR......................... 700 $ 111
Sony Corp. sponsored ADR...... 1,400 123
-----------
234
-----------
OFFICE EQUIPMENT - 0.6%
Canon, Inc. sponsored ADR..... 450 61
-----------
TOTAL JAPAN................. 295
-----------
KOREA - 2.2%
BANKING - 0.7%
Kookmin Bank sponsored GDR.... 3,575 78
-----------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 0.5%
Samsung Electronics Co., Ltd.
sponsored GDR............... 914 53
-----------
TELECOMMUNICATIONS
SERVICES - 0.2%
SK Telecom Co. Ltd. ADR....... 2,900 29
-----------
UTILITIES - ELECTRIC - 0.8%
Korea Electric Power
Corporation sponsored ADR... 5,100 95
-----------
TOTAL KOREA................. 255
-----------
MEXICO - 3.3%
BEVERAGES - 2.0%
Coca-Cola Femsa, S.A. de C.V.
sponsored ADR............... 4,500 232
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RETAIL - GENERAL
MERCHANDISE - 1.3%
Cifra, S.A. de C.V. ADR....... 81,300 $ 149
-----------
TOTAL MEXICO................ 381
-----------
NETHERLANDS - 3.7%
BEVERAGES - 0.4%
Heineken N.V. ADR............. 300 51
-----------
COMPUTER SOFTWARE - 1.2%
Baan Company N.V.*............ 2,000 138
-----------
INSURANCE - 1.0%
ING Groep N.V................. 2,542 117
-----------
PUBLISHING - 1.1%
Wolters Kluwer N.V............ 1,000 122
-----------
TOTAL NETHERLANDS........... 428
-----------
PERU - 0.9%
TELECOMMUNICATIONS
SERVICES - 0.9%
Telefonica del Peru sponsored
ADR......................... 4,100 107
-----------
PHILIPPINES - 2.1%
CONGLOMERATE - 0.5%
Ayala Corp, Inc............... 83,750 60
-----------
INFRASTRUCTURE - 0.4%
International Container
Terminal Services, Inc.*.... 91,500 47
-----------
PROPERTY DEVELOPMENT - 0.2%
Fil-Estate Land, Inc.*........ 74,700 22
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
TELECOMMUNICATIONS
SERVICES - 0.7%
Philippine Long Distance
Telephone Company sponsored
ADR......................... 1,200 $ 77
-----------
UTILITIES - ELECTRIC - 0.3%
Manila Electric Company, Class
B*.......................... 6,800 34
-----------
TOTAL PHILIPPINES........... 240
-----------
RUSSIA - 1.1%
TELECOMMUNICATIONS
SERVICES - 1.1%
Open Joint Stock Company
Vimpel Communications
sponsored ADR*.............. 3,350 127
-----------
SINGAPORE - 1.1%
COMPUTER SOFTWARE - 1.1%
Datacraft Asia*............... 40,000 127
-----------
SPAIN - 1.9%
TELECOMMUNICATIONS
SERVICES - 1.9%
Telefonica de Espana, S.A.
sponsored ADR............... 2,500 216
-----------
SWEDEN - 3.7%
CAPITAL GOODS EQUIPMENT - 0.6%
ABB AB sponsored ADR.......... 500 70
-----------
TELECOMMUNICATIONS
EQUIPMENT - 3.1%
Telefonaktiebolaget LM
Ericsson sponsored ADR...... 9,200 362
-----------
TOTAL SWEDEN................ 432
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
SWITZERLAND - 5.8%
CAPITAL GOODS EQUIPMENT - 0.4%
ABB AG - Sponsored ADR........ 270 $ 41
-----------
INSURANCE - 1.3%
Zurich Insurance Group........ 375 149
-----------
PHARMACEUTICALS - 4.1%
Novartis Aktiengesellschaft... 130 208
Roche Holdings Ltd. sponsored
ADR......................... 3,000 272
-----------
480
-----------
TOTAL SWITZERLAND........... 670
-----------
TAIWAN - 0.5%
ELECTRONICS & ELECTRICAL
EQUIPMENT - 0.5%
ASE Test Limited.............. 1,500 63
-----------
UNITED KINGDOM - 10.3%
BUSINESS SERVICES - 3.0%
Hays PLC...................... 10,900 103
Rentokil Initial PLC.......... 15,600 55
Reuters Holdings PLC ADS B.... 3,000 189
-----------
347
-----------
COMPUTER SOFTWARE - 2.6%
Dr Solomon's Group PLC ADR*... 10,000 254
Sema Group PLC................ 2,200 45
-----------
299
-----------
GAMING - 1.3%
Ladbroke Group PLC............ 39,300 155
-----------
INSURANCE - 0.5%
Prudential Corporation PLC.... 5,300 52
-----------
INVESTMENT MANAGEMENT - 1.3%
AMVESCAP PLC sponsored ADR.... 2,600 152
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RESTAURANTS - 0.8%
Whitbread PLC................. 7,500 $ 95
-----------
TELECOMMUNICATIONS
SERVICES - 0.8%
Vodafone Group Plc sponsored
ADR......................... 1,800 87
-----------
TOTAL UNITED KINGDOM........ 1,187
-----------
UNITED STATES - 24.0%
ADVERTISING - 1.6%
The Interpublic Group of
Companies, Inc.............. 3,000 184
-----------
BANKING - 1.6%
Citicorp...................... 500 60
Wells Fargo & Company......... 450 121
-----------
181
-----------
BEVERAGES - 0.4%
The Coca-Cola Company......... 600 41
-----------
COMMUNICATIONS
EQUIPMENT - 1.6%
Cisco Systems*................ 2,700 181
-----------
COMPUTER HARDWARE - 0.3%
Hewlett-Packard............... 700 39
-----------
COMPUTER SOFTWARE - 3.6%
Microsoft Corporation*........ 550 70
Oracle Systems*............... 3,500 176
Rational Software
Corporation*................ 10,000 168
-----------
414
-----------
CONSUMER PRODUCTS - 1.9%
The Gillette Company.......... 2,300 218
-----------
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
CONSUMER SERVICES - 0.4%
Expeditors International of
Washington, Inc............. 1,800 $ 51
-----------
DIVERSIFIED MANUFACTURING -
0.3%
General Electric.............. 450 29
-----------
ELECTRONICS & ELECTRICAL
EQUIPMENT - 2.0%
Intel Corporation............. 1,300 184
Linear Technology
Corporation................. 900 47
-----------
231
-----------
FINANCIAL SERVICES - 1.7%
American Express Company...... 600 45
Green Tree Financial
Corporation................. 4,300 153
-----------
198
-----------
HOUSEHOLD PRODUCTS - 0.8%
Colgate-Palmolive Company..... 1,500 98
-----------
INSURANCE - 0.6%
American International Group,
Inc......................... 450 67
-----------
LEISURE - 1.0%
HFS, Incorporated*............ 1,600 93
The Walt Disney Company....... 350 28
-----------
121
-----------
MEDICAL EQUIPMENT &
SUPPLIES - 3.5%
Boston Scientific
Corporation*................ 4,000 246
Johnson & Johnson............. 850 55
Medtronic, Inc................ 1,300 105
-----------
406
-----------
PHARMACEUTICALS - 1.7%
Merck & Co., Inc.............. 700 73
Pfizer Inc.................... 1,000 120
-----------
193
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
----------- -----------
<S> <C> <C>
RESTAURANTS - 0.3%
McDonald's Corporation........ 800 $ 39
-----------
TOBACCO PRODUCTS - 0.7%
Philip Morris Companies
Inc......................... 1,900 84
-----------
TOTAL UNITED STATES......... 2,775
-----------
TOTAL COMMON STOCKS - 95.6%
(COST $9,933)............... 11,052
-----------
TOTAL INVESTMENT IN
SECURITIES - 95.6%
(COST $9,933)............... $ 11,052
-----------
-----------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
THE PASADENA VALUE 25 FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
COMMON STOCKS
AUTO/TRUCK PARTS & EQUIPMENT
REPLACEMENT - 1.3%
Echlin, Inc............................. 7,410 $ 267
---------
CHEMICALS - SPECIALTY - 4.2%
Eastman Chemical Company................ 13,495 857
---------
DISTRIBUTION - AUTO PARTS &
EQUIPMENT - 3.5%
Genuine Parts Company................... 21,240 719
---------
FOOD PRODUCTS - WHOLESALE - 4.1%
SUPERVALU, Inc.......................... 24,065 830
---------
HOME FURNISHINGS - 4.1%
Springs Industries, Inc. (Class A)...... 16,065 847
---------
HOUSEHOLD APPLIANCES - 4.0%
Maytag Corporation...................... 31,073 812
---------
INTEGRATED STEEL - 4.5%
USX-U.S. Steel Group.................... 26,555 931
---------
MANUFACTURING - AUTO PARTS &
EQUIPMENT - 4.1%
Dana Corporation........................ 21,860 831
---------
MANUFACTURING - AUTOMOBILES &
TRUCKS - 16.2%
Chrysler Corporation.................... 24,335 798
Ford Motor Company...................... 23,260 878
General Motors Corporation.............. 13,425 748
PACCAR Inc.............................. 19,510 906
---------
3,330
---------
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
MANUFACTURING - CHEMICALS - 3.8%
The Dow Chemical Company................ 9,025 $ 786
---------
MANUFACTURING - MISCELLANEOUS - 4.0%
Cooper Industries, Inc.................. 16,615 827
---------
METALS - COPPER - 3.9%
Phelps Dodge Corporation................ 9,485 808
---------
METALS - PRODUCERS - 4.1%
ASARCO Incorporated..................... 27,580 845
---------
OIL - EXPLORATION & PRODUCTION - 3.6%
Kerr-McGee Corporation.................. 11,610 736
---------
OIL - INTEGRATED - 3.5%
Texaco, Inc............................. 6,625 720
---------
OIL PRODUCTION - 10.9%
Amoco Corporation....................... 8,280 720
Phillips Petroleum Company.............. 17,650 772
USX-Marathon Group...................... 25,750 744
---------
2,236
---------
PAPER & RELATED PRODUCTS - 3.9%
Westvaco Corporation.................... 25,120 790
---------
PUBLISHING - 4.0%
The McGraw-Hill Companies, Inc.......... 14,045 826
---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
THE PASADENA VALUE 25 FUND
INVESTMENT IN SECURITIES AT JUNE 30, 1997 (UNAUDITED) (CONTINUED)
(Dollars in thousands)
<TABLE>
<CAPTION>
SHARES VALUE
--------- ---------
<S> <C> <C>
TELECOMMUNICATIONS SERVICES - 11.0%
AT&T Corp............................... 20,410 $ 716
BellSouth Corporation................... 14,840 688
SBC Communications, Inc................. 13,770 852
---------
2,256
---------
TOTAL COMMON STOCKS - 98.7%
(COST $18,601)........................ 20,254
---------
TOTAL INVESTMENT IN SECURITIES - 98.7%
(COST $18,601)........................ $ 20,254
---------
---------
</TABLE>
- -------------
* Non-income producing securities.
SEE NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
(This page has been left blank intentionally.)
33
<PAGE>
THE PASADENA GROWTH, NIFTY FIFTY, BALANCED RETURN,
SMALL & MID-CAP GROWTH, GLOBAL GROWTH AND VALUE 25 FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS AND RELATED CALCULATIONS.)
<TABLE>
<CAPTION>
The The
The The The Pasadena Pasadena The
Pasadena Pasadena Pasadena Small & Global Pasadena
Growth Nifty Fifty Balanced Mid-Cap Growth Value 25
Fund Fund Return Fund Growth Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ----------- -----------
ASSETS:
Investment in securities, at value
(Cost $268,539, $149,438, $39,455,
$20,144, $9,933, and $18,601)
See accompanying schedules.......... $ 487,254 $ 256,109 $ 63,381 $ 22,876 $ 11,052 $ 20,254
Cash.................................. 4,280 10,044 881 1,553 386 37
Receivable for investments sold....... -- -- -- -- 33 --
Receivable for Fund shares sold....... 150 395 3 272 85 250
Dividends and interest receivable..... 393 239 463 5 32 49
Deposit with broker for investments
sold short.......................... -- -- -- -- -- 247
----------- ----------- ----------- ----------- ----------- -----------
Total assets...................... 492,077 266,787 64,728 24,706 11,588 20,837
----------- ----------- ----------- ----------- ----------- -----------
LIABILITIES:
Payable for Fund shares repurchased... 1,084 329 88 -- 2 4
Accrued administration fees........... 272 140 30 12 5 9
Accrued investment management fees.... 266 153 48 19 10 14
Accrued service fees.................. 623 238 82 12 7 10
Accrued distribution fees............. 152 171 20 13 6 8
Investments sold short, at value
(proceeds $247)..................... -- -- -- -- -- 263
Payable for investments purchased..... -- -- -- 40 2 --
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities................. 2,397 1,031 268 96 32 308
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AT JUNE 30, 1997........... $ 489,680 $ 265,756 $ 64,460 $ 24,610 $ 11,556 $ 20,529
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS CONSIST OF:
Capital paid-in....................... $ 237,290 $ 149,361 $ 37,408 $ 21,144 $ 9,170 $ 18,881
Accumulated undistributed income:
Net investment income............... -- -- 258 -- -- 8
Net realized gain on investments.... 33,675 9,724 2,868 734 1,267 3
Net unrealized appreciation in value
of investments...................... 218,715 106,671 23,926 2,732 1,119 1,637
----------- ----------- ----------- ----------- ----------- -----------
$ 489,680 $ 265,756 $ 64,460 $ 24,610 $ 11,556 $ 20,529
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
PER SHARE VALUES:
CLASS A
Net asset value and redemption price
($405,688,835 DIVIDED BY
16,921,028, $165,823,130
DIVIDED BY 5,449,959, $53,639,150
DIVIDED BY 1,714,566, $15,137,467
DIVIDED BY 722,744, $7,633,587
DIVIDED BY 347,918 and $13,125,609
DIVIDED BY 1,139,970).............. $ 23.98 $ 30.43 $ 31.28 $ 20.94 $ 21.94 $ 11.51
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Maximum offering price [NAV per share
DIVIDED BY
(1 - maximum sales load)]........... $ 25.38 $ 32.20 $ 33.10 $ 22.16 $ 23.22 $ 12.18
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
CLASS B
Net asset value, offering price and
redemption price ($54,094,093
DIVIDED BY 2,324,341, $62,923,313
DIVIDED BY 2,125,611, $5,931,235
DIVIDED BY 191,812, $6,119,492
DIVIDED BY 293,996, $2,196,883
DIVIDED BY 100,627 and $5,539,819
DIVIDED BY 482,316)................ $ 23.27 $ 29.60 $ 30.92 $ 20.81 $ 21.83 $ 11.49
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
CLASS C
Net asset value, offering price and
redemption price ($29,896,897
DIVIDED BY 1,284,622, $37,009,393
DIVIDED BY 1,250,220, $4,889,245
DIVIDED BY 157,959, $3,353,450
DIVIDED BY 161,108, $1,725,139
DIVIDED BY 79,019 and $1,863,097
DIVIDED BY 162,203)................ $ 23.27 $ 29.60 $ 30.95 $ 20.81 $ 21.83 $ 11.49
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
THE PASADENA GROWTH, NIFTY FIFTY, BALANCED RETURN,
SMALL & MID-CAP GROWTH, GLOBAL GROWTH AND VALUE 25 FUNDS
STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE SIX-MONTHS ENDED JUNE 30, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
The The
The The The Pasadena Pasadena The
Pasadena Pasadena Pasadena Small & Global Pasadena
Growth Nifty Fifty Balanced Mid-Cap Growth Value 25
Fund Fund Return Fund Growth Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
----------- ----------- ----------- ----------- ----------- -----------
INVESTMENT INCOME:
Dividends................... $ 1,929 $ 1,113 $ 234 $ 4 $ 83 $ 170
Interest and other.......... 588 116 587 15 -- 8
----------- ----------- ----------- ----------- ----------- -----------
Total investment income... 2,517 1,229 821 19 83 178
----------- ----------- ----------- ----------- ----------- -----------
EXPENSES:
Administration fees......... 1,662 843 239 48 32 34
Investment management
fees...................... 1,584 848 275 80 58 51
Service fees................ 609 300 77 20 13 14
Distribution fees - Class
B......................... 189 203 20 14 6 7
Distribution fees - Class
C......................... 105 116 17 5 2 1
----------- ----------- ----------- ----------- ----------- -----------
Total expenses before
Manager's waivers....... 4,149 2,310 628 167 111 107
Manager's expense
waivers................. (35) (82) (65) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total expenses - net...... 4,114 2,228 563 167 111 107
----------- ----------- ----------- ----------- ----------- -----------
Net investment income
(loss).................. (1,597) (999) 258 (148) (28) 71
----------- ----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on
investments............... 33,621 8,247 2,839 641 477 3
Net increase in unrealized
appreciation.............. 10,489 26,186 3,647 2,363 1,057 1,636
----------- ----------- ----------- ----------- ----------- -----------
Net gain on investments... 44,110 34,433 6,486 3,004 1,534 1,639
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS... $ 42,513 $ 33,434 $ 6,744 $ 2,856 $ 1,506 $ 1,710
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
35
<PAGE>
THE PASADENA GROWTH, NIFTY FIFTY, BALANCED RETURN,
SMALL & MID-CAP GROWTH, GLOBAL GROWTH, AND VALUE 25 FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
The Pasadena The Pasadena
Growth Fund Nifty Fifty Fund
----------------------------- -----------------------------
Six-Months Six-Months
Ended Year Ended Ended Year Ended
June 30, 1997 December 31, June 30, 1997 December 31,
(unaudited) 1996 (unaudited) 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................... $ (1,597) $ (3,735) $ (999) $ (1,344)
Net realized gain on
investments............... 33,621 35,738 8,247 14,376
Net increase (decrease) in
unrealized appreciation in
value of investments...... 10,489 67,038 26,186 30,983
------------- ------------- ------------- -------------
Net increase in net assets
resulting from
operations................ 42,513 99,041 33,434 44,015
------------- ------------- ------------- -------------
Distributions to shareholders:
Net investment income....... -- -- -- --
Capital gains............... -- (35,995) -- (12,204)
------------- ------------- ------------- -------------
Decrease in net assets
resulting from
distributions to
shareholders.............. -- (35,995) -- (12,204)
------------- ------------- ------------- -------------
Capital share transactions:
Net increase (decrease) in
net assets resulting from
capital share
transactions.............. (56,301) (30,277) 13,618 22,004
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets................ (13,788) 32,769 47,052 53,815
NET ASSETS:
Beginning of period........... 503,468 470,699 218,704 164,889
------------- ------------- ------------- -------------
End of period................. $ 489,680 $ 503,468 $ 265,756 $ 218,704
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
THE PASADENA GROWTH, NIFTY FIFTY, BALANCED RETURN,
SMALL & MID-CAP GROWTH, GLOBAL GROWTH, AND VALUE 25 FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
The Pasadena The Pasadena The Pasadena
Balanced Return Fund Small & Mid-Cap Growth Fund Global Growth Fund
----------------------------- ----------------------------- -----------------------------
Six-Months Six-Months Six-Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, 1997 December 31, June 30, 1997 December 31, June 30, 1997 December 31,
(unaudited) 1996 (unaudited) 1996 (unaudited) 1996
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................... $ 258 $ 577 $ (148) $ (21) $ (28) $ 5
Net realized gain on
investments............... 2,839 3,223 641 469 477 1,243
Net increase (decrease) in
unrealized appreciation in
value of investments...... 3,647 5,744 2,363 279 1,057 (268)
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from
operations................ 6,744 9,544 2,856 727 1,506 980
------------- ------------- ------------- ------------- ------------- -------------
Distributions to shareholders:
Net investment income....... -- (564) -- (25) -- (12)
Capital gains............... -- (3,123) -- (398) -- (455)
------------- ------------- ------------- ------------- ------------- -------------
Decrease in net assets
resulting from
distributions to
shareholders.............. -- (3,687) -- (423) -- (467)
------------- ------------- ------------- ------------- ------------- -------------
Capital share transactions:
Net increase (decrease) in
net assets resulting from
capital share
transactions.............. (3,023) (2,676) 12,361 7,347 1,416 4,918
------------- ------------- ------------- ------------- ------------- -------------
Total increase (decrease) in
net assets................ 3,721 3,181 15,217 7,651 2,922 5,431
NET ASSETS:
Beginning of period........... 60,739 57,558 9,393 1,742 8,634 3,203
------------- ------------- ------------- ------------- ------------- -------------
End of period................. $ 64,460 $ 60,739 $ 24,610 $ 9,393 $ 11,556 $ 8,634
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
<CAPTION>
The Pasadena
Value 25 Fund
-----------------------------
Inception
Six-Months (December 17,
Ended 1996) through
June 30, 1997 December 31,
(unaudited) 1996
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
Operations:
Net investment income
(loss).................... $ 71 $ --
Net realized gain on
investments............... 3 --
Net increase (decrease) in
unrealized appreciation in
value of investments...... 1,636 1
------------- -------------
Net increase in net assets
resulting from
operations................ 1,710 1
------------- -------------
Distributions to shareholders:
Net investment income....... (62) --
Capital gains............... -- --
------------- -------------
Decrease in net assets
resulting from
distributions to
shareholders.............. (62) --
------------- -------------
Capital share transactions:
Net increase (decrease) in
net assets resulting from
capital share
transactions.............. 18,394 486
------------- -------------
Total increase (decrease) in
net assets................ 20,042 487
NET ASSETS:
Beginning of period........... 487 --
------------- -------------
End of period................. $ 20,529 $ 487
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
THE PASADENA GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended December 31,
For the Six-Months Ended -------------------------------------
June 30, 1997
(Unaudited) 1996
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 21.94 $ 21.40 $ 21.40 $ 19.28 $ 18.99 $ 18.99
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.06)(2) (.16)(2) (.16)(2) (.14)(3) (.31)(3) (.31)(3)
Net realized and unrealized gain
(loss) on investments............... 2.10 2.03 2.03 4.47 4.39 4.39
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 2.04 1.87 1.87 4.33 4.08 4.08
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... -- -- -- (1.67) (1.67) (1.67)
--------- --------- --------- --------- --------- ---------
Total distributions................... -- -- -- (1.67) (1.67) (1.67)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 23.98 $ 23.27 $ 23.27 $ 21.94 $ 21.40 $ 21.40
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 9.30%(2) 8.74%(2) 8.74%(2) 22.49%(3) 21.52%(3) 21.52%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $405,689 $ 54,094 $ 29,897 $426,785 $ 49,444 $ 27,239
Ratio of expenses to average net
assets(5)........................... 1.6%(2) 2.3%(2) 2.3%(2) 1.6%(3) 2.3%(3) 2.3%(3)
Ratio of net investment loss to
average net assets(5)............... (0.5)%(2) (1.5)%(2) (1.5)%(2) (0.6)%(3) (1.5)%(3) (1.5)%(3)
Portfolio turnover rate............... 45.8% 45.8% 45.8% 70.1% 70.1% 70.1%
Average commission rate paid per
share(6)............................ $ 0.0592 $ 0.0592 $ 0.0592 $ 0.0578 $ 0.0578 $ 0.0578
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Growth Fund. Such information
is based on the Fund's unaudited financial statements for the six-months
ended June 30, 1997, and the Fund's audited financial statements for all
other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$35,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.06), $(.16) and $(.16), respectively, 9.30%, 8.74% and 8.74%,
respectively, 1.6%, 2.3% and 2.3%, respectively, and (0.5)%, (1.5)%
and (1.5)%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$30,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.14), $(.31) and $(.31), respectively, 22.49%, 21.52% and 21.52%,
respectively, 1.6%, 2.4% and 2.4%, respectively, and (0.7)%, (1.5)%
and (1.5)%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charges.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
THE PASADENA GROWTH FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------------------
1995 1994
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 15.40 $ 15.28 $ 15.28 $ 16.00 $ 15.89 $ 15.89
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.06) (.20) (.20) (.03) (.14) (.14)
Net realized and unrealized gain
(loss) on investments............... 4.24 4.21 4.21 (.57) (.47) (.47)
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 4.18 4.01 4.01 (.60) (.61) (.61)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... (.30) (.30) (.30) -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions................... (.30) (.30) (.30) -- -- --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 19.28 $ 18.99 $ 18.99 $ 15.40 $ 15.28 $ 15.28
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 27.16% 26.26% 26.26% (3.75)% (3.84)% (3.84)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $415,416 $ 34,786 $ 20,497 $391,831 $ 11,349 $ 6,136
Ratio of expenses to average net
assets(5)........................... 1.6% 2.4% 2.4% 1.6% 2.3% 2.3%
Ratio of net investment loss to
average net assets(5)............... (0.3)% (1.1)% (1.1)% (0.2)% (1.0)% (1.0)%
Portfolio turnover rate............... 65.9% 65.9% 65.9% 53.8% 53.8% 53.8%
Average commission rate paid per
share(6)
<CAPTION>
For the Year Ended
December 31,
-----------------------
1993 1992
--------- ---------
Class A Class A
--------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 17.00 $ 16.80
--------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.02) (.05)
Net realized and unrealized gain
(loss) on investments............... (.98) .43
--------- ---------
Total gain (loss) from investment
operations.......................... (1.00) .38
--------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... -- (.18)
--------- ---------
Total distributions................... -- (.18)
--------- ---------
Net asset value, end of period.......... $ 16.00 $ 17.00
--------- ---------
--------- ---------
TOTAL RETURN(4)......................... (5.87)% 2.24%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $532,208 $625,624
Ratio of expenses to average net
assets(5)........................... 1.6% 1.6%
Ratio of net investment loss to
average net assets(5)............... --% (0.3)%
Portfolio turnover rate............... 22.9% 24.5%
Average commission rate paid per
share(6)
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Growth Fund. Such information
is based on the Fund's unaudited financial statements for the six-months
ended June 30, 1997, and the Fund's audited financial statements for all
other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$35,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.06), $(.16) and $(.16), respectively, 9.30%, 8.74% and 8.74%,
respectively, 1.6%, 2.3% and 2.3%, respectively, and (0.5)%, (1.5)%
and (1.5)%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$30,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.14), $(.31) and $(.31), respectively, 22.49%, 21.52% and 21.52%,
respectively, 1.6%, 2.4% and 2.4%, respectively, and (0.7)%, (1.5)%
and (1.5)%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charges.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
THE PASADENA NIFTY FIFTY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended December 31,
For the Six-Months Ended -------------------------------------
June 30, 1997
(Unaudited) 1996
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 26.50 $ 25.88 $ 25.88 $ 22.18 $ 21.85 $ 21.85
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.08)(2) (.18)(2) (.18)(2) (.12)(3) (.30)(3) (.30)(3)
Net realized and unrealized gain on
investments......................... 4.01 3.90 3.90 6.00 5.89 5.89
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 3.93 3.72 3.72 5.88 5.59 5.59
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... -- -- -- (1.56) (1.56) (1.56)
--------- --------- --------- --------- --------- ---------
Total distributions................... -- -- -- (1.56) (1.56) (1.56)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period........ $ 30.43 $ 29.60 $ 29.60 $ 26.50 $ 25.88 $ 25.88
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 14.83%(2) 14.37%(2) 14.37%(2) 26.53%(3) 25.60%(3) 25.60%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $165,823 $ 62,923 $ 37,009 $145,469 $ 47,143 $ 26,092
Ratio of expenses to average net
assets(5)........................... 1.6%(2) 2.3%(2) 2.3%(2) 1.7%(3) 2.5%(3) 2.5%(3)
Ratio of net investment loss to
average net assets(5)............... (0.6)%(2) (1.3)%(2) (1.3)%(2) (0.4)%(3) (1.2)%(3) (1.2)%(3)
Portfolio turnover rate............... 28.7% 28.7% 28.7% 41.9% 41.9% 41.9%
Average commission rate paid per
share(6)............................ $ 0.0597 $ 0.0597 $ 0.0597 $ 0.0585 $ 0.0585 $ 0.0585
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Nifty Fifty Fund. Such
information is based on the Fund's unaudited financial statements for the
period ended June 30, 1997, and the Fund's audited financial statements for
all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$82,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.09), $(.19) and $(.19) respectively, 14.83%, 14.37% and 14.37%,
respectively, 1.7%, 2.4% and 2.4%, respectively, and (0.6)%, (1.4)%
and (1.4)%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$70,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and investment income to average
net assets for Class A, Class B and Class C shares would have been
$(.13), $(.31) and $(.31) respectively, 26.48%, 25.55% and 25.55%
respectively, 1.8%, 2.5% and 2.5%, respectively, and (0.5)%, (1.3)%
and (1.3)%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charge.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
THE PASADENA NIFTY FIFTY FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------------------
1995 1994
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 17.30 $ 17.17 $ 17.17 $ 17.12 $ 17.02 $ 17.02
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.05) (.21) (.21) (.03) (.14) (.15)
Net realized and unrealized gain on
investments......................... 4.93 4.89 4.89 .21 .29 .30
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 4.88 4.68 4.68 .18 .15 .15
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions................... -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Net asset value, end of period........ $ 22.18 $ 21.85 $ 21.85 $ 17.30 $ 17.17 $ 17.17
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 28.21% 27.26% 27.26% 1.05% 0.88% 0.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $122,322 $ 27,462 $ 15,105 $100,596 $ 6,722 $ 4,283
Ratio of expenses to average net
assets(5)........................... 1.9% 2.6% 2.6% 1.9% 2.6% 2.6%
Ratio of net investment loss to
average net assets(5)............... (0.3)% (1.0)% (1.0)% (0.2)% (0.9)% (0.9)%
Portfolio turnover rate............... 26.5% 26.5% 26.5% 23.2% 23.2% 23.2%
Average commission rate paid per
share(6)
<CAPTION>
For the Year Ended
December 31,
-----------------------
1993 1992
--------- ---------
Class A Class A
--------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 17.21 $ 16.60
--------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss(1)................ (.06) (.05)
Net realized and unrealized gain on
investments......................... (.03) .66
--------- ---------
Total gain (loss) from investment
operations.......................... (.09) .61
--------- ---------
LESS DISTRIBUTIONS:
Capital gains......................... -- --
--------- ---------
Total distributions................... -- --
--------- ---------
Net asset value, end of period........ $ 17.12 $ 17.21
--------- ---------
--------- ---------
TOTAL RETURN(4)......................... (0.52)% 3.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $134,284 $195,067
Ratio of expenses to average net
assets(5)........................... 1.8% 1.9%
Ratio of net investment loss to
average net assets(5)............... --% (0.3)%
Portfolio turnover rate............... 2.2% 12.9%
Average commission rate paid per
share(6)
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Nifty Fifty Fund. Such
information is based on the Fund's unaudited financial statements for the
period ended June 30, 1997, and the Fund's audited financial statements for
all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$82,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and net investment loss to average
net assets for Class A, Class B and Class C shares would have been
$(.09), $(.19) and $(.19) respectively, 14.83%, 14.37% and 14.37%,
respectively, 1.7%, 2.4% and 2.4%, respectively, and (0.6)%, (1.4)%
and (1.4)%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$70,000. Absent the waiver, net investment loss per share, total
return and the ratios of expenses and investment income to average
net assets for Class A, Class B and Class C shares would have been
$(.13), $(.31) and $(.31) respectively, 26.48%, 25.55% and 25.55%
respectively, 1.8%, 2.5% and 2.5%, respectively, and (0.5)%, (1.3)%
and (1.3)%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charge.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
THE PASADENA BALANCED RETURN FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Six-Months Ended
June 30, 1997 For the Year Ended
(Unaudited) December 31, 1996
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 28.08 $ 27.85 $ 27.88 $ 25.39 $ 25.26 $ 25.28
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1).............. .14(2) .03(2) .03(2) .29(3) .09(3) .09(3)
Net realized and unrealized gain
(loss) on investments............... 3.06 3.04 3.04 4.23 4.16 4.16
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 3.20 3.07 3.07 4.52 4.25 4.25
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Net investment income................. -- -- -- (.30) (.13) (.12)
Capital gains......................... -- -- -- (1.53) (1.53) (1.53)
--------- --------- --------- --------- --------- ---------
Total distributions................... -- -- -- (1.83) (1.66) (1.65)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 31.28 $ 30.92 $ 30.95 $ 28.08 $ 27.85 $ 27.88
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 11.40%(2) 11.02%(2) 11.01%(2) 17.78%(3) 16.82%(3) 16.79%(3)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $ 53,639 $ 5,931 $ 4,889 $ 51,947 $ 4,609 $ 4,183
Ratio of expenses to average net
assets(5)........................... 1.7%(2) 2.5%(2) 2.5%(2) 2.0%(3) 2.7%(3) 2.7%(3)
Ratio of net investment income to
average net assets(5)............... 0.9%(2) 0.2%(2) 0.2%(2) 1.1%(3) 0.3%(3) 0.3%(3)
Portfolio turnover rate............... 13.5% 13.5% 13.5% 35.1% 35.1% 35.1%
Average commission rate paid per
share(6)............................ $ 0.0593 $ 0.0593 $ 0.0593 $ 0.0597 $ 0.0597 $ 0.0597
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Balanced Return Fund. Such
information is based on the Fund's unaudited financial statements for the
period ended June 30, 1997, and the Fund's audited financial statements for
all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$65,000. Absent the waiver, net investment income per share, total
return and the ratios of expenses and net investment income to
average net assets for Class A, Class B and Class C shares would have
been $.11, $.00 and $.00 respectively, 11.40%, 11.02% and 11.01%,
respectively, 1.9%, 2.7% and 2.7%, respectively, and 0.7%, 0.0% and
0.0%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$55,000. Absent the waiver, net investment income per share, total
return and the ratios of expenses and investment income to average
net assets for Class A, Class B and Class C shares would have been
$.27, $.06 and $.06 respectively, 17.66%, 16.74% and 16.71%
respectively, 2.1%, 2.8% and 2.8%, respectively, and 1.0%, 0.2% and
0.2%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charge.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
THE PASADENA BALANCED RETURN FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
For the Year Ended December 31,
-------------------------------------------------------------------------------
1995 1994
------------------------------------- -------------------------------------
Class A Class B Class C Class A Class B Class C
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 20.54 $ 20.49 $ 20.48 $ 21.97 $ 21.89 $ 21.89
--------- --------- --------- --------- --------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1).............. .27 .08 .07 .39 .26 .25
Net realized and unrealized gain
(loss) on investments............... 5.31 5.29 5.30 (1.36) (1.32) (1.31)
--------- --------- --------- --------- --------- ---------
Total gain (loss) from investment
operations.......................... 5.58 5.37 5.37 (.97) (1.06) (1.06)
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Net investment income................. (.29) (.16) (.13) (.46) (.34) (.35)
Capital gains......................... (.44) (.44) (.44) -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions................... (.73) (.60) (.57) (.46) (.34) (.35)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period.......... $ 25.39 $ 25.26 $ 25.28 $ 20.54 $ 20.49 $ 20.48
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
TOTAL RETURN(4)......................... 27.18% 26.20% 26.23% (4.43)% (4.85)% (4.85)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $ 52,028 $ 2,721 $ 2,809 $ 53,047 $ 1,223 $ 1,449
Ratio of expenses to average net
assets(5)........................... 2.1% 2.9% 2.9% 2.1% 2.9% 2.9%
Ratio of net investment income to
average net assets(5)............... 1.2% 0.3% 0.3% 1.8% 1.3% 1.3%
Portfolio turnover rate............... 51.1% 51.1% 51.1% 28.2% 28.2% 28.2%
Average commission rate paid per
share(6)............................
<CAPTION>
For the Year Ended
December 31,
-----------------------
1993 1992
--------- ---------
Class A Class A
--------- ---------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 21.76 $ 20.95
--------- ---------
GAIN (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income(1).............. .32 .25
Net realized and unrealized gain
(loss) on investments............... .21 .69
--------- ---------
Total gain (loss) from investment
operations.......................... .53 .94
--------- ---------
LESS DISTRIBUTIONS:
Net investment income................. (.32) (.13)
Capital gains......................... -- --
--------- ---------
Total distributions................... (.32) (.13)
--------- ---------
Net asset value, end of period.......... $ 21.97 $ 21.76
--------- ---------
--------- ---------
TOTAL RETURN(4)......................... 2.44% 4.49%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands).......................... $ 84,591 $ 75,143
Ratio of expenses to average net
assets(5)........................... 2.1% 2.3%
Ratio of net investment income to
average net assets(5)............... 1.5% 1.2%
Portfolio turnover rate............... 4.8% 6.3%
Average commission rate paid per
share(6)............................
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Balanced Return Fund. Such
information is based on the Fund's unaudited financial statements for the
period ended June 30, 1997, and the Fund's audited financial statements for
all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of administration fees of
$65,000. Absent the waiver, net investment income per share, total
return and the ratios of expenses and net investment income to
average net assets for Class A, Class B and Class C shares would have
been $.11, $.00 and $.00 respectively, 11.40%, 11.02% and 11.01%,
respectively, 1.9%, 2.7% and 2.7%, respectively, and 0.7%, 0.0% and
0.0%, respectively.
3 These amounts reflect the impact of a waiver of administration fees of
$55,000. Absent the waiver, net investment income per share, total
return and the ratios of expenses and investment income to average
net assets for Class A, Class B and Class C shares would have been
$.27, $.06 and $.06 respectively, 17.66%, 16.74% and 16.71%
respectively, 2.1%, 2.8% and 2.8%, respectively, and 1.0%, 0.2% and
0.2%, respectively.
4 Total return measures the change in the value of an investment during
each of the periods indicated. It does not include the impact of
paying any applicable front-end or contingent deferred sales charge.
5 Annualized for periods of less than one year.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
THE PASADENA SMALL & MID-CAP GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Inception
(October
For the Year Ended December 31, 10,
------------------------------------------------ 1994)
For the Six-Months Ended through
June 30, 1997 1996 December
(Unaudited) ------------------------------------ 1995 31, 1994
------------------------------ Class Class --------- --------
Class A Class B Class C Class A B(5) C(5) Class A Class A
-------- -------- -------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 18.39 $ 18.35 $ 18.35 $ 14.90 $ 16.44 $ 17.99 $ 12.07 $ 10.00
-------- -------- -------- -------- -------- -------- --------- --------
GAIN (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1)................. (.15) (.22) (.22) (.12)(2) (.32) (.29) .22(2) .07(2)
Net realized and unrealized
gain on investments....... 2.70 2.68 2.68 7.45 2.43 .85 2.87 2.00
-------- -------- -------- -------- -------- -------- --------- --------
Total gain from investment
operations................ 2.55 2.46 2.46 7.33 2.11 .56 3.09 2.07
-------- -------- -------- -------- -------- -------- --------- --------
LESS DISTRIBUTIONS:
Net investment income....... -- -- -- (.28) -- -- (.08) --
Capital gains............... -- -- -- (3.56) (.20) (.20) (.18) --
-------- -------- -------- -------- -------- -------- --------- --------
Total distributions......... -- -- -- (3.84) (.20) (.20) (.26) --
-------- -------- -------- -------- -------- -------- --------- --------
Net asset value, end of
period...................... $ 20.94 $ 20.81 $ 20.81 $ 18.39 $ 18.35 $ 18.35 $ 14.90 $ 12.07
-------- -------- -------- -------- -------- -------- --------- --------
-------- -------- -------- -------- -------- -------- --------- --------
TOTAL RETURN(3)............... 13.87% 13.41% 13.41% 52.37%(2) 12.84% 3.12% 25.68%(2) 20.70%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)............ $15,137 $ 6,119 $ 3,353 $ 7,859 $ 1,480 $ 54 $ 1,742 $ 121
Ratio of expenses to average
net assets(4)............. 1.8% 2.5% 2.5% 1.1%(2) 2.6% 2.6% 0.0%(2) 0.0%(2)
Ratio of net investment
income (loss) to average
net assets(4)............. (1.6)% (2.3)% (2.3)% (0.7)%(2) (2.2)% (2.2)% 1.5%(2) 2.6%(2)
Portfolio turnover rate..... 176.2% 176.2% 176.2% 297.1% 297.1% 297.1% 121.4% 157.9%
Average commission rate paid
per share(6).............. $0.0562 $0.0562 $0.0562 $0.0547 $0.0547 $0.0547
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Small & Mid-Cap Growth Fund.
Such information is based on the Fund's unaudited financial statements for
the six months ended June 30, 1997, and the Fund's audited financial
statements for all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of Manager fees of
$18,499, $13,443 and $585 for the periods ended December 31, 1996,
1995 and 1994, respectively, and the Manager's reimbursement for
income taxes of $6,654 during 1994. Had the waivers and reimbursement
not been made, net investment income (loss) per share, total return
(not annualized for the period ended December 31, 1994) and the
ratios of expenses and net investment income (loss) to average net
assets (annualized for the period ended December 31, 1994) would have
been $(.25), 51.35%, 1.9% and (1.4)%, respectively, $(.11), 23.40%,
2.3% and (0.8)%, respectively, and $(.01), 15.10%, 22.1% (2.3% if
only normal and recurring expenses are taken into account) and
(0.4)%, respectively, for the periods ended December 31, 1996, 1995
and 1994, respectively.
3 Total return measures the change in the value of an investment during
the period indicated and does not include the impact of paying any
applicable front-end or contingent deferred sales charge.
4 Annualized for periods of less than one year.
5 The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the
first day Class B and Class C shares were sold, September 18, 1996
and October 8, 1996, respectively.
6 This disclosure, effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
THE PASADENA GLOBAL GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For the Year Ended December 31,
----------------------------------------------------------
For the Six-Months Ended
June 30, 1997 1996
(Unaudited) --------------------------------- 1995 1994
------------------------------ Class Class -------- --------
Class A Class B Class C Class A B(5) C(5) Class A Class A
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 19.06 $ 19.04 $ 19.03 $ 17.27 $ 17.44 $ 17.88 $ 14.06 $ 11.18
-------- -------- -------- -------- -------- -------- -------- --------
GAIN (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1)................. (.04) (.10) (.07) .03(2) (.08) (.04) .24(2) .10(2)
Net realized and unrealized
gain on investments....... 2.92 2.89 2.87 3.55 1.82 1.34 3.11 2.78
-------- -------- -------- -------- -------- -------- -------- --------
Total gain from investment
operations................ 2.88 2.79 2.80 3.58 1.74 1.30 3.35 2.88
-------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Net investment income....... -- -- -- (.04) -- (.01) -- --
Capital gains............... -- -- -- (1.75) (.14) (.14) (.14) --
-------- -------- -------- -------- -------- -------- -------- --------
Total distributions......... -- -- -- (1.79) (.14) (.15) (.14) --
-------- -------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period...................... $ 21.94 $ 21.83 $ 21.83 $ 19.06 $ 19.04 $ 19.03 $ 17.27 $ 14.06
-------- -------- -------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN(3)............... 15.11% 14.65% 14.71% 21.77%(2) 9.98% 7.28% 23.84%(2) 25.76%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)............ $ 7,634 $ 2,197 $ 1,725 $ 7,654 $ 874 $ 106 $ 3,203 $ 141
Ratio of expenses to average
net assets(4)............. 2.0% 2.8% 2.8% 0.8%(2) 2.7% 2.7% 0.0%(2) 0.0%(2)
Ratio of net investment
income to average net
assets(4)................. (0.4)% (1.1)% (1.1)% 0.1%(2) (1.9)% (1.6)% 1.4%(2) 0.8%(2)
Portfolio turnover rate..... 93.1% 93.1% 93.1% 220.3% 220.3% 220.3% 29.0% 479.3%
Average commission rate paid
per share(6).............. $0.0150 $0.0150 $0.0150 $0.0301 $0.0301 $0.0301
<CAPTION>
Inception
(November 1,
1993) through
December 31,
1993
-------------
Class A
-------------
<S> <C><C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 10.00
-------------
GAIN (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income
(loss)(1)................. .01(2)
Net realized and unrealized
gain on investments....... 1.17
-------------
Total gain from investment
operations................ 1.18
-------------
LESS DISTRIBUTIONS:
Net investment income....... --
Capital gains............... --
-------------
Total distributions......... --
-------------
Net asset value, end of
period...................... $ 11.18
-------------
-------------
TOTAL RETURN(3)............... 11.80%(2)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)............ $ 112
Ratio of expenses to average
net assets(4)............. 0.0%(2)
Ratio of net investment
income to average net
assets(4)................. 0.8%(2)
Portfolio turnover rate..... 215.8%
Average commission rate paid
per share(6)..............
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Global Growth Fund. Such
information is based on the Fund's unaudited financial statements for the
six-months ended June 30, 1997, and the Fund's audited financial statements
for all other periods presented.
1 This information was prepared using the average number of shares
outstanding during each period.
2 These amounts reflect the impact of a waiver of Manager fees of
$62,438, $42,545, $2,784 and $410 for the periods ended December 31,
1996, 1995, 1994 and 1993, respectively, and the Manager's
reimbursement for income taxes of $13,109 during 1994. Absent waivers
and reimbursement, net investment income (loss) per share, total
return (not annualized for the period ended December 31, 1993) and
ratios of expenses and net investment income (loss) to average net
assets (annualized for the periods ended December 31, 1993) would
have been $(.21), 21.71%, 2.0% and (1.2)%, respectively, $(.15),
22.88%, 2.3%, and (0.9)%, respectively, $(.21), 14.40%, 10.4% (2.3%
if only normal and recurring expenses are taken into account) and
(1.7)%, respectively, and $(.03), 11.40%, 2.3% and (1.5)%,
respectively, for the periods ended December 31, 1996, 1995, 1994 and
1993, respectively.
3 Total return measures the change in the value of an investment during
the period indicated and does not include the impact of paying any
sales charge.
4 Annualized for periods of less than one year.
5 The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the
first day Class B and Class C shares were sold, September 18, 1996
and October 21, 1996, respectively.
6 This disclosure effective for the first time in 1996, has not been
applied retroactively.
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
THE PASADENA VALUE 25 FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Inception
For the Six-Months Ended (December 17,
June 30, 1997 1996) to
(Unaudited) December 31,
------------------------------------- 1996
Class Class -------------
Class A B(4) C(4) Class A
--------- --------- --------- -------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period.... $ 10.21 $ 10.39 $ 10.39 $ 10.00
--------- --------- --------- -------------
GAIN FROM INVESTMENT OPERATIONS:
Net investment income(1).............. .08 -- -- --
Net realized and unrealized gain on
investments......................... 1.26 1.13 1.13 .21
--------- --------- --------- -------------
Total gain from investment
operations.......................... 1.34 1.13 1.13 .21
--------- --------- --------- -------------
LESS DISTRIBUTIONS:
Net investment income................. (.04) (.03) (.03) --
--------- --------- --------- -------------
Total distributions................... (.04) (.03) (.03) --
--------- --------- --------- -------------
Net asset value, end of period.......... $ 11.51 $ 11.49 $ 11.49 $ 10.21
--------- --------- --------- -------------
--------- --------- --------- -------------
TOTAL RETURN(2)......................... 13.12% 10.86% 10.86% 2.10%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(in thousands)...................... $ 13,126 $ 5,540 $ 1,863 $ 487
Ratio of expenses to average net
assets(3)........................... 1.8% 2.5% 2.5% 1.8%
Ratio of net investment income to
average net assets(3)............... 1.4% 0.6% 0.6% 1.2%
Portfolio turnover rate............... 33.1% 33.1% 33.1% 0.0%
Average commission rate paid per
share............................... $ 0.0602 $ 0.0602 $ 0.0602 $ 0.0600
</TABLE>
- -------------
The table above provides condensed information concerning income and
capital changes for one share of The Pasadena Value 25 Fund. Such
information is based on the Fund's unaudited financial statements for the
six-months ended June 30, 1997 and the Fund's audited financial statements
for the period ended December 31, 1996.
1 This information was prepared using the average number of shares
outstanding during each period.
2 Total return measures the change in the value of an investment during
the period indicated and does not include the impact of paying any
sales charge.
3 Annualized.
4 The beginning net asset value per share of Class B and Class C shares
equals the net asset value per share of the Class A shares as of the
first day Class B and Class C shares were sold (January 9, 1997).
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES: The Pasadena Growth Fund, The Pasadena Nifty
Fifty Fund, The Pasadena Balanced Return Fund, The Pasadena Small & Mid-Cap
Growth Fund, The Pasadena Global Growth Fund and The Pasadena Value 25 Fund,
collectively referred to as the "Funds," are series of the Pasadena Investment
Trust (the "Trust"), a Massachusetts business trust registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. Each Fund offers three Classes (Class A, Class B and Class C) of no par
value shares (an unlimited number of which have been authorized). Class A shares
are sold with a maximum front-end sales charge of 5.5% of the offering price.
Class B and Class C shares are sold at their respective net asset values. Class
B shares redeemed during the first four years of ownership may be subject to a
contingent deferred sales charge ("CDSC") of up to 5%. Class C shares of The
Pasadena Small & Mid-Cap Growth Fund, The Pasadena Global Growth Fund and The
Pasadena Value 25 Fund redeemed in the first year of ownership may be subject to
a CDSC of 1%. At the beginning of the seventh year after purchase, Class B
shares automatically convert into Class A shares based upon the relative net
asset values of the two Classes, without imposition of any sales charges. The
significant accounting policies of the Funds are as follows:
A. SECURITIES VALUATION. Securities traded on a securities exchange (foreign or
domestic) or on Nasdaq are stated at the last sale price determined as of
4:00 p.m. Eastern Time on the day of valuation; securities for which no sale
was reported on that date are stated at the last sale price on the business
day the security was last traded. Securities traded only in the
over-the-counter market and not on Nasdaq are valued at the current or last
quoted bid price. If no bid price is quoted that day, and in the case of
U.S. Government securities if no bid prices of comparable issues exist, the
security is valued by such method as the Trust's Board of Trustees shall
determine in good faith reflects the security's fair value.
B. INCOME AND EXPENSE ALLOCATION. All items of income and expense not directly
related to a specific Class of shares are allocated among the three Classes
based upon the relative aggregate value of the outstanding shares of each
Class.
C. FEDERAL INCOME TAXES. It is the Funds' policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to their
shareholders. Accordingly, no federal income tax provisions are required.
Distributions of income and capital gains are determined in accordance with
income tax regulations which differ in certain respects from generally
accepted accounting principles. Accordingly, the Funds have reclassified to
capital paid-in the effects of permanent differences included in
undistributed income. The aggregate cost of securities for financial
statement purposes approximates their cost for federal income tax purposes.
D. FOREIGN CURRENCY TRANSACTIONS. The books and records of the Funds are
maintained in U.S. dollars. Assets and liabilities denominated in foreign
currencies are converted into U.S. dollars using the exchange rates existing
at the end of each period. Purchases and sales of investment securities,
dividend and interest income, and expenses are translated at the rates of
exchange prevailing on the respective dates of such transactions. Net
realized foreign exchange gains and losses arise from the differences
between asset and liability amounts initially stated in foreign currencies
and the U.S. dollar value of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the
unrealized value of assets and liabilities at the end of the reporting
period resulting from changes in the exchange rates. The Funds do not
isolate that portion of their results of operations resulting from changes
in foreign exchange rates on investments from fluctuations arising from
changes in the market prices of securities held. The Funds did not have any
material exchange gains or losses during the periods covered by these
financial statements.
E. OTHER. The Funds recognize security transactions on the trade date. Realized
gains and losses on sales of investments are determined on the identified
cost basis. Dividend income less foreign taxes withheld (if any) and
distributions to shareholders are recorded on the ex-dividend date. Interest
income is recorded on an accrual basis.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES: Under separate investment
management agreements, Roger Engemann Management Co., Inc. (the "Manager")
furnishes advice and recommendations with respect to the Funds' securities
portfolios, supervises the Funds' investments, provides Fund accounting and
pricing, and provides the Trust's Board of Trustees with periodic and special
reports on investment securities, economic conditions and
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued):
other pertinent subjects. The Manager also performs various administrative and
shareholder services to each Fund under separate administration agreements. All
normal operating expenses of the Funds, except for fees and expenses associated
with investment management services, service fees and distribution fees, are
paid by the Manager pursuant to the administration agreements.
For the services provided and expenses assumed under the management and
administration agreements, the Manager receives separate fees computed and
prorated on a daily basis as follows:
<TABLE>
<CAPTION>
NET ASSETS LEVEL MANAGEMENT FEE ADMINISTRATION FEE
---------------- ------------------- ---------------------
<S> <C> <C> <C>
The Pasadena Growth, First $30,000 1.00%
Balanced Return and Next $70,000 0.80%
Nifty Fifty Funds Next $400,000 0.60%
Over $500,000 0.40%
First $30,000 0.50%
Next $20,000 0.70%
Next $50,000 0.50%
Over $100,000 0.70%
The Pasadena Small & Mid- First $50,000 1.00% 0.60%
Cap Growth Fund Next $450,000 0.90% 0.50%
Over $500,000 0.80% 0.40%
The Pasadena Global First $50,000 1.10% 0.60%
Growth Fund Next $450,000 1.00% 0.50%
Over $500,000 0.90% 0.40%
The Pasadena Value 25 Fund First $50,000 0.90% 0.60%
Next $450,000 0.80% 0.50%
Over $500,000 0.70% 0.40%
</TABLE>
Broker/dealers and other service providers, including the Manager and the Funds'
distributor, Pasadena Fund Services, Inc. (the "Distributor"), receive service
fees at an annualized 0.25% of each Fund's average daily net asset value for
services to shareholders.
Pursuant to the distribution plans (the "Plans") adopted by the Funds, each Fund
pays distribution fees to the Distributor at an annualized rate of 0.75% of its
average daily net assets attributable to Class B and Class C shares. The fees
reimburse the Distributor for distribution costs (principally payments to
broker/dealers) incurred on behalf of the Funds with respect to Class B and
Class C shares. Under the Plans, Class B and Class C shares are not obligated to
pay any distribution costs in excess of the distribution fee paid or accrued
even if the Plans are terminated or otherwise discontinued.
Roger Engemann & Associates, Inc., a wholly-owned subsidiary of Pasadena Capital
Corporation (PCC), owns 93.5% of the Manager's capital stock. The Distributor is
also a wholly-owned subsidiary of PCC. Roger Engemann, the controlling
shareholder of PCC, is Chairman of the Board and President of the Trust.
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(DOLLARS IN THOUSANDS)
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES (continued):
During 1997 the Manager elected to waive the above fees as follows:
<TABLE>
<CAPTION>
EXPENSE WAIVED TIME PERIOD AMOUNT
--------------------- ----------------------- -----------
<S> <C> <C> <C>
The Pasadena Growth Fund Administration fees January 1, 1997 - April $ 35
14, 1997
The Pasadena Nifty Fifty Fund Administration fees January 1, 1997 - April $ 82
14, 1997
The Pasadena Balanced Return Fund Administration fees January 1, 1997 - April $ 65
14, 1997
</TABLE>
3. INVESTMENT TRANSACTIONS: For the six months ended June 30, 1997, purchases
and sales of securities, other than short-term securities, aggregated $168,790
and $233,391, respectively, for The Pasadena Growth Fund, $76,970 and $67,953
respectively, for The Pasadena Nifty Fifty Fund, $8,158 (which includes $889 in
U.S. government obligations) and $10,907, respectively, for The Pasadena
Balanced Return Fund, $37,590 and $26,531, respectively, for The Pasadena Small
& Mid-Cap Growth Fund, $10,345 and $9,230, respectively, for The Pasadena Global
Growth Fund and $23,173 and $4,684, respectively, for The Pasadena Value 25
Fund.
At June 30, 1997, the aggregate cost of securities for The Pasadena Growth Fund,
The Pasadena Nifty Fifty Fund, The Pasadena Balanced Return Fund, The Pasadena
Small & Mid-Cap Growth Fund, The Pasadena Global Growth Fund and The Pasadena
Value 25 Fund was $268,539, $149,438, $39,455, $20,144, $9,933 and $18,601,
respectively. Net unrealized appreciation aggregated $218,715, $106,671,
$23,926, $2,732, $1,119 and $1,653, respectively, of which $227,578, $108,272,
$24,650, $3,452, $1,305 and $1,686, respectively, related to appreciated
securities and $8,863, $1,601, $724, $720, $186, and $133, respectively, related
to depreciated securities.
At June 30, 1997, The Pasadena Value 25 Fund was "short against the box" 7,310
shares of Echlin Inc. The proceeds on deposit with the broker total $247. The
value of the shares total $263.
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
4. CAPITAL SHARE TRANSACTIONS: The Funds' capital share transactions were as
follows:
<TABLE>
<CAPTION>
Net Assets Shares
----------------------------- -----------------------------
Six-Months Six-Months
Ended June Year Ended Ended June Year Ended
30, 1997 December 31, 30, 1997 December 31,
The Pasadena Growth Fund (unaudited) 1996 (unaudited) 1996
- -----------------------------------
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
CLASS A
Shares sold........................ $ 5,130 $ 19,445 230 914
Shares issued in reinvestment of
distributions.................... -- 27,035 -- 1,236
Shares repurchased................. (61,959) (90,882) (2,760) (4,242)
------------- ------------- ------------- -------------
Net decrease....................... (56,829) (44,402) (2,530) (2,092)
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 3,862 13,137 178 625
Shares issued in reinvestment of
distributions.................... -- 3,299 -- 154
Shares repurchased................. (3,602) (6,393) (164) (300)
------------- ------------- ------------- -------------
Net increase....................... 260 10,043 14 479
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 2,772 7,457 127 356
Shares issued in reinvestment of
distributions.................... -- 1,798 -- 84
Shares repurchased................. (2,504) (5,173) (115) (247)
------------- ------------- ------------- -------------
Net increase....................... 268 4,082 12 193
------------- ------------- ------------- -------------
Net decrease resulting from capital
share transactions............... $ (56,301) $ (30,277) (2,504) (1,420)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
The Pasadena Nifty Fifty Fund
- -----------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold........................ $ 15,567 $ 19,958 561 803
Shares issued in reinvestment of
distributions.................... -- 7,236 -- 273
Shares repurchased................. (16,751) (27,395) (601) (1,101)
------------- ------------- ------------- -------------
Net decrease....................... (1,184) (201) (40) (25)
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 11,402 16,788 419 680
Shares issued in reinvestment of
distributions.................... -- 2,450 -- 95
Shares repurchased................. (3,182) (5,120) (115) (210)
------------- ------------- ------------- -------------
Net increase....................... 8,220 14,118 304 565
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 10,253 12,251 376 493
Shares issued in reinvestment of
distributions.................... -- 1,358 -- 52
Shares repurchased................. (3,671) (5,522) (134) (228)
------------- ------------- ------------- -------------
Net increase....................... 6,582 8,087 242 317
------------- ------------- ------------- -------------
Net increase resulting from capital
share transactions............... $ 13,618 $ 22,004 506 857
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
50
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Net Assets Shares
----------------------------- -----------------------------
Six-Months Six-Months
Ended June Year Ended Ended June Year Ended
30, 1997 December 31, 30, 1997 December 31,
The Pasadena Balanced Return Fund (unaudited) 1996 (unaudited) 1996
- -----------------------------------
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
CLASS A
Shares sold........................ $ 1,011 $ 1,671 35 61
Shares issued in reinvestment of
distributions.................... -- 2,918 -- 104
Shares repurchased................. (5,026) (9,904) (171) (363)
------------- ------------- ------------- -------------
Net decrease....................... (4,015) (5,315) (136) (198)
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 1,272 1,909 43 70
Shares issued in reinvestment of
distributions.................... -- 224 -- 8
Shares repurchased................. (496) (562) (17) (20)
------------- ------------- ------------- -------------
Net increase....................... 776 1,571 26 58
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 824 2,078 28 77
Shares issued in reinvestment of
distributions.................... -- 217 -- 8
Shares repurchased................. (608) (1,227) (20) (46)
------------- ------------- ------------- -------------
Net increase....................... 216 1,068 8 39
------------- ------------- ------------- -------------
Net decrease resulting from capital
share transactions............... $ (3,023) $ (2,676) (102) (101)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
The Pasadena Small & Mid-Cap Growth Fund
- --------------------------------------------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold........................ $ 8,912 $ 7,102 477 391
Shares issued in reinvestment of
distributions.................... -- 405 -- 24
Shares repurchased................. (3,438) (1,683) (182) (105)
------------- ------------- ------------- -------------
Net increase....................... 5,474 5,824 295 310
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 4,179 1,491 223 82
Shares issued in reinvestment of
distributions.................... -- 12 -- 1
Shares repurchased................. (178) (34) (10) (2)
------------- ------------- ------------- -------------
Net increase....................... 4,001 1,469 213 81
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 2,928 75 160 4
Shares issued in reinvestment of
distributions.................... -- 1 -- --
Shares repurchased................. (42) (22) (2) (1)
------------- ------------- ------------- -------------
Net increase....................... 2,886 54 158 3
------------- ------------- ------------- -------------
Net increase resulting from capital
share transactions............... $ 12,361 $ 7,347 666 394
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
51
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Net Assets Shares
----------------------------- -----------------------------
Six-Months Six-Months
Ended June Year Ended Ended June Year Ended
30, 1997 December 31, 30, 1997 December 31,
The Pasadena Global Growth Fund (unaudited) 1996 (unaudited) 1996
- -----------------------------------
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
CLASS A
Shares sold........................ $ 2,802 $ 5,512 141 295
Shares issued in reinvestment of
distributions.................... -- 459 -- 26
Shares repurchased................. (3,936) (2,005) (195) (105)
------------- ------------- ------------- -------------
Net increase (decrease)............ (1,134) 3,966 (54) 216
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 1,296 842 66 46
Shares issued in reinvestment of
distributions.................... -- 6 -- --
Shares repurchased................. (202) -- (11) --
------------- ------------- ------------- -------------
Net increase....................... 1,094 848 55 46
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 1,477 103 74 6
Shares issued in reinvestment of
distributions.................... -- 1 -- --
Shares repurchased................. (21) -- (1) --
------------- ------------- ------------- -------------
Net increase....................... 1,456 104 73 6
------------- ------------- ------------- -------------
Net increase resulting from capital
share transactions............... $ 1,416 $ 4,918 74 268
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
Net Assets Shares
----------------------------- -----------------------------
Inception Inception
Six-Months (December 17, Six-Months (December 17,
Ended June 1996) through Ended June 1996) through
30, 1997 December 31, 30, 1997 December 31,
The Pasadena Value 25 Fund (unaudited) 1996 (unaudited) 1996
- -----------------------------------
<S> <C> <C> <C> <C>
------------- ------------- ------------- -------------
CLASS A
Shares sold........................ $ 13,645 $ 486 1,302 48
Shares issued in reinvestment of
distributions.................... 35 -- 3 --
Shares repurchased................. (2,349) -- (213) --
------------- ------------- ------------- -------------
Net increase....................... 11,331 486 1,092 48
------------- ------------- ------------- -------------
CLASS B
Shares sold........................ 5,348 -- 491 --
Shares issued in reinvestment of
distributions.................... 4 -- -- --
Shares repurchased................. (104) -- (9) --
------------- ------------- ------------- -------------
Net increase....................... 5,248 -- 482 --
------------- ------------- ------------- -------------
CLASS C
Shares sold........................ 1,826 -- 163 --
Shares issued in reinvestment of
distributions.................... 1 -- -- --
Shares repurchased................. (12) -- (1) --
------------- ------------- ------------- -------------
Net increase....................... 1,815 -- 162 --
------------- ------------- ------------- -------------
Net increase resulting from capital
share transactions............... $ 18,394 $ 486 1,736 48
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
52
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(IN THOUSANDS)
5. DISTRIBUTIONS: Distributions to shareholders were as follows:
<TABLE>
<CAPTION>
The Pasadena The Pasadena The Pasadena
Growth Fund Nifty Fifty Fund Balanced Return Fund
----------------------------- ----------------------------- -----------------------------
Six-Months Six-Months Six-Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, 1997 December 31, June 30, 1997 December 31, June 30, 1997 December 31,
(unaudited) 1996 (unaudited) 1996 (unaudited) 1996
<S> <C> <C> <C> <C> <C> <C>
------------- ------------- ------------- ------------- ------------- -------------
Net investment income:
Class A....................... $ -- $ -- $ -- $ -- $ -- $ 526
Class B....................... -- -- -- -- -- 21
Class C....................... -- -- -- -- -- 17
Capital gains:
Class A....................... -- 30,458 -- 8,069 -- 2,670
Class B....................... -- 3,565 -- 2,685 -- 238
Class C....................... -- 1,972 -- 1,450 -- 215
------------- ------------- ------------- ------------- ------------- -------------
Total........................... $ -- $ 35,995 $ -- $ 12,204 $ -- $ 3,687
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
The Pasadena The Pasadena The Pasadena
Small & Mid-Cap Growth Fund Global Growth Fund Value 25 Fund
----------------------------- ----------------------------- -----------------------------
Inception
Six-Months Six-Months Six-Months (December 17,
Ended Year Ended Ended Year Ended Ended 1996) through
June 30, 1997 December 31, June 30, 1997 December 31, June 30, 1997 December 31,
(unaudited) 1996 (unaudited) 1996 (unaudited) 1996
<S> <C> <C> <C> <C> <C> <C>
------------- ------------- ------------- ------------- ------------- -------------
Net investment income:
Class A....................... $ -- $ 25 $ -- $ 12 $ 44 $ --
Class B....................... -- -- -- -- 13 --
Class C....................... -- -- -- -- 5 --
Capital gains:
Class A....................... -- 385 -- 449 -- --
Class B....................... -- 12 -- 5 -- --
Class C....................... -- 1 -- 1 -- --
------------- ------------- ------------- ------------- ------------- -------------
Total........................... $ -- $ 423 $ -- $ 467 $ 62 $ --
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
6. PENDING ACQUISITION: On June 9, 1997, Pasadena Capital Corporation signed a
definitive Agreement and Plan of Merger with Phoenix Duff & Phelps Corporation,
a diversified financial services company. The acquisition is subject to the
approval of new management agreements with Roger Engemann & Associates, Inc.
53
