THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
DEAR SHAREHOLDER:
The management of the Rodney Square Multi-Manager Fund is
pleased to report to you on Fund activity for the six months
ended June 30, 1997.
PORTFOLIO REVIEW*
The Growth Portfolio (the "Portfolio") performed well for
shareholders during the first half of 1997. The total return
presented below represents the change in market value plus any
income or capital gains distributed during the period, assuming
distributions are reinvested and the sales load is not reflected.
NET ASSET VALUE CAPITAL GAINS & NET ASSET VALUE TOTAL RETURN
AS OF 12/31/96 INCOME DISTRIBUTED AS OF 06/30/97 1/1/97 - 06/30/97
---------------- ------------------ --------------- -----------------
$19.22 $0.00 $22.39 16.49%
MANAGEMENT'S DISCUSSION OF PORTFOLIO PERFORMANCE
The U.S. stock market repeatedly reached new highs during the
first six months of the year against a backdrop of moderate
economic growth and low inflation. The Standard & Poor's 500
Index, an unmanaged, capitalization weighted index of five
hundred publicly traded stocks of large U.S. companies, returned
20.6% for the first half of the year. The Russell 2000 Index, an
index comprised of the 2,000 smallest of the 3,000 largest
publicly traded U.S. companies based on market capitalization,
was up 10.2% for the same period. The Portfolio returned 16.5%
for the first six months of the year compared to 14.3% for the
average growth mutual fund according to Lipper Analytical
Services.
The equity market's first half ascent to record levels was
not uninterrupted. Stocks started the year strongly as 1996
corporate earning reports exceeded expectations. However, it
became clear the economy was growing too rapidly midway through
the first quarter. This was evident in the strength of
employment and incomes, and in the continued uptrend of leading
indicators. While inflation remained relatively subdued, the
tight labor market and excess liquidity pointed to increases
ahead, so the Federal Reserve responded by raising interest rates
to slow the economy before any serious problems emerged. As a
result, stocks slid and gave back much of their year to date
gains by mid April.
The stock market resumed its uptrend with a vengeance during
the second quarter. Gains were strong across the board as the
market responded to evidence that the domestic economy was once
again slowing. This repeated a pattern seen throughout this
expansion, which is now over six years old. Accelerations have
been short-lived, which has avoided overheating and reduced
upward pressure on inflation and interest rates. Slowdowns have
also been short-lived, which has allowed corporate profits to
continue to climb.
- ----------------
* 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 REFLECT THE EFFECT OF
THE MAXIMUM SALES LOAD OF 4.00%. SEE FINANCIAL HIGHLIGHTS ON
PAGE 10.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
PRESIDENT'S MESSAGE - CONTINUED
- -------------------------------------------------------------------------------
Both portfolio advisers, William Blair & Company and Frontier
Capital Management Company made solid contributions to the
Portfolio's good performance for the first six months of 1997.
Blair's emphasis on mid-size growth companies with good market
niches and less volatile earnings helped the Portfolio minimize
damage during the sell off in stocks in the first quarter. Blair
also contributed significantly to the Portfolio's outperformance
in the second quarter with its overweighting in technology
stocks, one of the best performing sectors. Frontier's large
technology weighting hurt Portfolio performance in the first
quarter as this sector was hit hardest by the stock market slide.
However, Frontier's continued conviction about the prospects for
technology stocks rewarded shareholders in the second quarter as
this sector bounced back strongly.
The Portfolio's ten largest holdings as of June 30, 1997 are
listed below:
Automatic Data Processing, Inc.
First Data Corporation
Cognizant Corporation
Household International, Inc.
Molex, Inc. (Class A Shares)
Home Depot, Inc.
Acxiom Corporation
Shared Medical Systems Corporation
Tech Data Corporation
Healthsouth Corporation
These positions change over time and may not be in the Portfolio
at any time other than June 30, 1997.
SUMMARY
With the stock market in record territory, identifying
companies overlooked by the recent market advance should be the
key to outperformance going forward. The Portfolio brings
together different yet complementary styles of small to mid-
capitalization growth stock investing which should serve
investors well in this environment. 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 18, 1997
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS / JUNE 30, 1997 (UNAUDITED)
(Showing Percentage of Total Value of Net Assets)
- -------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -------
COMMON STOCK - 97.1%
COMMUNICATIONS & BROADCASTING - 1.6%
Airtouch Communications, Inc.*.......... 28,000 $ 766,500
Lamar Advertising Co.*.................. 8,700 221,850
Primus Telecommunications
Group, Inc.*.......................... 7,200 75,600
SFX Broadcasting, Inc. (A Shares)*...... 3,700 156,094
Transaction Network Services, Inc.*..... 12,850 181,506
------------
TOTAL COMMUNICATIONS & BROADCASTING............... 1,401,550
------------
FINANCE - 8.2%
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS - 2.3%
Household Intl., Inc.................... 17,000 1,996,438
------------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES - 2.6%
Credit Acceptance Corp.*................ 50,000 643,750
Jefferies Group, Inc.................... 4,500 256,500
Raymond James Financial, Inc............ 48,290 1,321,925
------------
2,222,175
------------
STATE & NATIONAL BANKS - 3.3%
MBNA Corp............................... 40,000 1,465,000
State Street Boston Corp................ 30,000 1,387,500
------------
2,852,500
------------
TOTAL FINANCE..................................... 7,071,113
------------
MANUFACTURING - 37.5%
CHEMICALS & ALLIED PRODUCTS - 3.3%
Airgas, Inc. (Rights 1/1000 Share
of Preferred @ $100)*................ 48,700 964,869
Cambrex Corp............................ 10,500 416,062
Hanna (M.A.) Co......................... 44,000 1,267,750
The Scotts Co.*......................... 7,000 203,000
------------
2,851,681
------------
COMPUTER & OFFICE EQUIPMENT - 7.8%
3D Systems Corp.*....................... 6,800 62,050
Accent Color Sciences, Inc.*............ 9,300 38,072
Black Box Corp.*........................ 30,900 1,243,725
Computer Products, Inc.*................ 9,700 242,500
Data General Corp. (Rights 1/100
Share of Junior Preferred @ $100)*.... 37,800 982,800
Digital Link Corp.*..................... 5,500 116,187
HPR, Inc.*.............................. 8,000 148,000
Hyperion Software Corp.*................ 18,100 404,987
Intel Corp.............................. 9,000 1,276,313
Intergraph Corp.*....................... 25,900 220,150
VALUE
SHARES (NOTE 2)
-------- -------
Linear Technology Corp.................. 13,000 $ 672,750
Microsoft Corp.*........................ 10,000 1,263,750
Xcellenet, Inc.*........................ 4,700 76,962
------------
6,748,246
------------
ELECTRICAL MEASUREMENT & TEST INSTRUMENTS - 0.6%
GenRad, Inc.*........................... 23,000 520,375
------------
FOOD & BEVERAGE - 0.6%
Smithfield Foods, Inc.*................. 8,100 498,150
------------
MISCELLANEOUS ELECTRICAL MACHINERY, EQUIP. & SUPPLIES - 8.2%
American Precision Industries........... 6,500 125,937
Anadigics, Inc.*........................ 8,700 269,700
Berg Electronics Corp.*................. 13,600 488,750
Burr-Brown Corp. *...................... 14,100 486,450
Genlyte Group, Inc.*.................... 14,600 191,625
Lattice Semiconductor Corp.*............ 16,250 918,125
Maxim Integrated Products, Inc.*........ 24,000 1,365,000
Microchip Technology, Inc.*............. 20,850 620,288
Molex, Inc. (A Shares).................. 56,250 1,961,719
Symbol Technologies, Inc.*.............. 19,200 645,600
Windmere-Durable Holdings, Inc.,
(Warrants, Expire, 01/19/98, Exercise
Price $7.50).......................... 131 1,163
------------
7,074,357
------------
MISCELLANEOUS INDUSTRIAL MACHINERY & EQUIPMENT - 4.0%
Applied Power, Inc. (A Shares).......... 12,000 619,500
Camco Intl., Inc........................ 8,800 481,800
Harman Intl. Industries, Inc............ 18,900 796,163
Illinois Tool Works, Inc................ 12,000 599,250
Tower Automotive, Inc.*................. 11,500 494,500
Varco Intl., Inc.*...................... 8,100 261,225
Watts Industries, Inc. (A Shares)....... 8,600 206,400
------------
3,458,838
------------
MISCELLANEOUS MANUFACTURING INDUSTRIES - 1.3%
Brown & Sharpe Manufacturing
Co. (A Shares)....................... 13,200 199,650
Cavalier Homes, Inc..................... 10,546 105,460
Continental Homes Holding Corp.......... 7,600 133,950
Cuno, Inc.*............................. 10,000 167,500
Fairfield Communities, Inc.*............ 3,000 100,875
Pittway Corp. (A Shares)................ 8,400 417,900
------------
1,125,335
------------
PHARMACEUTICAL PREPARATIONS - 3.1%
Anika Therapeutics, Inc.*............... 3,840 26,880
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS / JUNE 30, 1997 (UNAUDITED) - CONTINUED
- -------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -------
Elan Corp. plc, ADR*.................... 10,000 $ 452,500
Physio-Control Intl. Corp.*............. 11,600 174,000
R.P. Scherer Corp.*..................... 21,100 1,089,288
Smithkline Beecham plc ADR.............. 10,000 916,250
------------
2,658,918
------------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES - 3.3%
Advanced Technology
Laboratories, Inc.*.................. 17,800 765,400
Cognex Corp.*........................... 15,000 397,500
Haemonetics Corp. *..................... 15,900 304,087
Medtronic, Inc.......................... 15,000 1,215,000
Respironics, Inc.*...................... 5,400 114,075
------------
2,796,062
------------
PRINTING & PUBLISHING - 1.6%
Applied Graphics Technology, Inc.*...... 7,000 278,250
Gibson Greeting, Inc.................... 10,000 225,000
Intl. Imaging Materials, Inc.*.......... 8,200 133,250
Wallace Computer Services, Inc.......... 25,000 751,563
------------
1,388,063
------------
TELECOMMUNICATIONS EQUIPMENT - 2.6%
Allen Group, Inc.*...................... 14,200 294,650
Analog Devices, Inc.*................... 29,600 786,250
Coherent Communications Systems
Corp.*............................... 7,900 197,500
Digital Microwave Corp.*................ 7,300 219,000
Microwave Power Devices, Inc.*.......... 12,300 60,731
Network Equip. Technologies, Inc.*...... 19,500 351,000
Oak Industries, Inc.*................... 7,300 209,875
Ortel Corp.*............................ 5,000 90,000
Summa Four, Inc.*....................... 4,700 34,075
------------
2,243,081
------------
TEXTILES & APPAREL - 0.6%
Cintas Corp............................. 7,000 481,250
------------
TRANSPORTATION EQUIPMENT - 0.5%
Dura Automotive Systems, Inc.*.......... 6,600 184,800
Wabash National Corp.................... 9,000 250,875
------------
435,675
------------
TOTAL MANUFACTURING............................... 32,280,031
------------
MINING - 2.5%
CRUDE PETROLEUM & NATURAL GAS - 1.9%
American Exploration Co.*............... 8,200 119,925
Belco Oil & Gas Corp.*.................. 10,100 216,519
BJ Services Co.*........................ 6,200 332,475
Devon Energy Corp....................... 8,400 308,700
VALUE
SHARES (NOTE 2)
------ -------
Pogo Producing Co....................... 6,100 $ 235,994
Snyder Oil Corp......................... 11,900 218,663
Wiser Oil Co............................ 8,800 162,250
------------
1,594,526
------------
MISCELLANEOUS METAL ORES - 0.6%
Minerals Technologies, Inc.............. 15,000 562,500
------------
TOTAL MINING...................................... 2,157,026
------------
SERVICES - 33.3%
AMUSEMENT & RECREATION SERVICES - 1.0%
Scientific Games Holdings Corp.*........ 10,300 212,438
Walt Disney Co.......................... 8,000 642,000
------------
854,438
------------
BUSINESS SERVICES - 9.4%
Automatic Data Processing, Inc.......... 50,000 2,350,000
Catalina Marketing Corp.*............... 1,300 62,563
CDI Corp.*.............................. 8,900 371,019
CUC Intl., Inc.*........................ 40,000 1,032,500
Donnelley Enterprise Solutions, Inc.*... 6,100 63,288
F.Y.I., Inc.*........................... 7,700 184,800
First Data Corp......................... 53,000 2,328,687
Norrell Corp............................ 17,000 561,000
PMT Services, Inc.*..................... 20,100 306,525
Reuters Holding plc ADR ................ 5,000 315,000
Service Experts, Inc.*.................. 4,900 120,050
Tetra Technologies, Inc.*............... 7,800 193,050
TMP Worldwide, Inc.*.................... 8,100 196,425
------------
8,084,907
------------
COMPUTER SERVICES - 17.8%
Acxiom Corp.*........................... 92,800 1,902,400
American Management Systems, Inc.*...... 40,000 1,070,000
BA Merchant Services, Inc. (A Shares)*.. 30,000 571,875
BDM Intl., Inc.*........................ 8,800 202,400
Boole & Babbage, Inc.*.................. 14,850 315,562
Broadway & Seymour, Inc.*............... 10,900 137,613
Ceridian Corp.*......................... 14,700 621,075
Cognizant Corp.......................... 50,000 2,025,000
Computer Task Group, Inc................ 17,800 663,050
DST Systems, Inc.*..................... 8,000 266,500
Factset Research Systems, Inc.*......... 5,400 132,300
Fiserv, Inc.*........................... 22,412 1,000,136
Gensym Corp. (Rights 1/1000 Shares
of Junior Preferred @ $35)*........... 200 32,400
IA Corp. I*............................. 9,500 26,719
JDA Software Group, Inc.*............... 4,700 160,387
Manugistics Group, Inc.*................ 10,800 480,600
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS / JUNE 30, 1997 (UNAUDITED) - CONTINUED
- -------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
------ -------
Marcam Corp. (Rights 1/1000
Share of Junior Preferred @ $60)*..... 16,000 $ 232,000
Mastech Corp.*.......................... 7,100 142,887
May & Speh, Inc.*....................... 40,000 540,000
Network General Corp.*.................. 16,900 251,387
Oracle Systems Corp.*................... 10,000 503,750
Projest Software, Inc.*................. 4,600 66,700
PSW Technologies, Inc.*................. 6,700 78,725
RTW, Inc. (Rights 1/100 Share of
Junior Preferred @ $85)*............. 6,150 49,200
SCI Systems, Inc.*...................... 11,600 739,500
Shared Medical Systems Corp............. 30,000 1,620,000
State of The Art, Inc.*................. 7,700 84,700
Sungard Data Systems, Inc.*............. 23,800 1,106,700
Telxon Corp............................. 13,300 239,400
------------
15,262,966
------------
HOTEL SERVICES - 0.2%
Servico, Inc............................ 11,200 166,600
------------
MEDICAL & HEALTH SERVICES - 3.6%
Coventry Corp.*......................... 17,000 257,123
Healthsouth Corp.*...................... 55,000 1,371,562
Interim Services, Inc.*................. 18,000 801,000
Medirisk, Inc........................... 8,100 65,306
Pharmaceutical Product Dev., Inc.*...... 9,200 202,400
Res-Care, Inc........................... 8,900 170,212
Total Renal Care Holdings, Inc.*........ 3,800 152,713
Veterinary Centers of America, Inc.*.... 5,800 70,687
------------
3,091,003
------------
PERSONAL SERVICES - 0.7%
Stewart Enterprises, Inc. (A Shares).... 14,550 611,100
------------
SANITARY SERVICES - 0.6%
Allied Waste Industries, Inc.*.......... 28,400 493,450
------------
TOTAL SERVICES.................................... 28,564,464
------------
TRANSPORTATION - 2.3%
AirExpress Intl. Corp................... 29,925 1,189,519
Sea Containers, Ltd. (A Shares)......... 11,300 255,662
USFreightways Corp...................... 20,000 517,500
------------
TOTAL TRANSPORTATION.............................. 1,962,681
VALUE
SHARES (NOTE 2)
------ -------
WHOLESALE & RETAIL TRADE - 11.7%
MISCELLANEOUS RETAIL STORES - 2.2%
Barnes & Noble, Inc.*................... 10,000 $ 430,000
Best Buy Co., Inc.*..................... 14,000 208,250
Jumbosports, Inc.*...................... 27,750 105,797
Just For Feet, Inc.*.................... 6,262 109,194
Wal-Mart Stores, Inc.................... 30,000 1,014,375
------------
1,867,616
------------
RETAIL APPAREL & ACCESSORY STORES - 0.9%
Gymboree Corp........................... 11,600 278,400
Linens `n Things, Inc.*................. 17,500 518,438
------------
796,838
------------
RETAIL BUILDING MATERIALS - 2.4%
Barnett, Inc.*.......................... 5,600 137,200
Home Depot, Inc......................... 28,000 1,930,250
------------
2,067,450
------------
RETAIL EATING & DRINKING PLACES - 0.6%
Applebee's Intl., Inc (Rights 1/1000 Share
of Preferred @ $75)................. 17,000 454,750
Checkers Drive-In Restaurant, Inc....... 3,164 2,373
------------
457,123
------------
RETAIL FURNITURE & APPLIANCE STORES - 0.9%
Williams-Sonoma, Inc.*.................. 17,900 765,225
------------
WHOLESALE CHEMICALS & DRUGS - 0.4%
Amerisource Health Corp. (A Shares)*.... 6,900 344,138
------------
WHOLESALE ELECTRONIC EQUIP. & COMPUTERS - 2.3%
Daisytek Intl. Corp.*................... 8,200 324,925
Tech Data Corp.*........................ 43,800 1,376,962
Wyle Electronics........................ 7,500 296,250
------------
1,998,137
------------
WHOLESALE MISCELLANEOUS - 2.0%
Applied Industrial Technology, Inc...... 8,600 309,600
Staples, Inc.*.......................... 20,000 465,000
Viking Office Products, Inc.*........... 50,000 950,000
------------
1,724,600
------------
TOTAL WHOLESALE & RETAIL TRADE.................... 10,021,127
------------
TOTAL COMMON STOCK
(COST $49,944,507).............................. 83,457,992
------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
INVESTMENTS / JUNE 30, 1997 (UNAUDITED) - CONTINUED
- -------------------------------------------------------------------------------
Par Value
(000) (Note2)
----- ------
REPURCHASE AGREEMENTS - 3.2%
With C.S. First Boston Group, Inc: at 6.10%,
dated 06/30/97, to be repurchsed at
$2,788,372 on 07/01/97, collateralized by
$3,460,000 Federal Home Loan Mortgage
Corporation Security, due 03/01/27
(COST $2,787,900)..................... 2,788 2,787,900
-----------
TOTAL INVESTMENTS
(COST $52,732,407)+ - 100.3% 86,245,892
-----------
OTHER ASSETS AND LIABILITIES,
NET - (0.3)%.......................................... (259,837)
-----------
NET ASSETS - 100.0%................................... $85,986,055
===========
* Non-income producing security.
+ Cost for federal income tax purposes (Note 3).
The accompanying notes are an integral part of the financial statements.
<PAGE>
THE RODNEY SQUARE MULT-MANAGER FUND - THE GROWTH PORTFOLIO
- ----------------------------------------------------------
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1997 (Unaudited)
ASSETS:
Investments in securities (including repurchase
agreement of $2,787,900), at market (identified
cost $52,732,407) (Note 2)............................ $86,245,892
Dividends and interest receivable ..................... 43,519
Receivable for investment securities sold.............. 5,634
Receivable for Fund shares sold........................ 498
Other assets........................................... 1,268
-----------
Total assets ......................................... 86,296,811
-----------
LIABILITIES:
Due to Manager (Note 4)................................ $ 80,711
Payable for investment securities purchased............ 160,238
Payable for Fund shares redeemed....................... 22,296
Other accrued expenses (Note 4)........................ 47,511
--------
Total liabilities..................................... 310,756
-----------
NET ASSETS............................................. $85,986,055
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest........................... $38,411
Additional paid-in capital.............................. 45,293,845
Accumulated net investment loss......................... (333,982)
Accumulated net realized gain........................... 7,474,296
Net unrealized appreciation of investments (Note 3)..... 33,513,485
-----------
NET ASSETS, for 3,841,108 shares outstanding............ $85,986,055
===========
NET ASSET VALUE and redemption price per share
($85,986,055 / 3,841,108 outstanding shares of
beneficial interest,$0.01 par value)................... $22.39
======
Maximum offering price per share (100/96.00 of $22.39)... $23.32
======
The accompanying notes are an integral part of the finanacial statements.
<PAGE>
THE RODNEY SQUARE MULT-MANAGER FUND - THE GROWTH PORTFOLIO
- ----------------------------------------------------------
FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six-Month Period Ended June 30, 1997 (Unaudited)
INVESTMENT INCOME:
Dividends............................................... $ 148,940
Interest................................................ 49,024
-----------
Total investment income............................... 197,964
-----------
EXPENSES:
Management fee (Note 4)................................. $379,812
Distribution expenses (Note. 4)......................... 8,790
Custodian fee (Note 4).................................. 17,151
Transfer Agent fee (Note 4)............................. 8,254
Administration fee (Note 4)............................. 34,183
Accounting fee (Note 4)................................. 22,315
Trustees' fees and expenses (Note 4).................... 3,012
Legal................................................... 17,616
Audit .................................................. 16,014
Registration fees....................................... 8,347
Shareholder reports..................................... 10,745
Miscellaneous........................................... 5,707
--------
Total expenses........................................ 531,946
-----------
Net investment loss........................................ (333,982)
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investment transactions 7,475,383
Change in net unrealized appreciation of investments.... 5,045,540
-----------
Net gain on investments.................................... 12,520,923
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS....... $12,186,941
===========
The accompanying notes are an integral part of the finanacial statements.
<PAGE>
THE RODNEY SQUARE MULT-MANAGER FUND - THE GROWTH PORTFOLIO
- ----------------------------------------------------------
FINANCIAL STATEMENTS - CONTINUED
- -------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
INCREASE (DECREASE IN NET ASSETS:
Operations:
Net investment loss....................................... $ (333,982)
Net realized gain on investment transactions ............. 7,475,383
Change in net unrealized appreciation of investments...... 5,045,540
-----------
Net increase in net assets resulting from operations...... 12,186,941
-----------
Decrease in net assets from Fund share transactions
(Note 5)................................................... (2,374,627)
-----------
Increase in net assets..................................... 9,812,314
NET ASSETS:
Beginning of period....................................... 76,173,741
-----------
End of period............................................. $85,986,055
===========
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss....................................... $ (551,197)
Net realized gain on investment transactions.............. 9,091,297
Change in net unrealized appreciation of investments...... 6,815,611
-----------
Net increase in net assets resulting from operations...... 15,355,711
-----------
Distributions to shareholders from:
Net capital gain ($2.41 per share)........................ (8,583,660)
-----------
Increase in net assets from Fund share transactions
(Note 5)................................................... 3,090,954
-----------
Increase in net assets..................................... 9,863,005
NET ASSETS:
Beginning of year......................................... 66,310,736
-----------
End of year............................................... $76,173,741
===========
The accompanying notes are an intergral part of the financial statements.
<PAGE>
THE RODNEY SQUARE MULT-MANAGER FUND - 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 -------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
JUNE 30, 1997+ 1996 1995 1994 1993 1992
----------------- ----- ---- ---- ---- ----
NET ASSET VALUE - BEGINNING OF PERIOD... $19.22 $17.41 $15.14 $16.39 $15.56 $15.68
------ ------ ------ ------ ------ -------
INVESTMENT OPERATIONS:
Net investment loss**.................. (0.09) (0.15) (0.10) (0.03) (0.03) 0.00
Net realized and unrealized gain (loss)
on investments....................... 3.26 4.37 4.38 (0.02) 2.29 0.92
------ ------ ------ ------ ------ -------
Total from investment operations... 3.17 4.22 4.28 (0.05) 2.26 0.92
------ ------ ------ ------ ------ -------
DISTRIBUTIONS:
From net realized gain on investments.. 0.00 (2.41) (2.01) (1.20) (1.43) (1.04)
------ ------ ------ ------ ------ -------
NET ASSET VALUE - END OF PERIOD......... $22.39 $19.22 $17.41 $15.14 $16.39 $15.56
====== ====== ====== ====== ====== =======
TOTAL RETURN *** ....................... 16.49% 24.25% 28.43% (0.23)% 14.57% 5.95%
RATIO (TO AVERAGE NET ASSETS)/SUPPLEMENT DATA:
Expenses............................... 1.40%* 1.43% 1.43% 1.38% 1.42% 1.46%
Net investment loss.................... (0.88)%* (0.78)% (0.53)% (0.17)% (0.18)% (0.03)%
Portfolio turnover rate................. 33.61%* 34.84% 49.12% 37.05% 44.38% 37.79%
Average commission rate paid++.......... $0.0591 $0.0630 - - - -
Net assets at end of period (000 omitted) $85,986 $76,174 $66,311 $65,267 $66,091 $60,852
<FOOTNOTE>
* Annualized.
** The net investment loss per share for the year ended December 31, 1996
was calculated using average shares outstanding.
*** These results do not include the sales load. If the sales load had been
included, the returns would have been lower.
+ Unaudited.
++ Required disclosure for fiscal years beginning after September 1, 1995
pursuant to SEC regulations.
</FOOTNOTE>
</TABLE>
<PAGE>
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.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL
STATEMENTS. The preparation of Financial Statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contigent assets and liabilities at the date
of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual
results could differ from those estimates.
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.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
- -------------------------------------------------------------------------------
3. PURCHASES AND SALES OF INVESTMENT SECURITIES. During
the six-month period ended June 30, 1997, purchases and
sales of investment securities (excluding short-term
investments) were $12,539,568 and $17,769,524,
respectively.
The following balances for the Portfolio are as of June 30,
1997:
<TABLE>
<CAPTION>
COST FOR NET TAX BASIS TAX BASIS GROSS TAX BASIS GROSS
FEDERAL INCOME UNREALIZED UNREALIZED UNREALIZED
TAX PURPOSES APPRECIATION APPRECIATION DEPRECIATION
-------------- -------------- ---------------- ----------------
<C> <C> <C> <C>
$52,732,407 $33,513,485 $35,116,100 ($1,602,615)
</TABLE>
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 portfolio adviser, 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, 1997
amounted to $379,812.
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,
1997 amounted to $34,183.
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.
<PAGE>
THE RODNEY SQUARE MULTI-MANAGER FUND - THE GROWTH PORTFOLIO
- -----------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED
- -------------------------------------------------------------------------------
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 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, 1997, such expenses
amounted to $8,790.
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, 1997, RSMC's fees for accounting
services amounted to $22,315.
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, 1997 the fees and expenses of the "non-
interested" Trustees amounted to $3,012.
5. FUND SHARES. At June 30, 1997, 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:
<TABLE>
<CAPTION>
FOR THE SIX-MONTH PERIOD ENDED FOR THE FISCAL YEAR ENDED
JUNE 30, 1997 (UNAUDITED) DECEMBER 31, 1996
------------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ --------- ----------
<S> <C> <C> <C> <C>
Shares sold......................... 95,162 $ 1,874,666 167,501 $ 3,187,296
Shares issued to shareholders in
reinvestment of distributions...... 0 0 392,595 7,522,118
Shares redeemed..................... (218,019) (4,249,293) (404,017) (7,618,460)
---------- ----------- --------- -----------
Net increase (decrease)............. (122,857) $(2,374,627) 156,079 $ 3,090,954
=========== ===========
Shares outstanding:
Beginning of period................. 3,963,965 3,807,886
---------- ---------
End of period....................... 3,841,108 3,963,965
========== =========
</TABLE>
<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.
RS19-8/97
[Right section]
the RODNEY SQUARE
MULTI-MANAGER FUND
THE GROWTH PORTFOLIO
[graphic] RSMC logo
SEMIANNUAL REPORT
JUNE 30, 1997
<PAGE>
