<PAGE>
APRIL 30, 1997
SEMI-ANNUAL REPORT
(UNAUDITED)
THE CRABBE HUSON
SPECIAL FUND, INC.
CRABBE HUSON
SMALL CAP FUND
CRABBE HUSON
REAL ESTATE
INVESTMENT FUND
CRABBE HUSON
EQUITY FUND
CRABBE HUSON
ASSET ALLOCATION FUND
CRABBE HUSON
OREGON TAX-FREE FUND
CRABBE HUSON
INCOME FUND
CRABBE HUSON
U.S. GOVERNMENT
INCOME FUND
CRABBE HUSON
U.S. GOVERNMENT
MONEY MARKET FUND
CRABBE HUSON FUNDS
<PAGE>
CRABBE HUSON FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S>
Page 1 To Our Fellow Shareholders
Review and Schedule of Investments
Page 13 The Crabbe Huson Special Fund, Inc.
Page 18 Crabbe Huson Small Cap Fund
Page 22 Crabbe Huson Asset Allocation Fund
Page 29 Crabbe Huson Equity Fund
Page 34 Crabbe Huson Real Estate Investment Fund
Page 38 Crabbe Huson Oregon Tax-Free Fund
Page 44 Crabbe Huson Income Fund
Page 48 Crabbe Huson U.S. Government Income Fund
Page 51 Crabbe Huson U.S. Government Money Market Fund
Page 54 Statements of Assets & Liabilities
Page 58 Statements of Operations
Page 62 Statements of Changes in Net Assets
Page 66 Notes to Financial Statements
Page 78 Financial Highlights
</TABLE>
<PAGE>
[LOGO]
CRABBE HUSON
May 30, 1997
To Our Fellow Shareholders:
Last fall, Jim Crabbe and I sat down to do a taped interview for use at a
meeting for retirement plan participants. We spent most of the session
discussing our contrarian management philosophy and what it means for those who
invest with us. When we reviewed the recording, one of Jim's statements hit home
with me as the best thought. He said that we're fully aware of the importance of
the money we manage -- for the audience that day, it represented the prospect of
a secure retirement -- and that "it's a responsibility we take very seriously."
On its surface, his statement isn't earth-shattering. In fact, it's pretty
simple. But the truth behind it, along with our unwavering belief in the
long-term success of the contrarian philosophy, form the paradigm of our work.
You've entrusted part of your financial future to Crabbe Huson. You should know
we haven't lost touch with that display of trust.
In the mutual fund industry, which has become very competitive, it seems as
though some have lost perspective on our true mission: we believe this is to
manage your assets in a way that will maximize your potential for growth while
minimizing the risk necessary to achieve that growth. We're fully aware that
it's your money, not ours.
When we last reported to you, we were in the midst of an uninterrupted rise in
the value of the popular market indices, a market situation that played very
well into the hands of growth- and momentum-style investors, but had been rather
hard on value-based and contrarian managers (this trend continues in a slightly
different way today). However, as is our mandate, we had removed competitive
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considerations from the picture and looked solely at the market. What we saw
caused a level of concern significant enough to make us uncomfortable about
risking your money in the stocks that were driving up the indices. We shied away
from those stocks and opted for high-quality equities that were selling at
better prices.
Did this prompt questions from shareholders, the media and others about the
soundness of our approach? Did it mean we may have missed out on a measure of
performance? Yes to both questions. Were we tempted to buy into the boom and add
the likes of Coca-Cola, Merck and 3Com to our portfolios? No. We knew the risk
was too great.
So we didn't. And what we suspected would happen finally did: in March and
April, the market became more volatile. Growth stocks were shaken. In late
April, market interest began to broaden into the secondary tier of stocks that
were more reasonably priced. These were the stocks we owned (and still do), and
our fund performance has responded in kind.
No one is sure where the market is headed, so we don't spend much time trying to
predict its direction. We follow a bottom-up stock-picking discipline, heavy on
research and mindful of price. Our objective, when you get down to it, is to
find what other investors aren't seeing. That's the road map you expected us to
follow when you invested, and we have no intention of departing from our course.
Some of you took time to call, write or send an e-mail regarding our Annual
Report. We appreciate your doing so, since your comments and suggestions are
always helpful. Here are some of the updates we've made to this report, based on
your comments:
- - We're including a restatement of Crabbe Huson's investment philosophy, which
explains the philosophical underpinnings of our actions.
- - Market behavior, particularly the disparity between leadership stocks and the
rest of the equity universe, is again demonstrated graphically, providing an
illustration of the market area in which we most often work.
- - Mindful of cost, we've cut back on the use of color in this report and have
kept the size small to reduce postage charges.
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Thank you for the continued opportunity to be of service as you pursue your
long-term investment goals. Please keep in touch.
Sincerely,
[SIGNATURE]
Richard S. Huson
President
P.S. If you're interested in seeing a video of the interview with Jim Crabbe and
me, we'll be glad to send you a free copy. Just call our Investor Services
Center at (800) 541-9732, or send us an e-mail at [email protected].
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------------------------------------------
OUR CONTRARIAN INVESTMENT PHILOSOPHY
----------------------------------
In the investment world, the term "contrarian" is often misused and
misunderstood. In our view, contrarian investing represents a mindset that
requires a unique perspective and disciplined thinking.
Most investors look favorably upon stocks rising in price and reject those
falling in price. This conventional model causes them to overlook quality
companies with prices that have fallen because of events or perceptions that are
transitory in nature. To a contrarian, however, a stock falling in price becomes
more attractive while one rising in price becomes less so. By purchasing the
stock of companies that are out of favor, the contrarian has an opportunity to
realize profit when these companies regain popularity. This process may involve
less initial risk, since purchase prices usually are at the low end of their
valuation cycles.
CRABBE HUSON'S CONTRARIAN INVESTMENT PROCESS
We invest in companies, not just in stocks.
Our investment selection process is focused on finding quality companies with
sound business models and forward-thinking, intelligent management. As does the
overall stock market, the price of a company's stock will fluctuate over time.
Our approach, however, concentrates on finding good businesses and buying them
at attractive prices. These stocks typically offer greater potential upside
performance and minimized downside risk.
With price as our first consideration, we identify possible buying
opportunities. Then, before committing to buy, we ask questions: Is the company
healthy? Is there a catalyst for a business or price change? What events may
cause that change? What's the potential for profit or loss? Buying decisions are
made only after our questions are answered fully.
We believe sell disciplines are necessary to maintain the integrity of the
portfolios and, accordingly, they play a central role in our equity management
method. Through our research process, we assign target prices to stocks and use
those targets as exit points, selling them when they have reached, or nearly
reached, that price.
THE IMPORTANCE OF TEAMWORK
The bedrock of Crabbe Huson's effort is the team-based approach to portfolio
management. We strongly believe in the importance of more than one perspective
and in the value of collective ability.
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THE IMPORTANCE OF TEAMWORK (CONTINUED)
While our managers are responsible for discrete sections of each portfolio, the
investment team works closely to back individual efforts with insight and
support. This structure allows latitude for the research, analysis and
discussion necessary for making effective portfolio decisions. Our team process
and strict management disciplines help ensure consistency in our method and, in
the end, value for our shareholders.
WHAT IT MEANS FOR INVESTORS
Through the contrarian model, Crabbe Huson works to deliver long-term
performance with less risk for investors. Our process often precludes us from
buying the "stock of the day." We instead focus on delivering performance by
purchasing tomorrow's market leaders at reasonable prices. Our strategy also
helps provide liquidity, since we often buy shares when there is little market
interest and sell after recognition of the company's true worth increases demand
and pushes up the price.
When investing for the long term, market changes are unavoidable. Logically, as
the market evolves, the contrarian/value and growth/momentum styles each will
rotate in and out of favor. Since only one approach cannot advance you toward
your financial goals in all markets, the contrarian model should be included as
a component of a carefully designed, diversified portfolio.
The nature of our approach inclines us to go against the crowd, so at times
you'll notice strategies or holdings that seem incongruent with current
investment trends. This method may cause some to classify our practice as
iconoclastic. While that characterization may be accurate, be assured we're not
contrarian merely for the sake of being so. Crabbe Huson is fully committed to
this investment style because it has consistently produced competitive results
for investors. It's an approach we believe is worthy of your trust.
5
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------------------------------------------
INVESTMENT REVIEW AND DISCUSSION
----------------------------------
In the six months following our last report, the market has displayed volatility
to a degree that has not been seen since 1994. Of course, any discussion of
relative turbulence must be held within the context of the market's leadership
stocks -- particularly, the very few large-cap issues to which most investment
capital has been attracted and the ones that drive the indices. Though the break
in the upward trend was welcome and played to the benefit of our equity
portfolios, a more significant trend has not yet changed in a meaningful way:
the current market has broadened to a degree, but still is very much two-tiered.
Our equity funds have largely benefited from the broadening into secondary
issues, but our belief is that the popular indices remain highly concentrated,
and thus present a fair degree of risk.
The bond market has been fairly active over the last six months, particularly in
March when the Federal Reserve (the Fed) hiked interest rates by a quarter of a
point. Despite the fairly consistent activity in the market, we kept fixed
income portfolios fairly quiet. The reserved stance has been to our benefit, as
bonds recovered their pre-rate hike losses.
Here's a review of the markets:
EQUITY MARKET
Performance by Crabbe Huson's lineup of equity funds was mixed for the first
half of fiscal 1997. Benefiting from the turbulence late in the reporting
period, the Special and Small Cap Funds performed very well. Returns for the
Equity and Asset Allocation Funds, which participate more actively in the mid-
to large-cap arenas, were overall positive, but not as strong.
Its unprecedented nature makes the recent environment in which these funds
operate an interesting study in market dynamics. Capital inflow into equities
continues at a torrid pace. Index mutual funds, often an available option in
401(k) plans and other retirement vehicles, have attracted a great deal of this
investment capital. Funds emulating the S&P 500 Index are particular favorites,
and the money flowing through these funds into the market has concentrated
performance (to an extreme degree, we believe) in the upper tier of the index.
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This was very well illustrated in a NEWSWEEK article from the April 7, 1997
issue, in which the author asked Birinyi Associates to break down 1996 returns
for the S&P 500 Index. The results tell us all that glitters is not gold:
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1996 RETURNS FOR THE S&P 500 (WITHOUT DIVIDEND
INCOME)
<S> <C>
Without the 100 Largest-Cap
5.40% Stocks
9.10% Without the 50 Largest-Cap Stocks
12.20% Without the 25 Largest-Cap Stocks
20.30% All Stocks
Source: Newsweek
</TABLE>
Obviously, for about 100 stocks, 1996 was a spectacular year, but for the other
400 it was merely average, if not below-par. The performance of the top 100
stocks clearly has driven the positive numbers for the entire index.
If this evidence isn't sufficiently convincing, consider the absolute
performances of the Dow Jones Industrial Average, S&P 500 and Russell 2000
Indices: For the first half of fiscal 1997, the Dow and S&P 500 gained 16.2% and
13.6%, respectively, while the Russell 2000 (which represents a greater
cross-section of the market) was up by only .70%.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
INDEX PERFORMANCE FOR FISCAL YEAR THROUGH
4/30/97
<S> <C>
Dow Jones 16.20%
Russell 2000 0.70%
S&P 500 13.60%
</TABLE>
These numbers paint what to us is a very clear picture: Most stocks have already
"corrected." The ongoing bull market is powered almost exclusively by a very
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narrow, but very visible, section of equities -- the very equities that are
beneficiaries of the index investing craze. The result is a vicious circle:
money flows into index funds; index funds buy the big-name stocks; big-name
stock valuations are pushed higher; higher valuations fuel index fund
performance; performance attracts more money to index funds. Sooner or later the
circle will break. When it does, we believe the stocks we own today will be
positioned to assume new leadership roles in the market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STOCK INFLOWS
(BILLIONS) S&P 500
<S> <C> <C>
7/31/92 6.70 424.21
8/31/92 3.28 414.84
9/30/92 4.55 414.35
10/31/92 5.16 418.68
11/30/92 10.09 430.16
12/31/92 9.45 439.77
1/31/93 10.35 438.78
2/28/93 8.65 443.38
3/31/93 11.88 451.67
4/30/93 11.73 440.19
5/31/93 9.18 450.19
6/30/93 9.39 450.53
7/31/93 9.85 448.13
8/31/93 12.19 463.56
9/30/93 9.17 458.93
10/31/93 13.46 467.84
11/30/93 9.00 461.79
12/31/93 14.71 466.45
1/31/94 18.29 481.61
2/28/94 14.39 467.14
3/31/94 6.70 445.77
4/30/94 11.30 450.91
5/31/94 11.80 456.51
6/30/94 7.70 444.27
7/31/94 9.20 458.25
8/31/94 14.10 475.50
9/30/94 8.10 426.71
10/31/94 9.30 472.35
11/30/94 3.00 453.69
12/31/94 5.40 451.23
1/31/95 6.20 470.42
2/28/95 8.70 487.39
3/31/95 7.20 500.71
4/30/95 10.60 514.71
5/31/95 8.40 533.40
6/30/95 8.20 544.75
7/31/95 13.90 562.06
8/30/95 13.20 561.88
9/30/95 12.60 584.41
10/31/95 9.20 581.50
11/30/95 14.50 605.37
12/31/95 17.00 615.93
1/31/96 28.90 636.02
2/29/96 21.91 640.43
3/31/96 21.40 648.91
4/30/96 26.09 654.17
5/31/96 25.16 669.12
6/30/96 14.48 670.59
7/31/96 5.76 639.95
8/30/96 17.92 651.99
9/30/96 17.42 687.31
10/31/96 13.47 705.27
11/1/96 17.10 757.02
12/31/96 12.22 740.74
1/31/97 29.08 786.16
2/28/97 18.16 790.82
3/31/97 10.75 757.12
4/30/97 15.74 801.34
5/30/97 18.50 848.28
6/30/97 892.91
Source: Investment Company Institute
Flow for November is estimated, source AMG Data
Services
</TABLE>
We're not comfortable risking your money by chasing performance from these
equities and would rather be invested elsewhere. By not participating in this
buying frenzy, one might say our funds have paid a price in opportunity cost. We
believe this is true only to an extent, since an aversion to risk is at the
heart of Crabbe Huson's investment approach.
Some argue that the large-cap crowd is comprised of excellent companies and are
worth a look by that virtue alone. It's true, they're quality businesses, but
the fact that they're good COMPANIES doesn't always make them good INVESTMENTS.
Our portfolios are concentrated in the stocks that offer better potential for
upward, rather than downward, movement. While our performance in this
growth-oriented market may have been less than pleasing, long-term shareholders
continue to be rewarded with competitive performance from funds that, thanks to
their conservative nature, should help them sleep well during turbulent periods.
This point was clearly proven during the volatile period of late March through
mid-April. As most equity sectors corrected by better than 10%, Crabbe Huson's
equity family performed extremely well on a relative basis. The Special and
Small Cap Funds, after a very brief decline, began an upward trend that has
lasted through the date of this report. The Equity and Asset Allocation Funds, a
bit slower to recover, handily outperformed most funds in their peer groups, as
well as their comparative market indices.
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As contrarians, we eagerly welcomed the interruption in the upward trend, since
it finally seems to have at least partially broken Wall Street's fixation on the
elite large-cap group and spread its attention to more reasonably priced issues
in the "secondary" area of the market. We're not negative on large-cap stocks by
definition -- we just didn't think it was wise to participate in them at that
moment.
We think the market, in getting out of its current predicament, can take either
the easy way or the hard way: If it takes the easy route, it will continue to
broaden. Obviously, we prefer this option, as we think our stocks will be the
focus of new market attention. If, however, it takes the hard route, it will
continue to narrow before falling of its own weight. In a correction or
prolonged bear market, we believe our stocks, on a relative basis, are
positioned to weather the storm better than equities in the growth category.
Therefore, we believe our funds would see a less violent downward impact than
would growth- or momentum-oriented funds.
Happily, the market appears to be broadening. If it continues to do so, we
believe the funds will continue to respond favorably as Wall Street recognizes
the true underlying value of the stocks we own. In this situation, we would
continue to put available capital to work as we find good companies selling for
reasonable prices.
BOND MARKET
The six-month period ending April 30, 1997 was tepid for bond markets. The yield
on the bellwether 30-year Treasury bond stood at 6.65% on October 31, 1996, and
at 6.95% on April 30, 1997. On the whole, bonds lost about 2% in price, but
gained about 3.5% in coupon rate, providing a total yield of approximately 1.5%
for the reporting period.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
30-YEAR BONDS AND 90-DAY TREASURY BILL
YIELDS
<S> <C> <C>
Bonds T-Bills
10/31/94 7.97% 5.15%
11/30/94 8.00% 5.72%
12/31/94 7.88% 5.69%
1/31/95 7.70% 6.00%
2/28/95 7.45% 5.94%
3/31/95 7.43% 5.88%
4/30/95 7.34% 5.87%
5/31/95 6.65% 5.81%
6/30/95 6.62% 5.57%
7/31/95 6.85% 5.58%
8/31/95 6.65% 5.45%
9/30/95 6.50% 5.42%
10/31/95 6.33% 5.51%
11/30/95 6.13% 5.49%
12/31/95 5.95% 5.08%
1/31/96 6.03% 5.05%
2/28/96 6.47% 5.03%
3/31/96 6.67% 5.15%
4/28/96 6.91% 5.16%
5/30/96 6.99% 5.19%
6/30/96 6.87% 5.16%
7/31/96 6.97% 5.31%
8/31/96 7.12% 5.29%
9/30/96 6.93% 5.04%
10/31/96 6.64% 5.15%
11/30/96 6.35% 5.13%
12/31/96 6.64% 5.18%
1/31/97 6.79% 5.15%
2/28/97 6.80% 5.22%
3/31/97 7.10% 5.33%
4/30/97 6.96% 5.24%
5/30/97 6.91% 4.95%
Source: Ned Davis Research, Inc.
</TABLE>
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The weak showing for bonds was due primarily to three factors:
- - Stronger than expected economic growth
During the fourth quarter of 1996, the nation's gross domestic product (GDP)
growth rate jumped from 3.8% in the fourth quarter of 1996, up from 2.1% from
the previous quarter. In the first quarter of 1997, the GDP grew at a 5.6%
clip, the strongest in nine years.
- - Job growth strength
Average monthly payroll growth was 240,000 during the first quarter of 1997,
up from the fourth quarter's 225,000. In addition, as the employment
environment firmed, unemployment fell while wages increased.
- - The Fed's interest rate hike in March
Driven by the explosive economic growth enjoyed in recent months, on March 25,
the Fed confirmed the bond market's fears and raised the federal funds rate
(the rate Federal Reserve member banks charge each other for short-term loans)
from 5.25% to 5.50%.
Although economic growth continues to be very strong, recent data suggests a
slight softening. Payroll growth averaged 140,000 per month in March and April,
retail sales have slowed, and hourly earnings growth has declined. In addition,
what appears to be a long-awaited agreement on a five-year balanced budget plan
has added encouragement to the bond market.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GDP GROWTH
<S> <C>
Quarter Over Quarter Change
12/31/94 3.00%
3/31/95 0.40%
6/30/95 0.70%
9/30/95 3.80%
12/31/95 0.30%
3/31/96 2.00%
6/30/96 4.70%
9/30/96 2.10%
12/31/96 3.80%
3/31/97 5.80%
6/30/1997 est. 2.50%
Source: Dept. of Commerce, Bureau of Economic
Analysis
Reflects revised chain weighted data
</TABLE>
In the midst of a generally active bond market, Crabbe Huson's fixed income
funds made modest portfolio shifts during the first half of the fiscal year (the
last noteworthy moves were made in September 1996, just prior to the start of
the current fiscal year). As the economy strengthened and bond prices began to
fall, we kept average maturities longer than the overall market, believing
prices would recover. Indeed, they did rally, and our portfolios finished
stronger in the fourth calendar quarter of 1996.
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As the first quarter of 1997 progressed, however, yields rose commensurate with
the economic rebound. Because we didn't sell the bonds we owned at the beginning
of the year, our portfolio returns have lagged the indices by a fraction.
However, we continue to be positioned slightly longer in average maturities and
believe the portfolios will benefit as both the economy and manufacturing sector
cool.
REAL ESTATE MARKET
Real estate investment trust (REIT) market indices began to narrow early in the
reporting period and have continued that trend through the early spring. Much
like the stock market, stellar performance was posted by a very few large
capitalization REITs, disproportionately affecting the performance of the REIT
market as a whole.
Real estate-oriented mutual funds continue their growing roles as a presence in
the REIT market. In the first quarter of calendar year 1997, nearly $4.5 billion
of capital was raised in initial and secondary public offerings, $2.5 billion of
which was absorbed by REIT mutual funds. Capitalization of the REIT market is on
a pace to further increase in 1997, probably by about 20 - 25%.
The contrarian approach that is so much a part of our equity and fixed-income
strategy is no less important in our real estate investment management efforts.
Though the Real Estate Investment Fund lagged its comparative index for the six
months ending April 30, we're very comfortable with its positioning and are
keeping a wary eye on the ongoing trend in concentration of capital in the REIT
market.
CLOSING THOUGHT
Financial markets are in uncharted territory. As we evaluate the seemingly
endless enthusiasm about the market, we feel obliged to make this observation:
If it's so good out there in the equity market, the benefits should accrue to
the rank-and-file stocks in the market, not just a select few. If that happens,
we're poised to enter an extraordinarily constructive period for stock
investing. At present, we're sanguine about the general state of the economic
environment in which the markets operate (and believe the list of positive
factors easily outweighs the negatives), but our stance remains cautiously
optimistic.
Market turbulence (and even market corrections), always triggered by some event,
can arrive from the most unpredictable places. For now, economic factors are as
good as they've ever been: there are more jobs than people to fill them,
interest rates are low, the budget deficit is receding. The market reflects much
of this positive outlook and is at high values according to traditional
measures. That means, however, that we're also in a high-risk situation. In
light of the current state of the market, we believe the contrarian investment
model is a very appropriate option for the diversified investor.
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Investment results quoted are historical and include changes in share price and
reinvestment of dividends and capital gains (if any). Data quoted represents
past performance. Future returns and principal value will fluctuate so that an
investor's share, when redeemed, may be worth more or less than the original
cost.
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THE CRABBE HUSON SPECIAL FUND, INC.
INVESTMENT OBJECTIVE: TO PROVIDE SIGNIFICANT LONG-TERM CAPITAL APPRECIATION
THROUGH A FLEXIBLE POLICY OF INVESTING IN A DIVERSIFIED PORTFOLIO OF CAREFULLY
SELECTED STOCKS THAT HAVE SMALL TO MEDIUM MARKET CAPITALIZATIONS. THE FUND MAY
INVEST AS MUCH AS 100% OF ITS ASSETS IN STOCKS, AND MAY HOLD UP TO 25% OF ITS
ASSETS IN SHORT POSITIONS.
INVESTMENT RESULTS
Primary Class
Inception Date April 9, 1987
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 6.59%
14.86% 5 Year 15.62%
Life of Fund 13.27%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The Special Fund performed superbly through the first half of the fiscal year,
both in absolute numbers and relative to its benchmark indices. The portfolio
posted a fiscal year-to-date return of 14.86%, easily outpacing the respective
returns of 1.61% and 3.21% for the Russell 2000 and NASDAQ Composite Indices.
The fund's positive performance was even further pronounced against the backdrop
of the declining market in the second fiscal quarter. For the three-month period
ending April 30, the Special Fund was up 3.96%, versus losses of -6.77% for the
Russell 2000 and -8.63% for the NASDAQ Composite.
It's pleasing to note that fund's long and short(1) positions each contributed
to the fund's outperformance of both its peer group and its comparative indices.
The short position, at 19.10% of total net assets, remains concentrated in the
technology-related issues we believe are overvalued. While some have expressed
concern over this defensive tactic, the short position proved itself by
performing precisely as it should have in the recent sharply declining market:
as a buffer against the turbulence. We remain confident that our skepticism of
the positive long-term consensus on these stocks is well founded, and believe
our position will continue to deliver good results as the year unfolds.
At present, the fund's well diversified portfolio is carefully weighted in the
health care and transportation sectors. Each has contributed measurably to
performance, and we believe the stocks in these areas are poised for continued
growth. Toward the end of calendar year 1996, we reduced our exposure to
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<PAGE>
energy stocks through profit taking and re-employed the funds into new out-of-
favor stocks. In addition to contributing to performance, this move helped
cushion the fund from the impact of the sharp selloff in small-cap stocks late
in the reporting period. We still maintain a slight weighting in the energy
stocks we believe offer promise going forward, and also have a bias toward the
broad category of industrials and basic materials.
On April 9, the Special Fund marked its ten-year anniversary. Because we
encourage shareholders in all our funds to adopt and maintain a long-term
perspective, it's particularly gratifying to note that the fund's long-term
numbers are highly competitive. According to a recent compilation by
Morningstar, the Chicago-based fund research firm, the Special Fund returned an
average of 13.47% for the ten years ending April 30, 1997, placing it first of
13 funds in the Small Cap Blend category(2). The numbers serve as a reassuring
affirmation in the long-term value of our contrarian method.
Looking ahead, we believe a significant number of our stocks are nearing periods
of newfound recognition by the wider market, and accordingly we're very
comfortable with the fund's current positioning. At the same time, the unusual
market dynamics of the last few months has presented us with an expanding menu
of investment opportunities, so we see nothing on the horizon that would prevent
us from constructively putting capital to work. In the absence of a broad
general market selloff, we look forward to continued positive achievements for
the second half of the fiscal year.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
James E. Crabbe John W. Johnson, CFA
</TABLE>
- -------------------
(1) Selling short is a hedging technique whereby stocks are borrowed, sold at
current market value, then purchased at a later date. This strategy would be
followed if it is believed a security's price will decline. If it does decline,
the security may be purchased at a lower price, resulting in a gain. If the
price rises, the security may be purchased at a higher price, resulting in a
loss.
(2) The fund was ranked #11 of 67 and #2 of 25 for the one- and five-year
periods ending 4/30/97, respectively.
14
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 85.2%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 19.9%
464,400 Century Aluminum Company........................... $ 7,662,600
671,500 Crompton & Knowles Corp............................ 14,605,125
420,700 General Chemical Group............................. 9,360,575
57,900 Huntco, Inc........................................ 752,700
734,800 Longview Fibre Company............................. 11,848,650
4,770,200 *Lytton Minerals, Ltd.............................. 11,100,240
982,400 Oregon Steel Mills, Inc............................ 16,209,600
356,800 *Pegasus Gold, Inc................................. 2,475,300
131,100 *Synthetic Industries.............................. 2,523,675
--------------
76,538,465
--------------
CONSUMER CYCLICALS - 5.1%
904,800 *Bombay Company, Inc............................... 3,279,900
153,900 Cato Corp. - Class A............................... 711,788
464,700 *Payless Cashways, Inc............................. 813,225
1,132,100 Phillips-Van Heusen................................ 14,858,812
--------------
19,663,725
--------------
CONSUMER STAPLES - 5.2%
702,100 Fleming Companies.................................. 11,409,125
548,000 Hudson Foods, Inc. - Class A....................... 8,494,000
--------------
19,903,125
--------------
ELECTRONICS/TECHNOLOGY - 0.8%
231,400 *Input/Output, Inc................................. 3,239,600
--------------
ENERGY - 9.1%
637,100 *Forest Oil Corp................................... 8,441,575
400,700 Holly Corp......................................... 9,817,150
1,051,400 Snyder Oil Corp.................................... 16,690,975
--------------
34,949,700
--------------
FINANCIAL - 2.1%
191,500 *Olympic Financial Ltd. ........................... 1,843,188
387,100 *Pico Holdings, Inc................................ 1,645,175
253,300 *Risk Capital Holdings, Inc........................ 4,812,700
--------------
8,301,063
--------------
HEALTHCARE - 21.5%
1,225,500 *Coventry Corp..................................... 15,854,906
384,900 *Healthsource, Inc................................. 8,082,900
930,600 Integrated Health Services......................... 29,895,525
1,226,900 *Mid Atlantic Medical Services..................... 14,569,438
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
15
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C>
HEALTHCARE - (CONTINUED)
1,010,500 *Sun Healthcare Group, Inc......................... $ 14,273,312
--------------
82,676,081
--------------
INDUSTRIALS - 8.9%
1,249,400 *Motivepower Industries............................ 14,680,450
1,262,800 *Rollins Environmental Services.................... 3,630,550
895,500 Wabash National Corp............................... 16,007,062
--------------
34,318,062
--------------
REAL ESTATE INVESTMENT TRUST - 1.0%
270,500 *Catellus Development Corp......................... 3,989,875
--------------
TELECOMMUNICATIONS - 1.2%
212,500 *Brooks Fiber Properties........................... 4,621,875
--------------
TRANSPORTATION - 10.4%
117,600 Airborne Freight Corp.............................. 4,130,700
766,900 Hunt (JB) Transportation Services, Inc............. 10,640,738
310,600 *Landstar System, Inc.............................. 7,959,125
194,200 Teekay Shipping Corp............................... 5,486,150
608,900 *Yellow Corp....................................... 11,721,325
--------------
39,938,038
--------------
Total Common Stocks 328,139,609
--------------
SHORT TERM INVESTMENTS - 7.4%
- -----------------------------------------------------------------------------------
INVESTMENT COMPANY - 1.1%
4,206,600 SSgA U.S. Government Money Market Fund 5.390%**.... 4,206,600
--------------
REPURCHASE AGREEMENT - 6.3%
24,356,942 State Street Bank and Trust Company***(b) 5.00%
5/01/97.......................................... 24,356,942
--------------
Total Short Term Investments 28,563,542
--------------
Total Investments - 92.6% 356,703,151
--------------
(Cost $314,310,582)****
</TABLE>
* Non-income producing security.
** Rate reflects 7 day yield as of April 30, 1997.
*** The repurchase agreement, dated 4/30/97, $24,356,942 due 5/01/97, is
collateralized by
$23,720,000 U.S. Treasury Note, 7.250%, maturing 2/15/16, with a market
value of
$24,845,870.
**** The aggregate cost for federal income tax purpose is identical. Aggregate
gross unrealized
appreciation is $55,621,598 and the aggregate gross unrealized depreciation
is $13,229,029,
resulting in net unrealized appreciation of $42,392,569.
(b) This security is pledged as collateral for short sales.
See accompanying notes to financial statements.
16
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
SECURITIES SOLD SHORT - (19.1%)
- -----------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS
TECHNOLOGY - (19.1%)
88,600 *America Online, Inc............................... $ (3,998,075)
178,900 *Compaq Computers, Corp............................ (15,273,588)
119,000 *Dell Computer, Corp............................... (9,958,812)
434,300 *Gartner Group, Inc. - Class A..................... (11,400,375)
209,400 *Sun Microsystems, Inc............................. (6,033,338)
672,300 *Tellabs, Inc...................................... (26,807,962)
--------------
(73,472,150 )
--------------
Total Securities Sold Short - (19.1%) (73,472,150 )
--------------
(Proceeds $45,903,081)(a)
Other Assets and (Liabilities), Net - 26.5% 102,134,890
--------------
TOTAL NET ASSETS - 100.0% $ 385,365,891
--------------
--------------
</TABLE>
* Non-income producing security.
(a) Aggregate proceeds for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $160,171 and the aggregate
gross unrealized depreciation is $27,729,240, resulting in net
unrealized depreciation of $27,569,069.
See accompanying notes to financial statements.
17
<PAGE>
CRABBE HUSON SMALL CAP FUND
INVESTMENT OBJECTIVE: PROVIDE LONG-TERM CAPITAL APPRECIATION THROUGH A
DIVERSIFIED PORTFOLIO OF CAREFULLY SELECTED STOCKS WITH SMALL MARKET
CAPITALIZATIONS. THE FUND MAY HOLD UP TO 100% OF ITS ASSETS IN EQUITY
SECURITIES.
INVESTMENT RESULTS
Primary Class
Inception Date February 16, 1996
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 15.82%
11.66% Life of Fund 20.05%
</TABLE>
Institutional Class
Inception Date October 10, 1996
<TABLE>
<CAPTION>
SIX MONTHS CUMULATIVE RETURN
ENDING APRIL 30, 1997 SINCE INCEPTION
- --------------------- ----------------------------------
<S> <C> <C>
11.96% 11.56%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The Small Cap Fund, which closed out its first year in mid-February, continues
to be a solid performer in Crabbe Huson's roster of equity funds. For the first
half of fiscal year 1997, the fund returned 11.66%, well ahead of the 1.61% and
3.21% returns posted respectively by the Russell 2000 and NASDAQ Composite
Indices. The institutional class of shares returned 11.96% for the reporting
period.
The fiscal quarter ending April 30 was brutal for the small cap indices, with
the Russell 2000 losing 6.77% and the NASDAQ dropping by 8.63%. The fund fared
much better, finishing the quarter with a modest gain of 0.33%. Combined with a
very strong fiscal first quarter, this good relative performance widened the
fund's lead over most in its peer group.
The fund has had no shortage of buying opportunities. Market volatility often
opens doors for contrarians, and the recent turbulence in the small cap arena
has enabled us to put most available capital to good work. The portfolio was
relatively fully invested through most of the last six months, though profit
taking in the health care sector and in some other special situation stocks
reduced equity holdings to 87% of the fund by the end of April.
Despite migrating out of some health care stocks, the sector remains one of the
fund's largest areas of industry concentration, along with basic materials and
18
<PAGE>
transportation stocks. The latter two are host to some high-quality companies
that are undervalued because of past earnings that have been static or
depressed.
Our strategy for the Small Cap portfolio is to parallel the Special Fund's long
position stocks. Barring a general market downturn, we're optimistic about these
stocks and the fundamentals of their underlying companies. We believe the fund
is well positioned to capitalize on their further recognition by the market.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
James E. Crabbe John W. Johnson, CFA
Portfolio Manager Portfolio Manager
</TABLE>
19
<PAGE>
CRABBE HUSON SMALL CAP FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 86.5%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 22.2%
191,400 Battle Mountain Gold............................... $ 1,100,550
77,800 Century Aluminum Company........................... 1,283,700
25,700 Crompton & Knowles Corp............................ 558,975
80,300 *Essex International Inc........................... 1,445,400
43,200 General Chemical Group............................. 961,200
33,500 Huntco Inc. - Class A.............................. 435,500
460,200 *Lytton Minerals, Ltd.............................. 1,070,884
105,500 Oregon Steel Mills, Inc............................ 1,740,750
174,800 *Pegasus Gold, Inc................................. 1,212,675
49,400 *Synthetic Industries.............................. 950,950
--------------
10,760,584
--------------
CONSUMER CYCLICALS - 6.5%
196,800 *Bombay Company, Inc............................... 713,400
115,200 Cato Corp. - Class A............................... 532,800
486,900 *Payless Cashways, Inc............................. 852,075
81,000 Phillips-Van Heusen................................ 1,063,125
--------------
3,161,400
--------------
CONSUMER STAPLES - 2.9%
54,400 Fleming Companies.................................. 884,000
31,800 Hudson Foods, Inc. - Class A....................... 492,900
--------------
1,376,900
--------------
ELECTRONICS/TECHNOLOGY - 7.4%
94,300 *CCC Information Services.......................... 1,108,025
76,900 *DecisionOne Holdings Corp......................... 1,134,275
87,000 *Input/Output, Inc................................. 1,218,000
14,000 *Mentor Graphics Corp.............................. 98,875
--------------
3,559,175
--------------
ENERGY - 8.4%
74,300 *Forest Oil Corp................................... 984,475
23,600 Holly Corp......................................... 578,200
78,300 Monterey Resources, Inc............................ 1,194,075
41,200 Snyder Oil Corp.................................... 654,050
43,400 Western Gas Resources.............................. 667,275
--------------
4,078,075
--------------
FINANCIAL - 5.5%
47,000 *CB Commercial Real Estate......................... 987,000
84,100 *Olympic Financial Ltd............................. 809,462
45,900 *Risk Capital Holdings, Inc........................ 872,100
--------------
2,668,562
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
20
<PAGE>
CRABBE HUSON SMALL CAP FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
HEALTHCARE - 15.2%
151,600 *Coventry Corp..................................... $ 1,961,325
47,000 *Healthsource, Inc................................. 987,000
10,400 Integrated Health Services......................... 334,100
146,200 *Isolyser Company, Inc............................. 548,250
157,300 *Mid Atlantic Medical Services..................... 1,867,937
115,600 *Sun Healthcare Group, Inc......................... 1,632,850
--------------
7,331,462
--------------
INDUSTRIALS - 5.2%
380,900 *Rollins Environmental Services.................... 1,095,088
79,500 Wabash National Corp............................... 1,421,062
--------------
2,516,150
--------------
TELECOMMUNICATIONS - 2.8%
62,900 *Brooks Fiber Properties........................... 1,368,075
--------------
TRANSPORTATION - 10.4%
27,700 Airborne Freight Corp.............................. 972,963
99,600 Hunt (JB) Transportation Services, Inc............. 1,381,950
24,500 *Hvide Marine Inc. - Class A....................... 422,625
22,000 Knightsbridge Tankers Ltd.......................... 500,500
37,400 *Landstar System, Inc.............................. 958,375
42,200 *Yellow Corp....................................... 812,350
--------------
5,048,763
--------------
Total Common Stocks 41,869,146
--------------
SHORT TERM INVESTMENTS - 9.1%
- -----------------------------------------------------------------------------------
DISCOUNT NOTE - 8.3%
$4,000,000 Federal Home Loan Bank 5.280%** 5/01/97............ 4,000,000
--------------
INVESTMENT COMPANY - 0.8%
408,380 SSgA Money Market Fund 5.390%***................... 408,380
--------------
Total Short Term Investments 4,408,380
--------------
Total Investments - 95.6% 46,277,526
(Cost $45,177,729)****
Other Assets and (Liabilities), Net - 4.4% 2,134,126
--------------
TOTAL NET ASSETS - 100.0% $ 48,411,652
--------------
--------------
</TABLE>
* Non-income producing security.
** Rate reflects purchase yield to maturity.
*** Rate reflects 7 day yield as of April 30, 1997.
**** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $3,709,480 and the
aggregate gross unrealized depreciation is $2,609,683, resulting in
net unrealized appreciation of $1,099,797.
See accompanying notes to financial statements.
21
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
INVESTMENT OBJECTIVE: PRESERVATION OF CAPITAL, CAPITAL APPRECIATION AND INCOME
THROUGH A PORTFOLIO OF STOCKS, FIXED INCOME SECURITIES, CASH AND CASH
EQUIVALENTS. THE FUND CAN HOLD AS MUCH AS 75% OR AS LITTLE AS 20% OF ITS ASSETS
IN COMMON STOCKS.
INVESTMENT RESULTS
Primary Class
Inception Date January 31, 1989
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 4.89%
2.18% 5 Year 10.10%
Life of Fund 9.79%
</TABLE>
Institutional Class
Inception Date October 28, 1996
<TABLE>
<CAPTION>
SIX MONTHS CUMULATIVE RETURN
ENDING APRIL 30, 1997 SINCE INCEPTION
- --------------------- ----------------------------------
<S> <C> <C>
2.44% 3.04%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The Asset Allocation Fund, our medium-risk portfolio, returned 2.18% for the
fiscal half-year, compared to 14.68% for the S&P 500 Index and 1.30% for the
Lehman Brothers Government/Corporate Bond Index. The fund's institutional class
of shares returned 2.44% for the reporting period.
The fund had a moderate start to the fiscal year, returning 3.9% for the quarter
ending January 31. The three months following were more challenging: the
portfolio fell by 1.66%, with the equity portion of the fund primarily
responsible for the disappointing results. The mid-cap heavy stock side of the
fund, it's important to note, closely tracked the returns of the S&P 400 Mid-Cap
and Russell 2000 Indices for the period. Clearly, it was a very challenging
investment environment for any equity fund not participating in the top 100
stocks in the S&P 500.
Though market interest has broadened somewhat, mid- to large-cap equity growth
has struggled in the shadow cast by the top 50 or so stocks leading the indices.
These "star" issues have the seemingly endless benefits of 1) significant
exposure to foreign economies, 2) imminently recognizable names, 3) above-
average growth rates, and 4) extremely predictable quarterly earnings. This
22
<PAGE>
presents very tough competition for other stocks which, despite their attractive
nature, have to battle for attention. We believe growth from the leadership
stocks eventually will have to slow -- fundamentals simply don't support their
continued appreciation at this level. When they do, we think market interest
will broaden into the issues in which we're now concentrated, not simply remain
focused on stocks with good momentum.
On the bond front, we must continue to be wary of wage inflation and job growth,
as the consumer side of the economy simply is not strong enough to push the
economy into high rates of inflation. Going forward, the risk/reward equation
for bonds may be more attractive than stocks over the next six to twelve months.
We're not abandoning our faith in the long-term value of equities, but it's
worth noting that bond returns can at times outstrip that of stocks, all while
providing a portfolio with valuable insurance. Of late, weak bond performance
has made the cost of that insurance high, but the debt market is as fluid as
ever and we're always watching for good opportunities.
As of the date of this report, the Asset Allocation Fund holds 54% stocks, 35%
bonds and 11% cash. We may increase the bond position and decrease stock
exposure if the market remains narrow and if the economy reduces its blistering
rate of growth.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Richard S. Huson, CFA John E. Maack, Jr., CFA
[SIGNATURE] [SIGNATURE]
Marian L. Kessler Robert E. Anton
[SIGNATURE]
Garth R. Nisbet, CFA
</TABLE>
23
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 34.4%
- -----------------------------------------------------------------------------------
AGENCIES - 6.3%
$ 420,000 International Bank For Reconstruction & Development
Floater 5.890%** 8/07/97......................... $ 413,654
1,500,000 Student Loan Marketing Association Treasury Inverse
Floater 4.820%*** 2/11/98........................ 1,491,075
900,000 Federal National Mortgage Association 6.080%
9/25/00.......................................... 884,808
1,200,000 Federal National Mortgage Association 8.250%
12/18/00......................................... 1,260,468
550,000 Tennessee Valley Authority 6.125% 7/15/03.......... 526,625
925,000 Federal National Mortgage Association 5.875%
2/02/06.......................................... 858,169
1,000,000 Federal Home Loan Bank 5.850% 2/21/06.............. 925,840
800,000 Interamerican Development Bank 6.125% 3/08/06...... 755,000
--------------
7,115,639
--------------
COLLATERALIZED MORTGAGE OBLIGATION - 0.5%
591,824 Greenwich Capital Acceptance Inc. GNMA 1993
(Principal Only) - Class B-1 (Amortized Yield to
Maturity) 6.978%................................. 566,116
--------------
CORPORATE BONDS - 11.9%
750,000 Baxter International 7.500% 5/01/97................ 750,000
1,000,000 Norwest Financial Inc. 6.000% 8/15/97.............. 1,000,430
500,000 GMAC 8.000% 10/01/99............................... 515,000
550,000 Upjohn Co. 5.875% 4/15/00.......................... 537,625
600,000 Pepsico, Inc. 5.875% 6/01/00....................... 585,750
400,000 American Express Credit 6.500% 8/01/00............. 396,500
800,000 Ford Motor Credit 6.250% 11/08/00.................. 786,000
600,000 WMX Technologies 6.700% 5/01/01.................... 594,750
725,000 GMAC 9.000% 10/15/02............................... 788,438
600,000 IBM Corp 7.250% 11/01/02........................... 608,250
550,000 JP Morgan & Co. 7.625% 9/15/04..................... 564,438
550,000 Pacific Bell 6.250% 3/01/05........................ 521,125
550,000 Anheuser Busch 7.000% 9/01/05...................... 541,062
700,000 US West Communications 6.625% 9/15/05.............. 677,250
550,000 Bear Stearns Co. 6.875% 10/01/05................... 530,750
600,000 Snap-on, Inc. 6.625% 10/01/05...................... 582,750
975,000 Walt Disney Company 6.750% 3/30/06................. 945,750
700,000 Teleport Communications 9.875% 7/01/06............. 728,000
550,000 Eli Lilly 8.375% 12/01/06.......................... 598,125
600,000 AT&T Corp. 7.750% 3/01/07.......................... 622,500
</TABLE>
** Represents a structured note that pays interest at a rate that increases
(decreases) by a multiple of the peseta/deutchemark exchange rate.
*** Inverse floater represents a security that pays interest at a rate that
increases (decreases) in
the same magnitude as a decline (increase) in the 10-year Constant Maturity
Treasuries
rate minus 180 basis points.
See accompanying notes to financial statements.
24
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
CORPORATE BONDS - (CONTINUED)
$ 550,000 GTE South 6.000% 2/15/08........................... $ 498,437
--------------
13,372,930
--------------
</TABLE>
<TABLE>
<C> <S> <C>
MORTGAGE PASS-THROUGH SECURITIES - 6.5%
105,369 Federal Home Loan Mortgage Corp Pool #281037 9.250%
11/01/16......................................... 111,111
790,377 Federal Home Loan Mortgage Corp Pool #303033 9.000%
4/01/17.......................................... 826,924
1,246,954 Federal Home Loan Mortgage Corp Pool #C80344 7.500%
9/01/25.......................................... 1,240,420
1,317,871 Federal Home Loan Mortgage Corp Pool #D65456 7.000%
11/01/25......................................... 1,281,221
2,004,831 Federal Home Loan Mortgage Corp Pool #C80409 8.000%
6/01/26.......................................... 2,035,384
1,791,715 Federal Home Loan Mortgage Corp Pool #C00495 7.000%
1/01/27.......................................... 1,740,347
--------------
7,235,407
--------------
U.S. GOVERNMENT BONDS - 9.2%
5,410,000 U.S. Treasury Bond 6.000% 2/15/26.................. 4,727,691
5,310,000 U.S. Treasury Bond 6.750% 8/15/26.................. 5,135,142
530,000 U.S. Treasury Bond 6.500.% 11/15/26................ 496,742
--------------
10,359,575
--------------
Total Fixed Income Securities 38,649,667
--------------
COMMON STOCKS - 54.0%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 8.9%
86,400 *Bethlehem Steel Corp.............................. 712,800
20,800 Cyprus Amax Minerals............................... 465,400
24,000 Freeport McMoRan Copper - Class B.................. 699,000
30,300 Great Lakes Chemical Corp.......................... 1,283,963
14,100 International Paper Co............................. 595,725
87,600 Louisiana Pacific Corp............................. 1,631,550
14,400 Mead Corp.......................................... 808,200
63,092 Millenium Chemicals, Inc........................... 1,119,883
95,800 *National Steel Corp. - Class B.................... 946,025
19,000 Newmont Mining Corp................................ 657,875
29,100 Santa Fe Pacific Gold Corp......................... 429,225
21,300 WMX Technologies, Inc.............................. 625,687
--------------
9,975,333
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
25
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
CONSUMER CYCLICALS - 9.1%
35,300 American Greetings Corp. - Class A................. $ 1,129,600
39,200 *Costco Companies, Inc............................. 1,131,900
50,500 Ford Motor Company................................. 1,754,875
54,700 Intimate Brands, Inc............................... 1,018,788
98,700 Limited, Inc....................................... 1,788,937
41,100 Readers Digest Association - Class A............... 945,300
51,100 Singer Co.......................................... 945,350
52,300 *Toys R Us, Inc.................................... 1,490,550
--------------
10,205,300
--------------
CONSUMER STAPLES - 4.9%
21,200 Albertson's, Inc................................... 699,600
47,400 *General Nutrition Companies....................... 1,019,100
36,400 *Outback Steakhouse, Inc........................... 714,350
24,800 Quaker Oats........................................ 992,000
44,800 Tambrands, Inc..................................... 2,105,600
--------------
5,530,650
--------------
ENERGY - 4.1%
12,700 Burlington Resources, Inc.......................... 538,163
15,500 ENSERCH Corp....................................... 304,188
12,900 *ENSERCH Exploration............................... 114,487
64,500 *Noble Drilling Corp............................... 1,120,687
16,400 Panenergy Corp..................................... 725,700
16,700 Tidewater, Inc..................................... 670,088
61,100 Union Texas Petroleum Holdings, Inc................ 1,153,262
--------------
4,626,575
--------------
FINANCIAL - 0.9%
11,700 Advanta Corp. - Class B............................ 260,325
10,100 ITT Hartford Group, Inc............................ 752,450
--------------
1,012,775
--------------
HEALTHCARE - 2.1%
59,100 *Medpartners, Inc.................................. 1,078,575
16,300 Pharmacia & Upjohn, Inc............................ 482,888
17,900 *Scherer R.P. Corp................................. 823,400
--------------
2,384,863
--------------
INDUSTRIALS - 5.7%
46,100 Cincinnati Milacron, Inc........................... 933,525
45,800 *Detroit Diesel Corp............................... 784,325
62,000 *Gulfstream Aerospace Corp......................... 1,581,000
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
26
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
INDUSTRIALS - (CONTINUED)
59,100 McDermott International, Inc....................... $ 1,093,350
31,500 *New Holland NV.................................... 696,938
37,700 *USG Corp.......................................... 1,291,225
--------------
6,380,363
--------------
REAL ESTATE INVESTMENT TRUST - 0.9%
27,900 Spieker Properties, Inc............................ 973,012
--------------
TECHNOLOGY - 7.2%
44,500 AMP, Inc........................................... 1,596,438
7,500 *Cisco Systems, Inc................................ 388,125
26,800 Electronic Data Systems Corp....................... 894,450
45,900 *General Instrument Corp........................... 1,072,912
24,700 *National Semiconductor Corp....................... 617,500
26,200 *Silicon Graphics.................................. 389,725
164,600 *Tandem Computers, Inc............................. 2,119,225
19,000 *U.S. Robotics Corp................................ 961,875
--------------
8,040,250
--------------
TELECOMMUNICATIONS - 5.9%
44,003 *Cox Communications, Inc. - Class A................ 858,059
117,100 *LCI International, Inc............................ 1,946,787
19,100 NYNEX Corp......................................... 988,425
91,800 *Tele-Communications Inc. - Group A................ 1,267,988
92,350 *U.S. West Media Group............................. 1,593,037
--------------
6,654,296
--------------
TRANSPORTATION - 2.2%
11,300 *AMR Corp.......................................... 1,052,313
51,500 Southwest Airlines................................. 1,416,250
--------------
2,468,563
--------------
UTILITIES - 2.1%
63,400 Entergy Corp....................................... 1,481,975
35,400 PG&E Corp.......................................... 849,600
--------------
2,331,575
--------------
Total Common Stocks 60,583,555
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
27
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
SHORT TERM INVESTMENTS - 11.0%
- -----------------------------------------------------------------------------------
<C> <S> <C>
DISCOUNT NOTE - 9.8%
$ 11,000,000 Federal Home Loan Bank 5.280% 5/01/97****.......... $ 11,000,000
INVESTMENT COMPANY - 1.2%
1,325,936 SSgA Money Market Fund 5.390%(a)................... 1,325,936
--------------
Total Short Term Investments 12,325,936
--------------
Total Investments - 99.4% 111,559,158
(Cost $111,588,905)(b)
Other Investments(c) - 17.1% 19,185,703
(Cost $19,185,703)
Other Assets and (Liabilities), Net - (16.5%) (18,489,014 )
--------------
TOTAL NET ASSETS - 100.0% $ 112,255,847
--------------
--------------
</TABLE>
**** Rates reflect purchase yield to maturity.
(a) Rate reflects 7 day yield as of April 30, 1997.
(b) The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $4,413,507 and the
aggregate gross unrealized depreciation is $4,443,254, resulting in
net unrealized depreciation of $29,747.
(c) Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1997, the
market value of the securities on loan is $18,858,768.
See accompanying notes to financial Statement.
28
<PAGE>
CRABBE HUSON EQUITY FUND
INVESTMENT OBJECTIVE: TO PROVIDE LONG-TERM CAPITAL APPRECIATION THROUGH A
DIVERSIFIED PORTFOLIO OF WIDELY AND ACTIVELY TRADED COMMON STOCKS WITH MEDIUM TO
LARGE MARKET CAPITALIZATIONS. THE FUND MAY HAVE UP TO 100% OF ITS ASSETS
INVESTED IN COMMON STOCKS.
INVESTMENT RESULTS
Primary Class
Inception Date January 31, 1989
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 6.06%
2.97% 5 Year 14.01%
Life of Fund 13.62%
</TABLE>
Institutional Class
Inception Date October 3, 1996
<TABLE>
<CAPTION>
SIX MONTHS CUMULATIVE RETURN
ENDING APRIL 30, 1997 SINCE INCEPTION
- --------------------- ----------------------------------
<S> <C> <C>
3.17% 1.55%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
For the fiscal year to date, the Crabbe Huson Equity Fund returned 2.97%,
significantly trailing the S&P 500 Index return of 14.68%. The fund's
institutional class of shares returned 3.17% for the reporting period.
Against the backdrop of index performance, this is a disappointing number;
however, the fund's performance is commensurate with 1) its exposure to stocks
that by-and-large aren't in the section of thirty to fifty market leaders, and
2) its aversion to risk. Certainly, we're striving for better absolute
performance in the second half of the fiscal year, but more importantly, we're
working to keep the fund out of what could turn into very turbulent waters
during a market downturn.
Early in the reporting period, it appeared that the market was beginning to warm
to contrarian stocks. Cash flows into mutual funds remained strong, but the
market had begun an expansion beyond the handful of large-cap stocks that have
dominated performance since 1995. In January, however, the market returned to
its old ways as most fund managers poured the dollars they received
29
<PAGE>
into the large, liquid stocks that displayed any degree of earnings visibility.
The Equity Fund portfolio was held in check by the market's refocused attention
on these spotlight stocks.
Notwithstanding a mid-March correction, the S&P 500 continued its narrow rise
through the end of April, fueled both by performance-chasers and, we believe, a
growing sense of fear. So disparate is the gap between the large-cap crowd and
the others in the index that without these big names, the S&P 500 actually would
have been DOWN through March.
Our management decisions for the Equity Fund (and for all equity funds in the
Crabbe Huson family) are based on two strategies: long-term capital growth from
good companies and avoiding unnecessary risk. We continue to invest in companies
for which we can identify a valuation floor and where potential disappointments
presumably have been discounted in the price of the stocks. While the results of
this strategy may vary from the market over the short term, it's the risk-averse
approach that represents the hallmark of our strategy and historically has
provided competitive long-term returns.
We continue to believe the market must either broaden beyond the overvalued
growth stocks or topple of its own weight. There is evidence that interest is
broadening to include the issues in the Equity Fund's portfolio, and we are
confident in the fund's long-term potential.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Richard S. Huson, CFA John E. Maack, Jr., CFA
[SIGNATURE] [SIGNATURE]
Marian L. Kessler Robert E. Anton
</TABLE>
30
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 95.0%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 14.7%
464,000 *Bethlehem Steel Corp.............................. $ 3,828,000
108,900 Cyprus Amax Minerals............................... 2,436,638
129,400 Freeport McMoRan Copper - Class B.................. 3,768,775
149,900 Great Lakes Chemical Corp.......................... 6,352,012
56,200 International Paper Co............................. 2,374,450
469,500 Louisiana Pacific Corp............................. 8,744,437
70,500 Mead Corp.......................................... 3,956,813
319,335 Millenium Chemicals, Inc........................... 5,668,196
555,900 *National Steel Corp. - Class B.................... 5,489,512
98,800 Newmont Mining Corp................................ 3,420,950
151,000 Santa Fe Pacific Gold Corp......................... 2,227,250
135,300 WMX Technologies, Inc.............................. 3,974,438
--------------
52,241,471
--------------
CONSUMER CYCLICALS - 16.1%
190,100 American Greetings Corp. - Class A................. 6,083,200
207,800 *Costco Companies, Inc............................. 6,000,225
322,800 Ford Motor Company................................. 11,217,300
281,400 Intimate Brands, Inc............................... 5,241,075
551,100 Limited, Inc....................................... 9,988,688
218,500 Readers Digest Association......................... 5,025,500
318,000 Singer Co.......................................... 5,883,000
271,700 *Toys R Us, Inc.................................... 7,743,450
--------------
57,182,438
--------------
CONSUMER STAPLES - 8.5%
134,200 Albertson's, Inc................................... 4,428,600
250,400 *General Nutrition Companies....................... 5,383,600
186,000 *Outback Steakhouse, Inc........................... 3,650,250
158,200 Quaker Oats........................................ 6,328,000
223,300 Tambrands, Inc..................................... 10,495,100
--------------
30,285,550
--------------
ENERGY - 7.6%
67,900 Burlington Resources, Inc.......................... 2,877,263
82,500 ENSERCH Corp....................................... 1,619,062
129,600 *ENSERCH Exploration............................... 1,150,200
400,200 *Noble Drilling Corp............................... 6,953,475
86,000 Panenergy Corp..................................... 3,805,500
109,200 Tidewater, Inc..................................... 4,381,650
325,900 Union Texas Petroleum Holdings, Inc................ 6,151,362
--------------
26,938,512
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
31
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
FINANCIAL - 1.7%
61,600 Advanta Corp. - Class B............................ $ 1,370,600
64,100 ITT Hartford Group, Inc............................ 4,775,450
--------------
6,146,050
--------------
HEALTHCARE - 3.8%
361,200 *Medpartners, Inc.................................. 6,591,900
88,400 Pharmacia & Upjohn, Inc............................ 2,618,850
93,100 *Scherer R.P. Corp................................. 4,282,600
--------------
13,493,350
--------------
INDUSTRIALS - 10.1%
239,600 Cincinnati Milacron, Inc........................... 4,851,900
241,900 *Detroit Diesel Corp............................... 4,142,538
324,300 *Gulfstream Aerospace Corp......................... 8,269,650
374,900 McDermott International, Inc....................... 6,935,650
163,200 *New Holland NV.................................... 3,610,800
239,600 *USG Corp.......................................... 8,206,300
--------------
36,016,838
--------------
REAL ESTATE INVESTMENT TRUST - 1.6%
165,600 Spieker Properties, Inc............................ 5,775,300
--------------
TECHNOLOGY - 13.6%
226,300 AMP, Inc........................................... 8,118,513
50,400 *Cisco Systems, Inc................................ 2,608,200
169,300 Electronic Data Systems Corp....................... 5,650,387
267,300 *General Instrument Corp........................... 6,248,138
158,200 *National Semiconductor Corp....................... 3,955,000
163,100 *Silicon Graphics.................................. 2,426,112
1,029,300 *Tandem Computers, Inc............................. 13,252,237
121,000 *U.S. Robotics Corp................................ 6,125,625
--------------
48,384,212
--------------
TELECOMMUNICATIONS - 9.8%
239,719 *Cox Communications, Inc. - Class A................ 4,674,521
614,000 *LCI International, Inc............................ 10,207,750
113,700 NYNEX Corp......................................... 5,883,975
487,700 *Tele-Communications Inc. - Group A................ 6,736,356
426,700 *U.S. West Media Group............................. 7,360,575
--------------
34,863,177
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
32
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
TRANSPORTATION - 4.1%
61,100 *AMR Corp.......................................... $ 5,689,937
325,600 Southwest Airlines................................. 8,954,000
--------------
14,643,937
--------------
UTILITIES - 3.4%
152,626 Entergy Corp....................................... 7,790,888
184,200 PG&E Corp.......................................... 4,420,800
--------------
12,211,688
--------------
Total Common Stocks 338,182,523
--------------
SHORT TERM INVESTMENTS - 5.1%
- -----------------------------------------------------------------------------------
DISCOUNT NOTES** - 4.8%
FEDERAL HOME LOAN BANK - 4.8%
$ 15,000,000 5.280% 5/01/97..................................... 15,000,000
295,000 5.150% 5/20/97..................................... 294,198
640,000 5.380% 6/18/97..................................... 635,409
20,000 5.240% 6/19/97..................................... 19,857
80,000 5.230% 7/28/97..................................... 78,977
250,000 5.490% 7/30/97..................................... 246,569
130,000 5.470% 8/01/97..................................... 128,183
510,000 5.480% 8/04/97..................................... 502,625
80,000 5.280% 8/29/97..................................... 78,592
--------------
16,984,410
--------------
INVESTMENT COMPANY - 0.3%
1,025,563 SSgA Money Market Fund 5.390%***................... 1,025,563
--------------
Total Short Term Investments 18,009,973
--------------
Total Investments - 100.1% 356,192,496
(Cost $351,196,926)****
Other Investments(a) - 13.8% 49,233,313
(Cost $49,233,313)
Other Assets and (Liabilities), Net - (13.9%) (49,566,372 )
--------------
TOTAL NET ASSETS - 100.0% $ 355,859,437
--------------
--------------
</TABLE>
* Non-income producing security.
** Rates reflect purchase yield to maturity.
*** Rate reflects 7 day yield as of April 30, 1997.
**** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $25,299,381 and the
aggregate gross unrealized depreciation is $20,303,811, resulting in
net unrealized appreciation of $4,995,570.
(a) Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1997, the
market value of the securities on loan is $48,092,097.
See accompanying notes to financial statements.
33
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
INVESTMENT OBJECTIVE: TO PROVIDE CURRENT INCOME AND POTENTIAL CAPITAL
APPRECIATION THROUGH EQUITY SECURITIES OF REAL ESTATE INVESTMENT TRUSTS (REITS)
AND OTHER REAL ESTATE INDUSTRY COMPANIES. UNDER NORMAL CIRCUMSTANCES, AT LEAST
75% OF THE FUND WILL BE INVESTED IN SUCH SECURITIES.
INVESTMENT RESULTS
Primary Class
Inception Date April 1, 1994
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 27.45%
9.47% Life of Fund 14.15%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
Continuing its solid run from last year, the Real Estate Investment Fund
returned 9.47% for the first half of the 1997 fiscal year, compared to the
13.29% posted by the Morgan Stanley REIT Index.
The disparity in the returns is due chiefly to an ongoing narrowing in the
leadership of the Morgan Stanley REIT Index (a real estate securities market
indicator), similar to trends in the stock market. In the opening months of the
fiscal year, the outstanding performance of a few large capitalization REITs
disproportionately affected that of the market as a whole, affecting our
relative performance. Though this trend continued into early 1997, real estate
market performance since that time has been comparatively flat. The Morgan
Stanley REIT Index returned only .22% for the first calendar quarter, and
discrete sectors of the REIT market finished mixed: five sectors advanced, five
declined.
As is the case with our stock portfolios, the contrarian style is the rule of
the day for real estate investments. While we're mindful of the success of a
select group of companies, we will continue to buy REITs that have
underperformed for a period of time, whose current pricing offers good relative
value and whose future performance we believe is likely to be buoyed by a
clearly identifiable catalyst. We believe this strategy will produce higher
current dividends and above-average total returns with less volatility. This is
not to imply that we won't own any star performers -- we're more interested in
buying tomorrow's stars, not yesterday's.
Despite recent moderate underperformance, we're highly optimistic about the Real
Estate Investment Fund's portfolio. Two areas of concentration at present
34
<PAGE>
are apartments and factory outlets. Moderate construction of new apartments,
higher interest rates and a dwindling inventory of cheap land are driving up
housing costs, which should be good for apartments. In the case of factory
outlets, this once high-flyer has dramatically underperformed for nearly two
years. We believe that over the next six months, potential merger activity and
better investor understanding of outlet retail economics will help boost
interest in this sector.
The macroeconomic backdrop for real estate continues to look favorable. The
Fed's rate increase in March, along with above-average industrial production and
employment growth are conducive to increased demand for most types of space.
Higher interest rates push up the costs of new construction, prompting
developers and capital suppliers to carefully consider adding any new supply.
We remain highly confident that the real estate sector will continue to present
good opportunities going forward, and that investors will benefit both from
competitive performance and an added degree of portfolio diversification.
[SIGNATURE]
Jay L. Willoughby, CFA
35
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- --------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 98.9%
- ------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST - 98.9%
APARTMENT - 32.3%
27,900 Ambassador Apartments, Inc......................... $ 680,063
50,000 Columbus Realty Trust.............................. 1,056,250
56,500 Evans Withycombe Residential....................... 1,115,875
24,500 Merry Land & Investment Company.................... 502,250
21,100 Mid-America Apartment Communities.................. 545,962
63,700 Oasis Residential, Inc............................. 1,417,325
39,300 Pacific Gulf Properties, Inc....................... 830,212
33,800 Security Capital Atlantic.......................... 726,700
40,700 Smith Charles Residential.......................... 1,103,987
46,200 Summit Properties, Inc............................. 912,450
41,706 United Dominion Realty Trust....................... 573,458
--------------
9,464,532
--------------
LODGING - 7.4%
21,000 Boykin Lodging Trust, Inc.......................... 451,500
24,650 FelCor Suite Hotels, Inc........................... 884,319
2,106 *Homestead Village, Inc............................ 36,329
1,413 *Homestead Village, Inc. - Warrants................ 11,127
43,000 RFS Hotel Investors, Inc........................... 774,000
--------------
2,157,275
--------------
MALLS - 6.0%
44,340 Simon DeBartolo Group, Inc......................... 1,269,232
39,750 Taubman Centers, Inc............................... 501,844
--------------
1,771,076
--------------
OFFICE/INDUSTRIAL - 23.7%
33,200 Arden Realty Group................................. 825,850
39,700 CarrAmerica Realty Corp............................ 1,106,637
31,200 Cousin Properties, Inc............................. 799,500
4,000 Highwoods Properties, Inc.......................... 124,500
5,500 Kilroy Realty Corp................................. 129,250
60,700 Liberty Property Trust............................. 1,464,388
54,200 Prentiss Properties................................ 1,280,475
60,600 Security Capital Industrial........................ 1,219,575
--------------
6,950,175
--------------
OTHER - 1.8%
11,900 Getty Realty Corp. ................................ 199,325
13,300 Golf Trust of America, Inc......................... 339,150
--------------
538,475
--------------
</TABLE>
*Non-income producing security.
See accompanying notes to financial statements.
36
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- --------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - (CONTINUED)
- ------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S> <C>
OUTLET CENTERS - 13.5%
59,800 Horizon Group, Inc................................. $ 769,925
130,400 Prime Retail, Inc.................................. 1,581,100
64,700 Tanger Factory Outlet Center....................... 1,617,500
--------------
3,968,525
--------------
SHOPPING CENTER - 12.1%
8,300 Bradley Real Estate................................ 158,738
9,000 Commercial Net Lease Realty........................ 131,625
19,700 Developers Diversified Realty Corp................. 726,438
57,750 Glimcher Realty Trust.............................. 1,032,281
67,700 Kranzco Realty Trust............................... 1,066,275
25,500 Malan Realty Investors, Inc........................ 436,687
--------------
3,552,044
--------------
STORAGE - 2.1%
12,800 Shurgard Storage................................... 336,000
11,000 Storage Trust Realty............................... 264,000
--------------
600,000
--------------
Total Common Stocks 29,002,102
--------------
SHORT TERM INVESTMENTS - 0.4%
- ------------------------------------------------------------------------------------
INVESTMENT COMPANY - 0.4%
128,940 SSgA Money Market Fund 5.39%**..................... 128,940
--------------
Total Investments - 99.3% 29,131,042
(Cost $27,953,716)***
Other Investments**** - 16.7% 4,903,907
(Cost $4,903,907)
Other Assets and (Liabilities), Net - (16.0%) (4,701,120 )
--------------
TOTAL NET ASSETS - 100.0% $ 29,333,829
--------------
--------------
</TABLE>
** Rate reflects 7 day yield as of April 30, 1997.
*** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $1,817,309 and the
aggregate gross unrealized depreciation is $639,983, resulting in net
unrealized appreciation of $1,177,326.
**** Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1997, the
market value of the securities on loan is $4,686,137.
See accompanying notes to financial statements.
37
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
INVESTMENT OBJECTIVE: TO PROVIDE CAPITAL PRESERVATION AND A HIGH LEVEL OF
CURRENT INCOME BY INVESTING AT LEAST 80% OF ITS ASSETS IN TAX-EXEMPT MUNICIPAL
BONDS ISSUED BY THE STATE OF OREGON AND ITS POLITICAL SUBDIVISIONS. TYPICALLY,
THE ONLY TAXABLE INCOME EARNED BY THE FUND IS THROUGH OVERNIGHT INTEREST ON
TEMPORARY CASH. SHARES OF THE FUND ARE AVAILABLE ONLY TO RESIDENTS OF THE STATE
OF OREGON.
INVESTMENT RESULTS
Primary Class
Inception Date October 4, 1984
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 3.67%
1.41% 5 Year 5.41%
10 Year 5.72%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The Oregon Tax-Free(1) Fund posted a relatively strong 1.41% return for the
first half of the fiscal year, lagging the Lehman Brothers Municipal Index
(10-year average maturity) return of 2.29%. The fund's comparison to the index
is useful for context; however, we're mindful that it's not an entirely accurate
comparison in that the index is a composite of municipal bonds from across the
country, not just of Oregon's bonds. Further, the index often includes bonds of
lower quality, while the Oregon Tax-Free Fund participates only in
investment-grade issues. Content quality is high: 60% of the bonds we own either
are rated AAA or are pre-refunded in U.S. Treasury obligations.
The fund's average maturity remains stable at approximately nine years. In the
taxable bond market, this number would equate to an average maturity; however,
it's actually relatively intermediate compared to a majority of the municipal
bond indices. Because of this intermediate bias, we believe the fund should
outperform if rates increase, but probably will lag after any significant drop
in rates. If credit deteriorates, we think the fund will outperform because most
of its competitors have taken longer positions in the market.
Oregon Measure 47, which passed last November, will have a mixed impact on
Oregon's municipal bond market. Under the terms of the measure, the issuing of
any new supply may be curtailed, thereby supporting prices of outstanding
- -------------------
(1) Shareholders may be subject to capital gains, ordinary income and
alternative minimum taxes. Consult your tax advisor.
38
<PAGE>
securities. However, some lower-quality issues, which are not owned by the fund,
may be negatively impacted as the competition for additional state and local tax
revenue continues to provide an increasing challenge for many issuers.
Oregon Measure 50, which is scheduled for a vote in May, is designed to restore
some of the tax revenue lost under the passage of Measure 47. If it passes,
revenues statewide should be enhanced, a development that would generally be
good for the health of the state's obligations.
As was the case at the start of the fiscal year, there's nothing threatening on
the political horizon, and further tax abatement appears unlikely. The Oregon
bond market, and to a degree the fund, probably will be impacted more by changes
in interest rates or fine-tuning of the tax code. We have maintained our average
maturity, but may elect to lengthen the average if yields increase. We believe
the fund is positioned well and should provide competitive returns for the next
half of the fiscal year.
[SIGNATURE]
Garth R. Nisbet, CFA
Portfolio Manager
39
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 97.6%
- -----------------------------------------------------------------------------------
EDUCATION - 42.8%
$ 150,000 Josephine County Oregon School District 5.750%
6/01/02 (FGIC)................................... $ 156,375
340,000 Hood River County Oregon School District 6.000%
6/01/03 (AMBAC).................................. 360,825
200,000 Multnomah County Oregon School District 4.250%
6/01/03.......................................... 193,000
210,000 Washington & Clackamas School District 5.250%
6/01/03.......................................... 211,838
300,000 Deschutes G.O. School District #1 5.800% 2/01/04... 311,625
500,000 Deschutes/Jefferson County School District 5.300%
6/01/04 (MBIA)................................... 508,125
300,000 Jefferson County School District #509J 6.500%
6/15/04 (FSA).................................... 326,250
250,000 Washington County School District 6.200%
9/01/04*......................................... 264,375
15,000 Washington & Clackamas School District 5.000%
1/01/05.......................................... 14,756
400,000 University Puerto Rico Services 5.100% 6/01/05
(MBIA)........................................... 407,000
410,000 Washington & Clackamas School District 5.250%
6/01/05.......................................... 411,538
250,000 Clackamas & Washington County School District #003
7.200% 10/01/05*................................. 265,313
125,000 Marion & Polk County School District 5.700%
10/01/05*........................................ 130,313
160,000 Marion County Oregon School District 6.000%
11/01/05 (FGIC).................................. 170,400
200,000 Clackamas Community College 5.100% 12/01/05........ 200,250
1,015,000 Crook County Oregon School District 4.700% 2/01/06
(FSA)............................................ 970,594
435,000 Jefferson County Oregon School District 5.400%
6/15/06 (FSA).................................... 440,981
135,000 Portland Oregon Community College 5.800% 7/01/06... 139,219
150,000 Marion & Polk County Oregon School District 4.750%
10/01/06*........................................ 145,688
435,000 Multnomah County School District 5.000% 3/01/07.... 430,106
335,000 Jackson County Oregon School District 5.200%
6/01/07 (FSA).................................... 335,000
450,000 Josephine County Oregon School District 5.750%
6/01/07 (FGIC)................................... 470,812
1,000,000 Salem Keizer School District #24-J 5.500% 6/01/07
(FGIC)........................................... 1,018,750
185,000 Washington County School District 4.950% 6/01/07
(FSA)............................................ 182,687
950,000 Multnomah County School District 5.600% 12/01/07
(FGIC)........................................... 984,437
240,000 Lane County Area Education District 4.850%
6/01/08.......................................... 231,600
</TABLE>
*Dates reflect pre-refunded dates.
See accompanying notes to financial statements.
40
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
EDUCATION - (CONTINUED)
$ 160,000 Marion County Oregon School District 4.850% 6/01/08
(AMBAC).......................................... $ 154,800
200,000 Clackamas & Washington County School District #003
7.250% 10/01/09*................................. 212,500
765,000 Salem Educational Facility (Revenue) 6.000%
4/01/10.......................................... 787,950
225,000 Marion & Polk County School District #24-J 6.000%
10/01/10*........................................ 237,656
100,000 Washington County School District 6.100% 6/01/12
(FSA)............................................ 104,750
--------------
10,779,513
--------------
ELECTRIC UTILITY - 3.4%
310,000 Emerald Peoples Utility District 6.300%
11/01/01*........................................ 329,375
250,000 Emerald Peoples Utility District 5.450% 11/01/03
(AMBAC).......................................... 257,188
250,000 Emerald Peoples Utility District 6.500%
11/01/03*........................................ 268,125
--------------
854,688
--------------
HEALTH & HOSPITAL - 3.5%
250,000 Clackamas County Hospital Facility Revenue 5.800%
3/01/02 (MBIA)................................... 259,062
300,000 Clackamas County Hospital (Sisters of Providence)
6.200% 10/01/02.................................. 321,000
293,000 Deschutes County (St. Charles Medical Center)
6.750% 1/01/06*.................................. 310,214
--------------
890,276
--------------
MISCELLANEOUS - 13.5%
250,000 City of Portland 6.950% 4/01/99.................... 261,250
90,000 Puerto Rico G.O. 7.125% 7/01/02.................... 92,268
240,000 Puerto Rico G.O. 7.125% 7/01/02.................... 245,743
100,000 State of Oregon G.O. 9.000% 4/01/03................ 120,250
175,000 State of Oregon G.O. 7.200% 7/01/04................ 197,969
205,000 State of Oregon G.O. 8.200% 7/01/04................ 243,437
110,000 State of Oregon G.O. 6.000% 8/01/04................ 117,150
200,000 State of Oregon G.O. 9.000% 10/01/04............... 220,250
355,000 State of Oregon G.O. 6.750% 5/01/05................ 394,494
250,000 State of Oregon G.O. (Veterans) 7.250% 7/01/06..... 289,375
300,000 Salem Oregon - Series A 5.875% 1/01/07............. 307,875
200,000 State of Oregon G.O. 7.250% 1/01/07................ 232,000
200,000 State of Oregon G.O. (Veterans) 8.250% 1/01/07..... 246,250
100,000 State of Oregon G.O. (Alt Energy) 6.400% 1/01/08... 103,125
180,000 State of Oregon G.O. 9.200% 4/01/08................ 238,950
</TABLE>
*Dates reflect pre-refunded dates.
See accompanying notes to financial statements.
41
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
MISCELLANEOUS - (CONTINUED)
$ 100,000 Oregon State Veterans Welfare 5.550% 4/01/09....... $ 101,250
--------------
3,411,636
--------------
PUBLIC IMPROVEMENTS - 7.2%
335,000 Central Lincoln PUD 6.500% 1/01/02................. 355,519
350,000 City of Portland (Urban Renewal) 5.700% 6/01/04.... 363,562
400,000 Metro Oregon Open Spaces Program 4.900% 9/01/07.... 388,000
270,000 Port of Morrow (Pollution Control) 6.375%
4/01/08*......................................... 288,225
160,000 Portland Oregon Building Service 4.750% 4/01/08.... 154,600
150,000 Metro Oregon Regional Center 5.000% 8/01/10........ 140,438
135,000 Bend County Library 5.375% 6/01/11 (AMBAC)......... 134,156
--------------
1,824,500
--------------
REFUNDING BONDS - 6.8%
400,000 Metropolitan Service District 7.000% 7/01/01*...... 431,000
400,000 Oregon State Department General Services 6.100%
9/01/06.......................................... 422,500
250,000 Oregon State Revenue - Series B 6.250% 1/01/08*.... 267,188
270,000 Metropolitan Service District 6.600% 7/01/11*...... 286,875
185,000 Oregon Economic Development Dept-Series B 6.350%
1/01/13*......................................... 198,181
100,000 Oregon State Department General Services 7.200%
1/15/15*......................................... 108,375
--------------
1,714,119
--------------
SEWER AND WATER - 13.8%
260,000 Portland Oregon Sewer System Revenue 5.550%
6/01/04.......................................... 270,400
350,000 Portland Oregon Sewer System 5.750% 10/01/05
(FGIC)........................................... 367,500
500,000 Washington County Sewer System 5.800% 10/01/05
(AMBAC).......................................... 524,375
350,000 Washington County Sewer System 5.900% 10/01/06
(AMBAC).......................................... 367,062
940,000 McMinnville Sewer System 4.700% 2/01/07 (FGIC)..... 911,800
100,000 Portland Oregon Sewer System Revenue 5.150%
3/01/08.......................................... 99,625
100,000 Portland Oregon Sewer System Revenue 5.100%
8/01/08.......................................... 99,750
350,000 Portland Oregon Sewer System 6.000% 10/01/12
(FGIC)........................................... 363,125
</TABLE>
*Dates reflect pre-refunded dates.
See accompanying notes to financial statements.
42
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
SEWER AND WATER - (CONTINUED)
$ 500,000 McMinnville Sewer System 5.000% 2/01/14 (FGIC)..... $ 469,375
--------------
3,473,012
--------------
TRANSPORTATION - 6.6%
545,000 Oregon State Light Rail 7.000% 6/01/04............. 604,269
1,000,000 Tri-Met Light Rail 5.900% 7/01/06.................. 1,048,750
--------------
1,653,019
--------------
Total Fixed Income Securities 24,600,763
--------------
SHORT TERM INVESTMENT - 0.9%
- -----------------------------------------------------------------------------------
INVESTMENT COMPANY - 0.9%
226,434 DreyfusTax-Exempt Cash Management Fund 4.000%**.... 226,434
--------------
Total Investments - 98.5% 24,827,197
(Cost $24,119,814)***
Other Assets and (Liabilities), Net - 1.5% 366,710
--------------
TOTAL NET ASSETS - 100.0% $ 25,193,907
--------------
--------------
</TABLE>
AMBAC - American Municipal Bond Assurance Corp.
FGIC - Financial Guaranty Insurance Corp.
FSA - Financial Security Assurance
G.O. - General Obligation
MBIA - Municipal Bond Insurance Assoc.
PUD - Public Utility District
** Rate reflects 7 day yield as of April 30, 1997.
*** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $816,984 and the aggregate
gross unrealized depreciation is $109,601, resulting in net unrealized
appreciation of $707,383.
See accompanying notes to financial statements.
43
<PAGE>
CRABBE HUSON INCOME FUND
INVESTMENT OBJECTIVE: TO PROVIDE CAPITAL PRESERVATION AND A HIGH LEVEL OF
CURRENT INCOME THROUGH A DIVERSIFIED PORTFOLIO OF FIXED INCOME SECURITIES,
INCLUDING CONVERTIBLE BONDS AND DEBENTURES.
INVESTMENT RESULTS
Primary Class
Inception Date January 31, 1989
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 3.27%
1.00% 5 Year 5.47%
Life of Fund 6.80%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
For the six months ending April 30, 1997, the Crabbe Huson Income Fund returned
an even 1.00%, slightly lagging the 1.30% returned by the Lehman Brothers
Government/Corporate Bond Index. Viewed on a risk-adjusted basis, the
conservative returns for the fund are commensurate with its conservative nature.
It's worth noting that the overall quality of investment-grade bond funds has
deteriorated over the last ten years or so. Some managers have added foreign
bonds, high-yield ("junk") bonds or collateralized mortgage obligations (CMOs)
to portfolios to boost yield. Given the current high valuations for relatively
risky bonds, we prefer to keep risk at a minimum (our contrarian style applies
as much to bonds as it does stocks). We may sacrifice a bit of performance over
the short term, but we prefer the less risky path. Should yield spreads
significantly widen, we may pursue these higher yielding options.
In the Income Fund (and across the board for our fixed income offerings), we
maintained a fairly consistent duration during the reporting period. We elected
to keep the positions we established late in the 1996 fiscal year, minimize
trading costs and maintain a portfolio we believed was well positioned to
weather any bond market gyrations.
In retrospect, we think it was the right move. The benchmark 30-year Treasury
bond stood at 6.65% at the end of last October; it finished the fiscal half-year
at 6.95%, a relatively modest upward change in yield. The primary driver of
higher market interest rates was the explosive economic growth enjoyed during
the period. The nation's gross domestic product grew by a staggering 5.6% during
44
<PAGE>
the winter months, its strongest showing in nine years, and jobs were added to
payrolls at a rate of nearly a quarter of a million per month. This growth
sounded the inflation alarm for the Federal Reserve, and on March 25 its Federal
Open Market Committee hiked interest rates by a quarter of a point.
When rates went up, our average maturities were slightly longer than that of the
index -- around 115% of its average. If the economy cools and rates fall, we're
well positioned to benefit. Recent data suggests the economy is in fact
softening. Payroll growth has slowed, and Washington seems close to the
long-elusive five-year balanced budget plan. Bonds have reacted positively: In
April alone, market returns approximated 1.5%, its best month since November,
1996.
Going forward, we remain cautiously optimistic for bonds. We plan no significant
moves until we see appropriate opportunities in the market. As we've stated, our
contrarian strategy may cause us to miss some turns in the economy, but we're
also often able to look past the false signals that cause some bond fund returns
to fluctuate wildly. We fully expect to be present for true market opportunities
as they develop.
[SIGNATURE]
Garth R. Nisbet, CFA
45
<PAGE>
CRABBE HUSON INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 97.3%
- -----------------------------------------------------------------------------------
AGENCIES - 1.4%
$ 50,000 Interamerican Development Bank 6.125% 3/08/06...... $ 47,188
--------------
CORPORATE BONDS - 35.3%
100,000 WMX Technologies 6.700% 5/01/01.................... 99,125
50,000 IBM Corp 7.250% 11/01/02........................... 50,688
100,000 JP Morgan & Company 7.625% 9/15/04................. 102,625
100,000 Pacific Bell 6.250% 3/01/05........................ 94,750
100,000 Anheuser Busch 7.000% 9/01/05...................... 98,375
100,000 Bear Stearns Company 6.875% 10/01/05............... 96,500
100,000 Snap-on, Inc. 6.625% 10/01/05...................... 97,125
50,000 Walt Disney Company 6.750% 3/30/06................. 48,500
100,000 Sysco Corp 7.000% 5/01/06.......................... 99,125
50,000 Teleport Communications 9.875% 7/01/06............. 52,000
100,000 Wal-Mart Stores 8.000% 9/15/06..................... 105,875
100,000 Eli Lilly 8.375% 12/01/06.......................... 108,750
50,000 AT&T Corp 7.750% 3/01/07........................... 51,875
100,000 GTE South 6.000% 2/15/08........................... 90,625
--------------
1,195,938
--------------
INSURED BONDS - 2.6%
90,000 City of Lincoln, Oregon 5.800% 6/01/97 (AMBAC)..... 89,982
--------------
MORTGAGE PASS-THROUGH SECURITIES - 31.4%
75,624 Federal National Mortgage Association Pool #30333
9.250% 9/01/16................................... 79,806
117,105 Federal Home Loan Mortgage Corp Pool #302029 9.500%
10/01/16......................................... 124,529
135,542 Federal Home Loan Mortgage Corp Pool #303033 9.000%
4/01/17.......................................... 141,809
211,582 Federal Home Loan Mortgage Corp Pool #301538
10.000% 7/01/17.................................. 228,432
133,050 Federal Home Loan Mortgage Corp Pool #C80344 7.500%
09/01/25......................................... 132,352
141,200 Federal Home Loan Mortgage Corp Pool #D65456 7.000%
11/01/25......................................... 137,274
214,803 Federal Home Loan Mortgage Corp Pool #C80409 8.000%
06/01/26......................................... 218,077
--------------
1,062,279
--------------
</TABLE>
See accompanying notes to financial statements.
46
<PAGE>
CRABBE HUSON INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT BONDS - 26.6%
$ 430,000 U.S. Treasury Bond 6.000% 2/15/26.................. $ 375,768
175,000 U.S. Treasury Bond 6.750% 8/15/26.................. 169,237
380,000 U.S. Treasury Bond 6.500% 11/15/26................. 356,155
--------------
901,160
--------------
Total Fixed Income Securities 3,296,547
--------------
SHORT TERM INVESTMENT - 1.2%
- -----------------------------------------------------------------------------------
INVESTMENT COMPANY - 1.2%
41,056 SSgA U.S. Government Money Market Fund 5.140%*..... 41,056
--------------
Total Investments - 98.5% 3,337,603
(Cost $3,360,844)**
Other Investments*** - 12.0% 404,736
(Cost $404,736)
Other Assets and (Liabilities), Net - (10.5%) (355,597 )
--------------
TOTAL NET ASSETS - 100.0% $ 3,386,742
--------------
--------------
</TABLE>
* Rate reflects 7 day yield as of April 30, 1997.
** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $32,604 and the aggregate
gross unrealized depreciation is $55,845, resulting in net unrealized
depreciation of $23,241.
*** Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1997, the
market value of the securities on loan is $396,286.
AMBAC -American Municipal Bond Assurance Corp.
See accompanying notes to financial statements.
47
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
INVESTMENT OBJECTIVE: TO PROVIDE A HIGH LEVEL OF CURRENT INCOME, CONSISTENT WITH
CAPITAL PRESERVATION, THROUGH A PORTFOLIO OF SHORT- AND INTERMEDIATE-TERM DEBT
OBLIGATIONS OF THE UNITED STATES GOVERNMENT AND ITS AGENCIES OR
INSTRUMENTALITIES. AT LEAST 75% OF THE FUND'S ASSETS MUST HAVE MATURITIES OF
FIVE YEARS OR LESS.
INVESTMENT RESULTS
Primary Class
Inception Date January 31, 1989
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 3.60%
1.51% 5 Year 5.05%
Life of Fund 6.49%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The U.S. Government(1) Income Fund posted a 1.51% return for the first half of
fiscal 1997, a number that ranks the fund roughly in the middle of the pack
among its industry peers. The fund's appropriate benchmark, the Ryan Labs
Three-Year Treasury Index, returned 1.78% for the reporting period. The
difference is attributable to a moderately longer average maturity for the fund
than for the comparable index.
The fund's returns, which are subject to fluctuations in the short and
intermediate sectors of the bond market, were favorable in a climate of higher
rates and weaker returns. Current returns are especially reflective of an
increase in yields. For example, rates on five-year Treasuries increased from
6.25% on January 31, 1997 to 6.55% at the end of the quarter. By contrast, rates
on three-month Treasury bills increased by only .10% to finish at 5.25% for the
same period. Yield shifts aren't always parallel: bond mutual fund returns often
differ according to the positioning of their portfolios.
The fund's results for 1997 will again reflect broader market changes in the
short-term areas of the U.S. yield curve. Over the next six months, we expect
additional bond market volatility, due in part to a spillover from what we
believe will be a more turbulent stock market. We look for additional buffeting
if wages pick up or currency fluctuations become more pronounced.
48
<PAGE>
In light of our conservative approach and the potential for bond market
volatility, our outlook for the portfolio going forward is very positive. If
overvalued sections of the stock market are making investors nervous, the fund
offers an excellent option for short-term capital preservation and current
income.
[SIGNATURE]
Garth R. Nisbet, CFA
- -------------------
(1) An investment in the fund is neither insured nor guaranteed by the U.S.
Government.
49
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 98.7%
- -----------------------------------------------------------------------------------
AGENCIES - 34.5%
$ 255,000 International Bank For Reconstruction & Development
Floater 5.390%* 08/07/97......................... $ 251,147
150,000 Federal National Mortgage Association 4.950%
9/30/98.......................................... 147,682
200,000 Federal National Mortgage Association 6.340%
12/23/99......................................... 198,828
200,000 Federal National Mortgage Association 6.256%
2/25/00.......................................... 198,128
120,000 Federal National Mortgage Association 6.080%
9/25/00.......................................... 117,974
200,000 Federal National Mortgage Association 8.250%
12/18/00......................................... 210,078
220,000 Federal Home Loan Bank 6.290% 2/21/02.............. 216,040
180,000 Tennessee Valley Authority 6.125% 7/15/03.......... 172,350
200,000 Federal National Mortgage Association 5.800%
12/10/03......................................... 189,430
200,000 Federal Home Loan Bank 6.490% 1/08/04.............. 195,598
50,000 Federal Home Loan Bank 7.590% 3/10/05.............. 51,782
50,000 Federal National Mortgage Association 7.375%
3/28/05.......................................... 51,148
200,000 Federal National Mortgage Association 5.875%
2/02/06.......................................... 185,550
--------------
2,185,735
--------------
U.S. GOVERNMENT NOTES - 64.2%
1,170,000 U. S. Treasury Note 5.000% 1/31/98................. 1,162,512
30,000 U. S. Treasury Note 5.125% 2/28/98................. 29,806
125,000 U. S. Treasury Note 6.250% 7/31/98................. 125,266
825,000 U. S. Treasury Note 6.125% 8/31/98................. 825,058
500,000 U. S. Treasury Note 6.000% 9/30/98................. 499,360
190,000 U. S. Treasury Note 6.250% 8/31/00................. 188,797
100,000 U. S. Treasury Note 5.625% 11/30/00................ 97,268
100,000 U. S. Treasury Note 5.625% 2/28/01................. 97,034
1,060,000 U. S. Treasury Note 6.500% 10/15/06................ 1,041,694
--------------
4,066,795
--------------
Total Fixed Income Securities 6,252,530
--------------
SHORT TERM INVESTMENT - 0.4%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.4%
23,942 State Street Bank and Trust Company** 4.250%
5/01/97.......................................... 23,942
--------------
Total Investments - 99.1% 6,276,472
(Cost $6,307,030)***
Other Assets and (Liabilities), Net - 0.9% 56,461
--------------
TOTAL NET ASSETS - 100.0% $ 6,332,933
--------------
--------------
</TABLE>
* Represents a structured note that pays interest at a rate that
increases (decreases) by a multiple of the peseta/deutchemark exchange
rate.
** The repurchase agreement, dated 4/30/97, $23,942 due 5/01/97, is
collateralized by $25,000 U.S. Treasury Note, 5.250%, maturing
12/31/97, with a market value of $25,330.
*** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $59,770 and the aggregate
gross unrealized depreciation is $90,328, resulting in net unrealized
depreciation of $30,558.
See accompanying notes to financial statements.
50
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
INVESTMENT OBJECTIVE: TO PROVIDE CAPITAL PRESERVATION AND A HIGH LEVEL OF
CURRENT INCOME WHILE MAINTAINING SHAREHOLDER LIQUIDITY BY INVESTING IN
SHORT-TERM MONEY MARKET INSTRUMENTS THAT ARE DIRECT OBLIGATIONS OF THE UNITED
STATES GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES, AND REPURCHASE
AGREEMENTS WITH RESPECT TO SUCH OBLIGATIONS. THE AVERAGE MATURITY OF THE FUND
CANNOT EXCEED 90 DAYS.
INVESTMENT RESULTS
Primary Class
Inception Date January 31, 1989
<TABLE>
<CAPTION>
SIX MONTHS ANNUALIZED TOTAL RETURN
ENDING APRIL 30, 1997 PERIOD ENDING MARCH 31, 1997
- --------------------- ----------------------------------
<C> <S> <C>
1 Year 4.72%
2.33% 5 Year 3.92%
Life of Fund 5.13%
</TABLE>
INVESTMENT RESULTS QUOTED ARE HISTORICAL, INCLUDE CHANGES IN
SHARE PRICE, REINVESTMENT OF DIVIDENDS, AND CAPITAL GAINS, AND
REPRESENT PAST PERFORMANCE. FUTURE RETURN AND PRINCIPAL VALUE
WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
During a period of relatively low interest rates, the U.S. Government(1) Money
Market Fund closed the first six months of the fiscal year with a 2.33% return.
On a risk-adjusted basis, this was a very competitive number, given the recent
weak money market.
Short term rates increased during the latest fiscal quarter as three-month bill
yields rose to 5.25% from 5.15%, and two-year U.S. Treasuries jumped from 5.90%
to 6.25%. Most interest rates drifted higher as bond market sentiment shifted
toward concern and signs of economic activity strengthened during the first
calendar quarter of 1997. For most of the period, we kept the fund's average
maturity fairly consistent at around 60 days and kept fairly quiet on the
trading front.
The primary driver for money market returns will be short-term rates, so the
Federal Reserve Board's actions will be particularly impactful. At present, we
foresee little reason to change the average maturity period or alter the fund's
51
<PAGE>
strategy in any other significant way. Our outlook is for continuing competitive
returns that will make the fund a good option for investors seeking money market
returns while preserving capital.
[SIGNATURE]
Garth R. Nisbet, CFA
- -------------------
(1) An investment in the fund is neither insured nor guaranteed by the U.S.
Government. Although the fund intends to maintain a stable one dollar per share
net asset value, there is no assurance the fund will be able to do so.
52
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES* - 100.4%
- -----------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY - 100.4%
DISCOUNT NOTES - 100.4%
FEDERAL HOME LOAN BANK
$ 500,000 5.200% 5/16/97..................................... $ 498,917
1,205,000 5.150% 5/20/97..................................... 1,201,725
1,000,000 5.130% 5/28/97..................................... 996,152
1,265,000 5.240% 5/28/97..................................... 1,260,028
1,500,000 5.150% 5/30/97..................................... 1,493,777
500,000 5.150% 6/02/97..................................... 497,711
2,000,000 5.150% 6/03/97..................................... 1,990,558
2,000,000 5.210% 6/09/97..................................... 1,988,712
2,000,000 5.270% 6/10/97..................................... 1,988,289
1,500,000 5.140% 6/13/97..................................... 1,490,791
2,000,000 5.210% 6/17/97..................................... 1,986,396
360,000 5.380% 6/18/97..................................... 357,418
980,000 5.240% 6/19/97..................................... 973,010
450,000 5.380% 6/27/97..................................... 446,167
2,000,000 5.470% 6/30/97..................................... 1,981,767
1,000,000 5.330% 7/01/97..................................... 990,969
1,000,000 5.470% 7/09/97..................................... 989,516
2,000,000 5.280% 7/10/97..................................... 1,979,467
1,500,000 5.140% 7/14/97..................................... 1,484,152
1,500,000 5.270% 7/17/97..................................... 1,483,092
920,000 5.230% 7/28/97..................................... 908,238
750,000 5.490% 7/30/97..................................... 739,706
500,000 5.250% 7/31/97..................................... 493,365
870,000 5.470% 8/01/97..................................... 857,838
990,000 5.480% 8/04/97..................................... 975,683
500,000 5.550% 8/27/97..................................... 490,904
920,000 5.280% 8/29/97..................................... 903,808
--------------
31,448,156
--------------
OTHER INVESTMENTS - 0.0%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.0%
9,701 State Street Bank and Trust Company** 4.250%
5/01/97.......................................... 9,701
--------------
Total Investments - 100.4% 31,457,857
(Cost $31,457,857)***
Other Assets and (Liabilities), Net - (0.4%) (137,578 )
--------------
TOTAL NET ASSETS - 100.0% $ 31,320,279
--------------
--------------
</TABLE>
* Rates reflect purchase yield to maturity.
** The repurchase agreement, dated 4/30/97, $9,701 due 5/01/97, is
collateralized by $10,000 U.S. Treasury Note, 5.875%, maturing
8/15/98, with a market value of $10,083.
*** Aggregate cost for federal income tax purpose is identical.
See accompanying notes to financial statements.
53
<PAGE>
- -----------------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
THE CRABBE CRABBE HUSON
HUSON SPECIAL SMALL CAP
FUND, INC. FUND
------------- -------------
<S> <C> <C>
ASSETS:
Investment securities, at market $356,703,151 $ 46,277,526
Deposits with brokers for securities
sold short 47,293,396 --
Receivables:
Dividends and interest 157,062 12,615
Fund shares sold 1,378,609 87,938
Investment securities sold 8,757,839 1,971,258
Proceeds from securities sold short 45,903,081 --
Organization expenses (Note 1) 212,895 129,344
Prepaid Expenses 29,568 2,204
------------- -------------
$460,435,601 $ 48,480,885
------------- -------------
LIABILITIES:
Securities sold short, at market
(proceeds $45,903,081) 73,472,150 --
Payables:
Investment securities purchased 575,645 13,968
Fund shares redeemed 708,839 41,368
Deposits for securities loaned -- --
Directors/Trustees Fees (Note 2) 9,170 --
Income dividend -- --
Accrued liabilities 303,906 13,897
------------- -------------
75,069,710 69,233
------------- -------------
NET ASSETS: $385,365,891 $ 48,411,652
------------- -------------
------------- -------------
NET ASSETS CONSIST OF:
Capital shares 25,217 --
Capital paid in 334,913,581 44,681,123
Undistributed (distributed in excess
of) net investment income 85,599 (784)
Undistributed net realized gain (loss)
on investments 35,517,994 2,631,516
Net unrealized appreciation
(depreciation) on investments and
short sales 14,823,500 1,099,797
------------- -------------
$385,365,891 $ 48,411,652
------------- -------------
------------- -------------
PRIMARY CLASS
Net Assets $385,365,891 $ 23,249,828
Shares outstanding (Note 3) 25,291,130 1,915,613
------------- -------------
------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 15.24 $ 12.14
------------- -------------
------------- -------------
INSTITUTIONAL CLASS
Net Assets -- $ 25,161,824
Shares outstanding (Note 3) -- 2,070,774
------------- -------------
------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- $ 12.15
------------- -------------
------------- -------------
INVESTMENTS, AT COST $314,310,582 $ 45,177,729
</TABLE>
See accompanying notes to financial statements.
54
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON
ASSET CRABBE REAL ESTATE
ALLOCATION HUSON EQUITY INVESTMENT
FUND FUND FUND
------------- ------------- ------------
<S> <C> <C> <C>
ASSETS:
Investment securities, at market $130,744,861 $405,425,809 $34,034,949
Deposits with brokers for securities
sold short -- -- --
Receivables:
Dividends and interest 611,276 403,295 137,806
Fund shares sold 20,178 280,811 73,379
Investment securities sold 450,860 1,992,471 --
Proceeds from securities sold short -- -- --
Organization expenses (Note 1) 36,700 132,452 70,320
Prepaid Expenses 8,527 28,319 1,735
------------- ------------- ------------
$131,872,402 $408,263,157 $34,318,189
------------- ------------- ------------
LIABILITIES:
Securities sold short, at market
(proceeds $45,903,081) -- -- --
Payables:
Investment securities purchased 264,372 2,469,221 --
Fund shares redeemed 40,299 438,683 10,428
Deposits for securities loaned 19,185,703 49,233,313 4,903,907
Directors/Trustees Fees (Note 2) 2,203 8,144 210
Income dividend 60,527 -- 18,931
Accrued liabilities 63,451 254,359 50,884
------------- ------------- ------------
19,616,555 52,403,720 4,984,360
------------- ------------- ------------
NET ASSETS: $112,255,847 $355,859,437 $29,333,829
------------- ------------- ------------
------------- ------------- ------------
NET ASSETS CONSIST OF:
Capital shares -- -- --
Capital paid in 104,027,491 307,240,892 26,374,080
Undistributed (distributed in excess
of) net investment income (34,853) 295,154 98,182
Undistributed net realized gain (loss)
on investments 8,292,956 43,327,821 1,684,241
Net unrealized appreciation
(depreciation) on investments and
short sales (29,747) 4,995,570 1,177,326
------------- ------------- ------------
$112,255,847 $355,859,437 $29,333,829
------------- ------------- ------------
------------- ------------- ------------
PRIMARY CLASS
Net Assets $ 97,904,693 $332,717,058 $29,333,829
Shares outstanding (Note 3) 7,648,481 17,991,803 2,446,240
------------- ------------- ------------
------------- ------------- ------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 12.80 $ 18.49 $ 11.99
------------- ------------- ------------
------------- ------------- ------------
INSTITUTIONAL CLASS
Net Assets $ 14,351,154 $ 23,142,379 --
Shares outstanding (Note 3) 1,121,168 1,249,611 --
------------- ------------- ------------
------------- ------------- ------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 12.80 $ 18.52 --
------------- ------------- ------------
------------- ------------- ------------
INVESTMENTS, AT COST $130,774,608 $400,430,239 $32,857,623
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE
OREGON TAX-FREE HUSON INCOME
FUND FUND
--------------- -------------
<S> <C> <C>
ASSETS:
Investment securities, at market $24,827,197 $ 3,742,339
Receivables:
Dividends and interest 403,319 54,657
Fund shares sold -- 232
Investment securities sold -- 51
Organization expenses (Note 1) 7,830 6,151
Prepaid Expenses 1,755 273
--------------- -------------
$25,240,101 $ 3,803,703
--------------- -------------
LIABILITIES:
Payables:
Fund shares redeemed -- --
Deposits for securities loaned -- 404,736
Directors/Trustees Fees (Note 2) 435 118
Income dividend 20,678 2,446
Accrued liabilities 25,081 9,661
--------------- -------------
46,194 416,961
--------------- -------------
NET ASSETS: $25,193,907 $ 3,386,742
--------------- -------------
--------------- -------------
NET ASSETS CONSIST OF:
Capital paid in 24,291,799 3,453,612
Undistributed (distributed in excess
of) net investment income 956 308
Undistributed net realized gain (loss)
on investments 193,769 (43,937)
Net unrealized appreciation
(depreciation) on investments and
short sales 707,383 (23,241)
--------------- -------------
$25,193,907 $ 3,386,742
--------------- -------------
--------------- -------------
PRIMARY CLASS
Shares outstanding (Note 3) 2,029,969 339,128
--------------- -------------
--------------- -------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 12.41 $ 9.99
--------------- -------------
--------------- -------------
INVESTMENTS, AT COST $24,119,814 $ 3,765,580
</TABLE>
See accompanying notes to financial statements.
56
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON
CRABBE HUSON U.S. GOVERNMENT
U.S. GOVERNMENT MONEY MARKET
INCOME FUND FUND
---------------- ----------------
<S> <C> <C>
ASSETS:
Investment securities, at market $ 6,276,472 $ 31,457,857
Receivables:
Dividends and interest 68,431 1
Fund shares sold 307 409,575
Investment securities sold -- --
Organization expenses (Note 1) 6,249 18,142
Prepaid Expenses 524 2,517
---------------- ----------------
$ 6,351,983 $ 31,888,092
---------------- ----------------
LIABILITIES:
Payables:
Fund shares redeemed -- 486,879
Deposits for securities loaned -- --
Directors/Trustees Fees (Note 2) 166 858
Income dividend 7,273 34,866
Accrued liabilities 11,611 45,210
---------------- ----------------
19,050 567,813
---------------- ----------------
NET ASSETS: $ 6,332,933 $ 31,320,279
---------------- ----------------
---------------- ----------------
NET ASSETS CONSIST OF:
Capital paid in 6,445,523 31,320,279
Undistributed (distributed in excess
of) net investment income (1,500) --
Undistributed net realized gain (loss)
on investments (80,532) --
Net unrealized appreciation
(depreciation) on investments and
short sales (30,558) --
---------------- ----------------
$ 6,332,933 $ 31,320,279
---------------- ----------------
---------------- ----------------
PRIMARY CLASS
Shares outstanding (Note 3) 599,783 31,320,279
---------------- ----------------
---------------- ----------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 10.56 $ 1.00
---------------- ----------------
---------------- ----------------
INVESTMENTS, AT COST $ 6,307,030 $ 31,457,857
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
- -----------------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF OPERATIONS
For the six months ended April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
THE CRABBE CRABBE
HUSON HUSON
SPECIAL SMALL CAP
FUND, INC. FUND
------------ -----------
<S> <C> <C>
INVESTMENT INCOME
Interest $ 3,017,098 $ 148,282
Dividends (net of foreign taxes
withheld of $0; $0; $2,407; $12,257;
and $0 respectively) 1,502,829 105,984
------------ -----------
4,519,927 254,266
------------ -----------
EXPENSES
Investment advisory fees (Note 2) 1,815,627 191,528
Transfer agent - Primary class 414,864 16,596
Institutional class -- 7,354
Printing 70,855 1,140
Postage 36,510 373
Custody 301,658 12,510
Legal 15,624 614
Interest 54,533 247
Auditing 23,208 2,183
Insurance 12,757 378
Directors/Trustees fees (Note 2) 17,265 789
State Registration fees - Primary
class 19,759 6,266
Institutional
class -- 4,466
Federal Registration fees -- 7,372
Amortization of organization expenses
-
Primary class -- 16,614
Institutional class -- 6,436
Miscellaneous 49,318 1,664
Distribution fees - Primary class
(Note 2) 333,528 27,254
Administration (Note 2) 95,454 4,666
------------ -----------
3,260,960 308,450
Fees waived by investment advisor
(Note 2) (186,226) (43,847)
Expenses reimbursed by investment
advisor (Note 2) -- (18,257)
Fees paid indirectly (Note 2) -- (310)
------------ -----------
NET EXPENSES 3,074,734 246,036
------------ -----------
NET INVESTMENT INCOME 1,445,193 8,230
------------ -----------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 35,323,345 2,632,445
Net change in unrealized appreciation
or depreciation of investments and
short sales 21,457,743 1,014,881
------------ -----------
NET GAIN ON INVESTMENTS 56,781,088 3,647,326
------------ -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $58,226,281 $3,655,556
------------ -----------
------------ -----------
</TABLE>
See accompanying notes to financial statements.
58
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE
HUSON
CRABBE HUSON CRABBE REAL ESTATE
ASSET ALLOCATION HUSON EQUITY INVESTMENT
FUND FUND FUND
----------------- ------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $ 1,708,730 $ 667,747 $ 37,369
Dividends (net of foreign taxes
withheld of $0; $0; $2,407; $12,257;
and $0 respectively) 471,533 2,702,115 690,366
----------------- ------------- -----------
2,180,263 3,369,862 727,735
----------------- ------------- -----------
EXPENSES
Investment advisory fees (Note 2) 590,133 1,798,867 147,854
Transfer agent - Primary class 46,303 179,124 15,435
Institutional class 7,427 7,317 --
Printing 13,488 45,076 1,537
Postage 2,588 11,206 508
Custody 35,349 89,594 11,593
Legal 3,968 13,187 644
Interest 751 3,100 3,445
Auditing 7,140 21,025 2,380
Insurance 2,672 8,315 456
Directors/Trustees fees (Note 2) 4,737 16,429 928
State Registration fees - Primary
class 5,833 11,482 8,267
Institutional
class 5,758 10,023 --
Federal Registration fees -- -- 2,454
Amortization of organization expenses
-
Primary class 34,442 107,079 15,352
Institutional class 6,437 6,437 --
Miscellaneous 11,727 41,558 1,798
Distribution fees - Primary class
(Note 2) 138,812 488,743 36,964
Administration (Note 2) 25,670 88,266 4,920
----------------- ------------- -----------
943,235 2,946,828 254,535
Fees waived by investment advisor
(Note 2) (96,668) (22,294) (31,865)
Expenses reimbursed by investment
advisor (Note 2) (19,622) (23,777) --
Fees paid indirectly (Note 2) (147) (8,972) (890)
----------------- ------------- -----------
NET EXPENSES 826,798 2,891,785 221,780
----------------- ------------- -----------
NET INVESTMENT INCOME 1,353,465 478,077 505,955
----------------- ------------- -----------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 8,343,889 43,895,908 1,684,242
Net change in unrealized appreciation
or depreciation of investments and
short sales (6,961,192) (29,705,361) (70,472)
----------------- ------------- -----------
NET GAIN ON INVESTMENTS 1,382,697 14,190,547 1,613,770
----------------- ------------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,736,162 $ 14,668,624 $2,119,725
----------------- ------------- -----------
----------------- ------------- -----------
</TABLE>
See accompanying notes to financial statements.
59
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
For the six months ended April 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
CRABBE
HUSON CRABBE
OREGON HUSON
TAX-FREE INCOME
FUND FUND
---------- ----------
<S> <C> <C>
INVESTMENT INCOME
Interest $ 673,823 $ 125,073
---------- ----------
EXPENSES
Investment advisory fees (Note 2) 63,869 14,085
Transfer agent 14,404 11,525
Printing 3,105 570
Postage 786 322
Custody 11,101 7,128
Legal 793 148
Interest 249 46
Auditing 2,628 1,687
Insurance 530 71
Directors/Trustees fees (Note 2) 954 191
Registration fees 24 5,537
Amortization of organization expenses 7,308 4,627
Miscellaneous 2,427 474
Distribution fees (Note 2) 31,934 4,695
Administration (Note 2) 5,204 921
---------- ----------
145,316 52,027
Fees waived by investment advisor
(Note 2) (20,134) (14,085)
Expenses reimbursed by investment
advisor (Note 2) -- (22,918)
---------- ----------
NET EXPENSES 125,182 15,024
---------- ----------
NET INVESTMENT INCOME 548,641 110,049
---------- ----------
REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on
investments 41,196 64,209
Net change in unrealized appreciation
or depreciation of investments (217,794) (135,385)
---------- ----------
NET GAIN (LOSS) ON INVESTMENTS (176,598) (71,176)
---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 372,043 $ 38,873
---------- ----------
---------- ----------
</TABLE>
See accompanying notes to financial statements.
60
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON
CRABBE HUSON U.S. GOVERNMENT
U.S. GOVERNMENT MONEY MARKET
INCOME FUND FUND
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME
Interest $ 205,375 $ 983,688
---------------- ----------------
EXPENSES
Investment advisory fees (Note 2) 18,876 91,833
Transfer agent 11,301 25,816
Printing 818 4,215
Postage 322 1,339
Custody 5,972 12,334
Legal 248 1,289
Interest 45 222
Auditing 1,835 3,372
Insurance 141 687
Directors/Trustees fees (Note 2) 312 1,550
Registration fees 6,242 9,098
Amortization of organization expenses 4,697 15,797
Miscellaneous 791 4,028
Distribution fees (Note 2) 9,438 45,916
Administration (Note 2) 1,693 8,423
---------------- ----------------
62,731 225,919
Fees waived by investment advisor
(Note 2) (18,876) (91,833)
Expenses reimbursed by investment
advisor (Note 2) (15,541) (5,520)
---------------- ----------------
NET EXPENSES 28,314 128,566
---------------- ----------------
NET INVESTMENT INCOME 177,061 855,122
---------------- ----------------
REALIZED AND UNREALIZED GAIN:
Net realized gain (loss) on
investments (33,184) --
Net change in unrealized appreciation
or depreciation of investments (37,527) --
---------------- ----------------
NET GAIN (LOSS) ON INVESTMENTS (70,711) 0
---------------- ----------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 106,350 $ 855,122
---------------- ----------------
---------------- ----------------
</TABLE>
See accompanying notes to financial statements.
61
<PAGE>
- -----------------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
THE CRABBE HUSON
SPECIAL FUND, INC.
-------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1997 1996
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,445,193 $ 5,381,244
Net realized gain (loss) on investments 35,323,345 13,551,901
Net change in unrealized appreciation or depreciation of
investments and short sales 21,457,743 32,571,427
-------------- --------------
Increase (decrease) in net assets resulting from
operations 58,226,281 51,504,572
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -
Primary shares (1,445,193) (5,381,244)
Institutional shares -- --
In excess of net investment income -
Primary shares (2,878,909) (7,928,234)
Institutional shares -- --
From net realized gain on investments -
Primary shares (9,865,503) (13,551,901)
Institutional shares -- --
In excess of net realized gain on investments - Primary
shares -- (22,612,405)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (139,710,190) (399,551,217)
-------------- --------------
Total increase (decrease) in net assets (95,673,514) (397,520,429)
FUND NET ASSETS, BEGINNING OF PERIOD 481,039,405 878,559,834
-------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 385,365,891 $ 481,039,405
-------------- --------------
-------------- --------------
**Including undistributed (distribution in excess of) net
investment income of: $ 85,599 $ 2,964,508
-------------- --------------
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON
EQUITY FUND
-----------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 478,077 $ 2,620,900
Net realized gain (loss) on investments 43,895,908 33,226,713
Net change in unrealized appreciation or depreciation of
investments (29,705,361) 19,590,608
------------- -------------
Increase (decrease) in net assets resulting from
operations 14,668,624 55,438,221
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -
Primary shares (430,093) (2,620,900)
Institutional shares (19,411) --
In excess of net investment income -
Primary shares (1,048,499) (1,071,179)
Institutional shares -- --
From net realized gain on investments -
Primary shares (33,083,445) (20,585,296)
Institutional shares (348,809) --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (64,871,871) 22,648,015
------------- -------------
Total increase (decrease) in net assets (85,133,504) 53,808,861
FUND NET ASSETS, BEGINNING OF PERIOD 440,992,941 387,184,080
------------- -------------
FUND NET ASSETS, END OF PERIOD** $355,859,437 $440,992,941
------------- -------------
------------- -------------
**Including undistributed net investment income of: $ 295,154 $ 1,315,080
------------- -------------
------------- -------------
</TABLE>
* For the period from February 20, 1996 (commencement of operations) to
October 31, 1996.
See accompanying notes to financial statements.
62
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON
SMALL CAP FUND ASSET ALLOCATION FUND
--------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED PERIOD ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996* 1997 1996
------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 8,230 $ 45,933 $ 1,353,465 $ 3,151,042
Net realized gain (loss) on investments 2,632,445 379,409 8,343,889 6,464,101
Net change in unrealized appreciation or depreciation of
investments and short sales 1,014,881 84,916 (6,961,192) 2,105,152
------------ ------------ ------------- -------------
Increase (decrease) in net assets resulting from
operations 3,655,556 510,258 2,736,162 11,720,295
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -
Primary shares -- -- (1,204,689) (3,082,300)
Institutional shares (21,320) -- (135,421) (14,792)
In excess of net investment income -
Primary shares (37,543) -- -- --
Institutional shares -- -- (3,814) --
From net realized gain on investments -
Primary shares (281,168) -- (6,443,096) (6,464,101)
Institutional shares (99,170) -- (189,266) --
In excess of net realized gain on investments - Primary
shares -- -- -- (4,974,320)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 24,525,562 20,059,477 (10,047,702) (6,171,166)
------------ ------------ ------------- -------------
Total increase (decrease) in net assets 27,741,917 20,569,735 (15,287,826) (8,986,384)
FUND NET ASSETS, BEGINNING OF PERIOD 20,669,735 100,000 127,543,673 136,530,057
------------ ------------ ------------- -------------
FUND NET ASSETS, END OF PERIOD** $48,411,652 $20,669,735 $112,255,847 $127,543,673
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
**Including undistributed (distribution in excess of) net
investment income of: $ (784) $ 49,849 $ (34,853) $ (44,394)
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON REAL
ESTATE INVESTMENT FUND
---------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income $ 505,955 $ 594,037
Net realized gain (loss) on
investments 1,684,242 1,149,515
Net change in unrealized appreciation
or depreciation of investments (70,472) 2,224,902
------------ ------------
Increase (decrease) in net assets
resulting from operations 2,119,725 3,968,454
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income -
Primary shares (419,024) (594,037)
Institutional shares -- --
In excess of net investment income -
Primary shares -- --
Institutional shares -- --
From net realized gain on investments
-
Primary shares (1,144,247) (238,357)
Institutional shares -- --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 8,128,435 (1,472,634)
------------ ------------
Total increase (decrease) in net
assets 8,684,889 1,663,426
FUND NET ASSETS, BEGINNING OF PERIOD 20,648,940 18,985,514
------------ ------------
FUND NET ASSETS, END OF PERIOD** $29,333,829 $20,648,940
------------ ------------
------------ ------------
**Including undistributed net investment
income of: $ 98,182 $ 11,251
------------ ------------
------------ ------------
</TABLE>
63
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
CRABBE HUSON
OREGON TAX-FREE FUND
---------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 548,641 $ 1,203,459
Net realized gain (loss) on investments 41,196 152,573
Net change in unrealized appreciation or depreciation of
investments (217,794) (440,577)
------------ ------------
Increase in net assets resulting from operations 372,043 915,455
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (548,641) (1,203,459)
In excess of net investment income -- --
From net realized gain on investments -- (3,019)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (764,516) (1,644,327)
------------ ------------
Total increase (decrease) in net assets (941,114) (1,935,350)
FUND NET ASSETS, BEGINNING OF PERIOD 26,135,021 28,070,371
------------ ------------
FUND NET ASSETS, END OF PERIOD** $25,193,907 $26,135,021
------------ ------------
------------ ------------
**Including undistributed net investment income of: $ 956 $ 956
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON U.S. GOVERNMENT
MONEY MARKET FUND
-----------------------------
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, OCTOBER 31,
1997 1996
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 855,122 $ 2,216,779
------------- -------------
Increase (decrease) in net assets resulting from
operations 855,122 2,216,779
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (855,122) (2,216,779)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (10,850,417) (12,543,523)
------------- -------------
Total increase (decrease) in net assets (10,850,417) (12,543,523)
FUND NET ASSETS, BEGINNING OF PERIOD 42,170,696 54,714,219
------------- -------------
FUND NET ASSETS, END OF PERIOD $ 31,320,279 $ 42,170,696
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON U.S.
INCOME FUND GOVERNMENT INCOME FUND
--------------------------- --------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996 1997 1996
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $ 110,049 $ 318,070 $ 177,061 $ 362,431
Net realized gain (loss) on investments 64,209 73,271 (33,184) 99,961
Net change in unrealized appreciation or depreciation of
investments (135,385) (111,166) (37,527) (96,510)
------------ ------------ ------------ -----------
Increase in net assets resulting from operations 38,873 280,175 106,350 365,882
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (110,049) (315,728) (177,061) (362,431)
In excess of net investment income (3,252) -- (1,593) (599)
From net realized gain on investments -- -- -- --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (1,232,336) (2,461,066) (2,111,819) 88,005
------------ ------------ ------------ -----------
Total increase (decrease) in net assets (1,306,764) (2,496,619) (2,184,123) 90,857
FUND NET ASSETS, BEGINNING OF PERIOD 4,693,506 7,190,125 8,517,056 8,426,199
------------ ------------ ------------ -----------
FUND NET ASSETS, END OF PERIOD** $ 3,386,742 $ 4,693,506 $ 6,332,933 $8,517,056
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------
**Including undistributed net investment income of: $ 308 $ 3,560 $ (1,500) $ 93
------------ ------------ ------------ -----------
------------ ------------ ------------ -----------
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION: The Crabbe Huson Special Fund, Inc. ("Special Fund"), Crabbe
Huson Small Cap Fund ("Small Cap Fund"), Crabbe Huson Asset Allocation Fund
("Asset Allocation Fund"), Crabbe Huson Equity Fund ("Equity Fund"), Crabbe
Huson Real Estate Investment Fund ("Real Estate Fund"), Crabbe Huson Oregon
Tax-Free Fund ("Oregon Tax-Free Fund") Crabbe Huson Income Fund ("Income Fund"),
Crabbe Huson U.S. Government Income Fund ("U.S. Government Income Fund") and
Crabbe Huson U.S. Government Money Market Fund ("Money Market Fund") are
registered under the Investment Company Act of 1940, as amended. All of the
Funds (other than the Oregon Tax-Free Fund) are open-end diversified investment
companies. The Oregon Tax-Free Fund is registered under the Investment Company
Act of 1940, as amended, as an open-end non-diversified investment company. Each
of the Funds (other than the Special Fund) is a separate series of the Crabbe
Huson Funds, a Delaware business trust offering an unlimited number of shares of
beneficial interest without par value. The Special Fund is an Oregon Corporation
which currently is authorized to issue 100,000,000 shares of common stock with
$.001 par value. All of the Funds offer shares of the Primary Class and the
Small Cap, Asset Allocation, and Equity Funds also offer shares of the
Institutional Class. The two classes of shares differ principally in the
distribution fees and shareholder servicing fees.
The following is a summary of significant accounting policies consistently
followed by the Funds in preparation of financial statements.
SECURITY VALUATION--MONEY MARKET FUND: The securities owned by the Fund are
valued based upon the amortized cost method. Pursuant to this method, a security
is valued by reference to the acquisition cost as adjusted for amortization of
premium or accretion of discount. Although the Fund seeks to maintain the net
asset value per share at $1.00, there can be no assurance that the net asset
value per share will not vary.
SECURITY VALUATION--ALL OTHER FUNDS: Securities listed or traded on a
registered securities exchange, including over-the-counter securities, are
valued at the last reported sales price on the date of computation. Where last
sale information is not available, the best bid price is used. Securities and
assets for which market quotations are not readily available are valued at fair
market value as determined in good faith by or under the direction of the Board
of Trustees/Directors of the Funds.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND EXPENSES: Security transactions
are accounted for on the trade date. Interest income, consisting of interest
accrued plus the accretion of original issue discount and minus the amortization
of investment premium, is recorded daily on the accrual basis. Dividends are
recorded on the ex-dividend date. Net realized gains and losses on investments
are computed on the first-in, first-out, method. For Funds with more than one
class, investment income and realized and unrealized gains and losses are
allocated to each class based upon the relative daily net
66
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
assets of each class of shares. Expenses that are directly attributable to a
specific fund or class are charged only to that fund or class. Expenses not
directly attributable to a specific fund or class are allocated to each fund or
class based on its relative daily net assets.
DIVIDENDS AND DISTRIBUTIONS: The Oregon Tax-Free Fund declares dividends from
its net investment income each business day. The net investment income for
Saturdays, Sundays and holidays is declared as a dividend on the next business
day. Declared dividends are accrued through the last business day of each month
and are distributed on that date. Net capital gains realized by the Fund, if
any, are declared and distributed on an annual basis, usually in December.
The Money Market Fund declares dividends from its net investment income each
business day. The net investment income for Saturdays, Sundays and holidays is
declared as a dividend on the prior business day. Declared dividends are accrued
through the last business day of each month and are distributed on that date.
Net capital gains realized by the Fund, if any, are declared and distributed on
an annual basis, usually in December.
The Income Fund and U.S. Government Income Fund declare and distribute dividends
from net investment income on the last business day of each month. Net capital
gains realized by the Funds, if any, are declared and distributed on an annual
basis, usually in December.
The Asset Allocation Fund and Real Estate Fund declare and distribute dividends
from net investment income on the last business day of each fiscal quarter. Net
capital gains realized by the Funds, if any, are declared and distributed on an
annual basis, usually in December. The Asset Allocation Fund's dividends are
determined on a class level and capital gains are determined on a fund level.
The Special Fund, Small Cap Fund and Equity Fund expect to declare and
distribute to shareholders in December substantially all of the net investment
income and net realized capital gains, if any. The Small Cap and Equity Funds'
dividends are determined on a class level and capital gains are determined on a
fund level.
SHORT SALES: The Special Fund sold securities short during the period.
Outstanding short sales at April 30, 1997 are listed in the schedule of
investments. A short sale is effected when it is believed that the price of a
particular security will decline, and involves the sale of a security which the
Fund does not own in the hope of purchasing the same security at a later date at
a lower price. To make delivery to the buyer, the Fund must borrow the security.
The Fund is then obligated to return the security to the lender, and therefore
it must subsequently purchase the same security.
Proceeds from the sale of a borrowed security remain on deposit with the broker
loaning that security. Additional deposits may be required in the event that the
value of the securities sold short exceeds a percentage of the amount on deposit
with the broker. In addition, the borrowing fund is required to segregate cash
or U.S. Government securities
67
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
in an amount equal to the market value of all borrowed securities less any
amounts on deposit with brokers. As a result of these activities, the borrowing
fund will not be deemed to create leverage merely by entering into a short
selling transaction, except to the extent that income is earned on amounts on
deposit with the broker. The Special Fund may not have the amount on deposit
with the broker plus the value of the segregated securities exceed 25% of its
Net Assets.
OPTIONS: The Special, Small Cap, Real Estate, Equity, Asset Allocation and
Income Funds may write call options on securities they own or have the right to
acquire, and may purchase put and call options on individual securities and
indexes written by others. The purchase of any of these instruments can result
in the entire loss on the investment in that particular instrument or, in the
case of writing covered options, can limit the opportunity to earn a profit on
the underlying security.
When an option is written (sold), an amount equal to the premium received is
recorded as a liability. The amount of liability is adjusted daily to reflect
the current market value of the option written. When an option written by the
Fund expires on its stipulated expiration date, the Fund realizes a gain equal
to the net premium received for the option. When the Fund enters into a closing
purchase transaction, the Fund realizes a gain or loss equal to the difference
between the cost of a closing purchase transaction and the premium received when
the call option was written. In the case of either expiration of a written
option or a closing purchase transaction, the liability related to such option
is extinguished.
Call or put options purchased are accounted for in the same manner as marketable
portfolio securities. When a call or put option is exercised, the proceeds from
the underlying securities bought or sold are decreased by the premium paid in
determining the gain or loss.
Options on stock indices differ from options on securities in that the exercise
of an option on a stock index is settled in cash and does not involve delivery
of the actual underlying security.
REPURCHASE AGREEMENTS: Each of the Funds may engage in repurchase agreement
transactions. Repurchase agreements are agreements under which a Fund purchases
a security and simultaneously commits to resell that security to the seller (a
commercial bank or recognized securities dealer) at an agreed upon price on an
agreed upon date within a number of days. The resale price reflects the purchase
price plus an agreed upon market rate of interest that is unrelated to the
coupon rate or maturity of the purchased security. All repurchase agreements are
fully collateralized and marked to market daily, and may therefore be viewed by
the SEC or the courts as loans collateralized by the underlying security. There
are some risks associated with repurchase agreements. For instance, in the case
of default by the seller, a Fund could incur a loss or, if bankruptcy by the
seller, a Fund could incur costs and delays in realizing upon the collateral.
68
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
LOANS OF PORTFOLIO SECURITIES: Each of the Funds may lend portfolio securities,
up to 20% (10% for Oregon Tax-Free Fund) of the value of a Fund's total assets.
The Funds receive total collateral in an amount at least equal to 100% of the
market value of the securities loaned at the inception of the loan. The value of
the portfolio securities loaned is marked to market on a daily basis and
additional collateral is received from the borrower, as necessary, to ensure
that its value is at least equal to 100% of the securities loaned at all times.
Cash collateral received is invested in a short-term instrument, Navigator
Securities Lending Trust-Prime Portfolio, a regulated investment company offered
by State Street Bank and Trust Company. Interest income earned on the investment
of the collateral plus reimbursement for management fees associated with such
investment, in excess of rebates to the borrower, is recorded on an accrual
basis. Income earned on non-cash collateral is based on a percentage of the
market value of the securities loaned and is recorded on an accrual basis. If
the borrower defaults and the value of the portfolio securities increases in
excess of the collateral received or if bankruptcy proceedings commence with
respect to the borrower of the security, realization of the value of the
securities loaned may be delayed or limited.
ORGANIZATION COSTS: Expenses incurred in connection with the original
organization of the Funds are amortized using the sum of the years method. As of
April 30, 1997 the initial organization costs for all Funds except for Small Cap
Fund and Real Estate Fund have been fully amortized. The Crabbe Huson Group,
Inc., the Fund's investment advisor, has agreed that, in the event any of the
initial shares are redeemed during the 60-month period for amortizing the Fund's
organization costs, the Fund will be reimbursed by the investment advisor for
the unamortized balances of such costs in the same proportion as the number of
shares reduced bears to the number of initial shares outstanding at the time of
redemption.
On February 27, 1996 at a joint annual meeting of the shareholders of record at
the close of business on December 20, 1995, of all Funds except for Special Fund
and Small Cap Fund, shareholders approved an Agreement and Plan of
Reorganization and Liquidation (the "Reorganization") in which each Fund would
become a separate series of the Crabbe Huson Funds, a business trust organized
under the laws of the State of Delaware (the "Trust"). The reorganization became
effective on October 1, 1996. All of the expenses incurred in connection with
the reorganization were paid by each of the respective series' of the Trust and
are being amortized over a one year period.
The expenses incurred in connection with the addition of the Institutional Class
are being amortized over a 60 month period. The costs associated with state
registration of shares will be amortized over a period of 12 months.
LINE OF CREDIT: The Funds participate in a $30 million line of credit provided
by State Street Corporation, primarily for temporary or emergency purposes.
Under the agreement, each of the Funds except Special Fund, may borrow up to the
lesser of 15% of each Fund's total assets or the remaining unused balance of the
$20 million unsecured line of credit. Special Fund may borrow the lesser of $30
million or 33 1/3% of its total assets on a
69
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
secured basis. Interest is payable at the Overnight Federal Funds rate plus
0.75%, on an annualized basis. The Funds are charged quarterly, a negotiated
aggregate commitment fee on the daily unutilized credit balance. For the period
ended April 30, 1997, average funds borrowed were $1,616,615, $0, $0, $23,029,
$109,278, $3,012, $669, $0 and $0 for Special Fund, Small Cap Fund, Asset
Allocation Fund, Equity Fund, Real Estate Fund, Oregon Tax-Free Fund, Income
Fund, U.S. Government Income Fund and Money Market Fund. At April 30, 1997, the
Funds had no borrowings under this line of credit.
When the Special Fund borrows it must put in a segregated account (with the
Fund's custodian) debt securities, domestic or foreign equities, or commercial
paper in an amount equal to at least 200% of the amount borrowed. The Fund must
daily maintain the segregated account to ensure that its value is at least equal
to 200% of the funds borrowed at all times. No single issuer, other than U.S.
Government and U.S. Government agencies, can comprise in excess of 10% of the
pledged collateral.
FEDERAL INCOME TAXES: It is each Fund's policy to distribute substantially all
of its taxable income to shareholders and otherwise comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies.
Therefore, no provision has been made for Federal income or excise taxes. Due to
the timing of dividend distributions and the differences in accounting for
income and realized gains (losses) for financial statement and federal income
tax purposes, the fiscal year in which amounts are distributed may differ from
the year in which the income and realized gains (losses) are recorded by the
Funds. The differences between the income or gains distributed on a book versus
tax basis are shown as excess distributions of net investment income and net
realized gain on sales of investments on the Statement of Changes in Net Assets.
On the Statement of Assets and Liabilities, as a result of permanent book-to-tax
differences, reclassification adjustments have been made, between the capital
paid in, undistributed net investment income and undistributed net realized gain
(loss) on investments accounts.
ESTIMATES: The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
income and expenses at the date of the financial statements. Actual results
could differ from these estimates.
70
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
NOTE 2. INVESTMENT ADVISOR AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISOR: The Funds have entered into an investment advisory
agreement with The Crabbe Huson Group, Inc. (the "Advisor"), an affiliated
company. The investment advisory fee of each Fund is accrued daily and paid
semi-monthly. The annual investment advisory fee for each Fund is described
below:
ASSET ALLOCATION FUND
SPECIAL FUND
SMALL CAP FUND
EQUITY FUND
REAL ESTATE FUND
1.00% of average daily net assets up to $100,000,000
.85 of 1% of average daily net assets between $100,000,000 and $500,000,000
.60 of 1% of average daily net assets over $500,000,000
INCOME FUND
.75 of 1% of average daily net assets up to $100,000,000
.60 of 1% of average daily net assets between $100,000,000 and $500,000,000
.50 of 1% of average daily nets assets over $500,000,000
U.S. GOVERNMENT INCOME FUND
MONEY MARKET FUND
OREGON TAX-FREE FUND
.50 of 1% of average daily net assets up to $500,000,000
.45 of 1% of average daily net assets between $500,000,000 and $1,000,000,000
.40 of 1% of average daily net assets over $1,000,000,000
Through October 31, 1997, the Advisor has agreed to reimburse "Other Expenses,"
including management fees as necessary, to the extent Total Fund Operating
Expenses exceed 1.00% of average daily net assets for Small Cap Fund -
Institutional Class, Asset Allocation Fund - Institutional Class, and Equity
Fund - Institutional Class. With respect to the other funds, the Advisor may at
times voluntarily waive its advisory fees or reimburse a Fund's expenses.
DISTRIBUTOR: The Funds have entered into a distribution agreement with Crabbe
Huson Securities, Inc. (the "Distributor"), an affiliated company. The Primary
Class shares of each Fund have each adopted a distribution plan pursuant to Rule
12b-1 under the 1940 Act (the "Plan"). Under the Plan, each of the participating
Funds' Primary Class shares may pay up to 0.25% of such class's average daily
net assets to the Distributor as reimbursement for its actual expenses incurred
in the distribution and promotion of such class's shares. There is no
distribution fee for the Institutional Class shares.
71
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
ADMINISTRATOR: State Street Bank and Trust Company (the "Administrator") serves
as administrator of the Funds. The Administrator provides services for the Funds
that relate to administration, operations and compliance. The Funds pay the
Administrator a fee at the rate of 0.06% of the average net assets of the Funds
managed by the Advisor up to $500 million, 0.03% of the next $500 million, and
0.01% of those assets in excess of $1 billion, plus $7,500 for each class of
share excluding the initial class of share, and certain out of pocket costs.
Each Fund pays its pro rata share of such fee.
DIRECTORS/TRUSTEES FEES: Each of the disinterested trustees/directors are paid
an annual retainer of $17,000 and are reimbursed for expenses incurred in
attending meetings. Each Fund pays its pro rata share of such fees and expenses
based upon its relative asset amounts. For the period ended April 30, 1997, the
Funds incurred aggregate fees of $43,155.
FEES PAID INDIRECTLY: The Funds have entered into a custodian, recordkeeping,
and pricing agreement with Investors Fiduciary Trust Company ("IFTC"). IFTC's
fees for these services are subject to reduction by credits earned by each Fund,
based on the cash balances of the Funds held by IFTC as Custodian. For the
respective period ended April 30, 1997, credits earned were $310, $4,698, and
$890 for Small Cap Fund, Equity Fund, and Real Estate Fund.
The Special Fund, Asset Allocation Fund, Equity Fund, and Real Estate Fund, have
entered into a directed brokerage agreement with State Street Brokerage
Services, Inc. ("SSBSI"). Under this arrangement, SSBSI will pay the Funds a
percentage of commissions generated as credits, and used to offset all or a
portion of certain outside service providers fees incurred by the Funds. For the
period ended April 30, 1997, credits earned of $0, $147, $4,274 and $0 for
Special Fund, Asset Allocation Fund, Equity Fund and Real Estate Fund
respectively, were used to offset transfer agency fees.
72
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
NOTE 3. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
THE CRABBE HUSON CRABBE HUSON SMALL CAP FUND
SPECIAL FUND, INC. PRIMARY CLASS
------------------------------------------------------ ----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------ ----------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS PERIOD SIX MONTHS PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996 1997 1996 1997 1996* 1997 1996*
------------------------------------------------------ ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,662,283 16,617,712 $ 53,691,184 $ 233,860,994 1,106,867 2,043,129 $ 13,066,638 $22,018,325
Shares issued in
reinvestment of
dividends 963,162 3,308,309 13,532,413 45,480,552 27,329 0 315,372 0
------------------------------------------------------ ----------------------------------------------------
4,625,445 19,926,021 67,223,597 279,341,546 1,134,196 2,043,129 13,382,010 22,018,325
Shares redeemed (14,433,589) (48,496,931) (206,933,787) (678,892,763) (957,199) (314,513) (11,416,018) (3,478,097 )
------------------------------------------------------ ----------------------------------------------------
Net increase
(decrease) (9,808,144 ) (28,570,910) $(139,710,190) $(399,551,217) 176,997 1,728,616 $ 1,965,992 $18,540,228
------------------------------------------------------ ----------------------------------------------------
------------------------------------------------------ ----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON SMALL CAP FUND
INSTITUTIONAL CLASS
--------------------------------------------------- CRABBE HUSON ASSET ALLOCATION FUND
PRIMARY CLASS
SHARES AMOUNT ----------------------------------------------------
SHARES AMOUNT
--------------------------------------------------- ----------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996** 1997 1996** 1997 1996 1997 1996
--------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,923,778 137,489 $22,450,501 $1,519,249 592,297 3,015,467 $ 7,767,136 $ 39,902,669
Shares issued in
reinvestment of
dividends 10,450 0 120,489 0 518,238 969,482 6,711,829 12,786,682
--------------------------------------------------- ----------------------------------------------------
1,934,228 137,489 22,570,990 1,519,249 1,110,535 3,984,949 14,478,965 52,689,351
Shares redeemed (943) 0 (11,420 ) 0 (2,799,389) (4,657,739) (36,987,144) (61,385,618)
--------------------------------------------------- ----------------------------------------------------
Net increase
(decrease) 1,933,285 137,489 $22,559,570 $1,519,249 (1,688,854) (672,790) $(22,508,179) $ (8,696,267)
--------------------------------------------------- ----------------------------------------------------
--------------------------------------------------- ----------------------------------------------------
</TABLE>
* For the period from February 20, 1996 (commencement of operations) to October
31, 1996.
** For the period from October 10, 1996 (commencement of operations) to October
31, 1996.
73
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
CRABBE HUSON ASSET ALLOCATION FUND
INSTITUTIONAL CLASS
--------------------------------------------------- CRABBE HUSON EQUITY FUND
PRIMARY CLASS
SHARES AMOUNT ------------------------------------------------------
SHARES AMOUNT
--------------------------------------------------- ------------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996* 1997 1996* 1997 1996 1997 1996
--------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,152,243 187,617 $15,236,777 $2,510,320 $2,016,968 11,091,787 $ 38,940,117 $ 208,125,323
Shares issued in
reinvestment of
dividends 25,838 1,105 333,964 14,781 1,692,862 1,173,785 31,673,436 21,649,846
--------------------------------------------------- ------------------------------------------------------
1,178,081 188,722 15,570,741 2,525,101 3,709,830 12,265,572 70,613,553 229,775,169
Shares redeemed (245,635) 0 (3,110,264 ) 0 (8,102,118 ) (11,190,672) (155,282,467) (211,612,310)
--------------------------------------------------- ------------------------------------------------------
Net increase
(decrease) 932,446 188,722 $12,460,477 $2,525,101 $(4,392,288) 1,074,900 $ (84,668,914) $ 18,162,859
--------------------------------------------------- ------------------------------------------------------
--------------------------------------------------- ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON EQUITY FUND
INSTITUTIONAL CLASS
--------------------------------------------------- CRABBE HUSON REAL ESTATE
INVESTMENT FUND
SHARES AMOUNT PRIMARY CLASS
----------------------------------------------------
SHARES AMOUNT
--------------------------------------------------- ----------------------------------------------------
SIX MONTHS PERIOD SIX MONTHS PERIOD SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996** 1997 1996** 1997 1996 1997 1996
--------------------------------------------------- ----------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,053,736 232,349 $20,362,051 $4,605,156 1,855,814 1,378,623 $ 23,097,044 $ 14,907,333
Shares issued in
reinvestment of
dividends 19,670 0 368,216 0 115,459 48,016 1,394,397 498,344
--------------------------------------------------- ----------------------------------------------------
1,073,406 232,349 20,730,267 4,605,156 1,971,273 1,426,639 24,491,441 15,405,677
Shares redeemed (50,068) (6,076) (933,224 ) (120,000) (1,308,366) (1,603,237) (16,363,006) (16,878,311)
--------------------------------------------------- ----------------------------------------------------
Net increase
(decrease) 1,023,338 226,273 $19,797,043 $4,485,156 662,907 (176,598) $ 8,128,435 $ (1,472,634)
--------------------------------------------------- ----------------------------------------------------
--------------------------------------------------- ----------------------------------------------------
</TABLE>
* For the period from October 28, 1996 (commencement of operations) to October
31, 1996.
** For the period from October 3, 1996 (commencement of operations) to October
31, 1996.
74
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
CRABBE HUSON OREGON TAX-FREE FUND
PRIMARY CLASS
--------------------------------------------------- CRABBE HUSON INCOME FUND
PRIMARY CLASS
SHARES AMOUNT ---------------------------------------------------
SHARES AMOUNT
--------------------------------------------------- ---------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
--------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 81,278 261,030 $1,017,204 $3,286,985 38,209 192,421 $ 388,620 $1,964,440
Shares issued in
reinvestment of
dividends 33,261 75,204 416,702 941,352 9,686 27,472 97,854 279,126
--------------------------------------------------- ---------------------------------------------------
114,539 336,234 1,433,906 4,228,337 47,895 219,893 486,474 2,243,566
Shares redeemed (175,303) (470,511) (2,198,422 ) (5,872,664 ) (168,927) (460,625) (1,718,810 ) (4,704,632 )
--------------------------------------------------- ---------------------------------------------------
Net increase
(decrease) (60,764) (134,277) $ (764,516 ) $(1,644,327) (121,032) (240,732) $(1,232,336) $(2,461,066)
--------------------------------------------------- ---------------------------------------------------
--------------------------------------------------- ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON U.S. GOVERNMENT
INCOME FUND
PRIMARY CLASS
--------------------------------------------------- CRABBE HUSON U.S. GOVERNMENT
MONEY MARKET FUND
SHARES AMOUNT PRIMARY CLASS
------------------------------------------------------
SHARES AMOUNT
--------------------------------------------------- ------------------------------------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1997 1996 1997 1996 1997 1996 1997 1996
--------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 53,617 257,510 $ 571,038 $2,731,392 48,610,830 116,487,103 48,610,830 116,487,103
Shares issued in
reinvestment of
dividends 12,202 28,445 129,447 302,807 611,317 1,506,752 611,317 1,506,752
--------------------------------------------------- ------------------------------------------------------
65,819 285,955 700,485 3,034,199 49,222,147 117,993,855 49,222,147 117,993,855
Shares redeemed (264,714) (277,647) (2,812,304 ) (2,946,194 ) (60,072,564) (130,537,378) (60,072,564) (130,537,378)
--------------------------------------------------- ------------------------------------------------------
Net increase
(decrease) (198,895) 8,308 $(2,111,819) $ 88,005 (10,850,417) (12,543,523) $(10,850,417) $ (12,543,523)
--------------------------------------------------- ------------------------------------------------------
--------------------------------------------------- ------------------------------------------------------
</TABLE>
75
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
NOTE 4. INVESTMENT TRANSACTIONS
For the six months ended April 30, 1997, Crabbe Huson U.S. Government Money
Market Fund had aggregate security purchases and sales (including maturities) of
$112,622,183 and $124,125,727, respectively. Aggregate purchases, sales and
maturities for the period ended April 30, 1997 (excluding short-term securities)
for the remaining Funds, are as follows:
<TABLE>
<CAPTION>
CRABBE HUSON
THE CRABBE CRABBE HUSON ASSET
HUSON SPECIAL SMALL CAP ALLOCATION CRABBE HUSON
FUND, INC. FUND FUND EQUITY FUND
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases: $ 48,260,960 $ 32,050,843 $ 60,048,398 $242,206,253
-------------------------------------------------------------
-------------------------------------------------------------
Sales and Maturities: 206,231,107 8,803,764 78,460,719 319,391,932
-------------------------------------------------------------
-------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON CRABBE HUSON
REAL ESTATE OREGON U.S.
INVESTMENT TAX-FREE CRABBE HUSON GOVERNMENT
FUND FUND INCOME FUND INCOME FUND
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases: $ 19,492,921 $ 392,667 $ 371,403 $ 2,473,215
-------------------------------------------------------------
-------------------------------------------------------------
Sales and Maturities: 9,804,441 1,309,590 1,563,504 4,515,703
-------------------------------------------------------------
-------------------------------------------------------------
</TABLE>
76
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
NOTE 5. PROXY VOTING RESULTS
The Real Estate Fund's sub-advisor, Aldrich, Eastman & Waltch, L.P. ("AEW"), was
acquired by New England Investment Companies, L.P., effective December 10, 1996.
AEW consolidated their operations with Copley Real Estate Advisors, Inc. and
formed AEW Capital Management, L.P. At a special meeting of the shareholders of
the Real Estate Fund, on December 30, 1996, the subadvisory contract among
Crabbe Huson Funds, on behalf of the Real Estate Fund, the Crabbe Huson Group,
Inc. and AEW Capital Management, L.P. was approved as follows:
<TABLE>
<CAPTION>
% OF SHARES TO
TOTAL % OF SHARES TO
NUMBER OF OUTSTANDING TOTAL
SHARES SHARES SHARES VOTED
-----------------------------------------------------
<S> <C> <C> <C>
For 1,165,330.630 61.004% 98.967%
Against 8,058.838 0.422% 0.684%
Abstain 4,109.000 0.215% 0.349%
</TABLE>
77
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
The following information should be read in conjunction with the financial
statements and notes thereto appearing elsewhere in this Semi-Annual Report. For
the year or period ended 10/31/96 and thereafter, calculations are based for a
share outstanding during the period. For years or periods ending prior to
11/1/95, calculations are based on average number of shares outstanding for each
period.
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED
------------ ----------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................... $13.71 $13.80 $14.08 $11.82 $8.36
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................... 0.06 0.14 0.27 0.05 (0.08)
Net Realized & Unrealized Gain (Loss) on Investments.... 1.94 0.55 (0.29) 2.30 3.54
---------------------------------------------------------------
Total from Investment Operations.................... 2.00 0.69 (0.02) 2.35 3.46
LESS DISTRIBUTIONS
Distributions from Net Investment 0.06 0.14 0.02 0.00 0.00
Income.................................................
Distributions in excess of Net Investment Income........ 0.08 0.07 0.00 0.09 0.00
Distributions from Capital Gains........................ 0.33 0.21 0.24 0.00 0.00
Distributions in excess of Capital 0.00 0.36 0.00 0.00 0.00
Gains..................................................
---------------------------------------------------------------
Total Distributions................................. 0.47 0.78 0.26 0.09 0.00
---------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.......................... $15.24 $13.71 $13.80 $14.08 $11.82
---------------------------------------------------------------
---------------------------------------------------------------
TOTAL RETURN............................................ 14.86% 5.03% 1.78% 22.40% 41.39%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)....................... $385,366 $481,039 $878,560 $319,811 $238,167
Ratio of Expenses to Average Net Assets................. 1.50%(d) 1.37%(a) 1.40% 1.44% 1.57%
Ratio of Net Investment Income to Average Net Assets.... 0.70%(d) 0.72% 1.95% 0.39% (0.73)%
Portfolio Turnover Rate................................. 12.95% 32.88% 122.97% 146.44% 73.29%
Average Commission Rate................................. $0.0433 $0.0358(b) -- -- --
<CAPTION>
PERIOD
ENDED
-----------
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87(c)
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................... $12.05 $8.78 $11.49 $9.69 $8.13 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................... (0.02) 0.04 0.15 0.21 (0.05) (0.04)
Net Realized & Unrealized Gain (Loss) on Investments.... (1.62) 4.01 (1.43) 1.59 1.61 (1.83)
Total from Investment Operations.................... (1.64) 4.05 (1.28) 1.80 1.56 (1.87)
LESS DISTRIBUTIONS
Distributions from Net Investment 0.03 0.14 0.22 0.00 0.00 0.00
Income.................................................
Distributions in excess of Net Investment Income........ 2.02 0.64 1.21 0.00 0.00 0.00
Distributions from Capital Gains........................ 0.00 0.00 0.00 0.00 0.00 0.00
Distributions in excess of Capital 0.00 0.00 0.00 0.00 0.00 0.00
Gains..................................................
Total Distributions................................. 2.05 0.78 1.43 0.00 0.00 0.00
NET ASSET VALUE, END OF PERIOD.......................... $8.36 $12.05 $8.78 $11.49 $9.69 $8.13
TOTAL RETURN............................................ 8.11% 49.58% (10.90)% 18.68% 19.63% (30.32)%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)....................... $5,857 $3,542 $2,926 $3,356 $4,393 $1,892
Ratio of Expenses to Average Net Assets................. 1.74% 1.92% 2.00% 2.00% 3.94% 2.60%(d)
Ratio of Net Investment Income to Average Net Assets.... (0.25)% 0.32% 1.55% 1.96% 3.34% 0.05%(d)
Portfolio Turnover Rate................................. 102.27% 256.68% 314.73% 275.62% 155.12% 3.90%
Average Commission Rate................................. -- -- -- -- -- --
</TABLE>
78
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED
------------ ----------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93
---------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA (cont.)
Average Number of Shares Outstanding.................... 28,541,098* -- -- -- --
Amount of Debt Outstanding at April 30, 1997............ $0 -- -- -- --
Average Amount of Debt Outstanding During the Period.... $1,616,615* -- -- -- --
Average Amount of Debt Per Share During the Period...... $0.06 -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................. 1.59%(d) 1.37%(a) 1.40% 1.54% 1.59%
Ratio of Net Investment Income to Average Net Assets.... 0.61%(d) 0.72% 1.95% 0.29% (0.75)%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................. 1.50%(d) 1.37% -- -- --
Ratio of Net Investment Income to Average Net Assets.... 0.70%(d) 0.72% -- -- --
<CAPTION>
PERIOD
ENDED
-----------
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88 10/31/87(C)
<S> <C> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA (cont.)
Average Number of Shares Outstanding.................... -- -- -- -- -- --
Amount of Debt Outstanding at April 30, 1997............ -- -- -- -- -- --
Average Amount of Debt Outstanding During the Period.... -- -- -- -- -- --
Average Amount of Debt Per Share During the Period...... -- -- -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................. 2.18% 2.40% 2.86% 2.44% -- --
Ratio of Net Investment Income to Average Net Assets.... (0.69)% (0.15)% 0.70% 1.53% -- --
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................. -- -- -- -- -- --
Ratio of Net Investment Income to Average Net Assets.... -- -- -- -- -- --
</TABLE>
- -------------------
(a) Ratios include expenses paid indirectly through directed brokerage and
certain expense offset arrangements.
(b) Disclosure of the average commission rate paid relates to the purchase
and sale of investment securities and is required for funds that
invest greater than 10% of average net assets in equity transactions.
This disclosure is required for fiscal periods beginning on or after
September 1, 1995.
(c) Commencement of operations - 4/9/87.
(d) Computed on an annualized basis.
(e) Commencement of operations - 2/20/96.
(f) Commencement of operations - 10/10/96.
(g) Commencement of operations - 1/31/89.
(h) Commencement of operations - 10/28/96.
(i) Commencement of operations - 10/3/96.
(j) Commencement of operations - 4/4/94.
(k) The Fund's fiscal year was changed from 9/30 to 10/31, effective
10/31/87, which represents a conformed 12 month period.
* Computed on a daily basis.
79
<PAGE>
CRABBE HUSON SMALL CAP FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED PERIOD ENDED
------------ ------------
4/30/97 10/31/96(e)
---------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.02 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ (0.01) 0.03
Net Realized & Unrealized Gain (Loss) on 1.29 0.99
Investments.................................
---------------------------
Total from Investment Operations......... 1.28 1.02
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.00 0.00
Distributions in excess of Net Investment 0.02 0.00
Income......................................
Distributions from Capital Gains............. 0.14 0.00
---------------------------
Total Distributions...................... 0.16 0.00
---------------------------
NET ASSET VALUE, END OF PERIOD............... $12.14 $11.02
---------------------------
---------------------------
TOTAL RETURN................................. 11.66% 10.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $23,250 $19,156
Ratio of Expenses to Average Net Assets...... 1.50%(a)(d) 1.50%(a)(d)
Ratio of Net Investment Income to Average Net (0.19)%(d) 0.70%(d)
Assets......................................
Portfolio Turnover Rate...................... 27.22% 39.34%
Average Commission Rate...................... $0.0303 $0.0275(b)
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.77%(a)(d) 2.32%(a)(d)
Ratio of Net Investment Income to Average Net (0.46)%(d) (0.11)%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.50%(d) 1.51%(d)
Ratio of Net Investment Income to Average Net (0.19)%(d) 0.71%(d)
Assets......................................
</TABLE>
See footnotes on page 79.
80
<PAGE>
CRABBE HUSON SMALL CAP FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED PERIOD ENDED
------------ ------------
4/30/97 10/31/96(f)
---------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.01 $11.05
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.03 0.00
Net Realized & Unrealized Gain (Loss) on 1.28 (0.04)
Investments.................................
---------------------------
Total from Investment Operations......... 1.31 (0.04)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.03 0.00
Distributions in excess of Net Investment 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.14 0.00
---------------------------
Total Distributions...................... 0.17 0.00
---------------------------
NET ASSET VALUE, END OF PERIOD............... $12.15 $11.01
---------------------------
---------------------------
TOTAL RETURN................................. 11.96% (0.36)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $25,162 $1,514
Ratio of Expenses to Average Net Assets...... 1.00%(a)(d) 1.00%(a)(d)
Ratio of Net Investment Income to Average Net 0.35%(d) (0.43)%(d)
Assets......................................
Portfolio Turnover Rate...................... 27.22% 39.34%
Average Commission Rate...................... $0.0303 $0.0275(b)
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.40%(a)(d) 3.55%(a)(d)
Ratio of Net Investment Income to Average Net (0.05)%(d) (2.98)%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.00%(d) 1.00%(d)
Ratio of Net Investment Income to Average Net 0.35%(d) (0.43)%(d)
Assets......................................
</TABLE>
See footnotes on page 79.
81
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED
-------------- -----------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $13.39 $13.64 $12.87 $13.52 $11.68
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.15 0.30 0.34 0.30 0.23
Net Realized & Unrealized Gain (Loss) on 0.15 0.88 1.21 (0.08) 2.09
Investments.................................
----------------------------------------------------------------
Total from Investment Operations......... 0.30 1.18 1.55 0.22 2.32
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.15 0.30 0.33 0.29 0.24
Distributions in excess of Net Investment 0.00 0.00 0.00 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.74 0.64 0.45 0.58 0.24
Distributions in excess of Capital Gains..... 0.00 0.49 0.00 0.00 0.00
----------------------------------------------------------------
Total Distributions...................... 0.89 1.43 0.78 0.87 0.48
----------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $12.80 $13.39 $13.64 $12.87 $13.52
----------------------------------------------------------------
----------------------------------------------------------------
TOTAL RETURN................................. 2.18% 8.96% 13.00% 2.66% 20.93%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $97,905 $125,018 $136,530 $110,152 $85,390
Ratio of Expenses to Average Net Assets...... 1.40%(a)(d) 1.47%(a) 1.48% 1.44% 1.46%
Ratio of Net Investment Income to Average Net 2.19%(d) 2.22% 2.57% 2.30% 1.85%
Assets......................................
Portfolio Turnover Rate...................... 53.23% 252.29% 225.70% 149.19% 116.10%
Average Commission Rate...................... $0.0510 $0.0536(b) -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.56%(a)(d) 1.47%(a) 1.49% 1.52% 1.54%
Ratio of Net Investment Income to Average Net 2.03%(d) 2.22% 2.56% 2.22% 1.77%
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.40%(d) 1.46% -- -- --
Ratio of Net Investment Income to Average Net 2.19%(d) 2.22% -- -- --
Assets......................................
<CAPTION>
PERIOD
ENDED
-----------
10/31/92 10/31/91 10/31/90 10/31/89(g)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.00 $9.24 $10.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.35 0.41 0.46 0.40
Net Realized & Unrealized Gain (Loss) on 0.82 1.82 (1.12) 0.29
Investments.................................
Total from Investment Operations......... 1.17 2.23 (0.66) 0.69
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.35 0.43 0.72 0.00
Distributions in excess of Net Investment 0.00 0.00 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.14 0.04 0.07 0.00
Distributions in excess of Capital Gains..... 0.00 0.00 0.00 0.00
Total Distributions...................... 0.49 0.47 0.79 0.00
NET ASSET VALUE, END OF PERIOD............... $11.68 $11.00 $9.24 $10.69
TOTAL RETURN................................. 11.25% 24.55% (6.40)% 9.30%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $55,099 $23,893 $13,174 $12,578
Ratio of Expenses to Average Net Assets...... 1.52% 1.76% 1.90% 1.91%(d)
Ratio of Net Investment Income to Average Net 3.02% 3.97% 4.51% 5.02%(d)
Assets......................................
Portfolio Turnover Rate...................... 155.26% 157.89% 161.72% 88.14%
Average Commission Rate...................... -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REI
Ratio of Expenses to Average Net Assets...... 1.62% 1.79% 1.93% 1.93%(d)
Ratio of Net Investment Income to Average Net 2.92% 3.94% 4.49% 5.00%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... -- -- -- --
Ratio of Net Investment Income to Average Net -- -- -- --
Assets......................................
</TABLE>
See footnotes on page 79.
82
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED PERIOD ENDED
------------------ ------------------
4/30/97 10/31/96(h)
--------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $13.39 $13.38
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.23 0.01
Net Realized & Unrealized Gain (Loss) on 0.09 0.08
Investments.................................
--------------------------------------
Total from Investment Operations......... 0.32 0.09
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.17 0.01
Distributions in excess of Net Investment 0.00 0.07
Income......................................
Distributions from Capital Gains............. 0.74 0.00
--------------------------------------
Total Distributions...................... 0.91 0.08
--------------------------------------
NET ASSET VALUE, END OF PERIOD............... $12.80 $13.39
--------------------------------------
--------------------------------------
TOTAL RETURN................................. 2.44% 0.59%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $14,351 $2,526
Ratio of Expenses to Average Net Assets...... 1.00%(a)(d) 1.00%(a)(d)
Ratio of Net Investment Income to Average Net 2.63%(d) 2.87%(d)
Assets......................................
Portfolio Turnover Rate...................... 53.23% 252.29%
Average Commission Rate...................... $0.0510 $0.0536 (b)
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.55%(a)(d) 2.00%(a)(d)
Ratio of Net Investment Income to Average Net 2.08%(d) 1.87%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.00%(d) 1.00%(d)
Ratio of Net Investment Income to Average Net 2.63%(d) 2.87%(d)
Assets......................................
</TABLE>
See footnotes on page 79.
83
<PAGE>
CRABBE HUSON EQUITY FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED
--------------- YEAR ENDED
------------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...................... $19.50 $18.17 $16.44 $16.08 $13.03
Net Investment Income..................................... 0.02 0.11 0.22 0.19 0.10
Net Realized & Unrealized Gain (Loss) on Investments...... 0.58 2.33 1.75 0.57 3.45
------------------------------------------------------------------
Total from Investment Operations...................... 0.60 2.44 1.97 0.76 3.55
LESS DISTRIBUTIONS
Distributions from Net Investment Income.................. 0.02 0.11 0.09 0.04 0.11
Distributions in excess of Net Investment Income.......... 0.05 0.06 0.00 0.00 0.00
Distributions from Capital Gains.......................... 1.54 0.94 0.15 0.36 0.39
------------------------------------------------------------------
Total Distributions................................... 1.61 1.11 0.24 0.40 0.50
------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............................ $18.49 $19.50 $18.17 $16.44 $16.08
------------------------------------------------------------------
------------------------------------------------------------------
TOTAL RETURN.............................................. 2.97% 13.78% 13.37% 7.89% 29.90%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)......................... $332,717 $436,578 $387,184 $153,105 $34,520
Ratio of Expenses to Average Net Assets................... 1.44%(a)(d) 1.38%(a) 1.40% 1.45% 1.49%
Ratio of Net Investment Income to Average Net Assets...... 0.22%(d) 0.56% 1.30% 1.18% 0.67%
Portfolio Turnover Rate................................... 63.72% 117.00% 92.43% 106.49% 114.38%
Average Commission Rate................................... $0.0522 $0.0530(b) -- -- --
Average Number of Shares Outstanding...................... 20,428,945* -- -- -- --
Amount of Debt Outstanding at April 30, 1997.............. $0 -- -- -- --
Average Amount of Debt Outstanding During the Period...... $22,191* -- -- -- --
Average Amount of Debt Per Share During the Period........ $0.00 -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................... 1.45%(a)(d) 1.38%(a) 1.40% 1.56% 1.64%
Ratio of Net Investment Income to Average Net Assets...... 0.21%(d) 0.56% 1.30% 1.06% 0.52%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................... 1.44%(d) 1.37% -- -- --
Ratio of Net Investment Income to Average Net Assets...... 0.22%(d) 0.57% -- -- --
<CAPTION>
PERIOD
ENDED
------------
10/31/92 10/31/91 10/31/90 10/31/89(g)
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...................... $12.57 $8.54 $10.50 $10.00
Net Investment Income..................................... 0.20 0.19 0.25 0.31
Net Realized & Unrealized Gain (Loss) on Investments...... 0.92 4.15 (1.67) 0.19
Total from Investment Operations...................... 1.12 4.34 (1.42) 0.50
LESS DISTRIBUTIONS
Distributions from Net Investment Income.................. 0.10 0.31 0.39 0.00
Distributions in excess of Net Investment Income.......... 0.00 0.00 0.00 0.00
Distributions from Capital Gains.......................... 0.56 0.00 0.15 0.00
Total Distributions................................... 0.66 0.31 0.54 0.00
NET ASSET VALUE, END OF PERIOD............................ $13.03 $12.57 $8.54 $10.50
TOTAL RETURN.............................................. 12.48% 52.44% (14.97)% 6.72%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)......................... $13,429 $5,930 $2,944 $5,018
Ratio of Expenses to Average Net Assets................... 1.55% 1.84% 1.93% 1.69%(d)
Ratio of Net Investment Income to Average Net Assets...... 1.57% 1.60% 2.56% 3.98%(d)
Portfolio Turnover Rate................................... 180.72% 171.82% 265.25% 90.54%
Average Commission Rate................................... -- -- -- --
Average Number of Shares Outstanding...................... -- -- -- --
Amount of Debt Outstanding at April 30, 1997.............. -- -- -- --
Average Amount of Debt Outstanding During the Period...... -- -- -- --
Average Amount of Debt Per Share During the Period........ -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................... 1.93% 2.41% 2.66% 1.97%(d)
Ratio of Net Investment Income to Average Net Assets...... 1.18% 1.03% 1.83% 3.68%(d)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................... -- -- -- --
Ratio of Net Investment Income to Average Net Assets...... -- -- -- --
</TABLE>
See footnotes on page 79.
84
<PAGE>
CRABBE HUSON EQUITY FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED PERIOD ENDED
-------------- --------------
4/30/97 10/31/96(i)
-------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $19.51 $19.82
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.12 0.00
Net Realized & Unrealized Gain (Loss) on 0.52 (0.31)
Investments.................................
-------------------------------
Total from Investment Operations......... 0.64 (0.31)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.09 0.00
Distributions in excess of Net Investment 0.00 0.00
Income......................................
Distributions from Capital Gains............. 1.54 0.00
-------------------------------
Total Distributions...................... 1.63 0.00
-------------------------------
NET ASSET VALUE, END OF PERIOD............... $18.52 $19.51
-------------------------------
-------------------------------
TOTAL RETURN................................. 3.17% (1.56)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $23,142 $4,415
Ratio of Expenses to Average Net Assets...... 1.00%(a)(d) 1.00%(a)(d)
Ratio of Net Investment Income to Average Net 0.65%(d) 0.15%(d)
Assets......................................
Portfolio Turnover Rate...................... 63.72% 117.00%
Average Commission Rate...................... $0.0522 $0.0530(b)
Average Number of Shares Outstanding......... 787,229* --
Amount of Debt Outstanding at April 30, $0 --
1997........................................
Average Amount of Debt Outstanding During the $838* --
Period......................................
Average Amount of Debt Per Share During the $0.00 --
Period......................................
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.40%(a)(d) 1.58%(a)(d)
Ratio of Net Investment Income to Average Net 0.25%(d) (0.43)%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.00%(d) 1.00%(d)
Ratio of Net Investment Income to Average Net 0.65%(d) 0.15%(d)
Assets......................................
</TABLE>
See footnotes on page 79.
85
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED PERIOD ENDED
-------------- --------------------------------- --------------
4/30/97 10/31/96 10/31/95 10/31/94(j)
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.58 $9.69 $9.50 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.21 0.38 0.44 0.37
Net Realized & Unrealized Gain (Loss) on 0.89 2.01 0.31 (0.64)
Investments.................................
-----------------------------------------------------------------------
Total from Investment Operations......... 1.10 2.39 0.75 (0.27)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.18 0.38 0.44 0.23
Distributions in excess of Net Investment 0.00 0.00 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.51 0.12 0.12 0.00
-----------------------------------------------------------------------
Total Distributions...................... 0.69 0.50 0.56 0.23
-----------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $11.99 $11.58 $9.69 $9.50
-----------------------------------------------------------------------
-----------------------------------------------------------------------
TOTAL RETURN................................. 9.47% 25.39% 8.31% (3.25)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $29,334 $20,649 $18,986 $18,280
Ratio of Expenses to Average Net Assets...... 1.50%(a)(d) 1.50%(a) 1.50% 1.01%(d)
Ratio of Net Investment Income to Average Net 3.42%(d) 3.59% 4.59% 6.30%(d)
Assets......................................
Portfolio Turnover Rate...................... 34.81% 120.19% 59.53% 43.30%
Average Commission Rate...................... $0.0621 $0.0570(b) -- --
Average Number of Shares Outstanding......... 2,415,702* -- -- --
Amount of Debt Outstanding at April 30, $0 -- -- --
1997........................................
Average Amount of Debt Outstanding During the $109,278* -- -- --
Period......................................
Average Amount of Debt Per Share During the $0.05 -- -- --
Period......................................
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.72%(a)(d) 1.88%(a) 1.89% 2.03%(d)
Ratio of Net Investment Income to Average Net 3.21%(d) 3.21% 4.20% 5.28%(d)
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.51%(d) 1.50% -- --
Ratio of Net Investment Income to Average Net 3.42%(d) 3.59% -- --
Assets......................................
</TABLE>
See footnotes on page 79.
86
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
----------- ---------------------------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $12.50 $12.62 $11.99 $12.80 $12.20 $12.14
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.27 0.54 0.55 0.54 0.57 0.62
Net Realized & Unrealized Gain (Loss) on (0.09) (0.12) 0.70 (0.80) 0.69 0.15
Investments.................................
-------------------------------------------------------------------------------
Total from Investment Operations......... 0.18 0.42 1.25 (0.26) 1.26 0.77
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.27 0.54 0.55 0.54 0.57 0.62
Distributions in excess of Net Investment 0.00 0.00 0.00 0.00 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.00 0.00 0.07 0.01 0.09 0.09
-------------------------------------------------------------------------------
Total Distributions...................... 0.27 0.54 0.62 0.55 0.66 0.71
-------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $12.41 $12.50 $12.62 $11.99 $12.80 $12.20
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TOTAL RETURN................................. 1.41% 3.43% 10.66% (2.06)% 10.71% 6.51%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $25,194 $26,135 $28,070 $29,046 $29,408 $20,296
Ratio of Expenses to Average Net Assets...... 0.98%(d) 0.98%(a) 0.98% 0.98% 1.05% 1.11%
Ratio of Net Investment Income to Average Net 4.30%(d) 4.33% 4.45% 4.37% 4.51% 5.04%
Assets......................................
Portfolio Turnover Rate...................... 1.55% 15.64% 22.91% 20.58% 11.62% 25.30%
Average Number of Shares Outstanding......... 2,056,133* -- -- -- -- --
Amount of Debt Outstanding at April 30, $0 -- -- -- -- --
1997........................................
Average Amount of Debt Outstanding During the $3,021* -- -- -- -- --
Period......................................
Average Amount of Debt Per Share During the $0.00 -- -- -- -- --
Period......................................
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.14%(d) 1.04%(a) 1.08% 1.08% 1.09% 1.13%
Ratio of Net Investment Income to Average Net 4.14%(d) 4.27% 4.35% 4.26% 4.46% 5.01%
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 0.98%(d) 0.98% -- -- -- --
Ratio of Net Investment Income to Average Net 4.30%(d) 4.33% -- -- -- --
Assets......................................
</TABLE>
See footnotes on page 79.
87
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED
------------------------------------------------------------
10/31/87
10/31/91 10/31/90 10/31/89 10/31/88 (k)
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.74 $11.72 $11.72 $11.08 $12.15
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.64 0.63 0.68 0.64 0.73
Net Realized & Unrealized Gain (Loss) on 0.48 0.05 0.08 0.64 (0.99)
Investments.................................
------------------------------------------------------------
Total from Investment Operations......... 1.12 0.68 0.76 1.28 (0.26)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.65 0.64 0.67 0.64 0.73
Distributions in excess of Net Investment 0.00 0.00 0.00 0.00 0.00
Income......................................
Distributions from Capital Gains............. 0.07 0.02 0.09 0.00 0.08
------------------------------------------------------------
Total Distributions...................... 0.72 0.66 0.76 0.64 0.81
------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $12.14 $11.74 $11.72 $11.72 $11.08
------------------------------------------------------------
------------------------------------------------------------
TOTAL RETURN................................. 9.85% 6.00% 6.67% 12.02% (1.95)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $18,383 $18,766 $19,173 $20,058 $14,277
Ratio of Expenses to Average Net Assets...... 1.21% 1.38% 1.04% 1.21% 1.14%
Ratio of Net Investment Income to Average Net 5.36% 5.41% 5.82% 5.53% 5.66%
Assets......................................
Portfolio Turnover Rate...................... 53.40% 58.52% 45.25% 31.44% 19.18%
Average Number of Shares Outstanding......... -- -- -- -- --
Amount of Debt Outstanding at April 30, -- -- -- -- --
1997........................................
Average Amount of Debt Outstanding During the -- -- -- -- --
Period......................................
Average Amount of Debt Per Share During the -- -- -- -- --
Period......................................
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.24% 1.55% 1.16% 1.32% --
Ratio of Net Investment Income to Average Net 5.34% 5.23% 5.71% 5.42% --
Assets......................................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... -- -- -- -- --
Ratio of Net Investment Income to Average Net -- -- -- -- --
Assets......................................
</TABLE>
See footnotes on page 79.
88
<PAGE>
CRABBE HUSON INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED
------------ ------------------------------------------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92 10/31/91 10/31/90
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF $10.20 $10.26 $9.71 $10.75 $10.90 $10.63 $10.01 $10.27
PERIOD............................
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.............. 0.62 0.54 0.53 0.50 0.46 0.66 0.70 0.69
Net Realized & Unrealized Gain (0.52) (0.05) 0.58 (0.76) 0.33 0.36 0.62 (0.24)
(Loss) on Investments.............
---------------------------------------------------------------------------------------------
Total from Investment 0.10 0.49 1.11 (0.26) 0.79 1.02 1.32 0.45
Operations....................
LESS DISTRIBUTIONS
Distributions from Net Investment 0.31 0.54 0.53 0.50 0.49 0.66 0.70 0.69
Income............................
Distributions in excess of Net 0.00 0.01 0.03 0.01 0.00 0.00 0.00 0.00
Investment Income.................
Distributions from Capital Gains... 0.00 0.00 0.00 0.27 0.45 0.09 0.00 0.02
---------------------------------------------------------------------------------------------
Total Distributions............ 0.31 0.55 0.56 0.78 0.94 0.75 0.70 0.71
---------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD..... $9.99 $10.20 $10.26 $9.71 $10.75 $10.90 $10.63 $10.01
---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------
TOTAL RETURN....................... 1.00% 4.94% 11.92% (2.71)% 7.73% 9.74% 13.51% 4.43%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $3,387 $4,694 $7,190 $5,273 $5,697 $5,634 $5,486 $2,123
(000's)...........................
Ratio of Expenses to Average Net 0.80%(d) 0.80%(a) 0.80% 0.80% 0.81% 0.90% 0.98% 1.51%
Assets............................
Ratio of Net Investment Income to 5.86%(d) 5.31% 5.47% 4.92% 4.34% 6.09% 6.82% 6.89%
Average Net Assets................
Portfolio Turnover Rate............ 9.92% 468.75% 543.15% 306.79% 260.22% 227.45% 115.76% 73.76%
Average Number of Shares 372,496* -- -- -- -- -- -- --
Outstanding.......................
Amount of Debt Outstanding at April $0 -- -- -- -- -- -- --
30, 1997..........................
Average Amount of Debt Outstanding $669* -- -- -- -- -- -- --
During the Period.................
Average Amount of Debt Per Share $0.00 -- -- -- -- -- -- --
During the Period.................
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net 2.77%(d) 2.29%(a) 1.95% 2.16% 1.96% 1.94% 2.42% 3.07%
Assets............................
Ratio of Net Investment Income to 3.89%(d) 3.82% 4.32% 3.56% 3.19% 5.06% 5.38% 5.33%
Average Net Assets................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net 0.80%(d) 0.80% -- -- -- -- -- --
Assets............................
Ratio of Net Investment Income to 5.86%(d) 5.31% -- -- -- -- -- --
Average Net Assets................
<CAPTION>
PERIOD
ENDED
-----------
10/31/89(G)
<S> <C>
NET ASSET VALUE, BEGINNING OF $10.00
PERIOD............................
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.............. 0.55
Net Realized & Unrealized Gain 0.28
(Loss) on Investments.............
Total from Investment 0.83
Operations....................
LESS DISTRIBUTIONS
Distributions from Net Investment 0.56
Income............................
Distributions in excess of Net 0.00
Investment Income.................
Distributions from Capital Gains... 0.00
Total Distributions............ 0.56
NET ASSET VALUE, END OF PERIOD..... $10.27
TOTAL RETURN....................... 10.43%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period $1,356
(000's)...........................
Ratio of Expenses to Average Net 1.15%(d)
Assets............................
Ratio of Net Investment Income to 7.23%(d)
Average Net Assets................
Portfolio Turnover Rate............ 86.60%
Average Number of Shares --
Outstanding.......................
Amount of Debt Outstanding at April --
30, 1997..........................
Average Amount of Debt Outstanding --
During the Period.................
Average Amount of Debt Per Share --
During the Period.................
RATIOS IF FEES HAD NOT BEEN WAIVED
Ratio of Expenses to Average Net 4.56%(d)
Assets............................
Ratio of Net Investment Income to 3.81%(d)
Average Net Assets................
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net --
Assets............................
Ratio of Net Investment Income to --
Average Net Assets................
</TABLE>
See footnotes on page 79.
89
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
----------- --------------------------------------------------------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $10.66 $10.66 $10.27 $11.04 $10.91 $10.69
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................. 0.26 0.47 0.51 0.46 0.47 0.58
Net Realized & Unrealized Gain (Loss) on Investments.. (0.10) 0.00 0.40 (0.65) 0.22 0.29
----------------------------------------------------------------------
Total from Investment Operations.................. 0.16 0.47 0.91 (0.19) 0.69 0.87
LESS DISTRIBUTIONS
Distributions from Net Investment Income.............. 0.26 0.47 0.51 0.47 0.48 0.58
Distributions in excess of Net Investment Income...... 0.00 0.00 0.01 0.00 0.00 0.00
Distributions from Capital Gains...................... 0.00 0.00 0.00 0.11 0.08 0.07
----------------------------------------------------------------------
Total Distributions............................... 0.26 0.47 0.52 0.58 0.56 0.65
----------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD........................ $10.56 $10.66 $10.66 $10.27 $11.04 $10.91
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL RETURN.......................................... 1.51% 4.55% 9.12% (1.78)% 6.71% 8.70%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)..................... $6,333 $8,517 $8,426 $9,249 $11,218 $8,959
Ratio of Expenses to Average Net Assets............... 0.75%(d) 0.75%(a) 0.75% 0.75% 0.75% 0.80%
Ratio of Net Investment Income to Average Net Assets.. 4.69%(d) 4.44% 4.85% 4.39% 4.33% 5.35%
Portfolio Turnover Rate............................... 33.49% 226.37% 230.43% 76.09% 81.74% 105.52%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets............... 1.66%(d) 1.63%(a) 1.46% 1.47% 1.26% 1.52%
Ratio of Net Investment Income to Average Net Assets.. 3.78%(d) 3.56% 4.14% 3.66% 3.81% 4.63%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets............... 0.75%(d) 0.75% -- -- -- --
Ratio of Net Investment Income to Average Net Assets.. 4.69%(d) 4.44% -- -- -- --
<CAPTION>
PERIOD
ENDED
-----------
10/31/91 10/31/90 10/31/89(g)
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.................. $10.24 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................................. 0.67 0.68 0.56
Net Realized & Unrealized Gain (Loss) on Investments.. 0.45 (0.04) 0.29
Total from Investment Operations.................. 1.12 0.64 0.85
LESS DISTRIBUTIONS
Distributions from Net Investment Income.............. 0.67 0.67 0.57
Distributions in excess of Net Investment Income...... 0.00 0.00 0.00
Distributions from Capital Gains...................... 0.00 0.01 0.00
Total Distributions............................... 0.67 0.68 0.57
NET ASSET VALUE, END OF PERIOD........................ $10.69 $10.24 $10.28
TOTAL RETURN.......................................... 11.17% 6.40% 11.15%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)..................... $3,748 $2,069 $1,717
Ratio of Expenses to Average Net Assets............... 0.96% 1.42% 1.14%(d)
Ratio of Net Investment Income to Average Net Assets.. 6.44% 6.72% 7.35%(d)
Portfolio Turnover Rate............................... 114.81% 87.71% 40.42%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets............... 2.15% 2.84% 3.40%(d)
Ratio of Net Investment Income to Average Net Assets.. 5.25% 5.31% 5.09%(d)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets............... -- -- --
Ratio of Net Investment Income to Average Net Assets.. -- -- --
</TABLE>
See footnotes on page 79.
90
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD PERIOD
ENDED YEAR ENDED ENDED
----------- ----------------------------------------------------------------------------- -----------
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(g)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD............... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment
Income............... 0.02 0.05 0.05 0.03 0.03 0.03 0.06 0.07 0.06
Net Realized &
Unrealized Gain
(Loss) on
Investments.......... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------------------------------------------------------------------------------------------------------
Total from
Investment
Operations....... 0.02 0.05 0.05 0.03 0.03 0.03 0.06 0.07 0.06
LESS DISTRIBUTIONS
Distributions from Net
Investment Income.... 0.02 0.05 0.05 0.03 0.03 0.03 0.06 0.07 0.06
Distributions in
excess of Net
Investment Income.... 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
---------------------------------------------------------------------------------------------------------
Total
Distributions.... 0.02 0.05 0.05 0.03 0.03 0.03 0.06 0.07 0.06
---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END
OF PERIOD............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL RETURN.......... 2.33% 4.81% 5.30% 3.28% 2.53% 3.36% 13.76% 7.62% 10.05%(d)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of
Period (000's)....... $31,320 $42,171 $54,714 $32,383 $14,784 $12,395 $14,907 $21,406 $10,735
Ratio of Expenses to
Average Net Assets... 0.70%(d) 0.70%(a) 0.70% 0.70% 0.70% 0.75% 0.81% 0.80% 0.60%(d)
Ratio of Net
Investment Income to
Average Net Assets... 4.66%(d) 4.74% 5.21% 3.39% 2.51% 3.32% 5.76% 7.57% 8.43%(d)
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to
Average Net Assets... 1.23%(d) 1.06%(a) 1.16% 1.29% 1.32% 1.09% 1.18% 1.33% 1.34%(d)
Ratio of Net
Investment Income to
Average Net Assets... 4.13%(d) 4.38% 4.75% 2.81% 1.88% 2.98% 5.38% 7.04% 7.69%(d)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to
Average Net Assets... 0.70%(d) 0.70% -- -- -- -- -- -- --
Ratio of Net
Investment Income to
Average Net Assets... 4.66%(d) 4.74% -- -- -- -- -- -- --
</TABLE>
See footnotes on page 79.
91
<PAGE>
CRABBE HUSON FUNDS
MAILING ADDRESS
Crabbe Huson Funds
P.O. Box 8413
Boston, MA 02266-8413
INVESTMENT ADVISOR
The Crabbe Huson Group, Inc.
121 S.W. Morrison, Suite 1400
Portland, OR 97204
DISTRIBUTOR
Crabbe Huson Securities Inc.
121 S.W. Morrison, Suite 1400
Portland, OR 97204
LEGAL COUNSEL
Davis Wright Tremaine
1300 S.W. Fifth Avenue, Suite 2200
Portland, OR 97201
TRANSFER AGENT &
INVESTOR SERVICES
State Street Bank and Trust Company
P.O. Box 8413
Boston, MA 02266-8413
FUND DIRECTORS
William W. Wyatt Jr.
Louis Scherzer
Richard P. Wollenberg
Bob L. Smith
Gary L. Capps
Richard S. Huson
James E. Crabbe
Craig P. Stuvland
<PAGE>
1-800-541-9732
http:/www.contrarian.com
CRABBE HUSON FUNDS
121 S.W. Morrison, Suite 1400
Portland, OR 97204
Bulk Rate
U.S. Postage
PAID
Portland, OR
Permit No. 1502
