THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
PRESIDENT'S MESSAGE
- ------------------------------------------------------------------------------
DEAR SHAREHOLDER:
The management of Rodney Square Multi-Manager Fund would like to report
to you on the Fund's activity for the year ended December 31, 1995.
PORTFOLIO REVIEW*
The stock market during 1995 proved quite rewarding for most investors as
reflected by the Portfolios' investment returns. The total returns presented
below represent changes in market value plus any income or capital gains
distributed during the year, assume distributions are reinvested, and do not
reflect the effect of a sales load.
NET ASSET
VALUE AS OF CAPITAL GAINS & NET ASSET VALUE TOTAL RETURN
PORTFOLIO 12/31/94 INCOME DISTRIBUTED AS OF 12/31/95 1/1/95-12/31/95
- ---------- ----------- ------------------ --------------- ---------------
Growth $15.14 $2.01 $17.41 28.4%
Growth and
Income 8.33 1.01 9.47 26.0%
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The overall strength of U.S. financial markets helped push a number of
domestic stock indices to record levels in 1995. The Standard & Poor's 500
Index ("S&P 500"), an unmanaged, capitalization weighted index of five hundred
publicly traded stocks, achieved a 37.6% gain for the year. The Russell 2000,
comprised of the smallest 2000 stocks out of the 3000 largest U.S. companies,
based on market capitalization, was up 28.4% for the year. Among mutual funds
with similar objectives, the Growth Portfolio's 28.4% return compared to the
average return of 30.8% for all growth funds, as measured by Lipper Analytical
Services ("Lipper"). The Growth and Income Portfolio's return of 26.0%
compared to the 30.9% average return of the Lipper growth and income funds
category.
- ----------------------------------
* PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
INVESTMENT RETURNS AND PRINCIPAL VALUES MAY FLUCTUATE, SO THAT, WHEN
REDEEMED, SHARES MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. AN
INVESTMENT IN THE PORTFOLIOS IS NEITHER INSURED NOR GUARANTEED BY
WILMINGTON TRUST COMPANY OR ANY OTHER BANKING INSTITUTION, THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION (FDIC), THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY. THE TOTAL RETURNS DO NOT REFLECT THE
EFFECT OF THE MAXIMUM SALES LOAD OF 4.00%. SOME RETURNS ARE HIGHER DUE
TO THE MANAGER'S MAINTENANCE OF EXPENSES. SEE FINANCIAL HIGHLIGHTS ON
PAGES 22 AND 23.
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THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
PRESIDENT'S MESSAGE-CONTINUED
- ------------------------------------------------------------------------------
The forces behind the rally in stocks during 1995 were low interest
rates, expanding earnings, modest inflation and a strong dollar. During 1995,
larger capitalization stocks generally outperformed small capitalization
("small cap") stocks as a slow growing economy and budget worries in
Washington led investors toward larger, more defensive, stocks. It also
became evident that small cap stocks, especially technology-oriented
companies, were not immune from the business cycle. The inability to maintain
earnings growth in the face of slowing consumer spending and pricing pressure
stalled the surprising rally in small cap stocks in 1995. Hence, technology
stocks, market leaders for the first nine months of 1995, fell sharply during
the fourth quarter.
THE GROWTH PORTFOLIO
The Growth Portfolio's small cap stock orientation led the advisers of
the Portfolio to large holdings of technology stocks during 1995. Many of
these stocks posted excellent returns, despite the year end sell off in the
sector. Frontier Capital Management Co. held almost half of its portfolio in
technology oriented companies like SCI Systems, Inc., which manufactures
computers for other computer companies. William Blair & Co. ("Blair")
emphasized companies with niche products and services that offer franchise-
like cash flow. Blair, in addition to holding technology stocks such as
Microsoft Corp. and Xilinx, Inc., also concentrated in specialty financial
companies like credit card issuer MBNA Corp.
[GRAPHICAL REPRESENTATION (POINTS AND LINES) REQUIRED BY ITEM 5A OF FORM N-1A]
[FOLLOWING ARE GRAPH POINTS AND TOTAL RETURNS]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT*
<TABLE>
<CAPTION>
Feb-87 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth
Portfolio $10,000 $9,500 $10,100 $14,000 $14,000 $16,000 $18,000 $20,000 $20,500 $30,000
S&P 500
Index $9,900 $9,400 $10,000 $13,000 $12,000 $15,000 $17,000 $19,500 $19,500 $25,000
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR INCEPTION
------ ------ ---------
FUND** 23.29% 16.14% 11.11%
FUND*** 28.43% 17.09% 11.62%
INDEX 37.58% 16.60% 12.61%
- ------------------------------
* PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. RETURNS ARE HIGHER
DUE TO MAINTENANCE OF THE PORTFOLIO'S EXPENSES BY RODNEY SQUARE
MANAGEMENT CORP. SEE FINANCIAL HIGHLIGHTS ON PAGE 22.
** THESE VALUES REFLECT THE EFFECT OF THE MAXIMUM SALES LOAD OF 4.00%.
*** THESE VALUES DO NOT REFLECT THE EFFECT OF THE SALES LOAD.
2
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
PRESIDENT'S MESSAGE-CONTINUED
- ------------------------------------------------------------------------------
THE GROWTH AND INCOME PORTFOLIO
The advisers of the Growth and Income Portfolio took advantage of the
positive moves by larger company stocks during 1995. Sirach Capital
Management, Inc. ("Sirach") found value in the finance and healthcare sectors
with holdings in Citicorp and Johnson & Johnson. Returns from these sectors
reflect the move that occurred in the second half of 1995 toward larger
companies with more predictable growth characteristics. Wedge Capital
Management L.L.P. ("Wedge") also took advantage of the merger and acquisition
activity in financial stocks with holdings in banks such as Chemical Banking
Corp. and First Union Corp. Wedge's holdings in oil companies such as British
Petroleum Co. Ltd. and Royal Dutch Petroleum Co., benefited from the firming
of energy prices in 1995. Because of its value disciplines, Wedge held a
relatively large cash position throughout the year.
All of the advisers generally agree that 1996 will not be a repeat of
1995. They agree the key for success in 1996 will be the ability to find
value in individual stocks as opposed to entire sectors. Each of our advisers
employ various valuation screens designed to isolate those companies with the
best characteristics for future growth. We feel strongly that this, combined
with the multi-manager format, which allows investors to reduce their
investment volatility through multiple investment approaches, will deliver
superior returns. Rodney Square Management Corporation will continue to
review and evaluate the individual advisers in an effort to deliver above
average performance for our shareholders.
[GRAPHICAL REPRESENTATION (POINTS AND LINES) REQUIRED BY ITEM 5A OF FORM N-1A]
[FOLLOWING ARE GRAPH POINTS AND TOTAL RETURNS]
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT*
<TABLE>
<CAPTION>
Feb-87 Dec-87 Dec-88 Dec-89 Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth and
Income Portfolio $10,000 $9,500 $10,100 $14,000 $14,000 $16,000 $18,000 $20,000 $20,500 $30,000
S&P 500 Index $9,900 $9,400 $10,000 $13,000 $12,000 $15,000 $17,000 $19,500 $19,500 $25,000
</TABLE>
AVERAGE ANNUAL TOTAL RETURN
1 YEAR 5 YEAR INCEPTION
------ ------ ---------
FUND** 20.99% 11.63% 8.32%
FUND*** 26.03% 12.55% 8.82%
INDEX 37.58% 16.60% 12.34%
- ------------------------------
* PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. RETURNS ARE HIGHER
DUE TO MAINTENANCE OF THE PORTFOLIO'S EXPENSES BY RODNEY SQUARE
MANAGEMENT CORP. SEE FINANCIAL HIGHLIGHTS ON PAGE 23.
** THESE VALUES REFLECT THE EFFECT OF THE MAXIMUM SALES LOAD OF 4.00%.
*** THESE VALUES DO NOT REFLECT THE EFFECT OF THE SALES LOAD.
3
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
PRESIDENT'S MESSAGE-CONTINUED
- ------------------------------------------------------------------------------
We invite your questions and comments, and we thank you for your
investment in The Rodney Square Multi-Manager Fund. We look forward to
reviewing our investment outlook and strategy with you in our next report to
shareholders.
Sincerely,
/s/ Martin L. Klopping
Martin L. Klopping
President
February 10, 1996
4
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS/DECEMBER 31, 1995
(Showing Percentage of Total Value of Net Assets)
- ------------------------------------------------------------------------------
PAR VALUE
(000) (NOTE 2)
----- -----------
REPURCHASE AGREEMENTS - 4.1%
WITH CS FIRST BOSTON GROUP, INC.
at 6.00%, dated 12/29/95, to be
repurchased at $2,737,124 on
01/02/96, collateralized by
$2,803,449 Federal Farm Credit
Bank Discount Notes with various
MATURITIES TO 06/05/96
(COST $2,735,300).......................... 2,735 $ 2,735,300
-----------
SHARES
------
COMMON STOCK - 96.2%
FINANCE, INSURANCE & REAL ESTATE - 9.9%
INSURANCE CARRIERS - 1.1%
Compdent Corp.*......................... 4,300 178,450
GCR Holdings, Ltd....................... 8,300 186,750
Meadowbrook Insurance Group, Inc.*...... 6,000 201,000
Renaissancere Holdings Ltd.*............ 6,500 197,438
-----------
763,638
-----------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS - 2.5%
Advanta Corp. (B Shares)................ 10,000 363,750
Household International, Inc............ 22,000 1,300,750
-----------
1,664,500
-----------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES - 2.9%
Alex Brown, Inc......................... 12,700 533,400
Federal Home Loan Mortgage Corp......... 6,000 501,000
Raymond James Financial, Inc............ 42,193 891,327
-----------
1,925,727
-----------
STATE & NATIONAL BANKS - 3.4%
MBNA Corp............................... 30,000 1,106,250
State Street Boston Corp................ 25,000 1,125,000
-----------
2,231,250
-----------
TOTAL FINANCE, INSURANCE
& REAL ESTATE....................... 6,585,115
-----------
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
MANUFACTURING - 36.1%
CHEMICALS & ALLIED PRODUCTS - 4.1%
Air Products and Chemicals, Inc......... 16,000 $ 844,000
Airgas, Inc.*........................... 15,000 498,750
Applied Extrusion Technologies, Inc.*... 6,500 81,250
Cambrex Corp............................ 7,000 289,625
Hanna (M.A.) Co......................... 36,000 1,008,000
-----------
2,721,625
-----------
COMPUTER & OFFICE EQUIPMENT - 5.0%
3D Systems Corp.*....................... 5,000 118,750
Cirrus Logic, Inc.*..................... 11,700 231,075
Data General Corp.*..................... 23,000 316,250
Digi International, Inc.*............... 15,000 285,000
Digital Link Corp....................... 5,500 77,687
HPR Inc.*............................... 4,000 120,500
Hyperion Software Corp.*................ 13,400 284,750
Intel Corp.............................. 12,000 681,000
Microcom, Inc.*......................... 5,600 145,600
Microsoft Corp.*........................ 10,000 877,500
Network Appliance, Inc.*................ 2,100 84,263
Xcellenet, Inc.* 4,700 69,913
-----------
3,292,288
-----------
FOOD & BEVERAGE - 0.4%
Smithfield Foods, Inc.*................. 8,100 257,175
-----------
MISC. ELECTRICAL MACHINERY, EQUIP. & SUPPLIES - 3.8%
Genlyte Group, Inc.*.................... 14,600 98,550
GenRad, Inc.*........................... 23,000 221,375
Microchip Technology, Inc.*............. 13,700 500,050
Molex, Inc. (A Shares).................. 45,000 1,378,125
Watkins-Johnson Co...................... 6,700 293,125
-----------
2,491,225
-----------
MISC. INDUSTRIAL MACHINERY & EQUIP. - 3.5%
Augat, Inc.............................. 24,200 414,425
Camco International, Inc................ 6,800 190,400
Harman International Industries, Inc.... 18,900 758,363
Illinois Tool Works, Inc................ 11,000 649,000
Tower Automotive, Inc.*................. 7,900 138,250
Varco International, Inc.*.............. 14,900 178,800
-----------
2,329,238
-----------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 2.2%
Cavalier Homes, Inc..................... 5,625 $ 116,719
Continental Homes Holding Corp.......... 7,600 187,150
Newell Co............................... 20,000 517,500
Pittway Corp. (A Shares)................ 7,400 501,350
Whittaker Corp.*........................ 6,100 132,675
-----------
1,455,394
-----------
PHARMACEUTICAL PREPARATIONS - 4.6%
Abbott Laboratories..................... 19,000 793,250
Alpharma, Inc. (A Shares)............... 12,800 334,400
Anika Research, Inc.*................... 4,140 16,042
Elan Corp. plc, ADR*.................... 18,000 875,250
R.P. Scherer Corp.*..................... 21,100 1,036,537
-----------
3,055,479
-----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 5.2%
Advanced Technology Laboratories,
Inc.*................................. 17,800 436,100
Cognex Corp.*........................... 15,000 521,250
Fisher Scientific International......... 8,200 273,675
Gelman Sciences, Inc.*.................. 5,500 138,875
Haemonetics Corp.*...................... 33,400 592,850
Kensey Nash Corp.*...................... 5,100 63,750
Nellcor Puritan Bennet, Inc.*........... 13,000 754,000
Research Medical, Inc.*................. 5,800 156,600
Spacelabs Medical, Inc.*................ 17,600 506,000
-----------
3,443,100
-----------
PRINTING & PUBLISHING - 1.0%
Banta Corp.............................. 10,000 440,000
International Imaging Materials, Inc.*.. 8,200 207,050
-----------
647,050
-----------
TELECOMMUNICATIONS EQUIPMENT - 3.3%
Analog Devices, Inc.*................... 33,150 1,172,681
Microwave Power Devices, Inc.*.......... 9,000 100,125
Network Equipment Technologies, Inc.*... 17,600 481,800
Oak Industries, Inc.*................... 7,300 136,875
Summa Four, Inc......................... 5,100 68,212
TSX Corp.*.............................. 4,600 98,900
Westell Technologies, Inc.*............. 5,600 140,700
-----------
2,199,293
-----------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
TEXTILES & APPAREL - 2.1%
Authentic Fitness Corp.................. 11,500 $ 238,625
Cintas Corp............................. 20,000 890,000
Donnkenny, Inc.......................... 9,300 168,563
Fieldcrest Cannon, Inc.*................ 6,500 108,062
-----------
1,405,250
-----------
TRANSPORTATION EQUIPMENT - 0.9%
OEA, Inc................................ 20,000 597,500
-----------
TOTAL MANUFACTURING................... 23,894,617
-----------
MINING - 3.5%
CRUDE PETROLEUM & NATURAL GAS - 1.5%
Benton Oil & Gas Co.*................... 7,900 118,500
Devon Energy Corp....................... 12,900 328,950
Pogo Producing Co....................... 12,000 339,000
Weatherford Enterra, Inc.*.............. 7,943 229,354
-----------
1,015,804
-----------
MISCELLANEOUS METAL ORES - 2.0%
AMCOL International Corp................ 14,700 209,475
Minerals Technologies Inc............... 30,000 1,095,000
-----------
1,304,475
-----------
TOTAL MINING.......................... 2,320,279
-----------
SERVICES - 22.6%
BUSINESS SERVICES - 8.4%
Automatic Data Processing, Inc.......... 24,000 1,782,000
CUC International, Inc.*................ 14,000 477,750
First Data Corp......................... 25,000 1,671,875
Norrell Corp............................ 6,700 196,812
The Olsten Corp......................... 10,000 395,000
PMT Services, Inc.*..................... 6,700 202,675
PST Vans, Inc.*......................... 4,000 18,500
Shared Medical Systems Corp............. 15,000 815,625
-----------
5,560,237
-----------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
COMPUTER SERVICES - 7.5%
Acxiom Corp.*........................... 25,100 $ 687,113
American Management Systems, Inc.*...... 13,000 390,000
Banyan Systems, Inc.*................... 9,100 93,275
Boole & Babbage, Inc.*.................. 9,900 242,550
Broadway & Seymour, Inc.*............... 9,000 146,250
Ceridian Corp.*......................... 14,700 606,375
Computer Task Group, Inc................ 8,900 175,775
Fiserv, Inc.*........................... 23,412 702,360
MDL Information Systems, Inc.*.......... 10,200 234,600
Marcam Corp.*........................... 16,000 244,000
Project Software, Inc................... 4,600 160,425
SPS Transaction Services, Inc.*......... 8,900 263,662
State of The Art, Inc.*................. 10,700 105,663
Sungard Data Systems, Inc.*............. 23,800 678,300
Technology Solutions Co.*............... 500 9,750
Telxon Corp............................. 11,100 251,138
-----------
4,991,236
-----------
MEDICAL & HEALTH SERVICES - 5.8%
American Medical Response, Inc.*........ 6,100 198,250
HealthSouth Corp.*...................... 34,000 990,250
HealthWise of America, Inc.*............ 7,050 274,950
Interim Services Inc.*.................. 19,000 660,250
Medaphis Corp.*......................... 14,000 518,000
Ornda Healthcorp*....................... 25,600 595,200
Owen Healthcare, Inc.*.................. 7,700 212,713
Sterling Healthcare Group*.............. 5,400 57,375
Total Renal Care Holdings, Inc.*........ 7,000 206,500
Veterinary Centers of America, Inc.*.... 5,800 97,875
-----------
3,811,363
-----------
PERSONAL SERVICES - 0.5%
Stewart Enterprises, Inc. (A Shares).... 9,700 358,900
-----------
SANITARY SERVICES - 0.4%
United Waste Systems, Inc.*............. 7,100 264,475
-----------
TOTAL SERVICES........................ 14,986,211
-----------
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
TRANSPORTATION, COMMUNICATION, ELECTRIC
& SANITATION - 4.2%
COMMUNICATION & BROADCASTING - 2.2%
Airtouch Communications, Inc.*.......... 18,000 $ 508,500
ANADIGICS, Inc.*........................ 5,400 114,750
Reuters Holding plc, ADR................ 10,000 551,250
SFX Broadcasting, Inc. (A Shares)*...... 3,700 111,925
Transaction Network Services, Inc.*..... 6,300 157,500
-----------
1,443,925
-----------
ELECTRIC, GAS & WATER UTILITIES - 0.1%
Southwestern Energy Co.................. 8,000 102,000
-----------
TRANSPORTATION - 1.9%
Air Express International Corp.......... 29,925 688,275
Covenant Transport, Inc. (A Shares)..... 6,000 72,000
TNT Freightways Corp.................... 25,000 503,125
-----------
1,263,400
-----------
TOTAL TRANSPORTATION,
COMMUNICATION, ELECTRIC
& SANITATION........................ 2,809,325
-----------
WHOLESALE & RETAIL TRADE - 19.9%
MISCELLANEOUS RETAIL STORES - 2.8%
Barnes & Noble Inc.*.................... 9,000 261,000
Best Buy Co., Inc.*..................... 19,400 315,250
Just For Feet, Inc.*.................... 7,575 270,806
Sports & Recreation, Inc.*.............. 20,550 146,419
Trend-Lines, Inc. (A Shares)*........... 7,650 76,500
Wal-Mart Stores, Inc.................... 35,000 783,125
-----------
1,853,100
-----------
RETAIL BUILDING MATERIALS - 2.0%
Home Depot, Inc......................... 28,000 1,340,500
-----------
RETAIL EATING & DRINKING PLACES - 0.7%
Applebee's International, Inc. Rights
1/1000 Share of Preferred @ $75....... 17,000 386,750
Hometown Buffet Inc.*................... 7,900 87,394
-----------
474,144
-----------
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH PORTFOLIO
- -----------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -----------
RETAIL FURNITURE & APPLIANCE STORES - 0.5%
Williams-Sonoma, Inc.*.................. 15,700 $ 290,450
-----------
WHOLESALE CHEMICALS & DRUGS - 2.1%
Amerisource Health Corp. (A Shares)*.... 6,900 $227,700
Cardinal Health, Inc.................... 12,616 690,726
Walgreen Co............................. 16,000 478,000
-----------
1,396,426
-----------
WHOLESALE ELECTRONIC EQUIP. & COMPUTERS - 9.1%
Arrow Electronics, Inc.*................ 15,700 677,063
Daisytek International Corp.*........... 6,900 212,175
Inmac Corp.*............................ 17,000 196,562
Lattice Semiconductor Corp.*............ 21,450 699,806
Maxim Integrated Products, Inc.*........ 46,800 1,801,800
SCI Systems, Inc.*...................... 14,300 443,300
Symbol Technologies, Inc.*.............. 16,600 655,700
Tech Data Corp.*........................ 43,800 657,000
Wyle Electronics........................ 7,500 263,437
Xilinx, Inc.*........................... 14,000 427,000
-----------
6,033,843
-----------
WHOLESALE MISCELLANEOUS - 2.7%
Alco Standard Corp...................... 22,000 1,003,750
Bearings, Inc........................... 9,000 263,250
Grainger (W.W.), Inc.................... 8,000 530,000
-----------
1,797,000
-----------
TOTAL WHOLESALE
& RETAIL TRADE...................... 13,185,463
-----------
TOTAL COMMON STOCK
(COST $42,128,676).................. 63,781,010
-----------
TOTAL INVESTMENTS
(COST $44,863,976)** - 100.3%................ 66,516,310
OTHER ASSETS AND LIABILITIES,
NET - (0.3)% ................................ (205,574)
-----------
NET ASSETS - 100.0%............................ $66,310,736
===========
* Non-income producing security.
** Cost for federal income tax purposes (Note 3).
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS/DECEMBER 31, 1995
(Showing Percentage of Total Value of Net Assets)
- ------------------------------------------------------------------------------
PAR VALUE
(000) (NOTE 2)
----- ----------
REPURCHASE AGREEMENTS - 20.6%
With C.S. Boston Group, Inc. at 6.00%,
dated 12/29/95, to be repurchased
at $1,485,890 on 01/02/96, collateralized
by $1,523,720 Federal Farm Credit Bank
Discount Notes with various maturities
to 05/14/96 (COST 1,484,900).......... 1,485 $1,484,900
----------
SHARES
------
COMMON STOCK - 79.4%
COMMUNICATION & BROADCASTING - 0.7%
Viacom Inc., (B Shares)*................ 1,000 47,375
----------
ELECTRIC, GAS & TELECOMMUNICATION UTILITIES - 6.5%
Coastal Corp............................ 2,500 93,125
Peco Energy Co.......................... 800 24,100
Telefonica de Espana S.A., ADR.......... 1,900 79,562
Unicom Corp............................. 1,700 55,675
Williams Cos., Inc...................... 3,800 166,725
WorldCom Inc.*.......................... 1,500 52,875
----------
472,062
----------
FINANCE, INSURANCE & REAL ESTATE - 13.9%
INSURANCE CARRIERS - 4.4%
Aflac, Inc............................ 300 13,013
American General Corp................. 1,300 45,337
American International Group, Inc..... 750 69,375
Exel Ltd.............................. 400 24,400
MGIC Investment Corp.................. 1,000 54,250
Providian Corp........................ 500 20,375
St. Paul Cos., Inc.................... 1,600 89,000
----------
315,750
----------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS - 1.1%
Mercury Finance Co.................... 2,250 29,812
Washington Federal, Inc............... 1,892 48,482
----------
78,294
----------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ ----------
STATE & NATIONAL BANKS - 8.4%
Bank of Boston Corp..................... 1,000 $ 46,250
BankAmerica Corp........................ 1,000 64,750
Capital One Financial Corp.............. 1,500 35,812
Chemical Banking Corp................... 1,000 58,750
Citicorp................................ 600 40,350
Comerica, Inc........................... 1,500 60,188
First Bank Systems, Inc................. 300 14,888
First Union Corp........................ 2,000 111,250
Keycorp................................. 2,500 90,625
MBNA Corp............................... 500 18,438
Suntrust Banks, Inc..................... 1,000 68,500
----------
609,801
----------
TOTAL FINANCE, INSURANCE
& REAL ESTATE....................... 1,003,845
----------
MANUFACTURING - 38.6%
TRANSPORTATION - 2.9%
AMR Corp.*.............................. 700 51,975
CSX Corp................................ 1,800 82,125
Illinois Central Corp................... 2,000 76,750
----------
210,850
----------
CHEMICALS & ALLIED PRODUCTS - 6.0%
Amgen, Inc.............................. 1,400 83,125
Eastman Chemical Co..................... 2,100 131,513
FMC Corp................................ 800 54,100
IMC Global Inc.......................... 900 36,788
Mallinckrodt Group, Inc................. 2,700 98,212
Praxair, Inc............................ 1,000 33,625
----------
437,363
----------
COMPUTER & OFFICE EQUIPMENT - 6.1%
Bay Networks, Inc....................... 750 30,844
Hewlett-Packard Co...................... 800 67,000
Intel Corp.............................. 800 45,400
International Business Machines Corp.... 800 73,400
LSI Logic Corp.*........................ 1,000 32,750
Microsoft Corp.*........................ 400 35,100
Paychex, Inc............................ 1,000 49,875
Xerox Corp.............................. 800 109,600
----------
443,969
----------
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ ----------
FOOD & BEVERAGE - 3.4%
CPC International....................... 500 $ 34,312
Conagra, Inc............................ 1,500 61,875
IBP, Inc................................ 500 25,250
Pepsico, Inc............................ 1,300 72,637
Sysco Corp.............................. 1,500 48,750
----------
242,824
----------
IRON & STEEL - 1.0%
British Steel plc, ADS.................. 2,700 69,188
----------
MISC. ELECTRICAL MACHINERY, EQUIP. & SUPPLIES - 3.4%
Black & Decker Corp..................... 1,000 35,250
General Electric Co..................... 1,100 79,200
Loral Corp.............................. 1,100 38,913
Raytheon Co............................. 2,000 94,500
----------
247,863
----------
MISC. INDUSTRIAL MACHINERY & EQUIP. - 0.9%
Case Corp............................... 500 22,875
Deere & Co.............................. 1,200 42,300
----------
65,175
----------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.6%
Gillette Co............................. 1,000 52,125
Premark International, Inc.............. 400 20,250
Procter & Gamble Co..................... 500 41,500
----------
113,875
----------
PAPER & PAPER PRODUCTS - 1.6%
Boise Cascade Corp...................... 1,400 48,475
Mead Corp............................... 800 41,800
Weyerhaeuser Co......................... 600 25,950
----------
116,225
----------
PHARMACEUTICAL PREPARATIONS - 3.8%
Abbott Laboratories..................... 2,000 83,500
Bristol-Myers Squibb Co................. 300 25,762
Johnson & Johnson....................... 500 42,812
Merck & Co., Inc........................ 600 39,450
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ ----------
Pfizer, Inc............................. 500 $ 31,500
Schering-Plough, Inc.................... 1,000 54,750
----------
277,774
----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 0.6%
Beckman Instruments, Inc................ 700 24,763
Nellcor Puritan Bennet, Inc.*........... 300 17,400
----------
42,163
----------
PRINTING & PUBLISHING - 0.6%
American Greetings Corp................. 1,700 46,963
----------
RUBBER & PLASTICS - 1.4%
Goodyear Tire & Rubber Co............... 2,200 99,825
----------
TELECOMMUNICATIONS EQUIPMENT - 1.1%
ADC Telecommunications, Inc............. 1,000 36,500
Adaptec, Inc............................ 1,000 41,000
----------
77,500
----------
TEXTILES & APPAREL - 0.8%
Nautica Enterprises, Inc.*.............. 450 19,688
Nine West Group, Inc.*.................. 1,000 37,500
----------
57,188
----------
TRANSPORTATION EQUIPMENT - 3.4%
AlliedSignal, Inc....................... 1,500 71,250
Echlin, Inc............................. 500 18,250
Ford Motor Co........................... 1,700 49,300
General Motors Corp. (E Shares)......... 1,000 52,000
Rockwell International Corp............. 1,000 52,875
----------
243,675
----------
TOTAL MANUFACTURING................... 2,792,420
----------
MINING - 6.9%
COAL - 0.4%
Pittston Services Group................. 900 28,238
----------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ ----------
CRUDE PETROLEUM & NATURAL GAS - 5.5%
Atlantic Richfield Co................... 300 $ 33,225
British Petroleum Co. Ltd., ADR......... 702 71,692
Chevron Corp............................ 1,000 52,500
Halliburton Co.......................... 1,000 50,625
Mobil Corp.............................. 500 56,000
Nova Corp............................... 2,300 18,400
Royal Dutch Petroleum Co................ 600 84,675
Tenneco, Inc............................ 700 34,738
----------
401,855
----------
MISCELLANEOUS METAL ORES - 1.0%
Potash Corp. of Saskatchewan, Inc....... 1,000 70,875
----------
TOTAL MINING.......................... 500,968
----------
SERVICES - 6.8%
BUSINESS SERVICES - 2.2%
CUC International, Inc.*................ 1,250 42,656
Equifax, Inc............................ 2,600 55,575
First Data Corp......................... 300 20,062
Marriott International Inc.............. 1,000 38,250
----------
156,543
----------
MEDICAL & HEALTH SERVICES - 4.1%
Columbia/HCA Healthcare Corp............ 2,784 141,288
Foundation Health Corp.................. 1,200 51,600
Phycor, Inc.*........................... 1,125 56,883
Vencor, Inc.*........................... 1,500 48,750
----------
298,521
----------
SANITARY SERVICES - 0.5%
Sanifill Inc.*.......................... 1,000 33,375
----------
TOTAL SERVICES 488,439
----------
WHOLESALE & RETAIL TRADE - 6.0%
MISCELLANEOUS RETAIL STORES - 3.0%
Eckerd Corp.*........................... 1,500 66,937
General Nutrition Cos................... 900 20,700
Price/Costco, Inc....................... 1,500 22,875
Walgreen Co............................. 2,500 74,688
Wal-Mart Stores, Inc.................... 1,500 33,562
----------
218,762
----------
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND/GROWTH AND INCOME PORTFOLIO
- ----------------------------------------------------------------
INVESTMENTS-CONTINUED
- ------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ ----------
RETAIL EATING & DRINKING PLACES - 1.3%
McDonald's Corp......................... 2,000 $ 90,250
----------
RETAIL FOOD STORES - 1.3%
Safeway Inc.*........................... 1,500 77,250
SuperValu, Inc.......................... 600 18,900
----------
96,150
----------
WHOLESALE ELECTRONIC EQUIP. & COMPUTERS - 0.4%
Arrow Electronics, Inc.*................ 700 30,187
----------
TOTAL WHOLESALE
& RETAIL TRADE...................... 435,349
----------
TOTAL COMMON STOCK
(COST $4,624,593)..................... 5,740,458
----------
TOTAL INVESTMENTS
(COST $6,109,493)** - 100.0%................. 7,225,358
OTHER ASSETS AND LIABILITIES,
NET - (0.0)% ................................ 354
----------
NET ASSETS - 100.0%............................ $7,225,712
==========
* Non-income producing security.
** Cost for federal income tax purposes was $6,116,504 (Note 3).
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1995
GROWTH GROWTH AND INCOME
PORTFOLIO PORTFOLIO
----------- -----------------
ASSETS:
Investments in securities (including
repurchase agreements of
$2,735,300 and $1,484,900,
respectively), at market
(identified cost $44,863,976
and $6,109,493, respectively) (Note 2)... $66,516,310 $7,225,358
Dividends and interest receivable.......... 48,134 9,037
Receivable for Fund shares sold............ 41,872 19,251
Other assets............................... 300 32
----------- ----------
Total assets..................... 66,606,616 7,253,678
----------- ----------
LIABILITIES:
Due to Manager (Note 4).................... 56,431 147
Payable for investments purchased.......... 179,109 -
Other accrued expenses (Note 4)............ 60,340 27,819
----------- ----------
Total liabilities................ 295,880 27,966
----------- ----------
NET ASSETS................................. $66,310,736 $7,225,712
=========== ==========
NET ASSETS CONSIST OF:
Undistributed net investment income........ $ - $ 273
Net unrealized appreciation of
investments (Note 3)..................... 21,652,334 1,115,865
Accumulated net realized gain.............. 2,733 -
Distributions in excess of net
realized gains........................... - (7,079)
Shares of beneficial interest.............. 38,079 7,633
Additional paid-in capital................. 44,617,590 6,109,020
----------- ----------
NET ASSETS, for 3,807,886 and
763,267 shares outstanding,
respectively............................. $66,310,736 $7,225,712
=========== ==========
NET ASSET VALUE and redemption
price per share ($66,310,736 / 3,807,886
and $7,225,712 / 763,267 outstanding
shares of beneficial interest,
$0.01 par value, respectively)........... $17.41 $9.47
====== =====
Maximum offering price per share
(100/96.00 of $17.41 and
100/96.00 of $9.47, respectively)........ $18.14 $9.86
====== =====
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Fiscal Year Ended December 31, 1995
GROWTH GROWTH AND INCOME
PORTFOLIO PORTFOLIO
----------- -----------------
INVESTMENT INCOME:
Income:
Dividends................................ $ 413,900 $ 106,072
Interest................................. 161,320 93,927
----------- ----------
575,220 199,999
----------- ----------
Expenses:
Management fee (Note 4).................. 640,522 69,211
Distribution expenses (Note 4)........... 18,594 5,995
Custodian fee (Note 4)................... 34,765 27,431
Transfer Agent fee (Note 4).............. 14,108 13,235
Administration fee (Note 4).............. 57,64 76,229
Accounting fee (Note 4).................. 45,000 45,000
Trustees' fees and expenses (Note 4)..... 5,398 4,950
Legal.................................... 21,465 2,407
Audit.................................... 38,574 8,837
Registration fees........................ 13,995 14,372
Miscellaneous............................ 23,204 6,189
----------- ----------
Total expenses before
reimbursement.................. 913,272 203,856
Reimbursement from Manager
(Note 4)....................... - (100,039)
----------- ----------
Total expenses, net........................ 913,272 103,817
----------- ----------
Net investment income (loss)............... (338,052) 96,182
----------- ----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment
transactions........................... 7,295,858 612,530
Net unrealized appreciation of investments
during the year........................ 8,615,648 893,146
----------- ----------
Net gain on investments.................... 15,911,506 1,505,676
----------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS.......................... $15,573,454 $1,601,858
=========== ==========
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
GROWTH GROWTH AND INCOME
PORTFOLIO PORTFOLIO
----------- -----------------
FOR THE YEAR ENDED DECEMBER 31, 1995
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)............. $ (338,052) $ 96,182
Net realized gain on investment
transactions........................... 7,295,858 612,530
Net unrealized appreciation of
investments during the year............ 8,615,648 893,146
----------- ----------
Net increase in net assets resulting
from operations........................ 15,573,454 1,601,858
----------- ----------
Distributions to shareholders from:
Net investment income ($0.00 and
$0.13 per share, respectively)......... - (96,184)
Net realized capital gains ($2.01
and $0.88 per share, respectively)..... (6,955,073) (612,961)
----------- ----------
Total distributions to shareholders...... (6,955,073) (709,145)
----------- ----------
Decrease in net assets from Fund share
transactions (Note 5).................... (7,574,816) (116,957)
----------- ----------
Increase in net assets..................... 1,043,565 775,756
NET ASSETS:
Beginning of year........................ 65,267,171 6,449,956
----------- ----------
End of year
(including undistributed net
investment income of $0 and $273,
respectively).......................... $66,310,736 $7,225,712
=========== ==========
FOR THE YEAR ENDED DECEMBER 31, 1994
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss)............. $ (115,975) $ 71,085
Net realized gain on investment
transactions........................... 4,911,108 236,741
Net unrealized depreciation
of investments during the year......... (4,935,019) (709,145)
----------- ----------
Net decrease in net assets resulting
from operations........................ (139,886) (401,319)
----------- ----------
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS-CONTINUED
GROWTH GROWTH AND INCOME
PORTFOLIO PORTFOLIO
----------- -----------------
Distributions to shareholders from:
Net investment income ($0.00 and $0.10
per share, respectively)............... $ - $ (70,810)
Net capital gain ($1.20 and $0.32
per share, respectively)............... (4,796,011) (240,067)
----------- ----------
Total distributions to shareholders...... (4,796,011) (310,877)
----------- ----------
Increase in net assets from Fund share
transactions (Note 5).................... 4,112,033 650,262
----------- ----------
Decrease in net assets..................... (823,864) (61,934)
NET ASSETS:
Beginning of year........................ 66,091,035 6,511,890
----------- ----------
End of year
(including accumulated net
investment income (loss) of
$(239,522) and $275, respectively)..... $65,267,171 $6,449,956
=========== ==========
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
The following tables include selected data for a share outstanding for each
Portfolio throughout each year and other performance information derived from
the financial statements. They should be read in conjunction with the
financial statements and notes thereto.
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
GROWTH PORTFOLIO
NET ASSET VALUE - BEGINNING OF YEAR. $15.14 $16.39 $15.56 $15.68 $11.59
------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income (loss)...... (0.10) (0.03) (0.03) 0.00 0.07
Net realized and unrealized
gain (loss)on investments....... 4.38 (0.02) 2.29 0.92 4.71
------ ------ ------ ------ ------
Total from investment
operations.................. 4.28 (0.05) 2.26 0.92 4.78
------ ------ ------ ------ ------
DISTRIBUTIONS:
From net investment income........ 0.00 0.00 0.00 0.00 (0.07)
From net realized gain on
investments..................... (2.01) (1.20) (1.43) (1.04) (0.62)
------ ------ ------ ------ ------
Total distributions........... (2.01) (1.20) (1.43) (1.04) (0.69)
------ ------ ------ ------ ------
NET ASSET VALUE - END OF YEAR....... $17.41 $15.14 $16.39 $15.56 $15.68
====== ====== ====== ====== ======
TOTAL RETURN*....................... 28.43% (0.23)% 14.57% 5.95% 41.54%
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses**...................... 1.43% 1.38% 1.42% 1.46% 1.50%
Net investment income (loss).... (0.53)% (0.17)% (0.18)% (0.03)% 0.52%
Portfolio turnover rate........... 49.12% 37.05% 44.38% 37.79% 32.63%
Net assets at end of year
(000 omitted)................... $66,311 $65,267 $66,091 $60,852 $56,648
* These results do not include the sales load. If the sales load had
been included, the returns would have been lower.
** RSMC reimbursed a portion of the Portfolio's expenses amounting to
0.04% of average daily net assets for the year ended December 31, 1991.
The annualized expense ratio, had there been no reimbursement of
expenses by RSMC, would have been 1.54%.
22
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
FINANCIAL HIGHLIGHTS-CONTINUED
- ------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
GROWTH AND INCOME PORTFOLIO
NET ASSET VALUE - BEGINNING OF YEAR.. $8.33 $9.29 $10.51 $12.09 $10.47
INVESTMENT OPERATIONS:
Net investment income.............. 0.13 0.10 0.10 0.18 0.28
Net realized and unrealized
gain (loss) on investments....... 2.02 (0.64) 1.39 0.52 2.37
------ ------------ ------ ------
Total from investment
operations................... 2.15 (0.54) 1.49 0.70 2.65
------ ------ ------ ------ ------
DISTRIBUTIONS:
From net investment income......... (0.13) (0.10) (0.10) (0.18) (0.28)
From net realized gain on
investments...................... (0.88) (0.32) (2.61) (2.10) (0.75)
------ ------ ------ ------ ------
Total distributions............ (1.01) (0.42) (2.71) (2.28) (1.03)
------ ------ ------ ------ ------
NET ASSET VALUE - END OF YEAR........ $9.47 $8.33 $9.29 $10.51 $12.09
====== ====== ====== ====== ======
TOTAL RETURN*........................ 26.03% (5.82)% 14.26% 5.90% 25.74%
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses**....................... 1.50% 1.50% 1.50% 1.50% 1.50%
Net investment income............ 1.39% 1.12% 0.80% 1.37% 2.12%
Portfolio turnover rate............ 83.49% 106.26% 68.49% 76.63% 133.02%
Net assets at end of year
(000 omitted).................... $7,226 $6,450 $6,512 $10,147 $15,432
* These results do not include the sales load. If the sales load had
been included, the returns would have been lower.
** RSMC reimbursed a portion of the Portfolio's expenses amounting to
1.45%, 1.54%, 1.35%, 0.93% and 0.79% for the five years in the period
ended December 31, 1995, respectively. The annualized expense ratio,
had there been no reimbursement of expenses by RSMC, would have been
2.95%, 3.04%, 2.85%, 2.43%, and 2.29%, respectively.
23
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND. The Rodney Square Multi-Manager Fund (the
"Fund") is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a diversified, open-end management
investment company established as a Massachusetts business trust. The
Declaration of Trust, dated August 19, 1986, as last amended on February
15, 1993, permits the Board of Trustees to establish separate series each
of which issues a separate class of shares. The authorized shares of
beneficial interest in the Fund are currently divided into two series,
the Growth Portfolio and the Growth and Income Portfolio (each, a
"Portfolio" and collectively, the "Portfolios"). The investment
objective of the Growth Portfolio is to produce superior long-term
capital appreciation by investing in securities of companies which are
judged by its portfolio advisers to possess strong growth
characteristics. The investment objective of the Growth and Income
Portfolio is to produce superior long-term total return through a
combination of capital appreciation and income by investing in securities
with attractive growth or valuation characteristics or relatively high
income yields.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies of the Fund:
SECURITY VALUATION. Each Portfolio's securities, except short-term
investments with remaining maturities of 60 days or less, are valued at
their market value as determined by their last sale price in the
principal market in which these securities are normally traded. Lacking
any sales, such securities will be valued at the mean between the closing
bid and ask price. Short-term investments with remaining maturities of
60 days or less are valued at amortized cost, which approximates market
value, unless the Fund's Board of Trustees determines that this does not
represent fair value. The value of all other securities is determined in
good faith under the direction of the Board of Trustees.
REPURCHASE AGREEMENTS. The Portfolios, through their custodian, receive
delivery of the underlying securities, the market value of which at the
time of purchase is required to be an amount equal to at least 101% of
the resale price. Rodney Square Management Corporation ("RSMC") is
responsible for determining that the value of these underlying securities
is at all times equal to 101% of the resale price.
FEDERAL INCOME TAXES. Each Portfolio is treated as a separate entity and
intends to continue to qualify for treatment as a "regulated investment
company" under Subchapter M of the Internal Revenue Code of 1986 and to
distribute all of its taxable income to its shareholders. Therefore, no
federal income tax provision is required. The Growth Portfolio
reclassified $(577,574) and $558,143 from accumulated net investment loss
and accumulated net realized gain, repectively, to additional paid-in
capital. These reclassifications were made to present undistributed
income and accumulated gains on a tax basis and have no impact on the net
asset value of the Portfolio. Certain temporary book/tax timing
differences are reflected as "distributions in excess of net realized
gains" in the Statement of Assets and Liabilities.
24
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
NOTES TO THE FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS. Distributions of net investment income
earned by the Growth Portfolio will be made annually in December.
Distributions of net investment income earned by the Growth and Income
Portfolio will be made quarterly in March, June, September and December.
Distributions of net capital gains realized by each Portfolio will be
made annually in December. An additional distribution may be made to the
extent necessary to avoid the payment of a 4% excise tax.
OTHER. Investment security transactions are accounted for on a trade
date basis. Each Portfolio uses the specific identification method for
determining realized gain or loss on investments for both financial and
federal income tax reporting purposes.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES. During the year ended
December 31, 1995, purchases and sales of investment securities
(excluding short-term investments) aggregated as follows:
GROWTH AND
GROWTH PORTFOLIO INCOME PORTFOLIO
---------------- ----------------
Purchases....... $30,253,215 $4,473,251
Sales........... 43,533,448 5,007,247
The following balances are as of December 31, 1995:
TAX BASIS TAX BASIS
COST FOR NET TAX BASIS GROSS GROSS
FEDERAL INCOME UNREALIZED UNREALIZED UNREALIZED
PORTFOLIO TAX PURPOSES APPRECIATION APPRECIATION DEPRECIATION
------------ -------------- ------------- ------------ ------------
Growth......... $44,863,976 $21,652,334 $23,148,441 $(1,496,107)
Growth
and Income... 6,116,504 1,108,854 1,150,490 (41,636)
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES. The Fund, on
behalf of each Portfolio, employs RSMC, a wholly owned subsidiary of
Wilmington Trust Company ("WTC"), which in turn is wholly owned by
Wilmington Trust Corporation, a publicly held bank holding company, to
provide asset management, consulting services and other services to the
Fund. Each Portfolio's assets are managed by portfolio advisers who have
entered into advisory agreements with RSMC and the Fund. It is
anticipated that each Portfolio will ordinarily be served by at least two
portfolio advisers. RSMC, as well as each portfolio adviser, is
considered an "investment adviser" to the applicable Portfolio as that
term is defined in the 1940 Act.
For management services to the Fund, RSMC receives an annual fee equal to
1.00% of the average daily net assets of each Portfolio up to $200
million of Fund assets and 0.95% of the average daily net assets in
excess of $200 million. RSMC has agreed to waive its fees or reimburse
each Portfolio monthly to the extent that operating expenses (excluding
taxes, extraordinary expenses, brokerage commissions and interest) exceed
an annual rate of 1.50% of average daily net assets.
25
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
NOTES TO THE FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
The following table summarizes the management fees for the year ended
December 31, 1995:
GROSS
MANAGEMENT REIMBURSEMENT
PORTFOLIO FEE FROM MANAGER
-------------------- ---------- -------------
Growth................ $640,522 $ -
Growth and Income..... 69,211 100,039
RSMC serves as Administrator to the Fund under an Administration
Agreement dated December 31, 1992. Pursuant to this agreement, RSMC is
responsible for services such as budgeting, maintaining federal and state
registration for the Fund's shares, financial reporting, compliance
monitoring and corporate management. For the services provided, RSMC
receives a monthly administration fee from the Fund at an annual rate of
0.09% of each Portfolio's average daily net assets. The administration
fee paid to RSMC for the year ended December 31, 1995 amounted to $57,647
and $6,229 for the Growth Portfolio and the Growth and Income Portfolio,
respectively.
WTC serves as Custodian of the assets of the Fund. For its services, WTC
is paid an annual fee based upon the average daily net assets of each
Portfolio as follows: 0.025% of average daily net assets of each
Portfolio up to $50 million; 0.020% of average daily net assets of each
Portfolio in excess of $50 million up to $100 million and 0.015% of
average daily net assets of each Portfolio over $100 million, plus $15
per purchase, sale or maturity of a portfolio security. The custodian
fee is subject to a minimum charge of $1,000 per Portfolio, per month,
exclusive of any transaction charges.
RSMC serves as Transfer and Dividend Paying Agent for the Fund pursuant
to a Transfer Agent Agreement with the Fund dated December 31, 1992. For
its services, the Fund pays RSMC $7 per shareholder account per year,
plus various other transaction fees, subject to a minimum of $1,000 per
month, plus out-of-pocket expenses.
Pursuant to a Distribution Agreement with the Fund dated December 31,
1992, Rodney Square Distributors, Inc. ("RSD"), a wholly owned subsidiary
of WTC, manages the Fund's distribution efforts and provides assistance
and expertise in developing marketing plans and materials. The Fund's
Board of Trustees has adopted, and the Fund's shareholders have approved,
a distribution plan with respect to each Portfolio pursuant to Rule 12b-1
under the 1940 Act to allow the Fund to reimburse RSD for certain
distribution activities and to allow WTC to incur certain expenses, the
payment of which may be considered to constitute indirect payment by the
Fund of distribution expenses. The Board of Trustees has authorized
annual payments of up to 0.25% of each Portfolio's average daily net
assets to reimburse RSD for such expenses. For the year ended December
31, 1995, such expenses amounted to $18,594 and $5,995 for the Growth
Portfolio and the Growth and Income Portfolio, respectively.
26
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
NOTES TO THE FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
RSMC determines the net asset value per share of each Portfolio and
provides accounting services to the Fund pursuant to an Accounting
Services Agreement with the Fund on behalf of each Portfolio. For its
services, RSMC receives an annual fee of $45,000 per Portfolio plus an
amount equal to 0.02% of that portion of each Portfolio's average daily
net assets in excess of $100 million. For the year ended December 31,
1995, RSMC's fees for accounting services amounted to $45,000 per
Portfolio.
The salaries of all officers of the Fund, the Trustees who are
"interested persons" of the Fund, RSMC, RSD, or their affiliates and all
personnel of the Fund, RSMC or RSD performing services related to
research, statistical and investment activities are paid by RSMC, RSD or
their affiliates. For the year ended December 31, 1995 the fees and
expenses of the "non-interested" Trustees amounted to $5,398 and $4,950
for the Growth Portfolio and the Growth and Income Portfolio,
repectively.
5. FUND SHARES. At December 31, 1995, there was an unlimited number of
shares of beneficial interest, $0.01 par value, authorized. The
following table summarizes the activity in shares of each Portfolio:
GROWTH PORTFOLIO
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- --------- --------- ----------
Shares sold............ 388,740 $ 7,028,995 323,662 $5,252,086
Shares issued
to shareholders
in reinvestment
of dividends......... 349,493 6,021,765 303,972 4,553,501
Shares redeemed........(1,240,767) (20,625,576) (350,492) (5,693,554)
---------- ----------- --------- ----------
Net increase
(decrease)........... (502,534) $(7,574,816) 277,142 $4,112,033
=========== ==========
Shares outstanding:
Beginning of year...... 4,310,420 4,033,278
---------- ---------
End of year............ 3,807,886 4,310,420
========== =========
27
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
NOTES TO THE FINANCIAL STATEMENTS-CONTINUED
- ------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO
FOR THE YEAR ENDED FOR THE YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
---------- --------- --------- ----------
Shares sold.......... 121,230 $1,137,365 236,338 $2,127,357
Shares issued
to shareholders
in reinvestment
of dividends....... 72,293 681,872 34,067 285,058
Shares redeemed...... (204,858) (1,936,194) (196,585) (1,762,153)
-------- ---------- -------- ----------
Net increase
(decrease).......... (11,335) $ (116,957) 73,820 $ 650,262
========== ==========
Shares outstanding:
Beginning of year.... 774,602 700,782
-------- --------
End of year.......... 763,267 774,602
======== ========
28
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
REPORT OF INDEPENDENT AUDITORS
- ------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Trustees of The Rodney Square Multi-Manager Fund:
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of The Rodney Square Multi-Manager
Fund (comprising, respectively, the Growth and Growth and Income Portfolios)
as of December 31, 1995, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years
in the period then ended, and financial highlights for each of the five years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1995 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting The Rodney Square Multi-Manager Fund
at December 31, 1995, the results of their operations for the year then ended,
the changes in their net assets for each of the two years in the period then
ended, and financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Baltimore, Maryland
January 24, 1996
29
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND
- ------------------------------------
TAX INFORMATION
- ------------------------------------------------------------------------------
By now shareholders to whom year-end tax reporting is required by the IRS
should have received their Form 1099-DIV from the Fund.
The Growth and the Growth and Income Portfolios paid distributions of $2.0065
and $0.5930, respectively, from net long-term capital gains during the year
ended December 31, 1995. Pursuant to Section 852 of the Internal Revenue
Code, the Growth and the Growth and Income Portfolios designate $6,933,993 and
$411,742, respectively, as capital gain distributions for the fiscal year
ended December 31, 1995.
30
<PAGE>
TRUSTEES THE RODNEY SQUARE
Eric Brucker MULTI-MANAGER FUND
Fred L. Buckner
Martin L. Klopping
John J. Quindlen
------------------
OFFICERS
Martin L. Klopping, PRESIDENT
Joseph M. Fahey, Jr., VICE PRESIDENT
Robert C. Hancock, VICE PRESIDENT & TREASURER
Marilyn Talman, Esq., SECRETARY
Diane D. Marky, ASSISTANT SECRETARY
Connie L. Meyers, ASSISTANT SECRETARY
Louis C. Schwartz, Esq., ASSISTANT SECRETARY
John J. Kelley, ASSISTANT TREASURER
- ---------------------------------------------
[Graphic] Ceasar
Rodney upon his
FUND MANAGER, ADMINISTRATOR AND galloping horse
TRANSFER AGENT facing right,
Rodney Square Management Corporation reverse image on
------------------------------------ dark background
CUSTODIAN
Wilmington Trust Company
------------------------
DISTRIBUTOR
Rodney Square Distributors, Inc.
--------------------------------
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
--------------------------
ANNUAL REPORT
DECEMBER 31, 1995
INDEPENDENT AUDITORS
Ernst & Young LLP
---------------------
THIS REPORT IS SUBMITTED FOR THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND.
THE REPORT IS NOT AUTHORIZED FOR DISTRIBUTION
TO PROSPECTIVE INVESTORS IN THE FUND UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE
PROSPECTUS.
RS04 - 2/96
