<PAGE> 1
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SEMI-ANNUAL REPORTS (UNAUDITED) MAY 31, 1997
THE COWEN
FAMILY OF FUNDS
COWEN INCOME+GROWTH FUND, INC.
COWEN FUNDS, INC.
Opportunity Fund
Government Securities Fund
Intermediate Fixed Income Fund
(COWEN & COMPANY LOGO)
COWEN & COMPANY
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<PAGE> 2
----------------------------
CONTENTS
Chairman's Letter............................................................. 1
Income + Growth Fund.......................................................... 2
Opportunity Fund.............................................................. 4
Intermediate Fixed Income Fund and
Government Securities Fund.................................................... 6
Statements of Investments..................................................... 8
Statements of Assets and Liabilities..........................................22
Statements of Operations......................................................24
Statements of Changes in Net Assets...........................................26
Notes to Combined Financial Statements........................................30
<PAGE> 3
CHAIRMAN'S LETTER JULY 21, 1997
To Our Shareholders:
During the Cowen Family of Funds' semi-annual period ended May 31, 1997, the
stock market indices continued to break new high barriers, inflationary
pressures remained benign and the economic expansion that has created nearly 14
million new jobs since 1991 qualified as our country's third longest on record.
This time period also saw both the stock and bond markets experience the
fluctuations that can affect them from time to time. For example, stock prices
saw a sharp correction over the second half of March and the Federal Reserve
Board increased short-term interest rates -- for the first time in more than two
years -- at the end of March.
The management team of the Cowen Family of Funds continued to demonstrate to
its shareholders that they can rely on the consistent application of strict
investment disciplines supported by extensive research and analytical resources.
We believe this commitment to the long-term perspective is the reason the Cowen
Opportunity Fund, the Cowen Intermediate Fixed Income Fund, and the Cowen
Government Securities Fund each outperformed the majority of the funds with
similar respective disciplines for this semi-annual period. The Cowen
Income + Growth Fund is undergoing a transition in its investment approach due
to changing market conditions, which we mentioned in our last report. You can
read about how this Fund already proved its mettle during the March stock market
correction as well as descriptions of each of the Fund's investment strategies
and outlooks in the portfolio managers' commentary on the following pages.
We encourage you to take a long-term view of your portfolios, to manage your
investment risk through diversification within a family of funds, and, if
possible, to follow a regular investment plan, investing a certain amount of
money at the same time each month or quarter regardless of market conditions.
Following these basic principles can help us help you meet your financial goals.
Call your Investment Executive to discuss how the Cowen Family of Funds can
continue to help you meet the full spectrum of your financial objectives.
Sincerely,
/s/ Joseph M. Cohen
Joseph M. Cohen
Chairman
<PAGE> 4
COWEN INCOME + GROWTH FUND
Enhancing Diversification to
Provide Strong Dividend Yield
The strength of the stock market over the six months ending May 31, 1997 was
primarily concentrated in the larger-cap stocks, in general, and the technology
sector, in particular. Rising interest rates meant interest-sensitive
sectors -- such as energy, utilities and REITs -- underperformed. Together, the
narrow but strong bull market and higher interest rates, like the conditions of
the previous semi-annual period, favored higher-risk, capital
appreciation-oriented investment approaches, not the more conservative,
lower-risk strategy of the Cowen Income + Growth Fund. Thus, the Fund's
performance lagged in comparison.
Still, the subtle adjustments we began making in our stock selection
process -- to enhance upside potential through industry diversification, take
the sting out of interest rate fluctuations, and heighten our flexibility to
gain exposure to fast-growing economic sectors when attractive opportunities
arise and meaningfully reduce exposure to regulated utilities as market
conditions warrant -- are beginning to work. For example, during the market
correction in March, when the S&P 500 Index was down 4.1% for the month, the
Income + Growth Fund (Class A shares) declined by only 1.4%. In keeping with
part of our objective to provide some downside protection, the Fund showed not
only that it was able to withstand the correction, but also that its strategy
served as a well-positioned "cushion."
For the six months ending May 31, 1997, the Fund's Class A shares had a
positive return of 4.23%. This performance compares to the S&P 500 Index's
return of 13.14% and to the Lipper Equity-Income average return of 10.12% for
the same period. The Fund's Class B and Class C shares returned 3.91% and 4.38%
respectively for the period.
INVESTMENT REVIEW
In implementing the adjustments in our stock selection process over the last
semi-annual period, we made the following changes within the portfolio:
- We trimmed the Fund's energy exposure -- While this sector was up on an
absolute basis, it underperformed on a relative basis to the market, as some
of the larger-cap international oil companies' prices reached full
valuations. For example, we sold Exxon at a profit when it reached the
Fund's price target.
- We re-introduced regional banks and telephones -- Though we had eliminated
the Fund's exposure to these sectors in the previous semi-annual period,
valuations here once again became reasonable and earnings visibility better.
Thus, we added such names as CoreStates Financial, Bank One and Nations
Bank. We also re-bought and re-sold NYNEX within the period, taking those
profits and investing them in GTE.
- We reduced allocation to the utilities sectors -- Portfolio allocation to
both the electric and natural gas utilities has been trimmed somewhat as we
seek to diversify away from the more interest-sensitive areas. We also
eliminated Central and Southwest Utilities from the portfolio, as ambiguity
of the regulatory situation in Texas gave us concern.
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2
<PAGE> 5
- We enhanced diversification on an individually selected, company specific
basis -- Moving away from interest-sensitive and toward more
economically-sensitive stocks, we added DuPont Corporation and Dana
Corporation in the industrial sector. We initiated a position in U.S.
Tobacco and re-added J.C. Penney at a good price. On the other hand, we sold
Tambrands, at a handsome profit, when its stock rose dramatically after a
takeover by Procter & Gamble, and we also sold Heinz and U.S. Steel after
each reached their respective target prices. In all, as of May 31, the Fund
had 46 different stocks in its portfolio, up from about 35 names six months
earlier. We will continue to diversify on an opportunistic basis.
Throughout this portfolio activity, it is important to keep in mind that the
Fund never wavered from its high-quality, high-dividend strategy and that the
Fund continued to offer its shareholders very strong dividend yield.
LOOKING AHEAD
We intend to maintain our strategy going forward focusing on providing an above
average absolute dividend yield, and capturing more upside potential and even
greater downside protection through continued enhanced diversification. We
intend to maintain our position in REITs, as their dividend yields are still
attractive and, as they tend to be countercyclical, we believe these securities
give good downside protection. We also intend to maintain our allocation to the
paper and natural resources sectors, which while flat for this semi-annual
period, showed signs of strong performance late in the period.
Given the length of this bull market and the full valuations we see throughout
much of it, we maintain two strong beliefs. First, individual stock selection
based on intensive fundamental research is more important than ever. And second,
it is absolutely critical for any well-diversified equity portfolio to maintain
a significant high-yield, high-quality, low-volatility component. In our
opinion, should either the economy slow substantially and/or the market see a
major correction or another series of lesser corrections, then investors with a
portion of their portfolio invested in a vehicle like the Income + Growth Fund
will, as has already been shown several times within the last couple of years,
benefit from its defensive characteristics.
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3
<PAGE> 6
COWEN OPPORTUNITY FUND
Benefiting from Strong Sector Allocation and
Positive Small-Cap Special Situations
During the semi-annual period ended May 31, 1997, economic growth and low
inflation continued to be positive for equity investors, although stock market
volatility increased due to uncertainty regarding the direction of interest
rates. Against this backdrop, the Cowen Opportunity Fund's Class A shares had a
positive return of 6.17%, compared to just 1.4% for the Lipper Small Company
Index average. Large-capitalization stocks outperformed small-cap stocks during
the semi-annual period, with the S&P 500 Index returning 13.14%, compared to
7.5% for the Russell 2000. The Fund's Class B and Class C shares returned 5.78%
and 6.18% respectively for the period.
It is also worth noting that for the twelve months ended May 31, 1997, the
Cowen Opportunity Fund gained 15.8%, sharply outperforming both the Russell
2000, which increased by 11.2%, and the Lipper Small Cap Mutual Fund Index,
which declined by 2.7%. The Fund's outperformance was achieved primarily by
recording only a modest decline during the market turbulence from January to
April, when concerns about rising interest rates led to about an 8% decline in
the Russell 2000 Index and about a 9.7% decline in the S&P 500 Index. The Fund
then participated fully during the flat and rising periods for small-cap stocks.
Longer-term results are even better with Morningstar ranking the Cowen
Opportunity Fund in the top 7% of all funds in its category for the five-year
period ended May 31, 1997.*
INVESTMENT REVIEW
Working within our small-cap value discipline, the Fund's competitive
semi-annual performance was primarily due to strong sector allocation and
several stock specific special situations. Specifically, the portfolio:
- Continued to be overweighted in the energy sector -- Approximately 38% of
the portfolio is allocated to energy-related stocks, with about half of that
in small domestic exploration and production companies, and half in oil
service companies and drillers. Current statistics regarding valuation
levels, supply/demand balances, industry consolidation and production versus
consumption lead us to maintain a very positive outlook for this sector.
- Underwent a build-up in the health care sector -- Health care represents
approximately 12% of the portfolio. During this semi-annual period, Cigna
completed its tender for Healthsource, and ICN Pharmaceuticals and KOS
Pharmaceuticals both performed well. We believe that generic
pharmaceuticals, including Mylan Labs and Alpharma, as well as companies
focusing on women's heath care needs, such as Neopath and Columbia Labs,
offer good potential. Many drugs have come off of their patents recently and
many more are scheduled to do so over the next three to four years, and
women's health care is becoming the focus of many research labs' activities.
- Reduced its weighting in the technology sector -- We have had modest
representation in technology (the worst performing sector in the Russell
2000 Index year to date), but stock selection has benefited the Fund. Better
performing technology companies in our portfolio, such as Barra and Evans &
Suther-
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4
<PAGE> 7
land, were recently added to the re-constituted Russell 2000 Index.
The technology sector has come under pressure recently, as this industry has
had to absorb about 350 new companies going public in the last three years
alone compared to 200 in the entire decade of the 1980s. To add to the
pressure, this plethora of freshly minted technology companies was met with
slowing orders as technology purchasing managers were more focused on coding
problems raised by the year 2000. There has also been a slowdown in
telecommunications orders, thanks to legislative and industry consolidation
issues. Even with all these factors, however, Cowen's analytical process is
beginning to find attractive opportunities in technology and
telecommunications.
- Benefited from the aggregate of several special situation companies, which
have been taken over at higher valuations -- Williams Sonoma, Lojack and Wet
Seal each performed well during the period, and the portfolio abounds with
many similar stock specific holdings for which we have great enthusiasm.
LOOKING AHEAD
The almost unprecedented rise of large-cap stocks over the past two and half
years has captured the attention of investors, managers and the media. However,
while large-cap stocks have, in fact, been the place to be recently, history and
capital market theory are witness to small caps' superior long-term performance.
Here's why we believe the second half of 1997 may very well be strong for the
small-cap sector.
During the last few quarters, the S&P 500 Index has been the best performing
index as corporate downsizing, outsourcing, write-offs and stock buybacks have
helped these larger companies produce profits at an even better rate than would
be expected from analyzing revenue growth only -- and at a rate better than that
of smaller companies. However, the market now seems to be placing a premium on
these earnings growth rates, such that the price/earnings multiple on the S&P
500 is now at a historically high level. We believe this momentum-driven,
large-cap cycle is reaching its peak and that an anticipated slowing of profit
growth in the coming quarters, combined with high valuations, should point
investors toward the sector of the market that we see as most undervalued,
namely "mainstream small cap."
As small-cap stocks have lagged behind, a huge disparity in performance,
valuation and, in our opinion, opportunity has been created. For the first time
since December, small-cap stocks outperformed large-cap stocks in the month of
May, and this may just be the beginning. Growth potential is solid, and
valuations in the small-cap sector are currently at 1990 levels. The majority of
stocks in the Fund's portfolio are even more attractively priced. This
extraordinary value in the small-cap sector, coupled with a prospective capital
gains tax cut, which have historically been positive for small caps, makes us
optimistic that this sector will soon begin to outperform.
We are confident that our philosophy and long-standing investment discipline
of seeking growth out of value in all environments will continue to reward our
investors.
- ------------------------------------
* Morningstar categorizes the Cowen Opportunity Fund as a "Small Blend" fund. As
of May 31, 1997, there are 129 funds in this category of which 29 have a
five-year record. The Cowen Opportunity Fund is 2 out of these 29 funds based
on Net Asset Value performance.
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5
<PAGE> 8
COWEN INTERMEDIATE FIXED INCOME FUND
COWEN GOVERNMENT SECURITIES FUND
Adjusting Asset Allocation to Capture Higher Yields
Interest rates generally moved higher across the yield curve over the six months
ended May 31, 1997, as signs of strength in the U.S. economy continued to
dominate. In such an environment, it was the flexibility to adjust fixed-income
sector weightings more than any altering of maturity or duration that was the
key to the strong performance of both the Cowen Intermediate Fixed Income Fund
and the Cowen Government Securities Fund during this period.
The semi-annual return of the Intermediate Fixed Income Fund's Class A shares
was 1.16%. This tracked its benchmark, the Lehman Brothers Intermediate
Government/Corporate Index, which had a return of 1.25%, and significantly
outperformed the Lipper Intermediate Investment Grade average return of 0.69%.
The Fund's Class B and Class C shares returned 1.05% and 1.28% respectively for
the period. The semi-annual return of the Government Securities Fund's Class A
shares was 1.05%. This strongly outperformed both the Lehman Brothers Aggregate
Index, which had a return of 0.94%, and the Lipper U.S. General Government
average return of only 0.35%. The Fund's Class C shares returned .97% for the
period.
INVESTMENT REVIEW
Continuing the pattern of the previous year, the yields on five-year U.S.
Treasury Notes changed more than any other part of the yield curve over the six
months ending May 31, increasing by more than 0.65%. Economic strength -- as
evidenced by first calendar quarter GDP growth of 5.9%, strong consumer
spending, and increased manufacturing inventories -- prompted the Federal
Reserve Board to raise the fed funds rate for the first time in over two years
by 0.25% to 5.50% in March. Interestingly, this above-trend economic growth did
not result in a rise in the reported inflation rate. In fact, by some measures,
inflation is actually lower. For example, the Consumer Price Index, on a year
over year basis, declined from 3.3% in December 1996 to 2.8% in March 1997. Unit
labor costs were down similarly.
The absence of inflationary pressures, along with signs that the economy was
slowing in the second quarter, were most likely the primary reasons behind the
Federal Reserve Board's decision not to raise interest rates when it met on May
20th, surprising many analysts and investors who had anticipated that they
would.
Our primary strategy leading to both Funds' strong performance during the
semi-annual period was to shift the asset allocation among the fixed-income
sectors, rather than dramatically changing the average maturity. More
specifically, the Government Securities Fund's average maturity went from 6.8
years at the end of November to 6.98 years at the end of May, and its average
duration from 4.4 years to 4.1 years over the same period. However, we did move
from a relatively even weighting between U.S. Treasuries and mortgage securities
to a heavily overweighted position in pass-through mortgage securities,
primarily GNMAs, as we sought their higher yields and monthly cash flow. In
fact, mortgages were the best performing sector of the bond market during the
six month period. As of May 31, the Fund was 72% invested in mortgages and 28%
in U.S. Treasuries.
Similarly in the Intermediate Fixed Income Fund, the emphasis was on seeking
securities with
--
6
<PAGE> 9
more defensive-like characteristics during a period of rising interest rates.
Thus, as of May 31, the Fund was 31% invested in mortgages, 31% in investment
grade corporate securities, and 38% in U.S. Treasuries. Through a reduction in
the U.S. Treasury sector, we also were able to introduce a core position of 14%
in preferred stock to the Fund during this semi-annual period, as allowed by the
Fund's Prospectus. Preferred stock is a class of stock that pays dividends at a
specified rate and has preference over common stock in the payment of dividends
and the liquidation of assets. The preferred stocks in the Fund are all
investment grade, pay a higher yield than other similarly available regular
corporate bonds, are listed and traded on the New York Stock Exchange and thus
highly liquid, and fit in well with the high quality, conservative discipline
maintained in this Fund. Preferred stock actually helps in the goal of a
relative stable NAV as its price is less sensitive to rate changes than similar
bonds. This somewhat critical strategic re-structuring of the Fund contributed
to the Fund's strong performance. Excluding the preferred stock component of the
portfolio, the Fund's average maturity stayed relatively stable at approximately
5.0 years.
LOOKING AHEAD
Going forward, we anticipate that our current strategy in both Funds will remain
much the same, with an emphasis on higher-yielding, higher-quality, fixed-income
asset classes and individual securities. This positioning, which has proved
positive in this environment, is based on our belief that the forward momentum
in the economy will likely continue for the near term. The major question for
the bond market looking ahead is whether the economy will rebound from the
moderate slowdown experienced in the second calendar quarter and the Federal
Reserve Board will, in turn, be forced to raise interest rates once later in
1997. Our best estimate is that it will and they will.
Certain leading indicators tell us that the economy still looks strong. For
example, a survey from early May indicates that hiring plans for the third
calendar quarter by major companies is expected to be the healthiest it has been
since 1988. Thirty percent of U.S. companies expect to hire, and only five
percent expect to downsize. Another recent report says that 57 major
metropolitan areas in the nation had an unemployment rate below 3% in April
1997, as compared to only 37 areas in the preceding month. In our opinion, then,
employment growth in the U.S. is at the point where labor in some markets is
becoming scarce, thus putting some upward pressure on wages. Average hourly
earnings are already up 4% from one year ago. In short, we believe that the
economy is not on the verge of a slowdown, but rather is likely to continue to
improve for the rest of 1997 and that interest rates are not likely to decline
rapidly from their current levels.
If the economy does do a rapid about face and/ or at the point when it appears
to be slowing, we will likely change both Funds' allocation emphasis toward U.S.
Treasuries and extend average maturity. Until that time, we are pleased to stay
the course with the wind at our backs, maintaining our active yet conservative
disciplines, high-quality investments and attractive risk/return profile.
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7
<PAGE> 10
COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- 97.7% of total portfolio
AUTO PARTS -- 1.6%
30,000 Dana Corp. $ 1,083,750
------------
CHEMICALS -- 1.5%
9,300 Du Pont (E.I.) De Nemours 1,012,538
------------
CONSUMER PRODUCTS -- 3.8%
26,000 American Brands, Inc. 1,274,000
50,000 Readers Digest Association 1,237,500
------------
2,511,500
------------
ENERGY -- 24.2%
10,000 Amoco Oil Co. 893,750
36,000 Baker Hughes, Inc. 1,350,000
30,000 Burlington Resources 1,395,000
30,000 Coastal Corp. 1,503,750
27,000 Consolidated Natural Gas 1,434,375
40,000 KN Energy 1,685,000
13,000 Mobil Corp. 1,818,375
14,000 Murphy Oil Corp. 649,250
10,000 Schlumberger Ltd 1,191,250
12,000 Shell Transport & Trading ADR 1,432,500
12,000 Texaco, Inc. 1,309,500
33,000 Tidewater, Inc. 1,390,125
------------
16,052,875
------------
FINANCIAL SERVICES -- 9.2%
24,000 Banc One Corp. 1,038,000
18,000 Corestates Financial Corp. 951,750
17,000 Lincoln National Corp. 1,034,875
17,000 NationsBank Corp. 1,000,875
50,000 Ohio Casualty Corp. 2,075,000
------------
6,100,500
------------
</TABLE>
See notes to combined financial statements
--
8
<PAGE> 11
COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
FOOD PROCESSING -- 1.2%
9,000 CPC International $ 774,000
------------
NATURAL RESOURCES -- 8.8%
75,000 Cyprus Amax Minerals Corp. 1,828,125
46,000 Newmont Mining Corp. 1,799,750
20,000 Potlatch Corp. 857,500
26,000 Union Camp Corp. 1,365,000
------------
5,850,375
------------
PHARMACEUTICALS -- 2.9%
55,000 Pharmacia & Upjohn, Inc. 1,904,375
------------
REAL ESTATE INVESTMENT TRUSTS -- 9.9%
50,000 Kimco Realty Corp. 1,575,000
72,000 New Plan Realty Investment Trust 1,584,000
100,000 United Dominion Realty Trust 1,475,000
45,000 Weingarten Realty Investment Trust 1,929,375
------------
6,563,375
------------
RETAIL -- 3.8%
29,000 J C Penney Corp. 1,493,500
37,000 Wal-Mart Stores, Inc. 1,100,750
------------
2,594,250
------------
TELEPHONE/COMMUNICATIONS -- 5.2%
25,000 AT & T Corp. 921,875
65,000 Comcast Corp. Special Class A 1,129,375
32,000 GTE Corp. 1,412,000
------------
3,463,250
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TOBACCO -- 6.8%
75,000 RJR Nabisco Holdings Corp. 2,428,125
73,000 UST, Inc. 2,080,500
------------
4,508,625
------------
</TABLE>
See notes to combined financial statements
--
9
<PAGE> 12
COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
UTILITIES -- 18.8%
69,000 Baltimore Gas & Electric $ 1,811,250
58,000 Brooklyn Union Gas Co. 1,616,750
62,000 MCN Energy 1,836,750
45,000 MidAmerican Energy Holdings 759,375
48,000 Piedmont Natural Gas Co. 1,170,000
65,000 Scana Corp. 1,625,000
59,000 Utilicorp United, Inc. 1,593,000
65,000 Western Resources, Inc. 2,120,625
------------
12,532,750
------------
TOTAL COMMON STOCKS (Cost $59,212,153) 64,952,163
------------
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENTS -- 2.3%
GENERAL ELECTRIC CAPITAL CORP.:
$ 500,000 5.53%, 06/05/1997 500,000
1,000,000 5.60%, 06/06/1997 1,000,000
------------
TOTAL SHORT TERM INVESTMENTS (Cost $1,500,000) 1,500,000
------------
TOTAL INVESTMENTS (Cost $60,712,153) $ 66,452,163
============
</TABLE>
See notes to combined financial statements
--
10
<PAGE> 13
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- 98% of total portfolio
OIL & GAS EXPLORATION -- 21.8%
35,000 Abraxas Petroleum* $ 468,125
7,200 Barrett Resources 241,200
434,700 Canadian 88 Energy* 1,877,719
36,000 Devon Energy 1,341,000
208,800 Enserch Exploration* 2,270,700
54,700 HS Resources* 793,150
211,000 Hurricane Hydrocarbon* 865,476
31,300 Louisiana Land & Exploration 1,611,950
143,000 Oryx Energy* 3,306,875
61,600 Parker & Parsley 2,094,400
18,700 Pogo Producing 748,000
178,000 Rigel Energy* 2,222,657
60,000 Rio Alto Exploration* 474,790
142,300 Santa Fe Energy* 2,152,288
10,300 Seagull Energy* 185,400
45,400 Titan Exploration* 414,275
64,600 United Meridian Corp.* 2,325,600
-------------
23,393,605
-------------
OIL/GAS EQUIPMENT & SERVICES -- 17.1%
25,100 BJ Services* 1,386,775
25,300 Dreco Energy Services* 1,258,675
51,800 Global Marine* 1,165,500
50,500 Nabors Industries Inc.* 1,133,094
138,900 Oceaneering International* 2,361,300
74,800 Offshore Logistics* 1,355,750
55,600 Parker Drilling* 535,150
24,600 Petroleum Geo Services* 1,051,650
19,500 Pool Energy Services* 324,188
73,300 Pride Petroleum* 1,630,925
37,000 Reading & Bates* 938,875
47,100 Rowan Companies* 1,089,188
11,000 Smith International Inc.* 576,125
20,800 Tidewater 876,200
37,700 Varco International* 1,036,750
47,500 Weatherford Enterra* 1,620,936
-------------
18,341,081
-------------
</TABLE>
See notes to combined financial statements
--
11
<PAGE> 14
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
METALS & MINING -- 10.2%
159,100 Amax Gold* $ 1,054,038
73,900 Armco Steel* 277,125
20,000 Asarco 622,500
65,300 Battle Mountain Gold 399,963
28,300 Bema Gold Corp* 210,481
52,400 Cambior Inc 681,200
205,600 Canyon Resources* 668,200
46,800 Cyprus Amax Minerals 1,140,750
80,500 Echo Bay Mines* 493,063
5,100 Getchell Gold Co* 203,363
38,000 Hecla Mining Co* 218,500
46,100 Kaiser Aluminum Corp* 530,150
78,500 LTV Steel 1,099,000
16,200 National Steel* 218,700
28,300 Oregon Steel Mills Corp. 530,625
98,600 Pegasus Gold* 696,363
9,000 Pittston Minerals Group 123,750
75,000 Royal Oak Mines* 196,873
205,200 TVX Gold* 1,308,150
12,800 Zeigler Coal Hldg. 297,600
-------------
10,970,394
-------------
HEALTH CARE SERVICES/HMOS -- 6.3%
11,200 Coventry Corp* 163,100
38,900 Humana Inc* 880,113
22,900 Magellan Health Services* 624,025
8,200 Maxicare* 196,800
181,800 Mid Atlantic Medical* 2,340,675
20,000 Morrison Health 325,000
35,300 Novacare* 445,663
24,800 Rehabcare Corp.* 855,600
19,400 Sierra Healthcare* 603,824
8,600 United Wisconsin 306,375
-------------
6,741,175
-------------
</TABLE>
See notes to combined financial statements
--
12
<PAGE> 15
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
BUILDING CONSTRUCTION -- 5.1%
57,900 Agco Corp $ 1,845,563
2,000,000 Anhui Expressway 477,511
38,900 Bucyrus Intl Inc* 359,825
157,100 Dravo Corp* 1,728,100
31,500 Fortress Group 169,313
18,500 Northwest Pipe Company* 300,625
877,000 Shenzhen Expressway 294,276
7,700 USG Corp* 268,537
-------------
5,443,750
-------------
TRUCKING/TRANSPORT/PARTS -- 5.0%
9,600 Caliber Systems 307,200
8,700 CNF Transportation 280,575
16,400 Covenant Transportation* 248,050
108,000 Fuji Heavy Industries 565,878
175,000 Nissan Motor 1,162,350
5,100 Roadway Express 96,900
26,800 Simon Transportation* 495,800
21,900 Smithway Motor Express* 235,425
45,000 Titan International Inc 686,250
65,100 Transport Corp of America* 878,850
9,200 Werner Enterprises 179,400
9,500 Yellow Corp* 181,688
-------------
5,318,366
-------------
PHARMACEUTICALS -- 4.9%
40,000 Alpharma 670,000
37,300 Carter Wallace 615,450
22,100 ICN Pharmaceuticals 477,913
178,800 Mylan Labs, Inc. 2,704,350
11,500 Onyx Pharmaceuticals* 123,625
24,000 Yamanouchi Pharm 592,636
-------------
5,183,974
-------------
</TABLE>
See notes to combined financial statements
--
13
<PAGE> 16
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
CONSUMER SERVICES -- 4.3%
43,900 Berlitz International Inc.* $ 1,048,113
15,000 Fuji Photo Film 582,035
175,000 Guidang Garam 754,599
13,500 Meade Instruments* 92,813
80,900 Sotheby's Holdings 1,253,950
12,300 Stewart Enterprises 415,125
26,300 York Group 483,262
-------------
4,629,897
-------------
SOFTWARE -- 4.0%
25,800 Barra Inc* 761,100
15,800 Cellular Technical Service* 215,275
23,900 Evans & Sutherland* 627,375
20,000 Expert Software* 86,250
40,200 Gerber Scientific 758,775
84,900 Intergraph* 599,606
103,200 Novell* 812,700
48,000 Platinum Software* 435,000
-------------
4,296,081
-------------
RETAILERS -- 3.3%
6,700 Autobacs Seven 489,976
18,000 Michael Stores* 355,500
5,000 Roberds* 25,625
30,000 Trans World Entertainment* 446,250
25,800 Wet Seal Inc* 757,875
39,600 Williams Sonoma* 1,460,250
-------------
3,535,476
-------------
</TABLE>
See notes to combined financial statements
--
14
<PAGE> 17
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
FINANCIAL SERVICES -- 3.3%
16,600 Alliance Bancorp $ 487,625
46,900 American Banknote* 199,325
11,300 First Commerce Corp 509,913
22,335 IBS Financial 332,233
1,500 Shokoh Fund 400,068
45,600 Standard Financial 1,063,050
10,600 Union Planters 500,850
-------------
3,493,064
-------------
ELECTRONICS/ELECTRICAL -- 2.8%
23,700 BE Aerospace* 574,725
72,000 Daimei Telecomm Eng 650,434
30,900 DSP Communications* 343,763
83,400 Lo-Jack Corp* 969,525
66,000 Sumitomo Bakelite (Tokyo) 495,156
-------------
3,033,603
-------------
UTILITIES/BROADCASTING -- 1.7%
10,000 Cablevision* 326,250
18,000 Central Euro Media* 423,000
9,000 Central Hudson Gas & Elec 290,250
45,000 Comcast Corp-Class A 781,875
-------------
1,821,375
-------------
PAPER PRODUCTS -- 1.7%
9,100 Albany International 207,025
14,200 Bowater Corp 701,125
17,000 Pope & Talbot 280,500
45,000 Stone Containers* 618,750
-------------
1,807,400
-------------
RESTAURANTS/FOOD PRODUCTS -- 1.7%
23,100 Brinker Int'l* 320,513
34,650 Flowers Inds Inc 610,706
31,500 Hudson Foods Inc 500,062
23,200 Tasty Banking Inc 374,100
-------------
1,805,381
-------------
</TABLE>
See notes to combined financial statements
--
15
<PAGE> 18
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS -- (Continued)
COMPUTER EQUIPMENT -- 1.6%
43,000 Dai Nippon Screen (Tokyo) $ 359,967
16,600 Information Resource* 249,000
12,300 Komag Inc 355,163
30,000 Lightbridge* 258,750
16,500 Union Tool 451,432
-------------
1,674,312
-------------
MEDICAL SUPPLIES/SERVICES -- 1.1%
41,300 Healthsource Inc.* 887,950
14,900 Neopath* 294,275
-------------
1,182,225
-------------
ENVIRONMENTAL -- .9%
38,900 Calgon Carbon Corp 544,600
190,000 ICF Kaiser International* 451,250
-------------
995,850
-------------
REAL ESTATE -- .8%
58,200 Atlantic Gulf Communities* 327,375
354,000 Hong Kong & Shanghai Hotel 548,235
-------------
875,610
-------------
SHIPPING -- .2%
11,700 Kirby Exploration* 220,838
-------------
AGRICULTURAL -- .2%
14,300 Agrium 193,050
-------------
TOTAL COMMON STOCKS (Cost $94,103,477) 104,956,503
-------------
</TABLE>
See notes to combined financial statements
--
16
<PAGE> 19
COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS -- (continued)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
SHORT TERM INVESTMENTS -- 2.0%
$1,000,000 American Express, 5.50% 6/3/97 $ 1,000,000
1,150,000 Ford Motor Credit, 5.58% 6/6/97 1,150,000
-------------
TOTAL SHORT TERM INVESTMENTS
(Cost $2,150,000) 2,150,000
-------------
TOTAL INVESTMENTS (Cost $96,253,477) $ 107,106,503
=============
</TABLE>
- ---------------
* Non-income producing security
See notes to combined financial statements
--
17
<PAGE> 20
COWEN GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
MORTGAGE-BACKED SECURITIES -- 71.8%
of total portfolio
FEDERAL NATIONAL MORTGAGE ASS'N (FNMA) CERTIFICATES:
$172,181 9.000%, 02/01/15 $ 181,327
698,924 7.000%, 12/01/24 684,722
GOVERNMENT NATIONAL MORTGAGE ASS'N (GNMA)
CERTIFICATES:
42,610 8.000%, 05/15/02 43,225
12,532 10.000%, 04/15/16 13,683
9,354 10.000%, 07/15/17 10,216
10,382 10.000%, 11/15/17 11,339
9,514 9.000%, 05/15/21 10,132
13,057 9.500%, 11/15/21 14,061
87,914 9.500%, 03/20/25 93,683
168,473 8.000%, 05/15/25 171,577
477,114 8.000%, 05/15/26 485,464
546,383 8.000%, 11/15/26 555,945
-----------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $2,278,841) 2,275,374
-----------
U.S. TREASURY NOTES -- 28.2%
900,000 6.250%, 10/31/01 (Cost $902,990) 891,702
-----------
TOTAL INVESTMENTS (Cost $3,181,831) $ 3,167,076
===========
</TABLE>
See notes to combined financial statements
--
18
<PAGE> 21
COWEN INTERMEDIATE FIXED INCOME FUND
STATEMENT OF INVESTMENTS
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
CUMULATIVE PREFERRED STOCK -- 14.7%
of total portfolio
12,000 American Financial Capital 9.125%, 10/15/26 $ 307,500
8,500 Protective Life Corp. 8.25%, 04/30/27 214,625
8,600 McDonald's Corp. 7.50%, 09/30/36 213,925
20,000 Merrill Lynch TOPRS 7.750%, 12/31/36 500,000
15,000 Textron Capital Trust 7.92%, 03/31/45 369,375
------------
TOTAL CUMULATIVE PREFERRED STOCK
(Cost $1,598,298) 1,605,425
------------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
CORPORATE NOTES -- 16.0%
$ 765,000 Phillip Morris Cos. Inc. 6.000%, 11/15/99 749,547
1,000,000 Sears Roebuck Acceptance 7.010%, 09/19/02 998,090
------------
TOTAL CORPORATE NOTES
(Cost $1,740,580) 1,747,637
------------
MORTGAGE-BACKED SECURITIES -- 31.1%
FEDERAL NATIONAL MORTGAGE ASS'N (FNMA)
CERTIFICATES:
100,553 9.000%, 05/01/09 104,876
90,246 9.500%, 03/01/10 97,254
178,738 7.500%, 09/01/10 180,972
877,492 7.000%, 11/01/10 873,192
82,606 9.000%, 04/01/15 86,994
111,178 9.500%, 07/01/22 119,845
</TABLE>
See notes to combined financial statements
--
19
<PAGE> 22
COWEN INTERMEDIATE FIXED INCOME FUND
STATEMENT OF INVESTMENTS -- (CONTINUED)
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT DESCRIPTION VALUE
<C> <S> <C>
MORTGAGE-BACKED SECURITIES -- (Continued)
GOVERNMENT NATIONAL MORTGAGE ASS'N (GNMA)
CERTIFICATES:
$ 126,367 8.000%, 06/15/01 $ 128,193
50,543 9.000%, 12/15/16 54,080
48,520 10.000%, 12/15/18 52,992
41,299 8.500%, 10/15/21 43,196
69,758 8.000%, 06/15/22 71,457
721,333 8.000%, 11/15/24 735,753
831,404 8.000%, 09/15/26 845,953
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $3,416,792) 3,394,757
------------
U.S. TREASURY NOTES -- 38.2%
1,000,000 7.750%, 01/31/00 1,034,060
1,000,000 7.125%, 02/29/00 1,019,220
1,000,000 6.250%, 10/31/01 990,780
1,000,000 6.250%, 02/15/03 986,410
150,000 6.625%, 04/30/02 150,655
------------
TOTAL U.S. TREASURY NOTES
(Cost $4,265,559) 4,181,125
------------
TOTAL INVESTMENTS (Cost $11,021,229) $ 10,928,944
============
</TABLE>
See notes to combined financial statements
--
20
<PAGE> 23
(This page intentionally left blank)
--
21
<PAGE> 24
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME + GROWTH
FUND
<S> <C>
ASSETS:
Investments in securities, at value (cost $60,712,153, $96,253,477,
$3,181,831 and $11,021,229, respectively -- see statements) $ 66,452,163
Cash 42,834
Receivables:
Cowen & Company --
Subscriptions to Common Stock 37,051
Investment securities sold --
Dividends and interest 164,080
Prepaid expenses, etc. 19,193
Deferred organization expenses -- Note 1(E) --
----------------
TOTAL ASSETS 66,715,321
----------------
LIABILITIES:
Payables:
Custodian --
Cowen & Company 45,813
Redemptions of Common Stock 46,632
Dividends -- Note 1(C) --
Investment securities purchased --
Accrued expenses and other liabilities 70,840
----------------
TOTAL LIABILITIES 163,285
----------------
NET ASSETS $ 66,552,036
================
NET ASSETS consist of:
Paid-in Capital $ 56,086,771
Accumulated undistributed net investment income 220,631
Accumulated net realized gain (loss) on investments 4,504,624
Net unrealized appreciation (depreciation) on investments 5,740,010
----------------
NET ASSETS $ 66,552,036
================
CLASS A
Net assets $ 51,658,333
Outstanding shares of common stock, ($.001 par value) 4,009,471
Net asset value per share $ 12.88
Maximum offering price per share $ 13.52
CLASS B
Net assets $ 3,224,862
Outstanding shares of common stock, ($.001 par value) 251,766
Net asset value per share $ 12.81
CLASS C
Net assets $ 11,668,841
Outstanding shares of common stock, ($.001 par value) 902,198
Net asset value per share $ 12.93
</TABLE>
See notes to combined financial statements
--
22
<PAGE> 25
<TABLE>
<CAPTION>
GOVERNMENT INTERMEDIATE FIXED
OPPORTUNITY FUND SECURITIES FUND INCOME FUND
<S> <C> <C> <C>
$107,106,503 $ 3,167,076 $ 10,928,944
43,912 -- 25,965
-- 4,760 1,673
283,749 1,111 551
4,914,581 -- --
38,241 19,240 95,021
18,767 11,674 11,674
-- 8,634 8,730
------------ ----------- -------------
112,405,753 3,212,495 11,072,558
------------ ----------- -------------
-- 5,417 --
91,524 -- --
51,448 7,500 48,267
-- 574 6,220
4,895,148 -- --
88,573 22,807 31,409
------------ ----------- -------------
5,126,693 36,298 85,896
------------ ----------- -------------
$107,279,060 $ 3,176,197 $ 10,986,662
============ =========== =============
$ 89,563,961 $ 3,212,018 $ 11,334,191
-- -- --
6,862,073 (21,066) (255,244)
10,853,026 (14,755) (92,285)
------------ ----------- -------------
$107,279,060 $ 3,176,197 $ 10,986,662
============ =========== =============
$ 48,517,862 $ 3,078,326 $ 9,760,886
3,151,476 328,163 1,051,991
$ 15.40 $ 9.38 $ 9.28
$ 16.17 $ 9.85 $ 9.50
$ 10,277,655 $ $ 550,705
688,152 58,921
$ 14.94 $ $ 9.35
$ 48,483,543 $ 97,871 $ 675,071
3,113,960 10,308 72,996
$ 15.57 $ 9.49 $ 9.25
</TABLE>
--
23
<PAGE> 26
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME + GROWTH
FUND
<S> <C>
INVESTMENT INCOME:
Dividend income $ 1,204,490
Interest income 80,409
-----------
TOTAL INCOME 1,284,899
-----------
EXPENSES:
Investment management fee -- Note 2(A) 248,183
Service fee -- Class A -- Note 2(C) 64,461
Service and Distribution fees -- Class B -- Note 2(C) 14,538
Professional fees 18,648
Shareholder servicing fees
Class A 25,118
Class B 1,800
Class C 2,391
Directors' fees and expenses -- Note 2(D) 12,322
Federal and state registration fees 19,720
Prospectus and shareholders' reports 25,476
Custodian fees 8,361
Amortization of organization expenses -- Note 1(E) --
Miscellaneous 2,686
-----------
TOTAL EXPENSES 443,704
Less: expenses waived and absorbed --
Notes 2(A, C and D) (46,327)
-----------
NET EXPENSES 397,377
-----------
Net Investment Income (loss) 887,522
-----------
Realized and Unrealized Gain (Loss) on Investments --
Note 3:
Net realized gain (loss) on investments 4,806,954
Net unrealized appreciation (depreciation) on
investments (2,952,329)
-----------
Net Realized and Unrealized Gain (Loss) on Investments 1,854,625
-----------
Net Increase (Decrease) in Net Assets Resulting from
Operations $ 2,742,147
===========
</TABLE>
See notes to combined financial statements
--
24
<PAGE> 27
<TABLE>
<CAPTION>
GOVERNMENT INTERMEDIATE FIXED
OPPORTUNITY FUND SECURITIES FUND INCOME FUND
<S> <C> <C>
$ 243,863 $ -- $ --
142,891 89,775 442,484
---------- --------- ----------
386,754 89,775 442,484
---------- --------- ----------
440,854 7,751 31,459
56,298 3,113 13,228
46,808 -- 1,572
16,658 8,942 8,846
29,110 2,115 7,975
7,049 -- 252
6,191 189 406
11,721 11,721 11,721
19,965 13,597 13,727
15,106 1,012 4,736
21,815 1,894 3,588
-- 6,901 6,989
2,870 392 964
---------- --------- ----------
674,445 57,627 105,463
(47,297) (52,459) (65,496)
---------- --------- ----------
627,148 5,168 39,967
---------- --------- ----------
(240,394) 84,607 402,517
---------- --------- ----------
7,257,632 (9,296) (105,090)
(893,087) (47,791) (187,231)
---------- --------- ----------
6,364,545 (57,087) (292,321)
---------- --------- ----------
$6,124,151 $ 27,520 $ 110,196
========== ========= ==========
</TABLE>
--
25
<PAGE> 28
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME + GROWTH FUND
------------------------------
SIX MONTHS
ENDED YEAR
5/31/97 ENDED
(UNAUDITED) 11/30/96
<S> <C> <C>
OPERATIONS:
Net investment income $ 887,522 $ 2,441,778
Net realized gain on investments 4,806,954 8,408,735
Net unrealized (depreciation) on
investments (2,952,329) (48,607)
----------- ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 2,742,147 10,801,906
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (731,251) (1,959,683)
Class B (28,071) (68,567)
Class C (184,016) (625,281)
Net realized gains on investments
Class A (6,585,113) (1,843,725)
Class B (328,686) (55,281)
Class C (1,476,639) (722,597)
----------- ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (9,333,776) (5,275,134)
----------- ------------
COMMON STOCK TRANSACTIONS -- NOTE 4
Proceeds from shares sold 3,827,773 12,200,391
Net asset value of shares issued in
reinvestments of distributions 8,669,610 4,990,142
Cost of shares redeemed (6,169,557) (25,962,378)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM COMMON STOCK TRANSACTIONS 6,327,826 (8,771,845)
----------- ------------
TOTAL (DECREASE) IN NET ASSETS (263,803) (3,245,073)
NET ASSETS:
Beginning of period 66,815,839 70,060,912
----------- ------------
End of period $66,552,036 $ 66,815,839
=========== ============
Undistributed net investment income $ 220,631 $ 276,408
=========== ============
</TABLE>
See notes to combined financial statements
--
26
<PAGE> 29
STATEMENTS OF CHANGES IN NET ASSETS -- (continued)
<TABLE>
<CAPTION>
OPPORTUNITY FUND
-------------------------------
SIX MONTHS
ENDED YEAR
5/31/97 ENDED
(UNAUDITED) 11/30/96
<S> <C> <C>
OPERATIONS:
Net investment loss $ (240,394) $ (297,291)
Net realized gain on investments 7,257,632 11,722,237
Net unrealized appreciation (depreciation)
on investments (893,087) 8,236,515
------------ ------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 6,124,151 19,661,461
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains on investments
Class A (5,387,688) (911,398)
Class B (1,131,024) (154,675)
Class C (4,941,726) (450,538)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (11,460,438) (1,516,611)
------------ ------------
COMMON STOCK TRANSACTIONS -- NOTE 4
Proceeds from shares sold 18,456,135 27,354,999
Net asset value of shares issued in
reinvestments of distributions 11,254,873 1,490,968
Cost of shares redeemed (10,207,752) (18,321,441)
------------ ------------
NET INCREASE IN NET ASSETS FROM COMMON
STOCK TRANSACTIONS 19,503,256 10,524,526
------------ ------------
TOTAL INCREASE IN NET ASSETS 14,166,969 28,669,376
NET ASSETS:
Beginning of period 93,112,091 64,442,715
------------ ------------
End of period $107,279,060 $ 93,112,091
============ ============
</TABLE>
See notes to combined financial statements
--
27
<PAGE> 30
STATEMENTS OF CHANGES IN NET ASSETS -- (continued)
<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES FUND
-----------------------------
SIX MONTHS
ENDED YEAR
5/31/97 ENDED
(UNAUDITED) 11/30/96
<S> <C> <C>
OPERATIONS:
Net investment income $ 84,607 $ 229,001
Net realized (loss) on investments (9,296) (5,078)
Net unrealized (depreciation) on
investments (47,791) (96,320)
---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 27,520 127,603
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (81,574) (221,638)
Class B -- (1,751)
Class C (3,033) (5,612)
---------- ----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (84,607) (229,001)
---------- ----------
COMMON STOCK TRANSACTIONS -- NOTE 4
Proceeds from shares sold 654,285 308,567
Net asset value of shares issued in
reinvestments of distributions 80,320 205,999
Cost of shares redeemed (224,703) (1,833,196)
---------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM COMMON STOCK TRANSACTIONS 509,902 (1,318,630)
---------- ----------
TOTAL INCREASE (DECREASE) IN NET
ASSETS 452,815 (1,420,028)
NET ASSETS:
Beginning of period 2,723,382 4,143,410
---------- ----------
End of period $3,176,197 $2,723,382
========== ==========
</TABLE>
See notes to combined financial statements
--
28
<PAGE> 31
STATEMENTS OF CHANGES IN NET ASSETS -- (continued)
<TABLE>
<CAPTION>
INTERMEDIATE FIXED
INCOME FUND
-----------------------------
SIX MONTHS
ENDED YEAR
5/31/97 ENDED
(UNAUDITED) 11/30/96
<S> <C> <C>
OPERATIONS:
Net investment income $ 402,517 $1,073,450
Net realized (loss) on investments (105,090) (151,102)
Net unrealized (depreciation) on
investments (187,231) (288,658)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 110,196 633,690
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (337,303) (885,315)
Class B (19,160) (50,276)
Class C (46,054) (137,858)
Net realized gains on investments
Class A -- (140,232)
Class B -- (5,359)
Class C -- (17,397)
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (402,517) (1,236,437)
----------- -----------
COMMON STOCK TRANSACTIONS -- NOTE 4
Proceeds from shares sold 372,874 6,747,241
Net asset value of shares issued in
reinvestments of dividends 352,987 1,056,981
Cost of shares redeemed (3,846,301) (9,917,773)
----------- -----------
NET (DECREASE) IN NET ASSETS FROM COMMON
STOCK TRANSACTIONS (3,120,440) (2,113,551)
----------- -----------
TOTAL(DECREASE) IN NET ASSETS (3,412,761) (2,716,298)
NET ASSETS:
Beginning of Period 14,399,423 17,115,721
----------- -----------
End of Period $10,986,662 $14,399,423
=========== ===========
</TABLE>
See notes to combined financial statements
--
29
<PAGE> 32
COWEN FUNDS
NOTES TO COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: Cowen Income + Growth Fund, Inc.
("CIG") and Cowen Funds, Inc. (collectively "the Funds") are registered under
the Investment Company Act of 1940 ("Act") as diversified open-end management
companies. Cowen Funds, Inc. operates as a series company currently issuing
common stock representing its portfolios designated as the Cowen Intermediate
Fixed Income Fund ("CIFIF"), Cowen Government Securities Fund, formerly known as
Cowen Tradition Fixed Income Fund ("CGSF"), and Cowen Opportunity Fund ("COF").
Cowen & Company ("Cowen") acts as the investment manager and distributor of each
of the Funds' shares. These combined financial statements together with the
notes thereto, consist of CIG, COF, CIFIF and CGSF. The Funds' financial
statements are prepared in accordance with generally accepted accounting
principals which may require the use of management estimates and assumptions.
Actual results could differ from these estimates.
(A) Portfolio valuation: Securities whose principal market is on an exchange
are valued at the last sales price on the exchange or, in the absence of
currently reported sales on the exchange, at the most recent bid price in the
over-the-counter market or, in the absence of a recent bid price, the bid
equivalent as obtained from one or more of the major market makers for the
securities to be valued. Securities traded principally in the over-the-counter
market are valued at the most recent bid price. Short-term investments are
carried at amortized cost, which approximates value.
(B) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including amortization
of discount on investments, is recognized on the accrual basis.
(C) Dividends to shareholders: Dividends for CIG and COF are recorded on the
ex-dividend date. Dividends for CGSF and CIFIF are earned on settled shares
daily and paid monthly. To the extent that net realized capital gain can be
offset by capital loss carryovers, if any, it is the policy of each Fund not to
distribute such gain.
(D) Federal income taxes: It is the policy of each Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the provisions available to
certain investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of taxable income sufficient to relieve
it from all, or substantially all, Federal income taxes.
At November 30, 1996, CGSF and CIFIF had unused capital loss carryovers of
approximately $12,000 and $150,000, respectively, available for Federal income
tax purposes to be applied against future securities profits, if any. If not
applied, the carryovers expire $6,800 in fiscal 2002 and $155,200 in fiscal
2004.
(E) Deferred organization expenses: Organization expenses paid by CGSF and
CIFIF are being amortized to operations from January 20, 1993, the date
operations commenced, over the period during which it is expected that a benefit
will be realized, not to exceed five years. In the event that any of the initial
shares purchased by Cowen in connection with the organization of each Fund are
redeemed by any holder thereof prior to the amortization of such expenses,
redemption proceeds will be reduced by a pro rata portion of any unamortized
organizational expenses in the same proportion as the number of initial shares
being redeemed bears to the number of initial shares outstanding at the time of
redemption.
--
30
<PAGE> 33
(F) Dividends from net investment income and distributions from realized gains
from investment transactions are determined in accordance with Federal income
tax regulations, which may differ from investment income and realized gains
determined under generally accepted accounting principles. These "book/tax"
differences are either considered temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes, but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in capital. As of May 31, 1997, COF reclassified $240,394 from accumulated
undistributed net investment loss to accumulated net realized gain on
investments. Net investment loss, net realized gains, and net assets were not
affected by this change.
(G) Options Transactions: When a Fund writes an option, the premium received
by the Fund is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from writing
options which expire unexercised are recorded by the Fund on the expiration date
as realized gains from options written. The difference between the premium and
the amount paid on effecting a closing purchase transaction, including brokerage
commissions, is also treated as a realized gain, or if the premium is less than
the amount paid for the closing purchase transaction, as a realized loss. If a
call option is exercised, the premium is added to the proceeds from the sale of
the underlying security in determining whether the Fund has realized a gain or
loss.
NOTE 2 - INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Investment Management Fee: Fees paid by the Funds to Cowen pursuant to the
provisions of Investment Management Agreements ("Agreements") are payable
monthly, based on an annual rate of .75%, .90%, .50% and .60% for CIG, COF,
CIFIF and CGSF, respectively, of the average daily value of each Fund's net
assets. Since May 9, 1994, Cowen has voluntarily reimbursed the CIG's expenses
in an amount equal to an annual rate of .20% through August 31, 1995, of .18%
from that date through March 31, 1996 and of .14% thereafter, of the average
daily value of its net assets, and the COF's expenses in an amount equal to an
annual rate of .22% through March 31, 1996, of .13% through March 31, 1997 and
.03% thereafter, of the average daily value of its net assets.
With respect to CGSF and CIFIF, through July 11, 1994, Cowen waived all of
each Fund's Investment Management Fee and has agreed to pay all of each Fund's
expenses. From July 11, 1994 through March 31, 1995, Cowen continued to waive
all of each Fund's Investment Management Fee and to pay all of each Fund's
expenses. With respect to CGSF, Cowen voluntarily waived its investment
management fee and service fee and absorbed all other expenses, except for .25%
through March 31, 1996 and .40% thereafter of other expenses and .50% of the
Class B distribution fee. The directors' fees are being waived by directors.
With respect to CIFIF, Cowen voluntarily waived its investment management fee
and absorbed all other expenses, except for .25% through March 31, 1996 and .40%
thereafter of other expenses and its service and distribution fees. The
directors' fees are being waived by directors.
Cowen has agreed to maintain these fee and expense reimbursement arrangements
for each Fund through March 31, 1998 (see "Shareholder Servicing and
Distribution Plan" later in this note).
(B) In acting as distributor during the period ended May 31, 1997, Cowen
earned $37,149, $73,639, $1,680 and $1,308 of commissions on sales of the shares
of CIG, COF, CGSF and CIFIF, respectively.
--
31
<PAGE> 34
(C) Shareholder Servicing and Distribution Plans (the "Plan"): Cowen is paid
monthly fees by each of the Funds in connection with (1) the servicing of
shareholder accounts in Class A and Class B shares and (2) providing
distribution related services in respect of Class B shares. A monthly service
fee, authorized pursuant to the Plan adopted by each of the Funds pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"), is calculated at the annual rate of .25% of the value of the average
daily net assets of the Fund attributable to each of Class A and Class B shares
and is used by Cowen to provide compensation for ongoing servicing and/or
maintenance of shareholder accounts with the Funds. Compensation is paid by
Cowen to persons, including Cowen employees, who respond to inquiries of
shareholders of a Fund regarding their ownership of shares or their accounts
with the Fund or who provide other similar services not otherwise required to be
provided by the Fund's investment advisor, transfer agent or other agent of the
Fund.
In addition, pursuant to the Plan, the Funds pay to Cowen a monthly
distribution fee at the annual rate of .75% for CIG, COF and CGSF and of .25%
for CIFIF of the Funds' average daily net assets attributable to Class B shares.
The distribution fee is used by Cowen to provide (1) initial and ongoing sales
compensation to its registered representatives or those of other broker-dealers
that enter into selected dealer agreements with Cowen in respect of sales of
Class B shares; (2) costs of printing and distributing the Funds' Prospectus,
Statement of Additional Information and sales literature to prospective
investors in Class B shares; (3) costs associated with any advertising relating
to Class B shares; and (4) payments to, and expenses of, persons who provide
support services in connection with the distribution of Class B shares.
Payments under the Plan are not tied exclusively to the service and/or
distribution expenses actually incurred by Cowen, and the payments may exceed
expenses actually incurred by Cowen. The Board of Directors evaluates the
appropriateness of the Plan and its payment terms on a continuing basis and in
doing so considers all relevant factors, including expenses borne by Cowen and
amounts it receives under the Plan.
(D) Directors who are not officers, directors, partners, stockholders or
employees of Cowen or its affiliates receive from each Fund a fee of $3,000 per
annum plus $500 per meeting attended and $375 for each audit committee meeting
attended and reimbursement for travel and out-of-pocket expenses; however the
Directors have agreed to waive their fees from CGSF and CIFIF until such time as
Cowen ceases to waive its Investment Management Fee.
NOTE 3 - SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of
investment securities, excluding short-term securities, during the period ended
May 31, 1997, was as follows:
<TABLE>
<CAPTION>
CIG COF CGSF CIFIF
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases $ 22,809,608 $ 72,501,556 $ 1,700,850 $ 5,611,143
- ---------------------------------------------------------------------------
Sales $ 24,591,271 $ 60,736,438 $ 1,059,835 $ 8,300,862
- ---------------------------------------------------------------------------
</TABLE>
At May 31, 1997, the cost of investments for Federal tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statements of Investments).
At May 31, 1997, accumulated net unrealized appreciation (depreciation) on
investments was as follows:
<TABLE>
<CAPTION>
CIG COF CGSF CIFIF
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross
Unrealized
Appreciation $ 7,313,675 $ 14,724,721 $ 10,108 $ 29,678
Gross
Unrealized
Depreciation 1,573,665 3,871,695 24,863 121,963
- ------------------------------------------------------------------------
Net $ 5,740,010 $ 10,853,026 $ (14,755) $ (92,285)
- ------------------------------------------------------------------------
</TABLE>
NOTE 4 - COMMON STOCK TRANSACTIONS: At May 31, 1997, there were authorized 250
million shares, $.001 par value, of each class of each Fund's Common Stock.
Transactions in the Funds' Common Stock were as follows:
--
32
<PAGE> 35
COWEN FUNDS
NOTE 4 -- (continued)
COWEN INCOME + GROWTH FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1997
------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- --------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 150,728 $ 1,878,810 59,658 $ 747,971 94,528 $ 1,200,992
Dividends Reinvested 559,165 6,834,652 25,571 311,273 124,218 1,523,685
-------- ----------- ------- ---------- ---------- ------------
709,893 8,713,462 85,229 1,059,244 218,746 2,724,677
Shares Redeemed (346,500) (4,371,131) (13,805) (175,595) (128,652) (1,622,831)
-------- ----------- ------- ---------- ---------- ------------
Net Increase 363,393 $ 4,342,331 71,424 $ 883,649 90,094 $ 1,101,846
======== =========== ======= ========== ========== ============
<CAPTION>
YEAR ENDED NOVEMBER 30, 1996
------------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- --------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 323,430 $ 4,240,149 84,994 $1,114,910 519,587 $ 6,845,332
Dividends Reinvested 273,319 3,559,882 9,145 118,830 100,573 1,311,430
-------- ----------- ------- ---------- ---------- ------------
596,749 7,800,031 94,139 1,233,740 620,160 8,156,762
Shares Redeemed (686,981) (9,077,987) (24,372) (318,947) (1,267,397) (16,565,444)
-------- ----------- ------- ---------- ---------- ------------
Net Increase (Decrease) (90,232) $(1,277,956) 69,767 $ 914,793 (647,237) $ (8,408,682)
======== =========== ======= ========== ========== ============
</TABLE>
--
33
<PAGE> 36
COWEN FUNDS
NOTE 4 -- (continued)
COWEN OPPORTUNITY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1997
-----------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- ---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 403,916 $ 5,843,381 99,687 $ 1,421,760 756,002 $11,189,924
Dividends Reinvested 371,816 5,276,074 78,964 1,090,492 340,886 4,888,308
-------- ----------- ------- ----------- --------- -----------
775,732 11,119,455 178,651 2,512,252 1,096,888 16,078,232
Shares Redeemed (269,668) (4,006,575) (32,241) (451,680) (390,236) (5,749,497)
-------- ----------- ------- ----------- --------- -----------
Net Increase 506,064 $ 7,112,880 146,410 $ 2,060,572 706,652 $10,328,735
======== =========== ======= =========== ========= ===========
<CAPTION>
FOR YEAR ENDED NOVEMBER 30, 1996
-----------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- ---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 307,594 $ 4,456,116 102,767 $ 1,463,700 1,457,942 $21,435,183
Dividends Reinvested 69,163 895,655 11,962 152,511 33,954 442,416
-------- ----------- ------- ----------- --------- -----------
376,757 5,351,771 114,729 1,616,211 1,491,896 21,877,599
Shares Redeemed (679,963) (9,608,731) (72,025) (1,007,199) (543,685) (7,705,512)
-------- ----------- ------- ----------- --------- -----------
Net Increase (Decrease) (303,206) $(4,256,960) 42,704 $ 609,012 948,211 $14,172,087
======== =========== ======= =========== ========= ===========
</TABLE>
--
34
<PAGE> 37
COWEN FUNDS
NOTE 4 -- (continued)
COWEN GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1997
-----------------------------------------------
CLASS A CLASS C
----------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- ---------
<S> <C> <C> <C> <C>
Shares Sold 69,011 $ 644,763 1,003 $ 9,522
Dividends Reinvested 8,239 77,291 319 3,029
-------- ----------- ------- ---------
77,250 722,054 1,322 12,551
Shares Redeemed (23,323) (219,490) (546) (5,213)
-------- ----------- ------- ---------
Net Increase 53,927 $ 502,564 776 $ 7,338
======== =========== ======= =========
<CAPTION>
YEAR ENDED NOVEMBER 30, 1996
---------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- -------------------- ------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- --------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 23,793 $ 226,905 -- $ -- 8,386 $ 81,662
Dividends Reinvested 20,988 199,947 46 462 583 5,590
-------- ----------- ------- --------- ------ --------
44,781 426,852 46 462 8,969 87,252
Shares Redeemed (172,053) (1,640,548) (15,360) (154,719) (3,980) (37,929)
-------- ----------- ------- --------- ------ --------
Net Increase (Decrease) (127,272) $(1,213,696) (15,314) $(154,257) 4,989 $ 49,323
======== =========== ======= ========= ====== ========
</TABLE>
--
35
<PAGE> 38
COWEN FUNDS
NOTE 4 -- (continued)
COWEN INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1997
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- -------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 23,823 $ 222,062 2,283 $ 21,445 13,904 $ 129,367
Dividends Reinvested 31,825 295,603 1,545 14,454 4,638 42,930
-------- ----------- ------- --------- -------- -----------
55,648 517,665 3,828 35,899 18,542 172,297
Shares Redeemed (258,724) (2,407,942) (25,547) (240,788) (130,525) (1,197,571)
-------- ----------- ------- --------- -------- -----------
Net (Decrease) (203,076) $(1,890,277) (21,719) $(204,889) (111,983) $(1,025,274)
======== =========== ======= ========= ======== ===========
<CAPTION>
YEAR ENDED NOVEMBER 30, 1996
--------------------------------------------------------------------------
CLASS A CLASS B CLASS C
----------------------- -------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- ----------- ------- --------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 564,602 $ 5,378,480 29,055 $ 282,806 114,335 $ 1,085,955
Dividends Reinvested 93,189 880,449 3,251 30,724 15,529 145,808
-------- ----------- ------- --------- -------- -----------
657,791 6,258,929 32,306 313,530 129,864 1,231,763
Shares Redeemed (913,933) (8,525,965) (10,626) (99,472) (138,370) (1,292,336)
-------- ----------- ------- --------- -------- -----------
Net Increase (Decrease) (256,142) $(2,267,036) 21,680 $ 214,058 (8,506) $ (60,573)
======== =========== ======= ========= ======== ===========
</TABLE>
--
36
<PAGE> 39
COWEN FUNDS
NOTE 5
NOTE 5 - FINANCIAL HIGHLIGHTS: Selected data for a share of Common Stock
outstanding throughout each period:
<TABLE>
<CAPTION>
COWEN INCOME + GROWTH FUND -- CLASS A
------------------------------------------------------------------------------------
YEAR ENDED NOVEMBER FOUR
SIX MONTHS 30, MONTHS YEAR ENDED JULY 31,
ENDED ------------------- ENDED -------------------------------
5/31/97 1996 1995 11/30/94 1994 1993 1992
----------- ------- ------- -------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 14.40 $ 13.19 $ 10.62 $11.06 $ 12.97 $ 12.85 $ 11.30
------- ------- ------- ------ ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Investment Income -- Net 0.17 0.48 0.51 0.19 0.52 0.48 0.46
Net Realized and Unrealized Gains
(Losses) on Investments 0.32 1.74 2.54 (0.50) (0.44) 0.68 1.57
------- ------- ------- ------ ------- ------- -------
Net from Investment Operations 0.49 2.22 3.05 (0.31) 0.08 1.16 2.03
------- ------- ------- ------ ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income (0.19) (0.52) (0.48) (0.13) (0.52) (0.49) (0.48)
Distributions from Net Realized
Gains on Investments (1.82) (0.49) -- -- (1.47) (0.55) --
------- ------- ------- ------ ------- ------- -------
Total Distributions (2.01) (1.01) (0.48) (0.13) (1.99) (1.04) (0.48)
------- ------- ------- ------ ------- ------- -------
NET ASSET VALUE,
End of Period $ 12.88 $ 14.40 $ 13.19 $10.62 $ 11.06 $ 12.97 $ 12.85
======= ======= ======= ====== ======= ======= =======
Total Return(5) 8.46%(2) 17.86% 29.50% (8.50%)(2) 0.28% 9.45% 18.49%
RATIOS/SUPPLEMENTARY
DATA
Net Assets (000 omitted) $51,658 $52,502 $49,298 $32,104 $34,722 $35,016 $32,956
Ratio of Expenses to Average
Net Assets 0.61%(3) 1.24% 1.31% 0.47%(3) 1.26% 1.33% 2.02%
Ratio of Investment Income -- Net
to Average Net Assets 1.33%(3) 3.56% 4.29% 1.65%(3) 4.32% 3.74% 3.84%
Decrease Reflected on Above
Ratios Due to Expense
Reimbursements/Waivers 0.07%(3) 0.15% 0.19% 0.07%(3) 0.04% -- --
Portfolio Turnover Rate 36% 79% 72% 31% 76% 62% 73%
Average Commission Rate Paid(8) $ 0.06 $0.0612
</TABLE>
--
37
<PAGE> 40
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN INCOME + GROWTH FUND -- CLASS B
---------------------------------------------------------------
YEAR ENDED FOUR PERIOD FROM
SIX MONTHS NOVEMBER 30, MONTHS 5/17/94(4)
ENDED ------------------ ENDED THROUGH
5/31/97 1996 1995 11/30/94 7/31/94
----------- ------- ------ -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 14.31 $ 13.14 $10.58 $11.04 $ 10.85(1)
------- ------- ------ ------ ---------
INCOME FROM INVESTMENT
OPERATIONS
Investment Income -- Net 0.13 0.37 0.42 0.16 0.09
Net Realized and Unrealized Gains
(Losses) on Investments 0.32 1.73 2.54 (0.50) 0.20
------- ------- ------ ------ ---------
Net from Investment Operations 0.45 2.10 2.96 (0.34) 0.29
------- ------- ------ ------ ---------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.13) (0.44) (0.40) (0.12) (0.10)
Distributions from Net Realized Gains on
Investments (1.82) (0.49) -- -- --
------- ------- ------ ------ ---------
Total Distributions (1.95) (0.93) (0.40) (0.12) (0.10)
------- ------- ------ ------ ---------
NET ASSET VALUE,
End of Period $ 12.81 $ 14.31 $13.14 $10.58 $ 11.04
======= ======= ====== ====== =======
Total Return(5) 7.82%(2) 16.89% 28.49% (9.33%)(2) 13.19%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 3,225 $ 2,581 $1,453 $ 280 $ 56
Ratio of Expenses to Average Net Assets 1.00%(3) 2.04% 2.07% 0.75%(3) 0.57%(3)
Ratio of Investment Income -- Net to
Average Net Assets 0.93%(3) 2.76% 3.44% 1.31%(3) 0.45%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers 0.07%(3) 0.15% 0.19% 0.07%(3) 0.04%(3)
Portfolio Turnover Rate 36% 79% 72% 31% 76%
Average Commission Rate Paid(8) $ 0.06 $0.0612
</TABLE>
--
38
<PAGE> 41
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN INCOME + GROWTH FUND -- CLASS C
----------------------------------------------------------------
YEAR ENDED FOUR PERIOD FROM
SIX MONTHS NOVEMBER 30, MONTHS 5/19/94(4)
ENDED ------------------- ENDED THROUGH
5/31/97 1996 1995 11/30/94 7/31/94
----------- ------- ------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 14.45 $ 13.23 $ 10.62 $11.06 $ 10.91(1)
----------- ------- ------- -------- -----------
INCOME FROM INVESTMENT
OPERATIONS
Investment Income -- Net 0.19 0.58 0.52 0.20 0.10
Net Realized and Unrealized Gains
(Losses) on Investments 0.32 1.69 2.59 (0.50) 0.16
----------- ------- ------- -------- -----------
Net from Investment Operations 0.51 2.27 3.11 (0.30) 0.26
----------- ------- ------- -------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income (0.21) (0.56) (0.50) (0.14) (0.11)
Distributions from Net Realized
Gains on Investments (1.82) (0.49) -- -- --
----------- ------- ------- -------- -----------
Total Distributions (2.03) (1.05) (0.50) (0.14) (0.11)
----------- ------- ------- -------- -----------
NET ASSET VALUE,
End of Period $ 12.93 $ 14.45 $ 13.23 $10.62 $ 11.06
=========== ======= ======= ======== ===========
Total Return(5) 8.76%(2) 18.25% 29.99% (8.37%)(2) 10.63%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 omitted) $11,669 $11,733 $19,309 $6,029 $ 4,988
Ratio of Expenses to Average Net
Assets 0.46%(3) 0.90% 0.96% 0.40%(3) 0.28%(3)
Ratio of Investment Income -- Net
to Average Net Assets 1.48%(3) 3.90% 4.66% 1.68%(3) 1.13%(3)
Decrease Reflected on Above Ratios
Due to Expense
Reimbursements/Waivers 0.07%(3) 0.16% 0.19% 0.07%(3) 0.05%(3)
Portfolio Turnover Rate 36% 79% 72% 31% 76%
Average Commission Rate Paid(8) $ 0.06 $0.0612
</TABLE>
--
39
<PAGE> 42
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN OPPORTUNITY FUND -- CLASS A
-----------------------------------------------------------------------
SIX MONTHS YEAR ENDED NOVEMBER 30,
ENDED -------------------------------------------------------
5/31/97 1996 1995 1994 1993 1992
----------- ------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 16.61 $ 13.13 $ 12.98 $ 16.06 $ 14.92 $ 14.72
----------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Investment Income (Loss) -- Net(6) (0.04) (0.07) (0.04) (0.09) (0.16) (0.20)
Net Realized and Unrealized Gains on
Investments 0.89 3.86 0.97 1.22 3.79 2.22
----------- ------- ------- ------- ------- -------
Net from Investment Operations 0.85 3.79 0.93 1.13 3.63 2.02
----------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income -- -- -- -- -- --
Distributions from Net Realized Gains
on Investments (2.06) (0.31) (0.78) (4.21) (2.49) (1.82)
----------- ------- ------- ------- ------- -------
Total Distributions (2.06) (0.31) (0.78) (4.21) (2.49) (1.82)
----------- ------- ------- ------- ------- -------
NET ASSET VALUE,
End of Period $ 15.40 $ 16.61 $ 13.13 $ 12.98 $ 16.06 $ 14.92
=========== ======= ======= ======= ======= =======
Total Return(5) 12.35%(2) 29.63% 7.91% 9.53% 29.48% 15.33%
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $48,518 $43,950 $38,724 $34,487 $19,147 $13,547
Ratio of Expenses to Average Net
Assets 0.68%(3) 1.39% 1.43% 1.47% 1.63% 2.52%
Ratio of Investment Loss -- Net to
Average Net Assets (0.29%)(3) (0.46%) (0.28%) (0.66%) (1.10%) (1.43%)
Decrease Reflected on Above Ratios Due
to Expense Reimbursements/Waivers 0.05%(3) 0.16% 0.22% 0.14% -- --
Portfolio Turnover Rate 65% 182% 148% 152% 167% 145%
Average Commission Rate Paid(8) $0.0299 $0.0575
</TABLE>
--
40
<PAGE> 43
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN OPPORTUNITY FUND -- CLASS B
--------------------------------------------------
YEAR ENDED PERIOD FROM
SIX MONTHS NOVEMBER 30, 5/17/94(4)
ENDED ------------------ THROUGH
5/31/97 1996 1995 11/30/94
----------- ------- ------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 16.23 $ 12.93 $12.91 $ 12.18(1)
----------- ------- ------ -----------
INCOME FROM INVESTMENT OPERATIONS:
Investment Income (Loss) -- Net(6) (0.10) (0.18) (0.14) (0.09)
Net Realized and Unrealized Gains on Investments 0.87 3.79 0.94 0.82
----------- ------- ------ -----------
Net from Investment Operations 0.77 3.61 0.80 0.73
----------- ------- ------ -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income -- -- -- --
Distributions from Net Realized Gains on Investments (2.06) (0.31) (0.78) --
----------- ------- ------ -----------
Total Distributions (2.06) (0.31) (0.78) --
----------- ------- ------ -----------
NET ASSET VALUE,
End of Period $ 14.94 $ 16.23 $12.93 $ 12.91
=========== ======= ====== ===========
Total Return(5) 11.57%(2) 28.67% 6.97% 11.04%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $10,278 $ 8,794 $6,455 $ 2,207
Ratio of Expenses to Average Net Assets 1.06%(3) 2.17% 2.19% 1.32%(3)
Ratio of Investment Loss -- Net to Average Net
Assets (0.67%)(3) (1.24%) (1.06%) (0.83%)(3)
Decrease Reflected on Above Ratios Due to Expense
Reimbursements/Waivers 0.05%(3) 0.16% 0.22% 0.12%(3)
Portfolio Turnover Rate 65% 182% 148% 152%
Average Commission Rate Paid(8) $0.0299 $0.0575
</TABLE>
--
41
<PAGE> 44
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN OPPORTUNITY FUND -- CLASS C
---------------------------------------------------
YEAR ENDED PERIOD FROM
SIX MONTHS NOVEMBER 30, 5/9/94(4)
ENDED ------------------- THROUGH
5/31/97 1996 1995 11/30/94
----------- ------- ------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 16.77 $ 13.20 $ 12.99 $ 12.36(1)
----------- ------- ------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Investment Income (Loss) -- Net(6) (0.02) (0.01) 0.01 (0.03)
Net Realized and Unrealized Gains on Investments 0.88 3.89 0.98 0.66
----------- ------- ------- -----------
Net from Investment Operations 0.86 3.88 0.99 0.63
----------- ------- ------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income -- -- -- --
Distributions from Net Realized Gains on
Investments (2.06) (0.31) (0.78) --
----------- ------- ------- -----------
Total Distributions (2.06) (0.31) (0.78) --
----------- ------- ------- -----------
NET ASSET VALUE,
End of Period $ 15.57 $ 16.77 $ 13.20 $ 12.99
=========== ======= ======= ===========
Total Return(5) 12.36%(2) 30.17% 8.40% 9.04%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $48,484 $40,369 $19,264 $ 8,151
Ratio of Expenses to Average Net Assets 0.51%(3) 1.01% 1.03% 0.75%(3)
Ratio of Investment Income (Loss) --
Net Assets (0.11%)(3) (0.07%) 0.11% (0.26%)(3)
Decrease Reflected on Above Ratios Due to Expense
Reimbursements/Waivers 0.05%(3) 0.15% 0.22% 0.13%(3)
Portfolio Turnover Rate 65% 182% 148% 152%
Average Commission Rate Paid(8) $0.0299 $0.0575
</TABLE>
--
42
<PAGE> 45
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN GOVERNMENT
SECURITIES FUND -- CLASS A
---------------------------------------------------------------
PERIOD FROM
1/20/93
YEAR ENDED (COMMENCEMENT
SIX MONTHS NOVEMBER 30, OF OPERATIONS)
ENDED ---------------------------- THROUGH
5/31/97 1996 1995 1994 11/30/93
----------- ------ ------ ------ --------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 9.59 $9.83 $ 9.17 $10.11 $ 9.77
----------- ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Investment Income -- Net 0.31 0.64 0.69 0.52 0.41
Net Realized and Unrealized Gains
(Losses) on Investments (0.21) (0.24) 0.66 (0.84) 0.30
----------- ------ ------ ------ ------
Net from Investment Operations 0.10 0.40 1.35 (0.32) 0.71
----------- ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.31) (0.64) (0.69) (0.56) (0.37)
Distributions from Net Realized Gains
on Investments -- -- -- (0.06) --
----------- ------ ------ ------ ------
Total Distributions (0.31) (0.64) (0.69) (0.62) (0.37)
----------- ------ ------ ------ ------
NET ASSET VALUE,
End of Period $ 9.38 $9.59 $ 9.83 $ 9.17 $10.11
=========== ====== ====== ====== ======
Total Return(5) 2.10%(2) 4.34% 15.23% (3.24%) 8.49%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ 3,078 $2,631 $3,945 $ 488 $ 547
Ratio of Expenses to Average Net
Assets 0.20%(3) 0.34% 0.22% -- --
Ratio of Investment Income -- Net to
Average Net Assets 3.26%(3) 6.72% 7.08% 5.24% 5.06%(3)
Decrease Reflected on Above Ratios Due
to:
Investment Management and Service
Fees Waived by Cowen 0.42%(3) 0.85% 0.85% 0.78% 0.75%(3)
Other Expenses Waived or Absorbed 1.60%(3) 2.72% 3.63% 11.85% 16.94%(3)
Portfolio Turnover Rate 40% 107% 289% 210% 122%
</TABLE>
--
43
<PAGE> 46
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN GOVERNMENT
SECURITIES FUND -- CLASS B*
--------------------------------------
YEAR ENDED PERIOD FROM
NOVEMBER 30, 7/15/94(4)
---------------------- THROUGH
1996(7) 1995 11/30/94
----------- ------ -----------
<S> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 10.01 $ 9.28 $9.52(1)
----------- ------ -----
INCOME FROM INVESTMENT OPERATIONS:
Investment Income -- Net 0.14 0.63 0.20
Net Realized and Unrealized Gains (Losses) on Investments 0.10 0.73 (0.24)
----------- ------ -----
Net from Investment Operations 0.24 1.36 (0.04)
----------- ------ -----
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.14) (0.63) (0.20)
Distributions from Net Realized Gains on Investments -- -- --
----------- ------ -----
Total Distributions (0.14) (0.63) (0.20)
----------- ------ -----
NET ASSET VALUE,
End of Period $ --(7) $10.01 $9.28
=========== ====== =====
Total Return(5) 2.37(7) 15.09% (1.27%)(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ -- $ 153 $ 60
Ratio of Expenses to Average Net Assets 0.16%(3) 0.75% 0.28%(3)
Ratio of Investment Income -- Net to Average Net Assets 1.24%(3) 6.62% 2.02%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management, Service and Distribution Fees
Waived by Cowen 0.22%(3) 1.10% 0.30%(3)
Other Expenses Waived or Absorbed 0.60%(3) 5.29% 6.05%(3)
Portfolio Turnover Rate 107% 289% 210%
</TABLE>
- ---------------
* No activity subsequent to February 12, 1996
--
44
<PAGE> 47
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN GOVERNMENT
SECURITIES FUND -- CLASS C
-----------------------------------------------
YEAR ENDED PERIOD FROM
SIX MONTHS NOVEMBER 30, 7/11/94(4)
ENDED --------------- THROUGH
5/31/97 1996 1995 11/30/94
----------- ----- ----- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $9.71 $9.94 $9.17 $9.45(1)
----- ----- ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Investment Income -- Net 0.31 0.65 0.70 0.22
Net Realized and Unrealized Gains (Losses) on
Investments (0.22) (0.23) 0.77 (0.28)
----- ----- ----- -----
Net from Investment Operations 0.09 0.42 1.47 (0.06)
----- ----- ----- -----
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.31) (0.65) (0.70) (0.22)
Distributions from Net Realized Gains on Investments -- -- -- --
----- ----- ----- -----
Total Distributions (0.31) (0.65) (0.70) (0.22)
----- ----- ----- -----
NET ASSET VALUE,
End of Period $9.49 $9.71 $9.94 $9.17
===== ===== ===== =====
Total Return(5) 1.94%(2) 4.48% 16.52% (1.57%)(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ 98 $ 93 $ 45 $ 13
Ratio of Expenses to Average Net Assets 0.20%(3) 0.36% 0.20% --
Ratio of Investment Income -- Net to Average Net
Assets 3.26%(3) 6.75% 7.12% 2.42%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fees Waived by Cowen 0.30%(3) 0.60% 0.60% 0.24%(3)
Other Expenses Waived or Absorbed 1.72%(3) 3.14% 5.14% 6.26%(3)
Portfolio Turnover Rate 40% 107% 289% 210%
</TABLE>
--
45
<PAGE> 48
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN INTERMEDIATE
FIXED INCOME FUND -- CLASS A
------------------------------------------------------------------
PERIOD FROM
1/20/93
YEAR ENDED NOVEMBER 30, (COMMENCEMENT
SIX MONTHS OF OPERATIONS)
ENDED ------------------------------ THROUGH
5/31/97 1996 1995 1994 11/30/93
----------- ------- ------- ------ ---------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 9.47 $ 9.71 $ 9.12 $ 9.95 $ 9.77
----------- ------- ------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Investment Income -- Net 0.30 0.63 0.67 0.51 0.40
Net Realized and Unrealized Gains
(Losses) on Investments (0.19) (0.15) 0.59 (0.68) 0.14
----------- ------- ------- ------ ------
Net from Investment Operations 0.11 0.48 1.26 (0.17) 0.54
----------- ------- ------- ------ ------
LESS DISTRIBUTIONS:
Dividends from Net Investment
Income (0.30) (0.63) (0.67) (0.53) (0.36)
Distributions from Net Realized
Gains on Investments -- (0.09) -- (0.13) --
----------- ------- ------- ------ ------
Total Distributions (0.30) (0.72) (0.67) (0.66) (0.36)
----------- ------- ------- ------ ------
NET ASSET VALUE,
End of Period $ 9.28 $ 9.47 $ 9.71 $ 9.12 $ 9.95
=========== ======= ======= ====== =======
Total Return(5) 2.32%(2) 5.21% 14.22% (1.77%) 6.50%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ 9,761 $11,885 $14,667 $2,836 $ 1,167
Ratio of Expenses to Average Net
Assets 0.32%(3) 0.59% 0.47% 0.12% --
Ratio of Investment Income -- Net
to Average Net Assets 3.18%(3) 6.61% 6.90% 5.41% 4.93%(3)
Decrease Reflected on Above Ratios
Due to:
Investment Management and Service
Fees Waived by Cowen 0.25%(3) 0.50% 0.50% 0.63% 0.75%(3)
Other Expenses Waived or Absorbed 0.28%(3) 0.52% 0.86% 3.43% 4.45%(3)
Portfolio Turnover Rate 45% 110% 264% 159% 143%
</TABLE>
--
46
<PAGE> 49
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN INTERMEDIATE FIXED
INCOME FUND -- CLASS B
-------------------------------------------------
YEAR ENDED PERIOD FROM
SIX MONTHS NOVEMBER 30, 7/12/94(4)
ENDED ----------------- THROUGH
5/31/97 1996 1995 11/30/94
----------- ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 9.54 $9.78 $9.17 $ 9.32(1)
----------- ------ ------ -----------
INCOME FROM INVESTMENT OPERATIONS:
Investment Income -- Net 0.29 0.61 0.65 0.20
Net Realized and Unrealized Gains (Losses) on
Investments (0.19) (0.15) 0.61 (0.15)
----------- ------ ------ -----------
Net from Investment Operations 0.10 0.46 1.26 0.05
----------- ------ ------ -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.29) (0.61) (0.65) (0.20)
Distributions from Net Realized Gains on Investments -- (0.09) -- --
----------- ------ ------ -----------
Total Distributions (0.29) (0.70) (0.65) (0.20)
----------- ------ ------ -----------
NET ASSET VALUE,
End of Period $ 9.35 $9.54 $9.78 $ 9.17
=========== ====== ====== ===========
Total Return(5) 2.10%(2) 4.96% 14.12% 1.25%(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ 551 $ 769 $ 577 $ 313
Ratio of Expenses to Average Net Assets 0.45%(3) 0.85% 0.68% 0.19%(3)
Ratio of Investment Income -- Net to Average Net
Assets 3.04%(3) 6.40% 6.79% 2.15%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management, Service and Distribution
Fees Waived by Cowen 0.25%(3) 0.50% 0.50% 0.18%(3)
Other Expenses Waived or Absorbed 0.24%(3) 0.46% 1.25% 1.37%(3)
Portfolio Turnover Rate 45% 110% 264% 159%
</TABLE>
--
47
<PAGE> 50
COWEN FUNDS
NOTE 5 -- (continued)
<TABLE>
<CAPTION>
COWEN INTERMEDIATE FIXED
INCOME FUND -- CLASS C
-------------------------------------------------
YEAR ENDED PERIOD FROM
SIX MONTHS NOVEMBER 30, 7/12/94(4)
ENDED ----------------- THROUGH
5/31/97 1996 1995 11/30/94
----------- ------ ------ -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
NET ASSET VALUE,
Beginning of Period $ 9.44 $ 9.68 $ 9.10 $ 9.34(1)
----------- ------ ------ -----------
INCOME FROM INVESTMENT OPERATIONS:
Investment Income -- Net 0.31 0.65 0.69 0.23
Net Realized and Unrealized Gains (Losses) on
Investments (0.19) (0.15) 0.58 (0.24)
----------- ------ ------ -----------
Net from Investment Operations 0.12 0.50 1.27 (0.01)
----------- ------ ------ -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.31) (0.65) (0.69) (0.23)
Distributions from Net Realized Gains on Investments -- (0.09) -- --
----------- ------ ------ -----------
Total Distributions (0.31) (0.74) (0.69) (0.23)
----------- ------ ------ -----------
NET ASSET VALUE,
End of Period $ 9.25 $ 9.44 $ 9.68 $ 9.10
=========== ====== ====== ===========
Total Return(5) 2.56%(2) 5.46% 14.41% (0.36%)(2)
RATIOS/SUPPLEMENTARY DATA
Net Assets (000 Omitted) $ 675 $1,745 $1,872 $ 565
Ratio of Expenses to Average Net Assets 0.20%(3) 0.35% 0.20% --
Ratio of Investment Income -- Net to Average Net
Assets 3.36%(3) 6.87% 7.23% 1.98%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fee Waived by Cowen 0.25%(3) 0.50% 0.50% 0.16%(3)
Other Expenses Waived or Absorbed 0.22%(3) 0.42% 0.97% 1.87%(3)
Portfolio Turnover Rate 45% 110% 264% 159%
</TABLE>
- ---------------
(1) Based upon the Class A Net Asset Value on the day prior to commencement of
distribution
(2) Annualized
(3) Not Annualized
(4) Commencement of Distribution
(5) Exclusive of Sales Charges
(6) Based upon average shares outstanding
(7) For the period from December 1, 1995 to February 12, 1996, the day on which
all outstanding shares were presented for redemption
(8) Disclosure required for years after September 1, 1995
--
48
<PAGE> 51
COWEN FAMILY OF FUNDS
Financial Square
New York, NY 10005-3597
DIRECTORS
Joseph M. Cohen, Chairman
James H. Carey
Dr. Peter P. Gil
Dr. Martin J. Gruber
Burton J. Weiss
OFFICERS
Joseph M. Cohen, Chairman of the Board of Directors and Chief Executive Officer
David R. Sarns, President
William Church, Vice President and Senior Investment Officer
Creighton H. Peet, Vice President, Treasurer, Chief Financial Officer and Senior
Investment Officer
William Rechter, Senior Investment Officer(1)
Alan Koepplin, Investment Officer(2)
Benedict Capaldi, Investment Officer(3)
Paul D. Houk, Investment Officer(3)
Gordon G. Ifill, Assistant Investment Officer(2)
Rodd M. Baxter, Secretary
Irwood Schlackman, Controller
<TABLE>
<S> <C>
INVESTMENT ADVISER CUSTODIAN
& DISTRIBUTOR & TRANSFER AGENT
Cowen & Company Investors Fiduciary Trust Co.
Financial Square P.O. Box 419111
New York, NY 10005 Kansas City, MO 64141
LEGAL COUNSEL INDEPENDENT AUDITORS
Willkie Farr & Gallagher Ernst & Young LLP
One Citicorp Center 787 Seventh Avenue
153 East 53rd Street New York, NY 10019
New York, NY 10022
</TABLE>
- ---------------
(1) Cowen Income + Growth and Cowen Opportunity
(2) Cowen Intermediate Fixed Income and Cowen Government Securities
(3) Cowen Income + Growth COW/SEMIANN 5/97
