<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
The Emerging Growth Fund
Second-Quarter Report
June 30, 1997
EMERGING GROWTH
2
<PAGE>
The Emerging Growth Fund SECOND-QUARTER REPORT
FUND PHILOSOPHY
The Robertson Stephens Emerging Growth Fund seeks capital appreciation by
investing in small, rapidly growing companies. The Fund is actively managed,
involving hands-on fundamental research that includes extensive travel and
visits with company managements. The Fund seeks to invest in companies that are
growing at least 20% annually, are market share leaders, and are managed by
executives who can leverage a competitive advantage and consistently execute in
today's business environment. The Fund is intended for investors with long-term
investment goals.
CONTENTS
Fund Highlights 1
Report to Shareholders 2
Fund Performance - Class A Shares 6
Portfolio Summary 7
Fund Performance - Class C Shares 8
Schedule of Investments 9
Statement of Assets and Liabilities 16
Statement of Operations 17
Statement of Changes in Net Assets 18
Financial Highlights - Class A Shares 19
Financial Highlights - Class C Shares 20
Notes to Financial Statements 21
Administration 28
<PAGE>
FUND HIGHLIGHTS
YEAR 2000
Our strong performance was led by a very large weighting (12-15%) in firms
related to the nascent industry of fixing the Year 2000 problem.
SMALL VS. LARGE CAP
Our smaller-capitalization growth companies demonstrate heavy investment
spending and real revenue and EPS growth.
OUTLOOK
We are very optimistic about the relative performance outlook for smaller,
emerging growth companies over the next 12-18 months.
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
DEAR SHAREHOLDER:
The second quarter of 1997 was characterized by volatile selling early on and
later powerful buying pressures. The Fund rose 22.89% during the quarter, which
compared favorably to the Russell 2000 Growth Index's return of 17.55%. For the
year to date, the Fund was up 5.68% versus 5.23% for the Russell 2000 Growth.
For the period from May 8, 1997 (Commencement of Operations) to June 30, 1997,
the Fund's Class C shares had a return of 11.35%.
The macroeconomic environment remains an ideal one for small-capitalization,
emerging growth stocks. Stable or declining interest rates, low inflation,
strong new business formations, and an excess of venture capital funding for
entrepreneurs continue to provide rich soil for young, start-up firms.
SMALL VS. LARGE CAP
Despite such rosy forecasts, investors remain skittish about committing new
investment capital to smaller firms. Investors presently prefer larger companies
with high returns on total capital and are placing unsustainably high price-to-
earnings multiples on these firms. One such large company is KELLOGG, whose
cereal business is currently in a price war and which has grown revenues at only
a 5% pace over the past 3-5 years.
"The macroeconomic environment remains an IDEAL one for small-capitalization,
EMERGING GROWTH stocks."
2
<PAGE>
KELLOGG overcomes these mediocre numbers by repurchasing $1.4 billion worth of
stock in the open market using debt, and consequently generating 19% annual EPS
growth during that same time period. Investors are currently paying a hefty P/E
multiple of 27x for KELLOGG'S shares, quite a lofty valuation for a slow-growth
company that, in essence, is returning cash back to shareholders in the form of
stock repurchases.
I believe that investors will prefer strong, real revenue growth over
"manufactured" earnings growth, especially so in a declining interest rate
economy. Our Fund compares quite favorably to companies such as KELLOGG. Our
projected revenue and EPS growth is 28-32% and our earnings multiple is 25x 1998
EPS.
Our smaller-capitalization growth companies demonstrate heavy investment
spending and real revenue and EPS growth. They are for the most part gaining
market share in emerging growth industry subsegments. The industry sales of our
companies are growing at a minimum of 3x KELLOGG'S revenue growth rate of 3%,
and the companies we target grow revenue by at least 20% per year. Our types of
companies deserve to sell for significant premiums over the valuations of large
corporations, and eventually I believe they will. I am patient enough to wait
for such premium valuations, and I hope that my fellow shareholders are as well.
YEAR 2000
During the quarter, small, emerging stocks staged an admirable rebound in
performance, particularly in technology, business services, and
telecommunications equipment stocks. Our strong performance was led by a very
large weighting (12-15%) in firms related to the nascent industry of fixing the
Year 2000 problem. This emerging industry subsegment is coming to be dominated
by lower-end computer service firms about which we happen to know a lot. Higher-
end systems integrators have ceded or outright lost this business to lower-
priced contract programmers. The labor intensity of converting COBOL software
code is such that client companies seek out the lowest-priced talent who can do
these jobs adequately.
3
<PAGE>
PORTFOLIO
INVESTMENT MANAGEMENT
The Year 2000 problem has provided these low-end contract programmers with a
chance to get higher prices and, more importantly, strong footholds into client
companies that may decide to outsource more in-house information personnel in
the future. The best computer programming firms are using windfall revenue
growth and higher valuations to acquire their way into higher value-added
information services, such as packaged application integration and consulting.
LUXURY HOTELS AND RESORTS
We also have purchased a large position in FOUR SEASONS (1.26% of the portfolio
at quarter-end), which is a very well run luxury hotel management firm. FOUR
SEASONS meets all of our key qualification criteria. First, its proprietary
advantage is its well-known brand name and highest-quality, premium image. It
also is gaining share from its peers in the luxury end of the hotel market,
which is also the fastest growth segment. As FOUR SEASONS is only a management
company, it has high margins and increasing returns on total capital that
4
<PAGE>
confirm the company's proprietary nature. FOUR SEASONS is growing both in the
United States and overseas, and is adding new products such as resorts in exotic
destinations and timeshares, striving to appeal to other aspects of the upscale
consumer's life besides business travel. I believe that management is excellent
and will protect the company's brand image, which has taken 30 years to build.
I contrast FOUR SEASONS with another hot hotel company, STARWOOD, which is
attempting to launch an upscale brand from scratch. I would like all of you to
watch STARWOOD for me and see which stock does better over time. My bet is with
the established, well-known name.
The previous examples are only two of the exciting ideas that the first half's
discovery process generated. Our Fund is filled with a well-balanced mixture of
increasingly well known, fast-growth, small-capitalization companies; developing
industry subsegments, such as Year 2000, deep submicron semiconductor equipment,
and biological drug contract manufacturers; and companies exploiting established
growth industry niches where entrenched competitors may have passed up
incremental growth opportunities. Finding companies that fully exploit their
advantages and grow faster than their peers is our ongoing strategy.
"FINDING COMPANIES THAT FULLY EXPLOIT THEIR ADVANTAGES AND GROW FASTER THAN
THEIR PEERS IS OUR ONGOING STRATEGY."
As I have said in many phone messages and several conference calls over the past
eight months, I am very optimistic about the relative performance outlook for
smaller, emerging growth companies over the next 12-18 months. I invite you to
keep listening to my updates in the coming months at the number listed below. If
you should have questions, please give us a call or E-mail us at [email protected].
Sincerely,
/s/ JAMES L. CALLINAN
JAMES L. CALLINAN
Portfolio Manager
August 1, 1997
TO HEAR MY ONGOING THOUGHTS ON THE FUND, CALL OUR
PORTFOLIO MANAGER HOTLINE AT 1-800-766-3863.
5
<PAGE>
FUND PERFORMANCE - CLASS A SHARES
Results of a hypothetical $10,000 investment
in The Robertson Stephens Emerging Growth Fund, the S&P 500 Index(1), and the
Russell 2000 Growth Index(2)
IF INVESTED ON NOVEMBER 30, 1987(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
EMERGING GROWTH S&P 500 RUSSELL 2000
FOR THE PERIOD ENDED 6/30/97 FUND INDEX(1) GROWTH INDEX(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Since inception (11/30/87)(3) 529.69% 410.54% 264.71%
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
EMERGING GROWTH S&P 500 RUSSELL 2000
FOR THE PERIODS ENDED 6/30/97 FUND INDEX(1) GROWTH INDEX(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One year 10.39% 34.72% 4.60%
Three years 21.15% 28.83% 18.54%
Five years 16.44% 19.76% 15.14%
Since inception (11/30/87)(3) 21.15% 18.53% 14.45%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index") is a
widely recognized, unmanaged index of market activity base 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 Growth Index is a market capitalization-weighted index
composed of 2,000 U.S. companies with a greater-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.
Investing in smaller companies may involve risks such as less publicly available
information than larger companies, volatility, and illiquidity.
6
<PAGE>
PORTFOLIO SUMMARY
AS OF JUNE 30, 1997
[CHART]
Other/Other Assets, Net 3.1%
Real Estate 0.3%
Telecommunications Services 1.0%
Consumer 1.3%
Pharmaceuticals 2.4%
Medical Devices 2.9%
Financial 3.2%
Hotels 3.6%
Education 5.0%
Media 5.4%
Business Services 6.0%
Restaurants/Retail 6.7%
Health Care Services 6.9%
Cash/Cash Equivalents 2.1%
IT Services 20.3%
Software 12.1%
Telecommunications Equipment 10.6%
Hardware/Semiconductors 7.1%
TOP TEN HOLDINGS
1.
COMPUTER LEARNING CENTERS, INC. (2.36%)
Provides information technology and computer-related education and training.
2.
HBO & COMPANY (2.02%)
Sells information systems and technology to health care institutions.
3.
ECSOFT GROUP PLC (1.61%)
Provides information technology consulting, applications development, and system
integration services to large European-based companies and organizations.
4.
THE WET SEAL, INC. (1.53%)
Sells moderately priced casual apparel designed for young women with active
lifestyles.
5.
ASM LITHOGRAPHY HOLDING (1.45%)
Researches, develops, and manufactures advanced lithography systems for the
semiconductor industry.
6.
REMEDY CORPORATION (1.39%)
Designs, manufactures, and markets client/server software.
7.
VITESSE SEMICONDUCTOR CORPORATION
(1.33%)
Designs, manufactures, and markets integrated circuits.
8.
LAMAR ADVERTISING COMPANY (1.28%)
Owns and operates outdoor advertising structures.
9.
STRAYER EDUCATION, INC. (1.27%)
Offers a business-oriented curriculum to working adults through nine campuses in
the Washington, D.C., and northern Virginia area.
10.
FOUR SEASONS HOTELS, INC. (1.26%)
Owns and manages medium-sized luxury hotels in 16 countries under the names
"Four Seasons" and "Regent."
7
<PAGE>
FUND PERFORMANCE - CLASS C SHARES
Results of a hypothetical $10,000 investment
in The Robertson Stephens Emerging Growth Fund, the S&P 500 Index(1), and the
Russell 2000 Growth Index(2)
IF INVESTED ON MAY 8, 1997(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
EMERGING GROWTH EMERGING GROWTH S&P 500 RUSSELL 2000
FOR THE PERIOD ENDED 6/30/97 FUND FUND(4) INDEX(1) GROWTH INDEX(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Since inception (5/8/97)(3) 12.35% 11.35% 8.17% 10.95%
- --------------------------------------------------------------------------------------------------------------------------------
</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 Growth Index is a market capitalization-weighted index
composed of 2,000 U.S. companies with a greater-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.
Investing in smaller companies may involve risks such as less publicly available
information than larger companies, volatility, and illiquidity.
8
<PAGE>
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- -----------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES - 6.0%
ASI Solutions, Inc. 65,300 $ 644,837
Abacus Direct Corporation 10,000 325,000
Accustaff, Inc. 109,300 2,589,044
CSG Systems International, Inc. 25,000 771,875
Data Dimensions, Inc. 15,000 330,000
Forrester Research, Inc. 21,000 618,187
Maximus, Inc. 19,400 346,775
On Assignment, Inc. 20,000 780,000
Optical Coating Laboratories, Inc.(1) 10,000 135,000
Profit Recovery Group International 86,500 1,200,187
Romac International, Inc. 83,100 2,721,525
Staff Leasing, Inc. 24,600 461,250
Technology Solutions Corporation 25,000 987,500
Universal Outdoor Holdings, Inc. 34,300 1,196,212
Waterlink, Inc. 6,900 89,700
- -----------------------------------------------------------------------------------------------------------------------------
13,197,092
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 12.1%
Arbor Software Corporation 49,000 1,727,250
BMC Software, Inc. 23,900 1,323,462
Citrix Systems, Inc. 40,000 1,755,000
Computer Concepts Corporation 100,000 50,000
Dataworks Corporation 25,000 546,875
Forecross Corporation 20,500 352,600
GT Interactive Software 5,000 59,375
Genesys Telecom Laboratories, Inc. 4,700 130,425
Great Plains Software, Inc. 3,000 81,000
HNC Software, Inc. 10,000 381,250
Intersolv, Inc. 10,000 93,750
JDA Software Group, Inc. 20,000 682,500
LGS Group, Inc.(1,6) 182,600 1,257,348
New Era of Networks, Inc. 39,700 655,050
Peerless Systems Corporation 33,400 459,250
Pure Atria Corporation 60,000 847,500
Rational Software Corporation 46,000 773,375
Remedy Corporation 76,900 3,076,000
Segue Software, Inc. 15,000 204,375
Siebel System, Inc. 75,000 2,418,750
Simulation Sciences, Inc. 101,700 1,550,925
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE - CONTINUED
Smallworldwide PLC, ADR(5) 122,000 $ 2,074,000
Software Aristry , Inc. 30,000 476,250
Technology Modeling Associates, Inc. 42,100 573,612
Vantive Corporation 93,350 2,637,137
Wind River Systems, Inc. 67,500 2,581,875
- -----------------------------------------------------------------------------------------------------------------------------
26,768,934
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER - 1.3%
800-Jr Cigar, Inc. 34,500 715,875
Miller Industries, Inc. 40,000 640,000
Modtech, Inc. 59,700 768,637
Racing Champions Corporation 6,400 99,200
Sotheby's Holdings, Inc.(1) 15,000 253,125
Speedway Motorsports, Inc. 19,600 426,300
- -----------------------------------------------------------------------------------------------------------------------------
2,903,137
- -----------------------------------------------------------------------------------------------------------------------------
EDUCATION - 5.0%
Apollo Group, Inc., Class A 20,400 719,100
Aris Corporation 24,800 542,500
Computer Learning Centers, Inc. 124,550 5,231,100
Education Management Corporation 9,800 254,800
Learning Tree International, Inc. 35,000 1,553,125
Strayer Education, Inc. 74,200 2,819,600
- -----------------------------------------------------------------------------------------------------------------------------
11,120,225
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 1.2%
Uniphase Corporation 46,800 2,726,100
- -----------------------------------------------------------------------------------------------------------------------------
2,726,100
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.2%
American Express Company(1) 10,000 745,000
Arm Financial Group, Inc. 1,300 26,000
Equitable of Iowa Companies 30,000 1,680,000
Financial Federal Corporation 52,200 1,148,400
Resource Bancshares Mortgage Group, Inc.(1) 65,200 1,287,700
Southern Pacific Funding Corporation 25,000 415,625
SunAmerica, Inc. 35,000 1,706,250
- -----------------------------------------------------------------------------------------------------------------------------
7,008,975
- -----------------------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HARDWARE/SEMICONDUCTORS - 7.1%
ASM Lithography Holding 55,000 $ 3,217,500
Comdisco, Inc. 45,000 1,170,000
Compaq Computer Corporation 10,000 992,500
Hirsch International Corporation, Class A 6,700 149,075
InTest Corporation 30,300 272,700
Iomega Corporation 91,700 1,822,537
Microage, Inc. 74,800 1,374,450
Nichols Research Corporation 5,000 105,000
PRI Automation, Inc. 25,000 948,438
RadiSys Corporation 21,900 870,525
RF Micro Devices, Inc. 5,500 105,188
Sipex Corporation 10,000 362,500
Tekelec Corporation 33,700 1,192,138
Veeco Instruments, Inc. 5,000 193,750
Vitesse Semiconductor Corporation 90,000 2,941,875
- -----------------------------------------------------------------------------------------------------------------------------
15,718,176
- -----------------------------------------------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 6.7%
Assisted Living Concepts, Inc. 66,100 1,826,012
Cerner Corporation 46,600 978,600
Coventry Corporation 127,000 1,920,875
Curative Health Services, Inc. 20,000 575,000
Foundation Health Systems, Inc., Class A 95 2,903
HBO & Company(1) 64,900 4,469,988
Medic Computer Systems, Inc. 5,000 111,250
Medical Manager Corporation 46,500 685,875
Medquist, Inc. 19,400 589,275
Renal Care Group, Inc. 34,600 1,442,387
Sunrise Assisted Living, Inc. 26,200 917,000
Universal Health Services, Inc., Class B 35,000 1,347,500
- -----------------------------------------------------------------------------------------------------------------------------
14,866,665
- -----------------------------------------------------------------------------------------------------------------------------
HEALTH CARE SPECIALIZED SERVICES - 0.2%
Sunquest Information Systems, Inc. 27,900 418,500
- -----------------------------------------------------------------------------------------------------------------------------
418,500
- -----------------------------------------------------------------------------------------------------------------------------
HOTELS - 3.6%
CapStar Hotel Company 50,000 1,600,000
Comfort Systems USA, Inc. 10,300 160,937
Doubletree Corporation 35,000 1,439,375
Fairfield Communities, Inc. 43,726 1,470,288
Four Seasons Hotels, Inc. 94,500 2,799,562
Leisure Canada, Inc.(6) 20,000 37,691
Silverleaf Resorts, Inc. 36,600 562,725
- -----------------------------------------------------------------------------------------------------------------------------
8,070,578
- -----------------------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INFORMATION TECHNOLOGY SERVICES/YEAR 2000 - 20.3%
Accelr-8 Technology Corporation 55,000 $ 818,125
Affiliated Computer Services, Inc., Class A 30,000 840,000
Alternative Resources Corporation 104,700 2,133,262
Amdahl Corporation 140,000 1,225,000
Analysts International Corporation(1) 42,600 1,427,100
BDM International, Inc. 26,000 598,000
Ciber, Inc. 30,000 1,025,625
Claremont Technology Group, Inc. 104,200 2,474,750
Complete Business Solutions, Inc. 68,600 1,697,850
Computer Horizons Corporation 52,700 1,804,975
Computer Management Sciences, Inc. 127,650 2,616,825
Computer Task Group, Inc.(1) 65,000 2,421,250
Compuware Corporation 50,000 2,387,500
CORESTAFF, Inc. 25,000 675,000
Crystal Systems Solutions, Ltd. 40,000 840,000
ECsoft Group PLC ADR(5) 254,400 3,561,600
EVI, Inc. 20,000 840,000
IMRS, Inc. 20,000 910,000
Intelligroup, Inc. 18,100 174,212
Keane, Inc. 29,200 1,518,400
Mastech Corporation 80,000 1,610,000
Metro Information Services, Inc. 30,000 592,500
Micro Focus Group PLC, ADR(5) 84,300 2,507,925
NGC Corporation, Class B(1) 80,000 1,235,000
ONTRACK Data International, Inc. 50,000 1,150,000
Premiere Technologies, Inc. 28,000 728,000
RCM Technologies, Inc. 24,500 260,312
RWD Technologies, Inc. 8,600 148,350
SCB Computer Technology, Inc. 5,000 117,500
Seec, Inc. 65,000 1,251,250
Strategia Corporation 14,300 198,412
Transition Systems, Inc. 46,000 836,625
Unicomp, Inc. 115,000 805,000
Vanstar Corporation 93,000 1,313,625
Viasoft, Inc. 45,300 2,298,975
- -----------------------------------------------------------------------------------------------------------------------------
45,042,948
- -----------------------------------------------------------------------------------------------------------------------------
MEDIA - 5.4%
Emmis Broadcasting Corporation 53,900 2,351,388
Gemstar International Group, Ltd. 131,500 2,416,313
Journal Register Company 20,000 397,500
Lamar Advertising Company, Class A 111,100 2,833,050
TMP Worldwide, Inc. 75,000 1,818,750
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEDIA - CONTINUED
Univision Communications, Inc. 35,000 $ 1,369,375
VDI Media, Inc. 37,300 419,625
Westwood One, Inc. 10,000 322,500
- -----------------------------------------------------------------------------------------------------------------------------
11,928,501
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES - 2.0%
Acuson Corporation 70,000 1,610,000
CYTYC Corporation 60,000 1,627,500
Spine-Tech, Inc. 35,000 1,299,375
- -----------------------------------------------------------------------------------------------------------------------------
4,536,875
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 0.9%
ResMed, Inc. 26,500 642,625
SeaMED Corporation 35,000 708,750
Wesley Jessen VisionCare, Inc. 23,300 556,287
- -----------------------------------------------------------------------------------------------------------------------------
1,907,662
- -----------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 2.4%
Dura Pharmaceuticals, Inc. 65,000 2,591,876
Medicis Pharmaceutical Corporation, Class A 49,900 2,488,763
Vertex Pharmaceuticals, Inc. 5,000 191,250
- -----------------------------------------------------------------------------------------------------------------------------
5,271,889
- -----------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 0.3%
CB Commercial Real Estate Services Group, Inc. 23,300 704,825
- -----------------------------------------------------------------------------------------------------------------------------
704,825
- -----------------------------------------------------------------------------------------------------------------------------
RESTAURANTS/RETAIL - 6.7%
Bed Bath & Beyond, Inc. 70,000 2,126,250
Claire's Stores, Inc.(1) 95,000 1,662,500
Coldwater Creek 55,900 1,453,400
DM Management Company 126,300 1,436,662
Delia's, Inc. 44,600 825,100
Dress Barn, Inc. 10,000 195,000
Foodmaker, Inc. 25,000 409,375
Gadzooks, Inc. 35,300 688,350
General Nutrition Companies, Inc. 5,000 140,000
K & G Men's Center, Inc. 25,300 550,275
NPC International, Inc. 10,000 116,250
Pacific Sunwear of California, Inc. 38,400 1,238,400
Piercing Pagoda, Inc. 23,400 587,925
The Wet Seal, Inc. 107,500 3,392,969
Vans, Inc. 10,000 151,250
- -----------------------------------------------------------------------------------------------------------------------------
14,973,706
- -----------------------------------------------------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
<CAPTION>
SCHEDULE OF INVESTMENTS (CONTINUED)
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT - 10.6%
ACE*COMM Corporation 100,000 $ 1,962,500
Aspect Telecommunications Corporation 70,000 1,557,500
Brightpoint, Inc. 78,300 2,549,644
CIENA Corporation 5,000 235,625
Cellstar Corporation 19,200 588,000
Corning, Inc. 40,000 2,225,000
Digital Microwave Corporation 34,400 1,032,000
GeoTel Communications Corporation 175,500 2,347,313
LCC International, Inc., Class A 110,000 1,732,500
Lightbridge, Inc. 145,500 1,109,438
Natural Microsystems Corporation 55,000 1,980,000
P-Com, Inc. 49,800 1,643,400
SpecTran Corporation 28,200 549,900
Spectrian Corporation 56,300 2,076,063
Tellabs, Inc. 33,200 1,855,050
- -----------------------------------------------------------------------------------------------------------------------------
23,443,933
- -----------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 1.0%
Midcom Communications, Inc. 201,000 1,067,813
Transaction Systems Architects, Inc., Class A 35,000 1,207,500
- -----------------------------------------------------------------------------------------------------------------------------
2,275,313
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 96.0% (Cost $180,325,405) 212,884,034
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
Applied Micro Circuits Corporation, Series 3, Restricted(2,3) 2,381 43,953
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 0.0% (Cost $50,001) 43,953
PAR VALUE
- -----------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS
Midcom Communications, 8.25%, Due 8/15/03, 144A(1,3,4) 1,000,000 654,380
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.3% (Cost $1,000,000) 654,380
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) PAR VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT BONDS
U.S. Treasury STRIP, Due 2/15/23 12,000,000 2,073,636
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL GOVERNMENT BONDS - 0.9% (COST $1,892,040) 2,073,636
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 97.2% (COST $183,267,446) 215,656,003
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash 1
Repurchase Agreement
State Street Bank & Trust Company, 5.50%, dated 6/30/1997,
due 7/1/1997, maturity value $4,612,705 (collateralized by $4,675,000 par value
U.S. Treasury Notes, 6.375%, due 4/30/97) 4,612,000
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 2.1% 4,612,001
- -----------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.7% 1,433,782
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 221,701,786
- -----------------------------------------------------------------------------------------------------------------------------
(1) Income-producing security.
(2) Restricted security. See 4.c. in Notes to Financial Statements.
(3) Fair-value security. See 1.a. in Notes to Financial Statements.
(4) These securities may be resold in transactions exempt from registration under
Rule 144A of the Securities Act of 1933.
(5) ADR - American Depository Receipt.
(6) Foreign security denominated in Canadian Dollars.
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $183,267,446) $ 215,656,003
Cash and cash equivalents 4,612,001
Receivable for investments sold 5,634,088
Receivable for fund shares subscribed 768,687
Dividends/interest receivable 42,415
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 226,713,194
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 3,298,541
Payable for fund shares redeemed 1,237,624
Accrued expenses 251,758
Payable to adviser 178,775
Payable to distributor 44,710
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 5,011,408
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS 221,701,786
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------
Paid-in capital 178,649,600
Accumulated undistributed net investment loss (264,890)
Accumulated net realized gain from investments 10,928,519
Net unrealized appreciation on investments 32,388,557
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS 221,701,786
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share - Class A Shares $ 21.21
(Net assets of $221,648,980 applicable to 10,449,791 shares of beneficial interest
outstanding with no par value)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share - Class C Shares $ 21.19
(Net assets of $52,806 applicable to 2,492 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.
16
<PAGE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Interest $ 988,628
Dividends 63,366
Class action settlement revenue from investments 158,256
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 1,210,250
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 967,268
Distribution fees - Class A Shares 241,807
Transfer agent fees 113,657
Custodian fees 59,755
Shareholder reports 41,630
Professional fees 27,150
Registration and filing fees 11,765
Trustees' fees and expenses 11,041
Insurance 1,027
Distribution fees - Class C Shares 30
Shareholder servicing fees - Class C Shares 10
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,475,140
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (264,890)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 7,351,660
Net change in unrealized appreciation on investments 4,525,334
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 11,876,994
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 11,612,104
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
<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 loss $ (264,890) $ (1,502,797)
Net realized gain from investments 7,351,660 22,243,747
Net change in unrealized appreciation on investments 4,525,334 9,164,670
- -----------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 11,612,104 29,905,620
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income - Class A Shares - -
Net investment income - Class C Shares(1) - -
Realized gains on investments - Class A Shares - (28,398,700)
Realized gains on investments - Class C Shares(1) - -
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (28,398,700)
- -----------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net (decrease)/increase in net assets resulting from capital share transactions (314,700) 41,168,975
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (314,700) 41,168,975
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 11,297,404 42,675,895
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Beginning of period 210,404,382 167,728,487
End of period $ 221,701,786 $ 210,404,382
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first sold on May 8, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS A SHARES
<TABLE>
<CAPTION>
FOR THE FOR THE FOR THE
SIX MONTHS FOR THE NINE MONTHS FOR THE FOR THE THREE MONTHS FOR THE FOR THE
FOR A SHARE OUTSTANDING ENDED 6/30/97 YEAR ENDED ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED
THROUGHOUT EACH PERIOD: (UNAUDITED) 12/31/96 12/31/95 3/31/95 3/31/94 3/31/93 12/31/92 12/31/91
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
beginning of period $ 20.07 $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 $ 11.67
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.03) (0.17) (0.15) (0.17) (0.40) (0.02) (0.15) (0.09)
Net realized gain/(loss)
and unrealized appreciation/
(depreciation) on investments 1.17 4.23 2.58 2.26 4.06 (2.04) (0.31) 6.82
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase/(Decrease)
in Net Assets
Resulting From Operations 1.14 4.06 2.43 2.09 3.66 (2.06) (0.46) 6.73
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net
investment income - - - - - - - -
Distributions from realized
gain on investments - (3.20) (1.58) (2.10) - - (0.27) (0.90)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 21.21 $ 20.07 $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.68% 21.53% 13.50% 12.01% 24.88% (12.28)% (2.55)% 58.70%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000s) $ 221,649 $ 210,404 $ 167,728 $ 182,275 $ 168,192 $ 228,893 $ 277,531 $ 141,929
Ratio of Expenses to
Average Net Assets 1.52% 1.60% 1.64% 1.56% 1.60% 1.54% 1.49% 1.59%
Ratio of Net Investment Loss
to Average Net Assets (0.27)% (0.83)% (0.99)% (0.96)% (1.27)% (0.61)% (0.92)% (0.68)%
Portfolio Turnover Rate 221% 270% 147% 280% 274% 43% 124% 147%
Average Commission Rate Paid(1) $0.0560 $0.0587 - - - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 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 of the periods has
been determined by using the average number of Class A shares outstanding
throughout each period. Distributions reflect actual per-share amounts
distributed for the periods.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS C SHARES
FOR THE
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 6/30/97(1) (UNAUDITED)
- -----------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 18.86
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Net investment loss (0.03)
Net realized gain and unrealized appreciation on
investments and securities sold short 2.36
- -----------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations 2.33
- -----------------------------------------------------------------------------
Distributions from net investment income --
Distributions from realized gain on investments --
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 21.19
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
TOTAL RETURN 12.35%
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------
Net Assets, end of period (000s) $ 53
Ratio of Expenses to Average Net Assets 2.27%
Ratio of Net Investment Income to Average Net Assets (1.02)%
Portfolio Turnover Rate 221%
Average Commission Rate Paid(2) $ 0.0560
(1) Class C shares were first sold on May 8, 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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Emerging Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 30, 1987. The Trust offers 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 may bear 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 were 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 May 8, 1997. Class C shares are subject to a 1%
contingent deferred sales charge if those shares are redeemed within one year of
purchase.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. At June 30, 1997, 99.7% of the Fund's long
positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
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 that could have a significant impact on the value
of the security. At June 30, 1997, approximately 0.3% of the Fund's long
positions were valued using these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries in the healthcare and
technology sectors. Accordingly, the performance of the Fund may be subject to a
greater risk of market fluctuation than that of a Fund invested in a wider
spectrum of market or industrial sectors.
22
<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. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to shareholders are recorded on the ex-dividend date.
g. 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 daily net assets of each class and the specific expense rate
applicable to each class.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
h. 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 for the six months ended June 30,
1997, and for the year ended December 31, 1996, and for Class C for the period
from May 8, 1997 (Commencement of Operations) to June 30, 1997, were as follows:
Class A
1/1/97 - 6/30/97 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 5,005,312 $ 98,115,996
Shares reinvested - -
- -------------------------------------------------------------------------------
5,005,312 98,115,996
- -------------------------------------------------------------------------------
Shares redeemed (5,039,735) (98,480,696)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net decrease (34,423) $ (364,700)
- -------------------------------------------------------------------------------
1/1/96 - 12/31/96 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 10,385,165 $ 223,710,716
Shares reinvested 1,385,610 27,461,885
- -------------------------------------------------------------------------------
10,385,775 251,172,601
- -------------------------------------------------------------------------------
Shares redeemed (10,019,081) (210,003,626)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net increase 1,751,694 $ 41,168,975
- -------------------------------------------------------------------------------
Class C
5/8/97* - 6/30/97 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 2,492 $ 50,000
Shares reinvested - -
- -------------------------------------------------------------------------------
2,492 50,000
- -------------------------------------------------------------------------------
Shares redeemed - -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net increase 2,492 $ 50,000
- -------------------------------------------------------------------------------
* Class C shares were first sold on May 8, 1997.
24
<PAGE>
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 1.00% of the average daily net assets of the Fund. For the six months
ended June 30, 1997, the Fund incurred investment advisory fees of $967,268. For
the six months ended June 30, 1997, there was no expected reimbursement of
advisory fees and other expenses.
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 1.00% of the Fund's average net
assets attributable to Class C. For the six months ended June 30, 1997, for
Class A, and for the period from May 8, 1997 (Commencement of Operations)
through June 30, 1997, for Class C, the Fund incurred distribution fees of
$241,807 and $30, respectively.
25
<PAGE>
Notes to Financial Statements (CONTINUED)
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 May 8, 1997 (Commencement of Operations) through
June 30, 1997, the Fund incurred shareholder
servicing fees of $10.
e. BROKERAGE COMMISSIONS:
RSIM Inc. may direct orders for investment transactions to RS & Co. as broker-
dealer, subject to Fund policies as stated in the prospectus, regulatory
constraints, and the ability of RS & Co. to provide competitive prices and
commission rates. All investment transactions in which RS & Co. acts as a broker
may only be executed on an agency basis. Subject to certain constraints, the
Fund may make purchases of securities from offerings or underwritings in which
RS & Co. has been retained by the issuer. For the six months ended June 30,
1997, the Fund paid brokerage commissions of $44,775 to RS & Co., which
represented 9.4% of total commissions paid during this period.
26
<PAGE>
NOTE 4 INVESTMENTS:
a. TAX BASIS OF INVESTMENTS:
At June 30, 1997, the cost of investments purchased for federal income tax
purposes was $183,267,446. Accumulated net unrealized appreciation on
investments was $32,388,557, consisting of gross unrealized appreciation and
depreciation of $37,110,801 and ($4,722,244), 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 short-term investments) were
$390,037,011 and $369,703,322, 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 $43,953, which represented 0% 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
- -------------------------------------------------------------------------------
Applied Micro Circuits
Corporation, Convertible
Preferred Stock, Series 3 2 $ 50 $ 44 9/14/87
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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.
27
<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
John P. Rohal, Trustee
Managing Director and Director of Research, Robertson, Stephens & Co.
Terry R. Otton
Chief Financial Officer
Dana K. Welch
Secretary
INVESTMENT ADVISER
Robertson Stephens Investment Management, Inc.
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 Emerging Growth Fund. It is not authorized for distribution to
prospective investors unless preceded or accompanied by an effective prospectus.
Published August 29, 1997
28
<PAGE>
Design: Broom & Broom, Inc., San Francisco Photography: Anne Hamersky,
Jerry Orabona, Bill Zemanek
In addition to THE EMERGING GROWTH 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 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 PARTNERS FUND
A SMALL-CAP FUND USING A VALUE METHODOLOGY - This methodology combines
traditional Graham & Dodd balance sheet analysis and cash flow analysis. No
load. Managed by Andy Pilara.
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.
<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 EmGr under the heading Robertson Stephens.
Its computer quotation symbol is RSEGX.
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.
<PAGE>
JIM CALLINAN
Portfolio Manager
The Robertson Stephens Emerging Growth Fund
G. RANDY HECHT
President
Robertson Stephens
Investment Trust
[email protected]
INVESTMENT TEAM
RESEARCH
Catherine Baker
Rod Berry
Stephen Bishop
Susan Richardson
Rob Zidar
SENIOR TRADER
Catherine O'Neill
ADMINISTRATION
Nancy Mayer
INVESTMENT
