THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
PRESIDENT'S MESSAGE
- ------------------------------------------------------------------------
DEAR SHAREHOLDER:
The management of Rodney Square Multi-Manager Fund (the "Fund") would
like to report to you on the Fund's activity and results for the first
half of 1996.
PERFORMANCE REVIEW*
The first half of 1996 produced excellent returns for the Growth
Portfolio's (the "Portfolio") shareholders. The total return numbers
presented below represent changes in market value, plus any income or
capital gains distributed during the period, assuming distributions have
been reinvested, and do not reflect a sales load.
TOTAL RETURN
NET ASSET VALUE CAPITAL GAINS & NET ASSET VALUE 12/31/95-06/30/96
AS OF 12/31/95 INCOME DISTRIBUTED AS OF 06/30/96 (NON-ANNUALIZED)
- --------------- ------------------ --------------- -----------------
$17.41 $0.00 $19.55 12.29%
The effects of moderate inflation, relatively low interest rates and
mutual fund inflows continued to boost the U.S. Equity market for the
first half of 1996. The Standard & Poor's 500 Composite Stock Price
Index ("S&P 500"), an unmanaged, capitalization weighted index of five
hundred publicly traded stocks of companies based in the U.S., returned
10.1% for the first six months of 1996. The Russell 2000 Index
("Russell 2000") returned 10.4% for the same period. The Russell 2000
is comprised of stocks of the smallest 2,000 of the largest 3,000 U.S.
companies based on market capitalization. Among mutual funds with
similar strategies, the Growth Portfolio was up 12.3% versus 10.1% for
Lipper Analytical Services' ("Lipper") growth funds average for the same
period.
The three factors that have driven financial markets since the
beginning of 1995 remained in place during the first half of 1996.
Investors continued to place money into the equity markets using mutual
funds, at a record pace. In fact, more money went into stock mutual
funds during the first 6 months of this year than in any other previous
year. Inflation remained relatively benign despite higher than expected
job growth reports and increases in some commodity prices, especially in
food. Finally, interest rates remained relatively low, though they
approached the psychologically important 7% level during the quarter.
- --------------
* 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 PORTFOLIO 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 RETURN DOES
NOT RELFECT 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 PAGE 10.
1
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
PRESIDENT'S MESSAGE - CONTINUED
- ------------------------------------------------------------------------
These factors combined to lift the broader domestic equity markets to
new records during the 2nd quarter. However, market leadership changed
late during the quarter as excess capacity, high inventory levels and
downward earnings revisions caused investors to shift from technology
and basic industry stocks to more economically defensive issues. In
fact, the Lipper science and technology funds average returned only 7.9%
for the first six months of the year, versus 10.8% for the Lipper
general equity funds average.
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
THE GROWTH PORTFOLIO
The Portfolio achieved excellent results with large positions in
technology stocks. This occurred despite a market sell off in that
sector toward the end of the second quarter. William Blair & Co.'s
("Blair") technology holdings were oriented toward information service
and warehousing companies like Automatic Data Processing, Inc. and
First Data Corporation. Blair's financial sector holdings, like State
Street Boston Corporation and Household International , Inc., benefited
from positive equity and fixed income market conditions. Frontier
Capital Management Company ("Frontier") maintained its large position in
technology stocks throughout the first half of 1996 and ended the second
quarter with 42.2% in that sector. Frontier has benefited from its
large weighting in technology stocks since the beginning of 1995.
Frontier took advantage of the move toward more defensive sectors during
the year, holding positions in retail and apparel stocks like Just for
Feet, Incorporated, and drug and hospital stocks like Cardinal Health,
which has benefited from the cost reduction theme in that sector.
GROWTH AND INCOME PORTFOLIO
On May 20, 1996, the Board of Trustees of the Rodney Square Multi-
Manager Fund voted to liquidate the Growth and Income Portfolio. The
Growth and Income Portfolio made a liquidating cash distribution of the
net assets, at the time of the liquidation, on June 21, 1996.
SUMMARY
The first six months of 1996 have shown investors that above average
returns often come with above average volatility. The multi-manager
format of the Portfolio allows investors to take advantage of that
volatility through investment in both large and small capitalization
stocks and through different management styles. Looking forward to the
rest of 1996, we are confident that the strategy will deliver superior
performance for investors. In its role as fund manager, Rodney Square
Management Corporation will continue to review and evaluate the
individual sub-advisers in an effort to deliver consistent, above
average performance to shareholders.
2
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
PRESIDENT'S MESSAGE - CONTINUED
- ------------------------------------------------------------------------
The Portfolio's ten largest holdings on June 30, 1996 are listed below:
GROWTH PORTFOLIO
(top ten as a % of total assets: 21.0%)
-------------------------------------------
First Data Corporation
Household International, Inc.
Automatic Data Processing, Inc.
State Street Boston Corporation
Home Depot, Inc.
Molex Inc.
MBNA Corporation
Microsoft Corporation
Analog Devices, Inc.
M.A. Hanna Company
We invite your questions and comments, and 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
August 20, 1996
3
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS/JUNE 30, 1996 (UNAUDITED)
(Showing Percentage of Total Value of Net Assets)
- -------------------------------------------------------------------------
PAR VALUE
(000) (NOTE 2)
----- --------
REPURCHASE AGREEMENT - 3.2%
With C.S. First Boston Group, Inc. at
5.60%, dated 06/28/96, to be
repurchased at $2,277,863 on 07/01/96
collateralized by a Federal Home Loan
Mortgage Corporation Security with a
maturity of 02/07/97 (market value
$2,337,478)
(COST $2,276,800)....................... $ 2,277 $ 2,276,800
-------------
SHARES
------
COMMON STOCK - 97.7%
COMMUNICATIONS & BROADCASTING - 1.2%
Airtouch Communications, Inc.*.......... 18,000 508,500
SFX Broadcasting, Inc. (A Shares)*...... 3,700 144,300
Transaction Network Services, Inc.*..... 9,450 203,175
-------------
855,975
-------------
FINANCE, INSURANCE & REAL ESTATE - 9.8%
INSURANCE CARRIERS - 0.5%
Meadowbrook Insurance Group, Inc.*...... 6,000 184,500
RenaissanceRe Holdings Ltd.*............ 6,500 199,875
-------------
384,375
-------------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS - 2.7%
Household International, Inc............ 25,000 1,900,000
-------------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES - 2.4%
Alex Brown, Inc......................... 12,700 717,550
Raymond James Financial, Inc............ 42,193 954,617
-------------
1,672,167
-------------
STATE & NATIONAL BANKS - 4.2%
MBNA Corp............................... 45,000 1,282,500
State Street Boston Corp................ 34,000 1,734,000
-------------
3,016,500
-------------
TOTAL FINANCE, INSURANCE
& REAL ESTATE.................................... 6,973,042
-------------
MANUFACTURING - 38.6%
CHEMICALS & ALLIED PRODUCTS - 2.9%
Airgas, Inc.*........................... 30,000 570,000
Cambrex Corp............................ 7,000 357,875
Hanna (M.A.) Co......................... 54,000 1,127,250
-------------
2,055,125
-------------
COMPUTER & OFFICE EQUIPMENT - 5.4%
Black Box Corp.*........................ 20,000 475,000
Data General Corp.*..................... 23,000 299,000
VALUE
SHARES (NOTE 2)
------ --------
Digital Link Corp....................... 5,500 $ 93,500
HPR Inc.*............................... 8,000 170,000
Hyperion Software Corp.*................ 13,400 165,825
Intel Corp.............................. 12,000 881,250
Linear Technology Corp.................. 10,000 300,000
Microsoft Corp.*........................ 10,000 1,201,250
Microcom, Inc.*......................... 5,600 70,700
3D Systems Corp.*....................... 6,600 145,200
Xcellenet, Inc.*........................ 4,700 50,525
-------------
3,852,250
-------------
ELECTRICAL MEASUREMENT & TEST INSTRUMENTS - 0.5%
GenRad, Inc.*........................... 23,000 379,500
-------------
FOOD & BEVERAGE - 0.3%
Smithfield Foods, Inc.*................. 8,100 204,525
-------------
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT
& SUPPLIES - 6.7%
Anadigics, Inc.*........................ 5,800 168,925
Berg Electronics Corp................... 5,300 125,875
Windmere Corp. Warrants, Expire
1/19/98, Exercise Price $7.50......... 131 737
Genlyte Group, Inc.*.................... 14,600 113,150
Lattice Semiconductor Corp.*............ 15,150 365,494
Maxim Integrated Products, Inc.*........ 24,000 655,500
Microchip Technology, Inc.*............. 11,500 284,625
Molex, Inc.............................. 45,000 1,321,875
Solectron Corp.......................... 8,000 303,000
Symbol Technologies, Inc.*.............. 16,600 738,700
Xilinx, Inc.*........................... 21,000 666,750
-------------
4,744,631
-------------
MISCELLANEOUS INDUSTRIAL MACHINERY & EQUIPMENT - 4.3%
Augat, Inc.............................. 24,200 462,825
Camco International, Inc................ 8,800 298,100
Harman International Industries, Inc.... 18,900 930,825
Illinois Tool Works, Inc................ 11,000 743,875
Tower Automotive, Inc.*................. 7,900 193,550
Varco International, Inc.*.............. 18,700 338,937
-------------
2,968,112
-------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.2%
Cavalier Homes, Inc..................... 8,437 195,106
Continental Homes Holding Corp.......... 7,600 163,400
Pittway Corp. (A Shares)................ 8,400 390,600
Toll Brothers........................... 900 14,737
Whittaker Corp.*........................ 5,100 94,350
-------------
858,193
-------------
The accompanying notes are an integral part of the financial statements.
4
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS (UNAUDITED)-- CONTINUED
- -------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ --------
NONFERROUS METALS - 0.4%
Oregon Metallurgical Corp............... 9,900 $ 292,050
-------------
PHARMACEUTICAL PREPARATIONS - 5.1%
Abbott Laboratories..................... 19,000 826,500
Alpharma, Inc. (A Shares)............... 12,800 254,400
Anika Research, Inc.*................... 4,140 25,357
Elan Corp. plc, ADR*.................... 18,000 1,028,250
R.P. Scherer Corp.*..................... 21,100 957,413
Smithkline Beecham plc ADR.............. 10,000 543,750
-------------
3,635,670
-------------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 4.6%
Advanced Technology Laboratories,
Inc.*................................. 17,800 649,700
Cognex Corp.*........................... 15,000 241,875
Fisher Scientific International......... 8,200 307,500
Gelman Sciences, Inc.*.................. 5,500 124,437
Haemonetics Corp.*...................... 38,400 700,800
Kensey Nash Corp.*...................... 5,100 68,213
Nellcor Puritan Bennet, Inc.*........... 12,000 582,000
Research Medical, Inc................... 5,800 128,325
Respironics, Inc.*...................... 5,400 99,900
Spacelabs Medical, Inc.*................ 14,000 325,500
-------------
3,228,250
-------------
PRINTING & PUBLISHING - 1.2%
Applied Graphics Technology Inc......... 4,900 77,788
International Imaging Materials,
Inc.*................................. 8,200 194,750
Wallace Computer Services, Inc.......... 10,000 597,500
-------------
870,038
-------------
TELECOMMUNICATIONS EQUIPMENT - 4.0%
Analog Devices, Inc.*................... 46,825 1,194,038
Digital Microwave Corp.................. 12,300 204,488
Microwave Power Devices, Inc.*.......... 12,300 73,800
Network Equipment Technologies, Inc.*... 19,500 414,375
Oak Industries, Inc.*................... 7,300 216,263
Ortel Corporation....................... 5,000 122,500
Summa Four, Inc......................... 5,100 70,761
TSX Corp.*.............................. 4,600 127,650
Westell Technologies, Inc.*............. 11,200 439,600
-------------
2,863,475
-------------
TEXTILES & APPAREL - 1.4%
Cintas Corp............................. 12,000 642,000
Donna Karan International Inc........... 4,700 131,600
Donnkenny, Inc.......................... 11,500 224,250
-------------
997,850
-------------
VALUE
SHARES (NOTE 2)
------ --------
TRANSPORTATION EQUIPMENT - 0.6%
OEA, Inc................................ 11,000 $ 412,500
-------------
TOTAL MANUFACTURING............................... 27,362,169
-------------
MINING - 3.2%
CRUDE PETROLEUM & NATURAL GAS - 1.7%
BJ Services Co.......................... 6,200 217,775
Belco Oil & Gas Corp.................... 10,600 376,300
Devon Energy Corp....................... 12,900 316,050
Pogo Producing Co....................... 8,700 331,687
-------------
1,241,812
-------------
MISCELLANEOUS METAL ORES - 1.5%
Minerals Technologies Inc............... 30,000 1,027,500
-------------
TOTAL MINING...................................... 2,269,312
-------------
SERVICES - 27.2%
BUSINESS SERVICES - 9.9%
Automatic Data Processing, Inc.......... 48,000 1,854,000
CDI Corporation......................... 7,100 239,625
CUC International, Inc.*................ 14,000 497,000
F.Y.I. Inc.............................. 6,100 112,850
First Data Corp......................... 25,000 1,990,625
ICT Group, Inc.......................... 4,000 77,000
Norrell Corp............................ 7,300 358,612
The Olsten Corp......................... 15,000 440,625
PMT Services, Inc.*..................... 20,100 575,363
Protection One, Inc..................... 10,800 176,850
Reuters Holding plc, ADR................ 10,000 725,000
-------------
7,047,550
-------------
COMPUTER SERVICES - 11.0%
Acxiom Corp.*........................... 25,100 856,537
American Management Systems, Inc.*...... 15,000 438,750
BDM International Inc................... 3,700 172,050
Boole & Babbage, Inc.*.................. 9,900 237,600
Broadway & Seymour, Inc.*............... 9,000 108,000
Ceridian Corp.*......................... 14,700 742,350
Computer Task Group, Inc................ 8,900 251,425
Decisionone Holdings Corp............... 6,600 156,750
Factset Research Systems Inc............ 700 14,000
Fiserv, Inc.*........................... 22,412 672,360
Gensym Corporation...................... 6,000 132,000
Information Resources, Inc.............. 31 380
Intuit Incorporated..................... 8,000 378,000
MDL Information Systems, Inc.*.......... 10,200 303,450
Marcam Corp.*........................... 16,000 192,000
Parcplace Digitalk Inc.................. 9,100 83,037
The Peak Technologies Group............. 4,200 98,175
Project Software & Dev., Inc............ 4,600 215,625
The accompanying notes are an integral part of the financial statements.
5
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS (UNAUDITED)-- CONTINUED
- -------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ --------
RTW Incorporated........................ 7,050 $ 222,075
SCI Systems, Inc.*...................... 14,300 580,937
Shared Medical Systems Corp............. 10,000 642,500
State of the Art, Inc.*................. 10,700 197,950
Sungard Data Systems, Inc.*............. 23,800 954,975
Telxon Corp............................. 11,100 130,425
-------------
7,781,351
-------------
MEDICAL & HEALTH SERVICES - 4.7%
American Medical Response, Inc.*........ 6,100 215,025
Conmed Corporation...................... 4,500 119,812
Corvel Corp............................. 5,300 189,475
Healthsouth Corp.*...................... 25,000 900,000
Interim Services Inc.*.................. 22,000 946,000
Ornda Healthcorp*....................... 13,600 326,400
Owen Healthcare, Inc.*.................. 7,600 105,450
Pharmaceutical Product Development,
Inc.................................. 3,600 120,600
Total Renal Care Holdings, Inc.*........ 7,000 295,750
Veterinary Centers of America, Inc.*.... 5,800 129,776
-------------
3,348,288
PERSONAL SERVICES - 0.6%
Stewart Enterprises, Inc. (A Shares).... 14,550 454,688
-------------
SANITARY SERVICES - 1.0%
Allied Waste Industries, Inc............ 28,400 252,050
United Waste Systems, Inc.*............. 14,200 457,950
-------------
710,000
-------------
TOTAL SERVICES.................................... 19,341,877
-------------
TRANSPORTATION - 1.5%
Air Express International Corp.......... 29,925 845,381
Sea Containers, Ltd. (A Shares)........ 11,300 214,700
-------------
1,060,081
-------------
UTILITIES - 0.2%
ELECTRIC, GAS & WATER UTILITIES - 0.2%
Southwestern Energy Co.................. 8,000 113,000
-------------
WHOLESALE & RETAIL TRADE - 16.0%
MISCELLANEOUS RETAIL STORES - 5.8%
Autozone Inc............................ 10,000 347,500
Barnes & Noble Inc.*.................... 12,000 430,500
Best Buy Co., Inc.*..................... 19,400 443,775
Just For Feet, Inc.*.................... 7,575 400,528
Office Depot Inc........................ 40,000 815,000
Sports & Recreation, Inc.*.............. 27,750 253,219
VALUE
SHARES (NOTE 2)
------ --------
Wal-Mart Stores, Inc.................... 35,000 $ 888,125
Walgreen Co............................. 16,000 536,000
-------------
4,114,647
-------------
RETAIL BUILDING MATERIALS - 2.1%
Home Depot, Inc......................... 28,000 1,512,000
-------------
RETAIL EATING & DRINKING PLACES - 0.8%
Applebee's International, Inc. (Preferred
rights attached.).................... 17,000 546,125
-------------
RETAIL FURNITURE & APPLIANCE STORES - 0.6%
Williams-Sonoma, Inc.*.................. 17,900 422,888
-------------
WHOLESALE CHEMICALS & DRUGS - 1.7%
Amerisource Health Corp. (A Shares)*.... 6,900 229,425
Cardinal Health, Inc.................... 12,616 909,929
Chirex Inc.............................. 7,100 81,650
-------------
1,221,004
-------------
WHOLESALE ELECTRONIC EQUIPMENT & COMPUTERS - 3.6%
Allen Group Inc......................... 14,700 319,725
Arrow Electronics, Inc.*................ 11,000 474,375
Daisytek International Corp.*........... 8,200 344,400
Hughes Supply Inc....................... 5,300 184,175
Tech Data Corp.*........................ 43,800 952,650
Wyle Electronics........................ 7,500 248,437
-------------
2,523,762
-------------
WHOLESALE MISCELLANEOUS - 1.4%
Alco Standard Corp...................... 17,000 769,250
Bearings, Inc........................... 9,000 243,000
-------------
1,012,250
-------------
TOTAL WHOLESALE & RETAIL TRADE.................... 11,352,676
-------------
TOTAL COMMON STOCK
(COST $43,863,792)............................... 69,328,132
-------------
TOTAL INVESTMENTS (COST $46,140,592)+ - 100.9%......... 71,604,932
-------------
OTHER ASSETS AND LIABILITIES, NET - (0.9)%............. (626,679)
-------------
NET ASSETS - 100.0%.................................... $ 70,978,253
-------------
* Non-income producing security.
+ Cost for federal income tax purposes (Note 3).
The accompanying notes are an integral part of the financial statements.
6
THE RODNEY SQUARE MULTI-MANAGER - THE GROWTH PORTFOLIO
- ------------------------------------------------------
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
Assets:
Investments in securities (including
repurchase agreement of $2,276,800),
at market (identified cost $46,140,592)
(Note 2)....................................... $71,604,932
Cash............................................ 90
Dividends and interest receivable............... 44,385
Receivable for investment securities sold....... 23,417
Receivable for Fund shares sold................. 32,644
Other assets.................................... 1,877
-----------
Total assets................................... 71,707,345
-----------
Liabilities:
Due to Manager (Note 4)......................... $ 59,035
Payable for investment securities purchased..... 630,224
Payable for Fund shares redeemed................ 15,973
Other accrued expenses (Note 4)................. 23,860
----------
Total liabilities.............................. 729,092
-----------
Net Assets...................................... $70,978,253
===========
Net Assets consist of:
Shares of beneficial interest................... $ 36,307
Additional paid-in capital...................... 41,361,266
Accumulated net investment loss................. (237,700)
Accumulated net realized gain................... 4,354,040
Net unrealized appreciation of
investments (Note 3).......................... 25,464,340
-----------
Net Assets, for 3,630,670 shares
outstanding................................... $70,978,253
===========
Net Asset Value and redemption price
per share ($70,978,253/3,630,670
outstanding shares of beneficial
interest, $0.01 par value).................... $19.55
======
Maximum offering price per share
(100/96.00 of $19.55)......................... $20.36
======
The accompanying notes are an integral part of the financial statements.
7
THE RODNEY SQUARE MULTI-MANAGER - THE GROWTH PORTFOLIO
- ------------------------------------------------------
FINANCIAL STATEMENTS - CONTINUED
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six-Month Period Ended June 30, 1996 (Unaudited)
INVESTMENT INCOME:
Dividends...................................... $ 199,446
Interest....................................... 40,637
-----------
240,083
-----------
EXPENSES:
Management fee (Note 4)........................ $ 344,068
Distribution expenses (Note 4)................. 7,916
Custodian fee (Note 4)......................... 17,325
Transfer Agent fee (Note 4).................... 7,112
Administration fee (Note 4).................... 30,966
Accounting fee (Note 4)........................ 22,377
Trustees' fees and expenses (Note 4)........... 2,536
Legal.......................................... 9,933
Audit.......................................... 18,579
Registration fees.............................. 5,958
Miscellaneous.................................. 11,013
----------
Total expenses............................... 477,783
-----------
Net investment loss............................. (237,700)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment
transactions................................ 4,351,307
Net unrealized appreciation of
investments during the period............... 3,812,006
-----------
Net gain on investments........................ 8,163,313
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS............................... $ 7,925,613
===========
The accompanying notes are an integral part of the financial statements.
8
THE RODNEY SQUARE MULTI-MANAGER - THE GROWTH PORTFOLIO
- ------------------------------------------------------
FINANCIAL STATEMENTS - CONTINUED
- ------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996 (UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss............................ $ (237,700)
Net realized gain on investment
transactions................................. 4,351,307
Net unrealized appreciation of
investments during the period................ 3,812,006
-----------
Net increase in net assets
resulting from operations.................... 7,925,613
-----------
Decrease in net assets from Fund
share transactions (Note 5)................... (3,258,096)
-----------
Increase in net assets.......................... 4,667,517
NET ASSETS:
Beginning of period............................ 66,310,736
-----------
End of period.................................. $70,978,253
===========
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss............................ $ (338,052)
Net realized gain on investment
transactions................................. 7,295,858
Net unrealized appreciation of
investments during the year.................. 8,615,648
-----------
Net increase in net assets
resulting from operations.................... 15,573,454
-----------
Distributions to shareholders from:
Net capital gain ($2.01 per share)............. (6,955,073)
-----------
Decrease in net assets from Fund
share transactions (Note 5)................... (7,574,816)
-----------
Increase in net assets.......................... 1,043,565
NET ASSETS:
Beginning of year.............................. 65,267,171
-----------
End of year.................................... $66,310,736
===========
The accompanying notes are an integral part of the financial statements.
9
THE RODNEY SQUARE MULTI-MANAGER - THE GROWTH PORTFOLIO
- ------------------------------------------------------
FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------------
The following table includes selected data for a share outstanding
throughout each period and other performance information derived from
the financial statements. It should be read in conjunction with the
financial statements and notes thereto.
<TABLE>
<CAPTION>
FOR THE SIX-MONTH FOR THE YEARS ENDED DECEMBER 31,
PERIOD ENDED -------------------------------------------------
JUNE 30, 1996+ 1995 1994 1993 1992 1991
---------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE - BEGINNING OF PERIOD..... $17.41 $15.14 $16.39 $15.56 $15.68 $11.59
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income (loss)............. (0.07) (0.10) (0.03) (0.03) 0.00 0.07
Net realized and unrealized gain
(loss) on investments................... 2.21 4.38 (0.02) 2.29 0.92 4.71
------ ------ ------ ------ ------ ------
Total from investment operations...... 2.14 4.28 (0.05) 2.26 0.92 4.78
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
From net investment income............... 0.00 0.00 0.00 0.00 0.00 (0.07)
From net realized gain on investments.... 0.00 (2.01) (1.20) (1.43) (1.04) (0.62)
------ ------ ------ ------ ------ ------
Total distributions................ 0.00 (2.01) (1.20) (1.43) (1.04) (0.69)
------ ------ ------ ------ ------ ------
NET ASSET VALUE - END OF PERIOD........... $19.55 $17.41 $15.14 $16.39 $15.56 $15.68
====== ====== ====== ====== ====== ======
TOTAL RETURN ** 12.29% 28.43% (0.23)% 14.57% 5.95% 41.54%
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses++............................... 1.39%* 1.43% 1.38% 1.42% 1.46% 1.50%
Net investment income (loss)............. (0.69)%* (0.53)% (0.17)% (0.18)% (0.03)% 0.52%
Portfolio turnover rate................... 33.44%* 49.12% 37.05% 44.38% 37.79% 32.63%
Average commission rate paid.............. $0.0654 - - - - -
Net assets at end of period
(000 omitted)........................... $70,978 $66,311 $65,267 $66,091 $60,852 $56,648
</TABLE>
* Annualized.
** These results do not include the sales load. If the sales load had
been included, the returns would have been lower. The total return
for the six-month period ended June 30, 1996 has not been annualized.
+ Unaudited.
++ Effective December 22, 1990, Rodney Square Management Corporation
("RSMC") agreed to waive its fee or bear any expenses (excluding
taxes, extraordinary expenses, brokerage commissions and interest)
which would cause the Portfolio's ratio of expenses to average daily
net assets to exceed, on an annual basis, 1.50%. The annualized
expense ratio, had there been no reimbursement of expenses or fee
waivers by RSMC, would have been 1.54% for the year ended December 31,
1991. For the six-month period ended June 30, 1996 and for the years
ended December 31, 1995, 1994, 1993, and 1992, no reimbursement or fee
waiver was necessary.
10
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -----------------------------------------------------------------
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 Growth Portfolio (the
"Portfolio") is the only series currently offered by the Fund.
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.
2.SIGNIFICANT ACCOUNTING POLICIES. The following is a summary
of the significant accounting policies of the Fund:
SECURITY VALUATION. The 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 Portfolio, through it's custodian,
receives 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. The 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.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions of net
investment income earned and net capital gains realized by the
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. The 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 six-
month period ended June 30, 1996, purchases and sales of
investment securities (excluding short-term investments) were
$11,224,431 and $13,840,611, respectively.
11
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)-- CONTINUED
- -----------------------------------------------------------------
The following balances for the Portfolio are as of June 30,
1996:
COST FOR NET TAX BASIS TAX BASIS GROSS TAX BASIS GROSS
FEDERAL INCOME UNREALIZED UNREALIZED UNREALIZED
INCOME TAX APPRECIATION APPRECIATION DEPRECIATION
---------- ------------ ------------ ------------
$46,140,592 $25,464,340 $27,021,191 $(1,556,851)
4.MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES. The
Fund 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. The Portfolio's assets are
managed by portfolio advisers who have entered into advisory
agreements with RSMC and the Fund. It is anticipated that the
Portfolio will ordinarily be served by at least two portfolio
advisers. RSMC, as well as each of the Portfolio's advisers,
is considered an "investment adviser" to the 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 the
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 the 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.
The management fees paid to RSMC for the six-month period
ended June 30, 1996 amounted to $344,068.
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 the Portfolio's average daily net
assets. The administration fee paid to RSMC for the six-month
period ended June 30, 1996 amounted to $30,966.
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 the Portfolio as follows: 0.025% of
average daily net assets of the Portfolio up to $50 million;
0.020% of average daily net assets of the Portfolio in excess
of $50 million up to $100 million and 0.015% of average daily
net assets of the 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
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.
12
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)-- CONTINUED
- -----------------------------------------------------------------
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 the 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 the Portfolio's average
daily net assets to reimburse RSD for such expenses. For the
six-month period ended June 30, 1996, such expenses amounted
to $7,916.
RSMC determines the net asset value per share of the Portfolio
and provides accounting services to the Fund pursuant to an
Accounting Services Agreement with the Fund on behalf of the
Portfolio. For its services, RSMC receives an annual fee of
$45,000, plus an amount equal to 0.02% of that portion of the
Portfolio's average daily net assets in excess of $100
million. For the six-month period ended June 30, 1996, RSMC's
fees for accounting services amounted to $22,377.
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 six-month period ended June 30, 1996, the
fees and expenses of the "non-interested" Trustees amounted to
$2,536.
5.FUND SHARES. At June 30, 1996, there was an unlimited number
of shares of beneficial interest, $0.01 par value, authorized.
The following table summarizes the activity in shares of the
Portfolio:
FOR THE SIX-MONTH PERIOD FOR THE YEAR ENDED
ENDED JUNE 30, 1996+ DECEMBER 31, 1995
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares sold 95,545 $1,764,005 388,740 $7,028,995
Shares issued to share-
holders in reinvestment
of distributions 0 0 349,493 6,021,765
Shares redeemed (272,761) (5,022,101) (1,240,767) (20,625,576)
--------- ---------- ---------- -----------
Net decrease (177,216) $(3,258,096) (502,534) $(7,574,816)
========== ===========
Shares outstanding:
Beginning of period 3,807,886 4,310,420
--------- ---------
End of period 3,630,670 3,807,886
========= =========
+ Unaudited.
13
<PAGE>
[outside cover -- divided into two sections]
[Left Section]
TRUSTEES
Eric Brucker
Fred L. Buckner
Robert J. Christian
Martin L. Klopping
John J. Quindlen
-----------------------
OFFICERS
Martin L. Klopping, PRESIDENT
Joseph M. Fahey, Jr., VICE PRESIDENT
Robert C. Hancock, VICE PRESIDENT & TREASURER
Carl M. Rizzo, Esq., SECRETARY
Diane D. Marky, ASSISTANT SECRETARY
Connie L. Meyers, ASSISTANT SECRETARY
John J. Kelley, ASSISTANT TREASURER
-------------------------------------------
FUND MANAGER, ADMINISTRATOR AND TRANSFER AGENT
Rodney Square Management Corporation
----------------------------------------
CUSTODIAN
Wilmington Trust Company
-----------------------------
DISTRIBUTOR
Rodney Square Distributors, Inc.
------------------------------------
LEGAL COUNSEL
Kirkpatrick & Lockhart LLP
------------------------------
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.
RS19 - 8/96
[Right Section]
the RODNEY SQUARE
MULTI-MANAGER FUND
THE GROWTH PORTFOLIO
[GRAPHIC - RSMC Logo]
SEMIANNUAL REPORT
JUNE 30, 1996
