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Filed Pursuant to Rule 497(e)
Registration No. 33-16439
FUND PROSPECTUS SUPPLEMENT
to Prospectus dated August 15, 1996 (as revised October 11, 1996)
The information in the Table entitled "Annual Fund Operating Expenses" and in
the "Example" on page 2 of the Prospectus relating to the GROWTH & INCOME FUND
is replaced in its entirety by the following:
ANNUAL FUND OPERATING EXPENSES:
(as a percentage of average net assets)
Management Fees 1.00%
Rule 12b-1 Expenses 0.25%
Other Expenses (reflecting
voluntary expense limitations) 0.05%(1)
Total Fund Operating Expenses
(reflecting voluntary expense
limitations) 1.30%(1)
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(1) Reflecting voluntary expense limitation. In the absence of the limitation,
Other Expenses and Total Fund Operating Expenses would be .60% and 1.85%,
respectively.
EXAMPLE
1 Year 3 Years 5 Years 10 Years
Growth & Income Fund $13 $41 N/A N/A
Robertson Stephens Investment Management has agreed to waive its fee under its
Administrative Services Agreement with the Growth & Income Fund, and to bear
certain expenses of the Fund, to the extent necessary so that Other Expenses
(excluding any brokerage, interest, taxes, deferred organizational expenses, and
extraordinary expenses) will not exceed 0.05% of the Fund's average daily net
assets. See "Expense Summary" in the Prospectus for additional information.
ALL FUNDS
The section of the Prospectus entitled "Short Sales," appearing on page 13,
should be replaced in its entirety with the following:
When Robertson Stephens Investment Management anticipates that the price of a
security will decline, it may sell the security short and borrow the same
security from a broker or other institution to complete the sale. A Fund may
make a profit or incur a loss depending upon whether the market price of the
security decreases or increases between the date of the short sale and the date
on which the Fund must replace the borrowed security. An increase in the value
of a security sold short by a Fund over the price at which it was sold short
will result in a loss to the Fund, and there can be no assurance that a Fund
will be able to close out the position at any particular time or at an
acceptable price. All short sales must be fully collateralized.
December 20, 1996
ROBERTSON STEPHENS INVESTMENT TRUST
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STATEMENT OF ADDITIONAL INFORMATION
ROBERTSON STEPHENS MUTUAL FUNDS
AUGUST 15, 1996
AS REVISED DECEMBER 20, 1996
Robertson Stephens Investment Trust (the "Trust") is an open-end series
investment company. This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus of the Trust
dated August 15, 1996 (as revised October 11, 1996). A copy of the Trust's
Prospectus can be obtained upon request made to Robertson, Stephens & Company
LLC ("RS&Co."), the Trust's distributor, 555 California Street, San Francisco,
California 94104, telephone 1-800-766-FUND.
TABLE OF CONTENTS
CAPTION PAGE
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INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . . . . . 2
THE FUNDS' INVESTMENT LIMITATIONS. . . . . . . . . . . . . . . . . . . . . . .15
MANAGEMENT OF THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . .20
THE FUNDS' DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
HOW NET ASSET VALUE IS DETERMINED. . . . . . . . . . . . . . . . . . . . . . .34
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
HOW PERFORMANCE IS DETERMINED. . . . . . . . . . . . . . . . . . . . . . . . .36
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
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INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Funds are described in detail
in the Prospectus. The following discussion provides supplemental information
concerning certain investment techniques in which one or more of the Funds may
engage, and certain of the risks they may entail. Certain of the investment
techniques may not be available to all of the Funds.
All of the Funds, except for the Emerging Growth Fund, are managed by
Robertson, Stephens & Company Investment Management, L.P. ("RSIM, L.P."). The
Emerging Growth Fund is managed by Robertson Stephens Investment Management,
Inc. ("RSIM, Inc."). RSIM, L.P. and RSIM, Inc. are sometimes referred to in
this Statement collectively as "Robertson Stephens Investment Management."
LOWER-RATED DEBT SECURITIES
Certain of the Funds may purchase lower-rated debt securities, sometimes
referred to as "junk bonds" (those rated BB or lower by Standard & Poor's
("S&P") or Ba or lower by Moody's Investor Service, Inc. ("Moody's")). See
APPENDIX A for a description of these ratings. None of the Funds intends, under
current circumstances, to purchase such securities if, as a result, more than
35% of the Fund's assets would be invested in securities rated below BB or Ba.
The lower ratings of certain securities held by a Fund reflect a greater
possibility that adverse changes in the financial condition of the issuer, or in
general economic conditions, or both, or an unanticipated rise in interest
rates, may impair the ability of the issuer to make payments of interest and
principal. The inability (or perceived inability) of issuers to make timely
payment of interest and principal would likely make the values of securities
held by the Fund more volatile and could limit the Fund's ability to sell its
securities at prices approximating the values a Fund had placed on such
securities. It is possible that legislation may be adopted in the future
limiting the ability of certain financial institutions to purchase lower rated
securities; such legislation may adversely affect the liquidity of such
securities. In the absence of a liquid trading market for securities held by
it, the Fund may be unable at times to establish the fair market value of such
securities. The rating assigned to a security by Moody's or S&P does not
reflect an assessment of the volatility of the security's market value or of the
liquidity of an investment in the security.
Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. Thus, a decrease
in interest rates generally will result in an increase in the value of a Fund's
fixed-income securities. Conversely, during periods of rising interest rates,
the value of a Fund's fixed-income securities generally will decline. In
addition, the values of such securities are also affected by changes in general
economic conditions and business conditions affecting the specific industries of
their issuers. Changes by recognized rating services in their ratings of any
fixed-income security and in the ability of an issuer to make payments of
interest and principal may also affect the value of these investments. Changes
in the value of portfolio securities generally will not affect cash income
derived from such securities, but will affect the Fund's net asset value. A
Fund will not necessarily dispose of a security when its rating is reduced below
its rating at the time of purchase, although Robertson Stephens Investment
Management will monitor the investment to determine whether continued investment
in the security will assist in meeting the Fund's investment objective.
Issuers of lower-rated securities are often highly leveraged, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. In addition, such
issuers may not have more traditional methods of financing available to them,
and may be unable to repay debt at maturity by refinancing. The risk of loss
due to default in payment of interest or principal by such issuers is
significantly greater because such securities frequently are unsecured and
subordinated to the prior payment of senior indebtedness. Certain of the lower-
rated securities in which the Funds may invest are issued to raise funds in
connection with the acquisition of a company, in so-called "leveraged buy-out"
transactions.
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The highly leveraged capital structure of such issuers may make them especially
vulnerable to adverse changes in economic conditions.
Under adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer, a Fund could find it more
difficult to sell lower-rated securities when Robertson Stephens Investment
Management believes it advisable to do so or may be able to sell such securities
only at prices lower than if such securities were more widely held. In many
cases, such securities may be purchased in private placements and, accordingly,
will be subject to restrictions on resale as a matter of contract or under
securities laws. Under such circumstances, it may also be more difficult to
determine the fair value of such securities for purposes of computing a Fund's
net asset value. In order to enforce its rights in the event of a default under
such securities, a Fund may be required to take possession of and manage assets
securing the issuer's obligations on such securities, which may increase the
Fund's operating expenses and adversely affect the Fund's net asset value. A
Fund may also be limited in its ability to enforce its rights and may incur
greater costs in enforcing its rights in the event an issuer becomes the subject
of bankruptcy proceedings.
Certain securities held by a Fund may permit the issuer at its option to
"call," or redeem, its securities. If an issuer were to redeem securities held
by a Fund during a time of declining interest rates, the Fund may not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.
OPTIONS
The Funds may purchase and sell put and call options on their portfolio
securities to enhance investment performance and to protect against changes in
market prices. There is no assurance that a Fund's use of put and call options
will achieve its desired objective, and a Fund's use of options may result in
losses to the Fund.
COVERED CALL OPTIONS. A Fund may write covered call options on its
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may
also be used as a limited form of hedging against a decline in the price of
securities owned by the Fund.
A call option gives the holder the right to purchase, and obligates the
writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times while
obligated as a writer, either owns the underlying securities (or comparable
securities satisfying the cover requirements of the securities exchanges), or
has the right to acquire such securities through immediate conversion of
securities.
In return for the premium received when it writes a covered call option, a
Fund gives up some or all of the opportunity to profit from an increase in the
market price of the securities covering the call option during the life of the
option. The Fund retains the risk of loss should the price of such securities
decline. If the option expires unexercised, the Fund realizes a gain equal to
the premium, which may be offset by a decline in price of the underlying
security. If the option is exercised, the Fund realizes a gain or loss equal to
the difference between the Fund's cost for the underlying security and the
proceeds of sale (exercise price minus commissions) plus the amount of the
premium.
A Fund may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A Fund may enter into closing
purchase transactions in order to free itself to sell the underlying security or
to write another call on the security, realize a profit on a previously written
call option, or protect a security from being called in an unexpected market
rise. Any profits from a closing purchase transaction may be offset by a
decline in the value of the underlying security. Conversely, because increases
in the market price of a call option will generally reflect increases in the
market price of the underlying security, any loss resulting from a closing
purchase transaction is likely to be offset in whole or in part by unrealized
appreciation of the underlying security owned by the Fund.
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COVERED PUT OPTIONS. A Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
Fund plans to purchase. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash
and high-grade short-term debt obligations or other permissible collateral equal
to the price to be paid if the option is exercised.
In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, a Fund also receives
interest on the cash and debt securities maintained to cover the exercise price
of the option. By writing a put option, the Fund assumes the risk that it may
be required to purchase the underlying security for an exercise price higher
than its then current market value, resulting in a potential capital loss unless
the security later appreciates in value.
A Fund may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.
PURCHASING PUT AND CALL OPTIONS. A Fund may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it
sold the underlying security instead of buying the put option.
A Fund may purchase call options to hedge against an increase in the price
of securities that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.
A Fund may also purchase put and call options to attempt to enhance its
current return.
OPTIONS ON FOREIGN SECURITIES. A Fund may purchase and sell options on
foreign securities if Robertson Stephens Investment Management believes that the
investment characteristics of such options, including the risks of investing in
such options, are consistent with the Fund's investment objective. It is
expected that risks related to such options will not differ materially from
risks related to options on U.S. securities. However, position limits and other
rules of foreign exchanges may differ from those in the U.S. In addition,
options markets in some countries, many of which are relatively new, may be less
liquid than comparable markets in the U.S.
RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve
certain risks, including the risks that Robertson Stephens Investment Management
will not forecast interest rate or market movements correctly, that a Fund may
be unable at times to close out such positions, or that hedging transactions may
not accomplish their purpose because of imperfect market correlations. The
successful use of these strategies depends on the ability of Robertson Stephens
Investment Management to forecast market and interest rate movements correctly.
An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. There is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close out
an option position. As a result, a Fund may be forced to continue to
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hold, or to purchase at a fixed price, a security on which it has sold an option
at a time when Robertson Stephens Investment Management believes it is
inadvisable to do so.
Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict a Fund's use of
options. The exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an investor or group
of investors acting in concert. It is possible that the Trust and other clients
of Robertson Stephens Investment Management may be considered such a group.
These position limits may restrict the Funds' ability to purchase or sell
options on particular securities.
Options which are not traded on national securities exchanges may be closed
out only with the other party to the option transaction. For that reason, it
may be more difficult to close out unlisted options than listed options.
Furthermore, unlisted options are not subject to the protection afforded
purchasers of listed options by The Options Clearing Corporation.
Government regulations, particularly the requirements for qualification as
a "regulated investment company" under the Internal Revenue Code, may also
restrict the Funds' use of options.
SPECIAL EXPIRATION PRICE OPTIONS
Certain of the Funds may purchase over-the-counter ("OTC") puts and calls
with respect to specified securities ("special expiration price options")
pursuant to which the Funds in effect may create a custom index relating to a
particular industry or sector that Robertson Stephens Investment Management
believes will increase or decrease in value generally as a group. In exchange
for a premium, the counterparty, whose performance is guaranteed by a broker-
dealer, agrees to purchase (or sell) a specified number of shares of a
particular stock at a specified price and further agrees to cancel the option at
a specified price that decreases straight line over the term of the option.
Thus, the value of the special expiration price option is comprised of the
market value of the applicable underlying security relative to the option
exercise price and the value of the remaining premium. However, if the value of
the underlying security increases (or decreases) by a prenegotiated amount, the
special expiration price option is canceled and becomes worthless. A portion of
the dividends during the term of the option are applied to reduce the exercise
price if the options are exercised. Brokerage commissions and other transaction
costs will reduce these Funds' profits if the special expiration price options
are exercised. A Fund will not purchase special expiration price options with
respect to more than 25% of the value of its net assets, and will limit premiums
paid for such options in accordance with state securities laws.
LEAPS AND BOUNDS
The Value + Growth Fund may purchase certain long-term exchange-traded
equity options called Long-Term Equity Anticipation Securities ("LEAPs") and
Buy-Right Options Unitary Derivatives ("BOUNDs"). LEAPs provide a holder the
opportunity to participate in the underlying securities' appreciation in excess
of a fixed dollar amount. BOUNDs provide a holder the opportunity to retain
dividends on the underlying security while potentially participating in the
underlying securities' capital appreciation up to a fixed dollar amount. The
Value + Growth Fund will not purchase these options with respect to more than
25% of the value of its net assets.
LEAPs are long-term call options that allow holders the opportunity to
participate in the underlying securities' appreciation in excess of a specified
strike price, without receiving payments equivalent to any cash dividends
declared on the underlying securities. A LEAP holder will be entitled to
receive a specified number of shares of the underlying stock upon payment of the
exercise price, and therefore the LEAP will be exercisable at any time the price
of the underlying stock is above the strike price. However, if at expiration
the price of the underlying stock is at or below the strike price, the LEAP will
expire worthless.
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BOUNDs are long-term options which are expected to have the same economic
characteristics as covered call options, with the added benefits that BOUNDs can
be traded in a single transaction and are not subject to early exercise.
Covered call writing is a strategy by which an investor sells a call option
while simultaneously owning the number of shares of the stock underlying the
call. BOUND holders are able to participate in a stock's price appreciation up
to but not exceeding a specified strike price while receiving payments
equivalent to any cash dividends declared on the underlying stock. At
expiration, a BOUND holder will receive a specified number of shares of the
underlying stock for each BOUND held if, on the last day of trading, the
underlying stock closes at or below the strike price. However, if at expiration
the underlying stock closes above the strike price, the BOUND holder will
receive a payment equal to a multiple of the BOUND's strike price for each BOUND
held. The terms of a BOUND are not adjusted because of cash distributions to
the shareholders of the underlying security. BOUNDs are subject to the position
limits for equity options imposed by the exchanges on which they are traded.
The settlement mechanism for BOUNDs operates in conjunction with that of
the corresponding LEAPs. For example, if at expiration the underlying stock
closes at or below the strike price, the LEAP will expire worthless, and the
holder of a corresponding BOUND will receive a specified number of shares of
stock from the writer of the BOUND. If, on the other hand, the LEAP is "in the
money" at expiration, the holder of the LEAP is entitled to receive a specified
number of shares of the underlying stock from the LEAP writer upon payment of
the strike price, and the holder of a BOUND on such stock is entitled to the
cash equivalent of a multiple of the strike price from the writer of the BOUND.
An investor holding both a LEAP and a corresponding BOUND, where the underlying
stock closes above the strike price at expiration, would be entitled to receive
a multiple of the strike price from the writer of the BOUND and, upon exercise
of the LEAP, would be obligated to pay the same amount to receive shares of the
underlying stock. LEAPs are American-style options (exercisable at any time
prior to expiration), whereas BOUNDs are European-style options (exercisable
only on the expiration date).
FUTURES CONTRACTS
INDEX FUTURES CONTRACTS AND OPTIONS. A Fund may buy and sell stock index
futures contracts and related options for hedging purposes or to attempt to
increase investment return. A stock index futures contract is a contract to buy
or sell units of a stock index at a specified future date at a price agreed upon
when the contract is made. A unit is the current value of the stock index.
The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P 100
Index") is composed of 100 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 100 Index assigns relative weightings to
the common stocks included in the Index, and the Index fluctuates with changes
in the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).
Positions in index futures may be closed out only on an exchange or board
of trade which provides a secondary market for such futures.
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In order to hedge its investments successfully using futures contracts and
related options, a Fund must invest in futures contracts with respect to indexes
or sub-indexes the movements of which will, in its judgment, have a significant
correlation with movements in the prices of the Fund's securities.
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who
fail to exercise their options prior to the exercise date suffer a loss of the
premium paid.
As an alternative to purchasing and selling call and put options on index
futures contracts, each of the Funds which may purchase and sell index futures
contracts may purchase and sell call and put options on the underlying indexes
themselves to the extent that such options are traded on national securities
exchanges. Index options are similar to options on individual securities in
that the purchaser of an index option acquires the right to buy (in the case of
a call) or sell (in the case of a put), and the writer undertakes the obligation
to sell or buy (as the case may be), units of an index at a stated exercise
price during the term of the option. Instead of giving the right to take or
make actual delivery of securities, the holder of an index option has the right
to receive a cash "exercise settlement amount." This amount is equal to the
amount by which the fixed exercise price of the option exceeds (in the case of a
put) or is less than (in the case of a call) the closing value of the underlying
index on the date of the exercise, multiplied by a fixed "index multiplier."
A Fund may purchase or sell options on stock indices in order to close out
its outstanding positions in options on stock indices which it has purchased. A
Fund may also allow such options to expire unexercised.
Compared to the purchase or sale of futures contracts, the purchase of call
or put options on an index involves less potential risk to a Fund because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar
to those risks relating to the purchase or sale of index futures contracts.
MARGIN PAYMENTS. When a Fund purchases or sells a futures contract, it is
required to deposit with its custodian an amount of cash, U.S. Treasury bills,
or other permissible collateral equal to a small percentage of the amount of the
futures contract. This amount is known as "initial margin." The nature of
initial margin is different from that of margin in security transactions in that
it does not involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that is returned
to a Fund upon termination of the contract, assuming the Fund satisfies its
contractual obligations.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when a Fund sells a futures contract and the price of the
underlying index rises above the delivery price, the Fund's position declines in
value. The Fund then pays the broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the value of
the index underlying the futures contract. Conversely, if the price of the
underlying index falls below the delivery price of the contract, the Fund's
futures position increases in value. The broker then must make a variation
margin payment equal to the difference between the delivery price of the futures
contract and the value of the index underlying the futures contract.
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When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.
SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS
LIQUIDITY RISKS. Positions in futures contracts may be closed out only on
an exchange or board of trade which provides a secondary market for such
futures. Although the Funds intend to purchase or sell futures only on
exchanges or boards of trade where there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange or
board of trade will exist for any particular contract or at any particular time.
If there is not a liquid secondary market at a particular time, it may not be
possible to close a futures position at such time and, in the event of adverse
price movements, a Fund would continue to be required to make daily cash
payments of variation margin. However, in the event financial futures are used
to hedge portfolio securities, such securities will not generally be sold until
the financial futures can be terminated. In such circumstances, an increase in
the price of the portfolio securities, if any, may partially or completely
offset losses on the financial futures.
The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
a Fund generally will purchase only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option or at any particular time.
In the event no such market exists for particular options, it might not be
possible to effect closing transactions in such options, with the result that a
Fund would have to exercise the options in order to realize any profit.
HEDGING RISKS. There are several risks in connection with the use by a
Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying securities or
index or movements in the prices of a Fund's securities which are the subject of
a hedge. Robertson Stephens Investment Management will, however, attempt to
reduce this risk by purchasing and selling, to the extent possible, futures
contracts and related options on securities and indexes the movements of which
will, in its judgment, correlate closely with movements in the prices of the
underlying securities or index and the Fund's portfolio securities sought to be
hedged.
Successful use of futures contracts and options by a Fund for hedging
purposes is also subject to Robertson Stephens Investment Management's ability
to predict correctly movements in the direction of the market. It is possible
that, where a Fund has purchased puts on futures contracts to hedge its
portfolio against a decline in the market, the securities or index on which the
puts are purchased may increase in value and the value of securities held in the
portfolio may decline. If this occurred, the Fund would lose money on the puts
and also experience a decline in value in its portfolio securities. In
addition, the prices of futures, for a number of reasons, may not correlate
perfectly with movements in the underlying securities or index due to certain
market distortions. First, all participants in the futures market are subject
to margin deposit requirements. Such requirements may cause investors to close
futures contracts through offsetting transactions which could distort the normal
relationship between the underlying security or index and futures markets.
Second, the margin requirements in the futures markets are less onerous than
margin requirements in the securities markets in general, and as a result the
futures markets may attract more speculators than the securities markets do.
Increased participation by speculators in the futures markets may also cause
temporary price distortions. Due to the possibility of price distortion, even a
correct forecast of general market trends by Robertson Stephens Investment
Management still may not result in a successful hedging transaction over a very
short time period.
OTHER RISKS. Funds will incur brokerage fees in connection with their
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks, those
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transactions themselves entail certain other risks. Thus, while a Fund may
benefit from the use of futures and related options, unanticipated changes in
interest rates or stock price movements may result in a poorer overall
performance for the Fund than if it had not entered into any futures contracts
or options transactions. Moreover, in the event of an imperfect correlation
between the futures position and the portfolio position which is intended to be
protected, the desired protection may not be obtained and the Fund may be
exposed to risk of loss.
INDEXED SECURITIES
Certain of the Funds may purchase securities whose prices are indexed to
the prices of other securities, securities indices, currencies, precious metals,
or other commodities, or other financial indicators. Indexed securities
typically, but not always, are debt securities or deposits whose value at
maturity or coupon rate is determined by reference to a specific instrument or
statistic. Gold-indexed securities, for example, typically provide for a
maturity value that depends on the price of gold, resulting in a security whose
price tends to rise and fall together with gold prices. Currency-indexed
securities typically are short-term to intermediate-term debt securities whose
maturity values or interest rates are determined by reference to the values of
one or more specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting in a
security whose price characteristics are similar to a put option on the
underlying currency. Currency-indexed securities also may have prices that
depend on the values of a number of different foreign currencies relative to
each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, commodity or other instrument to which
they are indexed, and also may be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the credit
risks associated with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
Government agencies.
REPURCHASE AGREEMENTS
A Fund may enter into repurchase agreements. A repurchase agreement is a
contract under which the Fund acquires a security for a relatively short period
(usually not more than one week) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). It is the Trust's present
intention to enter into repurchase agreements only with member banks of the
Federal Reserve System and securities dealers meeting certain criteria as to
creditworthiness and financial condition established by the Trustees of the
Trust and only with respect to obligations of the U.S. Government or its
agencies or instrumentalities or other high-quality, short-term debt
obligations. Repurchase agreements may also be viewed as loans made by a Fund
which are collateralized by the securities subject to repurchase. Robertson
Stephens Investment Management will monitor such transactions to ensure that the
value of the underlying securities will be at least equal at all times to the
total amount of the repurchase obligation, including the interest factor. If
the seller defaults, a Fund could realize a loss on the sale of the underlying
security to the extent that the proceeds of sale including accrued interest are
less than the resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or insolvency
proceedings, a Fund may incur delay and costs in selling the underlying security
or may suffer a loss of principal and interest if the Fund is treated as an
unsecured creditor and required to return the underlying collateral to the
seller's estate.
LEVERAGE
Leveraging a Fund creates an opportunity for increased net income but, at
the same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of a Fund's shares and in the yield on
a Fund's portfolio. Although the principal of such borrowings will be fixed, a
Fund's assets may change in value during the time the borrowing is outstanding.
Since any decline in value of a Fund's investments will be borne entirely by the
Fund's shareholders (and not by those persons providing the leverage to the
Fund),
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the effect of leverage in a declining market would be a greater decrease in net
asset value than if the Fund were not so leveraged. Leveraging will create
interest expenses for a Fund, which can exceed the investment return from the
borrowed funds. To the extent the investment return derived from securities
purchased with borrowed funds exceeds the interest a Fund will have to pay, the
Fund's investment return will be greater than if leveraging were not used.
Conversely, if the investment return from the assets retained with borrowed
funds is not sufficient to cover the cost of leveraging, the investment return
of the Fund will be less than if leveraging were not used.
REVERSE REPURCHASE AGREEMENTS
In connection with its leveraging activities, a Fund may enter into reverse
repurchase agreements, in which the Fund sells securities and agrees to
repurchase them at a mutually agreed date and price. A reverse repurchase
agreement may be viewed as a borrowing by the Fund, secured by the security
which is the subject of the agreement. In addition to the general risks
involved in leveraging, reverse repurchase agreements involve the risk that, in
the event of the bankruptcy or insolvency of the Fund's counterparty, the Fund
would be unable to recover the security which is the subject of the agreement,
that the amount of cash or other property transferred by the counterparty to the
Fund under the agreement prior to such insolvency or bankruptcy is less than the
value of the security subject to the agreement, or that the Fund may be delayed
or prevented, due to such insolvency or bankruptcy, from using such cash or
property or may be required to return it to the counterparty or its trustee or
receiver.
SECURITIES LENDING
A Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. Government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) a Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities of any Fund loaned will not at any time exceed one-
third (or such other limit as the Trustees may establish) of the total assets of
the Fund. In addition, it is anticipated that a Fund may share with the
borrower some of the income received on the collateral for the loan or that it
will be paid a premium for the loan.
Before a Fund enters into a loan, Robertson Stephens Investment Management
considers all relevant facts and circumstances, including the creditworthiness
of the borrower. The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of the securities or
possible loss of rights in the collateral should the borrower fail financially.
Although voting rights or rights to consent with respect to the loaned
securities pass to the borrower, a Fund retains the right to call the loans at
any time on reasonable notice, and it will do so in order that the securities
may be voted by a Fund if the holders of such securities are asked to vote upon
or consent to matters materially affecting the investment. A Fund will not lend
portfolio securities to borrowers affiliated with the Fund.
SHORT SALES
Certain of the Funds may seek to hedge investments or realize additional
gains through short sales. Short sales are transactions in which a Fund sells a
security it does not own, in anticipation of a decline in the market value of
that security. To complete such a transaction, a Fund must borrow the security
to make delivery to the buyer. A Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by a Fund. Until the security is replaced, a Fund is
required to repay the lender any dividends or interest that accrue during the
period of the loan. To borrow the security, a Fund also may be required to pay
a premium, which would increase the cost of the security sold. The net proceeds
of the short sale will be retained by the broker (or by the Fund's custodian in
a special custody account), to the extent necessary to meet margin requirements,
until the short position is closed out. A Fund also will incur transaction
costs in effecting short sales.
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A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which a
Fund replaces the borrowed security. A Fund will realize a gain if the security
declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a Fund may be required to pay in connection with
a short sale. An increase in the value of a security sold short by a Fund over
the price at which it was sold short will result in a loss to the Fund, and
there can be no assurance that a Fund will be able to close out the position at
any particular time or at an acceptable price.
FOREIGN INVESTMENTS
Investments in foreign securities may involve considerations different from
investments in domestic securities due to limited publicly available
information, non-uniform accounting standards, lower trading volume and possible
consequent illiquidity, greater volatility in price, the possible imposition of
withholding or confiscatory taxes, the possible adoption of foreign governmental
restrictions affecting the payment of principal and interest, expropriation of
assets, nationalization, or other adverse political or economic developments.
Foreign companies may not be subject to auditing and financial reporting
standards and requirements comparable to those which apply to U.S. companies.
Foreign brokerage commissions and other fees are generally higher than in the
United States. It may be more difficult to obtain and enforce a judgment
against a foreign issuer.
In addition, to the extent that a Fund's foreign investments are not U.S.
dollar-denominated, the Fund may be affected favorably or unfavorably by changes
in currency exchange rates or exchange control regulations and may incur costs
in connection with conversion between currencies.
DEVELOPING COUNTRIES. The considerations noted above for foreign
investments generally are intensified for investments in developing countries.
These risks include (i) volatile social, political and economic conditions; (ii)
the small current size of the markets for such securities and the currently low
or nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) the existence of national policies which may
restrict a Fund's investment opportunities, including restrictions on investment
in issuers or industries deemed sensitive to national interests; (iv) foreign
taxation; (v) the absence of developed structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain developing countries, of a capital market
structure or market-oriented economy; (vii) economies based on only a few
industries; and (viii) the possibility that recent favorable economic
developments in certain developing countries may be slowed or reversed by
unanticipated political or social events in such countries.
FOREIGN CURRENCY TRANSACTIONS
A Fund may engage in currency exchange transactions to protect against
uncertainty in the level of future foreign currency exchange rates and to
increase current return. A Fund may engage in both "transaction hedging" and
"position hedging."
When it engages in transaction hedging, a Fund enters into foreign currency
transactions with respect to specific receivables or payables of the Fund
generally arising in connection with the purchase or sale of its portfolio
securities. A Fund will engage in transaction hedging when it desires to "lock
in" the U.S. dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, a Fund will attempt to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.
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A Fund may purchase or sell a foreign currency on a spot (I.E., cash) basis
at the prevailing spot rate in connection with transaction hedging. A Fund may
also enter into contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign currency futures
contracts.
For transaction hedging purposes, a Fund may also purchase exchange-listed
and over-the-counter call and put options on foreign currency futures contracts
and on foreign currencies. A put option on a futures contract gives a Fund the
right to assume a short position in the futures contract until expiration of the
option. A put option on currency gives a Fund the right to sell a currency at a
specified exercise price until the expiration of the option. A call option on a
futures contract gives a Fund the right to assume a long position in the futures
contract until the expiration of the option. A call option on currency gives a
Fund the right to purchase a currency at the exercise price until the expiration
of the option. A Fund will engage in over-the-counter transactions only when
appropriate exchange-traded transactions are unavailable and when, in the
opinion of Robertson Stephens Investment Management, the pricing mechanism and
liquidity are satisfactory and the participants are responsible parties likely
to meet their contractual obligations.
When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which securities held by the Fund are denominated or are quoted in
their principle trading markets or an increase in the value of currency for
securities which the Fund expects to purchase. In connection with position
hedging, a Fund may purchase put or call options on foreign currency and foreign
currency futures contracts and buy or sell forward contracts and foreign
currency futures contracts. A Fund may also purchase or sell foreign currency
on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the values of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is impossible to forecast with precision the market value of a Fund's
portfolio securities at the expiration or maturity of a forward or futures
contract. Accordingly, it may be necessary for a Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security or securities being hedged is less than the
amount of foreign currency a Fund is obligated to deliver and if a decision is
made to sell the security or securities and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security or
securities of a Fund if the market value of such security or securities exceeds
the amount of foreign currency the Fund is obligated to deliver.
To offset some of the costs to a Fund of hedging against fluctuations in
currency exchange rates, the Fund may write covered call options on those
currencies.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which a Fund owns or intends to purchase or
sell. They simply establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged currency, they tend
to limit any potential gain which might result from the increase in the value of
such currency.
A Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, by purchasing and selling options on
foreign currencies and on foreign currency futures contracts, and by purchasing
and selling foreign currency forward contracts.
CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a
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cancelable forward contract, the holder has the unilateral right to cancel the
contract at maturity by paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades. A
foreign currency futures contract is a standardized contract for the future
delivery of a specified amount of a foreign currency at a future date at a price
set at the time of the contract. Foreign currency futures contracts traded in
the United States are designed by and traded on exchanges regulated by the
Commodity Futures Trading Commission (the "CFTC"), such as the New York
Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in a given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, a Fund may either accept
or make delivery of the currency specified in the contract, or at or prior to
maturity enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original forward
contract. Closing transactions with respect to futures contracts are effected
on a commodities exchange; a clearing corporation associated with the exchange
assumes responsibility for closing out such contracts.
Positions in foreign currency futures contracts and related options may be
closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although a Fund will normally purchase or
sell foreign currency futures contracts and related options only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a secondary market on an exchange or board of trade will exist
for any particular contract or option or at any particular time. In such event,
it may not be possible to close a futures or related option position and, in the
event of adverse price movements, a Fund would continue to be required to make
daily cash payments of variation margin on its futures positions.
FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate similarly
to options on securities, and are traded primarily in the over-the-counter
market, although options on foreign currencies have recently been listed on
several exchanges. Such options will be purchased or written only when
Robertson Stephens Investment Management believes that a liquid secondary market
exists for such options. There can be no assurance that a liquid secondary
market will exist for a particular option at any specific time. Options on
foreign currencies are affected by all of those factors which influence exchange
rates and investments generally.
The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last-sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the U.S. options
markets.
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FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at
one rate, while offering a lesser rate of exchange should a Fund desire to
resell that currency to the dealer.
PRECIOUS METALS
The value of the investments of certain Funds may be affected by changes in
the price of gold and other precious metals. Gold has been subject to
substantial price fluctuations over short periods of time and may be affected by
unpredictable international monetary and other governmental policies, such as
currency devaluations or revaluations; economic and social conditions within a
country; trade imbalances; or trade or currency restrictions between countries.
Because much of the world's known gold reserves are located in South Africa,
political and social conditions there may pose special risks to investments in
gold. For instance, social upheaval and related economic difficulties in South
Africa could cause a decrease in the share values of South African issuers.
Many institutions have rescinded policies that preclude investments in companies
doing business in South Africa. In July 1991, the United States lifted the
prohibition on new U.S. investment in South Africa, including the purchase of
newly-issued securities of South African companies.
In addition to its investments in securities, a Fund may, as described from
time to time in the Prospectus, invest a portion of its assets in precious
metals, such as gold, silver, platinum, and palladium, and precious metal
options and futures. The prices of precious metals are affected by broad
economic and political conditions, but are less subject to local and company-
specific factors than securities of individual companies. As a result, precious
metals and precious metal options and futures may be more or less volatile in
price than securities of companies engaged in precious metals-related
businesses. Precious metals may be purchased in any form, including bullion and
coins, provided that Robertson Stephens Investment Management intends to
purchase only those forms of precious metals that are readily marketable and
that can be stored in accordance with custody regulations applicable to mutual
funds. A Fund may incur higher custody and transaction costs for precious
metals than for securities. Also, precious metals investments do not pay
income.
Under current federal income tax law, gains from selling precious metals
(and certain other assets) may not exceed 10% of a Fund's annual gross income.
This tax requirement could a Fund to hold or sell precious metals, securities,
options, or futures when it would not otherwise do so.
ZERO-COUPON DEBT SECURITIES AND PAY-IN-KIND SECURITIES
Zero-coupon securities in which a Fund may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity. Zero-
coupon securities usually trade at a deep discount from their face or par value
and are subject to greater market value fluctuations from changing interest
rates than debt obligations of comparable maturities which make current
distributions of interest. As a result, the net asset value of shares of a Fund
investing in zero-coupon securities may fluctuate over a greater range than
shares of other mutual funds investing in securities making current
distributions of interest and having similar maturities.
When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.
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Zero-coupon securities allow an issuer to avoid the need to generate cash
to meet current interest payments. Even though zero-coupon securities do not
pay current interest in cash, a Fund is nonetheless required to accrue interest
income on them and to distribute the amount of that interest at least annually
to shareholders. Thus, a Fund could be required at times to liquidate other
investments in order to satisfy its distribution requirement.
A Fund also may purchase pay-in-kind securities. Pay-in-kind securities
pay all or a portion of their interest or dividends in the form of additional
securities.
THE FUNDS' INVESTMENT LIMITATIONS
The Trust has adopted the following fundamental investment restrictions
which (except to the extent they are designated as nonfundamental as to any
Fund) may not be changed without the affirmative vote of a majority of the
outstanding voting securities of the affected Fund.
THE CONTRARIAN FUND-TM-, THE DEVELOPING COUNTRIES FUND, THE EMERGING GROWTH
FUND AND THE VALUE + GROWTH FUND.
A Fund may not:
1. purchase or sell commodities or commodity contracts, or interests in
oil, gas, or other mineral leases, or other mineral exploration or
development programs, although it may invest in companies that engage
in such businesses to the extent otherwise permitted by a Fund's
investment policies and restrictions and by applicable law, except as
required in connection with otherwise permissible options, futures and
commodity activities as described elsewhere in the Prospectus and this
Statement;
2. purchase or sell real estate, although it may invest in securities
secured by real estate or real estate interests, or issued by
companies, including real estate investment trusts, that invest in
real estate or real estate interests;
3. make short sales or purchases on margin, although it may obtain short-
term credit necessary for the clearance of purchases and sales of its
portfolio securities and except as required in connection with
permissible options, futures, short selling and leverage activities as
described elsewhere in the Prospectus and this Statement;
4. (a) for the Contrarian Fund-TM- and the Developing Countries Fund
only: with respect to 50% of its total assets, invest in the
securities of any one issuer (other than the U.S. Government and its
agencies and instrumentalities), if immediately after and as a result
of such investment more than 5% of the total assets of the Fund would
be invested in such issuer (the remaining 50% of its total assets may
be invested without restriction except to the extent other investment
restrictions may be applicable);
(b) for the Emerging Growth Fund and Value + Growth Fund only: with
respect to 75% of its total assets, invest in the securities of any
one issuer (other than the U.S. Government and its agencies and
instrumentalities), if immediately after and as a result of such
investment more than 5% of the total assets of the Fund would be
invested in such issuer (the remaining 25% of its total assets may be
invested without restriction except to the extent other investment
restrictions may be applicable);
5. mortgage, hypothecate, or pledge any of its assets as security for any
of its obligations, except as required for otherwise permissible
borrowings (including reverse repurchase agreements), short sales,
financial options and other hedging activities;
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6. make loans of the Fund's assets, including loans of securities
(although it may, subject to the other restrictions or policies stated
herein, purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase agreement
is deemed to be a loan), except that the Contrarian Fund-TM- and
Developing Countries Fund each may lend up to one-third of its total
assets to other parties;
7. borrow money, except from banks for temporary or emergency purposes or
in connection with otherwise permissible leverage activities, and then
only in an amount not in excess of (a) one-third of the value of the
Contrarian Fund's-TM- or Developing Countries Fund's total assets, or
(b) 5% of the Emerging Growth Fund's or Value + Growth Fund's total
assets (in any case as determined at the lesser of acquisition cost or
current market value and excluding collateralized reverse repurchase
agreements);
8. underwrite securities of any other company, although it may invest in
companies that engage in such businesses if it does so in accordance
with policies established by the Trust's Board of Trustees (the
Board's current policy permits a Fund to invest in companies that
directly or through subsidiaries execute portfolio transactions for a
Fund or have entered into selling agreements with the Distributor to
sell Fund shares, to the extent permitted by applicable law), and
except to the extent that the Fund may be considered an underwriter
within the meaning of the Securities Act of 1933, as amended, in the
disposition of restricted securities;
9. invest more than 25% of the value of the Fund's total assets in the
securities of companies engaged in any one industry (except securities
issued by the U.S. Government, its agencies and instrumentalities);
10. issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Fund from making any
otherwise permissible borrowings, mortgages or pledges, or entering
into permissible reverse repurchase agreements, and options and
futures transactions;
11. purchase the securities of any company for the purpose of exercising
management or control (nonfundamental restriction for the Contrarian
Fund-TM-, the Developing Countries Fund and the Value + Growth Fund);
12. (a) purchase more than 10% of the outstanding voting securities of any
one issuer (fundamental restriction for the Emerging Growth Fund and
nonfundamental restriction for the Value + Growth Fund);
(b) own, directly or indirectly, more than 25% of the voting
securities of any one issuer or affiliated person of the issuer
(nonfundamental restriction of the Contrarian Fund-TM- and the
Developing Countries Fund);
13. (a) purchase the securities of any registered investment company,
except as part of a merger or similar reorganization transaction
(Emerging Growth Fund only);
(b) purchase the securities of other investment companies, except as
permitted by the 1940 Act or as part of a merger, consolidation,
acquisition of assets or similar reorganization transaction (Value +
Growth Fund only);
(c) purchase the securities of other investment companies, except as
permitted by the 1940 Act (and then only in the open market where no
commission except the ordinary broker's commission is paid) or as part
of a merger, consolidation, acquisition of assets or similar
reorganization transaction (nonfundamental for the Contrarian
Fund-TM-);
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(d) purchase the securities of other investment companies, except as
permitted by the 1940 Act and except as otherwise provided in the
Prospectus (nonfundamental for the Developing Countries Fund);
14. (a) invest more than 5% of the value of its total assets in securities
of any issuer which has not had a record, together with its
predecessors, of at least three years of continuous operations
(Emerging Growth Fund only); and
(b) invest more than 50% of its total assets in the securities of
issuers which, together with any predecessors, have a record of less
than three years of continuous operation or in restricted securities
(nonfundamental restriction for The Contrarian Fund-TM- and the
Developing Countries Fund);
15. invest more than 10% of the value of its total assets in securities
that are not readily marketable or that would require registration
under the Securities Act of 1933, as amended, upon disposition (as a
matter of operating policy, the Fund interprets this restriction as
including venture capital investments such as venture capital
partnerships whose securities are not registered under the Securities
Act of 1933 and unregistered securities of companies which are not yet
publicly held; furthermore, and as an additional matter of operating
policy, the Board of Trustees has adopted a further restriction that
no more than 5% of the Fund's total assets may be held in such
restricted securities) (Emerging Growth Fund only).
ALL OTHER FUNDS.
As fundamental investment restrictions, which may not be changed with
respect to a Fund without approval by the holders of a majority of the
outstanding shares of that Fund, a Fund may not:
1. issue any class of securities which is senior to the Fund's shares of
beneficial interest, except that each of the Funds may borrow money to
the extent contemplated by Restriction 3 below;
2. purchase securities on margin (but a Fund may obtain such short-term
credits as may be necessary for the clearance of transactions).
(Margin payments or other arrangements in connection with transactions
in short sales, futures contracts, options, and other financial
instruments are not considered to constitute the purchase of
securities on margin for this purpose.);
3. borrow more than one-third of the value of its total assets less all
liabilities and indebtedness (other than such borrowings) not
represented by senior securities;
4. act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal securities
laws;
5. (i) (as to 75% of the Diversified Growth Fund's, the Global Low-Priced
Stock Fund's, the Global Natural Resources Fund's, the Growth & Income
Fund's, the Information Age Fund's-TM-, and the MicroCap Growth
Fund's total assets and 50% of the Partners Fund's total assets)
purchase any security (other than obligations of the U.S. Government,
its agencies or instrumentalities) if as a result more than 5% of the
Fund's total assets (taken at current value) would then be invested in
securities of a single issuer, or (ii) purchase any security if as a
result 25% or more of the Fund's total assets (taken at current value)
would be invested in a single industry, except that the Information
Age Fund-TM- will invest without limit in any one or more information
technology industries and the Global Natural Resources Fund will
invest without limit in any one or more natural resources industries,
as described in the Trust's Prospectus at the time;
B-17
<PAGE>
6. invest in securities of any issuer if any officer or Trustee of the
Trust or any officer or director of RSIM, L.P. or RSIM, Inc., as the
case may be, owns more than 1/2 of 1% of the outstanding securities
of such issuer, and such officers, Trustees and directors who own more
than 1/2 of 1% own in the aggregate more than 5% of the outstanding
securities of such issuer (This policy is non-fundamental as to the
MicroCap Growth Fund);
7. make loans, except by purchase of debt obligations or other financial
instruments in which the Fund may invest consistent with its
investment policies, by entering into repurchase agreements, or
through the lending of its portfolio securities;
8. purchase or sell commodities or commodity contracts, except that a
Fund may purchase or sell financial futures contracts, options on
financial futures contracts, and futures contracts, forward contracts,
and options with respect to foreign currencies, and may enter into
swap transactions or other financial transactions, and except as
required in connection with otherwise permissible options, futures,
and commodity activities as described elsewhere in the Prospectus or
this Statement at the time;
9. purchase or sell real estate or interests in real estate, including
real estate mortgage loans, although (i) it may purchase and sell
securities which are secured by real estate and securities of
companies, including limited partnership interests, that invest or
deal in real estate and it may purchase interests in real estate
investment trusts, and (ii) the Global Natural Resources Fund may
invest in any issuers in the natural resources industries, as
described in the Prospectus at the time. (For purposes of this
restriction, investments by a Fund in mortgage-backed securities and
other securities representing interests in mortgage pools shall not
constitute the purchase or sale of real estate or interests in real
estate or real estate mortgage loans.).
In addition, it is contrary to the current policy of each of the
Diversified Growth, Global Low-Priced Stock, Global Natural Resources, Growth &
Income, Information Age-TM-, MicroCap Growth, and Partners Funds, which policy
may be changed without shareholder approval, to invest more than 15% of its net
assets in securities which are not readily marketable, including securities
restricted as to resale (other than securities restricted as to resale but
determined by the Trustees, or persons designated by the Trustees to make such
determinations, to be readily marketable).
All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above as fundamental or to the extent
designated as such in a Prospectus, the other investment policies described in
this Statement or in the Prospectus are not fundamental and may be changed by
approval of the Trustees. As a matter of policy, the Trustees would not
materially change a Fund's investment objective without shareholder approval.
The Investment Company Act of 1940, as amended (the "1940 Act"), provides
that a "vote of a majority of the outstanding voting securities" of the Fund
means the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of a Fund, or (2) 67% or more of the shares present at a meeting if more
than 50% of the outstanding shares are represented at the meeting in person or
by proxy.
B-18
<PAGE>
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
Set forth below is certain information about the Trust's trustees and
executive officers:
*G. RANDY HECHT, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Hecht, 45, has served as the Chief Operating Officer of Robertson,
Stephens & Company, Inc. since January 1993, as Chief Financial Officer of
Robertson, Stephens & Company LLC (and its predecessors) from June 1984 to
January 1993 and as the head of the firm's Investment Management Group
since 1988. He is a limited partner of Robertson, Stephens & Company LLC,
and a member of the Management and Executive Committees of Robertson,
Stephens & Company, Inc. As of October 18, 1988, Mr. Hecht assumed the
responsibilities of President and Chief Executive Officer of the Trust.
From May 1987 through May 1995, he served as Chief Financial Officer of
the Trust. Mr. Hecht has been a Director of RSIM, Inc., and of Robertson,
Stephens & Company, Inc., the sole general partner of RSIM, L.P., one of
the Trust's Advisers, from June 1989 to January 1993, and since January
1993, respectively. Mr. Hecht served as the Trust's Secretary from May
1987 through January 1989, as RSIM, L.P.'s Secretary from 1993 to the
present, and as RSIM, Inc.'s Secretary from May 1987 through June 1989. He
has been a Trustee of the Trust since June 1987.
LEONARD B. AUERBACH, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Auerbach, 49, is the President and Chairman of the Board of Auerbach
Associates, Inc., a management consulting firm which he founded in 1979.
Mr. Auerbach is also the sole shareholder and director of a company that is
a general partner of Tuttle & Company, which provides mortgage pipeline
interest rate hedging services to a variety of institutional clients. Mr.
Auerbach is the President of Tuttle & Auerbach Securities, Inc., an
introducing broker trading futures on behalf of institutional hedging
clients and individuals. He also is a Director of Roelof Mining, Inc. He
was a professor of Business Administration at St. Mary's College, Moraga,
California until June 1992. He is the co-founder, and served as the
Chairman until March 1986, of Intraview Systems Corporation, a privately-
held company whose assets were acquired by Worlds of Wonder, Inc. He has
been a Trustee of the Trust since June 1987.
DANIEL R.
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Cooney, 71, is retired. He had a consulting agreement with Lord Abbett
& Co., a mutual fund adviser, from January 1987 until December 1989. From
September 1985 through December 1986 he was an Executive Vice President and
Senior Adviser of the Lord Abbett Developing Growth Fund, a mutual fund.
Mr. Cooney was the portfolio manager of the Lord Abbett Developing Growth
Fund from its inception (October 1973) through September 1985, at which
time the Lord Abbett Developing Growth Fund had assets of approximately
$250 million. He has been a Trustee of the Trust since April 1989.
TERRY R. OTTON, CHIEF FINANCIAL OFFICER
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Otton, 42, has served as Treasurer, Chief Financial Officer, and
Principal Accounting Officer of Robertson, Stephens & Company LLC (and its
predecessors) since January 1993, and has been a Managing Director since
January 1992. Prior to becoming Chief Financial Officer of Robertson,
Stephens & Company LLC, he served as Controller from January 1988 to
December 1992. Mr. Otton is a Certified Public
-------------------------
* DENOTES A TRUSTEE WHO IS AN "INTERESTED PERSON," AS DEFINED IN THE 1940
ACT.
B-19
<PAGE>
Accountant, and prior to joining Robertson, Stephens & Company LLC in 1982,
was employed by Arthur Anderson.
JAMES K. PETERSON, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Peterson, 55, is a private consultant; he served as Director of the IBM
Retirement Funds from April 1988 until October 1996. Mr. Peterson was a
Manager of the IBM Retirement Funds from March 1981 until April 1988. Mr.
Peterson has been a Trustee of the Trust since June 1987.
*JOHN P. ROHAL, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Rohal, 49, has served as Managing Director and Director of Research for
Robertson, Stephens & Company LLC (and its predecessors) since April 1993.
From November 1987 to April 1993 he was Managing Director and co-head of
the technology research group for Alex. Brown & Sons, an investment banking
firm. He has been a Trustee of the Trust since July 1993.
DANA K. WELCH, SECRETARY
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Ms. Welch, 45, has served as General Counsel of Robertson, Stephens &
Company LLC (and its predecessors) since June 1995. Prior to joining
Robertson, Stephens & Company LLC, Ms. Welch was Special Counsel at
O'Melveny & Myers, a Los Angeles based law firm. She has served as
Secretary of the Trust since August 1996.
Pursuant to the terms of the Advisory Agreements with the Funds, Robertson
Stephens Investment Management pays all compensation of officers of the Trust as
well as the fees and expenses of all Trustees of the Trust who are affiliated
persons of Robertson Stephens Investment Management. The Trust pays each
unaffiliated Trustee an annual fee of $30,000 and reimburses their actual out-
of-pocket expenses relating to attendance at meetings of the Board of Trustees.
CONTROL PERSONS AND SHARE OWNERSHIP
Shareholders of record who owned on May 10, 1996 more than 5% of the
outstanding shares of any Fund were as follows:
Percentage of Fund's
Shareholder Shares Owned Outstanding Shares
----------- ------------ ------------------
CONTRARIAN FUND-TM-
Charles Schwab & Co., Inc. 19,306,425 33.5%
Cash Account Special Custody
FBO Customers Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 6,578,447 11.4%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
B-20
<PAGE>
DEVELOPING COUNTRIES FUND
Charles Schwab & Co., Inc. 1,638,736 39.8%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 529,024 12.8%
Attn: Mutual Funds, 5th Floor
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
FTC & Co. 232,383 5.6%
Attn: Datalynx #082
P.O. Box 5508
Denver, CO 80217-5508
Donaldson Lufkin Jenrette 301,120 7.3%
Securities Corp.
P.O. Box 2052
Jersey City, NJ 07303-2052
EMERGING GROWTH FUND
Charles Schwab & Co., Inc. 1,808,366 20.7%
Cash Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
GLOBAL LOW-PRICED STOCK FUND
National Financial Services Corp. 227,107 18.2%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
FTC & Co. 119,574 9.6%
Attn: Datalynx #003
P.O. Box 173736
Denver, CO 80217-3736
Charles Schwab & Co., Inc. 236,171 19.0%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
B-21
<PAGE>
San Francisco, CA 94101-4122
GLOBAL NATURAL RESOURCES FUND
National Financial Services Corp. 278,408 11.3%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
Charles Schwab & Co., Inc. 1,440,454 58.9%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94101-4122
GROWTH & INCOME FUND
Charles Schwab & Co., Inc. 7,001,310 43.8%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 2,247,847 12.5%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
INFORMATION AGE FUND-TM-
National Financial Services Corp. 914,143 14.9%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
Charles Schwab & Co., Inc. 1,891,488 30.8%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
PARTNERS FUND
Charles Schwab & Co., Inc. 496,462 36.4%
Reinvest Account
Attn: Mutual Fund Department
B-22
<PAGE>
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 119,584 8.7%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
FTC & Co. 161,640 11.8%
Attn: Datalynx #082
P.O. Box 5508
Denver, CO 80217-5508
VALUE + GROWTH FUND
Charles Schwab & Co., Inc. 14,242,994 37.1%
Cash Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 5,622,888 14.6%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
To the Funds' knowledge, there were no shareholders who owned beneficially
5% or more of a Fund's shares on May 10, 1996.
On May 10, 1996 the officers and trustees of the Trust, as a group,
beneficially owned less than 1% of the outstanding shares of each Fund.
The Trust's Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified in the Declaration of
Trust that they have not acted in good faith in the reasonable belief that their
actions were in the best interests of the Trust or that such indemnification
would relieve any officer or Trustee of any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of his or her duties. The Trust, at its expense, provides
liability insurance for the benefit of its Trustees and officers.
ROBERTSON STEPHENS INVESTMENT MANAGEMENT
Pursuant to Investment Advisory Agreements (the "Advisory Agreements"),
Robertson Stephens Investment Management determines the composition of the
Funds' portfolios, the nature and timing of the changes to the Funds'
portfolios, and the manner of implementing such changes. Robertson Stephens
Investment Management also (a) provides the Funds with investment advice,
research, and related services for the investment of their assets, subject to
such directions as it may receive from the Board of Trustees; (b) pays all of
the Trust's executive officers' salaries and executive expenses (if any); (c)
pays all expenses incurred in performing its investment advisory duties under
the
B-23
<PAGE>
Advisory Agreements; and (d) furnishes the Funds with office space and certain
administrative services (pursuant, in the case of the Diversified Growth Fund,
the Global Low-Price Stock Fund, the Global Natural Resources Fund, the Growth &
Income Fund, the Information Age Fund-TM-, and the MicroCap Growth Fund,
Administrative Services Agreements with the Funds, as described below). The
services of Robertson Stephens Investment Management to the Funds are not deemed
to be exclusive, and Robertson Stephens Investment Management or any affiliate
may provide similar services to other series of the Trust, other investment
companies, and other clients, and may engage in other activities. The Funds may
reimburse Robertson Stephens Investment Management (on a cost recovery basis
only) for any services performed for a Fund by it outside its duties under the
Advisory Agreements.
Investment decisions for the Funds and for the other investment advisory
clients of Robertson Stephens Investment Management and its affiliates are made
with a view to achieving their respective investment objectives. Investment
decisions are the product of many factors in addition to basic suitability for
the particular client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or sold for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more other clients are selling the security. In
some instances, one client may sell a particular security to another client. It
also sometimes happens that two or more clients simultaneously purchase or sell
the same security, in which event each day's transactions in such security are,
insofar as possible, averaged as to price and allocated between such clients in
a manner which in Robertson Stephens Investment Management's opinion is
equitable to each and in accordance with the amount being purchased or sold by
each. There may be circumstances when purchases or sales of portfolio
securities for one or more clients will have an adverse effect on other clients.
Robertson Stephens Investment Management employs professional staffs of
portfolio managers who draw upon a variety of resources, including RS&Co., for
research information for the Funds.
MANAGEMENT FEES. The Funds pay Robertson Stephens Investment Management
fees as compensation for the services provided by it under the Advisory
Agreements. The amount of these management fees is calculated daily and payable
monthly at the following annual rates based on the average daily net assets of
each Fund:
Contrarian Fund-TM- 1.50%
Developing Countries Fund 1.25%
Diversified Growth Fund 1.00%
Emerging Growth Fund 1.00%
Global Low-Priced Stock Fund 1.00%
Global Natural Resources Fund 1.00%
Growth & Income Fund 1.00%
Information Age Fund-TM- 1.00%
MicroCap Growth Fund 1.25%
Partners Fund 1.25%
Value + Growth Fund 1.00%
These management fees are higher than those paid by most other investment
companies. Robertson Stephens Investment Management also may at its discretion
from time to time pay for Fund expenses from its own assets, or reduce the
management fee of a Fund.
ADMINISTRATIVE FEES. The Diversified Growth Fund, Global Low-Priced Stock
Fund, Global Natural Resources Fund, Growth & Income Fund, Information Age Fund-
TM-, and MicroCap Growth Fund have entered into Administrative Services
Agreements with RSIM, L.P., pursuant to which RSIM, L.P. continuously provides
business management services to the Funds and generally manages all of the
business and affairs of the Funds, subject to the general oversight of the
Trustees. The Funds pay RSIM, L.P. a fee, calculated daily and payable monthly,
at the annual rate of 0.25% of their respective average daily net assets.
The proceeds received by each Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to the
rights of creditors, will be specifically allocated to such Fund, and constitute
the
B-24
<PAGE>
underlying assets of that Fund. The underlying assets of each Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of such Fund and with a share of the general liabilities
of the Trust. Expenses with respect to any two or more Funds may be allocated
in proportion to the net asset values of the respective Funds except where
allocations of direct expenses can otherwise be fairly made.
Each of the Advisory Agreements is subject to annual approval (in the case
of the Global Low-Priced Stock Fund, the Global Natural Resources Fund, the
Growth & Income Fund, the Information Age Fund-TM-, and the Partners Fund,
commencing in 1997, and in the case of the Diversified Growth Fund and the
MicroCap Growth Fund, in 1998) by (i) the vote of the Trustees or of a majority
of the outstanding voting securities (as defined in the 1940 Act) of the
affected Fund, and (ii) the vote of a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust, RSIM, L.P., or
RSIM, Inc. Each is terminable by Robertson Stephens Investment Management or
the Trust, without penalty, on 60 days written notice to the other and will
terminate automatically in the event of its assignment.
Each of the Administrative Services Agreements is subject to annual
approval (in the case of the Global Low-Priced Stock Fund, the Global Natural
Resources Fund, the Growth & Income Fund, the Information Age Fund-TM- and the
Partners Fund, commencing in 1997, and in the case of the Diversified Growth
Fund and the MicroCap Growth Fund, in 1998) by (i) the Board of Trustees, and
(ii) the vote of a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act). The Administrative Services Agreements may be
terminated without penalty, by the Trust or by the vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) of the affected Fund,
on 30 days notice to RSIM, L.P.
B-25
<PAGE>
RECENT MANAGEMENT AND ADMINISTRATIVE FEES PAID BY THE FUNDS.
Reimbursement Administration
Management Fees(1) Of Expenses(2) Fees
CONTRARIAN FUND-TM- ------------------ -------------- --------------
6/3/93 - 3/31/94 $1,476,494
Year ended 3/31/95 $8,053,129 $785,897
Nine Months Ended $5,648,970
12/31/95
DEVELOPING COUNTRIES
FUND
5/2/94 - 3/31/95 $174,084 $ 44,177
Nine months ended 12/31/95 $145,517 $282,462
EMERGING GROWTH FUND
Year ended 3/31/94 $1,084,284
Year ended 3/31/95 $1,736,763
Nine Months Ended $1,288,465
12/31/95
GLOBAL LOW-PRICED STOCK FUND
11/15/95 - 12/31/95 $854 $6,440 $213
GLOBAL NATURAL RESOURCES FUND
11/15/95 - 12/31/95 $470 $5,748 $117
GROWTH & INCOME FUND
7/12/95 - 12/31/95 $415,116
INFORMATION AGE FUND-TM-
11/15/95 - 12/31/95 $25,307 $6,327
PARTNERS FUND
7/12/95 - 12/31/95 $42,710 $93,846
VALUE + GROWTH FUND
Year ended 3/31/94 $288,116 $191,672
Year ended 3/31/95 $1,260,821
Nine Months Ended $9,702,327
12/31/95
(1) Before giving effect to any reimbursement or waiver by RSIM.
(2) Includes amount of management fees waived or reimbursed by RSIM, plus
the amount of any other expenses for which RSIM reimbursed the Fund or which
RSIM bore on behalf of the Fund.
B-26
<PAGE>
EXPENSES
Each Fund will pay all expenses related to its operation which are not
borne by Robertson Stephens Investment Management or RS&Co., including but not
limited to taxes, interest, brokerage fees and commissions, compensation paid to
RS&Co. under a Fund's 12b-1 Plan, fees paid to members of the Board of Trustees
who are not officers, directors, stockholders, or employees of Robertson
Stephens Investment Management or RS&Co., SEC fees and related expenses, state
Blue Sky qualification fees, charges of custodians, transfer agents, registrars
or other agents, outside auditing, accounting, and legal services, charges for
the printing of prospectuses and statements of additional information for
regulatory purposes or for distribution to shareholders, certain shareholder
report charges, and charges relating to corporate matters.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Transactions on U.S. stock exchanges, commodities markets, and futures
markets and other agency transactions involve the payment by a Fund of
negotiated brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions according to such
factors as the difficulty and size of the transaction. Transactions in foreign
investments often involve the payment of fixed brokerage commissions, which may
be higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Trust usually includes an undisclosed dealer commission or
mark-up. In underwritten offerings, the price paid by the Trust includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the Securities
Exchange Act of 1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, Robertson Stephens Investment Management receives brokerage and
research services and other similar services from many broker-dealers with which
Robertson Stephens Investment Management places a Fund's portfolio transactions
and from third parties with which these broker-dealers have arrangements. These
services include such matters as general economic and market reviews, industry
and company reviews, evaluations of investments, recommendations as to the
purchase and sale of investments, newspapers, magazines, pricing services,
quotation services, news services, and personal computers utilized by Robertson
Stephens Investment Management's managers and analysts. Where the services
referred to above are not used exclusively by Robertson Stephens Investment
Management for research purposes, Robertson Stephens Investment Management,
based upon its own allocations of expected use, bears that portion of the cost
of these services which directly relates to its non-research use. Some of these
services are of value to Robertson Stephens Investment Management and its
affiliates in advising various of its clients (including the Funds), although
not all of these services are necessarily useful and of value in managing the
Funds. The management fee paid by a Fund is not reduced because Robertson
Stephens Investment Management or its affiliates receive these services even
though Robertson Stephens Investment Management might otherwise be required to
purchase some of these services for cash.
Robertson Stephens Investment Management places all orders for the purchase
and sale of portfolio investments for the Funds and buys and sells investments
for the Funds through a substantial number of brokers and dealers. Robertson
Stephens Investment Management seeks the best overall terms available for the
Funds, except to the extent Robertson Stephens Investment Management may be
permitted to pay higher brokerage commissions as described below. In doing so,
Robertson Stephens Investment Management, having in mind a Fund's best
interests, considers all factors it deems relevant, including, by way of
illustration, price, the size of the transaction, the nature of the market for
the security or other investment, the amount of the commission, the timing of
the transaction taking into account market prices, and trends, the reputation,
experience, and financial stability of the broker-dealer involved and the
quality of service rendered by the broker-dealer in other transactions.
As permitted by Section 28(e) of the 1934 Act, and by the Advisory
Agreements, Robertson Stephens Investment Management may cause a Fund to pay a
broker-dealer which provides "brokerage and research services" (as defined in
B-27
<PAGE>
the 1934 Act) to Robertson Stephens Investment Management an amount of disclosed
commission for effecting securities transactions on stock exchanges and other
transactions for the Fund on an agency basis in excess of the commission which
another broker-dealer would have charged for effecting that transaction.
Robertson Stephens Investment Management's authority to cause a Fund to pay any
such greater commissions is also subject to such policies as the Trustees may
adopt from time to time. Neither RSIM, L.P. nor RSIM, Inc. currently intends to
cause the Funds to make such payments. It is the position of the staff of the
Securities and Exchange Commission that Section 28(e) does not apply to the
payment of such greater commissions in "principal" transactions. Accordingly,
RSIM, L.P. and RSIM, Inc. will use their best efforts to obtain the best overall
terms available with respect to such transactions.
The following tables provide information regarding brokerage commissions
paid by the Funds for the periods indicated.
PERIOD FISCAL YEAR PERIOD
CONTRARIAN FUND-TM- 3/31/95-12/31/95 ENDED 3/31/95 6/3/93 - 3/31/94
- ------------------- ---------------- ------------- ----------------
Percentage of total 62% 69% 83%
transactions involving
brokerage commissions
Dollar amount of
commissions $1,026,683 $1,959,452 $1,140,692
Percentage (dollar 1% ($6,840) 14.8% ($289,074) 18% ($210,807)
amount) paid to RS&Co.
Percentage of brokerage 1% 14% 26%
transactions effected
through RS&Co.
Percentage of transactions 38% 31% 17%
effected without brokerage
commissions
B-28
<PAGE>
PERIOD PERIOD
DEVELOPING COUNTRIES FUND 3/31/95-12/31/95 5/2/94 - 3/31/95
- ------------------------- ---------------- ----------------
Percentage of total transactions 87% 76%
involving brokerage commissions
Dollar amount of commissions $228,245 $170,919
Percentage (dollar amount) paid to RS&Co. 0% ($0) .73% ($1,250)
Percentage of brokerage transactions
effected through RS&Co. 0% 2%
Percentage of transactions effected
without brokerage commissions 13% 24%
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR
PERIOD ENDED ENDED PERIOD
EMERGING GROWTH FUND 3/31/95-12/31/95 3/31/95 3/31/94 1/1/94-3/31/94
- -------------------- ---------------- ----------- ----------- --------------
<S> <C> <C> <C>
Percentage of total transactions
involving brokerage commissions 21% 21% 37% 10%
Dollar amount of commissions $300,963 $559,915 $1,007,880 $105,582
Percentage (dollar amount) paid to
RS&Co. 24% ($71,498) 29.2% ($163,607) 21% ($216,575) 8% ($8,442)
Percentage of brokerage transactions
effected through RS&Co. 4% 24% 16% 5%
Percentage of transactions effected
without brokerage commissions 79% 79% 63% 92%
</TABLE>
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR
PERIOD ENDED ENDED PERIOD
VALUE + GROWTH FUND 3/31/95-12/31/95 3/31/95 3/31/94 4/21/92-3/31/93
- ------------------- ---------------- ----------- ----------- ---------------
<S> <C> <C> <C> <C>
Percentage of total transactions
involving brokerage commissions 77% 49% 69% 50%
Dollar amount of commissions $1,707,929 $665,354 $295,284 $105,025
Percentage (dollar amount) paid to
RS&Co. 21% ($356,240) 12.4% ($82,270) 35% ($102,015) 40% ($41,493)
Percentage of brokerage transactions
effected through RS&Co. 9% 13% 39% 38%
Percentage of transactions effected
without brokerage commissions 23% 51% 31% 50%
</TABLE>
B-29
<PAGE>
<TABLE>
<CAPTION>
PERIOD
GLOBAL LOW-PRICED STOCK FUND 11/15/95-12/31/95
- ---------------------------- -----------------
<S> <C>
Percentage of total transactions involving brokerage commissions 51%
Dollar amount of commissions $1,595
Percentage (dollar amount) paid to RS&Co. 0% ($0)
Percentage of brokerage transactions effected through RS&Co. 0%
Percentage of transactions effected without brokerage commissions 49%
<CAPTION>
PERIOD
GLOBAL NATURAL RESOURCES FUND 11/15/95-12/31/95
- ---------------------------- -----------------
<S> <C>
Percentage of total transactions involving brokerage commissions 84%
Dollar amount of commissions $1,242
Percentage (dollar amount) paid to RS&Co. 41% ($515)
Percentage of brokerage transactions effected through RS&Co. 39%
Percentage of transactions effected without brokerage commissions 16%
<CAPTION>
PERIOD
GROWTH & INCOME FUND 7/12/95-12/31/95
- -------------------- -----------------
<S> <C>
Percentage of total transactions involving brokerage commissions 45%
Dollar amount of commissions $282,119
Percentage (dollar amount) paid to RS&Co. 18% ($49,415)
Percentage of brokerage transactions effected through RS&Co. 7%
Percentage of transactions effected without brokerage commissions 55%
<CAPTION>
PERIOD
INFORMATION AGE FUND-TM- 11/15/95-12/31/95
- ------------------------ -----------------
<S> <C>
Percentage of total transactions involving brokerage commissions 75%
Dollar amount of commissions $21,166
Percentage (dollar amount) paid to RS&Co. 25% ($5,200)
Percentage of brokerage transactions effected through RS&Co. 8%
Percentage of transactions effected without brokerage commissions 25%
<CAPTION>
PERIOD
PARTNERS FUND 7/12/95-12/31/95
- ------------- ------------------
<S> <C>
Percentage of total transactions involving brokerage commissions 70%
Dollar amount of commissions $21,979
Percentage (dollar amount) paid to RS&Co. 0.1% ($25)
Percentage of brokerage transactions effected through RS&Co. 1%
Percentage of transactions effected without brokerage commissions 30%
</TABLE>
B-30
<PAGE>
THE FUNDS' DISTRIBUTOR
Each of the Funds has adopted a Distribution Plan under Rule 12b-l of the
1940 Act (each a "Plan"). Pursuant to the Plans, each Fund may pay RS&Co. (also
referred to as the "Distributor") distribution fees, for services the
Distributor renders and costs and expenses it incurs in connection with the
continuous offering of the Fund's shares, at an annual rate of 0.25% of its
average daily net assets, except the Contrarian Fund-TM-, which may pay a
distribution fee at an annual rate of 0.75%, and the Developing Countries Fund,
which may pay an annual fee of 0.50%. These expenses may include, but are not
limited to, costs of advertising and promoting the sale of shares of the Funds
and payments to dealers, financial institutions, advisers, or other firms. The
Plans also permit the Distributor to receive compensation based on a prorated
portion of its overhead expenses attributable to the distribution of each Fund's
shares, which include leases, communications, salaries, training, supplies,
photocopying, and any other category of the Distributor's expenses attributable
to the distribution of these Funds' shares. The Value + Growth Fund's Plan
became effective on January 1, 1996.
RECENT PAYMENTS UNDER THE FUNDS' DISTRIBUTION PLANS.
CONTRARIAN FUND-TM- DISTRIBUTION FEES WAIVER
- ------------------- ----------------- ------
6/3/93 - 3/31/94 $ 738,247
Year ended 3/31/95 $4,026,498
Nine months ended 12/31/95 $2,824,481
DEVELOPING COUNTRIES FUND
- -------------------------
5/2/94 - 3/31/95 $69,633
Nine months ended 12/31/95 $37,616
EMERGING GROWTH FUND
- --------------------
Year ended 3/31/94 $451,071
Year ended 3/31/95 $434,190
Nine months ended 12/31/95 $322,116
GLOBAL LOW-PRICED STOCK FUND
- ----------------------------
11/15/95 - 12/31/95 $213 $213
GLOBAL NATURAL RESOURCES FUND
- -----------------------------
11/15/95 - 12/31/95 $117
GROWTH & INCOME FUND
- --------------------
7/25/95 - 12/31/95 $103,780
INFORMATION AGE FUND-TM-
- ------------------------
11/15/95 - 12/31/95 $6,327
PARTNERS FUND
- -------------
7/12/95 - 12/31/95 $8,542
B-31
<PAGE>
HOW NET ASSET VALUE IS DETERMINED
A Fund determines net asset value per share once daily, as of 4:30 p.m.
eastern time on each day the New York Stock Exchange (the "Exchange") is open.
The Exchange is closed Saturdays, Sundays, New Year's Day, Presidents' Day, Good
Friday, Memorial Day, the Fourth of July, Labor Day, Thanksgiving, and
Christmas.
Securities for which market quotations are readily available are valued
using the last reported sale price or, if no sales are reported (as in the case
of some securities traded over-the-counter), at the mean between the closing bid
and asked prices, except that certain U.S. Government securities are stated at
the mean between the last reported bid and asked prices. Short-term investments
having remaining maturities of 60 days or less are stated at amortized cost,
which approximates market value. All other securities and assets are valued at
their fair value following procedures approved by the Trustees. Liabilities are
deducted from the total, and the resulting amount is divided by the number of
shares outstanding.
Reliable market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks, or certain
foreign securities. These investments are stated at fair value on the basis of
valuations furnished by pricing services, which determine valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
If any securities held by a Fund are restricted as to resale, Robertson
Stephens Investment Management determines their fair values. The fair value of
such securities is generally determined as the amount which a Fund could
reasonably expect to realize from an orderly disposition of such securities over
a reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Fund in connection with such disposition). In addition,
specific factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation), the size of the
holding, the prices of any recent transactions or offers with respect to such
securities, and any available analysts' reports regarding the issuer.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset
value of a Fund's shares are computed as of such times. Also, because of the
amount of time required to collect and process trading information as to large
numbers of securities issues, the values of certain securities (such as
convertible bonds and U.S. Government securities) are determined based on market
quotations collected earlier in the day at the latest practicable time prior to
the close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange which will
not be reflected in the computation of a Fund's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value following procedures
approved by the Trustees.
REDEMPTIONS
During any 90-day period, the Trust is committed to pay in cash all
requests to redeem shares by any one shareholder, up to the lesser of $250,000
and 1% of the value of a Fund's net assets at the beginning of the period.
Should redemptions by any shareholder of a Fund exceed this limitation, the
Trust reserves the right to redeem the excess amount in whole or in part in
securities or other assets. If shares are redeemed in this manner, the
redeeming shareholder typically will incur brokerage and other costs in
converting the securities to cash.
B-32
<PAGE>
TAXES
Each Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, a Fund would not be subject to federal income tax
on any of its net investment income or net realized capital gains that are
distributed to shareholders. As long as each Fund maintains its status as a
regulated investment company and distributes all of its income, it will not,
under present law, be subject to any excise or income taxes in Massachusetts or
to franchise or income taxes in California.
In order to qualify as a "regulated investment company," a Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stock, securities, or currencies;
(b) derive less than 30% of its gross income from the sale or other disposition
of certain assets (including stock and securities) held less than three months;
(c) diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets consists of cash, cash
items, U.S. Government securities, and other securities limited generally with
respect to any one issuer to not more than 5% of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its assets is invested in the securities
of any issuer (other than U.S. Government securities). In order to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, moreover, a Fund must in general distribute at least 90% of its
interest, dividends, net short-term capital gain, and certain other income each
year.
An excise tax at the rate of 4% will be imposed on the excess, if any, of
each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November, or December to
shareholders of record on a date in any such month and paid by the Fund during
the following January will be treated for federal tax purposes as paid by the
Fund and received by shareholders on December 31 of the year in which declared.
With respect to investment income and gains received by a Fund from sources
outside the United States, such income and gains may be subject to foreign taxes
which are withheld at the source. The effective rate of foreign taxes to which
a Fund will be subject depends on the specific countries in which its assets
will be invested and the extent of the assets invested in each such country and
therefore cannot be determined in advance.
A Fund's ability to use options, futures, and forward contracts and other
hedging techniques, and to engage in certain other transactions, including short
sales, may be limited by tax considerations, in particular, the requirement that
less than 30% of the Fund's gross income be derived from the sale or disposition
of assets held for less than three months. A Fund's transactions in foreign
currency-denominated debt instruments and its hedging activities will likely
produce a difference between its book income and its taxable income. This
difference may cause a portion of the Fund's distributions of book income to
constitute returns of capital for tax purposes or require the Fund to make
distributions exceeding book income in order to permit the Fund to continue to
qualify, and be taxed under Subchapter M of the Code, as a regulated investment
company.
B-33
<PAGE>
Under federal income tax law, a portion of the difference between the
purchase price of zero-coupon securities in which a Fund has invested and their
face value ("original issue discount") is considered to be income to the Fund
each year, even though the Fund will not receive cash interest payments from
these securities. This original issue discount (imputed income) will comprise a
part of the net investment income of the Fund which must be distributed to
shareholders in order to maintain the qualification of the Fund as a regulated
investment company and to avoid federal income tax at the level of the Fund.
Each Fund is required to withhold 31% of all income dividends and capital
gain distributions, and 31% of the gross proceeds of all redemptions of Fund
shares, in the case of any shareholder who does not provide a correct taxpayer
identification number, about whom a Fund is notified that the shareholder has
under reported income in the past, or who fails to certify to a Fund that the
shareholder is not subject to such withholding. Tax-exempt shareholders are not
subject to these back-up withholding rules so long as they furnish the Fund with
a proper certification.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative actions. Dividends and distributions also may be subject to
state and federal taxes. Shareholders are urged to consult their tax advisers
regarding specific questions as to federal, state, or local taxes. The
foregoing discussion relates solely to U.S. federal income tax law. Non-U.S.
investors should consult their tax advisers concerning the tax consequences of
ownership of shares of the Fund, including the possibility that distributions
may be subject to a 30% United States withholding tax (or a reduced rate of
withholding provided by treaty). Statements as to the tax status of
distributions will be mailed annually.
HOW PERFORMANCE IS DETERMINED
STANDARDIZED PERFORMANCE INFORMATION
Average annual total return of a Fund for one-, five-, and ten-year periods
(or for such shorter periods as the Fund has been in existence) is determined by
calculating the actual dollar amount of investment return on a $1,000 investment
in the Fund at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year or less is equal to the actual return of the Fund during that
period. Total return calculations assume reinvestment of all Fund distributions
at net asset value on their respective reinvestment dates. Total return may be
presented for other periods.
The Funds impose no sales load on initial purchases or on reinvested
dividends. Accordingly, no sales charges are deducted for purposes of this
calculation. The calculation of total return assumes that all dividends, if
any, and distributions paid by a Fund would be reinvested at the net asset value
on the day of payment.
At times, Robertson Stephens Investment Management may reduce its
compensation or assume expenses of the Fund in order to reduce the Fund's
expenses. Any such fee reduction or assumption of expenses would increase the
Fund's total return during the period of the fee reduction or assumption of
expenses.
All data are based on past performance and do not predict future results.
B-34
<PAGE>
PERFORMANCE INFORMATION
The average annual total returns of each of the Funds for the periods
indicated through December 31, 1995 are set forth below.
CONTRARIAN FUND-TM-
-------------------
Year ended December 31, 1995 30.86%
From inception (6/30/93) through December 31, 1995 13.83%
DEVELOPING COUNTRIES FUND
-------------------------
Year ended December 31, 1995 (14.41)%
From inception (5/2/94) through December 31, 1995 (11.70)%
EMERGING GROWTH FUND
--------------------
Year ended December 31, 1995 20.31%
Three years ended December 31, 1995 11.67%
Five years ended December 31, 1995 16.58%
From inception (11/30/87) through December 31, 1995 21.72%
GLOBAL LOW-PRICED STOCK FUND
----------------------------
From inception (11/15/95) through December 31, 1995 4.50%
GLOBAL NATURAL RESOURCES FUND
-----------------------------
From inception (11/15/95) through December 31, 1995 1.20%
GROWTH & INCOME FUND
--------------------
From inception (7/12/95) through December 31, 1995 12.40%
INFORMATION AGE FUND-TM-
------------------------
From inception (11/15/95) - December 31, 1995 (7.00)%
PARTNERS FUND
-------------
From inception (7/12/95) through December 31, 1995 3.90%
VALUE + GROWTH
--------------
Year ended December 31, 1995 42.70%
Three years ended December 31, 1995 28.78%
From inception (5/12/92) through December 31, 1995 26.47%
B-35
<PAGE>
NON-STANDARDIZED TOTAL RETURN INFORMATION
From time to time, a Fund may present non-standardized total return
information, in addition to standardized performance information, which may
include such results as the growth of a hypothetical $10,000 investment in the
Fund, and cumulative total return. Cumulative total return is calculated in a
similar manner to average annual total return, except that the results are not
annualized. Each calculation assumes that all dividends and distributions are
reinvested at net asset value on the reinvestment dates during the period.
INDICES AND PUBLICATIONS
A Fund may compare its performance with that of appropriate indices such as
the Standard & Poor's Composite Index of 500 stocks ("S&P 500"), Standard &
Poor's MidCap 400 Index ("S&P 400"), the NASDAQ Industrial Index, the NASDAQ
Composite Index, Russell 2000 Index or other unmanaged indices so that investors
may compare such results with those of a group of unmanaged securities. The S&P
500, the S&P 400, the NASDAQ Industrial Index, the NASDAQ Composite Index, and
the Russell 2000 Index are unmanaged groups of common stocks traded principally
on national securities exchanges and the over the counter market, as the case
may be. A Fund may also, from time to time, compare its performance to other
mutual funds with similar investment objectives and to the industry as a whole,
as quoted by rating services and publications, such as Lipper Analytical
Services, Inc., Morningstar Mutual Funds, Forbes, Money, and Business Week.
In addition, one or more portfolio managers or other employees of Robertson
Stephens Investment Management may be interviewed by print media, such as THE
WALL STREET JOURNAL or BUSINESS WEEK, or electronic news media, and such
interviews may be reprinted or excerpted for the purpose of advertising
regarding the Fund.
RELATIVE VOLATILITY - BETA
From time to time a Fund may present a statistical measure of the
volatility of a Fund's performance relative to the volatility of the performance
of the S&P 500. A Fund calls this comparative measure its "beta." Beta is
approximate, because it is statistical, and is not necessarily indicative of
future fund performance volatility. Thus, if a Fund's portfolio volatility
perfectly represents that of the S&P 500, a Fund's beta would be 1.0. If a
Fund's beta is greater than 1.0, a Fund's portfolio would tend to represent a
greater market risk than the S&P 500 because a Fund's portfolio would tend to be
more sensitive to movements in the securities markets. For example, if a Fund's
beta is 1.1, a Fund's performance would tend to vary approximately 10% more than
would the performance of the S&P 500. If a Fund's beta is 0.9, a Fund's
performance would tend to vary 10% less than the performance of the S&P 500.
The correlation is not usually exact because, depending upon the diversification
of a Fund's portfolio, a beta of less than 1.0 may indicate only that the
portfolio is less sensitive to market movements, not that the Fund's portfolio
has low overall risk.
The beta included with any presentation of the Fund's performance data will
be calculated according to the following formula:
n _ _
Sum [ R(FT)R(MT) - nR(F)R(M) ]
S = ------------------------------
n 2 _ 2
Sum [ R(MT) - nR(M) ]
B-36
<PAGE>
Where: n = number of months measured
R(FT) = rate of return on the Fund in month t
R(MT) = rate of return on the market index, I.E., the
S&P 500, in month t
_
R(F) = arithmetic average monthly rate of return of the
Fund
_
R(M) = arithmetic average monthly rate of return on the
market index, I.E., the S&P 500
The Value + Growth Fund's beta from the date upon which its prospectus
became effective (May 12, 1992) through December 31, 1993 was 0.63. The Value +
Growth Fund's beta for the twelve-month periods ended December 31, 1993 and
March 31, 1994 were 0.63 and 0.68, respectively, and for the period from April
1, 1994 through March 31, 1995 was 1.34. For the period March 31, 1995 through
December 31, 1995, the Fund's beta was 1.15.
ADDITIONAL INFORMATION
GENERAL
Robertson Stephens Investment Trust (the "Trust") is an open-end series
investment company, which was organized on May 11, 1987 as a Massachusetts
business trust.
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, c/o National Financial Data Services,
at P.O. Box 419717, Kansas City, MO 64141, serves as the Funds' Transfer Agent.
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, serves as the Funds' Custodian. As Transfer Agent, State Street Bank and
Trust Company maintains records of shareholder accounts, processes purchases and
redemptions of shares, acts as dividend and distribution disbursing agent, and
performs other related shareholder functions. As Custodian, it and
subcustodians approved by the Board of Trustees hold the securities in the
Funds' portfolio and other assets for safekeeping. The Transfer Agent and
Custodian do not participate in making investment decisions for the Funds.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 555 California Street, San Francisco, California
94104, are the Trust's independent accountants, providing audit services, tax
return review and other tax consulting services and assistance and consultation
in connection with the review of various Securities and Exchange Commission
filings. The Financial Highlights included in the Trust's combined prospectus
for the Contrarian, Developing Countries, Emerging Growth, Global Low-Priced
Stock, Global Natural Resources, Growth & Income, Information Age-TM-, Partners,
and Value + Growth Funds and the financial statements incorporated by reference
therein and included in this Statement have been so included and incorporated in
reliance upon the report of Price Waterhouse LLP, the independent accountants,
given on the authority of said firm as experts in auditing and accounting.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Agreement and Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by the Trust
or the Trustees. The Agreement and Declaration of Trust provides for
indemnification out of a Fund's property for all loss and expense of any
shareholder held personally liable for the
B-37
<PAGE>
obligations of that Fund. Thus the risk of a shareholder's incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Fund would be unable to meet its obligations.
OTHER INFORMATION
The Prospectus and this Statement, together, do not contain all of the
information set forth in the Registration Statement of Robertson Stephens
Investment Trust, as amended, filed with the Securities and Exchange Commission.
Certain information is omitted in accordance with rules and regulations of the
Commission. The Registration Statement may be inspected at the Public Reference
Room of the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
at prescribed rates.
B-38
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
This Appendix describes ratings applied to corporate bonds by Standard & Poor's
("S&P"), Moody's Investors Service, Inc. ("Moody's") and Fitch Investor
Services, Inc. ("Fitch").
S&P'S RATINGS
AAA: Debt rated 'AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB: Debt rated 'BBB' is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
Debt rated 'BB,' 'B,' 'CCC,' 'CC,' and 'C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. 'BB' indicates the least degree of speculation and 'C' the highest.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties of major exposures to adverse
markets.
BB: Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.
B: Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating.
CCC: Debt rated 'CCC' has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The 'CCC' rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
'B' or 'B-' rating.
CC: The rating 'CC' typically is applied to debt subordinated to senior debt
that is assigned an actual or implied 'CCC' rating.
C: The rating 'C' typically is applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC-' rating. The 'C' rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
payments are continued.
B-39
<PAGE>
CI: The rating 'CI' is reserved for income bonds on which no interest is being
paid.
D: Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The 'D' rating will also be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized.
The ratings from 'AA' to 'CCC' may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
MOODY'S RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the
B-40
<PAGE>
modifier 2 indicates a mid-range ranking; and the modifier 3 indicates that the
issue ranks in the lower end of its generic rating category.
FITCH RATINGS
AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated 'AAA.' Because bonds rate in the
'AAA' and 'AA' categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated 'F-1+.'
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these bonds, and therefore impair
timely payment. The likelihood that the rating of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB: Bonds are considered to be speculative. The obligor's ability to pay
interest and repay
principal may be affected over time by adverse economic changes. However,
business and financial
alternatives can be identified which could assist the obligor in satisfying its
debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issues.
CCC: Bonds have certain identifiable characteristics that, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, and D: Bonds in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. 'DDD'
represents the highest potential for recovery on these bonds, and 'D' represents
the lowest potential for recovery.
Note: Fitch ratings (other than the 'AAA,' 'DDD,' 'DD,' or 'D' categories) may
be modified by the addition of a plus (+) or minus (-) sign to show relative
position of a credit within the rating category.
B-41
<PAGE>
FINANCIAL STATEMENTS
Attached are financial statements of Robertson Stephens Investment Trust
for the specified periods.
B-42
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Contrarian
Fund:
In our opinion, the accompanying statement of net assets, including the
schedules of net assets and of securities sold short, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Robertson
Stephens Contrarian Fund (one of the series constituting The Robertson Stephens
Investment Trust, hereinafter referred to as the "Fund") at December 31, 1995,
the results of its operations for the nine months then ended, and the changes in
its net assets and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-43
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ALUMINUM - 6.0%
Kaiser Aluminum Corporation(1) 759,100 $ 9,868,300
MAXXAM, Inc. 517,800 18,252,450
Western Mining Holdings, Ltd.(1) 350,000 2,247,658
- --------------------------------------------------------------------------------
30,368,408
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 6.3%
American Buildings Company 296,000 6,660,000
Easco, Inc.(1) 110,500 953,062
Royal Plastics Group, Ltd. 1,666,300 24,100,641
- ------------------------------------------------------------------------------
31,713,703
- --------------------------------------------------------------------------------
COPPER MINING - 3.3%
Adrian Resources, Ltd. 1,713,003 6,272,439
Chase Resources Corporation 212,900 249,462
Indochina Goldfields, Ltd. - Restricted(2) 1,700,000 10,200,000
- --------------------------------------------------------------------------------
16,721,901
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 4.9%
Anderson Exploration, Ltd. 282,100 2,892,274
Anzoil N.L. 45,842,000 3,918,411
Louisiana Land & Exploration(1) 60,000 2,572,500
McMoRan Oil & Gas Company 1,412,420 4,855,194
Nescor Energy - Restricted(2) 375,000 1,125,000
Petro-Canada Installment Receipts 500,000 2,875,000
Tide West Oil Company 505,000 6,754,375
- --------------------------------------------------------------------------------
24,992,754
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.9%
Dundee Bancorp, Inc., Class A 1,956,000 19,696,081
- --------------------------------------------------------------------------------
19,696,081
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-44
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
GOLD MINING - 13.0%
Ashanti Goldfields - GDS(1,4) 600,000 $12,000,000
Bakyrchik Gold PLC 504,500 2,162,480
Cambior, Inc.(1) 1,159,900 12,635,307
Carson Gold Corporation 978,500 988,890
Central Fund of Canada, Class A(1) 487,300 2,192,850
Delta Gold Mining Corporation 1,142,600 794,925
El Callao Mining Corporation 450,000 197,730
Golden Shamrock Mines, Ltd. 6,477,000 3,995,771
Golden Star Resources, Ltd.(1) 1,677,500 8,906,535
Guyanor Resources, S.A. 335,500 835,372
MK Gold Company 636,000 1,590,000
Newmont Mining Corporation(1) 325,000 14,706,250
Queenstake Resources, Ltd. 2,039,300 746,723
Tombstone Explorations Co., Ltd. 244,500 170,102
Vengold, Inc. 4,756,400 3,831,593
Vengold, Inc., Series A Warrants(5) 1,286,000 473,238
- --------------------------------------------------------------------------------
66,227,766
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERNATIONAL CONGLOMERATE - 1.8%
Lonrho PLC(1) 7,310,950 9,266,035
- --------------------------------------------------------------------------------
9,266,035
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICKEL MINING - 25.6%
Diamond Fields Resources, Inc. 6,897,600 130,071,915
- --------------------------------------------------------------------------------
130,071,915
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REAL ESTATE - 4.0%
Atlantic Gulf Communities 371,700 2,508,975
Avatar Holdings, Inc. 262,600 9,191,000
Catellus Development Corporation 1,471,400 8,828,400
- --------------------------------------------------------------------------------
20,528,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 0.7%
Intertape Polymer Group(1) 49,000 1,537,375
NL Industries, Inc. 160,800 1,989,900
- --------------------------------------------------------------------------------
3,527,275
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-45
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION SERVICES - 1.9%
China Yuchai International, Ltd.(1) 388,800 $ 3,159,000
Harper Group(1) 367,700 6,526,675
- --------------------------------------------------------------------------------
9,685,675
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 71.5%
(COST: $259,092,818) $ 362,799,888
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS
- --------------------------------------------------------------------------------
Golden Star Resources, Ltd. - Warrants(5) 75,000 0
Queenstake Resources, Ltd. - Warrants(5) 500,000 0
- --------------------------------------------------------------------------------
TOTAL WARRANTS - 0.1% (COST: $13,000) 0
SHARES VALUE
- --------------------------------------------------------------------------------
PREFERRED STOCKS
- --------------------------------------------------------------------------------
United Services Advisors, Pfd. 279,860 454,773
Catellus Development, 3.625%, Conv. Pfd.,
12/31/99, Series B(1) 30,000 1,200,000
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS - 0.3%
(Cost: $2,852,690) 1,654,773
- --------------------------------------------------------------------------------
CONTRACTS VALUE
- --------------------------------------------------------------------------------
PUT OPTIONS
- --------------------------------------------------------------------------------
RUSSELL 2000 INDEX PUT OPTIONS
March 96 300 300 91,875
June 96 300 1000 625,000
S&P 500 INDEX PUT OPTIONS
March 96 500 525 19,687
March 96 525 350 21,875
March 96 540 975 103,594
March 96 565 450 101,250
March 96 600 1,700 1,168,750
June 96 525 250 59,375
June 96 550 250 96,875
June 96 565 350 205,625
TECHNOLOGY PUT BASKET
March 96 100 20 121,309
June 96 100 10 694,693
September 96 100 9 1,293,067
August 96 100 7 2,338,230
May 96 100 7 1,491,573
- --------------------------------------------------------------------------------
TOTAL PUT OPTIONS - 1.7% (Cost: $11,816,723) 8,432,778
The accompanying notes are an integral part of these financial statements.
B-46
<PAGE>
ROBERTSON, STEPHENS & COMPANY
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 73.5% (COST: $273,762,231) $ 372,887,439
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- -------------------------------------------------------------------------------
Cash 35,870
Repurchase Agreement 4,506,000
State Street Bank and Trust Company, 5.00%, dated
12/29/95, due 1/02/96, maturity value $4,508,503
(collateralized by $3,515,000 par value U.S. Treasury
Notes, 8.75%, due 05/15/17)
- -------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 0.9% 4,541,870
- -------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR
SECURITIES SOLD SHORT
- -------------------------------------------------------------------------------
Cash 2,000,000
U.S. Treasury Bills, 5.3%, due 01/25/96 88,692,060
Repurchase Agreement (Segregated) 27,000,000
State Street Bank and Trust Company, 5.00%, dated
12/29/95, due 1/02/96, maturity value $27,015,000
(collateralized by $20,900,000 par value U.S. Treasury
Notes, 8.75%, due 05/15/17)
- -------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK
FOR SECURITIES SOLD SHORT - 23.2% 117,692,060
- -------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 24.8% 126,091,492
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (22.2)% (Proceeds: $118,970,688) (112,746,628)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.2)% (989,492)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 507,476,741
- -------------------------------------------------------------------------------
(1) Income-producing securities.
(2) See 4.f. in Notes to Financial Statements.
(3) ADR - American Depository Receipts.
(4) GDS - Global Depository Shares.
(5) See 4.g. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-47
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF SECURITIES SOLD SHORT
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
HEALTHCARE/MEDICAL TECHNOLOGY/HMO - (2.0)%
Cerner Corporation 279,000 $ 5,719,500
Integrated Health Services, Inc. 185,800 4,645,000
- --------------------------------------------------------------------------------
10,364,500
- --------------------------------------------------------------------------------
MEDICAL SUPPLIES - (3.5)%
Biomet, Inc. 371,500 6,640,562
Enzo Biochem, Inc. 175,100 3,370,675
MediSense, Inc. 236,900 7,491,962
- --------------------------------------------------------------------------------
17,503,199
- --------------------------------------------------------------------------------
MEDICAL SERVICES - (0.4)%
Isolyser Company, Inc. 142,300 1,992,200
- --------------------------------------------------------------------------------
1,992,200
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - (0.9)%
Silicon Graphics, Inc. 171,700 4,721,750
- --------------------------------------------------------------------------------
4,721,750
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - (2.0)%
Avid Technology, Inc. 114,500 2,175,500
FTP Software, Inc. 187,400 5,434,600
Imnet Systems, Inc. 73,500 1,764,000
Seventh Level, Inc. 23,000 322,000
- --------------------------------------------------------------------------------
9,696,100
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - (0.9)%
DSC Communications Corporation 123,100 4,539,312
- --------------------------------------------------------------------------------
4,539,312
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - (0.8)%
Identix, Inc. 148,800 1,581,000
X Rite, Inc. 175,900 2,484,588
- --------------------------------------------------------------------------------
4,065,588
- --------------------------------------------------------------------------------
PERIPHERALS - (1.4)%
InFocus Systems, Inc. 137,500 4,967,188
Proxima Corporation 96,500 2,135,062
- --------------------------------------------------------------------------------
7,102,250
- --------------------------------------------------------------------------------
SEMICONDUCTORS - (0.4)%
Atmel Corporation 84,900 1,899,638
- --------------------------------------------------------------------------------
1,899,638
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - (1.9)%
Cidco, Inc. 167,900 4,281,450
Colonial Data Technologies Corp. 232,200 4,760,100
Equalnet Holding Corporation 86,500 627,125
- --------------------------------------------------------------------------------
9,668,675
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-48
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
TECHNOLOGY/NETWORK SYSTEMS - (0.1)%
American Power Conversion Corporation 72,000 $ 684,000
- --------------------------------------------------------------------------------
684,000
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - (4.3)%
Bed Bath & Beyond, Inc. 192,200 7,459,762
Best Buy Company, Inc. 70,000 1,137,500
Callaway Golf Company 165,000 3,733,125
First Alert, Inc. 103,500 892,688
Gymboree Corporation 137,700 2,840,062
Micro Warehouse, Inc. 135,700 5,869,025
- --------------------------------------------------------------------------------
21,932,162
- --------------------------------------------------------------------------------
RESTAURANTS - (1.7)%
IHOP Corporation 120,000 3,120,000
Papa John's International, Inc. 136,000 5,601,500
- --------------------------------------------------------------------------------
8,721,500
- --------------------------------------------------------------------------------
CONSUMER TECHNOLOGY - (1.9)%
Acclaim Entertainment, Inc. 295,171 1,313,867
Electronic Arts, Inc. 200,000 5,225,000
Sensormatic Electronics Corporation 190,900 3,316,887
- --------------------------------------------------------------------------------
9,855,754
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT - (22.2)%
(PROCEEDS: $118,970,688) $112,746,628
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-49
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $273,762,231) $ 372,887,439
Cash and Cash Equivalents 4,432,484
Deposits with brokers and custodian bank for
securities sold short 117,801,446
Receivable from brokers for securities sold short 126,091,492
Receivable for investments sold 1,102,973
Receivable for fund shares subscribed 1,370,360
Receivables, other 39,752
- --------------------------------------------------------------------------------
TOTAL ASSETS 623,725,946
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Securities sold short (Proceeds: $118,970,688) 112,746,628
Payable for investments purchaseed 335,490
Payable for fund shares redeemed 2,011,165
Accrued expenses 1,128,693
Payables, other 27,229
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 116,249,205
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 507,476,741
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 448,475,149
Accumulated net realized gain from investments 30,514,626
Accumulated net realized loss from options (63,862,419)
Accumulated net realized loss from securities sold short (12,999,883)
Net unrealized appreciation on investments 102,509,153
Net unrealized depreciation on options (3,383,945)
Net unrealized appreciation on securities sold short 6,224,060
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 507,476,741
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 13.78
Net Asset Value, offering and redemption price
per share (net assets of $507,476,741 applicable
to 36,817,846 shares of beneficial interest
outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-50
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- -------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Interest $ 7,423,520
Dividends (Net of foreign tax withheld of $48,403) 1,406,931
- -------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 8,830,451
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
Investment advisory fees 5,648,970
Distribution fees 2,824,481
Custodian and transfer agent fees 629,651
Professional fees 204,044
Shareholder reports 119,775
Registration and filing fees 79,621
Dividend expense for securities sold short 65,042
Trustees' fees and expenses 16,875
Other 16,500
- -------------------------------------------------------------------------------
TOTAL EXPENSES 9,604,959
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (774,508)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT
- -------------------------------------------------------------------------------
Net realized gain from investments 59,125,328
Net realized loss from options (36,060,843)
Net realized loss from securities sold short (12,590,530)
Net change in unrealized appreciation on investments 99,776,939
Net change in unrealized appreciation on options 12,067,990
Net change in unrealized depreciation on securities sold short (3,688,560)
- -------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON
INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT 118,630,324
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $ 117,855,816
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-51
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment loss $ (774,508) $ (1,464,747)
Net realized gain/(loss) from investments 59,125,328 (17,429,453)
Net realized loss from options (36,060,843) (27,569,968)
Net realized (loss)/gain from securities sold short (12,590,530) 1,299,923
Net change in unrealized appreciation/(depreciation) on investments 99,776,939 (10,936,753)
Net change in unrealized appreciation/(depreciation) on options 12,067,990 (28,287,843)
Net change in unrealized (depreciation)/appreciation on securities sold short (3,688,560) 1,117,823
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 117,855,816 (83,271,018)
- --------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Realized gains on investments - (12,605,850)
- --------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (12,605,850)
- --------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net (decrease)/increase in net assets resulting from capital share transactions (8,025,100) 8,572,147
- --------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (8,025,100) 8,572,147
- --------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS 109,830,716 (87,304,721)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 397,646,025 484,950,746
End of period $ 507,476,741 $ 397,646,025
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-52
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT EACH ERIOD: 12/31/95(2) 3/31/95 3/31/94(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 10.70 $ 12.34 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.01) (0.04) (0.02)
Net realized gain/(loss) and unrealized appreciation/(depreciation) on investments 3.09 (1.35) 2.36
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase/(Decrease) in Net Assets Resulting From Operations 3.08 (1.39) 2.34
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution from realized gains on investments - (0.25) -
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.78 $ 10.70 $ 12.34
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 28.79% (11.23)% 23.40%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $507,476,741 $397,646,025 $484,950,746
Ratio of Expenses to Average Net Assets 2.54% 2.46%(3) 2.22%
Ratio of Net Investment Loss to Average Net Assets (0.20)% (0.27)%(3) (0.77)%
Portfolio Turnover Rate 29% 79% 14%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 The Fund commenced operations on 6/3/93.
2 Represents a 9-month period then ended.
3 If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, the ratio of expenses to average net assets
for the year ended March 31, 1995 would have been 2.58% and the ratio of
net investment loss to average net assets would have been (0.42)%.
Per-share data for each period has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-53
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Contrarian Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on June 30, 1993. Prior to the public offering, shares were offered in a
private placement offering on June 3, 1993, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
nine series of shares -- The Robertson Stephens Emerging Growth Fund, The
Robertson Stephens Value + Growth Fund, The Robertson Stephens Contrarian Fund,
The Robertson Stephens Developing Countries Fund, The Robertson Stephens Growth
& Income Fund, The Robertson Stephens Partners Fund, The Robertson Stephens
Information Age Fund, The Robertson Stephens Global Natural Resources Fund, and
The Robertson Stephens Global Low-Priced Stock Fund. The assets for each series
are segregated and accounted for separately.
The Contrarian Fund, for book and tax purposes, has a calendar (12/31) year-end.
These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable equity securities including options and foreign securities are valued
at the last sale price on the principal exchange or market on which they are
traded; or, if there were no sales that day, at the mean between the closing bid
and asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 97.7% of
the Fund's long positions and 100% of its short positions were valued in this
manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which could have a significant impact on the value of the security. At
December 31, 1995, 2.3% of the Fund's long positions were valued using these
guidelines and procedures.
Principally as a result of significant stock price appreciation, on December 31,
1995, and on February 14, 1996, approximately 25.6% and 25.4%, respectively, of
the Contrarian Fund's net assets were invested in the common stock of Diamond
Fields Resources, a Canadian corporation. Shares of Diamond Fields Resources are
freely traded on the Toronto Stock Exchange; the shares held by the Fund are
currently restricted as to resale within the U.S.
B-54
<PAGE>
ROBERTSON, STEPHENS & COMPANY
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries involving base metals,
precious metals, and oil/energy. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized gain or loss and unrealized appreciation or depreciation from
investments, options, and securities sold short.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
B-55
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995, and the year ended March 31, 1995, were as follows:
<TABLE>
<CAPTION>
4/1/95 - 12/31/95 SHARES AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 27,676,642 $ 349,025,223
Shares reinvested - -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares redeemed (28,017,625) (357,050,323)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net (340,983) $ (8,025,100)
- -------------------------------------------------------------------------------
<CAPTION>
4/1/94 - 3/31/95 SHARES AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 50,424,429 $ 580,777,746
Shares reinvested 1,072,034 11,311,877
- -------------------------------------------------------------------------------
51,496,463 592,089,623
- -------------------------------------------------------------------------------
Shares redeemed (53,652,411) (583,517,476)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net (2,155,948) $ 8,572,147
- -------------------------------------------------------------------------------
</TABLE>
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee calculated at
an annual rate of 1.50% of the average daily net assets of the Fund. For the
nine months ended December 31, 1995, the Fund incurred investment advisory fees
of $5,648,970. When applicable, RSIM agrees to reimburse the Fund for any annual
operating expenses, including investment advisory fees but excluding
distribution fees and dividend expense for short sales, which exceed the most
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. The Fund has obtained a waiver from the State of California to exclude
a portion of its advisory fees for purposes of determining the compliance by the
Fund with the State's Expense Limitations. For the nine months ended December
31, 1995, there was no expected reimbursement of the advisory fees and other
expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Paul H. Stephens, Portfolio Manager, is a Member of RS Group and
Chief Investment Officer of RS & Co. All affiliated and access persons, as
defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
B-56
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,875 for the nine months ended
December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed annually by the Fund's Board of Trustees. Under this
Plan, RS & Co. is compensated for services in such capacity including its
expenses in connection with the promotion and distribution of the Fund's shares.
The distribution fee is calculated at an annual rate of 0.75% of the average
daily net assets of the Fund. For the nine months ended December 31, 1995, the
Fund incurred distribution fees of $2,824,481.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended December 31, 1995, the
Fund paid brokerage commissions of $6,840 to RS & Co. which represented 1% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short, and short-term investments) measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 29%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $391,364,722. Accumulated net unrealized appreciation on investments was
$110,748,961, consisting of gross unrealized appreciation and depreciation of
$177,228,106, and $(66,479,145), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $160,842,180 and $217,827,823,
respectively.
d. OPTIONS:
At December 31, 1995, 1.0% of the Fund's net assets consisted of premiums paid
for the purchase of S&P 500 Index put options to hedge portfolio long
investments against adverse price fluctuations. In addition, 1.3% of the Fund's
net assets represent premiums paid for the purchase of put options on baskets of
securities of issuers in the technology sector of the overall market.
B-57
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The risk associated with the purchase of these put options is limited to the
premium originally paid. The premium paid for the purchase of these options is
included in the Fund's "Statement of Net Assets" as an investment and
subsequently marked-to-market daily to reflect the market value of the options.
TECHNOLOGY PUT BASKET OPTIONS:
The Technology Put Basket Options (the "Options") are European-style put
options. The Options, customized for the Fund, are based on the underlying price
of different groups of high technology stocks. The market value of the Options
is determined daily based on the price of the underlying stocks, market
volatility, exercise date, and other relevant parameters.
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The Fund
will realize a gain if the security declines in value between those dates. All
short sales must be fully collateralized. The Fund maintains the collateral in a
segregated account consisting of cash and/or U.S. government securities
sufficient to collateralize its obligation on the short positions. The Fund may
also sell short "against the box" (i.e., the Fund enters into a short sale as
described above, while holding an offsetting long position in the security which
is sold short). If the Fund enters into a short sale against the box, it will
hold an equivalent amount of the securities to cover its position while the
short sale is outstanding. The Fund limits the value of short sale positions
(excluding short sales "against the box") to 25% of the Fund's total assets. At
December 31, 1995, the Fund had 18% of its total assets in short positions. For
the nine months ended December 31, 1995, the cost of investments purchased to
cover short sales and the proceeds from investments sold short were $142,564,487
and $150,129,469, respectively.
Included in the "Other Assets, Net" category in the Schedule of Net Assets are
the following securities sold short where the Fund has purchased the underlying
securities to effectively close out the short positions. At December 31, 1995,
the Fund chose not to complete the transactions which would have required
delivery of the purchased securities to the lender. The Fund does not consider
these boxed positions as investments.
SECURITIES SHARES VALUE
- --------------------------------------------------------------------------------
Acclaim Entertainment 94,500 $ 1,169,438
- --------------------------------------------------------------------------------
Avid Technology 35,000 665,000
- --------------------------------------------------------------------------------
Cidco, Inc. 13,500 344,250
- --------------------------------------------------------------------------------
Colonial Data Technologies 105,900 2,170,950
- --------------------------------------------------------------------------------
Electronic Arts 24,500 640,062
- --------------------------------------------------------------------------------
Isolyser Company, Inc. 153,200 2,144,800
- --------------------------------------------------------------------------------
$ 7,134,500
- --------------------------------------------------------------------------------
B-58
<PAGE>
ROBERTSON, STEPHENS & COMPANY
f. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. At December 31, 1995, the Fund held restricted
securities with an aggregate value of $11,325,000, which represented 2.2% of the
Fund's total net assets. Restricted securities are valued according to the
guidelines and procedures adopted by the Fund's Board of Trustees.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- --------------------------------------------------------------------------------
Indochina Goldfields 233 $ 233 $ 1,398 3/24/94
117 117 702 3/28/94
750 1,469 4,500 5/26/94
600 3,000 3,600 8/18/95
- --------------------------------------------------------------------------------
Nescor Energy 125 125 375 4/18/94
250 500 750 5/05/94
- --------------------------------------------------------------------------------
g. WARRANTS:
A warrant is an option which normally entitles the holder to purchase a
proportionate amount of a particular class of the issuer's securities at a
predetermined price during a specific period.
The following warrants were valued such that when the exercise price of the
warrant was less than that of the underlying common stock, the warrant was
priced using the modified Black-Scholes Valuation Formula. The Black-Scholes
Valuation Formula values a warrant by determining the differential between the
exercise price of the warrant and the current price of the underlying stock
based on a number of factors. These factors include, but are not limited to,
current price of the underlying stock, exercise price of the warrant, time to
expiration, assumed riskless rate of interest, compounded rate of return on the
stock, and standard deviation of the return on the stock. If the exercise price
was greater than that of the underlying common stock, the warrant was valued at
zero. This valuation method is subject to frequent review and is in accordance
with the guidelines and procedures adopted by the Fund's Board of Trustees.
SHARES COST VALUE EXPIRATION
SECURITY (000) (000) (000) DATE
- --------------------------------------------------------------------------------
Golden Star Resources -
Warrants 75 0 0 7/31/96
- --------------------------------------------------------------------------------
Queenstake Resources -
Warrants 500 0 0 3/18/97
- --------------------------------------------------------------------------------
Vengold, Inc. - Series A
Warrants 1,286 13 473 6/30/00
- --------------------------------------------------------------------------------
h. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, revalue of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets. At December 31, 1995, the
Fund had its largest concentrated investments, worth 33% of the Fund's total
assets, in Canada.
B-59
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Developing
Countries Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Developing Countries Fund (one
of the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
As explained in Note 1, the financial statements include securities, valued at
$1,878,230 (13 percent of net assets), whose values have been estimated by the
Board of Trustees in the absence of readily ascertainable market values. We
have reviewed the procedures used by the Board of Trustees in arriving at their
estimate of value and have inspected the underlying documentation, and, in the
circumstances, we believe the procedures are reasonable and the documentation
appropriate. However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would have been
used had a ready market for the securities existed, and the differences could be
material to the financial statements.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-60
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
Czech Republic - 15.1%
Ceske Energeticke Zavody A.S. 12,300 $ 444,656
Komercni Banka A.S., GDR(3) 40,000 728,000
SPT Telecom A.S. 4,000 378,009
Tabak A.S. 3,985 612,709
- --------------------------------------------------------------------------------
2,163,374
- --------------------------------------------------------------------------------
HONG KONG - 8.5%
ASM Pacific Technology, Ltd.(1) 460,000 398,577
Cathay Investment Fund, Ltd. 750,000 824,442
- --------------------------------------------------------------------------------
1,223,019
- --------------------------------------------------------------------------------
INDONESIA - 10.7%
First Dynasty Mines, Ltd. 100,000 476,016
PT Dynaplast, Foreign(1),(5),(6) 510,000 446,097
PT Japfa Comfeed Indonesia, Foreign(1),(5) 500,000 246,009
PT Multibreeder Adirama, Foreign(1),(5),(6) 749,000 262,060
PT Sumalindo Lestari Jaya, Foreign (1),(5) 130,000 105,182
- --------------------------------------------------------------------------------
1,535,364
- --------------------------------------------------------------------------------
KOREA - 9.5%
LG Electronics, Inc., GDR(3) 70,000 813,750
Samsung Electronics, GDS(4) 9,202 545,218
- --------------------------------------------------------------------------------
1,358,968
- --------------------------------------------------------------------------------
MALAYSIA - 8.7%
Aokam Perdana Berhad(1) 300,000 484,309
Land and General Berhad(1) 100,000 216,561
Lingui Developments Berhad(1) 300,000 555,184
Malaysian Ringgit 5,250 2,067
- --------------------------------------------------------------------------------
1,258,121
- --------------------------------------------------------------------------------
MEXICO - 4.5%
Cementos de Mexico, S.A., ADR(1),(2) 40,000 287,092
Vitro Sociedad Anonima, ADR(1),(2) 75,000 356,250
- --------------------------------------------------------------------------------
643,342
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-61
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
PHILIPPINES - 6.5%
Filinvest Land, Inc. 1,910,000 $ 611,666
International Container Terminal Services, Inc. 600,000 314,525
Negros Navigation Company, Inc. 50,500 5,969
- --------------------------------------------------------------------------------
932,160
- --------------------------------------------------------------------------------
POLAND - 7.4%
Bank Rozwolo Eksportu, S.A. 9,250 140,692
Exbud, S.A. 15,553 164,645
Huta Szkla Gospodarczego Irena 24,300 280,896
Mostostal Zabrze, S.A. 45,500 153,174
Stomil Olsztyn, S.A. 34,200 319,043
- --------------------------------------------------------------------------------
1,058,450
- --------------------------------------------------------------------------------
THAILAND - 11.1%
Alphatec Electronics Company, Ltd., Foreign(1),(5),(6) 38,000 543,073
GSS Array Technologies Company, Ltd., Foreign(1),(5) 230,000 1,050,450
- --------------------------------------------------------------------------------
1,593,093
- --------------------------------------------------------------------------------
VENEZUELA - 5.7%
Corimon C.A. Sponsored, ADR(1),(2) 50,000 187,500
Siderugica Venezolana Sivensa, ADR(1),(2),(6) 330,000 627,000
- --------------------------------------------------------------------------------
814,500
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 87.7% (COST: $14,787,089) 12,580,391
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash 959
Repurchase Agreement 1,661,000
State Street Bank and Trust Comapny, 5.00%, dated
12/29/95, due 1/2/96, maturity value $1,661,923
(collateralized by $1,290,000 par value U.S.
Treasury Notes, 8.75%, due 5/5/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 11.6% 1,661,959
The accompanying notes are an integral part of these financial statements.
B-62
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.7% $ 101,069
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 14,343,420
- --------------------------------------------------------------------------------
(1) Income-producing security.
(2) ADR - American Depository Receipt.
(3) GDR - Global Depository Receipt.
(4) GDS - Global Depository Shares.
(5) Foreign - Foreign Shares.
(6) Fair-valued securities, see 1.a. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-63
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $14,787,089) $ 12,580,391
Cash and cash equivalents 1,661,959
Receivable for fund shares subscribed 47,474
Receivable from Adviser 326,639
Receivables, other 15,436
- --------------------------------------------------------------------------------
TOTAL ASSETS 14,631,899
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for fund shares redeemed 221,858
Accrued expenses 66,621
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 288,479
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 14,343,420
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 19,051,696
Accumulated net realized loss from investments (2,321,733)
Accumulated net realized loss from options (464,150)
Accumulated net realized gain from securities sold short 284,305
Net unrealized depreciation on investments (2,206,698)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 14,343,420
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 8.02
Net Asset Value, offering and redemption price per
share (net assets of $14,343,420 applicable to
1,787,486 share of beneficial interest outstanding
with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-64
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 47,012
Dividends (Net of foreign tax withheld $14,794) 107,568
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 154,580
- --------------------------------------------------------------------------------
Investment advisory fees 145,517
Custodian and transfer agent fees 107,471
Professional fees 77,948
Registration and filing fees 56,369
Shareholder reports 43,796
Distribution fees 37,616
Trustees' fees and expenses 16,882
Other 10,126
Dividend expense for securities sold short 551
- --------------------------------------------------------------------------------
Total Expenses 496,276
Less: Reimbursement from Adviser (282,462)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 213,814
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (59,234)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DECPRECIATION)
ON INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT
- --------------------------------------------------------------------------------
Net realized loss from investments (1,302,128)
Net realized loss from options (464,150)
Net realized loss from securities sold short (17,500)
Net change in unrealized appreciation on investments 112,264
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS,
OPTIONS AND SECURITIES SOLD SHORT (1,671,514)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,730,748)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-65
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS ENDED PERIOD ENDED
12/31/95 3/31/95
- ------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------
Net investment (loss)/income $ (59,234) $ 103,473
Net realized loss from investments (1,302,128) (880,354)
Net realized loss from options (464,150) -
Net realized (loss)/gain from securities sold short (17,500) 344,728
Net change in unrealized appreciation/(depreciation) on
investments 112,264 (2,318,966)
- ------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (1,730,748) (2,751,119)
- ------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------
Net investment income - (77,099)
Realized gains on investments - (182,173)
- ------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (259,272)
- ------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions 7,729,040 11,355,519
- ------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 7,729,040 11,355,519
- ------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,998,292 8,345,128
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------
Beginning of period 8,345,128 0
End of period $ 14,343,420 $ 8,345,128
- ------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-66
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 12/31/95(2) 3/31/95(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, beginning of period $ 8.57 $ 10.00
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Net investment (loss)/income (0.03) 0.06
Net realized loss and unrealized depreciation on investments (0.52) (1.36)
- ----------------------------------------------------------------------------------------------
Total Decrease in Net Assets Resulting From Operations (0.55) (1.30)
- -----------------------------------------------------------------------------------------------
Distributions from net investment income - (0.04)
Distributions from realized gains on investments - (0.09)
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.02 $ 8.57
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
TOTAL RETURN (6.42)% (13.14)%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------
Net Assets, end of Period $ 14,343,420 $ 8,345,128
Ratio of Expenses to Average Net Assets 1.83%(2) 3.15%(2)
Ratio of Net Investment (Loss)/Income to Average Net Assets (0.51)%(2) 0.72%(2)
Portfolio Turnover Rate 103% 124%
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on 5/2/94.
(2) Represents a 9-month period then ended.
(3) If the Fund had paid all of its expenses and there had been no reimbursement
by the Adviser, the ratio of expenses to average net assets for the nine
months ended December 31, 1995, and the period ended March 31, 1995, would
have been 4.24% and 3.46%, respectively, and the ratio of net investment
(loss)/income to average net assets would have been (2.92)% and 0.41%,
respectively.
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
B-67
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Developing Countries Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on April 29, 1994, and it started to offer shares to the public on May 2,
1994. The Trust offers nine series of shares -- The Robertson Stephens Emerging
Growth Fund, The Robertson Stephens Value + Growth Fund, The Robertson Stephens
Contrarian Fund, The Robertson Stephens Developing Countries Fund, The Robertson
Stephens Growth & Income Fund, The Robertson Stephens Partners Fund, The
Robertson Stephens Information Age Fund, The Robertson Stephens Global Natural
Resources Fund, and The Robertson Stephens Global Low-Priced Stock Fund. The
assets for each series are segregated and accounted for separately.
The Developing Countries Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 87% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 13% of the Fund's long positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date).
B-68
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
Notes to Financial Statements
Realized gains and losses on securities transactions are determined on the basis
of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period ended December
31, 1995, and for the period ended March 31, 1995, were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 2,510,903 $ 23,109,743
Shares reinvested - -
- --------------------------------------------------------------------------------
2,510,903 23,109,743
- --------------------------------------------------------------------------------
Shares redeemed (1,687,748) (15,380,702)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 813,155 $ 7,729,040
- --------------------------------------------------------------------------------
5/2/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 3,093,680 $ 30,436,016
Shares reinvested 26,976 252,773
- --------------------------------------------------------------------------------
3,120,656 30,688,789
- --------------------------------------------------------------------------------
Shares redeemed (2,146,325) (19,333,270)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 974,331 $ 11,355,519
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the nine months ended December 31, 1995, the Fund incurred investment
advisory fees of $145,517. In addition, to limit the Fund's annual expense ratio
at 1.85%, RSIM has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees but excluding distribution fees and
dividend expense for short sales that exceed the most stringent limits
prescribed by any state in which the Fund's shares are offered for sale. For the
nine months period ended December 31, 1995, the Adviser agreed to reimburse
$282,462 of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's
B-69
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Distributor and RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief
Executive Officer and a Trustee of the Fund, is also a Director of RSIM, a
Member of RS Group, and Chief Operating Officer of RS & Co. Terry R. Otton,
Chief Financial Officer of the Fund, is a Member of RS Group and Chief Financial
Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS
Group and Director of Research for RS & Co. All affiliated and access persons,
as defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,882 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended December 31, 1995, the Fund
incurred distribution fees of $37,616.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-
dealer, subject to Fund policies as stated in the prospectus, regulatory
constraints, and the ability of RS & Co. to provide competitive prices and
commission rates. All investment transactions in which RS & Co. acts as a broker
may only be executed on an agency basis. Subject to certain constraints, the
Fund may make purchases of securities from offerings or underwritings in which
RS & Co. has been retained by the issuer. For the nine months ended December 31,
1995, the Fund paid no brokerage commissions to RS & Co.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short and short-term investments), measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 103%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $14,787,089. Accumulated net unrealized depreciation on investments was
$(2,206,698), consisting of gross unrealized appreciation and depreciation of
$665,060 and $(2,871,758), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold short
and short-term investments) were $19,507,366 and $13,996,457, respectively.
d. OPTIONS:
At December 31, 1995, the Fund had no hedge position in put options.
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which
B-70
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in value between those dates. All short sales must be fully
collateralized. The Fund maintains the collateral in a segregated account
consisting of cash and/or U.S. government securities sufficient to collateralize
its obligations on the short positions. The Fund may also sell short "against
the box" (i.e., the Fund enters into a short sale as described above, while
holding an offsetting long position in the security which is sold short). If the
Fund enters into a short sale "against the box," it will hold an equivalent
amount of the securities to cover its position while the short sale is
outstanding. The Fund limits the value of short sale positions (excluding short
sales "against the box") to 25% of the Fund's total assets. At December 31,
1995, none of the Funds total assets were in short positions. For the nine
months ended December 31, 1995, the cost of investments purchased to cover short
sales and the proceeds from investments sold short were $70,500 and $0,
respectively.
f. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets. At December 31, 1995, the
Fund had its largest concentrated foreign investments, worth 15% of the Fund's
total assets, in the Czech Republic.
B-71
<PAGE>
Independent Accountants' Report
To the Shareholders and Board of Trustees of The Robertson Stephens Emerging
Growth Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Emerging Growth Fund (one of
the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-72
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.6%
Cephalon, Inc. 65,300 $ 2,660,975
- --------------------------------------------------------------------------------
2,660,975
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 2.5%
Seagate Technology, Inc. 40,000 1,900,000
Sun Microsystems, Inc. 50,000 2,281,250
- --------------------------------------------------------------------------------
4,181,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 12.2%
Adobe Systems, Inc.1 15,400 954,800
Broderbund Software, Inc. 45,000 2,733,750
Citrix Systems, Inc. 7,050 229,125
Davidson & Associates, Inc. 45,000 990,000
FTP Software, Inc. 75,000 2,175,000
Informix Corporation 40,000 1,200,000
Legato Systems, Inc. 13,400 415,400
NetManage, Inc. 20,200 469,650
Number Nine Visual Technology Corporation 52,700 461,125
Premenos Technology Corporation 36,400 960,050
Remedy Corporation 22,400 1,327,200
Sierra On-Line, Inc. 103,300 2,969,875
Spectrum HoloByte, Inc. 216,900 1,409,850
Symantec Corporation 108,900 2,531,925
Tivoli Systems, Inc. 23,600 796,500
Verity, Inc. 18,400 814,200
- --------------------------------------------------------------------------------
20,438,450
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 10.6%
Baby Superstore, Inc. 22,450 1,279,650
Books-A-Million, Inc. 156,400 2,013,650
Cannondale Corporation 91,700 1,455,738
Creative Computers, Inc. 28,700 523,775
Garden Ridge Corp. 25,000 968,750
Gucci 10,000 388,750
Just For Feet, Inc. 25,000 893,750
Kohl's Corporation 74,100 3,890,250
The accompanying notes are an integral part of these financial statements.
B-73
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
Micro Warehouse, Inc. 47,400 $2,050,050
PETsMART, Inc. 102,150 3,166,650
Tiffany & Co.(1) 23,000 1,158,625
- --------------------------------------------------------------------------------
17,789,638
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER TECHNOLOGY - 3.4%
Acclaim Entertainment, Inc. 176,700 2,186,663
CDW Computer Centers, Inc. 21,200 858,600
Electronic Arts 98,700 2,578,537
- --------------------------------------------------------------------------------
5,623,800
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DATA COMMUNICATIONS/TELECOMMUNICATIONS - 8.1%
3Com Corporation 55,400 2,583,025
Ascend Communications, Inc. 5,000 405,625
Bay Networks, Inc. 55,500 2,282,437
Cascade Communications Corporation 10,000 852,500
Colonial Data Technologies 111,600 2,287,800
Netcom On Line Communications 10,000 360,000
Network General Corporation 63,300 2,112,637
P-COM, Inc. 102,600 2,052,000
UUNET Technologies, Inc. 10,000 630,000
- --------------------------------------------------------------------------------
13,566,024
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 1.2%
Credit Acceptance Corporation 100,000 2,075,000
- --------------------------------------------------------------------------------
2,075,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HEALTH CARE SERVICES - 3.2%
Emeritus Corporation 60,000 697,500
Express Scripts, Inc., Class A 20,000 1,020,000
Pediatrix Medical Group, Inc. 30,000 825,000
PhyCor, Inc. 46,050 2,328,403
United Dental Care, Inc. 11,500 474,375
- --------------------------------------------------------------------------------
5,345,278
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-74
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 17.3%
Coventry Corporation 216,200 $ 4,459,125
Endosonics Corporation 35,000 529,375
Healthsource, Inc. 115,200 4,147,200
Healthwise of America 41,400 1,614,600
Mid Atlantic Medical Services, Inc. 186,800 4,529,900
Oxford Health Plans, Inc. 34,800 2,570,850
PacifiCare Health Systems, Inc. 25,200 2,192,400
Physician Healthcare 71,500 2,645,500
Quintiles Transnational Corporation 46,400 1,902,400
Sierra Health Services 139,800 4,438,650
- --------------------------------------------------------------------------------
29,030,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LODGING - 1.1%
Bristol Hotel Company 74,300 1,811,063
- --------------------------------------------------------------------------------
1,811,063
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEDICAL SERVICES - 5.2%
American Oncology Resources, Inc. 19,000 923,875
Compdent Corporation 51,000 2,116,500
Exogen, Inc. 97,400 1,874,950
HBO & Company(1) 49,100 3,762,287
- --------------------------------------------------------------------------------
8,677,612
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER SERVICES - 4.0%
Corporate Express, Inc. 63,600 1,915,950
Landstar Systems, Inc. 51,800 1,385,650
Sylvan Learning Systems, Inc. 114,700 3,412,325
- --------------------------------------------------------------------------------
6,713,925
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESTAURANTS - 3.3%
Boston Chicken, Inc. 63,000 2,023,875
Daka International, Inc. 78,600 2,161,500
Landry's Seafood Restaurants 80,000 1,365,000
- --------------------------------------------------------------------------------
5,550,375
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-75
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 6.1%
Act Manufacturing 207,500 $ 2,308,438
Burr-Brown Corporation 124,200 3,167,100
Cypress Semiconductor Corporation 150,000 1,912,500
LSI Logic Corporation 50,000 1,637,500
Synopsys, Inc. 30,800 1,170,400
- --------------------------------------------------------------------------------
10,195,938
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 79.8% (Cost: $114,977,657) 133,659,328
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- --------------------------------------------------------------------------------
Applied Micro Circuits Corporation Series 3 -
Restricted(2) 2,381 43,953
Managed Health Network, Inc. Series B - Restricted(2) 500 72,930
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 0.1%
(Cost: $100,001) 116,883
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 79.9% (Cost: $115,077,658) 133,776,211
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 408
Repurchase Agreement 29,680,000
State Street Bank and Trust Company, 5.00%,
dated 12/29/95, due 01/2/96, maturity value
$29,696,489 (collateralized by $22,995,000
par value U.S. Treasury Notes, 8.75%, due
05/15/17).
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 17.6% 29,680,408
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 2.5% 4,271,868
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 167,728,487
- --------------------------------------------------------------------------------
(1)Income-producing security.
(2)See 4.d. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-76
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Statement of Net Assets
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $115,077,658) $ 133,776,211
Cash and cash equivalents 29,680,408
Receivable for investments sold 4,998,114
Receivable for fund shares subscribed 376,473
Dividends/interest receivable 20,330
- --------------------------------------------------------------------------------
TOTAL ASSETS 168,851,536
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 114,030
Payable for fund shares redeemed 429,171
Accrued expenses 259,379
Capital gains distribution payable 320,469
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,123,049
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 167,728,487
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 132,299,996
Accumulated net realized gain from investments 16,729,938
Net unrealized appreciation on investments 18,698,553
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 167,728,487
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 19.21
Net Asset Value, offering and redemption price per share
(net assets of $167,728,487 applicable to 8,732,520 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-77
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Operations
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 783,216
Dividends 28,264
Other Income 31,441
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 842,921
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 1,288,465
Distribution fees 322,116
Custodian and transfer agent fees 268,320
Shareholder reports 82,824
Professional fees 80,395
Registration and filing fees 45,702
Trustees' fees and expenses 16,875
Other 14,040
- --------------------------------------------------------------------------------
TOTAL EXPENSES 2,118,737
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,275,816)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from investments 22,504,993
Net change in unrealized depreciation on investments (731,214)
- --------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED DEPRECIATION ON INVESTMENTS 21,773,779
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,497,963
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-78
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Statement of Changes in Net Assets
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (1,275,816) $ (1,654,135)
Net realized gain from investments 22,504,993 6,598,824
Net change in unrealized
(depreciation)/appreciation on investments (731,214) 15,035,796
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 20,497,963 19,980,485
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments (13,460,981) (19,811,863)
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (13,460,981) (19,811,863)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net (decrease)/increase in net assets
resulting from capital share transactions (21,583,831) 13,915,017
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (21,583,831) 13,915,017
- --------------------------------------------------------------------------------
TOTAL (DECREASE)/INCREASE IN NET ASSETS (14,546,849) 14,083,639
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 182,275,336 168,191,697
End of period $ 167,728,487 $ 182,275,336
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-79
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Financial Highlights
<TABLE>
<CAPTION>
THREE-MONTH
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
THROUGHOUT EACH PERIOD: 12/31/95(1) 3/31/95 3/31/94 3/31/93 12/31/92 12/31/91
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 $ 11.67
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.15) (0.17) (0.40) (0.02) (0.15) (0.09)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain/(loss) and unrealized
appreciation/(depreciation)
on investments 2.58 2.26 4.06 (2.04) (0.31) 6.82
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase/(Decrease) in Net Assets
Resulting From Operations 2.43 2.09 3.66 (2.06) (0.46) 6.73
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution from realized gains
on investments (1.58) (2.10) - - (0.27) (0.90)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 13.50% 12.01% 24.88% (12.28)% (2.55)% 58.70%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period (000s) $ 167,728 $ 182,275 $ 168,192 $ 228,893 $ 277,531 $ 141,929
Ratio of Expenses to
Average Net Assets 1.64% 1.56% 1.60% 1.54% 1.49% 1.59%
Ratio of Net Investment Loss to
Average Net Assets (0.99)% (0.96)% (1.27)% (0.61)% (0.92)% (0.68)%
Portfolio Turnover Rate 147% 280% 274% 43% 124% 147%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents a 9-month period then ended.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-80
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements
The Robertson Stephens Emerging Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 30, 1987. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Emerging Growth Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At December 31, 1995,
99.9% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, approximately 0.1% of the Fund's
portfolio was valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Advisor to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital
B-81
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Gain and Return of Capital Distributions by Investment Companies" ("SOP"). The
purpose of this SOP is to report undistributed net investment income and
accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995, and for the year ended March 31, 1995, were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 2,181,298 $ 41,669,243
Shares reinvested 686,387 13,000,659
- --------------------------------------------------------------------------------
2,867,685 54,669,902
- --------------------------------------------------------------------------------
Shares redeemed (4,060,471) (76,253,733)
- --------------------------------------------------------------------------------
Net (decrease) (1,192,786) $ (21,583,831)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4/1/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 5,163,070 $ 94,127,247
Shares reinvested 1,070,767 18,663,580
- --------------------------------------------------------------------------------
6,233,837 112,790,827
- --------------------------------------------------------------------------------
Shares redeemed (5,463,027) (98,875,810)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 770,810 $ 13,915,017
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens Investment
Management, Inc. ("RSIM Inc.") an investment advisory fee calculated at an
annual rate of 1.00% of the average daily net assets of the Fund. For the nine
months ended December 31, 1995, the Fund incurred investment advisory fees of
$1,288,465. RSIM Inc. has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees, but excluding distribution fees
that exceed the most stringent limits prescribed by any state in which the
Fund's shares are offered for sale. For the nine months ended December 31, 1995,
there was no expected reimbursement of the advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM
Inc., the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer
and a Trustee of the Fund, is also a Director of RSIM Inc., a Member of RS
Group, and Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial
Officer of the Fund, is a Member of RS Group and Chief Financial Officer of RS &
Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director
of Research for RS & Co. All affiliated and access persons, as defined in the
1940 Act, follow strict guidelines and policies on personal trading as outlined
in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation
and reimbursement of expenses of $16,875 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an
B-82
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
annual rate of 0.25% of the average daily net assets of the Fund. For the nine
months ended December 31, 1995, the Fund incurred distribution fees of $322,116.
e. BROKERAGE COMMISSIONS:
RSIM Inc. may direct orders for investment transactions to RS & Co. as
broker-dealer, subject to Fund policies as stated in the prospectus,
regulatory constraints, and the ability of RS & Co. to provide competitive
prices and commission rates. All investment transactions in which RS & Co.
acts as a broker may only be executed on an agency basis. Subject to certain
constraints, the Fund may make purchases of securities from offerings or
underwritings in which RS & Co. has been retained by the issuer. For the nine
months ended December 31, 1995, the Fund paid brokerage commissions of
$71,498 to RS & Co. which represented 24% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the
cost of investments purchased or the proceeds from investments sold
(excluding short-term investments) measured as a percentage of the Fund's
average monthly investment portfolio for the nine months ended December 31,
1995, was 147%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $116,066,463. Accumulated net unrealized appreciation on investments was
$17,709,748, consisting of gross unrealized appreciation and depreciation of
$29,507,196 and $(11,797,448), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period ended December 31, 1995, the cost of investments purchased and
the proceeds from investments sold (excluding short-term investments) were
$219,859,671 and $278,926,405, respectively.
d. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At December 31, 1995, the Fund held restricted securities with an
aggregate value of $116,883, which represented 0.1% of the Fund's total net
assets.
ACQUISITION
SECURITY SHARES COST VALUE DATE
- --------------------------------------------------------------------------------
Applied Micro
Circuits
Corporation
Convertible
Preferred Stock,
Series 3 2,381 $50,001 $43,953 9/14/87
- --------------------------------------------------------------------------------
Managed Health
Network, Inc.
Convertible
Preferred Stock,
Series B 500 $50,000 $72,930 12/30/87
- --------------------------------------------------------------------------------
Each of the above securities was valued based on its common share price
equivalent. Each common share was valued at its fair value according to the
guidelines and procedures adopted by the Fund's Board of Trustees as outlined in
Note 1.a., paragraph 2.
At December 31, 1995, Applied Micro Circuits Corporation Convertible Preferred
Stock, Series 3, was valued at the common share price equivalent of $1.75,
assuming the 2,381 shares of the Convertible Preferred Stock were converted to
25,116 shares of common stock. Managed Health Network, Inc. Convertible
Preferred Stock, Series B, was valued at the common share price equivalent of
$1.6336, assuming the 500 shares of the Convertible Preferred Stock were
converted to 44,642 shares of common stock.
B-83
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of
The Robertson Stephens Global Low-Priced Stock Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Global Low-Priced Stock Fund
(one of the series constituting The Robertson Stephens Investment Trust,
hereinafter referred to as the "Fund") at December 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
period from November 15, 1995 (Commencement of Operations) through December 31,
1995, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1995, by correspondence with the custodian and brokers and the application
of alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-84
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.8%
Pharmos Corporation 20,000 $ 29,375
- --------------------------------------------------------------------------------
29,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLOSED-END FUNDS - 3.8%
Cathay Investment Fund, Ltd. 10,000 10,993
Greenchip Development Capital, Ltd. 12,026 7,866
Greenchip Emerging Growth, Ltd. 25,439 24,202
Greenchip Investments, Ltd. 30,000 19,845
- --------------------------------------------------------------------------------
62,906
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS SERVICES - 0.8%
CD Radio, Inc. 3,000 13,313
- --------------------------------------------------------------------------------
13,313
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 3.8%
Overseas and General, Ltd. 102,500 24,761
Van Der Horst, Ltd.(1) 4,000 20,219
Vietnam Industrial Investments, Ltd. 80,000 17,095
- --------------------------------------------------------------------------------
62,075
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.9%
AER Energy Resources, Inc. 5,000 14,375
- --------------------------------------------------------------------------------
14,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 2.3%
Canadian Conquest Exploration, Inc. 10,000 7,836
Nugas, Ltd. 10,000 15,526
Olympia Energy, Inc., Class A 25,000 14,280
- --------------------------------------------------------------------------------
37,642
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-85
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY SERVICES - 2.4%
Grant Geophysical, Inc. 14,000 $35,000
Veritas Energy Services, Inc. 700 3,845
- --------------------------------------------------------------------------------
38,845
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLD MINING - 2.3%
Bakyrchik Gold PLC 9,000 38,577
- --------------------------------------------------------------------------------
38,577
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEDIA - 1.3%
Valuevision International, Inc. 4,000 22,250
- --------------------------------------------------------------------------------
22,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REAL ESTATE - 2.9%
Catellus Development Corporation 8,000 48,000
- --------------------------------------------------------------------------------
48,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESTAURANTS - 2.4%
Taco Cabana, Class A 8,000 40,000
- --------------------------------------------------------------------------------
40,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RETAIL - 1.8%
Kmart Corporation(1) 4,000 29,000
- --------------------------------------------------------------------------------
29,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT AND SERVICES - 1.6%
China Yuchai International, Ltd.(1) 3,200 26,000
- --------------------------------------------------------------------------------
26,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 28.1% (Cost: $411,549) 462,358
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-86
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash $ 927
Federal Mortgage Corporation Discount Note, 5.65% due 1/4/96 999,529
Repurchase Agreement
State Street Bank and Trust Company, 5.00%, dated 12/29/95,
due 1/2/96,maturity value $316,176 (collateralized by $245,000
par value U.S. Treasury Notes, 8.75%, due 5/5/17) 316,000
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 80.1% 1,316,456
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (8.2)% (135,426)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 1,643,388
- --------------------------------------------------------------------------------
(1) Income-producing securities.
The accompanying notes are an integral part of these financial statements.
B-87
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $441,549) $ 462,358
Cash and cash equivalents 1,316,456
Receivable for fund shares subscribed 7,000
Receivable from Adviser 6,440
Receivables, other 19,283
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,811,537
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 147,835
Accrued expenses 20,314
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 168,149
- --------------------------------------------------------------------------------
TOTAL NET ASSETS 1,643,388
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------
Paid-in capital 1,620,721
Accumulated undistributed investment income 1,858
Net unrealized appreciation on investments 20,809
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 1,643,388
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.45
Net Asset Value, offering and redemption price per share
(Net assets of $1,643,388 applicable to 157,267 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-88
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 3,584
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,584
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Professional fees 2,307
Shareholder reports 1,667
Investment advisory fees 854
Trustees' fees and expenses 813
Custodian and transfer agent fees 706
Registration and filing fees 640
Organizational expenses 500
Other 253
Distribution fees 213
Administration fees 213
- --------------------------------------------------------------------------------
Total Expenses 8,166
Less: Reimbursement from Adviser (6,440)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 1,726
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,858
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 20,809
- --------------------------------------------------------------------------------
TOTAL UNREALIZED APPRECIATION ON INVESTMENTS 20,809
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,667
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-89
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------
Net investment income $ 1,858
Net change in unrealized appreciation on investments 20,809
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 22,667
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- -------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions 1,620,721
- -------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 1,620,721
- -------------------------------------------------------------------------------
Total Increase in Net Assets 1,643,388
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of year 0
End of year $ 1,643,388
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-89
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.03
Unrealized appreciation on investments 0.42
- --------------------------------------------------------------------------------
Total increase in net assets resulting from operations 0.45
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.45
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 4.50%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 1,643,388
Ratio of Expenses to Average Net Assets 1.91%(2)
Ratio of Net Investment Income to Average Net Assets 2.06%(2)
Portfolio Turnover Rate 0%
- --------------------------------------------------------------------------------
(1) The Fund commenced operations on 11/15/95.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995, would have been 9.04%, and the ratio of net investment
loss to average net assets would have been (5.07)%.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-91
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Low-Priced Stock Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Global Low-Priced Stock Fund, for book and tax purposes, has a calendar
(12/31) year-end. These financial statements reflect operations for the period
from November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 0% of the Fund's long positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income taxes for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
B-92
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995, were as
follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 164,230 $ 1,691,739
Shares reinvested - -
- --------------------------------------------------------------------------------
164,230 1,691,739
- --------------------------------------------------------------------------------
Shares redeemed (6,963) (71,018)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 157,267 $ 1,620,721
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION: Under the terms of an advisory
agreement, which is reviewed and approved annually by the Fund's Board of
Trustees, the Fund pays Robertson, Stephens & Company Investment Management,
L.P. ("RSIM"), an investment advisory fee and an administrative services fee
calculated respectively at an annual rate of 1.00% and 0.25% of the average
daily net assets of the Fund. For the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, the Fund incurred
investment advisory fees and administrative fees of $854 and $213, respectively.
RSIM has agreed to reimburse the Fund for any annual operating expenses,
including investment advisory fees but excluding distribution fees which exceed
the most stringent limits prescribed by any state in which the Fund's shares are
offered for sale. For the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, the Adviser agreed to reimburse $6,440 of
its fees and other expenses.
b. AFFILIATED PERSONS: Certain officers and Trustees of the Fund are also
Members and/or officers of Robertson, Stephens & Company Group, L.L.C. ("RS
Group"), the parent of Robertson, Stephens & Company LLC (RS & Co.), the
Fund's Distributor and RSIM, the Fund's Adviser. G. Randy Hecht, President,
Chief Executive Officer, and a Trustee of the Fund, is also a Director of
RSIM, a Member of RS Group, and Chief Operating Officer of RS & Co. Terry R.
Otton, Chief Financial Officer of the Fund, is a Member of RS Group and
Chief Financial Officer of
B-93
<PAGE>
ROBERTSON, STEPHENS & COMPANY
RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group
and Director of Research for RS & Co. All affiliated and access persons,
as defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $813 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, RS & Co. agreed to waive distribution
fees worth $213.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid no brokerage commissions
to RS & Co.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options and short-term investments), measured as a percentage of the Fund's
average monthly investment portfolio for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, was 0%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $441,549. Accumulated net unrealized appreciation on investments was
$20,809, consisting of gross unrealized appreciation and depreciation of $22,945
and $(2,136), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $441,549 and $0,
respectively.
d. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At December 31, 1995, the Fund had its largest concentrated
foreign investments, worth 5% of the Fund's total assets, in Australia.
B-94
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of
The Robertson Stephens Global Natural Resources Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Global Natural Resources Fund
(one of the series constituting The Robertson Stephens Investment Trust,
hereinafter referred to as the "Fund") at December 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
period from November 15, 1995 (Commencement of Operations), through December 31,
1995, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audit, which included confirmation of
securities at December 31, 1995, by correspondence with the custodian and
brokers and the application of alternative auditing procedures where
confirmations from brokers were not received, provides a reasonable basis for
the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-95
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ALUMINUM - 12.6%
Aluminum Company of America(1) 600 $ 31,725
Kaiser Aluminum Corporation 1,300 16,900
MAXXAM, Inc. 700 24,675
Western Mining Holdings, Ltd. - ADR(1,2) 1,000 26,125
- --------------------------------------------------------------------------------
99,425
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COAL MINING - 3.5%
Zeigler Coal Holding Company(1) 2,000 27,750
- --------------------------------------------------------------------------------
27,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 14.8%
Alberta Energy Company, Ltd.(1) 900 14,400
Amerada Hess Corporation(1) 600 31,800
New Cache Petroleums, Ltd. 8,000 25,192
Olympia Energy, Inc., Class A 25,000 14,280
Suncor, Inc.(1) 1,000 31,875
- --------------------------------------------------------------------------------
117,547
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY SERVICES - 1.7%
Ryan Energy Technologies, Inc. 16,000 9,374
Veritas Energy Services, Inc. 700 3,845
- --------------------------------------------------------------------------------
13,219
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLD MINING - 5.5%
Ashanti Goldfields - GDR(1,3) 727 14,540
Bakyrchik Gold PLC 1,000 4,287
Emperor Mines, Ltd. 5,000 7,990
Golden Shamrock Mines, Ltd. 10,000 6,169
Golden Star Resources, Ltd.(1) 2,000 10,250
- --------------------------------------------------------------------------------
43,236
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICKEL MINING - 4.2%
Inco, Ltd.(1) 1,000 33,250
- --------------------------------------------------------------------------------
33,250
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-96
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
REAL ESTATE - 4.5%
Catellus Development Corporation 6,000 $ 36,000
- --------------------------------------------------------------------------------
36,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 3.1%
NL Industries, Inc. 2,000 24,750
- --------------------------------------------------------------------------------
24,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 49.9% (Cost: $389,087) 395,177
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 81,423
Federal Mortgage Corporation Discount Note, 5.65%,
due 1/4/96 499,765
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 73.4% 581,188
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (23.3)% (184,621)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 791,744
- --------------------------------------------------------------------------------
(1) Income - producing security.
(2) ADR - American Depository Receipts.
(3) GDR - Global Depository Receipts.
The accompanying notes are an integral part of these financial statements.
B-97
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $389,087) $ 395,177
Cash and cash equivalents 581,188
Receivable for fund shares subscribed 7,000
Receivable from Adviser 5,748
Receivables, other 32,538
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,021,651
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 209,659
Accrued expenses 20,248
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 229,907
- --------------------------------------------------------------------------------
TOTAL NET ASSETS 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 784,748
Accumulated undistributed investment income 906
Net unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.12
Net Asset Value, offering and redemption price per share
(Net assets of $791,744 applicable to 78,211 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-98
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 2,139
Dividends 50
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,189
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Professional fees 2,104
Shareholder reports 1,521
Trustees' fees and expenses 742
Custodian and transfer agent fees 645
Registration and filing fees 584
Organizational expenses 500
Investment advisory fees 470
Other 231
Distribution fees 117
Administration fees 117
- --------------------------------------------------------------------------------
Total Expenses 7,031
Less: Reimbursement from Adviser (5,748)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 1,283
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 906
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
TOTAL UNREALIZED APPRECIATION ON INVESTMENTS 6,090
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,996
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-99
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment income $ 906
Net change in unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,996
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 784,748
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 784,748
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 0
End of year $ 791,744
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-100
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.02
Unrealized appreciation on investments 0.10
- --------------------------------------------------------------------------------
Total increase in net assets resulting from operations 0.12
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 1.20%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 791,744
Ratio of Expenses to Average Net Assets 2.60%(2)
Ratio of Net Investment Income to Average Net Assets 1.84%(2)
Portfolio Turnover Rate 0%
- --------------------------------------------------------------------------------
(1) The Fund commenced operations on 11/15/95.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995 would have been 14.25%, and the ratio of net investment
loss to average net assets would have been (9.81)%.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period. Ratios, except for total
return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
B-101
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Natural Resources Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Global Natural Resources Fund, for book and tax purposes, has a calendar
(12/31) year-end. These financial statements reflect operations for the period
from November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, none of the Fund's long positions were valued using these
guidelines and procedures.
B-102
<PAGE>
ROBERTSON, STEPHENS & COMPANY
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
E. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
F. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
G. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995, were as
follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 79,226 $ 794,930
Shares reinvested - -
- --------------------------------------------------------------------------------
79,226 794,930
- --------------------------------------------------------------------------------
Shares redeemed (1,015) (10,182)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 78,211 $ 784,748
- --------------------------------------------------------------------------------
B-103
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred investment advisory fees and administrative fees of $470 and $117,
respectively. RSIM has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees but excluding distribution fees
which exceed the most stringent limits prescribed by any state in which the
Fund's shares are offered for sale. For the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, the Advisor agreed to
reimburse $5,748 of its fees and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer, and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. All affiliated and access persons, as defined in the 1940 Act,
follow strict guidelines and policies on personal trading as outlined in the
Fund's Code of Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $742 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund incurred distribution fees of
$117.
B-104
<PAGE>
ROBERTSON, STEPHENS & COMPANY
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid brokerage commissions of
$515 to RS & Co. which represented 41% of total commissions paid for the period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, was 0%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $389,087. Accumulated net unrealized appreciation on investments was $6,090,
consisting of gross unrealized appreciation and depreciation
of $9,940 and $(3,850), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $389,087 and $0,
respectively.
D. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At December 31, 1995, the Fund had its largest
concentration of foreign investments, worth 13% of the Fund's total assets, in
Canada.
B-105
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Growth &
Income Fund
In our opinion, the accompanying statement of net assets, including the
schedules of net assets and of securities sold short, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Robertson
Stephens Growth & Income Fund (one of the series constituting The Robertson
Stephens Investment Trust, hereinafter referred to as the "Fund") at December
31, 1995, and the results of its operations, the changes in its net assets and
the financial highlights for the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at December 31, 1995, by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provides a reasonable basis
for the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-106
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------
ALUMINUM - 0.9%
MAXXAM, Inc.(1) 35,000 $1,233,750
- --------------------------------------------------------------------------------
1,233,750
- --------------------------------------------------------------------------------
BANKS - 6.3%
Bank of New York - Warrants(2), Expire 11/29/98 30,000 1,113,750
Commercial Federal Corporation 50,000 1,887,500
Corestates Financial Corporation 41,500 1,571,813
Mellon Bank Corporation 27,500 1,478,125
Meridian Bancorp 5,000 232,500
Norwest Corporation 25,500 841,500
Premier Bancorp, Inc. 10,000 233,750
UJB Financial Corporation 35,000 1,251,250
- --------------------------------------------------------------------------------
8,610,188
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.9%
Genzyme Corporation(1) 28,500 1,777,687
Molecular Dynamics, Inc.(1) 125,000 781,250
- --------------------------------------------------------------------------------
2,558,937
- --------------------------------------------------------------------------------
BUSINESS SERVICES - 2.3%
Moore Corporation, Ltd. 75,000 1,396,875
NuCO2, Inc.(1) 32,500 422,500
U.S. Office Products Company(1) 60,000 1,365,000
- --------------------------------------------------------------------------------
3,184,375
- --------------------------------------------------------------------------------
CLOTHING/RETAIL - 3.3%
Adidas AG, 144A 42,000 1,126,125
Sport-Haley, Inc.(1) 75,000 726,562
Vans, Inc.(1) 169,000 1,415,375
Warnaco Group, Inc., Class A 50,000 1,250,000
- --------------------------------------------------------------------------------
4,518,062
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.0%
ADT, Ltd.(1) 70,000 1,050,000
CKS Group, Inc.(1) 2,500 97,500
Learning Tree International, Inc.(1) 40,000 625,000
National Education Corporation(1) 185,000 1,503,125
Prepaid Legal Services, Inc.(1) 85,000 881,875
- --------------------------------------------------------------------------------
4,157,500
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 2.4%
Seagate Technology, Inc.(1) 30,000 1,425,000
Sun Microsystems, Inc.(1) 31,500 1,437,188
Truevision, Inc.(1) 80,000 395,000
- --------------------------------------------------------------------------------
3,257,188
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-107
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Shares Value
- -------------------------------------------------------------------------------
COMPUTER SOFTWARE - 7.2%
- --------------------------------------------------------------------------------
Adobe Systems, Inc. 27,000 $1,674,000
Citrix Systems, Inc.(1) 5,100 165,750
Computervision Corporation 90,000 1,383,750
Dialogic Corporation(1) 35,000 1,347,500
Expert Software, Inc.(1) 60,000 840,000
Informix Corporation(1) 35,000 1,050,000
Oracle Corporation(1) 25,000 1,059,375
Project Software & Development, Inc.(1) 10,000 348,750
Secure Computing Corporation(1) 4,500 252,000
Sybase, Inc.(1) 31,000 1,116,000
Vantive Corporation(1) 30,000 675,000
- --------------------------------------------------------------------------------
9,912,125
- --------------------------------------------------------------------------------
COSMETICS/PERSONAL CARE - 0.6%
Estee Lauder Companies, Class A(1) 23,000 802,125
- --------------------------------------------------------------------------------
802,125
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 3.5%
Affiliated Computer Services, Inc., Class A(1) 50,000 1,875,000
Computer Management Sciences, Inc.(1) 20,400 362,100
DST Systems, Inc.(1) 30,000 855,000
Reynolds & Reynolds Company 43,000 1,671,625
- --------------------------------------------------------------------------------
4,763,725
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 1.3%
Data Translation, Inc.(1) 105,000 1,706,250
Sync Research, Inc.(1) 2,000 90,500
- --------------------------------------------------------------------------------
1,796,750
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 2.3%
Diebold, Inc. 24,000 1,329,000
ITI Technologies, Inc.(1) 60,000 1,785,000
- --------------------------------------------------------------------------------
3,114,000
- --------------------------------------------------------------------------------
ENERGY SERVICES - 5.7%
Diamond Offshore Drilling, Inc.(1) 40,000 1,350,000
Falcon Drilling Company, Inc.(1) 90,000 1,350,000
Halliburton Company 30,000 1,518,750
Kerr-McGee Corporation 18,000 1,143,000
Schlumberger, Ltd. 18,000 1,246,500
Western Atlas, Inc.(1) 25,000 1,262,500
- --------------------------------------------------------------------------------
7,870,750
- --------------------------------------------------------------------------------
ENTERTAINMENT - 1.9%
National Gaming Corporation(1) 57,500 682,812
Stratosphere Corporation(1) 200,000 1,975,000
- --------------------------------------------------------------------------------
2,657,812
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-108
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 0.7%
Continental Waste Industries, Inc.(1) 87,500 $1,017,183
- --------------------------------------------------------------------------------
1,017,183
- --------------------------------------------------------------------------------
FINANCIAL SERVICE - 2.8%
Federal Home Loan Mortgage Corporation 16,000 1,336,000
Federal National Mortgage Association 12,500 1,551,563
Sirrom Capital Corporation 50,000 943,750
- --------------------------------------------------------------------------------
3,831,313
- --------------------------------------------------------------------------------
FOOD PROCESSING - 0.8%
Smithfield Foods, Inc.(1) 35,000 1,111,250
- --------------------------------------------------------------------------------
1,111,250
- --------------------------------------------------------------------------------
HEALTHCARE/HMO - 3.3%
American Oncology Resources, Inc.(1) 15,000 729,375
Community Health Systems, Inc.(1) 35,000 1,246,875
Mid Atlantic Medical Services, Inc.(1) 45,000 1,091,250
Oxford Health Plans, Inc.(1) 13,500 997,313
Surgical Care Affiliates, Inc. 12,500 425,000
- --------------------------------------------------------------------------------
4,489,813
- --------------------------------------------------------------------------------
INSURANCE - 4.3%
GCR Holdings, Ltd.(1) 57,000 1,282,500
Lincoln National Corporation 21,500 1,155,625
Prudential Reinsurance Holdings, Inc. 65,000 1,519,375
W. R. Berkley Corporation 35,000 1,881,250
- --------------------------------------------------------------------------------
5,838,750
- --------------------------------------------------------------------------------
MANUFACTURING - 2.6%
Fleetwood Enterprises, Inc. 67,000 1,725,250
Millipore Corporation 45,000 1,850,625
- --------------------------------------------------------------------------------
3,575,875
- --------------------------------------------------------------------------------
MEDIA - 2.2%
Emmis Broadcasting Corporation(1) 42,500 1,317,500
US West Media Group 40,000 760,000
United International Holdings, Inc., Class A(1) 62,500 921,875
- --------------------------------------------------------------------------------
2,999,375
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS & DEVICES - 3.6%
Dentsply International, Inc. 32,000 1,280,000
Guidant Corporation 55,000 2,323,750
Ventritex, Inc.(1) 80,000 1,390,000
- --------------------------------------------------------------------------------
4,993,750
- --------------------------------------------------------------------------------
Motor Vehicles and Parts Suppliers - 1.0%
Strattec Security Corporation(1) 75,000 1,350,000
- --------------------------------------------------------------------------------
1,350,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-109
<PAGE>
ROBERTSON, STEPHENS & COMPANY
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 4.6%
Bay Networks, Inc.(1) 24,500$ $1,007,563
Cisco Systems, Inc.(1) 20,000 1,492,500
Madge Networks N.V.(1) 24,000 1,074,000
NetManage, Inc.(1) 61,000 1,418,250
NetStar, Inc.(1) 23,000 419,750
Newbridge Networks Corporation(1) 20,000 827,500
- --------------------------------------------------------------------------------
6,239,563
- --------------------------------------------------------------------------------
PHARMACEUTICALS - 4.9%
Alteon, Inc.(1) 25,000 403,125
Bergen Brunswig Corporation 47,500 1,181,563
Biochem Pharma, Inc.(1) 17,000 682,125
Martek Biosciences Corporation 35,000 883,750
Matrix Pharmaceutical, Inc.(1) 68,000 1,275,000
North American Biologicals, Inc.(1) 71,100 764,325
Pharmacia & Upjohn, Inc. 39,000 1,511,250
- --------------------------------------------------------------------------------
6,701,138
- --------------------------------------------------------------------------------
REITs - 2.4%
Bay Apartment Communities, Inc. 50,000 1,212,500
Hospitality Properties Trust 30,000 802,500
Prime Residential, Inc. 65,000 1,202,500
- --------------------------------------------------------------------------------
3,217,500
- --------------------------------------------------------------------------------
RESTAURANTS - 1.2%
Consolidated Products, Inc.(1) 71,000 1,047,250
Main Street & Main, Inc.(1) 235,000 660,937
- --------------------------------------------------------------------------------
1,708,187
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 3.7%
IMC Global, Inc 36,000 1,471,500
Mississippi Chemical Corporation 50,000 1,162,500
Monsanto Company 14,000 1,715,000
Vigoro Corporation 12,500 771,875
- --------------------------------------------------------------------------------
5,120,875
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 3.6%
Applied Digital Access, Inc.(1) 75,000 881,250
Davox Corporation(1) 57,500 682,812
VTEL Corporation(1) 50,000 925,000
AT&T Corporation 18,000 1,165,500
MFS Communications Company(1) 301 16,028
Sprint Corporation 30,000 1,196,250
- --------------------------------------------------------------------------------
4,866,840
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-110
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION - 2.3%
Airborne Freight Corporation 25,000 $ 665,625
Atlantic Southeast Airlines, Inc. 72,500 1,558,750
Canada National Railway Company 64,500 967,500
- --------------------------------------------------------------------------------
3,191,875
- --------------------------------------------------------------------------------
UTILITIES - 1.8%
Equitable Resources, Inc. 42,500 1,328,125
US West Communications Group 30,000 1,072,500
- --------------------------------------------------------------------------------
2,400,625
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 88.4% (Cost: $108,160,639) 121,091,199
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
Energy - 0.9%
Enron Corporation, 6.25%, 12/13/98 Series 50,000 1,200,000
- --------------------------------------------------------------------------------
1,200,000
- --------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS - 2.3%
Atlantic Richfield Company, 9%, 9/15/97 Series 40,000 940,000
Noble Drilling Company, $1.5 Series 22,000 566,500
Westinghouse Electric Corporation, Pfd Series C, $1.30 100,000 1,650,000
- --------------------------------------------------------------------------------
3,156,500
- --------------------------------------------------------------------------------
REAL ESTATE - 0.6%
Catellus Development Corporation, $3.625, Class B 22,000 880,000
- --------------------------------------------------------------------------------
880,000
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.4%
MFS Communications Company, 8%, 5/31/99 Series 10,000 486,875
- --------------------------------------------------------------------------------
486,875
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 4.2% (Cost: $5,496,837) 5,723,375
- --------------------------------------------------------------------------------
PAR VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS
Computer Hardware & Components - 0.4%
Telxon Corporation, 5.75%, Due 01/01/03 500,000 537,500
- --------------------------------------------------------------------------------
537,500
- --------------------------------------------------------------------------------
CONSUMER & SPECIALITY RETAIL - 0.9%
Staples, Inc. 144A, 4.50%, Due 10/01/00 1,200,000 1,200,000
- --------------------------------------------------------------------------------
1,200,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-111
<PAGE>
ROBERTSON, STEPHENS & COMPANY
PAR VALUE
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.9%
Integrated Device Technology, Inc., 5.50%, Due 06/01/02 700,000 $570,500
Intermagnetics General Corporation, 5.75%, Due 09/15/03 500,000 690,000
- --------------------------------------------------------------------------------
1,260,500
- --------------------------------------------------------------------------------
ENERGY - 0.9%
Box Energy Corporation, 8.25%, Due 12/01/02 600,000 600,000
Cross Timbers Oil Company, 5.25%, Due 11/01/03 650,000 611,000
- --------------------------------------------------------------------------------
1,211,000
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 0.2%
Sandoz Capital, 144A, 2%, Due 10/06/02 250,000 235,625
- --------------------------------------------------------------------------------
235,625
- --------------------------------------------------------------------------------
GENERAL MERCHANDISE STORES - 0.8%
Federated Department Stores, Inc., 5.0%, Due 10/01/03 1,100,000 1,097,250
- --------------------------------------------------------------------------------
1,097,250
- --------------------------------------------------------------------------------
HOME BUILDING - 0.4%
Continental Homes Holding Corporation, 6.875%, Due 11/01/02 500,000 530,000
- --------------------------------------------------------------------------------
530,000
- --------------------------------------------------------------------------------
IRON/STEEL - 0.3%
USX Corporation, 7.0%, Due 06/15/17 500,000 476,250
- --------------------------------------------------------------------------------
476,250
- --------------------------------------------------------------------------------
PRECIOUS METALS - 0.3%
Coeur d'Alene Mines Corporation, 6.375%, Due 01/31/04 500,000 473,750
- --------------------------------------------------------------------------------
473,750
- --------------------------------------------------------------------------------
TRANSPORTATION - 0.4%
Reno Air, Inc. 144A, 9.0%, Due 09/30/02 500,000 485,000
- --------------------------------------------------------------------------------
485,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 5.5% (Cost: $7,303,573) 7,506,875
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 98.1% (Cost: $120,961,049) 134,321,449
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 122
Repurchase Agreement 2,077,000
State Street Bank and Trust Company, 5.0%, dated 12/29/95,
due 01/02/96 maturity value, $2,078,154 (collateralized by
$1,611,000 par value U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 1.5% 2,077,122
The accompanying notes are an integral part of these financial statements.
B-112
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- --------------------------------------------------------------------------------
Cash $ 64,375
Repurchase Agreement (Segregated) 1,700,000
State Street Bank and Trust Company, 5.0%,
dated 12/29/95, due 01/02/96 maturity value,
$1,700,944 (collateralized by $1,319,000
par value U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK
FOR SECURITIES SOLD SHORT - 1.3% 1,764,375
- --------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 1.0% 1,312,937
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (0.9) % (Proceeds: $1,312,937) (1,267,125)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (1.0)% (1,306,792)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 136,901,966
- --------------------------------------------------------------------------------
(1)Non-income-producing security.
(2)See Note 4.e. of Notes to Financial statements.
SCHEDULE OF SECURITIES SOLD SHORT
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE-(0.6)%
Netscape Communications, Inc. 6,000 $ 834,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT-(0.3)%
Applied Materials, Inc. 11,000 433,125
- --------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT-(0.9)%(Procceds:$1,312,937) $1,267,125
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-113
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $120,961,049) $ 134,321,449
Cash and cash equivalents 2,077,122
Deposits with brokers and custodian bank
for securities sold short 1,764,375
Receivable for investments sold 2,147,005
Receivable from brokers for securities sold short 1,312,937
Receivable for fund shares subscribed 937,174
Dividends/interest receivable 233,834
- --------------------------------------------------------------------------------
TOTAL ASSETS 142,793,896
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Securities sold short (Proceeds: $1,312,937) 1,267,125
Payable for investments purchased 4,103,136
Payable for fund shares redeemed 302,007
Accrued expenses 217,547
Payables, other 2,115
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 5,891,930
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 126,943,354
Accumulated net realized loss from investments (3,511,975)
Accumulated net realized gain from securities sold short 64,375
Net unrealized appreciation on investments 13,360,400
Net unrealized appreciation on securities sold short 45,812
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 11.24
Net Asset Value, offering and redemption price per share
(net assets of $136,901,966 applicable to 12,183,332 shares of
beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-114
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 328,706
Dividends (Net of foreign tax withheld of $3,172) 482,644
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 811,350
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 415,116
Distribution fees 103,780
Administrative fees 103,780
Custodian and transfer agent fees 73,989
Professional fees 34,977
Registration and filing fees 28,460
Shareholder reports 17,348
Organizational costs 15,520
Trustees' fees and expenses 11,249
Other 12,255
- --------------------------------------------------------------------------------
TOTAL EXPENSES 816,474
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (5,124)
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED
APPRECIATION/(DEPRECIATION) ON INVESTMENTS
Net realized loss from investments (3,511,975)
Net realized gain from securities sold short 64,375
Net change in unrealized appreciation on investments 13,360,400
Net change in unrealized appreciation on securities sold short 45,812
- -------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS 9,958,612
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,953,488
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-115
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (5,124)
Net realized loss from investments (3,511,975)
Net realized gain from securities sold short 64,375
Net change in unrealized appreciation on investments 13,360,400
Net change in unrealized appreciation on securities sold short 45,812
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 9,953,488
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 126,948,478
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 126,948,478
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 0
End of period $136,901,966
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-116
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT EACH PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment loss 0.00
Net realized gain and unrealized appreciation from investments 1.24
- --------------------------------------------------------------------------------
Total Increase in Net Assets Resulting From Operations 1.24
- --------------------------------------------------------------------------------
Distribution from realized gains on investments 0.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.24
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 12.40%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $136,901,966
Ratio of Expenses to Average Net Assets 1.94%
Ratio of Net Investment Loss to Average Net Assets (0.01)%
Portfolio Turnover Rate 97%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 7/12/95.
Per-share data for each period has been determined by using the average number
of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-117
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Growth & Income Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers nine series of shares -- The Robertson
Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth Fund, The
Robertson Stephens Contrarian Fund, The Robertson Stephens Developing Countries
Fund, The Robertson Stephens Growth & Income Fund, The Robertson Stephens
Partners Fund, The Robertson Stephens Information Age Fund, The Robertson
Stephens Global Natural Resources Fund, and The Robertson Stephens Global Low-
Priced Stock Fund. The assets for each series are segregated and accounted for
separately.
The Growth & Income Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for the period from July
12, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At December 31, 1995,
99.5% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, approximately 0.5% of the Fund's long
portfolio was valued using these guidelines and procedures.
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Advisor to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from July
12, 1995 (Commencement of Operations) through December 31, 1995. The Fund
complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
E. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
B-118
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
F. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from July 12,
1995 (Commencement of Operations) through December 31, 1995 were as follows:
7/12/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 14,440,164 $150,810,508
Share reinvested 0 0
- --------------------------------------------------------------------------------
14,440,164 150,810,508
- -------------------------------------------------------------------------------
Shares redeemed (2,256,832) (23,862,030)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 12,183,332 $126,948,478
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from July
12, 1995 (Commencement of Operations), through December 31, 1995, the Fund
incurred investment advisory fees and administrative fees of $415,116 and
$103,780, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding
distribution fees which exceed the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale. At December 31, 1995, there was
no expected reimbursement of advisory fees and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. John L. Wallace, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $11,249 for the period from July 12, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co., for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an annual rate of 0.25% of the
average daily net assets of the Fund. For the period from July 12, 1995
(Commencement of Operations) through December 31, 1995, the Fund incurred
distribution fees of $103,780.
B-119
<PAGE>
ROBERTSON, STEPHENS & COMPANY
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund paid brokerage commissions of
$49,415 to RS & Co., which represented 18% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the period for the period
from July 12, 1995 (Commencement of Operations) through December 31, 1995, was
97%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $122,418,733. Accumulated net unrealized appreciation on investments was
$13,261,465 consisting of gross unrealized appreciation and depreciation of
$15,555,488 and $(2,294,023), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from July 12, 1995 (Commencement of Operations), through December
31, 1995, the cost of investments purchased and the proceeds from investments
sold (excluding securities sold short and short-term investments) were
$213,718,729 and $89,250,840, respectively.
D. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not
want, in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to deliver to the
buyer upon the short sale; the Fund then is obligated to replace the security
borrowed by purchasing it in the open market at some later date. The Fund will
incur a loss if the market price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund will realize a gain if the security declines in value between those
dates. All short sales must be fully collateralized. The Fund maintains the
collateral in a segregated account consisting of cash and/or U.S. government
securities sufficient to collateralize its obligation on the short positions.
The Fund may also sell short against the box (i.e., the Fund enters into a short
sale as described above, while holding an offsetting long position in the
security which is sold short). If the Fund enters into a short sale against the
box, it will hold an equivalent amount of the securities to cover its position
while the short sale is outstanding. The Fund limits the value of short sale
positions (excluding short sales "against the box") to 25% of the Fund's total
assets. At December 31, 1995, the Fund had 0.8% of its total assets in short
positions. For the period from July 12, 1995 (Commencement of Operations)
through December 31, 1995, the cost of investments purchased to cover short
sales and proceeds from investments sold short were $205,625 and $1,582,937,
respectively.
E. WARRANTS:
A warrant is an option which normally entitles the holder to purchase a
proportionate amount of a particular class of the issuer's securities at a
predetermined price during a specific period.
The Bank of New York Warrants held by the Fund at December 31, 1995, were valued
at the last sale price on the principal exchange or market on which they are
traded, or, if there were no sales that day, at the mean between the closing bid
and asked prices.
B-120
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Independent Accountants' Report
To the Shareholders and Board of Trustees of The Robertson Stephens Information
Age Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Information Age Fund (one of
the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the period from
November 15, 1995 (Commencement of Operations), through December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-121
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 11.7%
Adaptec, Inc. 15,000 $ 615,000
Compaq Computer Corporation 18,000 864,000
Gateway 2000, Inc. 20,000 490,000
Seagate Technology, Inc. 20,000 950,000
Sun Microsystems, Inc. 20,000 912,500
- --------------------------------------------------------------------------------
3,831,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 22.9%
Adobe Systems Incorporated(1) 15,000 930,000
Cadence Design Systems, Inc. 15,000 630,000
FTP Software, Inc. 30,000 870,000
HNC Software, Inc. 10,000 477,500
Informix Corporation 30,000 900,000
Microsoft Corporation 9,500 833,625
Objective Systems Integrators, Inc. 1,300 71,175
Oracle Corporation 20,000 847,500
Parametric Technology, Inc. 15,000 997,500
Progress Software Corporation 10,000 375,000
Symantec Corporation 25,000 581,250
- --------------------------------------------------------------------------------
7,513,550
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 11.1%
ALANTEC Corporation 20,000 1,165,000
Bay Networks, Inc. 21,750 894,469
PairGain Technologies, Inc. 10,000 547,500
Shiva Corp. 10,000 727,500
UUNET Technologies, Inc. 5,000 315,000
- --------------------------------------------------------------------------------
3,649,469
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DATA COMMUNICATIONS - 5.6%
Ascend Communications, Inc. 10,000 811,250
Cabletron Systems, Inc. 12,500 1,012,500
- --------------------------------------------------------------------------------
1,823,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 3.6%
3Com Corporation 25,500 1,188,938
- --------------------------------------------------------------------------------
1,188,938
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-122
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 7.3%
Cisco Systems, Inc. 15,000 $ 1,119,375
DSC Communications Corporation 15,000 553,125
Stratacom, Inc.(1) 10,000 735,000
- --------------------------------------------------------------------------------
2,407,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 5.1%
Applied Materials, Inc. 15,000 590,625
KLA Instruments Corporation 12,500 325,781
Lam Research Corporation 5,000 228,750
Novellus Systems, Inc. 5,000 270,000
Ultratech Stepper, Inc. 10,000 257,500
- --------------------------------------------------------------------------------
1,672,656
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 7.6%
Altera Corporation 22,500 1,119,375
Analog Devices, Inc. 20,000 707,500
LSI Logic Corporation 20,000 655,000
- --------------------------------------------------------------------------------
2,481,875
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 5.5%
Cascade Communications Corporation 6,000 511,500
Nokia Corporation, ADR(1),(2) 15,000 583,125
QUALCOMM, Incorporated 15,000 645,000
Westell Technologies, Inc. 2,600 65,325
- --------------------------------------------------------------------------------
1,804,950
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 1.7%
ADC Telecommunications 15,000 547,500
- --------------------------------------------------------------------------------
547,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 1.6%
MFS Communications Company, Inc. 10,000 532,500
- --------------------------------------------------------------------------------
532,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TECHNOLOGY/NETWORK SYSTEMS - 1.2%
Synopsys, Inc. 10,000 380,000
- --------------------------------------------------------------------------------
380,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-123
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 1.9%
CompUSA, Inc. 20,000 $ 622,500
- --------------------------------------------------------------------------------
622,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - 1.7%
America Online, Inc. 15,000 562,500
- --------------------------------------------------------------------------------
562,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER SOFTWARE - 2.1%
Intuit, Inc. 9,000 702,000
- --------------------------------------------------------------------------------
702,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 90.6% (Cost: $29,423,102) 29,721,188
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS
- --------------------------------------------------------------------------------
Intel Corp. - Warrants(3), Expire 3/14/98 20,000 535,000
- --------------------------------------------------------------------------------
TOTAL WARRANTS - 1.6% (Cost: $577,500) 535,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 92.2% (Cost: $30,000,602) 30,256,188
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 500
Repurchase Agreement
State Street Bank and Trust Company, 5.00%,
dated 12/29/95, due 1/02/96, maturity value
$2,071,725 (collateralized by $1,605,000 par
value U.S. Treasury Notes, 8.75%, due 05/15/17) 2,070,000
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 6.3% 2,070,500
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 1.5% 498,948
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 32,825,636
- --------------------------------------------------------------------------------
(1) Income-producing security.
(2) ADR -- American Depository Receipts.
(3) See 4.e. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-124
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Net Assets
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $30,000,602) $ 30,256,188
Cash and cash equivalents 2,070,500
Receivable for investments sold 1,493,250
Receivable for fund shares subscribed 927,454
Receivables, other 33,350
- --------------------------------------------------------------------------------
TOTAL ASSETS 34,780,742
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 1,313,975
Payable for fund shares redeemed 581,621
Accrued expenses 59,510
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,955,106
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 34,686,571
Accumulated net realized loss from investments (2,116,521)
Net unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 9.30
Net Asset Value, offering and redemption price per share
(Net assets of $32,825,636 applicable to 3,530,635 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-125
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Statement of Operations
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 32,484
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 32,484
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 25,307
Custodian and transfer agent fees 7,032
Distribution fees 6,327
Administrative fees 6,327
Professional fees 3,691
Shareholder reports 2,901
Registration and filing fees 1,744
Trustees' fees and expenses 1,120
Other 1,046
Organizational expense 500
- --------------------------------------------------------------------------------
TOTAL EXPENSES 55,995
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (23,511)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/LOSS AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized loss from investments (2,116,521)
Net change in unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS (1,860,935)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,884,446)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-126
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Changes in Net Assets
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (23,511)
Net realized loss from investments (2,116,521)
Net change in unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (1,884,446)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions 34,710,082
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 34,710,082
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 0
End of year $ 32,825,636
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-127
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Financial Highlights
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment loss (0.01)
Net realized loss and unrealized appreciation on investments (0.69)
- --------------------------------------------------------------------------------
Total decrease in net assets resulting from operations (0.70)
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gain on investments -
- --------------------------------------------------------------------------------
Total Distributions -
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN (7.00)%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $32,825,636
Ratio of Expenses to Average Net Assets 2.13%
Ratio of Net Investment Loss to Average Net Assets (0.89)%
Portfolio Turnover Rate 89%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 11/15/95.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-128
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Notes to Financial Statements
The Robertson Stephens Information Age Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Information Age Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for the period from
November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
December 31, 1995, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, no security of the Fund was valued using
these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries in the technology and
telecommunications sectors. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
B-129
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date
the securities are purchased, sold, or sold short (trade date). Realized gains
and losses on securities transactions are determined on the basis of specific
identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995 were as follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 3,937,648 $ 38,546,017
- --------------------------------------------------------------------------------
3,937,648 38,546,017
- --------------------------------------------------------------------------------
Shares redeemed (407,013) (3,835,935)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 3,530,635 $ 34,710,082
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred investment advisory fees and administrative fees of $25,307 and
$6,327, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding
distribution fees that exceed the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale. At December 31, 1995, there was
no expected reimbursement of advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & CompanyLLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Ronald E. Elijah, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
B-130
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $1,120 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution
services and has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the 1940 Act, which is approved annually by the Fund's Board of Trustees.
Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of
the Fund's shares. The distirbution fee is calculated at an annual rate of
0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred distribution fees of $6,327.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid brokerage commissions of
$5,200 to RS & Co., which represented 25% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments) measured as a percentage of the Fund's average monthly
investment portfolio for the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, was 89%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $30,721,627. Accumulated net unrealized depreciation on investments was
$(465,439), consisting of gross unrealized appreciation and depreciation of
$1,169,474 and $(1,634,913), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $46,256,105 and
$14,138,982, respectively.
d. WARRANTS: A warrant is an option which normally entitles the holder to
purchase a proportionate number of a particular class of the issuer's
securities at a predetermined price during a specific period.
The Intel Corp. Warrants held by the Fund at December 31, 1995, were valued at
the last sale price on the principal exchange or market on which they are
traded, or, if there were no sales that day, at the mean between the closing bid
and asked prices.
B-131
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Partners
Fund:
In our opinion, the statement of net assets, including the schedules of net
assets, and the related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material respects, the
financial position of The Robertson Stephens Partners Fund (one of the series
constituting The Robertson Stephens Investment Trust, hereinafter referred to
as the "Fund") at December 31, 1995, and the results of its operations,
the changes in its net assets and the financial highlights for the period
from July 12, 1995 (Commencement of Operations), through December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-132
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS
ALUMINUM -- 7.7%
Kaiser Aluminum Corporation 20,000 $ 260,000
MAXXAM, Inc. 9,000 317,250
- ------------------------------------------------------------------------
577,250
- ------------------------------------------------------------------------
AUTOMOBILE PARTS/EQUIPMENT -- 1.6%
Wescast Industries, Inc., Class A(1) 12,500 120,312
- ------------------------------------------------------------------------
120,312
- ------------------------------------------------------------------------
Construction/Infrastructure -- 6.0%
American Buildings Company 20,000 450,000
- ------------------------------------------------------------------------
450,000
- ------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES -- 10.9%
Barefoot, Inc.(1) 11,000 115,500
Harper Group(1) 18,000 319,500
Pittston Services Group(1) 12,000 376,500
- ------------------------------------------------------------------------
811,500
- ------------------------------------------------------------------------
ENERGY -- 20.8%
Aztec Resources, Ltd. 29,000 47,785
Berkley Petroleum Corporation 50,000 302,087
CS Resources 10,000 72,318
Canadian 88 Energy Corporation 209,300 343,341
Canadian Conquest Exploration, Inc. 475,000 372,208
Discovery West Corporation 49,400 148,327
New Cache Petroleums, Ltd. 46,200 142,102
Nugas, Ltd. 50,000 77,627
Olympia Energy, Inc., Class A 75,000 42,841
- ------------------------------------------------------------------------
1,548,636
- ------------------------------------------------------------------------
ENERGY SERVICES -- 7.9%
EnServ Corporation 14,000 $ 120,469
Veritas Energy Services, Inc. 85,000 466,862
- ------------------------------------------------------------------------
587,331
The accompanying notes are integral part of these financial statements.
B-133
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANUFACTURING -- 2.5%
Gardner Denver Machinery, Inc. 10,000 190,000
- ------------------------------------------------------------------------
190,000
- ------------------------------------------------------------------------
REAL ESTATE -- 5.6%
Catellus Development Corporation 70,000 420,000
- ------------------------------------------------------------------------
420,000
- ------------------------------------------------------------------------
OTHER COMMON STOCK-0.1% 600 6,450
- ------------------------------------------------------------------------
6,450
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS-63.1% (COST: $4,535,499) 4,711,479
- ------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash 142
Federal Mortgage Corporation Discount Note, 5.65%, 01/04/95 1,799,152
Repurchase Agreement 1,665,000
State Street Bank and Trust Company, 5.00%, 12/29/95
due 01/2/96, maturity value $1,665,925 (collateralized
by $1,290,000 par value U.S. Treasury Notes, 8.75%,
due 05/15/17)
- ------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS -- 46.3% 3,464,294
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
OTHER LIABILITIES, NET - (9.4%) (695,429)
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 7,480,344
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
(1) Income-producing security.
The accompanying notes are an integral part of these financial statements.
B-134
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost: $4,535,499) $ 4,711,479
Cash and cash equivalents 3,464,294
Receivable for investments sold 378,000
Receivable for fund shares subscribed 10,050
Receivable from Adviser 93,846
Dividends/interest receivable 694
- --------------------------------------------------------------------------------
TOTAL ASSETS 8,658,363
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 1,141,652
Accrued expenses 36,367
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,178,019
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 7,248,887
Accumulated undistributed net investment income 46,395
Accumulated net realized gain from investments 36,775
Accumulated net realized loss from options (27,693)
Net unrealized appreciation on investments 175,980
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.39
Net Asset Value, offering and redemption
price per share (net assets of $7,480,344
applicable to 720,218 shares of beneficial
interest outstanding with no par value)
The accompanying notes are an integral part of these financial statements.
B-135
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividend Income $ 692
Interest 129,179
TOTAL INVESTMENT INCOME 129,871
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 42,710
Organizational expenses 32,420
Professional fees 28,841
Custodian and transfer agent fees 20,574
Shareholder reports 20,254
Trustees' fees and expenses 11,251
Registration and filing fees 9,441
Distribution fees 8,542
Other 3,289
- --------------------------------------------------------------------------------
Total Expenses 177,322
Less: Reimbursement from Adviser (93,846)
TOTAL EXPENSES, NET 83,476
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 46,395
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
AND OPTIONS
Net realized gain from investments 36,775
Net realized loss from options (27,693)
Net change in unrealized appreciation on investments 175,980
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 185,062
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 231,457
The accompanying notes are an integral part of these financial statements.
B-136
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment income $ 46,395
Net realized gain from investments 36,775
Net realized loss from options (27,693)
Net change in unrealized appreciation on investments 175,980
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 231,457
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Net investment income
Realized gains on investments
- -------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets resulting from capital share transactions 7,248,887
- -------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 7,248,887
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 0
End of period $7,480,344
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-137
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95 (1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.06
Net realized gain and unrealized appreciation on investments 0.33
- --------------------------------------------------------------------------------
Total Increase in Net Assets Resulting From Operations 0.39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 3.90%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 7,480,344
Ratio of Expenses to Average Net Assets 2.41%(2)
Ratio of Net Investment Income to Average Net Assets 1.34%(2)
Portfolio Turnover Rate 71%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 7/12/95.
(2)If the Fund had paid all of its expenses and there had been no reimbursement
by the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995, would have been 5.12%, and the ratio of net
investment loss to average net assets would have been (1.37)%
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-138
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Partners Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers nine series of shares -- The Robertson
Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth Fund, The
Robertson Stephens Contrarian Fund, The Robertson Stephens Developing Countries
Fund, The Robertson Stephens Growth & Income Fund, The Robertson Stephens
Partners Fund, The Robertson Stephens Information Age Fund, The Robertson
Stephens Global Natural Resources Fund, and The Robertson Stephens Global Low-
Priced Stock Fund. The assets for each series are segregated and accounted for
separately.
The Partners Fund, for book and tax purposes, has a calendar (12/31) year-end.
These financial statements reflect operations for the period from July 12, 1995
(Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 0% of the Fund's long positions were valued using these
guidelines and procedures.
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from July
12, 1995 (Commencement of Operations), through December 31, 1995. The Fund
complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
E. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign
B-139
<PAGE>
ROBERTSON, STEPHENS & COMPANY
currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
F. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
G. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares
of beneficial interest with no par value. Transactions in capital shares for the
period from July 12, 1995 (Commencement of Operations), through December 31,
1995 were as follows:
7/12/95 - 12/31/95 SHARES AMOUNT
- -----------------------------------------------
Shares sold 993,987 $ 10,001,278
Shares reinvested - -
- -----------------------------------------------
993,987 10,001,278
- -----------------------------------------------
Shares redeemed (273,769) (2,752,391)
- ------------------------------------------------
Net increase 720,218 $ 7,248,887
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the period from July 12, 1995 (Commencement of Operations), through
December 31, 1995, the Fund incurred investment advisory fees of $42,710. RSIM
has agreed to reimburse the Fund for any annual operating expenses, including
investment advisory fees but excluding distribution fees, which exceed the most
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. For the period from July 12, 1995 (Commencement of Operations),
through December 31, 1995, the Adviser agreed to reimburse $93,846 of its fees
and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Andrew P. Pilara, Jr., Portfolio Manager, is a Member of RS Group.
All affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation
B-140
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
and reimbursement of expenses of $11,251 for the period from July 12, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund incurred distribution fees of
$8,542.
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund paid brokerage commissions of
$25 to RS & Co., which represented 0.1% of the total commissions paid for the
period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, was 71%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $4,535,499. Accumulated net unrealized appreciation on investments was
$175,980, consisting of gross unrealized appreciation and depreciation of
$403,307 and $(227,327), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from July 12, 1995 (Commencement of Operations), through December
31, 1995, the cost of investments purchased and the proceeds from investments
sold (excluding options and short-term investments) were $6,038,159 and
$1,539,435, respectively.
D. OPTIONS:
At December 31, 1995, the Fund had no hedge positions in put options.
E. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
At December 31, 1995, the Fund had its largest concentrated foreign investments,
worth 25% of the Fund's total assets, in Canada.
B-141
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Independent Accountants' Report
To the Shareholders and Board of Trustees of
The Robertson Stephens Value + Growth Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Value + Growth Fund (one of the
series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine-month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-142
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31,1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
Biotechnology - 1.8%
Amgen, Inc. 350,000 $ 20,781,250
- --------------------------------------------------------------------------------
20,781,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 4.5%
3Com Corporation 1,100,000 51,287,500
- --------------------------------------------------------------------------------
51,287,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 13.4%
Adaptec, Inc. 368,000 15,088,000
Compaq Computer Corporation 906,000 43,488,000
Dell Computer 380,000 13,157,500
Hewlett-Packard Company(1) 390,000 32,662,500
Seagate Technology, Inc. 638,000 30,305,000
Sun Microsystems, Inc. 400,000 18,250,000
- --------------------------------------------------------------------------------
152,951,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 12.5%
Adobe Systems Incorporated(1) 312,000 19,344,000
Cadence Design Systems, Inc. 690,000 28,980,000
Computer Sciences Corporation 400,000 28,100,000
Microsoft Corporation 500,000 43,875,000
Parametric Technology Corporation 340,000 22,610,000
- --------------------------------------------------------------------------------
142,909,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 6.6%
CompUSA, Inc. 400,000 12,450,000
Nike, Inc.(1) 900,000 62,662,500
- --------------------------------------------------------------------------------
75,112,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER ELECTRONICS - 1.3%
Kemet Corporation 510,000 12,176,250
Vishay Intertechnology, Inc. 82,300 2,592,450
- --------------------------------------------------------------------------------
14,768,700
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-143
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 7.7%
Cabletron Systems, Inc. 595,000 $ 48,195,000
Cisco Systems, Inc. 530,000 39,551,250
- --------------------------------------------------------------------------------
87,746,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 6.6%
Charles Schwab Corporation(1) 821,900 16,540,737
First USA, Inc.(1) 184,000 8,165,000
Green Tree Financial Corporation(1) 510,000 13,451,250
Household International, Inc.(1) 385,000 22,763,125
MBNA Corporation(1) 250,000 9,218,750
Merrill Lynch & Company, Inc.(1) 100,000 5,100,000
- --------------------------------------------------------------------------------
75,238,862
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 15.4%
Columbia/HCA Healthcare Corporation(1) 500,000 25,375,000
Healthsource, Inc. 1,162,000 41,832,000
Horizon/CMS Healthcare Corporation 100,000 2,525,000
Oxford Health Plans 630,000 46,541,250
PacifiCare Health Systems, Class B 70,000 6,090,000
U.S. Healthcare, Inc.(1) 300,000 13,950,000
United Healthcare Corporation(1) 545,000 35,697,500
Vencor, Inc. 100,000 3,250,000
- --------------------------------------------------------------------------------
175,260,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LODGING/RECREATION - 3.2%
Hospitality Franchise Systems, Inc. 215,000 17,576,250
La Quinta Inns, Inc.(1) 235,000 6,433,125
Mirage Resorts, Inc. 350,000 12,075,000
- --------------------------------------------------------------------------------
36,084,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 3.4%
Bay Networks 942,000 38,739,750
- --------------------------------------------------------------------------------
38,739,750
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-144
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 11.5%
Applied Materials, Inc.(1) 1,410,000 $55,518,750
KLA Instruments Corporation 547,400 14,266,613
Lam Research Corporation 424,200 19,407,150
Novellus Systems, Inc. 403,300 21,778,200
Teradyne, Inc. 788,600 19,715,000
- --------------------------------------------------------------------------------
130,685,713
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 8.4%
Altera Corporation 629,000 31,292,750
Atmel Corporation 365,000 8,166,875
Intel Corporation(1) 500,000 28,375,000
LSI Logic Corporation 300,000 9,825,000
Microchip Technology, Inc. 454,200 16,578,300
VLSI Technology, Inc. 80,000 1,450,000
- --------------------------------------------------------------------------------
95,687,925
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 2.8%
Allen Group(1) 354,000 7,920,750
Frontier Corporation(1) 450,000 13,500,000
LCI International, Inc. 495,000 10,147,500
- --------------------------------------------------------------------------------
31,568,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%(Cost: $948,763,109) 1,128,821,825
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 233
- --------------------------------------------------------------------------------
Repurchase Agreement 16,544,000
State Street Bank and Trust Company, 5.00%, dated 12/29/95, due 01/2/96,
maturity value $16,553,191 (collateralized by $12,820,000 par value
U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 1.4% 16,544,233
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.5)% (5,214,891)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSESTS - 100% $1,140,151,167
- --------------------------------------------------------------------------------
(1) Income-producing security
The accompanying notes are an integral part of these financial statements.
B-145
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Net Assets
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $948,763,109) $ 1,128,821,825
Cash and cash equivalents 16,544,233
Receivable for investments sold 46,500
Receivable for fund shares subscribed 5,695,678
Receivables, other 417,093
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,151,525,329
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 2,023,749
Payable for fund shares redeemed 7,969,344
Accrued expenses 1,381,069
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 11,374,162
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $1,140,151,167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 986,869,159
Accumulated net realized loss from investments (26,776,708)
Net unrealized appreciation on investments 180,058,716
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $1,140,151,167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 22.66
Net Asset Value, offering and redemption price per share
(Net assets of $1,140,151,167 applicable to 50,318,588 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-146
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Statement of Operations
NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign tax withheld of $21,089) $ 1,998,900
Interest 1,143,886
Other Income 6,776
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,149,562
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 9,702,327
Custodian and transfer agent fees 834,156
Registration and filing fees 305,986
Interest expense 148,037
Shareholder reports 142,430
Professional fees 79,985
Trustees' fees and expenses 41,401
Other 17,598
- --------------------------------------------------------------------------------
TOTAL EXPENSES 11,271,920
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (8,122,358)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized loss from investments (25,249,381)
Net change in unrealized appreciation on investments 139,393,491
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS 114,144,110
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $106,021,752
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-147
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Changes in Net Assets
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (8,122,358) $ (1,115,225)
Net realized loss from investments (25,249,381) (1,344,592)
Net realized gain from options - 455,848
Net realized gain from securities sold short - 73,750
Net change in unrealized appreciation
on investments 139,393,491 39,217,602
Net change in unrealized depreciation on
securities sold short - (103,750)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 106,021,752 37,183,633
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments - (1,566,892)
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1,566,892)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions 605,226,408 348,785,903
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 605,226,408 348,785,903
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 711,248,160 384,402,644
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 428,903,007 44,500,363
End of year $1,140,151,167 $428,903,007
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-148
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Financial Highlights
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(2) 3/31/95 3/31/94 3/31/93(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 18.25 $ 13.56 $ 11.94 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income (0.16) (0.18) (0.04) 0.12
Net realized gain and unrealized appreciation on investments 4.57 5.07 1.99 1.88
- ------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets resulting from operations 4.41 4.89 1.95 2.00
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - (0.03) (0.06)
Distributions from realized gain on investments - (0.20) (0.30) -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.20) (0.33) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 22.66 $ 18.25 $ 13.56 $ 11.94
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 24.16% 36.27% 16.32% 20.05%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 1,140,151,167 $ 428,903,007 $44,500,363 $ 17,833,350
Ratio of Expenses to Average Net Assets 1.45% 1.68% 1.55%(3) 1.33%(3)
Ratio of Net Investment (Loss)/Income to Average Net Assets (1.04)% (1.09)% (0.51)%(3) 1.26%(3)
Portfolio Turnover Rate 104% 232% 250% 210%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) From April 21, 1992 (Commencement of Operations) to 3/31/93.
(2) Represents a 9-month period then ended.
(3) If the Fund had paid all of its expenses and had received no
reimbursement from the Adviser, the ratio of expenses to average
net assets for the periods ended March 31, 1994 and March 31, 1993 would
have been 2.35% and 2.71%, respectively, and the ratio of net
investment income/(loss) to average net assets would have been (1.31)%
and (0.12)%, respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-149
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Notes to Financial Statements
The Robertson Stephens Value + Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on May 12, 1992. Prior to the public offering, shares were offered in a
private placement offering on April 21, 1992, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
nine series of shares -- The Robertson Stephens Emerging Growth Fund, The
Robertson Stephens Value + Growth Fund, The Robertson Stephens Contrarian Fund,
The Robertson Stephens Developing Countries Fund, The Robertson Stephens Growth
& Income Fund, The Robertson Stephens Partners Fund, The Robertson Stephens
Information Age Fund, The Robertson Stephens Global Natural Resources Fund, and
The Robertson Stephens Global Low-Priced Stock Fund. The assets for each series
are segregated and accounted for separately.
The Value + Growth Fund, for book and tax purposes, has a calendar (12/31) year-
end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
December 31, 1995, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, no security of the Fund was valued using
these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries in the technology and
telecommunications sectors. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
B-150
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995 and for the year ended March 31, 1995 were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 71,111,212 $1,642,177,404
Shares reinvested 2,182 54,597
- --------------------------------------------------------------------------------
71,113,394 1,642,232,001
- --------------------------------------------------------------------------------
Shares redeemed (44,296,835) (1,037,005,593)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 26,816,559 $ 605,226,408
4/1/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 34,759,244 $ 574,001,458
Shares reinvested 79,555 1,276,754
- --------------------------------------------------------------------------------
34,838,799 575,278,212
- --------------------------------------------------------------------------------
Shares redeemed (14,619,427) (226,492,309)
- --------------------------------------------------------------------------------
Net increase 20,219,372 $ 348,785,903
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund paid Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee during fiscal
1995 calculated at an annual rate of 1.25% of the average daily net assets of
the Fund. (As of January 1, 1996, that rate was reduced to 1% of the average
daily net assets of the Fund.) For the nine months ended December 31, 1995, the
Fund incurred investment advisory fees of $9,702,327. RSIM has agreed to
reimburse the Fund for any annual operating expenses, including investment
advisory fees, but excluding dividend expense for short sales, which exceed the
most stringent limits prescribed by any state in which the Fund's shares are
offered for sale. For the nine months ended December 31, 1995, there was no
expected reimbursement of advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial
B-151
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS
Group and Director of Research for RS & Co. Ronald E. Elijah, Portfolio Manager,
is a Member of RS Group. All affiliated and access persons, as defined in the
1940 Act, follow strict guidelines and policies on personal trading as outlined
in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $41,401 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
Effective on January 1, 1996, the Fund has entered into an agreement with RS &
Co. for distribution services and has adopted a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act, which is approved annually by the Fund's Board of
Trustees. Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of the
Fund's shares. The distribution fee is calculated at an annual rate of 0.25% of
the average daily net assets of the Fund.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended December 31, 1995, the
Fund paid brokerage commissions of $356,240 to RS & Co. which represented 21% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short, and short-term investments) measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 104%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $951,916,535. Accumulated net unrealized appreciation on investments was
$176,905,290, consisting of gross unrealized appreciation and depreciation of
$205,497,759 and $(28,592,469), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $1,619,932,751 and $1,035,627,673,
respectively.
d. OPTIONS:
At December 31, 1995, the Fund had no hedge position in put options.
e. SHORT SALES:
At December 31, 1995, the Fund did not sell any securities short.
B-152
