PATHFINDER FUND
* * * *
Semi-Annual Report
November 1, 1996 - April 30, 1997
A NOTE FROM YOUR FUND'S PRESIDENT
From November 1, 1996 - April 30, 1997 PATHFINDER FUND lost
6.43% as micro caps continued their correction.
As this letter is being written, the "market" (Dow Jones
Industrial Average -- DJIA) has just experienced its second worse
(pointwise) decline, over 3%.
The beginning of the end? I don't think so -- more like the
end of the beginning. Blue chips were the beginning of this
phase of the Bull Market. Perhaps the baton is now being passed
to micro caps. We'll soon see.
PATHFINDER is up 20% so far this year, same as the DJIA.*
And this with a portfolio with a median capitalization of $35
million.** While we are not making a prediction, we have a
strong feeling that micro-cap stocks will lead the market in the
months to come as Blue Chips digest their meteoric gains.
At this writing, the Fund's Manager (including its officers
and directors) owns more than 12% of the Fund's shares.
The Fund's price is quoted in the Wall Street Journal,
Investor's Business Daily and some other major newspapers. If
we're not in your paper, call (800) 444-4778 for daily prices.
August 15, 1997 /s/ Ed Bernstein
* The Fund's average total returns for the one-, five- and
ten-year periods ended August 15, 1997 were 11%, 14% and 1%,
respectively, as computed according to the SEC's rules. Past
performance is not predictive of future results. Investment
return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than their
original cost.
** per Morningstar
PATHFINDER FUND
Schedule of Investments
April 30, 1997
(Unaudited)
Shares Market Value
COMMON STOCKS (98.87%)
BIO-TECH (3.16%)
14,000 Synbiotics Corporation $ 56,000
3,500 Synthetech, Inc. 22,313
--------
Total . . . . . . . . . . . . . 78,313
--------
COMMUNICATIONS (4.29%)
5,000 Alpine Group (The), Inc. 46,250
5,000 EMCEE Broadcast Products 17,500
18,000 Intelect Communications Systems 28,688
6,800 Micronetics Wireless, Inc. 13,600
--------
Total . . . . . . . . . . . . . 106,038
--------
COMPUTER SOFTWARE & RELATED TECHNOLOGIES/SERVICES
(11.55%)
10,000 ATEC Group, Inc. 7,187
45,000 AW Computer Systems, Inc. 32,344
4,500 Ault Incorporated 33,188
25,000 Canterbury Corporate Services 32,813
7,000 Computer Outsourcing Services 30,625
2,000 Edusoft Ltd. 4,625
2,700 GenRad, Inc. 44,550
2,500 Miltope Group, Inc. 7,344
24,000 Mitek Systems, Inc. 40,500
2,500 Quarterdeck Corporation 6,094
2,000 SBE, Inc. 10,000
3,000 SofTech, Inc. 8,625
1,000 Tseng Labs, Inc. 2,937
2,500 Waters Instruments, Inc. 11,719
3,000 Wells-Gardner Electronics, Inc. 10,687
500 Zoom Telephonics, Inc. 3,312
--------
Total . . . . . . . . . . . . . 286,550
--------
ELECTRONICS (6.11%)
39,500 All American Semiconductor 39,500
2,000 Amistar Corporation 7,750
1,300 Bell Microproducts, Inc. 13,487
1,000 Cherry Corporation (The) "B" 11,000
7,000 DCX, Inc. 8,750
1,600 Deswell Industries, Inc. 29,200
4,000 Electronic Designs, Inc. 10,750
2,000 Pacific Aerospace & Electronics, Inc. 6,500
2,000 Reliability, Inc. 19,000
2,000 Titan Corporation (The) 6,000
--------
Total . . . . . . . . . . . . . 151,937
--------
FOOD (3.20%)
8,000 Hain Food Group (The), Inc. 35,000
10,000 Hansen Natural Corporation 12,500
3,000 Skyline Chili, Inc.* 21,188
4,000 Vestro Natural Foods, Inc. 11,000
--------
Total . . . . . . . . . . . . . 79,688
--------
FURNITURE (3.33%)
21,900 DMi Furniture, Inc. 57,487
5,000 Dakotah, Inc. 15,000
2,000 Kewaunee Scientific Corporation* 10,250
--------
Total . . . . . . . . . . . . . 82,737
--------
HEALTH/BEAUTY (4.89%)
5,800 Aloette Cosmetics, Inc. 15,950
1,300 BeautiControl Cosmetics, Inc. 13,000
25,000 CCA Industries, Inc. 87,500
3,000 Cosmetic Group, U.S.A., Inc. 5,062
--------
Total . . . . . . . . . . . . . 121,512
--------
INSTRUMENTATION/MEASURING/CONTROL (4.35%)
15,000 ARC Capital 21,563
1,000 Medar, Inc. 5,500
6,000 Microfluidics 9,000
1,000 MotorVac Technologies, Inc. 4,375
6,000 Plasma-Therm, Inc. 26,250
12,000 Spectrum Control, Inc. 41,250
--------
Total . . . . . . . . . . . . . 107,938
--------
INSURANCE (1.01%)
3,000 Atlantic American Corporation 8,625
2,500 Seibels Bruce Group (The), Inc. 16,250
--------
Total . . . . . . . . . . . . . 24,875
--------
MANUFACTURING (15.27%)
31,500 Allied Devices Corporation 86,625
4,000 Arrow-Magnolia International 19,000
2,000 Aztec Manufacturing Co.* 18,500
18,200 Devlieg-Bullard, Inc. 51,187
3,000 Genlyte Group 37,688
1,700 Hirsch International Corp. 31,025
4,000 K-Tron International, Inc. 46,500
12,000 Nortech Systems, Inc. 55,500
9,000 PVC Container* 32,625
--------
Total . . . . . . . . . . . . . 378,650
--------
MEDICAL PRODUCTS/SERVICES (14.36%)
1,750 American Dental Technologies, Inc. 12,031
11,000 Arrhythmia Research Tech., Inc. 22,688
33,000 Biomerica, Inc. 78,375
18,000 Colorado MEDtech, Inc. 54,000
1,500 Cyberonics, Inc. 8,625
5,000 Hanger Orthopedic Group 33,750
2,000 Laboratory Specialists, Inc. 4,375
9,000 Medical Action Industries, Inc. 18,844
10,000 Mesa Laboratories, Inc. 52,500
1,000 OEC Medical Systems, Inc. 15,250
7,000 Palomar Medical Technologies 24,938
12,500 Pro-Dex 24,219
10,000 Transderm Laboratories Corporation 3,281
1,000 Trimedyne Incorporated 3,062
--------
Total . . . . . . . . . . . . . 355,938
--------
PACKAGING (1.69%)
6,000 Disc Graphics, Inc. 16,125
4,500 Leading Edge Packaging, Inc. 25,875
--------
Total . . . . . . . . . . . . . 42,000
--------
CONSUMER GOODS (7.16%)
32,000 Audio King Corporation 52,000
2,000 G-III Apparel Group Ltd. 10,500
1,500 S & K Famous Brands, Inc. 15,187
1,500 Serengeti Eyewear 4,687
7,000 Shop At Home, Inc. 21,000
33,000 U. S. Home & Garden, Inc. 74,250
--------
Total . . . . . . . . . . . . . . 177,624
--------
RECREATION/ENTERTAINMENT (6.61%)
13,000 ARC International Corp. 42,250
4,000 Ballantyne of Omaha, Inc. 58,000
7,500 PTI Holding, Inc. 63,750
--------
Total . . . . . . . . . . . . . . 164,000
--------
TRANSPORTATION (2.89%)
5,000 CHC Helicopter* 24,766
12,500 OTR Express, Inc. 46,875
--------
Total . . . . . . . . . . . . . 71,641
--------
OTHER (9.00%)
8,000 ACR Group, Inc. 24,250
9,000 Advanced Deposition Technologies, Inc. 36,000
6,800 Artistic Greetings, Inc. 33,150
2,000 Baker (Michael) Corp. 13,875
2,000 Hitox Corporation of America 5,375
1,500 Powell Industries, Inc. 21,000
5,000 Solomon-Page Group Ltd. (The) 10,625
11,000 Star Multi Care Services, Inc. 56,375
6,000 Team, Inc. 9,375
1,300 Universal Stainless & Alloy Products 13,000
--------
Total . . . . . . . . . . . . . 223,025
--------
Total Investments in Securities
(Cost $2,707,263)** 98.87 % 2,452,466
------ ---------
Other Assets in Excess of
Liabilities 1.13% 28,065
------ ---------
Total Net Assets 100.00 % $ 2,480,531
====== =========
* Income-producing security
** Cost for federal income tax purposes is the same,
and net unrealized depreciation consists of:
Gross Unrealized Appreciation 240,757
Gross Unrealized Depreciation (495,554)
-------
Net Unrealized Depreciation $ (254,797)
=======
See Notes to Financial Statements
PATHFINDER FUND
Statement of Assets and Liabilities
April 30, 1997
(Unaudited)
ASSETS:
Investments in securities, at value
(identified cost $2,707,263)
(Notes 2A and 3). . . . . . . . . . . . . $ 2,452,466
Cash . . . . . . . . . . . . . . . . . . . . . 18,949
Receivables:
Capital Shares Sold 865
Investment securities sold. . . . . . . . 43,819
Prepaid expenses and other . . . . . . . . . . 12,494
----------
Total Assets. . . . . . . . . . . . . . . 2,528,593
----------
LIABILITIES:
Payables:
Investment securities purchased . . . . . 15,971
Capital shares redeemed . . . . . . . . . 2,364
Accrued expenses . . . . . . . . . . . . . . . 29,727
----------
Total Liabilities . . . . . . . . . . . . 48,062
----------
NET ASSETS . . . . . . . . . . . . . . . . . . $ 2,480,531
==========
Net asset value, offering and redemption
price per share
($2,480,531 / 341,042 shares). . . . . . . . $ 7.27
====
At April 30, 1997 the components of
net assets were as follows:
Paid-in capital . . . . . . . . . . . . . $ 2,672,000
Accumulated net realized gains
on investments. . . . . . . . . . . . . 63,328
Net unrealized depreciation
of investments. . . . . . . . . . . . . (254,797)
----------
Net Assets . . . . . . . . . . . . . $ 2,480,531
==========
See Notes to Financial Statements
PATHFINDER FUND
Statement of Operations
for the Six Months Ended April 30, 1997
(Unaudited)
INVESTMENT INCOME:
Income:
Dividends . . . . . . . . . . . . . . . $ 93
Interest . . . . . . . . . . . . . . . . 585
------
Total income. . . . . . . . . . . . 678
------
Expenses:
Investment Advisory Fee (Note 4) . . . . 12,424
Transfer Agent . . . . . . . . . . . . . 12,234
Custody. . . . . . . . . . . . . . . . . 4,263
Professional Fees. . . . . . . . . . . . 13,297
Insurance. . . . . . . . . . . . . . . . 4,525
Accounting and Pricing . . . . . . . . . 9,968
Printing . . . . . . . . . . . . . . . . 110
Trustee Fees . . . . . . . . . . . . . . 3,053
Registration Fees. . . . . . . . . . . . 3,773
------
63,647
Less reimbursement of expenses. . . . . . . . ( 46,009)
------
Net expenses . . . . . . . . . . . . . . 17,638
------
Net investment loss . . . . . . . . (16,960)
------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investment securities. . . . . . . . . . 63,328
Net increase (decrease) in
unrealized appreciation of
investment securities. . . . . . . . . . (153,379)
-------
Net loss on investments . . . . . . (90,051)
------
Net decrease in net assets
resulting from operations . . . . $ (107,011)
=======
See Notes to Financial Statements
PATHFINDER FUND
Statement of Changes in Net Assets
Six Months
ended Year ended
Apr. 30, 1997 Oct. 31, 1996
------------- -------------
(Unaudited)
Operations:
Net investment loss. . . . . $ (16,960) $ (22,317)
Net realized gain on
investment securities. . . 63,328 402,712
Net change in unrealized
appreciation (depreciation)
of investment securities. . . (153,379) (437,841)
------- -------
Net increase (decrease)
in net assets resulting
from operations. . . . . . (107,011) 57,446
------- ------
Distributions from
net realized gains
($1.18 and $0.62,
respectively). . . . . . . (434,858) (157,391)
--------- -------
Capital Share transactions:
Shares sold. . . . . . . . 486,245 7,507,422
Shares reinvested. . . . . 345,205 143,904
Shares redeemed. . . . . . (1,049,129) (6,379,070)
--------- ---------
Net increase (decrease)
from capital share
transactions (a) . . . . . (217,679) 1,272,256
------- ---------
Total increase (decrease)
in net assets. . . . . . (759,548) 1,057,419
Net assets at the beginning
of the period. . . . . . . 3,240,079 2,182,660
--------- ---------
Net assets at the end
of the period. . . . . . . $2,480,531 $3,240,079
========= =========
(a) A summary of capital
share transactions
(number of shares) is
as follows:
Shares sold. . . . . . . 60,510 710,337
Shares reinvested. . . . 46,712 18,332
Shares redeemed. . . . . (128,994) (628,412)
------- -------
Net increase (decrease). . ( 21,772) 100,257
====== =======
See Notes to Financial Statements
PATHFINDER FUND
_________________________________________________________________
FINANCIAL HIGHLIGHTS
_________________________________________________________________
Six Months
ended
April 30, 1997
PER SHARE DATA
Net asset value at beginning of period. . . . $ 9.01
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.05)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . (.51)
---
Total from investment operations. . . . . (.56)
---
Less distributions
Distributions from realized gains . . . . . . (1.18)
Distributions from paid-in capital. . . . . . --
----
Total dividends and distributions. . . . . (1.18)
----
Net asset value at end of period. . . . . . . $ 7.27
====
TOTAL RETURN (6.43)%*
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 2,480
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 1.23 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (1.18)%
Portfolio turnover rate . . . . . . . . . . . 37.38 %*
Average commission rate per share . . . . . . 3.10 cents
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . --
Average amount of debt
outstanding during the period (c) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 350
Average amount of debt per
share during the period (c) . . . . . . . --
* Not annualized
Year ended
October 31, 1996
PER SHARE DATA
Net asset value at beginning of period. . . . $ 8.41
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.07)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . 1.29
----
Total from investment operations. . . . . 1.22
----
Less distributions
Distributions from realized gains . . . . . . (.62)
Distributions from paid-in capital. . . . . . --
Total dividends and distributions. . . . . (.62)
---
Net asset value at end of period. . . . . . . $ 9.01
====
TOTAL RETURN 15.60 %
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 3,240
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . .99 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (0.74)%
Portfolio turnover rate . . . . . . . . . . . 118.55 %
Average commission rate per share . . . . . . 2.97 cents
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . --
Average amount of debt
outstanding during the period (c) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 317
Average amount of debt per
share during the period (c) . . . . . . . --
Year ended
October 31, 1995
PER SHARE DATA
Net asset value at beginning of period. . . . $ 6.87
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.05)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . 1.59
----
Total from investment operations. . . . . 1.54
----
Less distributions
Distributions from realized gains . . . . . . --
Distributions from paid-in capital. . . . . . --
----
Total dividends and distributions. . . . . --
----
Net asset value at end of period. . . . . . . $ 8.41
====
TOTAL RETURN 22.42 %
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 2,183
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 1.19 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (0.72)%
Portfolio turnover rate . . . . . . . . . . . 59.89 %
Average commission rate per share . . . . . . --
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . --
Average amount of debt
outstanding during the period (c) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 327
Average amount of debt per
share during the period (c) . . . . . . . --
Year ended
October 31, 1994
PER SHARE DATA
Net asset value at beginning of period. . . . $ 7.34
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.39)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . .27
---
Total from investment operations. . . . . (.12)
---
Less distributions
Distributions from realized gains . . . . . . --
Distributions from paid-in capital. . . . . . (.35)
---
Total dividends and distributions. . . . . (.35)
---
Net asset value at end of period. . . . . . . $ 6.87
====
TOTAL RETURN (1.57)%
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 2,632
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 6.19 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (5.56)%
Portfolio turnover rate . . . . . . . . . . . 89.62 %
Average commission rate per share . . . . . . --
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . --
Average amount of debt
outstanding during the period (c) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 456
Average amount of debt per
share during the period (c) . . . . . . . --
Year ended
October 31, 1993
PER SHARE DATA
Net asset value at beginning of period. . . . $ 6.29
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.29)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . 1.65
----
Total from investment operations. . . . . 1.36
----
Less distributions
Distributions from realized gains . . . . . . --
Distributions from paid-in capital. . . . . . (.31)
---
Total dividends and distributions. . . . . (.31)
---
Net asset value at end of period. . . . . . . $ 7.34
====
TOTAL RETURN 21.80 %
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 4,002
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 4.41 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (4.15)%
Portfolio turnover rate . . . . . . . . . . . 71.02 %
Average commission rate per share . . . . . . --
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . --
Average amount of debt
outstanding during the period (c) . . . . 449,873
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 945
Average amount of debt per
share during the period (c) . . . . . . . $ 0.48
Year ended
October 31, 1992
PER SHARE DATA
Net asset value at beginning of period. . . . $ 7.42
----
Income from investment operations
Net investment income (loss). . . . . . . . . (.25)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . (.88)
---
Total from investment operations. . . . . (1.13)
----
Less distributions
Distributions from realized gains . . . . . . --
Distributions from paid-in capital. . . . . . --
----
Total dividends and distributions. . . . . --
----
Net asset value at end of period. . . . . . . $ 6.29
====
TOTAL RETURN (15.23)%
RATIOS / SUPPLEMENTAL DATA
Net assets at end of period
(000's omitted) . . . . . . . . . . . . . . 8,913
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 3.83 %
Ratio of net investment income
(loss) to average net assets (b) . . . . . . (3.48)%
Portfolio turnover rate . . . . . . . . . . . 81.32 %
Average commission rate per share . . . . . . --
Borrowings for the period:
Amount of debt outstanding
at the end of period (c). . . . . . . . . 1,740,000
Average amount of debt
outstanding during the period (c) . . . . 2,098,675
Average number of shares
outstanding during the period
(000's omitted) (c) . . . . . . . . . . . 1,728
Average amount of debt per
share during the period (c) . . . . . . . $ 1.21
(a) Ratio of expenses to average net assets prior to fee waiver
and expense reimbursement by the Adviser was 4.44%, 3.62%, 3.29%,
7.06%, 4.42% and 3.83%, respectively.
(b) Ratio of net investment income (loss) to average net assets
prior to fee waiver and expense reimbursement by the Adviser was
(4.39)%, (3.37)%, (2.83)%, (6.44)%, (4.16)% and (3.48)%,
respectively.
(c) Averages computed on a daily basis.
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS APRIL 30, 1997
_________________________________________________________________
Note 1 -- Organization
PATHFINDER FUND (the "Fund") is a series of shares of
Pathfinder Trust (the "Trust") which is registered under the
Investment Company Act of 1940, as amended, as a diversified
open-end management investment company. The Trust was organized
on January 21, 1987, as a Massachusetts business trust and may
issue an unlimited number of shares of beneficial interest
without par value in separate classes or "funds." Currently, the
Trust offers shares in one fund, PATHFINDER FUND.
Note 2 -- Significant Accounting Policies
The following is a summary of the significant accounting
policies consistently followed by the Fund in the preparation of
its financial statements. The policies are in conformity with
generally accepted accounting principles.
A. SECURITY VALUATION. Portfolio securities of the Fund,
which are traded both on an exchange and in the
over-the-counter market, are valued according to the
broadest and most representative market. When portfolio
securities are traded, the valuation is the last reported
sale price on the day of valuation. If there is no such
reported sale or the valuation is based on the
over-the-counter market, the securities are valued at the
mean between the bid and asked prices. Securities for which
reliable quotations are not readily available and restricted
securities are valued at their respective fair market values
as determined in good faith by the Board of Trustees of the
Trust. Short-term investments are stated at cost, which,
when combined with accrued interest, approximates market
value.
B. FEDERAL INCOME TAXES. It is the Fund's policy to
comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders.
Therefore, no federal income tax provision is required for
the Fund.
C. OTHER. As is common in the industry, security
transactions are accounted for on the date the securities
are purchased or sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
D. USE OF ESTIMATES IN FINANCIAL STATEMENTS. In preparing
financial statements in conformity with generally accepted
accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well
as the reported amounts of income and expenses during the
period. Actual results may differ from these estimates.
Note 3 -- Investments
For the six months ended April 30, 1997, the cost of
purchases and the proceeds from the sale of securities, excluding
short-term notes, for the Fund aggregated $1,054,854 and
$1,724,017, respectively.
Note 4 -- Investment Management and Distribution Agreements
The Fund has entered into an Investment Management Agreement
with the Manager under which the Fund pays a fee, computed daily
and payable quarterly, at an annual rate of .875% of the Fund's
average daily net assets. The Manager is responsible for
supervising the performance of all administrative services in
connection with the management of the Fund.
The Manager has agreed that, in any fiscal year, if the
operating expenses of the Fund (including the fees payable to the
Manager but excluding taxes, interest, distribution fees,
brokerage and extraordinary expenses) exceed the expense
limitations applicable to the Fund imposed by state securities
laws or any regulations thereunder, the Manager will reduce its
fees by the extent of such excess (unless the Manager obtains a
waiver of or variance from such limitations by the appropriate
state securities authorities) and, if required pursuant to any
such laws or regulations, will reimburse the Fund in the amount
of such excess. Currently, the Fund believes that the most
restrictive expense limitation to which the Trust is subject is
2.5% of the Fund's first $30 million of average net assets, 2.0%
of the next $70 million of average net assets and 1.5% of the
remaining average net assets. The Fund has received a waiver to
exclude portions of its custodial, recordkeeping, auditing,
transfer agency and insurance costs from this limitation. Any
such reductions or reimbursements may not be repaid to the
Manager in subsequent fiscal years. The Trust has adopted a Plan
pursuant to the rule 12b-1 under the Investment Company Act of
1940 (the "Plan") on behalf of the Fund, whereby it may pay up to
a maximum annual rate of .25% of its average daily net assets to
the Manager for expenses incurred in the distribution of the
Fund's shares. Pursuant to this Plan the Manager is entitled to
reimbursement at the end of each month for its actual expenses
incurred in the distribution and promotion of the Fund's shares,
including the printing of prospectuses and reports used for sales
purposes, expenses of preparation and printing of sales
literature and other such distribution-related expenses, a
prorated portion of the Manager's overhead expenses attributable
to the distribution of the Fund's shares (including leases,
communications, salaries, training, supplies, photocopying,
interest on overhead, and any other category of the Manager's
expenses attributable to the distribution of the Fund's shares)
and fees paid to dealers, banks or others as a distribution
service fee for servicing shareholders of the Fund. The Plan
permits the Manager to carry forward for a maximum of three years
distribution expenses covered by the Plan for which the Manager
has not yet received reimbursement. The Manager waived
reimbursement for all distribution expenses under the Plan,
including any accrued carry forward's, for fiscal year 1996
and
has undertaken to do so for fiscal year 1997.
Certain officers and Trustees of the Fund (the "Trust") are
also officers and/or Directors of the Manager.
PATHFINDER FUND
P.O. Box 75231
Los Angeles, CA 90075-0231
(800) 444-4778
* * * *
OFFICERS AND TRUSTEES
Edwin R. Bernstein, President,
Chief Financial Officer, Trustee
H. Randolph Moore, Jr., Trustee
Patricia C. Nagle, Trustee
Werner Lange, Trustee
Patricia L. Stephan, Vice President,
Secretary, Trustee
* * * *
Manager
Pathfinder Advisers
Shareholder Servicing Agent
Unified Advisers, Inc.
Custodian
The Fifth Third Bank
Legal Counsel
Baker & Daniels
This report is intended for
distribution to shareholders
of the Fund. It may also be
given to prospective investors
if preceded or accompanied by
the Fund's current Prospectus
which contains information
regarding fees, charges and
investment objectives and
policies.
