PATHFINDER FUND
* * * *
Annual Report
November 1, 1997 - October 31, 1998
A NOTE FROM YOUR FUND'S PRESIDENT
Short and sweet -- a disappointing fiscal year. As small
caps continued their lagging performance, we had the crushing
"Mini Bear Market" of 1998.
Many pundits believe that it's now the small caps' turn as
investors recognize their superior relative value over large
caps. At this writing, it looks like that may be the case, but
the jury's still out.
Meanwhile, we must report that your Fund is down 29% for
this fiscal year.*
At this writing, the Fund's Manager (including its officers
and directors) owns more than 9% of the Fund's shares.
The Fund's price is quoted in the Wall Street Journal, USA
Today, Investor's Business Daily, and other major newspapers.
Barron's has quotes on a weekly basis. If we're not in your
paper, call (800) 444-4778 for daily prices.
/s/ Ed Bernstein
* The Fund's average total returns for the one-, five- and ten-
year periods ended October 31, 1998, were (29.22)%, 5.13%, and
2.75%, 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.
PATHFINDER FUND
Schedule of Investments
October 31, 1998
Shares Market Value
COMMON STOCKS (102.27%)
BIO-TECH (2.32%)
4,000 Synbiotics Corporation $ 11,000
20,000 Trinity Biotech plc ADR 35,000
--------
Total . . . . . . . . . . . . . 46,000
--------
COMMUNICATIONS (11.31%)
2,000 Alpine Group, Inc. (The) 33,750
3,300 Applied Signal Technology, Inc. 37,333
8,400 CTC Communications Corp. 55,129
13,200 Intelect Communications, Inc. 37,132
8,000 International FiberCom, Inc. 61,000
--------
Total . . . . . . . . . . . . . 224,344
--------
DIVERSIFIED OPERATIONS (9.42%)
4,000 Astronics Corporation 38,000
5,600 Quixote Corporation * 67,200
6,000 Smart Choice Automotive Group, Inc. 27,378
5,000 Summa Industries 54,375
--------
Total . . . . . . . . . . . . . 186,953
--------
ELECTRONICS (4.21%)
32,000 All American Semiconductor 32,992
4,100 American Superconductor Corp. 40,487
1,000 Detection Systems, Inc. 10,125
--------
Total . . . . . . . . . . . . . 83,604
--------
FOOD/RESTAURANT (9.22%)
8,000 Au Bon Pain Co., Inc. 52,000
12,000 Fresh Juice Co., Inc. (The) 27,000
3,000 Hawaiian Natural Water Co., Inc. 11,250
7,000 Main St. and Main, Inc. 24,941
6,000 Suprema Specialties, Inc. 24,000
14,000 Vermont Pure Holdings, Ltd. 43,750
--------
Total . . . . . . . . . . . . . 182,941
--------
HEALTH/BEAUTY (3.19%)
4,000 Barber's Hairstyling (The) 28,000
19,000 Bradley Pharmaceuticals 19,000
5,000 IVC Industries, Inc. 7,030
600 Styling Technology Corp. 9,150
--------
Total . . . . . . . . . . . . . 63,180
--------
INSTRUMENTATION/MEASURING/CONTROL (1.84%)
7,000 JMAR Technologies, Inc. 12,250
4,800 Misonix, Inc. 24,302
--------
Total . . . . . . . . . . . . . 36,552
--------
LEISURE (8.75%)
13,500 ARC International Corp. 16,875
2,000 Ballantyne of Omaha, Inc. 15,500
2,300 Buckhead America Corp. 12,507
3,500 Concord Camera Corp. 15,971
4,000 Grand Toys International, Inc. 8,000
5,500 JAKKS Pacific, Inc. 55,688
8,000 PTI Holdings, Inc. 49,000
--------
Total . . . . . . . . . . . . . 173,541
--------
MANUFACTURING (13.38%)
25,000 Allied Devices Corporation 32,825
6,600 Arrow-Magnolia International, Inc. 33,825
2,500 Genlyte Group, Inc. 49,532
3,300 K-Tron International, Inc. 56,513
4,500 Kewaunee Scientific Corporation* 57,375
4,500 PVC Container Corp. 35,437
--------
Total . . . . . . . . . . . . . 265,507
--------
MEDICAL PRODUCTS/SERVICES (9.11%)
29,000 Biomerica, Inc. 29,000
5,500 Del Global Technololgies Corp. 51,563
1,000 Hanger Orthopedic Group, Inc. 19,750
6,000 Laboratory Specialists, Inc. 27,000
9,500 Medical Action Industries, Inc. 28,500
1,000 OEC Medical Systems, Inc. 25,000
--------
Total . . . . . . . . . . . . . 180,813
--------
RECYCLING/ENVIRONMENTAL REMEDIATION (2.22%)
4,000 REXX Environmental Corporation 10,376
18,000 Recycling Industries, Inc. 33,750
--------
Total . . . . . . . . . . . . . 44,126
--------
RETAIL (12.06%)
10,000 Family Bargain Corporation 18,440
11,800 Loehmann's, Inc. 41,300
1,500 S & K Famous Brands, Inc. 15,375
4,900 Shoe Carnival, Inc. 45,325
10,000 Shop At Home, Inc. 24,380
20,000 Strouds, Inc. 30,000
14,500 U.S. Home & Garden, Inc. 64,351
--------
Total . . . . . . . . . . . . . . 239,171
--------
SOFTWARE SYSTEMS/TRAINING (9.93%)
12,000 Canterbury Information Technology 7,500
6,000 Computer Outsourcing Services 51,000
4,000 FDP Corporation * 35,500
9,000 FTI Consulting, Inc. 36,279
7,500 4Front Technologies, Inc. 60,938
2,000 Ross Systems, Inc. 5,876
--------
Total . . . . . . . . . . . . . 197,093
--------
OTHER (5.31%)
17,000 ITEX Corporation 29,750
11,000 International Business Schools, Inc. 15,125
21,000 Mitek Systems, Inc. 17,073
11,000 OTR Express, Inc. 43,318
--------
Total . . . . . . . . . . . . . 105,266
--------
Total Investments in Securities
(Cost $2,246,528)** 102.27 % $ 2,029,091
------ ---------
Liabilities in Excess of
of Other Assets ( 2.27)% ( 44,994)
------ ---------
Total Net Assets 100.00 % $ 1,984,097
====== =========
* Income-producing security (all other securities are non-
income producing)
** Cost for federal income tax purposes is $2,258,481,
and net unrealized appreciation consists of:
Gross Unrealized Appreciation $ 290,531
Gross Unrealized Depreciation (519,921)
-------
Net Unrealized Depreciation $ (229,390)
=======
See Notes to Financial Statements
PATHFINDER FUND
Statement of Assets and Liabilities
October 31, 1998
ASSETS:
Investments in securities, at value
(identified cost $2,246,528)
(Notes 2A and 3). . . . . . . . . . . . . $ 2,029,091
Cash . . . . . . . . . . . . . . . . . . . . . 43,334
Receivables:
Capital Shares Sold . . . . . . . . . . . 345
Other assets . . . . . . . . . . . . . . . . . 4,090
----------
Total Assets. . . . . . . . . . . . . . . 2,076,860
----------
LIABILITIES:
Payables:
Investment securities purchased . . . . . 17,345
Capital shares redeemed . . . . . . . . . 51,448
Accrued expenses . . . . . . . . . . . . . . . 23,970
----------
Total Liabilities . . . . . . . . . . . . 92,763
----------
NET ASSETS . . . . . . . . . . . . . . . . . . $ 1,984,097
==========
Net asset value, offering and redemption
price per share
($1,984,097 / 290,887 shares). . . . . . . $ 6.82
=====
At October 31, 1998 the components of
net assets were as follows:
Paid-in capital . . . . . . . . . . . . . $ 2,210,267
Accumulated net realized loss
on investments. . . . . . . . . . . . . ( 8,733)
Net unrealized depreciation
of investments. . . . . . . . . . . . . (217,437)
----------
Net Assets . . . . . . . . . . . . . $ 1,984,097
==========
See Notes to Financial Statements
PATHFINDER FUND
Statement of Operations
for the Year Ended October 31, 1998
INVESTMENT INCOME:
Income:
Dividends . . . . . . . . . . . . . . . $ 3,406
Other income . . . . . . . . . . . . . . 29,244
------
Total income. . . . . . . . . . . . 32,650
------
Expenses:
Investment Advisory Fee (Note 4) . . . . 25,144
Transfer Agent . . . . . . . . . . . . . 21,438
Custody. . . . . . . . . . . . . . . . . 15,194
Professional Fees. . . . . . . . . . . . 11,286
Insurance. . . . . . . . . . . . . . . . 5,866
Accounting and Pricing . . . . . . . . . 19,621
Trustee Fees . . . . . . . . . . . . . . 6,236
Registration Fees. . . . . . . . . . . . 17,000
Miscellaneous. . . . . . . . . . . . . . 83
-------
Total expenses. . . . . . . . . . . 121,868
Reimbursement of expenses (Note 4). . . . . . ( 61,472)
Fee reduction (Note 5). . . . . . . . . . . . ( 453)
-------
Net expenses. . . . . . . . . . . . 59,943
-------
Net investment loss. . . . . . ( 27,293)
------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
Net realized gain on
investment securities. . . . . . . . . . . . 4,660
Net decrease in unrealized
appreciation of investment securities. . . . (862,384)
-------
Net loss on investments . . . . . . (857,724)
-------
Net decrease in net assets
resulting from operations . . . . $ (885,017)
=======
See Notes to Financial Statements
PATHFINDER FUND
Statement of Changes in Net Assets
For the Year Ended October 31,
1998 1997
------------- -------------
Operations:
Net investment loss. . . . . $ ( 27,293) $ ( 36,421)
Net realized gain on
investment securities. . . 4,660 122,953
Net change in unrealized
appreciation (depreciation)
of investment securities. . . (862,384) 746,365
------- -------
Net increase (decrease)
in net assets resulting
from operations. . . . . . (885,017) 832,897
------- -------
Distributions from
net realized gains
($0.43 and $1.18,
respectively). . . . . . . (136,349) (393,026)
--------- -------
Capital Share transactions:
Shares sold. . . . . . . . 2,084,394 5,456,390
Shares reinvested. . . . . 124,769 344,646
Shares redeemed. . . . . . (3,020,092) (5,664,594)
--------- ---------
Net increase (decrease)
from capital share
transactions (a) . . . . . ( 810,929) 136,442
------- -------
Total increase (decrease)
in net assets. . . . . . (1,832,295) 576,313
Net assets at the beginning
of the year. . . . . . . . 3,816,392 3,240,079
--------- ---------
Net assets at the end
of the year. . . . . . . . $ 1,984,097 $ 3,816,392
========= =========
(a) A summary of capital
share transactions
(number of shares) is
as follows:
Shares sold. . . . . . . 221,522 563,800
Shares reinvested. . . . 14,697 46,637
Shares redeemed. . . . . (322,482) (593,061)
------- --------
Net increase (decrease). . (86,263) 17,376
======= ========
See Notes to Financial Statements
PATHFINDER FUND
FINANCIAL HIGHLIGHTS
_________________________________________________________________
Year Ended
October 31,1998
PER SHARE DATA
Net asset value at beginning of year. . . . . $ 10.12
-----
Income from investment operations
Net investment income (loss). . . . . . . . . (.09)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . (2.78)
-----
Total from investment operations. . . . . (2.87)
-----
Less distributions
Distributions from realized gains . . . . . . ( .43)
Distributions from paid-in capital. . . . . . --
-----
Total dividends and distributions. . . . . ( .43)
-----
Net asset value at end of year. . . . . . . . $ 6.82
=====
TOTAL RETURN (29.22)%
RATIOS / SUPPLEMENTAL DATA
Net assets at end of year
(000's omitted) . . . . . . . . . . . . . . 1,984
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 2.11 %
Ratio of expenses-net (b) . . . . . . . . . . 2.09 %
Ratio of net investment income
(loss) to average net assets (c) . . . . . . (0.95)%
Portfolio turnover rate . . . . . . . . . . . 44.71 %
Average commission rate per share . . . . . . $ --
Borrowings for the period:
Amount of debt outstanding
at the end of period
(000's omitted). . . . . . . . . . . . . . $ 17
Average amount of debt
outstanding during the period
(000's ommitted) (d) . . . . . . . . . . . $ 151
Average number of shares
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . 325
Average amount of debt per
share during the period (d) . . . . . . . $ 0.46
Year Ended
October 31, 1997
PER SHARE DATA
Net asset value at beginning of year. . . . . $ 9.01
-----
Income from investment operations
Net investment income (loss). . . . . . . . . (.10)
Net realized and unrealized gain (loss)
on investments. . . . . . . . . . . . . . . 2.39
-----
Total from investment operations. . . . . 2.29
-----
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 year. . . . . . . . $ 10.12
=====
TOTAL RETURN 30.26 %
RATIOS / SUPPLEMENTAL DATA
Net assets at end of year
(000's omitted) . . . . . . . . . . . . . . 3,816
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 1.37 %
Ratio of expenses-net (b) . . . . . . . . . . 1.28 %
Ratio of net investment income
(loss) to average net assets (c) . . . . . . (1.08)%
Portfolio turnover rate . . . . . . . . . . . 130.56 %
Average commission rate per share . . . . . . $ .0327
Borrowings for the period:
Amount of debt outstanding
at the end of period
(000's omitted) . . . . . . . . . . . . . $ 1,096
Average amount of debt
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . $ 57
Average number of shares
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . 387
Average amount of debt per
share during the period (d) . . . . . . . $ 0.15
Year ended
October 31, 1996
PER SHARE DATA
Net asset value at beginning of year. . . . . $ 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 year
(000's omitted) . . . . . . . . . . . . . . 3,240
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . .99 %
Ratio of expenses-net (b) . . . . . . . . . . .99 %
Ratio of net investment income
(loss) to average net assets (c) . . . . . . (0.74)%
Portfolio turnover rate . . . . . . . . . . . 118.55 %
Average commission rate per share . . . . . . $ .0297
Borrowings for the period:
Amount of debt outstanding
at the end of period. . . . . . . . . . . --
Average amount of debt
outstanding during the period (d) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . 317
Average amount of debt per
share during the period (d) . . . . . . . --
Year ended
October 31, 1995
PER SHARE DATA
Net asset value at beginning of year. . . . . $ 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 year. . . . . . . . $ 8.41
====
TOTAL RETURN 22.42 %
RATIOS / SUPPLEMENTAL DATA
Net assets at end of year
(000's omitted) . . . . . . . . . . . . . . 2,183
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 1.19 %
Ratio of expenses-net (b) . . . . . . . . . . 1.19 %
Ratio of net investment income
(loss) to average net assets (c) . . . . . . (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. . . . . . . . . . . --
Average amount of debt
outstanding during the period (d) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . 327
Average amount of debt per
share during the period (d) . . . . . . . --
Year ended
October 31, 1994
PER SHARE DATA
Net asset value at beginning of year. . . . . $ 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 year
(000's omitted) . . . . . . . . . . . . . . 2,632
Ratio of expenses to average
net assets (a). . . . . . . . . . . . . . . 6.19 %
Ratio of expenses-net (b) . . . . . . . . . . 6.19 %
Ratio of net investment income
(loss) to average net assets (c) . . . . . . (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. . . . . . . . . . . --
Average amount of debt
outstanding during the period (d) . . . . --
Average number of shares
outstanding during the period
(000's omitted) (d) . . . . . . . . . . . 456
Average amount of debt per
share during the period (d) . . . . . . . --
(a) Ratio of expenses to average net assets prior to fee waiver
and expense reimbursement by the Adviser was 4.25%, 4.14%, 3.62%,
3.29%, and 7.06%, respectively.
(b) Ratio of expenses-net includes the effect of custody credits.
(c) Ratio of net investment income (loss) to average net assets
prior to fee waiver and expense reimbursement by the Adviser was
(3.11)%, (3.94)%, (3.37)%, (2.83)%, and (6.44)%, respectively.
(d) Averages computed on a daily basis.
See Notes to Financial Statements
NOTES TO FINANCIAL STATEMENTS October 31, 1998
_________________________________________________________________
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 year ended October 31, 1998, the cost of purchases and
the proceeds from the sale of securities, excluding short-term
notes, for the Fund aggregated $1,352,274 and $3,358,561,
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. The Manager also currently intends to limit the
total operating expenses of the Fund to 2.00% of average daily
net assets. Accordingly, the Manager waived its investment
advisory fee of $25,144 and reimbursed $36,328 in other expenses
for the year ended October 31, 1998.
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 has waived reimbursement for all
distribution expenses under the Plan, including any accrued carry
forwards, for fiscal year 1998.
Certain officers and Trustees of the Fund (the "Trust") are
also officers and/or Directors of the Manager. During the year
ended October 31, 1998 the Fund did not pay any compensation to
its officers.
Note 5 -- Custody of Securities
Under an agreement with the Custodian Bank, custody fees are
reduced by credits for cash balances. Such reductions totalled
$453 for the Trust during the year ended October 31, 1998. The
Fund's cash balances at the Custodian Bank, which earned credits
against custody fees, could have been invested in short-term
instruments at times when the cash balances rose to minimum
investable levels and at times when cash was not needed for
redemptions or securities purchased. Such short term investments
would produce additional investment income to the Fund.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders of PATHFINDER FUND and
the Board of Trustees of Pathfinder Trust
We have audited the accompanying statement of assets and
liabilities of PATHFINDER FUND, a series of shares of beneficial
interest of Pathfinder Trust, including the schedule of
investments, as of October 31, 1998, and the related statements
of operations for the year then ended, the statement of changes
in net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the
period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation
of securities owned as of October 31, 1998, by correspondence
with the custodian and brokers. An audit also includes assessing
the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements and financial
highlights referred to above present fairly, in all material
respects, the financial position of PATHFINDER FUND as of October
31, 1998, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the
five years in the period then ended, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
November 20, 1998
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
Independent Auditors
Tait, Weller & Baker
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.
