President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Global Growth
Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
To further update you, as of December 4, 1995, the year-to-date total return
of your Blanchard Global Growth Fund was a solid 10.45%.* (Average annual
returns through 9/30/95 for the 1-year, 3-year, 5-year and since inception
[6/1/86] periods were respectively: 5.04%, 8.78%, 7.95%, and 8.10%.*)
Although past performance is not a guarantee of future performance, we're quite
pleased with this year's results so far, as we hope you are.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
*Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. Year-to-date
total return assumes reinvestment of all distributions. Average annual return
numbers are the total return annualized and compounded, and assume reinvestment
of all distributions. Returns shown do not reflect an account opening fee
which was charged at the Fund's inception, but is no longer charged.
BLANCHARD GLOBAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
U.S. EQUITY SECURITIES SECTOR--50.5%
- --------------------------------------------------------------------------------------------------
AUTOMOTIVE & RELATED--2.5%
---------------------------------------------------------------------------------
20,000 Chrysler Corp. $ 1,032,500
---------------------------------------------------------------------------------
30,000 Harley Davidson, Inc. 802,500
--------------------------------------------------------------------------------- -------------
Total 1,835,000
--------------------------------------------------------------------------------- -------------
BANKING--6.5%
---------------------------------------------------------------------------------
20,000 Citicorp 1,297,500
---------------------------------------------------------------------------------
20,000 Mellon Bank Corp. 1,002,500
---------------------------------------------------------------------------------
20,000 NationsBank Corp. 1,315,000
---------------------------------------------------------------------------------
15,000 Provident Bancorp, Inc. 633,750
---------------------------------------------------------------------------------
15,000 UJB Financial Corp. 478,125
--------------------------------------------------------------------------------- -------------
Total 4,726,875
--------------------------------------------------------------------------------- -------------
BROADCAST, RADIO & TV--0.5%
---------------------------------------------------------------------------------
20,000 Comcast Corp., Class A 357,500
--------------------------------------------------------------------------------- -------------
CHEMICALS & RELATED--4.5%
---------------------------------------------------------------------------------
17,000 Du Pont (E.I.) de Nemours & Co. 1,060,375
---------------------------------------------------------------------------------
10,000 Monsanto Co. 1,047,500
---------------------------------------------------------------------------------
40,000 Morton International, Inc. 1,220,000
--------------------------------------------------------------------------------- -------------
Total 3,327,875
--------------------------------------------------------------------------------- -------------
CONSTRUCTION--0.3%
---------------------------------------------------------------------------------
10,000 Wabash National Corp. 253,750
--------------------------------------------------------------------------------- -------------
CONSUMER & RELATED--6.1%
---------------------------------------------------------------------------------
10,000 Craftmade International, Inc. 83,750
---------------------------------------------------------------------------------
25,000 Eastman Kodak Co. 1,565,625
---------------------------------------------------------------------------------
30,000 Home Depot, Inc. 1,117,500
---------------------------------------------------------------------------------
35,000 Mattel, Inc. 1,006,250
---------------------------------------------------------------------------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
U.S. EQUITY SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
CONSUMER & RELATED--CONTINUED
---------------------------------------------------------------------------------
25,000 Sara Lee Corp. $ 734,375
--------------------------------------------------------------------------------- -------------
Total 4,507,500
--------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL--5.4%
---------------------------------------------------------------------------------
20,000 Avnet, Inc. 1,007,500
---------------------------------------------------------------------------------
30,000 Baker Hughes, Inc. 588,750
---------------------------------------------------------------------------------
20,000 General Electric Co. 1,265,000
---------------------------------------------------------------------------------
15,000 Intel Corp. 1,048,125
--------------------------------------------------------------------------------- -------------
Total 3,909,375
--------------------------------------------------------------------------------- -------------
ENERGY RELATED--3.3%
---------------------------------------------------------------------------------
20,000 Burlington Resources, Inc. 720,000
---------------------------------------------------------------------------------
30,000 El Paso Natural Gas 810,000
---------------------------------------------------------------------------------
20,000 Tenneco, Inc. 877,500
--------------------------------------------------------------------------------- -------------
Total 2,407,500
--------------------------------------------------------------------------------- -------------
ENTERTAINMENT & LEISURE--2.8%
---------------------------------------------------------------------------------
40,000 Carnival Corp., Class A 930,000
---------------------------------------------------------------------------------
30,000 Time Warner, Inc. 1,095,000
--------------------------------------------------------------------------------- -------------
Total 2,025,000
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--2.5%
---------------------------------------------------------------------------------
30,000 American Express Co. 1,218,750
---------------------------------------------------------------------------------
25,000 Capital One Financial Corp. 612,500
--------------------------------------------------------------------------------- -------------
Total 1,831,250
--------------------------------------------------------------------------------- -------------
FOOD, BEVERAGE & TOBACCO--2.3%
---------------------------------------------------------------------------------
20,000 Philip Morris Cos., Inc. 1,690,000
--------------------------------------------------------------------------------- -------------
INDUSTRIAL & RELATED--1.8%
---------------------------------------------------------------------------------
20,000 Motorola, Inc. 1,312,500
--------------------------------------------------------------------------------- -------------
INSURANCE--0.9%
---------------------------------------------------------------------------------
30,100 Washington National Corp. 684,775
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
U.S. EQUITY SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
METALS & MINING--0.4%
---------------------------------------------------------------------------------
136,000 Canyon Resources Corp. $ 263,500
--------------------------------------------------------------------------------- -------------
OIL & RELATED--0.8%
---------------------------------------------------------------------------------
50,000 (a)Reading & Bates Corp. 575,000
--------------------------------------------------------------------------------- -------------
PHARMACEUTICALS--4.1%
---------------------------------------------------------------------------------
36,000 Pfizer, Inc. 2,065,500
---------------------------------------------------------------------------------
11,000 Warner-Lambert Co. 936,375
--------------------------------------------------------------------------------- -------------
Total 3,001,875
--------------------------------------------------------------------------------- -------------
RESTAURANTS/FOOD SERVICE--0.3%
---------------------------------------------------------------------------------
14,000 Dave & Buster's, Inc. 210,000
--------------------------------------------------------------------------------- -------------
RETAIL--1.2%
---------------------------------------------------------------------------------
20,000 Penney (J.C.) Co., Inc. 842,500
--------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--4.3%
---------------------------------------------------------------------------------
40,000 (a)Airtouch Communications, Inc. 1,140,000
---------------------------------------------------------------------------------
25,000 SBC Communications, Inc. 1,396,875
---------------------------------------------------------------------------------
25,000 (a)Tele-Communications, Inc., Class A 425,000
---------------------------------------------------------------------------------
6,250 Tele-Communications, Inc., Series A(LBTYA) 153,906
--------------------------------------------------------------------------------- -------------
Total 3,115,781
--------------------------------------------------------------------------------- -------------
TOTAL U.S. EQUITY SECURITIES SECTOR (IDENTIFIED COST $31,291,271) 36,877,556
--------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--17.7%
- --------------------------------------------------------------------------------------------------
AUSTRALIA--0.8%
---------------------------------------------------------------------------------
MACHINERY--0.2%
---------------------------------------------------------------------------------
10,702 Broken Hill Proprietary Co. Ltd. 144,943
--------------------------------------------------------------------------------- -------------
METALS & MINING--0.3%
---------------------------------------------------------------------------------
30,000 Western Mining Corporation Holdings Ltd. 192,413
--------------------------------------------------------------------------------- -------------
PUBLISHING/PRINTING--0.3%
---------------------------------------------------------------------------------
51,863 News Corp., Pfd. 237,034
--------------------------------------------------------------------------------- -------------
TOTAL AUSTRALIA 574,390
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
CANADA--0.9%
---------------------------------------------------------------------------------
METALS & MINING--0.9%
---------------------------------------------------------------------------------
5,000 (a)Cominco, Ltd. $ 97,029
---------------------------------------------------------------------------------
80,000 Eldorado Corp., Ltd. 217,943
---------------------------------------------------------------------------------
140,000 Greenstone Resources Ltd. 341,250
--------------------------------------------------------------------------------- -------------
Total 656,222
--------------------------------------------------------------------------------- -------------
TOTAL CANADA 656,222
--------------------------------------------------------------------------------- -------------
FRANCE--1.7%
---------------------------------------------------------------------------------
CONSTRUCTION--0.2%
---------------------------------------------------------------------------------
1,545 Bouygues 164,291
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.3%
---------------------------------------------------------------------------------
1,130 Groupe Danone 180,473
--------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL--0.1%
---------------------------------------------------------------------------------
600 Legrand 100,366
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.5%
---------------------------------------------------------------------------------
3,600 AXA 199,947
---------------------------------------------------------------------------------
2,060 Credit Local de France 163,069
--------------------------------------------------------------------------------- -------------
Total 363,016
--------------------------------------------------------------------------------- -------------
HOUSING & CONSTRUCTION--0.3%
---------------------------------------------------------------------------------
1,510 Compagnie de St. Gobain 180,023
--------------------------------------------------------------------------------- -------------
MULTI-INDUSTRY--0.1%
---------------------------------------------------------------------------------
1,000 Primagaz Cie Gaz 77,667
--------------------------------------------------------------------------------- -------------
TEXTILE & APPAREL--0.2%
---------------------------------------------------------------------------------
1,122 Castorama Dubois Investisse 181,948
--------------------------------------------------------------------------------- -------------
TOTAL FRANCE 1,247,784
--------------------------------------------------------------------------------- -------------
GERMANY--1.3%
---------------------------------------------------------------------------------
CHEMICALS & RELATED--0.3%
---------------------------------------------------------------------------------
302 Linde AG 185,585
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
GERMANY--CONTINUED
---------------------------------------------------------------------------------
MACHINERY--0.2%
---------------------------------------------------------------------------------
380 Mannesmann AG $ 125,074
--------------------------------------------------------------------------------- -------------
MEDICAL PRODUCTS & RELATED--0.4%
---------------------------------------------------------------------------------
265 Fresenius 211,797
---------------------------------------------------------------------------------
225 Wella AG, Pfd. 123,242
--------------------------------------------------------------------------------- -------------
Total 335,039
--------------------------------------------------------------------------------- -------------
PHARMACEUTICALS--0.2%
---------------------------------------------------------------------------------
2,900 Merck KGAA 121,142
--------------------------------------------------------------------------------- -------------
UTILITIES & RELATED--0.2%
---------------------------------------------------------------------------------
4,650 Veba AG 190,909
--------------------------------------------------------------------------------- -------------
TOTAL GERMANY 957,749
--------------------------------------------------------------------------------- -------------
HONG KONG--1.5%
---------------------------------------------------------------------------------
AIRLINES--0.1%
---------------------------------------------------------------------------------
14,000 Swire Pacific Ltd. 105,022
--------------------------------------------------------------------------------- -------------
CONSTRUCTION--0.1%
---------------------------------------------------------------------------------
35,000 New World Infrastructure 61,565
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.7%
---------------------------------------------------------------------------------
175,932 First Pacific Co. 202,516
---------------------------------------------------------------------------------
17,976 HSBC Holdings 261,560
--------------------------------------------------------------------------------- -------------
Total 464,076
--------------------------------------------------------------------------------- -------------
REAL ESTATE--0.5%
---------------------------------------------------------------------------------
30,000 Cheung Kong 169,174
---------------------------------------------------------------------------------
23,000 Sun Hung Kai Properties 183,692
--------------------------------------------------------------------------------- -------------
Total 352,866
--------------------------------------------------------------------------------- -------------
RETAIL--0.1%
---------------------------------------------------------------------------------
115,000 Giordano International Ltd. 95,193
--------------------------------------------------------------------------------- -------------
TOTAL HONG KONG 1,078,722
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
IRELAND--0.1%
---------------------------------------------------------------------------------
HOUSING & CONSTRUCTION--0.1%
---------------------------------------------------------------------------------
14,000 CRH PLC $ 92,472
--------------------------------------------------------------------------------- -------------
ITALY--0.2%
---------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.2%
---------------------------------------------------------------------------------
91,000 Telecom Italia Mobile 152,713
--------------------------------------------------------------------------------- -------------
JAPAN--3.7%
---------------------------------------------------------------------------------
CHEMICALS & RELATED--0.4%
---------------------------------------------------------------------------------
12,000 Sekisui Chemical Co. 156,019
---------------------------------------------------------------------------------
20,000 Sumitomo Bakelite Co., Ltd. 163,840
--------------------------------------------------------------------------------- -------------
Total 319,859
--------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL EQUIPMENT--0.7%
---------------------------------------------------------------------------------
7,000 Canon, Inc. 119,752
---------------------------------------------------------------------------------
3,000 Canon Sales Co., Inc. 70,971
---------------------------------------------------------------------------------
1,000 Kyocera Corp. 81,920
---------------------------------------------------------------------------------
15,000 Minebea Co. 121,707
---------------------------------------------------------------------------------
7,000 NEC Corp. 92,380
--------------------------------------------------------------------------------- -------------
Total 486,730
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--1.0%
---------------------------------------------------------------------------------
7,000 Nomura Securities Co., Ltd. 127,963
---------------------------------------------------------------------------------
225,000 Nikkei 300 Stock Index Fund 571,875
--------------------------------------------------------------------------------- -------------
Total 699,838
--------------------------------------------------------------------------------- -------------
HOUSING & CONSTRUCTION--0.2%
---------------------------------------------------------------------------------
13,000 Taisei Corp. 77,648
---------------------------------------------------------------------------------
3,000 Tostem Corp. 92,087
--------------------------------------------------------------------------------- -------------
Total 169,735
--------------------------------------------------------------------------------- -------------
INDUSTRIAL & RELATED--0.4%
---------------------------------------------------------------------------------
19,000 Mitsubishi Heavy Industries 146,547
---------------------------------------------------------------------------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
JAPAN--CONTINUED
---------------------------------------------------------------------------------
INDUSTRIAL & RELATED--CONTINUED
---------------------------------------------------------------------------------
50,000 NKK Corporation $ 120,729
--------------------------------------------------------------------------------- -------------
Total 267,276
--------------------------------------------------------------------------------- -------------
MACHINERY--0.6%
---------------------------------------------------------------------------------
1,000 Autobacs Seven Co. 94,335
---------------------------------------------------------------------------------
16,000 Komatsu Ltd. 125,128
---------------------------------------------------------------------------------
6,000 Mori Seiki Co. 118,481
---------------------------------------------------------------------------------
9,000 Takuma Co., Ltd. 114,375
--------------------------------------------------------------------------------- -------------
Total 452,319
--------------------------------------------------------------------------------- -------------
REAL ESTATE--0.2%
---------------------------------------------------------------------------------
14,000 Mitsubishi Estate 149,176
--------------------------------------------------------------------------------- -------------
TRANSPORTATION--0.2%
---------------------------------------------------------------------------------
40,000 Kawasaki Kisen Kaisha Ltd. 107,141
--------------------------------------------------------------------------------- -------------
TOTAL JAPAN 2,652,074
--------------------------------------------------------------------------------- -------------
MEXICO--0.1%
---------------------------------------------------------------------------------
CONSTRUCTION--0.1%
---------------------------------------------------------------------------------
8,000 Empresas ICA Sociedad Controladora S.A., ADR 77,000
--------------------------------------------------------------------------------- -------------
NETHERLANDS--1.5%
---------------------------------------------------------------------------------
CONSUMER & RELATED--0.3%
---------------------------------------------------------------------------------
1,300 Heineken NV 230,701
--------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL--0.3%
---------------------------------------------------------------------------------
6,125 Philips Electronics N.V. 236,801
--------------------------------------------------------------------------------- -------------
INSURANCE--0.3%
---------------------------------------------------------------------------------
5,500 Aegon N.V. 208,803
--------------------------------------------------------------------------------- -------------
PUBLISHING/PRINTING--0.3%
---------------------------------------------------------------------------------
2,100 Wolters Kluwer 191,127
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
NETHERLANDS--CONTINUED
---------------------------------------------------------------------------------
RETAIL--0.3%
---------------------------------------------------------------------------------
5,450 Ahold NV $ 206,560
--------------------------------------------------------------------------------- -------------
TOTAL NETHERLANDS 1,073,992
--------------------------------------------------------------------------------- -------------
SWEDEN--0.6%
---------------------------------------------------------------------------------
CONSUMER RELATED--0.1%
---------------------------------------------------------------------------------
1,800 Autoliv AB 103,274
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.2%
---------------------------------------------------------------------------------
4,400 Kinnevik AB 121,917
--------------------------------------------------------------------------------- -------------
INSURANCE--0.2%
---------------------------------------------------------------------------------
4,680 Skandia Forsakrings AB 118,751
--------------------------------------------------------------------------------- -------------
RETAIL--0.1%
---------------------------------------------------------------------------------
1,400 Hennes & Mauritz AB, Class B 91,498
--------------------------------------------------------------------------------- -------------
TOTAL SWEDEN 435,440
--------------------------------------------------------------------------------- -------------
SWITZERLAND--1.3%
---------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
1,405 Oerlikon Buhrle Ag 108,905
--------------------------------------------------------------------------------- -------------
INSURANCE--0.3%
---------------------------------------------------------------------------------
340 Winterthur Schwizerische Versicherungs-Gesellschaft 223,712
--------------------------------------------------------------------------------- -------------
MACHINERY--0.3%
---------------------------------------------------------------------------------
185 BBC Brown Boveri 214,608
--------------------------------------------------------------------------------- -------------
MEDICAL PRODUCTS & RELATED--0.3%
---------------------------------------------------------------------------------
30 Roche Holding AG 218,004
--------------------------------------------------------------------------------- -------------
METALS & MINING--0.3%
---------------------------------------------------------------------------------
290 Alusuisse Lonza Holding AG 221,721
--------------------------------------------------------------------------------- -------------
TOTAL SWITZERLAND 986,950
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
UNITED KINGDOM--4.0%
---------------------------------------------------------------------------------
AEROSPACE--0.3%
---------------------------------------------------------------------------------
19,000 British Aerospace $ 212,980
--------------------------------------------------------------------------------- -------------
BANKING--0.4%
---------------------------------------------------------------------------------
15,744 Bank of Ireland 105,043
---------------------------------------------------------------------------------
23,328 National Westminster Bank PLC 232,911
--------------------------------------------------------------------------------- -------------
Total 337,954
--------------------------------------------------------------------------------- -------------
CONSUMER RELATED--1.0%
---------------------------------------------------------------------------------
24,000 Cadbury Schweppes 198,261
---------------------------------------------------------------------------------
40,000 Compass Group 271,937
---------------------------------------------------------------------------------
14,000 Greencore Group PLC 112,775
---------------------------------------------------------------------------------
61,000 William Morrison Supermarkets 143,700
--------------------------------------------------------------------------------- -------------
Total 726,673
--------------------------------------------------------------------------------- -------------
ENTERTAINMENT & LEISURE--0.3%
---------------------------------------------------------------------------------
17,104 Granada Group PLC 183,074
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
12,000 David S. Smith (Holdings) 109,281
--------------------------------------------------------------------------------- -------------
HEALTH CARE--0.5%
---------------------------------------------------------------------------------
21,000 Smithkline Beecham Corp., Class A 219,296
---------------------------------------------------------------------------------
45,000 Takare PLC 145,850
--------------------------------------------------------------------------------- -------------
Total 365,146
--------------------------------------------------------------------------------- -------------
INSURANCE--0.2%
---------------------------------------------------------------------------------
13,000 Legal & General Group PLC 140,482
--------------------------------------------------------------------------------- -------------
MACHINERY--0.2%
---------------------------------------------------------------------------------
29,000 Chubb Security 152,451
--------------------------------------------------------------------------------- -------------
OIL RELATED--0.3%
---------------------------------------------------------------------------------
25,763 British Petroleum, Ltd. 189,404
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
UNITED KINGDOM--CONTINUED
---------------------------------------------------------------------------------
RETAIL--0.3%
---------------------------------------------------------------------------------
8,538 Thorn EMI $ 198,838
--------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--0.2%
---------------------------------------------------------------------------------
11,000 Carlton Communications PLC 167,565
--------------------------------------------------------------------------------- -------------
TRANSPORTATION--0.2%
---------------------------------------------------------------------------------
51,000 British Airways Capital, Conv. Bond, 9.75%, 6/15/2005 161,668
--------------------------------------------------------------------------------- -------------
TOTAL UNITED KINGDOM 2,945,516
--------------------------------------------------------------------------------- -------------
TOTAL FOREIGN SECURITIES SECTOR (IDENTIFIED COST $11,632,764) 12,931,024
--------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--10.5%
- --------------------------------------------------------------------------------------------------
ARGENTINA--0.3%
---------------------------------------------------------------------------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
3,500 Quilmes Industrial SA 61,600
--------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--0.1%
---------------------------------------------------------------------------------
1,400 Telecom Argentina S.A., ADR 53,725
--------------------------------------------------------------------------------- -------------
UTILITIES & RELATED--0.1%
---------------------------------------------------------------------------------
16,970 Compania Naviera Perez Companc SA, Class B 74,830
--------------------------------------------------------------------------------- -------------
TOTAL ARGENTINA 190,155
--------------------------------------------------------------------------------- -------------
BRAZIL--1.3%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.6%
---------------------------------------------------------------------------------
7,464 Cia Acos Especiais Itabira-Acesita., ADR 108,958
---------------------------------------------------------------------------------
1,154,088 Cia Acos Especiais Itabira-Acesita., Pfd. 9,600
---------------------------------------------------------------------------------
2,308,176 Cia Acos Especiais Itabira-Acesita., Pfd. 19,198
---------------------------------------------------------------------------------
4,007 Companhia Energetica de Minas Gerais, ADR 86,657
---------------------------------------------------------------------------------
3,500 Companhia Vale Do Rio Doce, ADR 141,013
---------------------------------------------------------------------------------
6,600 Usinas Uni Sd Mg, ADR 62,446
--------------------------------------------------------------------------------- -------------
Total 427,872
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
BRAZIL--CONTINUED
---------------------------------------------------------------------------------
CAPITAL GOODS--0.1%
---------------------------------------------------------------------------------
7,481 (a)Rhodia-Ster S.A., GDR $ 98,009
--------------------------------------------------------------------------------- -------------
ENERGY RELATED--0.2%
---------------------------------------------------------------------------------
500,500 Centrais Eletricas Brasileiras 142,063
--------------------------------------------------------------------------------- -------------
RETAIL--0.1%
---------------------------------------------------------------------------------
8,000,000 Lojas Americanas S.A., Preference 80,680
--------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--0.3%
---------------------------------------------------------------------------------
5,450 Telecomunicacoes Brasileras, ADR 219,578
--------------------------------------------------------------------------------- -------------
TOTAL BRAZIL 968,202
--------------------------------------------------------------------------------- -------------
CHILE--0.3%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.1%
---------------------------------------------------------------------------------
17,000 Antofagasta Holdings PLC 81,976
--------------------------------------------------------------------------------- -------------
CAPITAL GOODS--0.1%
---------------------------------------------------------------------------------
3,200 Madeco SA, ADR 79,600
--------------------------------------------------------------------------------- -------------
RETAIL & RELATED--0.1%
---------------------------------------------------------------------------------
3,200 Santa Isabel S.A., ADR 72,400
--------------------------------------------------------------------------------- -------------
TOTAL CHILE 233,976
--------------------------------------------------------------------------------- -------------
CHINA--0.2%
---------------------------------------------------------------------------------
AUTOMOTIVE & RELATED--0.1%
---------------------------------------------------------------------------------
190,000 Qingling Motors Co., Class H 41,530
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
135,000 (a)China North Industries Investment Ltd. 101,250
--------------------------------------------------------------------------------- -------------
TOTAL CHINA 142,780
--------------------------------------------------------------------------------- -------------
COLUMBIA--0.2%
---------------------------------------------------------------------------------
BANKING--0.1%
---------------------------------------------------------------------------------
3,600 Banco Industrial Colombiano, ADR 49,050
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
COLUMBIA--CONTINUED
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.1%
---------------------------------------------------------------------------------
6,000 Cementos Diamante S.A., GDR $ 105,000
--------------------------------------------------------------------------------- -------------
TOTAL COLOMBIA 154,050
--------------------------------------------------------------------------------- -------------
ECUADOR--0.1%
---------------------------------------------------------------------------------
CONSTRUCTION--0.1%
---------------------------------------------------------------------------------
514 LA Cemento Nacional C.A., GDR 107,940
--------------------------------------------------------------------------------- -------------
HONG KONG--0.0%
---------------------------------------------------------------------------------
MULTI INDUSTRY--0.0%
---------------------------------------------------------------------------------
60,000 (a)Star Paging International Holding, Ltd., Warrants 792
--------------------------------------------------------------------------------- -------------
HUNGARY--0.2%
---------------------------------------------------------------------------------
BANKING--0.1%
---------------------------------------------------------------------------------
7,500 OTP Bank, GDR 64,688
--------------------------------------------------------------------------------- -------------
CAPITAL GOODS--0.1%
---------------------------------------------------------------------------------
450 (a)Matav Rt. 64,225
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.0%
---------------------------------------------------------------------------------
2,100 (a)Kekut Asvanyiz, GDR 17,862
--------------------------------------------------------------------------------- -------------
TOTAL HUNGARY 146,775
--------------------------------------------------------------------------------- -------------
INDIA--0.7%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.2%
---------------------------------------------------------------------------------
30,000 Gujarat Ambuja, Conv. Bond, 3.50%, 6/30/1999 41,738
---------------------------------------------------------------------------------
1,300 (a)Hindalco Industries Ltd., GDR 40,820
---------------------------------------------------------------------------------
1,100 United Phosphorous Ltd., GDR 25,300
--------------------------------------------------------------------------------- -------------
Total 107,858
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
3,500 (a)DCW, Ltd., GDR 21,000
---------------------------------------------------------------------------------
7,700 (a)Dr. Reddy's Laboratories, GDR 73,150
--------------------------------------------------------------------------------- -------------
Total 94,150
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
INDIA--CONTINUED
---------------------------------------------------------------------------------
INVESTMENT COMPANIES--0.4%
---------------------------------------------------------------------------------
5,149 (a)IS Himalayan Fund N.V. $ 66,422
---------------------------------------------------------------------------------
1,130 (a)IS Himalayan Fund N.V., Warrants 565
---------------------------------------------------------------------------------
22,782 (a)Indian Opportunities Fund Ltd. 240,354
--------------------------------------------------------------------------------- -------------
Total 307,341
--------------------------------------------------------------------------------- -------------
TOTAL INDIA 509,349
--------------------------------------------------------------------------------- -------------
INDONESIA--0.6%
---------------------------------------------------------------------------------
BANKING--0.1%
---------------------------------------------------------------------------------
78,750 PT Bank Dagang Nasional 70,220
--------------------------------------------------------------------------------- -------------
BASIC INDUSTRIES--0.1%
---------------------------------------------------------------------------------
62,000 PT Gadjah Tunggal 39,586
--------------------------------------------------------------------------------- -------------
CAPITAL GOODS--0.2%
---------------------------------------------------------------------------------
3,100 (a)PT Indosat, ADR 102,688
--------------------------------------------------------------------------------- -------------
CHEMICALS--0.0%
---------------------------------------------------------------------------------
34,000 Keramika Indonesia Associates 28,071
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.0%
---------------------------------------------------------------------------------
35,000 PT Concord Benefit Textile 10,018
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.2%
---------------------------------------------------------------------------------
60,000 (a)PT Andayani Megah 51,519
---------------------------------------------------------------------------------
35,400 PT Bank International Indonesia 123,923
--------------------------------------------------------------------------------- -------------
Total 175,442
--------------------------------------------------------------------------------- -------------
TOTAL INDONESIA 426,025
--------------------------------------------------------------------------------- -------------
ISRAEL--0.2%
---------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
6,400 (a)Ampal-American Israel Corp., Class A 36,000
---------------------------------------------------------------------------------
8,600 (a)Ampal-American Israel Corp., Warrants 3,225
--------------------------------------------------------------------------------- -------------
Total 39,225
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
ISRAEL--CONTINUED
---------------------------------------------------------------------------------
INVESTMENT COMPANIES--0.1%
---------------------------------------------------------------------------------
6,700 First Israel Fund, Inc. $ 73,700
--------------------------------------------------------------------------------- -------------
TOTAL ISRAEL 112,925
--------------------------------------------------------------------------------- -------------
KOREA--0.9%
---------------------------------------------------------------------------------
CAPITAL GOODS--0.3%
---------------------------------------------------------------------------------
6,180 (a)Anam Industrial Co., Ltd. 171,229
---------------------------------------------------------------------------------
6,000 (a)Daewoo Heavy Industries, Pfd. 54,578
--------------------------------------------------------------------------------- -------------
Total 225,807
--------------------------------------------------------------------------------- -------------
CONSTRUCTION & HOUSING--0.1%
---------------------------------------------------------------------------------
9,000 (a)Kumho Construction & Engineering Co., Pfd. 72,927
--------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL--0.0%
---------------------------------------------------------------------------------
14 (a)Samsung Electronics Co. 1,652
--------------------------------------------------------------------------------- -------------
INDUSTRIAL & RELATED--0.1%
---------------------------------------------------------------------------------
2,066 Hyundai Motor Service Co., Pfd. 61,563
--------------------------------------------------------------------------------- -------------
TRANSPORTATION--0.1%
---------------------------------------------------------------------------------
2,283 (a)Dong Bang Forwarding Co. 67,134
--------------------------------------------------------------------------------- -------------
UTILITIES & RELATED--0.3%
---------------------------------------------------------------------------------
3,200 (a)Korea Electric Power Corp. 131,739
---------------------------------------------------------------------------------
2,239 (a)Yukong Ltd. 84,275
--------------------------------------------------------------------------------- -------------
Total 216,014
--------------------------------------------------------------------------------- -------------
TOTAL KOREA 645,097
--------------------------------------------------------------------------------- -------------
LUXEMBOURG--0.2%
---------------------------------------------------------------------------------
INDUSTRIAL & RELATED--0.2%
---------------------------------------------------------------------------------
120,000 Siam Sindhorn, Conv. Bond, Series WW, 2.00%, 7/31/2000 113,100
--------------------------------------------------------------------------------- -------------
MALAYSIA--1.3%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.3%
---------------------------------------------------------------------------------
19,000 United Engineers Ltd. 118,142
---------------------------------------------------------------------------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
MALAYSIA--CONTINUED
---------------------------------------------------------------------------------
BASIC INDUSTRIES--CONTINUED
---------------------------------------------------------------------------------
21,000 YTL Corp., Bhd $ 114,050
--------------------------------------------------------------------------------- -------------
Total 232,192
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
10,000 Edaran Otomobil Nasional 78,709
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.6%
---------------------------------------------------------------------------------
24,000 Commerce Asset Holdings Bhd 119,008
---------------------------------------------------------------------------------
47,000 Renong Berhad 71,767
---------------------------------------------------------------------------------
57,000 Technology Resources Industries Bhd 144,687
---------------------------------------------------------------------------------
20,000 Westmont Berhad 69,264
--------------------------------------------------------------------------------- -------------
Total 404,726
--------------------------------------------------------------------------------- -------------
INDUSTRIAL & RELATED--0.1%
---------------------------------------------------------------------------------
51,400 Aokam Perdana BHD 86,172
--------------------------------------------------------------------------------- -------------
RETAIL--0.2%
---------------------------------------------------------------------------------
105,000 LARUT Consolidated Berhad 134,711
--------------------------------------------------------------------------------- -------------
TOTAL MALAYSIA 936,510
--------------------------------------------------------------------------------- -------------
MEXICO--0.7%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.0%
---------------------------------------------------------------------------------
35,200 (a)Cemex SA, Warrants 246
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.0%
---------------------------------------------------------------------------------
83,000 (a)Cifra SA de CV, Warrants 2,117
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.4%
---------------------------------------------------------------------------------
5,300 (a)Ceteco Holdings NV, ADR 172,738
---------------------------------------------------------------------------------
7,900 (a)Grupo Carso SA de CV, ADR 83,424
---------------------------------------------------------------------------------
16,200 (a)Grupo Carso SA de CV, Warrants 1,134
---------------------------------------------------------------------------------
9,800 Grupo Industrial Durango SA de CV, ADR 78,400
--------------------------------------------------------------------------------- -------------
Total 335,696
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
MEXICO--CONTINUED
---------------------------------------------------------------------------------
INDUSTRIAL & RELATED--0.3%
---------------------------------------------------------------------------------
21,500 Apasco SA de CV $ 78,757
---------------------------------------------------------------------------------
24,000 Corporacion Industrial Sanluis, S.A. de C.V. 112,842
--------------------------------------------------------------------------------- -------------
Total 191,599
--------------------------------------------------------------------------------- -------------
TOTAL MEXICO 529,658
--------------------------------------------------------------------------------- -------------
PERU--0.3%
---------------------------------------------------------------------------------
CAPITAL GOODS--0.1%
---------------------------------------------------------------------------------
4,096 Cementos Lima S.A. 60,790
--------------------------------------------------------------------------------- -------------
REAL ESTATE--0.1%
---------------------------------------------------------------------------------
260,000 (a)Peru Real Estate S.A. 135,200
--------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--0.1%
---------------------------------------------------------------------------------
41,275 CPT Telefonica Del Peru, Class B 73,705
--------------------------------------------------------------------------------- -------------
TOTAL PERU 269,695
--------------------------------------------------------------------------------- -------------
PHILIPPINES--0.1%
---------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
244,375 (a)Filinvest Land, Inc. 65,768
--------------------------------------------------------------------------------- -------------
POLAND--0.5%
---------------------------------------------------------------------------------
BANKING--0.2%
---------------------------------------------------------------------------------
5,310 Bank Rozwoju Eksportu S.A. 82,691
---------------------------------------------------------------------------------
730 Bank Slaski S.A. 39,580
--------------------------------------------------------------------------------- -------------
Total 122,271
--------------------------------------------------------------------------------- -------------
BASIC INDUSTRIES--0.0%
---------------------------------------------------------------------------------
12,824 (a)Mostostal Export 30,060
--------------------------------------------------------------------------------- -------------
CAPITAL GOODS--0.1%
---------------------------------------------------------------------------------
3,000 (a)Debica S.A. 41,459
---------------------------------------------------------------------------------
8,000 (a)Polifarb-Cieszyn SA 29,515
--------------------------------------------------------------------------------- -------------
Total 70,974
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
POLAND--CONTINUED
---------------------------------------------------------------------------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
785 Zyweic Powowarskiew PLZ $ 62,403
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
12,000 Elektrim Towarzystwo Handlowe S.A. 40,114
--------------------------------------------------------------------------------- -------------
TOTAL POLAND 325,822
--------------------------------------------------------------------------------- -------------
RUSSIA--0.1%
---------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.1%
---------------------------------------------------------------------------------
10,060 (a)Petersburg Long Distance, Inc. 62,875
--------------------------------------------------------------------------------- -------------
SLOVENIA--0.1%
---------------------------------------------------------------------------------
BANKING--0.1%
---------------------------------------------------------------------------------
200 (a)Slovenia Kredit Bank 60,584
--------------------------------------------------------------------------------- -------------
SOUTH AFRICA--0.8%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.1%
---------------------------------------------------------------------------------
9,000 Sasol Ltd. 77,729
--------------------------------------------------------------------------------- -------------
CHEMICALS & RELATED--0.0%
---------------------------------------------------------------------------------
1,350 Polfin Ltd. 2,906
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.2%
---------------------------------------------------------------------------------
15,214 (a)JD Group, Ltd. 75,083
---------------------------------------------------------------------------------
2,400 South African Breweries, Ltd. 78,798
--------------------------------------------------------------------------------- -------------
Total 153,881
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.3%
---------------------------------------------------------------------------------
6,500 Barlow Limited 83,761
---------------------------------------------------------------------------------
4,500 Free State Consolidated Gold Mines Ltd. 41,949
---------------------------------------------------------------------------------
4,500 Imperial Holdings Ltd. 48,735
---------------------------------------------------------------------------------
6,000 Malbak Limited 39,893
--------------------------------------------------------------------------------- -------------
Total 214,338
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
SOUTH AFRICA--CONTINUED
---------------------------------------------------------------------------------
INDUSTRIAL & RELATED--0.1%
---------------------------------------------------------------------------------
900 Anglo American Industrial Corp., Ltd. $ 45,403
--------------------------------------------------------------------------------- -------------
PHARMACEUTICALS--0.0%
---------------------------------------------------------------------------------
3,900 South African Druggists Ltd. 32,346
--------------------------------------------------------------------------------- -------------
RETAIL--0.1%
---------------------------------------------------------------------------------
28,000 Metro Cash and Carry Ltd. 99,800
--------------------------------------------------------------------------------- -------------
TOTAL SOUTH AFRICA 626,403
--------------------------------------------------------------------------------- -------------
SRI LANKA--0.1%
---------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
6,800 (a)Sri Lanka Growth Fund 35,700
---------------------------------------------------------------------------------
1,360 (a)Sri Lanka Growth Fund, Warrants 1,020
--------------------------------------------------------------------------------- -------------
Total 36,720
--------------------------------------------------------------------------------- -------------
TOTAL SRI LANKA 36,720
--------------------------------------------------------------------------------- -------------
TAIWAN--0.4%
---------------------------------------------------------------------------------
BASIC INDUSTRIES--0.0%
---------------------------------------------------------------------------------
1,904 (a)Tuntex Distinct Corp., GDR 10,710
--------------------------------------------------------------------------------- -------------
INVESTMENT COMPANIES--0.4%
---------------------------------------------------------------------------------
37,500 (a)Taiwan Opportunities Fund Ltd. 297,750
--------------------------------------------------------------------------------- -------------
TOTAL TAIWAN 308,460
--------------------------------------------------------------------------------- -------------
THAILAND--0.6%
---------------------------------------------------------------------------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
19,000 (a)Hana Microelectronics Co., Ltd. 73,992
--------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--0.2%
---------------------------------------------------------------------------------
40,000 MDX Co., Ltd.--Foreign 72,720
---------------------------------------------------------------------------------
16,000 Siam City Credit Finance & Securities Co., Ltd. 68,667
--------------------------------------------------------------------------------- -------------
Total 141,387
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
EMERGING MARKETS SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
THAILAND--CONTINUED
---------------------------------------------------------------------------------
TRANSPORTATION--0.2%
---------------------------------------------------------------------------------
20,000 Precious Shipping, Ltd. $ 120,008
--------------------------------------------------------------------------------- -------------
UNASSIGNED--0.1%
---------------------------------------------------------------------------------
16,000 TPI Polene Co., Ltd. 108,087
--------------------------------------------------------------------------------- -------------
TOTAL THAILAND 443,474
--------------------------------------------------------------------------------- -------------
TURKEY--0.2%
---------------------------------------------------------------------------------
BASIC GOODS--0.1%
---------------------------------------------------------------------------------
701,000 Eregli Demir Ve Celik Fabrikalari T.A.S. 83,314
--------------------------------------------------------------------------------- -------------
CONSUMER GOODS & RELATED--0.1%
---------------------------------------------------------------------------------
171 Koc Yatirim Ve Sanayi Mamulleri Pazarlama S.A. 48
---------------------------------------------------------------------------------
83,000 Migros Turk 95,412
--------------------------------------------------------------------------------- -------------
Total 95,460
--------------------------------------------------------------------------------- -------------
TOTAL TURKEY 178,774
--------------------------------------------------------------------------------- -------------
URUGUAY--0.1%
---------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
---------------------------------------------------------------------------------
4,200 (a)Banco Comerical S.A., GDR 71,400
--------------------------------------------------------------------------------- -------------
TOTAL EMERGING MARKETS SECTOR (IDENTIFIED COST $9,287,126) 7,667,309
--------------------------------------------------------------------------------- -------------
PRECIOUS METALS SECTOR/METAL MINING SECURITIES--0.9%
- --------------------------------------------------------------------------------------------------
CANADA--0.5%
---------------------------------------------------------------------------------
100,000 (a)Dayton Mining Corp. 347,067
--------------------------------------------------------------------------------- -------------
UNITED STATES--0.4%
---------------------------------------------------------------------------------
18,000 Ashanti Goldfields Co., GDR 294,750
--------------------------------------------------------------------------------- -------------
TOTAL PRECIOUS METALS SECTOR/METAL MINING SECURITIES
(IDENTIFIED COST $723,290) 641,817
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
U.S. FIXED INCOME SECURITIES SECTOR--11.2%
- --------------------------------------------------------------------------------------------------
FINANCIAL SERVICES--1.1%
---------------------------------------------------------------------------------
$ 290,000 Chase Manhattan Grantor Trust, Series 1995-A, Class A, 6.00%,
9/17/2001 $ 290,583
---------------------------------------------------------------------------------
140,000 Chemical Master Credit Card Trust 1, Class A, 6.23%, 6/15/2003 140,880
---------------------------------------------------------------------------------
170,000 Nationsbank Credit Card Master Trust 1995-1, Class A, 6.45%,
4/15/2003 172,664
---------------------------------------------------------------------------------
190,000 Nissan Auto Receivables Grantor Trust, Series 1995-A, Class A, 6.10%, 8/15/2001 190,408
--------------------------------------------------------------------------------- -------------
Total 794,535
--------------------------------------------------------------------------------- -------------
GOVERNMENT/AGENCY--9.9%
---------------------------------------------------------------------------------
330,000 (c)Federal Home Loan Mortgage Corp., Pool TBA, 7.00%, 11/1/2009 332,681
---------------------------------------------------------------------------------
500,234 Government National Mortgage Association, Pool 352309, 6.50%,
3/15/2024 487,228
---------------------------------------------------------------------------------
1,113,778 Government National Mortgage Association, Pool 386475, 6.50%,
5/15/2024 1,084,819
---------------------------------------------------------------------------------
402,728 Government National Mortgage Association, Pool 780141, 10.00%,
12/15/2020 441,385
---------------------------------------------------------------------------------
100,000 United States Treasury Bond, 10.375%, 11/15/2012 134,344
---------------------------------------------------------------------------------
320,000 United States Treasury Bond, 10.75%, 5/15/2003 411,600
---------------------------------------------------------------------------------
160,000 United States Treasury Bond, 7.125%, 2/15/2023 174,450
---------------------------------------------------------------------------------
550,000 United States Treasury Bond, 7.50%, 11/15/2024 629,577
---------------------------------------------------------------------------------
300,000 United States Treasury Bond, 8.75%, 8/15/2020 385,313
---------------------------------------------------------------------------------
500,000 United States Treasury Note, 5.625%, 6/30/1997 500,313
---------------------------------------------------------------------------------
500,000 United States Treasury Note, 6.125%, 5/15/1998 505,313
---------------------------------------------------------------------------------
750,000 United States Treasury Note, 6.125%, 7/31/1996 753,046
---------------------------------------------------------------------------------
430,000 United States Treasury Note, 6.25%, 5/31/2000 437,390
---------------------------------------------------------------------------------
525,000 United States Treasury Note, 7.125%, 9/30/1999 549,609
---------------------------------------------------------------------------------
380,000 United States Treasury Note, 7.875%, 8/15/2001 417,406
--------------------------------------------------------------------------------- -------------
Total 7,244,474
--------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OR
FOREIGN VALUE
CURRENCY IN U.S.
PAR AMOUNT DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
U.S. FIXED INCOME SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
RETAIL--0.2%
---------------------------------------------------------------------------------
$ 120,000 Dayton Hudson CC Master Trust 1995-1 , Class A, 6.10%, 2/25/2002 $ 120,609
--------------------------------------------------------------------------------- -------------
TOTAL U.S. FIXED INCOME SECURITIES SECTOR (IDENTIFIED COST $7,919,591) 8,159,618
--------------------------------------------------------------------------------- -------------
FOREIGN FIXED INCOME SECURITIES SECTOR--8.8%
- --------------------------------------------------------------------------------------------------
AUSTRIA--0.2%
---------------------------------------------------------------------------------
1,090,000 Republic of Austria, Bond, 7.00%, 2/14/2000 114,983
--------------------------------------------------------------------------------- -------------
CANADA--0.8%
---------------------------------------------------------------------------------
810,000 Canada Govt. of, Deb., 6.50%, 6/1/2004 566,177
--------------------------------------------------------------------------------- -------------
DENMARK--0.7%
---------------------------------------------------------------------------------
3,000,000 Denmark, Foreign Gov't. Guarantee, 7.00%, 12/15/2004 521,266
--------------------------------------------------------------------------------- -------------
FRANCE--2.1%
---------------------------------------------------------------------------------
1,000,000 France O.A.T., 10/25/2019 29,488
---------------------------------------------------------------------------------
7,190,000 French Treasury Bill, 7.00%, 11/12/1999 1,498,695
--------------------------------------------------------------------------------- -------------
Total 1,528,183
--------------------------------------------------------------------------------- -------------
GERMANY--3.1%
---------------------------------------------------------------------------------
760,000 Deutschland Republic, Deb., 6.25%, 1/4/2024 476,215
---------------------------------------------------------------------------------
2,290,000 Deutschland Republic, Deb., 7.125%, 12/20/2002 1,711,481
---------------------------------------------------------------------------------
130,000 Germany Unity Fund, Bond, 8.00%, 1/21/2002 101,536
--------------------------------------------------------------------------------- -------------
Total 2,289,232
--------------------------------------------------------------------------------- -------------
UNITED KINGDOM--1.9%
---------------------------------------------------------------------------------
60,000 UK Treasury, 7.00%, 11/6/2001 92,105
---------------------------------------------------------------------------------
220,000 UK Treasury, 7.00%, 8/6/1997 349,348
---------------------------------------------------------------------------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN
CURRENCY VALUE
PAR AMOUNT IN U.S.
OR CONTRACTS DOLLARS
<C> <S> <C>
- --------------- --------------------------------------------------------------------------------- -------------
FOREIGN FIXED INCOME SECURITIES SECTOR--CONTINUED
- --------------------------------------------------------------------------------------------------
UNITED KINGDOM--CONTINUED
---------------------------------------------------------------------------------
545,000 UK Treasury, 9.75%, 8/27/2002 $ 951,829
--------------------------------------------------------------------------------- -------------
Total 1,393,282
--------------------------------------------------------------------------------- -------------
TOTAL FOREIGN FIXED INCOME SECURITIES SECTOR
(IDENTIFIED COST $6,301,875) 6,413,123
--------------------------------------------------------------------------------- -------------
OPTIONS--0.0%
- --------------------------------------------------------------------------------------------------
487,563 (a)Euro Style Call option on Canadian, expires 12/4/1995 strike @ 1.345
(IDENTIFIED COST $4,793) 3,676
--------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $67,160,710)(B) $ 72,694,123
--------------------------------------------------------------------------------- -------------
</TABLE>
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $67,160,710. The
net unrealized appreciation of investments on a federal tax basis amounts to
$5,533,413 which is comprised of $9,024,270 appreciation and $3,490,857
depreciation at October 31, 1995.
(c) When-issued security.
Note: The categories of investments are shown as a percentage of net assets
($72,992,696) at October 31, 1995.
The following acronyms are used throughout this portfolio:
ADR--American Depository Receipt
GDR--Global Depository Receipts
PLC--Public Limited Company
TBA--To Be Announced
(See Notes which are an integral part of the Financial Statements)
BLANCHARD GLOBAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- --------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $67,160,710) $ 72,694,123
- --------------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (at cost, $122,800) 119,505
- --------------------------------------------------------------------------------------------------
Receivable for foreign currency sold 10,973,055
- --------------------------------------------------------------------------------------------------
Receivable for investments sold 4,030,265
- --------------------------------------------------------------------------------------------------
Income receivable 563,058
- --------------------------------------------------------------------------------------------------
Receivable for shares sold 11,193
- --------------------------------------------------------------------------------------------------
Prepaid expenses 677
- -------------------------------------------------------------------------------------------------- -------------
Total assets 88,391,876
- --------------------------------------------------------------------------------------------------
LIABILITIES:
- --------------------------------------------------------------------------------------------------
Payable for foreign currency purchased $ 10,973,055
- -----------------------------------------------------------------------------------
Payable to Bank 2,821,171
- -----------------------------------------------------------------------------------
Payable for investments purchased 1,266,012
- -----------------------------------------------------------------------------------
Payable for shares redeemed 83,983
- -----------------------------------------------------------------------------------
Options written, at value (premiums received, $5,107) 1,849
- -----------------------------------------------------------------------------------
Accrued expenses 253,110
- ----------------------------------------------------------------------------------- -------------
Total liabilities 15,399,180
- -------------------------------------------------------------------------------------------------- -------------
NET ASSETS FOR 7,159,912 shares outstanding $ 72,992,696
- -------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------------------------
Paid in capital $ 68,711,813
- --------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and translation of assets and liabilities in foreign
currencies 5,548,700
- --------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (2,983,641)
- --------------------------------------------------------------------------------------------------
Undistributed net investment income 1,715,824
- -------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 72,992,696
- -------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- --------------------------------------------------------------------------------------------------
$72,992,696 / 7,159,912 shares outstanding $10.19
- -------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD GLOBAL GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $41,401) $ 703,268
- ----------------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $1,372) 493,195
- ---------------------------------------------------------------------------------------------------- ------------
Total income 1,196,463
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ----------------------------------------------------------------------------------------------------
Investment advisory fee $ 421,908
- --------------------------------------------------------------------------------------
Administrative personnel and services fee 25,000
- --------------------------------------------------------------------------------------
Custodian fees 94,982
- --------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 147,968
- --------------------------------------------------------------------------------------
Directors'/Trustees' fees 22,946
- --------------------------------------------------------------------------------------
Auditing fees 8,100
- --------------------------------------------------------------------------------------
Legal fees 2,077
- --------------------------------------------------------------------------------------
Portfolio accounting fees 47,045
- --------------------------------------------------------------------------------------
Distribution services fee 316,705
- --------------------------------------------------------------------------------------
Share registration costs 16,600
- --------------------------------------------------------------------------------------
Printing and postage 21,881
- --------------------------------------------------------------------------------------
Miscellaneous 127
- -------------------------------------------------------------------------------------- ------------
Total expenses 1,125,339
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 71,124
- ---------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ----------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency transactions 1,114,407
- ----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments and translation of assets and liabilities in
foreign currencies 3,248,724
- ---------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments and foreign currency 4,363,131
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 4,434,255
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD GLOBAL GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 71,124 $ 745,393
- -----------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency
transactions ($1,114,407 and ($335,613), respectively, as computed for
federal tax purposes) 1,114,407 (3,163,377)
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) on investments and
translation of assets and liabilities in foreign currencies 3,248,724 786,906
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 4,434,255 (1,631,078)
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net realized gains and foreign currency transactions -- --
- -----------------------------------------------------------------------
Distributions in excess of net realized gains and foreign currency
transactions -- (2,156,307)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from distributions to shareholders -- (2,156,307)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 3,820,064 17,005,687
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared -- 2,049,709
- -----------------------------------------------------------------------
Cost of shares redeemed (22,349,500) (37,985,576)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (18,529,436) (18,930,180)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (14,095,181) (22,717,565)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 87,087,877 109,805,442
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period (including undistributed net investment income of
$1,715,824 and $1,644,700, respectively) $ 72,992,696 $ 87,087,877
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD GLOBAL GROWTH FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1995 1995 1994 1993 1992 1991 1990 1989 1988
NET ASSET VALUE,
BEGINNING OF PERIOD $ 9.71 $ 10.04 $ 10.00 $ 9.92 $ 9.64 $ 9.62 $ 10.11 $ 9.68 $ 10.51
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.06 0.08 0.03 0.25 0.33 0.30 0.30 0.22 0.14
- -----------------------
Net realized and
unrealized gain
(loss) on investments
and foreign currency
transactions 0.42 (0.19) 1.29 0.32 0.26 0.14 0.09 0.49 (0.21)
- ----------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
Total from investment
operations 0.48 (0.11) 1.32 0.57 0.59 0.44 0.39 0.71 (0.07)
- ----------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS
- -----------------------
Distributions from
net investment income -- -- -- (0.30) (0.31) (0.21) (0.38) (0.10) (0.12)
- -----------------------
Distributions from
net realized gains
and foreign currency
transactions -- -- (1.28) (0.19) -- (0.21) (0.50) (0.18) (0.64)
- -----------------------
Distributions in
excess of net
realized gains and
foreign currency
transactions -- (0.22) -- -- -- -- -- -- --
- ----------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
Total distributions -- (0.22) (1.28) (0.49) (0.31) (0.42) (0.88) (0.28) (0.76)
- ----------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF
PERIOD $ 10.19 $ 9.71 $ 10.04 $ 10.00 $ 9.92 $ 9.64 $ 9.62 $ 10.11 $ 9.68
- ----------------------- ------ --------- --------- --------- --------- --------- --------- --------- ---------
TOTAL RETURN(B) 4.94% (1.04%) 12.91% 6.08% 6.24% 4.61% 3.74% 7.54% (0.57%)
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 2.67%* 2.51% 2.61% 2.40% 2.31% 2.36% 2.28% 2.29% 2.28%
- -----------------------
Net investment income 0.17%* 0.76% 0.67% 1.72% 2.31% 2.84% 2.86% 2.27% 1.42%
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted) $72,993 $87,000 $109,805 $84,780 $128,047 $193,593 $233,300 $244,048 $246,569
- -----------------------
Portfolio turnover 41% 221% 166% 138% 109% 78% 88% 85% 120%
- -----------------------
<CAPTION>
<S> <C>
1987(A)
NET ASSET VALUE,
BEGINNING OF PERIOD $ 8.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.01
- -----------------------
Net realized and
unrealized gain
(loss) on investments
and foreign currency
transactions 2.50
- ----------------------- -----------
Total from investment
operations 2.51
- ----------------------- -----------
LESS DISTRIBUTIONS
- -----------------------
Distributions from
net investment income --
- -----------------------
Distributions from
net realized gains
and foreign currency
transactions --
- -----------------------
Distributions in
excess of net
realized gains and
foreign currency
transactions --
- ----------------------- -----------
Total distributions --
- ----------------------- -----------
NET ASSET VALUE, END OF
PERIOD $ 10.51
- ----------------------- -----------
TOTAL RETURN(B) 31.38%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 3.10%*(c)
- -----------------------
Net investment income 0.34%*(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
Net assets, end of
period (000 omitted)
$149,018
- -----------------------
Portfolio turnover 70%
- -----------------------
</TABLE>
* Computed on an annualized basis.
(a) Represents period from June 1, 1986 (commencement of the Fund's operations)
to April 30, 1987.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) Net of expense reimbursement.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD GLOBAL GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios, one diversified and nine non-diversified. The
financial statements included herein are only those of Blanchard Global Growth
Fund (the "Fund"), a non-diversified portfolio. The financial statements of the
other portfolios are presented separately. The assets of each portfolio are
segregated and a shareholder's interest is limited to the portfolio in which
shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service. Investments in other
open end regulated investment companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
However, federal taxes may be imposed on the Fund upon disposition of
certain investments in passive foreign investment companies. Withholding
taxes on foreign interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $335,613, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2003.
Additionally, net capital losses of approximately $1,793,511 and $136,506
attributable to security transactions and foreign currency losses incurred
after October 31, 1994 are treated as arising on the first day of the
Fund's next taxable year.
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in securities of non-U.S.
issuers. The political or economic developments within a particular country
or region may have an adverse effect on the ability of domiciled issuers to
meet their obligations. Additionally, political or economic developments
may have an effect on the liquidity and volatility of portfolio securities
and currency holdings.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS--The Fund may enter into
forward commitments for the delayed delivery of securities and forward
foreign currency exchange contracts which are based upon financial indices
at a fixed price and exchange rate at a future date. Risks may arise upon
entering these contracts from the potential inability of counterparts to
meet the terms of their contracts and from unanticipated movements in
security prices and foreign exchange rates. The forward foreign currency
exchange contracts are adjusted by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until the contract settlement date.
At October 31, 1995, the Fund had outstanding forward commitments set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
SETTLEMENT CONTRACTS TO IN EXCHANGE APPRECIATION
DATE DELIVER/RECEIVE FOR (DEPRECIATION)
<S> <C> <C> <C> <C>
SALES
Deutsche Mark 11/01/95 156,552 $ 111,029 ($189)
- ------------------------------------
Deutsche Mark 11/16/95 294,012 207,971 (1,073)
- ------------------------------------
French Franc 11/30/95 395,810 80,844 (98)
- ------------------------------------
Hong Kong Dollar 11/02/95 1,241,713 160,573 (27)
- ------------------------------------
Italian Lira 11/02/95 141,295,005 88,365 (277)
- ------------------------------------
Italian Lira 12/18/95 1,255,355,000 776,327 (6,324)
- ------------------------------------
Japanese Yen 01/08/96 9,963,000 100,293 1,820
- ------------------------------------
New Zealand Dollar 11/15/95 124,000 80,960 (816)
- ------------------------------------
Pound Sterling 11/06/95 321,675 507,864 (640)
- ------------------------------------
Spanish Peseta 11/06/95 31,474,094 257,046 (823)
- ------------------------------------
Swedish Krona 12/11/95 4,915,000 702,335 (35,353)
- ------------------------------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNREALIZED
SETTLEMENT CONTRACTS TO IN EXCHANGE APPRECIATION
DATE DELIVER/RECEIVE FOR (DEPRECIATION)
PURCHASES
<S> <C> <C> <C> <C>
Austrian Schilling 11/16/95 1,186,000 $ 118,957 ($899)
- ------------------------------------
Canadian Dollar 11/16/95 260,000 194,480 249
- ------------------------------------
Danish Krone 11/10/95 2,881,000 530,351 (3,032)
- ------------------------------------
Deutsche Mark 11/02/95 151,001 107,858 (582)
- ------------------------------------
Deutsche Mark 11/16/95 2,310,011 1,615,391 27,040
- ------------------------------------
French Franc 12/12/95 5,457,000 1,079,968 35,098
- ------------------------------------
Italian Lira 11/02/95 139,150,005 87,378 (82)
- ------------------------------------
Japanese Yen 01/08/96 295,016,000 2,962,669 (46,780)
- ------------------------------------
Malaysian Ringgit 11/01/95 27,415 10,774 15
- ------------------------------------
Netherlands Guilder 11/15/95 124,000 80,352 (1,696)
- ------------------------------------
Pound Sterling 11/02/95 224,675 355,324 (106)
- ------------------------------------
Spanish Peseta 11/06/95 9,908,000 80,089 1,037
- ------------------------------------
Swedish Krona 12/11/95 4,731,000 675,857 34,215
- ------------------------------------ -----------------
Net Unrealized Appreciation
on Forward Commitments $ 677
- ------------------------------------ -----------------
</TABLE>
OPTIONS CONTRACTS--The Fund may write option contracts. A written option
obligates the Fund to deliver a call, or to receive a put, the contract
amount upon exercise by the holder of the option. The value of the option
contract is recorded as a liability and unrealized gain or loss is measured
by the difference between the current value and the premium received. For
the period ended October 31, 1995, the Fund had a realized loss of $91,142
on written options.
The following is a summary of the Fund's written option activity:
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE
CONTRACTS CONTRACTS FACE VALUE
<S> <C> <C>
Outstanding at April 30, 1995 -- $ --
- -----------------------------------------------------------------------------------
Contracts opened 1,437,313 8,366
- -----------------------------------------------------------------------------------
Contracts expired -- --
- ----------------------------------------------------------------------------------- ------------- -------------
Outstanding at October 31, 1995 1,437,313 $ 8,366
- ----------------------------------------------------------------------------------- ------------- -------------
</TABLE>
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
At October 31, 1995, the Fund had the following outstanding options:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION EXERCISE NUMBER OF APPRECIATION MARKET
TYPE DATE PRICE CONTRACTS (DEPRECIATION) VALUE
<S> <C> <C> <C> <C> <C>
Canadian currency call
option 12/4/95 1.30 942,500 $ 1,477 $ 3,556
Canadian currency call
option 12/4/95 1.365 494,813 1,782 4,810
------------- ------- -----------
Totals 1,437,313 $ 3,259 $ 8,366
------------- ------- -----------
</TABLE>
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee. The Fund held no restricted
securities as of October 31, 1995.
OTHER--Investment transactions are accounted for on the trade date.
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 380,210 1,720,511
- -----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared -- 219,892
- -----------------------------------------------------------------------
Shares redeemed (2,192,654) (3,905,396)
- ----------------------------------------------------------------------- ------------ ----------------
Net change resulting from share transactions (1,812,444) (1,964,993)
- ----------------------------------------------------------------------- ------------ ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Virtus Capital Management Inc., the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to 1.00% of the Fund's first $150 million of average daily
net assets, 0.875% of the Fund's average daily net assets in excess of $150
million but not exceeding $300 million and 0.75% of the Fund's average daily net
assets in excess of $300 million.
Virtus Capital Management Inc. became the Fund's investment adviser on July 12,
1995. Prior to July 12, 1995, Sheffield Managemen t Company served as the Fund's
investment adviser and received for its services an annual investment advisory
fee equal to 1.00% of the Fund's first $150 million of average daily net assets,
0.875% of the Fund's average daily net assets in excess of $150 million but not
exceeding $300 million and 0.75% of the Fund's average daily net assets in
excess of $300 million.
For the period ended October 31, 1995, the adviser(s) earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
ADVISER NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Management Company 171,129 --
- ----------------------------------------------------------------------------------
Virtus Capital Management 250,779 --
- ----------------------------------------------------------------------------------
</TABLE>
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
Under the terms of a sub-advisory agreement between the Adviser and Shufro Rose
& Ehrman (U.S. Equity Sector), Fiduciary International, Inc. (Foreign Equities
Sector and Foreign Fixed Income Sector), Investment Advisors, Inc. (U.S. Fixed
Income Sector), Cavelti Capital Management, Ltd. (Precious Metals Securities and
Bullion Sector), and Martin Currie Inc. (Emerging Markets Sector), (the
"Portfolio Advisers"). The Portfolio Advisers receive an annual fee from the
Adviser equal to approximately 35% of the advisory fee paid to the Adviser by
the Fund.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Fund for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's Fund shares. The Plan provides that the Fund may incur
distribution expenses up to .75 of 1% of the average daily net assets of the
Fund shares, annually, to reimburse FSC.
FSC became the Fund's principal distributor on July 12, 1995. Prior to July 12,
1995, Sheffield Investments, Inc. served as the Fund's principal distributor and
received for its services an annual distribution fee equal to .75 of 1% of the
Fund's average daily net assets.
For the period ended October 31, 1995, the distributor(s) earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
DISTRIBUTOR NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Investments, Inc. 128,620 --
- ----------------------------------------------------------------------------------
Federated Securities Corp. 188,085 --
- ----------------------------------------------------------------------------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian. The fee is based on
the level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
BLANCHARD GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES $ 31,733,492
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 51,786,977
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
Blanchard
Global
Growth Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Asset Allocator
Fiduciary International, Inc.
Portfolio Advisers
Shufro Rose and Ehrman
U.S. Equity Securities
Fiduciary International, Inc.
Foreign Equity Securities
Cavelti Capital Management, Ltd.
Precious Metals Securities and Bullion
Investment Advisers, Inc.
U.S. Fixed Income
Fiduciary International, Inc.
Foreign Fixed Income
Martin Currie Inc.
Emerging Markets
Blanchard
Global
Growth Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of Signet
Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
CUSIP 093265106
G01485-01 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard 100% Treasury
Money Market Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
If you would like the most recent performance update, or have other questions,
please call Investors' Services at 1-800-829-3863.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
Although money market funds seek to maintain a stable net asset value of $1.00
per share, there is no assurance that they will be able to do so. An investment
in the Fund is neither insured nor guaranteed by the U.S. government.
BLANCHARD 100% TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY SECURITIES--99.3%
- -------------------------------------------------------------------------------------------------
$ 80,228,000 United States Treasury Bills, 11/9/1995-2/15/1996 $ 79,856,927
----------------------------------------------------------------------------------
60,000,000 United States Treasury Notes, 4.625%-8.50%, 11/15/1995-2/15/1996 59,998,336
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST) $ 139,855,263+
---------------------------------------------------------------------------------- --------------
</TABLE>
+ Also represents cost for federal tax purposes.
Note: The category of investments is shown as a percentage of net assets
($140,910,811) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 139,855,263
- -------------------------------------------------------------------------------------------------
Cash 1,576
- -------------------------------------------------------------------------------------------------
Income receivable 1,749,524
- ------------------------------------------------------------------------------------------------- --------------
Total assets 141,606,363
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable $ 509,409
- -------------------------------------------------------------------------------------
Payable to Transfer Agent 58,777
- -------------------------------------------------------------------------------------
Payable to Administrator 42,000
- -------------------------------------------------------------------------------------
Accrued expenses 85,366
- ------------------------------------------------------------------------------------- ----------
Total liabilities 695,552
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 140,986,906 shares outstanding $ 140,910,811
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$140,910,811 / 140,986,906 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 4,238,726
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Management fee $ 375,738
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 53,000
- ---------------------------------------------------------------------------------------
Custodian fees 19,985
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 205,297
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 4,600
- ---------------------------------------------------------------------------------------
Auditing fees 41,014
- ---------------------------------------------------------------------------------------
Legal fees 7,522
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 66,603
- ---------------------------------------------------------------------------------------
Share registration costs 13,181
- ---------------------------------------------------------------------------------------
Printing and postage 54,486
- ---------------------------------------------------------------------------------------
Insurance premiums 12,600
- ---------------------------------------------------------------------------------------
Miscellaneous 672
- --------------------------------------------------------------------------------------- -----------
Total expenses 854,698
- ---------------------------------------------------------------------------------------
Waiver of management fee (165,325)
- --------------------------------------------------------------------------------------- -----------
Net expenses 689,373
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 3,549,353
- ---------------------------------------------------------------------------------------------------- ------------
Net realized gain on investments 12,078
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 3,561,431
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) OCTOBER YEAR ENDED
31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 3,549,353 $ 7,639,549
- -----------------------------------------------------------------------
Net realized gain on investments 12,078 --
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 3,561,431 7,639,549
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income (3,531,079) (7,639,549)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 53,806,222 212,621,088
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 2,791,685 7,175,266
- -----------------------------------------------------------------------
Cost of shares redeemed (80,872,007) (285,432,758)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (24,274,100) (65,636,404)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (24,243,748) (65,636,404)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 165,154,559 230,790,963
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 140,910,811 $ 165,154,559
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------
Net investment income 0.02 0.04 0.03 0.03 0.04 0.07
- -------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------
Distributions from net investment income (0.02) (0.04) (0.03) (0.03) (0.04) (0.07)
- ------------------------------------------------- ------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------- ------ --------- --------- --------- --------- ---------
TOTAL RETURN (A) 2.40% 4.02% 2.76% 3.42% 4.60% 6.80%
- -------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------
Expenses 0.92%* 0.99% 0.41% 0.08% 0.86% 1.11%
- -------------------------------------------------
Net investment income 4.71%* 3.83% 2.80% 3.27% 4.52% 6.62%
- -------------------------------------------------
Expense waiver/reimbursement (b) 0.22%* 0.08% 0.52% 0.84% 0.60% 0.12%
- -------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------
Net assets, end of period (000 omitted) $140,911 $165,155 $231,791 $164,974 $58,000 $38,000
- -------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios. The financial statements included herein are
only those of Blanchard 100% Treasury Money Market Fund (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal
Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 53,806,222 212,621,088
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2,791,685 7,175,266
- -------------------------------------------------------------------------
Shares redeemed (80,872,007) (285,432,758)
- ------------------------------------------------------------------------- -------------------- ----------------
Net change resulting from share transactions (24,274,100) (65,636,404)
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
At October 31, 1995, capital paid-in aggregated $140,986,906.
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Virtus Capital Management, Inc., the Fund's Manager, receives
for its services an annual management fee equal to .50% of the first $500
million of the Fund's average daily net assets, .475% of the Fund's average
daily net assets in excess of $500 million but not exceeding $1 billion, plus
.45% of the Fund's average daily net assets in excess of $1 billion. The Manager
may voluntarily choose to waive any portion of its fee. The Manager can modify
or terminate this voluntary waiver at any time at its sole discretion.
Virtus Capital Management, Inc. became the Fund's manager on July 13, 1995.
Prior to July 13, 1995, Sheffield Management Company served as the Fund's
investment manager for which it received a fee.
For the six months ended October 31, 1995, the managers earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
MANAGERS FEE EARNED EXPENSES WAIVED
<S> <C> <C>
Sheffield Management Company $ 149,070 $ 65,591
- ---------------------------------------------------------------------------- ------------- ----------
Virtus Capital Management, Inc. $ 226,668 $ 99,734
- ---------------------------------------------------------------------------- ------------- ----------
</TABLE>
SUB-ADVISORY FEE--HSBC Asset Management Americas, Inc. provides the Manager with
sub-advisory services for which it receives an fee equal to the greater of .10%
of the Fund's average daily net assets or $50,000, annually, from the Manager.
In addition, HSBC Asset Management Americas, Inc. may voluntarily choose to
reduce its compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund for
which it receives a fee. This fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ became the Fund's transfer agent on October 15, 1995. Prior to October 15,
1995, United States Trust Company of New York served as the Fund's transfer
agent for which it received a fee.
For the six months ended October 31, 1995, the transfer agents earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
TRANSFER AGENT FEE EARNED
<S> <C>
United States Trust Company of New York $ 186,329
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 18,968
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
FServ became the Fund's portfolio accountant on October 15, 1995. Prior to
October 15, 1995, Mutual Fund Services Company served as the Fund's portfolio
accountant for which it received a fee.
For the six months ended October 31, 1995, the portfolio accountants earned fees
as follows:
<TABLE>
<CAPTION>
AMOUNT OF
PORTFOLIO ACCOUNTANT FEE EARNED
<S> <C>
Mutual Fund Services Company $ 60,449
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 6,154
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
CUSTODIAN FEES--Signet Trust Company is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average daily net
assets for the period, plus out-of-pocket expenses.
Signet Trust Company became the Fund's custodian on October 15, 1995. Prior to
October 15, 1995, United States Trust Company of New York served as the Fund's
custodian for which it received a fee.
For the six months ended October 31, 1995, the custodians earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
CUSTODIAN FEE EARNED
<S> <C>
United States Trust Company of New York $ 18,139
- --------------------------------------------------------------------------------------------------- -------------
Signet Trust Company $ 1,846
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
Blanchard
100% Treasury
Money
Market Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Blanchard
100% Treasury
Money
Market Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of Signet
Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
CUSIP 093215101
G01485-06 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Short-Term
Global Income Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
If you would like the most recent performance update, or have other questions,
please call Investors' Services at 1-800-829-3863.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
FOREIGN CURRENCY IN U.S.
PAR AMOUNT DOLLARS
<C> <S> <C>
- --------------------- ------------------------------------------------------------------------- --------------
FOREIGN FIXED INCOME--39.3%
- ------------------------------------------------------------------------------------------------
CZECHOSLOVAKIA--1.0%
-------------------------------------------------------------------------
GOVERNMENT/AGENCY--1.0%
-------------------------------------------------------------------------
52,000,000 Czech Republic, 14.00%, 7/8/1996 $ 2,048,184
------------------------------------------------------------------------- --------------
DENMARK--5.4%
-------------------------------------------------------------------------
GOVERNMENT/AGENCY--5.4%
-------------------------------------------------------------------------
53,000,000 Denmark, 9.00%, 11/15/1998 10,379,813
------------------------------------------------------------------------- --------------
NETHERLANDS--9.9%
-------------------------------------------------------------------------
GOVERNMENT/AGENCY--9.9%
-------------------------------------------------------------------------
29,000,000 Netherlands Government, 6.25%, 7/15/1998 19,041,703
------------------------------------------------------------------------- --------------
SPAIN--9.3%
-------------------------------------------------------------------------
GOVERNMENT/AGENCY--9.3%
-------------------------------------------------------------------------
2,200,000,000 Spain (Government), Deb., 9.90%, 10/31/1998 17,884,068
------------------------------------------------------------------------- --------------
UNITED KINGDOM--13.7%
-------------------------------------------------------------------------
FINANCIAL SERVICES--12.0%
-------------------------------------------------------------------------
2,225,000 Abbey National Treasury Services, PLC, 6.00%, 8/10/1999 3,324,308
-------------------------------------------------------------------------
2,000,000 Abbey National Treasury Services, PLC, 7.75%, 6/23/1998 3,185,771
-------------------------------------------------------------------------
2,000,000 Bayerische Hypotheken, Unsub., 7.00%, 12/21/1998 3,118,577
-------------------------------------------------------------------------
2,000,000 Halifax Building Society, Unsub., 7.75%, 12/3/1998 3,185,771
-------------------------------------------------------------------------
1,830,000 Leeds Permanent Building Society, Sr. Unsub., 7.375%,
5/6/1998 2,889,664
-------------------------------------------------------------------------
3,000,000 Lloyds Bank PLC, Deb., 10.25%, 3/11/1998 5,010,119
-------------------------------------------------------------------------
1,500,000 National and Provincial Building Society, Sr. Unsub., 8.25%,
11/4/1998 2,420,455
------------------------------------------------------------------------- --------------
Total 23,134,665
------------------------------------------------------------------------- --------------
</TABLE>
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN CURRENCY
PAR AMOUNT, VALUE
PRINCIPAL AMOUNT IN U.S.
OR CONTRACTS DOLLARS
<C> <S> <C>
- --------------------- ------------------------------------------------------------------------- --------------
FOREIGN FIXED INCOME--CONTINUED
- ------------------------------------------------------------------------------------------------
UNITED KINGDOM--CONTINUED
-------------------------------------------------------------------------
GOVERNMENT/AGENCY--1.7%
-------------------------------------------------------------------------
1,919,000 United Kingdom Treasury, 9.75%, 1/19/1998 $ 3,205,601
------------------------------------------------------------------------- --------------
Total United Kingdom 26,340,266
------------------------------------------------------------------------- --------------
TOTAL FOREIGN FIXED INCOME (IDENTIFIED COST $74,650,674) 75,694,034
------------------------------------------------------------------------- --------------
FOREIGN OPTIONS--0.0%
- ------------------------------------------------------------------------------------------------
50 IMM Euro$Future expires 12/18/1995 @ $94.25 (IDENTIFIED COST $10,375) 10,000
------------------------------------------------------------------------- --------------
U.S. FIXED INCOME--53.6%
- ------------------------------------------------------------------------------------------------
COMPUTERS RELATED--0.8%
-------------------------------------------------------------------------
500,000 Unisys Corp., Deb., 9.50%, 7/15/1998 470,000
-------------------------------------------------------------------------
1,000,000 Unisys Corp., Sr. Note, 9.75%, 9/15/1996 975,000
------------------------------------------------------------------------- --------------
Total 1,445,000
------------------------------------------------------------------------- --------------
CONSUMER RELATED--2.6%
-------------------------------------------------------------------------
2,530,000 RJR Nabisco, Inc., Note, 8.75%, 7/15/2007 2,547,799
-------------------------------------------------------------------------
2,500,000 Valassis Communication, Inc., Sr. Sub. Note, 9.375%,
3/15/1999 2,566,898
------------------------------------------------------------------------- --------------
Total 5,114,697
------------------------------------------------------------------------- --------------
ELECTRICAL UTILITIES--1.4%
-------------------------------------------------------------------------
2,750,000 Long Island Lighting Co., Deb., 7.30%, 7/15/1999 2,746,230
------------------------------------------------------------------------- --------------
ENTERTAINMENT--4.2%
-------------------------------------------------------------------------
2,000,000 Caesars World, Inc., Sr. Sub. Note, 8.875%, 8/15/2002 2,120,000
-------------------------------------------------------------------------
2,500,000 Harrah's Operations, Inc., Sr. Sub. Note, 8.75%, 3/15/2000 2,568,750
-------------------------------------------------------------------------
3,000,000 Time Warner, Inc., Note, 9.625%, 5/1/2002 3,421,467
------------------------------------------------------------------------- --------------
Total 8,110,217
------------------------------------------------------------------------- --------------
FINANCIAL SERVICES--21.9%
-------------------------------------------------------------------------
7,112,129 Champion, Series 1995-2, 7.34%, 10/25/2026 7,263,261
-------------------------------------------------------------------------
2,889,775 CMC Securities Corp. 1993, 7.50%, 2/25/2023 2,896,104
-------------------------------------------------------------------------
</TABLE>
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
PRINCIPAL IN U.S.
AMOUNT DOLLARS
<C> <S> <C>
- --------------------- ------------------------------------------------------------------------- --------------
U.S. FIXED INCOME--CONTINUED
- ------------------------------------------------------------------------------------------------
FINANCIAL SERVICES--CONTINUED
-------------------------------------------------------------------------
4,033,479 Contimortgage 1995-1, 8.75%, 4/15/2007 $ 4,057,397
-------------------------------------------------------------------------
4,476,849 General Electric Capital Mtg. 1992, 7.50%, 11/25/2018 4,481,745
-------------------------------------------------------------------------
3,136,092 GMAC Grantor Trust 1993-B, 4.00%, 9/15/1998 3,102,564
-------------------------------------------------------------------------
2,500,000 Le Groupe Videotron Ltee, Sr. Note, 10.625%, 2/15/2005 2,671,875
-------------------------------------------------------------------------
5,000,000 Lehman Brothers Holdings, Inc., Medium Term Note, 8.63%,
2/26/1999 5,298,054
-------------------------------------------------------------------------
2,026,252 Merrill Lynch Mtg. Investors 1990-I, 9.20%, 1/15/2011 2,079,441
-------------------------------------------------------------------------
3,988,163 The Money Store HEL Trust 1995-A1, 8.00%, 9/15/2005 4,013,089
-------------------------------------------------------------------------
5,700,000 U.S. Leasing International, Sr. Note, 8.75%, 12/1/2001 6,354,645
------------------------------------------------------------------------- --------------
Total 42,218,175
------------------------------------------------------------------------- --------------
GOVERNMENT/AGENCY--19.5%
-------------------------------------------------------------------------
1,645,329 Federal National Mortgage Association, 9.50%, 11/1/2021 1,748,555
-------------------------------------------------------------------------
401,021 (a)Resolution Trust Corp. 1991-6, 8.773%, 3/25/2021 399,517
-------------------------------------------------------------------------
5,000,000 (a)Resolution Trust Corp. 1991-6, 8.773%, 3/25/2021 5,114,063
-------------------------------------------------------------------------
5,848,424 Resolution Trust Corp. 1991-7, 7.75%, 12/25/2018 5,855,734
-------------------------------------------------------------------------
3,734,383 Resolution Trust Corp. 1991-M7, 8.15%, 1/25/2021 3,855,750
-------------------------------------------------------------------------
3,270,561 (a)Resolution Trust Corp. 1992-3, 6.448%, 9/25/2019 3,252,164
-------------------------------------------------------------------------
1,946,376 (a)Resolution Trust Corp. 1992-3, 6.052%, 5/25/2021 1,926,304
-------------------------------------------------------------------------
2,137,834 (a)Resolution Trust Corp. 1992-6, 7.359%, 11/25/2025 2,124,472
-------------------------------------------------------------------------
1,920,735 (a)Resolution Trust Corp. 1992-7, 7.426%, 3/25/2022 1,915,933
-------------------------------------------------------------------------
1,205,176 Resolution Trust Corp. 1992-C1, 8.80%, 8/25/2023 1,247,357
-------------------------------------------------------------------------
6,498,018 (a)Resolution Trust Corp. 1992-M4, 6.475%, 9/25/2021 6,313,230
-------------------------------------------------------------------------
3,690,352 (a)Resolution Trust Corp. 1994-1, 8.145%, 9/25/2029 3,727,255
------------------------------------------------------------------------- --------------
Total 37,480,334
------------------------------------------------------------------------- --------------
INDUSTRY RELATED--2.3%
-------------------------------------------------------------------------
2,500,000 Oryx Energy Co., Deb., 9.75%, 9/15/1998 2,526,698
-------------------------------------------------------------------------
</TABLE>
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOREIGN CURRENCY
PAR AMOUNT, VALUE
PRINCIPAL AMOUNT IN U.S.
OR CONTRACTS DOLLARS
<C> <S> <C>
- --------------------- ------------------------------------------------------------------------- --------------
U.S. FIXED INCOME--CONTINUED
- ------------------------------------------------------------------------------------------------
2,000,000 USX Corp., 5.75%, 7/1/2001 $ 1,860,000
------------------------------------------------------------------------- --------------
Total 4,386,698
------------------------------------------------------------------------- --------------
UTILITIES--0.9%
-------------------------------------------------------------------------
1,650,000 Arkla, Inc., Note, 8.875%, 7/15/1999 1,757,278
------------------------------------------------------------------------- --------------
TOTAL U.S. FIXED INCOME (IDENTIFIED COST $101,161,459) 103,258,629
------------------------------------------------------------------------- --------------
U.S. OPTIONS--0.0%
- ------------------------------------------------------------------------------------------------
50 U.S. Bond Future expires 11/18/1995 @ $118.00 (IDENTIFIED COST $44,907) 29,688
------------------------------------------------------------------------- --------------
U.S. TREASURY SECURITIES--0.9%
- ------------------------------------------------------------------------------------------------
1,800,000 U.S. Treasury Bond, 6.25%, 8/15/2023 1,761,185
------------------------------------------------------------------------- --------------
SHORT-TERM SECURITIES--2.1%
- ------------------------------------------------------------------------------------------------
6,500,000,000 Bank of Nigara, 7/8/1996 2,636,698
-------------------------------------------------------------------------
1,400,000 U.S. Treasury Bills, 1/18/1996 1,384,134
------------------------------------------------------------------------- --------------
TOTAL SHORT-TERM SECURITIES (IDENTIFIED COST $5,752,298) 4,020,832
------------------------------------------------------------------------- --------------
(B)REPURCHASE AGREEMENTS--3.7%
- ------------------------------------------------------------------------------------------------
7,198,800 Merrill Lynch, Pierce, Fenner & Smith, Inc., 5.82%, dated
10/31/1995, due 11/1/1995 7,198,800
------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $188,818,513)(C) $ 191,973,168
------------------------------------------------------------------------- --------------
</TABLE>
(a) Denotes variable rate securities which show current rate and next demand
date.
(b) The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market price at the date of the portfolio.
(c) The cost of investments for federal tax purposes amounts to $188,818,513.
The net unrealized appreciation of investments on a federal tax basis
amounts to $3,154,655 which is comprised of $3,238,150 appreciation and
$83,495 depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($192,620,180) at October 31, 1995.
The following acronym is used throughout this portfolio:
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $188,818,513) $ 191,973,168
- -------------------------------------------------------------------------------------------------
Cash 5,994,606
- -------------------------------------------------------------------------------------------------
Income receivable 3,844,925
- -------------------------------------------------------------------------------------------------
Receivable for investments sold 141,054
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 347,665
- -------------------------------------------------------------------------------------------------
Receivable for daily variation margin 58,034
- -------------------------------------------------------------------------------------------------
Receivable for foreign currency sold 94,308,147
- -------------------------------------------------------------------------------------------------
Deferred expenses 14,031
- ------------------------------------------------------------------------------------------------- --------------
Total assets 296,681,630
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 7,282,957
- ----------------------------------------------------------------------------------
Payable for shares redeemed 954,424
- ----------------------------------------------------------------------------------
Income distribution payable 985,245
- ----------------------------------------------------------------------------------
Payable for taxes withheld 8,411
- ----------------------------------------------------------------------------------
Payable for daily variation margin 61,890
- ----------------------------------------------------------------------------------
Payable for foreign currency purchased 94,308,147
- ----------------------------------------------------------------------------------
Options written, at value (premiums received, $25,562) 23,438
- ----------------------------------------------------------------------------------
Accrued expenses 436,938
- ---------------------------------------------------------------------------------- -------------
Total liabilities 104,061,450
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 114,520,998 shares outstanding $ 192,620,180
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------
Paid in capital $ 214,566,889
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and translation of assets and liabilities in foreign
currency 2,779,335
- -------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (12,548,695)
- -------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (12,177,349)
- ------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 192,620,180
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$192,620,180 / 114,520,998 shares outstanding $1.68
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $1,714) $ 8,367,539
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- -------------------------------------------------------------------------------------
Investment advisory fee $ 809,057
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 61,000
- -------------------------------------------------------------------------------------
Custodian fees 94,580
- -------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 369,913
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 68,539
- -------------------------------------------------------------------------------------
Auditing fees 21,728
- -------------------------------------------------------------------------------------
Legal fees 26,031
- -------------------------------------------------------------------------------------
Portfolio accounting fees 120,346
- -------------------------------------------------------------------------------------
Distribution services fee 269,686
- -------------------------------------------------------------------------------------
Share registration costs 44,957
- -------------------------------------------------------------------------------------
Printing and postage 72,938
- -------------------------------------------------------------------------------------
Insurance premiums 2,597
- -------------------------------------------------------------------------------------
Miscellaneous 23,483
- ------------------------------------------------------------------------------------- ------------
Total expenses 1,984,855
- --------------------------------------------------------------------------------------------------- -------------
Net investment income 6,382,684
- --------------------------------------------------------------------------------------------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
- ---------------------------------------------------------------------------------------------------
Net realized loss on investments and foreign currency transactions (1,804,649)
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments and translation of assets and liabilities in
foreign currency 5,378,571
- --------------------------------------------------------------------------------------------------- -------------
Net realized and unrealized gain on investments and foreign currency 3,573,922
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 9,956,606
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 6,382,684 $ 22,176,246
- -----------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency
transactions ($1,804,649 and $7,705,131 net losses, respectively, as
computed for federal tax purposes) (1,804,649) (44,398,143)
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments and
translation of assets and liabilities in foreign currency 5,378,571 15,576,577
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 9,956,606 (6,645,320)
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income (6,541,100) --
- -----------------------------------------------------------------------
Tax return of capital -- (22,509,967)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from distributions to shareholders (6,541,100) (22,509,967)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 14,891,947 80,352,297
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 4,631,119 18,687,481
- -----------------------------------------------------------------------
Cost of shares redeemed (64,187,840) (371,156,134)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (44,664,774) (272,116,356)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (41,249,268) (301,271,643)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 233,869,448 535,141,091
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 192,620,180 $ 233,869,448
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED OCTOBER 31,
<S> <C> <C> <C> <C> <C> <C>
1995 1995 1994 1993 1992 1991(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.66 $ 1.79 $ 1.85 $ 1.89 $ 1.95 $ 1.97
- --------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- --------------------------------------------
Net investment income 0.11 0.10+ 0.12 0.13 0.17 0.06
- --------------------------------------------
Net realized and unrealized gain (loss) on
investments and foreign currency (0.04) (0.13)+ (0.06) (0.04) (0.06) (0.02)
- -------------------------------------------- ------ --------- --------- --------- --------- -----------
Total from investment operations 0.07 (0.03) 0.06 0.09 0.11 0.04
- -------------------------------------------- ------ --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- --------------------------------------------
Distributions from net investment income (0.05) -- (0.01) (0.13) (0.17) (0.06)
- --------------------------------------------
Tax return of capital -- (0.10) (0.11) -- -- --
- -------------------------------------------- ------ --------- --------- --------- --------- -----------
Total distributions (0.05) (0.10) (0.12) (0.13) (0.17) (0.06)
- -------------------------------------------- ------ --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.68 $ 1.66 $ 1.79 $ 1.85 $ 1.89 $ 1.95
- -------------------------------------------- ------ --------- --------- --------- --------- -----------
TOTAL RETURN (B) 4.35% (1.45%) 3.12% 4.94% 5.85% 2.15%
- --------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- --------------------------------------------
Expenses 1.85%* 1.51% 1.44% 1.44% 1.32% 0.38%*
- --------------------------------------------
Net investment income 5.94%* 5.95% 6.41% 6.97% 8.50% 11.30%*
- --------------------------------------------
Expense waiver/reimbursement (c) -- 0.05% -- -- 0.09% 1.85%*
- --------------------------------------------
SUPPLEMENTAL DATA
- --------------------------------------------
Net assets, end of period (000 omitted) $192,620 $233,869 $535,141 $699,182 $1,240,563 $230,233
- --------------------------------------------
Portfolio turnover 51% 386% 327% 610% 412% 63%
- --------------------------------------------
</TABLE>
* Computed on an annualized basis.
Calculated based on average shares outstanding.
(a) Reflects operations for the period from January 8, 1991 (date of initial
public investment) to April 30, 1991.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM GLOBAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios, one diversified and nine non-diversified. The
financial statements included herein are only those of Blanchard Short-Term
Global Income Fund (the "Fund"), a non-diversified portfolio. The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
However, federal taxes may be imposed on the Fund upon disposition of
certain investments in passive foreign investment companies. Withholding
taxes on foreign interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $7,705,131, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2003.
Additionally, net capital losses of approximately $3,036,000 and
$13,924,000 attributable to security transactions and foreign currency
losses incurred after October 31, 1994 are treated as arising on the first
day of the Fund's next taxable year.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in securities of non-U.S.
issuers. The political or economic developments within a particular country
or region may have an adverse effect on the ability of domiciled issuers to
meet their obligations. Additionally, political or economic developments
may have an effect on the liquidity and volatility of portfolio securities
and currency holdings.
FUTURES CONTRACTS--Upon entering into a financial futures contract with a
broker, the Fund is required to deposit in a segregated account an amount
of cash or U.S. government securities equal to a percentage of the contract
value. The Fund agrees to receive from or to pay to the broker an amount of
cash equal to a specific dollar amount multiplied by the difference between
the closing value and the price at which the contract was made. On a daily
basis, the value of the financial futures contracts are determined and any
difference between such value and the original futures contracts values are
reflected in the "daily variation margin" account. Daily variation margin
adjustments, arising from this "marking to market" process, are recorded by
the Fund as unrealized gains or losses.
The Fund may decide to close its position on a contract at any time prior
to the contract's expiration. When a contract is closed, the Fund
recognizes a realized gain or loss. Risks of entering into futures
contracts include the possibility that a change in the value of the
contract may not correlate with changes in the value of the underlying
securities. For the period ended October 31, 1995, the Fund had realized
losses of ($60,914) on future contracts.
At October 31, 1995, the Fund had outstanding futures contracts as set
forth below:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS TO APPRECIATION
EXPIRATION DATE DELIVER/RECEIVE POSITION (DEPRECIATION)
<S> <C> <C> <C>
12/18/95 71 Long $ (4,082)
3/18/96 71 Short (14,733)
-----------------
Net Unrealized Appreciation/Depreciation on Futures
Contracts (18,815)
-----------------
</TABLE>
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS--The Fund may enter into
forward commitments for the delayed delivery of securities and forward
foreign currency exchange contracts which are based upon financial indices
at a fixed price and exchange rate at a future date. Risks may arise upon
entering these contracts from the potential inability of counterparts to
meet the terms of their contracts and from unanticipated movements in
security prices and foreign exchange rates. The forward foreign currency
exchange contracts are adjusted by the daily exchange rate of the
underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until the contract settlement date.
At October 31, 1995, the Fund had outstanding forward commitments set forth
below:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION
SETTLEMENT DATE CONTRACTS TO DELIVER/RECEIVE IN EXCHANGE FOR (DEPRECIATION)
<S> <C> <C> <C>
PURCHASES
11/03/95 31,465,790 Deutsche Marks $ 22,221,911 USD $136,873 USD
11/03/95 57,629,550 Danish Krone 10,540,770 USD 6,665 USD
11/03/95 28,747,250 Netherlands Guilder 18,298,695 USD (75,803) USD
11/03/95 2,045,000,000 Spanish Peso 16,861,112 USD (111,585) USD
11/03/95 16,500,400 British Pounds 26,385,659 USD (299,967) USD
</TABLE>
OPTIONS CONTRACTS--The Fund may write option contracts. A written option
obligates the Fund to deliver a call, or to receive a put, the contract
amount upon exercise by the holder of the option. The value of the option
contract is recorded as a liability and unrealized gain or loss is measured
by the difference between the current value and the premium received. For
the period ended October 31, 1995, the Fund had a realized gain of $69,311
on written options.
The following is a summary of the Fund's written option activity:
<TABLE>
<CAPTION>
NUMBER OF AGGREGATE
CONTRACTS CONTRACTS FACE VALUE
<S> <C> <C>
Outstanding at April 30, 1995 -- $ --
- -----------------------------------------------------------------------------
Contracts opened 50 25,562
- -----------------------------------------------------------------------------
Contracts expired -- --
--
- ----------------------------------------------------------------------------- -------------
Outstanding at October 31, 1995 50 $ 25,562
--
- ----------------------------------------------------------------------------- -------------
</TABLE>
At October 31, 1995, the Fund had the following outstanding options:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION EXERCISE NUMBER OF APPRECIATION MARKET
TYPE DATE PRICE CONTRACTS (DEPRECIATION) VALUE
<S> <C> <C> <C> <C> <C>
U.S. Bond Future,
Call Option 2/17/96 $124.00 50 $2,124 $23,438
</TABLE>
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Fund or in connection with
another registered offering of the securities. Many restricted securities
may be resold in the secondary market in transactions exempt from
registration. Such restricted securities may be determined to be liquid
under criteria established by the Board of Trustees. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee. The Fund held no restricted
securities as of October 31, 1995.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 8,835,742 46,167,838
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2,760,050 10,834,258
- -------------------------------------------------------------------------
Shares redeemed (38,210,710) (214,657,986)
- ------------------------------------------------------------------------- -------------------- ----------------
Net change resulting from share transactions (26,614,918) (157,655,890)
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Virtus Capital Management Inc., the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to .75% of the Fund's average daily net assets.
Virtus Capital Management Inc. became the Fund's investment adviser on July 12,
1995. Prior to July 12, 1995, Sheffield Management Company served as the Fund's
investment adviser and received for its services an annual investment advisory
fee equal to .75% of the Fund's average daily net assets.
For the period ended October 31, 1995, the adviser(s) earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
ADVISER FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Management Company $ 340,219 $ 24,000
- ----------------------------------------------------------------------------------
Virtus Capital Management, Inc. 492,838 --
- ----------------------------------------------------------------------------------
</TABLE>
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
Under the terms of a sub-advisory agreement between the Adviser and Lombard
Odier International Portfolio Management Limited( Foreign Fixed and Hedging
Transactions) and WLO Global Management (U.S. Fixed Securities Market), (the
"Portfolio-Advisers"). The Portfolio-Advisers receive an annual fee from the
Adviser equal to approximately .35% of the first $10 million of the Fund's
average daily net assets; .30% of the next $10 million of average daily net
assets: .25% of the next of $10 million of average daily net assets; .20% of the
next of $10 million of average daily net assets and .15% of average daily net
assets in excess of $40 million.; of the advisory fee paid to the Adviser by the
Fund.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Fund for the period.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .75 of 1% of the average daily net assets of the Fund annually,
to reimburse FSC.
FSC became the Fund's principal distributor on July 12, 1995. Prior to July 12,
1995, Sheffield Investments, Inc. served as the Fund's principal distributor and
received for its services an annual distribution fee equal to .25 of 1% of the
Fund's average daily net assets.
For the period ended October 31, 1995, the distributor(s) earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
DISTRIBUTOR NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Investments, Inc. $ 113,407 --
- ----------------------------------------------------------------------------------
Federated Securities Corp. $ 156,279 --
- ----------------------------------------------------------------------------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian. The fee is based on
the level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $133,706 were borne
initially by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following effective date.
For the period ended October 31, 1995, the Fund paid $12,983 pursuant to this
agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended October 31, 1995, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 102,170,445
- -------------------------------------------------------------------------------------------------- --------------
SALES $ 117,485,620
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
Blanchard
Short-Term
Global Income
Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
Lombard Odier International
Portfolio Mgt., Ltd.
WLO Global Management
Blanchard
Short-Term
Global Income
Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of
Signet Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
CUSIP 093265205
G01485-03 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard American
Equity Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
To further update you, as of December 4, 1995, the year-to-date total return
of your Blanchard American Equity Fund was a high 27.60%.* (Average annual
returns through 9/30/95 for the 1-year, and since inception [11/9/92] periods
were respectively: 25.50% and 7.00%.*)
Although past performance is not a guarantee of future performance, we're quite
pleased with this year's results so far, as we hope you are.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
*Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. Year-to-date
total return assumes reinvestment of all distributions. Average annual return
numbers are the total return annualized and compounded, and assume reinvestment
of all distributions. Returns shown do not reflect an account opening fee
which was charged at the Fund's inception, but is no longer charged.
BLANCHARD AMERICAN EQUITY FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--97.1%
- --------------------------------------------------------------------------------------------------
AEROSPACE--1.8%
-------------------------------------------------------------------------------------
2,900 Boeing Co. $ 190,312
------------------------------------------------------------------------------------- -------------
BROADCAST, RADIO & TV--2.4%
-------------------------------------------------------------------------------------
5,300 *British Sky Broadcasting Group, PLC, ADR 189,475
-------------------------------------------------------------------------------------
600 Capital Cities/ABC, Inc. 71,175
------------------------------------------------------------------------------------- -------------
Total 260,650
------------------------------------------------------------------------------------- -------------
COMMERCIAL SERVICES--4.1%
-------------------------------------------------------------------------------------
1,200 Alco Standard Corp. 106,200
-------------------------------------------------------------------------------------
1,700 *CUC International, Inc. 58,863
-------------------------------------------------------------------------------------
4,800 Loewen Group, Inc. 192,225
-------------------------------------------------------------------------------------
1,800 Paychex, Inc. 78,075
------------------------------------------------------------------------------------- -------------
Total 435,363
------------------------------------------------------------------------------------- -------------
COMPUTERS--5.0%
-------------------------------------------------------------------------------------
4,300 *3Com Corp. 202,100
-------------------------------------------------------------------------------------
2,350 *Cabletron Systems, Inc. 184,769
-------------------------------------------------------------------------------------
1,200 *Ceridian Corp. 52,200
-------------------------------------------------------------------------------------
2,200 Cirrus Logic, Inc. 92,675
------------------------------------------------------------------------------------- -------------
Total 531,744
------------------------------------------------------------------------------------- -------------
COMPUTER SOFTWARE & SERVICES--21.5%
-------------------------------------------------------------------------------------
800 Automatic Data Processing, Inc. 57,200
-------------------------------------------------------------------------------------
4,100 *Cisco Systems, Inc. 317,750
-------------------------------------------------------------------------------------
5,250 Computer Associates International, Inc. 288,750
-------------------------------------------------------------------------------------
2,200 *Computer Sciences Corp. 147,125
-------------------------------------------------------------------------------------
8,860 First Data Corp., Class 585,893
-------------------------------------------------------------------------------------
6,000 *Informix Corp. 174,750
-------------------------------------------------------------------------------------
3,600 *Microsoft Corp. 360,000
-------------------------------------------------------------------------------------
</TABLE>
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES--CONTINUED
-------------------------------------------------------------------------------------
8,300 *Oracle Corp. $ 362,088
------------------------------------------------------------------------------------- -------------
Total 2,293,556
------------------------------------------------------------------------------------- -------------
LODGING--1.8%
-------------------------------------------------------------------------------------
3,100 *HFS, Inc. 189,875
------------------------------------------------------------------------------------- -------------
ELECTRONICS & ELECTRICAL--22.2%
-------------------------------------------------------------------------------------
4,800 *Analog Devices, Inc. 173,400
-------------------------------------------------------------------------------------
2,800 Hewlett-Packard Co. 259,350
-------------------------------------------------------------------------------------
6,800 Intel Corp. 475,150
-------------------------------------------------------------------------------------
2,500 *LSI Logic Corp. 117,813
-------------------------------------------------------------------------------------
937 Molex, Inc., Class A 28,813
-------------------------------------------------------------------------------------
4,800 Motorola, Inc. 315,000
-------------------------------------------------------------------------------------
7,500 Nokia Corp., ADR 418,125
-------------------------------------------------------------------------------------
2,300 *SGS-Thomas Microelectronics N.V. 104,075
-------------------------------------------------------------------------------------
4,600 Texas Instruments, Inc. 313,950
-------------------------------------------------------------------------------------
3,700 *Xilinx, Inc. 170,200
------------------------------------------------------------------------------------- -------------
Total 2,375,876
------------------------------------------------------------------------------------- -------------
FINANCE--6.1%
-------------------------------------------------------------------------------------
1,300 Federal Home Loan Mortgage Corp. 90,025
-------------------------------------------------------------------------------------
500 Federal National Mortgage Association 52,438
-------------------------------------------------------------------------------------
3,400 Finova Group, Inc. 153,850
-------------------------------------------------------------------------------------
3,400 First USA, Inc. 156,400
-------------------------------------------------------------------------------------
5,500 MBNA Corp. 202,813
------------------------------------------------------------------------------------- -------------
Total 655,526
------------------------------------------------------------------------------------- -------------
INSURANCE--3.6%
-------------------------------------------------------------------------------------
1,650 American International Group, Inc. 139,218
-------------------------------------------------------------------------------------
3,200 MGIC Investment Corp. 182,000
-------------------------------------------------------------------------------------
1,300 PMI Group, Inc. 62,400
------------------------------------------------------------------------------------- -------------
Total 383,618
------------------------------------------------------------------------------------- -------------
</TABLE>
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
MANUFACTURING--4.2%
-------------------------------------------------------------------------------------
3,500 American Standard Companies $ 93,625
-------------------------------------------------------------------------------------
4,200 *Applied Materials, Inc. 210,525
-------------------------------------------------------------------------------------
2,400 Tyco Laboratories, Inc. 145,800
------------------------------------------------------------------------------------- -------------
Total 449,950
------------------------------------------------------------------------------------- -------------
MEDICAL SERVICES--2.0%
-------------------------------------------------------------------------------------
3,400 *Healthsouth Rehabilitation 88,825
-------------------------------------------------------------------------------------
2,400 United Healthcare Corp. 127,500
------------------------------------------------------------------------------------- -------------
Total 216,325
------------------------------------------------------------------------------------- -------------
MEDICAL SUPPLIES--4.0%
-------------------------------------------------------------------------------------
5,800 Medtronic, Inc. 334,950
-------------------------------------------------------------------------------------
1,700 *St. Jude Medical, Inc. 90,525
------------------------------------------------------------------------------------- -------------
Total 425,475
------------------------------------------------------------------------------------- -------------
PHARMACEUTICAL--4.1%
-------------------------------------------------------------------------------------
1,500 *Amgen, Inc. 72,000
-------------------------------------------------------------------------------------
2,800 Cardinal Health, Inc. 143,850
-------------------------------------------------------------------------------------
1,300 Merck & Co., Inc. 74,750
-------------------------------------------------------------------------------------
1,600 Pfizer, Inc. 91,800
-------------------------------------------------------------------------------------
1,300 *Scherer (R.P.) Corp. 57,850
------------------------------------------------------------------------------------- -------------
Total 440,250
------------------------------------------------------------------------------------- -------------
PROCESS INDUSTRIES--0.9%
-------------------------------------------------------------------------------------
1,900 Air Products & Chemicals, Inc. 98,087
------------------------------------------------------------------------------------- -------------
RETAIL TRADE--3.3%
-------------------------------------------------------------------------------------
5,200 *AutoZone, Inc. 128,700
-------------------------------------------------------------------------------------
7,650 *Office Depot, Inc. 218,981
------------------------------------------------------------------------------------- -------------
Total 347,681
------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--6.2%
-------------------------------------------------------------------------------------
2,900 *Andrew Corp. 122,525
-------------------------------------------------------------------------------------
17,000 Ericsson LM 363,109
-------------------------------------------------------------------------------------
</TABLE>
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ----------- ------------------------------------------------------------------------------------- -------------
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--CONTINUED
-------------------------------------------------------------------------------------
1,600 Glenayre Technologies, Inc. $ 102,800
-------------------------------------------------------------------------------------
800 *U S Robotics Corp. 74,000
------------------------------------------------------------------------------------- -------------
Total 662,434
------------------------------------------------------------------------------------- -------------
TRANSPORTATION--0.6%
-------------------------------------------------------------------------------------
1,800 *Fritz Companies, Inc. 63,000
------------------------------------------------------------------------------------- -------------
UTILITIES--3.3%
-------------------------------------------------------------------------------------
6,200 Enron Corp. 213,125
-------------------------------------------------------------------------------------
5,200 Frontier Corp. 140,400
------------------------------------------------------------------------------------- -------------
Total 353,525
------------------------------------------------------------------------------------- -------------
TOTAL COMMON STOCKS (IDENTIFIED COST $7,367,203) 10,373,247
------------------------------------------------------------------------------------- -------------
**REPURCHASE AGREEMENT--1.6%
- --------------------------------------------------------------------------------------------------
$ 173,252 Merrill Lynch, Pierce, Fenner and Smith, 5.82%, dated 10/31/1995,
due 11/1/1995 (AT AMORTIZED COST) 173,252
------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $7,540,455) $ 10,546,499+
------------------------------------------------------------------------------------- -------------
</TABLE>
* Non-income producing.
** The repurchase agreement is fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
+ The cost of investments for federal tax purposes amounts to $7,540,455. The
net unrealized appreciation of investments on a federal tax basis amounts to
$3,006,044, which is comprised of $3,125,990 appreciation and $119,946
depreciation at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($10,677,572) at October 31, 1995.
The following acronym(s) are used throughout this portfolio:
ADR----American Depositary Receipt
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
BLANCHARD AMERICAN EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $7,540,455) $ 10,546,499
- ---------------------------------------------------------------------------------------------------
Cash 133,501
- ---------------------------------------------------------------------------------------------------
Income receivable 4,176
- ---------------------------------------------------------------------------------------------------
Deferred expenses 55,392
- --------------------------------------------------------------------------------------------------- -------------
Total assets 10,739,568
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Accrued expenses 61,996
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 913,204 shares outstanding $ 10,677,572
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 8,327,392
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 3,006,044
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (520,602)
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (135,262)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 10,677,572
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
$10,677,572 / 913,204 shares outstanding $11.69
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD AMERICAN EQUITY FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Dividends $ 30,801
- ---------------------------------------------------------------------------------------------------
Interest 3,263
- --------------------------------------------------------------------------------------------------- ------------
Total income 34,064
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Management fee $ 56,625
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 20,000
- ---------------------------------------------------------------------------------------
Custodian fees 8,302
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 22,298
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,504
- ---------------------------------------------------------------------------------------
Auditing fees 4,295
- ---------------------------------------------------------------------------------------
Legal fees 10,602
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 27,917
- ---------------------------------------------------------------------------------------
Distribution services fee 25,739
- ---------------------------------------------------------------------------------------
Share registration costs 15,015
- ---------------------------------------------------------------------------------------
Printing and postage 14,094
- ---------------------------------------------------------------------------------------
Insurance premiums 500
- ---------------------------------------------------------------------------------------
Miscellaneous 13,195
- --------------------------------------------------------------------------------------- ----------
Total expenses 220,086
- ---------------------------------------------------------------------------------------
Waivers and reimbursements--
- ----------------------------------------------------------------------------
Waiver of management fee $ (56,625)
- ----------------------------------------------------------------------------
Reimbursement of other operating expenses (6,000)
- ---------------------------------------------------------------------------- ---------
Total waivers and reimbursements (62,625)
- --------------------------------------------------------------------------------------- ----------
Net expenses 157,461
- --------------------------------------------------------------------------------------------------- ------------
Net operating loss (123,397)
- --------------------------------------------------------------------------------------------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments 439,265
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments 1,625,333
- --------------------------------------------------------------------------------------------------- ------------
Net realized and unrealized gain on investments 2,064,598
- --------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 1,941,201
- --------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD AMERICAN EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net operating loss $ (123,397) $ (218,854)
- -----------------------------------------------------------------------
Net realized gain (loss) on investments 439,265 (304,036)
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) 1,625,333 1,056,341
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 1,941,201 533,451
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions in excess of net investment income -- (259,191)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 3,185,506 3,983,359
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared -- 253,349
- -----------------------------------------------------------------------
Cost of shares redeemed (4,077,478) (8,852,967)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (891,972) (4,616,259)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets 1,049,229 (4,341,999)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 9,628,343 13,970,342
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 10,677,572 $ 9,628,343
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD AMERICAN EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.63 $ 9.42 $ 9.10 $ 10.00
- -------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------------------
Net investment income (0.14) (0.01)(d) (0.20)(d) (0.03)(d)
- -------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 2.20 0.45 0.52 (0.87)
- ------------------------------------------------------------- ------- --------- --------- -----------
Total from investment operations 2.06 0.44 0.32 (0.90)
- ------------------------------------------------------------- ------- --------- --------- -----------
LESS DISTRIBUTIONS
- -------------------------------------------------------------
Distributions in excess of net investment income -- (0.23) -- --
- ------------------------------------------------------------- ------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 11.69 $ 9.63 $ 9.42 $ 9.10
- ------------------------------------------------------------- ------- --------- --------- -----------
TOTAL RETURN (B) 21.39% 4.83% 3.52% (9.00%)
- -------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------------------
Expenses 3.05%* 3.05% 3.00% 3.13%*
- -------------------------------------------------------------
Net investment income (2.39%)* (1.87%) (2.04%) (1.66%)*
- -------------------------------------------------------------
Expense waiver/reimbursement (c) 1.21%* 0.74% 0.01% 0.60%*
- -------------------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------------------
Net assets, end of period (000 omitted) $10,678 $9,628 $13,970 $31,148
- -------------------------------------------------------------
Portfolio turnover 32% 45% 97% 49%
- -------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from November 9, 1992 (commencement of
operations) to April 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Calculated based on average shares outstanding
(See Notes which are an integral part of the Financial Statements)
BLANCHARD AMERICAN EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
- --------------------------------------------------------------------------------
1. ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios. The financial statements included herein are
only those of Blanchard American Equity Fund (the "Fund"). The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees").
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $891,524, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of
the distributions to shareholders which would otherwise be necessary to
relieve the Fund of any liability for federal tax. Pursuant to the Code,
such capital loss carryforward will expire as follows:
<TABLE>
<CAPTION>
EXPIRATION YEAR EXPIRATION AMOUNT
<S> <C>
2002 $ 584,268
- -----------------------------------------------------------------------------------
2003 $ 307,256
- -----------------------------------------------------------------------------------
</TABLE>
As of April 30, 1995, the Fund had temporary book/tax differences primarily
attributable to wash sale loss deferrals. The Fund had permanent book/tax
differences primarily attributable to net operating loses. To reflect
reclassifications arising from permanent tax/book differences for the year
ended April 30, 1995, paid-in-capital was charged $466,180, accumulated
realized loss-net was credited $33,889 and accumulated distributions in
excess of investment income-net was credited $432,291.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
organizational expenses and registration of its shares in its first fiscal
year, excluding the initial expense of registering its shares, have been
deferred and are being amortized using the straight-line method over a
period not to exceed five years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 285,509 417,825
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared -- 27,994
- ----------------------------------------------------------------------
Shares redeemed (372,574) (928,616)
- ---------------------------------------------------------------------- ---------- ----------------
Net change resulting from share transactions (87,065) (482,797)
- ---------------------------------------------------------------------- ---------- ----------------
</TABLE>
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Virtus Capital Management, Inc., the Fund's investment manager,
(the "Manager"), receives for its services an annual investment advisory fee
equal to 1.10% of the Fund's average daily net assets. The Manager may
voluntarily choose to waive any portion of its fee and/or reimburse certain
operating expenses of the Fund. The Adviser can modify or terminate this
voluntary waiver and/or reimbursement at any time at its sole discretion.
Virtus Capital Management, Inc. became the Fund's investment manager on July 13,
1995. Prior to July 13, 1995, Sheffield Management Company served as the Fund's
investment manager for which it received a fee.
For the six months ended October 31, 1995, the managers earned fees and
reimbursed other expenses as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
MANAGER FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Management Company $ 22,465 $ 22,465
- ----------------------------------------------------------------------------------
Virtus Capital Management, Inc. $ 34,160 $ 34,160
- ----------------------------------------------------------------------------------
</TABLE>
SUB-ADVISORY FEE--Provident Investment Counsel provides the Manager with
sub-advisory services for which it receives a fee from the Manager determined by
applying the following annual rates to the Fund's average daily net assets: .50%
of the first $150 million; .45% of the next $100 million; .40% of the next $150
million; and .35% of average daily net assets in excess of $400 million. In
addition, Provident Investment Counsel may voluntarily choose to reduce its
compensation
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp., ("FSC") the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .50% of the average daily net assets of the Fund, annually, to
reimburse FSC.
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
FSC became the Fund's distributor on July 13, 1995. Prior to July 13, 1995,
Sheffield Investments, Inc. served as the Fund's distributor and was reimbursed
from the net assets of the Fund to finance activities intended to result in the
sale of the Fund's shares.
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
For the six months ended October 31, 1995, the distributors earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
DISTRIBUTOR FEE EARNED
<S> <C>
Sheffield Investments, Inc. $ 10,212
- ---------------------------------------------------------------------------------------------------
Federated Securities Corp. $ 15,527
- ---------------------------------------------------------------------------------------------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund. This
fee is based on the size, type, and number of accounts and transactions made by
shareholders.
FServ became the Fund's transfer agent on October 15, 1995. Prior to October 15,
1995, United States Trust Company of New York served as the Fund's transfer
agent for which it received a fee.
For the six months ended October 31, 1995, the transfer agents earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
TRANSFER AGENT FEE EARNED
<S> <C>
United States Trust Company of New York $ 20,238
- ---------------------------------------------------------------------------------------------------
Federated Services Company $ 2,060
- ---------------------------------------------------------------------------------------------------
</TABLE>
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
FServ became the Fund's portfolio accountant on October 15, 1995. Prior to
October 15, 1995, Mutual Fund Services Company served as the Fund's portfolio
accountant for which it received a fee.
For the six months ended October 31, 1995, the portfolio accountants earned fees
as follows:
<TABLE>
<CAPTION>
AMOUNT OF
PORTFOLIO ACCOUNTANT FEE EARNED
<S> <C>
Mutual Fund Services Company $ 25,338
- ---------------------------------------------------------------------------------------------------
Federated Services Company $ 2,579
- ---------------------------------------------------------------------------------------------------
</TABLE>
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian for which it receives a
fee. The fee is based on the level of the Fund's average daily net assets for
the period, plus out-of-pocket expenses.
Signet Trust Company became the Fund's custodian on October 15, 1995. Prior to
October 15, 1995, United States Trust Company of New York served as the Fund's
custodian for which it received
a fee.
BLANCHARD AMERICAN EQUITY FUND
- --------------------------------------------------------------------------------
For the six months ended October 31, 1995, the custodians earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
CUSTODIAN FEE EARNED
<S> <C>
United States Trust Company of New York $ 7,535
- ---------------------------------------------------------------------------------------------------
Signet Trust Company $ 767
- ---------------------------------------------------------------------------------------------------
</TABLE>
ORGANIZATIONAL EXPENSES--Organizational expenses of $132,941 were borne
initially by Sheffield Management Company.
The Fund has agreed to reimburse Sheffield Management Company for the
organizational expenses during the five year period following effective date.
For the period ended October 31, 1995, the Fund paid $13,195 pursuant to this
agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities for the six
months ended October 31, 1995, were as follows:
<TABLE>
<CAPTION>
<S> <C>
PURCHASES $ 3,266,131
- ---------------------------------------------------------------------------------------------------- ------------
SALES $ 4,311,643
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
Blanchard
American
Equity Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
Provident Investment
Counsel
Blanchard
American
Equity Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of
Signet Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
CUSIP 093212207
G01485-02 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Flexible
Income Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
To further update you, as of December 4, 1995, the year-to-date total return
of your Blanchard Flexible Income Fund was a solid 14.10%.* (Average annual
returns through 9/30/95 for the 1-year and since inception [11/2/92] periods
were respectively: 10.55% and 6.73%.*)
Although past performance is not a guarantee of future performance, we're quite
pleased with this year's results so far, as we hope you are.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
*Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. Year-to-date
total return assumes reinvestment of all distributions. Average annual return
numbers are the total return annualized and compounded, and assume reinvestment
of all distributions. Returns shown do not reflect an account opening fee
which was charged at the Fund's inception, but is no longer charged.
BLANCHARD FLEXIBLE INCOME FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE BONDS--35.0%
- -------------------------------------------------------------------------------------------------
AIRLINES--1.2%
-----------------------------------------------------------------------------
$ 852,000 Piedmont Aviation, Inc., 9.90%, 1/15/2001 $ 781,710
-----------------------------------------------------------------------------
1,389,000 Piedmont Aviation, Inc., 10.15%, 3/28/2003 1,281,353
-----------------------------------------------------------------------------
896,000 USAir, Inc., 9.90%, 1/15/2001 822,080
----------------------------------------------------------------------------- --------------
Total 2,885,143
----------------------------------------------------------------------------- --------------
BASIC MATERIALS--3.0%
-----------------------------------------------------------------------------
1,500,000 Bethlehem Steel Corp., Sr. Note, 10.375%, 9/1/2003 1,582,500
-----------------------------------------------------------------------------
1,500,000 Doman Industries, Ltd., Sr. Note, 8.75%, 3/15/2004 1,440,000
-----------------------------------------------------------------------------
1,500,000 Earle M. Jorgensen Co., Sr. Note, 10.75%, 3/1/2000 1,490,625
-----------------------------------------------------------------------------
1,000,000 Maxxam Group, Inc., Sr. Note, 11.25%, 8/1/2003 992,500
-----------------------------------------------------------------------------
1,500,000 Northwestern Steel & Wire Co., Sr. Note, 9.50%, 6/15/2001 1,462,500
----------------------------------------------------------------------------- --------------
Total 6,968,125
----------------------------------------------------------------------------- --------------
BROADCASTING--0.4%
-----------------------------------------------------------------------------
1,000,000 Storer Communications, Deb., 10.00%, 5/15/2003 1,006,250
----------------------------------------------------------------------------- --------------
CHEMICALS--0.4%
-----------------------------------------------------------------------------
1,000,000 Freeport-McMoran Resource, Sr. Sub. Note, 8.75%, 2/15/2004 1,020,000
----------------------------------------------------------------------------- --------------
CONSUMER RELATED--2.4%
-----------------------------------------------------------------------------
1,500,000 Pathmark Stores, Inc., Sr. Sub. Note, 9.625%, 5/1/2003 1,486,875
-----------------------------------------------------------------------------
1,750,000 Penn Traffic Co., Sr. Note, 10.25%, 2/15/2002 1,631,875
-----------------------------------------------------------------------------
1,600,000 Revlon Consumer Products Corp., Deb., 10.875%, 7/15/2010 1,616,000
-----------------------------------------------------------------------------
1,000,000 U.S. Leather, Inc., Sr. Note, 10.25%, 7/31/2003 805,000
----------------------------------------------------------------------------- --------------
Total 5,539,750
----------------------------------------------------------------------------- --------------
ELECTRONICS--0.4%
-----------------------------------------------------------------------------
1,000,000 Bell & Howell Co., Sr. Note, 9.25%, 7/15/2000 1,020,000
----------------------------------------------------------------------------- --------------
ENERGY & OIL RELATED--3.8%
-----------------------------------------------------------------------------
2,000,000 CTC Mansfield Funding Corp., Deb., 10.25%, 3/30/2003 2,038,136
-----------------------------------------------------------------------------
$ 2,000,000 Maxus Energy Corp., Medium Term Note, 11.02%, 5/15/2001 $ 2,015,000
-----------------------------------------------------------------------------
</TABLE>
BLANCHARD FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
CORPORATE BONDS--CONTINUED
- --------------------------------------------------------------------------------------------------
ENERGY & OIL RELATED--CONTINUED
-----------------------------------------------------------------------------
3,000,000 Triton Energy Corp., Sr. Sub. Disc. Note, 9.75%-12.50%,
11/1/1997-12/15/2000 2,685,000
-----------------------------------------------------------------------------
2,218,808 Tucson Electric Power Co., 10.21%, 1/1/2009 2,174,432
----------------------------------------------------------------------------- --------------
Total 8,912,568
----------------------------------------------------------------------------- --------------
FINANCIAL SERVICES--6.3%
-----------------------------------------------------------------------------
1,000,000 American Annuity Group, Inc., Sr. Sub. Note, 11.125%, 2/1/2003 1,055,000
-----------------------------------------------------------------------------
2,000,000 Americo Life, Inc., Sr. Sub. Note, 9.25%, 6/1/2005 1,890,000
-----------------------------------------------------------------------------
1,500,000 Bally Park Place Funding, Inc., 1st Mtg. Bond, 9.25%, 3/15/2004 1,486,875
-----------------------------------------------------------------------------
1,750,000 Granite Development Partners, Sr. Note, 10.83%, 11/15/2003 1,303,750
-----------------------------------------------------------------------------
3,550,000 Leucadia National Corp., Sr. Sub., 10.375%, 6/15/2002 3,869,500
-----------------------------------------------------------------------------
1,000,000 Navistar Financial Corp., Owner Trust, Sr. Sub. Note, 8.875%,
11/15/1998 1,010,000
-----------------------------------------------------------------------------
1,250,000 Phoenix Re Corp., Sr. Note, 9.75%, 8/15/2003 1,318,750
-----------------------------------------------------------------------------
1,500,000 Presidential Life Corp., Sr. Note, 9.50%, 12/15/2000 1,545,000
-----------------------------------------------------------------------------
1,250,000 Reliance Group Holdings, Inc., Sr. Note, 9.00%, 11/15/2000 1,275,000
----------------------------------------------------------------------------- --------------
Total 14,753,875
----------------------------------------------------------------------------- --------------
HEALTHCARE--1.0%
-----------------------------------------------------------------------------
2,278,603 Omega Healthcare Investors, Inc., Sr. Note, 7.11%, 7/15/2000 2,259,007
----------------------------------------------------------------------------- --------------
HOTELS--0.5%
-----------------------------------------------------------------------------
1,000,000 Host Marriot Travel Plaza, Sr. Note, 9.50%, 5/15/2005 985,000
----------------------------------------------------------------------------- --------------
INDUSTRIAL RELATED--11.4%
-----------------------------------------------------------------------------
800,333 ACF Industries, Inc., 12.50%, 2/1/1998 801,334
-----------------------------------------------------------------------------
1,000,000 ADT Operations, Inc., Sr. Sub. Note, 9.25%, 8/1/2003 1,065,000
-----------------------------------------------------------------------------
2,000,000 Armco, Inc., Sr. Note, 9.375%, 11/1/2000 1,970,000
-----------------------------------------------------------------------------
1,500,000 CMI Industries, Inc., Sr. Sub. Note, 9.50%, 10/1/2003 1,342,500
-----------------------------------------------------------------------------
1,500,000 Eletson Holdings, Inc., 9.25%, 11/15/2003 1,485,000
-----------------------------------------------------------------------------
1,500,000 EnviroSource, Inc., Sr. Note, 9.75%, 6/15/2003 1,357,500
-----------------------------------------------------------------------------
$ 3,000,000 Owens-Illinois, Inc., Note, 10.00%, 8/1/2002 $ 3,120,000
-----------------------------------------------------------------------------
2,250,000 PDV America, Inc., Sr. Note, 7.25%, 8/1/1998 2,171,250
-----------------------------------------------------------------------------
</TABLE>
BLANCHARD FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
CORPORATE BONDS--CONTINUED
- --------------------------------------------------------------------------------------------------
INDUSTRIAL RELATED--CONTINUED
-----------------------------------------------------------------------------
1,250,000 Riverwood International Corp., Sr. Note, 10.75%, 6/15/2000 1,315,625
-----------------------------------------------------------------------------
1,800,000 Sea Containers Ltd., Sr. Note, 9.50%, 7/1/2003 1,793,250
-----------------------------------------------------------------------------
3,000,000 Sequa Corp., Sr. Note, 8.75%, 12/15/2001 2,767,500
-----------------------------------------------------------------------------
2,000,000 Stone Consolidated Corp., Sr. Note, 10.25%, 12/15/2000 2,145,000
-----------------------------------------------------------------------------
2,500,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 2,478,125
-----------------------------------------------------------------------------
1,500,000 Tracor, Inc., Sr. Sub. Note, 10.875%, 8/15/2001 1,552,500
-----------------------------------------------------------------------------
1,500,000 UNC, Inc., Sr. Note, 9.125%, 7/15/2003 1,458,750
----------------------------------------------------------------------------- --------------
Total 26,823,334
----------------------------------------------------------------------------- --------------
INSURANCE--0.4%
-----------------------------------------------------------------------------
1,000,000 Penn Central Corp., Sub. Note, 10.625%, 4/15/2000 1,052,660
----------------------------------------------------------------------------- --------------
PAPER PRODUCTS--0.9%
-----------------------------------------------------------------------------
1,250,000 Fort Howard Corp., Sr. Sub. Note, 9.00%, 2/1/2006 1,193,750
-----------------------------------------------------------------------------
1,000,000 Repap Wisconsin, Inc., 1st Priority Sr. Secd. Note, 9.25%,
2/1/2002 970,000
----------------------------------------------------------------------------- --------------
Total 2,163,750
----------------------------------------------------------------------------- --------------
TELECOMMUNICATIONS--2.5%
-----------------------------------------------------------------------------
1,200,000 Cablevision Industries Corp., Sr. Note, 10.75%, 1/30/2002 1,309,500
-----------------------------------------------------------------------------
1,000,000 Cablevision Systems Corp., Sr. Sub. Deb., 10.75%, 4/1/2004 1,056,250
-----------------------------------------------------------------------------
1,000,000 Centennial Cellular Corp., Sr. Note, 10.125%, 5/15/2005 1,030,000
-----------------------------------------------------------------------------
4,000,000 Rogers Cablesystems Ltd., Sr. Secd. Note, 9.65%, 1/15/2014 2,597,403
----------------------------------------------------------------------------- --------------
Total 5,993,153
----------------------------------------------------------------------------- --------------
UTILITIES-ELECTRIC--0.4%
-----------------------------------------------------------------------------
1,000,000 Cleveland Electric Illuminating Co., 1st Mtg. Bond, 9.50%,
5/15/2005 1,020,645
----------------------------------------------------------------------------- --------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $80,736,155) 82,403,260
----------------------------------------------------------------------------- --------------
U.S. GOVERNMENT AND AGENCY ISSUES--54.2%
- --------------------------------------------------------------------------------------------------
$ 10,000,000 Federal National Mortgage Association, 8.625%, 4/10/2001 $ 10,103,990
-----------------------------------------------------------------------------
44,404,427 Government National Mortgage Association, 7.00%-10.00%,
6/15/2021-10/15/2025 46,433,214
-----------------------------------------------------------------------------
</TABLE>
BLANCHARD FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
U.S. GOVERNMENT AND AGENCY ISSUES--CONTINUED
- --------------------------------------------------------------------------------------------------
2,000,000 Resolution Trust Corp 1993-N3A, Series 1993, Class 4N3, 10.50%,
10/15/2003 2,005,000
-----------------------------------------------------------------------------
145,313 Resolution Trust Corp. 1994-N1, Series 1994-N1, Class 2, 6.00%,
1/15/2004 145,176
-----------------------------------------------------------------------------
1,250,000 Resolution Trust Corp. 1994-N1, Series 1994-N1, Class 4, 10.50%,
1/15/2004 1,256,250
-----------------------------------------------------------------------------
1,500,000 Resolution Trust Corp. 1994-N2, Series 1994-N2, Class 4, 10.50%,
12/15/2004 1,503,750
-----------------------------------------------------------------------------
17,000,000 United States Treasury Bill, 5/30/1996 16,477,879
-----------------------------------------------------------------------------
20,000,000 United States Treasury Bond, 8.125%, 8/15/2019 24,075,000
-----------------------------------------------------------------------------
25,000,000 United States Treasury Note, 6.50%, 4/30/1999 25,593,750
----------------------------------------------------------------------------- --------------
TOTAL U.S. GOVERNMENT AND AGENCY ISSUES
(IDENTIFIED COST $125,772,700) 127,594,009
----------------------------------------------------------------------------- --------------
FOREIGN GOVERNMENT--8.7%
- --------------------------------------------------------------------------------------------------
DKK 28,400,000 Denmark, Foreign Gov't. Guarantee, 7.00%, 12/15/2004 4,934,656
-----------------------------------------------------------------------------
DEM 14,180,000 Germany (Fed Republic), 7.25%-8.25%, 9/20/2001-10/21/2002 10,855,906
-----------------------------------------------------------------------------
AUD 6,550,000 Treasury Corp. of Victoria, 8.25%, 10/15/2003 4,827,183
----------------------------------------------------------------------------- --------------
TOTAL FOREIGN GOVERNMENTS (IDENTIFIED COST $22,990,756) 20,617,745
----------------------------------------------------------------------------- --------------
TOTAL LONG-TERM INVESTMENTS (IDENTIFIED COST $229,499,611) 230,615,014
----------------------------------------------------------------------------- --------------
</TABLE>
BLANCHARD FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<S> <S> <C>
*REPURCHASE AGREEMENT--0.4%
- --------------------------------------------------------------------------------------------------
$ 1,000,858 Merrill Lynch & Co., Inc., 5.82%, dated 10/31/1995, due 11/1/1995 $ 1,000,858
----------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (IDENTIFIED COST $230,500,469) $ 231,615,872+
----------------------------------------------------------------------------- --------------
</TABLE>
+ The cost of investments for federal income tax purposes amounts to
$230,500,469. The net unrealized appreciation of investments on a federal tax
basis amounts to $1,115,403 which is comprised of $3,921,712 appreciation and
$2,806,309 depreciation at October 31, 1995.
* Repurchase Agreement is fully collateralized by U.S. Treasury obligations
based on market prices at the date of the portfolio.
Note: The categories of investments are shown as a percentage of net assets
($235,552,733) at October 31, 1995.
The following acronym(s) are used throughout this portfolio:
AUD--Australian Dollars
DEM--Deutsche Marks
DKK--Danish Kroner
(See Notes which are an integral part of the Financial Statements)
BLANCHARD FLEXIBLE INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at value (identified and tax cost $230,500,469) $ 231,615,872
- -------------------------------------------------------------------------------------------------
Income receivable 4,372,164
- -------------------------------------------------------------------------------------------------
Receivable for investments sold 2,148,561
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 443,107
- -------------------------------------------------------------------------------------------------
Receivable for foreign currency sold 18,853,551
- -------------------------------------------------------------------------------------------------
Deferred expenses 104,136
- ------------------------------------------------------------------------------------------------- --------------
Total assets 257,537,391
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for shares redeemed $ 955,186
- ----------------------------------------------------------------------------------
Income distribution payable 1,256,240
- ----------------------------------------------------------------------------------
Payable to Bank 435,385
- ----------------------------------------------------------------------------------
Payable for foreign taxes withheld 2,210
- ----------------------------------------------------------------------------------
Payable for foreign currency purchased 18,853,551
- ----------------------------------------------------------------------------------
Accrued expenses 482,086
- ---------------------------------------------------------------------------------- -------------
Total liabilities 21,984,658
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS FOR 48,324,102 shares outstanding $ 235,552,733
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------
Paid in capital $ 252,016,334
- -------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments and foreign currency transactions 1,221,784
- -------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (16,794,674)
- -------------------------------------------------------------------------------------------------
Accumulated distributions in excess of net investment income (890,711)
- ------------------------------------------------------------------------------------------------- --------------
Total Net Assets $ 235,552,733
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$235,552,733 / 48,324,102 shares outstanding $4.87
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD FLEXIBLE INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------------------------------------------------------
Dividends $ 2,977
- ---------------------------------------------------------------------------------------------------
Interest (net of foreign taxes withheld of $2,210) 9,795,829
- --------------------------------------------------------------------------------------------------- -------------
Total income 9,798,806
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Management fee $ 950,594
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 91,000
- ---------------------------------------------------------------------------------------
Custodian fees 66,600
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 343,557
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 7,233
- ---------------------------------------------------------------------------------------
Auditing fees 62,384
- ---------------------------------------------------------------------------------------
Legal fees 20,373
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 90,371
- ---------------------------------------------------------------------------------------
Distribution services fee 316,865
- ---------------------------------------------------------------------------------------
Share registration costs 40,936
- ---------------------------------------------------------------------------------------
Printing and postage 82,605
- ---------------------------------------------------------------------------------------
Miscellaneous 16,944
- --------------------------------------------------------------------------------------- ----------
Total expenses 2,089,462
- --------------------------------------------------------------------------------------------------- -------------
Net investment income 7,709,344
- --------------------------------------------------------------------------------------------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- ---------------------------------------------------------------------------------------------------
Net realized gain on investments and foreign currency transactions 1,764,989
- ---------------------------------------------------------------------------------------------------
Net change in unrealized appreciation of investments and foreign currency transactions 7,355,814
- --------------------------------------------------------------------------------------------------- -------------
Net realized and unrealized gain on investments and foreign currency transactions 9,120,803
- --------------------------------------------------------------------------------------------------- -------------
Change in net assets resulting from operations $ 16,830,147
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD FLEXIBLE INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 7,709,344 $ 23,667,093
- -------------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency transactions 1,764,989 (25,650,427)
- -------------------------------------------------------------------------
Net change in unrealized appreciation of investments and foreign currency
transactions 7,461,116 9,037,357
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from operations 16,935,449 7,054,023
- ------------------------------------------------------------------------- -------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income (7,857,461) (178,445)
- -------------------------------------------------------------------------
Tax return of capital -- (23,736,224)
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from distributions to shareholders (7,857,461) (23,914,669)
- ------------------------------------------------------------------------- -------------------- ----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of shares 29,083,874 107,867,527
- -------------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 5,130,738 18,885,949
- -------------------------------------------------------------------------
Cost of shares redeemed (70,162,951) (397,723,871)
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets resulting from share transactions (35,948,339) (270,970,395)
- ------------------------------------------------------------------------- -------------------- ----------------
Change in net assets (26,870,351) (287,831,041)
- -------------------------------------------------------------------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 262,423,084 550,254,125
- ------------------------------------------------------------------------- -------------------- ----------------
End of period $ 235,552,733 $ 262,423,084
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD FLEXIBLE INCOME FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED PERIOD
OCTOBER 31, APRIL 30, ENDED APRIL 30,
1995 1995 1994 1993(A)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.71 $ 4.85 $ 5.09 $ 5.00
- ------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------
Net investment income 0.14 0.30(d) 0.40 0.21
- ------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.17 (0.13) (0.17) 0.09
- ------------------------------------------------------------ ------ --------- --------- ------
Total from investment operations 0.31 0.17 0.23 0.30
- ------------------------------------------------------------ ------ --------- --------- ------
LESS DISTRIBUTIONS
- ------------------------------------------------------------
Distributions from net investment income (0.15) 0.00 (0.36) (0.21)
- ------------------------------------------------------------
Distributions in excess of net investment income -- (0.31 (e) (0.03 (e) --
- ------------------------------------------------------------
Distributions from net realized gain on investment
transactions -- -- (0.08) --
- ------------------------------------------------------------ ------ --------- --------- ------
Total distributions (0.15) (0.31) (0.47) (0.21)
- ------------------------------------------------------------ ------ --------- --------- ------
NET ASSET VALUE, END OF PERIOD $ 4.87 $ 4.71 $ 4.85 $ 5.09
- ------------------------------------------------------------ ------ --------- --------- ------
TOTAL RETURN (B) 6.68% 3.74% 4.11% 6.17%
- ------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------
Expenses 1.65%* 1.58% 1.30% 0.20%*
- ------------------------------------------------------------
Net investment income 6.07%* 6.52% 7.10% 9.02%*
- ------------------------------------------------------------
Expense waiver/reimbursement (c) -- 0.01% 0.11% 1.39%*
- ------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------
Net assets, end of period (000 omitted) $235,553 $262,423 $550,254 $315,845
- ------------------------------------------------------------
Portfolio turnover 289% 455% 346% 129%
- ------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from November 2, 1992 (commencement of
operations) to April 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Calculated based on average shares.
(e) Distribution represents a tax return of capital.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD FLEXIBLE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios. The financial statements included herein are
only those of Blanchard Flexible Income Fund (the "Fund"). The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Trustees (the
"Trustees").
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and expenses are accrued daily. Bond premium and discount,
if applicable, are amortized as required by the Internal Revenue Code, as
amended (the "Code").
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $13,824,044, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of
the distributions to shareholders which would otherwise be necessary to
relieve the Fund of any liability for federal tax. Pursuant to the Code,
such capital loss carryforward will expire in 2003.
However, federal taxes may be imposed on the Fund upon the disposition of
certain investments in passive foreign investment companies. Withholding
taxes on foreign interest have been provided for in accordance with the
Fund's understanding of the applicable country's tax rules and rates.
Additionally, net capital losses of $4,733,320 attributable to security
transactions incurred after October 31, 1994 are treated as arising on May
1, 1995, the first day of the Fund's taxable year.
As of April 30, 1995, the Fund had temporary book/tax differences primarily
attributable to wash sales and post-October capital loss deferrals. To
reflect reclassifications arising from permanent book/tax differences for
the year ended April 30, 1995, paid-in-capital was charged $23,882,654,
accumulated realized loss--net was debited $8,777,420 and accumulated
distributions in excess of investment income--net was debited $15,105,234.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
organizational expenses and registration of its shares in its first fiscal
year, excluding the initial expense of registering its shares, have been
deferred and are being amortized using the straight-line method over a
period not to exceed five years from the Fund's commencement date.
FOREIGN CURRENCY COMMITMENTS--The Fund may enter into foreign currency
commitments for the delayed delivery of securities or foreign currency
exchange transactions. Risks may arise upon entering into these
transactions from the potential inability of counterparties to meet the
terms of their commitments and from unanticipated movements in security
prices or foreign exchange rates. The foreign currency transactions are
adjusted by the daily exchange rate of the underlying currency and any
gains or losses are recorded for financial statement purposes as unrealized
until the settlement date.
At October 31, 1995, the Fund had outstanding foreign currency commitments
as set forth below:
<TABLE>
<CAPTION>
COMMITMENTS TO UNREALIZED
SETTLEMENT DATE DELIVER/RECEIVE IN EXCHANGE FOR APPRECIATION
<S> <C> <C> <C>
11/14/95 28,680,000 Danish Kroner $ 5,210,756 $ 38,146
11/14/95 3,550,000 Canadian Dollars $ 2,630,701 $ 18,948
2/21/96 15,570,000 Deutsche Marks $ 11,012,094 $ 49,287
------------------- ---------------
Total $ 18,853,551 $ 106,381
------------------- ---------------
</TABLE>
BLANCHARD FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included within the net realized and unrealized gain or
loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 6,053,513 22,941,483
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 1,063,919 4,034,188
- ----------------------------------------------------------------------
Shares redeemed (14,550,483) (84,785,272)
- ---------------------------------------------------------------------- ---------------------- ----------------
Net change resulting from share transactions (7,433,051) (57,809,601)
- ---------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Virtus Capital Management, Inc., the Fund's investment manager,
(the "Manager"), receives for its services an annual management fee equal to
.75% of the Fund's average daily net assets.
Virtus Capital Management, Inc. became the Fund's investment manager on July 13,
1995. Prior to July 13, 1995, Sheffield Management Company served as the Fund's
investment manager and received for its services an annual investment management
fee equal to .75% of the Fund's average daily net assets.
For the six months ended October 31, 1995, the managers earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF
MANAGER FEE EARNED
<S> <C>
Sheffield Management Company $ 377,138
- --------------------------------------------------------------------------------------------------- -------------
Virtus Capital Management, Inc. $ 573,456
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
SUB-ADVISORY FEE--OFFITBANK provides the manager with sub-advisory services for
which it receives a fee from the Manager determined by applying the following
annual rates to the Fund's average daily net assets: .30% of the first $25
million of the Fund1s average daily net assets; .25% of the next $25 million of
average daily net assets; and .20% of average daily net assets in excess of $50
million. In addition, OFFITBANK may voluntarily choose to reduce its
compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .25% of the average daily net assets of the Fund's shares,
annually, to reimburse FSC.
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
FSC became the Fund's distributor on July 13, 1995. Prior to July 13, 1995,
Sheffield Investments, Inc. served as the Fund's distributor and was reimbursed
from the net assets of the Fund to finance activities intended to result in the
sale of the Fund's shares.
For the six months ended October 31, 1995, the distributors earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
DISTRIBUTOR FEE EARNED
<S> <C>
Sheffield Investments, Inc. $ 125,713
- --------------------------------------------------------------------------------------------------- -------------
Federated Securities Corp. $ 191,152
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund for
which it receives a fee. This fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ became the Fund's transfer agent on October 15, 1995. Prior to October 15,
1995, United States Trust Company of New York served as the Fund's transfer
agent for which it received a fee.
For the period ended October 31, 1995, the transfer agents earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
TRANSFER AGENT FEE EARNED
<S> <C>
United States Trust Company of New York $ 311,815
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 31,742
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
FServ became the Fund's portfolio accountant on October 15, 1995. Prior to
October 15, 1995, Mutual Fund Services Company served as the Fund's portfolio
accountant for which it received a fee.
For the six months ended October 31, 1995, the portfolio accountants earned fees
as follows:
<TABLE>
<CAPTION>
AMOUNT OF
PORTFOLIO ACCOUNTANT FEE EARNED
<S> <C>
Mutual Fund Services Company $ 82,021
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 8,350
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
CUSTODIAN FEES--Signet Trust Company is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average daily net
assets for the period, plus out-of-pocket expenses.
Signet Trust Company became the Fund's custodian on October 15, 1995. Prior to
October 15, 1995, United States Trust Company of New York served as the Fund's
custodian for which it received a fee.
For the six months ended October 31, 1995, the custodians earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
CUSTODIAN FEE EARNED
<S> <C>
United States Trust Company of New York $ 60,446
- --------------------------------------------------------------------------------------------------- -------------
Signet Trust Company $ 6,154
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities for the six
months ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------------------------
PURCHASES $ 673,802,393
- -------------------------------------------------------------------------------------------------- --------------
SALES 706,575,810
- -------------------------------------------------------------------------------------------------- --------------
</TABLE>
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
Blanchard
Flexible
Income Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
OFFITBANK
Blanchard
Flexible
Income Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of
Signet Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
CUSIP 093212306
G01485-07 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Short-Term
Flexible Income Fund (previously named Blanchard Short-Term Bond Fund), for the
six-month period ended October 31, 1995.
This report provide you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
To further update you, as of December 4, 1995, the year-to-date total return of
your Blanchard Short-Term Flexible Income Fund was a solid 8.20%.* (Average
annual returns through 9/30/95 for the 1-year and since inception [4/16/93]
periods were respectively: 7.69% and 5.11%.*)
Although past performance is not a guarantee of future performance, we're quite
pleased with this year's results so far, as we hope you are.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
*Investment return and principal value will fluctuate so that shares, upon
redemption, may be worth more or less than their original cost. Year-to-date
total return assumes reinvestment of all distributions. Average annual return
numbers are the total return annualized and compounded, and assume reinvestment
of all distributions. Returns shown do not reflect certain management fees
which were waived during the period. If management fees were reflected, the
returns would be lower.
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
CORPORATE BONDS--35.6%
- ---------------------------------------------------------------------------------------------------
AIRLINES--0.9%
-------------------------------------------------------------------------------------
$ 200,000 USAir, Inc., 9.80%, 1/15/2000 $ 186,000
------------------------------------------------------------------------------------- -------------
BASIC MATERIALS--2.5%
-------------------------------------------------------------------------------------
500,000 Owens-Illinois, Inc., Sr. Sub. Note, 10.25%, 4/1/1999 514,375
------------------------------------------------------------------------------------- -------------
CONSUMER RELATED--3.4%
-------------------------------------------------------------------------------------
200,000 MacAndrew Forbes, Deb., 12.25%, 7/1/1996 202,500
-------------------------------------------------------------------------------------
500,000 Revlon Consumer Products Corp., Sr. Note, 9.50%, 6/1/1999 506,250
------------------------------------------------------------------------------------- -------------
Total 708,750
------------------------------------------------------------------------------------- -------------
ENERGY & OIL RELATED--3.4%
-------------------------------------------------------------------------------------
250,000 Texas New Mexico Power, 1st Mtg. Bond, 9.25%, 9/15/2000 264,509
-------------------------------------------------------------------------------------
500,000 Triton Energy Corp., Sr. Sub. Disc. Note, 11/1/1997 427,500
------------------------------------------------------------------------------------- -------------
Total 692,009
------------------------------------------------------------------------------------- -------------
FINANCE - RETAIL--1.0%
-------------------------------------------------------------------------------------
200,000 Scotsman Industries, Inc., Sr. Note, 9.50%, 12/15/2000 198,000
------------------------------------------------------------------------------------- -------------
FINANCIAL SERVICES--6.0%
-------------------------------------------------------------------------------------
500,000 Navistar Financial Corp., Owner Trust, Sr. Sub. Note, 8.875%,
11/15/1998 505,000
-------------------------------------------------------------------------------------
400,000 Presidential Life Corp., Sr. Note, 9.50%, 12/15/2000 412,000
-------------------------------------------------------------------------------------
300,000 Reliance Group Holdings, Inc., Sr. Note, 9.00%, 11/15/2000 306,000
------------------------------------------------------------------------------------- -------------
Total 1,223,000
------------------------------------------------------------------------------------- -------------
INDUSTRIAL RELATED--9.2%
-------------------------------------------------------------------------------------
350,000 Armco, Inc., Sr. Note, 9.375%, 11/1/2000 344,750
-------------------------------------------------------------------------------------
500,000 PDV America, Sr. Note, 7.25%, 8/1/1998 482,500
-------------------------------------------------------------------------------------
350,000 Sequa Corp., Sr. Note, 8.75%, 12/15/2001 322,875
-------------------------------------------------------------------------------------
250,000 Stone Container Corp., Sr. Note, 9.875%, 2/1/2001 247,812
-------------------------------------------------------------------------------------
200,000 Stone Container Corp., Sr. Sub. Note, 11.00%, 8/15/1999 205,000
-------------------------------------------------------------------------------------
</TABLE>
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
CORPORATE BONDS--CONTINUED
- ---------------------------------------------------------------------------------------------------
INDUSTRIAL RELATED--CONTINUED
-------------------------------------------------------------------------------------
$ 300,000 Unisys Corp., Sr. Note, 10.625%, 10/1/1999 $ 277,500
------------------------------------------------------------------------------------- -------------
Total 1,880,437
------------------------------------------------------------------------------------- -------------
INSURANCE--1.3%
-------------------------------------------------------------------------------------
250,000 Penn Central Corp., Sub. Note, 10.625%, 4/15/2000 263,165
------------------------------------------------------------------------------------- -------------
OTHER--2.4%
-------------------------------------------------------------------------------------
250,000 SIFTO Canada, Inc., Sr. Note, 8.50%, 7/15/2000 233,387
------------------------------------------------------------------------------------- -------------
PAPER PRODUCTS--1.4%
-------------------------------------------------------------------------------------
300,000 Repap Wisconsin, Inc., 1st Priority Sr. Secd. Note, 9.25%, 2/1/2002 291,000
------------------------------------------------------------------------------------- -------------
STEEL--0.9%
-------------------------------------------------------------------------------------
200,000 Wheeling Pittsburgh Corp., Sr. Note, 9.375%, 11/15/2003 184,750
------------------------------------------------------------------------------------- -------------
TELECOMMUNICATIONS--3.2%
-------------------------------------------------------------------------------------
300,000 Centennial Cellular Corp., Sr. Note, 8.875%, 11/1/2001 293,250
-------------------------------------------------------------------------------------
368,800 SCI Television, Inc., Note, 7.50%, 6/30/1998 368,800
-------------------------------------------------------------------------------------
250,000 Videotron Ltd., Sr. Sub. Note, 10.25%, 10/15/2002 260,625
------------------------------------------------------------------------------------- -------------
Total 922,675
------------------------------------------------------------------------------------- -------------
TOTAL CORPORATE BONDS (IDENTIFIED COST $7,327,037) 7,297,548
------------------------------------------------------------------------------------- -------------
U.S. GOVERNMENT AGENCY--12.1%
- ---------------------------------------------------------------------------------------------------
2,262,130 Government National Mortgage Association, 10.00%,
6/15/2021 (identified cost $2,465,721) 2,477,595
------------------------------------------------------------------------------------- -------------
U.S. TREASURY SECURITIES--49.4%
- ---------------------------------------------------------------------------------------------------
U.S. TREASURY BILL--5.9%
-------------------------------------------------------------------------------------
1,250,000 5/30/1996 1,211,609
------------------------------------------------------------------------------------- -------------
U.S. TREASURY NOTES--43.5%
-------------------------------------------------------------------------------------
4,300,000 6.50%, 5/15/1997 4,356,438
-------------------------------------------------------------------------------------
</TABLE>
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- -------------
U.S. TREASURY SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES--CONTINUED
-------------------------------------------------------------------------------------
$ 4,500,000 6.875%, 10/31/1996 $ 4,557,650
------------------------------------------------------------------------------------- -------------
Total 8,914,088
------------------------------------------------------------------------------------- -------------
TOTAL U.S. TREASURY SECURITIES (IDENTIFIED COST $10,052,862) 10,125,690
------------------------------------------------------------------------------------- -------------
TOTAL INVESTMENTS (IDENTIFIED COST $19,845,620) $ 19,900,840+
------------------------------------------------------------------------------------- -------------
</TABLE>
+ The cost of investments for federal tax purposes amounts to $19,845,620. The
net unrealized appreciation of investments on a federal tax basis amounts to
$55,220 which is comprised of $173,061 appreciation and $117,841 depreciation
at October 31, 1995.
Note: The categories of investments are shown as a percentage of net assets
($20,479,541) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $19,845,620) $ 19,900,840
- ---------------------------------------------------------------------------------------------------
Cash 156,965
- ---------------------------------------------------------------------------------------------------
Income receivable 526,152
- ---------------------------------------------------------------------------------------------------
Deferred expenses 40,891
- --------------------------------------------------------------------------------------------------- -------------
Total assets 20,624,848
- ---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Income distribution payable $ 99,036
- ---------------------------------------------------------------------------------------
Accrued expenses 46,271
- --------------------------------------------------------------------------------------- ----------
Total liabilities 145,307
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 6,894,317 shares outstanding $ 20,479,541
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 21,116,891
- ---------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments 55,220
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments (621,973)
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (70,597)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 20,479,541
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
- ---------------------------------------------------------------------------------------------------
($20,479,541 / 6,894,317 shares outstanding) $ 2.97
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------------------------
Interest $ 788,767
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------
Management fee $ 82,538
- -----------------------------------------------------------------------------------------
Administrative personnel and services fee 13,725
- -----------------------------------------------------------------------------------------
Custodian fees 10,073
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 28,334
- -----------------------------------------------------------------------------------------
Directors'/Trustees' fees 1,812
- -----------------------------------------------------------------------------------------
Auditing fees 8,482
- -----------------------------------------------------------------------------------------
Legal fees 5,600
- -----------------------------------------------------------------------------------------
Portfolio accounting fees 42,446
- -----------------------------------------------------------------------------------------
Distribution services fee 27,513
- -----------------------------------------------------------------------------------------
Share registration costs 11,901
- -----------------------------------------------------------------------------------------
Printing and postage 23,312
- -----------------------------------------------------------------------------------------
Insurance premiums 750
- -----------------------------------------------------------------------------------------
Miscellaneous 8,238
- ----------------------------------------------------------------------------------------- ----------
Total expenses 264,724
- -----------------------------------------------------------------------------------------
Waiver of management fee (59,358)
- ----------------------------------------------------------------------------------------- ----------
Net expenses 205,366
- ----------------------------------------------------------------------------------------------------- ----------
Net investment income 583,401
- ----------------------------------------------------------------------------------------------------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
- -----------------------------------------------------------------------------------------------------
Net realized gain on investments 41,829
- -----------------------------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments 244,436
- ----------------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments 286,265
- ----------------------------------------------------------------------------------------------------- ----------
Change in net assets resulting from operations $ 869,666
- ----------------------------------------------------------------------------------------------------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) OCTOBER YEAR ENDED
31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 583,401 $ 1,502,880
- -----------------------------------------------------------------------
Net realized gain (loss) on investments 41,829 (572,264)
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments 244,436 443,090
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 869,666 1,373,706
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income (583,401) (1,502,880)
- -----------------------------------------------------------------------
Distributions in excess of net investment income (12,719) (18,912)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from distributions to shareholders (596,120) (1,521,792)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 3,172,122 21,020,411
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 451,527 1,341,339
- -----------------------------------------------------------------------
Cost of shares redeemed (6,862,161) (41,150,317)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (3,238,512) (18,788,567)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (2,964,966) (18,936,653)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 23,444,507 42,381,160
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 20,479,541 $ 23,444,507
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED PERIOD
(UNAUDITED) YEAR ENDED ENDED
OCTOBER 31, APRIL 30, APRIL 30,
<S> <C> <C> <C> <C>
1995 1995 1994 1993(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 2.94 $ 2.93 $ 3.00 $ 3.00
- ----------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ----------------------------------------------------------------
Net investment income 0.08 0.15 0.17 0.00(d)
- ----------------------------------------------------------------
Net realized and unrealized gain (loss) on investments 0.03 0.00(d) (0.06) 0.00(d)
- ---------------------------------------------------------------- ------------- --------- --------- -----------
Total from investment operations 0.11 0.15 0.11 0.00(d)
- ---------------------------------------------------------------- ------------- --------- --------- -----------
LESS DISTRIBUTIONS
- ----------------------------------------------------------------
Distributions from net investment income (0.08) (0.14) (0.17) (0.00)(d)
- ----------------------------------------------------------------
Distributions in excess of net investment income 0.00(d) (0.00 (d) -- --
- ----------------------------------------------------------------
Distributions from net realized gain on investments -- (0.00) (0.01) (0.00)(d)
- ---------------------------------------------------------------- ------------- --------- --------- -----------
Total distributions (0.08) (0.14) (0.18) (0.00)(d)
- ---------------------------------------------------------------- ------------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 2.97 $ 2.94 $ 2.93 $ 3.00
- ---------------------------------------------------------------- ------------- --------- --------- -----------
TOTAL RETURN (B) 3.82% 5.34% 3.72% 0.15%
- ----------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ----------------------------------------------------------------
Expenses 1.87%* 1.38% 0.63% 3.03%*
- ----------------------------------------------------------------
Net investment income 5.30%* 4.80% 5.64% 3.89%*
- ----------------------------------------------------------------
Expense waiver/reimbursement (c) 0.54%* 0.75% 1.42% 0.00%*
- ----------------------------------------------------------------
SUPPLEMENTAL DATA
- ----------------------------------------------------------------
Net assets, end of period (000 omitted) $20,480 $23,445 $42,000 $2,000
- ----------------------------------------------------------------
Portfolio turnover 120% 84% 212% 36%
- ----------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from April 16, 1993 (commencement of
operations) April 30, 1993.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Less than one cent per share.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD SHORT-TERM FLEXIBLE INCOME FUND
(FORMERLY, BLANCHARD SHORT-TERM BOND FUND)
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end, management investment company. The
Trust consists of ten portfolios. The financial statements included herein are
only those of Blanchard Short-Term Flexible Income Fund (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
prices provided by an independent pricing service.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1995, the Fund, for federal tax purposes, had a capital loss
carryforward of $401,749, which will reduce the Fund's taxable income
arising from future net realized gain on investments, if any, to the extent
permitted by the Code, and thus will reduce the amount of the distributions
to shareholders which would otherwise be necessary to relieve the Fund of
any liability for federal tax. Pursuant to the Code, such capital loss
carryforward will expire in 2003.
Additionally, net capital losses of $254,000 attributable to security
transactions incurred after October 31, 1994 and treated as arising on May
1, 1995, the first day of the Fund's taxable year.
As of April 30, 1995, the Fund had temporary book/tax differences primarily
attributable to post-October loss deferrals and non-deductible expenses.
The Fund had permanent book/tax differences primarily attributable to
foreign currency losses. To reflect reclassifications arising from
permanent book/tax differences for the year ended April 30, 1995,
paid-in-capital was charged $187,618, accumulated realized loss-net was
credited $38,144 and accumulated overdistributed investment income-net was
credited $149,474.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized using the straight-line method over a period not to exceed five
years from the Fund's commencement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 1,068,552 7,207,260
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 152,029 460,620
- -------------------------------------------------------------------------
Shares redeemed (2,311,622) (14,143,317)
- ------------------------------------------------------------------------- -------------------- ----------------
Net change resulting from share transactions (1,091,041) (6,475,437)
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Virtus Capital Management, Inc. the Fund's manager (the
"Manager"), receives for its services an annual management fee equal to .75% of
the Fund's average daily net assets.
Virtus Capital Management became the Fund's manager on July 13, 1995. Prior to
July 13, 1995, Sheffield Management Company served as the Fund's manager and
received for its services an annual management fee equal to .75% of the Fund's
average daily net assets.
For the six months ended October 31, 1995, the managers earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
MANAGER FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Management Company $ 32,746 $ 23,550
- ---------------------------------------------------------------------------------
Virtus Capital Management, Inc. $ 49,792 $ 35,808
- ---------------------------------------------------------------------------------
</TABLE>
The Manager may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Manager can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
SUB-ADVISORY FEE--OFFITBANK provides the manager with sub-advisory services for
which it receives a fee from the Manager equal to .25% of the Fund's average
daily net assets. In addition, OFFITBANK may voluntarily choose to reduce its
compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp., ("FSC") the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .25% of the average daily net assets of the Fund's shares,
annually, to reimburse FSC.
The distributor may voluntarily choose to waive any portion of its fee. The
distributor can modify or terminate this voluntary waiver at any time at its
sole discretion.
FSC became the Fund's distributor on July 13, 1995. Prior to July 13, 1995,
Sheffield Investments, Inc. served as the Fund's distributor and was reimbursed
from the net assets of the Fund to finance activities intended too result in the
sale of the Fund's shares.
For the period ended October 31, 1995, the distributors earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF
DISTRIBUTOR FEE EARNED
<S> <C>
Sheffield Investments, Inc. $ 10,915
- --------------------------------------------------------------------------------------------------- -------------
Federated Securities Corp. $ 16,598
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund for
which it receives a fee. This fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ became the Fund's transfer agent on October 15, 1995. Prior to October 15,
1995, United States Trust Company of New York served as the Fund's transfer
agent for which it received a fee.
For the period ended October 31, 1995, the transfer agent earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
TRANSFER AGENT FEE EARNED
<S> <C>
United States Trust Company of New York $ 25,716
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 2,618
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
PORTFOLIO ACCOUNTING FEES-- FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
FServ became the Fund's portfolio accountant on October 15, 1995. Prior to
October 15, 1995, Mutual Fund Services Company served as the Fund's portfolio
accountant for which it received a fee.
For the period ended October 31, 1995, the portfolio accountants earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
PORTFOLIO ACCOUNTANT FEE EARNED
<S> <C>
Mutual Funds Services Company $ 38,524
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 3,922
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian for which it receives a
fee. The fee is based on the level of the Fund's average daily net assets for
the period, plus out-of-pocket expenses.
Signet Trust Company became the Fund's custodian on October 15, 1995. Prior to
October 15, 1995, United States Trust Company of New York served as the Fund's
custodian for which it received
a fee.
For the period ended October 31, 1995, the custodians earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF
CUSTODIAN FEE EARNED
<S> <C>
United States Trust Company of New York $ 9,142
- --------------------------------------------------------------------------------------------------- -------------
Signet Trust Company $ 931
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
ORGANIZATIONAL EXPENSES--Organizational expenses of $77,143 were borne initially
by the Manager. The Fund has agreed to reimburse the Manager for the
organizational expenses during the five year period following the Fund's
effective date. For the six months ended October 31, 1995, the Fund paid $7,790
pursuant to this agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities for the six
months ended October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ---------------------------------------------------------------------------------------------------
PURCHASES $ 24,574,454
- --------------------------------------------------------------------------------------------------- -------------
SALES $ 27,191,564
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
THIS PAGE INTENTIONALLY LEFT BLANK
Blanchard
Short-Term
Flexible Income
Fund*
*formerly Blanchard
Short-Term Bond Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
OFFITBANK
Blanchard
Short-Term
Flexible Income
Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of
Signet Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of
principal invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
CUSIP 093212405
G01485-04 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard 100% Treasury
Money Market Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
If you would like the most recent performance update, or have other questions,
please call Investors' Services at 1-800-829-3863.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
Although money market funds seek to maintain a stable net asset value of $1.00
per share, there is no assurance that they will be able to do so. An investment
in the Fund is neither insured nor guaranteed by the U.S. government.
BLANCHARD 100% TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY SECURITIES--99.3%
- -------------------------------------------------------------------------------------------------
$ 80,228,000 United States Treasury Bills, 11/9/1995-2/15/1996 $ 79,856,927
----------------------------------------------------------------------------------
60,000,000 United States Treasury Notes, 4.625%-8.50%, 11/15/1995-2/15/1996 59,998,336
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST) $ 139,855,263+
---------------------------------------------------------------------------------- --------------
</TABLE>
+ Also represents cost for federal tax purposes.
Note: The category of investments is shown as a percentage of net assets
($140,910,811) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 139,855,263
- -------------------------------------------------------------------------------------------------
Cash 1,576
- -------------------------------------------------------------------------------------------------
Income receivable 1,749,524
- ------------------------------------------------------------------------------------------------- --------------
Total assets 141,606,363
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Income distribution payable $ 509,409
- -------------------------------------------------------------------------------------
Payable to Transfer Agent 58,777
- -------------------------------------------------------------------------------------
Payable to Administrator 42,000
- -------------------------------------------------------------------------------------
Accrued expenses 85,366
- ------------------------------------------------------------------------------------- ----------
Total liabilities 695,552
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 140,986,906 shares outstanding $ 140,910,811
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- -------------------------------------------------------------------------------------------------
$140,910,811 / 140,986,906 shares outstanding $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ----------------------------------------------------------------------------------------------------
Interest $ 4,238,726
- ----------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------
Management fee $ 375,738
- ---------------------------------------------------------------------------------------
Administrative personnel and services fee 53,000
- ---------------------------------------------------------------------------------------
Custodian fees 19,985
- ---------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 205,297
- ---------------------------------------------------------------------------------------
Directors'/Trustees' fees 4,600
- ---------------------------------------------------------------------------------------
Auditing fees 41,014
- ---------------------------------------------------------------------------------------
Legal fees 7,522
- ---------------------------------------------------------------------------------------
Portfolio accounting fees 66,603
- ---------------------------------------------------------------------------------------
Share registration costs 13,181
- ---------------------------------------------------------------------------------------
Printing and postage 54,486
- ---------------------------------------------------------------------------------------
Insurance premiums 12,600
- ---------------------------------------------------------------------------------------
Miscellaneous 672
- --------------------------------------------------------------------------------------- -----------
Total expenses 854,698
- ---------------------------------------------------------------------------------------
Waiver of management fee (165,325)
- --------------------------------------------------------------------------------------- -----------
Net expenses 689,373
- ---------------------------------------------------------------------------------------------------- ------------
Net investment income 3,549,353
- ---------------------------------------------------------------------------------------------------- ------------
Net realized gain on investments 12,078
- ---------------------------------------------------------------------------------------------------- ------------
Change in net assets resulting from operations $ 3,561,431
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) OCTOBER YEAR ENDED
31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net investment income $ 3,549,353 $ 7,639,549
- -----------------------------------------------------------------------
Net realized gain on investments 12,078 --
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations 3,561,431 7,639,549
- ----------------------------------------------------------------------- ---------------------- ----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -----------------------------------------------------------------------
Distributions from net investment income (3,531,079) (7,639,549)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 53,806,222 212,621,088
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared 2,791,685 7,175,266
- -----------------------------------------------------------------------
Cost of shares redeemed (80,872,007) (285,432,758)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (24,274,100) (65,636,404)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (24,243,748) (65,636,404)
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 165,154,559 230,790,963
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 140,910,811 $ 165,154,559
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED)
OCTOBER 31, YEAR ENDED APRIL 30,
1995 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------------
Net investment income 0.02 0.04 0.03 0.03 0.04 0.07
- -------------------------------------------------
LESS DISTRIBUTIONS
- -------------------------------------------------
Distributions from net investment income (0.02) (0.04) (0.03) (0.03) (0.04) (0.07)
- ------------------------------------------------- ------ --------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------------- ------ --------- --------- --------- --------- ---------
TOTAL RETURN (A) 2.40% 4.02% 2.76% 3.42% 4.60% 6.80%
- -------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------------
Expenses 0.92%* 0.99% 0.41% 0.08% 0.86% 1.11%
- -------------------------------------------------
Net investment income 4.71%* 3.83% 2.80% 3.27% 4.52% 6.62%
- -------------------------------------------------
Expense waiver/reimbursement (b) 0.22%* 0.08% 0.52% 0.84% 0.60% 0.12%
- -------------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------------
Net assets, end of period (000 omitted) $140,911 $165,155 $231,791 $164,974 $58,000 $38,000
- -------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD 100% TREASURY MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios. The financial statements included herein are
only those of Blanchard 100% Treasury Money Market Fund (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal
Revenue Code, as amended (the "Code"). Distributions to shareholders are
recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 53,806,222 212,621,088
- -------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 2,791,685 7,175,266
- -------------------------------------------------------------------------
Shares redeemed (80,872,007) (285,432,758)
- ------------------------------------------------------------------------- -------------------- ----------------
Net change resulting from share transactions (24,274,100) (65,636,404)
- ------------------------------------------------------------------------- -------------------- ----------------
</TABLE>
At October 31, 1995, capital paid-in aggregated $140,986,906.
(4) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
MANAGEMENT FEE--Virtus Capital Management, Inc., the Fund's Manager, receives
for its services an annual management fee equal to .50% of the first $500
million of the Fund's average daily net assets, .475% of the Fund's average
daily net assets in excess of $500 million but not exceeding $1 billion, plus
.45% of the Fund's average daily net assets in excess of $1 billion. The Manager
may voluntarily choose to waive any portion of its fee. The Manager can modify
or terminate this voluntary waiver at any time at its sole discretion.
Virtus Capital Management, Inc. became the Fund's manager on July 13, 1995.
Prior to July 13, 1995, Sheffield Management Company served as the Fund's
investment manager for which it received a fee.
For the six months ended October 31, 1995, the managers earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
MANAGERS FEE EARNED EXPENSES WAIVED
<S> <C> <C>
Sheffield Management Company $ 149,070 $ 65,591
- ---------------------------------------------------------------------------- ------------- ----------
Virtus Capital Management, Inc. $ 226,668 $ 99,734
- ---------------------------------------------------------------------------- ------------- ----------
</TABLE>
SUB-ADVISORY FEE--HSBC Asset Management Americas, Inc. provides the Manager with
sub-advisory services for which it receives an fee equal to the greater of .10%
of the Fund's average daily net assets or $50,000, annually, from the Manager.
In addition, HSBC Asset Management Americas, Inc. may voluntarily choose to
reduce its compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Trust for the period. FAS may
voluntarily choose to waive a portion of its fee.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ") serves as transfer and dividend disbursing agent for the Fund for
which it receives a fee. This fee is based on the size, type, and number of
accounts and transactions made by shareholders.
FServ became the Fund's transfer agent on October 15, 1995. Prior to October 15,
1995, United States Trust Company of New York served as the Fund's transfer
agent for which it received a fee.
For the six months ended October 31, 1995, the transfer agents earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
TRANSFER AGENT FEE EARNED
<S> <C>
United States Trust Company of New York $ 186,329
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 18,968
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
PORTFOLIO ACCOUNTING FEES--FServ maintains the Fund's accounting records for
which it receives a fee. The fee is based on the level of the Fund's average
daily net assets for the period, plus out-of-pocket expenses.
FServ became the Fund's portfolio accountant on October 15, 1995. Prior to
October 15, 1995, Mutual Fund Services Company served as the Fund's portfolio
accountant for which it received a fee.
For the six months ended October 31, 1995, the portfolio accountants earned fees
as follows:
<TABLE>
<CAPTION>
AMOUNT OF
PORTFOLIO ACCOUNTANT FEE EARNED
<S> <C>
Mutual Fund Services Company $ 60,449
- --------------------------------------------------------------------------------------------------- -------------
Federated Services Company $ 6,154
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
CUSTODIAN FEES--Signet Trust Company is the Fund's custodian for which it
receives a fee. The fee is based on the level of the Fund's average daily net
assets for the period, plus out-of-pocket expenses.
Signet Trust Company became the Fund's custodian on October 15, 1995. Prior to
October 15, 1995, United States Trust Company of New York served as the Fund's
custodian for which it received a fee.
For the six months ended October 31, 1995, the custodians earned fees as
follows:
<TABLE>
<CAPTION>
AMOUNT OF
CUSTODIAN FEE EARNED
<S> <C>
United States Trust Company of New York $ 18,139
- --------------------------------------------------------------------------------------------------- -------------
Signet Trust Company $ 1,846
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors or Trustees of the above companies.
Blanchard
100% Treasury
Money
Market Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Blanchard
100% Treasury
Money
Market Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of Signet
Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
CUSIP 093215101
G01485-06 (12/95)
President's Message
December 15, 1995
Dear Shareholder,
I'm pleased to present the Semi-Annual Report for your Blanchard Worldwide
Emerging Markets Fund for the six-month period ended October 31, 1995.
This report provides you with complete financial information on your Fund,
including a list of investments included in the portfolio and the financial
statements.
If you would like the most recent performance update, or have other questions,
please call Investors' Services at 1-800-829-3863.
Thank you for your confidence in the Blanchard Group of Funds as a way to put
your money to work for you.
We remain committed to delivering the highest level of personal service.
Sincerely,
Edward C. Gonzales
President
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------------- ---------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--103.1%
- ---------------------------------------------------------------------------------------------------
ARGENTINA--3.0%
----------------------------------------------------------------------------
CONSUMER GOODS & RELATED--1.0%
----------------------------------------------------------------------------
4,900 Quilmes Industrial SA $ 86,240
---------------------------------------------------------------------------- ------------
TELECOMMUNICATIONS--0.9%
----------------------------------------------------------------------------
2,000 Telecom Argentina S.A., ADR 76,750
---------------------------------------------------------------------------- ------------
UTILITIES & RELATED--1.1%
----------------------------------------------------------------------------
22,120 Compania Naviera Perez Companc SA, Class B 97,539
---------------------------------------------------------------------------- ------------
TOTAL ARGENTINA 260,529
---------------------------------------------------------------------------- ------------
BRAZIL--13.3%
----------------------------------------------------------------------------
BASIC INDUSTRY--3.8%
----------------------------------------------------------------------------
9,920 Cia Acos Especiais Itabira-Acesita., ADR 144,810
----------------------------------------------------------------------------
4,100 Companhia Vale Do Rio Doce, ADR 165,187
----------------------------------------------------------------------------
3,187,080 Cia Acos Especiais Itabira-Acesita., Pfd. 26,509
---------------------------------------------------------------------------- ------------
Total 336,506
---------------------------------------------------------------------------- ------------
CAPITAL GOODS--1.4%
----------------------------------------------------------------------------
9,487 Rhodia-Ster S.A., GDR 124,289
---------------------------------------------------------------------------- ------------
ENERGY RELATED--3.1%
----------------------------------------------------------------------------
573,000 Centrais Eletricas Brasileiras 162,642
----------------------------------------------------------------------------
4,941 Companhia Energetica de Minas Gerais, ADR 106,856
---------------------------------------------------------------------------- ------------
Total 269,498
---------------------------------------------------------------------------- ------------
IRON/STEEL--0.9%
----------------------------------------------------------------------------
8,100 Usinas Uni Sd Mg., ADR 76,638
---------------------------------------------------------------------------- ------------
RETAIL--1.0%
----------------------------------------------------------------------------
9,000,000 Lojas Americanas S.A., Preference 90,767
---------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------------- ---------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
BRAZIL--CONTINUED
----------------------------------------------------------------------------
TELECOMMUNICATIONS--3.1%
----------------------------------------------------------------------------
6,720 Telecomunicacoes Brasileras, ADR $ 270,745
---------------------------------------------------------------------------- ------------
TOTAL BRAZIL 1,168,443
---------------------------------------------------------------------------- ------------
CHILE--3.0%
----------------------------------------------------------------------------
BASIC INDUSTRY--1.0%
----------------------------------------------------------------------------
17,500 Antofagasta Holdings PLC 84,387
---------------------------------------------------------------------------- ------------
CAPITAL GOODS--1.0%
----------------------------------------------------------------------------
3,700 Madeco SA, ADR 92,038
---------------------------------------------------------------------------- ------------
RETAIL--1.0%
----------------------------------------------------------------------------
3,700 Santa Isabel S.A., ADR 83,713
---------------------------------------------------------------------------- ------------
TOTAL CHILE 260,138
---------------------------------------------------------------------------- ------------
CHINA--1.9%
----------------------------------------------------------------------------
AUTOMOTIVE--0.6%
----------------------------------------------------------------------------
240,000 Qingling Motors Co., Class H 52,459
---------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--1.3%
----------------------------------------------------------------------------
150,000 (a)China North Industries Investment Ltd. 112,500
---------------------------------------------------------------------------- ------------
TOTAL CHINA 164,959
---------------------------------------------------------------------------- ------------
COLOMBIA--2.1%
----------------------------------------------------------------------------
BASIC INDUSTRY--1.3%
----------------------------------------------------------------------------
6,500 Cementos Diamante S.A., GDR 113,750
---------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--0.8%
----------------------------------------------------------------------------
5,400 Banco Industrial Colombiano, ADR 73,575
---------------------------------------------------------------------------- ------------
TOTAL COLOMBIA 187,325
---------------------------------------------------------------------------- ------------
ECUADOR--1.1%
----------------------------------------------------------------------------
CONSTRUCTION--1.1%
----------------------------------------------------------------------------
456 LA Cemento Nacional C.A., GDR 95,760
---------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- --------------------- ---------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
HONG KONG--0.9%
----------------------------------------------------------------------------
ENGINEERING--0.9%
----------------------------------------------------------------------------
45,000 New World Infrastructure $ 79,155
---------------------------------------------------------------------------- ------------
MANUFACTURING--0.0%
----------------------------------------------------------------------------
40,000 (a)Star Paging International Holding, Ltd., Warrants 528
---------------------------------------------------------------------------- ------------
TOTAL HONG KONG 79,683
---------------------------------------------------------------------------- ------------
HUNGARY--2.2%
----------------------------------------------------------------------------
BANKING--0.9%
----------------------------------------------------------------------------
10,000 OTP Bank, GDR 86,250
---------------------------------------------------------------------------- ------------
CAPITAL GOODS--0.9%
----------------------------------------------------------------------------
550 (a)Matav Rt 78,497
---------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--0.3%
----------------------------------------------------------------------------
2,800 (a)Kekut Asvanyiz, GDR 23,817
---------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--0.1%
----------------------------------------------------------------------------
3,100 (a)Konzum Ker ES Ipari 9,079
---------------------------------------------------------------------------- ------------
TOTAL HUNGARY 197,643
---------------------------------------------------------------------------- ------------
INDIA--7.5%
----------------------------------------------------------------------------
BASIC INDUSTRY--1.7%
----------------------------------------------------------------------------
35,000 Gujarat Ambuja, Conv. Bond, 3.50%, 6/30/1999 48,694
----------------------------------------------------------------------------
1,900 (a)Hindalco Industries Ltd., GDR 59,660
----------------------------------------------------------------------------
1,650 United Phosphorous Ltd., GDR 37,950
---------------------------------------------------------------------------- ------------
Total 146,304
---------------------------------------------------------------------------- ------------
CONSUMER--1.4%
----------------------------------------------------------------------------
4,800 (a)DCW, Ltd., GDR 28,800
----------------------------------------------------------------------------
10,000 (a)Dr. Reddy's Laboratories, GDR 95,000
---------------------------------------------------------------------------- ------------
Total 123,800
---------------------------------------------------------------------------- ------------
INVESTMENT COMPANIES--4.4%
----------------------------------------------------------------------------
7,803 (a)IS Himalayan Fund N.V. 99,878
----------------------------------------------------------------------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
INDIA--CONTINUED
-------------------------------------------------------------------------------------
INVESTMENT COMPANIES--CONTINUED
-------------------------------------------------------------------------------------
1,180 (a)IS Himalayan Fund N.V., Warrants $ 590
-------------------------------------------------------------------------------------
27,307 (a)Indian Opportunities Fund Ltd. 288,093
------------------------------------------------------------------------------------- ------------
Total 388,561
------------------------------------------------------------------------------------- ------------
TOTAL INDIA 658,665
------------------------------------------------------------------------------------- ------------
INDONESIA--5.0%
-------------------------------------------------------------------------------------
BANKING--2.7%
-------------------------------------------------------------------------------------
105,000 PT Bank Dagang Nasional 93,626
-------------------------------------------------------------------------------------
41,000 PT Bank International Indonesia 143,527
------------------------------------------------------------------------------------- ------------
Total 237,153
------------------------------------------------------------------------------------- ------------
CAPITAL GOODS--0.5%
-------------------------------------------------------------------------------------
1,500 (a)PT Indosat, ADR 49,688
------------------------------------------------------------------------------------- ------------
CHEMICALS--0.4%
-------------------------------------------------------------------------------------
41,000 Keramika Indonesia Associates 33,851
------------------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--1.4%
-------------------------------------------------------------------------------------
68,000 PT Andayani Megah 58,388
-------------------------------------------------------------------------------------
39,000 PT Concord Benefit Textile 11,162
-------------------------------------------------------------------------------------
84,000 PT Gadjah Tunggal 53,633
------------------------------------------------------------------------------------- ------------
Total 123,183
------------------------------------------------------------------------------------- ------------
TOTAL INDONESIA 443,875
------------------------------------------------------------------------------------- ------------
ISRAEL--0.4%
-------------------------------------------------------------------------------------
FINANCIAL SERVICES--0.1%
-------------------------------------------------------------------------------------
2,200 (a)Ampal-American Israel Corp., Class A 12,375
------------------------------------------------------------------------------------- ------------
INVESTMENT COMPANIES--0.3%
-------------------------------------------------------------------------------------
2,300 First Israel Fund, Inc. 25,300
------------------------------------------------------------------------------------- ------------
TOTAL ISRAEL 37,675
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
KOREA--6.4%
-------------------------------------------------------------------------------------
BASIC INDUSTRY--0.7%
-------------------------------------------------------------------------------------
8,000 Kumho Construction & Engineering Co., Pfd. $ 64,824
------------------------------------------------------------------------------------- ------------
CAPITAL GOODS--1.5%
-------------------------------------------------------------------------------------
4,944 (a)Anam Industrial Co., Ltd., Pfd. 75,599
-------------------------------------------------------------------------------------
6,000 (a)Daewoo Heavy Industries, Pfd. 54,578
------------------------------------------------------------------------------------- ------------
Total 130,177
------------------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--0.0%
-------------------------------------------------------------------------------------
2 (a)Samsung Electronics Co., Pfd. 243
------------------------------------------------------------------------------------- ------------
TRANSPORTATION--0.4%
-------------------------------------------------------------------------------------
1,342 (a)Dong Bang Forwarding Co. 39,463
------------------------------------------------------------------------------------- ------------
UTILITIES & RELATED--3.8%
-------------------------------------------------------------------------------------
6,000 (a)Korea Electric Power Corp. 247,010
-------------------------------------------------------------------------------------
2,239 (a)Yukong Ltd. 84,275
------------------------------------------------------------------------------------- ------------
Total 331,285
------------------------------------------------------------------------------------- ------------
TOTAL KOREA 565,992
------------------------------------------------------------------------------------- ------------
LUXEMBOURG--1.9%
-------------------------------------------------------------------------------------
INDUSTRIAL--1.9%
-------------------------------------------------------------------------------------
180,000 Siam Sindhorn, Conv. Bond, Series WW, 2.00%, 7/31/2000 169,650
------------------------------------------------------------------------------------- ------------
MALAYSIA--12.7%
-------------------------------------------------------------------------------------
BASIC INDUSTRY--0.8%
-------------------------------------------------------------------------------------
42,400 Aokam Perdana Bhd 71,084
------------------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--1.0%
-------------------------------------------------------------------------------------
11,000 Edaran Otomobil Nasional 86,580
------------------------------------------------------------------------------------- ------------
ENGINEERING--2.9%
-------------------------------------------------------------------------------------
22,000 United Engineers Ltd. 136,797
-------------------------------------------------------------------------------------
22,000 YTL Corp., Bhd 119,481
------------------------------------------------------------------------------------- ------------
Total 256,278
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
MALAYSIA--CONTINUED
-------------------------------------------------------------------------------------
FINANCIAL SERVICES--6.1%
-------------------------------------------------------------------------------------
31,000 Commerce Asset Holdings Bhd $ 153,719
-------------------------------------------------------------------------------------
55,000 Renong Berhad 83,983
-------------------------------------------------------------------------------------
82,000 (a)Technology Resources Industries Bhd 208,146
-------------------------------------------------------------------------------------
25,000 Westmont Berhad 86,580
------------------------------------------------------------------------------------- ------------
Total 532,428
------------------------------------------------------------------------------------- ------------
RETAIL--1.9%
-------------------------------------------------------------------------------------
133,000 LARUT Consolidated Berhad 170,634
------------------------------------------------------------------------------------- ------------
TOTAL MALAYSIA 1,117,004
------------------------------------------------------------------------------------- ------------
MEXICO--5.6%
-------------------------------------------------------------------------------------
AUTO PARTS--1.7%
-------------------------------------------------------------------------------------
30,000 Corporacion Industrial Sanluis, S.A. de C.V. 141,053
------------------------------------------------------------------------------------- ------------
BUILDING MATERIALS--0.9%
-------------------------------------------------------------------------------------
21,200 Apasco SA de CV 77,659
------------------------------------------------------------------------------------- ------------
ENGINEERING--1.0%
-------------------------------------------------------------------------------------
9,500 Empresas ICA Sociedad Controladora S.A., ADR 91,438
------------------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--1.1%
-------------------------------------------------------------------------------------
9,400 Grupo Carso SA de CV, ADR 99,264
------------------------------------------------------------------------------------- ------------
FOREST PRODUCTS--0.9%
-------------------------------------------------------------------------------------
10,000 (a)Grupo Industrial Durango SA de CV, ADR 80,000
------------------------------------------------------------------------------------- ------------
TOTAL MEXICO 489,414
------------------------------------------------------------------------------------- ------------
NETHERLANDS--2.2%
-------------------------------------------------------------------------------------
HOME APPLIANCES--2.2%
-------------------------------------------------------------------------------------
6,000 Ceteco Holdings NV, ADR 195,553
------------------------------------------------------------------------------------- ------------
PERU--3.8%
-------------------------------------------------------------------------------------
BUILDING MATERIALS--0.9%
-------------------------------------------------------------------------------------
5,380 Cementos Lima S.A. 79,846
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
PERU--CONTINUED
-------------------------------------------------------------------------------------
REAL ESTATE--2.0%
-------------------------------------------------------------------------------------
345,000 (a)Peru Real Estate S.A. $ 179,400
------------------------------------------------------------------------------------- ------------
TELECOMMUNICATIONS--0.9%
-------------------------------------------------------------------------------------
43,874 CPT Telefonica Del Peru, Class B 78,346
------------------------------------------------------------------------------------- ------------
TOTAL PERU 337,592
------------------------------------------------------------------------------------- ------------
POLAND--5.6%
-------------------------------------------------------------------------------------
CAPITAL GOODS--1.6%
-------------------------------------------------------------------------------------
3,000 (a)Bydgoska Fabryka Kabli S.A. 42,682
-------------------------------------------------------------------------------------
4,000 (a)Debica S.A. 55,279
-------------------------------------------------------------------------------------
11,500 (a)Polifarb-Cieszyn SA 42,428
------------------------------------------------------------------------------------- ------------
Total 140,389
------------------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--1.6%
-------------------------------------------------------------------------------------
1,400 (a)Huta Szkla Gospodarczego Irena 16,837
-------------------------------------------------------------------------------------
18,550 (a)Mostostal Export 43,482
-------------------------------------------------------------------------------------
1,019 Zyweic Powowarskiew PLZ 81,005
------------------------------------------------------------------------------------- ------------
Total 141,324
------------------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--2.4%
-------------------------------------------------------------------------------------
7,200 Bank Rozwoju Eksportu S.A. 112,124
-------------------------------------------------------------------------------------
895 Bank Slaski S.A. 48,526
-------------------------------------------------------------------------------------
15,760 Elektrim Towarzystwo Handlowe S.A. 52,683
------------------------------------------------------------------------------------- ------------
Total 213,333
------------------------------------------------------------------------------------- ------------
TOTAL POLAND 495,046
------------------------------------------------------------------------------------- ------------
RUSSIA--0.8%
-------------------------------------------------------------------------------------
TELECOMMUNICATIONS--0.8%
-------------------------------------------------------------------------------------
11,000 (a)Petersburg Long Distance, Inc. 68,750
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
SLOVENIA--0.7%
-------------------------------------------------------------------------------------
BANKING--0.7%
-------------------------------------------------------------------------------------
210 Slovenia Kredit Bank $ 63,613
------------------------------------------------------------------------------------- ------------
SOUTH AFRICA--8.8%
-------------------------------------------------------------------------------------
BASIC INDUSTRY--1.0%
-------------------------------------------------------------------------------------
10,000 Sasol Ltd. 86,365
------------------------------------------------------------------------------------- ------------
CHEMICALS--0.0%
-------------------------------------------------------------------------------------
1,500 (a)Polifin Ltd. 3,228
------------------------------------------------------------------------------------- ------------
COMMERCIAL SERVICES--0.7%
-------------------------------------------------------------------------------------
5,300 (a)Imperial Holdings Ltd. 57,399
------------------------------------------------------------------------------------- ------------
CONSUMER GOODS & RELATED--1.9%
-------------------------------------------------------------------------------------
17,242 (a)JD Group, Ltd. 85,092
-------------------------------------------------------------------------------------
2,500 South African Breweries, Ltd. 82,081
------------------------------------------------------------------------------------- ------------
Total 167,173
------------------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--1.8%
-------------------------------------------------------------------------------------
9,000 Barlow Limited 115,976
-------------------------------------------------------------------------------------
7,000 (a)Malbak Limited 46,541
------------------------------------------------------------------------------------- ------------
Total 162,517
------------------------------------------------------------------------------------- ------------
METALS & MINING--0.6%
-------------------------------------------------------------------------------------
5,500 Free State Consolidated Gold Mines Ltd. 51,271
------------------------------------------------------------------------------------- ------------
INDUSTRIAL--0.6%
-------------------------------------------------------------------------------------
1,000 Anglo American Industrial Corp., Ltd. 50,448
------------------------------------------------------------------------------------- ------------
PHARMACEUTICALS--0.5%
-------------------------------------------------------------------------------------
5,500 South African Druggists Ltd. 45,616
------------------------------------------------------------------------------------- ------------
RETAIL--1.7%
-------------------------------------------------------------------------------------
42,000 (a)Metro Cash and Carry Ltd. 149,700
------------------------------------------------------------------------------------- ------------
TOTAL SOUTH AFRICA 773,717
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
TAIWAN--4.4%
-------------------------------------------------------------------------------------
BASIC INDUSTRY--0.1%
-------------------------------------------------------------------------------------
1,700 (a)Tuntex Distinct Corp., GDR $ 9,563
------------------------------------------------------------------------------------- ------------
INVESTMENT COMPANY--4.3%
-------------------------------------------------------------------------------------
47,500 (a)Taiwan Opportunities Fund Ltd. 377,150
------------------------------------------------------------------------------------- ------------
TOTAL TAIWAN 386,713
------------------------------------------------------------------------------------- ------------
THAILAND--6.4%
-------------------------------------------------------------------------------------
CAPITAL GOODS--2.1%
-------------------------------------------------------------------------------------
12,000 (a)Hana Microelectronics Co., Ltd. 46,732
-------------------------------------------------------------------------------------
20,000 TPI Polene Co., Ltd. 135,108
------------------------------------------------------------------------------------- ------------
Total 181,840
------------------------------------------------------------------------------------- ------------
FINANCIAL SERVICES--2.7%
-------------------------------------------------------------------------------------
21,000 Krung Thai Bank PLC 83,449
-------------------------------------------------------------------------------------
31,500 MDX Co., Ltd.--Foreign 57,267
-------------------------------------------------------------------------------------
22,000 Siam City Credit Finance & Securities Co., Ltd. 94,417
------------------------------------------------------------------------------------- ------------
Total 235,133
------------------------------------------------------------------------------------- ------------
TRANSPORTATION--1.6%
-------------------------------------------------------------------------------------
24,000 Precious Shipping, Ltd. 144,010
------------------------------------------------------------------------------------- ------------
TOTAL THAILAND 560,983
------------------------------------------------------------------------------------- ------------
TURKEY--2.5%
-------------------------------------------------------------------------------------
CONSUMER GOODS & RELATED--1.3%
-------------------------------------------------------------------------------------
102,000 Migros Turk 117,253
------------------------------------------------------------------------------------- ------------
IRON/STEEL--1.2%
-------------------------------------------------------------------------------------
860,000 Eregli Demir Ve Celik Fabrikalari T.A.S. 102,211
------------------------------------------------------------------------------------- ------------
TOTAL TURKEY 219,464
------------------------------------------------------------------------------------- ------------
</TABLE>
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
IN U.S.
SHARES DOLLARS
<C> <S> <C>
- ------------ ------------------------------------------------------------------------------------- ------------
EMERGING MARKETS SECURITIES--CONTINUED
- ---------------------------------------------------------------------------------------------------
URUGUAY--0.9%
-------------------------------------------------------------------------------------
FINANCIAL SERVICES--0.9%
-------------------------------------------------------------------------------------
4,700 Banco Comerical S.A., GDR $ 79,900
------------------------------------------------------------------------------------- ------------
TOTAL INVESTMENTS (IDENTIFIED COST $10,486,574)(B) $ 9,078,086
------------------------------------------------------------------------------------- ------------
</TABLE>
(a) Non-income producing.
(b) The cost of investments for federal tax purposes amounts to $10,486,574. The
net unrealized depreciation of investments on a federal tax basis amounts to
$1,408,488 which is comprised of $1,908,171 depreciation and $499,683
appreciation at October 31, 1995.
The following acronyms are used throughout this portfolio:
ADR--American Depository Receipt
GDR--Global Depository Receipts
PLC--Public Limited Company
Note: The categories of investments are shown as a percentage of net assets
($8,806,402) at October 31, 1995.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------------------------
Total investments in securities, at value (identified and tax cost $10,486,574) $ 9,078,086
- ---------------------------------------------------------------------------------------------------
Cash denominated in foreign currencies (at cost, $50,468) 51,088
- ---------------------------------------------------------------------------------------------------
Income receivable 13,114
- ---------------------------------------------------------------------------------------------------
Receivable for investments sold 536,049
- ---------------------------------------------------------------------------------------------------
Deferred expenses 106,858
- --------------------------------------------------------------------------------------------------- -------------
Total assets 9,785,195
---------------------------------------------------------------------------------------------------
LIABILITIES:
- ---------------------------------------------------------------------------------------------------
Payable for investments purchased $ 142,190
- ---------------------------------------------------------------------------------------
Payable for shares redeemed 191,706
- ---------------------------------------------------------------------------------------
Payable to Bank 563,741
- ---------------------------------------------------------------------------------------
Payable for taxes withheld 3,719
- ---------------------------------------------------------------------------------------
Accrued expenses 77,437
- --------------------------------------------------------------------------------------- ----------
Total liabilities 978,793
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS for 1,458,991 shares outstanding $ 8,806,402
- --------------------------------------------------------------------------------------------------- -------------
NET ASSETS CONSIST OF:
- ---------------------------------------------------------------------------------------------------
Paid in capital $ 13,389,265
- ---------------------------------------------------------------------------------------------------
Net unrealized depreciation of investments and translation of assets and liabilities in foreign
currency (1,409,107)
- ---------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (2,874,907)
- ---------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (298,849)
- --------------------------------------------------------------------------------------------------- -------------
Total Net Assets $ 8,806,402
- --------------------------------------------------------------------------------------------------- -------------
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE:
- ---------------------------------------------------------------------------------------------------
$8,806,402 / 1,458,991 shares outstanding $6.04
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- -----------------------------------------------------------------------------------------------------
Dividends (net of foreign taxes withheld of $48,435) $ 17,274
- -----------------------------------------------------------------------------------------------------
Interest 1,794
- ----------------------------------------------------------------------------------------------------- -----------
Total income 19,068
- -----------------------------------------------------------------------------------------------------
EXPENSES:
- -----------------------------------------------------------------------------------------------------
Investment advisory fee $ 70,426
- -----------------------------------------------------------------------------------------
Administrative personnel and services fee 16,000
- -----------------------------------------------------------------------------------------
Custodian fees 43,690
- -----------------------------------------------------------------------------------------
Transfer and dividend disbursing agent fees and expenses 17,944
- -----------------------------------------------------------------------------------------
Directors'/Trustees' fees 2,722
- -----------------------------------------------------------------------------------------
Auditing fees 8,599
- -----------------------------------------------------------------------------------------
Legal fees 12,983
- -----------------------------------------------------------------------------------------
Portfolio accounting fees 48,402
- -----------------------------------------------------------------------------------------
Distribution services fee 28,254
- -----------------------------------------------------------------------------------------
Share registration costs 6,881
- -----------------------------------------------------------------------------------------
Printing and postage 13,949
- -----------------------------------------------------------------------------------------
Miscellaneous 3,248
- ----------------------------------------------------------------------------------------- ----------
Total expenses 273,098
- -----------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee (70,426)
- ----------------------------------------------------------------------------------------- ----------
Net expenses 202,672
- ----------------------------------------------------------------------------------------------------- -----------
Net operating loss (183,604)
- ----------------------------------------------------------------------------------------------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS:
- -----------------------------------------------------------------------------------------------------
Net realized loss on investments and foreign currency transactions (322,535)
- -----------------------------------------------------------------------------------------------------
Net change in unrealized depreciation of investments and translation of assets and liabilities in
foreign currency (16,063)
- ----------------------------------------------------------------------------------------------------- -----------
Net realized and unrealized loss on investments and foreign currency (338,598)
- ----------------------------------------------------------------------------------------------------- -----------
Change in net assets resulting from operations $ (522,202)
- ----------------------------------------------------------------------------------------------------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(UNAUDITED) OCTOBER YEAR ENDED
31, 1995 APRIL 30, 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -----------------------------------------------------------------------
OPERATIONS--
- -----------------------------------------------------------------------
Net operating loss $ (183,604) $ (206,700)
- -----------------------------------------------------------------------
Net realized gain (loss) on investments and foreign currency
transactions ($(322,535) and $0, respectively, as computed for federal
tax purposes) (322,535) (2,459,682)
- -----------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) of investments and
translation of assets and liabilities in foreign currency (16,063) (1,382,453)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from operations (522,202) (4,048,835)
- ----------------------------------------------------------------------- ---------------------- ----------------
SHARE TRANSACTIONS--
- -----------------------------------------------------------------------
Proceeds from sale of shares 2,146,085 21,445,228
- -----------------------------------------------------------------------
Net asset value of shares issued to shareholders in payment of
distributions declared -- --
- -----------------------------------------------------------------------
Cost of shares redeemed (4,955,533) (13,300,910)
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets resulting from share transactions (2,809,448) 8,144,318
- ----------------------------------------------------------------------- ---------------------- ----------------
Change in net assets (3,331,650) 4,095,483
- -----------------------------------------------------------------------
NET ASSETS:
- -----------------------------------------------------------------------
Beginning of period 12,138,052 8,042,569
- ----------------------------------------------------------------------- ---------------------- ----------------
End of period $ 8,806,402 $ 12,138,052
- ----------------------------------------------------------------------- ---------------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(UNAUDITED) YEAR ENDED
OCTOBER 31, APRIL 30,
<S> <C> <C> <C>
1995 1995 1994(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 6.40 $ 7.98 $ 8.00
- ------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ------------------------------------------------------------------------------
Net investment income (loss) (0.14) (0.11) --
- ------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency (0.22) (1.47) (0.02)
- ------------------------------------------------------------------------------ ------ --------- -----------
Total from investment operations (0.36) (1.58) (0.02)
- ------------------------------------------------------------------------------ ------ --------- -----------
LESS DISTRIBUTIONS
- ------------------------------------------------------------------------------
Distributions from net investment income -- -- --
- ------------------------------------------------------------------------------
Distributions from net realized gain on investments and foreign currency
transactions -- -- --
- ------------------------------------------------------------------------------ ------ --------- -----------
Total distributions -- -- --
- ------------------------------------------------------------------------------ ------ --------- -----------
NET ASSET VALUE, END OF PERIOD $ 6.04 $ 6.40 $ 7.98
- ------------------------------------------------------------------------------ ------ --------- -----------
TOTAL RETURN (B) (5.63%) (19.80%) (0.25%)
- ------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ------------------------------------------------------------------------------
Expenses 3.59%* 3.59% 3.07%*
- ------------------------------------------------------------------------------
Net investment income (loss) (3.25%)* (1.44%) (0.10%)*
- ------------------------------------------------------------------------------
Expense waiver/reimbursement (c) 1.25%* 0.63% 1.35%*
- ------------------------------------------------------------------------------
SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------
Net assets, end of period (000 omitted) $8,806 $12,138 $8,043
- ------------------------------------------------------------------------------
Portfolio turnover 42% 132% 0%
- ------------------------------------------------------------------------------
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from March 1, 1994 (date of initial
public investment) to April 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
BLANCHARD WORLDWIDE EMERGING MARKETS FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Blanchard Funds (the "Trust") is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end, management investment company. The
Trust consists of ten portfolios, one diversified and nine non-diversified. The
financial statements included herein are only those of Blanchard Worldwide
Emerging Markets Fund (the "Fund") a non-diversified portfolio. The financial
statements of the other portfolios are presented separately. The assets of each
portfolio are segregated and a shareholder's interest is limited to the
portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Short-term securities with remaining maturities of
sixty days or less at the time of purchase may be valued at amortized cost,
which approximates fair market value. All other securities are valued at
the prices provided by an independent pricing service. Investments in other
open end regulated investment companies are valued at net asset value.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
However, federal taxes may be imposed on the Fund upon the disposition of
certain investments in passive foreign investment companies. Withholding
taxes on foreign interest and dividends have been provided for in
accordance with the Fund's understanding of the applicable country's tax
rules and rates.
Net capital losses of $2,474,894 and $144,048 attributable to security
transactions and foreign currency losses incurred after October 31, 1994
are treated as arising on the first day of the Fund's current taxable year.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
CONCENTRATION OF CREDIT RISK--The Fund invests in securities of non-U.S.
issuers. The political or economic developments within a particular country
or region may have an adverse effect on the ability of domiciled issuers to
meet their obligations. Additionally, political or economic developments
may have an effect on the liquidity and volatility of portfolio securities
and currency holdings.
FOREIGN CURRENCY TRANSLATION--The accounting records of the Fund are
maintained in U.S. dollars. All assets and liabilities denominated in
foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of FCs, currency gains or losses
realized between the trade and settlement dates on securities transactions,
the difference between the amounts of dividends, interest, and foreign
withholding taxes recorded on the Fund's books, and the U.S. dollar
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in the value of assets and
liabilities other than investments in securities at fiscal year end,
resulting from changes in the exchange rate.
OTHER--Investment transactions are accounted for on the trade date.
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 1995 APRIL 30, 1995
<S> <C> <C>
Shares sold 332,777 2,641,403
- ---------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 0 0
- ---------------------------------------------------------------------
Shares redeemed (768,967) (1,754,090)
- --------------------------------------------------------------------- ---------- ----------------
Net change resulting from share transactions (436,190) 887,313
- --------------------------------------------------------------------- ---------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Virtus Capital Management Inc., the Fund's investment
adviser, (the "Adviser"), receives for its services an annual investment
advisory fee equal to 1.25 of 1% of the Fund's average daily net assets.
Virtus Capital Management Inc. became the Fund's investment adviser on July 12,
1995. Prior to July 12, 1995, Sheffield Management Company served as the Fund's
investment adviser and received for its services an annual investment advisory
fee equal to 1.25% of the Fund's average daily net assets.
For the period ended October 31, 1995, the advisers earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
ADVISER NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Management Company $ 28,045 $ 28,045
- ----------------------------------------------------------------------------------
Virtus Capital Management 42,381 42,381
- ----------------------------------------------------------------------------------
</TABLE>
The Adviser may voluntarily choose to waive any portion of its fee and/or
reimburse certain operating expenses of the Fund. The Adviser can modify or
terminate this voluntary waiver and/or reimbursement at any time at its sole
discretion.
Under the terms of a sub-advisory agreement between the Adviser and Martin
Currie, Inc. (Equities Sector), Martin Currie Inc. receives an annual fee from
the Adviser equal to .50 of 1% of the first $150 million of the equity sector's
average daily net assets and .40 of 1% of the sector's average daily net assets
in excess of $150 million. Under the terms of a sub-advisory agreement between
the adviser and OFFITBANK (Fixed Income Sector), OFFITBANK receives an annual
fee from the Adviser equal to .45 of 1% of the first $150 million of the fixed
income sector's average daily net assets and .35 of 1% of the sector's average
daily net assets in excess of $150 million. In addition, Martin Currie Inc. and
Offitbank may voluntarily choose to reduce their compensation.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. This fee is based on the
level of average aggregate net assets of the Fund for the period.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .50 of 1% of the average daily net assets of the Fund shares,
annually, to reimburse FSC.
FSC became the Fund's principal distributor on July 12, 1995. Prior to July 12,
1995, Sheffield Investments, Inc. served as the Fund's principal distributor and
received for its services an annual distributon fee equal to .50 of 1% of the
Fund's average daily net assets.
For the period ended October 31, 1995, the distributor earned fees as follows:
<TABLE>
<CAPTION>
AMOUNT OF AMOUNT OF
DISTRIBUTOR NAME FEE EARNED FEE WAIVED
<S> <C> <C>
Sheffield Investments, Inc. $ 12,087 $ 0
- ----------------------------------------------------------------------------------
Federated Securities Corp. 16,167 0
- ----------------------------------------------------------------------------------
</TABLE>
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES AND PORTFOLIO
ACCOUNTING FEES--Federated Services Company ("FServ") serves as transfer and
dividend disbursing agent for the Fund. This fee is based on the size, type, and
number of accounts and transactions made by shareholders. FServ also maintains
the Fund's accounting records for which it receives a fee. The fee is based on
the level of the Fund's average daily net assets for the period plus
out-of-pocket expenses.
CUSTODIAN FEES--Signet Trust Co. is the Fund's custodian. The fee is based on
the level of the Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $145,001 were borne
initially by the Adviser. The Fund has agreed to reimburse the Adviser for the
organizational expenses during the five year period following effective date.
For the period ended October 31, 1995, the Fund paid $12,972 pursuant to this
agreement.
GENERAL--Certain of the Officers and Trustees of the Trust are Officers and
Directors of the above companies.
(5) INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended
October 31, 1995, were as follows:
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------------------------
PURCHASES $ 4,441,122
- ---------------------------------------------------------------------------------------------------- ------------
SALES $ 6,772,937
- ---------------------------------------------------------------------------------------------------- ------------
</TABLE>
Blanchard
Worldwide
Emerging
Markets Fund
Semi-Annual
Report
October 31, 1995
Managed by: Virtus Capital Management
Portfolio Advisers
Martin Currie, Inc.
Equity Securities
OFFITBANK
Fixed Income Securities
Blanchard
Worldwide
Emerging
Markets Fund
The Blanchard Group of Funds are available through Signet Financial Services,
Inc., and are advised by Virtus Capital Management, Inc., an affiliate of Signet
Financial Services, Inc.
Products offered through Signet Financial Services, Inc., are not deposits,
obligations of, or guaranteed by Signet Financial Services, Inc., any bank or
other financial institution, and are not insured by the FDIC or any Federal
Agency. In addition, they involve risk, including possible loss of principal
invested.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
CUSIP 093212702
