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[ARIEL MUTUAL FUNDS LOGO]
Ariel Growth Fund
Ariel Appreciation Fund
Quarterly Report-June 30, 1995
[LOGO APPEARS HERE]
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[Photo of John W. Rogers, Jr.]
John W. Rogers, Jr.
President & Co-Chief
Investment Officer
[Photo of Eric T. McKissack]
Eric T. McKissack
Co-Chief Investment
Officer
[Photo of Franklin Morton]
Franklin Morton
Vice President &
Director of Research
"In this current market environment that has rewarded the volatile issues that
we, at Ariel, avoid and ignored the consistent businesses that we favor, we have
been repeatedly asked when a more normal market environment will return--a stock
market where security prices reflect today's earnings and product quality as
opposed to ethereal investor enthusiasm over promises of tomorrow's future
growth."
<PAGE>
Ariel Growth Fund
Inception November 6, 1986
Average Annual Total Return
----------------------------------------------------
1 Year 3 Year 5 Year Life of Fund
----------------------------------------------------
Ariel +9.3% +7.8% +6.7% +12.5%
Growth
Fund
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Total return does not reflect a maximum 4.75% sales load that was charged
prior to July 15, 1994
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Ariel Growth Fund
Portfolio Composition
[CHART APPEARS HERE]
Consumer Discretionary and Services 46.7%
Health Care 3.0%
Consumer Staples 12.0%
Materials and Processing 19.8%
Producer Durables 6.4%
Financial Services 12.1%
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S&P 500
[CHART APPEARS HERE]
Consumer Staples 11.8%
Consumer Discretionary and Services 10.7%
Health Care 9.4%
Technology 9.6%
Utilities 12.8%
Integrated Oils 8.3%
Other Energy 1.1%
Materials and Processing 8.9%
Producer Durables 5.0%
Autos and Transportation 4.6%
Financial Services 12.4%
Comparison of change in value of $10,000 invested
in Ariel Growth Fund and comparable indices*
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ariel Growth Fund $10,000 $27,698
S&P 500 10,000 $28,728
Russell 2500 10,000 $26,619
*Statistics represent past performance which is not indicative of future results.
</TABLE>
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Ariel Appreciation Fund
Inception December 1, 1989
Average Annual Total Return
----------------------------------------------------------
1 Year 3 Year 5 Year Life of Fund
----------------------------------------------------------
Ariel +5.6% +7.5% +7.7% +8.9%
Appreciation
Fund
----------------------------------------------------------
Total return does not reflect a maximum 4.75% sales load that was charged prior
to July 15, 1994.
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Ariel Appreciation Fund
Portfolio Composition
[CHART APPEARS HERE]
Financial Services 16.8%
Consumer Staples 7.8%
Consumer Discretionary and Services 40.6%
Producer Durables 5.2%
Autos and Transportation 1.7%
Health Care 13.1%
Technology 1.2%
Materials and Processing 13.6%
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S&P 500
[CHART APPEARS HERE]
Consumer Staples 11.8%
Consumer Discretionary and Services 10.7%
Health Care 9.4%
Technology 9.6%
Utilities 12.8%
Integrated Oils 8.3%
Other Energy 1.1%
Materials and Processing 8.9%
Producer Durables 5.0%
Autos and Transportation 4.6%
Financial Services 12.4%
Comparison of change in value of $10,000 invested
in Ariel Appreciation Fund and comparable indices*
[CHART APPEARS HERE]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ariel Appreciation Fund $10,000 $16,132
S&P 500 10,000 $18,679
Russell 2500 10,000 $19,663
*Statistics represent past performance which is not indicative of future results.
</TABLE>
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Quarterly Letter-June 30, 1995
Ariel Growth Fund
Ariel Appreciation Fund
Dear Shareholder:
For the three months ended June 30,1995, the small and medium-sized companies
that make up the Ariel Growth Fund and the Ariel Appreciation Fund portfolios
returned +2.0% and +2.1%, respectively. Over this same period, the smaller
securities that comprise the Russell 2500 Index returned a +8.9%, while the
large stocks of the S&P 500 Index posted a +9.5% gain.
"Technology Issues Lead Stocks Higher" reads a New York Times headline. Another
story in the same paper details the effects of the eye popping gains and reports
that ". . . money is pouring into technology through venture capital, new
[stock] issues and new mutual funds set up to buy technology stocks." Given the
dramatic ascent of tech stock prices in past months and the current level of
investor enthusiasm for these red hot issues, one might assume that the
aforementioned news items reflect a discussion of very recent events. But, in
fact, these articles were actually published more than a decade ago in 1983.
Someone once said that "those who forget the lessons of times past are destined
to repeat it." Yet, for some reason, when it comes to investing, the collective
memories of most individual and institutional investors appear to be very short.
In this current market environment that has rewarded the volatile issues that
we, at Ariel, avoid and ignored the consistent businesses that we favor, we have
been repeatedly asked when a more normal market environment will return--a stock
market where security prices reflect today's earnings and product quality as
opposed to ethereal investor enthusiasm over promises of tomorrow's future
growth. While it is impossible for us to be able to say with any certainty when
such a transformation will occur, a brief look at investment manias effectively
shows that these periods of excess are fairly predictable. They may come
unexpectedly and they may last much longer than anyone thinks but, as Burton
Malkiel writes in his famous book A Random Walk Down Wall Street, " . . .
eventually they reverse themselves. Such reversals come with the suddenness of
an earthquake; and the bigger the binge, the greater the resulting hangover."
Flower Power
Malkiel seeks to prove this point of view by chronicling a number of investment
manias, the most famous of which has to do with a speculative period in 17th
century Holland that drove the price of tulip bulbs up 5,900% over a three year
period.
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Ariel Growth Fund
Ten Largest Holdings
as of June 30, 1995
1 Longs Drug Stores, Inc.
A leading operator of retail drug stores in California and other western states
2 First Brands Corporation
Manufacturer and marketer of consumer products for home and automotive markets
3 Central Newspapers, Inc.
Leading media company that publishes daily and weekly newspapers in metropolitan
Phoenix and Indianapolis
4 Clorox Company
Leading producer of bleach, household cleaning and other widely recognized
consumer products
5 Ecolab, Inc.
Leading developer and marketer of premium cleaning and sanitizing products and
services for the hospitality markets
6 Rouse Company
A retail mall developer
7 Russell Corporation
Designer and manufacturer of leisure apparel and athletic uniforms
8 T. Rowe Price Associates
Investment advisor to family of no-load mutual funds and to private accounts of
institutional individual clients
9 Harte-Hanks Communications
Diversified communications company with businesses in newspapers, publications,
direct marketing and broadcasting
10 Omnicom Group, Inc.
Fourth largest advertising agency in the world
The staggering fall in bulb prices, which ultimately followed, led to a severe
economic depression which devastated the entire country. But 1637 is a long
time back. Certainly much too long ago for our modern investing memories. How
could we be expected to learn from a devastating occurrence that we were not
able to witness first hand? Moreover, it's impossible to imagine that today's
sophisticated investing crew would be so mistaken as to run up the prices of
mere flowers.
Telephone Companies in Japan
Instead of flowers 358 years ago, how about Japanese stocks in the late 1980s?
Our memories of the Japanese stock mania were jogged by a headline in a recent
issue of The Wall Street Journal. A story summarizing the market's strong
investment results through this year's second quarter was entitled, "Good Times
Roll Everywhere Except Japan." Could this be the same Japanese stock market
that rose 79% in 1986 and 51% in 1987? The same Japanese market that supposedly
diversified international fund managers loved so much that they poured more than
50% of their assets in this one country alone? The same Japanese stock market
where in the summer of 1987 a popular security like Nippon Telephone and
Telegraph traded at 250 times earnings and cost over $21,000 a share? Where the
securities of a mundane Japanese business sold for an average of 69 times
earnings versus 20 times earnings for U.S. issues selling at their pre-Crash
peak?
In this euphoric environment, classic mania prevailed. There was justification
for the absurd stock prices. One fund manager was quoted as having said,
"People who say Japan is comically overvalued . . . don't recognize how much
accounting practices in Japan understate earnings." Another who refused to
acknowledge centuries of bull and bear markets commented, "I can't see any
special reason
2
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Ariel Appreciation Fund
Ten Largest Holdings
as of June 30, 1995
1 Rouse Company
A retail mall developer
2 Hasbro, Inc.
World's largest toy manufacturer
3 Russell Corporation
Designer and manufacturer of leisure apparel and athletic uniforms
4 Harte-Hanks Communications
Diversified communications company with businesses in newspapers, publications,
direct marketing and broadcasting
5 Bergen Brunswig Corp.
Nation's second largest distributor/wholesaler of pharmaceuticals and health
care products
6 Omnicom Group, Inc.
Fourth largest advertising agency in the world
7 Longs Drug Stores, Inc.
A leading operator of retail drug stores in California and other western states
8 Merry Land &
Investment Co., Inc.
One of the largest owners and operators of upscale garden apartments in the
southeast (a real estate investment trust-REIT)
9 Stanhome, Inc.
Leading worldwide marketer and manufacturer of high quality consumer products,
including giftware and collectibles
10 MBIA, Inc.
Leading insurer of muncipal bonds
for the Japanese stock market to fall." And yet another, demonstrating the most
common form of group think, declared after a staggering rise in stock prices,
"If anything, I'm more positive about the Japanese stocks that I hold now than
about those I held a year ago."
And then the abrupt end. As Newsweek recently reported, " . . . one of the most
spectacular bear markets ever [has] wiped out roughly one-half of Japan's equity
values." In fact, by mid-year 1995, the Nikkei Index had fallen 53% from the
all time high that it posted in December 1989. And what of the investor
enthusiasm that ignored company fundamentals but was enamored with the thrill of
fast rising prices? That enthusiasm has now turned to anger and widespread
disdain. "This market is now a bottomless swamp," quipped one former Japanese
stock market zealot.
Will Rogers on Real Estate
While we admit the tulip bulb craze was just too long ago, perhaps Japan is just
too far away for investors to have learned the mania lesson. But then again,
right in our own backyard, there was the real estate craze of the 1980s. You
remember real estate-the perfect investment where it was impossible to lose
money? Will Rogers had to have known this when he said, "The best investment is
land, because there ain't any more of it."
A seasoned real estate agent described this wild real estate environment in the
following manner: "In late 1985 and 1986, it was ridiculous . . . anyone who
could pass the state's real estate licensing exam could quickly close a few
profitable deals with little more than a phone, a list and a car . . . People
ended up bidding for properties. Appraisers were backed up for 12 weeks for a
credit check that took three days." With easy money to be made, developers
built more properties. In no time, most of the
3
<PAGE>
New Additions to the
Ariel Family
We are pleased to announce that James W. Atkinson has joined our Ariel team in
the role as Executive Vice President for Finance and Administration. Jim comes
to Ariel with over 2 decades of experience. Most recently he worked at the
investment management firm of Stein Roe & Farnham, Incorporated. Eight of his 13
year tenure at Stein Roe was spent in the capacity of Chief Financial Officer.
Prior to this work experience, Jim spent 10 years as a partner at the accounting
firm of Arthur Andersen & Co. Jim is a Certified Public Accountant and a
graduate of the University of Illinois. We are delighted to welcome him to our
Ariel family.
Additionally, this fall we will be introducing a new member to the no-load Ariel
Mutual Funds family--the Ariel Premier Bond Fund. The Fund will be managed by
our Chicago neighbor, Lincoln Capital Management Company. More details to follow
in the coming months.
major metropolitan areas were overbuilt in response to the perception of
heightened demand. When the demand quickly waned, the market cracked. And so
we then read articles that were entitled, "Dark Side of the Real Estate Boom . .
. All That Doesn't Glitter."
Three's a Charm
All this brings us back to today's technology craze where a growing number of
headlines tell us that if we're not on the bandwagon along with the rest of the
crowd, we're missing a fabulous ride. "Tech-Powered Funds Rip the Cover Off the
Ball" says Barron's. "Tech Stocks Lead Charge to Record Highs," writes USA
Today. "Eye Popping Technology Led a Grand First Half for Funds," writes The
New York Times. This is the kind of speculative market where you can just feel
that the end is near when you hear that the assets of one fund devoted
exclusively to technology investing grew from $400 million to $2.4 billion-a
sixfold increase-in less than six months time. Or when you read that of the 25
best performing funds of the second quarter ending June 30, 1995, 13 were
technology sector funds and the remaining 12 carried significant tech
weightings.
Yet, perhaps we should not be surprised by this current phenomenon because it's
nothing new. A recent issue of Barron's gave an historical perspective on past
tech manias. We learned that technology issues have experienced a dramatic run
up on three separate occasions in modern times. The first was over 25 years
ago, the second coming was in the early 1980s and the third wave happens to be
right now. The first time, we are told that strength in the market was largely
due to "35 companies, pretty much the pride of technology." (The list was made
up of now familiar names like IBM, Texas Instruments and Electronic Data
Systems.) Yet
4
<PAGE>
when the bubble finally did burst, it is reported from their 1966-73 high to
their 1974-76 low, these stocks suffered an average loss of 83%.
But 1983 was to be the year of the comeback. As the stories and headlines that
were referenced at the beginning of this letter attest, business news was
dominated by a common belief that technology was the future and soaring stock
prices reflected this new found enthusiasm. Business profiles often centered on
the scores of entrepreneurs in Silicon Valley, California who became
millionaires by simply offering shares of their high-tech companies to the
investing public. However, as is often the case with love at first sight, the
love affair was short lived, and this time, the negative sentiment lingered for
more than five years. News stories proclaimed, "Technology Stocks in Slump with
No End in Sight," "High-Tech Stocks Hammered," "Technology Sector Hit By
Concerns of Weak Demand." Where were the parachutes? Barron's reports that
"from their 1983 highs to their '84-'89 lows, these shares suffered a shrinkage
value of 85.2%." But perhaps it's true that three is a charm and this time
really is different. And if you believe that, we have some expensive tulips to
sell you.
With all that said, we do not feel that buying technology stocks is inherently
bad-there are some portfolio managers that have distinguished themselves by
identifying those companies on the leading versus the bleeding edge. However, we
do feel that given the unparalleled returns in this one sector, the rich
valuations of these volatile issues and the complexity of these businesses, the
risks are very great and the real values are to be found elsewhere.
Although we could not be more committed to our disciplined style and our belief
in investing in consistent industries, there is no question that this has been a
difficult period to live through. And while we will always be long-term in our
thinking, we do understand that sometimes, the short-run can feel like a very
long time. In such an environment, we even remind ourselves of the importance
of patience. As Wall Street Week host Louis Rukeyser recently said, " . . .
perfection is never going to be found anywhere in an imperfect world, and when
events humble us, it's character that counts."
As always, we appreciate the opportunity to serve you and welcome any comments
that you might have.
Sincerely,
/s/ John W. Rogers, Jr. /s/ Eric T. McKissack
John W. Rogers, Jr. Eric T. McKissack, CFA
Portfolio Manager Portfolio Manager
Ariel Growth Fund Ariel Appreciation Fund
5
<PAGE>
Ariel Growth Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 99.17% Market Value
of Shares
<C> <S> <C>
Advertising-3.36%
71,700 Omnicom Group, Inc. $ 4,346,813
-----------
Apparel & Shoes-4.00%
179,900 Russell Corp. 5,172,125
-----------
Business Services-6.80%
137,950 Angelica Corp. 3,448,750
218,550 Ecolab, Inc. 5,354,475
-----------
8,803,225
-----------
Consumer Products-11.49%
22,025 American Greetings Corp., Class A 646,984
81,175 Armor All Products Corp. 1,400,269
84,000 Clorox Co. 5,481,000
149,950 First Brands Corp. 6,429,106
61,420 Oil-Dri Corporation of America 913,622
-----------
14,870,981
-----------
Education-2.49%
161,174 DeVRY, Inc.* 3,223,480
-----------
Entertainment/Leisure-5.57%
134,300 Hasbro, Inc. 4,264,025
125,075 Johnson Worldwide Associates, Inc., Class A* 2,939,263
-----------
7,203,288
-----------
Environmental-1.00%
80,450 Safety Kleen Corp. 1,297,256
-----------
Financial Services-10.01%
90,925 Duff & Phelps Corp. 977,444
52,200 MBIA, Inc. 3,471,300
94,500 Northern Trust Corp. 3,803,625
122,000 T. Rowe Price Associates 4,697,000
-----------
12,949,369
-----------
</TABLE>
6
<PAGE>
Ariel Growth Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 99.17%-(continued) Market Value
of Shares
<C> <S> <C>
Food/Restaurants-5.00%
161,333 Bob Evans Farms, Inc. $ 3,287,160
147,900 McCormick & Co., Inc. 3,179,850
-----------
6,467,010
-----------
Furniture & Furnishings-8.32%
326,600 Interface, Inc., Class A 4,082,500
84,000 Leggett & Platt, Inc. 3,696,000
120,695 Miller (Herman), Inc. 2,987,201
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10,765,701
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Health Care-3.03%
171,560 Bergen Brunswig Corp., Class A 3,924,435
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Miscellaneous-4.58%
162,900 Specialty Equipment Cos., Inc.* 2,097,337
115,995 Stanhome, Inc. 3,827,835
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5,925,172
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Newspapers-10.24%
453,110 American Media, Inc., Class A 3,115,131
189,390 Central Newspapers, Inc., Class A 5,610,679
178,925 Harte-Hanks Communications 4,517,856
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13,243,666
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Office & Business Equipment-4.40%
175,320 General Binding Corp. 3,068,100
172,350 Hunt Mfg. Co. 2,628,338
-----------
5,696,438
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Packaging-5.22%
198,750 Sealright Co., Inc. 3,329,063
234,100 Shorewood Packaging Corp.* 3,423,712
-----------
6,752,775
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Printing & Publishing-1.71%
98,235 Commerce Clearinghouse, Inc., Class A 2,210,288
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</TABLE>
7
<PAGE>
Ariel Growth Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 99.17%-(continued) Market Value
of Shares
<C> <S> <C>
Real Estate-4.40%
17,000 Merry Land & Investment Co., Inc. $ 346,375
272,455 Rouse Co. 5,346,929
------------
5,693,304
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Retailing-7.55%
181,145 Longs Drug Stores, Inc. 6,792,938
465,680 Payless Cashways, Inc.* 2,968,710
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9,761,648
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Total Common Stock (cost $102,141,564) 128,306,974
------------
Principal SHORT-TERM INVESTMENTS 0.71%
Amount
$925,000 Investors Fiduciary Trust Company (IFTC)
Overnight Sweep 925,000
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Total Short-Term Investments
(cost $925,000) 925,000
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Total Investments 99.88%
(cost $103,066,564) 129,231,974
Other Assets and Cash
less Liabilities 0.12% 154,219
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NET ASSETS 100.00% $129,386,193
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</TABLE>
*Non-income producing security
8
<PAGE>
Ariel Appreciation Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 98.78% Market Value
of Shares
<C> <S> <C>
Advertising-3.36%
72,625 Omnicom Group, Inc. $ 4,402,891
-----------
Apparel & Shoes-5.12%
163,470 Russell Corp. 4,699,763
192,800 Stride Rite Corp. 2,000,300
-----------
6,700,063
-----------
Autos &Transportation-1.63%
127,600 Harper Group, Inc. 2,137,300
-----------
Business Services-3.16%
64,800 Ecolab, Inc. 1,587,600
76,300 Equifax, Inc. 2,546,513
-----------
4,134,113
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Consumer Products-4.96%
37,050 American Greetings Corp., Class A 1,088,344
153,800 Armor All Products Corp. 2,653,050
3,950 Clorox Co. 257,737
58,110 First Brands Corp. 2,491,466
-----------
6,490,597
-----------
Entertainment/Leisure-6.24%
144,740 Carnival Cruise Lines, Inc. 3,383,297
150,900 Hasbro, Inc. 4,791,075
-----------
8,174,372
-----------
Environmental-1.08%
87,400 Safety Kleen Corp. 1,409,325
-----------
Financial Services-11.01%
120,250 Duff & Phelps Corp. 1,292,700
60,495 MBIA, Inc. 4,022,917
91,120 MBNA Corp. 3,075,300
73,200 Northern Trust Corp. 2,946,300
80,000 T. Rowe Price Associates 3,080,000
-----------
14,417,217
-----------
</TABLE>
9
<PAGE>
Ariel Appreciation Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 98.78%-(continued) Market Value
of Shares
<C> <S> <C>
Food/Restaurants-5.18%
71,600 Bob Evans Farms, Inc. $ 1,458,850
92,055 McCormick & Co., Inc. 1,979,183
103,300 Universal Foods Corp. 3,344,338
-----------
6,782,371
-----------
Furniture & Furnishings-5.14%
469,500 INTERCO, Inc.* 2,758,313
90,380 Leggett & Platt, Inc. 3,976,720
-----------
6,735,033
-----------
Health Care-10.57%
52,300 Bausch & Lomb, Inc. 2,170,450
195,487 Bergen Brunswig Corp., Class A 4,471,765
23,400 Invacare Corp. 971,100
96,500 Sybron Corp.* 3,847,938
87,900 Vivra, Inc.* 2,384,287
-----------
13,845,540
-----------
Industrial-2.61%
136,600 Watts Industries, Inc., Class A 3,423,538
-----------
Miscellaneous-6.32%
83,000 Fisher Scientific International 2,749,375
123,750 Stanhome, Inc. 4,083,750
52,700 Wellman, Inc. 1,442,662
-----------
8,275,787
-----------
Newspapers-5.59%
182,850 Harte-Hanks Communications 4,616,962
44,050 Tribune Co. 2,703,569
-----------
7,320,531
-----------
Office & Business Equipment-2.41%
129,305 General Binding Corp. 2,262,837
23,200 Pitney-Bowes, Inc. 890,300
-----------
3,153,137
-----------
Packaging-2.33%
208,370 Shorewood Packaging Corp.* 3,047,411
-----------
</TABLE>
10
<PAGE>
Ariel Appreciation Fund
Schedule of Investments
June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Number COMMON STOCKS 98.78%-(continued) Market Value
of Shares
<C> <S> <C>
Printing & Publishing-7.96%
83,750 Banta Corp. $ 2,784,688
56,000 Commerce Clearinghouse, Inc., Class A 1,260,000
68,500 Commerce Clearinghouse, Inc., Class B 1,489,875
25,200 Donnelley (R.R.)& Sons Co. 907,200
75,500 Houghton Mifflin Co. 3,982,625
------------
10,424,388
------------
Real Estate-7.56%
210,050 Merry Land & Investment Co., Inc. 4,279,769
286,450 Rouse Co. 5,621,581
------------
9,901,350
------------
Retailing-5.39%
115,920 Longs Drug Stores, Inc. 4,347,000
425,350 Payless Cashways, Inc.* 2,711,606
------------
7,058,606
------------
Technology-1.16%
22,500 Computer Associates International, Inc. 1,524,375
------------
Total Common Stock (cost $108,835,931) 129,357,945
------------
Principal SHORT-TERM INVESTMENTS 1.16%
Amount
$1,525,000 Investors Fiduciary Trust Company (IFTC)
Overnight Sweep 1,525,000
------------
Total Short-Term Investments
(cost $1,525,000) 1,525,000
------------
Total Investments 99.94%
(cost $110,360,931) 130,882,945
Other Assets and Cash
less Liabilities 0.06% 79,862
------------
NET ASSETS 100.00% $130,962,807
============
</TABLE>
*Non-income producing security
11
<PAGE>
[PHOTO APPEARS HERE]
The Ariel Mutual Funds team that serves you (from left to right) Mellody Hobson,
Senior Vice President & Director of Marketing; Eric T. McKissack, Co-Chief
Investment Officer; Lisa G. Hardiman, Director of Shareholder Services; John W.
Rogers, Jr., President & Co-Chief Investment Officer; Franklin Morton (seated),
Vice President & Director of Research.
Ariel Mutual Funds
Ariel Growth Fund
Ariel Appreciation Fund
Money Market Options
Cash Resource Money Market
U.S. Government Money Market
Cash Resource Tax-Exempt Money Market
<PAGE>
================================================================================
Board of Directors
Mario L. Baeza President of Wasserstein Perella International, a leading
international investment bank, CEO of its Latin American operations and co-head
of operations in Spain and Portugal, Mario is widely regarded as a preeminent
expert in business and legal issues in Latin America. He received a B.A. from
Cornell University and a J.D. from Harvard Law School, where he later taught.
William C. Deitrich, C.P.A. Bill is a director and vice president, treasurer and
CFO of Shopping Alternatives, Inc., a provider of home shopping services to the
retail grocery and pharmacy industries. He has a B.A. from Georgetown
University. Bill serves on the board and program staff of the Shalem Institute,
an internationally known ecumenical organization.
Royce N. Flippin, Jr. Director of program advancement for the Massachusetts
Institute of Technology, Royce is also president of Flippin Associates, a broad-
based consulting firm providing strategic and implementation services in the
management of critical needs for the public and private sectors. He earned his
B.A. from Princeton University and an M.B.A. from Harvard Business School. Royce
is on the board of several corporations and non-profit institutions.
John G. Guffey Currently, John is treasurer of Silby, Guffey & Co., Inc., a
venture capital firm investing in early stage companies in the health care and
environmental industries. John has a B.S. from the University of Pennsylvania's
Wharton School. He does volunteer work and holds directorships with various
local and national non-profit organizations.
Mellody Hobson As senior vice president and director of marketing, Mellody
oversees the servicing of Ariel Capital Management Inc.'s 39 institutional
clients, as well as the marketing of the Ariel Mutual Funds. She received a B.A.
from Princeton University's Woodrow Wilson School. Mellody works with a variety
of civic institutions, including those affiliated with Princeton.
Christopher G. Kennedy Chris is executive vice president of Merchandise Mart
Properties, Inc. which manages, among other prime properties, The Merchandise
Mart; The Washington Design Center; and New York's Decoration and Design
Building. He earned his B.A. from Boston College and his M.B.A. at the J.L.
Kellogg Graduate School of Management at Northwestern University. Chris serves
on the board of directors of the Chicago Convention &Tourism Bureau; Boston-
based Citizens Energy Corp. and Citizens Corp.; and the Greater Chicago Food
Depository.
Eric T. McKissack, CFA In the capacity of vice chairman &co-chief investment
officer of Ariel Capital Management, Inc., Eric is responsible for co-managing
client and mutual fund portfolios. He received a B.S. in both Management and
Architecture from the Massachusetts Institute of Technology and he earned his
M.B.A. from the University of California at Berkeley. He is also a Chartered
Financial Analyst. Eric serves on a variety of civic and corporate boards.
Bert N. Mitchell, C.P.A. Bert is founder, chairman and CEO of Mitchell/Titus &
Co., the nation's largest minority-owned accounting firm. He holds B.B.A.,
M.B.A. and Honorary Doctorate degrees from the Baruch School of Business of the
City University of New York, where he has also been a member of the accounting
faculty. Bert is also a graduate of the Owner-President Management Program of
the Harvard Business School. Bert is active in community affairs, philanthropy
and politics.
Ariel Investment Trust
307 North Michigan Avenue
Suite 500
Chicago, Illinois 60601
800.292.7435
312.726.0140
Fax 312.726.7473
