<PAGE>
GROWTH & INCOME
ROBERTSON STEPHENS MUTUAL FUNDS
The Growth & Income Fund
Annual Report
December 31, 1995
[PHOTO]
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
FUND PHILOSOPHY
The Growth & Income Fund seeks to achieve long-term total return by investing
primarily in small- and mid-cap stocks and convertible bonds and preferred
stocks. Our flexible, bottom-up approach is based on value recognition and trend
analysis. We look for well-managed companies with improving fundamentals that
are positioned for growth. Our formula for long-term success also includes a
disciplined approach to risk: losses are eliminated quickly, and we are
constantly looking for new opportunities.
CONTENTS
Fund Highlights 1
Report to Shareholders 2
Fund Performance 8
Portfolio Summary 9
Schedule of Net Assets 10
Statement of Net Assets 17
Statement of Operations 18
Statement of Changes in Net Assets 19
Financial Highlights 20
Notes to Financial Statements 21
Independent Accountants' Report 24
Administration 24
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FUND HIGHLIGHTS
SOLID PERFORMANCE
The Robertson Stephens Growth & Income Fund was up 4.46% for the quarter ending
December 31, 1995.
HEALTH CARE EXPOSURE INCREASED
Our investments in health care-related stocks increased more than 40% in the
latest quarter. Industry fundamentals are strong, and we believe they are poised
for further improvement in 1996.
CONVERTIBLES PROVIDE SOME DOWNSIDE PROTECTION
Investors often forget that convertible issues outpace stocks on the downside
while providing current income. This proved to be the case in the fourth
quarter.
SEMICONDUCTORS -- FEW BRIGHT SPOTS
A slowing in demand, along with accelerating supply, led to a 35-60% decline in
most semiconductor stocks. We took advantage of this volatility and repositioned
our holdings away from commodity-based companies.
1996 -- AN ENCORE TO 1995?
Coming off a great year for equities, we now begin to focus our attention on the
future. Our framework going forward rests with three key assumptions: corporate
earnings will continue to slow; interest rates will remain a critical factor for
stocks; and public inflows into U.S. equity funds will be the primary supporter
of stock prices going forward.
1
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THE GROWTH & INCOME FUND ANNUAL RESULTS
[PHOTO]
FUND MANAGER
JOHN L. WALLACE
Portfolio Manager
The Robertson Stephens
Growth & Income Fund
DEAR SHAREHOLDERS:
We are pleased to report that a commitment to diversified investing and
disciplined risk management enhanced the Fund's performance for the quarter and
year ended December 31, 1995. We finished the quarter up 4.46% -- slightly
underperforming the S&P 500, which was up 5.39%, but continuing to outpace the
Lipper Growth & Income Fund Index, which was up 4.05%.
We are pleased to report a total return of 12.4% since the Fund's launch on July
12, 1995, beating both the S&P 500 and the Lipper Growth & Income Fund Index,
which were up 11.16% and 8.46%, respectively, for the same time period.
It was a rough quarter for most small-cap investors. Concerns over economic
weakness and slower corporate earnings, as well as a collapse in many technology
stocks, caused a violent shift to more liquid, large-cap issues. In fact, the
best-performing major index for the quarter was the Dow itself, up 6.85%!
2
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ROBERTSON, STEPHENS & COMPANY
Small-cap relative performance peaked in late summer and has given back all of
its 1995 gain. We believe that going into 1996, smaller stocks still offer
higher earnings potential at lower P/Es than larger issues.
Projected Earnings Growth - 1995 to 1996
Projected EPS Growth (I/B/E/S), November 30, 1995
[GRAPH]
SOURCE: MERRILL LYNCH QUANTITATIVE ANALYSIS, I/B/E/S
At a median market cap of $1.1 billion, we still embrace a small-cap focus;
however, we are monitoring the relative strength of these investments closely.
Russell 2000 Versus S&P 500(1)
[GRAPH]
SOURCE: THE LEUTHOLD GROUP, DECEMBER 1995
(1) A rising bar represents small-cap stocks (Russell 2000) outpacing larger-cap
stocks (S&P 500).
HEALTH CARE -- NEW OPPORTUNITIES FOR 1996
We increased our exposure in the health care area by more than 40% during the
fourth quarter. These stocks now comprise more than 14% of the Fund, and we
continue to look for new ideas. We believe the group could be poised to outpace
the general market next year for the following reasons:
- - Demographics -- The U.S. population is aging, and the desire for improved
health care is on the rise.
- - The FDA is approving drugs and devices faster
than ever before.
- - Software and information technologies are helping improve the efficiencies,
margins, and earnings of health care companies.
- - R&D spending is generating more value-added products.
We believe that going into 1996, smaller stocks still offer higher EARNINGS
POTENTIAL at lower P/Es than larger issues."
3
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
"WE BELIEVE THE HEALTH CARE GROUP COULD BE POISED TO OUTPACE THE GENERAL MARKET
IN 1996 DUE TO INCREASING DEMAND FROM AN AGING U.S. POPULATION, FASTER FDA
APPROVAL, IMPROVED TECHNOLOGIES, AND INCREASED R&D SPENDING."
Our exposure is fairly broad-based -- from HMOs to biotech and pharmaceutical
companies to medical device manufacturers.
Recent additions include:
DENTSPLY INTERNATIONAL -- Develops, manufactures, and markets a broad range of
dental supplies and lab products. We believe new management and the integration
of recent acquisitions could help fuel earnings growth of 15%-plus.
COMMUNITY HEALTH SYSTEMS, INC. -- Owns and operates hospitals, primarily in
the southeastern and southwestern United States. Provides a broad range of
medical and surgical services. The company's strategy is to grow earnings
through improving market share of existing properties and acquisitions.
TECHNOLOGY -- DOWN BUT NOT OUT
At 23% of the Fund, technology and telecommunications companies still represent
a core holding. Computer-related hardware and software products
[PHOTO]
INVESTMENT MANAGEMENT
G. RANDY HECHT INVESTMENT TEAM
President RESEARCH
Robertson Stephens John Seabern
Investment Trust
TRADING
Christopher Beagle
Catherine O'Neill
ADMINISTRATION
Sarah Clark
4
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ROBERTSON, STEPHENS & COMPANY
are key to growth in many industries. We need new technologies to compete
better, increase productivity, and produce a better standard of living.
What investors forgot last quarter (and what we mentioned in our last report to
shareholders) was that tech stocks do not go up forever and are not immune to
the principal law of economics regarding supply and demand. We believe the
result was a 27% decline in the Philadelphia Semiconductor Index (SOX) and a 35-
60% decline in most semiconductor stocks.
As it became clear in the fall that increased capacity and supplies of almost
all types of semiconductor chips could meet or exceed current demand levels, we
eliminated our semiconductor holdings and focused on three areas where product
cycles, pricing, and margins were still in an upswing -- networking, data
services, and software.
Most technology stocks have underperformed the market since September. We think
it is too soon to capitulate on the entire group, but our current focus is on
fourth-quarter earnings reports and the consumer and corporate PC sell-through
into early 1996.
We will monitor the progress of this sector to see if it will regain its
leadership role for the duration of this market cycle. If fundamentals
deteriorate, we will not be afraid to shift assets accordingly.
CONVERTIBLES PROVIDE SOME DOWNSIDE PROTECTION
The Fund's asset mix has not changed since our last report. We have invested
almost 10% of assets in convertible bonds and preferred stocks. We are always
looking for high total return opportunities but appreciate the fact that
convertibles also give the Fund some protection against declining stock prices.
Unfortunately, the quarter provided two opportunities to show how dramatically
our bonds outpaced on the downside:
- - VLSI TECHNOLOGY, INC., a semiconductor manufacturer, was not immune to the
severe correction in tech stocks. The common stock declined more than
50% from the price where the bond was issued last September. The bond,
however, was down only 10%, and with income our total return was -8% versus -
52% for the common shareholders.
5
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
Net Cash Flow Into Domestic Equity Mutual Funds
(DOLLARS IN BILLIONS)
[GRAPH]
SOURCE: INVESTMENT COMPANY INSTITUTE
1996 FORECAST
- - STAPLES INC., one of the largest office supply superstore chains in the U.S.,
declined 26% during the quarter on fears of weakening retail sales. Our bond,
which matures in only four years, declined just 6%, and we added to our
position during the quarter.
Despite these clear-cut examples, in our opinion many of our competitors still
underappreciate the amount of downside protection short-maturity convertibles
provide. We intend to continue capitalizing on this fact.
1996 -- A REPEAT OF 1995?
The stock market just completed one of its best years ever, and the third best
year since the end of World War II. Any thoughts on 1996 performance have to
include a few key assumptions:
1. Corporate earnings will continue to slow. If the economy does not pick up
steam, we expect earnings growth to be in the 5-10% range for 1996. If EPS
growth decelerates, we expect further rotation into higher-quality growth
stocks. Stock selection becomes critical, and volatility and sector rotation
will increase.
2. Interest rates will remain a critical factor for equities. A slow-growth,
low inflationary environment has pushed the 30-year treasury bond below 6% --
its
6
<PAGE>
ROBERTSON, STEPHENS & COMPANY
lowest point in two years. We are probably in a 6-7% trading range until the
direction of the economy -- whether recession or reacceleration -- becomes
clear.
3. Cash inflows from the public will be a primary driver for funding the last
phase of the bull market. For the 11-month period ended November 30, 1995, net
equity inflows stood at approximately $111 billion. Any dramatic reduction in
new investments or net withdrawals puts the stock market at risk.
(See chart at left.)
Other variables that might affect stock prices in
1996 include:
- - Resolution of the budget deficit impasse
- - Capital gains tax cuts
- - Presidential-election-year surprises
- - Foreign and institutional demand for stocks
- - Rate cuts from the Fed
- - Investment alternatives to stocks
LOOKING AHEAD
Our strategy of being broadly diversified has enabled us to benefit and outpace
a strong stock market since July 1995. We believe 1996 will be a more difficult
year to make money since the odds favor a more subdued performance coming off a
great 1995. However, we also believe our disciplined approach to risk should
offer us some protection in the event of a market decline in 1996.
On behalf of the entire Growth & Income team, I would like to wish everyone a
healthy and prosperous 1996.
January 4, 1996
Sincerely,
/s/ JOHN L. WALLACE
JOHN L. WALLACE
Portfolio Manager
TO HEAR MY ONGOING THOUGHTS ON THE FUND, CALL ON OUR
24-HOUR HOTLINE AT 1-800-766-3863.
7
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
FUND PERFORMANCE
Results of a hypothetical $10,000 investment
in The Robertson Stephens Growth & Income Fund and the Lipper Growth & Income
Fund Index(2)
IF INVESTED ON JULY 12, 1995(3)
[GRAPH]
CUMULATIVE TOTAL RETURNS
<TABLE>
<CAPTION>
GROWTH & INCOME S&P 500 LIPPER GROWTH & INCOME
FOR THE PERIOD ENDED 12/31/95 FUND INDEX(1) FUND INDEX(2)
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Since inception (7/12/95)(3) 12.40% 11.16% 8.46%
- ------------------------------------------------------------------------------------------------------
</TABLE>
(1)The Standard & Poor's Composite Index of 500 stocks (S&P 500 Index) is a
widely recognized, unmanaged index of a selected portfolio of market
activity based on the aggregate performance of a selected portfolio of
publicly traded stocks. It is widely recognized as representative of the
stock market in general. Investment results assume the reinvestment of
dividends paid on the stocks constituting the index.
(2)The Lipper Growth & Income Fund Index is composed of 30 funds which
combine a growth of earnings orientation and an income requirement for
level and/or rising dividends. Lipper Mutual Funds indices are equally
weighted, composed of the largest mutual funds within their respective
investment objectives, and adjusted for the reinvestment of capital gains
distributions and income dividends.
(3)Date that the Fund's shares were first offered to the public.
Investors should realize that all performance data presented is based upon
past performance during limited periods of time, and that past performance is
no guarantee of future performance. Investors should also realize that both
investment return and principal value will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost.
8
<PAGE>
ROBERTSON, STEPHENS & COMPANY
PORTFOLIO SUMMARY
AS OF DECEMBER 31, 1995
[GRAPH]
TOP TEN HOLDINGS
1.
GUIDANT CORPORATION
Designs, develops, and manufactures products used in cardiac rhythm management,
coronary artery disease intervention, and other minimally invasive surgeries.
2.
STRATOSPHERE CORPORATION
Developing and building an observation tower in Las Vegas, Nevada. Intends to
own and operate the 1,012-foot Stratosphere Tower and its attendant
entertainment facilities.
3.
COMMERCIAL FEDERAL CORPORATION
A unitary, nondiversified savings and loan holding company for Commercial
Federal Bank.
4.
W. R. BERKLEY CORPORATION
An insurance holding company. Operates regional property casualty insurance,
specialty lines of insurance, insurance service operations, and reinsurances.
5.
AFFILIATED COMPUTER SERVICES, INC.
Provides information-processing services, including data processing
outsourcing, electronic funds transfer transaction processing, image
management, and professional services.
6.
MILLIPORE CORPORATION
Engages in the analysis and purification of fluids using membrane separations
technology.
7.
ITI TECHNOLOGIES, INC.
Designs and manufactures wireless home security systems.
8.
GENZYME CORPORATION
Operates in therapeutics, diagnostic products and services, pharmaceuticals and
fine chemicals, and tissue repair.
9.
FLEETWOOD ENTERPRISES, INC.
Produces and manufactures travel trailers and motor homes.
10.
MONSANTO COMPANY
Manufactures and sells worldwide a diversified line of specialty chemicals,
agricultural products, and prescription pharmaceuticals.
9
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, 1995 SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
ROBERTSON, STEPHENS & COMPANY
<TABLE>
<CAPTION>
Shares Value
- -------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
<TABLE>
<CAPTION>
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
ROBERTSON, STEPHENS & COMPANY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
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THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
ROBERTSON, STEPHENS & COMPANY
<TABLE>
<CAPTION>
PAR VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
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
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- --------------------------------------------------------------------------------
<S> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
(1)Non-income-producing security.
(2)See Note 4.e. of Notes to Financial statements.
SCHEDULE OF SECURITIES SOLD SHORT
<TABLE>
<CAPTION>
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
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)
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
<S> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
<S> <C>
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
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT EACH PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
<S> <C>
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%
- --------------------------------------------------------------------------------
</TABLE>
(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.
20
The accompanying notes are an integral part of these financial statements.
<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.
21
<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:
<TABLE>
<CAPTION>
7/12/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
<S> <C> <C>
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
- --------------------------------------------------------------------------------
</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 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.
22
<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.
23
<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
ADMINISTRATION
OFFICERS AND TRUSTEES
G. Randy Hecht
President, Chief Executive Officer
Terry R. Otton
Chief Financial Officer
Leonard B. Auerbach, Trustee
Daniel R. Cooney, Trustee
James K. Peterson, Trustee
John P. Rohal, Trustee
Robert I. Goldbaum, Secretary
INVESTMENT ADVISER
Robertson, Stephens & Company Investment Management, L.P.
555 California Street, Suite 2600
San Francisco, CA 94104
DISTRIBUTOR
Robertson, Stephens & Company LLC
555 California Street, Suite 2600
San Francisco, CA 94104
1-800-766-3863
TRANSFER AGENT AND DISBURSING AGENT
State Street Bank & Trust Company
c/o National Financial Data Services
Kansas City, MO
1-800-272-6944
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
AUDITORS
Price Waterhouse LLP
San Francisco, CA
LEGAL COUNSEL
Ropes & Gray
Boston, MA
This report is submitted for the information of shareholders of The Robertson
Stephens Growth & Income Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
Published February 27, 1996
24
<PAGE>
THE ROBERTSON STEPHENS MUTUAL FUNDS
In addition to THE GROWTH & INCOME FUND, Robertson Stephens offers the following
mutual funds:
THE CONTRARIAN FUND
A DEFENSIVE POSITION IN TODAY'S VOLATILE MARKET - Invests in attractively
priced, growing companies worldwide that are out of favor or have not been
discovered by institutional investors. Adheres to an independent, aggressive,
and flexible investment strategy. The Fund may engage in short sales and invests
in companies of all sizes. Managed by Paul Stephens.
THE DEVELOPING COUNTRIES FUND
A PORTFOLIO OF GROWING COMPANIES IN EMERGING MARKETS - Invests in publicly
traded equities of developing countries. The Fund may engage in short sales
and/or invest in private placement emerging market equity securities. No load.
Managed by Michael Hoffman.
THE EMERGING GROWTH FUND
SEEKING TO INVEST IN AMERICA'S MOST DYNAMIC, GROWTH-ORIENTED INDUSTRIES -
Invests primarily in common stocks of emerging growth companies (predominantly
technology, specialty retailing, and health care) with above-average growth
potential. No load. Managed by Dave Evans.
THE GLOBAL LOW-PRICED STOCK FUND
SEEKING OVERLOOKED AND UNDERVALUED COMPANIES - Invests in companies worldwide
that are low-priced (stock prices no greater than $10 per share), have future
growth potential, but are underappreciated by other investors. No load. Managed
by Hannah Sullivan.
THE GLOBAL NATURAL RESOURCES FUND
PRIMARILY FOCUSING ON ATTRACTIVE HARD ASSET COMPANIES - Invests in equities of
companies engaged in the discovery, development, production, or distribution of
natural resources, such as energy, metals, and forest products. No load. Managed
by Andy Pilara, Jr.
THE INFORMATION AGE FUND
FOCUSING ON INVESTMENTS IN THE INFORMATION TECHNOLOGY SECTOR - Invests in a wide
range of technology companies with strong fundamentals, market advantage, and
growth potential, including computer hardware and software, telecommunications,
and multimedia. No load. Managed by Ron Elijah.
THE PARTNERS FUND
SMALL-CAP VALUE WITH A CONTRARIAN DISCIPLINE - Invests with a value methodology
combining traditional Graham & Dodd balance sheet analysis and cash flow
analysis. No load. Managed by Andy Pilara, Jr.
THE VALUE+GROWTH FUND
A GROWTH FUND FOR VALUE-CONSCIOUS INVESTORS - Invests in mid-cap growth
companies with favorable price/earnings ratios in sectors with the potential for
above-average growth. Ability to short sell. No load. Managed by Ron Elijah.
Design: Broom & Broom, Inc., San Francisco Photography: Jerry Orabona, Bill
Zemanek
For a discussion of the risks associated with using options, international
investing, investing in a few sectors, allocating a large percentage of the
portfolio to one security, and short selling, please read the prospectus.
<PAGE>
ROBERTSON STEPHENS & COMPANY
MUTUAL FUNDS
555 California Street, Suite 2600
San Francisco, California 94104
FUND NEWS & INFORMATION
ROBERTSON STEPHENS
INVESTOR SERVICES
- -Knowledgeable mutual fund representatives.
- -Automated access to daily net asset values.
- -Portfolio managers' hotline, 24 hours a day.
1-800-766-3863
ROBERTSON STEPHENS
MUTUAL FUND E-MAIL
[email protected]
ROBERTSON STEPHENS
ACCOUNTLINK
- -Automated account information, 24 hours a day.
1-800-624-8025
FUND LISTINGS
The Fund is listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S BUSINESS
DAILY, and most local newspapers as Gr Inc under the heading Robertson Stephens.
Its computer quotation symbol is RSGIX.
The views expressed in this report were those of the Fund's portfolio manager as
of the date specified, and may not reflect the views of the portfolio manager on
the date they are first published or at any other time thereafter. RSIM and its
affiliates may buy or sell investments at any time for the Fund or their other
clients or for their own accounts and will not necessarily do so in a manner
consistent with the views expressed in this report. The prices at which they buy
or sell investments may be affected favorably by the contents of this report or
the timing of its publication. THE VIEWS EXPRESSED IN THIS REPORT ARE INTENDED
TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR INVESTMENT IN THE FUND
AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD CONSULT THEIR OWN
INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT PROGRAMS.
