LIGHTHOUSE GROWTH FUND
SEMI-ANNUAL REPORT
February 29, 1996
<PAGE>
LIGHTHOUSE GROWTH FUND
Dear Shareholder:
The Lighthouse Growth Fund began on September 29, 1995, with a net asset value
of $12.00. After five months of operation, the Fund reported a total return of
5.46% that includes a $.06 per share long-term capital gains distribution paid
in December, 1995. According to Lipper Analytical Services, the average growth
fund was up 6.12% for that same time period. The Fund achieved these results
despite its defensive position during a strong bull market (DJIA up 700 points
during the period).
Since last fall the equity markets have seen a tremendous amount of group
rotation. The growth/earnings momentum crowd has moved from semiconductor stocks
to communications/Internet stocks while a number of investors have moved to the
"safety" of blue chips. Many have taken the "no brainer" route by investing
heavily in index funds. We view this action as the last gasp of a five year bull
market with so-called "hot money" jumping out of the frying pan into the fire.
The past five years have been characterized by low inflation, falling interest
rates, rising corporate profits, strong capital spending, and above-average
equity returns. As contrarians, this near-perfect environment gives us cause for
concern.
Signs of excess are obvious. Individual investors are speculating (knowingly) in
hot new issues and (unknowingly) through mutual funds. High-tech IPOs are
commanding absurd valuations, with some creating overnight paper billionaires.
Individuals are pouring money into aggressive growth funds run by young guns who
have never witnessed a correction. Academics are expounding the virtues of
staying fully invested while dismissing market timing as a futile exercise. Wall
Street pundits are confident that any corrections will be shallow and
short-lived. Predictions of Dow 6000, 7000, and even 10,000 are becoming
commonplace. Politicians are even thinking about fixing the social security mess
by allowing baby boomers to invest their payroll taxes in stocks. Short sellers,
who were common 5 years ago, are now an endangered species.
We expect the investment climate of the next few years will not be nearly as
benign. The capital spending boom will turn to bust, corporate profits will
suffer, inflation fears will return, and the Fed will be defenseless to save the
day. Investors will eventually come to new conclusions: 1) trees do not grow to
the sky, 2) markets move in both directions, and 3) never confuse brains with a
5 year bull market. Capital spending recessions occur roughly every four years
('82, '86, '90-91) and 1996 is likely to follow suit. What makes this coming
bust frightening is not just the new capacity financed by the profits of the
current boom, but Wall Street's exuberance to bankroll even greater supply.
Our current investment strategy is twofold: bet against the high tech/capital
spending boom and position ourselves in the already beaten up consumer sector.
We also have a position in energy stocks because a number of companies are doing
well in a hostile environment and they offer a partial hedge against inflation.
As of February 29, the Lighthouse Growth Fund continued its defensive posture
with the Fund's net assets having a 15.7% short position, 38.0% in cash, 17.0%
in energy stocks, and a small position in put options on the S&P 100.
We have been careful to use our short position to hedge an existing long
position in technology stocks. Our net technology position was -2.1% as of
February 29. We are short industries that are surrounded by hype such as the
Internet and communications and those we believe are ultimately commodities such
as memory-related semiconductors. We are long industries that are less hyped,
such as computers, and have high barriers to entry, such as enterprise software.
<PAGE>
LIGHTHOUSE GROWTH FUND
We have made aggressive bets in the out-of-favor consumer sector. Despite
our concern that a recession could further dampen consumer spending, we believe
that low expectations, lean inventories, lack of new supply, and cheap
valuations make retail/apparel stocks attractive. Consumer stocks accounted for
34.0% of the Fund's net assets.
The Fund's most contradictory position to our bearish outlook is a 9.0%
weighting in financial stocks. This position includes stocks of regional
brokers, discount brokers, and mutual fund companies. First, these companies are
in the forefront of exploiting the secular trend from commission based advice to
fee based advice. Second, Wall Street has been very cautious not to overexpand
during good times. Third, we could be wrong. If the stock market does hit 6000,
these stocks will do well.
We would like to thank all our shareholders for selecting the Lighthouse Growth
Fund. We recognize there are many alternatives in the marketplace today and look
forward to rewarding your choice.
Sincerely,
/s/ /s/
Paul G. Horton Kevin P. Duffy
President / Managing Director Director of Research
<PAGE>
<TABLE>
<CAPTION>
LIGHTHOUSE GROWTH FUND
PORTFOLIO OF INVESTMENTS at February 29, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 76.8% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Goods - Steel: 0.2%
<S> <C> <C>
1,200 Chaparral Steel Company................................................. $ 17,100
--------
Consumer Goods - Apparel: 11.8%
9,000 AnnTaylor Stores, Inc................................................... 156,375
4,900 Dillard Department Stores, Class A...................................... 153,125
4,100 Jones Apparel Group..................................................... 169,638
4,300 Liz Claiborne, Inc...................................................... 134,913
19,000 Norton McNaughton, Inc.................................................. 144,875
3,000 Quiksilver, Inc......................................................... 87,000
------
845,926
-------
Consumer Goods - Consumer Products: 3.1%
19,000 Fossil, Inc............................................................. 175,750
5,700 Polk Audio, Inc......................................................... 47,559
------
223,309
-------
Consumer Goods - Mail Order: 5.6%
24,000 Land's End, Inc......................................................... 405,000
-------
Consumer Goods - Restaurants: 0.5%
3,000 Vicorp Restaurants, Inc................................................. 35,250
------
Consumer Goods - Retail: 11.3%
850 CompUSA, Inc............................................................ 34,000
31,000 Good Guys, Inc.......................................................... 259,625
13,000 Kmart Corp.............................................................. 91,000
15,000 MicroAge, Inc........................................................... 146,250
34,000 Sun Television & Appliances............................................. 127,500
6,500 Toys R Us............................................................... 155,188
-------
813,563
-------
Consumer Goods - Tobacco: 1.7%
725 Philip Morris Companies, Inc............................................ 71,775
1,500 RJR Nabisco, Inc........................................................ 50,437
------
122,212
-------
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LIGHTHOUSE GROWTH FUND
PORTFOLIO OF INVESTMENTS at February 29, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Energy - Oil, Secondary: 12.2%
2,650 Anadarko Petroleum Corp................................................. $ 144,425
7,000 Barrett Resources Corp.................................................. 168,000
15,000 Basin Exploration, Inc.................................................. 75,000
2,280 Forest Oil Corp......................................................... 25,650
5,000 Nuevo Energy Company.................................................... 130,000
10,000 Optima Petroleum Corp................................................... 29,375
16,000 Petrocorp, Inc.......................................................... 100,000
4,100 Pogo Producing Company.................................................. 138,887
5,000 Tide West Oil Company................................................... 68,125
------
879,462
-------
Energy - Oil Services: 1.8%
1,100 Dreco Energy Services, Ltd.............................................. 20,625
2,150 Hornbeck Offshore Services, Inc......................................... 45,956
5,000 Mitcham Industries, Inc................................................. 28,125
3,000 Numar Corp.............................................................. 35,250
250 Offshore Logistics, Inc................................................. 3,125
-----
133,081
-------
Energy - Seismic: 2.9%
7,500 Seitel, Inc............................................................. 194,062
300 Western Atlas, Inc...................................................... 15,788
------
209,850
-------
Financial - Brokerage Firm: 8.3%
200 Charles Schwab Corp..................................................... 5,100
2,600 Edwards (A.G.) & Sons, Inc.............................................. 63,050
1,050 Inter-Regional Financial Group.......................................... 22,969
8,763 Legg Mason, Inc......................................................... 263,985
5,050 Piper Jaffray Companies, Inc............................................ 71,962
2,000 Raymond James Financial, Inc............................................ 44,250
5,300 Waterhouse Investor Services, Inc....................................... 130,513
-------
601,829
-------
Financial - Mutual Fund Company: 0.7%
975 T. Rowe Price Associates, Inc........................................... 52,406
------
Health Care - Pharmaceutical: 0.5%
1,417 ICN Pharmaceuticals, Inc................................................ 32,591
------
<PAGE>
LIGHTHOUSE GROWTH FUND
PORTFOLIO OF INVESTMENTS at February 29, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Technology - Communications: 0.6%
4,000 Vtel Corp............................................................... $ 42,500
--------
Technology - Computers: 4.0%
1,160 AST Research, Inc....................................................... 7,703
875 Apple Computer, Inc..................................................... 24,062
3,110 Dell Computer Corp...................................................... 106,906
200 Gateway 2000, Inc....................................................... 5,900
2,700 Sun Microsystems, Inc................................................... 141,750
-------
286,321
-------
Technology - Computer Peripherals: 0.0%
221 Radius, Inc............................................................. 290
---
Technology - Semiconductors: 2.8%
350 Advanced Micro Devices, Inc............................................. 6,781
8,500 Cyrix Corp.............................................................. 196,562
4,300 QLogic Corp............................................................. 33,863
------
237,206
-------
Technology - Software: 6.2%
400 Gupta Corp.............................................................. 2,450
5,000 Intersolv, Inc.......................................................... 65,625
13,500 Progress Software Corp.................................................. 297,000
2,850 Software Publishing Corp................................................ 8,862
1,200 Sybase, Inc............................................................. 37,650
------
411,587
-------
Telecommunication - Telephone Companies: 0.0%
73 Telefonos de Mexico, ADR................................................ 2,227
-----
Transportation - Airlines: 2.6%
300 Comair Holdings, Inc.................................................... 9,338
5,700 Southwest Airlines Company.............................................. 175,275
-------
184,613
-------
Total Common Stocks (cost $5,680,377)................................... 5,536,323
---------
<PAGE>
LIGHTHOUSE GROWTH FUND
PORTFOLIO OF INVESTMENTS at February 29, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS: 0.2%
Consumer Goods - Retail: 0.1%
300 Best Buy, Cv. Preferred M............................................... $ 10,425
--------
Energy - Oil, Secondary: 0.1%
300 Snyder Oil Corp. Cv. Preferred A........................................ 5,250
-----
Total Preferred Stock (cost $18,042).................................... 15,675
------
Principal Amount REPURCHASE AGREEMENTS: 8.8%
- ------------------------------------------------------------------------------------------------------------------------------------
$634,599 Provident Bank Repurchase Agreement, 4.90%, dated 2/29/96,
due 3/1/96, collateralized by $640,000 U.S. Treasury Bills,
due 3/7/96 (proceeds $634,685) (cost $634,599).......................... 634,599
-------
Total Investment in Securities (cost $6,333,018+): 85.8%................ 6,186,597
Other Assets Less Liabilities: 14.2%.................................... 1,026,658
---------
Total Net Assets: 100.0%................................................ $7,213,255
==========
PUT OPTIONS at February 29, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Subject to Put Common Stocks / Expiration Date / Exercise Price
- ------------------------------------------------------------------------------------------------------------------------------------
1,000 Applied Materials / April / 45.......................................... $ 9,375
1,300 S&P 100 / March /600.................................................... 3,738
1,700 S&P 100 / May / 610..................................................... 22,100
------
Total (cost $43,166).................................................... $ 35,213
========
<PAGE>
LIGHTHOUSE GROWTH FUND
PORTFOLIO OF INVESTMENTS at February 29, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT at February 29, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Common Stocks Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
2,000 Alliance Semiconductor Corp............................................. $ 20,000
2,800 Applied Materials, Inc.................................................. 100,100
3,000 Ascend Communications, Inc.............................................. 135,750
2,100 Cascade Communications Corp............................................. 142,537
1,050 Integrated Silicon Solutions, Inc....................................... 13,500
3,500 KLA Instruments Corp.................................................... 84,000
8,000 Logic Devices, Inc...................................................... 50,000
3,000 Mattson Technology, Inc................................................. 31,500
3,300 Micron Technology, Inc.................................................. 105,600
1,200 Netcom On-Line Communications........................................... 27,900
2,000 Netscape Communications Corp............................................ 102,000
2,200 Premisys Communications, Inc............................................ 72,050
6,000 PSINet, Inc............................................................. 60,750
2,800 Spyglass, Inc........................................................... 64,750
1,600 Tencor Instruments...................................................... 33,200
2,300 UUNet, Inc.............................................................. 69,000
500 Xilinx, Inc............................................................. 19,313
------
Total (proceeds $1,570,383)............................................. $1,131,950
==========
<FN>
+At February 29, 1996, the cost of securities for Federal tax purposes was the
same as the basis for financial reporting. Unrealized appreciation and
depreciation of securities was as follows:
Gross unrealized appreciation........................................... $ 737,024
Gross unrealized depreciation........................................... (452,965)
--------
Net unrealized appreciation............................................. $ 284,059
</FN>
=========
</TABLE>
<PAGE>
LIGHTHOUSE GROWTH FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at February 29, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments, at value (identified cost $6,333,018) (Note 2-A) ......................... $6,186,597
Deposits with brokers for securities sold short........................................ 2,106,142
Put options purchased, at value - Cost $43,166......................................... 35,213
Receivables:
Expense reimbursement............................................................ 14,020
Investments sold................................................................. 40,961
Dividends and interest .......................................................... 1,778
Organization costs............................................................... 48,264
Other assets........................................................................... 8,730
-----
Total assets .............................................................. 8,441,705
---------
LIABILITIES
Securities sold short, at value - Proceeds $1,570,383.................................. 1,131,950
Payable for securities purchased....................................................... 66,675
Accrued expenses ...................................................................... 29,825
------
Total liabilities.......................................................... 1,228,450
---------
NET ASSETS ................................................................................. $7,213,255
==========
Net asset value, offering price and redemption price per share
($7,213,255/572,911 shares outstanding;
unlimited shares of no par value beneficial interest authorized) ...................... $12.59
======
SOURCE OF NET ASSETS
Paid-in capital ....................................................................... $6,824,870
Accumulated net investment loss........................................................ (31,116)
Undistributed net realized gain on investment transactions............................. 135,442
Net unrealized appreciation of investments............................................. 284,059
-------
Net assets ...................................................................... $7,213,255
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIGHTHOUSE GROWTH FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Period September 29, 1995* to February 29,
1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Income:
<S> <C>
Interest......................................................................... $ 5,960
Dividends........................................................................ 7,499
-----
Total income............................................................... 13,459
------
Expenses:
Advisory fees (Note 4)........................................................... 27,714
Distribution costs (Note 5)...................................................... 5,542
Administration fee (Note 4)...................................................... 10,945
Custodian and accounting fees.................................................... 7,593
Transfer agent fees.............................................................. 6,690
Auditing fees.................................................................... 6,205
Legal fees....................................................................... 1,560
Trustees' fees................................................................... 826
Reports to shareholders.......................................................... 1,033
Amortization of deferred organization expenses (Note 2D)......................... 3,788
Miscellaneous.................................................................... 4,178
-----
Total expenses............................................................. 76,074
Less, expenses reimbursed (Note 4)......................................... (31,499)
- -------
Net expenses............................................................... 44,575
------
Net investment loss ................................................. (31,116)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on security transactions....................................... 150,993
Net realized gain on put options purchased....................................... 13,910
Net unrealized appreciation of investments....................................... 284,059
-------
Net realized and unrealized gain on investments............................ 448,962
-------
Net Increase in Net Assets Resulting from Operations ................ $ 417,846
=========
<FN>
*Commencement of operations.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIGHTHOUSE GROWTH FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
For the Period September 29, 1995* to February 29, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
<S> <C>
Net investment loss....................................................................... $ (31,116)
Net realized gain on securities transactions.............................................. 150,993
Net realized gain on put options purchased................................................ 13,910
Net unrealized appreciation of investments................................................ 284,059
-------
Net increase in net assets resulting from operations ............................... 417,846
-------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net realized gain from securities transactions ($0.062 per share)......................... (29,461)
-------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding shares (a) ............. 6,824,870
---------
Total increase in net assets........................................................ 7,213,255
NET ASSETS:
Beginning of period....................................................................... -0-
-
End of period ............................................................................ $7,213,255
==========
<FN>
(a) A summary of capital shares transactions is as follows:
September 29, 1995*
through
February 29, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold .................................................................... 588,824 $7,015,553
Shares issued in reinvestment of distributions.................................. 2,409 29,010
Shares redeemed................................................................. (18,322) (219,693)
------- --------
Net increase.............................................................. 572,911 $6,824,870
======= ==========
*Commencement of operations.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIGHTHOUSE GROWTH FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout the period (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
September 29, 1995*
through
February 29, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net Asset Value, Beginning of Period.......................................................... $12.00
Income from Investment Operations:
Net investment loss..................................................................... (.05)
Net realized and unrealized gain on investments......................................... .70
---
Total from investment operations.............................................................. .65
---
Less Distributions:
Dividends (from net investment income).................................................. -0-
Distributions (from capital gains)...................................................... (.06)
----
Total Distributions........................................................................... (.06)
----
Net Asset Value, End of Period................................................................ $12.59
======
Total Return.................................................................................. 13.42%+
Ratios/Supplemental Data:
Net assets, end of period (millions).......................................................... $ 7.2
Ratio of expenses to average net assets:
Before expense reimbursement............................................................ 3.41%+
After expense reimbursement............................................................. 2.00%+
Ratio of net investment loss to average net assets:
Before expense reimbursement............................................................ (2.81)%+
After expense reimbursement............................................................. (1.40)%+
Portfolio turnover............................................................................ 8.71%
<FN>
*Commencement of operations.
+Annualized.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
LIGHTHOUSE GROWTH FUND
NOTES TO FINANCIAL
STATEMENTS at February 29, 1996 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Lighthouse Growth Fund (the "Fund") is a non-diversified 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 an open-end investment management company. The Fund began
operations on September 29, 1995.
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 valued at cost,
which when combined with accrued interest, approximates market
value.
U.S. Government securities with less than 60 days remaining to
maturity when acquired by the Fund are valued on an amortized cost
basis. U.S. Government securities with more than 60 days remaining
to maturity are valued at the current market value (using the mean
between the bid and asked price) until the 60th day prior to
maturity, and are then valued at amortized cost based upon the value
on such date unless the Board determines during such 60 day period
that this amortized cost basis does not represent fair 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, Dividends 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.
D. Deferred Organization Expenses: All of the expenses incurred by
the Advisor in connection with the organization and
registration of the Fund's shares will be borne by the Fund and are
being amortized to expense on a straight-line basis
over a period of five years.
NOTE 3 - SECURITIES SOLD SHORT
Securities sold short represent obligations of the Fund to make a future
delivery of a specific security and, correspondingly, create an obligation to
purchase the security at prevailing market prices (or deliver the security, if
owned by the Fund) at the later delivery date. As a result, these short sales
create the risk that the Fund's ultimate obligation to satisfy the delivery
requirements may exceed the amount recorded in the accompanying statement of
assets and liabilities.
<PAGE>
LIGHTHOUSE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
NOTE 4 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the period ending February 29, 1996, Lighthouse Capital Management,
Inc. (the "Advisor") provided the Fund with investment management services under
an Investment Advisory Agreement. The Advisor furnished all investment advice,
office space, facilities, and most personnel needed by the Fund. As compensation
for its services, the Advisor was entitled to a monthly fee at the annualized
rate of 1.25% based upon the average daily net assets of the Fund. For the
period ended February 29, 1996, the Fund incurred $27,714 in advisory fees.
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 2.00% of total net assets. As
a result, the Advisor waived its fee and will reimburse the Fund for expenses in
excess of the limit in the amount of $3,785.
Southampton Investment Management Company, Inc. (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 Manager.
Certain officers and trustees of the Trust are also officers and/or
directors of the Manager.
NOTE 5 - DISTRIBUTION COSTS
The Fund has adopted a Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act. The Plan provides that the Fund will pay a fee to
the Distributor at an annual rate of up to 0.25% of the average daily net assets
of the Fund. The Fund incurred $5,542 in distribution expenses for the period
ended February 29, 1996.
NOTE 6 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments, for
the period ended February 29, 1996 were $5,859,576 and $312,150, respectively.
Purchased options transactions during the period ended February 29, 1996
are summarized as follows:
<TABLE>
Put Options Purchased
<S> <C>
Options outstanding, beginning of period................................ $ -0-
Options purchased....................................................... 86,851
Options closed.......................................................... -0-
Options exercised....................................................... -0-
Options expired......................................................... (43,685)
-------
Options outstanding at February 29, 1996................................ 43,166
Unrealized depreciation at February 29, 1996............................ (7,953)
------
Market value of options at February 29, 1996............................ $35,213
</TABLE>
<PAGE>
Advisor
LIGHTHOUSE CAPITAL MANAGEMENT, INC.
10000 Memorial Drive, Suite 660
Houston, Texas 77024
(713) 688-6881
Account Inquiries (800) 282-2340
Distributor
FIRST FUND DISTRIBUTORS, INC.
4455 East Camelback Road, Suite 261E
Phoenix, Arizona 85018
Custodian
STAR BANK, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
Transfer and Dividend Disbursing Agent
RODNEY SQUARE MANAGEMENT CORP.
P.O. Box 8987
Wilmington, Delaware 19899
(800) 282-2340
Auditors
ERNST & YOUNG LLP
515 South Flower Street
Los Angeles, California 90071
Legal Counsel
HELLER, EHRMAN, WHITE & McAULIFFE
333 Bush Street
San Francisco, California 94104
