The Crescent Fund
Semi-Annual Report
For the Six Months Ended
September 30, 1995
<PAGE>
October 24, 1995
Dear Shareholder:
As the stock market continues its ascent, the Crescent Fund has become
more conservatively postured. Cash, as of September 30, 1995, stood at 17%.
Since that time it has increased somewhat more. Below, we have provided you with
information regarding the year-to-date net returns and annualized net returns
since inception, June 2, 1993, of the Crescent Fund:
The Crescent Fund's trailing twelve month return (September 30, 1994,
to September 30, 1995) was 23.7%. This year's nine month return, the return for
1994, and the annualized return since inception, June 2, 1993, are as follows:
<TABLE>
<CAPTION>
Lehman
Crescent Balanced Intermediate
Time Period Fund Index* S&P 500 DJIA Value Line T-Bond
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
12/31/94 - 09/30/95 23.3% 24.8% 29.8% 24.9% 19.3% 10.7%
12/31/93 - 12/31/94 4.3% 0.5% 1.3% 2.1% -6.0% -2.0%
06/02/93 - 09/30/95 15.9% 12.2% 14.6% 13.7% 7.2% 5.1%
<FN>
*75% S&P 500, 25% Lehman T-Bond.
</FN>
</TABLE>
Below are The Crescent Fund's ten largest investments as of September
30, 1995. These investments account for approximately 31% of the total portfolio
value:
American Express
Duff & Phelps
Dundee Bancorp
ECI Telecommunications
Littelfuse
Price Enterprises
Rockefeller Center, 13% Notes, due 12/31/2000
Santa Barbara Bancorp
Semi-Tech Global
U.S. Facilities
The Crescent Fund has taken positions in two money management firms,
Duff & Phelps and Dundee Bancorp. Duff & Phelps will have $36 billion under
management after merging with Phoenix Securities next
<PAGE>
month. Its stock trades at $10.75 per share and following the merger,
shareholders will receive a $1.75 cash dividend and 1/10 share of a new $25
convertible preferred. Adjusting the common stock for these distributions leaves
a price of $6.50. Duff & Phelps should report earnings in 1996 between $.60-.65
per share. In addition, the company has non cash charges to earnings of $.16 per
share which brings free cash flow per share up to $.75-80. The company has a
free cash flow multiple of less than 9x earnings. This stands in comparison to
T. Rowe Price and Ben Franklin, which have mid-double digit earnings multiples.
Dundee Bancorp is a Canadian money management firm with $3.6 billion
under management. They also have an investment portfolio which exceeds the value
of the current stock price. Effectively, we are getting the money management
business for free.
On the fixed income side, we continue to seek select investments in
high yield securities. There was, however, very little change in the portfolio
during the quarter.
The Crescent Fund had the following asset composition as of September
30, 1995. As you can see, we remain conservatively postured. The relatively poor
risk/reward in the stock market today keeps us from aggressively investing the
Fund's cash position.
<TABLE>
<S> <C>
Common Stocks 63.8%
Preferred Stocks 3.7%
Corporate Bonds 15.3%
Cash 17.2%
</TABLE>
As fundamental investors, we stake no claim in our ability to forecast
the economy. Today's economic landscape does not lead us to any insightful
conclusions, hence we spare you our amateur ruminations.
Best Regards,
Steven Romick Matthew Kallis
<PAGE>
Value of $10,000 Investment in the Crescent Fund
since Inception versus Balanced Index
(Graph Omitted)
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 67.6% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Banks: 7.2%
<S> <C> <C>
6,800 Chase Manhattan-Long.................................................... $ 415,650
16,600 Santa Barbara Bancorp................................................... 510,450
10,000 U.S. Trust Corp-New..................................................... 465,000
-------
1,391,100
---------
Consumer Goods: 1.6%
1,500 Alberto-Culver Co., Class A............................................. 39,750
8,000 Reebok International Ltd................................................ 275,000
-------
314,750
-------
Energy: 0.4%
4,000 YPF Sociedad Anonima-Sponsored ADR...................................... 72,000
------
Financial Services: 14.1%
15,000 American Express Co..................................................... 665,625
45,300 Duff & Phelps Corp...................................................... 492,637
66,400 Dundee Bancorp, Inc., Class A........................................... 661,822
5,150 Federal Home Loan Mortgage Corp......................................... 355,994
13,000 John Nuveen Company, Class A............................................ 321,750
10,000 Lehman Brothers Holdings, Inc........................................... 231,250
-------
2,729,078
---------
Healthcare: 3.3%
10,000 Global Health Sciences Fund............................................. 147,500
20,000 Summit Care Corp........................................................ 490,000
-------
637,500
-------
Insurance: 5.7%
6,500 Foremost Corp. of America............................................... 287,625
40,500 U.S. Facilities Corp.................................................... 815,063
-------
1,102,688
---------
Manufacturing: 6.3%
18,200 Coachmen Industries, Inc................................................ 302,575
15,000 Littlefuse, Inc.*....................................................... 487,500
18,000 Reliance Steel & Aluminum............................................... 330,750
10,000 Seda Specialty Packaging................................................ 105,000
-------
1,225,825
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Professional Services: 1.2%
<S> <C> <C>
15,000 Dames & Moore, Inc...................................................... $ 240,000
------------
Real Estate: 8.8%
40,000 Crown American Realty................................................... 330,000
5,000 Felcor Suite Hotels, Inc................................................ 150,000
50,000 Price Enterprises, Inc.*................................................ 800,000
22,900 Storage Equities, Inc................................................... 426,513
-------
1,706,513
---------
Restaurants: 1.9%
10,000 IHOP Corp............................................................... 262,500
8,000 Vicor Restaurants, Inc.*................................................ 96,000
------
358,500
-------
Retail: 1.3%
10,000 Shopko Stores, Inc...................................................... 123,750
20,000 Sportmart, Inc., Class A*............................................... 121,875
-------
245,625
-------
Savings & Loans: 3.0%
31,600 HF Bancorp, Inc......................................................... 308,100
11,000 Long Island Bancorp, Inc.*.............................................. 269,500
-------
577,600
-------
Technology: 5.9%
25,000 ECI Telecommunications.................................................. 559,375
6,000 Seagate Technology, Inc.*............................................... 252,750
20,000 Wang Laboratories, Inc.*................................................ 317,500
-------
1,129,625
---------
Miscellaneous: 6.9%
40,700 Charles Allmon Trust, Inc.*............................................. 376,475
1,000 Global Government Plus Fund, Inc........................................ 7,125
108,000 Semi Tech Global, Ltd.*................................................. 813,672
25,900 Vencap Equities Alta*................................................... 141,812
-------
1,339,084
---------
Total Common Stocks (cost $10,538,850).................................. 13,069,888
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Goods: 0.9%
<S> <C> <C>
6,450 RJR Nabisco Holdings Corp. Preferred 10%, 12/31/44 Series T............. $ 164,475
------------
Manufacturing: 2.1%
16,050 Manville Corp. $2.70, Series B.......................................... 407,269
-------
Medical Related: 0.8%
4,047 Foxmeyer Health, $4.20, Preferred, Series A*............................ 151,256
-------
Total Preferred Stocks (cost $647,138).................................. 723,000
-------
Principal Amount CORPORATE BONDS: 15.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Goods: 0.7%
$150,000 Playtex Family Products, 9%, due 12/15/2003............................. 141,375
-------
Energy: 1.4%
200,000 Mesa Capital, 12.75%, due 6/30/1998..................................... 186,000
86,000 Mesa Corp., Unsecured, 0%, due 6/30/1996................................ 79,872
------
265,872
-------
Leisure: 0.5%
85,000 MGM Grand Hotel Finance Corp., 12%, due 5/1/2002........................ 93,500
------
Manufacturing: 2.8%
400,000 Fomento Econ Mex, 9.5%, due 7/22/1997................................... 396,000
140,000 Triangle Pacific Corp., 10.5%, due 8/1/2003............................. 144,550
-------
540,550
-------
Media & Telecommunications: 3.2%
125,000 Adelphia Communications, 12.5%, due 5/15/2002........................... 126,563
200,000 Grupo Televisa, 10%, due 11/9/1997...................................... 198,500
225,000 Marvel Parent Holdings, 0%, due 4/15/1998............................... 163,125
125,800 Time Warner, Inc., 8.75%, due 1/10/2015................................. 130,832
-------
619,020
-------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Principal Amount
Miscellaneous: 2.4%
<S> <C>
$ 900,000 International Semitech Microelectric, 11.5%, due 8/15/2003.............. $ 466,875
------------
Real Estate: 4.0%
600,000 Rockefeller Center, 13%, due 12/31/2000................................. 657,000
125,000 Trump Plaza Funding, 10.875%, due 6/15/1998............................. 115,312
-------
772,312
-------
Retail: 0.3%
70,000 Fabri-Centers, 6.25%, due 3/1/2002...................................... 61,163
------
Total Corporate Bonds (cost $2,864,001) ............... 2,960,667
---------
REPURCHASE AGREEMENTS: 12.1%
- ------------------------------------------------------------------------------------------------------------------------------------
2,338,401 Provident Bank Repurchase Agreement, 6.25%, dated 9/29/1995,
due 10/2/1995, collateralized by $2,405,000 U.S. Treasury Bills,
due 11/24/1995 (proceeds $2,339,620) (cost $2,338,402).................. 2,338,402
Total Investment in Securities (cost $16,388,391): 98.8%................ 19,091,957
Other Assets Less Liabilities: 1.2%..................................... 230,766
-------
Total Net Assets: 100.0%................................................ $19,322,723
===========
<FN>
*Indicates non-income producing security.
</FN>
</TABLE>
<TABLE>
COVERED CALL OPTIONS WRITTEN at September 30, 1995
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Subject
to Call Common Stocks / Expiration Date / Exercise Price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7,500 American Express / October / 35......................................... $ 69,375
5,000 ECI Telcom / November / 22.5............................................ 5,937
6,000 Seagate / December / 40................................................. 29,250
------
Total (premiums received $57,802)....................................... $ 104,562
============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1995 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT at September 30, 1995
SharesCommon Stocks Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2,500 Acclaim Entertainment, Inc.............................................. $ 64,375
1,500 Alberto-Culver Co., Class B............................................. 45,750
2,500 Bed Bath & Beyond, Inc.................................................. 76,250
2,500 EZ Corp., Inc........................................................... 13,438
3,000 Fleetwood Enterprises, Inc.............................................. 59,625
3,000 Netcom On-Line Communications........................................... 132,000
3,500 Smithfield Foods, Inc................................................... 77,875
20,000 Sportmart, Inc.......................................................... 175,000
4,000 Warnaco Group, Class A.................................................. 96,000
------
Total (proceeds $662,984)............................................... $ 740,313
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (identified cost $16,388,391) (Note 2-A) .......... $19,091,957
Deposits with brokers for securities sold short........................................ 840,309
Receivables:
Dividends and interest .......................................................... 50,550
Securities sold.................................................................. 190,344
Organization costs (net of accumulated amortization of $6,006)......................... 10,673
Prepaid expenses....................................................................... 9,416
-----
Total assets .............................................................. 20,193,249
----------
LIABILITIES
Covered call options written, at value - premiums received $57,802..................... 104,562
Securities sold short, at value - proceeds $662,984.................................... 740,313
Payable to investment advisor.......................................................... 15,645
Payable to manager..................................................................... 3,911
Accrued expenses ...................................................................... 6,095
-----
Total liabilities.......................................................... 870,526
-------
NET ASSETS ...................................................................$19,322,723
===========
Net asset value, offering and redemption price per share
($19,322,723/1,489,552 shares outstanding;
unlimited number of no par value shares authorized) ............................. $12.97
======
SOURCE OF NET ASSETS
Paid-in capital ....................................................................... $15,576,136
Undistributed net investment income.................................................... 233,782
Undistributed net realized gain on investments......................................... 1,047,962
Net unrealized appreciation of investments............................................. 2,464,843
---------
Net assets....................................................................... $19,322,723
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - for the Six Months Ended September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Interest ........................................................................ $ 149,463
Dividends........................................................................ 187,165
-------
Total investment income ................................................... 336,628
-------
Expenses
Advisory fees (Note 3) .......................................................... 87,391
Manager's fee (Note 3)........................................................... 26,067
Custodian and accounting fees.................................................... 5,694
Transfer agent fees.............................................................. 3,750
Auditing fees.................................................................... 5,442
Legal fees....................................................................... 963
Reports to shareholders.......................................................... 1,493
Trustees' fees................................................................... 1,504
Insurance........................................................................ 1,608
Registration fees................................................................ 1,678
Amortization of organization costs............................................... 2,006
Dividend expense................................................................. 2,584
Miscellaneous.................................................................... 1,487
-----
Net expenses..................................................................... 141,667
-------
Net investment income ................................................... 194,961
-------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on security transactions ............................................ 1,020,277
Net realized gain on call options written.............................................. 26,697
Net realized loss on short sale transactions........................................... (29,821)
Net increase in unrealized appreciation of investments ................................ 1,378,359
---------
Net realized and unrealized gain on investments ................................. 2,395,512
---------
Net Increase in Net Assets Resulting from Operations ...................... $ 2,590,473
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended
Ended September March 31,
30,1995* 1995
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
<S> <C> <C>
Net investment income.................................................. $ 194,961 $ 287,185
Net realized gain on security transactions ............................ 1,020,277 281,570
Net realized gain on call options written.............................. 26,697 32,149
Net realized (loss) gain on short sale transactions.................... (29,821) 15,394
Net increase in unrealized appreciation of investments................. 1,378,359 617,069
--------- -------
Net increase in net assets resulting from operations ............ 2,590,473 1,233,367
--------- ---------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income ($0.04 and $0.18 per share, respectively)........ (53,490) (227,520)
Net realized gain from securities transactions ($0.53 per share)....... -0- (602,478)
- --------
Total dividends and distributions ............................... (53,490) (829,998)
------- --------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding
shares (a)....................................................... 795,350 5,413,466
------- ---------
Total increase in net assets .................................... 3,332,333 5,816,835
NET ASSETS
Beginning of period ................................................... 15,990,390 10,173,555
---------- ----------
End of period (including undistributed net investment income
of $233,782 and $92,311, respectively)......................... $19,322,723 $15,990,390
=========== ===========
<FN>
(a) A summary of capital shares transactions is as follows:
</FN>
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
September 30, 1995* March 31, 1995
Shares Value Shares Value
<S> <C> <C> <C> <C>
Shares sold ...................................... 106,425 $1,311,103 640,197 $7,000,403
Shares issued in connection with payment of
dividends................................... 4,257 50,827 76,721 815,341
Shares redeemed................................... (44,458) (566,580) (221,594) (2,402,278)
------- -------- -------- ----------
Net increase ..................................... 66,224 $ 795,350 495,324 $5,413,466
====== ========= ======= ==========
<FN>
*Unaudited.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
for a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended June 2, 1993* September
March 31, through
30, 1995** 1995 March 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period............................. $11.23 $10.96 $10.00
------ ------ ------
Income from investment operations:
Net investment income ..................................... .13 .21 .13
Net realized and unrealized gain on investments ........... 1.65 .77 .99
---- --- ---
Total from investment operations................................. 1.78 .98 1.12
---- --- ----
Less distributions:
Dividends from net investment income....................... (.04) (.18) (.10)
Distributions from net capital gains ...................... -0- (.53) (.06)
- ---- ----
Total distributions.............................................. (.04) (.71) (.16)
---- ---- ----
Net asset value, end of period .................................. $12.97 $11.23 $10.96
====== ====== ======
Total return .................................................... 34.11% 9.35% 13.73%+
Ratios/supplemental data:
Net assets, end of period (millions)............................. $19.3 $16.0 $10.2
Ratio of expenses to average net assets:
Before expense reimbursement .............................. 1.62%+ 1.65% 1.86%+
After expense reimbursement................................ 1.62%+ 1.65% 1.85%+
Ratio of net investment income to average net assets:
Before expense reimbursement .............................. 2.23%+ 2.16% 1.60%+
After expense reimbursement ............................... 2.23%+ 2.16% 1.61%+
Portfolio turnover rate ......................................... 46.82% 101.41% 88.88%
<FN>
*Commencement of operations.
**Unaudited.
+Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.6FhTop;
<PAGE>
NOTES TO FINANCIAL STATEMENTS at September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Crescent Fund (the "Fund") is a series of shares of beneficial
interest of Professionally Managed Portfolios (the "Trust"), which is registered
under the Investment Company Act of 1940 (the "1940 Act") as a diversified,
open-end management company. The Fund began operations on June 2, 1993.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund. These policies are in conformity with generally accepted
accounting principles.
A. Security Valuation. Investments in securities traded on a national
securities exchange or included in the NASDAQ National Market System
are valued at the last reported sale price at the close of regular
trading on the last business day of the period; securities traded on
an exchange or NASDAQ for which there has been no sale and other
over-the-counter securities are valued at the last reported bid
price. Securities for which quotations are not readily available are
valued at their respective fair values as determined in good faith by
the Board of Trustees. Short-term investments are stated at cost,
which when combined with accrued interest, approximates market value.
B. Federal Income Taxes. The Fund intends to comply with the
requirements of the Internal Revenue Code applicable to
regulated investment companies and to distribute all of its
taxable income to its shareholders. Therefore, no federal income tax
provision is required.
C. Security Transactions, Investment Income and Distributions. As is
common in the industry, security transactions are accounted for on
the trade date. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recognized on an
accrual basis. Discounts and premiums on securities purchased are
amoritized over the life of the respective securities. Income and
capital gains distributions to shareholders are determined in
accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are
primarily due to differing treatments for the deferral of wash sale
losses and amortization of organization costs.
D. Short Sales. A short sale transaction occurs when the Fund sells a
security it does not own, in anticipation that the market price of
the security will decline. If the value of the security sold short
increases between the time of the short sale and the time the Fund
closed out the short position, the Fund realizes a loss. Any dividend
declared on short positions existing on the record date shall be
recorded on the ex-dividend date and included as an expense of the
period.
E. Call and Put Options. When the Fund writes a call or put option an
amount equal to the premium received is reflected as a liability. The
amount of the liability is subsequently "marked to market" to reflect
the current market value of the option written. If an option which
the Fund has written either expires on its stipulated expiration
date, or if the Fund enters into a closing purchase transaction, the
Fund realizes a gain (or loss if the cost of the closing transaction
exceeds the premium received when the option is sold), and the
liability related to such option is extinguished. If a call option
which the Fund has written is exercised, the Fund realizes a gain or
loss from the sale of the underlying security and the
<PAGE>
NOTES TO FINANCIAL STATEMENTS at September 30, 1995 (Unaudited), Continued
proceeds from such a sale are increased by the premium originally
received. If a put option which the Fund has written is exercised,
the amount of the premium originally received reduces the cost of the
security which the Fund purchases upon exercise of the option.
The premium paid by the Fund for the purchase of a call or put
option is recorded as an investment and subsequently marked to market
to reflect the current market value of the option purchased. If an
option which the Fund has purchased expires on the stipulated
expiration date, the Fund realizes a loss in the amount of the cost
of the option. If the Fund enters into a closing transaction, it
realizes a gain (loss) if the proceeds from the sale are greater
(less) than the cost of the option purchased. If the Fund exercises a
put option, it realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale will be decreased
by the premium originally paid. If the Fund exercises a call option,
the cost of the security purchased upon exercise is increased by the
premium originally paid.
These option contracts may be listed for trading on a national
securities exchange or traded over-the-counter ("OTC"). OTC options
are transacted directly with dealers and not with a clearing
corporation, and there is a risk of non-performance by the dealer.
The Fund, as writer of a call option, loses the potential for gain on
the underlying security above the exercise price while the option is
outstanding. By writing a put option, the Fund might become obligated
to purchase the underlying security at an exercise price that exceeds
the then current market price.
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ended September 30, 1995, Crescent Management (the
"Advisor") provided the Fund with investment management services under an
Investment Advisory Agreement. The Advisor furnished all investment advice,
office space and certain administrative services, and provides most of the
personnel needed by the Fund. As compensation for its services, the Advisor was
entitled to a monthly fee at the annual rate of 1.00% based upon the average
daily net assets of the Fund.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to reduce fees payable to it by the Fund to the extent necessary to limit
the Fund's aggregate annual operating expenses to 1.85% of total net assets.
Southampton Investment Management Company (the "Manager") acts as the
Fund's Manager under an Investment Management Agreement. The Manager prepares
various federal and state regulatory filings, reports and returns for the Fund;
prepares reports and materials to be supplied to the trustees; monitors the
activities of the Fund's custodian, transfer agent and accountants; coordinates
the preparation and payment of Fund expenses and reviews the Fund's expense
accruals. For its services, the Manager receives an annual fee equal to the
greater of 0.25% of the Fund's average daily net assets or $30,000.
First Fund Distributors, Inc. (the "Distributor") acts as the Fund's
principal underwriter in a continuous public offering of the Fund's shares. The
Distributor is an affiliate of the Administrator. Certain officers and Trustees
of the Fund are also officers and/or directors of the Manager and Distributor.
<PAGE>
NOTES TO FINANCIAL STATEMENTS at September 30, 1995 (Unaudited), Continued
- --------------------------------------------------------------------------------
NOTE 4 - PURCHASES AND SALES OF SECURITIES
For the period ended September 30, 1995, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$7,106,953 and $6,523,155, respectively. At September 30, 1995, the cost of
securities for Federal tax purposes was $16,388,391. Unrealized appreciation and
depreciation of securities was as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $2,978,992
Unrealized depreciation............................................ (275,426)
--------
Net unrealized appreciation.................................. $2,703,566
==========
</TABLE>
Written options transactions during the period ended September 30, 1995
are summarized as follows:
<TABLE>
Call Options Written
Premiums Received
<S> <C>
Options outstanding, beginning of period........................... $(149,238)
Options written.................................................... (116,655)
Options closed..................................................... -0-
Options exercised.................................................. -0-
Options expired.................................................... 208,091
-------
Options outstanding at September 30, 1995.......................... (57,802)
Unrealized depreciation at September 30, 1995...................... (46,760)
--- ----- -------
Market value of written options at September 30, 1995.............. $(104,562)
</TABLE>
<PAGE>
Advisor
Crescent Management
1999 Avenue of the Stars
Suite 1950
Los Angeles, California 90067
(310) 201-3980
--
Distributor
First Fund Distributors, Inc.
4455 East Camelback Road, Suite 261E
Phoenix, Arizona 85018
--
Custodian and Transfer Agent
The Provident Bank
One East Fourth Street
Cincinnati, Ohio 45250-0967
(800) 424-2295
--
Auditors
Tait, Weller & Baker
2 Penn Center Plaza
Philadelphia, Pennsylvania 19102
--
Legal Counsel
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
This report is intended for the shareholders of
The Crescent Fund and should not be used as
sales literature unless accompanied or
preceded by a current prospectus.
