July 8, 1998
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
Annual Report to shareholders of the Pzena Focused Value Fund series of the
Registrant for the year ended April, 30 1998.
If you have any questions, please contact me at (602) 952-1100.
Sincerely yours,
/s/
Robert H. Wadsworth
<PAGE>
PZENA FOCUSED VALUE FUND
Annual Report
For the Year Ended
April 30, 1998
<PAGE>
PZENA FOCUSED VALUE FUND
May, 1998
Dear Shareholders:
It is my pleasure to present you with our 1998 Annual Report. As of April 30,
the Fund gained 13.6% calendar year-to-date, 35.1% for the twelve month period
ended, and 27.4% average annualized since inception (June 24, 1996). 1
As the media has so eloquently proclaimed, the performance of the U.S. stock
market during this long bull market is unprecedented. Thus, as investors we all
look ahead and ask the same basic questions:
o Has the market gone crazy?
o Are there any investment opportunities still available at
reasonable prices?
o Why not simply buy an index fund?
Let's consider these questions in order. No, the market has not really "gone
crazy." Rather, it has reacted reasonably to years of declining interest rates
and rising corporate profits. Yes, even in this very high market, there are
stocks available at attractive prices. As is almost always the case, low price
is caused by current turmoil. That is undoubtedly true for our recent purchases
in both the commodity and technology related businesses. Industry turmoil
exacerbated by problems in Asia has created some attractive values. The key
issue is to judge whether the problems are temporary or permanent.
The overriding investment concern for the market, however, is what happens when
the favorable conditions of the last few years reverse. The biggest
beneficiaries have been large growth stocks which are represented heavily in the
Dow Jones and S&P 500 indices. These are likely to be the casualties,
particularly if the economic boom ends in a classic interest rate rise followed
by declining corporate earnings. While valuations of the indices have climbed
sharply, we have managed to create a portfolio with much more attractive
valuation characteristics without sacrificing on company quality. Consider the
following:
<TABLE>
As of March 31, 1998 Pzena S&P500
<S> <C> <C>
Price-to-Book-Value 1.9x 4.4x
Price-to-Earnings 15x 22x
5-Year Historical Sales Growth 15% 13%
</TABLE>
Thus, while the period ahead may not offer returns as high as we have all
enjoyed over the past several years, we are confident that our classic value
approach will be a winning strategy. Thank you again for your trust in us and
look forward to continued investment success.
Sincerely,
/s/
Richard S. Pzena
1 The average annual total return for the year ended March 31, 1998, and
from inception through March 31, 1998 was 36.67% and 28.06%, respectively.
<PAGE>
PZENA FOCUSED VALUE FUND
Pzena Focused Value Fund
Value of $10,000 vs S&P Barra / 500 Value Index
Average Annual Total Return
Period Ended April 30, 1998
1 Year.....................35.10%
Since Inception (6/24/96)..27.43%
Qtr Fund Adj Fund Adj Barra
6/24/96 1000.00 10,000
6/30/96 991.00 9,910 10,000
9/30/96 999.00 9,990 10,264
12/31/96 1,106.70 11,067 11,236
3/31/97 1,132.76 11,328 11,434
6/30/97 1,272.10 12,721 13,089
9/30/97 1,421.47 14,215 14,289
12/31/97 1,378.59 13,786 14,606
3/31/98 1,548.20 15,482 16,293
4/30/98 1,565.59 15,656 16,486
Past performance is not predictive of future performance.
The S&P Barra/500 Value Index is a capitalization-weighted index of all the
stocks in the Standard & Poor's 500 that have low price-to-book ratios. The
index is unmanaged and returns include reinvested dividends.
The S&P 500 Index (dividends reinvested) has been removed from the above chart,
and is being replaced by the S&P Barra/500 Value Index. The S&P Barra/500 Value
Index more appropriately reflects our value investment style. As a broad market
reference, the total return for the S&P 500 Index over the time period shown was
69.7%.
<PAGE>
PZENA FOCUSED VALUE FUND
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS at April 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
Shares COMMON STOCKS: 96.5% Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Banks - Money Center: 0.4%
<S> <C> <C>
325 Bankers Trust Corp...................................................... $ 41,966
--------
Banks - Regional: 2.9%
11,425 Pacific Century Financial Corp.......................................... 282,055
-------
Building Materials: 4.4%
5,400 Owens Corning........................................................... 224,438
3,835 USG Corp.*.............................................................. 197,023
-------
421,461
-------
Chemicals: 5.0%
5,925 Lyondell Petrochemical Company.......................................... 194,784
5,875 Union Carbide Corp...................................................... 284,938
-------
479,722
-------
Chemicals - Diversified: 1.6%
2,025 FMC Corp.*.............................................................. 157,064
-------
Communications Equipment: 3.7%
17,725 Anixter International, Inc.*............................................ 353,392
-------
Computers - Peripherals: 4.3%
17,750 Quantum Corp.*.......................................................... 417,125
-------
Distributors - Health Food: 3.0%
15,625 Fleming Companies, Inc.................................................. 292,969
-------
Electronics - Component Distributors: 5.7%
4,750 Avnet, Inc.............................................................. 293,016
7,875 UCAR International, Inc.*............................................... 255,937
-------
548,953
-------
Electronics - Semiconductors: 1.3%
10,525 Integrated Device Technology, Inc.*..................................... 126,958
-------
<PAGE>
PZENA FOCUSED VALUE FUND
SCHEDULE OF INVESTMENTS at April 30, 1998, Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Engineering and Construction: 1.8%
3,775 Fluor Corp.............................................................. $ 178,369
---------
Equipment - Semiconductors: 0.8%
2,625 Lam Research Corp.*..................................................... 81,375
------
Foods: 2.5%
8,580 RJR Nabisco Holdings Corp............................................... 238,631
-------
Health Care - Long Term: 2.6%
16,250 Beverly Enterprises, Inc.*.............................................. 255,937
-------
Health Care - Managed Care: 5.3%
2,125 Aetna, Inc.............................................................. 171,727
7,150 Foundation Health Systems, Inc.*........................................ 206,903
1,900 PacifiCare Health Systems, Inc.*........................................ 133,475
-------
512,105
-------
Health Care - Medical Products/Supplies: 4.5%
22,775 Quest Diagnostics, Inc.*................................................ 438,419
-------
Insurance - Multi-Line: 2.5%
1,175 CIGNA Corp.............................................................. 243,152
-------
Insurance - Property and Casualty: 6.5%
1,375 CNA Financial Corp.*.................................................... 203,414
4,950 St. Paul Companies, Inc................................................. 419,549
-------
622,963
-------
Leisure Time - Products: 2.7%
7,250 Polaris Industries, Inc................................................. 258,281
-------
Machinery - Diversified: 2.4%
9,300 Coltec Industries, Inc.*................................................ 232,500
-------
Medical - Hospitals: 4.1%
12,000 Columbia/HCA Healthcare Corp............................................ 395,250
-------
<PAGE>
PZENA FOCUSED VALUE FUND
SCHEDULE OF INVESTMENTS at April 30, 1998, Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Market Value
- ------------------------------------------------------------------------------------------------------------------------------------
Steel Specialty: 1.0%
12,375 J&L Specialty Steel, Inc................................................ $ 100,547
---------
Textiles - Apparel: 4.0%
7,740 Fruit of the Loom, Inc., Class A*....................................... 289,282
1,800 VF Corp................................................................. 93,600
------
382,882
-------
Textiles - Specialty: 4.9%
26,830 Burlington Industries, Inc.*............................................ 469,525
-------
Tobacco: 2.5%
6,350 Philip Morris Companies, Inc............................................ 236,934
-------
Transportation - Air Freight: 1.2%
1,735 FDX Corp.*.............................................................. 117,980
-------
Transportation - Airlines: 3.7%
3,065 Delta Air Lines, Inc.................................................... 356,306
-------
Transportation - Railroads: 3.0%
3,505 Canadian Pacific, Ltd................................................... 103,178
3,350 Union Pacific Corp...................................................... 183,413
-------
286,591
-------
Utilities - Electric Companies: 7.6%
5,550 Nevada Power Company.................................................... 136,322
12,500 Northeast Utilities*.................................................... 176,563
1,750 Puget Sound Energy, Inc................................................. 46,047
10,750 Unicom Corp............................................................. 373,562
-------
732,494
-------
Waste Management: 0.6%
7,000 Waste Management International PLC, ADR*................................ 56,437
------
Total Common Stocks (cost $7,957,336)................................... 9,318,343
---------
<PAGE>
PZENA FOCUSED VALUE FUND
SCHEDULE OF INVESTMENTS at April 30, 1998, Continued
- ------------------------------------------------------------------------------------------------------------------------------------
Market Value
Principal Amount REPURCHASE AGREEMENT: 3.9%
- ------------------------------------------------------------------------------------------------------------------------------------
$374,000 Star Bank Repurchase Agreement, 4.80%, dated 4/30/1998,
due 5/1/1998, collateralized by $375,000 GNMA, 7.375%,
due 5/20/2024, (proceeds $374,050) (cost $374,000)...................... $ 374,000
---------
Total Investments in Securities (cost $8,331,336+): 100.4% ............. 9,692,343
Liabilities in excess of Other Assets: (0.4)%........................... (37,949)
-------
Total Net Assets: 100.0% ............................................... $9,654,394
==========
<FN>
*Non-income producing security.
+ At April 30, 1998, the cost of securities for Federal tax purposes was
$8,333,781. Unrealized appreciation and depreciation of securities were as
follows:
Gross unrealized appreciation........................................... $1,507,711
Gross unrealized depreciation........................................... (149,149)
--------
Net unrealized appreciation................................... $1,358,562
==========
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PZENA FOCUSED VALUE FUND
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES at April 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (cost $8,331,336).................................. $9,692,343
Cash................................................................................... 944
Receivables:
Securities sold.................................................................. 146,979
Fund shares sold................................................................. 887
Dividends and interest .......................................................... 10,111
Deferred organization costs ........................................................... 22,060
Prepaid expenses....................................................................... 5,709
-----
Total assets .............................................................. 9,879,033
---------
LIABILITIES
Payables:
Advisory fees.................................................................... 5,342
Administration fee............................................................... 2,692
Securities purchased............................................................. 168,564
Deferred organization costs...................................................... 33,219
Accrued expenses....................................................................... 14,822
------
Total liabilities.......................................................... 224,639
-------
NET ASSETS $9,654,394
==========
Net asset value, offering and redemption price per share
($9,654,394/670,352 shares outstanding;
unlimited number of shares authorized without par value) ........................ $14.40
======
COMPONENTS OF NET ASSETS
Paid-in capital ....................................................................... $7,963,087
Undistributed net realized gain on investments......................................... 330,300
Net unrealized appreciation on investments............................................. 1,361,007
---------
Net assets ...................................................................... $9,654,394
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PZENA FOCUSED VALUE FUND
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS - For the Year Ended April 30, 1998
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Income
<S> <C>
Dividends........................................................................ $ 81,223
Interest......................................................................... 15,187
------
Total income............................................................... 96,410
------
Expenses
Advisory fees.................................................................... 83,738
Administration fee............................................................... 30,000
Fund accounting fees............................................................. 13,023
Audit fee........................................................................ 11,117
Transfer agent fees.............................................................. 10,607
Custody fees..................................................................... 7,856
Amortization of deferred organization costs...................................... 6,997
Trustee fees..................................................................... 4,174
Miscellaneous.................................................................... 3,668
Legal fees....................................................................... 3,300
Reports to shareholders.......................................................... 3,072
Registration fees................................................................ 3,004
Insurance........................................................................ 391
---
Total expenses............................................................. 180,947
Less: expenses waived and reimbursed....................................... (63,814)
-------
Net expenses............................................................... 117,133
-------
Net investment loss ................................................. (20,723)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions..................................... 801,510
Net change in unrealized appreciation on investments............................. 1,090,800
---------
Net realized and unrealized gain on investments............................ 1,892,310
---------
Net increase in net assets resulting from operations ................ $1,871,587
==========
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PZENA FOCUSED VALUE FUND
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------------
Year June 24, 1996*
Ended through
April 30, 1998 April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS FROM:
OPERATIONS
<S> <C> <C>
Net investment loss.................................................... $ (20,723) $ (1,578)
Net realized gain from security transactions........................... 801,510 72,267
Net change in unrealized appreciation on investments................... 1,090,800 270,207
--------- -------
Net increase in net assets resulting from operations ............ 1,871,587 340,896
--------- -------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income.................................................. -0- (1,000)
Net realized gain on investments....................................... (515,429) (4,747)
-------- ------
Total distributions to shareholders ............................. (515,429) (5,747)
-------- ------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net change in
outstanding shares (a).............................................. 4,441,553 3,521,534
--------- ---------
Total increase in net assets .................................... 5,797,711 3,856,683
NET ASSETS
Beginning of period.................................................... 3,856,683 -0-
--------- -
End of period ......................................................... $9,654,394 $3,856,683
========== ==========
<FN>
(a) A summary of capital shares transactions is as follows:
Year June 24, 1996*
Ended through
April 30, 1998 April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
Shares Value Shares Value
- ------------------------------------------------------------------------------------------------------------------------------------
Shares sold............................. 347,998 $4,631,975 340,987 $3,605,818
Shares issued in reinvestment
of distribution...................... 39,637 496,658 497 5,483
Shares redeemed......................... (50,885) (687,080) (7,882) (89,767)
------- -------- ------ -------
Net increase............................ 336,750 $4,441,553 333,602 $3,521,534
======= ========== ======= ==========
*Commencement of operations.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PZENA FOCUSED VALUE FUND
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
For a capital share outstanding throughout each period
- ------------------------------------------------------------------------------------------------------------------------------------
Year June 24, 1996*
Ended through
April 30, 1998 April 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period................................... $11.56 $10.00
------ ------
Income from investment operations:
Net investment (loss) income..................................... (0.03) 0.00
Net realized and unrealized gain on investments.................. 3.93 1.59
---- ----
Total from investment operations....................................... 3.90 1.59
---- ----
Less distributions:
From net investment income....................................... 0.00 (0.01)
From net capital gains........................................... (1.06) (0.02)
----- -----
Total distributions.................................................... (1.06) (0.03)
----- -----
Net asset value, end of period......................................... $14.40 $11.56
====== ======
Total return........................................................... 35.10% 15.88%
Ratios/supplemental data:
Net assets, end of period (millions)................................... $ 9.7 $ 3.9
Ratio of expenses to average net assets:
Before expense reimbursement and waiver.......................... 2.69% 5.82%+
After expense reimbursement and waiver........................... 1.75% 1.75%+
Ratio of net investment loss to average net assets:
Before expense reimbursement and waiver.......................... (1.26)% (4.16)%+
After expense reimbursement and waiver........................... (0.32)% (0.09)%+
Portfolio turnover rate................................................ 53.95% 22.06%
Average commission rate paid per share................................. $.0597 $.0598
<FN>
*Commencement of operations.
+Annualized.
</FN>
</TABLE>
See accompanying Notes to Financial Statements.
<PAGE>
PZENA FOCUSED VALUE FUND
NOTES TO FINANCIAL STATEMENTS at April 30, 1998
- --------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Pzena Focused Value 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 management investment company. The Fund began
operations on June 24, 1996. The investment objective of the Fund is to seek
long-term growth of capital.
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 have been no sales,
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. The cost of securities owned on realized
transactions is relieved on a first-in, first-out basis. Dividend
income and distributions to shareholders are recorded on the
ex-dividend date.
D. Deferred Organization Costs. 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 on a
straight-line basis over a period of five years.
E. Use of Estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the
financial statements. Actual results could differ from those
estimates.
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS
For the year ended April 30, 1998, Pzena Investment Management, LLC (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 of the personnel needed by the Fund. As
compensation for its services,
<PAGE>
NOTES TO FINANCIAL STATEMENTS, Continued
the Advisor was entitled to a monthly fee at the annual rate of 1.25% based upon
the average daily net assets of the Fund. For the year ended April 30, 1998, the
Fund incurred $83,738 in Advisory fees.
The Fund is responsible for its own operating expenses. The Advisor has
agreed to limit the Fund's total expenses to not more than 1.75% of average net
assets. Any such reductions made by the Advisor in its fees or payments or
reimbursement of expenses which are the Fund's obligation are subject to
reimbursement by the Fund within three years, provided the Fund is able to
effect such reimbursement and remain in compliance with any expense limitations
then in effect. For the year ended April 30, 1998, the Advisor reimbursed the
Fund in the total amount of $63,814.
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 an annual fee at
the following rate:
Under $15 million - $30,000
$15 to $50 million - 0.20% of average daily net assets
$50 to $100 million - 0.15% of average daily net assets
$100 to $150 million - 0.10% of average daily net assets
Over $150 million - 0.05% of average daily net assets
For the year ended April 30, 1998, the Fund incurred $30,000 in
Administration fees.
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 the Distributor.
NOTE 4 - PURCHASES AND SALES OF SECURITES
The cost of purchases and the proceeds from the sale of securities, other
than short-term investments, for the year ended April 30, 1998, were $7,155,968
and $3,453,049, respectively.
<PAGE>
PZENA FOCUSED VALUE FUND
NOTES TO FINANCIAL STATEMENTS, Continued
NOTE 5 - YEAR 2000 ISSUE (Unaudited)
Like other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems it uses, and those used by the Fund's brokers and other major
service providers, do not properly process and calculate date-related
information and data from and after January 1, 2000. This is commonly known as
the "Year 2000 issue." Management is assessing its computer systems and the
systems compliance issues of its brokers and major service providers. Based on
information available to management, the Fund's brokers and major service
providers are taking steps that they believe are reasonably designed to address
the Year 2000 issue with respect to computer systems that they use. At this
time, however, there can be no assurance that these steps will be sufficient,
and the failure of a timely completion of all necessary procedures could have a
material adverse effect on the Fund's operations. Management will continue to
monitor the status of and its exposure to, this issue.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
TO THE SHAREHOLDERS OF
PZENA FOCUSED VALUE FUND and
THE BOARD OF TRUSTEES OF
PROFESSIONALLY MANAGED PORTFOLIOS
We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Pzena Focused Value Fund (a series of
Professionally Managed Portfolios) as of April 30, 1998, and the related
statement of operations, the statement of changes in net assets and the
financial highlights for the year then ended and for the period June 24, 1996
(commencement of operations) to April 30, 1997. 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.
We conducted our audit 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 April
30, 1998, 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Pzena Focused Value Fund as of April 30, 1998, the results of its operations,
the changes in its net assets and the financial highlights for the year then
ended and for the period June 24, 1996 (commencement of operations) to April 30,
1997, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
May 29, 1998
<PAGE>
Advisor
Pzena Investment Management, LLC
830 Third Avenue
14th Floor
New York, NY 10022
Distributor
First Fund Distributors, Inc.
4455 E. Camelback Road
Suite 261E
Phoenix, AZ 85018
Custodian
Star Bank, N.A.
425 Walnut Street
Cincinnati, OH 45202
Shareholder Service and Transfer Agent
American Data Services, Inc.
P.O. Box 5536
Hauppauge, NY 11788
Independent Auditors
Tait, Weller, & Baker
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
Counsel to the Fund
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 29th Floor
San Francisco, CA 94104
Counsel to the Advisor
Lane Altman & Owens
101 Federal Street
Boston, MA 02110
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.
