<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
The Partners Fund
Second-Quarter Report
June 30, 1997
PARTNERS
2
<PAGE>
The Partners Fund SECOND QUARTER REPORT
FUND PHILOSOPHY
The Partners Fund seeks to achieve long-term capital growth by investing
primarily in equity securities of U.S. small-cap companies using a value
methodology combining Graham & Dodd balance sheet analysis with cash flow
analysis.
CONTENTS
Fund Highlights 1
Report to Shareholders 2
Fund Performance - Class A Shares 8
Portfolio Summary 9
Fund Performance - Class C Shares 10
Schedule of Investments 11
Statement of Assets and Liabilities 15
Statement of Operations 16
Statement of Changes in Net Assets 17
Financial Highlights - Class A Shares 18
Financial Highlights - Class C Shares 19
Notes to Financial Statements 20
Administration 24
<PAGE>
FUND HIGHLIGHTS
ALUMINUM
We increased our aluminum position from 2.5% at year-end to 4.3% at June 30,
1997.
ENERGY EXPLORATION
We continue to add to our Canadian exploration and production companies and have
purchased three domestic explorers -- Houston Exploration (0.88%), Santa Fe
Energy (4.60%), and Titan Exploration (1.90%).
REAL ESTATE
We also increased our real estate position from 0.9% at year-end to 3.0% at June
30, 1997. Our newest purchase was Canadian Hotel Income Properties, the only
mid-priced Canadian hotel real estate investment trust (REIT).
UTILITIES
A new opportunity for us this year is the utility area.
ACQUISITION
During the quarter, BankAmerica agreed to acquire Robertson Stephens. The deal
is subject to regulatory and other approvals, and it is expected to be completed
as early as September 30, 1997.
1
<PAGE>
[PHOTO]
FUND MANAGER
Andrew P. Pilara, Jr.
Portfolio Manager
The Robertson Stephens Partners Fund
DEAR SHAREHOLDER:
The Partners Fund was up 8.03% for the second quarter, and 8.77% for the six
months ending June 30, 1997. For the same periods, the Russell 2000 Value Index
was up 15.09%, and 14.81%. For the period from April 14, 1997 (Commencement of
Operations) to June 30, 1997, the Fund's Class C shares had a return of 8.45%.
While our relative performance was materially above the Russell 2000 Value Index
in 1996, our 1997 first-half relative performance was below the Index. We do our
research work and judge the companies in the Fund based on a three-year time
horizon and would encourage you to use the same time frame to judge the
performance of the Partners Fund.
INVESTMENT OBJECTIVES
Our largest position at June 30, 1997, continues to be cash, at 33.4%. We
continue to increase our invested position in an orderly manner. The challenge
is not getting invested -- that's no problem. The challenge is to get invested
in an economic manner. That is, to structure the Fund with the appropriate
risk-adjusted return objective.
2
<PAGE>
ALUMINUM
During the first six months of 1997 we continued to find opportunities in many
of the same industries we were invested in during the majority of 1996. We
increased our aluminum position from 2.5% at year-end to 4.3% at June 30, 1997
(KAISER ALUMINUM, 2.38% of the Fund at quarter-end, and MAXXAM, 1.87%). Aluminum
supply/demand fundamentals continue to improve as Western world demand continues
to materially exceed Western world production. The more than two million ton
deficit in annual Western world supply is made up from Former Soviet Union (FSU)
exports. The magnitude of our dependence on the FSU for aluminum is not as large
as for our oil to OPEC, but we could possibly see spot aluminum shortages in the
next twelve months. We are factoring in the probability of restarts from the
major producers of 700,000-900,000 tons once the ingot price approaches the
mid-80-cents range. Aluminum ingot is currently selling at 77 cents. Annual
supply additions are not expected to exceed 3% to the end of the decade, and
annual demand growth is estimated to be greater than 3%. This would reduce
Western world inventories below the "critical level" of 5.5 weeks of supply.
"ALUMINUM SUPPLY/DEMAND FUNDAMENTALS CONTINUE TO IMPROVE AS WESTERN WORLD DEMAND
CONTINUES TO MATERIALLY EXCEED WESTERN WORLD PRODUCTION."
3
<PAGE>
ENERGY EXPLORATION
Our energy exploration exposure increased from 7.30% at year-end to 12.30% at
June 30, 1997. We continue to add to our Canadian exploration and production
companies and have purchased three domestic explorers -- HOUSTON EXPLORATION
(0.88%), SANTA FE ENERGY (4.60%), and TITAN EXPLORATION (1.90%). With these
three new investments, we think we are getting good exploration opportunities
both onshore (USA) and in the Gulf of Mexico at a cheap price. As stated in
previous letters, we are very positive on the long-term fundamentals for the
energy industry.
[PHOTO]
Investment Management
4
<PAGE>
"We believe DEREGULATION of the electric utility industry will present
OPPORTUNITIES throughout the utility sector."
REAL ESTATE
We also increased our real estate position from 0.9% at year-end to 3.0% at June
30, 1997. Our newest purchase was CANADIAN HOTEL INCOME PROPERTIES (2.10%), the
only mid-priced Canadian hotel real estate investment trust (REIT). Our
first-year dividend yield (on cost) is expected to exceed 15%. We were attracted
to the Canadian mid-price hotel industry because of a limited current supply,
rising occupancy and room rates (rising REVPAR), and a good Canadian economy.
UTILITIES
A new opportunity for us this year is the utility sector. We primarily define
utilities to include electrics, natural gas distribution, and natural gas
pipelines. We are attracted to this sector because of the possibility of
achieving 15% capital appreciation returns (our long-term objective) plus a 3-5%
yield, for a possible total shareholder return of 18-20% in companies that
historically have had low cash flow variability.
We believe deregulation of the electric utility industry will present
opportunities throughout the utility sector. Natural gas distribution companies
that can continue to control their customers will be of great value. States
where the regulators and legislators can agree will create opportunities for
their electric companies. Electric deregulation could be a long, drawn-out
process with some states, but we will patiently watch the process and pick our
spots. Natural gas pipelines are of interest because certain companies will be
exhibiting good pipeline volume growth and others have unregulated exploration
and production subsidiaries whose value is not currently reflected in their
stock price.
5
<PAGE>
"WE WANT LONG-TERM SHAREHOLDERS, AND BELIEVE THAT AN UNDERSTANDING OF OUR
PROCESS IS A PREREQUISITE TO LONG-TERM INVESTING IN THE FUND."
PHILOSOPHY
In each shareholder letter we spend some time discussing our investment
philosophy. We think it is essential that our shareholders receive the necessary
information in order to better understand our investment methodology. For it is
only in understanding the investment process that you can properly evaluate the
results. We want long-term shareholders, and believe that an understanding of
our process is a prerequisite to long-term investing in the Fund. Following our
own advice, when we analyze a company we spend a great deal of time evaluating
the company's capital deployment process (strategic process).
We are a different value fund! We do not use book-value or price-earnings
criteria to make investment decisions. We believe the stock market pays for
economic (cash) performance not accounting (reported earnings) performance. Our
primary financial metric is cash flow return on capital compared to a company's
weighted average cost of capital. Our questioning keys on the company's capital
allocation process. In doing
6
<PAGE>
so we are trying to assess how the management creates value. We always ask the
question, IS THIS A GOOD BUSINESS? The work of Stern Stewart on Economic Value
Added (EVA), the Holt Value Associates cash flow return on investment (CFROI)
data base, and the EVA research of Credit Suisse First Boston have been an
important part of our investment process.
Occasionally we reference books or articles that we feel would be of value to
our shareholders. There was an article in WORTH MAGAZINE (December/January 1997)
titled "Eight Ways to Beat the Pros." It was directed toward individual
investors but I also think it is relevant for portfolio managers. The eight
rules are:
1. Buy small companies
2. Buy what's out of style
3. Do hold cash
4. Buy what they can't
5. Buy embarrassing stocks
6. Buy orphaned stocks
7. Buy the business not the earnings estimates
8. Invest with independent money managers
I mention this article because, as you can see, most of these points are part of
our investment philosophy. Please write us if you read an interesting book or
article that you think would be of value to fellow shareholders.
In these very ebullient times in the stock market, we ask our shareholders to
maintain reasonable return expectations -- remembering that investing is not a
game of muscle, it's a game of survival.
Thank you for your support and trust. It is our hope that we can build a
profitable, long-term relationship.
Sincerely,
/s/ Andrew P. Pilara, Jr.
ANDREW P. PILARA, JR.
Portfolio Manager
August 5, 1997
TO HEAR MY ONGOING THOUGHTS ON THE FUND, CALL OUR PORTFOLIO MANAGER HOTLINE AT
1-800-766-3863.
7
<PAGE>
FUND PERFORMANCE - CLASS A SHARES
Results of a hypothetical $10,000 investment in The Robertson Stephens Partners
Fund, the S&P 500 Index(1), and the Russell 2000 Value Index(2)
IF INVESTED ON JULY 12, 1995(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
PARTNERS S&P 500 RUSSELL 2000
FOR THE PERIOD ENDED 6/30/97 FUND INDEX(1) VALUE INDEX(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Since inception (7/12/95)(3) 61.77% 64.79% 51.03%
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
PARTNERS S&P 500 RUSSELL 2000
FOR THE PERIODS ENDED 6/30/97 FUND INDEX(1) VALUE INDEX(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One year 18.60% 34.72% 28.24%
Since inception (7/12/95)(3) 27.66% 28.86% 23.28%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index") is a
widely recognized, unmanaged index 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 Russell 2000 Value Index is a market capitalization-weighted index
composed of 2,000 U.S. companies with a less-than-average growth
orientation and market capitalizations ranging from $40 million to $450
million. Investment results assume the reinvestment of dividends paid on
the stocks constituting the index. You cannot invest in an index itself.
(3) Date that the Fund's Class A 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. The correlation of
performance between an unmanaged index and this Fund is not usually exact.
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can involve
more volatility, less liquidity, and less publicly available information.
Investing in a more limited number of issuers and sectors can be subject to
greater market fluctuation. Options and futures may not be perfectly correlated
to the underlying index or security.
8
<PAGE>
PORTFOLIO SUMMARY
AS OF JUNE 30, 1997
[CHART]
Energy 12.3%
Utilities 7.9%
Manufacturing 6.6%
Transportation Equipment/Services 5.6%
Energy Services 5.4%
Insurance 5.2%
Distribution 5.1%
Aluminum 4.9%
Construction/Infrastructure 4.1%
Real Estate 3.0%
Entertainment 2.2%
Consumer/Business Services 2.1%
Holding Companies -- Diversified 05%
Cash/Cash Equivalents 33.4%
Other/Other Assets, Net 2.1%
TOP TEN HOLDINGS
1.
SANTA FE ENERGY RESOURCES, INC. (4.60%)
Explores for and produces oil and gas.
2.
AMERCO, INC. (2.85%)
Provides rental trucks, trailers, and other rental items through 1,000
company-owned U-Haul centers and more than 13,000 independent dealers in North
America.
3.
ENERFLEX SYSTEMS, LTD. (2.82%)
Manufactures, services, and leases compressor packages used in the production
and processing of gas, as well as manufactures and services gas engine power
systems.
4.
PITTSTON BURLINGTON GROUP (2.75%)
Operates Burlington Air Express, Inc., a global freight transportation and
logistics management company.
5.
SOUTHWESTERN ENERGY COMPANY (2.74%)
Through its subsidiaries, explores for, produces, gathers, transmits, markets,
and distributes oil and gas.
6.
KAISER ALUMINUM CORPORATION (2.38%)
Produces alumina and aluminum products for domestic and international markets. A
63%-owned subsidiary of MAXXAM, Inc.
7.
SPECIAL METALS CORPORATION (2.37%)
Produces superalloy and special alloy products for diverse applications.
8.
USX-DELHI GROUP, INC. (2.21%)
Purchases, gathers, processes, transports, and markets natural gas.
9.
COACHMEN INDUSTRIES, INC. (2.14%)
Manufactures recreational vehicles and conversions, modular housing units,
repair parts and supplies, and office furniture.
10.
CANADIAN HOTEL INCOME PROPERTIES (2.10%)
A real estate investment trust.
9
<PAGE>
FUND PERFORMANCE - CLASS C SHARES
Results of a hypothetical $10,000 investment
in The Robertson Stephens Partners Fund, the S&P 500 Index(1), and the Russell
2000 Value Index(2)
IF INVESTED ON APRIL 14, 1997(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
PARTNERS PARTNERS S&P 500 RUSSELL 2000
FOR THE PERIOD ENDED 6/30/97 FUND FUND(4) INDEX(1) VALUE INDEX(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Since inception (4/14/97)(3) 9.45% 8.45% 19.42% 5.74%
</TABLE>
(1) The Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index") is a
widely recognized, unmanaged index 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 Russell 2000 Value Index is a market capitalization-weighted index
composed of 2,000 U.S. companies with a less-than-average growth
orientation and market capitalizations ranging from $40 million to $450
million. Investment results assume the reinvestment of dividends paid on
the stocks constituting the index. You cannot invest in an index itself.
(3) Date that the Fund's Class C shares were first sold to the public.
(4) Reflects the contingent deferred sales charge imposed on redemptions within
the first year of purchasing shares.
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. The correlation of
performance between an unmanaged index and this Fund is not usually exact.
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can involve
more volatility, less liquidity, and less publicly available information.
Investing in a more limited number of issuers and sectors can be subject to
greater market fluctuation. Options and futures may not be perfectly correlated
to the underlying index or security.
10
<PAGE>
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(2) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- -----------------------------------------------------------------------------------------------------------------------------
ALUMINUM - 4.3%
Kaiser Aluminum Corporation 416,500 $5,102,125
MAXXAM, Inc. 85,500 4,002,469
- -----------------------------------------------------------------------------------------------------------------------------
9,104,594
- -----------------------------------------------------------------------------------------------------------------------------
CLOSED-END FUNDS - 0.5%
Cathay Investment Fund, Ltd.(1) HKD 755,000 1,071,987
- -----------------------------------------------------------------------------------------------------------------------------
1,071,987
- -----------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 4.1%
American Buildings Company 35,000 945,000
Giant Cement Holding, Inc. 110,000 2,062,500
Martin Marietta Materials, Inc.(1) 43,516 1,408,830
Medusa Corporation(1) 40,000 1,535,000
Monterey Homes Corporation 137,600 1,169,600
Northwest Pipe Company 20,000 367,500
Southdown, Inc.(1) 30,300 1,321,838
- -----------------------------------------------------------------------------------------------------------------------------
8,810,268
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER/BUSINESS SERVICES - 2.1%
Duff & Phelps Credit Rating Company 31,300 950,737
GC Companies, Inc. 30,000 1,372,500
The Selecta Group CHF 14,200 2,162,140
- -----------------------------------------------------------------------------------------------------------------------------
4,485,377
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION - 5.1%
Brylane, Inc. 92,000 3,547,750
Kevco, Inc. 258,500 3,489,750
Sunsource, LP, Class B(1) 817,700 3,935,181
- -----------------------------------------------------------------------------------------------------------------------------
10,972,681
- -----------------------------------------------------------------------------------------------------------------------------
ENERGY - 12.3%
Alliance Energy, Inc., Restricted(3),(4) CAD 1,000,000 271,808
Barrington Petroleum Ltd. CAD 125,700 501,105
Basin Exploration, Inc. 35,000 271,250
Best Pacific Resources, Ltd. CAD 1,500,000 1,217,700
Calahoo Petroleum, Ltd. CAD 1,825,500 1,257,003
Canadian Conquest Exploration, Inc. CAD 1,431,100 1,410,717
Cavell Energy Corporation CAD 124,500 374,497
Houston Exploration Company 121,300 1,887,731
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(2) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY - CONTINUED
Nugas, Ltd. CAD 289,500 $ 770,098
Oiltec Resources, Ltd., 144A(6) CAD 770,000 1,144,131
Orbit Oil & Gas, Ltd. CAD 654,500 517,091
Paragon Petroleum Corporation CAD 99,600 288,769
Place Resources Corporation, Class A CAD 406,300 618,439
Santa Fe Energy Resources, Inc. 671,100 9,856,781
Titan Exploration, Inc. 336,200 4,076,425
Ulster Petroleums, Ltd. CAD 156,000 1,413,402
Upton Resources, Inc. CAD 80,000 472,584
- -----------------------------------------------------------------------------------------------------------------------------
26,349,531
- -----------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES - 5.4%
Bowridge Resources Group, 144A(6) CAD 1,700,000 961,114
Computalog, Ltd. CAD 115,900 1,638,133
Dailey Petroleum Services Corporation 119,600 807,300
Enerflex Systems, Ltd.(1) CAD 303,200 6,043,562
Inter-tech Drilling Solutions CAD 414,500 330,483
NQL Drilling Tools, Inc., Class A CAD 363,900 1,846,338
OTATCO, Inc. CAD 59,000 20,527
- -----------------------------------------------------------------------------------------------------------------------------
11,647,457
- -----------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 2.2%
Cedar Fair, L.P.(1) 87,200 3,815,000
Reading Entertainment, Inc. 76,000 869,250
- -----------------------------------------------------------------------------------------------------------------------------
4,684,250
- -----------------------------------------------------------------------------------------------------------------------------
HOLDING COMPANIES-DIVERSIFIED - 0.5%
Valhi, Inc.(1) 118,400 962,000
- -----------------------------------------------------------------------------------------------------------------------------
962,000
- -----------------------------------------------------------------------------------------------------------------------------
INSURANCE - 5.2%
Desjardins Laurentian Financial Corp., Class A CAD 300,000 3,479,144
Foremost Corporation of America(1) 61,300 3,670,338
Markel Corporation 31,800 4,070,400
- -----------------------------------------------------------------------------------------------------------------------------
11,219,882
- -----------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 6.8%
Coachmen Industries, Inc.(1) 267,300 4,577,512
Gardner Denver Machinery, Inc. 20,000 595,000
Optek Technology, Inc. 100,000 1,462,500
Special Metals Corporation 260,900 5,087,550
TB Wood's Corporation(1) 189,100 2,753,769
- -----------------------------------------------------------------------------------------------------------------------------
14,476,331
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(2) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REAL ESTATE - 3.0%
Bentall Corporation, 144A6 CAD 50,000 $ 561,737
Canadian Hotel Income Properties REIT CAD 888,700 4,509,042
Catellus Development Corporation 80,000 1,450,000
- -----------------------------------------------------------------------------------------------------------------------------
6,520,779
- -----------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT/SERVICES - 5.6%
AMERCO, Inc. 202,800 6,109,350
Pittston Burlington Group1 209,400 5,889,375
- -----------------------------------------------------------------------------------------------------------------------------
11,998,725
- -----------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.9%
Atmos Energy Corporation 58,300 1,399,200
Aquila Gas Pipeline Corporation 218,300 3,042,556
Southwestern Energy Company1 451,800 5,873,400
United Cities Gas Company 17,900 420,650
USX-Delhi Group1 360,800 4,735,500
Utilicorp United, Inc. 50,000 1,456,250
- -----------------------------------------------------------------------------------------------------------------------------
16,927,556
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
OTHER COMMON STOCK - 0.6% 1,283,322
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 65.6% (Cost $123,078,735) 140,514,740
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(2) SHARES VALUE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
WARRANTS
- ----------------------------------------------------------------------------------------------------------------------------
Alliance Energy, Inc., 1/2 Warrants, Strike CAD 0.45,
Expire 12/19/97(3),(4),(5) 1,000,000 29,653
Oiltec Resources, Ltd., Warrants, Strike CAD 1.75,
Expire 11/18/97(3),(5) 770,000 230,883
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS-0.1% (Cost $258,830) 260,536
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS-65.7% (Cost $123,337,565) 140,775,276
- ----------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ----------------------------------------------------------------------------------------------------------------------------
Cash 177
U.S. Treasury Bill, due 7/3/97, $50,000,000 par value 49,987,333
Repurchase Agreement
State Street Bank and Trust Company, 5.50%,
dated 6/30/97, due 7/1/97, maturity value $21,616,302
(collateralized by $21,905,000 par value
U.S. Treasury Note, 6.375%, due 4/30/99) 21,613,000
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 33.4% 71,600,510
- ----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.9% 1,842,254
- ----------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $214,218,040
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) Foreign-denominated security; CAD - Canadian Dollar, HKD - Hong Kong
Dollar, CHF - Swiss Franc.
(3) Fair-value security. See 1.a. in Notes to Financial Statements.
(4) Restricted security. See 4.c. in Notes to Financial Statements.
(5) See 4.d. in Notes to Financial Statements.
(6) These securities may be resold in transactions exempt from registration
under 144A of the Securities Act of 1933, normally to qualified
institutional buyers.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $123,337,565) $140,775,276
Cash and cash equivalents 71,600,510
Receivable for investments sold 3,605,541
Receivable for fund shares subscribed 1,573,431
Dividends/interest receivable 59,694
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 217,614,452
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 2,710,903
Payable for fund shares redeemed 304,385
Payable to adviser 224,907
Accrued expenses 111,164
Payable to distributor 45,053
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,396,412
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $214,218,040
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------
Paid-in capital 190,092,385
Accumulated undistributed net investment income 1,204,157
Accumulated net realized gain from investments 5,470,011
Net unrealized appreciation on investments 17,451,487
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $214,218,040
- -----------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share - Class A Shares $ 15.88
(Net assets of $213,303,247 applicable to 13,428,028 shares of beneficial interest
outstanding with no par value)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share - Class C Shares $ 15.86
(Net assets of $914,793 applicable to 57,680 shares of beneficial interest
outstanding with no par value)1
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Redemption price per share is equal to the net asset value less any
applicable contingent deferred sales charge.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Interest $2,469,388
Dividends (net of foreign tax withheld of $6,244) 502,333
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,971,721
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------
Investment advisory fees
1,242,921
Distribution fees - Class A Shares 248,534
Transfer agent fees 116,925
Custodian fees 60,030
Registration and filing fees 32,670
Professional fees 29,865
Shareholder reports 23,530
Trustees' fees and expenses 11,041
Insurance 1,848
Distribution fees - Class C Shares 150
Shareholder servicing fees - Class C Shares 50
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,767,564
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,204,157
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND OPTIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 4,322,633
Net change in unrealized appreciation on investments 10,250,399
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 14,573,032
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $15,777,189
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
16
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 (UNAUDITED) DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income $ 1,204,157 $ 394,413
Net realized gain from investments 4,322,633 2,839,236
Net change in unrealized appreciation on investments 10,250,399 7,025,108
- -----------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations 15,777,189 10,258,757
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A Shares - (480,663)
Net investment income - Class C Shares(1) - -
Realized gains on investments - Class A Shares - (1,700,940)
Realized gains on investments - Class C Shares1 - -
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (2,181,603)
- -----------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets resulting from capital share transactions 71,173,312 111,710,041
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 71,173,312 111,710,041
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 86,950,501 119,787,195
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 127,267,539 7,480,344
End of period $214,218,040 $127,267,539
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first sold on April 14, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS A SHARES
<TABLE>
<CAPTION>
FOR THE SIX FOR THE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 6/30/97 (UNAUDITED) 12/31/96 12/31/95(1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.60 $ 10.39 $ 10.00
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.09 0.13 0.06
Net realized gain and unrealized
appreciation on investments 1.19 4.36 0.33
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1.28 4.49 0.39
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - (0.06) -
Distributions from realized gain on investments - (0.22) -
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.88 $ 14.60 $ 10.39
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 8.77% 43.15% 3.90%
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period (000s) $ 213,303 $ 127,268 $ 7,480
Ratio of Expenses to Average Net Assets 1.78% 1.93%(2) 2.41%(2)
Ratio of Net Investment Income
to Average Net Assets 1.21% 0.95%(2) 1.34%(2)
Portfolio Turnover Rate 33% 101% 71%
Average Commission Rate Paid(3) $ 0.0340 $ 0.0216 -
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class A shares were first issued on July 12, 1995.
(2) If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, for the year ended December 31, 1996, and for
the period from July 12, 1995 (Commencement of Operations), through
December 31, 1995, total return would have been 43.05% and 2.60%,
respectively, the ratio of expenses to average net assets would have been
2.15% and 5.12%, respectively, and the ratio of net investment
income/(loss) to average net assets would have been 0.73% and (1.37)%,
respectively.
(3) A fund is required to disclose its average commission rate per share for
security trades on which a commission is charged. This amount may vary from
fund to fund and period to period depending on the mix of trades executed
in various markets where trading practices and commission rate structures
may differ. This rate generally does not reflect markups, markdowns or
spreads on shares traded on a principle basis, if any.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
Per-share data with respect to Class A shares for each period has been
determined by using the average number of Class A shares outstanding
throughout the period. Distributions reflect actual per-share amounts
distributed for the year.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS C SHARES
<TABLE>
<CAPTION>
For the
Period Ended
FOR A SHARE OUTSTANDING 6/30/97(1)
throughout the period: (unaudited)
- ----------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 14.49
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Net investment income 0.00
Net realized gain and net change in unrealized appreciation on investments 1.37
- ----------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1.37
- ----------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 15.86
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
TOTAL RETURN 9.45%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------
Net Assets, end of period (000s) $ 915
Ratio of Expenses to Average Net Assets 2.53%
Ratio of Net Investment Income to Average Net Assets 0.46%
Portfolio Turnover Rate 33%
Average Commission Rate Paid(2) $ 0.0340
- ----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first sold on April 14, 1997.
(2) A fund is required to disclose its average commission rate per share for
security trades on which a commission is charged. This amount may vary from
fund to fund and period to period depending on the mix of trades executed
in various markets where trading practices and commission rate structures
may differ. This rate generally does not reflect markups, markdowns or
spreads on shares traded on a principle basis, if any.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
Total returns do not include the 1% contingent deferred sales charge.
Per-share data with respect to Class C shares has been determined by using
the average number of Class C shares outstanding throughout the period.
Distributions reflect actual per-share amounts distributed for the year.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
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 diversified, open-end management
investment company. The Fund became effective to offer shares to the public on
July 12, 1995. The Trust offers twelve series of shares -- The Robertson
Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth Fund, The
Contrarian Fund-TM-, The Robertson Stephens Developing Countries Fund, The
Robertson Stephens Growth & Income Fund, The Robertson Stephens Partners Fund,
The Information Age Fund-TM-, The Robertson Stephens Global Natural Resources
Fund, The Robertson Stephens Global Low-Priced Stock Fund, The Robertson
Stephens Diversified Growth Fund, The Robertson Stephens MicroCap Growth Fund
and The Robertson Stephens Global Value Fund. The assets for each series are
segregated and accounted for separately.
The Trustees have authorized the issuance of two classes of shares of beneficial
interest of the Fund, designated as Class A and C, respectively. The shares of
each class represent an interest in the same portfolio of investments of the
Fund. Expenses of the Fund are borne pro-rata by the holders of each class of
shares, except that each class bears expenses unique to that class (including,
but not limited to, distribution expenses applicable to such class). Shares of
each class would receive their pro-rata share of the net assets of the Fund, if
the Fund was liquidated. In addition, the Board of Trustees declares separate
distributions of each class of shares. Each class votes as a class only with
respect to its own distribution plan or other matters for which a class vote is
required by law or determined by the Board of Trustees. Class C shares were
first sold by the Fund on April 14, 1997. Class C shares are subject to a 1%
contingent deferred sales charge if those shares are redeemed within one year of
purchase.
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. Short-term
investments that will mature in 60 days or less are stated at amortized cost,
which approximates market value. 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 June
30, 1997, 99.4% 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 would have a significant impact on the value
of a security. At June 30, 1997, approximately 0.6% of the Fund's portfolio 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 concentrated within a number of industries involving
energy/energy services. 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.
20
<PAGE>
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 Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund intends to comply with requirements of the Internal Revenue Code,
qualifying as a regulated investment company. Therefore, the Fund does not
expect to be subject to income tax, and no provision for such tax will be made.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date securities are purchased
or sold (trade date). Realized gains or 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. Investments 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 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. DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to shareholders are recorded on the ex-dividend date.
h. CLASS ALLOCATIONS:
Income, common expenses, and realized and unrealized gains/(losses) are
determined at the Fund level and allocated daily to each class of shares based
on the appropriate net assets of the respective classes. Transfer agent
expenses, distribution/ shareholder service fees, and any other class specific
expenses, if any, are calculated daily at the class level based on the
appropriate net assets of each class and the specific expense rate applicable to
each class.
i. CAPITAL ACCOUNTS:
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains/(losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may differ
from the year in which the income and realized gains/(losses) were recorded by
the portfolio.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value divided into two classes designated Class A and Class C.
Transactions in capital shares for Class A shares for the six months ended June
30, 1997, and for the year ended December 31, 1996, and for Class C shares for
the period from April 14, 1997 (Commencement of Operations) to June 30, 1997,
were as follows:
Class A
1/1/97 - 6/30/97 SHARES AMOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares sold 12,641,026 $189,592,342
Shares reinvested - -
- --------------------------------------------------------------------------------
12,641,026 189,592,342
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares redeemed (7,932,428) (119,320,030)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 4,708,598 $70,272,312
- --------------------------------------------------------------------------------
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1/1/96 - 12/31/96 SHARES AMOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares sold 10,949,497 $153,105,777
Shares reinvested 142,016 2,066,658
- --------------------------------------------------------------------------------
11,091,513 155,172,435
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares redeemed (3,092,301) (43,462,394)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 7,999,212 $111,710,041
- --------------------------------------------------------------------------------
Class C
4/14/97* - 6/30/97 SHARES AMOUNT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares sold 57,680 $901,000
Shares reinvested - -
- --------------------------------------------------------------------------------
57,680 901,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares redeemed - -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 57,680 $901,000
- --------------------------------------------------------------------------------
*Class C shares were first sold on April 14, 1997.
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, 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 six months
ended June 30, 1997, the Fund incurred investment advisory fees of $1,242,921.
RSIM voluntarily agreed to waive any annual operating expenses, excluding
class-specific expenses, of the Fund's Class A shares and Class C shares
exceeding an annual expense ratio of 1.95%. For the six months ended June 30,
1997, the Adviser waived none of its fees and other expenses.
RSIM may recoup waived or reimbursed operating expenses over the succeeding two
years, subject to expense limitations then applicable to the Fund. No previous
expense waivers or reimbursements of operating expenses were recouped by RSIM
from the Fund during the six months ended June 30, 1997.
b. 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 $11,041 for the six months ended June 30, 1997.
c. DISTRIBUTION FEES:
The Fund has entered into agreements with Robertson, Stephens & Company LLC
("RS & Co.") for distribution services with respect to its Class A and Class
C shares and has adopted Plans of Distribution pursuant to Rule 12b-1 under
the 1940 Act, where continuance is reviewed annually by the Fund's Board of
Trustees. Under these Plans, RS & Co. is compensated for services in such
capacity including its expenses in connection with the promotion and
distribution of the Fund's Class A and Class C shares. The distribution fees
for Class A and Class C shares are calculated at an annual rate of 0.25% and
0.75%, respectively, based on the average daily net assets attributed to each
class of shares, although the Class C Plan contemplates payments at a rate of
up to 1% of the Fund's average net assets attributable to Class C shares. For
the six months ended June 30, 1997, for Class A, and for the period from
April 14, 1997 (Commencement of Operations) through June 30, 1997, for Class
C, the Fund incurred distribution fees of $248,534 and $150, respectively.
d. SHAREHOLDER SERVICING FEE:
The Trust has adopted a Shareholder Servicing Plan for the Class C shares of
each fund. Under the Plan, each fund pays fees to RS & Co. at an annual rate of
up to 0.25% of the fund's average daily net assets of the Class C shares. The
Plan contemplates that financial institutions will enter into shareholder
service agreements with RS & Co. to provide administrative support services to
their customers who are fund shareholders. In return for providing these support
services, a financial institution may receive payments from RS & Co. at a rate
not exceeding 0.25% of the average daily net assets of the Class C shares of
each fund for which the financial institution is the financial institution of
record. For the period from April 14, 1997 (Commencement of Operations) through
June 30, 1997, for Class C, the Fund incurred shareholder services fees of $50.
22
<PAGE>
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 six months ended June 30, 1997, the Fund
paid brokerage commissions of $2,965 to RS & Co., which represented 0.9%
of total commissions paid during this period.
NOTE 4 INVESTMENTS:
a. TAX BASIS OF INVESTMENTS:
At June 30, 1997, the cost of investments for federal income tax purposes was
$123,337,565. Accumulated net unrealized appreciation on investments, excluding
the foreign currency fluctuation associated with other assets and liabilities,
was $17,437,711, consisting of gross unrealized appreciation and depreciation of
$20,725,679 and $3,287,968, respectively.
b. INVESTMENT PURCHASES AND SALES:
For the six months ended June 30, 1997, the cost of investments purchased and
the proceeds from investments sold (excluding options and short-term
investments) were $105,552,170 and $33,885,155, respectively.
c. RESTRICTED SECURITIES:
A restricted security cannot be resold to the general public without prior
registration under the Securities Act of 1933. If the security is subsequently
reregistered and resold, the issuers would bear the expense of all registrations
at no cost to the Fund. At June 30, 1997, the Fund held restricted securities
with an aggregate value of $671,120, which represented 0.3% of the Fund's total
assets. Restricted securities are valued according to the guidelines and
procedures adopted by the Fund's Board of Trustees as outlined in Note 1a,
paragraphs 1 and 2.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Alliance Energy, Inc. 1,000 $207 $272 12/19/96
Alliance Energy, Inc.,
1/2 Warrants 1,000 87 30 12/19/96
Spire Energy 300 346 370 6/12/97
- -------------------------------------------------------------------------------
$640 $672
- -------------------------------------------------------------------------------
d. OPTIONS AND WARRANTS:
Options and warrants normally entitle the holder to purchase a proportionate
amount of a particular class of the issuer's securities at a predetermined price
during a specific period. Options and warrants for which market quotations were
not readily available were priced using the modified Black-Scholes Valuation
Formula. The Black-Scholes Valuation Formula values an option or warrant by
determining the differential between the exercise price of the option or 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 option or 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. 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.
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, revaluation 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.
NOTE 5 MERGER:
On June 8, 1997, BankAmerica Corporation ("BankAmerica") entered into an
Agreement and Plan of Merger with Robertson, Stephens & Company Group, L.L.C.
and Robertson, Stephens & Company, Inc., pursuant to which each of those
entities would be merged into a subsidiary of BankAmerica. Upon the consummation
of those mergers (expected to occur as early as September 30, 1997), BankAmerica
will become the owner of the entire beneficial interest in RSIM, L.P. and RSIM,
Inc.
23
<PAGE>
ADMINISTRATION
OFFICERS AND TRUSTEES
G. Randy Hecht, Trustee
President, Chief Executive Officer
Leonard B. Auerbach, Trustee
President and Chairman of
Auerbach Associates, Inc.
John W. Glynn, Jr., Trustee
Principal and Chairman of
Glynn Capital Management
James K. Peterson, Trustee
Former Director of the
IBM Retirement Funds
Terry R. Otton
Chief Financial Officer
Dana K. Welch
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
INDEPENDENT ACCOUNTANTS
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 Partners Fund. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
Published August 29, 1997
24
<PAGE>
THE ROBERTSON STEPHENS MUTUAL FUNDS
In addition to THE PARTNERS FUND, Robertson Stephens offers the following mutual
funds:
THE CONTRARIAN FUND-TM-
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. Managed by Paul Stephens.
THE DEVELOPING COUNTRIES FUND
A Portfolio of Growing Companies in Emerging Markets - Invests primarily in
publicly traded equities of developing countries, as well as in private
placement emerging market equity securities. No load. Managed by Michael
Hoffman.
THE DIVERSIFIED GROWTH FUND
Focusing on Small- and Mid-Cap Companies - Invests primarily in equity
securities to create a portfolio broadly diversified over industries and
companies. No load. Managed by John Wallace.
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 Jim Callinan.
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 or overlooked 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.
THE GLOBAL VALUE FUND
Applying a Cash Flow Value Methodology Worldwide - Uses a methodology that
combines traditional Graham & Dodd balance sheet analysis and cash flow
analysis. No load. Managed by Andy Pilara.
THE GROWTH & INCOME FUND
Seeking High Growth While Attempting to Manage Risk - Invests primarily in
small- and mid-cap company stocks, as well as convertible bonds and preferred
stocks. No load. Managed by John Wallace.
THE INFORMATION AGE FUND-TM-
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 MICROCAP GROWTH FUND
Focusing on Companies With Market Caps of Less Than $250 Million - Invests
primarily in "micro-cap" companies with the potential for long-term capital
appreciation. No load. Managed by David Evans.
THE VALUE + GROWTH FUND
A Growth Fund for the Long-Term Investor - Invests primarily in growth companies
with favorable price/earnings ratios in sectors with the potential for
above-average growth. No load. Managed by Ron Elijah.
Please read the prospectus to learn about the Funds' objectives, investment
policies, and the special risks associated with The Robertson Stephens Mutual
Funds, including international investing, investing in smaller companies,
investing in a more limited number of issuers and sectors or a particular
sector, short selling, using options and futures, and investing in
high-yielding, lower-quality debt securities.
25
<PAGE>
ROBERTSON, STEPHENS & COMPANY
BRINGING THE FUND MANAGER TO YOU
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 Manager Hotline, 24 hours a day.
1-800-766-3863
ROBERTSON STEPHENS
MUTUAL FUND E-MAIL
[email protected]
ROBERTSON STEPHENS
ON THE WEB
HTTP://WWW.RSIM.COM
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 Partners under the heading Robertson
Stephens. Its computer quotation symbol is RSPFX.
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, their other
clients or for their own accounts, and may 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.
THE PARTNERS FUND SECOND-QUARTER REPORT
26
