<PAGE>
SEMI-ANNUAL REPORTS (UNAUDITED) MAY 31, 1999
THE SG COWEN
FAMILY OF FUNDS
SG COWEN INCOME + GROWTH FUND, INC.
SG COWEN OPPORTUNITY FUND
SG COWEN GOVERNMENT SECURITIES FUND
SG COWEN INTERMEDIATE FIXED INCOME FUND
SG COWEN LARGE CAP VALUE FUND
[LOGO] [LOGO]
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CONTENTS
<TABLE>
<S> <C>
Chairman's Letter ...................................... 1
SG Cowen Income + Growth Fund, Inc. .................... 2
SG Cowen Opportunity Fund .............................. 4
SG Cowen Intermediate Fixed Income Fund and
SG Cowen Government Securities Fund .................... 6
SG Cowen Large Cap Value Fund .......................... 8
Statements of Investments .............................. 10
Statements of Assets and Liabilities ................... 24
Statements of Operations ............................... 26
Statements of Changes in Net Assets .................... 28
Notes to Financial Statements .......................... 33
</TABLE>
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CHAIRMAN'S LETTER
July 14, 1999
TO OUR SHAREHOLDERS:
With the Asian economic crisis receding and the U.S. economy continuing its
strong growth, the U.S. stock market vaulted to new heights, extending beyond
large-cap growth stocks into value and small-cap companies. However, interest
rates rose steadily during the six-month period ended May 31, 1999, making it a
difficult period for the bond market.
Because our three equity funds, the SG Cowen Income + Growth Fund, the SG
Cowen Opportunity Fund and the SG Cowen Large Cap Value Fund, focus on
dividend-paying companies, small-cap stocks and value, respectively, we had a
particularly rewarding six months. Value investors were finally rewarded for
focusing on stocks with low price/earnings ratios and above-average dividend
yields. Meanwhile the SG Cowen Intermediate Fixed Income Fund and the SG Cowen
Government Fund were down slightly during this temporary rise in interest rates.
On the following pages, the portfolio managers' commentary analyzes fund
performance and provides an outlook for the rest of 1999.
We are pleased to report that SG Cowen Opportunity Fund and the SG Cowen Large
Cap Value Fund outperformed their benchmarks during the six-month period. This
was partly due to our being overweighted in the energy area, which had been
shunned by investors last fall when oil prices were plummeting.
Because value underperformed growth and large-cap stocks outperformed
small-caps for an extended period, we could have discarded our discipline to
chase returns. Instead, we adhered to our investment philosophy and were
rewarded during the period for doing so. Even now, we continue to believe that
value and small-cap stocks are undervalued compared to their large-cap growth
counterparts.
We are committed to providing you with long-term performance that is
consistent with the investment disciplines of the SG Cowen Family of Funds.
Thank you for your continued support.
Sincerely,
/s/ Joseph M. Cohen
Joseph M. Cohen
Chairman
<PAGE>
SG COWEN INCOME + GROWTH FUND
REWARDED FOR SEEKING BARGAINS
For the first time in a few years, value investors were finally rewarded for
buying stocks with low price/earnings ratios and strong dividend yields.
Meanwhile, high-flying technology and Internet stocks proved vulnerable to
shifting investor sentiment regarding U.S. economic growth and a more volatile
interest rate environment.
PERFORMANCE
For the six months ended May 31, 1999, the total cumulative return of the SG
Cowen Income + Growth Fund's Class A shares was 5.98%. In comparison, the Lipper
Equity-Income Index return was 8.41 % while the S&P 500 Index returned 12.61%
during the same period. The Fund's Class B and Class I shares returned 5.64% and
6.11% respectively for the six months.
During the first two months of the period, the market was still being led by
large-capitalization growth stocks, primarily technology shares. However, by
late winter, technology stocks started to sell off, and we began to see some
movement in energy and economically sensitive cyclical stocks. That trend
continued through May 31, 1999.
ENERGY: PRICES SNAP BACK In energy, one of our largest sectors, our
investments in Baker Hughes, Texaco and Schlumberger moved up sharply. In
addition, we added two oil and two natural gas companies during the
period--Anadarko Petroleum, Apache Corp., Union Pacific Resources and Western
Gas Resources. Anadarko Petroleum and Apache Corp., two exploration and
production companies, each have high levels of oil reserves and are very
sensitive to the price of oil. Early in 1999, when oil fell to $11 per barrel,
shares in these companies fell dramatically. We purchased the shares with the
belief that a more reasonable price for oil was $16 to $18 per barrel, not $11.
Our investments in Union Pacific Resources and Western Gas Resources were
similarly purchased when the price of natural gas declined, primarily due to the
abnormally warm winter. As the price of oil and gas has strengthened from those
lower levels, the share prices of the companies have rebounded.
UTILITIES: DIVIDEND YIELD--AND TAKEOVERS Although natural gas distribution
companies are regulated and fall into the industry category of "utility," they
are also benefiting from the rebound in natural gas prices. For instance
Keyspan, formerly known as Brooklyn Union Gas, performed well as energy prices
snapped back.
In the electric utility area, we purchased Illinova, formerly Illinois Power,
in April 1999, with a view that the company's share price did not reflect its
underlying value. For many years, the company's performance had been hampered by
onerous regulation in Illinois and a costly nuclear power plant. Recently,
Illinova announced the sale of its nuclear plant and received a merger offer
from Dynegy, a Texas energy company, reflecting the trend toward consolidation
in the industry. Other companies in the portfolio that were acquired during the
period include Consolidated Natural Gas and New Century Enterprises, an electric
utility in Colorado.
FINANCIAL SERVICES: BENEFITING FROM STABILITY IN ASIA The portfolio holds a
combination of banks and REITs (real estate investment trusts). Traditionally,
banks fall in value when interest rates rise because they are unable to raise
lending rates as fast as they must raise the rates paid on deposits. However,
the improving global economy was viewed positively by investors, particularly
for money center banks such as Bank of America and Mellon Bank.
In 1998, the REIT group was down 25% despite the fact that earnings, cash flow
and dividends continued to rise. Money was flowing out of this area and into
more aggressive growth and high technology stocks. However, we believe that
REITs currently offer the ultimate in value and dividend yield.
2
<PAGE>
CONSUMER NONCYCLICALS: BUYING ON DIPS During the period, we took advantage
of weakness in the group, particularly pharmaceutical stocks. Given the
contrarian bent of the portfolio, we have built positions in Bristol-Myers and
Schering-Plough as the companies have fallen out of favor. We believe that
steady and improving earnings growth brought on by a strong pipeline of new
products will enable these shares to appreciate in value.
The contrarian approach is exemplified by our purchase of AlliedSignal last
fall, shortly after its hostile tender offer for AMP, which was viewed
disapprovingly by Wall Street. The company was selling at a low price/earnings
multiple considering its growth rate. The stock nearly doubled since our
original purchase. The company has since announced the acquisition of Honeywell,
which was viewed much more favorably by the investment community.
Indeed, the six-month period has been a time of very active corporate
restructuring. Early in the period, we sold our position in Mobil after its
announced merger with Exxon. After years of speculation, RJR Nabisco finally
split into two parts--Nabisco Group Holdings and RJR Tobacco, and the
marketplace has valued the parts as much greater than when the two entities were
together. We look for management's ability to create this type of value for
shareholders.
LOOKING FORWARD
Over the past few years, many managers felt acute pressure to stray from their
value roots. We resisted that pressure, and as a result, we are beginning to be
rewarded for our patience.
Historically, the domination of growth or value is not a short-term
phenomenon. With U.S. economic growth continuing to be strong and interest rates
at the higher end of a trading range, we could be in store for a multi-year
period of outperformance by value.
3
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SG COWEN OPPORTUNITY FUND
SMALL-CAP STOCKS STAGE IMPRESSIVE RALLY
After a number of years of underperformance, small-cap stocks staged an
impressive comeback during the six-month period ended May 31, 1999. The
disparity in valuation between small-cap value and large-cap growth had grown to
epic proportions. Midway through the period, the relative and absolute strength
of small-cap value stocks started to improve, as energy and other economically
sensitive stocks performed very well.
PERFORMANCE
For the six months ended May 31, 1999, the total cumulative return of the SG
Cowen Opportunity Fund Class A shares was 18.71%. In contrast, the unmanaged
Russell 2000 Index generated a total return of 11.08% for the same period, while
the S&P 500 Index returned 12.61%. The Fund's Class B and Class I shares
returned 18.33% and 19.04%, respectively for the six months.
During the first half of 1999, a substantial change in investor psychology
took place, in which money shifted from growth to value and from large cap to
mid-cap and small-cap stocks. As the Asian economic crisis receded and the U.S.
economy continued to post impressive growth, investors felt comfortable reaching
for stocks that were undervalued and perhaps less liquid.
ATTRIBUTION: ALLEGIANCE TELECOM TRIPLES Strong performers during the period
included Allegiance Telecommunications, Coventry Healthcare and Smith
International. Our purchase of Allegiance Telecommunications took advantage of
the selloff of telecommunications and technology stocks in late 1998. Between
December 1, 1998 and May 31, 1999, the stock nearly tripled from $13.375 to $37.
Coventry Healthcare, a regional HMO serving the Midwest, MidAtlantic and
Southeast United States, gained 95% in the period as investors recognized
management's efforts to reduce costs, increase membership rolls and gain pricing
strength with rising premiums.
The portfolio's overweighting in energy, service and equipment companies, and
drillers was a significant boost to performance in a period in which the price
of oil rose from about $11 to $18 per barrel. For example, our investment in
Smith International, a market leader in the energy, service and equipment area
produced a 90% return during the period. In addition, BJ Services, which
provides pressure pumping and stimulation services for new oil and gas wells
rose over 50%.
Another area of strong performance was economically cyclical sectors such as
paper and forest products. Our investment in Georgia Pacific produced a 65%
return. Certain investments have yet to pay off, such as Calgon Carbon in the
chemicals sector, a manufacturer and marketer of separation and purification
technologies. Although the stock has not performed well due to decreased Asian
demand, we believe the valuation remains very attractive as insiders continue to
purchase shares in the open market.
CURRENT STRATEGY: THE SEARCH FOR COMPANIES POISED FOR GROWTH Our current
strategy is to remain overweighted in energy and basic industry stocks, although
we are taking selected profits. While we continue to be underweighted in
financial services, we are actively searching for companies with attractive
valuations and some type of growth catalyst, particularly in insurance and, to
some degree, real estate investment trusts.
Our strategy is to seek companies that have fallen out of favor and are
selling at attractive valuations. We then look for potential catalysts that can
bring companies to life, such as new management, products or technology. Our
research team analyzes a company's fundamental strength, preferring those with
improving balance sheets and cash flows, growing market share and experienced
management with significant stock ownership.
4
<PAGE>
An excellent example of the rewards of our adherence to our long held and
time-tested discipline was our emphasis on energy stocks last fall during a
period when most investors shunned them. We had conviction that the $11 per
barrel oil prices were unsustainable, and that recessions in oil-producing
countries such as Saudi Arabia and Venezuela would force them to cut back
production to boost prices. In addition, the largest international oil companies
were stepping back from expensive exploration and production projects and
merging to cut costs. We also believed that Asia's economic problems were
temporary and that the Federal Reserve Board and other major central banks would
be successful in creating new liquidity. Year to date, energy has been one of
the best performing sectors in the Russell 2000 Index, with an average return of
more than 20%.
SMALL-CAP RESURGENCE
Our disciplined value approach has been successful when viewed over a long-term
horizon, and we believe the last few months suggests that our methodology is
poised to rebound again. In the past, when a shift to small-cap returns has
occurred, it lasted for several years--nine consecutive years after 1974 and
four consecutive years after 1990. With the current level of attractive
valuations and the return of confidence, we believe small caps should begin
another period of very strong performance.
5
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SG COWEN INTERMEDIATE FIXED INCOME FUND
SG COWEN GOVERNMENT SECURITIES FUND
STEADILY RISING INTEREST RATES CHILL THE BOND MARKET
During the winter and spring of 1999, the fixed-income investment environment
changed rather suddenly. The global economic crisis faded while the U.S. economy
boomed with no recession in sight. Energy prices snapped back, causing inflation
fears to be rekindled. After lowering short-term rates three times in the fall,
the Federal Reserve Board shifted its bias from neutral in the winter towards
raising interest rates in the spring, and bond yields rose sharply. As a result,
longer-duration bond portfolios generally fell in value.
PERFORMANCE
For the six month period ended May 31, 1999, the total cumulative return of the
SG Cowen Intermediate Fixed Income Fund's Class A shares was -0.46%. In
comparison, its benchmark, the Lehman Brothers Intermediate Government/Corporate
Index, an unmanaged benchmark of intermediate government and corporate bonds,
reflected a return of -0.25%. The Fund's Class B and Class I shares returned
- -0.55% and -0.34%, respectively.
The total cumulative return for the SG Cowen Government Securities Fund's
Class A shares was -1.94% for the six-month period. In comparison, its unmanaged
benchmark, the Lehman Brothers Aggregate Index, reflected a return of -0.71%.
The Fund's Class I shares returned -2.09%.
A LONG-TERM VIEW
Our strategy during the period was to generally maintain a longer duration
compared to our benchmarks in anticipation of lower interest rates. That
strategy worked to our advantage when performance is viewed over the past year.
In its June 11, 1999 edition, THE WALL STREET JOURNAL listed the SG Cowen
Government Securities Fund among its Top 15 Performers among government bond
funds for the year ended May 31, 1999 as tracked by Lipper Inc.
However, the six months ended May 31, 1999 was a period of rising interest
rates, particularly in February and May. In February, bond yields on U.S.
Treasury bonds recaptured most of the downward movement that took place last
fall when global investors created a surging demand for Treasury securities as a
safe haven. In May, yields rose once again when an April government report
showed a 0.7% increase in the Consumer Price Index, the largest monthly rise in
nine years. For the first five months of 1999, the CPI rose at an annual rate of
2.6% -- significantly higher than the inflation rate in 1998, which was 1.6%. In
addition, the Federal Reserve Board became more concerned about inflation,
shifting its "bias" on interest rates from neutral toward raising rates. As a
result, yields on the 2-year, 10-year and 30-year Treasury bond rose from 4.50%,
4.70%, and 5.07%, respectively on November 30, 1998 to 5.40%, 5.62%, and 5.82%
on May 31, 1999.
As interest rates were rising, we did shorten the portfolios' duration
somewhat by selling longer-term Treasury securities and buying shorter-duration
mortgages. However, our belief is that the long-term trend for interest rates is
downward, and so we chose not to radically change the portfolio's duration to
accommodate a temporary bear market. True, we would have made an exception and
aggressively shortened the portfolio's duration had we truly thought that
inflation had been rekindled. Instead, we continue to believe that the long-term
trend for inflation and interest rates is downward. By maintaining the
portfolio's duration, we believe that shareholders are likely to benefit in the
second half of 1999.
MORTGAGES OUTPERFORMED
During the period, the best performing asset class was mortgages--particularly
high-coupon mortgages, followed by corporates and U.S. Treasury bonds. In a
rising interest rate environment, Treasury
6
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bonds decline the most. Corporate bonds decline by less because they pay higher
yields. In addition, the strengthening economy tends to have a positive impact
on credit quality. Mortgages do the best, because they offer much higher yields,
and the risk of prepayment is reduced. Both funds hold a significant number of
Ginnie Mae mortgages with coupons approaching 9%.
During the six-month period, the allocation to mortgages increased at the
expense of U.S. government notes and bonds. As of November 30, 1998, 72% of the
SG Cowen Government Securities Fund was invested in U.S. government notes and
bonds, with the balance invested in mortgages. By May 31, 1999, 58% of the Fund
was invested in government notes and bonds, with the balance in mortgages.
As of November 30, 1998, 64% of the SG Cowen Intermediate Fixed Income Fund
was invested in U.S. governments, while 13% was invested in mortgages and 22%
was invested in corporates. By May 31, 1999, 54% of the Fund was invested in
governments, while 23% was invested in mortgages and 23% was invested in
preferred stock in such high quality names as Citigroup, McDonald's, Merrill
Lynch and Paine Webber.
LOOKING FORWARD
Bonds offer good long-term value based on several factors:
1. With inflation still below 2%, real returns on bonds are in excess of 4%.
2. Bonds are approaching valuation levels last seen in 1994 and 1997, years
just prior to periods of strong bond returns.
3. Bond market bullish sentiment is low, also approaching levels last seen in
1994 and 1988, years that preceded periods of strong bond returns.
The risk for bonds is that the economy will stay strong and inflation will
creep higher, despite the Federal Reserve Board's 25 basis point tightening on
June 30, 1999. Clearly, inflation has moved up this year, but we do not expect
it to accelerate significantly from here. Likewise, bond yields could rise to
6.25%, but we believe that they should stabilize once near that level.
Our portfolios have slightly underperformed their benchmarks for the six-month
period ended May 31, 1999, but significantly outperformed for the entire year of
1998 as rates declined. We continue to maintain a longer than average maturity
in the portfolios because we believe that bonds offer good value at current
yields.
7
<PAGE>
SG COWEN LARGE CAP VALUE FUND
FINALLY, A RETURN TO VALUE
After a three-year preference for growth, investors turned to value with a
vengeance in early April after economic data showed that the U.S. economy was
stronger than expected and that Asia was stabilizing. These two economic
factors, along with a rebound in the price of oil, dramatically improved the
outlook of the manufacturing and energy sectors.
PERFORMANCE
For the six months ended May 31, 1999, the total cumulative return for the Class
A shares was 17.39%. In contrast, the unmanaged Russell 1000 Value Index
generated a total return of 13.42% for the same period, while the Standard &
Poor's 500 Index was up 12.61%. The Fund's Class B and Class I shares returned
17.04% and 17.51%, respectively, for the fiscal period.
The number one contributor to performance was the rebound in energy prices,
which caused oil service companies in the portfolio to surge in price. The
second contributor to performance was our strong weighting in the economically
cyclical industrial sector. Third, our light exposure to poorly performing
consumer noncylicals, particularly pharmaceutical stocks, was a benefit to our
relative performance against the benchmarks. Fourth, an overweight in the
utility sector has been helpful in recent months, as that industry has continued
to consolidate. Finally, a number of companies in the portfolio were acquired by
larger players in the same industry.
A negative factor was our modest exposure to raw commodity companies, such as
paper and metals, which performed very well during the first half of 1999. The
stock prices for commodities moved up very quickly to fair value, at which point
we passed on them. In contrast, we believed that the oil service companies were
still very depressed relative to where we thought they could be 12-18 months
out.
The following stocks were noteworthy for their strong performance:
1. Noble Drilling, which provides offshore drilling and engineering services
for the oil & gas industry, nearly doubled in price during the six-month period.
However, we believe that the company's earnings potential and stock price
appreciation have yet to be realized, particularly if oil prices remain at $17
to $18 per barrel.
2. Nine West, the nation's largest retailer of women's shoes, doubled in price
when Jones of New York, a women's apparel company, purchased it. We saw value in
Nine West's large distribution network, as well as the possibility that the
company would be acquired if the asset value underlying the stock price wasn't
realized by current management.
3. Honeywell, a major electronics supplier to Boeing, was selling in the low
60s in early 1999 when the Asia economic crisis appeared to be choking off
aircraft sales. We purchased the company because our research indicated that the
stock had been depressed far out of proportion to its exposure to aerospace.
Later in the period, we sold the stock at 103 prior to an announced merger with
AlliedSignal.
While we could not have predicted an end to the Asian crisis, we believed that
our downside risk with Honeywell was minimal at the price we were paying for the
stock, while the upside was substantial. Our view was that Honeywell was a very
well-managed company with many excellent business niches such as the U.S.
construction industry. On the other hand, we decided that we would stay away
from basic commodity companies more directly dependent on foreign economic
activity, since we didn't know how long Asia would be in distress.
One company in the portfolio that should have benefited from Asia's improving
outlook was Lockheed Martin, a leading aerospace/defense company. However, the
stock has been under pressure since
8
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the company reported disappointing earnings due to problems in its satellite
division. We will continue to monitor the company's ability to improve its
percentage of successful launches, as well as the debate over the nation's level
of defense spending.
LOOKING FORWARD
The Fund invests in large-capitalization stocks that are statistically cheap on
a price/book value, price/sales, price/cash flow and price/earnings basis. In
addition, we look for inexpensive stocks in which there are near-term catalysts
that would return the stock price to a more normal level.
Over a 20 to 30 year period, the stock market performance of the growth and
value styles tend to track closely. When one style gets extended, then there's
usually an adjustment, a leveling mechanism in the market that tends to even out
the two styles.
Even though such a leveling mechanism was set in motion in April, we believe
that the portfolio's valuation characteristics remain favorable compared to the
S&P 500 Index. For example, on May 31, 1999, the Fund's P/E ratio on expected
calendar year 1999 earnings was 18.0 compared to the S&P 500, which was 24.5.
The portfolio's price/book value ratio was about 2.2 compared to 4.9 for the S&P
500 Index, and the portfolio's dividend yield was 1.9% compared to 1.3% for the
S&P 500 Index.
As value investors, we do not rely heavily on macroeconomic forecasts.
However, we believe that we will be amply rewarded over the long-term if we
consistently accumulate positions in stocks representing good value.
9
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SG COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS
AEROSPACE-DEFENSE - 1.5%
18,000 Lockheed Martin Corp. $ 727,875
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CHEMICALS - 6.9%
12,000 Du Pont (E.I.) De Nemour 785,250
40,000 Lubrizol Corp. 1,100,000
100,000 RPM, Inc./Ohio 1,387,500
------------
3,272,750
------------
CONSUMER PRODUCTS - 1.9%
22,000 Newell Rubbermaid, Inc. 891,000
------------
DIVERSIFIED MANUFACTURING - 4.7%
19,000 Allied Signal, Inc. 1,103,188
55,000 Engelhard Corp. 1,113,750
------------
2,216,938
------------
ENERGY - 19.6%
27,000 Anadarko Petroleum Corp. 1,012,500
39,000 Apache Corp. 1,404,000
20,000 Baker Hughes, Inc. 622,500
33,000 Coastal Corp. 1,272,563
12,000 Murphy Oil Corp. 588,750
16,000 Schlumberger Ltd 963,000
20,000 Texaco, Inc. 1,310,000
40,000 Tidewater, Inc. 1,022,500
38,000 Union Pacific Resources 529,625
40,000 Western Gas Resources, Inc. 520,000
------------
9,245,438
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FINANCIAL SERVICES - 12.3%
8,000 Banc One Corp. 452,500
14,000 Bank of America Corp. 905,625
40,000 First Security Corp. of Delaware 757,500
30,000 Mellon Bank Corp. 1,070,625
50,000 North Fork Bancorp. 1,065,625
30,000 Ohio Casualty Corp. 1,141,875
50,000 Republic Security Financial Corp. 418,750
------------
5,812,500
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
SG COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
FOOD - 7.3%
19,000 Campbell Soup Co. $ 838,375
37,000 Dean Foods Co. 1,387,500
55,000 Interstate Bakeries 1,203,125
------------
3,429,000
------------
PHARMACEUTICALS/HEALTH CARE - 4.9%
14,000 Bristol-Myers Squibb Co. 960,750
11,000 Pharmacia & Upjohn, Inc. 609,812
16,000 Schering-Plough Corp. 721,000
------------
2,291,562
------------
REAL ESTATE INVESTMENT TRUSTS - 9.6%
20,000 Hospitality Properties Trust 542,500
14,000 Kimco Realty Corp. 559,125
48,000 New Plan Excel Realty Investment Trust 960,000
125,000 United Dominion Realty Trust 1,382,812
35,000 Washington Real Estate Investment Trust 621,250
11,000 Weingarten Realty Investment Trust 462,000
------------
4,527,687
------------
RETAIL - 4.1%
21,000 J.C. Penney Corp. 1,085,438
18,000 Sears Roebuck & Co. 860,625
------------
1,946,063
------------
STEEL - 3.7%
33,000 Allegheny Teledyne, Inc. 674,438
39,000 USX-US Steel Group, Inc. 1,050,563
------------
1,725,001
------------
TELEPHONE/COMMUNICATIONS - 2.3%
17,000 GTE Corp. 1,072,063
------------
TOBACCO - 5.1%
30,000 Phillip Morris Co's, Inc. 1,156,875
40,000 RJR Nabisco Holdings Corp. 1,237,500
------------
2,394,375
------------
TRANSPORTATION - 1.4%
20,000 Norfolk Southern Corp. 655,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
SG COWEN INCOME + GROWTH FUND, INC.
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
UTILITIES - 14.7%
28,000 Cinergy Corp. $ 955,500
45,000 Illinova Corp. 1,223,436
55,000 K N Energy 1,179,063
18,000 Keyspan Energy Corp. 486,000
49,000 MCN Energy 980,000
25,000 New Century Energies, Inc. 1,010,938
45,000 Utilicorp United, Inc. 1,122,186
------------
6,957,123
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TOTAL INVESTMENTS
(Cost $42,766,648) $47,164,375
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------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
SG COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCKS - 85.8% OF TOTAL PORTFOLIO
AGRICULTURAL/FARM EQUIPMENT - 4.0%
12,000 Agco Corp $ 139,500
15,400 Agrium Inc. 138,600
6,100 Case Corp. 286,700
20,100 IMC Global 420,844
26,100 New Holland NV 389,869
5,000 Potash Corp. 271,875
------------
1,647,388
------------
BUILDING CONSTRUCTION - 1.2%
15,800 Olin Corp 209,350
3,400 Stanley Works 110,713
4,700 Texas Industries 170,963
------------
491,026
------------
CONSUMER DISCRETIONARY - 2.5%
9,300 Berlitz* 198,206
11,500 Callaway Golf 189,031
17,800 Reader's Digest 651,925
------------
1,039,162
------------
ENVIRONMENTAL - 2.7%
109,900 Calgon Corporation 625,056
108,000 ICF Kaiser* 54,000
29,025 Safety Kleen* 455,330
------------
1,134,386
------------
FINANCIAL SERVICES - 1.6%
4,500 Advanta Corp 77,906
9,900 Alliance Bancorp 241,931
3,400 Allmerica Financial Corp 199,113
8,500 Motor Club America* 102,531
5,000 PBOC Holdings* 43,125
------------
664,606
------------
HEALTH CARE SERVICES/HMOS - 6.0%
42,600 Coventry Health Care* 564,450
43,600 Humana* 547,725
25,000 Matria Healthcare* 150,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
SG COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
HEALTH CARE SERVICES/HMOS - (CONTINUED)
91,400 MID Atlantic Medical* $ 948,275
29,400 Physician Reliance Network* 264,600
------------
2,475,050
------------
MEDICAL SUPPLIES/SERVICES - 0.8%
10,700 Mentor Corp. 170,531
11,800 Zoll Medical* 148,238
------------
318,769
------------
METALS & MINING - 10.9%
6,200 Asarco 99,588
20,000 Ashanti Goldfields 150,000
129,000 Battle Mountain Gold 314,438
20,700 Bethlehem Steel* 172,069
39,600 Birmingham Steel 202,950
24,800 Cambior 82,150
29,600 Coeur D'Alene Mines 123,950
61,200 Cyprus Amax Minerals 768,825
10,000 Inco Ltd 142,500
33,700 Hecla Mining Co* 82,144
50,600 Homestake Mining 395,313
44,800 Kaiser Aluminum* 392,000
99,064 Kinross Gold* 173,362
41,800 LTV Steel 256,025
14,400 National Steel 109,800
35,600 Newmont Mining 634,125
15,000 Placer Dome 166,875
17,900 Teck Corp 126,924
72,200 TVX Gold* 75,256
------------
4,468,294
------------
OIL & GAS EQUIPMENT & SVCS - 16.4%
20,200 BJ Services* 556,763
8,000 Cabot Corp 143,000
16,700 Global Industries* 185,788
50,700 Global Marine* 712,969
11,100 Hanover Compressor* 308,025
34,200 Marine Drilling* 491,625
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
SG COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
OIL & GAS EQUIPMENT & SVCS - (CONTINUED)
22,700 Nabors* $ 454,000
21,500 National Oilwell* 259,344
24,400 Newpark Resources* 219,600
18,600 Noble Drilling* 337,125
14,400 Offshore Logistics* 162,900
16,600 Petroleum Geo Services* 267,675
49,600 Pride Int'l* 517,700
6,200 Rowan Companies* 104,625
14,500 Santa Fe International 293,625
5,000 Seitel* 79,063
14,200 Smith Int'l* 614,150
6,000 Transocean Offshore 147,750
20,800 Tuboscope Inc* 278,200
9,000 Ultramar Diamond Shamrock 198,000
21,800 UTI Energy* 313,375
5,000 Veritas* 91,250
------------
6,736,552
------------
OIL & GAS EXPLORATION - 19.2%
26,400 Barrett Resources* 892,650
10,000 Basin Exploration* 167,500
38,400 Bellwether Exploration* 180,000
53,500 Canadian 88 Energy* 205,106
10,700 Devon Energy 371,825
122,899 EEX Corporation* 837,256
25,800 Forest Oil* 272,513
29,100 HS Resources* 349,200
5,000 Mitchell Energy 80,625
27,100 Nuevo Energy* 413,275
167,240 Ocean Energy* 1,651,495
32,800 Pioneer Natural Res 356,700
20,400 Precision Drilling* 371,025
204,185 Santa Fe Snyder* 1,735,573
4,700 Titan Exploration* 21,738
------------
7,906,481
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
SG COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
PAPER - 1.0%
6,400 Boise Cascade $ 253,600
3,100 Bowater 159,650
------------
413,250
------------
REAL ESTATE - 1.1%
5,100 Felcor Lodging Trust 115,706
10,000 Hugoton Realty Trust 101,875
3,500 Storage USA 116,813
6,000 Washington Real Estate 106,500
------------
440,894
------------
RESTAURANTS/FOOD PRODUCTS - 0.6%
19,100 Tasty Baking 238,750
------------
RETAILERS - 3.7%
20,200 Claires Stores 590,850
28,400 Michael Stores* 759,700
17,800 Stage Stores* 94,563
16,100 The Sports Authority* 80,500
------------
1,525,613
------------
TECHNOLOGY/SOFTWARE - 1.7%
20,400 Mentor Graphics* 257,550
12,700 Novell* 298,450
21,800 Santa Cruz Operation* 129,438
------------
685,438
------------
TECHNOLOGY/HARDWARE - 5.9%
7,400 Entrust* 156,325
79,200 Oceaneering International* 1,222,650
48,200 Sequent Computer Systems* 626,600
6,800 Tektronix 157,675
27,300 Tokheim* 269,588
------------
2,432,838
------------
TELECOMMUNICATIONS - 0.2%
25,000 SCC Communications* 95,304
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
SG COWEN OPPORTUNITY FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
TRANSPORT/TRUCKING/SHIPBUILDING - 2.9%
8,200 Kirby Corporation* $ 154,775
16,900 Newport News Shipbuilding 464,750
18,700 Stewart Stevenson 205,700
27,300 Transport Corp of America* 365,138
------------
1,190,363
------------
UTILITIES - 3.4%
25,100 MCN Energy 502,000
70,300 Western Gas Resourcess 913,900
------------
1,415,900
------------
TOTAL COMMON STOCKS
(Cost $35,397,866) $35,320,064
------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
SHORT TERM INVESTMENTS - 14.2%
American Express Corp., 4.80%,
$1,500,000 06/02/1999 $ 1,500,000
Ford Motor Credit Corp., 4.81%,
$2,000,000 06/10/1999 2,000,000
General Motors Acceptance Corp., 4.73%,
$1,500,000 06/04/1999 1,500,000
Prudential Funding Corp., 4.83%,
$ 850,000 06/04/1999 850,000
------------
Total Short Term Investments
(Cost $5,850,000) $ 5,850,000
------------
TOTAL INVESTMENTS
(Cost $41,247,866) $41,170,064
------------
------------
</TABLE>
- -------------
* Non Income Producing Security
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
SG COWEN GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL DESCRIPTION VALUE
AMOUNT
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 42.2% OF
TOTAL PORTFOLIO
Federal Home Loan Mortgage Corporation
(FHLMC) Certificates:
$ 38,762 8.00%, 08/01/07 $ 39,842
67,695 8.00%, 02/01/09 69,814
116,133 8.50%, 01/01/10 121,136
Federal National Mortgage Ass'n (FNMA)
Certificates:
211,076 11.00%, 04/01/05 225,664
63,380 9.00%, 02/01/15 67,334
Government National Mortgage Ass'n
(GNMA) Certificates:
15,581 8.00%, 05/15/02 15,782
3,665 10.00%, 04/15/16 3,939
2,944 10.00%, 07/15/17 3,171
2,496 10.00%, 11/15/17 2,689
4,027 9.00%, 05/15/21 4,319
6,240 9.50%, 11/15/21 6,704
24,981 9.50%, 03/20/25 26,059
73,076 8.00%, 05/15/25 76,000
-----------
Total Mortgage-Backed Securities 662,453
-----------
U.S. TREASURY OBLIGATIONS - 57.8%
U.S. Treasury Notes & Bonds
50,000 5.00%, 04/30/01 49,648
100,000 5.50%, 03/31/03 99,422
200,000 4.25%, 11/15/03 189,032
200,000 5.625%, 02/15/06 198,156
150,000 5.50%, 02/15/08 147,655
200,000 6.00%, 02/15/26 198,562
U.S. Government Zero Coupon Strips
100,000 0.00%, 02/15/21 26,347
-----------
Total U.S. Treasury Obligations 908,822
-----------
TOTAL INVESTMENTS
(Cost $1,583,918) $1,571,275
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
SG COWEN INTERMEDIATE FIXED INCOME FUND
STATEMENT OF INVESTMENTS
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
CUMULATIVE PREFERRED STOCK - 22.7% OF
TOTAL PORTFOLIO
20,000 Citigroup Capital 6.850%, 01/22/38 $ 495,000
8,600 McDonalds Corp. 7.500%, 09/30/36 223,062
20,000 Merrill Lynch TOPRS 7.750%, 12/31/36 528,750
Paine Webber Group Capital Trust II,
10,000 8.080%, 03/01/37 252,500
-----------
Total Cumulative Preferred Stock 1,499,312
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
MORTGAGE-BACKED SECURITIES - 22.9%
Federal National Mortgage Ass'n (FNMA)
Certificates:
$ 78,201 9.000%, 02/01/02 80,273
558,306 7.000%, 01/01/08 566,330
51,962 9.000%, 05/01/09 53,897
64,479 9.500%, 03/01/10 68,941
90,353 7.500%, 09/01/10 92,810
235,662 7.500%, 04/01/11 240,852
21,185 9.000%, 04/01/15 22,507
58,548 9.500%, 07/01/22 62,704
Federal Home Loan Mortgage Corporation
(FHLMC) Certificates:
100,969 8.000%, 01/01/08 104,129
Government National Mortgage Ass'n
(GNMA) Certificates:
44,296 8.000%, 06/15/01 44,867
34,923 9.000%, 12/15/16 37,543
25,934 10.000%, 12/15/18 27,943
30,093 8.500%, 10/15/21 31,852
40,452 8.000%, 06/15/22 42,184
34,214 8.000%, 06/15/27 35,551
-----------
Total Mortgage-Backed Securities 1,512,383
-----------
U.S. TREASURY OBLIGATIONS - 54.4%
U.S. Treasury Notes & Bonds
210,000 5.000%, 04/30/01 208,524
435,000 6.000%, 07/31/02 439,893
200,000 5.750%, 11/30/02 200,624
500,000 6.250%, 02/15/03 509,610
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
SG COWEN INTERMEDIATE FIXED INCOME FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
U.S. TREASURY NOTES & BONDS -
(CONTINUED)
$ 400,000 5.750%, 08/15/03 $ 400,812
650,000 5.875%, 11/15/05 653,049
500,000 5.625%, 02/15/06 495,390
400,000 6.500%, 10/15/06 416,124
270,000 5.500%, 02/15/08 265,780
-----------
Total U.S. Treasury Notes & Bonds 3,589,806
-----------
TOTAL INVESTMENTS
(Cost $6,553,843) $6,601,501
-----------
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
SG COWEN LARGE CAP VALUE FUND
STATEMENT OF INVESTMENTS
MAY 31, 1999
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
COMMON STOCK - 96.6% OF TOTAL PORTFOLIO
AEROSPACE-DEFENSE - 2.4%
7,700 Lockheed Martin Corporation $ 311,369
------------
AUTO PARTS & EQUIPMENT - 2.9%
2,570 Dana Corp 132,676
10,280 Meritor Automotive Inc 250,575
------------
383,251
------------
BANKS - 12.9%
4,570 Banc One Corp 258,491
6,880 Bank of America Corporation 445,050
7,730 BankBoston Corporation 366,209
8,570 Fleet Financial Group Inc 352,441
4,270 Keycorp 148,382
1,880 National City Corp. 124,432
------------
1,695,005
------------
CHEMICALS - 1.8%
1,700 Du Pont (E.I.) De Nemour 111,244
6,160 IMC Global Inc 128,975
------------
240,219
------------
ELECTRIC AND GAS UTILITIES - 8.6%
9,950 Cinergy Corp 339,544
3,150 CMS Energy Corp. 146,475
9,050 Constellation Energy Group 282,247
8,930 New Century Energies Inc 361,107
------------
1,129,373
------------
FINANCIAL (DIVERSIFIED) - 4.3%
3,990 AMBAC Financial Group 232,667
4,970 MBIA Inc 339,513
------------
572,180
------------
INSURANCE - 3.5%
8,190 Allstate Corp 298,423
5,288 Conseco, Inc. 161,614
------------
460,037
------------
MANUFACTURING - 1.7%
5,290 York International Corp 223,172
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE>
SG COWEN LARGE CAP VALUE FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
MEDICAL - GENERIC DRUGS - 1.6%
8,130 Mylan Laboratories $ 206,299
------------
MORTGAGE LENDER - 2.9%
5,520 Federal National Mortgage Association 375,365
------------
NATURAL GAS - 6.5%
6,250 Consolidated Nat.Gas 371,484
13,180 MCN Energy Group Inc 263,600
6,100 Sonat Inc 216,169
------------
851,253
------------
OIL (DOMESTIC & INTERNATIONAL) - 8.3%
8,200 Burlington Resources 352,087
59,070 Ocean Energy * 583,316
2,890 Phillips Petroleum Co 151,544
------------
1,086,947
------------
OIL & GAS (DRILLING & EQUIP) - 17.4%
11,920 Cooper Cameron Corp.* 431,355
31,560 Noble Drilling Corporation* 572,025
44,400 R & B Falcon Corporation* 410,700
3,770 Smith International* 163,052
5,340 Tidewater Inc. 136,504
16,960 Weatherford International* 559,696
------------
2,273,332
------------
RAILROADS - 0.9%
2,410 CSX Corp 113,119
------------
RETAIL - 10.0%
4,960 Federated Department Stores* 270,320
6,870 Nine West* 190,642
7,130 Saks Inc.* 196,966
6,830 Sears Roebuck & Co 326,559
13,860 Toys R Us Inc* 319,646
------------
1,304,133
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
22
<PAGE>
SG COWEN LARGE CAP VALUE FUND
STATEMENT OF INVESTMENTS - (CONTINUED)
MAY 31, 1999
<TABLE>
<CAPTION>
SHARES DESCRIPTION VALUE
<C> <S> <C>
TELEPHONE - 5.8%
5,640 Bell Atlantic Corp $ 308,790
4,550 GTE Corp 286,934
1,500 Sprint Corp 169,125
------------
764,849
------------
TOBACCO - 5.1%
9,650 Philip Morris Cos Inc 372,128
9,370 RJR Nabisco Hldgs Corp 289,884
------------
662,012
------------
Total Common Stocks
(Cost $12,690,099) $12,651,915
------------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C>
SHORT TERM INVESTMENTS - 3.4%
General Motors Acceptance Corp., 4.89%,
$450,000 06/04/1999 $ 450,000
------------
Total Short Term Investments
(Cost $450,000) $ 450,000
------------
TOTAL INVESTMENTS
(Cost $13,140,099) $13,101,915
------------
------------
</TABLE>
- -------------
* Non-income producing security
SEE NOTES TO FINANCIAL STATEMENTS
23
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCOME + GROWTH OPPORTUNITY
FUND FUND
<S> <C> <C>
ASSETS
Investments in securities,
at value -
(Cost $42,766,648,
$41,247,866, $1,583,918,
$6,553,843 and
$13,140,099, respectively
- see statements) $47,164,375 $41,170,064
Cash 119,785 472,841
Receivables:
SG Cowen Securities
Corporation - -
Subscriptions to Common
Stock - 30
Investment Securities sold 250,549 1,008,071
Dividends and interest 150,543 15,525
Prepaid expenses 17,507 21,602
Deferred organization
expenses -
Note I (E) - -
------------------- -------------------
TOTAL ASSETS 47,702,759 42,688,133
------------------- -------------------
LIABILITIES
Payables:
SG Cowen Securities
Corporation 37,122 37,349
Redemptions of Common
Stock 158,346 86,107
Investment securities
purchased 354,620 1,191,599
Dividends - Note I (C) - -
Accrued expenses and other
liabilities 39,934 71,506
------------------- -------------------
TOTAL LIABILITIES 590,022 1,386,561
------------------- -------------------
NET ASSETS $47,112,737 $41,301,572
------------------- -------------------
------------------- -------------------
Net Assets consist of:
Paid-in capital $39,747,722 $51,374,525
Accumulated undistributed
net investment income 202,719 -
Accumulated net realized
gain (loss) on
investments 2,764,569 (9,995,151)
Net unrealized appreciation
(depreciation) on
investments 4,397,727 (77,802)
------------------- -------------------
NET ASSETS $47,112,737 $41,301,572
------------------- -------------------
------------------- -------------------
Class A
Net Assets $39,694,115 $21,624,355
Outstanding shares of common
stock, ($.001 par value) 3,268,056 1,812,368
Net asset value per share $ 12.15 $ 11.93
Maximum offering price per
share $ 12.76 $ 12.52
Class B
Net assets $ 2,249,476 $ 5,245,825
Outstanding shares of common
stock, ($.001 par value) 186,584 464,085
Net asset value per share $ 12.06 $ 11.30
Class I
Net assets $ 5,169,146 $14,431,392
Outstanding shares of common
stock, ($.001 par value) 423,774 1,184,068
Net asset value per share $ 12.20 $ 12.19
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
24
<PAGE>
<TABLE>
<CAPTION>
GOVERNMENT INTERMEDIATE FIXED LARGE CAP
SECURITIES FUND INCOME FUND VALUE FUND
<C> <C> <C>
$ 1,571,275 $ 6,601,501 $13,101,915
2,797 9,151 45,044
3,594 1,611 -
- - -
8,924 1,059 -
16,376 58,263 20,292
13,021 13,004 33,366
- - 77,388
------------------- ------------------- -------------------
1,615,987 6,684,589 13,278,005
------------------- ------------------- -------------------
- - 998
- 49,392 -
- - 130,739
1,058 3,731 -
5,372 10,196 15,347
------------------- ------------------- -------------------
6,430 63,319 147,084
------------------- ------------------- -------------------
$ 1,609,557 $ 6,621,270 $13,130,921
------------------- ------------------- -------------------
------------------- ------------------- -------------------
$ 1,597,583 $ 6,630,740 $12,881,299
- - 20,638
24,617 (57,128) 267,168
(12,643) 47,658 (38,184)
------------------- ------------------- -------------------
$ 1,609,557 $ 6,621,270 $13,130,921
------------------- ------------------- -------------------
------------------- ------------------- -------------------
$ 1,459,882 $ 6,089,396 $11,297,830
156,300 641,640 1,015,568
$ 9.34 $ 9.49 $ 11.12
$ 9.81 $ 9.72 $ 11.67
- $ 299,638 $ 231,194
- 31,336 20,779
- $ 9.56 $ 11.13
$ 149,675 $ 232,236 $ 1,601,897
15,850 24,558 143,962
$ 9.44 $ 9.46 $ 11.13
</TABLE>
25
<PAGE>
Statements of Operations
Six Months Ended May 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
INCOME + GROWTH OPPORTUNITY
FUND FUND
<S> <C> <C>
INVESTMENT INCOME
Dividend Income $ 891,833 $ 117,526
Interest Income 13,656 28,448
------------------- -------------------
Total Income 905,489 145,974
------------------- -------------------
EXPENSES
Investment management fee -
Note 2(A) 178,384 178,204
Service fee - Class A - Note
2(C) 49,956 25,983
Service and Distribution
fees - Class B - Note 2(C) 11,654 25,736
Professional fees 14,792 14,941
Shareholder servicing fees
Class A 15,151 14,162
Class B 1,652 4,290
Class I 1,271 2,832
Directors' fees and expenses
- Note 2(D) 12,702 12,631
Federal and State
registration fees 15,958 15,297
Prospectus and shareholders'
reports 10,688 19,673
Custodian fees 2,515 13,278
Amortization of organization
expenses - Note 1(E) - -
Bookkeeping fees - -
Miscellaneous 2,193 3,382
------------------- -------------------
Total Expenses 316,916 330,409
Less: Expenses waived and
absorbed - Note 2(A,
C, and D) - -
------------------- -------------------
Net Expenses 316,916 330,409
------------------- -------------------
Net Investment Income (Loss) 588,573 (184,435)
------------------- -------------------
Realized and Unrealized Gain
(Loss) on investments - Note
3:
Net realized gain (loss)
on investments 3,085,719 (6,019,028)
Net unrealized
appreciation
(depreciation) on
investments (1,142,056) 12,527,209
------------------- -------------------
Net Realized and Unrealized
Gain (Loss) on Investments 1,943,663 6,508,181
------------------- -------------------
Net Increase (Decrease) in Net
Assets resulting from
Operations $ 2,532,236 $ 6,323,746
------------------- -------------------
------------------- -------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
26
<PAGE>
<TABLE>
<CAPTION>
GOVERNMENT INTERMEDIATE LARGE CAP
SECURITIES FUND FIXED INCOME FUND VALUE FUND
<S> <C> <C> <C>
INVESTMENT INCOME
Dividend Income $ - $ 54,662 $ 150,717
Interest Income 46,757 176,754 3,560
---------- ---------- ----------
Total Income 46,757 231,416 154,277
---------- ---------- ----------
EXPENSES
Investment management fee -
Note 2(A) 4,770 18,454 46,692
Service fee - Class A - Note
2(C) 1,830 8,366 13,697
Service and Distribution
fees - Class B - Note 2(C) - 946 940
Professional fees 8,608 8,010 10,982
Shareholder servicing fees
Class A 1,262 4,160 7,262
Class B - 399 334
Class I 427 408 734
Directors' fees and expenses
- Note 2(D) 12,020 12,020 11,769
Federal and State
registration fees 14,394 14,251 19,028
Prospectus and shareholders'
reports 3,232 2,883 6,945
Custodian fees 572 3,540 -
Amortization of organization
expenses - Note 1(E) - - 10,563
Bookkeeping fees - - 7,572
Miscellaneous 166 428 1,168
---------- ---------- ----------
Total Expenses 47,281 73,865 137,686
Less: Expenses waived and
absorbed - Note 2(A,
C, and D) (44,101) (49,790) (62,662)
---------- ---------- ----------
Net Expenses 3,180 24,075 75,024
---------- ---------- ----------
Net Investment Income (Loss) 43,577 207,341 79,253
---------- ---------- ----------
Realized and Unrealized Gain
(Loss) on investments - Note
3:
Net realized gain (loss)
on investments 27,139 39,493 306,039
Net unrealized
appreciation
(depreciation) on
investments (102,711) (268,011) 1,610,465
---------- ---------- ----------
Net Realized and Unrealized
Gain (Loss) on Investments (75,572) (228,518) 1,916,504
---------- ---------- ----------
Net Increase (Decrease) in Net
Assets resulting from
Operations $ (31,995) $ (21,177) $1,995,757
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
27
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME + GROWTH FUND
---------------------------------------
SIX MONTHS
ENDED YEAR
MAY 31, ENDED
1999 NOVEMBER 30,
(UNAUDITED) 1998
<S> <C> <C>
OPERATIONS:
Net investment income $ 588,573 $ 1,389,104
Net realized gain on investments 3,085,719 3,036,017
Net unrealized (depreciation) on investments (1,142,056) (2,004,575)
------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 2,532,236 2,420,546
------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (506,895) (1,180,546)
Class B (19,173) (62,786)
Class I (74,344) (215,316)
Net realized gains on investments
Class A (2,550,390) (9,027,631)
Class B (150,275) (739,839)
Class I (334,097) (1,694,332)
------------- ---------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (3,635,174) (12,920,450)
------------- ---------------
COMMON STOCK TRANSACTIONS - NOTE 4
Proceeds from shares sold 629,093 2,185,781
Net asset value of shares issued in
reinvestments of distributions 3,474,446 12,156,461
Cost of shares redeemed (9,161,250) (20,874,108)
------------- ---------------
NET (DECREASE) IN NET ASSETS FROM COMMON STOCK
TRANSACTIONS (5,057,711) (6,531,866)
------------- ---------------
TOTAL (DECREASE) IN NET ASSETS (6,160,649) (17,031,770)
NET ASSETS:
Beginning of period 53,273,386 70,305,156
------------- ---------------
End of period $ 47,112,737 $ 53,273,386
------------- ---------------
------------- ---------------
Undistributed net investment income $ 202,719 $ 214,558
------------- ---------------
------------- ---------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
28
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
OPPORTUNITY FUND
-------------------------------
SIX MONTHS
ENDED YEAR
MAY 31, ENDED
1999 NOVEMBER 30,
(UNAUDITED) 1998
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (184,435) $ (536,186)
Net realized (loss) on investments (6,019,028) (3,542,215)
Net unrealized appreciation (depreciation) on
investments 12,527,209 (17,068,140)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 6,323,746 (21,146,541)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gains on investments
Class A - (9,734,658)
Class B - (1,954,564)
Class I - (9,241,687)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS - (20,930,909)
------------- -------------
COMMON STOCK TRANSACTIONS - NOTE 4
Proceeds from shares sold 2,646,830 12,413,889
Net asset value of shares issued in
reinvestments of distributions - 20,168,020
Cost of shares redeemed (20,861,522) (55,694,070)
------------- -------------
NET (DECREASE) IN NET ASSETS FROM COMMON STOCK
TRANSACTIONS (18,214,692) (23,112,161)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS (11,890,946) (65,189,611)
NET ASSETS:
Beginning of period 53,192,518 118,382,129
------------- -------------
End of period $ 41,301,572 $ 53,192,518
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
29
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES FUND
-------------------------------
SIX MONTHS
ENDED YEAR
MAY 31, ENDED
1999 NOVEMBER 30,
(UNAUDITED) 1998
<S> <C> <C>
OPERATIONS:
Net investment income $ 43,577 $ 146,315
Net realized gain on investments 27,139 38,276
Net unrealized appreciation (depreciation) on
investments (102,711) 72,883
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (31,995) 257,474
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (40,110) (142,150)
Class I (3,467) (4,165)
Net realized gains on investments
Class A (37,726) (10,775)
Class I (3,070) (197)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (84,373) (157,287)
------------- -------------
COMMON STOCK TRANSACTIONS - NOTE 4
Proceeds from shares sold 106,161 105,815
Net asset value of shares issued in
reinvestments of distributions 73,717 144,861
Cost of shares redeemed (123,195) (2,178,322)
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
COMMON STOCK TRANSACTIONS 56,683 (1,927,646)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS (59,685) (1,827,459)
NET ASSETS:
Beginning of period 1,669,242 3,496,701
------------- -------------
End of period $ 1,609,557 $ 1,669,242
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
30
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
INTERMEDIATE FIXED
INCOME FUND
-------------------------------
SIX MONTHS
ENDED YEAR
MAY 31, ENDED
1999 NOVEMBER 30,
(UNAUDITED) 1998
<S> <C> <C>
OPERATIONS:
Net investment income $ 207,341 $ 556,609
Net realized gain on investments 39,493 162,727
Net unrealized appreciation (depreciation) on
investments (268,011) 179,663
------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (21,177) 898,999
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (188,863) (485,699)
Class B (10,430) (30,785)
Class I (9,124) (40,125)
------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (208,417) (556,609)
------------- -------------
COMMON STOCK TRANSACTIONS - NOTE 4
Proceeds from shares sold 135,105 814,243
Net asset value of shares issued in
reinvestments of distributions 173,566 469,619
Cost of shares redeemed (2,156,415) (3,599,456)
------------- -------------
NET (DECREASE) IN NET ASSETS FROM COMMON STOCK
TRANSACTIONS (1,877,744) (2,315,594)
------------- -------------
TOTAL (DECREASE) IN NET ASSETS (2,077,338) (1,973,204)
NET ASSETS:
Beginning of period 8,698,608 10,671,812
------------- -------------
End of period $ 6,621,270 $ 8,698,608
------------- -------------
------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
31
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS - (CONTINUED)
<TABLE>
<CAPTION>
LARGE CAP
VALUE FUND
---------------------------------
PERIOD FROM
JANUARY 2,
1998
(COMMENCEMENT
SIX MONTHS OF
ENDED OPERATIONS)
MAY 31, TO NOVEMBER
1999 30,
(UNAUDITED) 1998
<S> <C> <C>
OPERATIONS:
Net investment income $ 79,253 $ 105,345
Net realized gain (loss) on investments 306,039 (38,871)
Net unrealized appreciation (depreciation) on
investments 1,610,465 (1,648,649)
--------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 1,995,757 (1,582,175)
--------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income
Class A (67,887) (78,185)
Class B (397) (109)
Class I (8,800) (8,582)
--------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (77,084) (86,876)
--------------- -------------
COMMON STOCK TRANSACTIONS - NOTE 4
Proceeds from shares sold 561,486 17,852,421
Net asset value of shares issued in
reinvestments of distributions 76,810 86,029
Cost of shares redeemed (2,786,334) (2,909,113)
--------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS FROM
COMMON STOCK TRANSACTIONS (2,148,038) 15,029,337
--------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (229,365) 13,360,286
NET ASSETS:
Beginning of period 13,360,286 -
--------------- -------------
End of period $ 13,130,921 $ 13,360,286
--------------- -------------
--------------- -------------
Undistributed net investment income $ 20,638 $ 18,469
--------------- -------------
--------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
32
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES: SG Cowen Income + Growth Fund, Inc.
("CIG"), SG Cowen Funds, Inc. and SG Cowen Series Funds, Inc. (collectively "the
Funds") are registered under the Investment Company Act of 1940 ("Act") as
diversified open-end management companies. SG Cowen Funds, Inc. operates as a
series company currently issuing common stock representing its portfolios
designated as the SG Cowen Intermediate Fixed Income Fund ("CIFIF"), SG Cowen
Government Securities Fund ("CGSF"), and SG Cowen Opportunity Fund ("COF"). SG
Cowen Series Funds, Inc. operates as a series company currently issuing common
stock representing its portfolio designated as the SG Cowen Large Cap Value Fund
("LgCapValue"). Until July 1, 1998, Cowen & Co. ("Cowen") served as investment
manager and principal underwriter to the above-referenced Funds (the "Funds").
On July 1, 1998, Cowen's business was combined with Societe Generale Securities
Corporation ("SGSC"), a subsidiary of Societe Generale ("SG"), to form SG Cowen
Securities Corporation ("SG Cowen"). SG, a leading international commercial and
investment bank established in 1864, has a global network of offices in over 80
countries. Since July 1, 1998, SG Cowen has served as the new investment manager
to the Funds, with the existing investment management personnel of SG Cowen
continuing to provide investment management services to the Funds, and Funds
Distributor Inc. has served as the new principal underwriter to the Funds. SG
Cowen is also a selected dealer of the Funds' shares. Additionally, effective as
of July 1, 1998, the names of the Funds have been changed, as indicated above,
in order to reflect the Funds' new management by SG Cowen. These combined
financial statements together with the notes thereto, consist of CIG, COF,
CIFIF, CGSF and LgCapValue. 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, COF, and LgCapValue 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, 1998, COF, CIFIF and LgCapValue had unused capital loss
carryovers of approximately $2,200,000, $97,000 and $39,000,
33
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 1 - (CONTINUED)
respectively, available for Federal income tax purposes to be applied against
future securities profits, if any. If not applied, the carryovers expire in
fiscal 2006, 2005 and 2006, respectively.
(E) DEFERRED ORGANIZATION EXPENSES: Organization expenses paid by LgCapValue
are being amortized to operations from January 2, 1998, 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 SG Cowen in connection with the organization of the 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 or
redemption.
(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, 1999, COF reclassified $184,435 from accumulated
undistributed net investment loss to paid-in capital. 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 SG Cowen pursuant to the
provisions of Investment Management Agreements ("Agreements") are payable
monthly, based on an annual rate of .75%, .90%, .50%, .60% and .75% for CIG,
COF, CIFIF, CGSF and LgCapValue, respectively, of the average daily value of
each Fund's net assets. SG Cowen has voluntarily reimbursed the CIG's expenses
in an amount equal to an annual rate of .14% from December 1, 1996 through March
31, 1998, of the average daily value of its net assets, and the COF's expenses
in an amount equal to an annual rate of .13% from December 1, 1996 through March
31, 1997 and .03% from April 1, 1997 through March 31, 1998.
With respect to LgCapValue, SG Cowen has voluntarily reimbursed all expenses,
other than Investment Management Fee and distribution fees, in excess of .22% of
the average daily value of its net assets since its inception.
34
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 2 - (CONTINUED)
With respect to CGSF and CIFIF, SG Cowen has voluntarily waived its Investment
Management Fee for the period from December 1, 1996 through May 31, 1999. With
respect to CGSF, SG Cowen is voluntarily absorbing all other expenses, except
for .40% of other expenses and .50% of the Class B distribution fee. With
respect to CIFIF, SG Cowen is voluntarily absorbing all other expenses, except
for .40% of other expenses and its service and distribution fees. The directors
fees are being waived by directors of both Funds.
SG Cowen has agreed to maintain these fee and expense reimbursement
arrangements for each Fund through March 31, 2000 (see "Shareholder Servicing
and Distribution Plan" later in this note).
(B) In acting as a selected dealer during the six months ended May 31, 1999,
SG Cowen earned $2,093, $3,232, $832, $77 and $1,697 of commissions on sales of
the shares of CIG, COF, CGSF, CIFIF and LgCapValue, respectively.
(C) SHAREHOLDER SERVICING AND DISTRIBUTION PLANS (THE "PLAN"): SG Cowen (until
June 30, 1998 and Funds Distributor Inc. after that date) 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 to provide
compensation for ongoing servicing and/or maintenance of shareholder accounts
with the Funds. Compensation is paid to persons 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 SG Cowen (until June 30,
1998 and Funds Distributor, Inc. after that date) a monthly distribution fee at
the annual rate of .75% for CIG, COF, CGSF and Large Cap Value and of .25% for
CIFIF of the Funds' average daily net assets attributable to Class B shares. The
distribution fee is used 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 SG Cowen Funds 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 SG Cowen, and the payments may exceed
expenses actually incurred by SG 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 SG Cowen
and amounts it receives under the Plan.
(D) Directors who are not officers, directors, partners, stockholders or
employees of SG 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;
35
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 2 - (CONTINUED)
however the Directors have agreed to waive their fees from CGSF and CIFIF until
such time as SG 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, 1999, was as follows:
<TABLE>
<CAPTION>
CIG COF CGSF
<S> <C> <C> <C>
- --------------------------------------------------------
Purchases $ 21,837,844 $ 24,311,872 $ 829,716
<CAPTION>
- --------------------------------------------------------
<S> <C> <C> <C>
Sales $ 24,571,850 $ 48,551,491 $ 742,629
<CAPTION>
- --------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CIFIF LGCAP VALUE
<S> <C> <C>
- ----------------------------------------------------
Purchases $ 788,772 $ 2,113,232
<CAPTION>
- ----------------------------------------------------
<S> <C> <C>
Sales $ 2,495,904 $ 3,973,383
<CAPTION>
- ----------------------------------------------------
</TABLE>
At May 31, 1999, the cost of investments for Federal tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statements of Investments), except that due to wash sale transactions, the cost
of investments for COF was approximately $43,016,998.
At May 31, 1999, accumulated net unrealized appreciation (depreciation) on
investments was as follows:
<TABLE>
<CAPTION>
CIG COF CGSF
<S> <C> <C> <C>
- ----------------------------------------------------------
Gross Unrealized
Appreciation $ 5,818,283 $ 4,800,386 $ 6,132
Gross Unrealized
Depreciation 1,420,556 4,878,188 18,775
<CAPTION>
- ----------------------------------------------------------
<S> <C> <C> <C>
Net $ 4,397,727 $ (77,802) $ (12,643)
<CAPTION>
- ----------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CIFIF LGCAP VALUE
<S> <C> <C>
- ----------------------------------------------------
Gross Unrealized
Appreciation $ 83,216 $ 1,081,677
Gross Unrealized
Depreciation 35,558 1,119,861
<CAPTION>
- ----------------------------------------------------
<S> <C> <C>
Net $ 47,658 $ (38,184)
<CAPTION>
- ----------------------------------------------------
</TABLE>
36
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 4 - COMMON STOCK TRANSACTIONS: At May 31, 1999, 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:
SG COWEN INCOME + GROWTH FUND, INC.
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1999
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 10,344 $ 117,611 2,210 $ 25,286 42,729 $ 486,197
Dividends Reinvested 257,651 2,916,202 14,508 163,212 34,779 395,032
----------- ----------- ----------- ----------- ----------- -----------
267,995 3,033,813 16,718 188,498 77,508 881,229
Shares Redeemed (619,009) (7,063,054) (51,492) (586,082) (131,717) (1,512,114)
----------- ----------- ----------- ----------- ----------- -----------
Net (Decrease) (351,014) $(4,029,241) (34,774) $(397,584) (54,209) $ (630,885)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1998
-----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 66,898 $ 842,445 11,942 $ 148,973 95,443 $ 1,194,363
Dividends Reinvested 797,851 9,628,793 64,869 778,531 144,276 1,749,137
----------- ------------ ----------- ----------- ----------- -----------
864,749 10,471,238 76,811 927,504 239,719 2,943,500
Shares Redeemed (1,051,071) (12,860,553) (165,009) (2,038,404) (476,482) (5,975,151)
----------- ------------ ----------- ----------- ----------- -----------
Net (Decrease) (186,322) $ (2,389,315) (88,198) $(1,110,900) (236,763) $(3,031,651)
----------- ------------ ----------- ----------- ----------- -----------
----------- ------------ ----------- ----------- ----------- -----------
</TABLE>
37
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 4 - (CONTINUED)
SG COWEN OPPORTUNITY FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1999
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 12,238 $ 125,310 554 $ 6,086 241,805 $ 2,515,435
Dividends Reinvested - - - - - -
----------- ----------- ----------- ----------- ----------- -----------
12,238 125,310 554 6,086 241,805 2,515,435
Shares Redeemed (984,480) (9,845,953) (181,527) (1,679,041) (917,560) (9,336,534)
----------- ----------- ----------- ----------- ----------- -----------
Net (Decrease) (972,242) $(9,720,643) (180,973) ($1,672,955) (675,755) ($6,821,099)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1998
------------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------- ------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 105,810 $ 1,273,618 25,685 $ 318,364 823,633 $ 10,821,907
Dividends Reinvested 715,467 9,107,891 155,170 1,893,068 708,428 9,167,061
----------- ------------ ----------- ----------- ----------- ------------
821,277 10,381,509 180,855 2,211,432 1,532,061 19,988,968
Shares Redeemed (1,364,015) (16,830,066) (203,541) (2,378,860) (2,844,314) (36,485,144)
----------- ------------ ----------- ----------- ----------- ------------
Net (Decrease) (542,738) $ (6,448,557) (22,686) $ (167,428) (1,312,253) $(16,496,176)
----------- ------------ ----------- ----------- ----------- ------------
----------- ------------ ----------- ----------- ----------- ------------
</TABLE>
38
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 4 - (CONTINUED)
SG COWEN GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1999
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 6,105 $ 58,285 - - 4,981 $ 47,874
Dividends Reinvested 7,094 68,698 - - 513 5,019
----------- ----------- ----------- ----------- ----------- -----------
13,199 126,983 - - 5,494 52,893
Shares Redeemed (10,632) (102,091) - - (2,146) (21,104)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase 2,567 $ 24,892 - - 3,348 $ 31,789
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1998
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 4,447 $ 43,248 - - 6,269 $ 62,567
Dividends Reinvested 14,460 140,506 - - 439 4,355
----------- ----------- ----------- ----------- ----------- -----------
18,907 183,754 - - 6,708 66,922
Shares Redeemed (223,565) (2,171,094) - - (742) (7,228)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) (204,658) $(1,987,340) - - 5,966 $ 59,694
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
39
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 4 - (CONTINUED)
SG COWEN INTERMEDIATE FIXED INCOME FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1999
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 9,958 $ 96,854 - - 3,993 $ 38,251
Dividends Reinvested 16,232 156,641 884 $ 8,593 865 8,332
----------- ----------- ----------- ----------- ----------- -----------
26,190 253,495 884 8,593 4,858 46,583
Shares Redeemed (167,480) (1,626,095) (29,426) (288,513) (25,047) (241,807)
----------- ----------- ----------- ----------- ----------- -----------
Net (Decrease) (141,290) $(1,372,600) (28,542) $(279,920) (20,189) $(195,224)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, 1998
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 62,313 $ 596,958 9,711 $ 93,993 13,024 $ 123,292
Dividends Reinvested 43,194 415,034 1,781 17,249 3,905 37,336
----------- ----------- ----------- ----------- ----------- -----------
105,507 1,011,992 11,492 111,242 16,929 160,628
Shares Redeemed (308,574) (2,985,623) (17,594) (168,968) (46,397) (444,865)
----------- ----------- ----------- ----------- ----------- -----------
Net (Decrease) (203,067) $(1,973,631) (6,102) $ (57,726) (29,468) $(284,237)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
40
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 4 - (CONTINUED)
SG COWEN LARGE CAP VALUE FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED MAY 31, 1999
----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------ ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 7,126 $ 71,242 3,541 $ 32,116 46,684 $ 458,128
Dividends Reinvested 7,049 67,615 41 396 915 8,799
----------- ----------- ----------- ----------- ----------- -----------
14,175 138,857 3,582 32,512 47,599 466,927
Shares Redeemed (261,907) (2,552,089) - - (24,490) (234,246)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) (247,732) $(2,413,232) 3,582 $ 32,512 23,109 $ 232,681
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDED NOVEMBER 30, 1998
-----------------------------------------------------------------------------
CLASS A CLASS B CLASS I
------------------------- ------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
----------- ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares Sold 1,506,814 $ 16,004,343 25,536 $ 260,462 152,955 $ 1,587,616
Dividends Reinvested 8,038 77,339 12 109 880 8,581
----------- ------------ ----------- ----------- ----------- -----------
1,514,852 16,081,682 25,548 260,571 153,835 1,596,197
Shares Redeemed (251,551) (2,493,403) (8,352) (83,023) (32,982) (332,687)
----------- ------------ ----------- ----------- ----------- -----------
Net Increase 1,263,301 $ 13,588,279 17,196 $ 177,548 120,853 $ 1,263,510
----------- ------------ ----------- ----------- ----------- -----------
----------- ------------ ----------- ----------- ----------- -----------
</TABLE>
41
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - FINANCIAL HIGHLIGHTS: Selected data for a share of Common Stock
outstanding throughout each period:
<TABLE>
<CAPTION>
SG COWEN INCOME + GROWTH FUND, INC. - CLASS A
-----------------------------------------------------------------------
YEAR
SIX MONTHS FOUR ENDED
ENDED YEAR ENDED NOVEMBER 30, MONTHS JULY 31,
MAY 31, ---------------------------------- ENDED --------
1999 1998 1997 1996 1995 11/30/94 1994
----------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 12.34 $ 14.55 $ 14.40 $ 13.19 $ 10.62 $ 11.06 $ 12.97
----------- ------- ------- ------- ------- ---------- --------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.14 0.29 0.36 0.48 0.51 0.19 0.52
Net Realized and Unrealized Gains (Losses) on
Investments 0.53 0.19 1.97 1.74 2.54 (0.50) (0.44)
----------- ------- ------- ------- ------- ---------- --------
Net from Investment Operations 0.67 0.48 2.33 2.22 3.05 (0.31) 0.08
----------- ------- ------- ------- ------- ---------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.14) (0.30) (0.36) (0.52) (0.48) (0.13) (0.52)
Distributions from Net Realized Gains on
Investments (0.72) (2.39) (1.82) (0.49) - - (1.47)
----------- ------- ------- ------- ------- ---------- --------
Total Distributions (0.86) (2.69) (2.18) (1.01) (0.48) (0.13) (1.99)
----------- ------- ------- ------- ------- ---------- --------
NET ASSET VALUE
End of Period $ 12.15 $ 12.34 $ 14.55 $ 14.40 $ 13.19 $ 10.62 $ 11.06
----------- ------- ------- ------- ------- ---------- --------
----------- ------- ------- ------- ------- ---------- --------
Total Return(5) 11.96%(2) 3.98% 19.21% 17.86% 29.50% (8.50)%(2) 0.28%
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $39,694 $44,643 $55,383 $52,502 $49,298 $32,104 $34,722
Ratio of Expenses to Average Net Assets 0.65%(3) 1.20% 1.21% 1.24% 1.31% 0.47%(3) 1.26%
Ratio of Investment Income - Net to Average Net
Assets 1.22%(3) 2.22% 2.65% 3.56% 4.29% 1.65%(3) 4.32%
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers - 0.05% 0.14% 0.15% 0.19% 0.07%(3) 0.04%
Portfolio Turnover Rate 46% 62% 75% 79% 72% 31% 76%
</TABLE>
42
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN INCOME + GROWTH FUND, INC. - CLASS B
-----------------------------------------------------------------------
PERIOD
SIX MONTHS FOUR FROM
ENDED YEAR ENDED NOVEMBER 30, MONTHS 5/17/94(4)
MAY 31, ---------------------------------- ENDED THROUGH
1999 1998 1997 1996 1995 11/30/94 7/31/94
----------- ------- ------- ------- ------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 12.24 $ 14.46 $ 14.31 $ 13.14 $ 10.58 $ 11.04 $ 10.85(1)
----------- ------- ------- ------- ------- ---------- --------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.09 0.17 0.27 0.37 0.42 0.16 0.09
Net Realized and Unrealized Gains (Losses) on
Investments 0.54 0.20 1.95 1.73 2.54 (0.50) 0.20
----------- ------- ------- ------- ------- ---------- --------
Net from Investment Operations 0.63 0.37 2.22 2.10 2.96 (0.34) 0.29
----------- ------- ------- ------- ------- ---------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.09) (0.20) (0.25) (0.44) (0.40) (0.12) (0.10)
Distributions from Net Realized Gains on
Investments (0.72) (2.39) (1.82) (0.49) - - -
----------- ------- ------- ------- ------- ---------- --------
Total Distributions (0.81) (2.59) (2.07) (0.93) (0.40) (0.12) (0.10)
----------- ------- ------- ------- ------- ---------- --------
NET ASSET VALUE
End of Period $ 12.06 $ 12.24 $ 14.46 $ 14.31 $ 13.14 $ 10.58 $ 11.04
----------- ------- ------- ------- ------- ---------- --------
----------- ------- ------- ------- ------- ---------- --------
Total Return(5) 11.28%(2) 3.11% 18.34% 16.89% 28.49% (9.33)%(2) 13.19%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 2,249 $ 2,711 $ 4,478 $ 2,581 $ 1,453 $ 280 $ 56
Ratio of Expenses to Average Net Assets 1.05%(3) 1.97% 1.99% 2.04% 2.07% 0.75%(3) 0.57%(3)
Ratio of Investment Income - Net to Average Net
Assets 0.82%(3) 1.43% 1.84% 2.76% 3.44% 1.31%(3) 0.45%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/ Waivers - 0.06% 0.14% 0.15% 0.19% 0.07%(3) 0.04%(3)
Portfolio Turnover Rate 46% 62% 75% 79% 72% 31% 76%
</TABLE>
43
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN INCOME + GROWTH FUND, INC. - CLASS I
-----------------------------------------------------------------------------
SIX MONTHS FOUR PERIOD FROM
ENDED YEAR ENDED NOVEMBER 30, MONTHS 5/9/94(4)
MAY 31, ------------------------------------ ENDED THROUGH
1999 1998 1997 1996 1995 11/30/94 7/31/94
------------ -------- ------- ------- ------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of Period $ 12.39 $ 14.61 $ 14.45 $ 13.23 $ 10.62 $11.06 $10.91(1)
------ -------- ------- ------- ------- ---------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.17 0.35 0.41 0.58 0.52 0.20 0.10
Net Realized and Unrealized Gains (Losses) on
Investments 0.52 0.16 1.97 1.69 2.59 (0.50) 0.16
------ -------- ------- ------- ------- ---------- -----------
Net from Investment Operations 0.69 0.51 2.38 2.27 3.11 (0.30) 0.26
------ -------- ------- ------- ------- ---------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.16) (0.34) (0.40) (0.56) (0.50) (0.14) (0.11)
Distributions from Net Realized Gains on
Investments (0.72) (2.39) (1.82) (0.49) - - -
------ -------- ------- ------- ------- ---------- -----------
Total Distributions (0.88) (2.73) (2.22) (1.05) (0.50) (0.14) (0.11)
------ -------- ------- ------- ------- ---------- -----------
NET ASSET VALUE
End of Period $ 12.20 $ 12.39 $ 14.61 $ 14.45 $ 13.23 $10.62 $11.06
------ -------- ------- ------- ------- ---------- -----------
------ -------- ------- ------- ------- ---------- -----------
Total Return(5) 12.22%(2) 4.22% 19.57% 18.25% 29.99% (8.37)%(2) 10.63%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 5,169 $ 5,920 $10,444 $11,733 $19,309 $6,029 $4,988
Ratio of Expenses to Average Net Assets 0.51%(3) 0.91% 1.05% 0.90% 0.96% 0.40%(3) 0.28%(3)
Ratio of Investment Income - Net to Average Net
Assets 1.35%(3) 2.50% 2.98% 3.90% 4.66% 1.68%(3) 1.13%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers - 0.06% 0.14% 0.16% 0.19% 0.07%(3) 0.05%(3)
Portfolio Turnover Rate 46% 62% 75% 79% 72% 31% 76%
</TABLE>
44
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN OPPORTUNITY FUND - CLASS A
-------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, ----------------------------------------------------
1999 1998 1997 1996 1995 1994
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 10.05 $ 16.47 $ 16.61 $ 13.13 $ 12.98 $ 16.06
------------ -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Investment Income (Loss) - Net (6) (0.05) (0.08) (0.08) (0.07) (0.04) (0.09)
Net Realized and Unrealized Gains (Losses) on
Investments 1.93 (3.40) 2.00 3.86 0.97 1.22
------------ -------- -------- -------- -------- --------
Net from Investment Operations 1.88 (3.48) 1.92 3.79 0.93 1.13
------------ -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income - - - - - -
Distributions from Net Realized Gains on
Investments - (2.94) (2.06) (0.31) (0.78) (4.21)
------------ -------- -------- -------- -------- --------
Total Distributions - (2.94) (2.06) (0.31) (0.78) (4.21)
------------ -------- -------- -------- -------- --------
NET ASSET VALUE
End of Period $ 11.93 $ 10.05 $ 16.47 $ 16.61 $ 13.13 $ 12.98
------------ -------- -------- -------- -------- --------
------------ -------- -------- -------- -------- --------
Total Return(5) 37.41%(2) (24.89)% 13.55% 29.63% 7.91% 9.53%
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $21,624 $ 27,978 $ 54,809 $ 43,950 $ 38,724 $ 34,487
Ratio of Expenses to Average Net Assets 0.83%(3) 1.46% 1.38% 1.39% 1.43% 1.47%
Ratio of Investment Loss - Net to Average Net
Assets (0.47)%(3) (0.67)% (0.53)% (0.46)% (0.28)% (0.66)%
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers - 0.01% 0.06% 0.16% 0.22% 0.14%
Portfolio Turnover Rate 60% 124% 159% 182% 148% 152%
</TABLE>
45
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN OPPORTUNITY FUND - CLASS B
------------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED NOVEMBER 30, 5/17/94(4)
MAY 31, -------------------------------------- THROUGH
1999 1998 1997 1996 1995 11/30/94
----------- ------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 9.55 $15.92 $ 16.23 $12.93 $12.91 $12.18(1)
----------- ------- -------- ------- ------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income (Loss) - Net(6) (0.08) (0.18) (0.20) (0.18) (0.14) (0.09)
Net Realized and Unrealized Gains (Losses) on
Investments 1.83 (3.25) 1.95 3.79 0.94 0.82
----------- ------- -------- ------- ------- -----------
Net from Investment Operations 1.75 (3.43) 1.75 3.61 0.80 0.73
----------- ------- -------- ------- ------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income - - - - - -
Distributions from Net Realized Gains on
Investments - (2.94) (2.06) (0.31) (0.78) -
----------- ------- -------- ------- ------- -----------
Total Distributions - (2.94) (2.06) (0.31) (0.78) -
----------- ------- -------- ------- ------- -----------
NET ASSET VALUE
End of Period $11.30 $ 9.55 $ 15.92 $16.23 $12.93 $12.91
----------- ------- -------- ------- ------- -----------
----------- ------- -------- ------- ------- -----------
Total Return(5) 36.65%(2) (25.56)% 12.72% 28.67% 6.97% 11.04%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $5,246 $6,163 $ 10,629 $8,794 $6,455 $2,207
Ratio of Expenses to Average Net Assets 1.21%(3) 2.26% 2.15% 2.17% 2.19% 1.32%(3)
Ratio of Investment Loss - Net to Average Net
Assets (0.85%)(3) (1.47%) (1.31%) (1.24%) (1.06%) (0.83%)(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers - 0.01% 0.06% 0.16% 0.22% 0.12%(3)
Portfolio Turnover Rate 60% 124% 159% 182% 148% 152%
</TABLE>
46
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN OPPORTUNITY FUND - CLASS I
----------------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED NOVEMBER 30, 5/9/94(4)
MAY 31, ----------------------------------------- THROUGH
1999 1998 1997 1996 1995 11/30/94
------------ -------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 10.24 $ 16.69 $ 16.77 $ 13.20 $ 12.99 $12.36(1)
------------ -------- -------- -------- -------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income (Loss) - Net(6) (0.03) (0.04) (0.03) (0.01) 0.01 (0.03)
Net Realized and Unrealized Gains (Losses) on
Investments 1.98 (3.47) 2.01 3.89 0.98 0.66
------------ -------- -------- -------- -------- -----------
Net from Investment Operations 1.95 (3.51) 1.98 3.88 0.99 0.63
------------ -------- -------- -------- -------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income - - - - - -
Distributions from Net Realized Gains on
Investments - (2.94) (2.06) (0.31) (0.78) -
------------ -------- -------- -------- -------- -----------
Total Distributions - (2.94) (2.06) (0.31) (0.78) -
------------ -------- -------- -------- -------- -----------
NET ASSET VALUE
End of Period $ 12.19 $ 10.24 $ 16.69 $ 16.77 $ 13.20 $12.99
------------ -------- -------- -------- -------- -----------
------------ -------- -------- -------- -------- -----------
Total Return(5) 38.09%(2) (24.71)% 13.82% 30.17% 8.40% 9.04%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $14,431 $ 19,051 $ 52,944 $ 40,369 $ 19,264 $8,151
Ratio of Expenses to Average Net Assets 0.66%(3) 1.14% 1.02% 1.01% 1.03% 0.75%(3)
Ratio of Investment Income (Loss) - Net Assets (0.30)%(3) (0.34)% (0.19)% (0.07)% 0.11% (0.26)%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/ Waivers - 0.01% 0.06% 0.15% 0.22% 0.13%(3)
Portfolio Turnover Rate 60% 124% 159% 182% 148% 152%
</TABLE>
47
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN GOVERNMENT
SECURITIES FUND - CLASS A
----------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, -----------------------------------------------
1999 1998 1997 1996 1995 1994
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $10.03 $ 9.58 $ 9.59 $ 9.83 $ 9.17 $10.11
------ ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.26 0.55 0.61 0.64 0.69 0.52
Net Realized and Unrealized Gains (Losses) on
Investments (0.44) 0.48 (0.01) (0.24) 0.66 (0.84)
------ ------- ------- ------- ------- -------
Net from Investment Operations (0.18) 1.03 0.60 0.40 1.35 (0.32)
------ ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.26) (0.55) (0.61) (0.64) (0.69) (0.56)
Distributions from Net Realized Gains on
Investments (0.25) (0.03) - - - (0.06)
------ ------- ------- ------- ------- -------
Total Distributions (0.51) (0.58) (0.61) (0.64) (0.69) (0.62)
------ ------- ------- ------- ------- -------
NET ASSET VALUE
End of Period $ 9.34 $10.03 $ 9.58 $ 9.59 $ 9.83 $ 9.17
------ ------- ------- ------- ------- -------
------ ------- ------- ------- ------- -------
Total Return(5) (3.88%)(2) 11.13% 6.55% 4.34% 15.23% (3.24%)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 Omitted) $1,460 $1,542 $3,433 $2,631 $3,945 $ 488
Ratio of Expenses to Average Net Assets 0.20%(3) 0.40% 0.40% 0.34% 0.22% -
Ratio of Investment Income - Net to Average Net
Assets 2.69%(3) 5.71% 6.47% 6.72% 7.08% 5.24%
Decrease Reflected on Above Ratios Due to:
Investment Management and Service Fees Waived 0.43%(3) 0.85% 0.85% 0.85% 0.85% 0.78%
Other Expenses Waived or Absorbed 2.28%(3) 2.62% 2.70% 2.72% 3.63% 11.85%
Portfolio Turnover Rate 47% 69% 184% 107% 289% 210%
</TABLE>
48
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN GOVERNMENT
SECURITIES FUND -- CLASS I
-----------------------------------------------------------------
SIX MONTHS PERIOD FROM
ENDED YEAR ENDED NOVEMBER 30, 7/11/94(4)
MAY 31, ------------------------------------- THROUGH
1999 1998 1997 1996 1995 11/30/94
----------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $10.15 $ 9.70 $ 9.71 $ 9.94 $ 9.17 $ 9.45(1)
----------- ------- ------- ------- ------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.26 0.56 0.62 0.65 0.70 0.22
Net Realized and Unrealized Gains (Losses) on
Investments (0.46) 0.48 (0.01) (0.23) 0.77 (0.28)
----------- ------- ------- ------- ------- -----------
Net from Investment Operations (0.20) 1.04 0.61 0.42 1.47 (0.06)
----------- ------- ------- ------- ------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.26) (0.56) (0.62) (0.65) (0.70) (0.22)
Distributions from Net Realized Gains on
Investments (0.25) (0.03) - - - -
----------- ------- ------- ------- ------- -----------
Total Distributions (0.51) (0.59) (0.62) (0.65) (0.70) (0.22)
----------- ------- ------- ------- ------- -----------
NET ASSET VALUE
End of Period $ 9.44 $ 10.15 $ 9.70 $ 9.71 $ 9.94 $ 9.17
----------- ------- ------- ------- ------- -----------
----------- ------- ------- ------- ------- -----------
Total Return(5) (4.19%)(2) 11.04% 6.55% 4.48% 16.52% (1.57%)(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 150 $ 127 $ 63 $ 93 $ 45 $ 13
Ratio of Expenses to Average Net Assets 0.20%(3) 0.40% 0.40% 0.36% 0.20% -
Ratio of Investment Income - Net to Average Net
Assets 2.70%(3) 5.60% 6.49% 6.75% 7.12% 2.42%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fees Waived 0.30%(3) 0.60% 0.60% 0.60% 0.60% 0.24%(3)
Other Expenses Waived or Absorbed 2.51%(3) 3.66% 3.06% 3.14% 5.14% 6.26%(3)
Portfolio Turnover Rate 47% 69% 184% 107% 289% 210%
</TABLE>
49
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN INTERMEDIATE
FIXED INCOME FUND - CLASS A
------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED NOVEMBER 30,
MAY 31, ----------------------------------------------------
1999 1998 1997 1996 1995 1994
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 9.80 $ 9.47 $ 9.47 $ 9.71 $ 9.12 $ 9.95
----------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.27 0.53 0.59 0.63 0.67 0.51
Net Realized and Unrealized Gains (Losses) on
Investments (0.31) 0.33 - (0.15) 0.59 (0.68)
----------- -------- -------- -------- -------- --------
Net from Investment Operations (0.04) 0.86 0.59 0.48 1.26 (0.17)
----------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.27) (0.53) (0.59) (0.63) (0.67) (0.53)
Distributions from Net Realized Gains on
Investments -- - - (0.09) - (0.13)
----------- -------- -------- -------- -------- --------
Total Distributions (0.27) (0.53) (0.59) (0.72) (0.67) (0.66)
----------- -------- -------- -------- -------- --------
NET ASSET VALUE
End of Period $ 9.49 $ 9.80 $ 9.47 $ 9.47 $ 9.71 $ 9.12
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
Total Return(5) (0.92)%(2) 9.38% 6.47% 5.21% 14.22% (1.77)%
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $6,089 $ 7,671 $ 9,341 $ 11,885 $ 14,667 $ 2,836
Ratio of Expenses to Average Net Assets 0.32%(3) 0.65% 0.65% 0.59% 0.47% 0.12%
Ratio of Investment Income - Net to Average Net
Assets 2.75%(3) 5.58% 6.29% 6.61% 6.90% 5.41%
Decrease Reflected on Above
Ratios Due to:
Investment Management and Service Fees Waived 0.25%(3) 0.50% 0.50% 0.50% 0.50% 0.63%
Other Expenses Waived or Absorbed 0.41%(3) 0.51% 0.60% 0.52% 0.86% 3.43%
Portfolio Turnover Rate 11% 64% 92% 110% 264% 159%
</TABLE>
50
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN INTERMEDIATE FIXED
INCOME FUND - CLASS B
------------------------------------------------------------------
SIX MONTHS YEAR ENDED PERIOD FROM
ENDED NOVEMBER 30, 7/12/94(4)
MAY 31, ------------------------------------- THROUGH
1999 1998 1997 1996 1995 11/30/94
------------ ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $9.87 $ 9.54 $ 9.54 $ 9.78 $ 9.17 $ 9.32(1)
----- ------- ------- ------- ------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.26 0.51 0.53 0.61 0.65 0.20
Net Realized and Unrealized Gains (Losses) on
Investments (0.31) 0.33 - (0.15) 0.61 (0.15)
----- ------- ------- ------- ------- -----------
Net from Investment Operations (0.05) 0.84 0.53 0.46 1.26 0.05
----- ------- ------- ------- ------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.26) (0.51) (0.53) (0.61) (0.65) (0.20)
Distributions from Net Realized Gains on
Investments -- - - (0.09) - -
----- ------- ------- ------- ------- -----------
Total Distributions (0.26) (0.51) (0.53) (0.70) (0.65) (0.20)
----- ------- ------- ------- ------- -----------
NET ASSET VALUE
End of Period $9.56 $ 9.87 $ 9.54 $ 9.54 $ 9.78 $ 9.17
----- ------- ------- ------- ------- -----------
----- ------- ------- ------- ------- -----------
Total Return(5) (1.11)%(2) 9.07% 6.21% 4.96% 14.12% 1.25%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 300 $ 591 $ 630 $ 769 $ 577 $ 313
Ratio of Expenses to Average Net Assets 0.45%(3) 0.90% 0.90% 0.85% 0.68% 0.19%(3)
Ratio of Investment Income - Net to Average Net
Assets 2.69%(3) 5.33% 6.03% 6.40% 6.79% 2.15%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management, Service and
Distribution Fees Waived 0.25%(3) 0.50% 0.50% 0.50% 0.50% 0.18%(3)
Other Expenses Waived or Absorbed 0.44%(3) 0.52% 0.54% 0.54% 0.46% 1.25%(3)
Portfolio Turnover Rate 11% 64% 92% 110% 264% 159%
</TABLE>
51
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN INTERMEDIATE FIXED
INCOME FUND - CLASS I
-----------------------------------------------------------------
SIX MONTHS YEAR ENDED PERIOD FROM
ENDED NOVEMBER 30, 7/11/94(4)
MAY 31, ------------------------------------- THROUGH
1999 1998 1997 1996 1995 11/30/94
----------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
(UNAUDITED)
NET ASSET VALUE
Beginning of Period $9.77 $ 9.44 $ 9.44 $ 9.68 $ 9.10 $9.34(1)
----------- ------- ------- ------- ------- -----------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.28 0.55 0.61 0.65 0.69 0.23
Net Realized and Unrealized Gains (Losses) on
Investments (0.31) 0.33 - (0.15) 0.58 (0.24)
----------- ------- ------- ------- ------- -----------
Net from Investment Operations (0.03) 0.88 0.61 0.50 1.27 (0.01)
----------- ------- ------- ------- ------- -----------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.28) (0.55) (0.61) (0.65) (0.69) (0.23)
Distributions from Net Realized Gains on
Investments - - - (0.09) - -
----------- ------- ------- ------- ------- -----------
Total Distributions (0.28) (0.55) (0.61) (0.74) (0.69) (0.23)
----------- ------- ------- ------- ------- -----------
NET ASSET VALUE
End of Period $9.46 $ 9.77 $ 9.44 $ 9.44 $ 9.68 $9.10
----------- ------- ------- ------- ------- -----------
----------- ------- ------- ------- ------- -----------
Total Return(5) (0.68%)(2) 9.65% 6.74% 5.46% 14.41% (0.36%)(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $ 232 $ 437 $ 701 $ 1,745 $ 1,872 $ 565
Ratio of Expenses to Average Net Assets 0.20%(3) 0.40% 0.40% 0.35% 0.20% -
Ratio of Investment Income - Net to Average Net
Assets 2.87%(3) 5.87% 6.63% 6.87% 7.23% 1.98%(3)
Decrease Reflected on Above Ratios Due to:
Investment Management Fee Waived 0.25%(3) 0.50% 0.50% 0.50% 0.50% 0.16%(3)
Other Expenses Waived or Absorbed 0.47%(3) 0.51% 0.50% 0.42% 0.97% 1.87%(3)
Portfolio Turnover Rate 11% 64% 92% 110% 264% 159%
</TABLE>
52
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 5 - (continued)
<TABLE>
<CAPTION>
SG COWEN
LARGE CAP VALUE FUND
----------------------------------------------------------------------
CLASS A
----------------------------- CLASS B CLASS I
PERIOD FROM ----------------------- ------------
1/2/98 PERIOD
SIXTH MONTHS (COMMENCEMENT FROM
ENDED OF OPERATIONS) SIXTH MONTHS 4/17/98(4) SIXTH MONTHS
MAY 31, THROUGH ENDED THROUGH ENDED
1999 11/30/98 MAY 31, 1999 11/30/98 MAY 31, 1999
------------ -------------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED) (UNAUDITED)
NET ASSET VALUE
Beginning of Period $ 9.53 $ 10.00 $ 9.53 $11.11(1) $ 9.54
------------ -------------- ------------ -------- ------------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.06 0.08 0.03 0.01 0.08
Net Realized and Unrealized Gains (Losses) on
Investments 1.59 (0.49) 1.59 (1.58) 1.58
------------ -------------- ------------ -------- ------------
Net from Investment Operations 1.65 (0.41) 1.62 (1.57) 1.66
------------ -------------- ------------ -------- ------------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.06) (0.06) (0.02) (0.01) (0.07)
Distributions from Net Realized Gains on
Investments - - - - -
------------ -------------- ------------ -------- ------------
Total Distributions (0.06) (0.06) (0.02) (0.01) (0.07)
------------ -------------- ------------ -------- ------------
NET ASSET VALUE
End of Period $ 11.12 $ 9.53 $11.13 $ 9.53 $11.13
------------ -------------- ------------ -------- ------------
------------ -------------- ------------ -------- ------------
Total Return(5) 34.79%(2) (4.08%)(3) 34.08%(2) (14.15%)(3) 35.02%(2)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $11,298 $12,044 $ 231 $ 164 $1,602
Ratio of Expenses to Average Net Assets 0.60%(3) 1.11%(3) 0.97%(3) 1.23%(3) 0.48%(3)
Ratio of Investment Income - Net to Average Net
Assets 0.62%(3) 0.85%(3) 0.25%(3) 0.10%(3) 0.73%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers 0.49%(3) 0.66%(3) 0.35%(3) 0.53%(3) 0.49%(3)
Portfolio Turnover Rate 17% 67%(3) 17% 67%(3) 17%
<CAPTION>
PERIOD
FROM
2/2/98(4)
THROUGH
11/30/98
--------
<S> <C>
NET ASSET VALUE
Beginning of Period $ 9.77(1)
--------
INCOME FROM INVESTMENT OPERATIONS
Investment Income - Net 0.10
Net Realized and Unrealized Gains (Losses) on
Investments (0.25)
--------
Net from Investment Operations (0.15)
--------
LESS DISTRIBUTIONS:
Dividends from Net Investment Income (0.08)
Distributions from Net Realized Gains on
Investments -
--------
Total Distributions (0.08)
--------
NET ASSET VALUE
End of Period $ 9.54
--------
--------
Total Return(5) (1.56%)(3)
RATIOS / SUPPLEMENTARY DATA
Net Assets (000 omitted) $1,153
Ratio of Expenses to Average Net Assets 0.80%(3)
Ratio of Investment Income - Net to Average Net
Assets 1.01%(3)
Decrease Reflected on Above Ratios Due to
Expense Reimbursements/Waivers 0.55%(3)
Portfolio Turnover Rate 67%(3)
</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
53
<PAGE>
SG COWEN FUNDS
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
(UNAUDITED)
NOTE 6 - ADDITIONAL INFORMATION - CHANGE IN INDEPENDENT AUDITOR: On May 5, 1999,
based upon the recommendation of the Audit Committees of the Funds, the Boards
of Directors determined not to retain Ernst & Young LLP as the Funds'
independent auditor and voted to appoint KPMG LLP. During the Funds' two most
recent fiscal years, Ernst & Young LLP audit reports contained no adverse
opinion or disclaimer of opinion; nor were the reports qualified or modified as
to uncertainty, audit scope, or accounting principles. Further, during this same
period there were no disagreements with Ernst & Young LLP on any matter of
accounting principles or practices, financial statment disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Ernst & Young LLP, would have caused them to make reference to the subject
matter of such disagreements in connection with their audit reports. The Funds
have requested Ernst & Young LLP to provide a letter to the Securities and
Exchange Commission stating whether Ernst & Young LLP agrees with the foregoing
statements, and to provide the Funds with a copy of such letter. A copy of this
letter is available upon request by calling the Fund at 1-800-262-7116.
54
<PAGE>
SG COWEN FAMILY OF FUNDS
Financial Square
New York, NY 10005-3597
DIRECTORS
<TABLE>
<S> <C>
JOSEPH M. COHEN, Chairman
JAMES H. DR. MARTIN J.
CAREY GRUBER
DR. PETER P. BURTON J. WEISS
GIL
</TABLE>
OFFICERS
JOSEPH M. COHEN, CHAIRMAN OF THE BOARD OF DIRECTORS AND CHIEF EXECUTIVE OFFICER
WILLIAM CHURCH, SENIOR INVESTMENT OFFICER
CREIGHTON H. PEET, TREASURER, CHIEF FINANCIAL OFFICER AND SENIOR INVESTMENT
OFFICER
WILLIAM RECHTER, SENIOR INVESTMENT OFFICER(1)
ALAN KOEPPLIN, INVESTMENT OFFICER(2)
BENEDICT CAPALDI, INVESTMENT OFFICER(4)
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
SG Cowen Securities Corporation Investors Fiduciary
Financial Square Trust Co.
New York, NY 10005 P.O. Box 419111
Kansas City, MO 64141
DISTRIBUTOR TRANSFER AGENT
Funds Distributor, Inc. DST, Inc.
60 State Street, Suite 1300 210 West 10th Street
Boston, MA 02109 Kansas City, MO 64105
LEGAL COUNSEL INDEPENDENT AUDITORS
Willkie Farr & Gallagher KPMG
787 Seventh Avenue 757 Third Avenue
New York, NY 10019 New York, NY 10017
</TABLE>
- ------------
(1) SG Cowen Income + Growth and SG Cowen Opportunity
(2) SG Cowen Intermediate Fixed Income and SG Cowen Government Securities
(3) SG Cowen Income + Growth
(4) SG Cowen Income + Growth and SG Cowen Large Cap Value COW SEMI-ANN 5/99
