the RODNEY SQUARE
STRATEGIC EQUITY FUND
[GRAPHIC OMITTED]
ANNUAL REPORT
JUNE 30, 1999
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE
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DEAR SHAREHOLDER:
The last year has been an exciting one for our fund and for the investment
markets. This past spring the trustees of the fund recommended that we take
advantage of some cost saving opportunities by combining the Fund with two other
mutual fund families to form one larger fund. By doing this we can enjoy overall
lower costs and an expanded number of investment products available through one
fund family. But, more importantly we can benefit from the investment expertise
offered by two affiliates of Wilmington Trust Company - Cramer, Rosenthal,
McGlynn ("CRM") and Roxbury Capital Management ("Roxbury"). The Fund
reorganization that has been recommended by the board of trustees also
encompasses a recommendation to appoint CRM as investment adviser to the Large
Cap Value Equity Portfolio. Also, the board of trustees has recommended the
appointment of Roxbury as investment adviser to the Large Cap Growth Equity
Portfolio. The reasons for this recommendation are compelling. CRM has been
managing equities since 1973, specializing in a value approach. Their long
history of above average returns is an impressive one that the board considered
at length. Roxbury also specializes in equities, but, in contrast with CRM,
specializes in growth equities. Roxbury has been in business since 1986 and has
also generated an impressive investment performance. Since growth and value
investing can have very disparate short-term performance, we are pleased to
recommend such experienced companies as investment advisors for our fund. The
reorganization is expected to occur late this year, subject to such approvals of
shareholders of the fund and the two other mutual fund families as may be
required.
The investment markets also provided some excitement. Stocks continued
their march upward while fixed income markets continued to tread water, at best,
due to the anticipated rise in short-term interest rates toward the end of June.
In the last 12 months the Standard & Poors 500 Index, (S&P 500), posted a 22.8%
total return while bonds, as measured by the Lehman Government/Corporate Index,
rose only 2.7%.
We believe that our portfolios are well positioned to benefit from the
economic environment that is likely to develop over the next 12-18 months. Our
anticipated reorganization will not alter our investment strategy. Due to the
change in the fiscal year end of the Fund to June 30, this report covers the
period from the last fiscal year end, December 31, 1998 to June 30, 1999.
ECONOMIC ENVIRONMENT
Economic growth has already slowed from the pace established in the fourth
quarter of 1998. It is likely to slow further in coming months, but not because
the Fed raised short-term interest rates. A much more important factor has been
the rise in long-term interest rates - meaning mortgages as well. This rise
should alter the buying decisions of consumers and businesses alike.
Furthermore, businesses have probably already spent what they need for Y2K.
Consequently, consumer purchases for items that require financing - cars and
houses - should subside. We expect housing starts to fall to an annualized rate
of about 1.6 million units, compared with 1.77 million in the first quarter.
Overall, economic growth should be about 1 percentage point lower next year
versus this year, or about 3.0% next year versus 4% this year.
With growth slowing and worker and capital productivity improving, there is
little likelihood of inflation accelerating for a sustained time period. Unit
labor costs (worker compensation adjusted for productivity) in the second
quarter probably rose less than 1%. Commodity prices also are weak - except for
energy. Consequently, there is little "cost push" inflation. It might be argued
that "demand-pull" inflation is set to accelerate as the U.S. economy stays on a
strong growth pace. However, economic growth abroad remains lackluster and
manufacturing facilities in those countries are running at low capacity rates.
Hence, while U.S. companies might desire to increase prices, doing
1
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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so would almost surely be seen as an opportunity for foreign competitors to step
in and increase market share as they would be more willing to keep prices at the
lower level. In summary, competitive and productivity factors are likely to help
keep inflation low, we expect consumer price inflation to be in the 2% range at
year end 1999 and average slightly higher than that next year, about 2.2%
EQUITY OUTLOOK
Looking ahead, we expect corporate profits to continue to grow quite nicely.
Estimates for second quarter earnings should be in the 10-11% range, and for the
year we see operating profits up about 10%. We also believe that conditions look
very favorable for year 2000 earnings with a preliminary estimate of 7% growth.
We caution that these estimates are based on a relatively stable interest rate
environment. The modest increase in long-term interest rates to the 6% level and
a one-quarter boost in the Federal Reserve overnight rate has had little effect
on the market thus far. We are also encouraged that the fed has indicated that
it sees little need to increase rates again in the near term. So the combination
of good earnings, stable interest rates, low inflation and greater productivity
should keep the market moving forward. A stronger than expected economy with
creeping inflation and higher interest rates would appear to be the greatest
risk.
LARGE CAP GROWTH EQUITY PORTFOLIO
The Large Cap Growth Equity Portfolio (the "Growth Portfolio") returned
9.20% for the six-month period ended June 30, 1999. The S&P 500 Index, an
unmanaged, capitalization-weighted index of five hundred publicly traded stocks
achieved a gain of 12.38% for the same period. The Russell 1000 Growth Index
returned 10.45% for the same six-month period. The Russell 1000 Growth Index is
formed by assigning a style composite score to all of the companies in the
Russell 1000 Index, a passive index that that includes the largest 1000 stocks
in the U.S. as measured by market capitalization, to determine their growth or
value characteristics. Approximately 70% of the stocks are placed in either the
Growth or Value Index. The remaining stocks are placed in both indices with a
weight proportional to their growth or value characteristics.
The Growth Portfolio performance over the six-month period was enhanced due
to significant appreciation in selected technology stocks. Also contributing
were retail , financial and oil service stocks. The weakest performers were
those in the food and beverage, pharmaceutical and selected software companies.
The Fund's advisor, WTC, emphasizes the purchase of stocks that possess
above-average sustainable earnings growth rates at reasonable prices. As of the
date of this report, the Growth Portfolio is well diversified among all the
major sectors of the market with particular emphasis in the technology and
healthcare industries. As of June 30, 1999 the ten largest holdings in the Fund
were:
<TABLE>
<CAPTION>
10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS 10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS
---------------- ----------------------- ------------------- --------------------
<S> <C> <C> <C>
American International Group 4.3% Microsoft Corp. 3.5%
Cisco Systems Inc. 4.1 Home Depot Inc 3.3
MCI Worldcom Inc. 3.7 Merck & Co. 3.1
General Electric 3.7 Staples Inc 3.0
Intel Corp. 3.6 Tyco International 2.8
</TABLE>
2
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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The following graph compares the Growth Portfolio, the Russell 1000 Growth
Index and the S&P 500 Index, for the past 10 years ended June 30, 1999. In 1999,
the Growth Portfolio's fiscal year end changed from December 31 to June 30.
Therefore, account values have been presented at June 30, 1999, and as of June
30 in each prior year.
LARGE CAP GROWTH EQUITY PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000 INVESTMENT*
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
1 YEAR 5 YEAR 10 YEAR
-------- -------- --------
Growth Portfolio 19.91% 23.50% 16.73%
Russell 1000 Growth
Index 21.92% 27.16% 18.48%
S&P 500 Index 22.76% 27.88% 18.76%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Growth Russell 1000 S&P 500
Portfolio Growth Index Index
6/30/89 $10,000 $10,000 $10,000
6/30/90 $11,374 $11,439 $11,640
6/30/91 $11,782 $12,307 $12,500
6/30/92 $13,033 $14,121 $14,184
6/30/93 $15,473 $16,279 $16,110
6/30/94 $16,358 $16,390 $16,326
6/30/95 $19,850 $20,565 $20,576
6/30/96 $24,681 $25,965 $25,936
6/30/97 $31,814 $34,341 $34,925
6/30/98 $39,185 $44,695 $45,476
6/30/99 $46,987 $54,492 $55,826
- --------------------------------------------------------------------------------
- -------------------------------------
* Past performance is not necessarily indicative of future results. An
investment in the Portfolio is neither insured nor guaranteed by WTC or any
other banking institution, the U.S. Government, the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other
agency. The values shown reflect a hypothetical initial investment of
$10,000 with dividends reinvested. Returns are higher due to WTC's
maintenance of the Portfolio's expenses. The Russell 1000 Growth Index and
the S&P500 Index are unmanaged stock market indices without any associated
expenses and the returns assume reinvestment of all dividends. You cannot
invest in an index. Please read the prospectus carefully before investing.
Distributed by Provident Distributors, Inc. See Financial Highlights on
page 29.
3
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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LARGE CAP VALUE EQUITY PORTFOLIO
The Large Cap Value Equity Portfolio (the "Value Portfolio") returned 5.59%
for the six-month period ended June 30, 1999. The S&P 500 Index, an unmanaged,
capitalization-weighted index of five hundred publicly traded stocks achieved a
gain of 12.38% for the same period. The Russell 1000 Value Index returned 12.87%
for the same six-month period. The Russell 1000 Value Index is formed by
assigning a style composite score to all of the companies in the Russell 1000
Index, a passive index that that includes the largest 1000 stocks in the U.S. as
measured by market capitalization, to determine their growth or value
characteristics. Approximately 70% of the stocks are placed in either the Growth
or Value Index. The remaining stocks are placed in both indices with a weight
proportional to their growth or value characteristics.
During the last six months, the Value Portfolio underperformed its
benchmarks due to weak performance in the first three months of the year.
Performance was weak during these early months due to poor security selection in
the technology and utilities sectors. Additionally, the Portfolio had an average
market capitalization less than the benchmarks. This strategy was not successful
as the largest capitalization stocks performed better than the market as a
whole. Fund performance improved significantly in the three months ended June
30, 1999 with the Fund rising 12.49% versus a increase of 7.05% in the S&P 500
and 11.28% in the Russell 1000 Value index. Performance improved due to large
upward moves in energy-related stocks, retail food supermarkets and a strong
rebound in the same technology stocks that performed so poorly in the first half
of the year. The Portfolio holdings are well diversified with representation in
all major market sectors. The Portfolio is currently overweighted in the finance
and utilities sectors and underweighted in technology and healthcare stocks as
compared to the S&P500 Index. The strategy of the Value Portfolio is to continue
to buy stocks that appear undervalued by using statistical measures of relative
price-to-earnings ratios, price-to-book ratios and estimated prospective
earnings growth rates. As of June 30, 1999, the Value Portfolio's top ten
holdings were:
<TABLE>
<CAPTION>
10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS 10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS
- ------------------- ----------------------- ------------------- -----------------------
<S> <C> <C> <C>
Baker Hughes, Inc 3.8% American Greetings Corp 2.9%
Fortune Brands 3.1 Archstone Communities Trust 2.9
Johnson Controls 3.0 Cooper Industries 2.8
Raytheon Co. 3.0 Columbia Healthcare Corp 2.7
Post Properties 2.9 Coastal Corp. 2.6
</TABLE>
The following graph compares the performance of the Value Portfolio and its
predecessor, the Value Stock Fund (a collective investment fund), with that of
the Russell 1000 Value Index and the S&P 500 Index. The Value Stock Fund's
performance has been adjusted to reflect the annual deduction of fees and
expenses applicable to shares of the Value Portfolio (i.e., adjusted to reflect
anticipated expenses, absent investment advisory fee waivers). The Value Stock
Fund was not registered as a mutual fund under the Investment Company Act of
1940 (the "1940 Act") and therefore was not subject to certain investment
restrictions, limitations and diversification requirements imposed by the 1940
Act and the Internal Revenue Code of 1986, as amended. If the Value Stock Fund
had been registered under the 1940 Act, its performance may have been different.
In 1999, the Value Portfolio's fiscal year end changed from December 31 to June
30. Therefore, account values have been presented at June 30, 1999, and as of
June 30 in each prior year.
4
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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LARGE CAP VALUE EQUITY PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000 INVESTMENT*
- --------------------------------------------------------------------------------
Average Annual Total Return
- --------------------------------------------------------------------------------
SINCE
INCEPTION
1 YEAR 5 YEAR (12/1/91)
-------- -------- ----------
Value Portfolio/
Value Stock Fund 1 (0.26)% 16.63% 15.07%
Russell 1000 Value Index 21.92% 27.16% 21.09%
S&P 500 Index 22.76% 27.88% 21.43%
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Value Portfolio (6/29/98-6/30/99) Russell 1000 S&P 500
Value Stock Fund (12/1/91-6/29/98) Value Index Index
12/1/91 $10,000 $10,000 $10,000
6/30/92 $11,470 $11,053 $11,072
6/30/93 $13,113 $12,742 $12,576
6/30/94 $13,430 $12,829 $12,745
6/30/95 $16,254 $16,096 $16,063
6/30/96 $20,347 $20,323 $20,247
6/30/97 $25,967 $26,879 $27,265
6/30/98 $29,052 $34,983 $35,502
6/30/99 $28,976 $42,651 $43,582
- --------------------------------------------------------------------------------
- ---------------------------------
1 The Value Stock Fund was a collective investment fund that was not
registered as a mutual fund under the Investment Company Act of 1940 ("1940
Act"). On June 29, 1998, the Value Portfolio acquired all the assets and
assumed all the liabilities of the Value Stock Fund.
* Past performance is not necessarily indicative of future results. An
investment in the Portfolio is neither insured nor guaranteed by WTC or any
other banking institution, the U.S. Government, the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other
agency. The values shown reflect a hypothetical initial investment of
$10,000 with dividends reinvested. Returns are higher due to WTC's
maintenance of the Portfolio's expenses. The Russell 1000 Value Index and
the S&P 500 Index are unmanaged stock market indices without any associated
expenses and the returns assume reinvestment of all dividends. You cannot
invest in an index. Please read the prospectus carefully before investing.
Distributed by Provident Distributors, Inc. See Financial Highlights on
page 30.
5
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
PRESIDENT'S MESSAGE -- CONTINUED
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SMALL CAP EQUITY PORTFOLIO
The Small Cap Equity Portfolio (the "Small Cap Portfolio") returned 1.60%
for the six month period ended June 30, 1999. The Russell 2000 Index, comprised
of stocks of the smallest 2,000 of the 3,000 largest U.S. companies based on
market capitalization returned 9.29% for this same period.
The Small Cap Portfolio has a portion of the assets managed in a growth
style and a portion of the assets managed in a value style. The purpose of the
division is to dampen the volatility inherent in small cap portfolios. The
growth portion of the portfolio returned 2.71% compared to 12.82% for the
Russell 2000 Growth Index during the period. The underperformance on the growth
side of the fund related to a lower weighting in internet related stocks
compared to that of the index. The value portion of the fund returned 1.00%
during the six month period compared to 5.26% for the Russell 2000 Value Index.
The Russell 2000 Growth and Value Indices are subsets of the Russell 2000 Index
that each have the characteristics (respectively) of growth and value oriented
companies.
As of the date of this report the Small Cap Portfolio is well diversified
across economic sectors with overweightings in healthcare and technology that
are offset by underweightings in finance, REIT's and utilities. The strategy on
the growth side is to purchase companies with a significant and sustainable
competitive advantage in their respective industries. Within the technology
portion of the growth portfolio, particular emphasis is placed on companies with
a lead in a certain technological niche. For example, Qlogic, which is the
largest holding in the portfolio, is the leading company in the important "Fibre
Channel" method of transferring data between the computer and its disk drive. On
the value side of the portfolio, the strategy remains one of finding undervalued
companies relative to past and potential earnings growth. Companies are
emphasized that have the potential to recover from adversity and regain a
leading position in their industry.
<TABLE>
<CAPTION>
10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS 10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS
---------------- -------------------- ---------------- --------------------
<S> <C> <C> <C>
Qlogic 3.3% Factset Research Systems, Inc. 1.9%
O'Reilly Automotive, Inc. 2.2 Conmed Corp. 1.5
Profit Recovery Group 2.2 Fiserv, Inc. 1.4
Acxiom Corp. 2.1 Sungard Data Systems, Inc. 1.4
Linens N Things, Inc. 2.0 Intl. Speedway 1.4
</TABLE>
The following graph compares the performance of the Small Cap Portfolio and
its predecessor, the Small Cap Fund (a collective investment fund), with that of
the Russell 2000 Index. The Small Cap Fund's performance has been adjusted to
reflect the annual deduction of fees and expenses applicable to shares of the
Small Cap Portfolio (i.e., adjusted to reflect anticipated expenses, absent
investment advisory fee waivers). The Small Cap Fund was not registered as a
mutual fund under the Investment Company Act of 1940 (the "1940 Act") and
therefore was not subject to certain investment restrictions, limitations and
diversification requirements imposed by the 1940 Act and the Internal Revenue
Code of 1986, as amended. If the Small Cap Fund had been registered under the
1940 Act, its performance may have been different. In 1999 the Fund's year end
was changed from December 31 to June 30. Therefore, account values have been
presented at June 30, 1999, and as of June 30 in each prior year.
6
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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SMALL CAP EQUITY PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000 INVESTMENT*
- ------------------------------------------------
Average Annual Total Return
- ------------------------------------------------
SINCE
1 YEAR 4/1/97
-------- -------
Small Cap Portfolio/
Small Cap Fund 2 (5.47)% 14.15%
Russell 2000 Index 1.50% 15.18%
- ------------------------------------------------
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Small Cap Portfolio (6/29/98-6/30/99)
Small Cap Fund (4/1/97-6/29/98) Russell 2000 Index
4/1/97 $10,000 $10,000
6/30/97 $12,059 $11,621
6/30/98 $14,245 $13,538
6/30/99 $13,466 $13,742
- --------------------------------------------------------------------------------
- --------------------------------
2 The Small Cap Fund was a collective investment fund that was not registered
as a mutual fund under the Investment Company Act of 1940 ("1940 Act"). On
June 29, 1998, the Small Cap Equity Portfolio acquired all the assets and
assumed all the liabilities of the Small Cap Fund.
* Past performance is not necessarily indicative of future results. An
investment in the Portfolio is neither insured nor guaranteed by WTC or any
other banking institution, the U.S. Government, the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other
agency. The values shown reflect a hypothetical initial investment of
$10,000 with dividends reinvested. Returns are higher due to WTC's
maintenance of the Portfolio's expenses. Please bear in mind that investing
in small companies' stocks can involve higher risk and volatility than
those of larger companies. The Russell 2000 Index is an unmanaged stock
market index without any associated expenses and the return assumes
reinvestment of all dividends. You cannot invest in an index. Please read
the prospectus carefully before investing. Distributed by Provident
Distributors, Inc. See Financial Highlights on page 31.
7
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
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INTERNATIONAL EQUITY PORTFOLIO
The first six months of 1999 were marked by the introduction (and
subsequent weakness) of the new Euro currency, and signs of recovery in Japan
and the Asian emerging markets. In Europe, initial enthusiasm surrounding the
Euro waned quickly, as stronger economic growth and higher interest rates in the
United States combined to weaken the nascent currency by 12.2% versus the
dollar. The Euro played a major role in the dollar denominated return of the
European component of the MSCI EAFE Index (-2.4%). Meanwhile, Japan (+20.7%) and
other Pacific markets (+26.0%) exhibited strength on signs of recovery from the
economic woes that have plagued the Orient during the past two years. During the
period, the International Portfolio's exposure to the Pacific markets was
increased from 17.2% to 29.7%, while European exposure was reduced from 71.5% to
63.7%. This shift represents cautious optimism regarding the durability of the
Asian recovery, and a continued view that European consolidation will provide
long term benefits through an increased focus on shareholder wealth. As of June
30, exposure to emerging markets represented 8.3% of the portfolio, and cash
represented 3.1%. For the six month period, the Portfolio underperformed the
benchmark MSCI EAFE index by 0.7%; however, performance over longer periods
(i.e. 10 years and since inception in 1987) has been superior to the benchmark.
As of June 30, 1999, the International Equity Portfolio's top ten holdings were:
<TABLE>
<CAPTION>
10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS 10 LARGEST HOLDINGS PERCENT OF TOTAL ASSETS
------------------- ----------------------- -------------------- -----------------------
<S> <C> <C> <C>
Takeda Chemical Industry Ltd. 1.7% VNU NV 1.2%
Telecom Italia Spa 1.5 Istituto Banc San Paolo Torino 1.1
Novartis Ag Registered 1.4 Philips Electronics 1.1
ELF Aquitaine 1.4 Toshiba Corporation 1.1
NIT Mobile Com 1.2 Samsung Electronics 1.1
</TABLE>
The following graph compares the performance of the International Portfolio
and its predecessor, the International Fund (a collective investment fund), with
that of the MSCI EAFE Index. The International Fund's performance has been
adjusted to reflect the annual deduction of fees and expenses applicable to
shares of the International Portfolio (i.e., adjusted to reflect antici-pated
expenses, absent investment advisory fee waivers). The International Fund was
not registered as a mutual fund under the Investment Company Act of 1940 (the
"1940 Act") and therefore was not subject to certain investment restrictions,
limitations and diversification requirements imposed by the 1940 Act and the
Internal Revenue Code of 1986, as amended. If the International Fund had been
registered under the 1940 Act, its performance may have been different. In 1999
the Fund's fiscal year end was changed from December 31 to June 30. Therefore,
account values have been presented at June 30, 1999, and as of June 30 in each
prior year.
8
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THE RODNEY SQUARE STRATEGIC EQUITY FUND
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PRESIDENT'S MESSAGE -- CONTINUED
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY PORTFOLIO
COMPARISON OF CHANGE IN VALUE OF A HYPOTHETICAL $10,000 INVESTMENT*
- -----------------------------------------------------------
Average Annual Total Return
- -----------------------------------------------------------
1 YEAR 5 YEAR 10 YEAR
-------- -------- --------
International Portfolio/
International Fund 3 1.55% 7.01% 8.88%
MSCI EAFE Index 7.92% 8.52% 6.92%
- -----------------------------------------------------------
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
International Portfolio (6/29/98-6/30/99)
International Fund (12/31/88-6/29/98) MSCI EAFE Index
6/30/89 $10,000 $10,000
6/30/90 $12,740 $10,353
6/30/91 $10,823 $9,190
6/30/92 $12,216 $9,162
6/30/93 $13,358 $11,058
6/30/94 $16,692 $12,971
6/30/95 $16,600 $13,224
6/30/96 $19,203 $15,026
6/30/97 $21,851 $17,003
6/30/98 $23,061 $18,088
6/29/98 $23,419 $19,520
- --------------------------------------------------------------------------------
3 The International Fund was a collective investment fund that was not
registered as a mutual fund under the Investment Company Act of 1940 ("1940
Act"). On June 29, 1998, the International Portfolio acquired all the
assets and assumed all the liabilities of the International Fund.
* Past performance is not necessarily indicative of future results. An
investment in the Portfolio is neither insured nor guaranteed by WTC or any
other banking institution, the U.S. Government, the Federal Deposit
Insurance Corporation (FDIC), the Federal Reserve Board or any other
agency. The values shown reflect a hypothetical initial investment of
$10,000 with dividends reinvested. Returns are higher due to WTC's
maintenance of the Portfolio's expenses. Please bear in mind that investing
in foreign securities involves special risks such as currency fluctuation,
less extensive regulation of foreign brokers and possible political
instability. The MSCI EAFE Index is an unmanaged index representing the
market value weighted price of 1,100 stocks of the major stock exchanges in
Europe, Australia and the Far East. You cannot invest in an index. Please
read the prospectus carefully before investing. Distributed by Provident
Distributors, Inc. See Financial Highlights on page 32.
Sincerely,
/s/ ROBERT J. CHRISTIAN
Robert J. Christian
President
August 16, 1999
9
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THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP GROWTH EQUITY PORTFOLIO
- ----------------------------------------------------------------------------
INVESTMENTS / JUNE 30, 1999
(Showing Percentage of Total Value of Net Assets)
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
COMMON STOCK -- 98.3%
COMMUNICATION & BROADCASTING -- 3.6%
MCI Worldcom, Inc. ............................... 94,000 $ 8,107,500
------------
TOTAL COMMUNICATION & BROADCASTING ...................... 8,107,500
------------
DRILLING OIL & GAS WELLS -- 0.5%
Enron Oil & Gas Co. .............................. 50,000 1,012,500
------------
TOTAL DRILLING OIL & GAS WELLS .......................... 1,012,500
------------
FINANCE & INSURANCE -- 8.0%
INSURANCE CARRIERS -- 6.0%
American International Group, Inc. ............... 80,000 9,365,000
Equitable Cos., Inc. ............................. 26,000 1,742,000
Protective Life Corp. ............................ 65,000 2,145,000
------------
13,252,000
------------
STATE & NATIONAL BANKS -- 2.0%
Citigroup, Inc. .................................. 75,748 3,598,030
State Street Corp. ............................... 10,000 853,750
------------
4,451,780
------------
TOTAL FINANCE & INSURANCE ............................... 17,703,780
------------
MANUFACTURING -- 46.6%
AIRCRAFT & AEROSPACE -- 3.4%
AlliedSignal, Inc. ............................... 60,000 3,780,000
United Technologies Corp. ........................ 53,000 3,799,437
------------
7,579,437
------------
COMPUTERS & OFFICE EQUIPMENT -- 10.2%
Computer Associates International, Inc. .......... 60,250 3,313,750
Dell Computer Corp. .............................. 100,000 3,700,000
Intel Corp. ...................................... 134,000 7,973,000
Microsoft Corp ................................... 84,800 7,647,900
------------
22,634,650
------------
CONSUMER PRODUCTS -- 1.5%
Fortune Brands, Inc. ............................. 60,000 2,482,500
Procter & Gamble Co. ............................. 9,000 803,250
------------
3,285,750
------------
ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES -- 6.3%
General Electric Co. ............................. 71,000 8,023,000
Tyco International Ltd. .......................... 64,000 6,064,000
------------
14,087,000
------------
ELECTRONICS -- 3.6%
Analog Devices, Inc. ............................. 120,000 6,022,500
Maxim Integrated Products, Inc. .................. 30,200 2,008,300
------------
8,030,800
------------
VALUE
SHARES (NOTE 2)
-------- ----------
FOOD & BEVERAGE -- 1.7%
Coca-Cola Co. .................................... 20,000 $ 1,250,000
PepsiCo, Inc. .................................... 65,000 2,514,688
------------
3,764,688
------------
INDUSTRIAL MACHINERY & EQUIPMENT -- 1.8%
Illinois Tool Works, Inc. ........................ 50,000 4,100,000
------------
MANUFACTURING INDUSTRIES -- 1.3%
American Home Products Corp. ..................... 50,000 2,875,000
------------
OIL FIELD MACHINERY & EQUIPMENT -- 1.0%
Schlumberger Ltd. ................................ 36,384 2,317,206
------------
PHARMACEUTICAL PREPARATIONS-- 8.3%
Abbott Laboratories .............................. 55,000 2,502,500
Amgen, Inc. ...................................... 20,000 1,217,500
Biogen, Inc. ..................................... 14,000 900,375
Bristol-Meyers Squibb Co. ........................ 80,000 5,635,000
Johnson & Johnson Co. ............................ 55,000 5,390,000
Schering-Plough Corp. ............................ 53,000 2,809,000
------------
18,454,375
------------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 2.5%
Guidant Corp. .................................... 55,000 2,829,063
Medtronic, Inc. .................................. 35,000 2,725,625
------------
5,554,688
------------
TELECOMMUNICATIONS EQUIPMENT-- 3.7%
Lucent Technologies, Inc. ........................ 40,000 2,697,500
Tellabs, Inc. .................................... 40,000 2,702,500
Uniphase Corp. ................................... 17,000 2,822,000
------------
8,222,000
------------
TOBACCO -- 1.3%
Philip Morris Cos., Inc. ......................... 70,000 2,813,125
------------
TOTAL MANUFACTURING ..................................... 103,718,719
------------
SERVICES -- 27.2%
AMUSEMENT & RECREATIONAL SERVICES -- 2.5%
Carnival Corp., (A Shares) ....................... 40,000 1,940,000
Warner-Lambert Co. ............................... 54,000 3,746,250
------------
5,686,250
------------
BUSINESS SERVICES -- 7.8%
Automatic Data Processing, Inc. .................. 61,000 2,684,000
Berkshire Hathaway, Inc., (B Shares)* ............ 1,000 2,249,000
Equifax, Inc. .................................... 36,000 1,284,750
Halliburton Co. .................................. 59,500 2,692,375
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP GROWTH EQUITY PORTFOLIO
- ----------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
Merck & Co., Inc. ................................ 92,000 $ 6,808,000
Williams Cos., Inc. .............................. 40,000 1,702,500
------------
17,420,625
------------
COMPUTER SERVICES -- 15.0%
Acxiom Corp. ..................................... 70,000 1,745,625
America Online, Inc. ............................. 40,000 4,420,000
American Management Systems, Inc. ................ 58,100 1,862,831
Cisco Systems, Inc. .............................. 140,000 9,030,000
EMC Corp. ........................................ 60,000 3,300,000
IMS Health Inc. .................................. 93,000 2,906,250
Network Associates, Inc. ......................... 60,000 881,250
Oracle Corp. ..................................... 135,000 5,011,875
Peoplesoft, Inc. ................................ 80,000 1,380,000
Sun Microsystems, Inc. ........................... 20,000 1,377,500
Yahoo! Inc. ...................................... 8,000 1,378,000
------------
33,293,331
------------
MEDICAL & HEALTH SERVICES -- 0.7%
Healthsouth Corp. ................................ 100,000 1,493,750
------------
SANITARY SERVICES -- 1.2%
Waste Management, Inc. ........................... 50,000 2,687,500
------------
TOTAL SERVICES .......................................... 60,581,456
-----------
WHOLESALE & RETAIL TRADE -- 12.4%
MISCELLANEOUS RETAIL STORES -- 2.5%
Dayton Hudson Corp. .............................. 40,000 2,600,000
Family Dollar Stores, Inc. ....................... 120,000 2,880,000
------------
5,480,000
------------
RETAIL APPAREL & ACCESSORY STORES -- 2.7%
Linens 'N Things, Inc. ........................... 75,000 3,281,250
Zale Corp. ....................................... 70,000 2,800,000
------------
6,081,250
------------
RETAIL BUILDING MATERIAL-- 3.2%
Home Depot, Inc. ................................. 112,000 7,217,000
------------
RETAIL OFFICE SUPPLIES -- 3.0%
Staples, Inc. .................................... 215,250 6,659,297
------------
WHOLESALE CHEMICALS & DRUGS -- 1.0%
Cardinal Health, Inc. ............................ 33,467 2,146,071
------------
TOTAL WHOLESALE & RETAIL TRADE .......................... 27,583,618
------------
TOTAL COMMON STOCK
(COST $161,216,012) ................................... 218,707,573
------------
VALUE
SHARES (NOTE 2)
-------- ----------
SHORT-TERM INVESTMENTS -- 0.6%
Samson Street Fund -
Money Market Portfolio ......................... 722,172 722,172
Temp Cash Fund - Dollar Series ................... 722,171 722,171
------------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,444,343) ....................................... 1,444,343
------------
TOTAL INVESTMENTS -- 98.9%
(COST $162,660,355) .......................................... 220,151,916
OTHER ASSETS AND
LIABILITIES, NET-- 1.1% ...................................... 2,385,883
------------
NET ASSETS-- 100.0% ............................................. $222,537,799
============
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes. At June 30, 1999, net
unrealized appreciation was $57,491,561. This consisted of aggregate gross
unrealized appreciation for all securities for which there was an excess of
market value over tax cost of $64,141,363, and aggregate gross unrealized
depreciation for all securities for which there was an excess of tax cost
over market value of $6,649,802.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP VALUE EQUITY PORTFOLIO
- ---------------------------------------------------------------------------
INVESTMENTS /JUNE 30, 1999
(Showing Percentage of Total Value of Net Assets)
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
COMMON STOCK -- 98.3%
COMMUNICATION & BROADCASTING -- 1.4%
CBS Corp. ........................................ 25,500 $ 1,107,656
-----------
TOTAL COMMUNICATION & BROADCASTING ...................... 1,107,656
-----------
COMPUTERS & OFFICE EQUIPMENT-- 3.8%
Intel Corp. ...................................... 20,300 1,207,850
Xerox Corp. ...................................... 30,200 1,783,687
-----------
TOTAL COMPUTERS & OFFICE EQUIPMENT ...................... 2,991,537
-----------
ELECTRIC, GAS & WATER UTILITIES-- 11.9%
BEC Energy ....................................... 26,300 1,084,875
Coastal Corp. .................................... 50,500 2,020,000
Consolidated Natural Gas Co. ..................... 25,200 1,530,900
Entergy Corp. .................................... 20,000 625,000
New Century Energies, Inc. ....................... 44,900 1,742,681
Reliant Energy, Inc. ............................. 42,100 1,163,012
Texas Utilities Co. .............................. 30,600 1,262,250
-----------
TOTAL ELECTRIC, GAS & WATER UTILITIES ................... 9,428,718
-----------
FINANCE & INSURANCE -- 17.8%
FINANCIAL SERVICES -- 1.2%
A.G. Edwards & Sons, Inc. ........................ 30,200 973,950
-----------
INSURANCE CARRIERS -- 8.4%
Aetna, Inc. ...................................... 9,000 804,937
Allmerica Financial Corp. ........................ 26,100 1,587,206
American General Corp. ........................... 25,100 1,891,912
MBIA, Inc. ....................................... 21,600 1,398,600
Washington Mutual, Inc. .......................... 26,800 948,050
-----------
6,630,705
-----------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES -- 2.2%
Chase Manhattan Corp. ............................ 19,800 1,715,175
-----------
STATE & NATIONAL BANKS -- 6.0%
Bank One Corp. ................................... 29,200 1,739,225
First Union Corp. ................................ 30,800 1,447,600
PNC Bank Corp. ................................... 27,300 1,573,163
-----------
4,759,988
-----------
TOTAL FINANCE & INSURANCE ............................... 14,079,818
-----------
VALUE
SHARES (NOTE 2)
-------- -----------
MANUFACTURING -- 36.4%
CHEMICAL & ALLIED PRODUCTS -- 1.8%
Great Lakes Chemical Corp. ....................... 30,000 $ 1,381,875
-----------
CONSUMER PRODUCTS -- 7.6%
American Greetings Corp. ......................... 77,300 2,328,663
American Home Products Corp. ..................... 21,900 1,259,250
Fortune Brands, Inc. ............................. 58,905 2,437,194
-----------
6,025,107
-----------
ELECTRONICS -- 8.6%
Avnet, Inc. ...................................... 30,967 1,439,966
Emerson Electric Co. ............................. 18,200 1,144,325
Harris Corp. ..................................... 46,796 1,833,818
Raytheon Co. (A shares) .......................... 34,300 2,362,413
-----------
6,780,522
-----------
IRON & STEEL -- 2.0%
LTV Corp. ........................................ 241,200 1,613,025
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES -- 5.8%
Cooper Industries, Inc. .......................... 42,000 2,184,000
Johnson Controls, Inc. ........................... 34,200 2,370,488
-----------
4,554,488
-----------
OIL FIELD MACHINERY & EQUIPMENT -- 3.8%
Baker Hughes, Inc. ............................... 89,300 2,991,550
-----------
PAPER & PAPER PRODUCTS -- 2.2%
International Paper Co. .......................... 33,600 1,696,800
-----------
PHARMACEUTICAL PREPARATIONS -- 2.0%
Pharmacia & Upjohn, Inc. ......................... 28,300 1,607,794
-----------
TEXTILES & APPAREL -- 2.6%
VF Corp. ......................................... 47,300 2,022,075
-----------
TOTAL MANUFACTURING ..................................... 28,673,236
-----------
OIL & GAS -- 5.2%
Kerr-McGee Corp. ................................. 31,200 1,565,850
Mobil Corp. ...................................... 15,100 1,494,900
Texaco, Inc. ..................................... 17,400 1,087,500
-----------
TOTAL OIL & GAS ......................................... 4,148,250
-----------
REAL ESTATE INVESTMENT TRUSTS -- 5.8%
Archstone Communities Trust ...................... 104,900 2,301,244
Post Properties, Inc. ............................ 56,600 2,320,600
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS ..................... 4,621,844
-----------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP VALUE EQUITY PORTFOLIO
- ----------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
SERVICES -- 3.6%
Columbia Healthcare Corp. ........................ 91,900 $ 2,096,469
Meditrust Corp. .................................. 57,700 753,706
-----------
TOTAL SERVICES .......................................... 2,850,175
-----------
TELECOMMUNICATIONS -- 3.0%
AT&T Corp. ....................................... 21,450 1,197,178
SBC Communications, Inc. ......................... 20,600 1,194,800
-----------
TOTAL TELECOMMUNICATIONS ................................ 2,391,978
-----------
TRANSPORTATION -- 1.3%
Union Pacific Corp. .............................. 17,000 991,313
-----------
TOTAL TRANSPORTATION .................................... 991,313
-----------
WHOLESALE & RETAIL TRADE -- 8.1%
MISCELLANEOUS RETAIL STORES -- 3.7%
May Department Stores Co. ........................ 28,600 1,169,025
Zale Corp. ....................................... 45,000 1,800,000
-----------
2,969,025
-----------
RETAIL FOOD STORES -- 4.4%
Food Lion Inc. (A shares) ........................ 140,000 1,662,500
Supervalu, Inc. .................................. 70,000 1,798,125
-----------
3,460,625
-----------
TOTAL WHOLESALE & RETAIL TRADE .......................... 6,429,650
-----------
TOTAL COMMON STOCK
(COST $69,691,418) .................................... 77,714,175
-----------
SHORT-TERM INVESTMENTS -- 1.4%
Samson Street Fund -
Money Market Portfolio ......................... 568,360 568,360
Temp Cash Fund - Dollar Series ................... 568,360 568,360
-----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,136,720) ..................................... 1,136,720
-----------
TOTAL INVESTMENTS -- 99.7%
(COST $70,828,138) ........................................... 78,850,895
OTHER ASSETS AND
LIABILITIES, NET-- 0.3% ...................................... 209,165
-----------
NET ASSETS-- 100.0% ............................................. $79,060,060
===========
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes. At June 30, 1999, net
unrealized appreciation was $8,022,757. This consisted of aggregate gross
unrealized appreciation for all securities for which there was an excess of
market value over tax cost of $10,919,645, and aggregate gross unrealized
depreciation for all securities for which there was an excess of tax cost
over market value of $2,896,888.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- SMALL CAP EQUITY PORTFOLIO
- ---------------------------------------------------------------------
INVESTMENTS / JUNE 30, 1999
(Showing Percentage of Total Value of Net Assets)
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
COMMON STOCK -- 98.9%
COMMUNICATION & BROADCASTING -- 1.3%
Abovenet Communications, Inc.* ................... 20,000 $ 807,500
Primus Telecommunications Group,
Inc.* .......................................... 9,000 201,937
-----------
TOTAL COMMUNICATION & BROADCASTING ...................... 1,009,437
-----------
COMPUTER SERVICES -- 0.7%
Ariba, Inc. ...................................... 100 9,725
Autobytel.com, Inc.* ............................. 250 5,219
Brocade Communications Systems, Inc. ............. 2,000 192,875
iTurf, Inc. ...................................... 400 7,225
Rambus, Inc. ..................................... 3,000 276,562
-----------
TOTAL COMPUTER SERVICES ................................. 491,606
-----------
ELECTRIC, GAS & WATER UTILITIES -- 3.2%
Central Hudson Gas & Electric .................... 9,200 386,400
Commonwealth Energy Systems ...................... 10,300 432,600
Nevada Power Co. ................................. 23,500 587,500
Northwest Natural Gas Co. ........................ 24,800 598,300
Rochester Gas and Electric Corp. ................. 17,000 451,562
-----------
TOTAL ELECTRIC, GAS & WATER UTILITIES ................... 2,456,362
-----------
FINANCE & INSURANCE -- 8.8%
INSURANCE CARRIERS -- 5.1%
Delphi Financial Group, Inc.
(A Shares) ..................................... 5,100 182,962
Guaranteed Life Companies Inc. ................... 19,800 497,475
HCC Insurance Holdings, Inc. ..................... 22,000 499,125
Life USA Holding, Inc. ........................... 47,500 961,875
Medical Assurance, Inc.* ......................... 11,000 314,187
Protective Life Corp. ............................ 19,200 633,600
PXRE Corp. ....................................... 19,700 357,062
RenaissanceRe Holdings Limited ................... 11,238 415,806
-----------
3,862,092
-----------
SAVINGS, CREDIT & OTHER FINANCIAL INSTITUTIONS -- 1.5%
Affiliated Managers Group, Inc.* ................. 19,000 573,562
JSB Financial, Inc. .............................. 11,000 559,625
-----------
1,133,187
-----------
SECURITY & COMMODITY BROKERS, DEALERS & SERVICES -- 1.1%
ARM Financial Group, Inc.
(A Shares) ..................................... 34,500 293,250
T & W Financial Corp.* ........................... 65,000 459,062
Waddell & Reed Financial, Inc. ................... 5,000 137,187
-----------
889,499
-----------
STATE & NATIONAL BANKS -- 1.1%
Commonwealth Bancorp., Inc. ...................... 46,900 841,269
-----------
TOTAL FINANCE & INSURANCE ............................... 6,726,047
-----------
VALUE
SHARES (NOTE 2)
-------- ----------
MANUFACTURING -- 38.5%
AIRCRAFT & AEROSPACE -- 1.2%
Triumph Group, Inc.* ............................. 37,000 $ 943,500
-----------
AUTOMOTIVE EQUIPMENT -- 1.3%
Borge-Warner Automotive, Inc. .................... 9,500 522,500
Hayes Lemmerz International, Inc.* ............... 7,000 205,625
Lawson Products, Inc. ............................ 9,600 241,800
-----------
969,925
-----------
CHEMICAL & ALLIED PRODUCTS-- 1.7%
Bush Boake Allen, Inc.* .......................... 23,200 678,600
Cambrex Corp. .................................... 20,000 525,000
Tetra Technologies, Inc.* ........................ 9,700 89,119
-----------
1,292,719
-----------
COMPUTERS & OFFICE EQUIPMENT-- 5.3%
Data General Corp.* .............................. 47,500 691,719
Hyperion Solutions, Corp.* ....................... 33,750 601,172
Maxtor Corp.* .................................... 50,000 251,562
Qlogic Corp.* .................................... 19,000 2,508,000
-----------
4,052,453
-----------
ELECTRONICS -- 1.9%
Burr-Brown Corp.* ................................ 24,975 914,709
Lattice Semiconductor Corp.* ..................... 9,000 560,250
-----------
1,474,959
-----------
FOOD AND BEVERAGE -- 0.5%
Chiquita Brands International,
Inc. ........................................... 44,000 396,000
-----------
LIGHTING FIXTURES -- 1.6%
Advanced Lighting Technologies,
Inc.* .......................................... 40,300 362,700
Juno Lighting, Inc. .............................. 34,100 835,450
-----------
1,198,150
-----------
MANUFACTURED HOMES -- 0.1%
Cavalier Homes, Inc. ............................. 13,125 107,461
-----------
METAL PRODUCTS -- 1.7%
Commercial Metals Co. ............................ 15,900 453,150
Commonwealth Industries, Inc. .................... 28,100 351,250
Shiloh Industries, Inc.* ......................... 32,100 465,450
-----------
1,269,850
-----------
MISC. ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES -- 1.3%
Mercury Computer Systems, Inc.* .................. 12,000 387,000
Sensormatic Electronics Corp.* ................... 22,000 306,625
Spectrian Corp.* ................................. 19,500 282,750
-----------
976,375
-----------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- SMALL CAP EQUITY PORTFOLIO
- ----------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- ----------
MISC. INDUSTRIAL MACHINERY & EQUIPMENT -- 5.4%
Applied Industrial Technologies, Inc. ............ 22,875 $ 434,625
Brown & Sharpe Manufacturing Co.
(A Shares)* .................................... 43,600 237,075
Cognex Corp.* .................................... 18,800 593,375
Global Industrial Technologies, Inc.* ............ 40,000 482,500
IDEX Corp.* ...................................... 27,100 890,912
Terex Corp.* ..................................... 14,500 441,344
Titan International, Inc. ........................ 31,000 368,125
Varco International, Inc.* ....................... 32,000 350,000
Watts Industries, Inc. ........................... 18,600 356,887
-----------
4,154,843
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES -- 3.2%
Griffon Corp.* ................................... 82,400 643,750
Harman International Industries .................. 16,910 744,040
International Speedway Corp.
(A Shares) ..................................... 21,500 1,021,250
-----------
2,409,040
-----------
PAPER & PAPER PRODUCTS -- 0.9%
Glatfelter (P.H.) Co. ............................ 47,300 691,762
-----------
PHARMACEUTICAL PREPARATIONS-- 1.1%
Cellegy Pharmaceuticals* ......................... 25,000 115,625
Guilford Pharmaceuticals, Inc.* .................. 10,000 127,500
Roberts Pharmaceuticals* ......................... 26,100 632,925
-----------
876,050
-----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 7.5%
Closure Medical Corp.* ........................... 25,000 750,000
Conmed Corp.* .................................... 35,700 1,093,312
Cryolife, Inc.* .................................. 46,000 563,500
Haemonetics Corp.* ............................... 33,000 662,062
Maxxim Medical, Inc.* ............................ 27,500 641,094
Mentor Corp. ..................................... 28,000 521,500
Protein Design Lab, Inc.* ........................ 40,000 887,500
Respironics, Inc.* ............................... 10,700 161,838
Theragenics Corp.* ............................... 64,000 444,000
-----------
5,724,806
-----------
TELECOMMUNICATIONS EQUIPMENT-- 3.2%
Allen Telecom, Inc.* ............................. 63,000 677,250
Anadigics, Inc.* ................................. 15,100 558,700
Black Box Corp.* ................................. 16,700 837,088
Network Equipment Technologies* .................. 38,000 375,250
-----------
2,448,288
-----------
TEXTILES & APPAREL -- 0.6%
Wellman, Inc. .................................... 25,600 408,000
-----------
TOTAL MANUFACTURING ..................................... 29,394,181
-----------
VALUE
SHARES (NOTE 2)
-------- ----------
MISC. ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES-- 0.3%
Teleflex, Inc. ................................... 5,500 $ 238,906
-----------
TOTAL MISC. ELECTRICAL MACHINERY,
EQUIPMENT & SUPPLIES .................................. 238,906
-----------
MISCELLANEOUS MANUFACTURING INDUSTRIES -- 0.5%
Speedway Motorsports, Inc. ....................... 10,000 393,125
-----------
TOTAL MISCELLANEOUS
MANUFACTURING INDUSTRIES .............................. 393,125
-----------
OIL & GAS -- 3.2%
Devon Energy Corp. ............................... 15,000 536,250
Energen Corp. .................................... 33,600 625,800
Pool Energy Service Co.* ......................... 27,900 566,719
Tesoro Petroleum* ................................ 46,100 734,719
-----------
TOTAL OIL & GAS ......................................... 2,463,488
-----------
OIL & GAS EXPLORATION -- 0.4%
Core Laboratories NV ............................. 20,000 278,750
-----------
TOTAL OIL & GAS EXPLORATION ............................. 278,750
-----------
PERSONAL SERVICES -- 0.6%
Alterra Healthcare Corp. ......................... 31,000 426,250
-----------
TOTAL PERSONAL SERVICES ................................. 426,250
-----------
PHARMACEUTICAL PREPARATIONS -- 0.4%
QLT PhotoTherapeutics, Inc.* ..................... 5,000 275,000
-----------
TOTAL PHARMACEUTICAL PREPARATIONS ....................... 275,000
-----------
REAL ESTATE INVESTMENT TRUSTS -- 2.0%
American Health Properties, Inc. ................. 20,300 408,538
Developers Diversified Realty Corp. .............. 30,700 510,388
Kilroy Realty Corp. .............................. 25,300 615,106
-----------
TOTAL REAL ESTATE INVESTMENT TRUSTS ..................... 1,534,032
-----------
RETAIL APPAREL & ACCESSORY STORES -- 1.4%
Brown Shoe Company, Inc. ......................... 32,100 698,175
Zale Corp. ....................................... 10,000 400,000
-----------
TOTAL RETAIL APPAREL & ACCESSORY STORES ................. 1,098,175
-----------
SERVICES -- 17.3%
BUSINESS SERVICES -- 3.6%
CDI Corp. * ...................................... 12,500 425,781
Inacom Corp.* .................................... 18,900 238,613
SOS Staffing Services, Inc.* ..................... 24,000 126,000
Sterling Commerce, Inc.* ......................... 1,673 61,065
The Profit Recovery Group
International, Inc.* ........................... 35,000 1,655,938
Towne Services, Inc. ............................. 35,000 275,625
-----------
2,783,022
-----------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- SMALL CAP EQUITY PORTFOLIO
- ----------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
VALUE
SHARES (NOTE 2)
-------- -----------
COMPUTER SERVICES -- 8.2%
Acxiom Corp.* .................................... 64,700 $ 1,613,456
Aspen Technology, Inc.* .......................... 20,000 235,000
Computer Task Group, Inc.* ....................... 22,200 377,400
Factset Research Systems, Inc.* .................. 25,800 1,460,925
Fiserv, Inc. * ................................... 34,500 1,080,281
Mastech Corp.* ................................... 26,200 487,975
SunGard Data Systems, Inc.* ...................... 30,000 1,035,000
-----------
6,290,037
-----------
MEDICAL & HEALTH SERVICES-- 1.8%
Healthplan Services Corp. ........................ 60,500 412,156
Integrated Health Services, Inc. ................. 40,300 322,400
New American Healthcare Corp. .................... 30,000 69,375
Orthodontic Centers of America, Inc.* ............ 39,000 550,875
-----------
1,354,806
-----------
PERSONAL SERVICES -- 2.7%
F.Y.I., Inc.* .................................... 10,200 320,025
ITT Educational Services, Inc.* .................. 25,000 651,563
Shurgard Storage Centers, Inc. ................... 18,200 493,675
Stewart Enterprises, Inc. ........................ 36,300 528,619
-----------
1,993,882
-----------
SANITARY SERVICES -- 1.0%
Allied Waste Industries, Inc. * .................. 37,900 748,525
-----------
TOTAL SERVICES ........................................... 13,170,272
-----------
TELECOMMUNICATIONS EQUIPMENT -- 1.2%
Audiocodes, Ltd.* ................................ 15,000 405,000
SDL, Inc. ........................................ 9,400 479,988
-----------
TOTAL TELECOMMUNICATIONS EQUIPMENT ...................... 884,988
-----------
TRANSPORTATION -- 3.5%
Air Express International Corp. .................. 34,580 877,468
Consolidated Freightways Corp.* .................. 45,600 585,675
Sea Containers, Ltd. ............................. 25,544 857,321
Yellow Corp.* .................................... 21,200 376,300
-----------
TOTAL TRANSPORTATION .................................... 2,696,764
-----------
WHOLESALE & RETAIL TRADE -- 15.6%
MISCELLANEOUS RETAIL STORES -- 4.5%
A.C. Moore Arts & Crafts, Inc.* .................. 56,000 315,000
Barnes & Noble, Inc.* ............................ 13,800 377,775
Borders Group, Inc.* ............................. 15,000 237,188
Longs Drug Stores, Inc. .......................... 22,800 788,025
O'Reilly Automotive, Inc.* ....................... 33,400 1,682,525
-----------
3,400,513
-----------
RETAIL APPAREL & ACCESSORY STORES -- 2.3%
Big Dog Holdings, Inc.* .......................... 38,000 $ 199,500
Linens 'N Things, Inc.* .......................... 35,200 1,540,000
-----------
1,739,500
-----------
VALUE
SHARES (NOTE 2)
-------- -----------
RETAIL BUILDING MATERIAL-- 0.8%
Hughes Supply, Inc. .............................. 19,300 572,969
-----------
RETAIL EATING & DRINKING PLACES -- 1.6%
Bob Evans Farms, Inc. ............................ 31,700 630,038
Checkers Drive-In Restaurants* ................... 3,093 387
Mortons Restaurant Group, Inc.* .................. 30,000 571,875
-----------
1,202,300
-----------
RETAIL FOOD STORES -- 0.7%
Ingles Markets, Inc., (A Shares) ................. 37,700 574,925
-----------
RETAIL FURNITURE & APPLIANCE STORES -- 2.6%
Heilig-Meyers Co. ................................ 46,500 316,781
Springs Industries, Inc., (A Shares) ............. 9,700 423,163
Williams Sonoma, Inc.* ........................... 25,200 877,275
Winsloew Furniture, Inc.* ........................ 12,000 403,500
-----------
2,020,719
-----------
WHOLESALE CHEMICALS & DRUGS -- 0.5%
AmeriSource Health Corp.
(A Shares)* .................................... 15,000 382,500
-----------
WHOLESALE MISCELLANEOUS -- 2.6%
A.M. Castle & Co. ................................ 26,000 442,000
Merkert American Corp.* .......................... 30,000 285,000
Tristar Aerospace Co.* ........................... 64,000 528,000
Watsco, Inc. ..................................... 47,000 769,625
-----------
2,024,625
----------
TOTAL WHOLESALE & RETAIL TRADE .......................... 11,918,051
-----------
TOTAL COMMON STOCK
(COST $64,567,644) .................................... 75,455,434
-----------
SHORT-TERM INVESTMENTS -- 2.3%
Samson Street Fund -
Money Market Portfolio ......................... 896,654 896,654
Temp Cash Fund -Dollar Series .................... 896,655 896,655
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,793,309) ..................................... 1,793,309
----------
TOTAL INVESTMENTS -- 101.2%
(COST $66,360,953) ........................................... 77,248,743
OTHER ASSETS AND
LIABILITIES, NET-- (1.2%) .................................... (932,445)
-----------
NET ASSETS-- 100.0% ............................................. $76,316,298
===========
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes. At June 30, 1999, net
unrealized appreciation was $10,887,790. This consisted of aggregate
gross unrealized appreciation for all securities for which there was an
excess of market value over tax cost of $20,555,139, and aggregate
gross unrealized depreciation for all securities for which there was an
excess of tax cost over market value of $9,667,349.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------
INVESTMENTS / JUNE 30, 1999
(Showing Percentage of Total Value of Net Assets)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
COMMON STOCK -- 96.7%
AUSTRALIA -- 2.9%
Australia & New Zealand Bank Group, Ltd. Banking ..................................... 52,000 $ 382,372
Broken Hill Proprietary Co., Ltd. Metals-Non-Ferrous .......................... 48,200 558,332
National Australia Bank, Ltd. Banking ..................................... 25,200 417,011
Publishing & Broadcasting, Ltd. Broadcasting & Publishing ................... 35,000 230,978
QBE Insurance Group, Ltd. Insurance ................................... 47,906 182,333
WMC, Ltd. Metals-Non-Ferrous .......................... 38,800 166,680
Woodside Petroleum, Ltd. Energy Sources .............................. 14,100 95,478
----------
2,033,184
----------
AUSTRIA -- 1.0%
Bank Austria AG Banking ..................................... 4,200 220,898
OMV AG Energy Sources .............................. 2,600 231,905
RHI AG Building Materials & Components ............. 8,600 232,809
----------
685,612
----------
BRAZIL -- 0.6%
Companhia Vale Do Rio Doce* Metals-Non-Ferrous .......................... 3,200 --
Telecomunicacoes Brasileiras SA, ADR Telecommunications .......................... 4,400 396,825
----------
396,825
----------
CANADA -- 1.3%
Canadian National Railway Co. Transportation-Road & Rail .................. 5,500 368,500
Imasco Limited Multi-Industrial ............................ 9,321 250,028
Royal Bank of Canada Banking ..................................... 7,000 305,057
----------
923,585
----------
CHILE -- 0.1%
Enersis SA, ADR Utilities-Electrical & Gas .................. 3,990 91,271
----------
DENMARK -- 0.6%
Danisco AS Beverages & Tobacco ......................... 9,100 411,233
----------
FINLAND -- 1.9%
Kemira Oyj Chemicals ................................... 20,300 122,678
Merita PLC (A Shares) Banking ..................................... 72,450 411,682
Nokia Corp., ADR Electronic Components & Instruments ......... 3,200 293,000
Nokia Oyj Electronic Components & Instruments ......... 5,500 482,118
----------
1,309,478
----------
FRANCE -- 9.5%
Accor SA Leisure & Tourism ........................... 1,068 268,189
Alstom* Energy Equipment & Services ................. 2,460 77,376
Axa Insurance ................................... 1,401 170,921
Carrefour Merchandising ............................... 918 134,905
Christian Dior SA Recreation & Other Consumer Goods ........... 1,369 223,065
Club Mediterranee SA* Leisure & Tourism ........................... 503 53,377
Elf Aquitaine SA Energy Sources .............................. 6,640 974,416
Eurotunnel SA* Construction & Housing ...................... 157,745 232,629
Lafarge SA Building Materials & Components ............. 3,900 370,823
Lagardere SCA Multi-Industrial ............................ 15,461 575,594
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
Louis Vuitton Moet Hennessy* Recreation & Other Consumer Goods ........... 486 $ 142,290
Louis Vuitton Moet Hennessy Rights* Recreation & Other Consumer Goods ........... 486 14,209
Pinault-Printemps Redoute SA Building Materials & Components ............. 700 120,122
Promodes Food & Household Products ................... 800 525,122
Renault SA Automobiles ................................. 2,810 122,290
Rhone-Poulenc SA Health & Personal Care ...................... 13,483 616,112
Societe BIC SA Recreation & Other Consumer Goods ........... 9,332 492,257
Societe Nationale D'Exploitation des Tabacs Beverages & Tobacco ......................... 5,200 300,305
STMicroelectronics NV Telecommunications .......................... 2,951 196,595
Suez Lyonnaise des Eaux Business & Public Services .................. 1,389 250,532
Total SA Oil & Gas Operations ........................ 865 111,595
Union Des Assurances Federal Insurance ................................... 1,127 133,657
Vivendi SA Utilities-Electrical & Gas .................. 5,890 477,126
----------
6,583,507
----------
GERMANY -- 7.4%
BASF AG Chemicals ................................... 6,402 281,253
Bayerische Hypo-Und Vereinsbank AG Banking ..................................... 1,998 127,131
Daimler Chrysler AG Automobiles ................................. 7,318 639,216
Douglas Holding AG Textiles & Apparel .......................... 4,200 189,712
Heidelberger Druckmaschinen Machinery & Engineering ..................... 913 51,785
Hoechst AG Health & Personal Care ...................... 13,999 630,885
Karstadt AG Merchandising ............................... 317 151,360
Mannesmann AG Telecommunications .......................... 4,945 739,445
Metro AG Merchandising ............................... 4,010 255,153
SAP AG Business & Public Services .................. 910 312,036
Siemens AG Electrical & Electronics .................... 4,116 317,504
Software AG* Business & Public Services .................. 19,200 611,831
VEBA AG Utilities-Electrical & Gas .................. 11,965 705,798
Viag AG Utilities-Electrical & Gas .................. 319 148,039
----------
5,161,148
----------
GREECE -- 0.6%
Hellenic Telecommunication
Organization, ADR Telecommunications .......................... 35,000 387,188
----------
HONG KONG -- 2.2%
Anhui Expressway Co., Ltd. (B Shares) Machinery & Engineering ..................... 113,000 15,438
Cheung Kong Holdings, Ltd. Real Estate ................................. 24,000 213,440
Citic Pacific, Ltd. Multi-Industrial ............................ 74,000 236,060
Dao Heng Bank Group, Ltd. Financial Services .......................... 2,000 8,971
Esprit Holdings, Ltd. Textiles & Apparel .......................... 324,000 219,240
GZI Transport, Ltd. Machinery & Engineering ..................... 53,000 11,613
Hong Kong & China Gas Company, Ltd. Utilities-Electrical & Gas .................. 236,500 342,925
Jiangsu Expressway Co., Ltd. Machinery & Engineering ..................... 96,000 20,787
Kerry Properties, Ltd. Real Estate ................................. 43,396 57,331
New World Development Co., Ltd. Real Estate ................................. 67,303 201,685
New World Infrastructure, Ltd.* Business & Public Services .................. 36,600 68,873
Shenzhen Expressway Co., Ltd. Machinery & Engineering ..................... 90,000 19,024
Sichuan Expressway Co. (B Shares) Machinery & Engineering ..................... 67,000 7,081
Sun Hung Kai Properties Real Estate ................................. 11,000 100,308
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
Zhejiang Expressway Co., Ltd. (B Shares) Machinery & Engineering ..................... 66,000 $ 13,100
----------
1,535,876
----------
IRELAND -- 1.1%
Bank of Ireland Banking ..................................... 25,399 426,949
Irish Life & Permanent PLC Financial Services .......................... 30,425 321,607
----------
748,556
----------
ISRAEL -- 1.0%
ECI Telecommunications, Ltd. Electronic Components & Instruments ......... 12,100 401,569
Orbotech, Ltd.* Electronic Components & Instruments ......... 5,100 265,838
----------
667,407
----------
ITALY -- 4.9%
Assicurazioni Generali Insurance ................................... 2,700 93,557
Banca Nazionale del Lovoro* Banking ..................................... 22,200 69,827
Class Editori SPA Broadcasting & Publishing ................... 6,700 53,549
Finmeccanica SPA* Aerospace & Military Technology ............. 174,185 160,411
Gruppo Editoriale L'Espresso Broadcasting & Publishing ................... 4,800 77,716
Istituto Banc San Paolo Torino Banking ..................................... 58,890 801,654
Istituto Nazionale Delle Assicurazioni Insurance ................................... 14,500 33,645
La Rinascente SPA Merchandising ............................... 7,400 56,014
Mediaset SPA Broadcasting & Publishing ................... 14,800 131,565
Mondadori (Arnoldo Editore SPA) Broadcasting & Publishing ................... 5,400 93,557
Seat Pagine Gialle SPA Broadcasting & Publishing ................... 165,300 225,871
Telecom Italia SPA Telecommunications .......................... 101,747 1,057,679
Telecom Italia SPA di Risp Telecommunications .......................... 99,000 537,023
----------
3,392,068
----------
JAPAN -- 17.7%
Advantest Corp. Electronic Components & Instruments ......... 1,200 131,861
Asahi Glass Co., Ltd. Building Materials & Components ............. 18,000 116,742
Benesse Corp. Business & Public Services .................. 1,000 108,645
Canon, Inc. Data Processing & Reproduction .............. 14,600 419,775
Daiwa Securities Co., Ltd. Financial Services .......................... 41,000 270,993
Familymart Co. Food & Household Products ................... 7,700 353,076
Fuji Bank Limited Banking ..................................... 27,000 188,274
Fujitsu Ltd. Data Processing & Reproduction .............. 33,000 663,893
Hitachi Ltd. Electronics ................................. 16,000 150,038
Honda Motor Co., Ltd. Automobiles ................................. 16,000 678,144
Komatsu Ltd. Industrial Components ....................... 13,000 83,025
Matsushita Electric Industrial Co., Ltd. Appliances & Household Durables ............. 12,000 232,988
Mitsubishi Estate Co., Ltd. Real Estate ................................. 11,000 107,332
Mitsui Fudosan Real Estate ................................. 12,000 97,161
Murata Manufacturing Co., Ltd. Electronic Components & Instruments ......... 4,000 263,062
NEC Corp. Telecommunications .......................... 18,000 223,817
Nichiei Co., Ltd. Financial Services .......................... 50 4,379
Nikko Securities Co., Ltd. Financial Services .......................... 46,000 296,820
Nippon Telegraph & Telephone Corp. Telecommunications .......................... 56,000 656,994
Nissan Motor Co., Ltd.* Automobiles ................................. 28,000 133,712
NSK Limited Metals-Non-Ferrous .......................... 27,000 148,121
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
NTT Data Corp. Telecommunications .......................... 47,000 $ 373,558
NTT Mobile Communication Network, Inc. Telecommunications .......................... 65,000 880,729
Sakura Bank, Ltd. Banking ..................................... 48,000 182,028
Sanwa Bank Banking ..................................... 17,000 167,281
Shin-Etsu Chemical Co. Chemicals ................................... 5,000 167,305
Shohkoh Fund Co., Ltd. Financial Services .......................... 700 501,999
Sony Corp. Appliances & Household Durables ............. 2,000 215,638
Sony Corp., ADR Appliances & Household Durables ............. 600 66,225
Sumitomo Trust & Banking Banking ..................................... 38,000 182,722
Takeda Chemical Industries Health & Personal Care ...................... 26,000 1,205,094
Takefuji Corp. Financial Services .......................... 3,900 403,094
TDK Corp. Electronic Components & Instruments ......... 6,000 548,762
Teijin, Ltd. Chemicals ................................... 29,000 117,403
Terumo Corp. Health & Personal Care ...................... 5,000 111,330
Tokyo Electric Power Co. Utilities-Electrical & Gas .................. 20,000 422,188
Tokyo Electron, Ltd. Electronic Components & Instruments ......... 4,000 271,324
Toshiba Corp. Electrical & Electronics .................... 111,000 791,441
Yamada Denki Co., Ltd. Electrical & Electronics .................... 4,000 219,108
Yamanouchi Pharmaceutical Co., Ltd. Health & Personal Care ...................... 4,000 153,012
----------
12,309,093
----------
MEXICO -- 0.4%
Desc SA de CV (B Shares) Multi-Industrial ............................ 184,500 203,097
Tubos de Acero de Mexico SA, ADR Industrial Components ....................... 5,900 64,163
----------
267,260
----------
NETHERLANDS -- 7.1%
Aegon NV Insurance ................................... 6,122 444,149
AKZO Nobel NV Chemicals ................................... 4,260 179,243
Benckiser NV (B Shares) Recreation & Other Consumer Goods ........... 2,000 106,736
Buhrmann NV Data Processing & Reproduction .............. 14,640 236,280
DSM NV-- (NLG) Chemicals ................................... 810 86,874
Elsevier NV Broadcasting & Publishing ................... 12,510 145,138
Equant NV* Electronic Components & Instruments ......... 2,884 265,891
Gucci Group NV, ADR Textiles & Apparel .......................... 3,600 252,000
Heineken Holdings Beverages & Tobacco ......................... 5,132 193,175
Koninklijke Ahold NV* Merchandising ............................... 3,539 121,899
Koninklijke KPN NV Telecommunications .......................... 7,700 361,305
Koninklijke Wessanen NV Beverages & Tobacco ......................... 16,300 206,759
Philips Electronics NV Appliances & Household Durables ............. 8,096 798,596
Unilever NV Food & Household Products ................... 5,000 336,967
United Pan-Europe Communications NV* Telecommunications .......................... 1,630 88,419
Vedior NV Business & Public Services .................. 17,116 291,245
VNU NV Broadcasting & Publishing ................... 20,850 833,200
----------
4,947,876
----------
NEW ZEALAND -- 0.6%
Telecom Corp. of New Zealand, Ltd. Telecommunications .......................... 89,000 382,019
----------
NORWAY -- 0.9%
Orkla ASA (A Shares) Multi-Industrial ............................ 8,200 127,600
Orkla ASA (B Shares) Multi-Industrial ............................ 17,700 240,580
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
Sparebanken NOR Banking 12,720 $ 237,524
----------
605,704
----------
PHILIPPINES -- 0.8%
Philippine Long Distance Telephone Co. Telecommunications........................... 8,700 262,088
San Miguel Cl-B Food & Household Products ................... 145,000 316,304
----------
578,392
----------
PORTUGAL -- 1.0%
Brisa-Auto Estradas SA Transportation-Road & Rail .................. 7,600 313,505
Jeronimo Martins & Filho Merchandising ............................... 1,266 41,818
Telecel-Comunicacaoes Pessoais SA Telecommunications .......................... 2,500 322,271
----------
677,594
----------
SINGAPORE -- 0.9%
City Developments, Ltd. Miscellaneous ............................... 46,000 294,513
Development Bank of Singapore, Ltd. State & National Banks ...................... 6,000 73,305
Elec & Eltek International Co., Ltd. Electronic Components & Instruments ......... 58,000 226,200
Oversea-Chinese Banking Corp., Ltd. Financial Services .......................... 7,000 58,386
----------
652,404
----------
SOUTH AFRICA -- 0.3%
Sasol, Ltd. Transportation-Shipping ..................... 25,200 179,782
----------
South Korea -- 3.1%
Korea Telecom Corp., ADR Telecommunications .......................... 11,200 448,000
Pohang Iron & Steel Co., Ltd., ADR Metals-Steel ................................ 9,400 316,075
Samsung Electronics Co. Electrical & Electronics .................... 6,986 766,523
SK Telecom Co., Ltd., ADR Telecommunications .......................... 36,050 612,850
----------
2,143,448
----------
SPAIN -- 0.6%
Banco Santander Central Hispano SA Banking ..................................... 282 2,937
Telefonica de Espana* Telecommunications .......................... 3,258 156,940
Telefonica Publicidad e Informacion* Broadcasting & Publishing ................... 1,017 20,294
Union Electrica Fenosa SA Utilities-Electrical & Gas .................. 20,000 261,530
----------
441,701
----------
SWEDEN -- 4.2%
Astrazeneca Group Chemicals ................................... 10,342 402,647
Autoliv, Inc. Automobiles ................................. 1,100 33,511
Autoliv, Inc. Machinery & Engineering ..................... 7,500 226,875
Ericsson Telephone Co. Telecommunications Equipment ................ 17,300 554,504
Nordbanken Holding Co. AB State & National Banks ...................... 15,000 87,688
Skandia Forsakring AB Insurance Carriers .......................... 17,000 317,935
Skandinaviska Enskilda Banken (A Shares) Banking ..................................... 25,000 291,117
Svenska Handelsbanken B Banking ..................................... 39,000 431,206
Svenska Handlesbanken Cl-A-- (SEK) Banking ..................................... 4,200 50,390
Swedish Match AB Beverages & Tobacco ......................... 90,000 320,758
Trelleborg AB (B Shares) Multi-Industrial ............................ 23,500 207,311
----------
2,923,942
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
SWITZERLAND -- 4.2%
Nestle SA Food & Household Products ................... 129 $ 232,427
Novartis AG (Reg. Shares) Health & Personal Care ...................... 700 1,022,134
Roche Holding AG Health & Personal Care ...................... 53 544,800
Swisscom AG Telecommunications .......................... 470 176,863
United Bank of Switzerland AG Banking ..................................... 2,194 654,845
Zurich Allied AG Insurance ................................... 460 261,574
----------
2,892,643
----------
THAILAND -- 1.0%
BEC World Public Co., Ltd. Broadcasting & Publishing ................... 65,000 401,911
PTT Exploration & Production* Metals-Non-Ferrous .......................... 41,000 313,555
----------
715,466
----------
UNITED KINGDOM -- 18.4%
Abbey National PLC Financial Services .......................... 19,300 362,331
Amvescap PLC Financial Services .......................... 49,000 436,010
BAA PLC Transportation-Airlines ..................... 27,338 262,865
Bank of Ireland Banking ..................................... 25,159 422,754
Barclays PLC Banking ..................................... 4,960 144,328
BOC Group PLC Chemicals ................................... 20,131 393,481
British Aerospace PLC Transportation-Airlines ..................... 71,200 462,115
British Energy PLC Utilities-Electrical & Gas .................. 57,000 485,183
British Petroleum Co. PLC Energy Sources .............................. 15,287 273,980
Carlton Communications PLC Leisure & Tourism ........................... 59,500 493,332
Charter PLC Multi-Industrial ............................ 28,300 164,608
Cookson Group PLC Multi-Industrial ............................ 159,000 536,349
Diageo PLC Data Processing & Reproduction .............. 39,612 413,666
Enterprise Oil PLC Energy Sources .............................. 12,262 79,440
General Electric Co. PLC Electrical & Electronics .................... 28,838 294,108
Glaxo Wellcome PLC Health & Personal Care ...................... 14,956 415,628
Greencore Group PLC Food & Household Products ................... 59,000 193,908
Lasmo PLC Energy Sources .............................. 42,320 95,227
Lloyds TSB Group PLC Banking ..................................... 301 4,080
Marks & Spencer PLC Food & Household Products ................... 52,214 302,058
Orange PLC* Telecommunications .......................... 21,790 319,431
Pearson PLC Broadcasting & Publishing ................... 8,515 173,011
Powergen UK PLC Utilities-Electrical & Gas .................. 43,000 463,619
Prudential Corp. PLC Insurance ................................... 16,504 242,981
Reckitt & Colman PLC Recreation & Other Consumer Goods ........... 28,000 291,961
Reed International PLC Broadcasting & Publishing ................... 24,916 166,231
Rentokil Initial PLC Business & Public Services .................. 24,886 97,088
Reuters Group PLC Business & Public Services .................. 33,573 441,625
Rio Tinto PLC Metals-Non-Ferrous .......................... 27,307 457,771
Rolls-Royce PLC Aerospace & Military Technology ............. 73,000 308,961
Royal & Sun Alliance Insurance PLC Insurance ................................... 19,084 171,166
Sainsbury (J) PLC Food & Household Products ................... 13,125 82,755
Securicor PLC Business & Public Services .................. 28,000 245,618
Select Appointments Holdings PLC* Business & Public Services .................. 9,040 107,656
Sema Group PLC Business & Public Services .................. 29,000 279,532
Shell Transport & Trading Co. PLC Energy Sources .............................. 48,332 362,452
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------
INVESTMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE
INDUSTRY SHARES (NOTE 2)
-------- -------- ----------
<S> <C> <C> <C>
Smith Industries PLC Electronic Components & Instruments ......... 16,000 $ 211,349
Smithkline Beecham PLC Health & Personal Care ...................... 13,094 170,177
Tomkins PLC Industrial Components ....................... 94,000 408,212
United News & Media PLC Broadcasting & Publishing ................... 61,870 594,904
Vodafone Group PLC Telecommunications .......................... 35,015 689,924
WPP Group PLC Business & Public Services .................. 33,600 284,149
-----------
12,806,024
-----------
UNITED STATES -- 0.4%
Housing & Commercial Bank, GDR Banking ..................................... 4,900 151,655
Shinhan Bank, GDR Banking ..................................... 5,600 124,880
-----------
276,535
-----------
TOTAL COMMON STOCK ................................................................................... 67,126,821
(COST $59,812,716) -----------
PREFERRED STOCK -- 0.6%
FRANCE -- 0.3%
Casino Guichard Perrach SA Merchandising ............................... 3,100 169,757
-----------
GERMANY -- 0.4%
SAP AG Business & Public Services .................. 608 241,713
-----------
TOTAL PREFERRED STOCK
(COST $508,896) 411,470
-----------
PRINCIPAL
AMOUNT
----------
CORPORATE BONDS -- 0.0%
GERMANY -- 0.0%
Daimler-Benz (Cost $4,265) Automobiles ................................. 54 4,293
-----------
TOTAL INVESTMENTS (Cost $60,325,877)(DAGGER)-- 97.3% ....................................................... 67,542,584
OTHER ASSETS AND LIABILITIES, NET--2.7% .................................................................... 1,858,630
-----------
NET ASSETS-- 100.0% ........................................................................................ $69,401,214
===========
</TABLE>
* Non-income producing security.
(DAGGER) The cost for Federal income tax purposes was $60,376,080. At June 30,
1999, net unrealized appreciation was $7,166,504. This consisted of
aggregate gross unrealized appreciation for all securities for which
there was an excess of market value over tax cost of $10,973,240, and
aggregate gross unrealized depreciation for all securities for which
there was an excess of tax cost over market value of $3,806,736.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP INTERNATIONAL
GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in securities (identified cost $162,660,355,
$70,828,138, $66,360,953 and $60,325,877,
respectively), at value ........................... $220,151,916 $78,850,895 $77,248,743 $67,542,584
Cash in interest bearing account ..................... -- -- -- 2,100,363
Receivables:
Dividends and interest ............................ 118,115 142,234 52,526 160,403
Fund shares sold .................................. 106,892 30,373 41,366 13,902
Foreign taxes ..................................... -- -- -- 174,995
Investment securities sold ........................ 6,700,708 2,386,635 359,363 694,092
Unrealized appreciation on forward foreign currency
exchange contracts (Note 7) .................... -- -- -- 18,965
Other assets .. ...................................... -- 33,877 31,402 48,295
------------ ----------- ----------- -----------
Total assets . .................................... 227,077,631 81,444,014 77,733,400 70,753,599
------------ ----------- ----------- -----------
LIABILITIES:
Due to Manager ....................................... 86,500 21,083 21,098 21,802
Payables:
Fund shares redeemed .............................. 1,152,744 2,320,753 1,367,166 449,554
Investment securities purchased ................... 3,208,988 -- -- 834,552
Other accrued expenses ............................... 91,600 42,118 28,838 46,477
------------ ----------- ----------- -----------
Total liabilities ................................. 4,539,832 2,383,954 1,417,102 1,352,385
------------ ----------- ----------- -----------
NET ASSETS. .......................................... $222,537,799 $79,060,060 $76,316,298 $69,401,214
============ =========== =========== ===========
NET ASSETS CONSIST OF:
Paid-in capital ...................................... 157,672,384 74,479,517 65,106,243 58,300,277
Undistributed net investment income .................. -- 798,378 147,136 427,375
Accumulated net realized gain (loss) on:
Investment transactions ........................... 7,373,854 (4,240,592) 175,129 3,454,951
Net unrealized appreciation on:
Investments ....................................... 57,491,561 8,022,757 10,887,790 7,216,707
Translations of assets and liabilities in
foreign currencies ............................. -- -- -- 1,904
------------ ----------- ----------- -----------
NET ASSETS ........................................... $222,537,799 $79,060,060 $76,316,298 $69,401,214
============ =========== =========== ===========
Shares of beneficial interest outstanding ............ 8,637,571 8,051,614 8,027,246 6,920,853
------------ ----------- ----------- -----------
NET ASSET VALUE, offering and redemption
price per share (Net assets/outstanding
shares of beneficial interest) .................... $25.76 $9.82 $9.51 $10.03
====== ===== ===== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Period January 1, 1999 through June 30, 1999
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP INTERNATIONAL
GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ......................................... $ 615,996 $1,049,492 $ 395,262 $1,020,441
Interest .......................................... 53,025 60,135 45,314 65,439
Foreign taxes withheld ............................ -- -- -- (73,429)
----------- ---------- --------- -----------
669,021 1,109,627 440,576 1,012,451
----------- ---------- --------- -----------
EXPENSES:
Management fee .................................... 600,471 228,750 221,269 230,202
Accounting and administration fee ................. 109,176 41,590 36,878 35,416
Custodian fee ..................................... 17,655 7,433 6,576 77,711
Transfer agent fee ................................ 37,816 16,927 15,473 12,349
Trustees' fees and expenses ....................... 1,740 1,708 1,708 1,708
Professional fees ................................. 71,094 25,715 19,199 19,240
Registration fees ................................. 11,640 15,695 18,001 12,801
Amortization of organizational expenses ........... -- 4,163 3,855 5,953
Other expenses .................................... 20,753 8,776 9,793 24,648
----------- ---------- --------- -----------
Total expenses ................................. 870,345 350,757 332,752 420,028
Managment fee waived ........................... (51,521) (38,825) (37,727) (65,871)
----------- ---------- --------- -----------
Total expenses, net ......................... 818,824 311,932 295,025 354,157
----------- ---------- --------- -----------
Net investment income (loss) ......................... (149,803) 797,695 145,551 658,294
----------- ---------- --------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain (loss) from:
Investment transactions ........................ 7,373,854 (262,776) 508,263 3,480,044
Foreign currency related transactions .......... -- -- -- (230,919)
----------- ---------- --------- -----------
Total net realized gain (loss) .............. 7,373,854 (262,776) 508,263 3,249,125
----------- ---------- --------- -----------
Change in unrealized appreciation (depreciation) of:
Investments .................................... 12,232,542 3,283,988 (347,702) (1,809,343)
Foreign currency ............................... -- -- -- 121,478
----------- ---------- --------- -----------
Total change in unrealized appreciation
(depreciation) ........................... 12,232,542 3,283,988 (347,702) (1,687,865)
----------- ---------- --------- -----------
Net gain on investments and
foreign currency ............................... 19,606,396 3,021,212 160,561 1,561,260
----------- ---------- --------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ................................ $19,456,593 $3,818,907 $ 306,112 $ 2,219,554
=========== ========== ========= ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP INTERNATIONAL
GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO(DAGGER) PORTFOLIO(DAGGER) PORTFOLIO(DAGGER)
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ......................................... $ 866,051 $ 1,167,170 $ 374,818 $ 383,770
Interest .......................................... 193,635 145,317 108,913 119,313
Foreign taxes withheld ............................ -- -- -- (10,822)
----------- ----------- ----------- -----------
1,059,686 1,312,487 483,731 492,261
----------- ----------- ----------- -----------
EXPENSES:
Management fee .................................... 868,191 256,307 231,603 219,865
Accounting and administration fee ................. 150,210 46,601 38,600 33,825
Custodian fee ..................................... 33,056 9,656 9,109 41,750
Transfer agent fee ................................ 51,598 19,590 18,555 14,858
Trustees' fees .................................... 5,230 1,554 1,554 1,554
Professional fees ................................. 172,635 30,331 26,421 25,347
Registration fees ................................. 58,282 30,768 25,448 21,475
Amortization of organizational expenses ........... -- 3,938 3,617 5,287
Other expenses .................................... 17,353 10,447 10,419 9,623
----------- ----------- ----------- -----------
Total expenses ................................. 1,356,555 409,192 365,326 373,584
Management fee waived .......................... (179,082) (59,683) (56,522) (35,331)
----------- ----------- ----------- -----------
Total expenses, net ......................... 1,177,473 349,509 308,804 338,253
----------- ----------- ----------- -----------
Net investment income (loss) ......................... (117,787) 962,978 174,927 154,008
----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain (loss) from:
Investment transactions ........................ 23,800,207 (2,789,214) (188,829) 1,568,013
Foreign currency related transactions .......... -- -- -- (190,404)
----------- ----------- ----------- -----------
Total net realized gain (loss) .............. 23,800,207 (2,789,214) (188,829) 1,377,609
----------- ----------- ----------- -----------
Change in unrealized appreciation (depreciation) of:
Investments .................................... 7,975,088 (2,689,372) (4,659,464) (1,333,735)
Foreign currency ............................... -- -- -- (119,574)
----------- ----------- ----------- -----------
Total change in unrealized appreciation
(depreciation) ........................... 7,975,088 (2,689,372) (4,659,464) (1,453,309)
----------- ----------- ----------- -----------
Net gain (loss) on investments and
foreign currency ............................... 31,775,295 (5,478,586) (4,848,293) (75,700)
----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS ................................... $31,657,508 $(4,515,608) $(4,673,366) $ 78,308
=========== =========== =========== ===========
<FN>
(DAGGER) Commenced operations on June 29, 1998.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP INTERNATIONAL
GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
FOR THE PERIOD JANUARY 1, 1999
THROUGH JUNE 30, 1999
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss) ...................... $ (149,803) $ 797,695 $ 145,551 $ 658,294
Net realized gain (loss) from investment and
foreign currency transactions .................. 7,373,854 (262,776) 508,263 3,249,125
Change in unrealized appreciation (depreciation) of
investments and foreign currency ............... 12,232,542 3,283,988 (347,702) (1,687,865)
------------ ------------ ----------- -----------
Net increase in net assets resulting from
operations ........................................ 19,456,593 3,818,907 306,112 2,219,554
------------ ------------ ----------- -----------
Distributions to shareholders:
From net realized gains on investments ......... -- -- -- (780,343)
Decrease in net assets from Fund share
transactions (Note 5) ............................. (20,070,270) (18,538,419) (6,145,338) (5,822,443)
------------ ------------ ----------- -----------
Decrease in net assets ............................... (613,677) (14,719,512) (5,839,226) (4,383,232)
Net Assets:
Beginning of period ............................... 223,151,476 93,779,572 82,155,524 73,784,446
------------ ------------ ----------- -----------
End of period ..................................... $222,537,799 $ 79,060,060 $76,316,298 $69,401,214
============ ============ =========== ===========
</TABLE>
The accompanying notes are an integral part of th financial statements.
27
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP LARGE CAP SMALL CAP INTERNATIONAL
GROWTH EQUITY VALUE EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO(DAGGER) PORTFOLIO(DAGGER) PORTFOLIO(DAGGER)
------------- ---------------- ----------------- -----------------
<S> <C> <C> <C> <C>
FOR THE YEAR ENDED DECEMBER 31, 1998
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income (loss) ...................... $ (117,787) $ 962,978 $ 174,927 $ 154,008
Net realized gain (loss) from investment and
foreign currency transactions .................. 23,800,207 (2,789,214) (188,829) 1,377,609
Change in unrealized appreciation (depreciation) of
investments and foreign currency ............... 7,975,088 (2,689,372) (4,659,464) (1,453,309)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations ................................... 31,657,508 (4,515,608) (4,673,366) 78,308
------------ ------------ ----------- -----------
Distributions to shareholders:
Net investment income ............................. -- (962,296) (173,342) --
Net realized gains ................................ (23,800,865) -- -- (812,763)
In excess of net realized gains ................... -- (1,188,602) (144,305) --
------------ ------------ ----------- -----------
Total Distributions ......................... (23,800,865) (2,150,898) (317,647) (812,763)
------------ ------------ ----------- -----------
Increase in net assets from Fund share
transactions (Note 5) ............................. 123,849,693 100,446,078 87,146,537 74,518,901
------------ ------------ ----------- -----------
Increase in net assets ............................... 131,706,336 93,779,572 82,155,524 73,784,446
Net Assets:
Beginning of year ................................. 91,445,140 -- -- --
------------ ------------ ----------- -----------
End of year ....................................... $223,151,476 $ 93,779,572 $82,155,524 $73,784,446
============ ============ =========== ===========
</TABLE>
FOR THE YEAR ENDED DECEMBER 31, 1997
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment loss ............................... $ (720,844)
Net realized gain on investment transactions ...... 12,134,827
Net change in unrealized appreciation of
investments during the year .................... 8,815,986
------------
Net increase in net assets resulting from
operations ......................................... 20,229,969
------------
Distributions to shareholders from:
Net realized gains ................................ (11,758,959)
------------
Increase in net assets from Fund share
transactions (Note 5) ............................. 6,800,389
------------
Increase in net assets ............................... 15,271,399
------------
Net Assets:
Beginning of year ................................. 76,173,741
------------
End of year ....................................... $ 91,445,140
============
(DAGGER) Commenced operations on June 29, 1998.
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP GROWTH EQUITY PORTFOLIO
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
each year 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 PERIOD
JANUARY 1, 1999 FOR THE YEARS ENDED DECEMBER 31,
THROUGH -----------------------------------------------------
JUNE 30, 1999 1998(DAGGER) 1997 1996 1995 1994
-------------------- ------------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE-- BEGINNING OF PERIOD ................ $23.59 $21.37 $19.22 $17.41 $15.14 $16.39
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment loss 1 ............................. (0.02) (0.01) (0.19) (0.15) (0.10) (0.03)
Net realized and unrealized gain (loss)
on investments ................................. 2.19 5.02 5.44 4.37 4.38 (0.02)
------ ------ ------ ------ ------ ------
Total from investment operations ............ 2.17 5.01 5.25 4.22 4.28 (0.05)
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
From net realized gain on investments ............. -- (2.79) (3.10) (2.41) (2.01) (1.20)
------ ------ ------ ------ ------ ------
NET ASSET VALUE-- END OF PERIOD ...................... $25.76 $23.59 $21.37 $19.22 $17.41 $15.14
====== ====== ====== ====== ====== ======
TOTAL RETURN ......................................... 9.20%** 23.58% 27.50% 24.25% 28.43% (0.23)%
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses (net of fee waivers) ..................... 0.75%* 0.80% 1.38% 1.43% 1.43% 1.38%
Expenses (excluding fee waivers) .................. 0.80%* 0.92% N/A N/A N/A N/A
Net investment loss ............................... (0.14)%* (0.08)% (0.86)% (0.78)% (0.53)% (0.17)%
Portfolio turnover rate .............................. 15.50% 51.64% 28.05% 34.84% 49.12% 37.05%
Net assets at end of period (000 omitted) ............ $222,538 $223,151 $91,445 $76,174 $66,311 $65,267
<FN>
(DAGGER) Effective February 23, 1998, Wilmington Trust Company (WTC) assumed the
responsibility of Adviser to the Large Cap Growth Portfolio and with
the change in Adviser the investment objective of the Portfolio was
changed to seek superior long-term growth of capital by investing in
large cap U.S. equity securities that are judged by WTC to possess
strong growth characteristics. Prior to February 23, 1998, the Growth
Portfolio sought to achieve its investment ojective by investing at
least 65% of total assets in equity securities without regard to the
market capitalization of the issuers of such securities.
1 The net investment loss per share for the years ended December 31, 1996
and 1997 was calculated using average shares outstanding method.
* Annualized.
** Not Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- LARGE CAP VALUE EQUITY PORTFOLIO
- ----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- CONTINUED
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the 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 PERIOD FOR THE PERIOD
JANUARY 1, 1999 JUNE 29, 1998(DAGGER)
THROUGH THROUGH
JUNE 30, 1999 DECEMBER 31, 1998
----------------- ---------------------
<S> <C> <C>
NET ASSET VALUE-- BEGINNING OF PERIOD .......................................... $9.30 $10.00
----- ------
INVESTMENT OPERATIONS:
Net investment income ....................................................... 0.10 0.10
Net realized and unrealized gain (loss)
on investments ........................................................... 0.42 (0.58)
----- ------
Total from investment operations ...................................... 0.52 (0.48)
----- ------
DISTRIBUTIONS:
From net investment income .................................................. -- (0.10)
In excess of net realized gain on investments ............................... -- (0.12)
----- ------
Total distributions ................................................... -- (0.22)
----- ------
NET ASSET VALUE-- END OF PERIOD ................................................ $9.82 $ 9.30
===== ======
TOTAL RETURN ................................................................... 5.59%1 (4.79)%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses (net of fee waivers) ............................................... 0.75%* 0.75%*
Expenses (excluding fee waivers) ............................................ 0.84%* 0.88%*
Net investment income ....................................................... 1.92%* 2.07%*
Portfolio turnover rate ........................................................ 25.14% 36.78%
Net assets at end of period (000 omitted) ...................................... $79,060 $93,780
<FN>
(DAGGER) Commencement of operations.
1 Not annualized.
* Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- SMALL CAP EQUITY PORTFOLIO
- ---------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- CONTINUED
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the 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 PERIOD FOR THE PERIOD
JANUARY 1, 1999 JUNE 29, 1998(DAGGER)
THROUGH THROUGH
JUNE 30, 1999 DECEMBER 31, 1998
--------------- --------------------
<S> <C> <C>
NET ASSET VALUE-- BEGINNING OF PERIOD .......................................... $9.36 $10.00
----- ------
INVESTMENT OPERATIONS:
Net investment income ....................................................... 0.02 0.02
Net realized and unrealized gain (loss)
on investments ........................................................... 0.13 (0.62)
----- ------
Total from investment operations ...................................... 0.15 (0.60)
----- ------
DISTRIBUTIONS:
From net investment income .................................................. -- (0.02)
In excess of net realized gain on investments ............................... -- (0.02)
----- ------
Total distributions ................................................... -- (0.04)
----- ------
NET ASSET VALUE-- END OF PERIOD ................................................ $9.51 $ 9.36
===== ======
TOTAL RETURN ................................................................... 1.60%1 (6.03)%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses (net of fee waivers) ............................................... 0.80%* 0.80%*
Expenses (excluding fee waivers) ............................................ 0.90%* 0.95%*
Net investment income ....................................................... 0.39%* 0.45%*
Portfolio turnover rate ........................................................ 7.42% 9.81%
Net assets at end of period (000 omitted) ...................................... $76,316 $82,156
<FN>
(DAGGER) Commencement of operations.
1 Not annualized.
* Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND -- INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS -- CONTINUED
- --------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout
the 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 PERIOD FOR THE PERIOD
JANUARY 1, 1999 JUNE 29, 1998(DAGGER)
THROUGH THROUGH
JUNE 30, 1999 DECEMBER 31, 1998
--------------- --------------------
<S> <C> <C>
NET ASSET VALUE-- BEGINNING OF PERIOD .......................................... $ 9.82 $10.00
------ ------
INVESTMENT OPERATIONS:
Net investment income ....................................................... 0.06 0.02
Net realized and unrealized gain (loss)
on investments and foreign currencies .................................... 0.26 (0.09)
------ ------
Total from investment operations ...................................... 0.32 (0.07)
------ ------
DISTRIBUTIONS:
From net realized gain on investments ....................................... (0.11) (0.11)
------ ------
NET ASSET VALUE-- END OF PERIOD ................................................ $10.03 $ 9.82
====== ======
TOTAL RETURN ................................................................... 3.29%1 (0.70)%1
RATIOS (TO AVERAGE NET ASSETS)/
SUPPLEMENTAL DATA:
Expenses (net of fee waivers) ............................................... 1.00%* 1.00%*
Expenses (excluding fee waivers) ............................................ 1.19%* 1.10%*
Net investment income ....................................................... 1.86%* 0.46%*
Portfolio turnover rate ........................................................ 33.02% 27.66%
Net assets at end of period (000 omitted) ...................................... $69,401 $73,784
<FN>
(DAGGER) Commencement of operations.
1 Not annualized.
* Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. DESCRIPTION OF THE FUND. The Rodney Square Strategic Equity Fund (the "Fund")
is a diversified, open-end, management investment company organized as a
Massachusetts business trust and is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Fund consists of four separate
portfolios (the "Portfolios"): the Large Cap Growth Equity Portfolio, the
Large Cap Value Equity Portfolio, the Small Cap Equity Portfolio and the
International Equity Portfolio.
The Large Cap Growth Equity Portfolio (the "Growth Portfolio") seeks superior
long-term growth of capital by investing in large cap U.S. equity securities
that are judged by the Portfolio's adviser, Wilmington Trust Company ("WTC"
or "Adviser"), to possess strong growth characteristics.
The Large Cap Value Equity Portfolio (the "Value Portfolio") seeks superior
long-term growth of capital by investing in large cap U.S. equity securities
that are judged by WTC to be undervalued in the marketplace relative to
underlying profitability.
The Small Cap Equity Portfolio (the "Small Cap Portfolio") seeks superior
long-term growth of capital by investing in small cap U.S. equity securities
that are judged by WTC to either possess strong growth characteristics or to
be undervalued in the marketplace relative to underlying profitability.
The International Equity Portfolio (the "International Portfolio") seeks
superior long-term capital appreciation by investing primarily in equity
securities of issuers located outside the United States.
Effective June 30, 1999, the Fund changed its fiscal year end from December
31 to June 30 for financial reporting and federal income tax purposes.
2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of the
significant accounting policies of the Fund:
SECURITY VALUATION. Portfolio 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 are 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.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the International
Portfolio are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars on the following basis:
(i) market value of investment securities, assets and liabilities at the
daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the rates of exchange prevailing on the
respective dates of such transactions.
33
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
The International Portfolio does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates on investments
from the fluctuations arising from changes in market prices of securities
held. Such fluctuations are included with the net realized and unrealized
gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized between the trade and settlement dates on securities
transactions, the difference between the amounts of dividends, interest, and
foreign withholding taxes recorded on the International Portfolio's books,
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value
of assets and liabilities, other than investments in securities at the end of
the fiscal period, resulting from changes in exchange rates.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. In connection with portfolio
purchases and sales of securities denominated in a foreign currency, the
International Portfolio may enter into forward foreign currency exchange
contracts. Additionally, from time to time the International Portfolio may
enter into these contracts to hedge certain foreign currency assets. Foreign
currency exchange contracts are recorded at market value. Certain risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts. Realized gains or losses
arising from such transactions are included in net realized gain (loss) from
foreign currency transactions.
FEDERAL INCOME TAXES. The Portfolios are treated as separate entities which
intend to continue to qualify for treatment as "regulated investment
companies" under Subchapter M of the Internal Revenue Code of 1986, as
amended, and to distribute all of their taxable income to their shareholders.
Therefore, no federal income tax provision has been made in the financial
statements. As of June 30, 1999 the Value portfolio had a net tax basis
capital loss carryforward available to offset future capital gains of
approximately $4,210,000 which will expire June 30, 2007.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions of net investment income earned
and net capital gains realized by the Portfolios, if any, will be made
annually in December. An additional distribution may be made, if necessary.
Income and capital gains distributions are determined in accordance with
federal tax regulations and may differ from those determined in accordance
with generally accepted accounting principles. To the extent these
differences are permanent, such amounts are reclassified within the capital
accounts based on their federal tax basis treatment; temporary differences do
not require such reclassification.
DEFERRED ORGANIZATION COSTS. Costs incurred by the Value Portfolio, Small Cap
Portfolio and the International Portfolio in connection with their initial
registration and public offering of shares have been deferred and are being
amortized on a straight-line basis over a five-year period beginning on the
date the Portfolios commenced operations.
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 contingent
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.
34
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
OTHER. Investment security transactions are accounted for on a trade date
basis. The Portfolios use the specific identification method for determining
realized gain or loss on investments for both financial and federal income
tax reporting purposes. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income and expenses are reported
on the accrual basis.
3. PURCHASES AND SALES OF INVESTMENT SECURITIES. For the period January 1, 1999
through June 30, 1999, purchases and sales of investment securities
(excluding short-term investments) by the Portfolios were as follows:
<TABLE>
<CAPTION>
GROWTH PORTFOLIO VALUE PORTFOLIO SMALL CAP PORTFOLIO INTERNATIONAL PORTFOLIO
------------------ --------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
Purchases $33,796,678 $20,180,329 $5,416,134 $22,386,963
Sales 54,563,224 33,230,202 9,465,722 26,665,499
</TABLE>
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES. WTC, a wholly owned
subsidiary of Wilmington Trust Corporation, serves as Investment Adviser to
the Fund. Under the Advisory Agreement, WTC directs the investments of each
Portfolio in accordance with that Portfolio's investment objectives, policies
and limitations. In addition, WTC recommends sub-advisers for the
International Equity Portfolio, allocates assets among the sub-advisers, and
monitors and evaluates the sub-advisers' performance. For services provided
under the Advisory Agreement to the Growth Portfolio, Value Portfolio, Small
Cap Portfolio and International Portfolio, WTC receives a fee at the annual
rates of 0.55%, 0.55%, 0.60% and 0.65%, respectively, of the average daily
net assets of each Portfolio. WTC has agreed to waive its fee or reimburse
each Portfolio monthly to the extent that expenses of the Portfolio
(excluding taxes, extraordinary expenses, brokerage commissions and interest)
exceed an annual rate of 0.75% of the average daily net assets of the Growth
Portfolio, 0.75% of the average daily net assets of the Value Portfolio,
0.80% of the average daily net assets of the Small Cap Portfolio and 1.00% of
the average daily net assets of the International Portfolio.
Prior to February 23, 1998, the Fund employed Rodney Square Management
Corporation ("RSMC"), a wholly owned subsidiary of WTC, to provide asset
management, consulting services and other services to the Fund. For
management services to the Fund, RSMC received an annual fee equal to 1.00%
of the average daily net assets of the Growth Portfolio up to $200 million of
Fund net assets and 0.95% of the average daily net assets in excess of $200
million. RSMC had agreed to waive its fees or reimburse the Growth Portfolio
monthly to the extent that operating expenses (excluding taxes, extraordinary
expenses, brokerage commissions and interest) exceeded an annual rate of
1.50% of average daily net assets.
WTC also serves as custodian of the assets of the Growth Portfolio, Value
Portfolio and Small Cap Portfolio and receives a fee for this service. PFPC
Trust Company ("PFPCTrust") serves as sub-custodian to the assets of these
Portfolios, and is paid by WTC out of its fee. Bankers Trust Company serves
as Custodian of the International Portfolio's assets, and employs foreign
sub-custodians to maintain the International Portfolio's assets outside the
United States.
35
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
PFPC Inc. ("PFPC") performs certain administrative and accounting services,
including determining the net asset value per share of each Portfolio,
pursuant to an Administration and Accounting Services Agreement with the
Fund. For the services provided, the Fund pays PFPC an annual fee equal to
the amount derived from the following schedule: 0.10% of each Portfolio's
first $1 billion of average daily net assets; 0.075% of each Portfolio's next
$500 million in average net assets; 0.05% of each Portfolio's next $500
million of average daily net assets; and 0.035% of each Portfolio's average
daily nets assets in excess of $2 billion. In addition, any related
out-of-pocket expenses incurred by PFPC in the provision of services to a
Portfolio are borne by that Portfolio.
Prior to February 2, 1998, RSMC served as Administrator to the Fund pursuant
to an Administration Agreement with the Fund on behalf of the Growth
Portfolio. For the services provided, RSMC received a monthly administration
fee from the Fund at an annual rate of 0.09% of the Growth Portfolio's
average daily net assets.
Prior to February 2, 1998, RSMC determined the net asset value per share of
the Growth Portfolio and provided accounting services to the Fund pursuant to
an Accounting Services Agreement with the Fund on behalf of the Growth
Portfolio. For its services, RSMC received an annual fee of $45,000, plus an
amount equal to 0.02% of that portion of the Growth Portfolio's average daily
net assets in excess of $100 million.
PFPC also serves as transfer and dividend disbursing agent to the Fund. For
these services, the Fund pays PFPC an annual fee of 0.03% of the Fund's
average daily net assets, plus transaction charges and out-of-pocket
expenses. Prior to February 2, 1998, RSMC served as transfer and dividend
disbursing agent to the Fund. For its services, the Fund paid 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, Provident Distributors
("PDI") manages the Fund's distribution efforts and provides assistance and
expertise in developing marketing plans and materials and receives no
compensation from the Fund. Prior to January 26, 1998, the Fund's Board of
Trustees had authorized, pursuant to a Rule 12b-1 plan of distribution, a
payment of up to 0.25% of the Growth Portfolio's average daily net assets
annually to reimburse the distributor for expenses incurred in connection
with distribution activities. Effective January 26, 1998, the Fund's Rule
12b-1 plan was terminated.
The salaries of all officers of the Fund, the Trustees who are "interested
persons" of the Fund, PFPC, PDI, WTC and PFPC Trust or their affiliates and
all personnel of the Fund, PFPC, PDI, WTC or PFPC Trust performing services
related to research, statistical and investment activities are paid by PFPC,
PDI, WTC or PFPC Trust or their affiliates.
36
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
5. FUND SHARES. At June 30, 1999, 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 Portfolios:
<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE FISCAL FOR THE FISCAL
JANUARY 1, 1999 YEAR ENDED YEAR ENDED
THE GROWTH PORTFOLIO THROUGH JUNE 30, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
------------------------- -------------------------- -------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Shares sold ................. 422,168 $10,293,120 601,227 $ 13,986,641 179,170 $ 3,907,003
Shares issued in
exchange for securities
transferred in-kind
(Note 6) ................. -- -- 4,749,182 113,362,975 -- --
Shares issued to
shareholders in
reinvestment of
distributions ............ -- -- 972,651 22,740,589 490,664 10,372,625
Shares redeemed ............. (1,246,131) (30,363,390) (1,141,100) (26,240,512) (354,225) (7,479,239)
---------- ------------ ---------- ------------ ---------- -----------
Net increase (decrease) ..... (823,963) $ 20,070,270 5,181,960 $123,849,693 315,609 $ 6,800,389
============ ============ ===========
Beginning of year ........... 9,461,534 4,279,574 3,963,965
---------- ---------- ----------
End of year ................. 8,637,571 9,461,574 4,279,574
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD JANUARY 1, 1999 FOR THE PERIOD JUNE 29, 1998(DAGGER)
THE VALUE PORTFOLIO THROUGH JUNE 30, 1999 THROUGH DECEMBER 31, 1998
------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Shares sold ............................ 448,376 $ 4,123,795 998,364 $ 9,377,897
Shares issued in exchange for
securities transferred in-kind
(Note 6) ............................ -- -- 9,470,838 94,708,383
Shares issued to shareholders in
reinvestment of distributions ....... -- -- 231,206 2,124,787
Shares redeemed ........................ (2,479,068) (22,662,214) (618,102) (5,764,989)
----------- ------------ ----------- ------------
Net increase (decrease) ................ (2,030,692) $(18,538,419) 10,082,306 $100,446,078
============ ============
Shares outstanding:
Beginning of period .................... 10,082,306 --
----------- -----------
End of period .......................... 8,051,614 10,082,306
=========== ===========
<FN>
(DAGGER) Commencement of operations.
</FN>
</TABLE>
37
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1999 FOR THE PERIOD JUNE 29, 1998(DAGGER)
THE SMALL CAP PORTFOLIO THROUGH JUNE 30, 1999 THROUGH DECEMBER 31, 1998
------------------------------- -----------------------------------
SHARES AMOUNT SHARES AMOUNT
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Shares sold ............................. 1,015,748 $ 8,933,004 1,594,097 $14,358,820
Shares issued in exchange for
securities transferred in-kind
(Note 6) ............................. -- -- 7,904,155 79,041,552
Shares issued to shareholders in
reinvestment of distributions 33,474 306,962
Shares redeemed ......................... (1,762,319) (15,078,342) (757,909) (6,560,797)
---------- ------------ --------- -----------
Net increase (decrease) ................. (746,571) $ (6,145,338) 8,773,817 $87,146,537
============ ========= ===========
Shares outstanding:
Beginning of period ..................... 8,773,817 --
---------- ---------
End of period ........................... 8,027,246 8,773,817
========== =========
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1999 FOR THE PERIOD JUNE 29, 1998(DAGGER)
THE INTERNATIONAL PORTFOLIO THROUGH JUNE 30, 1999 THROUGH DECEMBER 31, 1998
------------------------------ ----------------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Shares sold ............................. 223,054 $ 2,207,700 1,425,587 $13,411,791
Shares issued in exchange for
securities transferred in-kind
(Note 6) ............................. -- -- 6,353,419 63,534,185
Shares issued to shareholders in
reinvestment of distributions ........ 76,844 771,510 82,135 803,274
Shares redeemed ......................... (894,964) (8,801,653) (345,222) (3,230,349)
--------- ----------- --------- -----------
Net increase (decrease) ................. (595,066) $(5,822,443) 7,515,919 $74,518,901
=========== ===========
Shares outstanding:
Beginning of period ..................... 7,515,919 --
--------- ---------
End of period ........................... 6,920,853 7,515,919
========= =========
<FN>
(DAGGER) Commencement of operations.
</FN>
</TABLE>
38
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
6. TRANSFERS IN-KIND AND COMMENCEMENT OF NEW PORTFOLIOS. Effective June 29,
1998, the Wilmington Trust Growth Stock Fund ("Growth Stock Fund"), the
Wilmington Trust Value Stock Fund ("Value Stock Fund"), the Wilmington Trust
Small Cap Fund ("Small Cap Fund") and the Wilmington Trust International Fund
("International Fund"), each a Wilmington Trust Collective Investment Fund
("WTCIF"), transferred all of their net assets, including their securities,
to the Growth Portfolio, the Value Portfolio, the Small Cap Portfolio and the
International Portfolio, respectively. The shareholders of each WTCIF
received shares of the respective Portfolios based on the net assets
transferred divided by the net asset value of the respective Portfolio.
The transfer was conducted on a taxable basis with respect to the Growth
Stock Fund, whereby any unrealized appreciation or depreciation on the
securities on the date of transfer was recognized by the Growth Stock Fund
and the Growth Portfolio's basis in the securities reflect their market value
as of the date of transfer.
The transfer of securities was conducted on a tax-free basis with respect to
the Value Stock Fund, the Small Cap Fund and the International Fund, whereby
any unrealized appreciation or depreciation on the securities on the date of
transfer was not treated as a taxable event by the Value Stock Fund, Small
Cap Fund and the International Fund. The Value Portfolio's, the Small Cap
Portfolio's and the International Portfolio's basis in the securities reflect
their historical cost basis as of the date of transfer.
The following table summarized the aforementioned transactions:
THE WILMINGTON TRUST COLLECTIVE INVESTMENT FUNDS
NET ASSET UNREALIZED
SHARES AT VALUE AT APPRECIATION
FUND NAME 6/28/98 6/28/98 AT 6/28/98
------------ --------- ------------ -------------
Growth Stock Fund 1,696,889 $113,362,975 $30,345,500
Value Stock Fund 2,046,297 94,708,383 7,428,141
Small Cap Fund 2,559,982 79,041,552 15,894,957
International Fund 2,152,552 63,534,185 10,359,785
THE RODNEY SQUARE STRATEGIC EQUITY FUND
COMBINED
SHARES NET ASSETS NAV
ISSUED IN AFTER PER
PORTFOLIO NAME EXCHANGE EXCHANGE SHARE
------------ --------- ------------ -------
Growth Portfolio 4,749,182 $209,657,472 $23.87
Value Portfolio 9,470,838 94,708,383 10.00
Small Cap Portfolio 7,904,155 79,041,552 10.00
International Portfolio 6,353,419 63,534,185 10.00
39
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
NOTES TO FINANCIAL STATEMENTS -- CONTINUED
- --------------------------------------------------------------------------------
7. COMMITMENTS. As of June 30, 1999, the International Portfolio had entered
into forward foreign currency exchange contracts which contractually obligate
the Portfolio to deliver or receive currencies at specified future dates. The
open contracts were as follows:
<TABLE>
<CAPTION>
NET UNREALIZED
SETTLEMENT CONTRACT VALUE AT APPRECIATION
DATE CURRENCY PURCHASED AMOUNT 6/30/99 (DEPRECIATION)
--------- ----------------------- --------- --------- ---------------
<S> <C> <C> <C> <C>
7/1/99 856 British Pound $ 1,365 $ 1,349 $ (16)
7/1/99 9,055 British Pound 14,440 14,273 (167)
7/2/99 564 British Pound 898 889 (9)
7/1/99 13,582,038 Japanese Yen 111,971 112,215 244
NET UNREALIZED
SETTLEMENT CONTRACT VALUE AT APPRECIATION
DATE CURRENCY SOLD AMOUNT 6/30/99 (DEPRECIATION)
--------- ----------------------- --------- --------- ---------------
<S> <C> <C> <C> <C>
7/1/99 43,298 British Pound $ 68,670 $ 68,250 $ 420
7/1/99 68,124 Eurodollars 70,952 70,255 697
7/1/99 40,280 Eurodollars 41,682 41,539 143
7/6/99 54,291 Eurodollars 56,181 55,989 192
9/7/99 75,655,669 Japanese Yen 649,405 631,944 17,461
</TABLE>
40
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- ---------------------------------------
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Trustees of the Rodney Square Strategic Equity Fund:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Rodney Square Strategic Equity Fund
(comprised of the Large Cap Growth Equity, Large Cap Value Equity, Small Cap
Equity and International Equity Portfolios) (the "Fund") as of June 30, 1999,
and the related statements of operations, the statements of changes in net
assets and the financial highlights for each of the periods indicated therein.
These financial statements and financial highlights are the responsibility of
the Funds' 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 and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 1999, by correspondence with the Funds'
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 Strategic Equity
Fund at June 30, 1999, and the results of their operations, the changes in their
net assets, and their financial highlights for each of the periods indicated
therein, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
Philadelphia, Pennsylvania
August 9, 1999
41
<PAGE>
THE RODNEY SQUARE STRATEGIC EQUITY FUND
- --------------------------------------
NOTICE TO SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------
TAX INFORMATION
In January, 2000 shareholders of the Funds will receive Federal income tax
information on all distributions paid to their accounts in calendar year
1999, including any distributions paid June 30, 1999 and December 31, 1999.
By now shareholders to whom year-end tax reporting is required by the IRS
should have received their Form 1099-DIV from their respective Portfolio.
Pursuant to Section 852 of the Internal Revenue Code of 1986, as amended, the
following Portfolio of the Fund paid a 20% capital gain distribution (from
net long-term capital gains) during the period ended June 30, 1999.
The following table summarizes the capital gain distributions:
TOTAL 20%
CAPITAL GAIN CAPITAL GAIN
PER SHARE DISTRIBUTION
------------ -------------
International Equity Portfolio 0.1133 $780,343
42
<PAGE>
[This Page Intentionally Left Blank.]
<PAGE>
TRUSTEES
Eric Brucker
Fred L. Buckner
Robert J. Christian
John J. Quindlen
--------------------
OFFICERS
Robert J. Christian, PRESIDENT
E. Matthew Brown, VICE PRESIDENT
Pat Colletti, VICE PRESIDENT & TREASURER
Gary M. Gardner, SECRETARY
Mary Jane Maloney, ASSISTANT SECRETARY
----------------------------------------
INVESTMENT ADVISER
Wilmington Trust Company
Rodney Square North
1100 N. Market St.
Wilmington, DE 19890-0001
---------------------------
ADMINISTRATOR,
TRANSFER AGENT AND
ACCOUNTING AGENT
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
----------------------
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
----------------------------------------
LEGAL COUNSEL
Pepper Hamilton LLP
-----------------------
INDEPENDENT AUDITORS
Ernst & Young LLP
---------------------
CUSTODIANS
Wilmington Trust Company
Bankers Trust Company
---------------------
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 6/99
