CAPSTONE NEW ZEALAND FUND (CNZLX)
--------------------------------------------------------------------------------
Dear Shareholders:
We are pleased to present this annual report on the Capstone New Zealand Fund
(the "Fund") for the six months ended April 30, 2000. The Fund's net asset value
("NAV") at April 30, 2000 was US $8.40 per share compared to US $9.27 at the end
of our October 31, 1999 fiscal year. A dividend of $.0591 was paid December 27,
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, 2000,
the NZSCI decreased by approximately 3.30% in New Zealand dollars or
approximately 7.70% in United States dollars. For the same period, the Fund's
total return decreased approximately 9.40% 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.
NEW ZEALAND MARKET OVERVIEW
Over the past 12 months, the New Zealand economy has been growing at a rapid
pace and grew at an annualized rate of 10% for the last half of 1999. We believe
that this rate of growth will be hard to sustain and we anticipate that a growth
rate of three to four percent per year for the next 24-36 months is more likely.
The fact that the economy should slow to more normal levels is not a cause for
concern. However, the sharp drop in business confidence over the last few months
is an area that will have to be monitored closely. According to the latest
survey, only a net 3% of businesses are positive about the general business
situation compared to a net 47% a year ago. We believe the far left coalition of
the new government and rising interest rates are the driving force behind the
decline. It is still to early to know if the decline in business confidence will
continue but if it remains under pressure, the decline could be self-fulfilling.
On the other hand, it could lead to an early change of government to a more
centrist mix.
Since the beginning of the year, the Reserve bank has tried to slow the New
Zealand economy by raising the cash rate by 100 basis points. We believe that
further increases are likely over the next 12 months that could result in an
additional 100 basis points. Such an increase should clearly have an impact on
domestic activity and could result in earnings results surprising on the
downside.
We believe that there will be pressure on stock performance and because of this
we have taken a cautionary stance. However, we are still relatively comfortable
with the New Zealand market as a whole. The market price-to earnings ratio of
12.8 is only marginally above its long-term average of 11.8 and relative to
bonds, the market is relatively cheap and seems to represent fair value. We feel
we have positioned the portfolio to participate in any future growth but also
have hedged the portfolio to provide downside protection. The weak New Zealand
currency has benefited tourism and farming which could help stimulate growth in
other sectors.
The New Zealand market's small size and increasing cross border stock trading
may lead to the New Zealand stock exchange linking with other exchanges. For
example, the Australian exchange has announced a link with Singapore. We would
support a similar arrangement for New Zealand.
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>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET % OF
VALUE NET
COMMON STOCKS - (100.98%) SHARES (NOTE 1-A) ASSETS
------ ---------- ------
<S> <C> <C> <C>
BROADCAST MEDIA - (11.32%)
Radioworks New Zealand, Limited................................. 117,952 $ 401,438 11.32%
ELECTRICAL/APPLIANCE MANUFACTURING - (4.85%)
Fisher & Paykel Industries...................................... 58,030 172,107 4.85%
ENVIRONMENTAL CONTROL - (7.91%)
Waste Management NZ, Limited.................................... 177,154 280,791 7.91%
FINANCE - (2.52%)
Montana Group NZ, Limited....................................... 92,000 89,461 2.52%
FOOD - MEAT PRODUCTS - (0.51%)
AFFCO Holdings, Limited (a)..................................... 100,000 17,989 0.51%
INDICES - (1.40%)
Australia Webs Index Series..................................... 5,000 49,688 1.40%
INVESTMENT COMPANIES - (5.08%)
Hellaby Holdings, Limited....................................... 91,640 76,635 2.16%
Tower, Limited.................................................. 25,000 56,521 1.59%
Westpac Investments, Limited.................................... 13,889 46,932 1.33%
---------- ------
180,088 5.08%
LUMBER & WOOD PRODUCTS - (3.15%)
Evergreen Forest, Limited (a)................................... 500,000 111,826 3.15%
MANUFACTURING - (0.36%)
Steel & Tube Holdings, Limited.................................. 20,000 12,641 0.36%
MANUFACTURING DISTRIBUTION - (2.41%)
Scott Technologies, Limited..................................... 79,997 85,568 2.41%
MEDIA - (3.13%)
Independent Newspapers, Limited................................. 60,000 111,145 3.13%
MOTION PICTURES & SERVICES - (0.34%)
Force Corporation, Limited...................................... 50,000 12,155 0.34%
<PAGE>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET % OF
VALUE NET
SHARES (NOTE 1-A) ASSETS
------ ---------- ------
OIL & GAS - (2.33%)
New Zealand Refining Co., Limited............................... 13,647 $ 82,608 2.33%
PORT OPERATIONS - (14.60%)
Lyttleton Port Co., Limited..................................... 276,250 188,038 5.30%
Northland Port Corporation...................................... 302,300 179,313 5.06%
South Port New Zealand, Limited................................. 336,500 150,518 4.24%
---------- ------
517,869 14.60%
REAL ESTATE - (2.02%)
Kiwi Income Property Trust...................................... 140,000 71,471 2.02%
RETAIL-DEPARTMENT STORES - (2.91%)
Arthur Barnett, Limited......................................... 210,300 103,270 2.91%
RETAIL-RESTAURANTS - (0.86%)
Restaurant Brands New Zealand, Limited.......................... 54,166 30,549 0.86%
RETIREMENT/AGED CARE- (1.16%)
Ryman Healthcare, Limited....................................... 50,000 41,327 1.16%
STOCK & STATION SERVICES - (9.22%)
Williams & Kettle, Limited...................................... 333,100 327,146 9.22%
TECHNOLOGY SERVICES - (5.00%)
Advantage Group, Limited (a).................................... 100,000 177,463 5.00%
TELECOM SERVICES - (0.83%)
Telecom Corporation of New Zealand, Limited..................... 7,000 29,610 0.83%
TOURIST SERVICES - (2.99%)
Tourism Holdings, Limited....................................... 97,499 106,185 2.99%
TRANSPORTATION - (11.34%)
Air New Zealand, Limited - Class B.............................. 112,600 137,413 3.87%
Auckland International Airport, Limited......................... 70,000 77,257 2.18%
Mainfreight, Limited 241,250 187,673 5.29%
---------- ------
402,343 11.34%
<PAGE>
CAPSTONE NEW ZEALAND FUND
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
MARKET % OF
VALUE NET
SHARES (NOTE 1-A) ASSETS
------ ---------- ------
UTILITIES-ELECTRIC - (4.74%)
Infrastructure & Utilities Corporation, Limited................. 294,729 $ 164,792 4.64%
Infrastructure & Utilities Corporation, Limited Warrants (a).... 55,972 3,538 0.10%
---------- ------
168,330 4.74%
TOTAL COMMON STOCK (Cost $4,695,834) 3,583,068 100.98%
BONDS (2.95%) PAR VALUE
---------
Evergreen Forest, zero coupon, due 3/19/09...................... $ 45,000 22,535 0.64%
Infrastructure & Utility Bond, 6.90% due 3/31/04................ 55,972 35,896 1.01%
State Bank of South Australia, 9.00%, due 7/30/02............... 94,000 46,293 1.30%
---------- ------
TOTAL BONDS (Amortized Cost $89,177).................................. 104,724 2.95%
TOTAL INVESTMENTS (Cost $4,785,011)................................... 3,687,792 103.93%
LIABILITIES IN EXCESS OF OTHER ASSETS................................. (139,672) (3.93%)
---------- ------
NET ASSETS............................................................ $3,548,120 100.00%
========== ======
</TABLE>
(a) Non-income producing security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF ASSETS AND LIABILITIES - APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities at market value (identified cost $4,785,011) (Note 1A)............. $ 3,687,792
Foreign currency, at value (identified cost $264,447) (Note 1B).............................. 261,822
Dividends receivable......................................................................... 3,261
Receivable for capital stock sold............................................................ 42,294
Prepaid expenses............................................................................. 628
-----------
Total Assets.......................................................................... 3,995,797
-----------
LIABILITIES:
Cash overdraft............................................................................... 349,564
Payable for capital stock redeemed........................................................... 29,005
Accrued expenses............................................................................. 68,908
-----------
Total Liabilities..................................................................... 447,477
-----------
NET ASSETS............................................................................................ $ 3,548,320
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE:
($3,548,320 / 422,478 shares of beneficial interest outstanding)...................................... $ 8.40
===========
SOURCE OF NET ASSETS:
Paid in capital.............................................................................. $ 4,892,991
Undistributed net investment income.......................................................... 25,697
Accumulated net realized loss on investments................................................. (270,379)
Net unrealized depreciation on securities and foreign currencies............................. (1,099,989)
-----------
$ 3,548,320
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C> <C>
Dividend income (net of foreign taxes withheld of $22,820)..................................... $ 121,497
Interest income................................................................................ 7,115
-----------
Total Investment Income................................................................... 128,612
Expenses: (Note 2)
Advisory fees............................................................. $ 16,052
Distribution fees......................................................... 5,351
Administrative services................................................... 5,351
Transfer agent fees....................................................... 14,390
Reports and notices to stockholders....................................... 2,622
Audit fees................................................................ 5,019
Legal fees................................................................ 9,313
Directors' fees and expenses.............................................. 4,148
Custodian fees............................................................ 1,590
Fund accounting fees...................................................... 22,687
Registration and filing fees.............................................. 6,223
Miscellaneous............................................................. 4,082
-----------
Total Expenses........................................................................... 96,828
-----------
Net Investment Income.............................................................. 31,784
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from security transactions................................................... (15,524)
Net realized loss on conversion of foreign currencies to U.S. Dollars.......................... (10,442)
Unrealized depreciation of investments:
Beginning of period....................................................... (733,720)
End of period............................................................. (1,099,989)
-----------
Net change in unrealized depreciation of investments...................................... (366,269)
-----------
Net realized and unrealized loss on investments........................................... (392,235)
-----------
Net decrease in net assets resulting from operations.................................. $ (360,451)
===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
CAPSTONE NEW ZEALAND FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 31,784 $ 67,149
Net realized gain (loss) on investments.................................... (25,966) 106,247
Net change in unrealized appreciation (depreciation) of investments,
forward currency contracts and foreign currencies...................... (366,269) 697,520
---------- -----------
Net increase (decrease) in net assets resulting from operations............ (360,451) 870,916
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income...................................................... (28,321) (19,837)
CAPITAL SHARE TRANSACTIONS:
Decrease in net assets resulting from capital
share transactions (Note 3)............................................ (412,308) (995,944)
---------- -----------
Total decrease in net assets........................................... (801,080) (144,865)
NET ASSETS
Beginning of period........................................................ 4,349,400 4,494,265
---------- -----------
End of period (including undistributed net investment
income of $25,697 and $22,234, respectively)............................... $3,548,320 $4,349,400
========== ===========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 2000 (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>
CAPSTONE NEW ZEALAND FUND
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,
1999, the Fund had a capital loss carryforward of $244,413 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, 2000, the Fund paid $5,351 in 12b-1 fees. Of this amount
approximately 10.6% 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, 2000,
directors of the Fund who are not "interested persons" received directors' fees
of $4,148.
<PAGE>
CAPSTONE NEW ZEALAND FUND
NOTE 3 - CAPITAL STOCK
At April 30, 2000 there were 422,478 shares outstanding. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
Shares sold............................................... 339,159 $ 3,056,941 436,155 $ 3,998,312
Shares issued to shareholders in reinvestment of
distributions........................................... 2,026 20,460 1,506 13,454
-------- ----------- -------- -----------
341,185 3,077,401 437,661 4,011,766
Shares redeemed........................................... (387,689) (3,489,709) (549,711) (5,007,710)
-------- ----------- -------- -----------
Net Decrease.......................................... (46,504) $ (412,308) (112,050) $ (995,944)
======== =========== ======== ===========
</TABLE>
NOTE 4 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities other than U.S. Government obligations
aggregated $556,754 and $446,924 respectively. At April 30, 2000, the cost of
investments for Federal income tax purposes was $4,785,011. Accumulated net
unrealized depreciation on investments was $1,099,989 consisting of $331,147
gross unrealized appreciation and $1,431,136 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 capital stock outstanding, total return, ratios to average net assets
and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
SIX
MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, --------------------------------------------------
2000 1999 1998 1997 1996 1995
---- --------------------------------------------------
(UNAUDITED)
----------
PER SHARE DATA
--------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of period................. $ 9.27 $ 7.73 $11.25 $12.73 $11.12 $10.44
------- ------ ------ ------ ------ ------
Income from investment operations:
Net investment income............................. 0.07 0.13 0.14 0.24 0.19 0.31
Net realized and unrealized gain (loss)........... (0.88) 1.44 (3.46) (1.55) 1.93 0.90
------ ------ ------ ------ ------ ------
Total from investment operations.................. (0.81) 1.57 (3.32) (1.31) 2.12 1.21
------ ------ ------ ------ ------ ------
Less distributions from:
Net investment income............................. (0.06) (0.03) (0.20) (0.17) (0.29) (0.21)
Net realized gain on investments.................. -- -- -- -- (0.22) (0.32)
------ ------ ------ ------ ------ ------
(0.06) (0.03) (0.20) (0.17) (0.51) (0.53)
Net asset value at end of period....................... $ 8.40 $ 9.27 $ 7.73 $11.25 $12.73 $11.12
====== ====== ====== ====== ====== ======
TOTAL RETURN (%) (1)................................... (8.85)% 20.38% (29.88)% (10.46)% 20.03% 12.22%
------------ ====== ====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA
------------------------
Net assets at end of period (in thousands)............. $3,548 $4,349 $4,494 $6,844 $8,258 $3,494
Ratio of total expenses to average net assets.......... 4.54%(2) 4.14% 4.37% 2.89% 3.63% 4.77%
Ratio of total expenses to average net assets, before
reimbursement and waiver of expenses.............. N/A N/A N/A 2.50% 2.72% 2.52%
Ratio of net investment income to average net assets... 1.49%(2) 1.42% 1.51% 1.65% 2.32% 3.06%
Portfolio turnover rate................................ 11% 8% 25% 24% 38% 38%
</TABLE>
(1) Calculated without sales charge. Sales charge eliminated on August 21, 1995.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>
CAPSTONE NEW ZEALAND FUND
5847 SAN FELIPE, SUITE 4100
HOUSTON, TEXAS 77057
1-800-262-6631
SEMIANNUAL REPORT TO SHAREHOLDERS
APRIL 30, 2000
--------------------------------------------------------------------------------
TRUSTEES OFFICERS
-------- --------
Edward L. Jaroski Edward L. Jaroski
President-Capstone
James F. Leary International Series Trust
John R. Parker Robert W. Scharar
President-Capstone
Bernard J. Vaughan New Zealand Fund
Linda G. Giuffre
Secretary/Treasurer
--------------------------------------------------------------------------------
INVESTMENT ADVISER TRANSFER AGENT
------------------ --------------
FCA Corp PFPC, 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, 2000
CAPSTONE
NEW ZEALAND
FUND
[Capstone Pyramid logo]
A Member Of
THE CAPSTONE GROUP
of Mutual Funds
<PAGE>
[Capstone Pyramid logo]
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
<PAGE>
CAPSTONE NEW ZEALAND FUND
5847 SAN FELIPE, SUITE 4100
HOUSTON, TX 77057
