<PAGE> 1
THE
OSTERWEIS
FUND
April 9, 1997
Dear Shareholders,
For several months, the biggest risk facing the stock market has been that
signs of higher inflation would induce the Fed to raise interest rates. In
March, the Fed did react to tightening labor markets and rising wage rates by
lifting the Fed Funds rate 0.25%. This triggered a sharp correction in the stock
market.
We are pleased to report that, despite this correction, The Osterweis Fund
ended the quarter with a slight gain, while many of our more aggressive
competitors suffered significant losses. The popular stock market averages have
masked the true degree of pain suffered by many stocks. For the latest fiscal
year ending March 31, 1997, The Osterweis Fund had a total return of 11.60%.
Because we believe that the Fed will probably raise rates at least once more
this year, we are taking a cautious approach towards managing The Osterweis
Fund. First, we are keeping some cash as a cushion and as a buying reserve
should stocks get cheaper. Second, we are focusing our investments in stocks
with strong earnings trends, and in many cases, with robust-free cash flow
generating ability. A number of the companies whose stocks we own are
aggressively repurchasing stock. This acts to cushion any market downturn and,
more importantly, to add to earnings per share by shrinking the number of shares
outstanding.
While market downturns can be unsettling, they do provide opportunities for
long-term value-oriented investors to acquire positions at attractive prices.
Because we do not believe that inflation is a serious problem now, we view the
current Fed tightening as a preventative action designed to slow the economy
rather than throw it into recession. As such, the Fed may be able to move toward
easier money late this year, at which time the market should resume its upward
momentum.
Sincerely,
/s/ John S. Osterweis
John S. Osterweis
The Osterweis Fund's annualized total return from its inception on October 1,
1993 through March 31, 1997 was 9.69%. The twelve months ending March 31, 1997
showed a total return of 11.60%. Results shown are past performance, which
should not be regarded as an indicator of future results. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than their cost. The Osterweis Fund is distributed by
First Fund Distributors, Inc., Phoenix, AZ 85018.
<PAGE> 2
THE OSTERWEIS FUND
Value of $10,000 vs. S&P 500 Index
Annual Average Total Return Periods
Ended March 31, 1997
1 Year Inception (10/1/93)
11.60% 9.69%
<TABLE>
<CAPTION>
10/4/93 12/31/93 12/31/94 12/31/95 3/31/96 6/30/96 9/30/96 12/31/96 3/31/97
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
The Osterweis Fund 10,000 10,444 10,323 11,849 12,376 12,991 13,269 13,758 13,812
S&P 500 Index 10,000 10,179 10,309 14,178 14,942 15,602 16,091 17,438 17,904
</TABLE>
Past performance is not predictive of future performance.
Page 1
<PAGE> 3
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS AT MARCH 31, 1997
- --------------------------------------------------------------------------------
Shares COMMON STOCKS: 81.3% Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
BANKS: 0.1%
200 J.P. Morgan & Co................................. $ 19,650
----------
BEVERAGES - ALCOHOLIC: 2.7%
10,800 Anheuser-Busch Companies......................... 454,950
----------
BUILDING AND HEAVY CONSTRUCTION: 2.9%
26,800 CalMat Co........................................ 472,350
----------
BUSINESS SERVICES: 5.7%
13,666 A.C. Nielsen Corp................................ 204,990
10,600 Allied Capital Corp.............................. 212,000
41,567 National Education Corp.......................... 524,783
----------
941,773
----------
COSMETICS - SOAP: 2.9%
9,240 Avon Products, Inc............................... 485,100
----------
CONSUMER PRODUCTS: 7.0%
5,700 Kimberly-Clark Corp.............................. 566,437
54,000 Playtex Products, Inc............................ 587,250
----------
1,153,687
----------
ENERGY: 9.0%
51,856 Patina Oil & Gas Corp............................ 447,258
34,909 Snyder Oil Corp.................................. 562,908
37,000 Wheelabrator Technology, Inc..................... 485,625
----------
1,495,791
----------
FINANCIAL SERVICES: 4.0%
8,400 Associates First Capital Corp., Class A.......... 361,200
12,000 Countrywide Credit Corp.......................... 297,000
----------
658,200
----------
INSURANCE: 5.9%
12,700 Hartford Steam Boiler Inspection................. 568,325
8,051 W. R. Berkley Corp............................... 410,601
----------
978,926
----------
</TABLE>
See accompanying Notes to Financial Statements.
3
<PAGE> 4
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS AT MARCH 31, 1997, CONTINUED
- --------------------------------------------------------------------------------
Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
MANUFACTURING - DIVERSIFIED: 2.3%
7,900 W.R. Grace & Co.................................. $ 374,262
----------
MEDIA AND BROADCASTING: 7.0%
12,500 Scandinavian Broadcasting System SA.............. 225,000
27,939 Westinghouse Electric Corp....................... 495,917
23,400 Westwood One, Inc................................ 432,900
----------
1,153,817
----------
NEWSPAPERS AND PUBLISHING: 2.9%
43,100 K-III Communications Corp........................ 484,875
----------
PHARMACEUTICALS: 5.4%
14,500 Forest Laboratories, Inc......................... 545,562
9,300 Pharmacia & Upjohn, Inc.......................... 340,613
----------
886,175
----------
REAL ESTATE: 11.0%
76,300 Catellus Development Corp........................ 1,163,575
24,800 Crescent Real Estate Equities.................... 663,400
----------
1,826,975
----------
RETAIL: 7.5%
15,300 Rite Aid Corp.................................... 642,600
11,852 Tandy Corp....................................... 594,082
----------
1,236,682
----------
TELECOMMUNICATIONS: 5.0%
7,900 Cellular Communications International, Inc....... 219,225
15,320 Corecomm Inc..................................... 222,140
18,267 NTL Inc.......................................... 392,741
----------
834,106
----------
Total Common Stocks (cost $10,633,770)........... 13,457,319
----------
</TABLE>
See accompanying Notes to Financial Statements.
4
<PAGE> 5
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS AT MARCH 31, 1997, CONTINUED
- --------------------------------------------------------------------------------
Shares CONVERTIBLE PREFERRED STOCK: 2.1% Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
ENERGY: 0.9%
6,400 Snyder Oil Corp., 6.00%, Preferred Convertible A.... $ 150,400
---------
TELECOMMUNICATIONS: 1.2%
7,785 AirTouch Communications, Inc., 6.00%, Class B....... 199,491
---------
Total Convertible Preferred stock (cost $320,127) .. 349,891
---------
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT AND
Principal Amount GOVERNMENT AGENCY OBLIGATIONS: 6.6%
- -------------------------------------------------------------------------------------
<S> <C> <C>
$200,000 FHLB, 6.20%, 10/16/1998.......................... 199,400
350,000 FHLD, 5.37%, 12/9/1997........................... 336,378
400,000 SLMA, 5.16%, 6/12/1997........................... 399,924
150,000 U.S. Treasury Notes, 5.00%, 1/31/1998............ 148,688
-----------
Total U. S. Government and Government Agency
Obligations (cost $1,086,199).................... 1,084,390
-----------
CONVERTIBLE CORPORATE BONDS: 3.6%
- -------------------------------------------------------------------------------------
414,000 Kelley Oil & Gas Partners, 7.875%, 12/15/1999.... 390,443
230,000 National Education Corp., 6.50%, 5/15/2011....... 207,000
-----------
Total Convertible Corporate Bonds (cost $507,281) 597,443
-----------
WARRANTS: 0.2%
- -------------------------------------------------------------------------------------
25,928 Patina Oil & Gas Corp., Exp. 5/2/2001 (cost $46,995) 38,892
-----------
REPURCHASE AGREEMENTS: 6.0%
- -------------------------------------------------------------------------------------
996,000 Star Bank Repurchase Agreement, 5.00%, dated 3/31/1997,
due 4/1/1997, collateralized by $1,070,000 GNMA, due
1/20/2024 (proceeds $996,138) (cost $996,000).... 996,000
-----------
</TABLE>
See accompanying Notes to Financial Statements.
5
<PAGE> 6
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS AT MARCH 31, 1997, CONTINUED
- ---------------------------------------------------------------------------------------------
Market Value
- ---------------------------------------------------------------------------------------------
<S> <C>
Total Investment in Securities (cost $13,590,372+): 99.8% ... $16,523,935
Other Assets less Liabilities: 0.2%.......................... 26,007
-----------
Total Net Assets: 100.0%..................................... $16,549,942
===========
</TABLE>
*Non-income producing security.
+At March 31, 1997, the cost of securities for Federal tax purposes was the same
as the basis for financial reporting. Unrealized appreciation and depreciation
of securities were as follows:
<TABLE>
<CAPTION>
<S> <C>
Gross unrealized appreciation.................... $ 3,544,026
Gross unrealized depreciation.................... (610,463)
-----------
Net unrealized appreciation................ $ 2,933,563
===========
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE> 7
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES AT MARCH 31, 1997
- ------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments in securities, at value (identified cost $13,590,372) (Note 2-A) ..... $16,523,935
Cash................................................................................. 815
Dividends and interest receivable ................................................... 43,611
Deferred organization costs (Note 2-E)............................................... 11,683
Prepaid expenses..................................................................... 1,801
-----------
Total assets ................................................................ 16,581,845
-----------
LIABILITIES
Payables:
Advisory fee..................................................................... 12,242
Administration fee............................................................... 2,081
Accrued expenses .................................................................... 17,580
-----------
Total liabilities............................................................ 31,903
-----------
NET ASSETS............................................................................... $16,549,942
===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($16,549,942/1,284,546 shares outstanding;
unlimited number of shares authorized without par value) $ 12.88
===========
COMPONENTS OF NET ASSETS
Paid-in capital ..................................................................... $13,145,613
Undistributed net investment income.................................................. 22,387
Undistributed net realized gain on investments....................................... 448,379
Net unrealized appreciation on investments........................................... 2,933,563
-----------
Net assets ...................................................................... $16,549,942
===========
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE> 8
THE
OSTERWEIS
FUND
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED MARCH 31, 1997
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Income
Interest .............................................. ......... $ 167,223
Dividends.............................................. ......... 230,875
Other.................................................. ......... 15,347
-----------
Total income ...................................... ......... 413,445
-----------
Expenses
Advisory fees (Note 3-A) .............................. ......... 179,929
Administration fees (Note 3-B)......................... ......... 34,149
Custodian and accounting fees.......................... ......... 24,105
Audit fees............................................. ......... 20,957
Transfer agent fees.................................... ......... 9,347
Amortization of organization costs (Note 2-E).......... ......... 7,753
Registration fees...................................... ......... 7,538
Legal fees............................................. ......... 5,576
Reports to shareholders................................ ......... 5,316
Miscellaneous fees..................................... ......... 3,440
Trustees' fees......................................... ......... 3,001
Insurance fees......................................... ......... 2,362
-----------
Total expenses..................................... ......... 303,473
-----------
NET INVESTMENT INCOME ....................... ......... 109,972
-----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions .............. ......... 576,542
Net change in unrealized appreciation on investments ...... ......... 1,224,750
-----------
Net realized and unrealized gain on investments ... ......... 1,801,292
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .... $ 1,911,264
===========
</TABLE>
See accompanying Notes to Financial Statements.
8
<PAGE> 9
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------
Year Ended Year Ended
March 31, 1997 March 31, 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
(DECREASE) INCREASE IN NET ASSETS FROM:
OPERATIONS
Net investment income .......................................... $ 109,972 $ 223,664
Net realized gain from security transactions ................... 576,542 148,463
Net change in unrealized appreciation on investments ........... 1,224,750 1,660,534
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . 1,911,264 2,032,661
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Net investment income .......................................... (113,260) (279,118)
Net realized gain from security transactions ................... (188,621) -0-
------------ ------------
TOTAL DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS .... (301,881) (279,118)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Net (decrease) increase in net assets derived from net change in
outstanding shares (a) ...................................... (1,943,533) 5,348,303
------------ ------------
TOTAL (DECREASE) INCREASE IN NET ASSETS .............. (334,150) 7,101,846
NET ASSETS
Beginning of year .............................................. 16,884,092 9,782,246
------------ ------------
END OF YEAR (including undistributed net investment income
of $22,387 and $25,675, respectively) ............... $ 16,549,942 $ 16,884,092
============ ============
</TABLE>
(a) A summary of capital shares transactions is as follows:
<TABLE>
<CAPTION>
Year Ended Year Ended
March 31, 1997 March 31, 1996
------------------------------- -------------------------------
Shares Value Shares Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Shares sold ........................................ 329,346 $ 4,104,926 709,552 $ 7,794,336
Shares reissued in reinvestment of distribution .... 24,407 297,077 24,121 271,115
Shares redeemed .................................... (507,580) (6,345,536) (241,996) (2,717,148)
----------- ----------- ----------- -----------
Net (decrease) increase ............................ (153,827) $(1,943,533) 491,677 $ 5,348,303
=========== =========== =========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
9
<PAGE> 10
THE
OSTERWEIS
FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
FOR A CAPITAL SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- ------------------------------------------------------------------------------------------------------------------------
Year Year Year October 1, 1993*
Ended Ended Ended through
March 31, 1997 March 31, 1996 March 31, 1995 March 31, 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........ $ 11.74 $ 10.33 $ 10.28 $ 10.00
Income from investment operations:
Net investment income ............. .08 .12 .28 .08
Net realized and unrealized gain on
investments ............. 1.27 1.48 .11 .22
-------- -------- -------- --------
Total from investment operations ............ 1.35 1.60 .39 .30
-------- -------- -------- --------
Less distributions:
From net investment income ........ (.08) (.19) (.25) (.02)
From net capital gains ............ (.13) -0- (.09) -0-
-------- -------- -------- --------
Total distributions ......................... (.21) (.19) (.34) (.02)
-------- -------- -------- --------
Net asset value, end of period .............. $ 12.88 $ 11.74 $ 10.33 $ 10.28
======== ======== ======== ========
Total return ................................ 11.60% 15.59% 3.91% 6.29%+
Ratios/supplemental data:
Net assets, end of period (millions) ........ $ 16.5 $ 16.9 $ 9.8 $ 5.1
Ratio of expenses to average net assets:
Before expense reimbursement ...... 1.75% 1.77% 2.32% 3.73%+
After expense reimbursement ....... 1.75% 1.75% 1.74% 1.75%+
Ratio of net investment income to average
net assets:
Before expense reimbursement ...... 0.63% 1.47% 2.74% 0.42%+
After expense reimbursement ....... 0.63% 1.49% 3.32% 2.40%+
Portfolio turnover rate ..................... 41.30% 57.32% 28.65% 34.97%
Average commission rate paid per share++ .... $ .0551 -- -- --
</TABLE>
- ----------
*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. This amount may vary from period to period and
fund to fund depending on the mix of trades executed in various markets where
trading practices and commission rate structures may differ.
See accompanying Notes to Financial Statements.
10
<PAGE> 11
THE
OSTERWEIS
FUND
NOTES TO FINANCIAL STATEMENTS AT MARCH 31, 1997
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Osterweis Fund (the "Fund") is a 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 management investment company. The Fund began operations on October 1,
1993. The investment objective of the Fund is to attain long-term total returns.
The Fund seeks to achieve its objective by investing primarily in equity
securities.
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. The Fund's investments are carried at
market value. Securities listed on an exchange or quoted on a
National Market System are valued at the last sale price.
Other securities are valued at the last quoted bid price.
Securities for which market quotations are not readily
available, if any, traded on an exchange or NASDAQ for which
there have been no sales and other over-the-counter securities
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, Dividends and Distributions. As is
common in the industry, security transactions are accounted
for on the trade date. The cost securities owned on realized
transactions are relieved on a first-in, first-out basis.
Dividend income and distributions to shareholders are recorded
on the ex-dividend date.
D. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect amounts reported in the financial statements and
accompanying notes. Actual results could differ from those
estimates.
E. Deferred Organization Costs. The Fund has incurred expenses of
$38,764 in connection with the organization of the Fund. These
costs have been deferred and are being amortized on a straight
line basis over a period of sixty months from the date the
Fund commenced investment operations. In the event that any of
the initial shares of the Fund are redeemed during the
amortization period by any holder thereof, the redemption
proceeds will be reduced by any unamortized organization
expenses in the same proportion as the number of said shares
being redeemed bears to the number of initial shares that are
outstanding at the time of redemption.
11
<PAGE> 12
THE
OSTERWEIS
FUND
NOTES TO FINANCIAL STATEMENTS AT, CONTINUED
- --------------------------------------------------------------------------------
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
The Trust, on behalf of the Fund, has approved an Advisory Agreement
with Osterweis Capital Management, Inc. (the "Advisor"). The Advisor agrees to
furnish all investment advice, office space, facilities, and most personnel
needed by the Fund. Advisory fees are computed daily and paid monthly by the
Fund at the annualized rate of 1.00% of the Fund's average daily net assets. For
the year ended March 31, 1997, the Fund incurred $179,929 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 1.75% of average daily
net assets annually. Any such reductions made by the Advisor in its fees or
payments or reimbursement of expenses which are the Fund's obligation may be
subject to reimbursement by the Fund within the following three years, provided
the Fund is able to effect such reimbursement and remain in compliance with any
applicable laws. As of March 31, 1997, such contingent amounts reimbursable to
the Advisor totaled $47,659.
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:
<TABLE>
<S> <C>
Under $15 million $30,000
$15 to $50 million 0.20% of average net assets
$50 to $100 million 0.15% of average net assets
$100 to $150 million 0.10% of average net assets
Over $150 million 0.05% of average net assets
</TABLE>
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 Trust are also officers and/or
directors of the Administrator and Distributor. As of March 31, 1997, the Fund
shares owned by the Fund's Advisor and its affiliates totalled 146,017 shares,
out of 1,284,546.
NOTE 4 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of securities, other
than U.S. Government obligations and short-term investments, for the year ended
March 31, 1997 were $7,259,772 and $10,270,873, respectively.
12
<PAGE> 13
THE
OSTERWEIS
FUND
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
THE OSTERWEIS FUND and
THE BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
We have audited the accompanying statement of assets and liabilities of
The Osterweis Fund (the Fund), a series of Professionally Managed Portfolios,
including the schedule of investments, as of March 31, 1997, and the related
statement of operations for the year then ended and the statement of changes in
net assets and the financial highlights for each of the two years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The financial highlights for the year ended March 31, 1995 and for the
period from October 1, 1993 (commencement of operations) through March 31, 1994
were audited by other auditors whose report dated May 16, 1995 expressed an
unqualified opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1997, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the 1997 and 1996 financial statements and financial
highlights referred to above present fairly, in all material respects, the
financial position of The Osterweis Fund as of March 31, 1997, the results of
its operations for the year then ended, and the changes in its net assets and
the financial highlights for each of the two years in the period then ended, in
conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Los Angeles, California
May 9, 1997
13
<PAGE> 14
ADVISOR
Osterweis Capital Management, Inc.
One Maritime Plaza, Suite 1201
San Francisco, California 94111
===================
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
2nd Floor
Huntington, New York 11743
===================
INDEPENDENT AUDITORS
Ernst & Young LLP
515 South Flower Street, 24th Floor
Los Angeles, California 90071
===================
LEGAL COUNSEL
Heller, Ehrman, White & McAuliffe
333 Bush Street
San Francisco, California 94104
This report is intended for shareholders of the Fund and may not be used as
sales literature unless preceded or accompanied by a current prospectus.
Past performance results shown in this report should not be considered a
representation of future performance. Share price and returns will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
Statements and other information herein are dated and are subject to change.
THE
OSTERWEIS
FUND
ANNUAL REPORT
MARCH 31, 1997
