<PAGE>
APRIL 30, 1998
[LOGO] SEMI-ANNUAL
REPORT
(UNAUDITED)
C R A B B E H U S O N F U N D S
- ------------------------------------------------------------------------------
THE CRABBE HUSON [ART]
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
<PAGE>
APRIL 30, 1998
SEMI-ANNUAL [ART]
REPORT Mt. Hood, Oregon
TABLE OF CONTENTS
PAGE 1 TO OUR FELLOW SHAREHOLDERS
REVIEW AND SCHEDULE OF INVESTMENTS
PAGE 14 THE CRABBE HUSON SPECIAL FUND, INC.
PAGE 19 CRABBE HUSON SMALL CAP FUND
PAGE 23 CRABBE HUSON ASSET ALLOCATION FUND
PAGE 30 CRABBE HUSON EQUITY FUND
PAGE 35 CRABBE HUSON REAL ESTATE
INVESTMENT FUND
PAGE 39 CRABBE HUSON OREGON TAX-FREE FUND
PAGE 45 CRABBE HUSON INCOME FUND
PAGE 49 CRABBE HUSON U.S. GOVERNMENT
INCOME FUND
PAGE 52 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 65 NOTES TO FINANCIAL STATEMENTS
PAGE 77 FINANCIAL HIGHLIGHTS
<PAGE>
[LOGO]
CRABBE HUSON
May 29, 1998
To Our Fellow Shareholders:
If you include all the various types of mutual funds you can pick from today --
open-end, closed-end, load, no-load, from the newest start-up fund to the giant
Fidelity Magellan -- the total number available is staggering. Take a look at
the mutual funds listings page of your newspaper: there are thousands of funds,
each competing intensely for your investment money.
Part of succeeding in this industry is clearly defining the benefit you offer to
investors. To encourage you to invest, each one in that lineup of thousands of
funds has to define itself in a way that demonstrates the benefits of its
investment style.
Crabbe Huson is a contrarian investment firm. We've told you often and in many
places (and will again in this report) what it means to be a contrarian and why
it's wise for you to include our style as an element of your diversified
portfolio. It may be useful for you, however, especially in light of the
market's orientation at the time of this writing, for us to say something about
what a contrarian IS NOT.
A contrarian at Crabbe Huson is not someone who says, in the midst of one of the
greatest bull markets in the history of investing, simply that "the market is
going down." Contrarians who are worth their salt aren't interested in telling
you the opposite of conventional wisdom just to be different.
Good contrarian investors act opposite "the crowd" because they see value or
promise that others don't. This is how we strive to operate at Crabbe Huson. To
be sure, some fund managers buy penny stocks from companies that are
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teetering on the brink, in the hope of hitting a home run. We have our share of
home runs every now and then, but more often than not, our team is in the game,
adding to our score with one base-hit after another.
The same goes for the kinds of stocks contrarians are buying. At Crabbe Huson,
we're not buying companies that have hit rock bottom. Their STOCK PRICES may
have, but not the value of the underlying businesses. Plenty of companies have
low stock values for an obvious and very good reason: their businesses are not
healthy and the market knows it. We're not interested in these companies.
Since our Annual Report late last year, the stock market has become increasingly
more turbulent and, overall, more richly valued as measured by the popular
indices. Our work in this environment has produced mostly positive results,
though in spots the market did throw us some curves. Speaking very generally,
we're not comfortable with the market's orientation toward high multiples and
favoritism toward index leaders. You've heard us say that before, but we'll
continue to say it as long as it's relevant to your investment considerations.
What does encourage us is the trend toward instability and volatility, because
such developments usually enhance the attractiveness of other areas of the
market, where stock pickers like us tend to work more actively. As early as
January, we said 1998 would be a volatile year, and so far that's been the case.
We have no reason to think this will change and we will explore our feelings
about the market more fully in the pages that follow.
As ever, we're fielding questions from you, the financial media, our
institutional clients, and others who are interested in why we invest the way we
do, particularly since the past few years have not favored our style. The answer
is the same as it was in the early part of the decade when Crabbe Huson's funds
were outrunning the market: This is what we do. We believe deeply in how we do
it. Our method has produced highly competitive returns over time, the objective
of any investor. Crabbe Huson's brand of contrarian investing plays a
specialized role in an investor's portfolio (risk-averse equity and fixed-income
investing), and that is the most frequently cited reason for investors to
entrust money to us. We'll never break that trust.
We continue to receive comments about these reports and are pleased that you
have taken time to give us your thoughts and suggestions. When you can, take a
minute to tell us what we're doing well, what needs improvement, or how we can
better serve you. It's important for us to know. Our Investor Services Center
representatives are always available to give you an ear in this regard.
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And, finally, our thanks again for the opportunity to serve your long-term
investment needs. It is our pleasure to serve you. Stay in touch.
Best regards,
[SIGNATURE]
Richard S. Huson
President
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------------------------------------------
CRABBE HUSON'S
CONTRARIAN INVESTMENT
PHILOSOPHY
----------------------------------
THE ART OF CONTRARIAN INVESTING
In the investment world, the term "contrarian" often is misused or
misunderstood. In our view, contrarian investing represents a mindset that
requires unique perspective and disciplined thinking.
One of Crabbe Huson's unique strengths is its developed and well-defined
investment philosophy. Crabbe Huson is a contrarian firm that follows a strict
price-driven investment discipline. This approach looks for fundamentally strong
companies that are currently out of favor -- due to industry conditions, company
shortfalls, or prevailing market preferences -- but which possess a catalyst
that will subsequently change investors' perceptions of the value of the stock.
Most investors typically look favorably upon stocks rising in price. The danger,
however, with this style is that the recognition and success of these stocks may
indicate that the most significant portion of their upside potential has passed.
Investing in rapidly appreciating stocks may appear to be relatively safe and
prudent, but it is at this point that a stock's downside risk may be greatest:
when it becomes overanalyzed, over-owned, and overvalued.
By focusing on buying sound companies during periods of price weakness, Crabbe
Huson's approach reduces inherent market risk, since each company has already
undergone a period of price adjustment prior to consideration for purchase.
A low tolerance for risk, or an emphasis on capital preservation, is the most
important element of Crabbe Huson's contrarian philosophy. This is reflected in
our team's investment universe, which consists of solid companies that afford
market liquidity and financial staying power. It also is reflected in our method
of purchasing securities. We set tight price parameters when purchasing a
security, carefully focusing on the risk/reward ratio when making a commitment
to a stock.
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 the value of collective ability.
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THE IMPORTANCE OF TEAMWORK (CONTINUED)
Crabbe Huson's contrarian investment process is institutionalized through this
team approach. This is not to be confused with a "group" or "committee" process
- -- each manager is allocated a segment of a central portfolio and has full
discretion to make investment decisions within that segment. This individual
effort is backed with insight and support from Crabbe Huson's investment
management team. Our structure allows latitude for the research, analysis, and
discussion necessary for making effective portfolio decisions.
WHAT IT MEANS FOR INVESTORS
Because the nature of our approach prompts us to see opportunities outside Wall
Street's mainstream of thought, investors will at times notice strategies or
holdings that seem incongruent with current investment trends. However, in the
final analysis, long-term Crabbe Huson shareholders have benefited from a
common-sense, risk-averse investment style that has provided historically
competitive long-term results with less relative market risk.
With experience, teamwork, and dedication to service, we have committed to our
style of contrarian investing with all the skill, care, and diligence we can
bring to bear. We believe it's an approach that is worthy of your trust.
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------------------------------------------------------
INVESTMENT REVIEW AND
DISCUSSION
----------------------------------
Riding on the back of falling inflation, lower interest rates, strong consumer
confidence, and, of course, cash flows into equity mutual funds, the market
continued its climb toward the sun -- an astounding 13.94% alone in the first
quarter of 1998(1) . Whatever happened to "irrational exuberance"?
The Dow Jones Industrial Average has advanced almost 3,000 points since Federal
Reserve Chairman Alan Greenspan's infamous warning in late 1996. The market,
though, in its determined optimism, has shrugged off Bill Clinton's woes, El
Nino, the "Asian flu," negative earnings momentum, and extreme equity
valuations. As of the date of this report, the Dow has exceeded 9,000. Clearly,
the market believes that if there is to be a respite in corporate profit growth,
it will be brief.
Investment results for Crabbe Huson Funds since our October 31, 1997, report
were good for fixed-income portfolios, good also in the large-cap equity and
real estate equity areas, but a little tougher in small-cap equities. Though the
trend toward volatility has continued, by and large there have been few changes
to the biases that have dominated the market for so long. In fact, the kind of
tendency toward large-cap "safe" stocks (IBM, Coca-Cola, etc.) that has run up
index performance in large-cap circles has trickled down to the small-cap sector
as well. Recent performance of the Russell 2000 Index has been driven by a
disproportionately small number of stocks.
In the bond market, trading ranges for bonds since the first of the calendar
year have been narrow, the narrowest since 1993, in fact. Yield ranges have not
changed significantly. The bond market continues to struggle with a strong
economy and a better-than-expected inflationary environment, offsetting factors
that lead to sideways trading ranges and make it more challenging to coax total
return from the market. Crabbe Huson's fixed-income fund lineup has held its own
against the indices for the reporting period, and it still leads the market by a
wide margin over the past year to 18 months.
Here is our team's review of the markets:
EQUITY MARKET
As a thesis, the tenor of the market has swung back and forth, especially over
the course of the reporting period. When questions about the market's long-term
health arose, we saw a "flight to quality" on the part of investors. As
confidence returned, investors felt they were on safer ground and interest
broadened to other areas of the market.
- -------------------
(1) S&P 500 Index return, adjusted for income.
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The economic backdrop causing this see-saw pattern is interesting. The parabolic
market that investors have enjoyed for the past several years has been driven by
both strong fundamentals -- good earnings growth, productivity gains, etc. --
and an unusual coalescence of normally contradictory events. A booming U.S.
economy peacefully coexists with falling inflation; a strong dollar has not hurt
multinational earnings growth; and, in some eyes, the Asian crisis seems to have
progressed from a full-scale disaster to a possible boon for our "supertanker"
economy.
Even examined through rose-colored glasses, however, the Asian crisis certainly
doesn't inspire confidence. Though Pacific Rim stock markets are up from their
fourth-quarter lows, some data indicate that these same economies are in serious
trouble. And the devaluation of many Asian currencies last year now renders
infeasible the importation into Asia of such staples as copper, aluminum, and
oil, as well as many U.S. products and services, like telecommunications and
computers. The crisis lurks in the wings as a potential long-term negative for
the market, and it warrants the continual monitoring that is part of our current
game plan.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
REAL GDP GROWTH
<S> <C>
(Quarter Over Quarter Change)
12/95 2.2%
3/96 1.8%
6/96 6.0%
9/96 1.0%
12/96 4.3%
3/97 4.9%
6/97 3.3%
9/97 3.1%
12/97 3.7%
3/98 4.2%
6/98 3.0%
(projected)
SOURCE: DEPT. OF COMMERCE, BUREAU OF ECONOMIC ANALYSIS
Reflects revised chain-weighted data
</TABLE>
On the domestic side, the cyclical nature and visibility of corporate earnings
have played a substantial historic role in driving both stock prices and price/
earnings multiples. Since the recession in 1990, growth in profits has been
nothing short of phenomenal. Pre-tax corporate earnings have risen 88% over the
past five years, while nominal gross domestic product (GDP) has risen only 29%.
Why? Explanations include a de-leveraging of the corporate debt explosion of the
1980s, fortuitously executed in a period of falling interest rates (net result:
less debt at a fraction of the cost). Corporate tax rates have declined
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and aggressive write-offs have further reduced taxes paid to the Treasury.
Technology has enhanced productivity, and profit margins are higher than at any
time since the 1960s.
One has to ask, however, how long bottom-line earnings and margins can benefit
from economic efficiencies. We may have squeezed as much blood from this turnip
as possible. Top-line growth would be a much healthier development, since
earnings growth in the second half of the year is going to be vital if
exceedingly high equity prices are to be justified.
This notwithstanding, market optimism abounds and an entrenched complacency
seems to exist that says no matter what, all will be fine. After all, it's been
more dangerous being out of this market than being in it. We agree with that
assessment, but as always we think it's smarter to concentrate on the stocks
with more reasonable valuations.
If you're a contrarian investor in the large-cap world, you're probably shaking
your head in wonderment at the market. The average stock in the S&P 500 Index is
selling at 23 times forecasted earnings, 1.7 times sales, and roughly 6 times
book value -- all the highest valuations in stock market history. And how's this
for a statistic: 18% of the performance for the S&P 500 Index for the first
calendar quarter of 1998 CAN BE ATTRIBUTED TO FIVE STOCKS.
As you would suspect, the characteristics of stocks in our Equity Fund and the
stock portion of our Asset Allocation Fund don't closely resemble those of that
index (one of the reasons you hired us to manage a portion of your money).
Because of this orientation, those portfolios have lagged the broader market
somewhat since the fiscal year's opening day. However, there's evidence that
even in a narrowly concentrated bull market, our stocks are setting a better
long-term pace: For the year ending April 30, 1998, the Equity Fund posted a
gain of 43.61%, compared to the 41.01% return of the S&P 500 Index for the same
time period.
Just as the mantra for real estate buyers is "location, location, location," the
mantra for the market today seems to be "cash flow, cash flow, cash flow."
Investor confidence in the market remains unshaken, even in the face of
heightened volatility in 1998.
8
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MUTUAL FUND INFLOWS
STOCK MUTUAL FUND INFLOWS ($-BL.) S&P 500
<S> <C> <C>
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 $15.71 $801.34
5/30/97 $20.54 $848.28
6/30/97 $16.59 $892.91
7/31/97 $26.81 $954.29
8/31/97 $14.02 $899.47
9/30/97 $25.78 $947.28
10/31/97 $18.50 $914.62
11/30/97 $12.70 $955.40
12/31/97 $16.80 $970.43
1/31/98 $14.60 $980.28
2/28/98 $24.20 $1,049.34
3/31/98 $23.20 $1,101.75
4/30/98 $24.50 $1,122.70
SOURCE: INVESTMENT COMPANY INSTITUTE
Flow for April is estimated by AMG Data
Services
</TABLE>
Can the flow of funds slow down? We think so. To date, new cash has not arrived
into the market at the same pace as it did in 1997. Further, two possible events
on the horizon could stem part of the cash flow:
- - An increase in interest rates. If the Fed decides to put the brakes on a
rapidly expanding economy, one leg would be cut from the table supporting
current valuations.
- - A fall-off in consumer confidence. If there's a slowdown in corporate
earnings, investor confidence in the market could dampen to the point of
triggering a correction in overvalued stocks.
Obviously, there's always the possibility for a wild card, but for now we're
watching for the garden-variety events that tend to puncture market bubbles.
There's a great deal of risk in the market from the standpoint of valuation in
the most popular indices and investors' concentration therein. At the same time,
though, there is significant value in the market away from the illusion painted
by the indices. That's why we're not prepared to join the panic about a
potential downfall. True, we could be in for quite a correction, but we think a
sell-off is more likely in the over-owned and richly valued index leaders. On
the large-cap side, we're doing our stock-picking work in the market's quieter
sectors.
In small-cap markets, all was well until the October 27, 1997, market decline,
just before the end of the last fiscal year. (We boasted in our Annual Report,
for instance, that even with the sharp sell-off in the last week of the fiscal
year, the Small Cap Fund would have been hard-pressed to perform any better and
that the Special Fund did extremely well against its benchmark, given its dual
role.) The market thereafter was more challenging.
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The rebound that followed the October correction was both impressive and,
examined more deeply, interesting. Individual investors showed signs of holding
their course by not abandoning wholesale their broad selection of small-cap
stocks. Professional managers were another story. Many flocked to the equities
with the most positive outlooks, focusing on liquidity instead of "best value"
and creating a concentration scenario much like the large-cap market trend we
discussed last spring.
From October 1997 through February 1998, the bulk of small-cap buying was done
in the largest stocks in the Russell 2000 Index. The resulting appearance was
that the small-cap market was moving right along, but judging that book by its
cover would have been a mistake. Half of the 22.36% total return for the Russell
2000 in 1997 was attributable to the largest 100 stocks in the index. Eliminate
those stocks from return calculations and the remaining 95% would have returned
a mere 11.25% for calendar year 1997. The bulk of that disparity is due to
investment activity in the fourth quarter of 1997 (which continued into January
of 1998). The chart below, this time including the top 200 stocks versus the
rest of the index, still is a striking representation of this effect:
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
RUSSELL 2000 TOP 200 VS BOTTOM 1800 PERFORMERS
TOP 200 PERFORMERS RUSSELL 2000 MINUS TOP 200
<S> <C> <C>
8/97 0.00% 0.00%
9/97 3.12% 4.20%
10/97 3.33% -0.40%
11/97 4.22% -1.94%
12/97 6.42% -2.39%
1/98 5.76% -3.31%
2/98 7.54% 2.30%
3/98 8.75% 5.21%
CUMULATIVE PERFORMANCE
8/1/97 THROUGH 3/31/98
SOURCE: COMPUSTAT
</TABLE>
The effect of that dichotomy was very limited participation by our small-cap-
oriented funds in the market's advance from its October 1997 lows through
mid-February. In the Small Cap Fund, a weak fourth quarter in 1997 was masked by
a strong return for the full 1997 year (the fund outpaced the Russell 2000 for
the year), but underperformance was more pronounced in the second fiscal
quarter. The end of the reporting period, however, was better, and we were well
ahead of the market for the month of April.
Two questions: First, why wasn't Crabbe Huson in the stocks that ran up the
index's total return? The answer is simple: for the same reason we're avoiding
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the so-called "safe" stocks in the large-cap sector -- in truth, they're not
safe at all. We think that over the long term, the market's upward trend can be
sustained only by a broadening into more reasonably valued stocks. As
contrarians, we're going to avoid overvalued stocks. We'd rather be talent
scouts for the next round of winners than cheerleaders for the aging stars.
Second, are we pleased with small-cap portfolio performance for the fiscal
half-year? Obviously, no. Though we're fully confident in our method, we took
the extra step of analytically pulling apart the portfolios to re-examine the
stocks, one by one. We concluded that we had our usual combination of
investments, including
(1) early-stage stocks, of which the market hasn't yet taken notice;
(2) development-stage issues, called "improving, but too early to buy" by Wall
Street; and
(3) recognition-stage equities, which are beginning to show enough value to
interest other investors.
Except for the usual one or two question-mark stocks, we're extremely
comfortable with our portfolio. We think we own solid companies that are either
out of favor or haven't yet gained the market's favor. What the current positive
market brings us is quickly developing investor sponsorship for the securities
in our funds that previously were unrecognized. The right combination, which we
believe we have, should lead to long-term market-beating performance. Remember,
bull markets are good -- but not necessarily for all stocks at the same time.
That certainly is the case in the small-cap universe at the halfway point in the
fiscal year.
BOND MARKET
For the past six months, the bond market has been atypical. Yield ranges have
been abnormally narrow, around 5.8% to 6% since December. The result is a rather
sideways market, one in which it's been hard to make significant progress
against the indices.
As we noted above, there has been a battle between the positive inflationary
environment, which is good for bonds, and continuing robust economic growth,
which generally is bad for bonds. Some of the euphoria from the stock market has
carried over into the fixed-income arena, tightening credit spreads and
narrowing premiums.
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EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
HISTORICAL YIELDS
30-Yr. Bonds 90-Day T-Bills
<S> <C> <C>
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%
2/29/96 6.47% 5.03%
3/31/96 6.67% 5.15%
4/30/96 6.91% 5.16%
5/31/96 6.99% 5.19%
6/30/96 6.87% 5.16%
7/31/96 6.97% 5.31%
8/30/96 7.12% 5.29%
9/30/96 6.92% 5.04%
10/31/96 6.64% 5.15%
11/29/96 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%
5/31/97 6.91% 4.95%
6/30/97 6.23% 5.17%
7/31/97 5.79% 5.24%
8/31/97 6.09% 5.22%
9/30/97 6.40% 5.11%
10/31/97 6.15% 5.19%
11/30/97 6.06% 5.19%
12/31/97 5.92% 5.34%
1/31/98 5.80% 5.18%
2/28/98 5.92% 5.31%
3/31/98 5.93% 5.13%
4/30/98 5.95% 4.98%
SOURCE: NED DAVIS RESEARCH INC. & BLOOMBERG
</TABLE>
Calendar year-to-date, Crabbe Huson's fixed-income lineup has been roughly even
with the indices. 1997 was an exceedingly good year, especially for our Income
Fund, and the lead we built up over the benchmark continued into the first
quarter of 1998. The fund returned 15.07% for the year ending March 31, 1998,
beating the Lehman Brothers Government/Corporate Bond Index by 2.68%, a
significant margin for a fixed-income fund.
Looking forward, our view is that the nation's economy will continue to be
strong, though its rate of growth will probably slow. The international picture
is softening, and questions remain about Asia's long-term economic outlook.
Weakness overseas should positively impact the U.S. inflation outlook.
Crabbe Huson is maintaining the constructive posture we've had in our bond
portfolios since 1996, and we believe we're well positioned to capitalize on
economic trends developing in 1998. In addition, as we mentioned in our last
report, our team is keeping the bond quality in the portfolios at a very high
level. As an industry participant, we remain concerned that misrepresentation of
portfolio content by others is exposing investors to unnecessary or hidden risk.
In some cases, conservative to moderate-risk funds are adding extra positions in
high-yield ("junk") bonds in an attempt to boost historic yields. As evidenced
by our Income Fund return for the past year or so, we believe this is
unnecessary and will continue to focus on both credit quality and total return.
REAL ESTATE INVESTMENT TRUST MARKET
The real estate investment trust (REIT) market has been flat since our last
report; the Morgan Stanley REIT Index declined by -0.61%. The good news is that
REITs are becoming better known as an asset and a diversification tool, helping
the REIT market become broader and deeper than ever before. The
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<PAGE>
bad news, however, is that it's not yet broad enough to absorb all the new
issues that have flooded in so far this year. Add to that the more modest rate
of funds inflow and the continued positive performance of the S&P 500, and REIT
index performance has been uninspiring to say the least.
Back to the good news: Crabbe Huson's real estate team turned in a solid six
months, outpacing the index by 365 basis points. We attribute this to solid
stock picking. Our team successfully navigated the market, avoiding many of the
pitfalls that negatively affected other managers.
Investors and traders are treading carefully these days, wary of the cross-
currents that dominate the market. Many are concerned about the legislation now
being batted about in Congress that would change how some REITs are taxed; other
concerns include the possibility of interest rate hikes and overcapacity in the
industry. REITs, with a 5.5% current yield and expected growth of 6%-8%, offer,
we believe, superior long-term returns, but 1998 could be a difficult year.
CLOSING THOUGHT
If you were to buy a business to run for the rest of your life as its owner and
chief executive, you would try to buy it at the most advantageous, not the
highest, available price. Then, as you ran the business, you likely wouldn't be
too concerned about valuation -- if you did your job well, the market would
realize the value.
This is exactly our approach, save for the chief executive role. We make
judgments about the value of a business, and if we're suitably impressed, we buy
a stake, let the management do its job well, and allow the market to catch up in
recognizing the value we identified early.
The advantages in all this for the investor, of course, are 1) competitive long-
term investment returns, and 2) the ability to sleep at night. In his editorial
in the April 13, 1998, edition of THE WALL STREET JOURNAL, Burton G. Malkiel
(professor of economics at Princeton University) noted that "U.S. stocks may not
be overvalued, but they are richly valued and risky, and they are likely to
produce considerably lower returns than in the recent past....the best policy
for investors is to reduce risk by diversifying broadly -- especially into
assets that tend to have low correlation with U.S. stocks."
We agree with Dr. Malkiel and believe that investors would be wise to maintain a
contrarian position in anticipation of a reversion to historical market return
averages. Our resolute belief is that Crabbe Huson's contrarian style, an
investment strategy devoted to recognizing value before others do, will continue
to play a real and positive role in contributing to your investment success over
the long term.
13
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC. (CHSPX)
INVESTMENT OBJECTIVE: 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, 1998 PERIOD ENDING MARCH 31, 1998
- --------------------- ----------------------------------
<C> <S> <C>
-6.30% 1 Year 4.57%
5 Year 11.61%
10 Year 14.66%
Life of Fund 12.46%
</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 had a period of difficulty since our last report. The fund
returned -6.30% for the fiscal half-year, trailing the Russell 2000 Index return
of 11.88%.
The narrow buying focus of the market for small-cap companies, which impacted
the fund's first fiscal quarter, persisted through the first two months of the
second quarter. Investors continued to display a bias toward a narrow group of
larger and more liquid growth stocks within the Russell 2000, mimicking the
recent outperformance of the "nifty fifty" within the large-cap S&P 500 Index.
This has resulted in continued below-average performance for the Special Fund
through the first half of fiscal 1998.
On the long side of the portfolio, over the course of the reporting period we've
owned some ideal stocks that have continued to contribute to long-term positive
performance, especially during the second half of the reporting period. In
particular, a number of companies in the trucking and trailer manufacturing
industry have steadily moved into a position of strength. In the health care
area, our holdings have done particularly well, with health maintenance
organizations, biotech companies, and long-term care facility companies all
catching the spotlight in the broader market. A few selected names in the
technology sector also have contributed to the plus side of the fund's ledger.
14
<PAGE>
Even though the Special Fund has a roster of good companies, participation in
the market has been a problem for a number of our stocks until just recently. As
we mentioned in our Investment Review and Discussion, the recovery from
October's brief market correction was extremely narrow as investors
(particularly fund managers and other investment pros) "took refuge" in the
biggest, most liquid names in the small-cap universe. This left some of our
stocks idling through the early spring, when the market finally ventured back
into pre-correction names. Our long positions were ahead of the index late in
the period, again realizing some of their early promise.
Further, the stocks we've sold short(1) have continued to temporarily handicap
the portfolio. The very stocks that are causing the most difficulty on the short
side continue to be the most overvalued and over-owned. Though there has not yet
been a lasting correction in these stocks, we believe they are the best vehicles
to carry out the strategic import of the short position, which is to buffer the
effects that a substantial market decline would have on the fund and to provide
buying power at or near a market bottom.
Even as we recognize the market's recent lack of hospitality to the fund's
holdings, we remain very positive on the fundamentals of the individual stocks
within the portfolio. With regard to stock selection, we think the portfolio
couldn't be on more solid ground. Our hope is that the market's current trend
toward broader interest will persist.
The fund's structure is designed to drive long-term performance with long
positions in undervalued, contrarian stocks while providing a hedge against
volatility with the stocks sold short -- an ideal arrangement for investors who
want long-term growth from equities without unnecessary exposure to
overvaluation and downside risk. The Special Fund has provided a competitive
long-term return for its shareholders; difficult as it is sometimes to make
headway in these markets, we remain loyal to our mission as contrarians and look
ahead to good performance from the fund going forward.
<TABLE>
<S> <C> <C>
[SIGNATURE] [SIGNATURE] [SIGNATURE]
James E. Crabbe John W. Johnson, CFA Peter Belton, 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 is followed
when 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.
15
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 108.9%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 18.6%
434,300 Century Aluminum Co.(b)........................... $ 7,274,525
253,800 Huntco Inc. - Class A(b).......................... 3,458,025
463,500 *Ispat International NV(a)(b)...................... 12,978,000
734,800 Longview Fibre Co.(d)............................. 12,445,674
7,527,400 *Lytton Minerals, Ltd.(a).......................... 4,997,750
373,800 Oregon Steel Mills, Inc.(d)....................... 8,877,750
--------------
50,031,724
--------------
COMMUNICATIONS - 1.5%
435,000 *Picturetel Corporation............................ 4,023,750
--------------
CONSUMER CYCLICALS - 11.5%
536,400 *Bombay Company, Inc............................... 2,614,950
153,900 Cato Corp. - Class A.............................. 2,193,075
1,046,300 *Oakley, Inc.(b)(d)................................ 13,798,081
1,043,000 Phillips-Van Heusen(b)(d)......................... 12,320,438
--------------
30,926,544
--------------
CONSUMER STAPLES - 3.6%
515,200 *Fleming Companies(b)(d)........................... 9,660,000
--------------
ENERGY - 11.3%
847,100 *EEX Corp.(b)...................................... 8,206,281
609,000 *Forest Oil Corp.(b)............................... 9,515,625
170,200 *Nuevo Energy Co.(b)............................... 6,063,375
317,600 Snyder Oil Corp................................... 6,768,850
--------------
30,554,131
--------------
FINANCIAL - 5.9%
927,500 **Arcadia Financial Ltd............................ 7,999,688
387,100 *Pico Holdings, Inc................................ 2,032,275
230,700 *Risk Capital Holdings, Inc.(d).................... 5,781,919
--------------
15,813,882
--------------
HEALTHCARE - 24.7%
739,900 *Coventry Corp..................................... 12,532,056
97,600 *Idexx Laboratories................................ 2,159,400
556,200 Integrated Health Services(b)(d).................. 21,448,462
369,800 *Interneuron Pharmaceuticals....................... 2,449,925
766,600 *Mid Atlantic Medical Services(b)(d)............... 9,822,063
199,700 *Phymatrix Corp.................................... 2,009,481
966,800 *Sun Healthcare Group, Inc.(b)(d).................. 16,193,900
--------------
66,615,287
--------------
</TABLE>
16
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
INDUSTRIALS - 13.2%
1,023,300 Battle Mountain Gold.............................. $ 7,354,969
2,024,200 *Laidlaw Environmental Services.................... 7,970,288
654,400 *Wabash National Corp.(b).......................... 20,204,600
--------------
35,529,857
--------------
TECHNOLOGY - 9.6%
131,800 *Actel Corp........................................ 1,960,525
195,300 *Checkpoint Systems(d)............................. 3,649,668
287,600 *Flanders Corp..................................... 1,689,650
404,400 *HMT Technology Corp............................... 5,257,200
295,800 *Input/Output, Inc................................. 7,358,025
259,800 *Mentor Graphics Corp.............................. 2,727,900
15,600 *Mylex Corp........................................ 124,800
204,000 *Sensormatic Electronics........................... 3,187,500
--------------
25,955,268
--------------
TRANSPORTATION - 9.0%
337,000 Hunt (JB) Transportation Services, Inc.(b)........ 10,784,000
98,800 *Landstar System, Inc.............................. 3,235,700
563,200 *Yellow Corp.(b)................................... 10,102,400
--------------
24,122,100
--------------
Total Common Stocks 293,232,543
--------------
(Cost $244,693,395)
Total Investments - 108.9% 293,232,543
--------------
(Cost $244,693,395)**
SECURITIES SOLD SHORT - (24.1%)
- -----------------------------------------------------------------------------------
COMMON STOCKS FINANCIAL - (4.8%)
86,600 *Citicorp.......................................... (13,033,300)
--------------
TECHNOLOGY - (16.1%)
163,600 *America Online, Inc............................... (13,088,000)
112,250 *Compaq Computers Corp............................. (3,150,016)
246,600 *Dell Computer Corp................................ (19,912,950)
113,850 *Gartner Group, Inc. - Class A..................... (3,771,281)
41,300 *Intel Corp........................................ (3,337,556)
--------------
(43,259,803 )
--------------
</TABLE>
17
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
SECURITIES SOLD SHORT - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
TRANSPORTATION - (3.2%)
99,700 *UAL Corp.......................................... $ (8,692,594)
--------------
Total Securities Sold Short - (24.1%) (64,985,697 )
--------------
(Proceeds $37,491,406)(c)
Other Assets and Liabilities, Net - 15.2% 40,938,922
--------------
TOTAL NET ASSETS - 100.0% $ 269,185,768
--------------
--------------
</TABLE>
* Non-income producing security.
** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $64,709,958 and the
aggregate gross unrealized depreciation is $16,170,810, resulting in
net unrealized appreciation of $48,539,148.
(a) American Depository Receipt.
(b) Security segregated to collateralize short sales.
(c) The aggregate proceeds for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $346,444 and the gross
unrealized depreciation is $27,840,735, resulting in net unrealized
depreciation of $27,494,291.
(d) Security segregated to collateralize borrowing.
See accompanying notes to financial statements.
18
<PAGE>
CRABBE HUSON SMALL CAP FUND (CHSCX)
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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
0.23% 1 Year 25.42%
Life of Fund 22.60%
</TABLE>
Institutional Class (CHISX)
Inception Date: October 10, 1996
<TABLE>
<CAPTION>
SIX MONTHS ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
0.46% 1 Year 25.93%
Life of Fund 25.59%
</TABLE>
INVESTMENT RESULTS 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.
Since its inception in February 1996, the Small Cap Fund has consistently been
one of Crabbe Huson's leading performers. The first half of fiscal 1998,
however, marked the first reporting period in which the fund either lagged the
index or generally posted relatively weaker returns. The fund returned 0.23% for
the fiscal year through April 30, compared to 11.88% for the Russell 2000 Index.
The fund's institutional class of shares showed a gain of 0.46% for the
reporting period. Though this left the fund behind the index for the reporting
period, we believe that the strong showing of the fund in April is the beginning
of greater recognition for the undervalued and over-discounted stocks in the
portfolio.
Since the market sell-off in October 1997, the small-cap market has struggled to
broaden beyond the highly valued large and liquid component of the Russell 2000;
in fact, each broadening attempt was met with resistance. April 1998 was the
first month that showed an encouraging trend toward better participation from
other stocks. If the present overall high confidence level of the general
small-cap market is sustained, we believe the Small Cap Fund is in an excellent
position to deliver solid absolute performance for the
19
<PAGE>
full 1998 fiscal year. And, depending on how right we are about the fundamental
progress of the individual companies owned in the portfolio, we also believe the
fund could not only eliminate the negative performance disparity with the
Russell 2000 but again exceed the results of that index.
The good news is that investors began to change their focus late in the second
fiscal quarter and became interested in a broader array of stocks, and ours
appeared on a number of radar scopes. This, combined with positive reaction to
the good economy by the underlying companies, helped the Small Cap Fund
outperform the Russell 2000 by 177 basis points for the month of April alone, a
nice short-term return and evidence of a better rationality being applied to the
market. In addition, we're finding a good selection of stocks to pick from as
activity increases in other areas of the market.
As we mentioned earlier in this report, we've taken time to break down the
fund's portfolio, stock by stock, to reaffirm our confidence in the underlying
companies. That exercise assured us again of the integrity of the portfolio. Our
judgment is that the small-cap market has fallen victim to the same bias that
has plagued the large-cap world for some time now: overreliance on index
leadership stocks for performance.
Going forward, we're optimistic about the fund's positioning. As we've said
earlier, we expect further volatility in the broader market, favoring stock-
pickers like us, and we believe there's good value in the broader small-cap
market. Even if there's a correction, we believe our selection of reasonably
valued stocks should serve us well.
<TABLE>
<S> <C> <C>
[SIGNATURE] [SIGNATURE] [SIGNATURE]
James E. Crabbe John W. Johnson, CFA Peter Belton, CFA
</TABLE>
20
<PAGE>
CRABBE HUSON SMALL CAP FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 96.8%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 10.5%
191,800 Century Aluminum Co............................... $ 3,212,650
223,000 Huntco Inc. - Class A............................. 3,038,375
205,000 *Ispat International NV (a)........................ 5,740,000
2,533,200 *Lytton Minerals, Ltd. (a)......................... 1,681,895
87,200 Oregon Steel Mills, Inc........................... 2,071,000
--------------
15,743,920
--------------
COMMUNICATIONS - 2.3%
384,900 *Picturetel Corporation............................ 3,560,325
--------------
CONSUMER CYCLICALS - 10.4%
295,100 *Bombay Company, Inc............................... 1,438,613
303,500 *Boston Chicken, Inc............................... 1,299,359
228,100 Cato Corp. - Class A.............................. 3,250,425
440,100 *Oakley, Inc....................................... 5,803,819
315,000 Phillips-Van Heusen............................... 3,720,937
--------------
15,513,153
--------------
CONSUMER STAPLES - 3.8%
306,300 Fleming Companies................................. 5,743,125
--------------
ENERGY - 10.4%
207,500 *Forest Oil Corp................................... 3,242,188
449,900 *Grey Wolf, Inc.................................... 1,940,193
184,000 KCS Energy, Inc................................... 2,852,000
30,000 *Marine Drilling Co., Inc.......................... 729,375
89,600 *Nuevo Energy Co................................... 3,192,000
70,800 Snyder Oil Corp................................... 1,508,925
111,900 Western Gas Resources............................. 2,098,125
--------------
15,562,806
--------------
FINANCIAL - 4.6%
618,600 *Arcadia Financial Ltd. (a)........................ 5,335,425
61,400 *Risk Capital Holdings, Inc........................ 1,538,838
--------------
6,874,263
--------------
HEALTHCARE - 15.1%
206,000 *Coventry Corp..................................... 3,489,125
251,200 *Idexx Laboratories................................ 5,557,800
16,600 Integrated Health Services........................ 640,138
306,500 *Interneuron Pharmaceuticals....................... 2,030,562
376,100 *Mid Atlantic Medical Services..................... 4,818,781
222,700 *Phymatrix Corp.................................... 2,240,919
115,600 *Sun Healthcare Group, Inc......................... 1,936,300
172,000 *Vysis, Inc........................................ 1,806,000
--------------
22,519,625
--------------
</TABLE>
21
<PAGE>
CRABBE HUSON SMALL CAP FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
INDUSTRIALS - 9.0%
586,200 Battle Mountain Gold.............................. $ 4,213,313
38,300 *Ladish Company, Inc............................... 593,650
1,212,900 *Laidlaw Environmental Services.................... 4,775,793
126,500 Wabash National Corp.............................. 3,905,688
--------------
13,488,444
--------------
TECHNOLOGY - 21.5%
73,800 Auspex Systems.................................... 535,050
228,100 *Checkpoint Systems................................ 4,262,619
226,400 *Actel Corp........................................ 3,367,700
146,800 *CCC Information Services.......................... 3,043,200
434,200 *Flanders Corp..................................... 2,550,925
220,000 *HMT Technology.................................... 2,860,000
194,900 *Input/Output, Inc................................. 4,848,138
358,700 *Mentor Graphics Corp.............................. 3,766,350
209,100 *Mylex Corp........................................ 1,672,800
224,500 *Precision Response Corp........................... 1,880,187
65,000 *Sensormatic Electronics........................... 3,409,375
--------------
32,196,344
--------------
TRANSPORTATION - 9.2%
211,400 Hunt (JB) Transportation Services, Inc............ 6,764,800
146,200 *Landstar System, Inc.............................. 4,788,050
126,300 *Yellow Corp....................................... 2,265,506
--------------
13,818,356
--------------
Total Common Stocks 145,020,361
--------------
(Cost $133,337,980)
SHORT TERM INVESTMENTS - 2.6%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.6%
$3,858,415 State Street Bank and Trust Company** 4.250%
5/1/98........................................... 3,858,415
--------------
Total Investments - 99.4% 148,878,776
(Cost $137,196,395)***
Other Assets and Liabilities, Net - 0.6% 906,598
--------------
TOTAL NET ASSETS - 100.0% $ 149,785,374
--------------
--------------
</TABLE>
* Non-income producing security.
** The Repurchase agreement, dated 4/30/98, $3,858,415 due 5/1/98, is
collateralized by $2,880,000 U.S. Treasury Note, 9.250%, maturing
2/15/16 with a market value of $3,942,000.
*** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $21,583,085 and the
aggregate gross unrealized depreciation is $9,900,704, resulting in
net unrealized appreciation of $11,682,381.
(a) American Depository Receipt.
See accompanying notes to financial statements.
22
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND (CHAAX)
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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
1 Year 30.21%
9.47% 5 Year 12.84%
Life of Fund 11.86%
</TABLE>
Institutional Class (CHAIX)
Inception Date: October 28, 1996
<TABLE>
<CAPTION>
SIX MONTHS ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
9.65% 1 Year 30.73%
Life of Fund 22.41%
</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, Crabbe Huson's medium-risk portfolio, showed a gain
of 9.47% for the first half of the fiscal year. This compares with 22.44% for
the S&P 500 Index and 3.64% for the Lehman Brothers Government/ Corporate Bond
Index for the same time period. The fund's institutional class of shares
returned 9.65% through April 30, 1998.
As of the date of this report, the fund's allocation was 40% bonds, 58%
equities, and 2% cash. This has been our position throughout the past six months
- -- we've avoided any "timing" moves and have kept average maturities in the bond
portfolio roughly the same at 125% of the market. The allocation percentages
have been the subject of frequent discussions at the weekly meetings of our
investment department, and we're not averse to consideration of adding further
assets to the bond column, particularly if interest rates increase. While an
upward shift in rates wouldn't necessarily be good for bonds, our belief is it
may be particularly bad for the stock market, and bonds would offer better
protection from downside volatility for the portfolio.
23
<PAGE>
Further, the economy may experience a deflationary trend following such a
correction, a positive for bonds given the wealth tied into the equity market.
Our thinking is that a chain reaction would cause a slowdown in spending as the
wealth effect suffered, followed by a decline in rates, which is ultimately good
for bonds. We're watching the upcoming scheduled meetings of the Federal Reserve
Board of Governors in anticipation of rate changes that could so notably impact
the economy and market.
On the equity side, we're also keeping a close eye on 1998 corporate profits.
The environment is becoming a bit tougher for corporations: the strengthening
dollar has begun to bite into profits, pricing power has begun to slide, and
wages are rising. All these factors are difficult to offset. In addition, the
Asian crisis has dulled profitability for a number of multinational companies.
We're watching closely for continued meager growth, as such a trend could also
affect investor psychology and trigger a sell-off.
The composition of the equity section of the Asset Allocation Fund is very
similar, if not identical, to that of the Equity Fund. As was the case for that
portfolio, our team was active in the early half of the fiscal year, dropping
the telecommunications and cable stocks in favor of new issues in energy and
basic industries. The stocks we've selected from these sectors look very
attractive to us going forward.
We continue to believe that the Asset Allocation Fund is an excellent option for
risk-averse investors who want to maintain an exposure to long-term equity
growth but want a measure of portfolio insurance through fixed-income
securities.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Richard S. Huson, CFA Marian L. Kessler
[SIGNATURE] [SIGNATURE]
John E. Maack, Jr., CFA Robert E. Anton
[SIGNATURE]
Garth R. Nisbet, CFA
</TABLE>
24
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 39.2%
- -----------------------------------------------------------------------------------
AGENCIES - 4.0%
$ 900,000 Federal National Mortgage Association 6.080%
9/25/00......................................... $ 906,093
1,200,000 Federal National Mortgage Association 8.250%
12/18/00........................................ 1,271,532
925,000 Federal National Mortgage Association 5.875%
2/02/06......................................... 916,111
1,000,000 Federal Home Loan Bank 5.850% 2/21/06............. 988,810
800,000 Interamerican Development Bank 6.125% 3/08/06..... 804,000
550,000 Tennessee Valley Authority 6.125% 7/15/03......... 548,625
--------------
5,435,171
--------------
ASSET-BACKED - 0.4%
500,000 Green Tree Financial 6.540% 7/15/19............... 503,125
--------------
CORPORATE BONDS - 9.4%
500,000 GMAC 8.000% 10/01/99.............................. 513,645
550,000 Upjohn Co. 5.875% 4/15/00......................... 550,000
600,000 Pepsico, Inc. 5.875% 6/01/00...................... 600,000
400,000 American Express Credit 6.500% 8/01/00............ 404,000
800,000 Ford Motor Credit 6.250% 11/08/00................. 803,000
600,000 WMX Technologies 6.700% 5/01/01................... 601,500
755,000 GMAC 9.000% 10/15/02.............................. 832,388
600,000 IBM Corp. 7.250% 11/01/02......................... 627,750
550,000 JP Morgan & Co. 7.625% 9/15/04.................... 585,750
550,000 Pacific Bell 6.250% 3/01/05....................... 550,000
550,000 Anheuser Busch 7.000% 9/01/05..................... 564,438
660,000 US West Communications 6.625% 9/15/05............. 674,025
550,000 Bear Stearns Co. 6.875% 10/01/05.................. 561,687
550,000 Snap-On, Inc. 6.625% 10/01/05..................... 566,500
975,000 Walt Disney Co. 6.750% 3/30/06.................... 1,007,906
700,000 Teleport Communications 9.875% 7/01/06............ 799,750
550,000 Eli Lilly 8.375% 12/01/06......................... 627,000
600,000 AT&T Corp. 7.750% 3/01/07......................... 660,000
550,000 GTE South 6.000% 2/15/08.......................... 532,813
550,000 Lincoln National Corp. 6.500% 3/15/08............. 545,875
--------------
12,608,027
--------------
MORTGAGE PASS-THROUGH SECURITIES - 5.6%
58,756 Federal Home Loan Mortgage Corp Pool #281037
9.250% 11/01/16................................. 62,171
633,852 Federal Home Loan Mortgage Corp Pool #303033
9.000% 4/01/17.................................. 669,031
1,049,058 Federal Home Loan Mortgage Corp Pool #C80344
7.500% 9/01/25.................................. 1,074,949
1,194,410 Federal Home Loan Mortgage Corp Pool #D65456
7.000% 11/01/25................................. 1,208,754
</TABLE>
25
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
MORTGAGE PASS-THROUGH SECURITIES - (CONTINUED)
$ 1,584,356 Federal Home Loan Mortgage Corp Pool #C80409
8.000% 6/01/26.................................. $ 1,639,887
1,680,290 Federal Home Loan Mortgage Corp Pool #C00495
7.000% 1/01/27.................................. 1,700,621
564,905 Government National Mortgage Corp Pool #780651
7.000% 10/15/27................................. 1,214,174
--------------
7,569,587
--------------
U.S. GOVERNMENT BONDS - 19.8%
745,000 U.S. Treasury Note 6.000% 6/30/99................. 748,896
5,615,000 U.S. Treasury Note 5.875% 7/31/99................. 5,634,821
130,000 U.S. Treasury Note 5.625% 10/31/99................ 130,100
800,000 U.S. Treasury Note 5.375% 1/31/00................. 797,344
1,080,000 U.S. Treasury Note 5.500% 2/29/00................. 1,078,413
80,000 U.S. Treasury Note 5.500% 3/31/00................. 79,894
55,000 U.S. Treasury Note 5.625% 12/31/02................ 54,917
1,350,000 U.S. Treasury Bond 5.500% 1/31/03................. 1,341,117
3,490,000 U.S. Treasury Bond 6.750% 8/15/26................. 3,833,730
530,000 U.S. Treasury Bond 6.500% 11/15/26................ 564,461
565,000 U.S. Treasury Bond 6.625% 2/15/27................. 612,228
9,230,000 U.S. Treasury Bond 6.375% 8/15/27................. 9,743,188
2,010,000 U.S. Treasury Bond 6.125% 11/15/27................ 2,058,561
--------------
26,677,670
--------------
Total Fixed Income Securities - 39.2% 52,793,580
--------------
(Cost $51,642,720)
COMMON STOCKS - 57.6%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 11.5%
11,600 Aluminum Company of America....................... 899,000
44,400 Asarco, Inc....................................... 1,107,225
54,000 *Bethlehem Steel Corp.............................. 840,375
8,000 Betzdearborn, Inc................................. 429,000
13,500 Dow Chemical Co................................... 1,305,281
23,300 Du Pont........................................... 1,696,531
77,800 Freeport McMoran Copper - Class B................. 1,463,613
70,700 Louisiana Pacific Corp............................ 1,546,562
52,228 Lyondell Petrochemical............................ 1,716,996
33,200 Morton International.............................. 1,062,400
34,300 Newmont Mining Corp............................... 1,104,031
17,500 Phelps Dodge Corp................................. 1,174,688
22,000 Praxair Inc....................................... 1,106,875
--------------
15,452,577
--------------
</TABLE>
26
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
COMMUNICATIONS - 3.3%
11,443 Bell Atlantic Corp................................ $ 1,070,636
22,800 *LCI International, Inc............................ 906,300
2,700 Reuters Holdings PLC(a)........................... 174,994
60,850 *U.S. West Media Group............................. 2,297,087
--------------
4,449,017
--------------
CONSUMER CYCLICALS - 9.7%
43,600 Callaway Golf Co.................................. 1,188,100
11,300 *CHS Electronics, Inc.............................. 235,888
38,800 *Circus Circus Enterprises......................... 700,825
25,500 *Crown Cork & Seal Co., Inc........................ 1,327,594
23,400 *MGM Grand, Inc.................................... 789,750
34,200 Manpower, Inc..................................... 1,506,937
26,100 McDonald's Corp................................... 1,614,938
11,800 *Outback Steakhouse, Inc........................... 449,875
62,800 Pep Boys-Manny, Moe, & Jack....................... 1,365,900
48,100 Rubbermaid, Inc................................... 1,376,862
26,100 Sears Roebuck & Co................................ 1,548,056
35,600 *Toys R Us, Inc.................................... 981,225
--------------
13,085,950
--------------
CONSUMER STAPLES - 2.6%
72,600 Deluxe Corp....................................... 2,432,100
57,900 Tyson Food, Inc. - Class A........................ 1,118,194
--------------
3,550,294
--------------
ENERGY - 8.0%
15,400 Burlington Resources, Inc......................... 723,800
111,242 *EEX Corporation................................... 1,077,657
51,200 *Global Marine, Inc................................ 1,206,400
32,600 McDermott International, Inc...................... 1,348,825
33,500 *Nabors Industries, Inc............................ 843,781
24,300 *Noble Drilling Corp............................... 785,194
12,400 Schlumberger, Ltd................................. 1,027,650
32,800 Sonat, Inc........................................ 1,455,500
53,900 Union Pacific Resources Group..................... 1,286,863
52,600 Union Texas Petroleum Holdings, Inc............... 1,061,862
--------------
10,817,532
--------------
FINANCIAL - 1.7%
79,100 Bank of Tokyo-Mitsubishi(a)....................... 993,694
35,900 C.I.T. Group, Inc. - Class A...................... 1,272,206
--------------
2,265,900
--------------
</TABLE>
27
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
HEALTHCARE - 3.0%
28,000 *Amgen Inc......................................... $ 1,669,500
79,300 *Dura Pharmaceuticals, Inc......................... 2,101,450
7,000 U.S. Surgical Corp................................ 220,500
--------------
3,991,450
--------------
INDUSTRIALS - 3.1%
40,900 New Holland NV(a)................................. 1,002,050
26,000 Cincinnati Milacron, Inc.......................... 807,625
23,600 *Detroit Diesel Corp............................... 542,800
34,600 Harnischfeger Industries.......................... 977,450
20,500 Tenneco, Inc...................................... 882,781
--------------
4,212,706
--------------
REAL ESTATE INVESTMENT TRUST - 0.9%
41,300 Security Capital Group - Class B.................. 1,249,325
--------------
TECHNOLOGY - 9.3%
38,900 Adobe Systems, Inc................................ 1,947,431
29,600 *Altera Corporation................................ 1,198,800
22,800 *Cabletron Systems................................. 302,100
28,400 Electronic Data Systems Corp...................... 1,221,200
14,100 Hewlett-Packard Co................................ 1,061,906
69,500 *National Semiconductor Corp....................... 1,529,000
34,600 *Seagate Technology, Inc........................... 923,387
172,900 *Silicon Graphics.................................. 2,258,506
19,800 Texas Instruments................................. 1,268,438
24,100 *3COM Corp......................................... 825,425
--------------
12,536,193
--------------
TRANSPORTATION - 2.8%
23,200 Boeing Co......................................... 1,161,450
24,200 *Northwest Airlines Corp. - Class A................ 1,270,500
23,600 Union Pacific Corp................................ 1,292,100
--------------
3,724,050
--------------
UTILITIES - 1.6%
70,300 Pacificorp........................................ 1,634,475
15,100 PG & E Corp....................................... 488,863
--------------
2,123,338
--------------
Total Common Stocks - 57.6% 77,458,332
--------------
(Cost $68,992,521)
</TABLE>
28
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
SHORT TERM INVESTMENTS - 20.7%
- -----------------------------------------------------------------------------------
<C> <S> <C>
REPURCHASE AGREEMENT - 3.3%
$ 4,483,348 State Street Bank and Trust Company** 4.250%
5/1/98........................................... $ 4,483,348
--------------
OTHER INVESTMENTS - 17.4%
23,418,938 Navigator Securities Lending Trust-Prime Portfolio
5.605%(b)(c).................................... 23,418,938
--------------
Total Short Term Investments - 20.7% 27,902,286
--------------
(Cost $27,902,286)
Total Investments - 117.5% 158,154,198
(Cost $148,537,527)(d)
Other Assets and (Liabilities), Net - (17.5%) (23,559,288 )
--------------
TOTAL NET ASSETS - 100.0% $ 134,594,910
--------------
--------------
</TABLE>
* Non-income producing security.
** The repurchase agreement, dated 4/30/98, $4,483,348 due 5/1/98, is
collateralized by $3,345,000 U.S. Treasury Note, 9.250%, maturing
2/15/16, with a market value of $4,578,469.
(a) American Depository Receipt.
(b) Rate reflects 7 day yield as of April 30, 1998.
(c) Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1998, the
market value of the securities on loan is $23,010,939.
(d) The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $11,097,436 and the
aggregate gross unrealized depreciation is $1,480,765 resulting in net
unrealized appreciation of $9,616,671.
See accompanying notes to financial statements.
29
<PAGE>
CRABBE HUSON EQUITY FUND (CHEYX)
INVESTMENT OBJECTIVE: 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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
13.87% 1 Year 44.02%
5 Year 18.27%
Life of Fund 16.61%
</TABLE>
Institutional Class (CHEIX)
Inception Date: October 3, 1996
<TABLE>
<CAPTION>
SIX MONTHS ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
14.08% 1 Year 44.56%
Life of Fund 28.95%
</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 first half of fiscal 1998, the Equity Fund posted a gain of 13.87%,
trailing the S&P 500 Index's return of 22.44%. The fund's institutional class of
shares returned 14.08% for the fiscal year through April 30, 1998.
Two trends of the past six months are clearly identifiable: In the first, as the
Asian crisis unfolded, investors fled back to the perceived safe,
stable-growing, large-cap stocks. In the more recent period, investors
recognized that Asia would not cause a global recession and began to return to
the stocks we own. Annoying as that can be for contrarian investors like us,
we're not becoming too concerned about it, since our general outlook calls for
the volatility that favors us as active managers. In addition, the more
important long-term numbers for the fund are still ahead of the index. The
Equity Fund's primary class of shares, for the one-year period through April 30,
returned 43.61% versus 41.01% for the S&P 500 Index -- a very pleasing return
for a solidly contrarian fund in the midst of a solidly growth-oriented market.
The portfolio was fairly active throughout the reporting period. Much of what
was successful in the first fiscal quarter was trimmed from the fund and
30
<PAGE>
replaced with some new performers. Communications stocks, specifically
telecommunications and cable, performed superbly for us last year, but we
released our positions as price targets were achieved. Early in 1998, we took
overweighted positions in energy and basic industries (commodity producers, like
copper and steel) after both sectors were beaten down by oil price drops and the
Asian crisis. As of the date of this report, we had added five new names to the
fund in the energy sector to bring our weighting to 13.5% of the portfolio,
compared with 8.5% for the S&P 500; in basic industries, we added six new names
to bring the total weighting to 17% of the fund, compared to only 4% for the
S&P.
This proved to be a well-timed move. Both sectors have rebounded nicely from
industry difficulties to contribute steadily to first quarter returns.
Obviously, they haven't kept pace with the index for this six-month reporting
period, but as usual, our contrarian style leads us away from the over-owned and
overvalued stocks that so heavily influence the benchmark (for better or worse).
Going forward, our outlook in terms of volatility is the same as what we see for
the small-cap side: we anticipate that it will play a greater role in the
everyday market. We welcome turbulence as opportunities to buy and as a chance
for market interest to broaden into the stocks we own. As bottom-up managers,
we'll continue to avoid specific sector plays (a top-down strategy) -- any
overweighting in a specific area will occur because we happen to find a good
concentration of attractive individual companies. We think the Equity Fund is on
solid ground as we move further ahead into 1998.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Richard S. Huson, CFA Marian L. Kessler
[SIGNATURE] [SIGNATURE]
John E. Maack, Jr., CFA Robert E. Anton
</TABLE>
31
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 98.4%
- -----------------------------------------------------------------------------------
BASIC MATERIALS - 19.8%
63,000 Aluminum Company of America....................... $ 4,882,500
240,300 Asarco, Inc....................................... 5,992,481
296,100 *Bethlehem Steel Corp.............................. 4,608,056
81,500 Betzdearborn, Inc................................. 4,370,438
71,000 Dow Chemical Co................................... 6,864,813
123,800 Du Pont........................................... 9,014,188
420,600 Freeport McMoran Copper - Class B................. 7,912,537
384,100 Louisiana-Pacific Corp............................ 8,402,187
275,817 Lyondell Petrochemical............................ 9,067,483
204,300 Morton International.............................. 6,537,600
182,500 Newmont Mining Corp............................... 5,874,219
93,600 Phelps Dodge Corp................................. 6,282,900
120,700 Praxair, Inc...................................... 6,072,719
--------------
85,882,121
--------------
COMMUNICATIONS - 5.2%
43,803 Bell Atlantic Corp................................ 4,098,318
125,500 *LCI International, Inc............................ 4,988,625
14,740 Reuters Holdings PLC(a)........................... 955,336
331,700 *U.S. West Media Group............................. 12,521,675
--------------
22,563,954
--------------
CONSUMER CYCLICALS - 16.6%
238,700 Callaway Golf Co.................................. 6,504,575
61,100 *CHS Electronic, Inc............................... 1,275,462
236,000 *Circus Circus Enterprises......................... 4,262,750
156,500 *Crown Cork & Seal Co., Inc........................ 8,147,781
119,600 *MGM Grand, Inc.................................... 4,036,500
188,400 Manpower, Inc..................................... 8,301,375
143,400 McDonald's Corp................................... 8,872,875
76,500 *Outback Steakhouse, Incorporated.................. 2,916,563
314,200 Pep Boys-Manny Moe & Jack......................... 6,833,850
263,800 Rubbermaid, Inc................................... 7,551,275
139,500 Sears Roebuck & Co................................ 8,274,094
191,600 *Toys R Us, Inc.................................... 5,280,975
--------------
72,258,075
--------------
CONSUMER STAPLES - 4.4%
393,700 Deluxe Corp....................................... 13,188,950
317,100 Tyson Foods, Inc. - Class A....................... 6,123,994
--------------
19,312,944
--------------
ENERGY - 13.9%
102,800 Burlington Resources, Inc......................... 4,831,600
591,209 *EEX Corp.......................................... 5,727,337
276,500 *Global Marine, Inc................................ 6,515,031
188,400 McDermott International, Inc...................... 7,795,050
</TABLE>
32
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
ENERGY - (CONTINUED)
180,400 *Nabors Industries, Inc............................ $ 4,543,825
157,400 *Noble Drilling Corp............................... 5,085,987
67,200 Schlumberger, Ltd................................. 5,569,200
178,700 Sonat, Inc........................................ 7,929,812
286,100 Union Pacific Resources Group, Inc................ 6,830,638
285,300 Union Texas Petroleum Holdings, Inc............... 5,759,494
--------------
60,587,974
--------------
FINANCIAL - 2.8%
426,300 Bank of Tokyo-Mitsubish(a)........................ 5,355,394
193,300 C.I.T. Group, Inc.-A.............................. 6,850,069
--------------
12,205,463
--------------
HEALTHCARE - 4.8%
142,100 *Amgen, Inc........................................ 8,472,713
430,500 *Dura Pharmaceuticals, Inc......................... 11,408,250
35,400 U. S. Surgical Corp............................... 1,115,100
--------------
20,996,063
--------------
INDUSTRIALS - 5.4%
243,300 New Holland NV(a)................................. 5,960,850
148,300 Cincinnati Milacron, Inc.......................... 4,606,568
128,700 *Detroit Diesel Corp............................... 2,960,100
188,100 Harnischfeger Industries.......................... 5,313,825
111,300 Tenneco, Inc...................................... 4,792,856
--------------
23,634,199
--------------
REAL ESTATE INVESTMENT TRUST - 1.6%
234,100 Security Capital Group B.......................... 7,081,525
--------------
TECHNOLOGY - 16.0%
205,000 Adobe Systems, Inc................................ 10,262,813
185,400 *Altera Corp....................................... 7,508,700
121,700 *Cabletron Systems................................. 1,612,525
151,500 Electronic Data Systems Corp...................... 6,514,500
76,200 Hewlett-Packard Co................................ 5,738,813
375,600 *National Semiconductor Corp....................... 8,263,200
189,400 *Seagate Technology, Inc........................... 5,054,612
935,900 *Silicon Graphics.................................. 12,225,194
126,300 Texas Instruments................................. 7,937,344
130,700 *3com Corp......................................... 4,476,475
--------------
69,594,176
--------------
TRANSPORTATION - 4.9%
125,500 Boeing Co......................................... 6,282,844
151,900 *Northwest Airlines Corp. - Class A................ 7,974,750
125,900 Union Pacific Corp................................ 6,893,025
--------------
21,150,619
--------------
</TABLE>
33
<PAGE>
CRABBE HUSON EQUITY FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
UTILITIES - 2.9%
372,100 Pacificorp........................................ $ 8,651,325
128,200 PG & E Corp....................................... 4,150,475
--------------
12,801,800
--------------
Total Common Stocks 428,068,913
--------------
(Cost $380,571,869)
SHORT TERM INVESTMENTS - 14.2%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 2.6%
$ 11,169,791 State Street Bank and Trust Company*** 4.250%
5/1/98........................................... 11,169,791
--------------
OTHER INVESTMENTS - 11.6%
50,253,524 Navigator Securities Lending Trust-Prime Portfolio
5.605%(b)**..................................... 50,253,524
--------------
Total Short Term Investments 61,423,315
--------------
(Cost $61,423,315)
Total Investments - 112.6% 489,492,228
(Cost $441,995,184)****
Other Assets and (Liabilities), Net - (12.6%) (54,761,714 )
--------------
TOTAL NET ASSETS - 100.0% $ 434,730,514
--------------
--------------
</TABLE>
* Non-income producing security.
** Rate reflects 7 day yield as of April 30, 1998.
*** The repurchase agreement, dated 4/30/98, $11,169,791 due 5/1/98, is
collateralized by $8,325,000 U.S. Treasury Note, 9.250%, maturing
2/15/16, with a market value of $11,394,844.
**** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $55,267,391 and the
aggregate gross unrealized depreciation is $7,770,347, resulting in
net unrealized appreciation of $47,497,044.
(a) American Depository Receipt.
(b) Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1998, the
market value of the securities on loan is $49,117,726.
See accompanying notes to financial statements.
34
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND (CHREX)
INVESTMENT OBJECTIVE: 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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
3.04% 1 Year 21.51%
Life of Fund 15.96%
</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 first half of the 1998 fiscal year, the Crabbe Huson Real Estate
Investment Fund returned 3.04%, solidly outperforming the -0.61% posted by the
Morgan Stanley REIT Index, the fund's benchmark. The one-year return for the
fund for the period ending April 30, 1998, is 22.90% versus the Morgan Stanley
REIT Index return of 17.11%.
One of the great debates today is whether or not REITs represent a new asset
class, just as bonds, oil, gold, or stocks are distinct kinds of securities. We
view REITs as a separate asset class, but we admit there are good arguments on
both sides. What isn't in dispute, though, is the low correlation between REIT
stocks and other assets. Over the past two years, as real estate market
performance has exceeded those of fixed-income instruments, commodities, and
utility stocks, the industry has gained increased appeal as a portfolio
diversification tool.
We are aware of the success of a select number of popular companies. In fact,
the fund has capitalized on some of the success: During the first three months
of this fiscal year, while popular stocks declined with the market, Crabbe
Huson's contrarian stock selection allowed the fund to buy these good companies
at attractive prices. Since that time, the fund has capitalized on the recovered
performance. For example, the fund picked up attractively priced, popular
companies like Starwood Hotels and Resorts, Equity Office Property Trust, and
Simon DeBartolo Group, Inc.
REIT stocks, including our own, performed very well in 1996 and 1997 but are
taking a rest in 1998. We think there are a number of reasons for this: First,
35
<PAGE>
the continued surge in the S&P 500 has pulled some investors out of REITs who
may previously have been interested in the sector as a safe haven. Also,
proposed legislative changes to the status of paired-shared REITs, which would
have made acquisitions and growth for these types of REITs harder, discouraged
investors. The flattening interest rate environment did not help either, and the
surge in the rate of initial and secondary stock offerings tended to make
investors think twice about REITs. With a current yield hovering at around 5.5%,
plus long-term funds from operations growth, which we believe could be in the 6%
to 8% range, the total return available from REIT stocks still holds substantial
appeal.
Ultimately, we remain confident that the real estate sector will continue to
present good buying opportunities, allowing investors to benefit from
competitive performance and portfolio diversification.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Richard S. Huson, CFA John E. Maack Jr., CFA
</TABLE>
36
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
COMMON STOCKS - 97.5%
- -----------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST - 97.5%
APARTMENT - 22.2%
31,600 Ambassador Apartments, Inc........................ $ 647,800
30,417 Camden Property Trust............................. 891,598
21,400 Equity Residential Properties Trust............... 1,051,275
25,300 Merry Land & Investment Co........................ 532,881
25,875 Post Properties, Inc.............................. 1,056,023
31,700 Security Capital Atlantic......................... 699,381
8,901 *Security Capital Group Warrants................... 25,034
42,600 Summit Properties, Inc............................ 870,638
26,006 United Dominion Realty Trust...................... 352,706
--------------
6,127,336
--------------
DIVERSIFIED - 13.9%
25,000 AMB Property Corp................................. 575,000
20,300 *Cadillac Fairview Corp............................ 446,600
15,600 Cousins Properties, Inc........................... 471,900
17,200 Crescent Real Estate Equities, Inc................ 586,950
23,800 Meditrust Corp.................................... 715,487
20,000 Security Capital Group, Class B .................. 605,000
10,900 Vornado Realty Trust.............................. 436,681
--------------
3,837,618
--------------
HEALTHCARE - 3.3%
11,000 *Brookdale Living Communities...................... 305,250
25,000 Capstone Capital Corp............................. 596,875
--------------
902,125
--------------
LODGING - 10.5%
17,050 FelCor Suite Hotels, Inc.......................... 596,750
34,419 *Homestead Village, Inc............................ 481,866
23,600 Starwood Lodging Trust............................ 1,184,426
25,000 Patriot American Hospitality, Inc................. 631,250
--------------
2,894,292
--------------
MANUFACTURED HOMES - 1.4%
14,700 Manufactured Home Communities..................... 371,175
--------------
OFFICE/INDUSTRIAL - 25.8%
19,800 CarrAmerica Realty Corp........................... 579,150
70,000 Corporate Office Properties....................... 739,375
41,900 Equity Office Properties Trust.................... 1,191,531
17,900 First Industrial Realty Trust..................... 581,750
13,500 Highwoods Properties,Inc.......................... 459,000
37,000 Kilroy Realty Corp................................ 980,500
25,000 Liberty Property Trust............................ 639,063
28,600 Prentiss Properties............................... 725,725
26,818 Security Capital Industrial....................... 655,365
17,600 Weeks Corp........................................ 554,400
--------------
7,105,859
--------------
</TABLE>
37
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
COMMON STOCKS - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUST - (CONTINUED)
OUTLET CENTERS - 4.3%
50,000 Prime Retail, Inc................................. $ 709,375
16,200 Tanger Factory Outlet Center...................... 489,038
--------------
1,198,413
--------------
REGIONAL MALLS - 6.7%
30,740 Simon DeBartolo Group, Inc........................ 1,012,499
62,850 Taubman Centers, Inc.............................. 852,403
--------------
1,864,902
--------------
SHOPPING CENTER - 5.8%
27,950 Glimcher Realty Trust............................. 593,938
50,000 IRT Property Co................................... 581,250
23,200 Kranzco Realty Trust.............................. 414,700
--------------
1,589,888
--------------
STORAGE - 1.9%
7,200 Shurgard Storage.................................. 202,500
13,500 Storage Trust Realty.............................. 327,375
--------------
529,875
--------------
TRIPLE NET LEASE - 1.8%
15,000 Hospitality Property Trust........................ 481,875
--------------
Total Common Stocks 26,903,358
--------------
(Cost $25,481,635)
SHORT TERM INVESTMENT - 17.4%
- -----------------------------------------------------------------------------------
OTHER INVESTMENTS - 17.4%
$4,791,210 Navigator Securities Lending Trust-Prime Portfolio
5.605%(**)***.................................... $ 4,791,210
--------------
Total Investments - 114.9% 31,694,568
(Cost $30,272,845)****
Other Assets and (Liabilities), Net - (14.9)% (4,105,305 )
--------------
TOTAL NET ASSETS - 100.0% $ 27,589,263
--------------
--------------
</TABLE>
* Non-income producing security.
** Rate reflects 7 day yield as of April 30, 1998.
*** Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1998, the
market value of the securities on loan is $4,665,678.
**** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $1,729,971 and the
aggregate gross unrealized depreciation is $308,249, resulting in net
unrealized appreciation of $1,421,723.
See accompanying notes to financial statements.
38
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND (ORBFX)
INVESTMENT OBJECTIVE: PROVIDE CAPITAL PRESERVATION AND A HIGH LEVEL OF CURRENT
INCOME BY INVESTING AT LEAST 80% OF THE FUND'S 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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
1.57% 1 Year 7.86%
5 Year 5.05%
Ten Year 6.41%
Life of Fund 7.79%
</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 first six months of the fiscal year, the Oregon Tax-Free(1) Fund
returned 1.57%, compared to a return of 2.77% for the Lehman Brothers Municipal
Bond Index.
Though we're aware of the importance of comparison to a benchmark, the Oregon
Tax-Free Fund is an intermediate-term bond fund composed solely of bonds from
the state of Oregon. The most appropriate index for comparative purposes,
unfortunately, is a composite of municipal bonds from across the country, not
just bonds from our home state. Further, the index often includes bonds of lower
quality, while the fund participates only in investment-grade issues. At least
65% of the bonds we own are rated AAA or are pre-refunded in U.S. Treasury
obligations.
Last October, we chose to increase the fund's average maturity from
approximately 9 years to 10 years. This move was executed to capture the
incremental yield provided by longer maturity bonds and to capture any potential
capital appreciation from a possible interest rate decline. While this move
extends the
- -------------------
(1) Shareholders may be subject to capital gains, ordinary income, and
alternative minimum taxes. Consult your tax advisor.
39
<PAGE>
average maturity beyond the historical pattern of the fund, it remains
significantly below the 13- to 20-year average maturity for many competing
Oregon funds; your fund continues to have lower interest rate sensitivity (risk)
than do most competing Oregon tax-free fixed income products.
In the past six months, the bond market has traded in a very narrow range. After
the significant rally of 1997, the bond market has paused to "take a breath" as
participants weigh implications of several important market forces. While
factors such as low inflation, sluggish exports, and a weak global economy
encourage the investors who think interest rates will fall, the bond market
"bears" are focused on low unemployment, rapid money growth, and rising wage
costs. To date, the tug of war between the two sides has produced little change
in interest rates, and the market is shaping up to deliver a "coupon year"
(little price change) in 1998.
Looking ahead, we see no threatening clouds on the horizon that could mar the
general outlook for the Oregon Tax-Free Fund. If current economic and political
factors continue, we believe that the fund's high-quality position will perform
positively with market trends.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Garth R. Nisbet, CFA Richard S. Huson, CFA
</TABLE>
40
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 98.9%
- -----------------------------------------------------------------------------------
EDUCATION - 30.4%
$ 300,000 Jefferson County School District #509J 6.500%
6/15/04 (FSA)................................... $ 334,875
250,000 Washington County School District 6.200%
9/01/04*......................................... 265,313
15,000 Washington & Clackamas School District 5.000%
1/01/05 ........................................ 15,375
250,000 Clackamas & Washington County School District #003
7.200% 10/01/05*................................. 260,938
125,000 Marion & Polk County School District 5.700%
10/01/05*........................................ 131,875
160,000 Marion County Oregon School District 6.000%
11/01/05 (FGIC)................................. 176,200
135,000 Portland Oregon Community College 5.800%
7/01/06......................................... 142,425
435,000 Multnomah County School District 5.000% 3/01/07... 442,069
335,000 Jackson County Oregon School District 5.200%
6/01/07 (FSA)................................... 347,143
450,000 Josephine County Oregon School District 5.750%
6/01/07 (FGIC).................................. 488,250
950,000 Multnomah County School District 5.600% 12/01/07
(FGIC).......................................... 1,001,061
300,000 Yamhill County S.D. #40 6.000% 06/01/08 (FGIC).... 333,750
240,000 Lane County Area Education District 4.850%
6/01/08......................................... 242,700
160,000 Marion County Oregon School District 4.850%
6/01/08 (AMBAC)................................. 161,000
200,000 Clackamas & Washington County School District #003
7.250% 10/01/09*................................. 209,000
765,000 Salem Educational Facility (Revenue) 6.000%
4/01/10......................................... 815,681
225,000 Marion & Polk County School District #24-J 6.000%
10/01/10*........................................ 240,187
100,000 Washington County School District 6.100% 6/01/12
(FSA)........................................... 108,125
500,000 Clackamas & Washington County School District #3
5.150% 6/1/14 (FGIC)............................ 503,125
900,000 Washington, Multnomah, & Yamhill School Dist #1J
5.000% 11/1/14.................................. 894,375
500,000 Clackamas Oregon Community College 5.400% 06/01/15
(MBIA).......................................... 511,875
400,000 Washington County School District #48J 5.000%
8/1/17.......................................... 390,500
--------------
8,015,842
--------------
ELECTRIC UTILITY - 2.0%
235,000 Emerald Peoples Utility District 6.300%
11/01/01*........................................ 249,100
250,000 Emerald Peoples Utility District 6.500%
11/01/03*........................................ 268,438
--------------
517,538
--------------
</TABLE>
41
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
HEALTH & HOSPITAL - 3.1%
$ 200,000 Clackamas County Hospital Facility Revenue 5.800%
3/01/02 (MBIA).................................. $ 209,500
300,000 Clackamas County Hospital (Sisters of Providence)
6.200% 10/01/02................................. 324,750
258,000 St. Charles Memorial Hospital 6.75% 1/01/06....... 280,253
--------------
814,503
--------------
MISCELLANEOUS - 11.8%
250,000 City of Portland 6.950% 4/01/99................... 256,820
100,000 State of Oregon G.O. 9.000% 4/01/03............... 120,000
175,000 State of Oregon G.O. 7.200% 7/01/04............... 201,031
205,000 State of Oregon G.O. 8.200% 7/01/04............... 245,744
110,000 State of Oregon G.O. 6.000% 8/01/04............... 118,938
200,000 State of Oregon G.O. 9.000% 10/01/04.............. 213,750
355,000 State of Oregon G.O. 6.750% 5/01/05............... 401,149
250,000 State of Oregon G.O. (Veterans) 7.250% 7/01/06.... 294,375
300,000 Salem Oregon - Series A 5.875% 1/01/07............ 311,625
200,000 State of Oregon G.O. 7.250% 1/01/07............... 237,000
200,000 State of Oregon G.O. (Veterans) 8.250% 1/01/07.... 250,500
100,000 State of Oregon G.O. (Alt Energy) 6.400%
1/01/08......................................... 101,485
180,000 State of Oregon G.O. 9.200% 4/01/08............... 242,775
100,000 Oregon State Veterans Welfare 5.550% 4/01/09...... 105,875
--------------
3,101,067
--------------
OTHER GENERAL OBLIGATION BOND - 1.1%
295,000 Umatilla County School District 4.750% 6/15/10
(AMBAC)......................................... 295,738
--------------
OTHER REVENUE BOND - 14.7%
665,000 Oregon State Dept. Admin. Svcs Lottery Rev 4.750%
4/1/13 (FSA).................................... 642,556
300,000 Oregon State Housing & Community SVCS. Dept.Mtg
5.150% 7/1/13................................... 304,500
500,000 Puerto Rico Commonwealth Infrastructure 5.000%
7/1/13 (AMBAC).................................. 497,500
300,000 Puerto Rico Public Buildings Authority Revenue
5.000% 7/1/13 (MBIA)............................ 300,000
1,000,000 Multnomah County OR Education Facilities Rev
5.150% 4/1/14 (AMBAC)........................... 1,003,750
500,000 Puerto Rico Electric Power Authority Revenue
5.250% 7/1/14 (MBIA)............................ 511,250
110,000 Oregon State Housing & Community SVCS. Dept.Mtg
5.150% 7/01/15.................................. 109,725
</TABLE>
42
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
OTHER REVENUE BOND - (CONTINUED)
$ 500,000 Molalla Oregon Water Revenue 5.200% 8/1/17
(FSA)........................................... $ 505,000
--------------
3,874,281
--------------
PUBLIC IMPROVEMENTS - 7.1%
335,000 Central Lincoln PUD 6.500% 1/01/02................ 355,519
350,000 City of Portland (Urban Renewal) 5.700% 6/01/04... 372,313
400,000 Metro Oregon Open Spaces Program 4.900% 9/01/07... 407,000
270,000 Port of Morrow (Pollution Control) 6.375%
4/01/08*......................................... 289,575
160,000 Portland Oregon Building Service 4.750% 4/01/08... 160,200
150,000 Metro Oregon Regional Center 5.000% 8/01/10....... 148,687
135,000 Bend County Oregon Library Service District 5.375%
6/1/11 (AMBAC).................................. 140,400
--------------
1,873,694
--------------
REFUNDING BONDS - 11.8%
400,000 Metropolitan Service District 7.000% 7/01/01*...... 426,000
400,000 Oregon State Department General Services 6.100%
9/01/06......................................... 426,500
250,000 Oregon State Revenue - Series B 6.250% 1/01/08*.... 267,187
270,000 Metropolitan Service District 6.600% 7/01/11*...... 283,500
300,000 Puerto Rico Commonwealth 5.500% 7/1/12 (AMBAC).... 319,125
185,000 Oregon Economic Development Dept-Series B 6.350%
1/01/13*......................................... 198,181
310,000 Puerto Rico Commonwealth 5.500% 7/1/14 (AMBAC).... 328,213
265,000 Canby Oregon Sewer Revenue 5.1500% 12/01/14
(FSA)........................................... 265,994
100,000 Oregon State Department General Services 7.200%
1/15/15*......................................... 107,000
485,000 Oregon City Oregon Sewer 5.200% 10/01/15 (FGIC)... 491,669
--------------
3,113,368
--------------
SEWER AND WATER - 10.6%
260,000 Portland Oregon Sewer System Revenue 5.550%
6/01/04 ........................................ 276,575
350,000 Portland Oregon Sewer System 5.750% 10/01/05
(FGIC) ......................................... 375,813
500,000 Washington County Sewer System 5.800% 10/01/05
(AMBAC)......................................... 538,750
255,000 Washington County Oregon United Sewer 5.900%
10/1/06......................................... 276,038
95,000 Washington County Oregon United Sewer 5.900%
10/1/06......................................... 102,006
140,000 McMinnville Sewer System 4.700% 2/01/07 (FGIC).... 140,875
100,000 Portland Oregon Sewer System Revenue 5.150%
3/01/08 ........................................ 102,500
</TABLE>
43
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
SEWER AND WATER - (CONTINUED)
100,000 Portland Oregon Sewer System Revenue 5.100%
8/01/08 ........................................ 103,375
350,000 Portland Oregon Sewer System 6.000% 10/01/12
(FGIC) ......................................... 378,875
500,000 McMinnville Sewer System 5.000% 2/01/14 (FGIC).... 494,375
--------------
2,789,182
--------------
STATE OF OREGON GENERAL OBLIGATION BOND - 3.9%
$1,000,000 Northern Oregon Corrections 5.400% 9/15/16 (AMBAC)
................................................ $ 1,023,750
--------------
TRANSPORTATION - 2.4%
545,000 Oregon State Light Rail 7.000% 6/01/04 (MBIA)..... 617,894
--------------
Total Fixed Income Securities 26,036,858
--------------
(Cost $24,969,623)
SHORT TERM INVESTMENT - 1.9%
- -----------------------------------------------------------------------------------
INVESTMENT COMPANY - 1.9%
491,881 Dreyfus Tax-Exempt Cash Management Fund 3.770%**... 491,881
--------------
Total Investments - 100.8% 26,528,739
(Cost $25,461,504)***
Other Assets and Liabilities, Net - (.8)% (204,733 )
--------------
TOTAL NET ASSETS - 100.0% $ 26,324,006
--------------
--------------
</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
* Dates reflect pre-refunded dates.
** Rate reflects 7 day yield as of April 30, 1998.
*** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $1,126,028 and the
aggregate gross unrealized depreciation is $58,793, resulting in net
unrealized appreciation of $1,067,235.
44
<PAGE>
CRABBE HUSON INCOME FUND (CHINX)
INVESTMENT OBJECTIVE: 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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
1 Year 15.07%
3.79% 5 Year 6.11%
Life of Fund 7.68%
</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 Crabbe Huson Income Fund returned 3.79% for the fiscal year-to-date, edging
out the Lehman Brothers Government/Corporate Bond Index return of 3.64%. The
fund's one-year performance continues to shine: for the year ending March 31,
1998, the fund showed a gain of 15.07%, easily outpacing the Lehman Index's
return of 12.39% for the same period.
In the fall of 1996, and again in the spring of 1997, we noted market and
economic "clues" that suggested interest rates would decline. That view,
particularly in early 1997 when the Federal Reserve recently had raised short-
term interest rates, was classically contrarian. Our maturity extension
ultimately benefited fund shareholders as U.S. inflation rates fell and
longer-term bond prices increased significantly. In addition, as the Southeast
Asian crisis accelerated and fears of sporadic market defaults increased, your
fund performed well because of our continued commitment to relatively high
credit quality.
We took our share of criticism for our decision; however, it proved to be the
right move at the right time. The fund was bumped into the 2nd percentile on
Morningstar's list last year. At the end of last year, the fund was ranked 6th
out of 413 intermediate-term bond funds.(1)
During the past five months, the bond market has been in a very narrow trading
range, perhaps as narrow a range as we have witnessed since the late 1980s.
Long-term yields have bounced between 5.7% and 6.1% and probably will not break
the range until the second half of 1998. We believe that,
45
<PAGE>
ultimately, export- and capital spending-based weakness will cool the U.S.
economy in the latter half of 1998, a development that will be positive for
bonds.
Going forward, while we remain positive on the bond market, we will be wary of
any signs of resumed inflation. Strong U.S. money supply growth, steady wage
inflation, and a 4.27% rate of unemployment clearly are significant concerns.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Garth R. Nisbet, CFA Richard S. Huson, CFA
</TABLE>
- -------------------
(1) The Crabbe Huson Income Fund ranked 130(th) out of 169 intermediate-term
bond funds for the five-year period ending 12/31/97. The fund ranked 10(th) out
of 145 funds for the year ending 3/31/98, and 116(th) out of 173 funds for the
five-year period ending 3/31/98.
46
<PAGE>
CRABBE HUSON INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 83.1%
- -----------------------------------------------------------------------------------
AGENCY - 1.1%
$ 50,000 Interamerican Development Bank 6.125% 3/08/06..... $ 50,250
--------------
ASSET-BACKED - 0.6%
30,000 Green Tree Financial 6.540% 7/15/19............... 30,188
--------------
CORPORATE BONDS - 17.2%
100,000 WMX Technologies 6.700% 5/01/01................... 100,250
50,000 IBM Corp. 7.250% 11/01/02......................... 52,313
100,000 JP Morgan & Co. 7.625% 9/15/04.................... 106,500
50,000 Pacific Bell 6.250% 3/01/05....................... 50,000
50,000 Anheuser Busch 7.000% 9/01/05..................... 51,313
50,000 Bear Stearns Co. 6.875% 10/01/05.................. 51,063
50,000 Snap-on, Inc. 6.625% 10/01/05..................... 51,500
50,000 Walt Disney Co. 6.750% 3/30/06.................... 51,687
50,000 Sysco Corp. 7.000% 5/01/06........................ 52,375
50,000 Teleport Communications 9.875% 7/01/06............ 57,125
50,000 Wal-Mart Stores 8.000% 9/15/06.................... 55,750
50,000 Eli Lilly 8.375% 12/01/06......................... 57,000
50,000 GTE South 6.000% 2/15/08.......................... 48,437
50,000 Lincoln National Corp. 6.500% 3/15/08............. 49,625
--------------
834,938
--------------
MORTGAGE PASS-THROUGH SECURITIES - 24.1%
71,317 Federal National Mortgage Association Pool #30333
9.250% 9/01/16.................................. 75,380
77,577 Federal Home Loan Mortgage Corp Pool #302029
9.500% 10/01/16................................. 82,337
108,699 Federal Home Loan Mortgage Corp Pool #303033
9.000% 4/01/17.................................. 114,732
206,344 Federal Home Loan Mortgage Corp Pool #301538
10.000% 7/01/17................................. 223,066
111,934 Federal Home Loan Mortgage Corp Pool #C80344
7.500% 09/01/25................................. 114,697
127,972 Federal Home Loan Mortgage Corp Pool #D65456
7.000% 11/01/25................................. 129,509
169,752 Federal Home Loan Mortgage Corp Pool #C80409
8.000% 06/01/26................................. 175,702
249,067 Government National Mortgage Association Pool
#780651 7.000% 10/15/27......................... 252,953
--------------
1,168,376
--------------
U.S. GOVERNMENT BONDS - 40.1%
65,000 U.S. Treasury Note 5.625% 11/30/99................ 65,058
255,000 U.S. Treasury Note 5.375% 1/31/00................. 254,153
</TABLE>
47
<PAGE>
CRABBE HUSON INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
FIXED INCOME SECURITIES - (CONTINUED)
- -----------------------------------------------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT BONDS - (CONTINUED)
$ 175,000 U.S. Treasury Bond 6.750% 8/15/26................. $ 192,236
380,000 U.S. Treasury Bond 6.500% 11/15/26................ 404,708
280,000 U.S. Treasury Bond 6.125% 2/15/27................. 286,765
100,000 U.S. Treasury Bond 6.625% 2/15/27................. 108,359
600,000 U.S. Treasury Bond 6.375% 8/15/27................. 633,360
--------------
1,944,639
--------------
Total Fixed Income Securities 4,028,391
--------------
(Cost $3,900,456)
SHORT TERM INVESTMENT - 15.0%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.4%
20,450 State Street Bank and Trust Company** 4.250%
5/1/98........................................... 20,450
--------------
OTHER INVESTMENTS - 14.6%
707,649 Navigator Securities Lending Trust-Prime Portfolio
5.605%(*)***..................................... 707,649
--------------
Total Short Term Investments 728,099
--------------
(Cost $728,099)
Total Investments - 98.1% 4,756,490
(Cost $4,628,555)****
Other Assets and (Liabilities), Net - 1.9% 94,292
--------------
TOTAL NET ASSETS - 100.0% $ 4,850,782
--------------
--------------
</TABLE>
* Rate reflects 7 day yield as of April 30, 1998.
** The repurchase agreement, dated 4/30/98, $20,450 due 5/1/98, is
collateralized by $20,000 U.S. Treasury Note, 9.250%, maturing
2/15/16, with a market value of $27,375.
*** Investment of collateral received for securities loaned in Navigator
Securities Lending Trust-Prime Portfolio. As of April 30, 1998, the
market value of the securities on loan is $702,888.
**** The aggregate cost for federal income tax purposes is identical.
Aggregate gross unrealized appreciation is $129,836 and the aggregate
gross unrealized depreciation is $1,901, resulting in net unrealized
appreciation of $127,935.
See accompanying notes to financial statements.
48
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND (CHUSX)
INVESTMENT OBJECTIVE: 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 ENDING ANNUALIZED TOTAL RETURN
APRIL 30, 1998 PERIOD ENDING MARCH 31, 1998
- ------------------- ------------------------------------
<C> <S> <C>
2.65% 1 Year 8.57%
5 Year 4.71%
Life of Fund 6.72%
</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 U.S. Government Income Fund posted a return of 2.65% for the first half of
the fiscal year, performing well in comparison with its industry peers. The
fund's appropriate benchmark, the Ryan Labs Three-Year Treasury Index, returned
2.79% for the reporting period.
Though slightly lagging its benchmark for the first half of the fiscal year, the
U.S. Government Income Fund has provided its investors with a high-quality fixed
income vehicle composed of top-quality, low-risk securities. We believe that our
contrarian style has positioned the fund to outperform others in its peer group
in the months to come. For instance, we recently added a position of
mortgage-backed securities at advantageous prices, helping the fund pace its
benchmark and post solid returns through the first quarter of 1998. For the year
ending March 31, 1998, the fund posted a healthy 8.57% return, beating the
previous year's results by nearly 5%.
Like the broader fixed income market, short- and intermediate-term interest
rates have remained fairly stable in the past five months. The fund's average
maturity now is 4.3 years and remains well within the intermediate range.
However, the fund's average maturity is slightly longer than the average of its
peer group and reflects our current market bias that interest rates will
ultimately decline.
49
<PAGE>
Overall, the economy continues to be healthy and we see no sign for now that the
Fed will interfere with rates. In any event, we believe that the fund is well
situated for potential bond market volatility. While overvalued sections of the
stock market keep investors on their toes, our fund offers an excellent risk-
averse option for capital preservation and current income.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Garth R. Nisbet, CFA Richard S. Huson, CFA
</TABLE>
50
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- -------------- --------------------------------------------------- --------------
<C> <S> <C>
FIXED INCOME SECURITIES - 98.1%
- -----------------------------------------------------------------------------------
AGENCIES - 44.1%
$ 250,000 Federal Farm Credit Bank 6.400% 1/16/02........... $ 254,245
220,000 Federal Home Loan Bank 6.290% 2/21/02............. 223,010
200,000 Federal Home Loan Bank 6.490% 1/08/04............. 205,896
50,000 Federal Home Loan Bank 7.590% 3/10/05............. 54,586
150,000 Federal National Mortgage Association 4.950%
9/30/98......................................... 149,469
120,000 Federal National Mortgage Association 6.080%
9/25/00......................................... 120,812
300,000 Federal National Mortgage Association 8.250%
12/18/00........................................ 317,883
200,000 Federal National Mortgage Association 6.230%
7/18/02......................................... 202,780
50,000 Federal National Mortgage Association 7.375%
3/28/05......................................... 54,013
200,000 Federal National Mortgage Association 5.875%
2/02/06......................................... 198,078
--------------
1,780,772
--------------
U.S. GOVERNMENT NOTE -47.7%
15,000 U. S. Treasury Note 5.875% 7/31/99................ 15,053
375,000 U. S. Treasury Note 5.625% 12/31/99............... 375,405
35,000 U. S. Treasury Note 5.500% 3/31/00................ 34,953
140,000 U. S. Treasury Note 6.250% 8/31/00................ 141,949
100,000 U. S. Treasury Note 5.625% 11/30/00............... 100,030
100,000 U. S. Treasury Note 5.625% 2/28/01................ 100,004
935,000 U. S. Treasury Note 5.625% 12/31/02............... 933,588
210,000 U. S. Treasury Note 6.500% 10/15/06............... 220,133
--------------
1,921,115
--------------
MORTGAGE PASS-THROUGH SECURITIES - 6.3%
249,067 Government National Mortgage Association
Pool #780651 7.000% 10/15/27.................... 252,953
--------------
Total Fixed Income Securities 3,954,840
--------------
(Cost $3,949,625)
SHORT TERM INVESTMENT - 0.8%
- -----------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.8%
33,155 State Street Bank and Trust Company* 4.250%
5/1/98........................................... 33,155
--------------
Total Investments - 98.9% 3,987,995
(Cost $3,982,780)**
Other Assets and Liabilities, Net - 1.1% 42,272
--------------
TOTAL NET ASSETS - 100.0% $ 4,030,267
--------------
--------------
</TABLE>
* The repurchase agreement, dated 4/30/98, $33,155 due 5/1/98, is
collateralized by $25,000 U.S. Treasury Note, 9.250%, maturing
2/15/16, with a market value of $34,219.
** The aggregate cost for federal income tax purpose is identical.
Aggregate gross unrealized appreciation is $23,974 and the aggregate
gross unrealized depreciation is $18,759, resulting in net unrealized
appreciation of $5,215.
See accompanying notes to financial statements.
51
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND (CHGXX)
INVESTMENT OBJECTIVE: PROVIDE CAPITAL APPRECIATION 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 IN 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>
ANNUALIZED TOTAL RETURN
PERIOD ENDING MARCH 31, 1998
----------------------------------
<C> <S> <C>
1 Year 4.90%
5 Year 4.34%
Life of Fund 5.11%
</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.
Short-term rates, the primary driver for money market returns, have declined
during the past fiscal quarter as three-month T-bill yields have dropped from
5.18% to 4.98%. However, short-term rates were the exception during the period,
as the rest of the interest rate yield curve increased slightly (E.G., two-year
U.S. treasuries rose from 5.31% to 5.56%). Consistent returns and the likelihood
of an eventual Federal Reserve reduction in short-term interest rates have
encouraged us to maintain an average maturity of approximately 60 days.
Going forward, we see little reason to change the current average maturity or
alter the fund's basic strategy in any significant way. In fact, our outlook
remains positive for continuing competitive returns that will make the fund a
good option for investors seeking money market returns while preserving capital.
<TABLE>
<S> <C>
[SIGNATURE] [SIGNATURE]
Garth R. Nisbet, CFA Richard S. Huson, CFA
</TABLE>
52
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
SCHEDULE OF INVESTMENTS
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
SHARES OR
FACE VALUE SECURITIES DESCRIPTION MARKET VALUE
- ------------ --------------------------------------------------- ------------
<C> <S> <C>
FIXED INCOME SECURITIES* - 100.0%
- --------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY - 100.0%
DISCOUNT NOTES - 100.0%
FEDERAL HOME LOAN BANK
$ 850,000 5.430% 5/1/98..................................... $ 850,000
1,000,000 5.340% 5/5/98..................................... 999,407
2,000,000 5.350% 5/6/98..................................... 1,998,514
1,000,000 5.360% 5/11/98.................................... 998,511
1,000,000 5.360% 5/20/98.................................... 997,171
1,000,000 5.340% 5/21/98.................................... 997,033
1,000,000 5.350% 5/27/98.................................... 996,136
1,000,000 5.230% 6/2/98..................................... 995,351
2,000,000 5.380% 6/5/98..................................... 1,989,539
1,500,000 5.290% 6/9/98..................................... 1,491,404
1,500,000 5.220% 6/15/98.................................... 1,490,213
1,000,000 5.220% 6/29/98.................................... 991,445
2,000,000 5.280% 6/30/98.................................... 1,982,400
1,000,000 5.320% 7/9/98..................................... 989,803
1,500,000 5.370% 7/31/98.................................... 1,479,639
2,000,000 5.310% 8/3/98..................................... 1,972,270
1,500,000 5.240% 9/16/98.................................... 1,469,870
1,500,000 5.260% 10/1/98.................................... 1,466,467
------------
24,155,173
------------
FEDERAL FARM CREDIT BUREAU
2,000,000 5.250% 7/13/98.................................... 1,978,708
1,500,000 5.220% 8/17/98.................................... 1,476,510
------------
3,455,218
------------
Total Fixed Income 27,610,391
------------
(Cost $27,610,391)
OTHER INVESTMENTS - 0.1%
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT - 0.1%
37,751 State Street Bank and Trust Company** 4.250%
5/1/98........................................... 37,751
------------
Total Investments - 100.1% 27,648,142
(Cost $27,648,142)***
Other Assets and Liabilities, Net - (0.1)% (40,965)
------------
TOTAL NET ASSETS - 100.0% $27,607,177
------------
------------
</TABLE>
* Rates reflect purchase yield to maturity.
** The repurchase agreement, dated 4/30/98, $37,751 due 5/1/98, is
collateralized by $30,000 U.S. Treasury Note, 9.250%, maturing
2/15/16, with a market value of $41,063.
*** 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, 1998
(Unaudited)
<TABLE>
<CAPTION>
THE CRABBE CRABBE HUSON
HUSON SPECIAL SMALL CAP
FUND, INC. FUND
--------------- ---------------
<S> <C> <C>
ASSETS:
Investment securities, at market (Note
1) $ 293,232,543 $ 148,878,776
Deposits with brokers for securities
sold short (Note 1) 28,430,451 --
Receivables:
Dividends and interest 111,087 28,662
Fund shares sold 123,795 430,185
Investment securities sold -- 502,149
Proceeds from securities sold short
(Note 1) 37,491,406 --
Organization expenses (Note 1) -- 100,136
Prepaid Expenses 19,085 8,708
--------------- ---------------
$ 359,408,367 $ 149,948,616
--------------- ---------------
LIABILITIES:
Securities sold short, at market (Note
1) 64,985,697 --
Payables:
Note Payable 17,463,386 --
Short Sales Closed (Note 1) 1,775,796 --
Investment securities purchased -- --
Fund shares redeemed 5,521,116 95,890
Deposits for securities loaned (Note
1) -- --
Directors/Trustees fees (Note 2) 8,152 1,380
Income dividend -- --
Distribution fees (Note 2) 38,831 8,309
Accrued liabilities 429,621 57,663
--------------- ---------------
90,222,599 163,242
--------------- ---------------
NET ASSETS: $ 269,185,768 $ 149,785,374
--------------- ---------------
--------------- ---------------
NET ASSETS CONSIST OF:
Capital shares 19,438 --
Capital paid in 247,716,629 137,123,151
Undistributed (distributed in excess
of) net investment income (829,266) (287,164)
Undistributed net realized gain (loss)
on investments 1,234,110 1,267,006
Net unrealized appreciation on
investments and short sales 21,044,857 11,682,381
--------------- ---------------
$ 269,185,768 $ 149,785,374
--------------- ---------------
--------------- ---------------
PRIMARY CLASS
Net Assets $ 269,185,768 $ 37,811,649
Shares outstanding (Note 3) 19,511,298 2,675,574
--------------- ---------------
--------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 13.80 $ 14.13
--------------- ---------------
--------------- ---------------
INSTITUTIONAL CLASS
Net Assets -- $ 111,973,725
Shares outstanding (Note 3) -- 7,912,096
--------------- ---------------
--------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE -- $ 14.15
--------------- ---------------
--------------- ---------------
INVESTMENTS, AT COST (Note 4) $ 244,693,395 $ 137,196,395
</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 (Note
1) $ 158,154,198 $ 489,492,228 $ 31,694,568
Deposits with brokers for securities
sold short (Note 1) -- -- --
Receivables:
Dividends and interest 805,437 405,867 84,762
Fund shares sold 148,360 1,026,435 113,000
Investment securities sold 640,445 3,467,208 659,939
Proceeds from securities sold short
(Note 1) -- -- --
Organization expenses (Note 1) 4,714 4,663 31,426
Prepaid Expenses 7,716 25,828 1,937
--------------- --------------- ---------------
$ 159,760,870 $ 494,422,229 $ 32,585,632
--------------- --------------- ---------------
LIABILITIES:
Securities sold short, at market (Note
1) -- -- --
Payables:
Note Payable -- -- 143,864
Short Sales Closed (Note 1) -- -- --
Investment securities purchased 1,617,386 8,926,315 --
Fund shares redeemed 970 271,640 30,408
Deposits for securities loaned (Note
1) 23,418,938 50,253,524 4,791,210
Directors/Trustees fees (Note 2) 2,018 7,436 704
Income dividend -- -- 20,616
Distribution fees (Note 2) 25,488 41,828 --
Accrued liabilities 101,160 190,972 9,567
--------------- --------------- ---------------
25,165,960 59,691,715 4,996,369
--------------- --------------- ---------------
NET ASSETS: $ 134,594,910 $ 434,730,514 $ 27,589,263
--------------- --------------- ---------------
--------------- --------------- ---------------
NET ASSETS CONSIST OF:
Capital shares -- -- --
Capital paid in 113,006,628 324,805,259 22,997,775
Undistributed (distributed in excess
of) net investment income 192,439 1,170,151 39,442
Undistributed net realized gain (loss)
on investments 11,779,172 61,258,060 3,130,323
Net unrealized appreciation on
investments and short sales 9,616,671 47,497,044 1,421,723
--------------- --------------- ---------------
$ 134,594,910 $ 434,730,514 $ 27,589,263
--------------- --------------- ---------------
--------------- --------------- ---------------
PRIMARY CLASS
Net Assets $ 98,058,434 $ 401,045,369 $ 27,589,263
Shares outstanding (Note 3) 6,890,721 19,075,645 2,197,315
--------------- --------------- ---------------
--------------- --------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 14.23 $ 21.02 $ 12.56
--------------- --------------- ---------------
--------------- --------------- ---------------
INSTITUTIONAL CLASS
Net Assets $ 36,536,476 $ 33,685,145 --
Shares outstanding (Note 3) 2,567,179 1,600,761 --
--------------- --------------- ---------------
--------------- --------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 14.23 $ 21.04 --
--------------- --------------- ---------------
--------------- --------------- ---------------
INVESTMENTS, AT COST (Note 4) $ 148,537,527 $ 441,995,184 $ 30,272,845
</TABLE>
See accompanying notes to financial statements.
55
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE
OREGON TAX-FREE HUSON INCOME
FUND FUND
--------------- ---------------
<S> <C> <C>
ASSETS:
Investment securities, at market (Note
1) $ 26,528,739 $ 4,756,490
Receivables:
Dividends and interest 372,271 63,853
Fund shares sold -- 750,187
Prepaid Expenses 1,555 225
--------------- ---------------
$ 26,902,565 $ 5,570,755
--------------- ---------------
LIABILITIES:
Payables:
Investment securities purchased 499,284 --
Fund shares redeemed 25,000 1,367
Deposits for securities loaned (Note
1) -- 707,649
Directors/Trustees fees (Note 2) 461 58
Income dividend 22,098 140
Distribution fees (Note 2) 12,080 1,287
Accrued liabilities 19,636 9,472
--------------- ---------------
578,559 719,973
--------------- ---------------
NET ASSETS: $ 26,324,006 $ 4,850,782
--------------- ---------------
--------------- ---------------
NET ASSETS CONSIST OF:
Capital paid in 24,834,270 4,759,710
Undistributed (distributed in excess
of) net investment income 169,838 319
Undistributed net realized gain (loss)
on investments 252,663 (37,182)
Net unrealized appreciation on
investments and short sales 1,067,235 127,935
--------------- ---------------
$ 26,324,006 $ 4,850,782
--------------- ---------------
--------------- ---------------
PRIMARY CLASS
Shares outstanding (Note 3) 2,075,628 465,361
--------------- ---------------
--------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 12.68 $ 10.42
--------------- ---------------
--------------- ---------------
INVESTMENTS, AT COST (Note 4) $ 25,461,504 $ 4,628,555
</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 (Note
1) $ 3,987,995 $ 27,648,142
Receivables:
Dividends and interest 60,922 6
Fund shares sold -- 333,535
Prepaid Expenses 228 570
--------------- ---------------
$ 4,049,145 $ 27,982,253
--------------- ---------------
LIABILITIES:
Payables:
Investment securities purchased -- --
Fund shares redeemed 2,818 298,792
Deposits for securities loaned (Note
1) -- --
Directors/Trustees fees (Note 2) 125 583
Income dividend 4,155 20,443
Distribution fees (Note 2) 1,207 21,226
Accrued liabilities 10,573 34,032
--------------- ---------------
18,878 375,076
--------------- ---------------
NET ASSETS: $ 4,030,267 $ 27,607,177
--------------- ---------------
--------------- ---------------
NET ASSETS CONSIST OF:
Capital paid in 4,018,302 27,610,119
Undistributed (distributed in excess
of) net investment income (981) --
Undistributed net realized gain (loss)
on investments 7,731 (2,942)
Net unrealized appreciation on
investments and short sales 5,215 --
--------------- ---------------
$ 4,030,267 $ 27,607,177
--------------- ---------------
--------------- ---------------
PRIMARY CLASS
Shares outstanding (Note 3) 374,070 27,607,177
--------------- ---------------
--------------- ---------------
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE $ 10.77 $ 1.00
--------------- ---------------
--------------- ---------------
INVESTMENTS, AT COST (Note 4) $ 3,982,780 $ 27,648,142
</TABLE>
See accompanying notes to financial statements.
57
<PAGE>
- -----------------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF OPERATIONS
For the six months ended April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
THE CRABBE CRABBE HUSON
HUSON SPECIAL SMALL CAP
FUND, INC. FUND
------------- ------------
<S> <C> <C>
INVESTMENT INCOME
Interest $ 2,264,436 $ 379,460
Securities Lending 165,709 --
Dividends 746,964 201,825
------------- ------------
3,177,109 581,285
------------- ------------
EXPENSES
Investment advisory fees (Note 2) 1,460,921 631,257
Distribution fees - Primary (Note 2) 407,805 48,203
Transfer agent - Primary 293,674 23,507
Institutional -- 9,326
Administration (Note 2) 72,523 28,828
Printing & Postage 23,592 2,941
Custody 71,012 28,305
Legal 12,129 4,235
Interest 280,337 633
Auditing 16,899 6,474
Insurance 9,448 1,203
Trustees fees (Note 2) 14,030 4,685
Registration fees - Primary 21,497 10,643
Institutional -- 10,676
Amortization of organization expenses -
Primary -- 10,274
Short sale dividend 148,748 --
Miscellaneous 169,957 11,293
------------- ------------
3,002,572 832,483
Fees waived by investment advisor (Note 2) (406,443) (63,869)
Expenses reimbursed by investment advisor
(Note 2) -- (16,396)
Fees paid indirectly (Note 2) (551) (669)
------------- ------------
NET EXPENSES 2,595,578 751,549
------------- ------------
NET INVESTMENT INCOME (LOSS) 581,531 (170,264)
------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 30,167,532 1,267,934
Net realized loss on short sales (26,351,855) --
Net change in unrealized appreciation
(depreciation) of investments and short
sales (30,295,539) 1,860,843
------------- ------------
NET GAIN (LOSS) ON INVESTMENTS (26,479,862) 3,128,777
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $(25,898,331) $ 2,958,513
------------- ------------
------------- ------------
</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 $ 1,724,574 $ 598,201 $ 43,901
Securities Lending 54,734 132,094 17,414
Dividends 599,810 3,225,075 679,539
---------------- ------------ ------------
2,379,118 3,955,370 740,854
---------------- ------------ ------------
EXPENSES
Investment advisory fees (Note 2) 615,727 1,813,351 152,839
Distribution fees - Primary (Note 2) 117,813 476,425 38,210
Transfer agent - Primary 33,550 130,369 16,842
Institutional 9,125 8,566 --
Administration (Note 2) 28,185 86,299 6,680
Printing & Postage 14,921 53,578 1,835
Custody 46,469 85,060 12,585
Legal 4,097 12,607 1,225
Interest -- 1,729 360
Auditing 5,995 17,599 2,775
Insurance 3,341 10,741 888
Trustees fees (Note 2) 4,570 15,503 1,313
Registration fees - Primary 10,523 26,657 9,683
Institutional 8,070 8,393 --
Amortization of organization expenses
-
Primary 360 360 14,875
Short sale dividend -- -- --
Miscellaneous 11,043 39,602 3,558
---------------- ------------ ------------
913,789 2,786,839 263,668
Fees waived by investment advisor
(Note 2) (83,747) (43,914 ) (34,409)
Expenses reimbursed by investment
advisor (Note 2) (16,463) (16,019 ) --
Fees paid indirectly (Note 2) -- (1,655 ) --
---------------- ------------ ------------
NET EXPENSES 813,579 2,725,251 229,259
---------------- ------------ ------------
NET INVESTMENT INCOME (LOSS) 1,565,539 1,230,119 511,595
---------------- ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 11,918,968 62,821,270 3,130,685
Net realized loss on short sales -- -- --
Net change in unrealized appreciation
(depreciation) of investments and
short sales (1,668,457) (9,698,528 ) (2,794,874)
---------------- ------------ ------------
NET GAIN (LOSS) ON INVESTMENTS 10,250,511 53,122,742 335,811
---------------- ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $11,816,050 $54,352,861 $ 847,406
---------------- ------------ ------------
---------------- ------------ ------------
</TABLE>
See accompanying notes to financial statements.
59
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF OPERATIONS (CONTINUED)
For the six months ended April 30, 1998
(Unaudited)
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE
OREGON TAX-FREE HUSON INCOME
FUND FUND
--------------- ------------
<S> <C> <C>
INVESTMENT INCOME
Interest $ 677,287 $121,812
Securities Lending -- 767
--------------- ------------
677,287 122,579
--------------- ------------
EXPENSES
Investment advisory fees (Note 2) 65,489 14,196
Distribution fees - (Note 2) 32,744 4,732
Transfer agent 14,623 10,766
Administration (Note 2) 4,985 649
Printing & Postage 3,350 779
Custody 13,920 6,316
Legal 832 100
Interest 313 49
Auditing 2,206 1,428
Insurance 701 99
Trustees fees (Note 2) 975 124
Registration fees 21 6,669
Miscellaneous 2,567 440
--------------- ------------
142,726 46,347
Fees waived by investment advisor
(Note 2) (14,332) (14,196)
Expenses reimbursed by investment
advisor (Note 2) -- (17,008)
Fees paid indirectly (Note 2) (36) --
--------------- ------------
NET EXPENSES 128,358 15,143
--------------- ------------
NET INVESTMENT INCOME (LOSS) 548,929 107,436
--------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 252,664 42,546
Net change in unrealized depreciation
of investments (372,109) (5,504)
--------------- ------------
NET GAIN (LOSS) ON INVESTMENTS (119,445) 37,042
--------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 429,484 $144,478
--------------- ------------
--------------- ------------
</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 $121,754 $ 805,511
Securities Lending -- --
--------------- ---------------
121,754 805,511
--------------- ---------------
EXPENSES
Investment advisory fees (Note 2) 10,548 73,097
Distribution fees - (Note 2) 5,274 36,548
Transfer agent 10,906 24,614
Administration (Note 2) 810 5,753
Printing & Postage 895 5,219
Custody 5,812 13,245
Legal 124 911
Interest 60 1
Auditing 1,613 2,315
Insurance 198 1,784
Trustees fees (Note 2) 153 1,013
Registration fees 6,292 8,770
Miscellaneous 535 5,124
--------------- ---------------
43,220 178,394
Fees waived by investment advisor
(Note 2) (10,548) (73,097)
Expenses reimbursed by investment
advisor (Note 2) (16,842) (2,961)
Fees paid indirectly (Note 2) (9) --
--------------- ---------------
NET EXPENSES 15,821 102,336
--------------- ---------------
NET INVESTMENT INCOME (LOSS) 105,933 703,175
--------------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 38,066 --
Net change in unrealized depreciation
of investments (28,694) --
--------------- ---------------
NET GAIN (LOSS) ON INVESTMENTS 9,372 --
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $115,305 $ 703,175
--------------- ---------------
--------------- ---------------
</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, 1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 581,531 $ 3,511,023
Net realized gain on investments 3,815,677 35,382,232
Net change in unrealized appreciation
or depreciation of investments and
short sales (30,295,539) 57,974,639
-------------- --------------
Increase (Decrease) in net assets
resulting from operations (25,898,331) 96,867,894
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income-Primary
shares (2,739,741) (4,324,808)
From net investment
income-Institutional shares -- --
In excess of net investment
income-Primary shares (829,266) --
In excess of net investment
income-Institutional shares -- --
From net realized gain on
investments-Primary shares (38,363,921) (9,866,077)
From net realized gain on
investments-Institutional shares -- --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (59,318,223) (167,381,164)
-------------- --------------
Total increase (decrease) in net
assets (127,149,482) (84,704,155)
FUND NET ASSETS, BEGINNING OF PERIOD 396,335,250 481,039,405
-------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 269,185,768 $ 396,335,250
-------------- --------------
-------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ (829,266) $ 2,158,210
-------------- --------------
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON
EQUITY FUND
--------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,230,119 $ 1,260,833
Net realized gain on investments 62,821,270 80,765,002
Net change in unrealized appreciation
or depreciation of investments (9,698,528) 22,494,641
-------------- --------------
Increase (Decrease) in net assets
resulting from operations 54,352,861 104,520,476
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income-Primary
shares (804,291) (1,478,593)
From net investment
income-Institutional shares (150,979) (19,410)
From net realized gain on
investments-Primary shares (77,290,554) (33,083,445)
From net realized gain on
investments-Institutional shares (4,893,327) (348,809)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 59,385,678 (106,452,034)
-------------- --------------
Total increase (decrease) in net
assets 30,599,388 (36,861,815)
FUND NET ASSETS, BEGINNING OF PERIOD 404,131,126 440,992,941
-------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 434,730,514 $ 404,131,126
-------------- --------------
-------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ 1,170,151 $ 895,302
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
62
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON
SMALL CAP FUND ASSET ALLOCATION FUND
-------------------------------- --------------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED OCTOBER 31, ENDED OCTOBER 31,
APRIL 30, 1998 1997 APRIL 30, 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ (170,264) $ 218,832 $ 1,565,539 $ 2,795,398
Net realized gain on investments 1,267,934 10,883,028 11,918,968 14,919,865
Net change in unrealized appreciation
or depreciation of investments and
short sales 1,860,843 9,736,622 (1,668,457) 4,353,683
-------------- -------------- -------------- --------------
Increase (Decrease) in net assets
resulting from operations 2,958,513 20,838,482 11,816,050 22,068,946
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income-Primary
shares -- (37,544) (952,092) (2,327,127)
From net investment
income-Institutional shares (68,736) (21,320) (400,251) (458,657)
In excess of net investment
income-Primary shares -- -- -- --
In excess of net investment
income-Institutional shares (287,164) -- -- --
From net realized gain on
investments-Primary shares (3,251,640) (281,168) (11,232,637) (6,443,097)
From net realized gain on
investments-Institutional shares (7,631,388) (99,170) (3,834,627) (189,266)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 43,847,513 73,149,261 14,640,691 (15,636,696)
-------------- -------------- -------------- --------------
Total increase (decrease) in net
assets 35,567,098 93,548,541 10,037,134 (2,985,897)
FUND NET ASSETS, BEGINNING OF PERIOD 114,218,276 20,669,735 124,557,776 127,543,673
-------------- -------------- -------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 149,785,374 $ 114,218,276 $ 134,594,910 $ 124,557,776
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ (287,164) $ 239,000 $ 192,439 $ (20,757)
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON
REAL ESTATE INVESTMENT FUND
--------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
-------------- --------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 511,595 $ 912,374
Net realized gain on investments 3,130,685 3,694,705
Net change in unrealized appreciation
or depreciation of investments (2,794,874) 2,968,799
-------------- --------------
Increase (Decrease) in net assets
resulting from operations 847,406 7,575,878
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income-Primary
shares (511,590) (908,865)
From net investment
income-Institutional shares -- --
From net realized gain on
investments-Primary shares (3,695,066) (1,144,248)
From net realized gain on
investments-Institutional shares -- --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (3,310,039) 8,086,847
-------------- --------------
Total increase (decrease) in net
assets (6,669,289) 13,609,612
FUND NET ASSETS, BEGINNING OF PERIOD 34,258,552 20,648,940
-------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 27,589,263 $ 34,258,552
-------------- --------------
-------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ 39,442 $ 39,437
-------------- --------------
-------------- --------------
</TABLE>
63
<PAGE>
- ---------------------------------------------------------------------
CRABBE HUSON FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
(Unaudited)
<TABLE>
<CAPTION>
CRABBE HUSON
OREGON TAX-FREE FUND
--------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 548,929 $ 1,110,234
Net realized gain on investments 252,664 72,541
Net change in unrealized appreciation
or depreciation of investments (372,109) 514,167
-------------- --------------
Increase in net assets resulting from
operations 429,484 1,696,942
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (548,929) (957,659)
In excess of net investment income -- --
From net realized gain on investments (71,383) (152,575)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 27,587 (234,482)
-------------- --------------
Total increase (decrease) in net
assets (163,241) 352,226
FUND NET ASSETS, BEGINNING OF PERIOD 26,487,247 26,135,021
-------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 26,324,006 $ 26,487,247
-------------- --------------
-------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ 169,838 $ 169,838
-------------- --------------
-------------- --------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON U.S. GOVERNMENT
MONEY MARKET FUND
--------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
APRIL 30, 1998 1997
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 703,175 $ 1,615,767
-------------- --------------
Increase in net assets resulting from
operations 703,175 1,615,767
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (703,175) (1,615,767)
CAPITAL SHARE TRANSACTIONS, NET (Note 3) (930,663) (13,632,856)
-------------- --------------
Total increase (decrease) in net
assets (930,663) (13,632,856)
FUND NET ASSETS, BEGINNING OF PERIOD 28,537,840 42,170,696
-------------- --------------
FUND NET ASSETS, END OF PERIOD $ 27,607,177 $ 28,537,840
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
64
<PAGE>
- ---------------------------------------------------------------------
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON U.S.
INCOME FUND GOVERNMENT INCOME FUND
-------------------------------- --------------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED OCTOBER 31, ENDED OCTOBER 31,
APRIL 30, 1998 1997 APRIL 30, 1998 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment income $ 107,436 $ 218,795 $ 105,933 $ 310,554
Net realized gain on investments 42,546 108,239 38,066 27,462
Net change in unrealized appreciation
or depreciation of investments (5,504) 21,295 (28,694) 26,940
-------------- -------------- -------------- --------------
Increase in net assets resulting from
operations 144,478 348,329 115,305 364,956
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (198,028) (222,046) (126,349) (310,554)
In excess of net investment income -- -- (981) (1,592)
From net realized gain on investments -- -- -- --
CAPITAL SHARE TRANSACTIONS, NET (Note 3) 1,656,180 (1,571,637) (451,927) (4,075,647)
-------------- -------------- -------------- --------------
Total increase (decrease) in net
assets 1,602,630 (1,445,354) (463,952) (4,022,837)
FUND NET ASSETS, BEGINNING OF PERIOD 3,248,152 4,693,506 4,494,219 8,517,056
-------------- -------------- -------------- --------------
FUND NET ASSETS, END OF PERIOD** $ 4,850,782 $ 3,248,152 $ 4,030,267 $ 4,494,219
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
**Including undistributed (distribution
in excess of) net investment income
of: $ 319 $ 90,911 $ (981) $ 20,416
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
</TABLE>
See accompanying notes to financial statements.
65
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS
April 30, 1998
(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. 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 market discount minus
the amortization of investment premium, is recorded daily on the accrual basis.
Dividends are recorded on the ex-dividend date. Dividends declared on short
positions existing on the record date are recorded on the ex-dividend date as an
expense. Net realized gains and losses on
66
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 assets of each
class of share. 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 either on
its relative daily net assets or evenly over the Funds or classes.
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 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, 1998 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
67
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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,
U.S. Government securities or other liquid securities 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
amount on deposit with the broker plus the value of the segregated securities
may not exceed 25% of 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.
68
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 realization of collateral.
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 digits
method. As of April 30, 1998 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.
69
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
LINE OF CREDIT: The Funds participate in a $40 million line of credit provided
by State Street Corporation, primarily for temporary or emergency purposes, $20
million of which is unsecured. 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 $40 million or 33 1/3% of its total assets
on a 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. At April 30,
1998, the Funds had $17,607,250 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
segregated account.
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 Statements 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, 1998
(Unaudited)
NOTE 2. INVESTMENT ADVISOR, OTHER TRANSACTIONS WITH
AFFILIATES, AND SERVICE PROVIDERS
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 $100,000,000
.45 of 1% of average daily net assets between $100,000,000 and $500,000,000
.40 of 1% of average daily net assets over $500,000,000
The Advisor may at times voluntarily waive its advisory fees or reimburse a
Fund's expenses net of any expense reduction realized through a directed
brokerage agreement, but it is under no legal or contractual obligation to do
so. The Advisor expects to waive its Management Fee and/or reimburse the Fund's
expenses during the current fiscal year ending October 31, 1998 to the extent
Total Fund Operating Expenses exceed 1.50% for the Special Fund, the Small Cap
Fund -- Primary Class, the Real Estate Fund, the Equity Fund -- Primary Class
and the Asset Allocation Fund -- Primary Class, 1.00% for the Small Cap Fund --
Institutional Class, the Equity Fund -- Institutional Class and the Asset
Allocation Fund -- Institutional Class, .98% for the Oregon Tax-Free Fund, .80%
for the Income Fund, .75% for the U.S. Government Income Fund and .70% for the
U.S. Government Money Market Fund.
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'
71
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 2. INVESTMENT ADVISOR, OTHER TRANSACTIONS WITH
AFFILIATES, AND SERVICE PROVIDERS (CONTINUED)
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.
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, 1998, the
Funds incurred aggregate fees of $42,366.
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 six
month period ended April 30, 1998, credits earned were $36, $551, $1,655, $9,
and $669 for Oregon Tax-Free Fund, Special Fund, Equity Fund, U.S. Government
Income Fund, and Small Cap Fund, respectively. The Funds could have invested the
assets used in connection with this agreement in an income producing asset if it
had not entered into such an agreement.
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 used to offset all or a portion
of certain outside service providers fees incurred by the Funds. For the six
month period ended April 30, 1998, no credits were earned under this agreement.
YEAR 2000: Substantially all of the portfolio and shareholder accounting and
record keeping for the Funds is managed by State Street Bank and Trust Company
("State Street") and various affiliates of State Street. State Street has
advised the Funds that its computer systems are being modified in order to avoid
any errors or delays attributable to the change to the year 2000, that these
modifications are nearly complete, and that it does not anticipate any
difficulties in accurate and timely reporting resulting from the change in year.
72
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(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 YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED SIX MONTHS ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, ENDED OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998 1997 APRIL 30, 1998 1997 1998 1997 1998 1997
----------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,546,329 6,932,446 $ 36,851,141 $ 107,701,421 932,133 2,953,831 $ 12,848,896 $ 41,485,452
Shares
issued in
reinvestment
of
dividends 3,099,046 963,254 40,752,447 13,533,694 243,064 27,329 3,079,615 315,372
----------------------------------------------------------- ------------------------------------------------------
5,645,375 7,895,700 77,603,588 121,235,115 1,175,197 2,981,160 15,928,511 41,800,824
Shares
redeemed (9,731,123) (19,397,928) (136,921,811) (288,616,279) (1,249,518) (1,969,881) (17,328,632) (27,110,004)
----------------------------------------------------------- ------------------------------------------------------
Net increase
(decrease) (4,085,748) (11,502,228) $ (59,318,223) $ (167,381,164) (74,321) 1,011,279 $ (1,400,121) $ 14,690,820
----------------------------------------------------------- ------------------------------------------------------
----------------------------------------------------------- ------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON SMALL CAP FUND
INSTITUTIONAL CLASS
--------------------------------------------------- CRABBE HUSON ASSET ALLOCATION 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 APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998 31, 1997 1998 1997 1998 1997 1998 1997
--------------------------------------------------- ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 4,242,770 4,486,781 $58,219,388 $58,662,035 567,559 937,862 $ 7,855,008 $ 12,837,676
Shares
issued in
reinvestment
of
dividends 630,407 10,450 7,987,258 120,489 865,174 586,343 11,361,487 7,726,444
--------------------------------------------------- ---------------------------------------------------
4,873,177 4,497,231 66,206,646 58,782,524 1,432,733 1,524,205 19,216,495 20,564,120
Shares
redeemed (1,573,691) (22,110) (20,959,012) (324,083) (965,400) (4,438,152) (13,572,162) (60,508,773)
--------------------------------------------------- ---------------------------------------------------
Net increase
(decrease) 3,299,486 4,475,121 $45,247,634 $58,458,441 467,333 (2,913,947) $ 5,644,333 $(39,944,653)
--------------------------------------------------- ---------------------------------------------------
--------------------------------------------------- ---------------------------------------------------
</TABLE>
73
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
CRABBE HUSON EQUITY FUND
PRIMARY CLASS
---------------------------------------------------------- CRABBE HUSON ASSET ALLOCATION FUND
INSTITUTIONAL CLASS
SHARES AMOUNT -------------------------------------------------
SHARES AMOUNT
-------------------------------------------------
---------------------------------------------------------- SIX
SIX MONTHS YEAR YEAR MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED SIX MONTHS ENDED ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, ENDED OCTOBER 31, APRIL OCTOBER APRIL 30, OCTOBER 31,
1998 1997 APRIL 30, 1998 1997 30, 1998 31, 1997 1998 1997
---------------------------------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,329,890 3,378,328 $ 48,127,724 $ 69,639,410 368,597 2,050,335 $ 5,282,551 $ 28,620,172
Shares
issued in
reinvestment
of
dividends 4,095,442 1,692,739 74,537,052 31,671,157 322,184 47,267 4,234,871 653,385
---------------------------------------------------------- -------------------------------------------------
6,425,332 5,071,067 122,664,776 101,310,567 690,781 2,097,602 9,517,422 29,273,557
Shares
redeemed (3,648,085) (11,156,760) (73,933,497) (223,126,227) (38,056) (371,870) (521,064) (4,965,600)
---------------------------------------------------------- -------------------------------------------------
Net increase
(decrease) 2,777,247 (6,085,693) $ 48,731,279 $ (121,815,660) 652,725 1,725,732 $ 8,996,358 $ 24,307,957
---------------------------------------------------------- -------------------------------------------------
---------------------------------------------------------- -------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON EQUITY FUND
INSTITUTIONAL CLASS
-------------------------------------------------- CRABBE HUSON OREGON TAX-FREE FUND
PRIMARY CLASS
SHARES AMOUNT --------------------------------------------------
SHARES AMOUNT
-------------------------------------------------- --------------------------------------------------
SIX SIX
MONTHS YEAR SIX MONTHS YEAR MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL OCTOBER APRIL 30, OCTOBER 31, APRIL 30, OCTOBER APRIL 30, OCTOBER 31,
30, 1998 31, 1997 1998 1997 1998 31, 1997 1998 1997
-------------------------------------------------- --------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 355,179 1,162,016 $ 6,800,871 $ 22,817,326 114,665 222,132 $ 1,466,111 $ 2,788,786
Shares
issued in
reinvestment
of
dividends 277,311 19,670 5,044,293 368,216 37,231 66,932 477,166 844,070
-------------------------------------------------- --------------------------------------------------
632,490 1,181,686 11,845,164 23,185,542 151,896 289,064 1,943,277 3,632,856
Shares
redeemed (61,093) (378,595) (1,190,765) (7,821,916) (149,219) (306,846) (1,915,690) (3,867,338)
-------------------------------------------------- --------------------------------------------------
Net increase
(decrease) 571,397 803,091 $ 10,654,399 $ 15,363,626 2,677 (17,782) $ 27,587 $ (234,482)
-------------------------------------------------- --------------------------------------------------
-------------------------------------------------- --------------------------------------------------
</TABLE>
74
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
Transactions in capital shares of the Funds were as follows:
<TABLE>
<CAPTION>
CRABBE HUSON INCOME FUND
PRIMARY CLASS
------------------------------------------------ CRABBE HUSON U.S. GOVERNMENT
INCOME FUND
SHARES AMOUNT PRIMARY CLASS
---------------------------------------------------
SHARES AMOUNT
------------------------------------------------ ---------------------------------------------------
SIX SIX
MONTHS YEAR SIX MONTHS YEAR MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
APRIL OCTOBER APRIL 30, OCTOBER 31, APRIL 30, OCTOBER APRIL 30, OCTOBER 31,
30, 1998 31, 1997 1998 1997 1998 31, 1997 1998 1997
------------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 203,460 107,712 $ 2,131,424 $ 1,092,232 144,655 69,750 $ 1,571,816 $ 743,485
Shares
issued in
reinvestment
of
dividends 18,524 19,273 193,595 196,574 8,387 20,527 90,469 218,495
------------------------------------------------ ---------------------------------------------------
221,984 126,985 2,325,019 1,288,806 153,042 90,277 1,662,285 961,980
Shares
redeemed (63,593) (280,175) (668,839) (2,860,443) (194,823) (473,104) (2,114,212) (5,037,627)
------------------------------------------------ ---------------------------------------------------
Net increase
(decrease) 158,391 (153,190) $ 1,656,180 $ (1,571,637) (41,781) (382,827) $ (451,927) $ (4,075,647)
------------------------------------------------ ---------------------------------------------------
------------------------------------------------ ---------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON U.S. GOVERNMENT
MONEY MARKET FUND
PRIMARY CLASS
------------------------------------------------------------ CRABBE HUSON REAL ESTATE
INVESTMENT FUND
SHARES AMOUNT PRIMARY CLASS
--------------------------------------------------------
SHARES AMOUNT
------------------------------------------------------------ --------------------------------------------------------
SIX MONTHS YEAR YEAR SIX MONTHS YEAR YEAR
ENDED ENDED SIX MONTHS ENDED ENDED ENDED SIX MONTHS ENDED
APRIL 30, OCTOBER 31, ENDED OCTOBER 31, APRIL 30, OCTOBER 31, ENDED OCTOBER 31,
1998 1997 APRIL 30, 1998 1997 1998 1997 APRIL 30, 1998 1997
------------------------------------------------------------ --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 40,369,240 90,566,952 $ 40,369,240 $ 90,566,952 607,833 2,581,854 $ 7,873,399 $ 33,065,740
Shares
issued in
reinvestment
of
dividends 557,170 1,163,552 557,170 1,163,552 319,332 149,238 3,985,819 1,860,225
------------------------------------------------------------ --------------------------------------------------------
40,926,410 91,730,504 40,926,410 91,730,504 927,165 2,731,092 11,859,218 34,925,965
Shares
redeemed (41,857,073) (105,363,360) (41,857,073) (105,363,360) (1,160,792) (2,083,483) (15,169,257) (26,839,118)
------------------------------------------------------------ --------------------------------------------------------
Net increase
(decrease) (930,663) (13,632,856) $ (930,663) $ (13,632,856) (233,627) 647,609 $ (3,310,039) $ 8,086,847
------------------------------------------------------------ --------------------------------------------------------
------------------------------------------------------------ --------------------------------------------------------
</TABLE>
75
<PAGE>
CRABBE HUSON FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1998
(Unaudited)
NOTE 4. INVESTMENT TRANSACTIONS
For the six months ended April 30, 1998, Crabbe Huson U.S. Government Money
Market Fund had aggregate security purchases and sales (including maturities) of
$311,497,420 and $313,155,186, respectively. Aggregate purchases, sales and
maturities for the period ended April 30, 1998 (excluding short-term securities)
for the remaining Funds, are as follows:
<TABLE>
<CAPTION>
THE CRABBE CRABBE HUSON
HUSON SPECIAL CRABBE HUSON ASSET ALLOCATION CRABBE HUSON
FUND, INC. SMALL CAP FUND FUND EQUITY FUND
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases: $ 44,174,028 $67,380,138 $ 71,684,855 $296,862,124
----------------------------------------------------------------------
----------------------------------------------------------------------
Sales and Maturities: 93,248,689 11,014,771 71,665,218 320,283,130
----------------------------------------------------------------------
----------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CRABBE HUSON CRABBE HUSON CRABBE HUSON
REAL ESTATE OREGON TAX-FREE CRABBE HUSON U.S. GOVERNMENT
INVESTMENT FUND FUND INCOME FUND INCOME FUND
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases: $15,757,064 $5,530,613 $2,118,348 $2,464,354
----------------------------------------------------------------------
----------------------------------------------------------------------
Sales and Maturities: 20,218,164 5,382,704 1,174,067 2,955,189
----------------------------------------------------------------------
----------------------------------------------------------------------
</TABLE>
NOTE 5. SUBSEQUENT EVENTS:
On June 10, 1998, The Crabbe Huson Group, Inc. (the "Adviser") entered into an
Asset Acquisition Agreement with Liberty Financial Companies ("Liberty"). Under
the Acquisition Agreement, Liberty would acquire substantially all of the assets
of the adviser, including its mutual fund advisory business. Closing of the
Acquisition is conditioned upon approval of the Reorganization by the
trustees/directors of the Crabbe Huson Funds and by the trustees of the
successor Colonial Funds. If the reorganization is approved, management expects
that a proxy statement will be prepared and distributed to the shareholders. The
close of the Acquisition and Reorganization is anticipated to occur in the
fourth quarter of 1998.
76
<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 ending on or after 10/31/96, calculations are based on 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
------------ --------------------------------------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $16.80 $13.71 $13.80 $14.08 $11.82 $8.36
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... 0.02 0.15 0.14 0.27 0.05 (0.08)
Net Realized & Unrealized Gain (Loss) on
Investments........................... (1.17) 3.41 0.55 (0.29) 2.30 3.54
----------------------------------------------------------------------------------------
Total from Investment Operations.... (1.15) 3.56 0.69 (0.02) 2.35 3.46
LESS DISTRIBUTIONS
Distributions from Net Investment
Income................................ 0.12 0.14 0.21 0.02 0.00 0.00
Distributions in excess of Net
Investment Income..................... 0.04 0.00 0.00 0.00 0.09 0.00
Distributions from Capital
Gains................................. 1.69 0.33 0.57 0.24 0.00 0.00
----------------------------------------------------------------------------------------
Total Distributions................. 1.85 0.47 0.78 0.26 0.09 0.00
----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.......... $13.80 $16.80 $13.71 $13.80 $14.08 $11.82
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TOTAL RETURN............................ (6.30)% 26.62% 5.03% 1.78% 22.40% 41.39%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)....... $269,186 $396,335 $481,039 $878,560 $319,811 $238,167
Ratio of Expenses to Average Net
Assets................................ 1.50%(a)(c) 1.50% 1.37%(a) 1.40% 1.44% 1.57%
Ratio of Net Investment Income to
Average Net Assets.................... 0.45%(c) 0.86% 0.72% 1.95% 0.39% (0.73)%
Portfolio Turnover Rate................. 13.54% 32.76% 32.88% 122.97% 146.44% 73.29%
Average Commission Rate (b)............. $0.0294 $0.0428 $0.0358 -- -- --
<CAPTION>
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
------------------------------------------------------------------------------
<S> <C><C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $12.05 $8.78 $11.49 $9.69 $8.13
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income................... (0.02) 0.04 0.15 0.21 (0.05)
Net Realized & Unrealized Gain (Loss) on
Investments........................... (1.62) 4.01 (1.43) 1.59 1.61
----------------------------------------------------------------------------------------
Total from Investment Operations.... (1.64) 4.05 (1.28) 1.80 1.56
LESS DISTRIBUTIONS
Distributions from Net Investment
Income................................ 0.03 0.14 0.22 0.00 0.00
Distributions in excess of Net
Investment Income..................... 2.02 0.64 1.21 0.00 0.00
Distributions from Capital
Gains................................. 0.00 0.00 0.00 0.00 0.00
----------------------------------------------------------------------------------------
Total Distributions................. 2.05 0.78 1.43 0.00 0.00
----------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD.......... $8.36 $12.05 $8.78 $11.49 $9.69
----------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------
TOTAL RETURN............................ 8.11% 49.58% (10.90)% 18.68% 19.63%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)....... $5,857 $3,542 $2,926 $3,356 $4,393
Ratio of Expenses to Average Net
Assets................................ 1.74% 1.92% 2.00% 2.00% 3.94%
Ratio of Net Investment Income to
Average Net Assets.................... (0.25)% 0.32% 1.55% 1.96% 3.34%
Portfolio Turnover Rate................. 102.27% 256.68% 314.73% 275.62% 155.12%
Average Commission Rate (b)............. -- -- -- -- --
</TABLE>
77
<PAGE>
THE CRABBE HUSON SPECIAL FUND, INC.
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED
---------------- ------------------------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95 10/31/94 10/31/93
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA (cont.)
Average Number of Shares Outstanding.... 23,355,462* 27,679,105 -- -- -- --
Amount of Debt Outstanding.............. $17,463,386 -- -- -- -- --
Average Amount of Debt Outstanding
During the Period..................... $9,226,961* $1,701,322 -- -- -- --
Average Amount of Debt Per Share During
the Period............................ $0.40 $0.06 -- -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net
Assets................................ 1.75%(a)(c) 1.58% 1.37%(a) 1.40% 1.54% 1.59%
Ratio of Net Investment Income to
Average Net Assets.................... 0.20%(c) 0.78% 0.72% 1.95% 0.29% (0.75)%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net
Assets................................ 1.50%(c) 1.50% 1.37% -- -- --
Ratio of Net Investment Income to
Average Net Assets.................... 0.45%(c) 0.86% 0.72% -- -- --
<CAPTION>
10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA (cont.)
Average Number of Shares Outstanding.... -- -- -- -- --
Amount of Debt Outstanding.............. -- -- -- -- --
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/O
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) Computed on an annualized basis.
(d) Commencement of operations - 2/20/96.
(e) Commencement of operations - 10/10/96.
(f) Commencement of operations - 1/31/89.
(g) Commencement of operations - 10/28/96.
(h) Commencement of operations - 10/3/96.
(i) Commencement of operations - 4/4/94.
* Computed on a daily basis.
78
<PAGE>
CRABBE HUSON SMALL CAP FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED PERIOD ENDED
------------------ ---------- ---------------
4/30/98 10/31/97 10/31/96(d)
-------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $15.48 $11.02 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................................... (0.04) 0.00 0.03
Net Realized & Unrealized Gain (Loss) on Investments........ (0.07) 4.62 0.99
-------------------------------------------------
Total from Investment Operations........................ (0.11) 4.62 1.02
LESS DISTRIBUTIONS
Distributions from Net Investment Income.................... 0.00 0.02 0.00
Distributions from Capital Gains............................ 1.24 0.14 0.00
-------------------------------------------------
Total Distributions..................................... 1.24 0.16 0.00
-------------------------------------------------
NET ASSET VALUE, END OF PERIOD.............................. $14.13 $15.48 $11.02
-------------------------------------------------
-------------------------------------------------
TOTAL RETURN................................................ 0.23% 42.38% 10.20%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)........................... $37,812 $42,563 $19,156
Ratio of Expenses to Average Net Assets..................... 1.50%(a)(c) 1.50% 1.50%(a)(c)
Ratio of Net Investment Income to Average Net Assets........ (0.57)%(c) 0.03% 0.70%(c)
Portfolio Turnover Rate..................................... 9.17% 65.11% 39.34%
Average Commission Rate (b)................................. $0.0357 $0.0363 $0.0275
Average Number of Shares Outstanding........................ 9,483,973* -- --
Amount of Debt Outstanding.................................. $0 -- --
Average Amount of Debt Outstanding During the Period........ $19,983* -- --
Average Amount of Debt Per Share During the Period.......... $0 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets..................... 1.59%(a)(c) 1.73% 2.32%(a)(c)
Ratio of Net Investment Income to Average Net Assets........ (0.66)%(c) (0.20)% (0.11)%(c)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets..................... 1.50%(c) 1.50% 1.51%(c)
Ratio of Net Investment Income to Average Net Assets........ (0.57)%(c) 0.03% 0.71%(c)
</TABLE>
See footnotes on page 78.
79
<PAGE>
CRABBE HUSON SMALL CAP FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED PERIOD ENDED
--------------- ------------ ------------
4/30/98 10/31/97 10/31/96(e)
-------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $15.53 $11.01 $11.05
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................................... (0.01) 0.07 0.00
Net Realized & Unrealized Gain (Loss) on Investments........ (0.07) 4.62 (0.04)
-------------------------------------------------
Total from Investment Operations........................ (0.08) 4.69 (0.04)
LESS DISTRIBUTIONS
Distributions from Net Investment Income.................... 0.01 0.03 0.00
Distributions in excess of Net Investment Income............ 0.05 0.00 0.00
Distributions from Capital Gains............................ 1.24 0.14 0.00
-------------------------------------------------
Total Distributions..................................... 1.30 0.17 0.00
-------------------------------------------------
NET ASSET VALUE, END OF PERIOD.............................. $14.15 $15.53 $11.01
-------------------------------------------------
-------------------------------------------------
TOTAL RETURN................................................ 0.46% 43.11% (0.36)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)........................... $111,974 $71,655 $1,514
Ratio of Expenses to Average Net Assets..................... 1.00%(a)(c) 1.00%(a) 1.00%(a)(c)
Ratio of Net Investment Income to Average Net Assets........ (0.13)%(c) 0.60% (0.43)%(c)
Portfolio Turnover Rate..................................... 9.17% 65.11% 39.34%
Average Commission Rate (b)................................. $0.0357 $0.0363 $0.0275
Average Number of Shares Outstanding........................ 9,483,973* -- --
Amount of Debt Outstanding.................................. $0 -- --
Average Amount of Debt Outstanding During the Period........ $19,983* -- --
Average Amount of Debt Per Share During the Period.......... $0 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets..................... 1.14%(a)(c) 1.28%(a) 3.55%(a)(c)
Ratio of Net Investment Income to Average Net Assets........ (0.27)%(c) 0.32% (2.98)%(c)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets..................... 1.00%(c) 1.00% 1.00%(c)
Ratio of Net Investment Income to Average Net Assets........ (0.13)%(c) 0.60% (0.43)%(c)
</TABLE>
See footnotes on page 78.
80
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED
--------------- YEAR ENDED
-------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
-------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $14.94 $13.39 $13.64 $12.87
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.16 0.32 0.30 0.34
Net Realized & Unrealized Gain (Loss) on
Investments................................ 1.07 2.29 0.88 1.21
-------------------------------------------------------
Total from Investment Operations......... 1.23 2.61 1.18 1.55
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.14 0.32 0.30 0.33
Distributions from Capital Gains............. 1.80 0.74 1.13 0.45
-------------------------------------------------------
Total Distributions...................... 1.94 1.06 1.43 0.78
-------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $14.23 $14.94 $13.39 $13.64
-------------------------------------------------------
-------------------------------------------------------
TOTAL RETURN................................. 9.47% 20.60% 8.96% 13.00%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $98,058 $95,960 $125,018 $136,530
Ratio of Expenses to Average Net Assets...... 1.38%(c) 1.42% 1.47% 1.48%
Ratio of Net Investment Income to Average Net
Assets..................................... 2.35%(c) 2.25% 2.22% 2.57%
Portfolio Turnover Rate...................... 58.19% 118.65% 252.29% 225.70%
Average Commission Rate (b).................. $0.0566 $0.0529 $0.0536 --
Average Number of Shares Outstanding
(Composite)................................ 9,685,020* 8,772,675 -- --
Amount of Debt Outstanding................... -- -- -- --
Average Amount of Debt Outstanding During the
Period..................................... -- $3,460 -- --
Average Amount of Debt Per Share During the
Period..................................... $0.00 $0.00 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.51%(c) 1.55% 1.47% 1.49%
Ratio of Net Investment Income to Average Net
Assets..................................... 2.22%(c) 2.12% 2.22% 2.56%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.38%(c) 1.42% 1.46% --
Ratio of Net Investment Income to Average Net
Assets..................................... 2.35%(c) 2.25% 2.22% --
</TABLE>
See footnotes on page 78.
81
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED PERIOD
------------------------------------------------------------ ENDED
--------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(f)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........... $13.52 $11.68 $11.00 $9.24 $10.69 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.......................... 0.30 0.23 0.35 0.41 0.46 0.40
Net Realized & Unrealized Gain (Loss) on
Investments.................................. (0.08) 2.09 0.82 1.82 (1.12) 0.29
-------------------------------------------------------------------------
Total from Investment Operations........... 0.22 2.32 1.17 2.23 (0.66) 0.69
LESS DISTRIBUTIONS
Distributions from Net Investment Income....... 0.29 0.24 0.35 0.43 0.72 0.00
Distributions from Capital Gains............... 0.58 0.24 0.14 0.04 0.07 0.00
-------------------------------------------------------------------------
Total Distributions........................ 0.87 0.48 0.49 0.47 0.79 0.00
-------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD................. $12.87 $13.52 $11.68 $11.00 $9.24 $10.69
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TOTAL RETURN................................... 2.66% 20.93% 11.25% 24.55% (6.40)% 9.30%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's).............. $110,152 $85,390 $55,099 $23,893 $13,174 $12,578
Ratio of Expenses to Average Net Assets........ 1.44% 1.46% 1.52% 1.76% 1.90% 1.91%(c)
Ratio of Net Investment Income to Average Net
Assets....................................... 2.30% 1.85% 3.02% 3.97% 4.51% 5.02%(c)
Portfolio Turnover Rate........................ 149.19% 116.10% 155.26% 157.89% 161.72% 88.14%
Average Commission Rate (b).................... -- -- -- -- -- --
Average Number of Shares Outstanding
(Composite).................................. -- -- -- -- -- --
Amount of Debt Outstanding..................... -- -- -- -- -- --
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........ 1.52% 1.54% 1.62% 1.79% 1.93% 1.93%(c)
Ratio of Net Investment Income to Average Net
Assets....................................... 2.22% 1.77% 2.92% 3.94% 4.49% 5.00%(c)
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 78.
82
<PAGE>
CRABBE HUSON ASSET ALLOCATION FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD YEAR PERIOD
ENDED ENDED ENDED
---------------- ---------- --------
4/30/98 10/31/97 10/31/96(g)
------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $14.94 $13.39 $13.38
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.20 0.42 0.01
Net Realized & Unrealized Gain (Loss) on
Investments................................ 1.06 2.24 0.08
------------------------------------------
Total from Investment Operations......... 1.26 2.66 0.09
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.17 0.37 0.08
Distributions from Capital Gains............. 1.80 0.74 0.00
------------------------------------------
Total Distributions...................... 1.97 1.11 0.08
------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $14.23 $14.94 $13.39
------------------------------------------
------------------------------------------
TOTAL RETURN................................. 9.65% 21.18% 0.59%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $36,536 $28,598 $2,526
Ratio of Expenses to Average Net Assets...... 1.00%(c) 1.00%(a) 1.00%(a)(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 2.75%(c) 2.70% 2.87%(c)
Portfolio Turnover Rate...................... 58.19% 118.65% 252.29%
Average Commission Rate (b).................. $0.0566 $0.0529 $0.0536
Average Number of Shares Outstanding
(Composite)................................ 9,685,020* 8,772,675 --
Amount of Debt Outstanding................... -- -- --
Average Amount of Debt Outstanding During the
Period..................................... -- $3,460 --
Average Amount of Debt Per Share During the
Period..................................... $0.00 $0.00 --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.23%(c) 1.42%(a) 2.00%(a)(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 2.52%(c) 2.28% 1.87%(c)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.00%(c) 1.00% 1.00%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 2.75%(c) 2.70% 2.87%(c)
</TABLE>
See footnotes on page 78.
83
<PAGE>
CRABBE HUSON EQUITY FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
----------------- ------------------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $23.32 $19.50 $18.17 $16.44
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.06 0.07 0.11 0.22
Net Realized & Unrealized Gain (Loss) on
Investments................................ 2.43 5.36 2.33 1.75
----------------------------------------------------------------------
Total from Investment Operations......... 2.49 5.43 2.44 1.97
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.05 0.07 0.17 0.09
Distributions from Capital Gains............. 4.74 1.54 0.94 0.15
----------------------------------------------------------------------
Total Distributions...................... 4.79 1.61 1.11 0.24
----------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $21.02 $23.32 $19.50 $18.17
----------------------------------------------------------------------
----------------------------------------------------------------------
TOTAL RETURN................................. 13.87% 29.87% 13.78% 13.37%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $401,045 $380,047 $436,578 $387,184
Ratio of Expenses to Average Net Assets...... 1.36%(a)(c) 1.42%(a) 1.38%(a) 1.40%
Ratio of Net Investment Income to Average Net
Assets..................................... 0.57%(c) 0.29% 0.56% 1.30%
Portfolio Turnover Rate...................... 74.30% 128.65% 117.00% 92.43%
Average Commission Rate (b).................. $0.0572 $0.0537 $0.0530 --
Average Number of Shares Outstanding
(composite)................................ 21,949,236* 19,623,834 -- --
Amount of Debt Outstanding................... -- -- -- --
Average Amount of Debt Outstanding During the
Period..................................... $47,731* $21,750 -- --
Average Amount of Debt Per Share During the
Period..................................... $0.00 $0.00 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.38%(a)(c) 1.44%(a) 1.38%(a) 1.30%
Ratio of Net Investment Income to Average Net
Assets..................................... 0.55%(c) 0.27% 0.56% 1.28%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.36%(c) 1.42% 1.37% --
Ratio of Net Investment Income to Average Net
Assets..................................... 0.57%(c) 0.29% 0.57% --
</TABLE>
See footnotes on page 78.
84
<PAGE>
CRABBE HUSON EQUITY FUND - PRIMARY CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD
YEAR ENDED ENDED
-------------------------------------------------------------- -----------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(f)
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $16.08 $13.03 $12.57 $8.54 $10.50 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.19 0.10 0.20 0.19 0.25 0.31
Net Realized & Unrealized Gain (Loss) on
Investments................................ 0.57 3.45 0.92 4.15 (1.67) 0.19
------------------------------------------------------------------------------
Total from Investment Operations......... 0.76 3.55 1.12 4.34 (1.42) 0.50
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.04 0.11 0.10 0.31 0.39 0.00
Distributions from Capital Gains............. 0.36 0.39 0.56 0.00 0.15 0.00
------------------------------------------------------------------------------
Total Distributions...................... 0.40 0.50 0.66 0.31 0.54 0.00
------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $16.44 $16.08 $13.03 $12.57 $8.54 $10.50
------------------------------------------------------------------------------
------------------------------------------------------------------------------
TOTAL RETURN................................. 7.89% 29.90% 12.48% 52.44% (14.97)% 6.72%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $153,105 $34,520 $13,429 $5,930 $2,944 $5,018
Ratio of Expenses to Average Net Assets...... 1.45% 1.49% 1.55% 1.84% 1.93% 1.69%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 1.18% 0.67% 1.57% 1.60% 2.56% 3.98%(c)
Portfolio Turnover Rate...................... 106.49% 114.38% 180.72% 171.82% 265.25% 90.54%
Average Commission Rate (b).................. -- -- -- -- -- --
Average Number of Shares Outstanding
(composite)................................ -- -- -- -- -- --
Amount of Debt Outstanding................... -- -- -- -- -- --
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...... 1.56% 1.64% 1.93% 2.41% 2.66% 1.97%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 1.06% 0.52% 1.18% 1.03% 1.83% 3.68%(c)
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 78.
85
<PAGE>
CRABBE HUSON EQUITY FUND - INSTITUTIONAL CLASS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD YEAR PERIOD
ENDED ENDED ENDED
------------------ --------------- ------------------
4/30/98 10/31/97 10/31/96(h)
-------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $23.40 $19.51 $19.82
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.10 0.21 0.00
Net Realized & Unrealized Gain (Loss) on
Investments................................ 2.43 5.31 (0.31)
-------------------------------------------------------------
Total from Investment Operations......... 2.53 5.52 (0.31)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.15 0.09 0.00
Distributions from Capital Gains............. 4.74 1.54 0.00
-------------------------------------------------------------
Total Distributions...................... 4.89 1.63 0.00
-------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $21.04 $23.40 $19.51
-------------------------------------------------------------
-------------------------------------------------------------
TOTAL RETURN................................. 14.08% 30.35% (1.56)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $33,685 $24,084 $4,415
Ratio of Expenses to Average Net Assets...... 1.00%(a)(c) 1.00%(a) 1.00%(a)(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 0.95%(c) 0.71% 0.15%(c)
Portfolio Turnover Rate...................... 74.30% 128.65% 117.00%
Average Commission Rate (b).................. $0.0572 $0.0537 $0.0530
Average Number of Shares Outstanding
(composite)................................ 21,949,236* 19,623,834 --
Amount of Debt Outstanding................... -- -- --
Average Amount of Debt Outstanding During the
Period..................................... $47,731* $21,750 --
Average Amount of Debt Per Share During the
Period..................................... $0.00 $0.00 --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.13%(a)(c) 1.23%(a) 1.58%(a)(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 0.82%(c) 0.48% (0.43)%(c)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.00%(c) 1.00% 1.00%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 0.95%(c) 0.71% 0.15%(c)
</TABLE>
See footnotes on page 78.
86
<PAGE>
CRABBE HUSON REAL ESTATE INVESTMENT FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD ENDED YEAR ENDED PERIOD ENDED
-------------- ------------------------------------------ ------------
4/30/98 10/31/97 10/31/96 10/31/95 10/31/94(i)
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $14.09 $11.58 $9.69 $9.50 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.23 0.38 0.38 0.44 0.37
Net Realized & Unrealized Gain (Loss) on
Investments................................ 0.16 3.02 2.01 0.31 (0.64)
--------------------------------------------------------------------------
Total from Investment Operations......... 0.39 3.40 2.39 0.75 (0.27)
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.23 0.38 0.38 0.44 0.23
Distributions from Capital Gains............. 1.69 0.51 0.12 0.12 0.00
--------------------------------------------------------------------------
Total Distributions...................... 1.92 0.89 0.50 0.56 0.23
--------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $12.56 $14.09 $11.58 $9.69 $9.50
--------------------------------------------------------------------------
--------------------------------------------------------------------------
TOTAL RETURN................................. 3.04% 30.56% 25.39% 8.31% (3.25)%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $27,589 $34,259 $20,649 $18,986 $18,280
Ratio of Expenses to Average Net Assets...... 1.50%(c) 1.50%(a) 1.50%(a) 1.50% 1.01%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 3.35%(c) 2.93% 3.59% 4.59% 6.30%(c)
Portfolio Turnover Rate...................... 54.52% 80.01% 120.19% 59.53% 43.30%
Average Commission Rate (b).................. $0.0415 $0.0617 $0.0570 -- --
Average Number of Shares Outstanding......... 2,384,062* 2,494,659 -- -- --
Amount of Debt Outstanding................... $143,864 -- -- -- --
Average Amount of Debt Outstanding
During the Period........................ $12,829* $72,728 -- -- --
Average Amount of Debt Per Share
During the Period........................ $0.01 $0.03 -- -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.73%(c) 1.76%(a) 1.88%(a) 1.89% 2.03%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 3.12%(c) 2.66% 3.21% 4.20% 5.28%(c)
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets...... 1.50%(c) 1.50% 1.50% -- --
Ratio of Net Investment Income to Average Net
Assets..................................... 3.35%(c) 2.93% 3.59% -- --
</TABLE>
See footnotes page 78.
87
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED) YEAR ENDED
PERIOD ENDED ----------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
-----------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $12.78 $12.50 $12.62 $11.99
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.27 0.54 0.54 0.55
Net Realized & Unrealized Gain (Loss) on Investments... (0.07) 0.28 (0.12) 0.70
-----------------------------------------------------
Total from Investment Operations................... 0.20 0.82 0.42 1.25
LESS DISTRIBUTIONS
Distributions from Net Investment Income............... 0.27 0.47 0.54 0.55
Distributions from Capital Gains....................... 0.03 0.07 0.00 0.07
-----------------------------------------------------
Total Distributions................................ 0.30 0.54 0.54 0.62
-----------------------------------------------------
NET ASSET VALUE, END OF PERIOD......................... $12.68 $12.78 $12.50 $12.62
-----------------------------------------------------
-----------------------------------------------------
TOTAL RETURN........................................... 1.57% 6.67% 3.43% 10.66%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)...................... $26,324 $26,487 $26,135 $28,070
Ratio of Expenses to Average Net Assets................ 0.98%(a)(c) 0.98% 0.98% 0.98%
Ratio of Net Investment Income to Average Net Assets... 4.19%(c) 4.25% 4.33% 4.45%
Portfolio Turnover Rate................................ 20.24% 17.19% 15.64% 22.91%
Average Number of Shares Outstanding................... 2,364,667* 2,073,284 -- --
Amount of Debt Outstanding............................. -- -- -- --
Average Amount of Debt Outstanding During the Period... $7,376* $2,734 -- --
Average Amount of Debt Per Share During the Period..... $0.00 $0.00 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................ 1.09%(a)(c) 1.10% 1.04% 1.08%
Ratio of Net Investment Income to Average Net Assets... 4.08%(c) 4.13% 4.27% 4.35%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................ 0.98%(c) 0.98% 0.98% --
Ratio of Net Investment Income to Average Net Assets... 4.19%(c) 4.25% 4.33% --
</TABLE>
See footnotes on page 78.
88
<PAGE>
CRABBE HUSON OREGON TAX-FREE FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------------------------------------------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89 10/31/88
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $12.80 $12.20 $12.14 $11.74 $11.72 $11.72 $11.08
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.54 0.57 0.62 0.64 0.63 0.68 0.64
Net Realized & Unrealized Gain (Loss) on
Investments................................ (0.80) 0.69 0.15 0.48 0.05 0.08 0.64
----------------------------------------------------------------------------------
Total from Investment Operations......... (0.26) 1.26 0.77 1.12 0.68 0.76 1.28
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.54 0.57 0.62 0.65 0.64 0.67 0.64
Distributions from Capital Gains............. 0.01 0.09 0.09 0.07 0.02 0.09 0.00
----------------------------------------------------------------------------------
Total Distributions...................... 0.55 0.66 0.71 0.72 0.66 0.76 0.64
----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $11.99 $12.80 $12.20 $12.14 $11.74 $11.72 $11.72
----------------------------------------------------------------------------------
----------------------------------------------------------------------------------
TOTAL RETURN................................. (2.06)% 10.71% 6.51% 9.85% 6.00% 6.67% 12.02%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $29,046 $29,408 $20,296 $18,383 $18,766 $19,173 $20,058
Ratio of Expenses to Average Net Assets...... 0.98% 1.05% 1.11% 1.21% 1.38% 1.04% 1.21%
Ratio of Net Investment Income to Average Net
Assets..................................... 4.37% 4.51% 5.04% 5.36% 5.41% 5.82% 5.53%
Portfolio Turnover Rate...................... 20.58% 11.62% 25.30% 53.40% 58.52% 45.25% 31.44%
Average Number of Shares Outstanding......... -- -- -- -- -- -- --
Amount of Debt Outstanding................... -- -- -- -- -- -- --
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...... 1.08% 1.09% 1.13% 1.24% 1.55% 1.16% 1.32%
Ratio of Net Investment Income to Average Net
Assets..................................... 4.26% 4.46% 5.01% 5.34% 5.23% 5.71% 5.42%
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 78.
89
<PAGE>
CRABBE HUSON INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
------------ ----------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
-------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $10.58 $10.20 $10.26 $9.71
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.25 0.62 0.54 0.53
Net Realized & Unrealized Gain (Loss) on Investments... 0.14 0.38 (0.05) 0.58
-------------------------------------------------------
Total from Investment Operations................... 0.39 1.00 0.49 1.11
LESS DISTRIBUTIONS
Distributions from Net Investment Income............... 0.26 0.62 0.55 0.53
Distributions in excess of Net Investment Income....... 0.29 0.00 0.00 0.03
Distributions from Capital Gains....................... 0.00 0.00 0.00 0.00
-------------------------------------------------------
Total Distributions................................ 0.55 0.62 0.55 0.56
-------------------------------------------------------
NET ASSET VALUE, END OF PERIOD......................... $10.42 $10.58 $10.20 $10.26
-------------------------------------------------------
-------------------------------------------------------
TOTAL RETURN........................................... 3.79% 10.25% 4.94% 11.92%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)...................... $4,851 $3,248 $4,694 $7,190
Ratio of Expenses to Average Net Assets................ 0.80%(c) 0.80% 0.80% 0.80%
Ratio of Net Investment Income to Average Net Assets... 5.68%(c) 5.96% 5.31% 5.47%
Portfolio Turnover Rate................................ 31.96% 56.37% 468.75% 543.15%
Average Number of Shares Outstanding................... 365,372* 359,151 -- --
Amount of Debt Outstanding............................. -- -- -- --
Average Amount of Debt Outstanding During the Period... $162* $1,408 -- --
Average Amount of Debt Per Share During the Period..... $0.00 $0.00 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................ 2.45%(c) 2.78% 2.29% 1.95%
Ratio of Net Investment Income to Average Net Assets... 4.03%(c) 3.98% 3.82% 4.32%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................ 0.80%(c) 0.80% 0.80% --
Ratio of Net Investment Income to Average Net Assets... 5.68%(c) 5.96% 5.31% --
</TABLE>
See footnotes on page 78.
90
<PAGE>
CRABBE HUSON INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD
YEAR ENDED ENDED
------------------------------------------------------------------- -------------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(f)
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $10.75 $10.90 $10.63 $10.01 $10.27 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.50 0.46 0.66 0.70 0.69 0.55
Net Realized & Unrealized Gain (Loss) on
Investments................................ (0.76) 0.33 0.36 0.62 (0.24) 0.28
-----------------------------------------------------------------------------------
Total from Investment Operations......... (0.26) 0.79 1.02 1.32 0.45 0.83
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.50 0.49 0.66 0.70 0.69 0.56
Distributions in excess of Net Investment
Income..................................... 0.01 0.00 0.00 0.00 0.00 0.00
Distributions from Capital Gains............. 0.27 0.45 0.09 0.00 0.02 0.00
-----------------------------------------------------------------------------------
Total Distributions...................... 0.78 0.94 0.75 0.70 0.71 0.56
-----------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $9.71 $10.75 $10.90 $10.63 $10.01 $10.27
-----------------------------------------------------------------------------------
-----------------------------------------------------------------------------------
TOTAL RETURN................................. (2.71)% 7.73% 9.74% 13.51% 4.43% 10.43%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $5,273 $5,697 $5,634 $5,486 $2,123 $1,356
Ratio of Expenses to Average Net Assets...... 0.80% 0.81% 0.90% 0.98% 1.51% 1.15%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 4.92% 4.34% 6.09% 6.82% 6.89% 7.23%(c)
Portfolio Turnover Rate...................... 306.79% 260.22% 227.45% 115.76% 73.76% 86.60%
Average Number of Shares Outstanding......... -- -- -- -- -- --
Amount of Debt Outstanding................... -- -- -- -- -- --
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...... 2.16% 1.96% 1.94% 2.42% 3.07% 4.56%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 3.56% 3.19% 5.06% 5.38% 5.33% 3.81%(c)
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 78.
91
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
-------------- ---------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
--------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $10.81 $10.66 $10.66 $10.27
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.27 0.53 0.47 0.51
Net Realized & Unrealized Gain (Loss) on Investments... 0.01 0.16 0.00 0.40
--------------------------------------------------
Total from Investment Operations................... 0.28 0.69 0.47 0.91
LESS DISTRIBUTIONS
Distributions from Net Investment Income............... 0.32 0.54 0.47 0.51
Distributions in excess of Net Investment Income....... 0.00 0.00 0.00 0.01
Distributions from Capital Gains....................... 0.00 0.00 0.00 0.00
--------------------------------------------------
Total Distributions................................ 0.32 0.54 0.47 0.52
--------------------------------------------------
NET ASSET VALUE, END OF PERIOD......................... $10.77 $10.81 $10.66 $10.66
--------------------------------------------------
--------------------------------------------------
TOTAL RETURN........................................... 2.65% 6.65% 4.55% 9.12%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)...................... $4,030 $4,494 $8,517 $8,426
Ratio of Expenses to Average Net Assets................ 0.75%(a)(c) 0.75% 0.75% 0.75%
Ratio of Net Investment Income to Average Net Assets... 5.03%(c) 4.82% 4.44% 4.85%
Portfolio Turnover Rate................................ 59.15% 45.42% 226.37% 230.43%
Average Number of Shares Outstanding................... 420,204* 602,738 -- --
Amount of Debt Outstanding............................. -- -- -- --
Average Amount of Debt Outstanding During the Period... $1,943* $50 -- --
Average Amount of Debt Per Share During the Period..... $0.00 $0.00 -- --
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................ 2.05%(a)(c) 1.78% 1.63% 1.46%
Ratio of Net Investment Income to Average Net Assets... 3.73%(c) 3.79% 3.56% 4.14%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................ 0.75%(c) 0.75% 0.75% --
Ratio of Net Investment Income to Average Net Assets... 5.03%(c) 4.82% 4.44% --
</TABLE>
See footnotes on page 78.
92
<PAGE>
CRABBE HUSON U.S. GOVERNMENT INCOME FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
PERIOD
YEAR ENDED ENDED
---------------------------------------------------------- ------------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(f)
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $11.04 $10.91 $10.69 $10.24 $10.28 $10.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 0.46 0.47 0.58 0.67 0.68 0.56
Net Realized & Unrealized Gain (Loss) on
Investments................................ (0.65) 0.22 0.29 0.45 (0.04) 0.29
-------------------------------------------------------------------------
Total from Investment Operations......... (0.19) 0.69 0.87 1.12 0.64 0.85
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 0.47 0.48 0.58 0.67 0.67 0.57
Distributions in excess of Net Investment
Income..................................... 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from Capital Gains............. 0.11 0.08 0.07 0.00 0.01 0.00
-------------------------------------------------------------------------
Total Distributions...................... 0.58 0.56 0.65 0.67 0.68 0.57
-------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD............... $10.27 $11.04 $10.91 $10.69 $10.24 $10.28
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TOTAL RETURN................................. (1.78)% 6.71% 8.70% 11.17% 6.40% 11.15%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $9,249 $11,218 $8,959 $3,748 $2,069 $1,717
Ratio of Expenses to Average Net Assets...... 0.75% 0.75% 0.80% 0.96% 1.42% 1.14%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 4.39% 4.33% 5.35% 6.44% 6.72% 7.35%(c)
Portfolio Turnover Rate...................... 76.09% 81.74% 105.52% 114.81% 87.71% 40.42%
Average Number of Shares Outstanding......... -- -- -- -- -- --
Amount of Debt Outstanding................... -- -- -- -- -- --
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...... 1.47% 1.26% 1.52% 2.15% 2.84% 3.40%(c)
Ratio of Net Investment Income to Average Net
Assets..................................... 3.66% 3.81% 4.63% 5.25% 5.31% 5.09%(c)
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 78.
93
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
(UNAUDITED)
PERIOD
ENDED YEAR ENDED
----------- ------------------------------------------
4/30/98 10/31/97 10/31/96 10/31/95
--------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................... $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................................. 0.02 0.05 0.05 0.05
Net Realized & Unrealized Gain (Loss) on Investments... 0.00 0.00 0.00 0.00
--------------------------------------------------------
Total from Investment Operations................... 0.02 0.05 0.05 0.05
LESS DISTRIBUTIONS
Distributions from Net Investment Income............... 0.02 0.05 0.05 0.05
Distributions in excess of Net Investment Income....... 0.00 0.00 0.00 0.00
--------------------------------------------------------
Total Distributions................................ 0.02 0.05 0.05 0.05
--------------------------------------------------------
NET ASSET VALUE, END OF PERIOD......................... $1.00 $1.00 $1.00 $1.00
--------------------------------------------------------
--------------------------------------------------------
TOTAL RETURN........................................... 2.41% 4.83% 4.81% 5.30%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)...................... $27,607 $28,538 $42,171 $54,714
Ratio of Expenses to Average Net Assets................ 0.70%(c) 0.70%(a) 0.70%(a) 0.70%
Ratio of Net Investment Income to Average Net Assets... 4.81%(c) 4.73% 4.74% 5.21%
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets................ 1.22%(c) 1.14%(a) 1.06%(a) 1.16%
Ratio of Net Investment Income to Average Net Assets... 4.29%(c) 4.29% 4.38% 4.75%
RATIOS NET OF FEES PAID INDIRECTLY
Ratio of Expenses to Average Net Assets................ 0.70%(c) 0.70% 0.70% --
Ratio of Net Investment Income to Average Net Assets... 4.81%(c) 4.73% 4.74% --
</TABLE>
See footnotes on page 78.
94
<PAGE>
CRABBE HUSON U.S. GOVERNMENT MONEY MARKET FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
--------------------------------------------------------- ------------
10/31/94 10/31/93 10/31/92 10/31/91 10/31/90 10/31/89(f)
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income........................ 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
------------------------------------------------------------------------
Total from Investment Operations......... 0.03 0.03 0.03 0.06 0.07 0.06
LESS DISTRIBUTIONS
Distributions from Net Investment Income..... 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
------------------------------------------------------------------------
Total Distributions...................... 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
------------------------------------------------------------------------
------------------------------------------------------------------------
TOTAL RETURN................................. 3.28% 2.53% 3.36% 13.76% 7.62% 10.05%(c)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's)............ $32,383 $14,784 $12,395 $14,907 $21,406 $10,735
Ratio of Expenses to Average Net Assets...... 0.70% 0.70% 0.75% 0.81% 0.80% 0.60%(c)
Ratio of Net Investment Income to Average Net
Assets...................................... 3.39% 2.51% 3.32% 5.76% 7.57% 8.43%(c)
RATIOS IF FEES HAD NOT BEEN WAIVED AND/OR REIMBURSED
Ratio of Expenses to Average Net Assets...... 1.29% 1.32% 1.09% 1.18% 1.33% 1.34%(c)
Ratio of Net Investment Income to Average Net
Assets...................................... 2.81% 1.88% 2.98% 5.38% 7.04% 7.69%(c)
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 78.
95
<PAGE>
[LOGO]
C R A B B E H U S O N F U N D S
MAILING ADDRESS
CRABBE HUSON FUNDS
P.O. BOX 8413
BOSTON, MA 02266-8413
INVESTMENT ADIVSOR
THE CRABBE HUSON GROUP, INC.
121 S.W. MORRISON, SUITE 1400
PORTLAND, OR 97204
DISTRIBUTOR
CRABBE HUSON SECURITIES, INC.
121 S.W. MORRISON, SUITE 1410
PORTLAND, OR 97204
LEGAL COUNSEL
DAVIS WRIGHT TREMAINE
1300 S.W. FIFTH AVENUE, SUITE 2300
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 S. SCHERZER
RICHARD P. WOLLENBERG
BOB L. SMITH
GARY L. CAPPS
RICHARD S. HUSON
JAMES E. CRABBE
CRAIG R. STUYLAND
<PAGE>
FOR MORE INFORMATION
1-800-541-9732
OR VISIT US ONLINE AT:
www.contrarian.com
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus.
Distributed by Crabbe Huson Securities, Inc.
