[LOGO]
TITAN FINANCIAL SERVICES FUND
TITAN GROWTH FUND
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SEMI-ANNUAL REPORT
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For the Six Months Ended
October 31, 2000
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[LOGO]
TITAN INVESTMENT
ADVISORS, LLC
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TITAN FINANCIAL SERVICES FUND
TITAN GROWTH FUND
9672 Pennsylvania Avenue * Upper Marlboro, Maryland 20772
Telephone: 301-599-7528 * 1-888-448-4826
Gilbert R. Giordano, President
November 10, 2000
RE: Semi-Annual Report Relative to the Six Months Ending October 31, 2000
Dear Shareholders:
Our Financial Services Fund enjoyed excellent performance during the last six
months. On October 31, 2000 it closed at $21.24. The abatement of interest rate
worries coupled with mergers of several of our larger holdings among the
brokerages, along with strong earnings of our insurance companies and smaller
regional banks have provided us with the catalyst that enabled the Fund to be up
23.56% during the six months ended October 31, 2000. In fact, from its opening
on May 22, 1996 through October 31, 2000. Titan Financial's average annual total
return was 22.20% as compared with 20.06% for the S&P 500. We are pleased with
the article that appeared in the New York Times on October 8, 2000. In a picture
that appeared in the article, my dog Titan is more photogenic than your
Portfolio Manager. The Financial Editor thought it somewhat unusual that the
Fund and my dog shared the name Titan, and desired to have both of us
photographed together. I hope both will live up to this significant name.
On a more serious note, I desire to give you my outlook for the balance of this
year, as well as the first quarter of next year. I believe that the Federal
Reserve has sufficiently slowed this economy down and I do not foresee any
additional increases in the interest rates. In fact, we may be fortunate enough
to see a reduction of interest rates during the first quarter of next year. This
certainly will help our banking sector. In addition, our investments in
insurance companies have been very successful, and we maintain strong holdings
in both casualty and life insurance companies. Although we have enjoyed three
major mergers among the brokerages, we still feel that there are one or two
mergers left in the near future. We still retain very strong positions in Bear
Stearns, A.G. Edwards, and to a lesser degree Raymond James Financial. We
believe the financials are the place to be, and we maintain our position of over
90% in the financial sectors.
On the other hand, we have had a very difficult time over the last six months in
the Titan Growth Fund. We unfortunately began the Fund at the beginning of what
has been a virtual bear market in the NASDAQ. Being overweighted in high-techs,
we suffered substantially in the second and third quarters of this year.
However, by moderating our position and having almost an equal weight between
the old world growth stocks and the new world growth stocks, we have been able
to benefit from the balance. During the past several weeks, we have been
outperforming the S&P. We have taken strong positions in such oversold stocks as
1
<PAGE>
Alcoa, General Motors, Hughes Electronics, IBM, GE, and many other similar
quality growth stocks. In addition, during the past few months we have taken
positions in stocks that have been bludgeoned and reduced to an oversold
position by relatively minor shortcomings. Accordingly, we have taken additional
positions in Home Depot and Wal-Mart, as well as new positions in Apollo,
Applied Materials, Advanced Micro, World Com, and Motorola. Moreover, we have
increased our position in pharmaceutical companies, such as Schering-Plough,
Bristol-Myers, and Mylan Laboratories, along with positions in natural gas
stocks that we believe will enjoy additional appreciation over the next year,
particularly if we have a cold winter.
Although our Fund closed at $8.28 on October 31, we believe that we are
positioned to enjoy a strong comeback during what we believe to be the finale of
a very powerful bear market in the NASDAQ and particularly the high-techs. We
continue to maintain a position of balance between growth stocks in the old
world economy as well as the new world economy. Additionally, we will seek
investments in "fallen angels" that have been bludgeoned and with patience will
hopefully produce excellent results.
Again, I thank you for your loyalty, and I certainly hope that you will consider
increasing your position in the Financial Services Fund, and take advantage of
the great opportunity of investing in the Growth Fund, after a virtual bear
market in the NASDAQ and profound correction in the S&P.
Very truly yours,
Gilbert R. Giordano
President
The Titan Financial Services Fund commenced operation on May 22, 1996. The
Fund's total return for the one year ended October 31, 2000 was 26.20% and
average annual return since inception on May 22, 1996 was 22.20%. The Titan
Growth Fund commenced operation on April 4, 2000. The Fund's cumulative total
return from April 4, 2000 through October 31, 2000 was -17.20%. PAST PERFORMANCE
IS NOT A GUARANTEE 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 the original cost.
2
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TITAN FINANCIAL SERVICES FUND
SCHEDULE OF INVESTMENTS at October 31, 2000 (Unaudited)
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SHARES VALUE
------- -----------
COMMON STOCKS: 100.0%
BANKS: 27.7%
2,000 Astoria Financial Corp $ 75,000
9,000 Bank Of America Corp. 432,563
3,333 Banco Bilbao Vizcaya ADR 45,412
4,500 Bank of New York Co., Inc. 259,031
3,500 Banc One Corp. 127,750
11,000 BB&T Corp. 350,625
2,000 Canadian Imperial Bank of Commerce 63,500
2,200 Cathay BanCorp, Inc. 108,487
9,500 Chase Manhattan Corp. 432,250
8,500 Comerica, Inc. 512,656
12,400 First Regional BanCorp* 89,900
4,000 First Tennessee National Corp. 92,000
2,000 Firstar Corp. 39,375
23,500 FleetBoston Financial Corp. 893,000
16,000 Hibernia Corp. - Class A 191,000
3,592 Hudson United BanCorp. 80,371
7,000 Imperial BanCorp.* 170,187
2,000 ITLA Capital Corp. 29,125
9,000 KeyCorp 222,187
10,500 Mellon Bank Corp. 506,625
10,000 North Fork BanCorp., Inc. 201,875
19,000 Patriot National Bank, Inc. 153,187
9,000 PNC Bank Corp. 601,875
11,453 PSB BanCorp., Inc. 47,244
3,400 Redwood Empire BanCorp. 74,800
11,000 Southtrust Corp. 356,125
9,000 Summit BanCorp. 337,500
2,000 Summit Bancshares, Inc. 35,500
2,000 TCF Financial Corp. 80,875
2,600 Texas Regional Banchares, Inc. 77,675
1,500 Three Rivers BanCorp. 11,812
8,000 Toronto-Dominion Bank 220,500
5,000 Uniao de Bancos Brasileiros SA (Unibanco), GDR 126,250
12,000 Union Bankshares Ltd.* 141,000
11,000 Union Planters Corp. 371,937
1,000 UnionBanCal Corp. 21,000
11,500 US BANCORP, Inc. 278,156
12,905 Wells Fargo & Co. 597,663
1,000 Zions Bancorporation 57,437
-----------
8,513,455
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BIOTECHNOLOGY: 1.1%
8,500 CryoLife, Inc.* 338,406
-----------
BROKERAGE SERVICES: 41.7%
14,600 Ameritrade Holding Corp. - Class A* 213,525
2,000 Associates First Capital Corp. - Class A 74,250
24,200 Bear Stearns Companies* 1,467,125
6,000 Blackrock, Inc. 255,750
11,000 Charles Schwab Corp. 386,375
23,833 Citigroup, Inc. 1,254,212
21,500 Donaldson, Lufkin & Jenrette, Inc. 1,930,969
3,000 Donaldson, Lufkin & Jenrette, Inc. 15,188
15,500 Edwards (A.G.), Inc. 786,625
6,500 E*TRADE Group, Inc.* 94,656
4,000 Franklin Resources, Inc. 171,360
5,000 Household International, Inc. 251,563
9,466 Legg Mason, Inc. (a) 491,640
23,200 Lehman Brothers Holdings, Inc. (a) 1,496,400
10,500 Merrill Lynch & Co., Inc. 735,000
2,000 Morgan Keegan, Inc. 39,875
11,600 Morgan Stanley Dean Witter & Co. (a) 931,625
4,000 National Discount Brokers Group, Inc. 194,750
15,450 Paine Webber Group, Inc. 1,100,812
9,000 Raymond James Financial, Inc. 304,312
8,000 Southwest Securities Group, Inc. 226,000
13,000 TD Waterhouse Group, Inc. 215,313
3,000 T. Rowe Price Associates, Inc. 140,438
3,000 Tucker Anthony Sutro Corp. 69,375
-----------
12,847,138
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BUILDING AND CONSTRUCTION: 0.1%
2,180 D.R. Horton, Inc. 40,330
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COMMERCIAL BANKS: 0.1%
2,000 Banknorth Group, Inc. 36,250
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3
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TITAN FINANCIAL SERVICES FUND
SCHEDULE OF INVESTMENTS at October 31, 2000 (Unaudited) - (Continued)
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SHARES VALUE
------- -----------
COMPUTERS - SERVICES: 0.2%
3,000 Ceridian Corp.* $ 75,000
-----------
COMPUTER SOFTWARE: 0.7%
4,500 First Data Corp. 225,562
-----------
DISTRIBUTION/WHOLESALE: 0.2%
3,000 Advanced Marketing Services, Inc. 54,000
-----------
ELECTRIC PRODUCTS: 0.1%
2,000 American Power Conversion* 25,875
-----------
ENERGY: 0.4%
1,820 Anadarko Petroleum Corp. 116,571
-----------
FINANCE: 0.1%
2,000 Doral Financial Group 35,750
-----------
FINANCIAL: 0.3%
5,000 Westcorp, Inc. 77,500
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FINANCIAL GUARANTEE INSURANCE: 0.6%
2,500 MGIC Investment Corp. 170,313
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FINANCIAL SERVICES: 4.9%
10,000 Advest Group, Inc. 323,750
2,500 Allmerica Financial Corp. 157,656
3,000 American Express Co. 180,000
1,500 Federated Investors, Inc. - Class B 43,688
3,000 Heller Financial, Inc. 87,750
3,000 Jefferies Group, Inc. 81,750
6,000 Knight Trading Group, Inc. 179,625
5,000 Labranche & Co., Inc. 198,125
5,000 Metris Companies, Inc. 161,875
1,000 Neuberger Berman, Inc. 65,750
1,000 Stilwell Financial, Inc. 44,813
-----------
1,524,782
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INSURANCE: 11.5%
16,000 Allstate Corp. 644,000
2,000 CNA Financial Corp.* 73,000
15,900 Fidelity National Financial, Inc. 390,544
3,000 First American Financial Corp. 62,813
9,000 John Hancock Financial Services* 280,125
4,000 Lincoln National Corp. 193,500
15,000 MetLife, Inc.* 414,375
7,000 Mony Group, Inc. 287,875
7,000 Nationwide Financial Services, Inc. 340,375
3,000 Protective Life Corp. 69,375
2,000 Renaissance RE Holdings, Ltd. 145,125
4,000 Safeco Corp. 96,750
9,000 Sun Life Financial Services Canada 184,500
13,000 Unumprovident Corp. 367,250
-----------
3,549,607
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INSURANCE - LIFE: 1.5%
8,500 AXA Financial, Inc. 459,531
-----------
INSURANCE - LIFE/HEALTH: 0.2%
500 Jefferson-Pilot Corp. 34,375
1,000 Torchmark Corp. 33,313
-----------
67,688
-----------
INSURANCE - MULTILINE: 0.2%
1,000 Hartford Financial Services Group, Inc. 74,438
-----------
INSURANCE - PROPERTY/CASUALTY: 0.4%
1,000 FPIC Insurance Group 13,813
-----------
INVESTMENT MANAGEMENT: 0.1%
1,000 The Technology Select Sector SPDR 43,719
-----------
OTHER: 0.1%
500 Nasdaq-100 Shares 40,906
-----------
PHARMACEUTICALS: 0.3%
2,000 Schering-Plough Corp. 103,375
-----------
RENTAL/LEASING COMPANIES: 0.2%
2,000 Avis Group Holdings, Inc. 59,750
-----------
RETAIL: 1.3%
6,000 BJ's Wholesale Club, Inc.* 197,625
3,000 Home Depot, Inc. 129,000
9,000 Topps Co.* 81,281
-----------
407,906
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THRIFT AND SAVINGS/SAVINGS BANKS: 4.8%
2,000 Cohoes Bancorp 33,375
2,000 Corus Bankshares, Inc. 79,375
4
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TITAN FINANCIAL SERVICES FUND
SCHEDULE OF INVESTMENTS at October 31, 2000 (Unaudited) - (Continued)
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SHARES VALUE
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12,000 Dime BanCorp, Inc. $ 293,250
500 First Federal of East Hartford 15,250
2,000 Firstfed Financial Corp. 51,000
6,000 Golden State BanCorp, Inc.* 156,750
6,500 Haven BanCorp., Inc. 186,063
2,000 MAF Bancorp, Inc. 48,000
1,500 Richmond County Financial Corp. 35,250
13,000 Washington Mutual, Inc. 572,000
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1,470,313
-----------
SUPER - REGIONAL BANKS: 0.1%
2,000 National City Corp. 42,750
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TELECOMMUNICATIONS: 0.2%
2,000 Oracle Corp.* 66,000
-----------
TELECOMMUNICATIONS - EQUIPMENT & SERVICES: 0.8%
3,500 Nortel Network Corp. (a) 159,250
2,000 Qwest Communications International, Inc.* 97,250
-----------
256,500
-----------
TRANSPORTATION - SERVICES: 0.1%
2,000 Norfolk Southern Corp. 28,250
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TOTAL COMMON STOCKS
(cost $20,597,143) 30,765,478
-----------
CONTRACTS VALUE
--------- -----------
LONG EQUITY OPTIONS: 0.6%
COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE
20 Allstate Corp. CALL/Jan/$25.00 31,000
50 Banc One Corp. CALL/Nov/$35.00 10,000
20 Bank of America Corp. CALL/Jan/$47.50 7,875
20 Edwards (A.G.), Inc. CALL/Nov/$40.00 22,000
20 First Data Corp. CALL/Nov/$35.00 30,500
20 Fleet Boston Corp. CALL/Jan/$20.00 16,625
10 General Electric CALL/Jan/$40.00 15,625
18 Mellon Bank CALL/Dec/$40.00 16,762
20 North Fork Bancorp, Inc. CALL/Nov/$17.50 5,625
20 Zions Bancorporation CALL/Nov/$40.00 35,500
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TOTAL LONG EQUITY OPTIONS
(cost $151,005) 191,512
-----------
TOTAL INVESTMENTS IN SECURITIES
(cost $20,748,148+): 100.6% 30,956,990
Liabilities in excess of Other Assets: (0.6%) (186,764)
-----------
NET ASSETS: 100.0% $30,770,226
===========
+ At October 31, 2000, the basis of investments for federal income tax
purposes was the same as their cost for financial reporting purposes.
Unrealized appreciation and depreciation were as follows:
Gross unrealized appreciation $10,401,351
Gross unrealized depreciation (192,509)
-----------
Net unrealized appreciation $10,208,842
===========
* Non-income producing security.
(a) Security object to call option.
ADR - American Depositary Receipt.
GDR - Global Depositary Receipt.
See accompanying Notes to Financial Statements.
5
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TITAN FINANCIAL SERVICES FUND
SCHEDULE OF CALL OPTIONS WRITTEN at October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
CONTRACTS
SUBJECT TO CALL COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE VALUE
--------------- -------------------------------------------- -----------
20 Legg Mason/Feb/50.00 $ (13,000)
20 Lehman Brothers Holdings, Inc./Jan/62.50 (18,250)
40 Lehman Brothers Holdings, Inc./Jan/70.00 (8,750)
40 Lehman Brothers Holdings, Inc./Jan/75.00 (15,500)
60 Lehman Brothers Holdings, Inc./Nov/75.00 (5,625)
20 Morgan Stanley Dean Witter & Co./Nov/100.00 (437)
20 Morgan Stanley Dean Witter & Co./Nov/90.00 (1,813)
20 Nortel Networks Corp./Dec/65.00 (1,375)
-----------
TOTAL CALL OPTIONS WRITTEN
(premiums received $119,744) $ (64,750)
===========
See accompanying Notes to Financial Statements.
6
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TITAN GROWTH FUND
SCHEDULE OF INVESTMENTS at October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
SHARES VALUE
------- -----------
COMMON STOCKS: 98.5%
AUTOMANUFACTURERS: 6.1%
900 General Motors Corp. $ 55,912
2,274 General Motors Corp. - Class H* 73,678
500 Navistar International Corp. 16,531
-----------
146,121
-----------
BANKS: 0.9%
500 Chase Manhattan Corp. 22,750
-----------
BROKERAGE SERVICE: 1.2%
1,000 Southwest Securities Group, Inc. 28,250
-----------
BUILDING AND CONSTRUCTION: 0.8%
500 Centex Corp. 18,500
-----------
COMMERCIAL SERVICES: 7.4%
3,500 Cendant Corp.* 42,000
2,500 Concord EFS, Inc.* 103,281
2,000 Nova Corp.* 31,375
-----------
176,656
-----------
COMMUNICATIONS - TECHNOLOGY: 1.4%
1,800 Metromedia Fiber Network, Inc.* (a) 34,200
-----------
COMPUTERS - INTEGRATED SYSTEMS: 2.1%
400 Compaq Computer Corp. 12,164
800 Electronic Data Systems Corp. 37,550
-----------
49,714
-----------
COMPUTERS - MICRO: 1.2%
500 Dell Computer Corp.* 14,750
150 International Business Machines Corp. 14,775
-----------
29,525
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COMPUTERS - NETWORKING PRODUCTS: 1.6%
700 Cisco Systems, Inc.* 37,712
-----------
COMPUTERS - SERVICES: 0.5%
500 Mentor Graphics Corp.* 11,719
-----------
COMPUTERS SOFTWARE: 7.7%
1,000 America Online, Inc.* 50,430
1,200 Microsoft Corp.* 82,650
1,000 National Data Corp. 38,125
1,500 Novell, Inc.* 13,500
-----------
184,705
-----------
DIVERSIFIED FINANCIAL SERVICES: 2.2%
1,000 Citigroup, Inc. 52,625
-----------
ELECTRIC - INTEGRATED: 2.5%
1,000 Dominion Resources Inc./Va 59,562
-----------
ELECTRIC PRODUCTS: 0.5%
1,000 American Power Conversion* 12,937
-----------
ENERGY - PIPELINE: 1.9%
600 Coastal Corp. 45,262
-----------
ENERGY SOURCES: 1.1%
1,500 CONSOL Energy, Inc. 25,406
-----------
FINANCE - MORTGAGE LOAN/BANKER: 2.4%
2,250 Adams Express Co. 56,250
-----------
HEALTHCARE - SERVICES: 4.3%
2,600 CryoLife, Inc.* 103,512
-----------
INVESTMENT MANAGEMENT: 1.9%
300 The Technology Select Sector SPDR 13,116
1,000 H&Q Healthcare Investors Fund 33,125
-----------
46,241
-----------
MACHINERY - GENERAL: 3.5%
1,000 Ingersoll-Rand Co. 37,750
800 Tyco International Ltd. 45,350
-----------
83,100
-----------
METAL - ALUMINUM: 1.4%
1,200 Alcoa, Inc. 34,425
-----------
MISCELLANEOUS: 0.6%
1,000 Ocean Energy, Inc.* 13,875
-----------
OIL & GAS PRODUCERS: 1.5%
1,000 Burlington Resources, Inc. 36,000
-----------
OTHER: 1.7%
500 Nasdaq-100 Shares 40,906
-----------
PAPER AND RELATED PRODUCTS: 2.3%
1,500 International Paper Co. 54,938
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7
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TITAN GROWTH FUND
SCHEDULE OF INVESTMENTS at October 31, 2000 (Unaudited) - (Continued)
--------------------------------------------------------------------------------
SHARES VALUE
------- -----------
PHARMACEUTICALS: 5.4%
800 Bristol-Myers Squibb Co. $ 48,750
1,000 Mylan Laboratories, Inc. 28,000
1,000 Schering-Plough Corp. 51,687
-----------
128,437
-----------
RETAIL: 5.2%
1,000 BJ's Wholesale Club, Inc.* 32,938
1,250 Home Depot, Inc. 53,750
500 Wal-Mart Stores, Inc. 22,688
2,500 Wild Oats Markets, Inc.* 15,781
-----------
125,157
-----------
RETAIL - DEPARTMENT STORES: 0.7%
650 Target Corp. 17,956
-----------
SCHOOLS: 0.3%
200 Apollo Group, Inc. - Class A* 7,825
-----------
SEMICONDUCTORS: 10.5%
1,500 Advanced Micro Devices, Inc.* 33,938
400 Alliance Semiconductor Corp.* 8,000
1,300 Applied Materials, Inc.* 69,063
600 Intel Corp. 27,000
500 Lam Research Corp. 9,688
1,000 LSI Logic Corp.* 32,875
1,000 National Semiconductor Corp. 26,000
1,100 Novellus Systems, Inc.* (a) 45,031
-----------
251,595
-----------
TELECOMMUNICATIONS: 17.7%
1,000 Global Crossing Ltd.* 23,625
2,900 Motorola, Inc. 72,319
2,700 Oracle Corp.* 89,100
600 Tellabs, Inc.* 29,963
1,200 Nortel Network Corp. (a) 54,600
2,000 Qwest Communications International, Inc.* 97,250
1,000 SBC Communications, Inc. 57,688
-----------
424,545
-----------
TOTAL COMMON STOCKS
(cost $2,397,067) 2,360,406
-----------
CONTRACTS VALUE
--------- -----------
LONG EQUITY OPTIONS: 2.2%
COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE
10 America Online, Inc. CALL/Nov/40.00 $ 10,500
20 America Online, Inc. CALL/Nov/50.00 5,200
10 Corning, Inc. CALL/Jan/70.00 15,500
10 General Electric CALL/Jan/45.00 11,250
7 Novellus Systems, Inc. CALL/Nov/35.00 4,856
10 WorldCom, Inc. CALL/Jan/20.00 5,250
TOTAL LONG EQUITY OPTIONS
(cost $68,713) 52,556
TOTAL INVESTMENTS IN SECURITIES
(cost $2,465,780+): 100.7% 2,412,962
Liabilities in excess of Other Assets: (0.7)% (15,880)
NET ASSETS: 100.0% $ 2,397,082
+ At October 31, 2000, the basis of investments for federal income tax
purposes was the same as their cost for financial reporting purposes.
Unrealized appreciation and depreciation were as follows:
Gross unrealized appreciation $ 232,136
Gross unrealized depreciation (284,954)
-----------
Net unrealized depreciation $ (52,818)
===========
* Non-income producing security.
(a) Security subject to call option.
8
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TITAN GROWTH SERVICES FUND
SCHEDULE OF CALL OPTIONS WRITTEN at October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
CONTRACTS
SUBJECT TO CALL COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE VALUE
--------------- -------------------------------------------- -----------
10 Metromedia Fiber Ntk/Jan/25.00 $ (2,250)
7 Nortel Network Corp./Jan/50.00 (3,281)
5 Novellus Systems, Inc./Nov/40.00 (1,938)
-----------
TOTAL CALL OPTIONS WRITTEN
(premiums received $8,066) $ (7,469)
===========
See accompanying Notes to Financial Statements.
9
<PAGE>
TITAN FUNDS
STATEMENT OF ASSETS AND LIABILITIES at October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FINANCIAL
SERVICES GROWTH
FUND FUND
------------ ------------
<S> <C> <C>
ASSETS
Investments in securities, at value
(cost $20,748,148 and $2,465,780, respectively) ...... $ 30,956,990 $ 2,412,962
Cash ................................................... 92,122 4,730
Receivables:
Due from advisor ..................................... -- 10,731
Securities sold ...................................... 125,089 7,305
Dividends ............................................ 28,355 450
Fund shares sold ..................................... 12,153 --
Prepaid Expenses ..................................... -- 228
------------ ------------
Total assets ....................................... 31,214,709 2,436,406
------------ ------------
LIABILITIES
Payables:
Call options written, at value (premium received
$119,744 and $8,066, respectively) ................. 64,750 7,469
Securities purchased ................................. 174,505 13,050
Fund shares redeemed ................................. 88,500 --
Due to advisor ....................................... 49,520 --
Distribution fees .................................... 6,252 472
Administration fees .................................. 5,500 2,787
Accrued expenses ....................................... 55,456 15,546
------------ ------------
Total liabilities .................................. 444,483 39,324
------------ ------------
NET ASSETS ............................................. $ 30,770,226 $ 2,397,082
============ ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($30,770,226/1,448,490 and $2,397,082/289,674)
shares outstanding; unlimited number of shares
authorized without par value) ........................ $ 21.24 $ 8.28
============ ============
COMPONENTS OF NET ASSETS
Paid-in capital ........................................ $ 20,800,210 $ 2,774,783
Accumulated net investment loss ........................ (141,683) (18,967)
Accumulated net realized loss on investments ........... (151,686) (306,513)
Net unrealized appreciation (depreciation)
on investments ....................................... 10,263,385 (52,221)
Net assets ......................................... $ 30,770,226 $ 2,397,082
============ ============
</TABLE>
See accompanying Notes to Financial Statements.
10
<PAGE>
TITAN FUNDS
STATEMENT OF OPERATIONS For the Six Months Ended October 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
FINANCIAL
SERVICES GROWTH
FUND FUND*
----------- -----------
INVESTMENT INCOME
Income
Dividends .................................... $ 206,874 $ 7,371
Interest ..................................... 1,788 269
----------- -----------
Total income ............................... 208,662 7,640
----------- -----------
Expenses
Advisory fees ................................ 138,666 11,425
Custody fees ................................. 56,608 10,054
Distribution fees ............................ 34,666 2,856
Administration fees .......................... 27,733 15,082
Registration fees ............................ 24,110 1,609
Transfer agent fees .......................... 18,271 10,054
Fund accounting fees ......................... 13,056 10,054
Reports to shareholders ...................... 12,110 2,011
Audit fees ................................... 11,439 --
Trustee fees ................................. 5,099 2,513
Miscellaneous ................................ 4,989 1,257
Legal fees ................................... 2,216 1,509
Insurance expense ............................ 1,382 1,005
----------- -----------
Total expenses ............................. 350,345 69,429
----------- -----------
Less: fees waived and expenses absorbed .... -- (43,723)
----------- -----------
Net expenses ............................... 350,345 25,706
----------- -----------
NET INVESTMENT LOSS ...................... (141,683) (18,066)
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized loss on investments ............... (195,604) (236,703)
Net unrealized appreciation
(depreciation) on investments ................ 6,053,234 (50,180)
----------- -----------
Net realized and unrealized gain
(loss) on investments ...................... 5,857,630 (286,883)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................ $ 5,715,947 $ (304,949)
=========== ===========
* Commenced operations on April 4, 2000.
See accompanying Notes to Financial Statements.
11
<PAGE>
TITAN FINANCIAL SERVICES FUND
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 2000# APRIL 30, 2000
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ......................... $ (141,683) $ (251,633)
Net realized gain (loss) on investments ..... (195,604) 3,132,563
Net unrealized appreciation (depreciation)
on investments ............................ 6,053,234 (4,516,701)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............... 5,715,947 (1,635,771)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Net decrease in net assets derived from net
change in outstanding shares (a) .......... (837,788) (3,262,800)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS ... 4,878,159 (4,898,571)
NET ASSETS
Beginning of period ......................... 25,892,067 30,790,638
------------ ------------
END OF PERIOD ............................... $ 30,770,226 $ 25,892,067
============ ============
(a) A summary of capital share transactions is as follows:
SIX MONTHS ENDED YEAR ENDED
OCTOBER 31, 2000 # APRIL 30, 2000
-------------------------- --------------------------
Shares Value Shares Value
----------- ----------- ----------- -----------
Shares sold ........ 115,140 $ 2,370,847 307,480 $ 5,345,002
Shares redeemed .... (173,255) (3,208,635) (510,779) (8,607,802)
----------- ----------- ----------- -----------
Net decrease ....... (58,115) $ (837,788) (203,299) $(3,262,800)
=========== =========== =========== ===========
# Unaudited.
See accompanying Notes to Financial Statements.
12
<PAGE>
TITAN GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
APRIL 4, 2000*
SIX MONTHS ENDED THROUGH
OCTOBER 31, 2000# APRIL 30, 2000
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS
Net investment loss ......................... $ (18,066) $ (901)
Net realized loss on investments ............ (236,703) (69,810)
Net unrealized depreciation on investments .. (50,180) (2,041)
------------ ------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS ......................... (304,949) (72,752)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets derived from net
change in outstanding shares (a) .......... 621,684 2,153,099
------------ ------------
TOTAL INCREASE IN NET ASSETS .............. 316,735 2,080,347
NET ASSETS
Beginning of period ......................... 2,080,347 --
------------ ------------
END OF PERIOD ............................... $ 2,397,082 $ 2,080,347
=========== ============
(a) A summary of capital share transactions is as follows:
APRIL 4, 2000*
SIX MONTHS ENDED THROUGH
OCTOBER 31, 2000 # APRIL 30, 2000
-------------------------- --------------------------
Shares Value Shares Value
----------- ----------- ----------- -----------
Shares sold 71,042 $ 621,684 218,632 $ 2,153,099
----------- ----------- ----------- -----------
Net increase 71,042 $ 621,684 218,632 $ 2,153,099
=========== =========== =========== ===========
# Unaudited.
* Commencement of operations.
See accompanying Notes to Financial Statements.
13
<PAGE>
TITAN FINANCIAL SERVICES FUND
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS MAY 22, 1996*
ENDED YEAR ENDED APRIL 30, THROUGH
OCTOBER 31, ------------------------------- APRIL 30,
2000# 2000 1999 1998 1997
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................... $ 17.19 $ 18.01 $ 19.61 $ 12.60 $ 10.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ......... (0.10) (0.17) (0.10) (0.06) 0.04
Net realized and unrealized
gain (loss) on investments ......... 4.15 (0.65) (0.31) 7.93 2.62
------- ------- ------- ------- -------
Total from investment operations ..... 4.05 (0.82) (0.41) 7.87 2.66
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ........... -- -- -- -- (0.06)
From net realized gain ............... -- -- (1.19) (0.86) --
------- ------- ------- ------- -------
Total distributions .................. -- -- (1.19) (0.86) (0.06)
------- ------- ------- ------- -------
Net asset value, end of period ....... $ 21.24 $ 17.19 $ 18.01 $ 19.61 $ 12.60
======= ======= ======= ======= =======
Total return ......................... 23.56% (4.55%) (0.15%) 63.47% 26.67%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(millions) ......................... $ 30.8 $ 25.9 $ 30.8 $ 33.1 $ 7.6
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived and
expenses absorbed or recouped ...... 2.52%+ 2.14% 2.06% 2.10% 3.14%+
After fees waived and
expenses absorbed or recouped ...... 2.52%+ 2.14% 2.06% 2.27% 2.49%+
RATIO OF NET INVESTMENT INCOME
(LOSS) TO AVERAGE NET ASSETS:
Before fees waived and
expenses absorbed or recouped ...... (1.02%)+ (0.91%) (0.62%) (0.44%) (0.33%)+
After fees waived and
expenses absorbed or recouped ...... (1.02%)+ (0.91%) (0.62%) (0.61%) 0.33%+
Portfolio turnover rate .............. 37.84% 180.47% 205.86% 107.12% 97.84%
</TABLE>
* Commencement of operations.
+ Annualized.
# Unaudited.
See accompanying Notes to Financial Statements.
14
<PAGE>
TITAN GROWTH FUND
FINANCIAL HIGHLIGHTS For a capital share outstanding throughout each period
--------------------------------------------------------------------------------
APRIL 4, 2000*
SIX MONTHS ENDED THROUGH
OCTOBER 31, 2000# APRIL 30, 2000
----------------- --------------
Net asset value, beginning of period .......... $ 9.52 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ......................... (0.06) (0.00)^
Net realized and unrealized loss
on investments ............................ (1.18) (0.48)
------- -------
Total from investment operations ............ (1.24) (0.48)
------- -------
Net asset value, end of period .............. $ 8.28 $ 9.52
======= =======
Total return ................................ (13.03%) (4.80%)
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (millions) ........ $ 2.4 $ 2.1
RATIO OF EXPENSES TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed .... 6.07%+ 7.75%+
After fees waived and expenses absorbed ..... 2.25%+ 2.11%+
RATIO OF NET INVESTMENT LOSS TO AVERAGE NET ASSETS:
Before fees waived and expenses absorbed .... (5.40%)+ (6.43%)+
After fees waived and expenses absorbed ..... (1.58%)+ (0.79%)+
Portfolio turnover rate ..................... 122.71%++ 20.69%++
* Commencement of operations.
# Unaudited.
+ Annualized.
++ Not Annualized
^ Amount represents less than $0.01 per share.
See accompanying Notes to Financial Statements.
15
<PAGE>
TITAN FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited)
--------------------------------------------------------------------------------
NOTE 1 - ORGANIZATION
The Titan Financial Services Fund (the "Financial Services Fund") and the
Titan Growth Fund (the "Growth Fund"), collectively, the "Funds", are
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
Financial Services Fund, whose primary objective is capital appreciation and
secondary objective is moderate income, began operations on May 22, 1996 and the
Growth Fund, whose objective is long-term capital growth, began operations on
April 4, 2000.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds. These policies are in conformity with generally accepted
accounting principles.
A. SECURITY VALUATION. Securities traded on a national securities
exchange or Nas-daq are valued at the last reported sales price at the
close of regular trading on each day the exchanges are open for
trading; 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 stated 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 Funds intend to comply with the requirements
of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to their
shareholders. Therefore, no federal income tax provision is required.
At October 31, 2000, the Growth Fund has a capital loss carryforward
of approximately $236,703 expiring April 30, 2008, available to offset
future gains, if any.
C. SECURITY TRANSACTIONS, DIVIDEND INCOME AND DISTRIBUTIONS. Security
transactions are accounted for on the trade date. The cost of
securities sold is determined on a first-in, first-out basis. Dividend
income and distributions to shareholders are recorded on the
ex-dividend date.
16
<PAGE>
TITAN FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
--------------------------------------------------------------------------------
D. OPTIONS CONTRACTS. The Funds may purchase a call option on securities
and indices. As the holder of a call option, the Funds have the right
to purchase the underlying security at the exercise price at any time
until the expiration date. The Funds may enter into closing sale
transactions with respect to such options, exercise such options or
permit such options to expire. If an option expires on the stipulated
expiration date or if the Funds enter into a closing sale transaction,
a gain or loss is realized. If the Funds exercise a call option, the
cost of the security acquired is increased by the premium paid for the
call.
The Funds may write (sell) call options on securities and indices.
When a Fund writes an option, an amount equal to the premium received
by a Fund is recorded as a liability and is subsequently adjusted to
reflect the current fair value of the options written. Premiums
received from writing options that expire unexercised are treated by
the Funds on the expiration date as realized gains from investments.
The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also
treated as a realized gain or loss. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying
security in determining whether a Fund has realized a gain or loss.
The Funds as writers of an option bears the market risk of an
unfavorable change in the price of the security underlying the written
option.
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.
F. RECLASSIFICATION OF CAPITAL ACCOUNTS. The Funds account and report for
distributions to shareholders in accordance with the American
Institute of Certified Public Accountant's Statement of Position 93-2:
DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF
INCOME, CAPITAL AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT
COMPANIES. For the year ended April 30, 2000, the Financial Services
Fund decreased paid in capital by $251,633 due to the Fund
experiencing a net investment loss. For the period ended April 30,
2000, the Growth Fund decreased paid-in-capital by $901 due to the
Fund experiencing a net investment loss. Net assets were not affected
by these changes.
17
<PAGE>
TITAN FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
--------------------------------------------------------------------------------
NOTE 3 - COMMITMENTS AND OTHER RELATED PARTY TRANSACTIONS.
Titan Investment Advisors, LLC (the "Advisor") provided the Funds 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 Funds. 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 each Fund. For the six months ended October 31, 2000, the
Financial Services Fund and Growth Fund incurred $138,666 and $11,425 in
advisory fees, respectively.
The Growth Fund is responsible for its own operating expenses. The Advisor
has contractually agreed to limit the Fund's total operating expenses, for an
indefinite period, by reducing all or a portion of its fees and reimbursing the
Fund for expenses, excluding interest and tax expense, so that its ratio of
expenses to average net assets will not exceed 2.25%. In the case of the Fund's
initial period of operations, any fee waived or voluntarily reduced and/or any
Fund expense absorbed by the Advisor pursuant to an agreed upon expense cap
shall be reimbursed by the Fund to the Advisor, if so requested by the Advisor,
anytime before the end of the fifth fiscal year following the year to which the
fee waiver and/or expense absorption relates, provided the aggregate amount of
the Fund's current operating expenses for such fiscal year does not exceed the
applicable limitation on Fund expenses. For the six months ended October 31,
2000, the Advisor waived fees of $11,425 and absorbed expenses of $32,298. The
Fund must pay its current ordinary operating expenses before the Advisor is
entitled to any reimbursement of fees and/or expenses. Any such reimbursement is
also contingent upon Board of Trustees review and approval prior to the time the
reimbursement is initiated.
Investment Company Administration, L.L.C. (the "Administrator") acts as the
Funds' 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 Funds' 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:
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 six months ended October 31, 2000, the Financial Services Fund and
Growth Fund incurred $27,733 and $15,082, respectively, in Administration fees.
18
<PAGE>
TITAN FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
--------------------------------------------------------------------------------
First Fund Distributors, Inc. (the "Distributor") acts as the Funds'
principal underwriter in a continuous public offering of the Funds' 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.
NOTE 4 - DISTRIBUTION PLAN
Each Fund has adopted a Distribution Plan (the "Plan") in accordance with
Rule 12b-1 under the 1940 Act. The Plan provides that each Fund will pay a fee
to the Advisor as Distribution Coordinator at an annual rate of up to 0.25% of
each Fund's average daily net assets. The fee is paid to the Advisor as
reimbursement for, or in anticipation of, expenses incurred for
distribution-related activity. For the six months ended October 31, 2000, the
Financial Services Fund and Growth Fund paid to the Advisor, as Distribution
Coordinator, $34,666 and $2,856, respectively.
NOTE 5 - PURCHASES AND SALES OF SECURITIES
The cost of purchases and the proceeds from sales of securities, excluding
short-term investments for the periods ended October 31, 2000, were as follows:
Purchases Sales
----------- ------------
Financial Services Fund $10,412,082 $ 11,442,551
Growth Fund $ 3,456,914 $ 2,750,788
The activity in call options written during the six months ended October 31,
2000 for the Financial Services Fund and Growth Fund are summarized as follows:
<TABLE>
<CAPTION>
Financial Services Fund Growth Fund
----------------------------- -----------------------------
Contracts Amount of Premiums Contracts Amount of Premiums
--------- ------------------ --------- ------------------
<S> <C> <C> <C> <C>
Options outstanding,
beginning of period (435) $(230,064) (60) $ (22,349)
Options written (1460) (656,385) (462) (196,010)
Options closed 1250 589,868 425 179,809
Options exercised 45 13,776 4 2,246
Options expired 360 163,061 71 28,238
Options outstanding at
October 31, 2000 (240) $(119,744) (22) $ (8,066)
Unrealized appreciation
at October 31, 2000 $ 54,994 $ 597
Market value of options
at October 31, 2000 $ 64,750 $ (7,469)
========= =========
</TABLE>
19
<PAGE>
TITAN FUNDS
NOTES TO FINANCIAL STATEMENTS (Unaudited) - (Continued)
--------------------------------------------------------------------------------
NOTE 6 - REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with government securities
dealers recognized by the Federal Reserve Board, with member banks of the
Federal Reserve System or with such other brokers or dealers that meet the
credit guidelines established by the Board of Trustees. The Funds will always
receive and maintain, as collateral, securities whose market value, including
accrued interest, will be at least equal to 100% of the dollar amount invested
by the Funds in each agreement, and the Funds will make payment for such
securities only upon physical delivery or upon evidence of book entry transfer
to the accounts of the custodian. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral.
If the seller defaults and the value of the collateral declines, or if
bankruptcy proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Funds may be delayed or limited.
20
<PAGE>
ADVISOR
TITAN INVESTMENT ADVISORS, LLC
9672 Pennsylvania Avenue
Upper Marlboro, MD 20772
888-44-TITAN
Account Inquiries 1-800-282-2340
DISTRIBUTOR
FIRST FUND DISTRIBUTORS, INC.
4455 E. Camelback Rd., Suite 261E
Phoenix, AZ 85018
CUSTODIAN
FIRSTAR INSTITUTIONAL CUSTODY SERVICES
425 Walnut Street
Cincinnati, OH 45202
TRANSFER AGENT
AMERICAN DATA SERVICES, INC.
P.O. Box 5536
Hauppauge, NY 11788-0132
INDEPENDENT AUDITORS
TAIT, WELLER & BAKER
8 Penn Center Plaza, Suite 800
Philadelphia, PA 19103
COUNSEL TO THE TRUST
PAUL, HASTINGS, JANOFSKY & WALKER LLP
345 California Street, 29th Floor
San Francisco, CA 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.
