BAILARD, BIEHL & KAISER FUND GROUP
BAILARD, BIEHL & KAISER
DIVERSA FUND
ANNUAL REPORT
September 30, 2000
950 Tower Lane, Suite 1900
Foster City, CA 94404
(800) 882-8383
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these securities, nor has it passed on the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
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November 30, 2000
Dear Shareholder:
We are pleased to present your Bailard, Biehl & Kaiser Diversa Fund Annual
Shareholders' Report for the year ended September 30, 2000. This was a very
volatile period in the investment markets. In this letter, we will discuss why
the markets were so volatile over the past twelve months, what we think the
future holds for investors and some possible changes in our investment strategy.
MARKET REVIEW AND PERFORMANCE UPDATE
For much of the 1990s, American investors enjoyed year after year of almost
unprecedented double-digit stock market returns. The extraordinary productivity
gains from the information technology revolution allowed the U.S. to achieve
strong growth with low inflation, making it the world's most competitive
economy. In such an environment, it was easy for investors to forget that market
risk is more than an intellectual abstraction; market risk is the very real
possibility that returns will fluctuate as perceptions of fundamental economic
conditions change. The events of the past year serve as an important reminder
that any asset area can experience negative returns. Each asset class in turn
has come under pressure, and, in many cases, the volatility has been even
greater than the market indices indicated.
Much of the market volatility for the year ended September 30, 2000 can be
explained by the shifting currents of investor sentiment as the Fed has acted to
slow down a very strong economy. Investors began the twelve months with a
"mania" for technology stocks and certain very popular momentum stocks that
tended to mask an underlying weakness in the broader equity markets. Investors
believed that the "New Economy" technology stocks would be immune from the
inflationary pressures and higher interest rates that were accompanying stronger
growth. Thanks to the extraordinary boom in global technology stocks, the major
U.S. and international stock indices racked up strong gains during the fourth
quarter of 1999 even as bonds posted negative returns and the broader equity
markets simply treaded water.
But the tide of investor sentiment began to turn in 2000 when more signs of
inflationary pressure led the Fed to raise interest rates further. Technology
stocks both here and abroad tumbled in April and May as inflation fears rose.
The world's equity markets did enjoy a brief respite during the summer when
signs of moderating growth helped alleviate inflation fears. However, in
September, investors began to refocus on the impact of higher energy prices, a
sliding euro and slower growth upon corporate earnings both here and abroad.
Once again, technology stocks were particularly hard hit. Some high profile
technology companies experienced 20% to 50% losses in a single day. When all the
dust had settled, the S&P 500 ended the third quarter of 2000 off 1.0%, with its
technology and communication services sectors down 13.7% and 11.1% respectively.
The MSCI EAFE international stock index also declined 8.1% for the quarter.
Ironically, U.S. bonds, the worst performing asset class at the beginning of our
twelve-month period, were the best performing asset class at the end of the
year.(1)
Steering a steady course through these shifting currents has not been easy. The
Bailard, Biehl & Kaiser Diversa Fund realized a total return of 3.97% for the
year ended September 30, 2000. All of the appreciation was earned during the
first six months of this period, when Diversa rose a total of 7.2%. But the Fund
2
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gave back 3.0% of the gain during the second quarter and another 1.1% of that
gain during the third quarter of 2000 due to the weakness in the U.S. and
international stock markets.(2)
Diversa's return would have been higher if the Fund had held more in stocks and
less in bonds during the fourth quarter of 1999. Diversa was also hurt by its
U.S. stock selection at the end of last year (slightly underweight in
technology) and its international (Japanese) stock selection during the second
quarter of this year. Nevertheless, we are satisfied with how well the Fund has
held up during the most recent period of market weakness. Diversa's multi-asset
diversification has helped moderate the worst effects of the stock market
correction. We are also pleased that, thus far this year, Diversa's U.S. stock
portfolio has outperformed the S&P 500.
MARKET OUTLOOK
Looking forward, we remain cautious about the outlook for U.S. and international
stock markets. U.S. stocks are still overvalued and vulnerable to negative news.
International stocks, although fundamentally attractive, are likely to fall in
tandem with U.S. stocks and are currently being hurt by a strong dollar. Foreign
equities would benefit from weakness in the dollar if a slowing economy or the
growing trade deficit were to cause capital to flow out of the United States.
Alternatively, if Europe can find a way to reinvigorate confidence in the euro,
the euro could recover ground against the dollar.
Fundamental changes are transforming the global bond markets. The long-term
decline in interest rates that began in the early 1980s appears to be coming to
an end. As a result, we believe that, going forward, income will play a more
important role than appreciation in determining total return. European Monetary
Union has reduced the diversification benefits of investing in European bonds.
At the same time, the U.S. bond market is becoming more diverse. As the federal
budget has swung from a deficit to a surplus, U.S. Treasury obligations are
becoming a smaller and smaller portion of the U.S. bond market, expanding the
role played by agency, corporate and mortgage-backed issues.
INVESTMENT STRATEGY
We have not made any changes to our strategic asset allocation targets in recent
months. We continue to overweight U.S. bonds, underweight U.S. stocks and remain
neutral in international stocks and bonds. The current strategic asset
allocation targets of the Bailard, Biehl & Kaiser Diversa Fund are 5% cash
equivalents, 25% U.S. bonds, 10% international bonds, 45% U.S. stocks and 15%
international stocks.
U.S. Stocks 45%
U.S. Bonds 25%
International Stocks 15%
International Bonds 10%
Cash 5%
3
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THESE ARE THE STRATEGIC ASSET ALLOCATION TARGETS FOR THE BAILARD, BIEHL & KAISER
DIVERSA FUND AS OF OCTOBER 31, 2000. THE FUND'S ACTUAL ASSET ALLOCATIONS MAY
FLUCTUATE FROM TIME TO TIME ABOVE OR BELOW THESE TARGETS. PLEASE NOTE THAT THE
FUND SOMETIMES USES S&P 500 PUT OPTIONS TO REDUCE ITS EFFECTIVE U.S. STOCK
EXPOSURE. AS A RESULT, FROM TIME TO TIME, THE FUND MAY HAVE A HIGHER WEIGHTING
IN U.S. STOCKS AND A LOWER WEIGHTING IN CASH EQUIVALENTS THAN THESE TARGETS
WOULD INDICATE.
We are in the process of reevaluating how we invest in U.S. and international
bonds, given the fundamental changes described above. It is likely that, going
forward, we will find more opportunities within the U.S. bond market and use
international bonds only when and if situations arise where we can enhance
returns.
CLOSING COMMENTS
Today's volatile market conditions highlight the benefits of diversifying across
different asset classes. Although diversification can't prevent all losses, it
can significantly reduce the downside risk in your portfolio. Now, more than
ever, we believe it is important for investors not to keep all their eggs in one
basket.
Please feel free to contact one of our client service counselors at 800-882-8383
if you have any questions or would like to discuss the Fund in greater detail.
We continue to appreciate your confidence and support.
Sincerely,
Thomas E. Bailard Burnie E. Sparks, Jr., CFA
Chairman President
----------
(1) The performance quoted represents past performance and is no indication of
future results.
(2) Total returns for investment periods ended September 30, 2000: 3 months:
-1.10%; 6 months: -4.10%; 12 months: 3.97%; 5 years: 8.92% annualized; 10
years: 9.20% annualized. As required by the Securities and Exchange
Commission, these figures reflect the average compounded return over the
period indicated that would equate an initial amount invested in shares of
the Fund to the ending redeemable value of such shares, assuming that all
dividends and distributions by the Fund were reinvested at net asset value.
The performance data quoted represents past performance, and the investment
return and principal value of an investment in the Bailard, Biehl & Kaiser
Diversa Fund will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
4
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
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Par Value Value
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DOMESTIC SECURITIES (73.9%)
DOMESTIC FIXED INCOME (26.2%)
CORPORATE BONDS (4.6%)
Ford Motor Credit $ 200,000 $ 202,963
7.875% 06/15/10
Gerber Products 320,000 353,884
9.000% 10/15/06
GTE North, Inc. 275,000 256,912
6.375% 02/15/10
HRPT Properties 200,000 195,530
6.875% 08/26/02
Tandy Corp. 300,000 291,562
6.950% 09/01/07
Universal Foods 100,000 92,953
6.500% 04/01/09
-----------
Total Corporate Bonds 1,393,804
-----------
GOVERNMENT AGENCY (4.6%)
Federal Farm Credit Banks 250,000 260,515
7.375% 02/09/10
Federal Home Loan Banks 200,000 191,591
5.250% 04/22/04
Federal Home Loan Banks 300,000 273,984
5.540% 10/15/08
Federal Home Loan Banks 200,000 196,709
6.000% 06/11/03
Federal National Mortgage Association 500,000 475,884
6.500% 04/29/09
-----------
Total Government Agency 1,398,683
-----------
UNITED STATES TREASURY OBLIGATIONS (17.0%)
United States Treasury Bonds 725,000 777,789
8.750% 11/15/08
United States Treasury Bonds 425,000 519,297
8.000% 11/15/21
United States Treasury Notes 350,000 362,906
6.625% 05/15/07
United States Treasury Notes 525,000 511,547
5.500% 02/15/08
United States Treasury Notes 450,000 441,562
5.625% 05/15/08
United States Treasury Notes 800,000 740,500
4.750% 11/15/08
United States Treasury Notes 1,050,000 1,020,141
5.500% 05/15/09
5
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Par Value Value
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UNITED STATES TREASURY OBLIGATIONS - CONTINUED
United States Treasury Notes $ 400,000 $ 397,500
5.625% 09/30/01
United States Treasury Notes 400,000 416,625
6.500% 02/15/10
-----------
Total United States Treasury Obligations 5,187,867
-----------
TOTAL DOMESTIC FIXED INCOME
(IDENTIFIED COST $8,117,081) 7,980,354
-----------
DOMESTIC STOCKS (47.7%) Shares Value
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BASIC INDUSTRY (1.0%)
Bemis Co. 3,300 $ 106,012
Du Pont (E.I.) De Nemours 1,926 79,809
Nucor Corp. 3,600 108,450
-----------
Total Basic Industry 294,271
-----------
CAPITAL GOODS (4.5%)
General Electric Co. 15,120 872,235
Tyco International 4,700 243,813
United Techonologies 3,800 263,150
-----------
Total Capital Goods 1,379,198
-----------
COMMUNICATIONS (3.3%)
AT&T Corp. 4,500 132,187
* Global Crossing 2,900 89,900
* MCI WorldCom, Inc. 4,000 121,500
* Qwest Communications International 3,150 151,397
SBC Communications, Inc. 4,500 225,000
Verizon Communications 6,000 290,625
-----------
Total Communications 1,010,609
-----------
CONSUMER CYCLICALS (2.6%)
* Lear Corp. 5,100 104,869
Lowes Companies, Inc. 4,600 206,425
Sears Roebuck & Co. 4,400 142,648
Wal-Mart Stores, Inc. 7,200 346,500
-----------
Total Consumer Cyclicals 800,442
-----------
CONSUMER STAPLES (4.7%)
Anheuser Busch, Inc. 4,400 186,175
Kimberly Clark Corp. 5,500 306,969
Pepsico, Inc. 8,000 368,000
Proctor & Gamble Co. 850 56,950
Sysco Corp. 8,100 375,131
Walt Disney Co. 3,900 149,175
-----------
Total Consumer Staples 1,442,400
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6
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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DOMESTIC STOCKS - CONTINUED
ENERGY/RESOURCES (3.2%)
Conoco, Inc. 1,103 $ 29,712
Exxon Mobil Corp. 4,356 388,228
Royal Dutch Patroleum 3,950 236,753
Unocal Corp. 3,900 138,206
Valero Refining & Marketing Co. 5,000 175,937
-----------
Total Energy/Resources 968,836
-----------
FINANCE (7.9%)
American International Group 4,912 470,017
Bank of America Corp. 5,001 261,927
Chase Manhattan Corp. 9,750 450,328
Citigroup, Inc. 5,733 309,940
Federal National Mortgage Association 6,300 450,450
Firstar Corp. 3,345 74,844
Lehman Brothers Holdings, Inc. 1,100 162,525
Wells Fargo & Co. 4,800 220,500
-----------
Total Finance 2,400,531
-----------
HEALTH CARE (5.2%)
Abbott Laboratories 3,800 180,738
* Alza Corp. 700 60,550
American Home Products 5,400 305,438
* Amgen, Inc. 2,000 139,656
Johnson & Johnson, Inc. 5,100 479,081
Merck & Co. 3,400 253,088
Pfizer, Inc. 3,500 157,281
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Total Health Care 1,575,832
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HIGH TECHNOLOGY (13.2%)
* America Online, Inc. 2,800 150,500
* Cisco Systems, Inc. 8,400 464,100
Compaq Computer Corp. 7,000 193,060
* EMC Corp. 4,200 416,325
Hewlett Packard Co. 2,100 203,700
Intel Corp. 12,800 532,000
International Business Machines, Inc. 4,000 450,000
Lucent Technologies, Inc. 3,300 100,856
* Microsoft Corp. 8,000 482,500
Motorola, Inc. 3,500 98,875
Nortel Networks Corp. 4,190 249,567
* Oracle Systems Corp. 3,800 299,250
* Sun Microsystems, Inc. 2,000 233,500
Texas Instuments, Inc. 3,000 141,563
-----------
Total High Technology 4,015,796
-----------
TRANSPORTATION (0.7%)
AMR Corp. 4,000 130,750
* Sabre Holdings Corp., Class A 2,890 83,629
-----------
Total Transportation 214,379
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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DOMESTIC STOCKS - CONTINUED
UTILITIES (1.4%)
Enron Corp. 5,000 $ 438,125
-----------
TOTAL DOMESTIC STOCKS
(IDENTIFED COST $8,910,779) 14,540,419
-----------
PUT OPTIONS ON STOCK INDICES (0.0%)
CONTRACTS PURCHASED
S&P 500 Stock Index October
Put @ 1400 Exp 10/21/00 10 12,000
-----------
TOTAL PUT OPTIONS ON STOCK INDICES
(IDENTIFIED COST $15,780) 12,000
-----------
TOTAL DOMESTIC SECURITIES
(IDENTIFIED COST $17,043,640) 22,532,773
Par Value
INTERNATIONAL SECURITIES (22.8%) (Local Currency) Value
----------- -----------
INTERNATIONAL FIXED INCOME (9.3%)
Asian Development Bank
3.125% 06/29/05 JPY 15,000,000 $ 150,792
British Aero Plc
7.450% 11/29/03 GBP 243 353
Eurohypo AG
4.000% 04/27/09 EUR 150,000 116,361
Government of Canada
8.500% 04/01/02 CAD 75,000 51,904
Government of Canada
7.250% 06/01/07 CAD 400,000 287,569
Government of Canada
6.000% 06/01/08 CAD 120,000 81,058
Government of France
9.500% 01/25/01 EUR 236,295 211,207
Government of France
5.250% 04/25/08 EUR 175,000 153,790
International Bank for Rec. & Dev.
7.250% 04/09/01 NZD 200,000 81,253
Kingdom of Denmark
8.000% 05/15/03 DKR 1,125,000 140,222
Kingdom of Spain
4.750% 07/30/14 EUR 175,000 141,163
Kingdom of Sweden
6.500% 10/25/06 SEK 1,600,000 177,422
Quebec Province
8.625% 11/04/11 GBP 60,000 101,757
8
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Par Value
(Local Currency) Value
----------- -----------
INTERNATIONAL FIXED INCOME - CONTINUED
Republic of Austria JPY 10,000,000 $ 106,663
4.500% 09/28/05
Republic of Austria JPY 20,000,000 214,953
6.250% 10/16/03
Republic of Finland EUR 340,000 309,978
8.750% 10/17/01
Republic of Germany EUR 100,000 94,609
6.000% 06/20/16
Republic of Germany EUR 100,000 93,297
6.500% 10/14/05
Republic of Italy EUR 100,000 103,535
7.250% 11/01/26
Tesco Plc GBP 30,000 46,563
7.500% 07/30/07
Treuhandanstalt EUR 89,476 82,853
7.750% 10/01/02
U.K. Treasury GBP 55,000 86,827
9.750% 08/27/02
TOTAL INTERNATIONAL FIXED INCOME
(IDENTIFIED COST$3,353,479) 2,834,129
-----------
INTERNATIONAL STOCKS (13.5%) Shares Value
-------- -----------
ARGENTINA (0.2%)
Banco De Galicia ADR 800 $ 9,400
* Grupo Financiero Galicia SA 5,875 8,935
Pecom Energia SA 3,800 14,449
Siderar SA 3,750 11,032
Telecom Argent Stet France ADR 400 8,650
-----------
Total Argentina 52,466
-----------
AUSTRALIA (0.3%)
Broken Hill Proprietary Ltd. 1,000 10,371
Commonwealth Bank of Australia 1,000 14,947
ERG (Energy Research Group) Ltd. 2,500 11,982
Macquarie Bank Ltd. 1,000 15,207
News Corporation Ltd. (The) 1,700 23,937
* Orbital Engine Corp. 12,000 11,308
Qantas Airways Ltd. 5,000 9,631
-----------
Total Australia 97,383
-----------
9
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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INTERNATIONAL STOCKS - CONTINUED
BRAZIL (0.6%)
Acucarv/Cm Brasil Dst. GDR 800 29,750
Centrais Eletricas Bras Pfd. ADR 2,500 25,625
CIA Paranense de Energy Copel 2,470,000 22,089
CIA Vale Do Rio Doce ADR 950 24,047
#* Telebras ADR 650 10
* Telebras Holders Pfd. ADR 425 33,628
Telecomunicacoes De Sao Paulo SA 425 6,641
+* Telesp Celular ADR, Rights 10/2/00 17 --
Telesudeste Celular ADR 85 1,785
Unibanco GDR 1,350 44,550
-----------
Total Brazil 188,125
-----------
CANADA (.8%)
* Crestar Energy, Inc. 1,200 19,939
* Ishares MSCI Canada Index Fund 9,500 153,188
* Methanex Corp. 6,000 29,510
* Westport Innovations, Inc. 2,000 25,588
-----------
Total Canada 228,225
-----------
DENMARK (0.4%)
Danske Bank 300 38,111
Novo-Nordisk AS 102 22,622
Tele Denmark AS 598 32,891
* William Demant Holdings 800 37,756
-----------
Total Denmark 131,380
-----------
FINLAND (0.3%)
Nokia ADR 1,900 75,644
Upm-Kymmene OY 1,000 25,565
-----------
Total Finland 101,209
-----------
FRANCE (1.6%)
AXA - UAP SA 150 19,590
Banque National De Paris Wts. 91 466
Bnp Paribas 413 36,409
France Telecom SA 450 48,208
Havas Advertising 2,000 31,592
* Ishares MSCI France Index Fund 10,400 257,400
Peugeot SA 80 14,211
Sanofi Synthelabo 400 21,496
10
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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INTERNATIONAL STOCKS - CONTINUED
FRANCE - CONTINUED
Scor 300 $ 13,104
Total Fina Elf SA ADR 400 29,375
-----------
Total France 471,851
-----------
GERMANY (0.6%)
Deutsche Bank AG 200 16,590
Deutsche Telekom 300 10,298
* Ishares MSCI Germany Index Fund 7,000 135,188
Siemens AG 200 25,723
-----------
Total Germany 187,799
-----------
GREECE (0.2%)
Hellenic Telecom Organ 1,720 32,927
National Bank of Greece 830 34,175
-----------
Total Greece 67,102
-----------
HONG KONG/CHINA (0.5%)
Cathay Pacific Airways 10,000 18,341
* China Mobile (Hong Kong) Ltd. 4,000 26,677
Dah Sing Financial Services 3,000 14,660
Dao Heng Bank 3,500 17,328
Gold Peak Industries 13,000 4,085
Sun Hung Kai Properties 3,000 28,281
Swire Pacific 7,000 43,633
-----------
Total Hong Kong/China 153,005
-----------
INDIA (0.0%)
Videsh Sanchar Nigam GDR 450 3,690
-----------
IRELAND (0.1%)
Bank of Ireland 2,545 20,347
CRH 750 11,940
Eircom Plc 2,500 5,559
-----------
Total Ireland 37,846
-----------
ISRAEL (0.2%)
Elbit Ltd. 3,100 28,288
* Gilat Satellite Networks Ltd. 400 30,750
-----------
Total Israel 59,038
-----------
ITALY (0.5%)
* Ishares MSCI Italy Index Fund 7,000 148,750
-----------
11
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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INTERNATIONAL STOCKS - CONTINUED
JAPAN (1.7%)
Fast Retailing Co. Ltd. 400 $ 81,066
+ Hokkaido Takushoku 12,000 111
* Ishares MSCI Japan Index Fund 26,300 348,475
Konami Co. 300 24,764
NTT Docomo, Inc. 2 57,376
-----------
Total Japan 511,792
-----------
MALAYSIA (0.1%)
Public Bank Berhad 10,000 8,211
Tenaga Nasional 6,000 17,842
-----------
Total Malaysia 26,053
-----------
MEXICO (0.2%)
* Banacci 2,500 11,462
Cemex SA ADR 300 6,019
Femsaubd Uts B & D 2,300 8,938
* Grupo Telavisa GDR 225 12,980
Telefonos De Mexico ADR 600 31,913
-----------
Total Mexico 71,312
-----------
NETHERLANDS (0.7%)
* Asm Lithography Holdings NV 300 9,954
Axxicon Group NV 1,700 27,453
* Ishares MSCI Netherlands Index Fund 6,200 139,500
Philips Electronics NV 776 33,397
-----------
Total Netherlands 210,304
-----------
NEW ZEALAND (0.3%)
Fletcher Challenge Energy 13,000 45,975
Telecom Corp. of New Zealand 10,000 24,878
Tranz Rail Holdings Ltd. 10,000 15,244
-----------
Total New Zealand 86,097
-----------
NORWAY (0.3%)
Christiana Bank OG 2,500 13,301
Norsk Hydro AS 900 37,672
* Petroleum Geo Service 1,000 16,963
Tomra Systems AG 600 19,728
-----------
Total Norway 87,664
-----------
POLAND (0.2%)
* Computerland Poland SA 500 12,355
* Kghm Polska Midez SA 3,000 18,995
Telekomunikacja Polska SA 3,000 15,421
-----------
Total Poland 46,771
-----------
12
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
-------- -----------
INTERNATIONAL STOCKS - CONTINUED
PORTUGAL (0.3%)
Banco Espirito Santo 1,380 $ 21,920
* Cimpor Cimentos Portugal Sgps SA 1,000 22,900
* Electricidade De Portugal 7,500 23,694
Portugal Telecom SA 2,500 25,701
-----------
Total Portugal 94,215
-----------
REPUBLIC OF KOREA (0.1%)
* Hankuk Electric Glass Co. 200 11,299
Pohang Iron & Steel 155 11,537
Shinhan Bank 1,300 14,572
-----------
Total Republic of Korea 37,408
-----------
RUSSIA (0.4%)
Ao Mosenergo ADR 3,800 13,813
Lukoil Oil Co. ADR 750 43,031
Rao Unified Energy System ADR 2,200 30,239
Rostelecom Long Distance &
International Telephone ADR 1,000 8,813
Surgutneftegaz ADR 1,000 14,650
* Vimpel Communications ADR 350 6,759
-----------
Total Russia 117,305
-----------
SINGAPORE (0.2%)
Dbs Land 8,000 12,228
Elec & Eltek International Co. 4,000 11,120
Overseas Chinese Banking Corp. 2,310 14,601
Singapore Airlines 1,300 12,325
United Overseas Bank 2,112 15,170
United Overseas Land, Wts. (Ex. 05/28/01) 450 28
-----------
Total Singapore 65,472
-----------
SOUTH AFRICA (0.3%)
Anglo American Corp. Plc 300 15,870
Impala Platinum Hldings Ltd. 850 36,750
Sappi Ltd. 1,000 7,409
Standard Bank Invest Corp. 4,800 18,446
-----------
Total South Africa 78,475
-----------
SPAIN (0.3%)
* Ishares MSCI Spain Index Fund 3,400 82,875
Repsol SA 500 9,200
Telefonica De Espana 20 396
Union Electrica Fenosa 500 9,005
-----------
Total Spain 101,476
-----------
SWEDEN (0.4%)
Ericsson Ltd. Telephone Co. ADR 2,800 41,475
* Ishares MSCI Sweden Index Fund 2,700 59,063
Svenska Handelsbanks 1,100 17,700
-----------
Total Sweden 118,238
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BAILARD, BIEHL & KAISER DIVERSA FUND
SCHEDULE OF INVESTMENTS
SEPTEMBER 30, 2000
(CONTINUED)
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Shares Value
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INTERNATIONAL STOCKS - CONTINUED
SWITZERLAND (0.2%)
* Ishares MSCI Switzerland Index Fund 4,200 $ 63,000
UNITED KINGDOM (1.5%)
Bae Systems 771 4,161
Barclays Bank 1,500 41,516
BP Amoco Plc 4,500 40,053
British Telecom 3,000 31,536
Cadbury Schweppes Plc 3,500 20,699
GKN 2,400 23,934
Glaxo Wellcome Plc 1,500 45,420
Hilton Group Plc 3,400 9,752
Kingfisher Plc 2,000 13,070
Reuters Group Plc 2,500 47,386
Rolls-Royce 8,000 20,167
Royal Bank of Scotland Group 3,000 63,339
* Royal Bank of Scotland Group 3,000 3,604
Sage Group 1,700 12,668
Smithkline Beecham Plc 2,064 28,273
Vodafone Group Plc 15,000 55,998
-----------
461,576
-----------
TOTAL INTERNATIONAL STOCKS
(IDENTIFIED COST $4,460,811) 4,105,027
-----------
TOTAL INTERNATIONAL SECURITIES
(IDENTIFIED COST $7,814,290) 6,939,156
-----------
TOTAL INVESTMENTS: 96.7%
(IDENTIFIED COST $24,857,930) 29,471,929
OTHER ASSETS LESS LIABILITIES: 3.3% 1,007,949
-----------
NET ASSETS: 100.0% $30,479,878
===========
CURRENCY LEGEND:
GBP - British Pound JPY - Japanese Yen
CAD - Canadian Dollar NZD - New Zealand
DKR - Danish Kronar SEK - Swedish Krona
EUR - Euro
----------
ADR - American depositary receipt.
GDR - Global depositary receipt.
* Non-income producing security.
# Fair value, using procedure approved by Board of Trustees/Directors (Note 1).
+ De-listed / bankrupt security; value by management (Note 1).
(See "Notes to Financial Statements")
14
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
--------------------------------------------------------------------------------
ASSETS
Investments, at value
(Identified cost $24,857,930) $29,471,929
Cash 718,910
Receivables:
Dividend, interest and recoverable foreign
taxes receivable $ 298,267
Portfolio securities sold 186,382
Unrealized gain on forward currency
contracts open (Note 5) 8,977 493,626
-----------
Prepaid expenses 10,738
Other assets 4,838
-----------
Total assets 30,700,041
-----------
LIABILITIES
Payables:
Portfolio securities purchased $ 74,475
Advisory fees (Note 3) 7,729 82,204
-----------
Accrued expenses 137,959
-----------
Total liabilities 220,163
-----------
Net assets (equivalent to $12.62 per share of
no par value capital stock, representing the
offering and redemption price for 2,414,954
shares outstanding, unlimited number of
shares authorized) $30,479,878
===========
Net assets consist of:
Capital paid in $24,575,052
Accumulated net investment income 471,592
Accumulated net realized gain on investments
and foreign currency transactions 817,230
Unrealized appreciation on:
Investments $ 4,613,999
Foreign currency 2,005 4,616,004
----------- -----------
$30,479,878
===========
(See "Notes to Financial Statements")
15
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30,2000
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $8,125) $ 342,504
Interest 806,876
-----------
Total income 1,149,380
-----------
EXPENSES
Advisory fees (See Note 3) $ 316,458
Custodian fees 142,864
Audit fees 72,922
Transfer agent fees 40,511
Administrative fees 33,197
Trustee fees and expenses (See Note 3) 20,455
Legal fees 14,523
Registration expense 7,011
Report to shareholders 3,947
Insurance expense 3,711
Miscellaneous expenses 11,344
-----------
Total expenses 666,943
Less: Fees waived (75,767)
-----------
Net expenses 591,176
-----------
Net investment income 558,204
-----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 1,091,323
Net unrealized loss on investments (279,511)
-----------
Net gain on investments 811,812
-----------
Net realized gain on foreign currency 1,716
Net unrealized gain on foreign currency
and foreign currency denominated assets and liabilities 42,078
-----------
Net gain on foreign currency 43,794
-----------
Net gain on investments and foreign currency 855,606
-----------
Net increase in net assets resulting from operations $ 1,413,810
===========
(See "Notes to Financial Statements")
16
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
September 30, 2000 September 30, 1999
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income $ 558,204 $ 562,833
Net realized gain on investments 1,091,323 2,115,899
Net unrealized gain (loss) on investments (279,511) 694,793
Net realized gain (loss) on foreign currency 1,716 (55,224)
Net unrealized gain on foreign currency and foreign
currency denominated assets and liabilities 42,078 18,651
----------- -----------
Net increase resulting from operations 1,413,810 3,336,952
----------- -----------
Distributions to shareholders:
From net investment income (540,898) (163,662)
From net realized gain (1,998,030) (2,803,986)
----------- -----------
Total distributions (2,538,928) (2,967,648)
----------- -----------
Fund share transactions:
Proceeds from shares sold 1,767,721 2,389,535
Net asset value of shares issued on
reinvestment of distributions 2,284,009 2,674,173
Cost of shares redeemed (6,995,229) (6,213,943)
----------- -----------
Net decrease resulting from
Fund share transactions (2,943,499) (1,150,235)
----------- -----------
Net decrease (4,068,617) (780,931)
NET ASSETS
Beginning of period 34,548,495 35,329,426
----------- -----------
End of period (including accumulated
net investment income of $471,592 and
$362,319, respectively) $30,479,878 $34,548,495
=========== ===========
NUMBER OF FUND SHARES
Sold 136,907 176,414
Issued on reinvestment of distributions 181,644 206,618
Redeemed (544,011) (461,523)
----------- -----------
Net decrease (225,460) (78,491)
=========== ===========
</TABLE>
(See "Notes to Financial Statements")
17
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
For a share outstanding throughout the year:
<TABLE>
<CAPTION>
For the Year Ended September 30,
-------------------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Year $ 13.08 $ 12.99 $ 13.91 $ 13.39 $ 13.20
------- ------- ------- ------- -------
Income from Investment Operations:
Net Investment Income 0.23(1) 0.28(1) 0.13(1) 0.40(1) 0.31
Net Realized/Unrealized Gain on
Securities and Foreign Currency 0.25 0.90 0.23 1.92 0.96
------- ------- ------- ------- -------
Total from Investment Operations 0.48 1.18 0.36 2.32 1.27
------- ------- ------- ------- -------
Less Distributions:
Net Investment Income (0.21) (0.13) (0.23) (0.42) (0.32)
Capital Gain (0.77) (0.96) (1.05) (1.38) (0.76)
------- ------- ------- ------- -------
Total Distributions (0.98) (1.09) (1.28) (1.80) (1.08)
------- ------- ------- ------- -------
Net Asset Value, End of Year $ 12.58 $ 13.08 $ 12.99 $ 13.91 $ 13.39
------- ------- ------- ------- -------
Total Return 3.97% 9.25% 2.98% 19.14% 10.09%
Ratios/Supplemental Data:
Net Assets, End of Year (millions) $ 30.5 $ 34.5 $ 35.3 $ 37.5 $ 36.6
Ratio of Expenses to Average Net Assets:
Before fees waived and expenses paid indirectly 2.00% 1.95% 1.86% 1.84% 1.99%
After fees waived and expenses paid indirectly 1.78% 1.95% 1.80% 1.84% 1.99%
Ratio of Net Investment Income to Average Net Assets:
Before fees waived and expenses paid indirectly 1.45% 1.51% 1.34% 1.87% 2.09%
After fees waived and expenses paid indirectly 1.68% 1.51% 1.34% 1.87% 2.09%
Portfolio Turnover Rate 36% 54% 59% 66% 68%
</TABLE>
1. Net investment income per share has been computed before adjustments for
book/tax differences.
(See "Notes to Financial Statements")
18
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Bailard, Biehl & Kaiser Diversa Fund (the "Fund") is the sole series of the
Bailard, Biehl & Kaiser Fund Group, which was organized as a Massachusetts
business trust in August 1986 and is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The following
significant accounting policies are followed by the Fund in the preparation of
its financial statements and are in conformity with generally accepted
accounting principles.
SECURITY VALUATION
Each listed investment security is valued at the closing price reported by the
principal securities exchange on which the issue is traded or, if no sale is
reported, the mean of the closing bid and asked prices. Securities which are
traded over-the-counter are normally valued at the mean of the closing bid and
asked prices quoted by major dealers of such securities, or, in the absence of
such prices, as determined in good faith by, or under procedures determined by,
the Trustees of the Fund. Short-term obligations with a maturity of 60 days or
less are valued at amortized cost which approximates market.
The Fund's investment in foreign securities may entail risks due to the
potential of political and economic instability in the countries in which the
securities are offered or the issuers conduct their operations. It is the Fund's
policy to continuously monitor exposure to these risks.
FOREIGN CURRENCY
Foreign currency amounts, other than the cost of investments, are translated
into U.S. dollar values at the mean of the bid and offer price of such currency
against U.S. dollars last quoted on the valuation date. The cost of investments
is translated at the rates of exchange prevailing on the dates the portfolio
securities were acquired.
The Fund includes foreign exchange gains and losses from dividends and interest
receivable and other foreign currency denominated payables and receivables in
realized and unrealized gain (loss) on foreign currency. The Fund does not
isolate that portion of the results of operations resulting from changes in
foreign exchange rates on investments from fluctuations arising from changes in
the market price of securities for financial reporting purposes. The impact of
fluctuations in foreign exchange rates on investments are included with net
realized and unrealized gain (loss) on investments.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
In connection with purchases and sales of securities denominated in foreign
currencies, the Fund may enter into forward foreign currency exchange contracts
("contracts"). Additionally, from time to time the Fund may enter into contracts
to sell foreign currencies to hedge certain foreign currency assets. All
commitments are "marked-to-market" daily at the applicable translation rates
supplied by a quotation service and any resulting unrealized gains or losses are
included as unrealized appreciation (depreciation) on foreign currency
denominated assets and liabilities. The Fund records realized gains or losses at
the time the forward contract is settled. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the terms
of their contracts and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
OPTIONS
The Fund may purchase and write call and put options on foreign currencies and
stock indices. When the Fund writes a call or put option, an amount equal to the
premium received is recorded as a liability and subsequently marked to market to
reflect the current value of the option written. Premiums received from writing
options which are exercised or closed are offset against the proceeds or amounts
paid on the transaction to determine the realized gain or loss. The Fund as a
writer of an option has no control over whether the underlying currencies or
indices may be sold (called) or purchased (put) and as a result bears the market
risk of an unfavorable change in the price of the currency or indices underlying
the written option.
19
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
NOTE 1 - CONTINUED
The Fund may also purchase put and call options. The Fund pays a premium which
is included in the Fund's Statement of Assets and Liabilities as an investment
and subsequently marked to market to reflect the current value of the option.
The risk associated with purchasing a put and call option is limited to the
premium paid.
The Fund follows the following procedures when valuing options. For all options
other than index options, the value is the last sale price on the exchange on
which they are listed, unless no sales of such options have taken place on that
day, in which case they will be valued at the mean between their closing bid and
asked prices. Exchange traded index options are valued at the last sale price
only if that price falls on or between the closing bid and asked prices on that
day. If the last sale price falls outside of the range of the closing bid and
asked prices, or if there has been no sale that day, then the index option will
be valued using the mean of the closing bid and asked prices.
FEDERAL INCOME TAXES
The Fund's policy is to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to its shareholders. Also, it is the Fund's intention to make
distributions in amounts sufficient to avoid imposition of excise tax under the
Internal Revenue Code. Therefore, no provision is made for Federal income or
excise taxes.
At the end of each year, capital paid in, accumulated net investment income and
accumulated net realized loss on investments will be adjusted for permanent
book-tax differences. Reclassifications between accumulated net investment
income and accumulated net realized loss on investments arise principally from
differing book and tax treatments for foreign currency transactions.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the 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.
OTHER
Investment security transactions are accounted for on the trade date (the date
the order to buy or sell is executed). Dividend income is recorded on the
ex-dividend date or when the Fund first becomes aware of such dividends.
Interest income is recorded on the accrual basis. Distributions to shareholders
are recorded on the ex-dividend date.
The Fund uses the identified cost method for determining realized gain or loss
on investments.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
For the year ended September 30, 2000, purchases and sales of investment
securities other than U.S. Government obligations and short-term investments
aggregated $9,612,312 and $12,556,955, respectively. Purchases and sales of U.S.
Government obligations aggregated $1,846,650 and $4,200,858, respectively.
NOTE 3 - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Advisory and Management Agreement with Bailard, Biehl
& Kaiser, Inc. (the "Advisor"). The Agreement requires the payment of a monthly
fee computed on an annual basis as follows:
.95% of the first $75,000,000 of the average net assets of the Fund;
.80% on the next $75,000,000;
.65% on amounts in excess of $150,000,000.
20
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
NOTE 3 - CONTINUED
The Fund is responsible for its own operating expenses. For the period from
October 1, 1999 through December 31, 1999, the Advisor did not place a voluntary
limit on the Fund's total expenses. Commencing on January 1, 2000 and through
June 30, 2000, the Advisor has agreed to limit the Fund's total expenses to not
more than 1.75% of the average daily net assets, and from July 1, 2000 through
December 31, 2000, the Advisor further limits the Fund's total expenses to
1.60%. The Advisor has stated its intention, but is not required, to reduce such
expenses further to 1.55% from January 1, 2001 through June 30, 2001, and to
1.50% from July 1,2001 through December 31, 2001. At September 30, 2000, the
Advisor waived fees of $75,767.
As approved by the Trustees, the Fund has entered into an agreement with its
custodian, Brown Brothers Harriman & Co. ("BBH & Co."), whereby brokerage
commissions charged on U.S. equity trades executed through BBH & Co. are
available to offset custody transaction charges. There were no such credits
during the year ended September 30, 2000.
Each outside Trustee is compensated by the Fund at the rate of $4,000 per year
plus an attendance fee of $667 for each Trustees' meeting attended and related
travel expenses.
NOTE 4 - TAX BASIS UNREALIZED APPRECIATION (DEPRECIATION)
Gross and net unrealized appreciation (depreciation) at September 30, 2000 based
on a cost of $24,815,062 for federal income tax purposes, is as follows:
Gross unrealized appreciation $ 6,489,757
Gross unrealized depreciation (1,832,890)
-----------
Net unrealized appreciation $ 4,656,867
===========
NOTE 5 - FORWARD FOREIGN CURRENCY CONTRACTS
At September 30, 2000, the Fund had entered into forward foreign currency
contracts which obligated the Fund to exchange currencies at specified future
dates. At the maturity of a forward contract, the Fund may either make delivery
of the foreign currency from currency held, if any, or from the proceeds of
portfolio securities sold, or it may terminate its obligation to deliver the
foreign currency at any time by purchasing an offsetting contract. The forward
value of amounts due to the Fund under the contracts, including contracts which
have been offset but remained unsettled, has been netted against the forward
value of the currency to be delivered by the Fund and the remaining amount is
shown as unrealized loss on forward currency contracts in the financial
statements. Open forward foreign currency exchange contracts outstanding at
September 30, 2000 is as follows:
Unrealized
Currency Currency Delivery Appreciation
Receivable Deliverable Date (Depreciation)
---------- ----------- -------- --------------
$ 95,306 SEK 803,000 10/19/00 $ 6,800
175,378 EUR 187,200 10/26/00 9,939
119,903 EUR 137,835 11/13/00 (2,021)
48,827 NZD 100,000 11/17/00 4,128
247,928 GBP 176,415 11/20/00 (13,206)
219,329 JPY 23,402,400 11/21/00 754
54,014 CAD 80,000 11/22/00 761
130,520 DKK 1,106,940 11/27/00 (623)
113,913 SEK 1,068,500 11/30/00 2,445
----------
$ 8,977
==========
21
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
--------------------------------------------------------------------------------
CURRENCY LEGEND:
CAD - Canadian Dollar JPY - Japanese Yen
DKK - Danish Kroner NZD - New Zealand Dollar
EUR - Euro SEK - Swedish Krona
GBP - British Sterling
22
<PAGE>
(UNAUDITED)
CUMULATIVE TOTAL RETURN OF A $10,000 INVESTMENT
OCTOBER 1, 1990 - SEPTEMBER 30, 2000
Past performance is not predictive of future performance
MSCI World Salomon Bros.
BB&K Diversa Fund (Local Currency) MSCI World (US$) WGBI (US$)
----------------- ---------------- ---------------- ----------
Sep-90 10,000 10,000 10,000 10,000
Sep-91 11,397 12,560 12,453 11,505
Sep-92 11,988 11,815 12,326 13,610
Sep-93 14,404 14,448 14,822 14,853
Sep-94 13,945 14,965 15,941 15,122
Sep-95 15,734 16,799 18,239 17,569
Sep-96 17,322 19,818 20,731 18,307
Sep-97 20,637 25,682 25,731 18,748
Sep-98 21,235 25,799 25,766 20,918
Sep-99 23,198 33,230 33,360 21,019
Sep-00 24,123 38,014 36,082 20,199
AVERAGE ANNUAL TOTAL RETURN *
1 Year 5 Year 10 Year
------ ------ -------
3.97% 8.92% 9.20%
As mandated by the Securities and Exchange Commission, the above graph shows the
historic growth of a $10,000 investment in the Bailard, Biehl & Kaiser Diversa
Fund since October 1, 1990. We compare this investment to the growth of the
Morgan Stanley World stock index over the same time period. This index, which
measures the performance of the domestic and international equity markets, is
given in both U.S. dollar and local currency terms. The index does not measure
the performance of the Fund's other asset classes, including domestic and
international bonds. As the graph indicates, a $10,000 investment in the
Bailard, Biehl & Kaiser Diversa Fund would have grown to $38,014 by September
30, 2000.
* These figures reflect the average annual compounded return over the period
indicated that would equate an initial amount invested in shares of the
Fund to the ending redeemable value of such shares, assuming that all
dividends and distributions by the Fund were reinvested at net asset value.
The performance data quoted represents past performance, and the investment
return and principal value of an investment in the Bailard, Biehl & Kaiser
Diversa Fund will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than their original cost.
23
<PAGE>
BAILARD, BIEHL & KAISER DIVERSA FUND
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of
Bailard, Biehl & Kaiser Diversa Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Bailard, Biehl & Kaiser Diversa
Fund (the "Fund") at September 30, 2000, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended, in conformity with accounting principles generally accepted
in the United States of America. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 2000 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
San Francisco, California
November 22, 2000
24
<PAGE>
BAILARD, BIEHL & KAISER
DIVERSA FUND
--------------------------------------------------------------------------------
Federal Income Tax Information: (Unaudited)
In accordance with the Code, during the fiscal year ended September 30, 2000,
the Fund declared long-term capital gain distribution in the amount of
$1,923,037.
25
<PAGE>
The following information is available by request at no charge.
SHAREHOLDER REPORTS:
Additional information about the Fund's investments and performance is available
in the Fund's Quarterly, Semi-Annual, and Annual Reports to shareholders. The
Annual Report discusses the market conditions and investment strategies that
significantly affected the Fund's performance during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI):
The SAI provides further detail about the Fund's investment policies, risks and
operations. It is incorporation by reference into this propectus, and is legally
a part of this prospectus.
To request this information or make any additional inquiries please contact us
at:
BB&K Fund Services, Inc.
950 Tower Lane, Suite 1900
Foster City, CA 94404-2131
Toll free (800) 882-8383
[email protected]
Information about the Fund may be reviewed and copied at the Securities and
Exchange Commission's (SEC) public regerence room in Washington, DC. Information
regarding the operation of the Public Reference Room may be obtained by calling
the SEC at 1-202-942-8090, or sending an email to: [email protected]. Reports
and other information about the Fund are also available at the SEC Internet site
at http://www.sec.gov. Copies of this information may also be obtained by
writing and paying a duplicating fee to: Public Reference Section, Securities
and Exchange Commission, Washington DC, 20549-0102.
Ticker: DVERX
SEC File Number: 811-4828
