CAPSTONE NEW ZEALAND FUND
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present this semi-annual report on the Capstone New Zealand
Fund (the "Fund") for the six months ended April 30, 1999. The Fund's net asset
value ("NAV") at April 30, 1999 was US $9.95 per share compared to US $7.73 at
the end of our October 31, 1998 fiscal year. A dividend of $0.03 was paid
January 6, 1999.
FUND'S COMPARATIVE PERFORMANCE
The Fund's strategy continues to concentrate on a diversified portfolio of
medium-sized stocks not readily available to individual US investors. The most
relevant index to compare the Fund's performance is the New Zealand Small
Company Index* ("NZSCI") that measures the performance of small to medium cap
stocks of the New Zealand market. During the six months ended April 30, 1999,
the NZSCI increased by 26.4% in New Zealand dollars. For the same period, the
Fund's total return was 29.2% in United States dollars. In analyzing comparisons
of performance to the NZSCI, the reader should remember an index does not
reflect currency conversions, cash positions, brokerage costs or administrative
or management fees incurred by the fund or individual investor.
Lipper Analytical Services, Inc., an independent mutual fund ranking service,
ranked the Capstone New Zealand Fund, based on total return, #1 out of 19 funds
and #9 out of 83 funds for the 5 year and 1 year periods, respectively, for all
Pacific Ex Japan funds during the periods ending 3/31/99. As always, past
performance is no guarantee of future results.
AVERAGE ANNUAL TOTAL RETURN
as of 10/31/99
- --------------------------------------------------------------------------------
1 YEAR 5 YEAR SINCE INCEPTION*
17.09% .41% 2.19%
*11/25/91
NEW ZEALAND MARKET OVERVIEW
The last six months have been positive for the New Zealand market and the Fund
as the New Zealand economy appears to be on the road to an expected period of
substantial growth. Stronger than expected Gross Domestic Product ("GDP")
growth, an improving current account balance, increased consumer and business
confidence and no indication of inflation are encouraging signs for the
financial markets.
GDP is expected to expand around 3.0% in the year ended March 2000. This
expansion continues to be led by the domestic sector as stronger export activity
(Asian demand), previously implemented tax cuts and AMP demutualization
contribute to the stronger growth. In fact, some experts believe New Zealand is
on course to become one of the fastest growing countries. This growth has caused
Treasurer Bill Birch to state that the New Zealand government should record a
budget surplus, estimated to be NZ$2.0 billion, for the current financial year
ending June 30, 1999. Treasurer Birch believes the government will soon be in a
position to offer tax relief for income earners.
The Current Account deficit, which occurs when imports exceed exports, has been
a focus for investors and has shown signs of improvement. The deficit peaked
last year at 8% of GDP and has since fallen to 6% of GDP as of December 1998.
The improvement came as a surprise to economists who estimated a deficit of 6.7%
of GDP. The reduction in the imbalance was primarily attributable to a decline
in the international investment income deficit. The improvement helps reduce the
risk premium on New Zealand assets which should effect the equity market by a
stronger New Zealand dollar and lower funding costs (interest rates).
The Westpac McDermott Miller Survey of Consumer Confidence rose to its highest
level over the past year and the NZIER Quarterly Survey of Business Opinion
showed its first positive result since the third quarter of 1997. Stronger
business and consumer confidence is usually associated with a firming in
earnings expectations. Although a rally in earnings momentum has not become
clearly visible, we maintain that earnings will begin to accelerate and that
this will be a catalyst for the equity market.
<PAGE>
CAPSTONE NEW ZEALAND FUND
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Even though there are signs of strong economic expansion, there have been no
signs of inflationary pressures. Actually, the Consumer Price Index ("CPI") fell
0.1% for the fourth quarter of 1998, which was unexpected by the financial
markets as they had forecast an increase of 0.4%. The CPI appears to indicate
that the Reserve Bank will not have to increase interest rates in the near term
and that is good news for the equity market.
The economy is growing, but not too fast. Some of the pressure of the current
account balance has been alleviated and consumer and business confidence is on
the rise while inflation seems to be of no immediate concern. All of these
factors paint a very positive picture for the New Zealand economy and in turn
the equity market and we anticipate that the New Zealand equity market could
outperform the other overseas markets.
NEW ZEALAND POLITICS
A change in government (National/ACT coalition) from center-right to center-left
is likely in the next election later this year with a Labor/Alliance party
coalition. The probable focus of the election will be on social issues and
possible effects from that government could be:
Slightly higher interest rates because of increased government spending,
Less volatility in the exchange/interest rates because the government will
require the Reserve Bank to use more instruments to implement monetary policy,
and
Benefits for exporters because of government assistance.
However, polls over the last few weeks indicate that the National/ACT coalition
has closed the gap so the election could be a close call.
THE PORTFOLIO
The Fund is widely diversified by industry sector. At April 30, 1999, the
percentages of equity investments of the Fund by major industry categories were
as follows:
Port Operations 13.3%
Transportation 12.7% Utilities (Electric) 9.3%
Insurance 7.8% Environmental Control 9.9%
Miscellaneous 7.5% Real Estate 2.2%
Media 13.2% Stock & Station Services 3.2%
Electrical/Manufacturing 4.3% Oil & Gas 2.5%
Horticultural Supplier 5.0% Vehicle Distributor 1.4%
Retail 3.0% Forestry 2.5%
Should you have any questions, please feel free to contact us and we thank you
for your continued support.
Sincerely,
/S/ Robert W. Scharar /S/ W. Lance Hall
- ------------------------------ ------------------------------
Robert W. Scharar W. Lance Hall
President and Portfolio Manager Assistant Portfolio Manager
*The New Zealand Small Company Index is composed of approximately 100 equity
securities, excluding those in the New Zealand Stock Exchange-40 Index, weighted
by their full market capitalization.
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
MARKET % OF
VALUE NET
COMMON STOCKS - (97.82%) SHARES (NOTE 1-A) ASSETS
------ ---------- ------
<S> <C> <C> <C>
BREWERIES - (0.90%)
DB Group, Limited 33,558 $ 44,631 0.90%
BROADCAST MEDIA - (11.94%)
Radio Otago, Limited 72,337 137,439 2.76%
Radio Pacific, Limited 151,700 457,770 9.18%
--------- ------
595,209 11.94%
ELECTRICAL/APPLIANCE MANUFACTURING - (4.26%)
Fisher & Paykel Industries 58,030 212,404 4.26%
ENVIRONMENTAL CONTROL - (9.92%)
Waste Management NZ, Limited 88,530 494,719 9.92%
FINANCE - (1.67%)
Corporate Investment ORD 184,000 83,286 1.67%
HORTICULTURAL SUPPLIER - (5.03%)
Fruitfed Supplies, Limited 449,000 250,908 5.03%
INSURANCE - (7.83%)
Metlifecare, Limited 325,000 390,472 7.83%
INVESTMENT COMPANIES - (1.42%)
Hellaby Holdings, Limited 61,640 70,613 1.42%
LUMBER & WOOD PRODUCTS - (2.47%)
Evergreen Forest, Limited (a) 500,000 122,939 2.47%
MANUFACTURING - (0.39%)
Steel & Tube Holdings, Limited 20,000 19,223 0.39%
MANUFACTURING DISTRIBUTION - (0.97%)
Scott Technologies, Limited 36,697 48,191 0.97%
MEDIA - (1.30%)
Independent Newspapers, Limited 15,000 64,711 1.30%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 1999 (UNAUDITED)
- ---------------------------------------------------------------------------------------------------------------------------
MARKET % OF
VALUE NET
SHARES (NOTE 1-A) ASSETS
------ --------- ------
<S> <C> <C> <C>
OIL & GAS - (2.48%)
New Zealand Refining Co., Limited 13,647 $ 123,544 2.48%
PORT OPERATIONS - (13.28%)
Lyttleton Port Co., Limited 304,800 294,666 5.91%
Northland Port Corporation, Limited 302,300 206,094 4.13%
South Port New Zealand, Limited 336,500 161,716 3.24%
--------- ------
662,476 13.28%
REAL ESTATE - (2.24%)
Capital Properties New Zealand Limited 50,000 13,970 0.28%
Kiwi Income Property Trust 140,000 97,793 1.96%
--------- ------
111,763 2.24%
RETAIL - DEPARTMENT STORES - (2.97%)
Arthur Barnett, Limited 210,300 148,074 2.97%
STOCK & STATION SERVICES - (3.22%)
Williams & Keattle, Limited 153,500 160,405 3.22%
TEXTILES - MANUFACTURING - (0.83%)
Donaghy's, Limited 58,715 41,342 0.83%
TOURIST SERVICES - (1.29%)
Tourism Holdings, Limited (a) 50,000 64,264 1.29%
TRANSPORTATION - (12.72%)
Air New Zealand, Limited - Class B 112,600 235,960 4.73%
Mainfreight, Limited 414,000 356,278 7.14%
Owens Group, Limited 56,500 42,624 0.85%
--------- ------
634,862 12.72%
UTILITIES - ELECTRIC - (9.28%)
Infrastructure & Utilities Corporation, Limited 559,729 462,922 9.28%
VEHICLE DISTRIBUTOR - (1.41%)
The Colonial Motor Co., Limited 56,100 70,535 1.41%
TOTAL COMMON STOCK (Cost $4,946,603) 4,877,493 97.82%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
MARKET % OF
VALUE NET
BONDS (1.63%) PAR VALUE (NOTE 1-A) ASSETS
--------- ---------- ------
<S> <C> <C> <C>
Evergreen Forest, zero coupon, due 3/19/09 $ 45,000 $ 25,147 0.50%
State Bank of South Australia, 9.00%, due 7/30/02 94,000 56,233 1.13%
--------- ------
TOTAL BONDS (Cost $55,327) 81,380 1.63%
TOTAL INVESTMENTS (Cost $5,001,930) 4,958,873 99.45%
OTHER ASSETS, LESS LIABILITIES 27,554 0.55%
--------- ------
NET ASSETS $4,986,427 100.00%
========= =======
(a) Non-income producing security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF ASSETS AND LIABILITIES - APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments in securities at market value (identified cost $5,001,930) (Note 1A) $ 4,958,873
Foreign currency , at value (identified cost $231,754) (Note 1B) 237,195
Receivable for securities sold 51,630
Dividends receivable 5,514
Interest receivable 3,562
Other assets 2,277
-------------
Total Assets 5,259,051
-------------
LIABILITIES:
Cash overdraft 191,760
Payable for capital stock purchased 226
Accrued expenses 80,638
-------------
Total Liabilities 272,624
-------------
NET ASSETS $ 4,986,427
=============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE:
($4,986,427 / 501,136 shares of beneficial interest outstanding) $ 9.95
=============
SOURCE OF NET ASSETS:
Paid in capital $ 5,617,269
Accumulated net realized loss on investments (555,293)
Distributions in excess of net investment income (9,810)
Net unrealized depreciation on securities and foreign currencies (65,739)
-------------
$ 4,986,427
=============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividend income $ 109,076
Interest income 4,812
-----------
Total Investment Income 113,888
Expenses: (Note 2)
Advisory fees $ 17,697
Distribution fees 5,899
Administrative services 5,899
Transfer agent fees 5,236
Reports and notices to stockholders 38,989
Audit fees 6,439
Legal fees 2,117
Directors' fees and expenses 4,018
Custodian fees 209
Fund accounting fees 8,087
Registration and filing fees 7,449
Miscellaneous 1,822
----------
Total Expenses 103,861
-----------
Net Investment Income 10,027
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from security transactions (96,830)
Net realized loss on conversion of foreign currencies to U.S. Dollars (82,725)
Unrealized depreciation of investments:
Beginning of period (1,431,240)
End of period (65,739)
----------
Net change in unrealized depreciation of investments 1,365,501
-----------
Net realized and unrealized gain on investments 1,185,946
-----------
Net increase in net assets resulting from operations $1,195,973
===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998
--------------- ----------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income $ 10,027 $ 77,631
Net realized loss on investments (179,555) (441,386)
Net change in unrealized depreciation of investments, forward currency
contracts and foreign currencies 1,365,501 (1,572,789)
----------- -----------
Net increase (decrease) in net assets resulting from operations 1,195,973 (1,936,544)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (19,837) (108,946)
CAPITAL SHARE TRANSACTIONS:
Decrease in net assets resulting from capital
share transactions (Note 3) (683,974) (304,273)
----------- -----------
Total increase (decrease) in net assets 492,162 (2,349,763)
NET ASSETS
Beginning of period 4,494,265 6,844,028
----------- -----------
End of period (including distributions in excess of net investment
income of $9,810 and $0, respectively) $4,986,427 $4,494,265
=========== ===========
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
</TABLE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
Capstone New Zealand Fund (the "Fund"), is one of two series of beneficial
interest of Capstone International Series Trust (the "Trust") which is
registered under the Investment Company Act of 1940 (the "Act"), as a
diversified open-end management investment company. The Fund's investment
objective is to seek long-term capital appreciation and current income by
investing in equity securities, debt securities, and securities convertible into
common stock of New Zealand issuers. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of its
financial statements.
A) VALUATION OF SECURITIES - Portfolio securities which are traded on securities
exchanges are valued at the last sales price on that exchange prior to the
relevant closing or, if there is no recent last sales price available, at the
last current bid quotation. A security which is listed or traded on more than
one exchange is valued at the quotation on the exchange determined to be the
primary market for such security. Fixed income securities are valued using
market quotations or pricing services. In the absence of any applicable price,
securities will be valued at a fair value as determined in good faith in
accordance with procedures established by the Board of Trustees.
B) CURRENCY TRANSLATION - For purposes of determining the Fund's net asset
value, all assets and liabilities initially expressed in foreign currency values
are converted into U.S. dollar values at the prevailing market rate at 14:00 GMT
on each U.S. business day, as established by the Board of Trustees. The cost of
securities is determined by using historical exchange rates. Income is
translated at approximate rates prevailing when accrued. The Fund does not
isolate that portion of gains and losses on investments which is due to changes
in foreign exchange rates from that which is due to changes in the market prices
of the investments. Such fluctuations are included with the net realized and
unrealized gains and losses from investments.
<PAGE>
C) ACCOUNTING FOR INVESTMENTS - Security transactions are accounted for on the
trade date. Realized gains and losses on security transactions are based on the
identified cost basis for both financial statement and Federal income tax
purposes. Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Discounts and premiums on bonds purchased are amortized over
the life of the bonds. Interest income and estimated expenses are accrued daily.
D) FEDERAL INCOME TAXES - No provision has been made for Federal income taxes
since it is the policy of the Fund to continue to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income and realized capital
gains, to relieve it from all, or substantially all, such taxes. At October 31,
1998, the Fund had a capital loss carryforward of $375,738, which expires in
2006. Under the United States-New Zealand tax treaty, New Zealand imposes a
withholding tax on dividends (15%) and interest (10%) received by the Fund.
There is currently no New Zealand tax on capital gains.
E) DISTRIBUTIONS TO SHAREHOLDERS - The Fund distributes its net investment
income, if any, and net realized gains (net of any capital loss carryovers)
annually. Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
foreign currency transactions and capital loss carryovers.
F) USE OF ESTIMATES - The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
NOTE 2 - INVESTMENT ADVISORY FEES, ADMINISTRATIVE FEES AND OTHER TRANSACTIONS
WITH AFFILIATES
The Fund retains FCA Corp, ("FCA") as its Investment Adviser. Under the
Investment Advisory Agreement (the "Agreement"), the Adviser is paid a monthly
fee based on the average net assets at the annual rate of .75%.
The Administrator, Capstone Asset Management Company, is paid a fee,
calculated daily and paid monthly, equal to an annual rate of .25% of the Fund's
average daily net assets.
Capstone Asset Planning Company ("CAPCO") serves as Distributor of the
Fund's shares. CAPCO is an affiliate of the Administrator, and both are
wholly-owned subsidiaries of Capstone Financial Services, Inc. ("CFS").
The Fund has adopted a Service and Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Act whereby Fund assets are used to reimburse CAPCO for
costs and expenses incurred with the distribution and marketing of shares of the
Fund and servicing of Fund shareholders. Distribution and marketing expenses
include, among other things, printing of prospectuses, advertising literature,
and costs of personnel involved with the promotion and distribution of the
Fund's shares. Under the Plan, the Fund pays CAPCO an amount computed at an
annual rate of up to 0.25% of the Fund's average net assets (including
reinvested dividends paid with respect to those assets). Of this amount, CAPCO
may reallocate to securities dealers (which may include CAPCO itself) and other
financial institutions and organizations (collectively, "Service Organizations")
amounts based on the Fund's average net assets owned by stockholders for whom
the Service Organizations have a servicing relationship. The Plan permits CAPCO
to carry forward for a maximum of twelve months distribution expenses covered by
the Plan for which CAPCO has not yet received reimbursement. For the six months
ended April 30, 1999, the Fund paid $5,899 in 12b-1 fees. Of this amount
approximately 12% was paid to Service Organizations other than CAPCO.
Certain officers and directors of the Fund who are also officers and
directors of the Adviser, the Administrator, Distributor or CFS, received no
compensation from the Fund. During the six months ended April 30, 1999,
directors of the Fund who are not "interested persons" received directors' fees
of $1,500.
<PAGE>
NOTE 3 - CAPITAL STOCK
At April 30, 1999 there were 501,136 shares outstanding. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998
-------------- -----------------
SHARES AMOUNT SHARES AMOUNT
------- ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold 310,283 $ 2,778,324 368,702 $ 2,861,378
Shares issued to shareholders in reinvestment of
distributions 1,506 13,454 9,459 92,030
------- ----------- ------- -----------
311,789 2,791,778 378,161 2,953,408
Shares redeemed (391,685) (3,475,751) (405,271) (3,257,681)
------- ----------- ------- -----------
Net Increase (decrease) (79,896) $ (683,973) (27,110) $ (304,273)
======= =========== ======= ===========
</TABLE>
NOTE 4 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities other than U.S. Government obligations
aggregated $128,335 and $873,416 respectively. At April 30, 1999, the cost of
investments for Federal income tax purposes was $5,001,930. Accumulated net
unrealized depreciation on investments was $43,057 consisting of $1,015,128
gross unrealized appreciation and $1,058,185 gross unrealized depreciation.
<PAGE>
CAPSTONE NEW ZEALAND FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table sets forth the per share operating performance data for a
share of captial stock outstanding, total return, ratios to average net assets
and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
- ---------------------------------------------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net asset value at beginning of period............... $ 7.73 $11.25 $12.73 $11.12 $10.44 $11.61
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income........................... 0.02 0.14 0.24 0.19 0.31 0.16
Net realized and unrealized gain (loss)......... 2.23 (3.46) (1.55) 1.93 0.90 (1.00)
------ ------ ------ ------ ------ ------
Total from investment operations................ 2.25 (3.32) (1.31) 2.12 1.21 (0.84)
------ ------ ------ ------ ------ ------
Less distributions from:
Net investment income........................... (0.03) (0.20) (0.17) (0.29) (0.21) (0.06)
Net realized gain on investments................ -- -- -- (0.22) (0.32) (0.27)
------ ------ ------ ------ ------ ------
(0.03) (0.20) (0.17) (0.51) (0.53) (0.33)
Net asset value at end of period..................... $ 9.95 $ 7.73 $11.25 $12.73 $11.12 $10.44
====== ====== ====== ====== ====== ======
TOTAL RETURN (%) (1)................................. 29.21% (29.88)% (10.46)% 20.03% 12.22% (7.40)%
- ------------ ====== ====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
Net assets at end of period (in thousands)........... $4,986 $4,494 $6,844 $8,258 $3,494 $3,014
Ratio of total expenses to average net assets........ 4.30%(2) 4.37% 2.89% 3.63% 4.77% 4.40%
Ratio of total expenses to average net assets, before
reimbursement and waiver of expenses............ N/A N/A 2.50% 2.72% 2.52% 2.50%
Ratio of net investment income to average net assets. 0.42%(2) 1.51% 1.65% 2.32% 3.06% 1.55%
Portfolio turnover rate.............................. 3% 25% 24% 38% 38% 40%
</TABLE>
(1) Calculated without sales charge. Sales charge eliminated on August 21, 1995.
(2) Annualized.
<PAGE>
CAPSTONE NEW ZEALAND FUND
5847 SAN FELIPE, SUITE 4100
HOUSTON, TEXAS 77057
1-800-262-6631
SEMIANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 1999
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
-------- --------
Edward L. Jaroski Edward L. Jaroski
President-Capstone International Series Trust
James F. Leary
Robert W. Scharar
John R. Parker President-Capstone New Zealand Fund
Bernard J. Vaughan Linda G. Giuffre
Secretary/Treasurer
- --------------------------------------------------------------------------------
INVESTMENT ADVISER TRANSFER AGENT
- ------------------ --------------
FCA Corp First Data Investor Services Group, Inc.
5847 San Felipe 3200 Horizon Drive
Suite 850 P.O. Box 61503
Houston, TX 77057 King of Prussia, PA 19406-0903
1-800-845-2340
ADMINISTRATOR CUSTODIAN
- ------------- ---------
Capstone Asset Management Company Fifth Third Bank
5847 San Felipe, Suite 4100 Fifth Third Center
Houston, TX 77057 38 Fountain Square Plaza
1-800-262-6631 Cincinnati, OH 45263
DISTRIBUTOR AUDITORS
- ----------- --------
Capstone Asset Planning Company Briggs, Bunting & Dougherty, LLP
5847 San Felipe, Suite 4100 Two Logan Square, Suite 2121
Houston, TX 77057 Philadelphia, PA 19103-4901
1-800-262-6631
<PAGE>
SEMIANNUAL REPORT
APRIL 30, 1999
CAPSTONE
NEW ZEALAND
FUND
Capstone Logo
A Member Of
THE CAPSTONE GROUP
of Mutual Funds
THE CAPSTONE GROUP
OF MUTUAL FUNDS
- --------------------------------------------------------------------------------
EQUITY
O CAPSTONE GROWTH FUND, INC.
FIXED INCOME
O CAPSTONE GOVERNMENT INCOME FUND
INTERNATIONAL/GLOBAL
O CAPSTONE JAPAN FUND
O CAPSTONE NEW ZEALAND FUND
For more complete information about the Capstone Funds including charges
and expenses, contact the Distributor at the address below to receive
additional prospectuses.
Please read it carefully before you invest or send money.
This publication must be accompanied or preceded by a
current prospectus for Capstone New Zealand Fund
CAPSTONE ASSET PLANNING COMPANY
5847 SAN FELIPE, SUITE 4100
HOUSTON, TEXAS 77057
1-800-262-6631
CAPSTONE NEW ZEALAND FUND
5847 SAN FELIPE, SUITE 4100
HOUSTON, TEXAS 77057
