TABLE OF CONTENTS
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LETTER FROM THE INVESTMENT ADVISOR.......................................... 1
Wasatch Equity Funds ..................................................... 2
Wasatch-Hoisington U.S. Treasury Fund .................................... 3
MICRO CAP FUND PORTFOLIO SUMMARY............................................ 4
Six Month Review ......................................................... 4
Average Annual Total Returns & Ten Largest Holdings ...................... 5
SMALL CAP VALUE FUND PORTFOLIO SUMMARY...................................... 6
Six Month Review ......................................................... 6
Average Annual Total Returns & Ten Largest Holdings ...................... 7
SMALL CAP GROWTH FUND PORTFOLIO SUMMARY..................................... 8
Six Month Review ......................................................... 8
Average Annual Total Returns & Ten Largest Holdings ...................... 9
CORE GROWTH FUND PORTFOLIO SUMMARY......................................... 10
Six Month Review ........................................................ 10
Average Annual Total Returns & Ten Largest Holdings ..................... 11
ULTRA GROWTH FUND PORTFOLIO SUMMARY........................................ 12
Six Month Review ........................................................ 12
Average Annual Total Returns & Ten Largest Holdings ..................... 13
WASATCH-HOISINGTON U.S. TREASURY FUND PORTFOLIO SUMMARY.................... 14
Six Month Review ........................................................ 14
Average Annual Total Returns & Holdings/Maturity Date ................... 15
SCHEDULE OF INVESTMENTS.................................................... 16
STATEMENTS OF ASSETS AND LIABILITIES....................................... 36
STATEMENTS OF OPERATIONS................................................... 38
STATEMENTS OF CHANGES IN NET ASSETS........................................ 40
FINANCIAL HIGHLIGHTS....................................................... 44
NOTES TO FINANCIAL STATEMENTS.............................................. 56
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<PAGE>
WASATCH FUNDS, INC.
150 SOCIAL HALL AVENUE
SALT LAKE CITY, UTAH 84111
1 (800) 551-1700
LETTER FROM THE INVESTMENT ADVISOR
MARCH 31, 2000
- --------------------------------------------------------------------------------
DEAR SHAREHOLDERS:
- ------------------
During the last part of 1999 a significant change in market leadership was
underway. The Russell 2000 Index, a widely accepted measure of the performance
of small company stocks, eclipsed the performance of the S&P 500R Index which is
considered to be representative of large company stocks. The S&P 500 that led
the market over much of the past five years, lagged the Russell 2000 for the six
months ended March 31st.
While small company stocks appeared to be enjoying a resurgence, in truth,
stock price gains were largely confined to only a few stocks. Over the past six
months, performance of the small cap Russell 2000 Index was driven almost
exclusively by a handful of extremely volatile technology and biotechnology
stocks. Most non-technology stocks did not participate in the price gains.
The stock price ascent of these tech and biotech companies was so sharp that
their market capitalizations quickly ballooned out of small cap range.
Interestingly, stocks with the most price momentum were often those of companies
with no earnings or astronomical price-to-earnings ratios (P/Es), the price of a
stock divided by its earnings per share.
According to a report by Morgan Stanley Dean Witter only 42% of the 2000
stocks in the Russell 2000 rose from the beginning of the year through February
14th. The stock prices of the remaining 58% declined. Furthermore, 75% of the
Russell 2000's performance was explained by only 24 stocks and 50% by just 12
stocks. Almost all of these were technology or biotechnology stocks. Of the 24
companies that contributed 75% of the performance, 12 had no earnings. Of the 12
with earnings, the average P/E was an astounding 534.
In January and February biotechnology stocks were one of the primary drivers
of the Russell 2000 Index. That changed in March. A sell-off of biotech stocks
was triggered by a March 9th meeting between President Clinton and British Prime
Minister Tony Blair in which they affirmed that there should be free access to
information gathered in the process of mapping the human genetic code. Although
no new information came from this meeting, investors viewed it as a threat to
companies' intel-
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<PAGE>
lectual property and patent rights. As a result, biotech stocks were decimated.
The unusual narrowness of the market and the usual investor concerns over
the direction of the economy and inflation made for a wild ride in the market,
particularly in the first quarter of 2000.
Price declines suffered by high-flying stocks late in the first quarter gave
investors greater appreciation for the risks of investing in companies that have
stock price momentum but not much in the way of fundamentals such as
profitability and earnings growth.
No one can deny that technology and biotechnology will continue to grow in
importance in our lives and in the economy. However, not every company will
become profitable. Many will not even exist five years from now. Investors have
been treating nearly every company within these dynamic sectors as a potential
leader. They appear to be more focused on the business opportunity of the sector
than on the fundamentals of individual companies.
WASATCH EQUITY FUNDS
- --------------------
The Wasatch Equity Funds are focused on the fundamentals of individual
companies. We strive to invest in companies that are profitable, have a history
of strong earnings growth and excellent growth prospects. We also want to invest
at a reasonable price. In other words, we want to make sure we can tangibly
demonstrate the value of the companies in which we have invested rather than
merely buying whatever stocks are currently popular.
For the six months ended March 31, 2000, the Wasatch Equity Funds each
sought to achieve their investment objective of long term growth of capital by
pursuing their individual investment strategies.
Across the board, technology was a strong performing sector. We visit the
companies and meet with their top management so we can gain a better feel for
business opportunities and growth prospects. Wasatch's technology investments
were thoroughly analyzed by our in-house research team to ensure that they have
favorable characteristics that may lead to strong earnings growth because it is
our philosophy that over the long term earnings growth drives stock prices.
The "reasonable price" buying opportunity for many of Wasatch's best
performing technology investments came during the Asian economic crisis toward
the end of 1998. Throughout the crisis many investors sold technology stocks
giving Wasatch the opportunity to buy good quality companies within its
conservative valuation guidelines. The opportunities of nearly two years ago,
helped set up the strong performance Wasatch's technology holdings have enjoyed
over the last six months. As prices appreciated, Wasatch again followed its
valuation discipline capturing profits for shareholders by trimming many tech
stocks as their prices soared.
Companies held by the Wasatch Equity Funds generally reported strong
earnings growth for the six months ended March 31st. Reflecting the environment
of the market at large, the stock prices of many non-technology companies were
flat, some even declined despite the fact that they too met or beat earnings
growth expectations.
The results achieved by each Wasatch Equity Fund over the past six months
and for longer time periods made a strong positive contribution to shareholders'
investment portfolios.
EQUITY FUNDS OUTLOOK
- --------------------
More important than how the Funds have performed in the past is how they are
positioned to perform in the future.
Overall, we feel that the companies in
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which the Wasatch Equity Funds are invested have the potential to produce
earnings growth that may translate into strong stock price appreciation.
We believe that profitable earnings growth is the most important indicator
of how an investment will perform over time. We cannot control what the market
will do or which stocks will be in favor or out of favor. What we can and will
do is continue to search for and invest in companies that have the potential to
produce the earnings growth we seek. This is a time-tested approach to investing
that has helped shareholders who remain focused on the long term to achieve
their goals.
For more information about the performance and outlook for each Wasatch
Equity Fund, please see the portfolio summaries beginning on page 4.
WASATCH-HOISINGTON
U.S. TREASURY FUND
- ------------------
Over the past six months, the bond market experienced unusual volatility. In
an effort to keep inflation from heating up, the Federal Reserve Board (Fed) has
raised interest rates five times since last spring. Thirty-year U.S. Treasury
bond prices declined throughout 1999. Then in the first three months of 2000
prices rebounded dramatically. The Treasury yield curve inverted. This means the
yield of 30-year Treasury bonds, which usually is higher, fell below the yield
of shorter term Treasury securities. Van Hoisington, lead manager of the
Wasatch-Hoisington U.S. Treasury Fund, attributes the inversion primarily to two
factors. The first is the huge federal budget surplus which reduces the supply
of long term U.S. Treasury bonds. The second is that investors may feel the
Fed's policy of raising short term interest rates will slow the economy and
reduce inflation. In this environment, long term bonds are more attractive than
short term bonds.
The inverted yield curve may signal important economic changes and will be
watched very closely with regard to positioning the Fund.
For more information about the economy and the performance and outlook of
the Wasatch-Hoisington U.S. Treasury Fund, please see the portfolio summary
beginning on page 14.
WORTH NOTING
- ------------
We have found that the best antidote for volatility is to remain focused on
a long term investment plan. Wasatch is committed to long term investing. We
believe the Funds we offer have the potential to make a positive contribution to
your efforts to achieve long term investment objectives.
The current Prospectus contains more information about each Fund's
investment objectives and strategy. If you have any questions or comments
regarding this report or your investments, please call us at 1 (800) 551-1700 or
visit us on the web at WWW.WASATCHFUNDS.COM.
We look forward to serving your investment needs in the coming years. We
appreciate your investment in Wasatch Funds.
Sincerely,
Samuel S. Stewart, Jr.
Chairman of the Board
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WASATCH MICRO CAP FUND-PORTFOLIO SUMMARY
- ----------------------------------------
MARCH 31, 2000
(PHOTO)
ROBERT GARDINER, CFA-LEAD MANAGER
The Micro Cap Fund invests the majority of its assets in companies with
market capitalizations of less than $400 million at the time of initial
purchase. We believe investments in these very small companies give the Fund the
potential for above average returns because they may be able to increase
earnings faster and sustain earnings growth longer than larger companies.
Liquidity issues and wide stock price fluctuations typical of micro cap
companies make the Micro Cap Fund most suitable for long term investors.
SIX MONTH REVIEW
- ----------------
The Wasatch Micro Cap Fund closed to new investors at around $175 million to
enable us to continue investing your assets in micro cap companies.
With a six month return of 35.77%, the Micro Cap Fund beat the 26.84% return
of its benchmark, the Russell 2000 Index, by a wide margin. Longer term results
were even more impressive. For the 12 months ended March 31, 2000, the Fund
returned 64.04% compared to the Russell's return of 37.29%. Since inception the
Fund has returned 32.81% which more than doubled the Russell's 16.01% return
over the same time period.
The technology sector played a major role in the positive results achieved
by the Fund and the Russell 2000 over the past six months. The Fund's
semiconductor holdings, including two of the Fund's most heavily weighted
positions, were particularly strong. Supertex, Inc., a semiconductor components
manufacturer, was up over 83.2%. Pericom Semiconductor Corp., a manufacturer of
semiconductors used in networking equipment, network servers and PCs, was up
over 139.9%.
While the market chased technology stocks, we moved in the opposite
direction. Throughout the six months ended March 31st we consistently trimmed
the Fund's technology holdings. First, to lock in profits due to strong stock
price appreciation. Second, to shift assets from stocks that we felt had become
overvalued to stocks that we believed were more reasonably priced.
The powerful performance of the Fund's technology holdings was the direct
result of another time when we moved in opposition to the market. During the
Asian economic crisis in 1998 when investors were selling technology stocks,
we bought aggressively as prices came down.
Performance was also positively affected by the Fund's health care holdings.
Three of the Fund's most heavily weighted positions are health care companies
that made notable contributions. CorVel Corporation, a provider of case
management and cost containment services for workers' compensation, was up
16.5%. ICU Medical, Inc., a maker of disposable connectors for intravenous
therapy, was up 20%. Techne Corp., a maker of complex, disposable research kits
for biotechnology, was up 119.9%.
Despite generally reporting strong
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WASATCH MICRO CAP FUND-PORTFOLIO SUMMARY
- ----------------------------------------
earnings growth, the stock prices of the business services and retail companies
in which the Fund invested did not make much of a contribution to performance.
Stock price gains of some holdings were offset by declines in other holdings.
Financial services stocks were weak due to concerns over rising interest
rates. Rising oil prices held back transportation stocks.
OUTLOOK
- -------
We are actively positioning the Fund with investments in growing companies
that we believe are reasonably priced. This means we are shifting assets out of
holdings that have become fully or overpriced and into holdings that we believe
have room for stock price appreciation.
While the benefits of this strategy may not be immediately realized, we
believe it favorably positions the Fund to achieve the long term results we
seek.
Several places where we are finding growing companies at what we believe are
great values are in the health care, business services and retail sectors. We're
seeing better opportunities in the technology sector since prices dropped
dramatically early in the second quarter.
We look forward to working with you as you strive to achieve your long term
investment objectives.
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AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- ---------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION<F1>
- --------------------------------------------------------------------------------
WASATCH MICRO CAP FUND 64.04% N/A 32.81%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
<F1> Inception: June 19, 1995.
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
- --------------------
1. CORVEL CORP. 5%
Case management and cost
containment services for
workers' compensation.
2. ICU MEDICAL, INC. 5%
Disposable connectors for
intravenous therapy.
3. SUPERTEX, INC. 4%
Semiconductor component
manufacturer.
4. ON ASSIGNMENT, INC. 4%
Specialty staffing for life
sciences and research
laboratories.
5. PERICOM SEMICONDUCTOR CORP. 3%
Semiconductors for networking
equipment, network servers
and PCs.
6. WHITEHALL JEWELLERS, INC. 3%
Fine jewelry retailer.
7. TECHNE CORP. 3%
Complex, disposable research
kits for biotechnology.
8. THE MEN'S WEARHOUSE, INC. 3%
Men's discount clothing
retailer.
9. WILMAR INDUSTRIES, INC. 3%
Maintenance products
distributor.
10.POWER-ONE, INC. 3%
Power supplies for
electronic devices.
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WASATCH SMALL CAP VALUE FUND-PORTFOLIO SUMMARY
- ----------------------------------------------
MARCH 31, 2000
(PHOTO)
JIM LARKINS, MBA-CO-MANAGER WITH
ROBERT GARDINER, CFA
The investment objective of the Small Cap Value Fund (formerly Micro-Cap
Value) is long term growth of capital. The Fund seeks to achieve its objective
by investing primarily in companies with market capitalizations of less than
$1.5 billion whose stocks are selling at a substantial discount to what we
believe is the company's underlying value. The Fund is designed for long term
investors who have assessed their tolerance for risk and volatility. Wasatch
intends to close the Fund when it reaches approximately $300 million in assets.
SIX MONTH REVIEW
- ----------------
The Wasatch Small Cap Value Fund's stellar returns over the past six months
are all the more impressive given the market environment during that time.
Value investing has been out of favor for well over a year as the market has
generally focused on momentum investing. Many value oriented funds have
struggled as value stocks have been largely ignored.
In this adverse environment, the Wasatch Small Cap Value Fund has soared.
The Fund's six month return of 31.57% soundly beat the Russell 2000 Value
Index's return of 5.41%. The Fund's 12 month return of 63.96% is nearly five
times greater than the Russell 2000 Value's return of 13.26%.
We attribute the Fund's strong showing to insightful investments that turned
out to be rewarding.
Two years ago, the Asian economic crisis created numerous opportunities to
get great values on technology companies with outstanding growth prospects
because their stock prices had been unreasonably beaten down.
Over the past six months, the stock prices of many of the technology
companies we invested in during the Asian crisis appreciated significantly. Two
are worth mentioning because they were among the Fund's most heavily weighted
positions during that time. One is Supertex, Inc., a manufacturer of
semiconductor components. We invested in Supertex in March 1998 at around $10
per share. As of March 31, 2000 the company's stock price had appreciated nearly
300% to $297/8. The other is Pericom Semiconductor Corp., a maker of
semiconductors for networking equipment, network servers and PCs. We invested in
Pericom in November 1998 at between $7 and $8 per share. As of March 31, 2000
the company's stock price had appreciated nearly 475% to $35 11/16.
We trimmed these holdings throughout the past six months to lock in profits
due to stock price appreciation.
The retail sector has been an excellent source of value priced investments.
It has been out of favor due to uncertainty about how Internet competition
would affect traditional retailers. We invested in Ross Stores, Inc., a discount
retailer of name brand apparel, at a price well below what we believe is the
company's intrinsic value.
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WASATCH SMALL CAP VALUE FUND-PORTFOLIO SUMMARY
- ----------------------------------------------
Excluding biotechnology, the health care sector has been a great place to
find value investments. Overall, the Fund's health care holdings had a positive
effect on performance.
The Fund's lone energy holding, Gulf Island Fabrication, Inc., a
manufacturer of offshore oil platforms, was one of the top contributors to
performance.
The effect of rising oil prices hurt the earnings of several of the Fund's
transportation holdings causing general stock price weakness.
Rising interest rates held back the performance of the Fund's financial
services holdings.
Throughout the past six months we have had excellent success finding
investments that we believe are undervalued. These companies typically have some
catalyst that we believe may lead to strong earnings growth and result in stock
price appreciation.
OUTLOOK
- -------
We have been doing our homework on numerous companies and how they are
positioned within their industries. We feel prepared to recognize when these
stocks are selling at great values.
The upside of stock market declines is that they create opportunities to
invest in companies at prices well below what they would normally command.
We believe the Small Cap Value Fund is well-positioned to continue making a
positive contribution to your efforts to achieve long term investment
objectives.
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AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- ---------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION<F1>
- --------------------------------------------------------------------------------
WASATCH SMALL CAP VALUE FUND 63.96% N/A 22.79%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
<F1> Inception: December 17, 1997.
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
- --------------------
1. ICU MEDICAL, INC. 4%
Disposable connectors for
intravenous therapy.
2. SUPERTEX, INC. 4%
Semiconductor component manufacturer.
3. ROSS STORES, INC. 3%
Discount name brand apparel retailer.
4. RAINBOW RENTALS, INC. 3%
Rent-to-own store operator.
5. THE MEN'S WEARHOUSE, INC. 3%
Men's discount clothing retailer.
6. WILMAR INDUSTRIES, INC. 3%
Maintenance products distributor.
7. WHITEHALL JEWELLERS, INC. 3%
Fine jewelry retailer.
8. WORLD ACCEPTANCE CORP. 3%
Consumer lending.
9. CORVEL CORPORATION 2%
Case management and cost
containment services for workers'
compensation.
10.REMEDYTEMP, INC. 2%
Temporary staffing agency.
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WASATCH SMALL CAP GROWTH FUND-PORTFOLIO SUMMARY
- -----------------------------------------------
MARCH 31, 2000
(PHOTO)
JEFF CARDON, CFA-LEAD MANAGER
The Small Cap Growth Fund (formerly Aggressive Equity) invests primarily in
growing small companies with market capitalizations of less than $1.5 billion at
the time of purchase. Investing in this segment of the market has historically
achieved higher returns for investors but requires patience and a long time
horizon because small company stock prices are subject to wide fluctuations. We
intend to close the Small Cap Growth Fund at approximately $300 million in
assets.
SIX MONTH REVIEW
- ----------------
As of March 31, 2000, the Small Cap Growth Fund's six month return of 26.29%
was in line with the 26.84% return of the Russell 2000 Index, a widely
recognized measure for the performance of small company stocks. The Fund's 12
month return of 50.13% was significantly better than the Russell 2000's return
of 37.29%. The S&P 500R Index, considered to be representative of large company
stocks, lagged the Fund and the Russell 2000 with a six month return of 17.51%
and a one year return of 17.94%.
Reflecting the market environment, the Small Cap Growth Fund's technology
holdings were the primary drivers of performance over the past six months.
There are two important differences between the Fund's holdings and the market's
top performers. First, the Fund's technology holdings are profitable companies.
Second, we invested in these companies at prices we believe were reasonable
relative to their profitability and earnings growth potential. The market's top
performers were companies with no earnings growth or astronomical price-to-
earnings ratios (P/Es).
Throughout the six months ended March 31st, we trimmed many technology
holdings to capture profits from strong stock price appreciation. This reduced
the Fund's exposure to the technology sector which we felt had become
overvalued.
Two of the Funds most heavily weighted positions are semiconductor companies
whose stock prices appreciated significantly. Microchip Technology, Inc., a
proprietary chip manufacturer, was up 92%. Micrel, Inc., a manufacturer of
analog semiconductors, was up 121.3%.
Led by price gains in biotechnology stocks, the Fund's health care sector
made a positive contribution to performance. The Fund's largest holding, Techne
Corp., a maker of complex, disposable research kits for biotechnology, was up
119.9%. Unlike typical biotech stocks, Techne is a highly profitable company
that sells consumables to the biotech industry.
ICU Medical, Inc., a maker of disposable connectors for intravenous therapy,
reported strong earnings growth and was rewarded by a stock price increase of
20%.
Rising oil prices contributed to stock price weakness among the Fund's
transportation holdings.
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WASATCH SMALL CAP GROWTH FUND-PORTFOLIO SUMMARY
- -----------------------------------------------
As a group, the Fund's financial services holdings were negatively affected
by rising interest rates.
Retail stocks have been out of favor. This contributed to price weakness in
a number of the Fund's retail holdings. A mild winter affected sales at O'Reilly
Automotive, Inc., the Fund's largest retail holding. This automotive parts
retailer/distributor typically enjoys strong sales in cold weather.
OUTLOOK
- -------
Overall, companies held by the Fund continued to report strong earnings
growth. We believe this bodes well for the Fund's ability to achieve outstanding
results over the long term.
In the short term, investments are affected by a variety of market and
economic forces. Over the long run, we are confident that if we adhere to our
discipline of investing in growing small companies at reasonable prices the Fund
will be a powerful force in your portfolio.
We look forward to working with you as you strive to achieve long term
investment objectives. Thank you for your investment in the Wasatch Small Cap
Growth Fund.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- ---------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
WASATCH SMALL CAP GROWTH FUND 50.13% 19.45% 17.99%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
- --------------------
1. TECHNE CORP. 5%
Complex, disposable research kits
for biotechnology.
2. O'REILLY AUTOMOTIVE, INC. 4%
Automotive parts retailer/distributor.
3. MICROCHIP TECHNOLOGY, INC. 4%
Proprietary chip manufacturer.
4. MICREL, INC. 4%
Analog semiconductors.
5. WHITEHALL JEWELLERS, INC. 4%
Fine jewelry retailer.
6. POWERTEL, INC. 3%
Services for wireless telecom.
7. EXPRESS SCRIPTS, INC., CLASS A 3%
Pharmacy benefits manager.
8. EXPEDITOR'S INTERNATIONAL
OF WASHINGTON, INC. 3%
International air and ocean
freight forwarder.
9. KNIGHT TRANSPORTATION, INC. 3%
Long haul trucking and
logistic services.
10.ICU MEDICAL, INC. 3%
Disposable connectors for
intravenous therapy.
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WASATCH CORE GROWTH FUND-PORTFOLIO SUMMARY
- ------------------------------------------
MARCH 31, 2000
(PHOTO)
SAMUEL S. STEWART, JR., PHD, CFA-LEAD
MANAGER. JB TAYLOR-CO-MANAGER
The Core Growth Fund (formerly Growth) seeks to invest in growing companies
that we believe are stable and have a history of consistent earnings growth. In
addition, we seek to invest in these companies at reasonable prices. The Core
Growth Fund is the most conservative of all the Wasatch Equity Funds. However,
because the Fund may invest in smaller companies, we believe it is best suited
for long term investors.
SIX MONTH REVIEW
- ----------------
The Wasatch Core Growth Fund was up 11.53% for the six months ended March
31, 2000. The Fund lagged the Russell 2000 Index's return of 26.84%.
The Fund was designed to be a long term investment so we feel its five and 10
year returns are much better indicators of overall performance. The Fund's five
year return of 17.73% outpaced the Russell 2000's return of 17.24% and its 10
year return of 15.73% outpaced the Russell 2000's return of 14.43%.
Over the past six months the performance of the Russell 2000 was driven
primarily by a handful of technology and biotechnology companies that either had
no earnings or excessively high valuations. This created an environment that was
unfavorable for the Fund on three counts.
First, reasonably priced stocks like those held by the Fund were shunned in
a market where the top performers were high priced stocks that kept going up.
Second, the Fund's discipline of investing in profitable companies with a
history of strong earnings growth precluded us from investing in companies with
no earnings like some of those that drove the Russell 2000's performance.
Third, very few technology companies meet our requirements for profitability
and stable growth potential. This meant the Fund was underweighted in the best
performing sector. The Fund's technology holdings made a positive contribution
to performance, led by the strength of Microchip Technology, Inc. and Supertex,
Inc.
While the market environment was unfavorable, earnings growth reported by
the Fund's holdings was extremely favorable. Growth reported over the past six
months has been at an all time high. We believe earnings growth is the most
important driver of stock prices over the long term. These excellent reports
give us confidence in the Fund's potential to produce outstanding long term
performance.
The Fund's only biotechnology holding was Techne Corp., a highly profitable
company that makes consumables for the biotechnology industry. Techne was one of
the Fund's most stable growers, producing average annual earnings of around 27%
for 31/2 years. We first invested in October 1996 at a split adjusted price of
$12.19. In the first quarter of 2000 we sold Techne at an average price of
$63.77. Our disciplined strategy produced an average total return of more than
400%.
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WASATCH CORE GROWTH FUND-PORTFOLIO SUMMARY
- ------------------------------------------
Excluding biotechnology, health care stocks have been among the weakest
performers over the past year and have become quite undervalued in spite of the
fact that the health care sector will experience increasing demand as the U.S.
population ages. The Fund's health care holdings made a positive contribution to
performance. In general, they had strong earnings and still have plenty of room
for stock price appreciation.
Despite generally reporting strong earnings growth and having a bright
outlook, the Fund's retail and business services holdings suffered from stock
price weakness.
Concern about rising interest rates caused stock price declines of several
of the Fund's financial services companies.
OUTLOOK
- -------
The last six months have been unusual. The best performing stocks have been
those of companies that are not profitable, have no earnings or have unrea
sonably high valuations based upon traditional valuation criteria. Going
forward, we believe this will normalize and that companies reporting strong
earnings growth will be rewarded with higher stock prices.
The record earnings growth reported by the Fund's holdings and their
potential to grow steadily in the future gives us confidence that the Fund is
well positioned to achieve excellent long term results for shareholders.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- ---------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
WASATCH CORE GROWTH FUND 24.38% 17.73% 15.73%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
- --------------------
1. AMERICREDIT CORP. 10%
Automobile and mortgage lender.
2. RENT-A-CENTER, INC. 7%
Rent-to-own store operator.
3. EXPRESS SCRIPTS, INC., CLASS A 5%
Pharmacy benefits manager.
4. LINCARE HOLDINGS INC. 4%
In-home respiratory therapy services.
5. WHITEHALL JEWELLERS, INC. 4%
Fine jewelry retailer.
6. FIRST HEALTH GROUP CORP. 4%
Medical cost management services
for group health and workers'
compensation.
7. COPART, INC. 3%
Vehicle salvage services.
8. PEDIATRIX MEDICAL GROUP INC. 3%
National network of neonatalogists.
9. ON ASSIGNMENT, INC. 3%
Specialty staffing for life sciences
and research laboratories.
10.ORTHODONTIC CENTERS OF
OF AMERICA, INC. 3%
Practice management for
orthodontists.
Semi-Annual Report
<PAGE>
WASATCH ULTRA GROWTH FUND-PORTFOLIO SUMMARY
- -------------------------------------------
MARCH 31, 2000
(PHOTO)
KAREY BARKER, CFA-LEAD MANAGER
AJAY KRISHNAN, MBA-CO-MANAGER
The Ultra Growth Fund (formerly Mid-Cap) is the most aggressive Fund in the
Wasatch Funds family. The Fund seeks to invest in rapidly growing companies in
fast growing sectors of the economy. It is best suited for aggressive investors
who plan to hold the Fund at least five years.
SIX MONTH REVIEW
- ----------------
For the six months ended March 31, 2000, the Ultra Growth Fund returned
19.07%. This return was better than the S&P 500R Index's return of 17.51%, but
lagged the Russell 2000 Index's return of 26.84% and the S&P MidCap 400R Index's
return of 32.05%.
During the period the Russell 2000 was driven primarily by a handful of
largely profitless technology and biotechnology companies that in our opinion
were overvalued.
The Fund invests in fast growing companies in dynamic sectors. However, we
expect our investments to have solid fundamentals such as profitability, a
strong competitive position and be realistically valued. That discipline kept us
out of some of the market's top performers that were heavy on stock price
momentum, but light on fundamentals.
It also kept us out of some of the worst performers as Wall Street dismissed
many stocks from early initial public offerings in previously "hot" spaces such
as Internet retailing.
Five of the Fund's 10 most heavily weighted positions fall under the broad
classification of technology. These include holdings in telecom equipment and
semiconductors, two industries where many companies have historically high
profits and long records of growth.
Semiconductor holdings were particularly strong through March 31st.
Significant gains were made by: Micrel, Inc., a manufacturer of analog
semiconductors; Microchip Technology, Inc., a proprietary chip manufacturer;
SDL, Inc., a manufacturer of semiconductor lasers; and JDS Uniphase Corporation,
a manufacturer of components and subsystems used in fiber optic
telecommunications networks.
Another dynamic sector in which we have found fast growing companies is
health care. The Fund remains overweighted in health care stocks compared to
most indexes. Excluding biotechnology, companies in this sector continue to be
among the most undervalued growth companies because investor concerns over
government reimbursement issues and managed care pricing pressure has held back
stock prices.
We saw significant positive contributors to performance in the Fund's health
care sector from names in biotechnology such as Techne Corporation and
Invitrogen Corporation, both makers of kits and products used for genetic
research. We also saw good returns from MedQuist Inc., a provider of electronic
transcription and data management services for health care, and the Fund's
large position in Shire Pharmaceuticals
Semi-Annual Report
<PAGE>
WASATCH ULTRA GROWTH FUND-PORTFOLIO SUMMARY
- -------------------------------------------
Group Plc, a developer of prescription medicines used in the treatment of
osteoporosis, Alzheimer's Disease and chronic fatigue syndrome. Express Scripts,
Inc., a pharmacy benefits manager, was the Fund's largest health care holding.
The company's stock price declined because of concerns regarding regulatory
inquiries at several of their competitors and the potential for increased
scrutiny or regulation of the industry.
While stock prices lately seem somewhat disconnected from the profits and
growth of the actual companies, we remain absolutely confident that this
fundamental relationship cannot be ignored for long. We continue to believe that
the most important measure of long term investment performance is not immediate
stock price gains but the health and wealth of the companies in which we invest.
Companies held in the Fund reported average annual earnings per share growth of
29% in the first quarter of 2000.
OUTLOOK
- -------
Looking ahead, we expect companies held in the Wasatch Ultra Growth Fund to
continue reporting high growth rates.
We will continue to pay close attention to their fundamentals and will
strive to invest at prices that make sense in light of their profitability and
growth prospects. It has been our experience that although the market may become
distracted at times, it eventually rewards fast growing, profitable companies
with higher stock prices.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- ---------------------------------------------------
1 YEAR 5 YEARS SINCE INCEPTION<F1>
- --------------------------------------------------------------------------------
WASATCH ULTRA GROWTH FUND 32.14% 16.47% 14.84%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
<F1> Inception: August 16, 1992.
TEN LARGEST HOLDINGS
- --------------------
1. MICREL, INC. 6%
Analog semiconductors.
2. EXPRESS SCRIPTS INC., CLASS A 6%
Pharmacy benefits manager.
3. SHIRE PHARMACEUTICALS GROUP 5%
Prescription medications developer.
4. SANMINA CORP. 5%
Contract manufacturer of electronics.
5. O'REILLY AUTOMOTIVE, INC. 5%
Automotive parts retailer/distributor.
6. F.Y.I. INCORPORATED 5%
Document management services.
7. JDSUNIPHASE CORPORATION 4%
Fiber optics components.
8. MEDQUIST INC. 4%
Electronic transcription and data
management services for health care.
9. MICROCHIP TECHNOLOGY, INC. 3%
Proprietary chip manufacturer.
10.SDL, INC. 3%
Semiconductor lasers manufacturer.
Semi-Annual Report
<PAGE>
WASATCH-HOISINGTON U.S. TREASURY FUND-PORTFOLIO SUMMARY
- -------------------------------------------------------
MARCH 31, 2000
(PHOTO)
VAN R. HOISINGTON-LEAD MANAGER
The U.S. Treasury Fund seeks to provide a rate of return that exceeds the rate
of inflation over a business cycle (the time it takes for the economy to shift
from a peak in business activity to a trough and back to a peak) by investing in
U.S. Treasury securities.
SIX MONTH REVIEW
- ----------------
For the six months ended March 31, 2000 the Wasatch-Hoisington U.S. Treasury
Fund returned an exceptional 6.91%, far above the 2.08% return of the Lehman
Brothers Aggregate Index. For the latest one, three and five year periods the
Fund bested the Lehman Aggregate by 0.73%, 3.35% and 0.96%, respectively.
In 1999 two fundamental and positive determinants of the U.S. Treasury bond
market were obscured by fears that the good economy would lead to higher
inflation.
First, the economy was best characterized by tight control of money in the
midst of an abundance of goods, the classic definition of falling inflation. The
Federal Reserve Board (Fed) was pursuing a program of monetary restraint.
Domestic and foreign producers were offering a wide and ever-increasing supply
of goods to the American consumer. The core inflation rate declined to a 33-year
low in spite of doubling oil prices.
Second, the U.S. Treasury registered a record surplus and most budget
forecasters predicted another new record in 2000, making it obvious that the
supply of Treasury securities would shrink.
Many bond market investors chose to ignore these two positive determinants
of Treasury yields and to fret about the presumed link between inflation and
unemployment. In this state of anxiety, the Treasury market in 1999 witnessed
one of the largest annual increases in long-term yields on record and the prices
of 30-year Treasury bonds declined.
The essentials of this year's Treasury market do not differ substantially
from those of last year. While the Fed has raised the Federal Funds rate two
more times this year and the supply of available goods and services has
continued to increase, these developments are merely a continuation of trends
that have been in place for a long time. The budget surplus looks just as large
for the current and next fiscal years as it did in 1999.
With the economy continuing to expand at a rapid clip and the unemployment
rate holding near a 30-year low of 4.1%, the link of these factors to inflation
should be just as real as in 1999. But, contrary to last year, bond market
participants have focused on positive aspects of market fundamentals and ignored
the hypothetical link between unemployment and inflation. Bond yields have
fallen sharply and the value of long term Treasury bonds has risen,
substantially overcoming the price declines suffered in 1999.
These events illustrate once again the importance of making investment
decisions on the basis of multi-year trends
Semi-Annual Report
<PAGE>
WASATCH-HOISINGTON U.S. TREASURY FUND-PORTFOLIO SUMMARY
- -------------------------------------------------------
and not on the unpredictable annual swings in market psychology.
The Fund's positive performance over the past six months was achieved by
adhering to our multi-year investment discipline keyed to inflation.
OUTLOOK
- -------
Due to the spreading oil price increase, the core Consumer Price Index
(CPI)inflation rate has turned upward slightly this year and may rise further.
All the intermittent core price increases of the past 10 years were reversed due
to the Fed's vigilance and the abundance of goods and services. Since monetary
policy works with time lags, some further upward creep in the core inflation
rate should not be troubling, especially since oil prices are no longer rising.
If the economy continues to remain robust over the near term, or inflation
is a little more than the Fed desires, the Fed will raise short term interest
rates further. This will put upward pressure on the yields of short and
intermediate Treasury securities. Since the supply of long term Treasury bonds
will be shrinking, the yield curve is likely to invert further. Eventually,
rising short term rates and the inversion of the yield curve will slow the
economy. Thus, the inverted yield curve and the huge budget surplus should
reward investors in long term Treasury bonds like those held by the Wasatch-
Hoisington U.S. Treasury Fund.
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS (as of March 31, 2000)
- --------------------------------------------------------------------------------
1 YEAR 5 YEARS 10 YEARS
- --------------------------------------------------------------------------------
WASATCH-HOISINGTON
U.S. TREASURY FUND 2.60% 8.11% 8.00%
- --------------------------------------------------------------------------------
Past performance is not necessarily indicative of future results. Within a long
term investment time frame share prices will fluctuate. Shareholders' capital
will grow more at some times, less at other times or it may decline. For more
complete information including charges and expenses read the prospectus
carefully.
- --------------------------------------------------------------------------------
HOLDINGS/MATURITY DATE
- ----------------------
1. U.S. TREASURY BOND 29%
11/15/2024
2. U.S. TREASURY BOND 13%
8/15/2027
3. U.S. TREASURY BOND 12%
11/15/2026
4. U.S. TREASURY BOND 9%
2/15/2027
5. U.S. TREASURY STRIP 8%
8/15/2025
6. U.S. TREASURY BOND 7%
8/15/2025
7. U.S. TREASURY BOND 5%
2/15/2026
8. U.S. TREASURY STRIP 4%
11/15/2021
9. U.S. TREASURY BOND 2%
8/15/2029
10.U.S. TREASURY BOND 2%
8/15/2026
Semi-Annual Report
<PAGE>
MICRO CAP FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS 87.3%
-------------------
BUILDERS & BUILDING SUPPLIES 0.5%
94,191 Building Materials Holding Corp.<F1> $853,606
5,000 Crossman Communities, Inc.<F1> 79,219
-----------
932,825
----------
BUSINESS PRODUCTS 0.1%
18,200 Koala Corp.<F1> 242,287
-----------
BUSINESS SERVICES 20.0%
11,000 Bottomline Technologies, Inc.<F1> 400,812
179,100 Charles River Associates Incorporated<F1> 3,481,256
99,000 Daisytek International Corp.<F1> 1,565,437
10,000 Forward Air Corporation<F1> 236,875
70,900 F.Y.I. Inc.<F1> 1,923,163
95,000 Global Imaging Systems, Inc.<F1> 736,250
243,750 National Dentex Corp.<F1> 3,595,313
51,600 NOVA Corporation<F1> 1,502,850
156,000 On Assignment, Inc.<F1> 7,020,000
64,100 QRS Corporation<F1> 4,823,525
62,000 RemedyTemp, Inc.<F1> 1,371,750
4,100 RWD Technologies, Inc.<F1> 34,338
169,700 SCP Pool Corporation<F1> 5,197,063
322,550 Wilmar Industries, Inc.<F1> 5,503,509
-----------
37,392,141
-----------
COMPUTER SOFTWARE 0.6%
17,900 Caldera Systems, Inc.<F1> 420,650
22,300 CFI ProServices, Inc.<F1> 151,919
17,000 Moldflow Corp.<F1> 287,937
900 OTG Software, Inc.<F1> 36,281
9,000 Transaction Systems Architects, Inc.<F1> 259,875
-----------
1,156,662
-----------
COMPUTER SYSTEMS & COMPONENTS 4.3%
138,200 Active Voice Corp.<F1> 2,003,900
13,000 PLX Technology, Inc.<F1> 484,047
91,000 Power-One, Inc.<F1> 5,494,125
-----------
7,982,072
-----------
ELECTRONICS 1.9%
75,000 Nu Horizons Electronics Corp.<F1> 1,659,375
353,350 PCD Inc.<F1> 1,855,087
-----------
3,514,462
-----------
Semi-Annual Report
<PAGE>
MICRO CAP FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY 0.2%
20,000 Gulf Island Fabrication, Inc.<F1> $292,500
-----------
FINANCIAL SERVICES 2.0%
30,000 ACE Cash Express, Inc.<F1> 513,750
628,700 World Acceptance Corp.<F1> 3,182,794
-----------
3,696,544
-----------
HEALTH CARE PROVIDERS 2.5%
442,584 AmSurg Corp., Class A<F1> 2,600,181
310,125 AmSurg Corp., Class B<F1> 1,860,750
21,000 U.S. Physical Therapy, Inc.<F1> 196,875
-----------
4,657,806
-----------
HEALTH CARE SERVICES 6.5%
387,000 American Healthways, Inc.<F1> 1,499,625
178,600 AmeriPath, Inc.<F1> 1,451,125
356,650 CorVel Corp.<F1> 9,272,900
-----------
12,223,650
-----------
OTHER 0.7%
86,200 Embrex, Inc.<F1> 1,357,650
-----------
PERSONAL PRODUCTS 0.7%
34,000 Maxwell Shoe Company Inc.<F1> 286,875
136,100 Signature Eyewear, Inc.<F1> 323,238
158,500 USANA, Inc.<F1> 708,297
-----------
1,318,410
-----------
PERSONAL SERVICES 3.5%
362,600 First Cash Financial Services, Inc.<F1> 2,220,925
319,000 Rainbow Rentals, Inc.<F1> 2,831,125
80,653 Rent-Way, Inc.<F1> 1,572,734
-----------
6,624,784
-----------
PHARMACEUTICAL & MEDICAL PRODUCTS 11.1%
8,500 Exactech, Inc.<F1> 143,969
473,700 ICU Medical, Inc.<F1> 8,526,600
69,900 Minntech Corp. 524,250
14,500 Myriad Genetics, Inc.<F1> 873,625
81,717 Techne Corp.<F1> 5,638,473
338,500 Young Innovations, Inc.<F1> 4,992,875
-----------
20,699,792
-----------
Semi-Annual Report
<PAGE>
MICRO CAP FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
REAL ESTATE 0.2%
32,000 National Health Investors, Inc. REIT $382,000
-----------
RETAIL 15.2%
58,666 99 Cents Only Stores<F1> 2,302,640
75,400 bebe Stores, Inc.<F1> 951,925
99,400 Cato Corporation (The) 1,167,950
55,000 Cost Plus, Inc.<F1> 1,859,687
40,000 Finish Line, Inc. (The)<F1> 390,000
19,700 Guitar Center, Inc.<F1> 225,319
147,200 Hibbett Sporting Goods, Inc.<F1> 3,026,800
108,000 MarineMax, Inc.<F1> 1,032,750
190,053 Men's Wearhouse, Inc. (The)<F1> 5,630,320
65,000 O'Charley's Inc.<F1> 845,000
159,600 O'Reilly Automotive, Inc.<F1> 2,264,325
10,000 Nautica Enterprises, Inc.<F1> 117,500
188,800 Travis Boats & Motors, Inc.<F1> 2,501,600
262,555 Whitehall Jewellers, Inc.<F1> 6,170,042
10,000 YOCREAM International, Inc.<F1> 37,500
-----------
28,523,358
-----------
SEMICONDUCTORS 12.2%
39,000 Integrated Measurement Systems, Inc.<F1> 792,187
54,378 Micrel, Inc.<F1> 5,220,288
37,000 Nanometrics Incorporated<F1> 1,803,750
177,800 Pericom Semiconductor Corporation<F1> 6,345,237
9,000 PSi Technologies Holdings, Inc.<F1> 149,625
15,900 Semtech Corporation<F1> 1,018,594
250,800 Supertex, Inc.<F1> 7,492,650
-----------
22,822,331
-----------
TRANSPORTATION 5.1%
126,300 Aramex International Limited<F1> 1,649,794
87,300 Carey International, Inc.<F1> 1,484,100
49,500 Covenant Transport, Inc.<F1> 785,813
215,000 Knight Transportation, Inc.<F1> 3,762,500
7,000 Motor Cargo Industries, Inc.<F1> 32,375
66,300 Smithway Motor Xpress Corp.<F1> 232,050
43,100 Transport Corp. of America, Inc.<F1> 210,113
203,000 USA Truck, Inc.<F1> 1,471,750
-----------
9,628,495
-----------
TOTAL COMMON STOCKS (COST $125,572,981) 163,447,769
-----------
Semi-Annual Report
<PAGE>
MICRO CAP FUND-SCHEDULE OF INVESTMENTS
MARCH 31, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 12.4%
----------------------------
(Variable Rate Demand Deposits)
$23,147,051 UMB Bank Money Market Fiduciary, 4.15% $23,147,051
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $23,147,051) 23,147,051
-----------
TOTAL INVESTMENTS (COST $148,720,032) 99.7% 186,594,820
OTHER ASSETS LESS LIABILITIES 0.3% 648,775
-----------
NET ASSETS 100.0% $187,243,595
===========
<F1>Non-income producing
See notes to financial statements.
Semi-Annual Report
<PAGE>
SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS 91.7%
-------------------
BASIC MATERIALS 0.5%
17,800 Encore Wire Corporation<F1> $127,938
-----------
BUILDERS & BUILDING SUPPLIES 2.6%
20,500 Building Materials Holding Corp.<F1> 185,781
9,000 Crossman Communities, Inc.<F1> 142,594
9,000 Monaco Coach Corporation<F1> 171,000
12,000 National R.V. Holdings, Inc.<F1> 189,750
-----------
689,125
-----------
BUSINESS PRODUCTS 1.1%
13,500 Astronics Corporation<F1> 155,250
10,000 Koala Corp.<F1> 133,125
-----------
288,375
-----------
BUSINESS SERVICES 10.8%
20,900 Daisytek International Corp.<F1> 330,481
30,000 Global Imaging Systems, Inc.<F1> 232,500
23,800 National Dentex Corp.<F1> 351,050
26,300 RemedyTemp, Inc.<F1> 581,887
18,000 RWD Technologies, Inc.<F1> 150,750
15,700 SCP Pool Corporation<F1> 480,813
39,000 Wilmar Industries, Inc.<F1> 665,437
-----------
2,792,918
-----------
COMPUTER SOFTWARE 0.9%
16,000 ANSYS, Inc.<F1> 172,000
8,000 CFI ProServices, Inc.<F1> 54,500
-----------
226,500
-----------
COMPUTER SYSTEMS & COMPONENTS 0.7%
1,300 Active Voice Corp.<F1> 18,850
2,500 Power-One, Inc.<F1> 150,937
-----------
169,787
-----------
ELECTRONICS 3.5%
22,200 Nu Horizons Electronics Corp.<F1> 491,175
77,300 PCD Inc.<F1> 405,825
-----------
897,000
-----------
ENERGY 1.8%
31,500 Gulf Island Fabrication, Inc.<F1> 460,688
-----------
Semi-Annual Report
<PAGE>
SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES 4.2%
11,300 BWC Financial Corp.<F1> $226,000
12,000 Central Financial Acceptance Corporation<F1> 67,500
22,000 Gainsco, Inc. 129,250
130,500 World Acceptance Corp.<F1> 660,656
-----------
1,083,406
-----------
HEALTH CARE PROVIDERS 1.4%
27,125 AmSurg Corp., Class A<F1> 159,359
6,000 AmSurg Corp., Class B<F1> 36,000
22,000 Pediatrix Medical Group Inc.<F1> 159,500
-----------
354,859
-----------
HEALTH CARE SERVICES 8.7%
32,000 America Service Group, Inc.<F1> 480,000
75,000 American Healthways, Inc.<F1> 290,625
34,000 AmeriPath, Inc.<F1> 276,250
24,450 CorVel Corp.<F1> 635,700
22,600 Interwest Home Medical, Inc.<F1> 90,400
26,500 Orthodontic Centers of America, Inc.<F1> 496,875
-----------
2,269,850
-----------
OTHER 0.6%
10,700 Embrex, Inc.<F1> 168,525
-----------
PERSONAL PRODUCTS 4.2%
45,200 Maxwell Shoe Company Inc.<F1> 381,375
73,600 Signature Eyewear, Inc.<F1> 174,800
12,000 Sport-Haley, Inc.<F1> 60,000
10,000 USANA, Inc.<F1> 44,687
21,000 WD-40 Company 441,000
-----------
1,101,862
-----------
PERSONAL SERVICES 5.6%
20,000 Carriage Services, Inc.<F1> 81,250
40,500 First Cash Financial Services, Inc.<F1> 248,063
80,400 Rainbow Rentals, Inc.<F1> 713,550
21,000 Rent-Way, Inc.<F1> 409,500
-----------
1,452,363
-----------
Semi-Annual Report
<PAGE>
SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
PHARMACEUTICAL & MEDICAL PRODUCTS 6.1%
62,600 ICU Medical, Inc.<F1> $1,126,800
5,000 Minntech Corp. 37,500
28,500 Young Innovations, Inc.<F1> 420,375
-----------
1,584,675
-----------
REAL ESTATE 0.5%
11,200 National Health Investors, Inc. REIT 133,700
-----------
RETAIL 21.1%
3,000 Abercrombie & Fitch Co.<F1> 48,000
1,000 bebe Stores, Inc.<F1> 12,625
35,100 Cato Corporation (The) 412,425
27,700 CSK Auto Corporation<F1> 386,069
51,000 Finish Line, Inc. (The)<F1> 497,250
15,800 Guitar Center, Inc.<F1> 180,713
1,000 Hibbett Sporting Goods, Inc.<F1> 20,563
30,500 MarineMax, Inc.<F1> 291,656
23,944 Men's Wearhouse, Inc. (The)<F1> 709,341
28,000 Monro Muffler Brake, Inc.<F1> 232,750
29,000 Nautica Enterprises, Inc.<F1> 340,750
10,000 O'Charley's Inc.<F1> 130,000
15,900 O'Reilly Automotive, Inc.<F1> 225,581
19,000 Pier 1 Imports, Inc. 194,750
34,000 Ross Stores, Inc. 818,125
21,700 Travis Boats & Motors, Inc.<F1> 287,525
28,262 Whitehall Jewellers, Inc.<F1> 664,157
10,000 YOCREAM International, Inc.<F1> 37,500
-----------
5,489,780
-----------
SEMICONDUCTORS 9.5%
6,000 Align-Rite International, Inc.<F1> 165,000
2,000 Asyst Technologies, Inc.<F1> 117,000
6,000 Integrated Measurement Systems, Inc.<F1> 121,875
8,500 Nanometrics Incorporated<F1> 414,375
15,500 Pericom Semiconductor Corporation<F1> 553,156
36,500 Supertex, Inc.<F1> 1,090,437
-----------
2,461,843
-----------
TELECOMMUNICATIONS 1.1%
8,900 Gentner Communications Corporation<F1> 180,225
4,000 Vari-L Company, Inc.<F1> 104,000
-----------
284,225
-----------
Semi-Annual Report
<PAGE>
SMALL CAP VALUE FUND-SCHEDULE OF INVESTMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION 6.8%
29,850 Aramex International Limited<F1> $389,917
6,200 Covenant Transport, Inc.<F1> 98,425
2,000 HEICO Corporation 29,000
24,000 HEICO Corporation, Class A 336,000
30,000 Keystone Automotive Industries, Inc.<F1> 176,250
5,000 Knight Transportation, Inc.<F1> 87,500
8,000 Motor Cargo Industries, Inc.<F1> 37,000
28,900 Smithway Motor Xpress Corp.<F1> 101,150
9,100 Transport Corp. of America, Inc.<F1> 44,362
65,000 USA Truck, Inc.<F1> 471,250
-----------
1,770,854
-----------
TOTAL COMMON STOCKS (COST $20,790,625) 23,808,273
-----------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 8.7%
---------------------------
(Variable Rate Demand Deposits)
$2,276,912 UMB Bank Money Market Fiduciary, 4.15% $2,276,912
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $2,276,912) 2,276,912
-----------
TOTAL INVESTMENTS (COST $23,067,537) 100.4% 26,085,185
-----------
LIABILITIES LESS OTHER ASSETS (0.4)% (113,538)
-----------
NET ASSETS 100.0% $25,971,647
===========
<F1>Non-income producing
See notes to financial statements.
Semi-Annual Report
<PAGE>
SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS
- ---------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS 87.5%
-------------------
BUSINESS SERVICES 19.4%
24,900 Bottomline Technologies, Inc.<F1> $907,294
116,775 Charles River Associates Incorporated<F1> 2,269,814
77,200 Complete Business Solutions, Inc.<F1> 1,727,350
88,400 Concord EFS, Inc.<F1> 2,027,675
125,000 Daisytek International Corp.<F1> 1,976,562
41,600 Forward Air Corporation<F1> 985,400
112,225 F.Y.I. Inc.<F1> 3,044,103
215,350 National Dentex Corp.<F1> 3,176,413
20,900 Netzee, Inc.<F1> 310,887
155,350 NOVA Corporation<F1> 4,524,569
80,900 On Assignment, Inc.<F1> 3,640,500
56,300 QRS Corporation<F1> 4,236,575
39,225 RoweCom Inc.<F1> 666,825
45,607 Sanmina Corp.<F1> 3,081,323
17,000 TenFold Corporation<F1> 1,028,500
150,300 Wilmar Industries, Inc.<F1> 2,564,494
-----------
36,168,284
-----------
COMPUTER SOFTWARE 3.5%
22,200 Chordiant Software, Inc.<F1> 360,750
54,600 InterCept Group, Inc. (The)<F1> 1,405,950
15,875 Legato Systems, Inc.<F1> 708,422
40,425 Synopsys, Inc.<F1> 1,970,719
73,200 Transaction Systems Architects, Inc.<F1> 2,113,650
-----------
6,559,491
-----------
COMPUTER SYSTEMS & COMPONENTS 6.1%
81,400 Active Voice Corp.<F1> 1,180,300
43,272 Computer Network Technology Corporation<F1> 757,260
41,775 MMC Networks, Inc.<F1> 1,378,575
79,950 PLX Technology, Inc.<F1> 2,976,888
32,550 Polycom, Inc.<F1> 2,577,553
51,040 Zebra Technologies Corporation<F1> 2,552,000
-----------
11,422,576
-----------
ELECTRONICS 0.5%
172,100 PCD Inc.<F1> 903,525
-----------
FINANCIAL SERVICES 1.1%
54,875 Metris Companies Inc. 2,133,266
-----------
Semi-Annual Report
<PAGE>
SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS
- ---------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS 1.2%
313,925 AmSurg Corp., Class A<F1> $1,844,309
60,300 AmSurg Corp., Class B<F1> 361,800
-----------
2,206,109
-----------
HEALTH CARE SERVICES 7.3%
197,200 AmeriPath, Inc.<F1> 1,602,250
133,500 Express Scripts, Inc., Class A<F1> 5,607,000
105,175 MedQuist Inc.<F1> 2,859,445
159,225 Orthodontic Centers of America, Inc.<F1> 2,985,469
65,050 TLC The Laser Center Inc.<F1> 654,566
-----------
13,708,730
-----------
PERSONAL SERVICES 1.5%
28,900 First Cash Financial Services, Inc.<F1> 177,013
47,000 Rent-A-Center, Inc.<F1> 705,000
99,388 Rent-Way, Inc.<F1> 1,938,066
-----------
2,820,079
-----------
PHARMACEUTICAL & MEDICAL PRODUCTS 9.7%
266,931 ICU Medical, Inc.<F1> 4,804,758
59,525 Myriad Genetics, Inc.<F1> 3,586,381
140,344 Techne Corp.<F1> 9,683,736
-----------
18,074,875
-----------
REAL ESTATE 1.2%
182,350 National Health Investors, Inc. REIT 2,176,803
-----------
RETAIL 16.4%
65,466 99 Cents Only Stores<F1> 2,569,540
66,800 bebe Stores, Inc.<F1> 843,350
135,800 CSK Auto Corporation 1,892,712
84,500 Hibbett Sporting Goods, Inc.<F1> 1,737,532
81,575 Linens 'n Things, Inc.<F1> 2,793,944
78,950 MarineMax, Inc.<F1> 754,959
155,740 Men's Wearhouse, Inc. (The)<F1> 4,613,798
527,875 O'Reilly Automotive, Inc.<F1> 7,489,227
90,525 Travis Boats & Motors, Inc.<F1> 1,199,456
280,875 Whitehall Jewellers, Inc.<F1> 6,600,562
-----------
30,495,080
-----------
Semi-Annual Report
<PAGE>
SMALL CAP GROWTH FUND-SCHEDULE OF INVESTMENTS
- ---------------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS 7.9%
1,298 Applied Materials, Inc.<F1> $122,336
73,814 Micrel, Inc.<F1> 7,086,144
113,587 Microchip Technology, Inc.<F1> 7,468,345
-----------
14,676,825
-----------
TELECOMMUNICATIONS 5.8%
10,000 Alamosa PCS Holdings, Inc.<F1> 377,500
10,000 InterWAVE Communications International, Ltd.<F1> 301,250
89,650 Powertel, Inc.<F1> 6,202,659
56,490 United States Cellular Corp.<F1> 4,010,790
-----------
10,892,199
-----------
TRANSPORTATION 5.9%
129,700 Expeditors International of Washington, Inc. 5,155,575
17,800 HEICO Corporation 258,100
37,600 HEICO Corporation, Class A 526,400
292,375 Knight Transportation, Inc.<F1> 5,116,563
-----------
11,056,638
-----------
TOTAL COMMON STOCKS (COST $114,883,122) 163,294,480
-----------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 10.7%
----------------------------
(Variable Rate Demand Deposits)
$19,889,163 UMB Bank Money Market Fiduciary, 4.15% $19,889,163
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $19,889,163) 19,889,163
-----------
TOTAL INVESTMENTS (COST $134,772,285) 98.2% 183,183,643
CASH AND OTHER ASSETS LESS LIABILITIES 1.8% 3,384,543
-----------
NET ASSETS 100.0% $186,568,186
===========
<F1>Non-income producing
See notes to financial statements.
Semi-Annual Report
<PAGE>
CORE GROWTH FUND-SCHEDULE OF INVESTMENTS
- ----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS 92.7%
-------------------
BUSINESS SERVICES 17.6%
305,800 American Bank Note Holographics, Inc.<F1> $917,400
69,300 Charles River Associates Incorporated<F1> 1,347,019
57,900 Concord EFS, Inc.<F1> 1,328,081
382,300 Copart, Inc.<F1> 6,690,250
30,075 CSG Systems International, Inc.<F1> 1,468,036
80,750 F.Y.I. Inc.<F1> 2,190,344
133,000 National Dentex Corp.<F1> 1,961,750
163,800 NOVA Corporation<F1> 4,770,675
143,200 On Assignment, Inc.<F1> 6,444,000
170,450 Res-Care, Inc.<F1> 1,597,969
171,800 SCP Pool Corporation<F1> 5,261,375
110,000 Wilmar Industries, Inc.<F1> 1,876,875
-----------
35,853,774
-----------
COMPUTER SOFTWARE 2.5%
104,825 Synopsys, Inc.<F1> 5,110,219
-----------
COMPUTER SYSTEMS AND COMPONENTS 1.9%
77,870 Zebra Technologies Corporation<F1> 3,893,500
-----------
FINANCIAL SERVICES 20.5%
1,215,662 AmeriCredit Corp.<F1> 19,830,486
79,100 Countrywide Credit Industries, Inc. 2,155,475
70,500 MBIA, Inc. 3,670,406
150,775 Metris Companies Inc. 5,861,378
231,550 MicroFinancial Incorporated 2,402,331
274,600 RTW, Inc.<F1> 1,373,000
145,000 WFS Financial Inc.<F1> 2,818,437
722,286 World Acceptance Corp.<F1> 3,656,573
-----------
41,768,086
-----------
HEALTH CARE PROVIDERS 7.7%
322,325 Lincare Holdings Inc.<F1> 9,145,972
892,225 Pediatrix Medical Group Inc.<F1> 6,468,631
-----------
15,614,603
-----------
Semi-Annual Report
<PAGE>
CORE GROWTH FUND-SCHEDULE OF INVESTMENTS
- ----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE SERVICES 15.6%
237,000 Express Scripts, Inc., Class A<F1> 9,954,000
238,100 First Health Group Corp.<F1> 7,529,912
112,575 MedQuist Inc.<F1> 3,060,633
334,681 Orthodontic Centers of America, Inc.<F1> 6,275,269
228,550 Renal Care Group, Inc.<F1> 4,956,678
-----------
31,776,492
-----------
PERSONAL SERVICES 9.6%
110,600 Bright Horizons Family Solutions, Inc.<F1> 2,391,725
169,450 Carriage Services, Inc.<F1> 688,391
246,550 First Cash Financial Services, Inc.<F1> 1,510,119
995,125 Rent-A-Center, Inc.<F1> 14,926,875
-----------
19,517,110
-----------
PHARMACEUTICAL & MEDICAL PRODUCTS 2.9%
329,300 ICU Medical, Inc.<F1> 5,927,400
-----------
RETAIL 9.3%
96,000 Hibbett Sporting Goods, Inc.<F1> 1,974,000
158,175 Men's Wearhouse, Inc. (The)<F1> 4,685,934
320,800 O'Reilly Automotive, Inc.<F1> 4,551,350
323,600 Whitehall Jewellers, Inc.<F1> 7,604,600
-----------
18,815,884
-----------
SEMICONDUCTORS 1.9%
31,912 Microchip Technology, Inc.<F1> 2,098,214
61,925 Supertex, Inc.<F1> 1,850,009
-----------
3,948,223
-----------
TRANSPORTATION 3.2%
48,000 Expeditors International of Washington, Inc. 1,908,000
90,900 HEICO Corporation 1,318,050
77,300 HEICO Corporation, Class A 1,082,200
124,800 Knight Transportation, Inc.<F1> 2,184,000
-----------
6,492,250
-----------
TOTAL COMMON STOCKS (COST $173,653,730) 188,717,541
-----------
Semi-Annual Report
<PAGE>
CORE GROWTH FUND-SCHEDULE OF INVESTMENTS
- ----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
WARRANTS 0.0%
-------------
1 Cherokee, Inc. Series C $1
-----------
TOTAL WARRANTS (COST $6) 1
-----------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 6.2%
---------------------------
(Variable Rate Demand Deposits)
$12,710,273 UMB Bank Money Market Fiduciary, 4.15% $12,710,273
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $12,710,273) 12,710,273
-----------
TOTAL INVESTMENTS (COST $186,364,009) 98.9% 201,427,815
CASH AND OTHER ASSETS LESS LIABILITIES 1.1% 2,179,695
-----------
NET ASSETS 100.0% $203,607,510
===========
<F1>Non-income producing
See notes to financial statements.
Semi-Annual Report
<PAGE>
ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS
- -----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON AND PREFERRED STOCKS 90.8%
---------------------------------
BUSINESS SERVICES 16.3%
3,100 Braun Consulting, Inc.<F1> $99,200
17,800 Charles River Associates Incorporated<F1> 345,987
8,250 Cognizant Technology Solutions Corporation<F1> 515,625
8,800 Complete Business Solutions, Inc.<F1> 196,900
8,450 Concord EFS, Inc.<F1> 193,822
25,600 Copart, Inc.<F1> 448,000
67,300 F.Y.I. Inc.<F1> 1,825,512
11,900 HomeServices.Com Inc.<F1> 117,513
2,550 Official Payments Corporation<F1> 107,100
3,900 ProBusiness Services, Inc.<F1> 100,669
3,100 QRS Corporation<F1> 233,275
28,300 Sanmina Corp.<F1> 1,912,019
13,100 The Management Network Group, Inc.<F1> 352,881
-----------
6,448,503
-----------
COMPUTER SOFTWARE 8.7%
7,200 Accrue Software, Inc.<F1> 329,737
5,200 Caldera Systems, Inc.<F1> 122,200
1,100 net.Genesis Corp.<F1> 49,225
14,400 Peregrine Systems, Inc.<F1> 965,700
18,185 Synopsys, Inc.<F1> 886,519
2,350 Tecnomatix Technologies Ltd.<F1> 101,931
1,100 TSI International Software Ltd.<F1> 91,369
11,675 TTI Team Telecom International Ltd.<F1> 385,275
67,884 Verisity Ltd. Series D Preferred<F1><F2> 500,000
325 Versata, Inc.<F1> 19,561
-----------
3,451,517
-----------
COMPUTER SYSTEMS & COMPONENTS 3.0%
700 Brocade Communications Systems, Inc.<F1> 125,519
4,000 MMC Networks, Inc.<F1> 132,000
1,750 Netopia, Inc.<F1> 125,891
8,550 Polycom, Inc.<F1> 677,053
2,250 RadiSys Corporation<F1> 135,281
-----------
1,195,744
-----------
FINANCIAL SERVICES 1.3%
31,700 AmeriCredit Corp.<F1> 517,106
-----------
Semi-Annual Report
<PAGE>
ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS
- -----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH CARE PROVIDERS 6.3%
113,000 AmSurg Corp., Class A<F1> $663,875
143,400 AmSurg Corp., Class B<F1> 860,400
133,800 Pediatrix Medical Group Inc.<F1> 970,050
-----------
2,494,325
-----------
HEALTH CARE SERVICES 16.1%
17,550 Accredo Health, Incorporated<F1> 581,344
82,500 AmeriPath, Inc.<F1> 670,312
56,225 Express Scripts, Inc., Class A<F1> 2,361,450
52,200 MedQuist Inc.<F1> 1,419,187
16,473 Priority Healthcare Corporation<F1> 827,768
51,100 TLC The Laser Center Inc.<F1> 514,194
-----------
6,374,255
-----------
OTHER 0.2%
2,000 Symyx Technologies<F1> 86,250
-----------
PERSONAL PRODUCTS 0.3%
3,000 Gildan Activewear Inc.<F1> 97,875
-----------
PERSONAL SERVICES 0.2%
2,150 National Information Consortium, Inc.<F1> 74,713
-----------
PHARMACEUTICAL & MEDICAL PRODUCTS 6.7%
700 Aspect Medical Systems, Inc.<F1> 25,112
1,750 Invitrogen Corporation<F1> 101,609
1,600 Myriad Genetics, Inc.<F1> 96,400
38,694 Shire Pharmaceuticals Group Plc<F1> 1,983,068
6,500 Techne Corp.<F1> 448,500
-----------
2,654,689
-----------
RETAIL 6.6%
4,400 99 Cents Only Stores<F1> 172,700
2,100 Dollar Tree Stores, Inc.<F1> 109,462
22,200 Hibbett Sporting Goods, Inc.<F1> 456,488
130,700 O'Reilly Automotive, Inc.<F1> 1,854,306
-----------
2,592,956
-----------
Semi-Annual Report
<PAGE>
ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS
- -----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS 11.8%
4,200 ASM Lithography Holding N.V.<F1> $469,350
900 Intersil Holding Corporation<F1> 46,519
24,900 Micrel, Inc.<F1> 2,390,400
19,725 Microchip Technology, Inc.<F1> 1,296,919
2,025 MKS Instruments, Inc.<F1> 102,262
300 Quantum Effect Devices, Inc.<F1> 23,887
3,500 Supertex, Inc.<F1> 104,563
2,200 Vitesse Semiconductor Corporation<F1> 211,750
-----------
4,645,650
-----------
TELECOMMUNICATIONS 11.6%
5,100 Anaren Microwave, Inc.<F1> 488,962
2,800 Applied Micro Circuits Corporation<F1> 420,175
600 Avanex Corporation<F1> 91,050
3,900 Aware, Inc.<F1> 156,488
1,600 BreezeCom Ltd.<F1> 59,800
8,700 Hybrid Networks, Inc.<F1> 115,275
3,300 InterWAVE Communications International, Ltd.<F1> 99,413
14,280 JDS Uniphase Corporation<F1> 1,727,880
5,800 SDL, Inc.<F1> 1,233,950
2,000 Tollgrade Communications, Inc.<F1> 106,000
700 Turnstone Systems, Inc.<F1> 80,500
-----------
4,579,493
-----------
TRANSPORTATION 1.7%
1,150 F5 Networks, Inc.<F1> 77,913
11,000 HEICO Corporation 159,500
31,900 HEICO Corporation, Class A 446,600
-----------
684,013
-----------
TOTAL COMMON AND PREFERRED
STOCKS (COST $26,782,967) 35,897,089
-----------
Semi-Annual Report
<PAGE>
ULTRA GROWTH FUND-SCHEDULE OF INVESTMENTS
- -----------------------------------------
MARCH 31, 2000 (UNAUDITED)
NUMBER
OF SHARES VALUE
- --------------------------------------------------------------------------------
WARRANTS 0.0%
-------------
4,202 CDnow, Inc.<F1> $0
-----------
TOTAL WARRANTS (COST $0) 0
-----------
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 7.8%
---------------------------
(Variable Rate Demand Deposits)
$3,092,849 UMB Bank Money Market Fiduciary, 4.15% $3,092,849
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $3,092,849) 3,092,849
-----------
TOTAL INVESTMENTS (COST $29,875,816) 98.6% 38,989,938
CASH AND OTHER ASSETS, LESS LIABILITIES 1.4% 546,782
-----------
NET ASSETS 100.0% $39,536,720
===========
<F1> Non-income producing
<F2> Preferred stock purchased in a private placement transaction;
resale to the public may require registration or sale only to
qualified institutional buyers. At March 31, 2000, this
security amounted to 1.3% of net assets.
See notes to financial statements.
Semi-Annual Report
<PAGE>
U.S. TREASURY FUND-SCHEDULE OF INVESTMENTS
- ------------------------------------------
MARCH 31, 2000 (UNAUDITED)
PRINCIPAL
AMOUNT VALUE
- --------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS 93.1%
---------------------------------
$600,000 U.S. Treasury Bond, 6.25%, 8/15/23 $607,698
12,830,000 U.S. Treasury Bond, 7.50%, 11/15/24 15,039,326
3,505,000 U.S. Treasury Bond, 6.875%, 8/15/25 3,845,931
2,835,000 U.S. Treasury Bond, 6.00%, 2/15/26 2,796,302
750,000 U.S. Treasury Bond, 6.75%, 8/15/26 814,020
6,135,000 U.S. Treasury Bond, 6.50%, 11/15/26 6,468,315
4,570,000 U.S. Treasury Bond, 6.625%, 2/15/27 4,894,379
6,355,000 U.S. Treasury Bond, 6.375%, 8/15/27 6,616,254
947,000 U.S. Treasury Bond, 6.125%, 8/15/29 963,885
7,100,000 U.S. Treasury Strip, 11/15/21 1,960,949
19,100,000 U.S. Treasury Strip, 8/15/25 4,316,791
-----------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(COST $50,605,776) 48,323,850
-----------
SHORT-TERM INVESTMENTS 2.5%
---------------------------
(Variable Rate Demand Deposits)
1,311,137 UMB Bank Money Market Fiduciary, 4.15% 1,311,137
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $1,311,137) 1,311,137
-----------
TOTAL INVESTMENTS (COST $51,916,913) 95.6% 49,634,987
OTHER ASSETS LESS LIABILITIES 4.4% 2,287,485
-----------
NET ASSETS 100.0% $51,922,472
===========
See notes to financial statements.
Semi-Annual Report
<PAGE>
(This page intentionally left blank.)
Semi-Annual Report
<PAGE>
WASATCH FUNDS-STATEMENTS OF ASSETS AND LIABILITIES
- --------------------------------------------------
MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments, at market value
Nonaffiliated issuers (cost
$124,988,468, $23,067,537,
$131,587,451, 169,081,717,
$29,875,816 and $51,916,913,
respectively) $162,187,976 $26,085,185 $180,007,230 $194,959,184 $38,989,938 $49,634,987
Affiliated issuers (cost $23,731,564,
$0, $3,184,834, $17,282,292, $0
and $0, respectively) 24,406,844 - 3,176,413 6,468,631 - -
Receivable for investment
securities sold 1,446,002 121,826 5,369,287 2,693,149 1,354,113 2,202,897
Capital shares receivable 863,824 11,647 2,325,690 957,850 1,710 57,564
Interest and dividends receivable 116,055 14,762 173,349 62,425 10,174 679,293
Prepaid expenses and other assets 29,803 17,387 26,869 37,002 16,973 33,508
------------- ------------- ------------- ------------- ------------- -------------
Total Assets 189,050,504 26,250,807 191,078,838 205,178,241 40,372,908 52,608,249
------------- ------------- ------------- ------------- ------------- -------------
LIABILITIES:
Payable for securities purchased 1,209,848 260,411 4,291,268 1,013,631 733,522 -
Capital shares payable 427,751 1,232 121,899 428,052 68,351 645,396
Accrued investment advisory fee 124,195 12,125 59,695 63,636 14,194 3,537
Accrued expenses 45,115 5,392 37,790 65,412 20,121 36,844
------------- ------------- ------------- ------------- ------------- -------------
Total Liabilities 1,806,909 279,160 4,510,652 1,570,731 836,188 685,777
------------- ------------- ------------- ------------- ------------- -------------
NET ASSETS $187,243,595 $25,971,647 $186,568,186 $203,607,510 $39,536,720 $51,922,472
============ ============ ============ ============ ============ ============
NET ASSETS CONSIST OF:
Capital stock 346,237 84,328 63,371 90,666 17,917 44,448
Paid-in capital in excess of par 108,621,608 19,838,886 104,068,268 165,912,886 22,030,218 59,872,952
Undistributed net investment income - - - - - 751,005
Undistributed net realized gain (loss)
on investments 40,400,962 3,030,785 34,025,189 22,540,152 8,374,463 (6,464,007)
Net unrealized appreciation
(depreciation) on investments 37,874,788 3,017,648 48,411,358 15,063,806 9,114,122 (2,281,926)
------------- ------------- ------------- ------------- ------------- -------------
Net Assets $187,243,595 $25,971,647 $186,568,186 $203,607,510 $39,536,720 $51,922,472
============ ============ ============ ============ ============ ============
CAPITAL STOCK, $.01 PAR VALUE:
Authorized 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000 10,000,000,000
Issued and outstanding 34,623,713 8,432,833 6,337,149 9,066,588 1,791,731 4,444,764
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $5.41 $3.08 $29.44 $22.46 $22.07 $11.68
====== ====== ====== ====== ====== ======
</TABLE>
Semi-Annual Report
<PAGE>
WASATCH FUNDS-STATEMENTS OF OPERATIONS
- ---------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $298,460 $22,446 $171,955 $238,870 $57,348 $1,999,137
Dividends 54,180 22,451 248,893 65,579 1,002 -
------------- ------------- ------------- ------------- ------------- -------------
352,640 44,897 420,848 304,449 58,350 1,999,137
------------- ------------- ------------- ------------- ------------- -------------
EXPENSES:
Investment advisory fee 1,639,248 151,179 858,489 967,603 255,553 160,355
Shareholder servicing fees 141,076 21,359 140,693 151,718 54,621 66,229
Fund administration and accounting fees 117,367 18,751 123,085 138,981 31,412 48,190
Reports to shareholders 27,312 3,573 28,971 34,685 8,720 12,579
Custody fees 9,148 3,711 7,893 10,087 5,370 3,663
Federal and state registration fees 8,488 4,690 6,253 9,557 4,810 11,523
Audit fees 5,580 1,739 5,981 6,874 2,408 3,302
Legal fees 4,919 580 5,203 6,265 1,468 2,438
Directors' fees 2,452 295 2,593 3,103 733 1,302
Other 6,430 2,173 6,669 6,986 2,708 3,293
------------- ------------- ------------- ------------- ------------- -------------
Total expenses before reimbursement 1,962,020 208,050 1,185,830 1,335,859 367,803 312,874
Reimbursement of expenses by advisor - (11,518) - - (10,028) (72,342)
------------- ------------- ------------- ------------- ------------- -------------
Net expenses 1,962,020 196,532 1,185,830 1,335,859 357,775 240,532
------------- ------------- ------------- ------------- ------------- -------------
NET INVESTMENT INCOME (LOSS) (1,609,380) (151,635) (764,982) (1,031,410) (299,425) 1,758,605
------------- ------------- ------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments
Nonaffiliated 42,107,938 3,287,819 35,024,233 23,743,753 8,983,437 (4,476,355)
Affiliated (33,008) - (101,217) (446,805) - -
------------- ------------- ------------- ------------- ------------- -------------
42,074,930 3,287,819 34,923,016 23,296,948 8,983,437 (4,476,355)
Change in unrealized appreciation
(depreciation) on investments 8,869,157 2,511,065 4,327,847 (1,944,971) (1,562,065) 5,541,092
------------- ------------- ------------- ------------- ------------- -------------
Net gain on investments 50,944,087 5,798,884 39,250,863 21,351,977 7,421,372 1,064,737
------------- ------------- ------------- ------------- ------------- -------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $49,334,707 $5,647,249 $38,485,881 $20,320,567 $7,121,947 $2,823,342
============= ============= ============= ============= ============= =============
</TABLE>
Semi-Annual Report
<PAGE>
WASATCH FUNDS-STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------
<TABLE>
<CAPTION>
MICRO CAP FUND SMALL CAP VALUE FUND SMALL CAP GROWTH FUND
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
March 31, 2000 September 30, March 31, 2000 September 30, March 31, 2000 September 30,
(Unaudited) 1999 (Unaudited) 1999 (Unaudited) 1999
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $(1,609,380) $(3,111,350) $(151,635) $(245,723) $(764,982) $(1,102,981)
Net realized gain on
investments 42,074,930 20,346,563 3,287,819 1,726,846 34,923,016 20,794,083
Change in unrealized appreciation
(depreciation) on investments 8,869,157 25,494,388 2,511,065 2,954,078 4,327,847 34,941,701
------------- ------------- ------------- ------------- ------------- -------------
Net increase in net assets
resulting from operations 49,334,707 42,729,601 5,647,249 4,435,201 38,485,881 54,632,803
DIVIDENDS PAID FROM:
Net investment income - - - - - -
Net realized gains (13,609,423) (12,017,532) (604,879) - (15,405,349) (18,539,487)
------------- ------------- ------------- ------------- ------------- -------------
(13,609,423) (12,017,532) (604,879) - (15,405,349) (18,539,487)
CAPITAL SHARE TRANSACTIONS:
Shares sold 33,195,318 67,340,072 5,976,184 11,711,690 40,668,555 37,645,640
Shares issued to holders in
reinvestment of dividends 13,428,147 11,888,645 586,278 - 15,001,041 17,995,373
------------- ------------- ------------- ------------- ------------- -------------
46,623,465 79,228,717 6,562,462 11,711,690 55,669,596 55,641,013
Shares redeemed (39,980,511) (82,598,473) (2,403,665) (13,682,187) (38,096,799) (69,542,550)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) 6,642,954 (3,369,756) 4,158,797 (1,970,497) 17,572,797 (13,901,537)
------------- ------------- ------------- ------------- ------------- -------------
TOTAL INCREASE IN NET ASSETS 42,368,238 27,342,313 9,201,167 2,464,704 40,653,329 22,191,779
NET ASSETS:
Beginning of period 144,875,357 117,533,044 $16,770,480 $14,305,776 145,914,857 123,723,078
------------- ------------- ------------- ------------- ------------- -------------
End of period $187,243,595 $144,875,357 $25,971,647 $16,770,480 $186,568,186 $145,914,857
============= ============= ============= ============= ============= =============
Undistributed net investment income
included in net assets at end of
period - - - - - $20,392
============= ============= ============= ============= ============= =============
</TABLE>
Semi-Annual Report
<PAGE>
WASATCH FUNDS-STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------
<TABLE>
<CAPTION>
CORE GROWTH FUND ULTRA GROWTH FUND U.S. TREASURY FUND
Six Months Year Six Months Year Six Months Year
Ended Ended Ended Ended Ended Ended
March 31, 2000 September 30, March 31, 2000 September 30, March 31, 2000 September 30,
(Unaudited) 1999 (Unaudited) 1999 (Unaudited) 1999
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $(1,031,410) $(1,762,435) $(299,425) $(691,228) $1,758,605 $4,315,855
Net realized gain (loss) on
investments 23,296,948 7,083,042 8,983,437 4,525,808 (4,476,355) (1,579,091)
Change in unrealized appreciation
(depreciation) on investments (1,944,971) 32,663,979 (1,562,065) 11,029,323 5,541,092 (13,031,830)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations 20,320,567 37,984,586 7,121,947 14,863,903 2,823,342 (10,295,066)
DIVIDENDS PAID FROM:
Net investment income - - - - (4,377,430) (1,876,281)
Net realized gains (4,089,114) (6,480,895) (2,924,931) (2,066,842) (23,254) (384,621)
------------- ------------- ------------- ------------- ------------- -------------
(4,089,114) (6,480,895) (2,924,931) (2,066,842) (4,400,684) (2,260,902)
CAPITAL SHARE TRANSACTIONS:
Shares sold 54,699,660 77,799,789 5,160,663 27,013,148 9,928,319 117,029,582
Shares issued to holders in
reinvestment of dividends 4,032,969 6,416,237 2,885,083 2,038,987 4,337,144 2,207,232
------------- ------------- ------------- ------------- ------------- -------------
58,732,629 84,216,026 8,045,746 29,052,135 14,265,463 119,236,814
Shares redeemed (44,474,813) (95,749,286) (13,910,776) (44,197,837) (37,764,932) (97,537,936)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease) 14,257,816 (11,533,260) (5,865,030) (15,145,702) (23,499,469) 21,698,878
------------- ------------- ------------- ------------- ------------- -------------
TOTAL INCREASE (DECREASE) IN NET ASSETS 30,489,269 19,970,431 (1,668,014) (2,348,641) (25,076,811) 9,142,910
NET ASSETS:
Beginning of period 173,118,241 153,147,810 41,204,734 43,553,375 76,999,283 67,856,373
------------- ------------- ------------- ------------- ------------- -------------
End of period $203,607,510 $173,118,241 $39,536,720 $41,204,734 $51,922,472 $76,999,283
============= ============= ============= ============= ============= =============
Undistributed net investment income
included in net assets at end of
period - - - - $751,005 $3,369,820
============= ============= ============= ============= ============= =============
</TABLE>
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
MICRO CAP FUND-FINANCIAL HIGHLIGHTS MICRO CAP FUND-FINANCIAL HIGHLIGHTS
- ------------------------------------ ------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
June 19, 1995<F1>
through
September 30,
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $4.41 $3.59 $4.29 $3.15 $2.72 $2.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.05) (0.09) (0.10) (0.04) (0.03) -
Net realized and unrealized gains (losses)
on securities 1.47 1.27 (0.27) 1.36 0.46 0.72
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 1.42 1.18 (0.37) 1.32 0.43 0.72
LESS DISTRIBUTIONS:
Distributions from capital gains (0.42) (0.36) (0.33) (0.18) - -
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.42) (0.36) (0.33) (0.18) - -
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $5.41 $4.41 $3.59 $4.29 $3.15 $2.72
======== ======== ======== ======== ======== ========
TOTAL RETURN<F2> 35.77% 37.73% (8.75)% 44.58% 15.81% 36.00%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $187,244 $144,875 $117,533 $157,907 $94,004 $25,368
Ratio to average net assets of:
Expenses, net of waivers
and reimbursements<F3> 2.39% 2.46% 2.50% 2.50% 2.50% 2.50%
Expenses, before waivers
and reimbursements<F3> 2.39% 2.46% 2.51% 2.58% 2.67% 3.40%
Net investment income (loss), net of
waivers and reimbursements<F3> (1.96)% (2.22)% (2.28)% (1.64)% (1.53)% (0.76)%
Net investment income (loss), before
waivers and reimbursements<F3> (1.96)% (2.22)% (2.29)% (1.72)% (1.70)% (1.66)%
Portfolio turnover rate<F2> 27% 57% 81% 99% 84% 0%
</TABLE>
<F1> Commencement of operations.
<F2> Not annualized for periods less than a year.
<F3> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP VALUE FUND-FINANCIAL HIGHLIGHTS SMALL CAP VALUE FUND-FINANCIAL HIGHLIGHTS
- ----------------------------------------- ------------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
December 17, 1997<F1>
2000 1999 through September 30, 1998
- ----------------------------------------------------------- -------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $2.43 $1.80 $2.00
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.02) (0.04) (0.01)
Net realized and unrealized gains (losses)
on securities 0.76 0.67 (0.19)
-------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.74 0.63 (0.20)
LESS DISTRIBUTIONS:
Distributions from capital gains (0.09) - -
-------- -------- --------
TOTAL DISTRIBUTIONS (0.09) - -
-------- -------- --------
NET ASSET VALUE, END OF PERIOD $3.08 $2.43 $1.80
======== ======== ========
TOTAL RETURN<F2> 31.57% 35.00% (10.00)%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $25,972 $16,770 $14,306
Ratio to average net assets of:
Expenses, net of waivers and reimbursements<F3> 1.95% 1.95% 1.95%
Expenses, before waivers and reimbursements<F3> 2.06% 2.18% 2.52%
Net investment income (loss), net of
waivers and reimbursements<F3> (1.51)% (1.54)% (1.02)%
Net investment income (loss), before
waivers and reimbursements<F3> (1.62)% (1.77)% (1.59)%
Portfolio turnover rate<F2> 39% 106% 114%
</TABLE>
<F1> Commencement of operations.
<F2> Not annualized for periods less than a year.
<F3> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP GROWTH FUND-FINANCIAL HIGHLIGHTS SMALL CAP GROWTH FUND-FINANCIAL HIGHLIGHTS
- ------------------------------------------ ------------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $26.01 $20.79 $29.73 $24.17 $25.00 $19.96
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.12) (0.20) (0.17) (0.12) (0.18) (0.04)
Net realized and unrealized gains (losses)
on securities 6.26 8.49 (5.08) 6.90 (0.11) 6.59
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 6.14 8.29 (5.25) 6.78 (0.29) 6.55
LESS DISTRIBUTIONS:
Distributions from capital gains (2.71) (3.07) (3.69) (1.22) (0.54) (1.51)
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (2.71) (3.07) (3.69) (1.22) (0.54) (1.51)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $29.44 $26.01 $20.79 $29.73 $24.17 $25.00
======== ======== ======== ======== ======== ========
TOTAL RETURN<F1> 26.29% 48.96% (19.13)% 29.45% (1.09)% 35.19%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $186,568 $145,915 $123,723 $188,965 $253,319 $305,311
Ratio to average net assets of:
Expenses, net of waivers and reimbursements<F2> 1.38% 1.44% 1.48% 1.50% 1.50% 1.47%
Expenses, before waivers and reimbursements<F2> 1.38% 1.44% 1.48% 1.54% 1.50% 1.47%
Net investment income (loss), net of
waivers and reimbursements<F2> (0.89)% (0.79)% (0.60)% (0.39)% (0.65)% (0.37)%
Net investment income (loss), before
waivers and reimbursements<F2> (0.89)% (0.79)% (0.60)% (0.43)% (0.65)% (0.37)%
Portfolio turnover rate<F1> 38% 46% 56% 48% 73% 29%
</TABLE>
<F1> Not annualized for periods less than a year.
<F2> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
CORE GROWTH FUND-FINANCIAL HIGHLIGHTS CORE GROWTH FUND-FINANCIAL HIGHLIGHTS
- ------------------------------------- --------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $20.62 $17.00 $22.34 $17.57 $15.97 $15.30
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.11) (0.21) (0.09) 0.08 0.07 0.02
Net realized and unrealized gains (losses)
on securities 2.43 4.55 (3.60) 6.07 1.87 4.59
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 2.32 4.34 (3.69) 6.15 1.94 4.61
LESS DISTRIBUTIONS:
Dividends from net investment income - - (0.03) (0.07) (0.05) -
Distributions from capital gains (0.48) (0.72) (1.62) (1.31) (0.29) (3.94)
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.48) (0.72) (1.65) (1.38) (0.34) (3.94)
NET ASSET VALUE, END OF PERIOD $22.46 $20.62 $17.00 $22.34 $17.57 $15.97
======== ======== ======== ======== ======== ========
TOTAL RETURN<F1> 11.53% 27.28% (17.49)% 37.58% 12.39% 39.76%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $203,608 $173,118 $153,148 $135,437 $104,237 $53,533
Ratio to average net assets of:
Expenses, net of waivers and reimbursements<F2> 1.38% 1.44% 1.44% 1.50% 1.50% 1.50%
Expenses, before waivers and reimbursements<F2> 1.38% 1.44% 1.44% 1.50% 1.51% 1.58%
Net investment income (loss), net of
waivers and reimbursements<F2> (1.07)% (1.07)% (0.50)% 0.44% 0.40% 0.29%
Net investment income (loss), before
waivers and reimbursements<F2> (1.07)% (1.07)% (0.50)% 0.44% 0.39% 0.21%
Portfolio turnover rate<F1> 44% 79% 63% 81% 62% 88%
</TABLE>
<F1> Not annualized for periods less than a year.
<F2> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
ULTRA GROWTH FUND-FINANCIAL HIGHLIGHTS ULTRA GROWTH FUND-FINANCIAL HIGHLIGHTS
- -------------------------------------- ---------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $20.02 $15.10 $21.85 $17.95 $18.61 $11.02
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.17) (0.34) (0.31) (0.35) (0.26) (0.02)
Net realized and unrealized gains (losses)
on securities 3.69 6.00 (4.44) 4.25 (0.21) 7.64
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 3.52 5.66 (4.75) 3.90 (0.47) 7.62
LESS DISTRIBUTIONS:
Distributions from capital gains (1.47) (0.74) (2.00) - (0.19) (0.03)
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (1.47) (0.74) (2.00) - (0.19) (0.03)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD $22.07 $20.02 $15.10 $21.85 $17.95 $18.61
======== ======== ======== ======== ======== ========
TOTAL RETURN<F1> 19.07% 39.86% (22.07)% 21.75% (2.54)% 69.24%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $39,537 $41,205 $43,553 $77,243 $128,490 $98,605
Ratio to average net assets of:
Expenses, net of waivers and reimbursements<F2> 1.75% 1.75% 1.75% 1.75% 1.75% 1.75%
Expenses, before waivers and reimbursements<F2> 1.80% 1.78% 1.90% 1.89% 1.81% 1.94%
Net investment income (loss), net of
waivers and reimbursements<F2> (1.46)% (1.49)% (1.54)% (1.48)% (1.27)% (0.71)%
Net investment income (loss), before
waivers and reimbursements<F2> (1.51)% (1.52)% (1.69)% (1.62)% (1.33)% (0.90)%
Portfolio turnover rate<F1> 52% 77% 91% 103% 121% 46%
</TABLE>
<F1> Not annualized for periods less than a year.
<F2> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
U.S. TREASURY FUND-FINANCIAL HIGHLIGHTS U.S. TREASURY FUND-FINANCIAL HIGHLIGHTS
- ---------------------------------------- ----------------------------------------
SIX MONTHS ENDED MARCH 31, 2000 (UNAUDITED) YEAR ENDED SEPTEMBER 30
2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------- ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $11.68 $13.42 $11.32 $10.21 $10.50 $10.09
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.39 0.61 0.27 0.61 0.44 0.56
Net realized and unrealized gains (losses)
on securities 0.34 (2.01) 2.39 0.73 0.01 0.44
-------- -------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS 0.73 (1.40) 2.66 1.34 0.45 1.00
LESS DISTRIBUTIONS:
Dividends from net investment income (0.73) (0.28) (0.56) (0.23) (0.74) (0.59)
Distributions from capital gains - (0.06) - - - -
-------- -------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (0.73) (0.34) (0.56) (0.23) (0.74) (0.59)
NET ASSET VALUE, END OF PERIOD $11.68 $11.68 $13.42 $11.32 $10.21 $10.50
======== ======== ======== ======== ======== ========
TOTAL RETURN<F1> 6.91% (10.65)% 24.30% 13.23% 4.42% 10.46%
SUPPLEMENTAL DATA AND RATIOS:
Net assets, end of period (in thousands) $51,922 $76,999 $67,856 $11,205 $7,427 $4,035
Ratio to average net assets of:
Expenses, net of waivers and reimbursements<F2> 0.75% 0.75% 0.75% 0.75% 0.93% 1.00%
Expenses, before waivers and reimbursements<F2> 0.97% 0.95% 0.95% 1.22% 1.67% 1.59%
Net investment income, net of waivers
and reimbursements<F2> 5.48% 4.96% 5.06% 5.97% 5.21% 5.88%
Net investment income, before waivers
and reimbursements<F2> 5.26% 4.76% 4.86% 5.50% 4.47% 5.29%
Portfolio turnover rate<F1> 1% 39% 5% 19% 30% 43%
</TABLE>
<F1> Not annualized for periods less than a year.
<F2> Annualized.
See notes to financial statements.
Semi-Annual Report
<PAGE>
WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
1. ORGANIZATION
-------------
Wasatch Funds, Inc. (the "Funds") is an open-end, registered management
investment company under the Invest ment Company Act of 1940. The Micro Cap,
Small Cap Value, Small Cap Growth, Core Growth and Ultra Growth Funds are non-
diversified portfolios and the Wasatch-Hoisington U.S. Treasury ("U.S.
Treasury") Fund is a diversified portfolio of Wasatch Funds. Each of the Funds
maintains its own investment objective. The Funds have entered into an
investment advisory agreement with Wasatch Advisors, Inc. (the "Manager") as
investment advisor.
2. SIGNIFICANT ACCOUNTING POLICIES
--------------------------------
The financial statements have been prepared in conformity with generally
accepted accounting principles which require management to make certain
estimates and assumptions at the date of the financial statements. The following
is a summary of the more significant of such policies.
VALUATION OF SECURITIES-Securities listed or admitted for trading privileges
on the New York Stock Exchange or the American Stock Exchange are valued at the
closing price on the exchange on which the security is traded. Securities traded
in the over-the-counter market are valued at the last sales price or, if no
sales occurred on the valuation date, at the last available bid price in the
over-the-counter market or on the basis of yield equivalents as obtained from
one or more dealers that make markets in these securities. Short-term securities
are valued at either original cost or amortized cost, both of which approximate
current market value. Securities and assets for which market quotations are not
readily available are valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Funds.
INVESTMENT IN SECURITIES-Security transactions are accounted for on the
trade date. Gains or losses on securities sold are determined on the identified
cost basis. Dividend income and distributions to shareholders are recorded on
the ex-dividend date. Interest income is recorded on the accrual basis.
FEDERAL INCOME TAXES-It is the Funds' policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all taxable income to shareholders.
EXPENSES-The Funds are charged for expenses that are directly attributable
to them, such as advisory and custodian fees. Expenses that are not directly
attributable to a portfolio are allocated among the portfolios in proportion to
their respective net assets.
USE OF MANAGEMENT ESTIMATES-The preparation of financial statements in
conformity with generally accepted accounting principles requires that
Management make certain 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. The reported amounts of
revenues and expenses during the reporting period may also be affected by the
estimates and assumptions Management is required to make. Actual results may
differ from those estimates.
Semi-Annual Report
<PAGE>
WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
3. DISTRIBUTIONS
--------------
Dividends from net investment income are declared and paid annually.
Distributions of net realized gains, if any, will be declared and paid at least
annually. The amount of dividends and distributions from net investment income
and net realized capital gains are determined in accordance with Federal income
tax regulations, which may differ from generally accepted accounting principles.
To the extent these book and tax differences are permanent in nature, such
amounts are reclassified among paid-in capital in excess of par value,
undistributed net investment income and undistributed net realized gain (loss)
on investments. Accordingly, at March 31, 2000, reclassifications were recorded
to increase undistributed net investment income by $1,609,380, $151,635,
$744,590, $1,031,410, $299,425 and $10 and decrease undistributed net realized
gain on investments by $5,047,927, $392,591, $3,992,704, $1,285,840, $1,336,065
and $10 and increase paid-in capital in excess of par by $3,438,547, $240,956,
$3,248,114, $254,430, $1,036,640 and $0 for the Micro Cap, Small Cap Value,
Small Cap Growth, Core Growth, Ultra Growth and U.S. Treasury Funds,
respectively.
- --------------------------------------------------------------------------------
4. CAPITAL STOCK
--------------
Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31, 2000
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 6,684,715 2,217,697 1,468,780 2,576,129 264,480 881,732
Dividends
reinvested 3,376,178 254,608 632,481 205,741 157,453 409,551
Shares redeemed (8,307,702) (944,321) (1,373,380) (2,110,225) (688,247) (3,436,222)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) 1,753,191 1,527,984 727,881 671,645 (266,314) (2,144,939)
============= ============= ============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION
YEAR ENDED SEPTEMBER 30, 1999
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 17,262,743 5,138,745 1,644,990 4,040,000 1,495,813 9,191,867
Dividends
reinvested 3,934,845 - 1,089,991 436,117 148,165 171,636
Shares redeemed (21,064,440) (6,159,795) (3,076,017) (5,090,665) (2,469,905) (7,831,244)
------------- ------------- ------------- ------------- ------------- -------------
Net increase
(decrease) 133,148 (1,021,050) (341,036) (614,548) (825,927) 1,532,259
============= ============= ============= ============= ============= =============
</TABLE>
Semi-Annual Report
<PAGE>
WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
5. PURCHASES AND SALES OF SECURITIES
- ------------------------------------
Purchases and sales of investment securities, excluding U.S. government and
short-term securities, for the six months ended March 31, 2000 are summarized
below:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Purchases $40,356,105 $8,857,274 $61,944,389 $84,973,295 $19,747,786 -
Sales 67,964,650 7,525,765 76,655,433 79,334,672 28,680,569 -
</TABLE>
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The only purchases and sales of U.S. government securities occurred in the
U.S. Treasury Fund and were $915,926 and $29,637,872, respectively. The Micro
Cap, Small Cap Value, Small Cap Growth, Core Growth, Ultra Growth and U.S.
Treasury Funds' tax basis in their investments is $148,949,942, $23,133,310,
$135,228,954, $186,684,613, $30,021,874 and $51,916,913, respectively.
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As of March 31, 2000, gross unrealized appreciation and (depreciation) for
federal income tax purposes were as follows:
<TABLE>
<CAPTION>
SMALL CAP SMALL CAP CORE ULTRA U.S.
MICRO CAP VALUE GROWTH GROWTH GROWTH TREASURY
FUND FUND FUND FUND FUND FUND
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Unrealized
appreciation $53,661,912 $5,479,262 $63,030,115 $42,558,805 $15,436,494 $893,224
Unrealized
depreciation (16,017,034) (2,527,387) (15,075,426) (27,815,603) (6,468,430) (3,175,150)
------------- ------------- ------------- ------------- ------------- -------------
Net unrealized
appreciation
(depreciation) $37,644,878 $2,951,875 $47,954,689 $14,743,202 $8,968,064 $(2,281,926)
============= ============= ============= ============= ============= =============
</TABLE>
Semi-Annual Report
<PAGE>
WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------
MARCH 31, 2000 (UNAUDITED)
6. INVESTMENT ADVISORY
--------------------
As the Funds' investment advisor, the Manager receives a monthly fee
calculated on average daily net assets. For the six months ended March 31, 2000,
management fees for the Micro Cap, Small Cap Value, Small Cap Growth, Core
Growth, Ultra Growth and U.S. Treasury Funds were 2.00%, 1.50%, 1.00%, 1.00%,
1.25% and 0.50% of the average daily net assets of each portfolio, respectively.
The Manager has voluntarily agreed to limit the expenses of the Micro Cap,
Small Cap Value, Small Cap Growth, Core Growth, Ultra Growth and U.S. Treasury
Funds to 2.50%, 1.95%, 1.50%, 1.50%, 1.75% and 0.75% of average daily net
assets, respectively. For the six months ended March 31, 2000, the Manager
reimbursed $11,518 for the Small Cap Value Fund, $10,028 for the Ultra Growth
Fund and $72,342 for the U.S. Treasury Fund.
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7. TRANSACTIONS WITH AFFILIATES
-----------------------------
The following is an analysis of transactions for the six months ended March
31, 2000 in the Micro Cap, Small Cap Growth and Core Growth Funds with
"affiliated companies" as defined by the Investment Company Act of 1940:
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<TABLE>
<CAPTION>
MICRO CAP FUND
AMOUNT OF AMOUNT OF
DIVIDENDS GAIN (LOSS)
CREDITED TO REALIZED ON
SHARE ACTIVITY INCOME SALE OF SHARES
----------------------------------------------------- FOR THE SIX FOR THE SIX
BALANCE BALANCE MOS. ENDED MOS. ENDED
SECURITY NAME 9/30/99 PURCHASES SALES 3/31/00 3/31/00 3/31/00
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AmSurg Corp.,
Class A and B 646,920 105,789 - 752,709 - -
ICU Medical, Inc. 484,900 9,000 20,200 473,700 - 16,529
National Dentex
Corp. 253,750 - 10,000 243,750 - (49,537)
Rainbow
Rentals, Inc. 260,000 59,000 - 319,000 - -
Young
Innovations, Inc. 338,500 - - 338,500 - -
</TABLE>
Semi-Annual Report
<PAGE>
<TABLE>
<CAPTION>
WASATCH FUNDS-NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000 (UNAUDITED)
SMALL CAP GROWTH FUND
AMOUNT OF AMOUNT OF
DIVIDENDS GAIN (LOSS)
CREDITED TO REALIZED ON
SHARE ACTIVITY INCOME SALE OF SHARES
----------------------------------------------------- FOR THE SIX FOR THE SIX
BALANCE BALANCE MOS. ENDED MOS. ENDED
SECURITY NAME 9/30/99 PURCHASES SALES 3/31/00 3/31/00 3/31/00
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AmSurg Corp.,
National Dentex
Corp. 251,700 1,000 37,350 215,350 - $ (101,217)
</TABLE>
<TABLE>
<CAPTION>
CORE GROWTH FUND
AMOUNT OF AMOUNT OF
DIVIDENDS GAIN (LOSS)
CREDITED TO REALIZED ON
SHARE ACTIVITY INCOME SALE OF SHARES
----------------------------------------------------- FOR THE SIX FOR THE SIX
BALANCE BALANCE MOS. ENDED MOS. ENDED
SECURITY NAME 9/30/99 PURCHASES SALES 3/31/00 3/31/00 3/31/00
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AmSurg Corp.,
National Dentex
Corp. 183,000 - 50,000 133,000<F1> - (225,776)
Pediatrix Medical
Group Inc. 910,575 - 18,350 892,225 - (221,029)
</TABLE>
<F1>No longer an affiliated company as of March 31, 2000
Semi-Annual Report
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