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Previous: VAN KAMPEN EQUITY TRUST, N-30D, 2000-05-30 |
Next: MICHAEL ANTHONY JEWELERS INC, 10-Q, 2000-05-30 |
ELITE GROWTH AND INCOME FUND
Portfolio of InvestmentsELITE INCOME FUND
Portfolio of InvestmentsPortfolio of Investments
The Elite Growth
& Income Fund
March 31, 2000
(unaudited)
Market Value
Shares Note 2A
------------- --------------
Common Stock 94.0%
Business Services 9.3%
-----------------------
40,000 Fed Ex. Corp.* $1,560,000
180,000 United Rentals* 3,105,000
64,200 Waste Management 878,737
--------------
Total Business Services 5,543,737
--------------
Capital Goods 15.5%
--------------------
77,500 Dura Automotive* 1,332,031
16,000 General Electric 2,483,000
92,000 Tyco International 4,588,500
12,000 United Technologies 758,250
--------------
Total Capital Goods 9,161,781
--------------
Consumer Goods and Services 21.2%
--------------------------------
80,000 Black and Decker 3,005,000
135,000 Coffee Station (a)* 33,750
43,400 H.R. Block 1,942,150
40,000 Limited Inc. 1,685,000
105,139 Optiva Corp. (a)* 1,182,814
40,000 Snap On Inc. 1,047,500
40,000 Starbucks* 1,792,500
40,000 Zale Corp.* 1,887,500
--------------
Total Consumer Goods and Services 12,577,464
--------------
Energy 3.2%
-------------
60,000 Petroleum Geo Services* 1,038,750
30,000 Pogo Producing 856,875
--------------
Total Energy 1,895,625
--------------
Financial Intermediaries 6.2%
------------------------------
40,000 Fannie Mae 2,257,500
40,000 Mellon Financial Corp. 1,180,000
10,000 Washington Mutual 265,000
--------------
Total Financial Intermediaries 3,702,500
--------------
Health Care Goods and Services 22.0%
-----------------------------------
30,000 American Home Products 1,608,750
160,000 Amerisource Health* 2,400,000
60,000 Cardinal Health 2,752,500
50,000 Elan PLC/ADR* 2,375,000
30,000 Medtronics Inc. 1,543,125
20,000 Merck and Co 1,242,500
30,000 Pfizer Inc. 1,096,875
--------------
Total Health Care Goods and Services 13,018,750
--------------
Technology and Telecommunications 16.6%
--------------------------------------
8,000 America Online* $ 538,000
80,000 Charter Communications* 1,146,250
12,000 Hewlett Packard 1,590,750
20,000 IBM 2,360,000
10,000 MCI WorldCom* 453,125
24,000 Microsoft* 2,550,000
100,000 Quantum DLT and Storage* 1,193,750
--------------
Total Technology and Telecommunications 9,831,875
--------------
Total Value of Common Stock (Cost $34,914,203) $ 55,731,732
Options - Covered Calls (3.0%)
-------------------------------
-30,000 Medtronic Inc. Call $ 45.00 05-19-00 (238,125)
-30,000 Starbucks Call $ 32.50 07-21-00 (410,625)
-30,000 Pfizer Call $ 40.00 09-15-00 (75,937)
-12,000 Hewlett Packard Call $155.00 11-17-00 (186,000)
-50,000 Elan Call $ 40.00 01-19-01 (668,750)
-40,000 Fedex Call $ 45.00 01-19-01 (192,500)
--------------
Total Value of Covered Calls (Cost ($1,090,238)) (1,771,937)
--------------
Convertible Securities 5.5%
----------------------------
210,000 Glenborough Reality $1.93 Preferred 3,123,750
5,000 Apartment and Investment $2.00 Preferred 122,500
--------------
Total Value of Preferred Stock (Cost $3,467,716) 3,246,250
--------------
Total Investments
(Cost $34,656,807**) 96.5% 57,204,795
Cash and receivables
In excess of liabilities 3.5% 2,102,572
----------- --------------
NET ASSETS 100.0% $59,307,367
============ ==============
(a) Restricted security (see note 3)
* Non - income producing
** Cost for Federal Income Tax purposes is the same
At March 31, 2000, unrealized appreciation of securities for Federal Income Tax purposes is as follows:
Unrealized appreciation $ 22,043,377
Unrealized depreciation (2,130,262)
-------------------
Net unrealized appreciation $ 19,913,115
===================
See Notes to Financial Statements
Portfolio of Investments
The Elite Income Fund
March 31, 2000
(unaudited)
Market Value
Par Value Note 2A
--------------
Bonds 96.2%
U.S. Government Notes and Bonds 42.0%
---------------------------------------
$ 2,400,000 U.S. Treasury Note
6.250% due 02/15/03 $ 2,386,128
730,000 U.S. Treasury Note
7.875% due 11/15/04 772,501
5,000,000 U.S. Treasury Bond
7.250% due 05/15/16 5,515,750
--------------
Total U.S. Government Notes and Bonds 8,674,379
--------------
Electric and Gas Utilities 28.7%
-------------------------------
450,000 Entergy Arkansas Inc.
7.000% due 03/01/02 444,375
1,485,000 Niagara Mohawk Power
5.875% due 09/01/02 1,431,169
125,000 Connecticut Light and Power Services
5.750 % due 01/15/03 125,000
150,000 Detroit Edison
7.400% due 01/15/03 150,187
595,000 Ohio Power
6.750% due 04/01/03 580,869
715,000 PG and E Gas Transmission NW Co.
7.100% due 06/01/05 712,319
500,000 Hawaiian Electric
6.660% due 12/05/05 477,500
650,000 Appalachian Power Co.
6.800% due 03/01/06 633,750
1,500,000 Kentucky Power
6.450% due 11/10/08 1,383,750
--------------
Total Electric and Gas Utility Bonds 5,938,919
--------------
Mortgage Backed Bonds 4.1%
-----------------------------
500,000 Fannie Mae (1993-93HA)
6.750% due 01/25/08 493,715
356,811 Federal Home Loan (Mortgage Backed)
6.100% due 02/15/24 356,286
--------------
Total Mortgage Backed Bonds 850,001
--------------
Financial/Corporate Bonds 21.4%
--------------------------------
150,000 GMAC
9.375% due 04/01/00 150,000
500,000 Heller Financial
6.500% due 05/15/00 500,015
360,000 Commercial Credit
5.750% due 07/15/00 359,240
515,000 Chrysler Financial
5.875% due 02/07/01 510,494
110,000 Associates Corp. NA
5.850% due 01/15/01 109,175
760,000 GMAC
6.875% due 07/15/01 757,150
700,000 Ford Motor Credit
8.200% due 02/15/02 710,500
500,000 Heller Financial
6.440% due 10/06/02 489,375
145,000 GMAC
7.050% due 09/29/03 143,369
105,000 GMAC
8.250% due 02/24/04 107,494
500,000 Ford Motor Credit
6.250% due 12/08/05 470,000
500,000 Federal Home Loan
0.000% due 09/29/17 116,600
--------------
Total Financial/Corporate Bonds 4,423,412
--------------
Total Value Bonds (Cost $ 19,983,469) 19,886,711
Shares
Preferred Stock 2.8%
-----------------------
39,500 Glenborough Reality $1.93 Preferred 587,563
--------------
Total Preferred Stock (Cost $ 682,008) 587,563
--------------
Total Investments
(Cost $ 20,665,476**) 99.0% 20,474,274
Cash and Receivables
In excess of liabilities 1.0% 198,362
------------ ---------------
NET ASSETS 100.0% $20,672,636
============ ===============
**Cost for Federal Income Tax purposes is the same.
At March 31, 2000, unrealized appreciation of Securities for Federal Income Tax is as follows:
Unrealized appreciation $ 325,608
Unrealized depreciation (516,812)
--------------
Net unrealized depreciation $ (191,204)
==============
See Notes to Financial Statements
March 31, 2000
(unaudited)
THE ELITE GROWTH THE ELITE
AND INCOME FUND INCOME FUND
----------------------- --------------------
ASSETS:
Investments in securities at value
(Notes 2A, 3 )(Cost $34,656,807
and $20,665,476) $ 57,204,795 $ 20,474,274
Cash and cash equivalent (Note 2E) 2,748,395 233,229
Receivables:
Interest 7,498 386,615
Dividends 166,184 19,133
------------------ -------------------
Total Assets 60,126,872 21,113,249
------------------ -------------------
LIABILITIES:
Payables:
Investment Purchased 573,600 ---
Investment management fees 56,768 13,104
Capital stock reacquired 89,955 98,349
Distributions 74,070 314,120
Accrued expenses 25,112 15,040
----------------- -------------------
Total Liabilities
819,505 440,613
----------------- -------------------
NET ASSETS:
The Elite Growth And Income Fund--
applicable to 2,468,992 shares
outstanding $ 59,307,367
================
The Elite Income Fund-applicable
to 2,094,134 shares outstanding $ 20,672,636
===================
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(Net assets / shares outstanding)
$ 24.02 $ 9.87
================ ===================
At March 31, 2000 the components of net assets were as follows:
Paid-in capital $ 34,365,179 $ 20,957,820
Accumulated net realized gain (loss) 5,016,886 (105,302)
Undistributed net investment income 12,187 11,322
Net unrealized appreciation
(depreciation) 19,913,115 (191,204)
---------------- -------------------
Net Assets $ 59,307,367 $ 20,672,636
================= ===================
See Notes to Financial Statements
For the Six Months Ended March 31, 2000 (unaudited)
THE ELITE GROWTH AND INCOME THE ELITE INCOME FUND
FUND
-------------------------- ---------------------
INVESTMENT INCOME:
Income:
Interest $ 91,858 $ 776,946
Dividends 447,834 33,664
-------------------- -----------------------
Total Income 539,692 810,610
-------------------- -----------------------
Expenses:
Investment management fee 319,335 84,863
Transfer agent fees 12,593 7,000
Custodian fees 11,019 8,322
Professional fees 9,445 4,984
Trustees fees and expenses 7,084 3,000
Record keeping services 22,039 12,07,658
Shareholder reports 1,574 651
Registration fees and other 14,955 6,409
------------------- -----------------------
Total Expenses 398,044 122,887
Fees paid indirectly (Note 6) (48,182) ---
Fees paid by manager (Note 5) --- (6,284)
------------------- -----------------------
Net Expenses 349,862 116,603
------------------- -----------------------
Net Investment Income 189,830 694,007
------------------- -----------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES AND OPTIONS CONTRACT
Net realized gain (loss):
Investment securities 4,697,996 (105,302)
Expired and closed covered call
options written (Note 4) 318,890 ---
------------------- ----------------------
Net realized gain (loss) on investment
securities and option contracts 5,016,886 (105,302)
------------------- ----------------------
Net increase (decrease) in unrealized
appreciation of investment securities (1,214,336) (105,915)
------------------- ----------------------
Net increase (decrease) in net assets
resulting from operations $ 3,992,380 $ 482,790
=================== ======================
See Notes to Financial Statements
THE ELITE
GROWTH AND INCOME FUND
Six Months Ended Year Ended September
March 31, 2000 30, 1999
----------------------- -----------------------
OPERATIONS:
Net investment income $ 189,830 $ 577,769
Net realized gain (loss) on investment
securities and options contracts 5,016,886 494,416
Net increase (decrease) in unrealized
appreciation of investment securities (1,214,336) 5,077,340
-------------------- ------------------
Net increase (decrease) in net assets
resulting from operations 3,992,380 6,149,525
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (190,458) (590,584)
Distributions from net realized gains on
investment transactions --- ---
CAPITAL SHARE TRANSACTIONS:
Increase (decrease) in net assets resulting
from capital share transactions (a) (9,583,102) (8,882,160)
-------------------- -----------------
Total increase (decrease) in net assets (5,781,180) (3,323,219)
NET ASSETS:
Beginning of period 68,890,469 72,270,707
-------------------- -----------------
End of period (including undistributed
net investment income of $36,762 and
$12,815 respectively). $ 59,307,367 $ 68,947,488
==================== =================
(a)Transactions in capital stock were as follows:
Six Months Ended March 31, Year Ended
2000 September 30,1999
----------------------------- ---------------------------
Shares Value Shares Value
-------------- ---------------- -------------- ----------------
Shares sold 143,330 $ 3,263,108 290,893 $ 6,787,327
Shares issued in reinvestment
of distributions 8,437 69,470 22,464 534,857
-------------- ---------------- -------------- ----------------
151,767 3,332,578 313,357 7,322,184
Shares redeemed (16,881,801) (16,204,344)
(758,358) (681,079)
-------------- ---------------- -------------- ----------------
Net increase (decrease) (606,591) $(13,618,693) (367,722) $ (8,882,160)
============== ================ ============== ================
See Notes to Financial Statements
THE ELITE
INCOME FUND
(unaudited)
Six Months Ended Year Ended
March 31, 2000 September 30, 1999
------------------- ------------------
OPERATIONS:
Net investment income $ 694,007 $ 1,584,832
Net realized gain (loss) on investment securities (105,302) (43,939)
Net increase (decrease) in unrealized
appreciation of investment securities (105,915) (2,028,967)
----------------- -------------------
Net increase (decrease) in net assets
resulting from operations (482,790) (488,074)
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income (680,401) (1,582,548)
CAPITAL SHARE TRANSACTIONS:
Increase (decrease)in net assets resulting from
capital share transactions (a) (4,851,246) (2,867,844)
----------------- -------------------
Total increase (decrease) in net assets (6,014,437) (4,938,466)
NET ASSETS:
Beginning of period 25,902,385 30,840,851
----------------- -------------------
End of period (including undistributed net
investment income of $24,544 and $11,322
respectively). $ 20,672,636 $ 25,902,385
================= ===================
(a)Transactions in capital stock were as follows:
Six Months Ended Year Ended
March 31, 2000 September 30,1999
------------------------------- ---------------------------
Shares Value Shares Value
------------- ---------------- -------------- ----------------
Shares sold 209,217 $ 2,043,722 566,425 $ 5,832,919
Shares issued in reinvestment
of distributions 69,470 680,558 141,532 1,445,177
------------ ----------------- ------------- ----------------
278,687 2,724,280 707,957 7,278,096
Shares redeemed (821,375) (8,098,462) (982,376) (10,145,940)
------------ ----------------- ------------- ----------------
Net increase (decrease) (542,688) $(5,374,182) (274,419) $(2,867,844)
============ ================= ============= ================
See Notes to Financial Statements
THE ELITE
GROWTH AND INCOME FUND
For a share outstanding throughout each period
(unaudited)
Years Ended September 30,
2000** 1999 1998 1997 1996
Net asset value, beginning of period $ 22.45 $ 21.02 $ 22.25 $ 20.55 $ 16.64
----------- ----------- ------------ ------------ -----------
Income from investment operations
Net investment income .07 .18 .18 .29 .11
Net gain (loss) on securities
(both realized and un 1.57 1.43 (1.24) 6.15 3.92
----------- ----------- ------------ ------------ -----------
Total from investment
Operations 1.64 1.61 (1.06) 6.44 4.03
----------- ----------- ------------ ------------ -----------
Less Distributions
Dividends from net investment
income (.07) (.18) (.17) (.29) (.12)
Distributions from capital gains --- --- --- (4.45) ---
----------- ----------- ------------ ------------ -----------
Total distributions (.07) (.18) (.17) (4.74) (.12)
----------- ----------- ------------ ------------ -----------
Net asset value, end of period $ 24.02 $ 22.45 $ 21.02 $ 22.25 $ 20.55
=========== =========== ============ ============ ===========
Total Return 7.32% 7.62% (4.82%) 34.66% 24.26%
Ratios/Supplemental Data
Net asset value, end of period
(in 000's) $ 59,307 $ 68,947 $ 72,271 $ 67,719 $ 44,799
Ratio of expenses to average net
assets 1.25%*(a) 1.25%* 1.23%* 1.30%* 1.33%
Ratio of net investment income
To average net assets .60%(a) .75% .71% 1.41% .61%
Portfolio turnover 129.81%(a) 133.11% 138.49% 115.80% 156.93%
*Ratio reflects fees paid through a directed brokerage arrangement. No fees were paid through a brokerage arrangement for 1996. The expense ratios for 2000 (six months), 1999, 1998, and 1997 after reduction of fees paid through the directed brokerage arrangement were 1.10%, 1.12%, 1.15%, and 1.27% respectively.
** For the six months ending March 31, 2000
(a) Annualized
See Notes to Financial Statements
THE ELITE
INCOME FUND
For a share outstanding throughout each period
(unaudited)
Years Ended September 30,
2000** 1999 1998 1997 1996
Net asset value, beginning of period $ 9.96 $ 10.72 $ 10.00 $ 9.73 $10.03
----------- ----------- ------------ ------------ -----------
Income from investment operations
Net investment income .30 .59 .59 .60 .60
Net gain (loss) on securities
(both realized and unrealized) (.09) (.76) .72 .27 (.23)
----------- ----------- ------------ ------------ -----------
Total from investment
operations .21 (.17) 1.31 .87 .37
----------- ----------- ------------ ------------ -----------
Less Distributions
Dividends from net investment
income (.30) (.59) (.59) (.60) (.62)
Distributions from capital gains --- --- --- --- (.05)
----------- ----------- ------------ ------------ -----------
Total distributions (.30) (.59) (.59) (.60) (.67)
----------- ----------- ------------ ------------ -----------
Net asset value, end of period $ 9.87 $ 9.96 $ 10.72 $ 10.00 $ 9.73
=========== =========== ============ ============ ===========
Total Return 3.73% (1.62)% 13.44% 9.20% 3.79%
Ratios/Supplemental Data
Net asset value, end of year
(in 000's) $ 20,673 $ 25,902 $ 30,841 $ 16,312 $12,618
Ratio of expenses to average
net assets 1.02%*(a) .95% .92% .96% 1.00%
Ratio of net investment income
to average net assets 5.73%(a) 5.60% 5.63% 6.01% 6.01%
Portfolio turnover 3.90%(a) 33.01% 21.41% 37.60% 43.37%
* Ratio reflects expenses prior to reimbursement from manager. Expense ratio after reimbursement was .96%.
** For the six months ending March 31, 2000
(a) Annualized
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS
March 31, 2000
Note 1 - Organization
The Elite Growth and Income Fund and The Elite Income Fund (the "Funds")
are two series of shares of beneficial interests of The Elite Group (the
"Trust"), which is registered under the Investment Company Act of 1940, as
amended, as a diversified open-end management company. The Trust was organized
in Massachusetts as a business trust on August 8, 1986. The Trust is authorized
to issue an unlimited number of no par shares of beneficial interest of any
number of series. Currently, the Trust has authorized only the two series above.
The Elite Growth and Income Fund's investment objective is to maximize total
returns through an aggressive approach to the equity and debt securities
markets. The Elite Income Fund's investment objective is to achieve the highest
income return obtainable over the long term commensurate with investments in a
diversified portfolio consisting primarily of investment grade debt securities.
Note 2 - Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds. The policies are in conformity with generally accepted
accounting principles.
A. Security Valuation - Investments in securities traded on a national securities exchange are valued at the last reported sales price. Securities which are traded over-the counter are valued at the bid price. Securities for which reliable quotations are not readily available are valued at their respective fair value as determined in good faith by, or under procedures established by the Board of Trustees.
B. Federal Income Taxes - The Funds intend to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and distribute all its taxable income to its shareholders. Therefore no federal income tax provision is required.
C. Option Accounting Principles (The Elite Growth and Income Fund) - When the Fund sells an option, an amount equal to the premium received by the Fund is included as an asset and an equivalent liability. The amount of the liability is marked-to-market to reflect the current market value of the options written. The current market value of a traded option is the last sale price. When an option expires on its stipulated expiration date or the Fund enters into a closing purchase transaction, the Fund realizes a gain (or loss if the cost of a closing purchase transaction exceeds the premium received when the option was sold) without regard to any unrealized gain or loss on the underlying security, and the liability related to such option is extinguished. If an option is exercised, the Fund realizes a gain or loss from the sale of the underlying security and the proceeds of the sale are increased by the premium received. The Elite Growth and Income Fund as a writer of an option may have no control over whether the underlying security may be sold (call) or purchased (put) and as a result bears the market risk of an unfavorable change in the price of the security underlying the written option.
D. Cash Equivalent - Consists of investment in mutual fund money market accounts.
E. Other - As is common in the industry, security transactions are accounted for on the trade date. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Income distributions 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 post - October losses. Interest income and estimated expenses are accrued daily.
F. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Note 3 - Restricted Securities
The Funds may invest in restricted securities. Restricted securities are
securities which have not been registered under the Securities Act of 1933, as
amended, and as a result are subject to restrictions on resale. Investments in
restricted securities are valued at fair value as determined in good faith by
the Trust's Board of Trustees. There are no unrestricted securities of these
issuers. At March 31, 2000 the Elite Growth and Income Fund had investments in
restricted securities with the date of acquisition, cost, fair value and
percentage of net assets listed below:
Dates of Percentage of
Acquisition Cost Value Net Assets
Stocks
105,139 Optiva Corporation 04/25/94 $ 111,710 $ 1,182,814 1.99%
135,000 Coffee Station, Inc 04/16/96 303,750 33,750 .06%
----------- ------------ --------
Total $ 415,460 $ 1,317,814 2.05%
=========== ============ ========
Note 4 - Purchases and Sales of Securities
For the six months ended March 31, 2000, purchases and sales of securities,
other than options and short-term notes were as follows:
Purchases Sales
The Elite Growth and Income Fund $ 37,649,335 $44,954,932
The Elite Income Fund $ 472,547 $ 4,092,117
| For The Elite Growth & Income Fund, transactions in covered call options written were as follows: |
Number of
Contracts* Premiums
Options outstanding on September 30, 1999 2,560 $ 1,400,027
Options written 4,610 2,768,000
Options terminated in closing purchase transactions (4,690) (2,741,547)
Options exercised --- ---
Options expired (560) (336,242)
-------------- ------------
Options outstanding on March 31, 2000 1,920 $ 1,090,238
============== ============
* Each contract represents 100 shares of common stock
Note 5 - Investment Management Fee and Other Transactions with Affiliates
The Funds retain McCormick Capital Management Inc. as their Investment
Manager. Under an Investment Management Agreement, the Investment Manager
furnishes each Fund with investment advice, office space and salaries of
non-executive personnel needed by the Funds to provide general office services.
As compensation for its services, the Manager is paid a monthly fee based upon
the average daily net assets of each Fund. For The Elite Growth and Income Fund
and The Elite Income Fund, the rates are 1% and 7/10 of 1%, respectively, up to
$250 million; 3/4 of 1% and 5/8% of 1%, respectively, over $250 million up to
$500 million; and 1/2 of 1% over $500 million for each Fund.
The Manager may voluntary reimburse a portion of the operating expenses of a Fund for any fiscal year (including management fees, but excluding taxes, interest and brokerage commissions). Voluntary reimbursements may cease at any time without prior notice.
NOTE 6 - Directed Brokerage Arrangement
In an effort to reduce the total expenses of the Funds, a portion of the
operating expenses may be paid through an arrangement with a third-party
broker-dealer who is compensated through commission trades. Payment of the
operating expenses by the broker-dealer, is based on a percentage of commissions
earned. Expenses paid under this arrangement during the six months ended March
31, 2000 were $48,182 for the Elite Growth and Income Fund.
NOTE 7 - Concentration
Although both of the funds have a diversified investment portfolio, there
are certain credit risks due to the manner in which the portfolio is invested,
which may subject the funds more significantly to economic changes occurring in
certain industries or sectors. The Elite Growth and Income Fund has investments in
excess of 10% in capital goods, consumer goods and services, financial
intermediaries, health care goods and services, and technology and
telecommunications industries. The Elite Income Fund has investments in excess
of 10% in the electric and gas utilities and financial industries.
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