[ FRONT COVER ]
[ WOODWARD FUNDS LOGO ART AND LOGOTYPE ]
Semi-Annual Report
June 30, 1996
Woodward International Equity Fund
Investment Adviser
[ NBD BANK LOGOTYPE ]
24 Hour yield information:
Purchase and Redemption orders:
(800) 688-3350
<PAGE>
Dear Shareholder:
As you know, the Woodward Funds have embarked on some exciting
changes over the last several months. Following the proxy solicitation, we are
pleased to report that the reorganization of the Woodward Funds has been
approved by shareholders. The reorganization is expected to be completed on or
around September 23,1996.
What does this mean to you?
First Chicago NBD Investment Management Company, the adviser to
the Prairie Funds, has joined forces with NBD Bank, the adviser to the
Woodward Mutual Fund Family, to create a powerful new fund group, soon to be
renamed the Pegasus Funds. As a shareholder, this means that the resources of
a stronger organization will be working for you.
o Strength in management -- With more than $12 billion in total assets, the
Pegasus Funds will be one of the largest bank-managed mutual fund
families in the country.
o Depth of experience -- Continuing a century-old tradition of asset
management for individuals and institutions, the Pegasus Funds' adviser
is comprised of more than 70 investment professionals who are dedicated
to the Funds' management.
o Breadth of investment choices -- Shareholders can select from a complete
array of 25 mutual funds to meet virtually any investment objective.
Pegasus Funds bring you "Strength in Investing"
In addition to offering you a wide range of investment
opportunities, we pride ourselves on delivering superior service and
convenience. We have added features such as systematic withdrawals and
cross-reinvestment of dividends -- allowing you to invest dividends from one
Pegasus Fund in another -- so that you can have more options for your
investment dollars.
Thank you for your patience throughout this transition. If you
have any questions, please speak with your Investment Professional or call
Shareholder Services toll-free at 1-800-688-3350.
Sincerely,
/s/ Marco Hanig
Marco Hanig
Managing Director
First Chicago NBD Investment Management Company
August 30, 1996
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<CAPTION>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(Unaudited)
<S> <C>
ASSETS:
Investment in securities:
At cost ..................................................... $158,349,956
============
At value (Note 2) ........................................... $171,165,200
Cash ............................................................. 157,211
Unrealized appreciation on foreign exchange contracts ............ 4,590
Withholding tax receivable ....................................... 235,655
Income receivable ................................................ 715,218
Deferred organization costs, net (Note 2) ........................ 42,883
Prepaids and other assets ........................................ 288
------------
TOTAL ASSETS ........................................... $172,290,763
============
LIABILITIES:
Payable for securities purchased ................................. 5,774,995
Unrealized depreciation on foreign exchange contracts ............ 11,096
Accrued investment advisory fee .................................. 99,420
Accrued distribution fees ........................................ 736
Accrued custodial fee ............................................ 22,561
Other payables and accrued expenses .............................. 57,784
------------
TOTAL LIABILITIES ...................................... 5,966,592
------------
NET ASSETS ............................................. $166,354,453
------------
Net assets consist of:
Capital shares (unlimited number of shares
authorized, par value $.10 per share).......................... $ 1,437,191
Additional paid-in capital ....................................... 151,085,550
Accumulated undistributed net investment income .................. 1,208,287
Accumulated undistributed net realized losses from investments and
foreign currency transactions .................................. (193,767)
Net unrealized appreciation on investments and
foreign currency translation ................................... 12,817,192
------------
TOTAL NET ASSETS ....................................... $166,354,453
============
Shares of capital stock outstanding .............................. 14,371,906
============
Net asset value and redemption price per share ................... $11.57
============
Maximum offering price per share ................................. $12.18
============
<FN>
See accompanying notes to financial statements.
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2
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<CAPTION>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(Unaudited)
<S> <C>
INVESTMENT INCOME (Note 2)
Interest ..................................................... $ 313,551
Dividends (net of foreign taxes withheld of $201,056) ........ 1,676,338
-------------
TOTAL INVESTMENT INCOME .................................. 1,989,889
-------------
EXPENSES (Notes 2, 3 and 5):
Investment advisory fee ...................................... 508,218
Distribution fees ............................................ 3,848
Professional fees ............................................ 17,973
Custodial fee ................................................ 117,338
Amortization of deferred organization costs .................. 6,276
Marketing expenses ........................................... 13,928
Registration, filing fees and other expenses ................. 114,824
-------------
NET EXPENSES ............................................ 782,405
-------------
NET INVESTMENT INCOME ............................................ $ 1,207,484
-------------
REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS
AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investment securities .................................... 3,083
Foreign currency transactions ............................ (42,594) (39,511)
-------------
Net change in unrealized appreciation (depreciation) on:
Investment securities .................................... 5,289,444
Assets and liabilities denominated
in foreign currencies .................................. (4,281) 5,285,163
------------- -------------
NET REALIZED AND UNREALIZED GAINS ON
INVESTMENTS AND FOREIGN CURRENCY ....................... 5,245,652
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS ....................... $ 6,453,136
=============
<FN>
See accompanying notes to financial statements.
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3
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<CAPTION>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) Dec. 31, 1995
--------------- --------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ...................................... $ 1,207,484 $ 1,001,636
Net realized losses from investments and foreign
currency transactions ................................ (39,511) (148,064)
Net change in unrealized appreciation on investments and
foreign currency translation ......................... 5,285,163 7,529,463
------------- -------------
Net increase in net assets from operations ................ 6,453,136 8,383,035
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income ................................. -- (1,033,171)
In excess of realized gains ................................ -- (3,255)
------------- -------------
Total distributions ..................................... -- (1,036,426)
------------- -------------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold .................................. 57,145,669 74,411,073
Net asset value of shares issued in reinvestment of
distributions to shareholders ............................ -- 720,012
------------- -------------
57,145,669 75,131,085
Less: payments for shares redeemed ......................... (4,532,653) (11,734,863)
------------- -------------
Net increase in net assets from capital share transactions . 52,613,016 63,396,222
------------- -------------
NET INCREASE IN NET ASSETS ................................... 59,066,152 70,742,831
NET ASSETS:
Beginning of period ........................................ 107,288,301 36,545,470
------------- -------------
End of period .............................................. $ 166,354,453 $ 107,288,301
============= =============
CAPITAL SHARE TRANSACTIONS:
Shares sold .................................................. 5,060,165 7,102,657
Shares issued in reinvestment of distributions to shareholders -- 65,214
------------- -------------
5,060,165 7,167,871
Less: shares redeemed ........................................ (401,150) (1,107,679)
------------- -------------
NET INCREASE IN SHARES OUTSTANDING ........................... 4,659,015 6,060,192
------------- -------------
CAPITAL SHARES:
Beginning of period ........................................ 9,712,891 3,652,699
------------- -------------
End of period .............................................. 14,371,906 9,712,891
============= =============
<FN>
See accompanying notes to financial statements.
</TABLE>
4
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<TABLE>
<CAPTION>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
June 30, 1996
(Unaudited)
Description Face Amount Market Value
----------- ----------- ------------
<S> <C> <C>
TEMPORARY CASH INVESTMENT ---- 7.52%
Salomon Brothers, Revolving Repurchase Agreement,
5.53%, 7/1/96 (secured by various U.S. Treasury
Strips with maturities ranging from 2/15/99 through
8/15/00, all held at Chemical Bank)
(Cost $102,477) ..................................... $12,865,298 $ 12,865,298
-------------
SHARES
------
COMMON STOCKS ---- 92.48%
ARGENTINA ---- 1.31%
BANKS
Bco Frances Rio Pl ............................ 12,200 117,530
Bco De Galicia Bue 'B' ........................ 18,700 119,850
CONSTRUCTION
Astra Cia Argentin ............................ 21,000 50,471
Ciadea Sa ..................................... 14,100 100,252
Perez Companc Sa 'B' .......................... 57,600 382,141
Ypf Sa Class 'D' .............................. 22,900 524,007
FOOD & AGRICULTURE
Molinos Rio Plata 'B' ......................... 3,100 33,372
LIQUOR & TOBACCO
Ba Embotelladora 'B' .......................... 50 33,548
MISCELLANEOUS
Comercial Del Plata ........................... 31,700 99,679
NON-FERROUS METALS
Siderca Sa .................................... 164,600 224,998
TELEPHONE
Telefonica De Argentina Class 'B' ............. 186,700 557,155
-------------
2,243,003
-------------
AUSTRALIA ---- 1.87%
BANKS
National Australia Bank ........................... 40,112 370,951
Westpac Bank Corp ................................. 55,410 245,528
CHEMICALS
Ici Australia .................................... 11,453 100,417
CONSTRUCTION
Boral Limited ..................................... 17,000 44,154
Csr Limited ....................................... 27,466 97,061
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5
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<S> <C> <C>
Pioneer International ................................. 38,380 111,766
ENERGY RAW MATERIAL
Broken Hill Pty........................................ 38,550 533,089
Santos Limited ........................................ 33,203 114,983
FOOD & AGRICULTURE
Amcor Limited ......................................... 22,913 155,992
Goodman Fielder Limited ............................... 23,031 23,383
LIQUOR & TOBACCO
Coca-Cola Amatil ...................................... 14,601 162,379
Fosters Brewing Gp .................................... 22,347 38,518
MEDIA
News Corporation (Aust Listing) ....................... 37,849 214,780
News Corporation Preferred Limited Voting Shares ...... 36,099 176,153
MULTI-INDUSTRY & CONGLOMERATES
Pacific Dunlop Limited ................................ 44,367 99,869
NON-FERROUS METALS
Cra Limited ........................................... 10,570 162,723
Mim Holding Limited ................................... 24,231 31,277
WMC Ltd ............................................... 36,388 260,617
RAILROAD & SHIPPING
Brambles Inds Limited ................................. 8,027 111,696
REAL PROPERTY
Gen Property Tst Units (Aust Listing) ................. 40,000 68,631
RETAIL
Coles Myer Limited .................................... 18,791 68,328
------------
3,192,295
------------
BELGIUM---- 2.72%
BANKS
Generale De Banque .................................... 1,300 451,259
Kredietbank ........................................... 1,550 463,581
CHEMICALS
Solvay ................................................ 850 521,600
ENERGY & UTILITIES
Electrabel ............................................ 4,250 907,546
Tractebel Inv Cap ..................................... 1,300 532,175
</TABLE>
6
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<S> <C> <C>
INSURANCE
Fortis Ag ............................................. 3,780 495,892
Fortis Ag(VVPR) Strip ................................. 80 46
INTERNATIONAL OIL
Petrofina Sa .......................................... 2,160 677,047
NON-FERROUS METALS
Union Miniere * ....................................... 1,804 138,198
OTHER ENERGY SOURCES
Gpe Bruxelles Lam ..................................... 2,300 287,784
PRODUCER GOODS
Bekaert Sa ............................................ 220 176,258
------------
4,651,386
------------
DENMARK ---- 2.22%
BANKS
Den Danske Bank........................................ 5,341 357,870
Unidanmark 'A' (Regd) ................................. 5,235 242,770
BUSINESS MACHINE
Iss International Series 'B' .......................... 2,800 62,537
Sophus Berendsen 'B' .................................. 2,521 337,049
DRUGS & MEDINCINE
Novo-Nordisk As 'B' ................................... 3,626 513,117
FOOD & AGRICULTURE
Danisco ............................................... 7,019 349,436
LIQUOR & TOBACCO
Carlsberg 'A' ......................................... 275 16,176
Carlsberg 'B' ......................................... 3,943 231,929
RAILROAD & SHIPPING
D/S 1912 'B' ......................................... 23 521,542
D/S Svendborg 'B' .................................... 14 457,095
TELEPHONE
Tele Danmark 'B' ...................................... 14,030 702,349
------------
3,791,870
------------
FINLAND ---- 3.37%
BANKS
Merita Ltd 'A' * ...................................... 182,000 379,991
</TABLE>
7
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<S> <C> <C>
CONSTRUCTION
Metro AB 'A' .......................................... 3,900 176,284
ELECTRONICS
Nokia (AB) Oy Series 'K' .............................. 22,200 810,896
Nokia (AB) Oy Series 'A' .............................. 38,100 1,402,333
FOOD & AGRICULTURE
Cultor Oy Series 2 .................................... 3,000 153,684
Cultor Oy Series 1 .................................... 4,000 195,441
INSURANCE
Pohjola Series 'B' .................................... 6,000 101,380
Sampo 'A' ............................................. 3,500 202,652
NON-FERROUS METALS
Outokumpo Oy 'A' ...................................... 23,500 394,541
PAPER & FOREST PRODUCTS
UPM-'Kymmene Oy * ..................................... 63,900 1,321,765
PRODUCER GOODS
Kone Corp 'B' ......................................... 1,500 166,921
RETAIL
Kesko ................................................. 21,000 309,628
Stockmann Oy 'A' ...................................... 1,600 87,819
TRAVEL & RECREATION
Amer Group 'A' ........................................ 3,800 63,798
------------
5,767,133
------------
FRANCE ---- 5.05%
BANKS
Banque National Paris ................................. 3,615 126,888
Cie De Suez ........................................... 3,751 137,199
Cie Fin Paribas 'A' ................................... 3,671 216,776
Societe Generale ...................................... 2,829 311,031
CHEMICALS
Air Liquide ('L') ..................................... 2,559 451,844
Rhone Poulenc Sa 'A' ................................. 8,486 223,026
CONSTRUCTION
Cie De St Gobain ...................................... 2,634 352,524
Lafarge Coppee Sa (Br) ................................ 2,600 157,321
</TABLE>
8
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<S> <C> <C>
CONSUMER DURABLES
Printemps (Av) ........................................ 600 209,903
DRUGS & MEDICINE
L'Oreal ............................................... 1,235 409,980
Sanofi ................................................ 3,139 235,238
ELECTRONICS
Alcatel Alsthom (Cge) ................................. 4,194 365,787
Csf (Thomson) ......................................... 4,520 127,046
Legrand ............................................... 950 169,772
Schneider Sa (Ex-Sp) .................................. 4,780 250,695
ENERGY & UTILITIES
Eaux (Cie Generale) ................................... 4,357 486,642
Lyonnaise Des Eaux .................................... 2,103 200,819
FOOD & AGRICULTURE
Danone (Ex Bsn) ....................................... 1,913 289,472
Eridania Beghin Sa .................................... 1,111 173,941
Saint Louis ........................................... 350 92,937
INSURANCE
Axa ................................................... 4,312 235,866
INTERNATIONAL OIL
Elf Auqitaine (Soc Nat) ............................... 6,116 449,782
Total B .............................................. 6,566 486,957
LIQUOR & TOBACCO
Lvmh Moet-Hennessy .................................... 2,300 545,503
Pernod-Ricard ......................................... 1,114 71,409
MEDIA
Havas ................................................. 500 40,889
MOTOR VEHICLES
Peugeot Sa ............................................ 2,543 340,345
PRODUCER GOODS
Michelin (Cgde) Class 'B' (Brwn Bds)(Reg) ............. 5,200 254,137
REAL PROPERTY
Sefimeg (Regd) ........................................ 2,786 188,328
RETAIL
Carrefour ............................................. 886 496,344
Carrefour New(B/R 07/02/98) * ......................... 786 217,108
Promodes .............................................. 433 124,818
</TABLE>
9
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<TABLE>
<S> <C> <C>
TRAVEL & RECREATION
Accor ................................................. 1,407 196,780
------------
8,637,107
------------
GERMANY ---- 6.22%
AIR TRANSPORT
Lufthansa Ag ......................................... 2,407 340,776
BANKS
Bayer Vereinsbank ..................................... 7,240 202,625
Deutsche Bank ......................................... 14,640 693,461
Dresdner Bank ......................................... 20,640 517,987
BONDS
Preussag 5.75% (W-Wts)05/17/01 ........................ 26,000 19,763
CHEMICALS
Basf (Var) ........................................... 1,526 434,600
Bayer (Var) ........................................... 17,000 598,073
Schering .............................................. 2,300 166,742
CONSTRUCTION
Hochtief .............................................. 657 293,508
ELECTRONICS
Siemens (Var) ......................................... 16,190 867,713
SAP N/V Pref .......................................... 1,700 252,631
ENERGY & UTILITIES
Rwe (Var) ............................................. 13,160 511,827
Veba .................................................. 14,250 757,372
INSURANCE
Munchener Ruckvers Reg Vink ........................... 195 398,420
Allianz (Regd) ........................................ 700 1,216,840
MOTOR VEHICLES
Daimler-Benz (Var) .................................... 1,434 769,221
Daimler-Benz Rts (07/03/96) * ........................ 1,434 188
Volkswagen (Var) ...................................... 706 262,755
PRODUCER GOODS
Linde ................................................. 456 295,534
Mannesmann (Var) ...................................... 1,446 497,789
Man AG Non Vtg Pref(Var) .............................. 900 175,017
</TABLE>
10
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<TABLE>
<S> <C> <C>
RETAIL
Kaufhof Holding ....................................... 902 341,034
STEEL
Preussag Br (Var) ..................................... 1,374 346,177
Thyssen ............................................... 1,066 195,042
Viag (Var) ............................................ 1,019 405,688
Viag (RFD 01/01/96) * ................................. 204 78,537
------------
10,639,320
------------
HONG KONG ---- 3.27%
AIR TRANSPORT
Cathay Pacific Airways ................................ 82,000 150,429
BANKS
Hang Seng Bank ........................................ 61,900 623,758
ENERGY & UTILITIES
China Light & Power ................................... 51,700 234,438
Hong Kong Electric .................................... 20,000 60,978
Hong Kong & China Gas ................................. 141,760 226,178
Hong Kong & China Gas Wts 09/30/97 * .................. 8,480 2,218
INSURANCE
Hysan Development Wts (04/30/98) * .................... 500 265
MULTI-INDUSTY & CONGLOMERATES
Hutchinson Whampoa .................................... 122,000 767,572
MISCELLANEOUS FINANCE
Swire Pacific 'A' ..................................... 65,000 556,327
Wharf (Holding) ....................................... 46,000 164,615
Wing Lung Bank ........................................ 43,177 249,897
REAL PROPERTY
Cheung Kong (Holdings) ................................ 86,000 619,404
Hopewell Holdings ..................................... 130,000 70,538
Hysan Development ..................................... 40,000 122,473
New World Development Co .............................. 57,089 264,775
Sun Hung Kai Properties ............................... 76,700 775,372
TELEPHONE
Hong Kong Telecomm .................................... 395,846 710,840
------------
5,600,077
------------
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11
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<S> <C> <C>
IRELAND ---- 2.82%
BANKS
Allied Irish Banks .................................... 133,396 692,607
Bank of Ireland (Dublin Listing) ...................... 45,825 311,870
CONSTRUCTION
Crh ................................................... 109,159 1,077,727
FOOD & AGRICULTURE
Greencore ............................................. 92,777 481,709
Kerry Group 'A' ....................................... 60,002 616,364
INSURANCE
Irish Life ............................................ 111,061 438,247
MEDIA
Independent News (Dublin Listing) ..................... 74,356 332,610
PAPER & FOREST PRODUCTS
Smurfit(Jefferson) (Dublin Listing) ................... 325,442 873,461
------------
4,824,595
------------
JAPAN ---- 29.63%
AIR TRANSPORT
Japan Airlines Co ..................................... 57,000 460,962
BANK
Asahi Bank ............................................ 42,000 486,317
Bank of Tokyo MITS - Ex Mitsubishi Bank ............... 66,000 1,528,426
Dai-Ichi Kangyo Bank .................................. 58,000 1,078,760
Fuji Bank ............................................. 50,000 1,075,842
Industrial Bank of Japan .............................. 26,000 644,776
Joyo Bank ............................................. 36,000 272,753
Sakura Bank ........................................... 19,000 211,339
Sumitomo Bank ......................................... 52,000 1,005,092
Tokai Bank ............................................ 34,000 440,184
BUSINESS MACHINE
Canon Inc ............................................. 21,000 436,537
Fujitsu ............................................... 61,000 556,156
Ricoh ................................................. 55,000 581,684
CHEMICALS
Asahi Chemical Industries ............................. 78,000 556,119
Dainippon Ink & Chemical .............................. 60,000 307,436
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12
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<S> <C> <C>
Mitsubishi Gas Chemical ............................... 19,000 83,670
Sekisui Chemical ...................................... 26,000 317,647
Shin-Etsu Chemical .................................... 22,650 433,665
Showa Denko Kk *....................................... 102,000 314,328
Sumitomo Chemical ..................................... 92,000 438,688
Toray Industries Inc .................................. 57,000 392,883
CONSTRUCTION
Chichibu Onoda Cement ................................. 50,000 286,739
Daiwa House Industry .................................. 40,000 619,977
Fujita Corp ........................................... 6,000 27,899
Haseko Corp ........................................... 134,000 580,317
Kajima Corp ........................................... 11,000 113,328
Nihon Cement Co ....................................... 30,000 220,730
Obayashi Corp ......................................... 16,000 144,564
Sato Kogyo Co ......................................... 65,000 398,244
Sekisui House ......................................... 48,000 547,039
Shimizu Corp .......................................... 36,000 397,150
Taisei Corp ........................................... 47,000 333,384
Toto .................................................. 15,000 225,653
CONSUMER DURABLES
Matsushita Electric Industries ........................ 67,000 1,246,154
Sanyo Electric Co ..................................... 88,000 536,754
Sharp Corp ............................................ 30,000 525,157
DRUGS & MEDICINE
Daiichi Pharmacy Co ................................... 37,000 570,105
Sankyo Co ............................................. 23,000 595,543
Takeda Chemical Industries ............................ 46,000 813,629
ELECTRONICS
Hitachi ............................................... 97,000 902,067
Kyocera ............................................... 11,000 777,251
Mitsubishi Electric Corp .............................. 53,000 369,178
Omron Corp ............................................ 28,000 594,813
Sony .................................................. 17,000 1,117,509
ENERGY & UTILITIES
Kansai Electric Power ................................. 26,000 594,996
Osaka Gas Co .......................................... 124,000 453,349
Tokyo Electric Power .................................. 55,300 1,401,640
</TABLE>
13
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<S> <C> <C>
Tokyo Gas Co .......................................... 15,000 54,704
FOOD & AGRICULTURE
Ajinomoto Co .......................................... 54,000 644,958
Yamazaki Baking Co .................................... 14,000 259,114
INTERNATIONAL OIL
Japan Energy Corp ..................................... 107,000 397,050
Nippon Oil Co ......................................... 86,000 582,578
MEDIA
Dai Nippon Printing ................................... 33,000 637,847
MULTI-INDUSTRY
Itochu Corp ........................................... 124,000 865,998
Marubeni Corp ......................................... 163,000 891,673
Mitsubishi ............................................ 29,000 380,739
Sumitomo Corp ......................................... 34,000 301,929
MISCELLANEOUS FINANCE
Daiwa Securities ...................................... 107,000 1,375,528
Mitsubishi Trust & Banking ............................ 11,000 185,537
Nomura Securities ..................................... 61,000 1,190,173
Yamaichi Securities ................................... 105,000 719,903
MOTOR VEHICLES
Honda Motor Co ........................................ 30,000 776,795
Nissan Motor Co ....................................... 53,000 470,170
Toyota Motor Corp ..................................... 64,000 1,598,811
NON-FERROUS METALS
Mitsubishi Steel *..................................... 17,000 99,506
Tostem Corp ........................................... 13,000 382,836
PAPER & FOREST PRODUCTS
Daishowa Paper Manufacturing *......................... 13,000 100,154
Honshu Paper Co ....................................... 56,000 396,712
PRODUCER GOODS
Bridgestone Corp ...................................... 31,000 590,710
Komatsu ............................................... 33,000 324,941
Kubota Corp ........................................... 68,000 448,243
Mitsubishi Heavy Industries ........................... 138,000 1,199,054
Nippondenso Co ........................................ 28,000 607,577
Sumitomo Heavy Industries ............................. 83,000 362,477
Toyo Seikan Kaisha .................................... 12,000 417,937
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14
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<S> <C> <C>
Toyoda Auto Loom ...................................... 12,000 239,603
RAILROAD & SHIPPING
East Japan Railway .................................... 38 199,213
Hankyu Corp ........................................... 65,000 380,465
Hitachi Zosen Corp .................................... 12,000 67,942
Mitsui Osk Lines * .................................... 63,000 217,120
Nagoya Railroad Co .................................... 74,000 377,147
Tokyu Corp ............................................ 114,000 867,877
REAL PROPERTY
Mitsubishi Estate ..................................... 114,000 1,569,454
RETAIL
Ito-Yokado Co ......................................... 19,000 1,145,043
Nichii Co ............................................. 56,000 929,236
Seven-Elevan Japan Npv ................................ 15,000 955,950
STEEL
Kawasaki Steel Corp ................................... 47,000 169,263
Kobe Steel * .......................................... 69,000 198,165
Nippon Steel Corp ..................................... 108,000 370,236
Nkk Corp * ............................................ 48,000 145,293
Sumitomo Metal Industries ............................. 156,000 477,893
TRAVEL & RECREATION
Nikon ................................................. 13,000 149,342
------------
50,739,329
------------
MALAYSIA ---- 1.87%
AIR TRANSPORT
Malaysian Airline Systems ............................. 8,000 25,489
BANKS
Ammb Holdings Berhad .................................. 13,000 182,347
Commerce Asset Holding ................................ 5,000 30,458
Dcb Holdings Berhad ................................... 17,000 58,251
Malayan Bkg Berhad .................................... 32,000 307,786
Public Bank Berhad .................................... 14,000 23,565
Public Bank Berhad (Alien Market) ..................... 51,000 141,029
CONSTRUCTION
Hume Inds (M) Berhad .................................. 16,000 78,229
United Engineers Berhad ............................... 22,000 152,531
</TABLE>
15
<PAGE>
<TABLE>
<S> <C> <C>
CONSUMER DURABLES
Tech Res Inds Berhad * ................................ 39,000 135,979
ENERGY & UTILITIES
Tenaga Nasional ....................................... 74,000 311,393
FOOD & AGRICULTURE
Golden Hope Plants .................................... 67,000 104,182
Nestle Malay Berhad ................................... 2,000 16,111
LIQUOR & TOBACCO
Rothmans Pall Mall .................................... 10,000 105,200
MISCELLANEOUS
Malayan Utd Inds ...................................... 229,000 185,385
MOTOR VEHICLES
Edaran Otomobil ....................................... 17,000 162,830
MULTI-INDUSTRY & CONGLOMERATES
Sime Darby Berhad ..................................... 52,200 144,347
PRODUCER GOODS
Leader Univ Holdings .................................. 41,333 116,782
RAILROAD & SHIPPING
Malaysian Int Ship (Alien Market) ..................... 22,000 68,330
REAL PROPERTY
Hong Leong Properties ................................. 123,000 142,952
TELEPHONE
Telekom Malaysia ...................................... 41,000 364,775
TRAVEL & RECREATION
Landmarks Berhad ...................................... 63,000 84,834
Magnum Corp Berhad .................................... 92,250 156,015
Resorts World Berhad .................................. 19,000 108,887
------------
3,207,687
------------
MEXICO ---- 1.26%
BANKS
Gpo Financiero Banamex-Ac Series 'B' .................. 43,000 89,634
Gpo Financiero Banamex-Ac Series 'L' .................. 21,016 39,926
CONSTRUCTION
Cemex Sa Ser 'A' ...................................... 53,937 194,977
FOOD & AGRICULTURE
Grupo Ind Bimbo Series 'A' ............................ 22,000 100,716
</TABLE>
16
<PAGE>
<TABLE>
<S> <C> <C>
LIQUOR & TOBACCO
Empresas La Modern 'A' ................................ 7,000 31,307
MEDIA
Fomento Economico Mexico Series'B' .................... 17,000 48,669
Grupo Televisa Ptg Certs Repr 1 A,L,D Shs ............. 11,500 180,547
MISCELLANEOUS FINANCE
Grupo Financiero Bancomer Series 'B' .................. 55,000 23,945
Grupo Financiero Bancomer Series 'L' .................. 2,037 675
Grupo Carso Series 'A1' * ............................. 16,000 113,355
MULTI-INDUSTRY
Desc Sa de Cv Ser'B' .................................. 6,000 32,455
MULTI-INDUSTRY & CONGLOMERATES
Alfa Sa Series 'A' (Cpo) ............................ 64,400 289,725
NON-FERROUS METALS
Industrias Penoles .................................... 21,500 98,427
PAPER & FOREST PRODUCTS
Kimberly Clark Mexico 'A' ............................. 12,900 234,863
RETAIL
Cifra Sa De Cv 'B' * ................................. 159,000 229,488
TELEPHONE
Telefonos De Mexico Series 'L' (Ltd Vtg) .............. 260,000 441,809
------------
2,150,518
------------
NETHERLANDS ---- 4.99%
AIR TRANSPORT
Klm ................................................... 2,341 74,880
BANK
ABN Amro Holding ...................................... 14,194 761,680
CHEMICALS
Akzo Nobel Nv ......................................... 3,096 370,908
ELECTRONICS
Philips Electronic .................................... 11,082 360,316
FOOD & AGRICULTURE
Ahold (kon) Nv ........................................ 4,389 237,837
Unilever Nv Cva ....................................... 6,232 901,772
INSURANCE
ING Groep Nv Cva ...................................... 30,890 921,103
</TABLE>
17
<PAGE>
<TABLE>
<S> <C> <C>
INTERNATIONAL OIL
Royal Dutch Petroleum (Br) ............................ 20,281 3,131,895
LIQUOR & TOBACCO
Heineken Nv ........................................... 1,734 387,438
MEDIA
Elsevier Nv ........................................... 23,480 356,263
Wolters Kluwer Cva .................................... 2,618 297,386
PAPER & FOREST PRODUCTS
KNP BT (Kon) Nv ....................................... 2,446 58,607
STEEL
Kon Hoogovens Nv Cva .................................. 1,568 58,054
TELEPHONE
Kon Ptt nederland ..................................... 16,563 626,822
------------
8,544,961
------------
NORWAY ---- 3.25%
AIR TRANSPORT
Helicopter Service .................................... 4,000 46,180
CHEMICALS
Dyno Industrier ....................................... 10,400 230,530
DRUGS & MEDICINE
Nycomed Series 'A' * .................................. 12,260 176,455
Nycomed Series 'B' * .................................. 8,468 117,315
ENERGY & UTILITIES
Hafslund Ser 'A' ...................................... 17,560 127,044
Hafslund Ser 'B' ...................................... 14,268 90,049
FOOD & AGRICULTURE
Orkla As 'A' ......................................... 9,100 479,070
Orkla As 'B' ......................................... 2,350 114,311
INSURANCE
Uni Storebrand As 'A' * ............................... 65,053 292,403
INTERNATIONAL OIL
Norsk Hydro As ........................................ 44,900 2,197,887
Transocean * .......................................... 14,721 381,829
MOTOR VEHICLES
Petroleum Geo Svs * ................................... 2,500 71,579
</TABLE>
18
<PAGE>
<TABLE>
<S> <C> <C>
PAPER & FOREST PRODUCTS
Norske Skogsindust 'A' ................................ 5,800 174,991
PRODUCER GOODS
Kvaerner As Series 'A' ................................ 9,900 418,321
Kvaerner As Series 'B' ................................ 3,900 150,685
RAILROAD & SHIPPING
Bergesen Dy As 'A' ................................... 10,000 207,810
Bergesen Dy As 'B' Non-Voting ........................ 7,100 143,173
Leif Hoegh & Co ....................................... 4,600 80,014
Unitor As ............................................. 4,000 64,652
------------
5,564,298
------------
PAPUA NEW GUINEA -- 0.00%
GOLD
Highland Gold Ltd ..................................... 4,846 2,403
------------
2,403
------------
SINGAPORE ---- 2.84%
AIR TRANSPORT
Singapore Airlines (Alien Market) ..................... 70,000 738,960
BANK
Dev Bank Singapore (Alien Market) ..................... 35,250 439,550
Overseas Chinese Bank (Alien Market) .................. 45,833 535,795
United Overseas Bank (Alien Market) ................... 56,804 543,312
CONSUMER DURABLES
Jardine Matheson (Sing Quote) ......................... 2,041 15,001
ENERGY & UTILITIES
Singapore Telecom ..................................... 192,000 511,477
LIQUOR & TOBACCO
Fraser & Neave ........................................ 21,600 223,431
Straits Trading Co .................................... 36,000 94,372
MEDIA
Singapore Press Holdings (Alien Market) ............... 19,000 372,881
MOTOR VEHICLES
Cycle & Carriage ...................................... 30,000 320,948
MULTI-INDUSTRY & CONGLOMERATES
Straits Steamship ..................................... 44,000 147,140
Straits Steamship Wts 12/12/00 * ...................... 11,000 13,794
</TABLE>
19
<PAGE>
<TABLE>
<S> <C> <C>
PRODUCER GOODS
Jurong Shipyard (Nl) .................................. 13,000 65,855
Keppel Corp ........................................... 50,000 418,012
REAL PROPERTY
City Developments ..................................... 44,600 347,588
Hong Kong Land Holdings (Sing Quote) .................. 25,975 58,444
RETAIL
Dairy Farms Intl (Sing Quote) ......................... 21,831 18,447
------------
4,865,007
------------
Spain ---- 3.37%
BANKS
Argentaria Corp Banc .................................. 6,069 264,609
Banco Bilbao Vizcaya (Regd) ........................... 14,688 594,573
Banco Central Hispan (Regd) ........................... 8,704 177,188
Banco Santander (Regd) ................................ 10,046 468,565
CONSTRUCTION
Fomento Const Y Contra ................................ 1,149 94,995
ENERGY & UTILITIES
Empresa Nac Electricid ................................ 13,522 842,680
Gas Natural Sdg Sa .................................... 1,963 411,858
Iberdrola Sa .......................................... 60,183 617,269
Union Electrical Fenosa ............................... 12,958 83,280
INSURANCE
Corporation Mapfre (Regd) ............................. 3,224 164,455
INTERNATIONAL OIL
Repsol Sa ............................................. 15,167 527,014
LIQUOR & TOBACCO
Tabacalera Sa Series 'A' (Regd) ....................... 1,599 80,442
NON-FERROUS METALS
Acerinox Sa (Regd) .................................... 1,136 118,286
PRODUCER GOODS
Zardoya-Otis .......................................... 1,196 114,536
RAILROAD & SHIPPING
Autopistas Cesa ....................................... 19,283 224,097
REAL PROPERTY
Vallehermoso Sa ....................................... 2,815 55,549
</TABLE>
20
<PAGE>
<TABLE>
<S> <C> <C>
TELEPHONE
Telefonica De Espana .................................. 50,748 934,127
------------
5,773,523
------------
SWITZERLAND ---- 4.37%
BANKS
Cs Holding (Regd) .................................... 6,834 649,744
Schweiz Bangesellsch (Br) ............................. 566 553,953
Schweiz Bangesellsch (Regd) ........................... 252 53,354
Schweiz Bankverein (Regd) ............................. 1,150 226,942
CHEMICALS
Ciba-Geigy (Br) ....................................... 260 315,330
Ciba-Geigy (Regd) ..................................... 380 462,992
CONSTRUCTION
Holderbank Fn Glarus (Br) ............................. 338 270,045
CONSUMER DURABLES
Smh Ag Neuenburg (Regd) ............................... 475 74,193
Smh Ag Neuenburg (Br) ................................. 105 72,984
DRUGS & MEDICINE
Roche Holdings Genusscheine Npv ....................... 137 1,044,760
Roche Holdings (Br) ................................... 44 546,642
Sandoz (Regd) ......................................... 935 1,068,985
ELECTRONICS
Abb (Br) .............................................. 340 420,504
Sgs Holding (Br) ...................................... 24 57,429
FOOD & AGRICULTURE
Merkur Hldg Ag (Regd) ................................. 80 16,810
Nestle Sa (Regd) ...................................... 924 1,054,932
INSURANCE
Zurich Versicherun (Regd) ............................ 1,650 449,530
NON-FERROUS METALS
Alusuisse-Lonza Holdings (Regd) ....................... 158 130,400
PRODUCER GOODS
Sulzer Ag Ptg ......................................... 13 7,790
------------
7,477,319
------------
</TABLE>
21
<PAGE>
<TABLE>
<S> <C> <C>
UNITED KINGDOM -- 12.05%
AIR TRANSPORT
British Airways ....................................... 44,575 383,704
BANKS
Abbey National ........................................ 38,813 326,264
Barclays .............................................. 62,474 750,367
Hsbc Holdings (UK Regd) ............................... 50,350 771,386
Hsbc Holdings (UK Regd) ............................... 26,947 422,052
LLoyds Bank ........................................... 149,093 729,731
CHEMICALS
Boc Group ............................................. 19,232 276,116
Imperial Chemical Industries .......................... 25,167 308,143
CONSTRUCTION
English China Clay .................................... 33,609 135,254
Rmc Group ............................................. 19,470 306,458
Taylor Woodrow ........................................ 91,386 221,513
DRUGS & MEDICINE
Glaxo Holdings ........................................ 77,813 1,047,649
Smithkline Beecham .................................... 63,516 679,489
Zeneca Group .......................................... 25,438 562,449
ELECTRONICS
General Electric Co ................................... 69,443 374,415
ENERGY & UTILITIES
British Gas ........................................... 133,516 373,423
National Power ........................................ 40,500 327,230
Thames Water .......................................... 26,744 235,616
FOOD & AGRICULTURE
Associated British Foods .............................. 41,799 251,346
Cadbury Schweppes ..................................... 27,535 217,770
Kingfisher ............................................ 31,197 313,626
Sainsbury (J) ......................................... 48,409 285,076
Tesco ................................................. 47,446 216,741
Unilever .............................................. 17,926 356,524
INSURANCE
Prudential Corp ....................................... 79,566 501,936
INTERNATIONAL OIL
British Petroleum ..................................... 145,089 1,272,605
</TABLE>
22
<PAGE>
<TABLE>
<S> <C> <C>
LIQUOR & TOBACCO
BAT Industries ........................................ 74,310 578,469
Bass .................................................. 32,124 403,806
Grand Metropolitan .................................... 47,103 312,516
Guinness .............................................. 64,119 466,260
MEDIA
British Sky Broadcasting .............................. 47,324 323,541
Reuters Holdings ...................................... 47,479 574,691
MULTI-INDUSTRY
Inchcape .............................................. 14,451 66,015
MULTI-INDUSTRY & CONGLOMERATES
Hanson ................................................ 145,900 409,192
PRODUCER GOODS
Btr ................................................... 114,438 450,758
Rolls Royce ........................................... 79,712 277,439
Rtz Corp (Regd) ....................................... 30,154 446,512
Smiths Industries ..................................... 28,460 311,317
REAL PROPERTY
Mepc .................................................. 52,543 331,464
RETAIL
Argos ................................................. 23,339 270,530
Boots Co .............................................. 31,574 284,056
Great Univ Stores ..................................... 19,328 196,408
Marks & Spencer ....................................... 86,326 631,097
Sears ................................................. 86,891 133,661
STEEL
British Steel ......................................... 84,490 215,957
TELEPHONE
British Telecom ....................................... 168,816 907,580
Cable & Wireless ...................................... 75,770 501,536
Vodafone Group ........................................ 98,389 366,140
</TABLE>
23
<PAGE>
<TABLE>
<S> <C> <C>
TRAVEL & RECREATION
Ladbroke Group ........................................ 64,565 180,578
Thorn Emi ............................................. 12,257 341,665
------------
20,628,071
------------
TOTAL COMMON STOCKS ................................... 158,299,902
------------
(COST $145,484,658)
TOTAL INVESTMENTS ..................................... $171,165,200
============
(COST $158,349,956)
<FN>
* Non Income producing security
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS (Continued)
Notes to Portfolio of Investments
At June 30, 1996, sector diversification of the Woodward International
Equity Funds equity investments was as follows:
% of
Sector Diversification Investments
---------------------- -----------
<S> <C>
Banks/Finance ........... 21.66%
Consumer Non-Durables ... 18.16
Materials and Services .. 15.44
Utilities ............... 9.62
Temporary Cash Investment 7.52
Technology............... 7.27
Energy................... 6.45
Capital Goods ........... 4.99
Consumer Durables ....... 3.71
Transportation .......... 3.63
Miscellaneous ........... 1.55
------
Total Investments........ 100.00%
======
</TABLE>
25
<PAGE>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
(1) Organization and Commencement of Operations
The Woodward Funds (Woodward) was organized as a Massachusetts business
trust on April 21, 1987, and registered under the Investment Company Act of
1940, as amended, as an open-end investment company. As of June 30, 1996,
Woodward consisted of seventeen separate series. The Woodward International
Equity Fund (International Fund) commenced operations on December 3, 1994.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies followed in
the preparation of the financial statements. The policies are in conformity
with generally accepted accounting principles for investment companies.
Following generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Investments
The International Fund values investment securities at market value which
is determined by a pricing service based upon quoted market prices or dealer
quotes at the close of the respective foreign securities exchange. Securities
for which market prices or dealer quotes are not readily available are valued
by the investment advisor, NBD Bank, (NBD) in accordance with procedures
approved by the Board of Trustees.
Investment security purchases and sales are accounted for on the day
after trade date.
Woodward invests in securities subject to repurchase agreements. Such
transactions are entered into only with institutions included on the Federal
Reserve System's list of institutions with whom the Federal Reserve open
market desk will do business. NBD, acting under the supervision of the Board
of Trustees, has established the following additional policies and procedures
relating to Woodward's investments in securities subject to repurchase
agreements: 1) the value of the underlying collateral is required to equal or
exceed 102% of the funds advanced under the repurchase agreement including
accrued interest; 2) collateral is marked to market daily by NBD to assure its
value remains at least equal to 102% of the repurchase agreement amount: and
3) funds are not disbursed by Woodward or its agent unless collateral is
presented or acknowledged by the collateral custodian.
Investment Income
Interest income is recorded daily on the accrual basis. Dividends are
recorded on the ex-dividend date or upon receipt of ex-dividend notification
in the case of certain foreign securities. Investment income is recorded net
of foreign taxes ??????? of these taxes is uncertain.
26
<PAGE>
Forward Foreign Currency Contracts
The International Fund may enter into a forward foreign currency contract
which is an agreement between two parties to buy and sell a currency at a set
price on a future date. The market value of the contract will fluctuate with
changes in currency exchange rates. The contract is "marked-to-market" daily
using the prevailing exchange rate and the change in market value is recorded
as an unrealized gain or loss. When the contract is closed, a realized gain or
loss is recorded equal to the difference between the value of the contract at
the time it was entered into and the value at the time it was closed.
The International Fund may enter into forward contracts with the
objective of minimizing its risk from adverse changes in the relationship
between currencies or to enhance income. The International Fund may also enter
into a forward contract in relation to a security denominated in a foreign
currency when it anticipates receipt in a foreign currency of dividend
payments in order to "lock in" the U.S. dollar price of a security or the U.S.
dollar equivalent of such dividend payments.
These contracts involve market risk in excess of the amounts reflected in
the International Fund's Statement of Assets and Liabilities. The face or
contract amount in U.S. dollars, as reflected in Footnote 6, reflects the
total exposure the fund has in that particular currency contract. Losses may
arise due to changes in the value of the foreign currency or if the
counterparty does not perform under the contract.
Foreign Currency Translations
The accounting records of the International Fund are maintained in U.S.
dollars. Foreign currency-denominated assets and liabilities are
"marked-to-market" daily using the prevailing exchange rate and the change in
value is recorded as an unrealized gain or loss. Upon receipt or payment, a
realized gain or loss is recorded equal to the difference between the original
value and the settlement value of the asset or liability. Purchases and sales
of securities, income, and expenses are translated into U.S. dollars at
prevailing exchange rate on the respective date of the transaction.
Net realized gains and losses on foreign currency transactions represent
gains and losses from sales and maturities of forward foreign currency
contracts, disposition of foreign currencies and currency gains and losses
realized between trade and settlement dates on securities transactions and
between the ex, pay and settlement dates on dividend income. Exchange rate
fluctuations on investments are not segregated in the statement of operations
from changes arising in market price movements. The effects of changes in
foreign currency exchange rates on investments in securities are included
within the net realized gain or loss on securities sold and net unrealized
appreciation or depreciation on investment securities held.
Federal Income Taxes
It is Woodward's policy to comply with the requirements of Subchapter M
of the Internal Revenue Code, as amended, applicable to regulated investment
companies and to distribute net investment income and realized gains to its
shareholders. Therefore, no federal income tax provision is required in the
accompanying financial statements.
27
<PAGE>
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to differing treatments for
foreign currency transactions, wash sales and post October 31 capital losses.
Also, due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the net investment
income or realized gains (losses) were recorded by the Fund. Certain
book-to-tax timing differences for the Fund are reflected as excess
distributions in the Statement of Changes in Net Assets. These distributions
do not constitute a tax return of capital.
Shareholder Dividends
Dividends from net investment income are declared and paid annually. Net
realized capital gains are distributed annually. Distributions from net
investment income and net realized gains are made during each year to avoid
the 4% excise tax imposed on regulated investment companies by the Internal
Revenue Code.
Deferred Organization Costs
Organization costs are being amortized on a straight-line basis over the
five year period beginning with the commencement of operations of the Fund.
Expenses
Expenses are charged daily as a percentage of the Fund's assets. Woodward
monitors the rate at which expenses are charged to ensure that a proper amount
of expense is charged to income each year. This percentage is subject to
revision if there is a change in the estimate of the future net assets of the
International Fund or change in expectations as to the level of actual
expenses.
Concentration of Risk
Investing in securities of foreign issuers and currency transactions, may
involve certain considerations and risks not typically associated with
investing in U.S. companies and U.S. government securities. These risks
include revaluation of currencies, adverse fluctuations in foreign currency
values and possible adverse political, social and economic developments,
including those particular to a specific industry, country or region, which
could cause the securities and their markets to be less liquid and price more
volatile than those of comparable U.S. companies and U.S. government
securities.
(3) Transactions with Affiliates
First of Michigan Corporation (FoM) and Essex National Securities, Inc.
(Essex) act as sponsors and co-distributors of Woodward's shares. Pursuant to
their Distribution Agreement with Woodward, FoM is entitled to receive a fee
at the annual rate of 005% of the International Fund's average net assets and
Essex is entitled to receive a fee at the annual rate of .10% of the aggregate
average net assets of Woodward's investment portfolios, attributable to
investments by clients of Essex.
NBD is the investment advisor pursuant to the Advisory Agreement. For its
advisory services to Woodward, NBD is entitled to a fee, computed daily and
28
<PAGE>
payable monthly. Under the Advisory Agreement, NBD also provides Woodward with
certain administrative services, such as maintaining Woodward's general ledger
and assisting in the preparation of various regulatory reports. NBD receives
no additional compensation for such services.
NBD, FoM, and Essex have agreed that they may waive their fees in whole
or in part; and, if in part, may specify the particular fund to which such
waiver relates as may be required to satisfy any expense limitation imposed by
state securities laws or other applicable laws. At present, no restrictive
expense limitation is imposed on Woodward. Restrictive limitations could be
imposed as a result of changes in current state laws and regulations in those
states where Woodward has qualified its shares, or by a decision of the
Trustees to qualify the shares in other states having restrictive expense
limitations.
NBD is also compensated for its services as Woodward's Custodian,
Transfer Agent and Dividend Disbursing Agent, and is reimbursed for certain
out of pocket expenses incurred on behalf of Woodward.
On March 10, 1994, Woodward adopted the Woodward Funds Deferred
Compensation Plan (the "Plan"), an unfunded, nonqualified deferred
compensation plan. The Plan allows an individual trustee to elect to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed. Liability for payment of the Trustees' Fees is allocated
equally among each of the individual Woodward Funds. The return on the
Trustees' balances is based on the 90-day Treasury bill rate. The liability is
immaterial at this time.
See Note 5 for a summary of fee rates and expenses pursuant to these
agreements.
29
<PAGE>
(4) Investment Securities Transactions
Information with respect to investment securities and
security transactions, excluding short-term securities, is as
follows:
<TABLE>
<S> <C>
Gross Unrealized Gains $ 16,356,311
Gross Unrealized Losses (3,541,067)
-------------
$ 12,815,244
=============
Federal Income Tax Cost $ 158,349,956
Purchases .............. $ 49,906,238
Sales, at value ........ $ 0
</TABLE>
(5) Expenses
Following is a summary of total expense rates charged,
advisory fee rates payable to NBD, and amounts paid to NBD, FoM,
and Essex pursuant to the agreements described in Note 3 for the
period ended June 30, 1996. The rates shown are stated as a
percentage of the Fund's average net assets.
<TABLE>
<S> <C>
Expense Rates:
January 1 ........................... 1.17%
March 18 ............................. 1.16%
May 21 ............................... 1.15%
NBD Advisory Fee:
January 1 ........................... 0.75%
Amounts Paid:
Advisory Fee to NBD .................. $ 508,218
Distribution Fees to FoM & Essex...... $ 3,848
Other Fees & Out of Pocket
Expenses to NBD ................... $ 120,426
</TABLE>
30
<PAGE>
(6) Forward Foreign Currency Contracts
As of June 30, 1996 the Fund had entered into five forward foreign
currency exchange contracts that obligate the Fund to deliver currencies
at specified future dates.
Outstanding contracts as June 30, 1996 are as follows:
<TABLE>
<CAPTION>
U.S. Dollar U.S. Dollar
Currency to Value as of Currency to Value as of Unrealized
Settlement Date be Delivered June 30, 1996 be Received June 30, 1996 Gain (Loss)
------------ ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
July 1, 1996 ..... 1,100,848 $1,100,848 120,742,650 $ 1,098,525 $ (2,323)
U.S. Dollars Japanese Yen
July 2, 1996 ..... 808,794 808,794 3,757,576 804,111 (4,683)
U.S. Dollars Finnish Marks
July 2, 1996 ..... 688,422 688,422 75,507,151 684,333 (4,089)
U.S. Dollars Japanese Yen
July 3, 1996 ..... 908,180 908,180 584,489 911,288 3,108
U.S. Dollars G.B. Pounds
July 3, 1996 ..... 666,483 666,483 417,184 667,965 1,482
U.S. Dollars Irish Punt
----------- -------------- -------------
$ 4,172,727 $ 4,166,222 $ (6,505)
=========== ============== =============
</TABLE>
(7) Subsequent Event
On August 23, 1996, the Woodward International Equity Fund merged with
the Prairie International Equity Fund. The transaction was effected as a
tax-free reorganization under the Internal Revenue Code, so that none of the
Fund's shareholders recognized taxable gains or losses as a result of the
reorganization.
31
<PAGE>
THE WOODWARD FUNDS
INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
The Financial Highlights present a per share analysis of how the International
Equity Fund's net asset values have changed during the periods presented.
Additional quantitative measures expressed in ratio form analyze important
relationships between certain items presented in the financial statements.
These Financial Highlights have been derived from the financial statements of
the International Equity Fund and other information for the periods presented.
<TABLE>
<CAPTION>
Six Months
Ended
June 30, 1996 Year Ended Period ended
(Unaudited) Dec. 31, 1995 Dec. 31, 1994
----------- ------------- -------------
<S> <C> <C> <C>
Net asset value, beginning of
period ........................... $ 11.05 $ 10.01 $ 10.00
Income from investment operations:
Net investment income ............ 0.10 0.10 0.01
Net realized and unrealized
gains on investments.......... 0.42 1.05 --
--------------- --------------- ---------------
Total from investment operations ..... 0.52 1.15 0.01
--------------- --------------- ---------------
Less distributions:
From net investment income ....... -- (0.11) --
From realized gains .............. -- -- --
--------------- --------------- ---------------
Total distributions .................. -- (0.11) --
--------------- --------------- ---------------
Net asset value, end of
period ........................... $ 11.57 $ 11.05 $ 10.01
=============== =============== ===============
Total Return (b) ..................... 9.58%(a) 11.47% 1.26%(a)
Ratios/Supplemental Data
Net assets, end of period ............ $ 166,354,453 $ 107,288,301 $ 36,545,470
Ratio of expenses to average net
assets ........................... 1.15%(a) 1.16% 1.15%(a)
Ratio of net investment income to
average net assets ............... 1.78%(a) 1.43% 1.18%(a)
Ratio of expenses to average net
assets without reimbursed expenses -- 1.24% 1.92%(a)
Ratio of net investment income
to average net assets without
reimbursed expenses .............. -- 1.35% 0.41%(a)
Portfolio turnover rate .............. 0.00% 2.09% 0.30%
Average commission rate .............. $ 0.1 $ .05
<FN>
- -------------------------------------------------
(a) Annualized for periods less than one year for comparability purposes.
Actual annual values may be less than or greater than those shown.
(b) Total returns as presented does not include any applicable sales load.
</TABLE>
32
<PAGE>
RESULTS OF SPECIAL SHAREHOLDER MEETING (Unaudited)
On July 10,1996, a special meeting of the shareholders of The Woodward
International Equity Fund was held to approve the following proposals.
The shareholders approved these proposals with respect to The Woodward
International Equity Fund as follows:
1. To approve a new investment advisory agreement ("New Advisory Agreement")
between each Trust, NBD Bank ("NBD") and First Chicago Investment
Management Company ("FCIMCO")
Affirmative 9,126,519
Against 137,907
Abstain 18,593
2. To approve a change to the fundamental investment limitations of each
Fund of the Trust with regard to the following:
a) investment in commodities
Affirmative 9,008,745
Against 241,192
Abstain 33,083
b) expanded power to borrow
Affirmative 9,007,444
Against 248,907
Abstain 26,669
c) issuing senior securities
Affirmative 9,014,825
Against 226,112
Abstain 42,083
3. To approve a change to the fundamental investment policies and
limitations of certain Funds of the Trusts, as follows:
a) to approve a change of the diversification policy of the
International Equity and Municipal Bond Funds from a
diversified to a non-diversified policy
Affirmative 9,014,021
Against 232,693
Abstain 36,305
c) to approve a change to the fundamental investment limitation
concerning concentration of investments in a
particular industry with respect to the Funds
Affirmative 9,035,260
Against 210,111
Abstain 37,649
4. To approve a change of the following fundamental policies and
limitations to non-fundamental policies and limitations:
b) limitation on investment in other investment companies
Affirmative 9,033,904
Against 215,700
Abstain 33,415
c) limitation on illiquid securities
Affirmative 9,030,678
Against 218,607
Abstain 33,734
<PAGE>
d) limitation on purchasing securities on margin
Affirmative 9,013,199
Against 235,383
Abstain 34,437
e) limitation on purchasing securities of companies for the purpose
of exercising control
Affirmative 9,033,905
Against 217,621
Abstain 31,493
f) limitation on writing or selling put options, call options,
straddles, spreads, or any combinations thereof
The Woodward International Equity Fund.
Affirmative 9,033,277
Against 219,098
Abstain 30,644
5. To approve certain changes to fundamental investment objectives of the
The Woodward International Equity Fund.
Affirmative 9,044,735
Against 208,414
Abstain 29,870
6. To ratify the appointment of two Trustees to the Board of Trustees
of each Trust.
Elected Trustees Current Trustees
---------------- ----------------
Ms. Marilyn McCoy Mr. Will M. Caldwell Mr. Donald B. Sutherland
Mr. John P. Gould Dr. Nicholas J. DeGrazia Mr. Donald L. Tuttle
Mr. Julius L. Pallone
Affirmative 9,131,820
Against 127,803
Abstain 31,238
<PAGE>
7. To approve amendments to the Amended and Restated Declaration of
Trust of The Woodward Funds.
Affirmative 9,114,161
Against 133,498
Abstain 35,361
8. To transact such other business as may properly come before the
Meetings or any adjournment thereof.
Affirmative 9,109,780
Against 129,051
Abstain 52,030
<PAGE>
[ BACK COVER ]
Investment Adviser:
NBD Bank
Detroit, Michigan 48226
Sponsors and Co-Distributors:
First of Michigan Corporation
Detroit, Michigan 48243
Essex National Securities, Inc.
Napa, California 94558
Custodian and Transfer Agent:
NBD Bank
Troy, Michigan 48007-7058
Legal Counsel:
Drinker Biddle & Reath
Philadelphia, Pennsylvania 19107-3496 [ WOODWARD FUNDS LOGO ]
- -------------------------------------------------------------------------------
The Woodward Funds ------------
P.O. Box 7058 BULK RATE
Troy, MI 48007-7058 U.S. POSTAGE
PAID
Detroit, MI
Permit No. 2
------------
