December 10, 1996
Securities and Exchange Commission
Attn: Filing Desk, Stop 1-4
450 Fifth Street, N.W.
Washington, DC 20549
Re: Professionally Managed Portfolios
File No. 811-5037
CIK No. 811030
Dear Sir or Madam:
On behalf of the above Registrant and pursuant to Rule 30b-2 under the
Investment Company Act of 1940, I enclose for filing via EDGAR, a copy of the
Semi-annual Report to shareholders of the Pro-Conscience Womens Fund series of
the Registrant for the six month period ended September 30, 1996.
If you have any questions, please contact me at (602) 952-1100.
Sincerely yours,
/s/
Robert H. Wadsworth
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
Semi-Annual Report
For the Six Months Ended
September 30, 1996
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
October 15, 1996
Dear Shareholders:
October 1, 1996, marked the third anniversary of the Pro-Conscience Women's
Equity Mutual Fund (WEMF).
As of September 30, 1996, the Fund's returns are as follows:
<TABLE>
<CAPTION>
One year Cumulative from inception Annualized from inception
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C>
13.94 % 29.91% 9.11%
</TABLE>
Anniversaries encourage reflection and, we want to use this opportunity to look
back as well as look forward. Three years ago we established WEMF with the goal
of providing good returns to our investors while increasing opportunities for
the advancement of women in corporations. Thanks to your support as
shareholders, WEMF can initiate dialogues with major corporations to encourage
them to improve their policies and practices regarding women. A recent survey
indicates that in 1995, 10 percent of the corporate officers at the nation's 500
largest companies were women, compared with 8.7 percent in 1994. While women
have made progress, we cannot let the little advancement lower the urgency for
change. Time alone will not bring about an equal playing field. We need the
sustained commitment of senior managers in corporations. We need to continue our
dialogues. We need to continue to apply economic pressure. We need to increase
our assets and become a voice that has to be reckoned with.
With the equity markets at an all-time high, investors are projecting a
well-behaved, gradual slowdown in growth. We currently expect economic growth of
between 2.5 percent to 3 percent over the next year, and inflation under 3
percent which we believe will be very positive for stock returns. However, we
are alert to the possibility that the economy may either grow too quickly or may
stop growing, which will have negative effects on the stock market. We are
implementing a more conservative strategy of increasing our holdings of
companies with less earnings volatility, and investing in stable sectors of the
economy, such as finance, healthcare, and consumer staples producers.
We welcome any comments and questions that you may have.
Sincerely yours,
/s/
Linda C.Y. Pei
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS at September 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 91.3% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Durables: 3.5%
<S> <C> <C>
2,600 Champion Enterprises, Inc............................................... $ 58,825
1,500 Honda Motor, Ltd........................................................ 75,937
------
134,762
-------
Consumer Products and Services: 18.3%
2,100 Aptargroup, Inc......................................................... 67,463
1,500 Avon Products, Inc...................................................... 74,437
2,700 Children's Discovery Centers*........................................... 17,550
2,200 Coca Cola Co............................................................ 111,925
2,000 Cyanotech Corp.*........................................................ 12,750
1,500 Gillette Co............................................................. 108,188
2,100 May Department Stores Co................................................ 102,112
2,200 McDonald's Corp......................................................... 104,225
2,500 Odwalla, Inc.*.......................................................... 44,375
2,100 Talbots, Inc............................................................ 63,000
------
706,025
-------
Energy and Resources: 5.0%
600 Amoco Corp.............................................................. 42,300
550 Atlantic Richfield Co., 1 Right 8/18/05................................. 70,125
2,500 Calenergy, Inc.......................................................... 79,688
------
192,113
-------
Financial Services: 13.4%
825 American International Group............................................ 83,119
2,140 Bank of Boston Corp..................................................... 123,853
2,800 Federal National Mortgage Association................................... 97,650
2,825 Norwest Corp............................................................ 115,472
1,500 Unum Corp............................................................... 96,187
------
516,281
-------
Healthcare: 15.8%
1,200 Amgen*.................................................................. 75,750
1,800 Becton Dickinson Co..................................................... 79,650
725 Boston Scientific Corp.................................................. 41,688
2,500 Invacare Corp........................................................... 70,000
1,900 Johnson & Johnson....................................................... 97,375
1,250 Medtronic, Inc.......................................................... 80,156
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
PORTFOLIO OF INVESTMENTS at September 30, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare, continued
1,650 Schering-Plough Corp.................................................... $ 101,475
1,500 United Healthcare Corp.................................................. 62,437
------
608,531
-------
Industrial Materials: 5.4%
2,600 Praxair, Inc............................................................ 111,800
2,000 Sonoco Products Co...................................................... 55,000
2,300 TJ International, Inc................................................... 41,975
------
208,775
-------
Media and Publishing: 5.0%
1,975 Edmark Corp.*........................................................... 26,909
1,350 Scholastic Corp.*....................................................... 97,875
1,050 The Walt Disney Co...................................................... 66,544
------
191,328
-------
Producer Products: 5.2%
3,050 Baldor Electric Co...................................................... 59,475
1,100 Illinois Tool Works, Inc................................................ 79,338
1,500 Wolverine Tube, Inc..................................................... 64,500
------
203,313
-------
Technology: 14.1%
700 Alco Standard Corp...................................................... 34,912
700 ADC Telecommunications, Inc............................................. 44,800
1,300 Automatic Data Processing, Inc.......................................... 56,712
1,000 Cisco Systems, Inc.*.................................................... 62,063
1,200 Hewlett-Packard Co...................................................... 58,500
650 Intel Corp.............................................................. 62,034
600 Microsoft Corp.......................................................... 79,125
1,200 Phamis, Inc............................................................. 20,100
1,250 Sanmina Corp............................................................ 50,313
325 Shared Medical Systems Corp............................................. 18,525
1,050 Xerox Corp.............................................................. 56,306
------
543,390
-------
Transportation: 1.3%
2,200 Southwest Airlines Co................................................... 50,325
------
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
PORTFOLIO OF INVESTMENTS at September 30, 1996 (Unaudited), Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities: 4.3%
800 BellSouth Corp.......................................................... $ 29,600
3,500 MCI Communications Corp................................................. 89,688
1,000 SBC Communications, Inc................................................. 48,125
------
167,413
-------
Total Common Stocks (cost $2,985,767)................................... 3,522,256
---------
Principal Amount REPURCHASE AGREEMENT: 7.1%
- ------------------------------------------------------------------------------------------------------------------------------------
$274,000 Star Bank Repurchase Agreement, 5.30%, dated 9/30/96, due 10/1/96,
collateralized by $300,000 GNMA, 7.0%, due 1/20/2024 (value of
collateral is $223,918) (proceeds $274,040) (cost $274,000) ............ 274,000
-------
Total Investment in Securities (cost $3,259,767+): 98.4%................ 3,796,256
Other Assets less Liabilities: 1.6%..................................... 59,869
------
Total Net Assets: 100.0%................................................ $3,856,125
==========
<FN>
* Indicates non-income producing security.
+ Cost for federal income tax purposes is the same.
Net unrealized appreciation consists of:
Gross unrealized appreciation..................................... $ 579,495
Gross unrealized depreciation..................................... (43,006)
-------
Net unrealized appreciation................................ $ 536,489
=========
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at September 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (identified cost $3,259,767) (Note 2-A) ........... $3,796,256
Cash................................................................................... 154
Receivables:
Dividends and interest .......................................................... 1,329
Securities sold.................................................................. 47,255
Fund shares sold................................................................. 8,690
Prepaid expenses....................................................................... 8,709
-----
Total assets .............................................................. 3,862,392
---------
LIABILITIES
Payables:
Fund shares redeemed............................................................. 2,011
Distribution fees................................................................ 2,260
Accrued expenses ...................................................................... 1,996
-----
Total liabilities.......................................................... 6,267
-----
NET ASSETS .............................................................................. $3,856,125
==========
Net asset value, offering and redemption price per share
($3,856,125/324,513 shares outstanding;
unlimited number of shares authorized without par value) ........................ $11.88
======
SOURCE OF NET ASSETS
Paid-in capital ....................................................................... $3,387,236
Undistributed net investment income.................................................... 42,167
Accumulated net realized loss on investments........................................... (109,767)
Net unrealized appreciation on investments............................................. 536,489
-------
Net assets ...................................................................... $3,856,125
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Six Months Ended September 30, 1996
(Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Interest ........................................................................ $ 44,017
Dividends........................................................................ 22,074
------
Total investment income ................................................... 66,091
------
Expenses
Advisory fees (Note 3) .......................................................... 17,722
Administration fee (Note 3)...................................................... 15,041
Distribution costs (Note 4)...................................................... 4,431
Custodian and accounting fees.................................................... 7,206
Transfer agent fees.............................................................. 3,259
Auditing fees.................................................................... 6,017
Legal fees....................................................................... 752
Trustees' fees .................................................................. 1,504
Registration fees ............................................................... 740
Reports to shareholders.......................................................... 2,006
Insurance........................................................................ 677
Miscellaneous.................................................................... 1,003
-----
Total expenses............................................................. 60,358
Less, expenses waived and reimbursed (Note 3).............................. (33,776)
- -------
Net expenses............................................................... 26,582
------
Net investment income ............................................. 39,509
------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss from security transactions .......................................... (31,459)
Net change in unrealized appreciation on investments .................................. 204,856
-------
Net realized and unrealized gain on investments ........................... 173,397
-------
Net Increase in Net Assets Resulting from Operations ................ $ 212,906
=========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
September 30, 1996* March 31, 1996
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM
OPERATIONS
<S> <C> <C>
Net investment income ................................................ $ 39,509 $ 29,521
Net realized gain (loss) from security transactions ................... (31,459) 39,800
Net realized loss on short sale transactions........................... -0- (18,542)
Net change in unrealized appreciation on investments................... 204,856 308,748
------- -------
Net increase in net assets resulting from operations ............ 212,906 359,527
------- -------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income ($0.31 per share)........................... -0- (79,392)
- -------
Total distributions to shareholders ............................. -0- (79,392)
- -------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in outstanding
shares (a) ...................................................... 334,450 1,515,669
------- ---------
Total increase in net assets .................................... 547,356 1,795,804
NET ASSETS
Beginning of period.................................................... 3,308,769 1,512,965
--------- ---------
End of period (including undistributed net investment income of
$42,167 and $2,658, respectively)............................... $3,856,125 $3,308,769
========== ==========
<FN>
(a) A summary of capital shares transactions is as follows:
Six Months Ended Year Ended
September 30, 1996* March 31, 1996
Shares Value Shares Value
Shares sold ...................................... 41,151 $466,826 149,768 $1,589,367
Shares issued in reinvestment of distributions.... -0- -0- 6,828 73,949
Shares redeemed .................................. (11,458) (132,376) (14,206) (147,647)
------- -------- ------- --------
Net increase ..................................... 29,693 $334,450 142,390 $1,515,669
====== ======== ======= ==========
*Unaudited.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended Year Ended October 1, 1993*
Ended September March March through
30, 1996# 31, 1996 31, 1995 March 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period .............. $11.22 $ 9.93 $10.46 $10.00
Income from investment operations:
Net investment income (loss) ................ .12 .01 .36 (.01)
Net realized and unrealized gain (loss)
on investments ........................ .54 1.59 (.28) .47
--- ---- ---- ---
Total from investment operations................... .66 1.60 .08 .46
--- ---- --- ---
Less distributions:
From net investment income................... -0- (0.31) (.02) -0-
From net capital gains ...................... -0- -0- (.59) -0-
- - ---- -
Total distributions................................ -0- (0.31) (.61) -0-
- ----- ---- -
Net asset value, end of period .................... $11.88 $11.22 $ 9.93 $10.46
====== ====== ====== ======
Total return ...................................... 12.08%+ 16.17% 0.97% 9.23%+
Ratios/supplemental data:
Net assets, end of period (millions)............... $ 3.9 $ 3.3 $ 1.5 $ 0.6
Ratio of expenses to average net assets:
Before expense reimbursement ................ 3.39%+ 4.75% 8.69% 21.93%+
After expense reimbursement.................. 1.50%+ 1.50% 1.50% 1.50%+
Ratio of net investment income (loss) to average net assets:
Before expense reimbursement ................ 0.32%+ (1.97%) (1.97%) (20.74%)+
After expense reimbursement ................. 2.22%+ 1.28% 5.22% (0.31%)+
Portfolio turnover rate ........................... 33.26% 120.64% 705.88% 139.26%
Average commission rate paid....................... $0.0546++ - - -
<FN>
*Commencement of operations.
+Annualized.
++For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate paid per share for security trades on
which commissions are charged.
#Unaudited.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
NOTES TO FINANCIAL STATEMENTS at September 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Pro-Conscience Women's Equity Mutual 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's primary
investment objective is to provide long-term capital appreciation. The Fund
seeks to achieve its objective by investing primarily in equity securities, but
there are no assurances that this objective will be achieved. The market value
of the Fund's investment portfolio will fluctuate with market conditions and an
investor's shares, when redeemed, may be worth more or less than their original
cost. The Fund began operations on October 1, 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.
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. Short Sales. A short sale transaction in which 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
increased 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.
C. 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. The Fund maintains a January 31 tax year end.
D. 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
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
recorded on the ex-dividend date. Interest income is recognized on an
accrual basis. Income and capital gains distributions 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 net operating losses and
deferral of post-October capital losses.
E. Accounting Estimates. In preparing financial statements in conformity
with generally accepted accounting principles, management makes
estimates and assumptions that affect the reported amounts of assets
and liabilities at the date of the financial statements, as well as
the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
For the six months ended September 30, 1996, Pro-Conscience Funds,
Incorporated (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. In order to maintain the
Fund's operating expenses at 1.50% of average daily net assets, the Advisor has
waived its fee and reimbursed expenses totaling $1,013 for the six months ended
September 30, 1996.
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 the most stringent limits
prescribed by any state in which the Fund's shares are offered for sale.
Currently, the most stringent limits prescribed are 2.50% of the first $30
million of net assets and reduced amounts thereafter. The limit is less
stringent than the voluntary limit explained above.
Investment Company Administration Corporation (the "Administrator") acts
as the Fund's Administrator under an Administration Agreement. The Administrator
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 Administrator receives a monthly fee at
the following annual rate:
Average Net Assets Fee or Fee Rate
Under $15 million $30,000
$15 to $50 million 0.20%
$50 to $100 million 0.15%
$100 to $150 million 0.10%
Over $150 million 0.05%
The Administrator has voluntarily waived its fees for the six months ended
September 30, 1996.
<PAGE>
PRO-CONSCIENCE
WOMEN'S EQUITY MUTUAL FUND
Advancing Gender Equality in the Workplace
NOTES TO FINANCIAL STATEMENTS (Unaudited), Continued
- --------------------------------------------------------------------------------
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 Administrator and Distributor.
NOTE 4 - 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 may 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 fee is paid to the Distributor as reimbursement for, or in
anticipation of, expenses incurred for distribution-related activity. For the
six months ended September 30, 1996, the Fund paid fees of $4,431 to the
Distributor.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
For the six months ended September 30, 1996, the cost of purchases and the
proceeds from sales of securities, excluding short-term securities, were
$1,357,314 and $1,113,121, respectively.
<PAGE>
Advisor
Pro-Conscience Funds, Incorporated
850 Montgomery Street, Suite 100
San Francisco, California 94133
(415) 296-9135
--
Distributor
First Fund Distributors, Inc.
4455 E. Camelback Road, Suite 261E
Phoenix, Arizona 85018
--
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, Ohio 45202
--
Transfer Agent
American Data Services, Inc.
24 West Carver Street
Second Floor
Huntington, New York 11743
--
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 Pro-Conscience Women's Equity
Mutual Fund and should not be used as
sales literature unless accompanied or
preceded by the Fund's current prospectus.
