<PAGE>
As filed with the Securities and Exchange Commission on January 21, 1997
Registration No. 33-16439
811-5159
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 26 /x/
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/
AMENDMENT NO. 28 /x/
ROBERTSON STEPHENS INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
555 California Street
San Francisco, California 94104
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (800) 766-3863
G. RANDY HECHT
c/o Robertson, Stephens & Company, L.P.
555 California Street
San Francisco, California 94104
(Name and Address of Agent for Service)
Copies to:
TIMOTHY W. DIGGINS, ESQUIRE
ROPES & GRAY
One International Place
Boston, MA 02110-2624
Approximate date of proposed public offering : As soon as practicable
after this Amendment becomes effective.
It is proposed that this filing will become effective:
(check appropriate box)
/ / Immediately upon filing pursuant to paragraph (b);
/ / On (date) pursuant to paragraph (b)
/x/ 60 days after filing pursuant to paragraph (a)(1);
/ / On (date) pursuant to paragraph (a)(1);
/ / 75 days after filing pursuant to paragraph (a)(2); or
/ / On (date) pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
/ / This post-effective amendment designates a new effective date for
a previously filed post-effective amendment.
The Registrant has registered an indefinite number of its shares of beneficial
interest, pursuant to Rule 24f-2 under the Investment Company Act of 1940. The
Registrant filed a Form 24f-2 on February 26, 1996 for the fiscal year ended
December 31, 1995. The Registrant expects to file a Form 24f-2 for the fiscal
year ended December 31, 1996 on or before the sixteenth day following the end of
such fiscal year.
Total Number of Pages __ Exhibit Index at __
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
Cross Reference Sheet
The Registration Statement contains a prospectus or prospectuses relating to
Registrant's Class A shares and a prospectus or prospectuses relating to
Registrant's Class C shares. References under "Prospectus Caption"
are to those sections of each of the prospectuses contained in the Registration
Statement, except as otherwise noted.
Information Required in
Prospectus by Form N-1A Combined
Registration Statement Part A Prospectus Caption
- ----------------------- ------ ------------------
Item 1. Cover Page . . . . . . . . . . . . . . . Prospectus Cover
Item 2. Synopsis . . . . . . . . . . . . . . . . Expense Summary
Item 3. Condensed Financial Information. . . . . How Performance is
Determined; and see Statement
of Additional Information -
Financial Statements
Item 4. General Description of Registrant. . . . Prospectus Cover; Investment
Objectives and Policies;
Additional Information
Item 5. Management of the Fund . . . . . . . . . Expense Summary; Management
of the Funds; Additional
Information
Item 5A. Management's Discussion of Fund
Performance . . . . . . . . . . . . . Included in Registrant's
Annual Performance
Reports to Shareholders for
Period ended December 31,
1995
Item 6. Capital Stock and Other Securities . . . Dividends, Distributions and
Taxes; Additional
Information; Back Cover Page;
and see Statement of
Additional Information -
Management of the Funds
Item 7. Purchase of Securities Being Offered . . How to Purchase Shares; How
Net Asset Value is
Determined; The Funds'
Distributor; Back Cover
Page
Item 8. Redemption or Repurchase . . . . . . . . How to Redeem Shares
Item 9. Pending Legal Proceedings. . . . . . . . Inapplicable
<PAGE>
Information Required in Statement of Statement of Additional
Additional Information by Form N-1A Information Caption For
Registration Statement Part B Each Series
- ------------------------------------ ------ ----------------------------
Item 10. Cover Page. . . . . . . . . . . . . . . Cover Page
Item 11. Table of Contents . . . . . . . . . . . Cover Page
Item 12. General Information and History . . . . Additional Information
Item 13. Investment Objectives and Policies. . . Investment Objectives and
Policies; The Funds'
Investment Limitations
Item 14. Management of the Fund . . . . . . . . Management of the Funds
Item 15. Control Persons and Principal
Holders of Securities . . . . . . . . . Management of the Funds
Item 16. Investment Advisory and Other
Services. . . . . . . . . . . . . . . . Management of the Funds; The
Funds' Distributor;
Additional Information
Item 17. Brokerage Allocation and Other
Services. . . . . . . . . . . . . . . . Management of the Funds; The
Funds' Distributor
Item 18. Capital Stock and Other Securities. . . See Prospectus - Additional
Information
Item 19. Purchase, Redemption and Pricing of
Securities Being Offered. . . . . . . . How Net Asset Value is
Determined; and see
Prospectus - How to Purchase
Shares; Prospectus - How to
Redeem Shares
Item 20. Tax Status. . . . . . . . . . . . . . . Taxes; and see Prospectus -
Dividends, Distributions and
Taxes
Item 21. Underwriter . . . . . . . . . . . . . . The Funds' Distributor; and
see Prospectus - The Funds'
Distributor
Item 22. Calculations of Performance Data. . . . How Performance is Determined
Item 23. Financial Statements. . . . . . . . . . Financial Statements
The information required to be included in Part C is set forth under the
appropriate item, so numbered, in Part C to this Registration Statement.
<PAGE>
This Amendment only relates to the Registrant's Class C Shares. The
information previously filed as part of the Registration Statement in respect
of the Registrant's existing class of shares is not amended or superseded
hereby.
<PAGE>
---------------
FORM N-lA
PART A
---------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
POST-EFFECTIVE AMENDMENT TO THE TRUST'S REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS
NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY
BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 21, 1997
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ROBERTSON STEPHENS MUTUAL FUNDS
555 California Street, Suite 2600 PROSPECTUS
San Francisco, CA 94104 CLASS C SHARES
800-270-5829 March , 1997
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ROBERTSON STEPHENS INVESTMENT TRUST makes available to investors the
expertise of the investment professionals at Robertson Stephens Investment
Management. The Trust is offering Class C shares of eleven mutual funds by this
Prospectus: The CONTRARIAN FUND-TM-, The Robertson Stephens DEVELOPING COUNTRIES
FUND, The Robertson Stephens DIVERSIFIED GROWTH FUND, The Robertson Stephens
EMERGING GROWTH FUND, The Robertson Stephens GLOBAL LOW-PRICED STOCK FUND, The
Robertson Stephens GLOBAL NATURAL RESOURCES FUND, The Robertson Stephens GROWTH
& INCOME FUND, The INFORMATION AGE FUND-TM-, The Robertson Stephens MICROCAP
GROWTH FUND, The Robertson Stephens PARTNERS FUND, and The Robertson Stephens
VALUE + GROWTH FUND.
THIS PROSPECTUS EXPLAINS CONCISELY THE INFORMATION ABOUT THE TRUST THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN THE FUNDS' CLASS C SHARES.
Please read it carefully and keep it for future reference. Investors can find
more detailed information about the Funds in the March __, 1997 Statement of
Additional Information, as amended from time to time. For a free copy of the
Statement of Additional Information, please call 1-800-270-5829. The Statement
of Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference.
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
-----
Expense Summary........................ 2
Investment Objectives and Policies..... 4
Management of the Funds................ 15
Portfolio Managers..................... 16
How to Purchase Shares................. 17
How to Redeem Shares................... 19
The Fund's Distributor................. 21
Shareholder Servicing Plan............. 21
Dividends, Distributions, and Taxes.... 22
How Net Asset Value is Determined...... 22
How Performance Is Determined.......... 23
Additional Information................. 23
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
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EXPENSE SUMMARY
The following table summarizes an investor's maximum transaction costs from
investing in Class C shares of each of the Funds and expenses each of the Funds
expects to incur in respect of its Class C shares. The Example shows the
cumulative expenses attributable to a $1,000 investment in Class C shares of the
Funds over specified periods.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee* None
Exchange Fee None
Contingent Deferred Sales Charge 1.0% in the
(as a percentage of the original purchase price first year,
or the current net asset value, whichever is less) and
eliminated
thereafter.
</TABLE>
- --------------------------
* A $9.00 FEE IS CHARGED FOR REDEMPTIONS MADE BY BANK WIRE.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
GLOBAL GLOBAL GROWTH
DEVELOPING DIVERSIFIED EMERGING LOW-PRICED NATURAL &
CONTRARIAN-TM- COUNTRIES GROWTH GROWTH STOCK RESOURCES INCOME
--------------- ------------- ------------- ----------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees 1.50% 1.25% 1.00% 1.00% 1.00% 1.00% 1.00%
Rule 12b-1 Expenses 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
Shareholder Service Fee 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses* 0.22% 0.35%(1) 0.70%(1) 0.35% 0.70%(1) 0.70%(1) 0.05%(1)
------ ------ ------ ----------- ------ ------ -----------
Total Fund Operating
Expenses* 2.72% 2.60%(1) 2.70%(1) 2.35% 2.70%(1) 2.70%(1) 2.05%(1)
<CAPTION>
ANNUAL FUND OPERATING E
(as a percentage of ave
MICRO
INFORMATION CAP VALUE +
AGE-TM- GROWTH PARTNERS GROWTH
------------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
Management Fees 1.00% 1.25% 1.25% 1.00%
Rule 12b-1 Expenses 0.75% 0.75% 0.75% 0.75%
Shareholder Service Fee 0.25% 0.25% 0.25% 0.25%
Other Expenses* 0.78% 0.45%(1) 0.45%(1) 0.33%
------ ----------- ------ -----------
Total Fund Operating
Expenses* 2.78% 2.70%(1) 2.70%(1) 2.33%
</TABLE>
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(1) REFLECTING VOLUNTARY EXPENSE LIMITATIONS.
* ESTIMATED BASED ON EXPECTED EXPENSES OF CLASS C SHARES.
2
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EXAMPLE
An investment of $1,000 in Class C shares of the Funds would incur the following
expenses, assuming 5% annual return and redemption at the end of each period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------- -----------
<S> <C> <C>
The Contrarian Fund-TM- $ 28 $ 84
The Developing Countries Fund $ 26 $ 81
The Diversified Growth Fund $ 27 $ 84
The Emerging Growth Fund $ 24 $ 73
The Global Low-Priced Stock Fund $ 27 $ 84
The Global Natural Resources Fund $ 27 $ 84
The Growth & Income Fund $ 21 $ 64
The Information Age Fund-TM- $ 28 $ 86
The MicroCap Growth Fund $ 27 $ 84
The Partners Fund $ 27 $ 84
The Value + Growth Fund $ 24 $ 73
</TABLE>
This information is provided to help investors understand the operating expenses
of the Funds. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
PERFORMANCE. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. Other
Expenses and Total Fund Operating Expenses for the Funds are estimated based on
the expenses the Funds expect to incur with respect to their Class C shares;
they also reflect voluntary expense limitations currently in effect for some of
the Funds. In the absence of those expense limitations, Other Expenses and Total
Fund Operating Expenses, respectively, of those Funds would be as follows:
Developing Countries Fund, 1.21% and 3.46%; Diversified Growth Fund, 1.19% and
3.19%; Global Low-Priced Stock Fund, 1.65% and 3.65%; Global Natural Resources
Fund, 0.92% and 2.92%; Growth & Income Fund, 0.51% and 2.51%; MicroCap Growth
Fund, 4.90% and 7.15%; and Partners Fund, 0.67% and 2.92%. The Management Fees
paid by the Funds are higher than those paid by most other mutual funds. Because
of Rule 12b-1 fees paid by the Funds, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales load permitted under
applicable broker-dealer sales rules.
3
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INVESTMENT OBJECTIVES AND POLICIES
The Robertson Stephens Mutual Funds are designed to make available to mutual
fund investors the expertise of the investment professionals at Robertson,
Stephens & Company Investment Management, L.P. and Robertson Stephens Investment
Management, Inc. (Robertson, Stephens & Company Investment Management, L.P. and
Robertson Stephens Investment Management, Inc. are referred to collectively in
this Prospectus as "Robertson Stephens Investment Management").
None of the Funds, other than the Growth & Income Fund, invests for current
income. Each of the Funds may hold a portion of its assets in cash or money
market investments.
The investment policies of each Fund may, unless otherwise specifically
stated, be changed by the Trustees of the Trust without shareholder approval, as
may each Fund's investment objective. All percentage limitations on investments
will apply at the time of investment and will not be considered violated unless
an excess or deficiency occurs or exists immediately after and as a result of
the investment. There can, of course, be no assurance that a Fund will achieve
its investment objective.
For a description of certain risks associated with the Funds' investment
practices, see "Other Investment Practices and Risk Considerations," below.
THE CONTRARIAN FUND-TM-
- -------------------------------------
The Contrarian Fund's-TM- investment objective is maximum long-term growth.
Normally, The Contrarian Fund-TM- seeks this growth by aggressive yet flexible
investing worldwide in growing companies that are attractively priced. The
Contrarian Fund-TM- focuses its investments primarily on equity securities of
domestic, multinational, and foreign companies whose potential values generally
have been overlooked by other investors. Such companies include attractively
priced businesses that have not yet been discovered or become popular,
previously unpopular companies with growth potential due to changed
circumstances, companies that have declined in value and no longer command an
investor following, and previously popular companies temporarily out of favor
due to short-term factors.
In implementing its "contrarian" investment strategy, the Fund may take
positions that are different from those taken by other mutual funds. For
example, the Fund may sell the stocks of some issuers short, and may take
positions in options and futures contracts in anticipation of a market decline.
The Fund may also borrow money to purchase additional portfolio securities. The
Fund is a non-diversified mutual fund.
THE DEVELOPING COUNTRIES FUND
- -------------------------------------
The Developing Countries Fund's investment objective is long-term capital
appreciation. The Fund invests primarily in a non-diversified portfolio of
publicly traded developing country equity securities. The Fund may also, to a
lesser degree, invest in private placements of developing country equity
securities.
Developing country equity securities are securities which are principally
traded in the capital markets of a developing country; securities of companies
that derive at least 50% of their total revenues from either goods produced or
services performed in developing countries or from sales made in developing
countries, regardless of where the securities of such companies are principally
traded; securities of companies organized under the laws of, and with a
principal office in, a developing country; securities of investment companies
(such as country funds) that principally invest in developing country
securities; and American Depository Receipts (ADRs) and Global Depository
Receipts (GDRs) with respect to the securities of such companies. Developing
countries are countries that in the opinion of Robertson Stephens Investment
Management are generally considered to be developing countries by the
international financial community. The Fund will normally invest at least
4
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65% of its assets in developing country equity securities. The Fund may also
borrow money to purchase additional portfolio securities. The Fund is a
non-diversified mutual fund.
The Developing Countries Fund may invest up to 10% of its total assets in
shares of other investment companies. Such other investment companies would
likely pay expenses similar to those paid by the Fund, including, for example,
advisory and administrative fees. Robertson Stephens Investment Management will
waive its investment advisory fees on the Fund's assets invested in other
open-end investment companies, to the extent of the advisory fees of those
investment companies attributable to the Fund's investment.
In selecting investments for the Fund, Robertson Stephens Investment
Management may consider a number of factors in evaluating potential investments,
including political risks, classic macroeconomic variables, and equity market
valuations. Robertson Stephens Investment Management may also focus on the
quality of a company's management, the company's growth prospects, and the
financial well being of the company. The Developing Countries Fund's investments
generally will reflect a broad cross-section of countries, industries, and
companies in order to minimize risk. In situations where the market for a
particular security is determined by Robertson Stephens Investment Management to
be sufficiently liquid, the Fund may engage in short sales.
THE DIVERSIFIED GROWTH FUND
- -------------------------------------
The Diversified Growth Fund's investment objective is to seek long-term
capital growth. In selecting investments for the Fund, Robertson Stephens
Investment Management focuses on small- and mid-cap companies, to create a
portfolio of investments broadly diversified over industry sectors and
companies.
The Fund will invest principally in common and preferred stocks and
warrants. Although the Fund intends to focus on companies with market
capitalizations of up to $3 billion, the Fund will remain flexible and may
invest in securities of larger companies. The Fund may also purchase debt
securities Robertson Stephens Investment Management believes are consistent with
the Fund's investment objective, and may engage in short sales of securities it
expects to decline in price.
Small- and mid-cap companies may present greater opportunities for
investment return than do larger companies, but also involve greater risks. They
may have limited product lines, markets, or financial resources, or may depend
on a limited management group. Their securities may trade less frequently and in
limited volume. As a result, the prices of these securities may fluctuate more
than prices of securities of larger, widely traded companies. See "Investments
in Smaller Companies," below.
THE EMERGING GROWTH FUND
- -------------------------------------
The Emerging Growth Fund's investment objective is capital appreciation. The
Fund invests in an actively managed diversified portfolio of equity securities
(principally common stocks) of emerging growth companies. Emerging growth
companies are companies that, in the opinion of Robertson Stephens Investment
Management, have the potential, based on superior products or services,
operating characteristics, and financing capabilities, for more rapid growth
than the overall economy.
The Emerging Growth Fund's investments generally are held in a portfolio of
securities of companies in industry segments that are experiencing rapid growth
and in companies with proprietary advantages. Robertson Stephens Investment
Management may consider a number of factors in evaluating potential investments,
including, for example, the rate of earnings growth, the quality of management,
the extent of proprietary operating advantage, the return on equity, and/or the
financial condition of the company.
Smaller companies may present greater opportunities for investment return
than do larger companies, but may also involve greater risks. They may have
limited product lines, markets, or financial resources, or may depend on a
limited
5
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management group. Their securities may trade less frequently and in limited
volume. As a result, the prices of these securities may fluctuate more than
prices of securities of larger, widely traded companies. See "Investments in
Smaller Companies," below.
THE GLOBAL LOW-PRICED STOCK FUND
- -------------------------------------
The Global Low-Priced Stock Fund's investment objective is long-term growth.
The Fund intends to invest in "low-priced" stocks (prices no greater than $10
per share) of companies worldwide that have future growth potential, but are
overlooked or underappreciated by other investors.
Robertson Stephens Investment Management believes there are substantial
opportunities to discover and invest in undervalued companies that have
long-term growth prospects. Such companies include attractively priced
businesses that have not yet been discovered by other investors, previously
out-of-favor companies with growth potential due to changing circumstances,
companies that have declined in value and no longer command an investor
following, and companies temporarily out of favor due to short-term factors. In
most cases there will be little coverage by Wall Street analysts of the
companies in which the Fund invests. Institutional ownership will also usually
be limited.
It has been the experience of Robertson Stephens Investment Management that
attractive investment opportunities often exist in companies whose stock price
is $10 or less per share. For many reasons, including limits on purchasing the
stocks "on margin" (with borrowed money), many investors do not buy low-priced
stocks. The result is less competition from other investors, and the potential
that a company's value may not be reflected fully in its stock price.
In selecting securities for the Fund's portfolio, Robertson Stephens
Investment Management uses a "bottom-up" analysis, looking at companies of all
sizes, and in all industries and geographical markets. Robertson Stephens
Investment Management focuses on a company's financial condition, profitability
prospects, and capital needs going forward.
Robertson Stephens Investment Management will likely invest in certain
stocks before other investors recognize their value. The result could be a lack
of stock price movement in the near term. Investors should therefore have a
long-term investment horizon when investing in the Fund.
Although the Fund will seek to invest principally in common stocks, it may
also invest any portion of its assets in preferred stocks, warrants, and debt
securities if Robertson Stephens Investment Management believes they would help
achieve the Fund's objective. The Fund will normally invest substantially all of
its assets in low-priced stocks, and will normally invest in securities of
issuers located in at least three countries, one of which may be the United
States.
Smaller companies may present greater opportunities for investment return
than do larger companies, but may also involve greater risks. They may have
limited product lines, markets, or financial resources, or may depend on a
limited management group. Their securities may trade less frequently and in
limited volume. As a result, the prices of these securities may fluctuate more
than prices of securities of larger, more widely traded companies. See
"Investments in Smaller Companies," below.
THE GLOBAL NATURAL
RESOURCES FUND
- -------------------------------------
The Global Natural Resources Fund's investment objective is long-term
capital appreciation. The Fund will invest primarily in securities of issuers in
the natural resources industries. The Fund is designed for investors who believe
that investment in securities of such companies provides the opportunity for
capital appreciation, while offering the potential over the long term to limit
the adverse effects of inflation. The Fund
6
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may invest in securities of issuers located anywhere in the world if Robertson
Stephens Investment Management believes they offer the potential for capital
appreciation.
Although the Fund will seek to invest principally in common stocks, it may
also invest in preferred stocks, securities convertible into common stocks or
preferred stocks, and warrants to purchase common stocks or preferred stocks.
The Fund will seek to invest in companies with strong potential for earnings
growth, and whose earnings and tangible assets could benefit from accelerating
inflation. Robertson Stephens Investment Management believes that companies in
the natural resources industries with the flexibility to adjust prices or
control operating costs offer attractive opportunities for capital growth when
inflation is rising.
Companies in the natural resources industries include companies that
Robertson Stephens Investment Management considers to be principally engaged in
the discovery, development, production, or distribution of natural resources,
the development of technologies for the production or efficient use of natural
resources, or the furnishing of related supplies or services. Natural resources
include, for example, energy sources, precious metals, forest products, real
estate, nonferrous metals, and other basic commodities.
Companies in the natural resources industries may include, for example:
- Companies that participate in the discovery and development of natural
resources from new or conventional sources.
- Companies that own or produce natural resources such as oil, natural gas,
precious metals, and other commodities.
- Companies that engage in the transportation, distribution, or processing
of natural resources.
- Companies that contribute new technologies for the production or efficient
use of natural resources, such as systems for energy conversion,
conservation, and pollution control.
- Companies that provide related services such as mining, drilling,
chemicals, and related parts and equipment.
A particular company will be considered to be principally engaged in the
natural resources industries if at the time of investment Robertson Stephens
Investment Management determines that at least 50% of the company's assets,
gross income, or net profits are committed to, or derived from, those
industries. A company will also be considered to be principally engaged in the
natural resources industries if Robertson Stephens Investment Management
considers that the company has the potential for capital appreciation primarily
as a result of particular products, technology, patents, or other market
advantages in those industries.
The Fund will normally invest at least 65% of its assets in securities of
companies in the natural resources industries. The Fund may invest the remainder
of its assets in securities of companies in any industry if Robertson Stephens
Investment Management believes they would help achieve the Fund's objective of
long-term capital appreciation. The portion of the Fund's assets invested in
such securities will vary depending on Robertson Stephens Investment
Management's evaluation of economic conditions, inflationary expectations, and
other factors affecting companies in the natural resources industries and other
sectors. The Fund may also sell securities short if it expects their market
price to decline. The Fund will normally invest in securities of issuers located
in at least three countries, one of which may be the United States.
Because the Fund's investments are concentrated in the natural resources
industries, the value of its shares will be especially affected by factors
peculiar to those industries and may fluctuate more widely than the value of
shares of a portfolio which invests in a broader range of industries. For
example, changes in commodity prices may affect both the industries which
produce, refine, and distribute them and industries which supply alternate
sources of commodities. In addition, certain of these industries are generally
subject to greater government regulation than many other industries; therefore,
changes
7
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in regulatory policies may have a material effect on the business of companies
in these industries.
THE GROWTH & INCOME FUND
- -------------------------------------
The Growth & Income Fund's investment objective is long-term total return.
The Fund will pursue this objective primarily by investing in equity and debt
securities, focusing on small- and mid-cap companies that offer the potential
for capital appreciation, current income, or both.
The Fund will normally invest the majority of its assets in common and
preferred stocks, convertible securities, bonds, and notes. Although the Fund
intends to focus on companies with market capitalizations of up to $3 billion,
the Fund will remain flexible and may invest in securities of larger companies.
The Fund may also engage in short sales of securities it expects to decline in
price. The Fund intends to pay dividends quarterly; the amount of any dividends
will fluctuate.
Small- and mid-cap companies may present greater opportunities for
investment return than do larger companies, but may also involve greater risks.
They may have limited product lines, markets, or financial resources, or may
depend on a limited management group. Their securities may trade less frequently
and in limited volume. As a result, the prices of these securities may fluctuate
more than prices of securities of larger, widely traded companies. See
"Investments in Smaller Companies," below.
THE INFORMATION AGE FUND-TM-
- -------------------------------------
The Information Age Fund's-TM- investment objective is long-term capital
appreciation. The Fund is designed for investors who believe that aggressive
investment in common stocks of companies in the information technology
industries provides significant opportunities for capital appreciation. While
ordinary mutual funds may place some of their investments in securities of
companies in the information technology sector, the Information Age Fund-TM-
focuses its investments in that sector.
Although the Fund will seek to invest principally in common stocks, it may
also invest any portion of its assets in preferred stocks and warrants if
Robertson Stephens Investment Management believes they would help achieve the
Fund's objective. The Fund may also engage in short sales of securities it
expects to decline in price.
Companies in the information technology industries include companies that
Robertson Stephens Investment Management considers to be principally engaged in
the development, production, or distribution of products or services related to
the processing, storage, transmission, or presentation of information or data.
The following examples illustrate the wide range of products and services
provided by these industries:
- Computer hardware and software of any kind, including, for example,
semiconductors, minicomputers, and peripheral equipment.
- Telecommunications products and services.
- Multimedia products and services, including, for example, goods and
services used in the broadcast and media industries.
- Data processing products and services.
- Financial services companies that collect or disseminate market, economic,
and financial information.
A particular company will be considered to be principally engaged in the
information technology industries if at the time of investment Robertson
Stephens Investment Management determines that at least 50% of the company's
assets, gross income, or net profits are committed to, or derived from, those
industries. A company will also be considered to be principally engaged in the
information technology industries if Robertson Stephens Investment Management
considers that the company has the potential for capital appreciation primarily
as a result of particular products, technology, patents, or other market
advantages in those industries. The Fund will normally invest at least 65% of
its assets in securities of companies in the information technology industries.
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Because the Fund's investments are concentrated in the information
technology industries, the value of its shares will be especially affected by
factors peculiar to those industries and may fluctuate more widely than the
value of shares of a portfolio which invests in a broader range of industries.
For example, many products and services are subject to risks of rapid
obsolescence caused by technological advances. Competitive pressures may have a
significant effect on the financial condition of companies in the information
technology industries. For example, if information technology continues to
advance at an accelerated rate, and the number of companies and product
offerings continues to expand, these companies could become increasingly
sensitive to short product cycles and aggressive pricing. In addition, many of
the activities of companies in the information technology industries are highly
capital intensive, and it is possible that a company which invests substantial
amounts of capital in the development of new products or services will be unable
to recover its investment or otherwise to meet its obligations.
THE MICROCAP GROWTH FUND
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The MicroCap Growth Fund's investment objective is long-term capital
appreciation. The Fund will invest in a diversified portfolio of equity
securities of "micro-cap" companies that Robertson Stephens Investment
Management believes offer the potential for long-term capital appreciation.
"Micro-cap" companies are companies with market capitalizations of $250
million or less.
Robertson Stephens Investment Management seeks to identify micro-cap
companies that have the potential, based on superior or niche products or
services, operating characteristics, management, or other factors, for long-term
capital appreciation. Equity securities in which the Fund may invest include
common stocks, preferred stocks, and warrants, and securities convertible into
common or preferred stocks. Under normal circumstances, the Fund will invest at
least 65% of its assets in securities which Robertson Stephens Investment
Management determines at the time of investment to be micro-cap companies. The
Fund may invest the remainder of its assets in securities of companies of any
size if Robertson Stephens Investment Management believes such investments are
consistent with the Fund's investment objective. The Fund may also engage in
short sales of securities it expects to decline in price.
Micro-cap and other small companies may offer greater opportunities for
capital appreciation than other companies but may also involve greater risks.
They may have limited product lines, markets, or financial resources, or may
depend on a limited management group. Their securities may trade less frequently
and in limited volume. As a result, the prices of these securities may fluctuate
more sharply than those of other securities, and the Fund may experience some
difficulty in establishing or closing out positions in these securities at
prevailing market prices. See "Investments in Smaller Companies," below.
THE PARTNERS FUND
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The Partners Fund's investment objective is long-term growth. The Fund will
employ a value methodology to invest in equity securities primarily of companies
with market capitalizations of up to $750 million. This traditional value
methodology combines Graham & Dodd balance sheet analysis with cash flow
analysis.
In selecting investments for the Fund, Robertson Stephens Investment
Management will:
- Perform fundamental research focusing on business analysis;
- Observe how management allocates capital;
- Strive to understand the unit economics of the business of the company;
- Key on the cash flow rate of return on capital employed;
- Discern the sources and uses of cash;
- Consider how management is compensated; and
- Ask how the stock market is pricing the entire company.
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At times, the Fund may invest all or most of its assets in securities of
U.S. issuers. At other times, the Fund may invest any portion of its assets in
foreign securities, if Robertson Stephens Investment Management believes they
offer attractive investment values.
Small companies may present greater opportunities for investment return than
do larger companies, but may also involve greater risks. They may have limited
product lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and in limited
volume. As a result, the prices of these securities may fluctuate more than
prices of securities of larger, widely traded companies. See "Investments in
Smaller Companies," below.
Although the Fund will seek to invest principally in common stocks, it may
also invest in preferred stocks, warrants, and debt securities if Robertson
Stephens Investment Management believes they would help achieve the Fund's
objective. The Fund may also hold a portion of its assets in cash or money
market instruments. The Fund is a non-diversified mutual fund.
THE VALUE + GROWTH FUND
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The Value + Growth Fund's investment objective is capital appreciation. The
Fund invests primarily in growth companies with favorable relationships between
price/earnings ratios and growth rates, in sectors offering the potential for
above-average returns. The Fund may invest in securities of larger or smaller
companies, if Robertson Stephens Investment Management believes they offer the
potential for capital appreciation.
In selecting investments for the Fund, Robertson Stephens Investment
Management's primary emphasis is typically on evaluating a company's management,
growth prospects, business operations, revenues, earnings, cash flows, and
balance sheet in relation to its share price. Robertson Stephens Investment
Management may select stocks which it believes are undervalued relative to the
current stock price. Undervaluation of a stock can result from a variety of
factors, such as a lack of investor recognition of (1) the value of a business
franchise and continuing growth potential, (2) a new, improved or upgraded
product, service or business operation, (3) a positive change in either the
economic or business condition for a company, (4) expanding or changing markets
that provide a company with either new earnings direction or acceleration, or
(5) a catalyst, such as an impending or potential asset sale or change in
management, that could draw increased investor attention to a company. Robertson
Stephens Investment Management also may use similar factors to identify stocks
which it believes to be overvalued, and may engage in short sales of such
securities.
OTHER INVESTMENT PRACTICES AND RISK CONSIDERATIONS
- -------------------------------------
The Funds may also engage in the following investment practices, each of
which involves certain special risks. The Statement of Additional Information
contains more detailed information about these practices (some of which,
including, for example, options and futures contracts, and certain debt
securities, may be considered "derivative" investments), including limitations
designed to reduce these risks.
INVESTMENTS IN SMALLER COMPANIES. Each of the Funds may invest a
substantial portion of its assets in securities issued by small companies. Such
companies may offer greater opportunities for capital appreciation than larger
companies, but investments in such companies may involve certain special risks.
Such companies may have limited product lines, markets, or financial resources
and may be dependent on a limited management group. While the markets in
securities of such companies have grown rapidly in recent years, such securities
may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and a Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly available information about the issuers of these securities
or
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less market interest in such securities than in the case of larger companies,
and it may take a longer period of time for the prices of such securities to
reflect the full value of their issuers' underlying earnings potential or
assets.
Some securities of smaller issuers may be restricted as to resale or may
otherwise be highly illiquid. The ability of a Fund to dispose of such
securities may be greatly limited, and a Fund may have to continue to hold such
securities during periods when Robertson Stephens Investment Management would
otherwise have sold the security. It is possible that Robertson Stephens
Investment Management or its affiliates or clients may hold securities issued by
the same issuers, and may in some cases have acquired the securities at
different times, on more favorable terms, or at more favorable prices, than a
Fund.
SHORT SALES. (ALL FUNDS EXCEPT THE EMERGING GROWTH, GLOBAL LOW-PRICED STOCK,
AND PARTNERS FUNDS.) When Robertson Stephens Investment Management anticipates
that the price of a security will decline, it may sell the security short and
borrow the same security from a broker or other institution to complete the
sale. A Fund may make a profit or incur a loss depending upon whether the market
price of the security decreases or increases between the date of the short sale
and the date on which the Fund must replace the borrowed security. An increase
in the value of a security sold short by a Fund over the price at which it was
sold short will result in a loss to the Fund, and there can be no assurance that
a Fund will be able to close out the position at any particular time or at an
acceptable price.
FOREIGN SECURITIES. The Funds may invest in securities principally traded
in foreign markets. Because foreign securities are normally denominated and
traded in foreign currencies, the value of a Fund's assets may be affected
favorably or unfavorably by currency exchange rates and exchange control
regulations. There may be less information publicly available about a foreign
company than about a U.S. company, and foreign companies are not generally
subject to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign
companies are less liquid and at times more volatile than securities of
comparable U.S. companies. Foreign brokerage commissions and other fees are also
generally higher than in the United States. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of a Fund's assets held abroad) and
expenses not present in the settlement of domestic investments.
In addition, there may be a possibility of nationalization or expropriation
of assets, imposition of currency exchange controls, confiscatory taxation,
political or financial instability, and diplomatic developments that could
affect the value of a Fund's investments in certain foreign countries. Legal
remedies available to investors in certain foreign countries may be more limited
than those available with respect to investments in the United States or in
other foreign countries. In the case of securities issued by a foreign
governmental entity, the issuer may in certain circumstances be unable or
unwilling to meet its obligations on the securities in accordance with their
terms, and a Fund may have limited recourse available to it in the event of
default. The laws of some foreign countries may limit a Fund's ability to invest
in securities of certain issuers located in those foreign countries. Special tax
considerations apply to foreign securities. A Fund may buy or sell foreign
currencies and options and futures contracts on foreign currencies for hedging
purposes in connection with its foreign investments. Except as otherwise
provided in this Prospectus, there is no limit on the amount of a Fund's assets
that may be invested in foreign securities.
Each of the Funds may invest in securities of issuers in developing
countries. Certain Funds may at times invest a substantial portion of their
assets in such securities. Investments in developing countries are subject to
the same risks applicable to foreign investments generally, although those risks
may be increased due to conditions in such countries. For example, the
securities markets and legal systems in developing countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed countries.
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Although many of the securities in which the Funds may invest are traded on
securities exchanges, they may trade in limited volume, and the exchanges may
not provide all of the conveniences or protections provided by securities
exchanges in more developed markets. The Funds may also invest a substantial
portion of their assets in securities traded in the over-the-counter markets in
such countries and not on any exchange, which may affect the liquidity of the
investment and expose the Funds to the credit risk of their counterparties in
trading those investments.
DEBT SECURITIES. Each of the Funds may invest in debt securities from time
to time, if Robertson Stephens Investment Management believes investing in such
securities might help achieve the Fund's objective. The Growth & Income Fund and
the Partners Fund may invest without limit in debt securities and other fixed-
income securities. Each of the other Funds may invest in debt securities to the
extent consistent with its investment policies, although Robertson Stephens
Investment Management expects that under normal circumstances those Funds would
not likely invest a substantial portion of their assets in debt securities.
THE CONTRARIAN FUND-TM-, THE DIVERSIFIED GROWTH FUND, AND THE GROWTH &
INCOME FUND may invest in lower-quality, high-yielding debt securities.
Lower-rated debt securities (commonly called "junk bonds") are considered to be
of poor standing and predominantly speculative. Securities in the lowest rating
categories may have extremely poor prospects of attaining any real investment
standing, and some of those securities in which a Fund may invest may be in
default. The rating services' descriptions of securities in the lower rating
categories, including their speculative characteristics, are set forth in the
Statement of Additional Information.
Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. In addition, the
lower ratings of such securities reflect a greater possibility that adverse
changes in the financial condition of the issuer, or in general economic
conditions, or both, or an unanticipated rise in interest rates, may impair the
ability of the issuer to make payments of interest and principal. Changes by
recognized rating services in their ratings of any fixed-income security and in
the ability or perceived inability of an issuer to make payments of interest and
principal may also affect the value of these investments. See the Statement of
Additional Information.
Each of the OTHER FUNDS will invest only in securities rated "investment
grade" or considered by Robertson Stephens Investment Management to be of
comparable quality. Investment grade securities are rated Baa or higher by
Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's.
Securities rated Baa or BBB lack outstanding investment characteristics, have
speculative characteristics, and are subject to greater credit and market risks
than higher-rated securities. Descriptions of the securities ratings assigned by
Moody's and Standard & Poor's are described in the Statement of Additional
Information.
Any of the Funds may at times invest in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from face value and pay interest only at maturity rather than at intervals
during the life of the security. Payment-in-kind bonds allow the issuer, at its
option, to make current interest payments on the bonds either in cash or in
additional bonds. The values of zero-coupon bonds and payment-in-kind bonds are
subject to greater fluctuation in response to changes in market interest rates
than bonds which pay interest currently, and may involve greater credit risk
than such bonds.
A Fund will not necessarily dispose of a security when its debt rating is
reduced below its rating at the time of purchase, although Robertson Stephens
Investment Management will monitor the investment to determine whether continued
investment in the security will assist in meeting the Fund's investment
objective. If a security's rating is reduced below investment grade, an
investment in that security may entail the risks of lower-rated securities
described below.
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BORROWING AND LEVERAGE. The CONTRARIAN FUND-TM- and DEVELOPING COUNTRIES
FUND may borrow money to invest in additional portfolio securities. This
practice, known as "leverage," increases a Fund's market exposure and its risk.
When a Fund has borrowed money for leverage and its investments increase or
decrease in value, the Fund's net asset value will normally increase or decrease
more than if it had not borrowed money. The interest the Fund must pay on
borrowed money will reduce the amount of any potential gains or increase any
losses. The extent to which a Fund will borrow money, and the amount it may
borrow, depend on market conditions and interest rates. Successful use of
leverage depends on Robertson Stephens Investment Management's ability to
predict market movements correctly. A Fund may at times borrow money by means of
reverse repurchase agreements. Reverse repurchase agreements generally involve
the sale by a Fund of securities held by it and an agreement to repurchase the
securities at an agreed-upon price, date, and interest payment. Reverse
repurchase agreements will increase a Fund's overall investment exposure and may
result in losses. The amount of money borrowed by a Fund for leverage may
generally not exceed one-third of the Fund's assets (including the amount
borrowed).
OPTIONS AND FUTURES. A Fund may buy and sell call and put options to hedge
against changes in net asset value or to attempt to realize a greater current
return. In addition, through the purchase and sale of futures contracts and
related options, a Fund may at times seek to hedge against fluctuations in net
asset value and to attempt to increase its investment return.
A Fund's ability to engage in options and futures strategies will depend on
the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that a Fund will
be able to utilize these instruments effectively for the purposes stated above.
Options and futures transactions involve certain risks which are described below
and in the Statement of Additional Information.
Transactions in options and futures contracts involve brokerage costs and
may require a Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.
INDEX FUTURES AND OPTIONS. A Fund may buy and sell index futures contracts
("index futures") and options on index futures and on indices (or may purchase
investments whose values are based on the value from time to time of one or more
securities indices) for hedging purposes. An index future is a contract to buy
or sell units of a particular bond or stock index at an agreed price on a
specified future date. Depending on the change in value of the index between the
time when the Fund enters into and terminates an index futures or option
transaction, the Fund realizes a gain or loss. A Fund may also buy and sell
index futures and options to increase its investment return.
LEAPS AND BOUNDS. The VALUE + GROWTH FUND may purchase long-term
exchange-traded equity options called Long-Term Equity Anticipation Securities
("LEAPs") and Buy-Write Options Unitary Derivatives ("BOUNDs"). LEAPs provide a
holder the opportunity to participate in the underlying securities' appreciation
in excess of a fixed dollar amount, and BOUNDs provide a holder the opportunity
to retain dividends on the underlying securities while potentially participating
in the underlying securities' capital appreciation up to a fixed dollar amount.
The VALUE + GROWTH FUND will not purchase these options with respect to more
than 25% of the value of its net assets.
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index of the securities held by a Fund that are the subject of a hedge. The
successful use by a Fund of the strategies described above further depends on
the ability of Robertson Stephens Investment Management to forecast market
movements correctly. Other risks arise from a Fund's potential inability to
close out futures or options positions. Although a
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Fund will enter into options or futures transactions only if Robertson Stephens
Investment Management believes that a liquid secondary market exists for such
option or futures contract, there can be no assurance that a Fund will be able
to effect closing transactions at any particular time or at an acceptable price.
Certain provisions of the Internal Revenue Code may limit a Fund's ability to
engage in options and futures transactions.
Each Fund expects that its options and futures transactions generally will
be conducted on recognized exchanges. A Fund may in certain instances purchase
and sell options in the over-the-counter markets. A Fund's ability to terminate
options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. A Fund will, however, engage in over-the-counter
transactions only when appropriate exchange-traded transactions are unavailable
and when, in the opinion of Robertson Stephens Investment Management, the
pricing mechanism and liquidity of the over-the-counter markets are satisfactory
and the participants are responsible parties likely to meet their obligations.
A Fund will not purchase futures or options on futures or sell futures if,
as a result, the sum of the initial margin deposits on the Fund's existing
futures positions and premiums paid for outstanding options on futures contracts
would exceed 5% of the Fund's assets. (For options that are "in-the-money" at
the time of purchase, the amount by which the option is "in-the-money" is
excluded from this calculation.)
NON-DIVERSIFICATION AND SECTOR CONCENTRATION. THE CONTRARIAN FUND-TM-, THE
DEVELOPING COUNTRIES FUND, AND THE PARTNERS FUND are "non-diversified"
investment companies, and may invest their assets in a more limited number of
issuers than may other investment companies. Under the Internal Revenue Code, an
investment company, including a non-diversified investment company, generally
may not invest more than 25% of its assets in obligations of any one issuer
other than U.S. Government obligations and, with respect to 50% of its total
assets, a Fund may not invest more than 5% of its total assets in the securities
of any one issuer (except U.S. Government securities). Thus, each of those Funds
may invest up to 25% of its total assets in the securities of each of any two
issuers. This practice involves an increased risk of loss to a Fund if the
market value of a security should decline or its issuer were otherwise not to
meet its obligations.
At times a Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. A Fund would only concentrate its investments in a particular market
sector if Robertson Stephens Investment Management were to believe the
investment return available from concentration in that sector justifies any
additional risk associated with concentration in that sector. When a Fund
concentrates its investments in a market sector, financial, economic, business,
and other developments affecting issuers in that sector will have a greater
effect on the Fund than if it had not concentrated its assets in that sector.
Currently, THE CONTRARIAN FUND-TM- has invested a significant portion of its
assets in companies within a number of industries involving base metals,
precious metals, and oil/energy. In addition, the VALUE + GROWTH FUND has
invested a significant portion of its assets in companies within a number of
industries in the technology and telecommunications sectors. Accordingly, the
performance of these Funds 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.
SECURITIES LOANS AND REPURCHASE AGREEMENTS. Each of the Funds may lend
portfolio securities to broker-dealers and may enter into repurchase agreements.
These transactions must be fully collateralized at all times, but involve some
risk to a Fund if the other party should default on its obligations and the Fund
is delayed or prevented from recovering the collateral.
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DEFENSIVE STRATEGIES. At times, Robertson Stephens Investment Management
may judge that market conditions make pursuing a Fund's basic investment
strategy inconsistent with the best interests of its shareholders. At such
times, Robertson Stephens Investment Management may temporarily use alternative
strategies, primarily designed to reduce fluctuations in the values of the
Fund's assets. In implementing these "defensive" strategies, a Fund may invest
in U.S. Government securities, other high-quality debt instruments, and other
securities Robertson Stephens Investment Management believes to be consistent
with the Fund's best interests.
PORTFOLIO TURNOVER. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by a Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. Portfolio turnover rates for each of the
following Funds during their fiscal periods ended December 31, 1995 were as
follows: Contrarian Fund, 29%; Developing Countries Fund, 103%; Emerging Growth
Fund, 147%; Value+Growth Fund, 104%. Portfolio turnover rates for the following
Funds for the nine months ended September 30, 1996 (unannualized) were as
follows: Global Low-Priced Stock Fund, 38%; Global Natural Resources Fund, 60%;
Growth & Income Fund, 160%; Information Age Fund, 256%; Partners Fund, 55%.
Annual portfolio turnover for the Diversified Growth and MicroCap Growth Funds
is expected to be less than 200%.
MANAGEMENT OF THE FUNDS
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. ROBERTSON, STEPHENS & COMPANY INVESTMENT
MANAGEMENT, L.P., 555 California Street, San Francisco, CA 94104, is the
investment adviser for each of the Funds other than the Emerging Growth Fund.
Robertson, Stephens & Company Investment Management, L.P., a California limited
partnership, was formed in 1993 and is registered as an investment adviser with
the Securities and Exchange Commission. The general partner of Robertson,
Stephens & Company Investment Management, L.P. is Robertson, Stephens & Company,
Inc., and the principal limited partner is Robertson, Stephens & Company LLC,
the Funds' distributor and a major investment banking firm specializing in
emerging growth companies that has developed substantial investment research,
underwriting, and venture capital expertise. Since 1978, Robertson, Stephens &
Company LLC has managed underwritten public offerings for over $26 billion of
securities of emerging growth companies. Robertson, Stephens & Company
Investment Management, L.P. and its affiliates have in excess of $4.1 billion
under management in public and private investment funds. Robertson, Stephens &
Company LLC, its general partner, Robertson, Stephens & Company, Inc., and
Sanford R. Robertson may be deemed to be control persons of Robertson, Stephens
& Company Investment Management, L.P.
ROBERTSON STEPHENS INVESTMENT MANAGEMENT, INC., 555 California Street, San
Francisco, CA 94104 is the investment adviser for the Emerging Growth Fund.
Robertson Stephens Investment Management, Inc. commenced operations in March
1986 and is registered as an investment adviser with the Securities and Exchange
Commission and is an indirect wholly-owned subsidiary of Robertson, Stephens &
Company LLC.
Subject to such policies as the Trustees may determine, Robertson Stephens
Investment Management furnishes a continuing investment program for the Funds
and makes investment decisions on their behalf pursuant to Investment Advisory
Agreements with each Fund. Robertson Stephens Investment Management is also
responsible for overall management of the Funds' business affairs, subject to
the authority of the Board of Trustees, and for providing office space
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and officers for the Trust. The Trust pays all expenses not assumed by Robertson
Stephens Investment Management including, among other things, Trustees' fees,
auditing, accounting, legal, custodial, investor servicing, and shareholder
reporting expenses, and payments under the Funds' Distribution Plans.
Robertson Stephens Investment Management places all orders for purchases and
sales of the Funds' investments. In selecting broker-dealers, Robertson Stephens
Investment Management may consider research and brokerage services furnished to
it and its affiliates. Robertson, Stephens & Company LLC may receive brokerage
commissions from the Funds in accordance with procedures adopted by the Trustees
under the Investment Company Act of 1940 which require periodic review of these
transactions. Subject to seeking the most favorable price and execution
available, Robertson Stephens Investment Management may consider sales of shares
of the Funds as a factor in the selection of broker-dealers.
Robertson Stephens Investment Management may at times bear certain expenses
of the Funds. The Investment Advisory Agreements between each of the Diversified
Growth Fund, the Global Low-Priced Stock Fund, the Global Natural Resources
Fund, the Growth & Income Fund, The Information Age Fund-TM-, the MicroCap
Growth Fund, the Partners Fund, and the Value + Growth Fund and Robertson
Stephens Investment Management permit Robertson Stephens Investment Management
to seek reimbursement for those expenses within the succeeding two-year period,
subject to any expense limitations then applicable to the Fund in question.
ADMINISTRATIVE SERVICES. Each of the Diversified Growth, Growth & Income,
Global Low-Priced Stock, Global Natural Resources, and MicroCap Growth Funds,
and The Information Age Fund-TM- has entered into an agreement with Robertson
Stephens Investment Management pursuant to which Robertson Stephens Investment
Management provides administrative services to the Fund. Each Fund pays
Robertson Stephens Investment Management a fee for such services at the annual
rate of 0.25% of its average daily net assets.
PORTFOLIO MANAGERS
Paul H. Stephens has served as The Contrarian Fund's-TM- portfolio manager
since its inception in June 1993. He is a founder of Robertson, Stephens &
Company LLC. In addition to managing public investment portfolios for
individuals since 1975, Mr. Stephens has acted as the firm's Chief Investment
Officer since 1978. He holds a B.S. and an M.B.A. from the University of
California at Berkeley.
James Callinan is responsible for managing the Emerging Growth Fund's
portfolio. Mr. Callinan has more than nine years of investment research and
management experience. From 1986 until June 1996, Mr. Callinan was employed by
Putnam Investments, where, beginning in June 1994, he served as portfolio
manager of the Putnam OTC Emerging Growth Fund. Mr. Callinan received an A.B. in
economics from Harvard College, an M.S. in accounting from New York University,
and an M.B.A. from Harvard Business School, and is a Chartered Financial
Analyst.
Ronald E. Elijah has managed the Value + Growth Fund's portfolio since that
Fund's inception in April 1992. Mr. Elijah is also the portfolio manager for The
Information Age Fund-TM-. From August 1985 to January 1990, Mr. Elijah was a
securities analyst for Robertson, Stephens & Company LLC. From January 1990 to
January 1992, Mr. Elijah was an analyst and portfolio manager for Water Street
Capital, which managed short selling investment funds. He holds a master's
degree in economics from Humboldt State University and an M.B.A. with an
emphasis in finance from Golden Gate University.
David Evans is responsible for managing the portfolio of the MicroCap Growth
Fund.
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Mr. Evans has more than fifteen years of investment research and management
experience, and has been a part of the management team at Robertson Stephens
Investment Management since 1989. Mr. Evans was an analyst and portfolio manager
at CIGNA before joining Robertson Stephens Investment Management. He holds a
B.A. from Muskingum College and an M.B.A. from the Wharton School of the
University of Pennsylvania.
Michael Hoffman has been responsible for managing the Developing Countries
Fund's portfolio since that Fund's inception in April 1994. From August 1990 to
April 1994, Mr. Hoffman was a portfolio manager with CIGNA International
Investment Advisors, where he managed four portfolios with net assets ranging
from $25 million to $100 million. He holds a B.S. from Pennsylvania State
University and a master's degree in international business from the University
of South Carolina.
Andrew P. Pilara, Jr. has been responsible for managing the Partners Fund
since the Fund's inception in July 1995 and is responsible for managing the
Global Natural Resources Fund. Since August 1993 he has been a member of the
Contrarian Fund-TM- management team. Mr. Pilara has been involved in the
securities business for over 25 years, with experience in portfolio management,
research, trading, and sales. Prior to joining Robertson, Stephens & Company
Investment Management, L.P., he was president of Pilara Associates, an
investment management firm he established in 1974. He holds a B.A. in economics
from St. Mary's College.
M. Hannah Sullivan is responsible for managing the Global Low-Priced Stock
Fund. Since April 1992, she has been a member of the management team for the
Contrarian Fund-TM-. She holds a B.A. in Spanish literature from Cornell
University and an M.B.A. from the University of California at Berkeley.
John L. Wallace has been responsible for managing the Growth & Income Fund
since its inception in July 1995 and is responsible for managing the Diversified
Growth Fund. Prior to joining Robertson, Stephens & Company Investment
Management, L.P., Mr. Wallace was Vice President of Oppenheimer Management
Corp., where he was portfolio manager of the Oppenheimer Main Street Income and
Growth Fund. He holds a B.A. from the University of Idaho and an M.B.A. from
Pace University.
HOW TO PURCHASE SHARES
Class C shares of any Fund may be purchased through your financial
institution, which may be a broker-dealer, a bank, or another institution. You
can open an account for Class C shares of a Fund with as little as $5,000
($1,000 for IRA and for gift/transfer-to-minor accounts) and make additional
investments at any time with as little as $100 ($1 for IRAs).
Your financial institution can assist you in establishing your account and
making your investment. Your financial institution is responsible for forwarding
all of the necessary documentation to the Trust, and may charge for its
services. If you do not have a financial institution, Robertson, Stephens & Co.
LLC, the Funds' principal underwriter ("RS&Co."), can refer you to one.
Once you have made the initial minimum investment in a Fund, you can make
regular investments in that Fund of $100 or more on a monthly or quarterly basis
through automatic deductions from your bank checking account. Application forms
are available from your financial institution or through RS&Co.
OTHER INFORMATION
ABOUT PURCHASING SHARES
- -------------------------------------
Each Fund's Class C shares are sold at the Fund's net asset value per share
next determined after the Fund receives your purchase order. In most cases, in
order to receive that day's public offering price, your financial institution
17
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- --------------------------------------------------------------------------------
must ensure that the Trust receives your order before the close of regular
trading on the New York Stock Exchange.
CONTINGENT DEFERRED SALES CHARGE. Class C shares are sold without an initial
sales charge, although a contingent deferred sales charge ("CDSC") of 1.00% is
imposed on redemptions of such shares within the first year after purchase,
based on the lower of the shares' cost or current net asset value.
In determining whether a CDSC is payable in respect of the Class C shares
redeemed, a Fund will first redeem the Class C shares held longest (together
with any Class C shares received upon reinvestment of distributions with respect
to those shares). Any of the shares being redeemed which were acquired by
reinvestment of distributions will be redeemed without a CDSC, and amounts
representing capital appreciation will not be subject to a CDSC. RS&Co. receives
the entire amount of any CDSC you pay. The amount of any CDSC is determined as a
percentage of the lesser of the current market value and the cost of the shares
being redeemed.
REINVESTMENT PRIVILEGE. If you redeem Class C shares of a Fund, you have a
one-time right, within 90 days, to reinvest the redemption proceeds plus the
amount of CDSC you paid, if any, at the next-determined net asset value. RS&Co.
must be notified in writing by you or by your financial institution of the
reinvestment for you to recover the CDSC. If you redeem shares in a Fund, there
may be tax consequences.
GENERAL
- -------------------------------------
If you are considering redeeming or exchanging shares of a Fund or
transferring shares to another person shortly after purchase, you should pay for
those shares with a certified check to avoid any delay in redemption, exchange,
or transfer. Otherwise a Fund may delay payment until the purchase price of
those shares has been collected or, if you redeem by telephone, until 15
calendar days after the purchase date.
A Fund may waive the CDSC on Class C shares redeemed by the Trust's current
and retired Trustees (and their families), current and retired employees (and
their families) of RS&Co., Robertson Stephens Investment Management, and their
affiliates, registered representatives and other employees (and their families)
of broker-dealers having sales agreements with RS&Co., employees (and their
families) of financial institutions having sales agreements with RS&Co. (or
otherwise having an arrangement with a broker-dealer or financial institution
with respect to sales of Fund shares), financial institution trust departments
investing an aggregate of $1 million or more in one or more funds in the
Robertson Stephens family, clients of certain administrators of tax-qualified
plans, employer-sponsored retirement plans, and tax-qualified plans when
proceeds from repayments of loans to participants are invested (or reinvested)
in the Robertson Stephens Funds. A Fund may sell shares not subject to any CDSC
in connection with the acquisition by the Fund of assets of an investment
company or personal holding company. In addition, the CDSC may be waived in the
case of (i) redemptions of shares held at the time a shareholder dies or becomes
disabled, including the shares of a shareholder who owns the shares with his or
her spouse as joint tenants with right of survivorship, provided that the
redemption is requested within one year of the death or initial determination of
disability; and (ii) redemptions in connection with the following retirement
plan distributions: (a) lump-sum or other distributions from a qualified
retirement plan following retirement or separation from service; (b)
distributions from an IRA, Keogh Plan, or Custodial Account under Section
403(b)(7) of the Internal Revenue Code following attainment of age 59 1/2; (c) a
tax-free return on an excess contribution to an IRA; and (d) distributions to
make "substantially equal periodic payments" as described in Section 72(t) of
the Internal Revenue Code. The minimum initial investment may be waived for
current and retired Trustees, and current and retired employees of the Trust,
RS&Co., or their affiliates. Contact your financial institution or RS&Co. for
information. If you invest through a broker-dealer or other financial
institution, your broker-dealer or other financial institution will be
responsible for electing on your
18
<PAGE>
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- --------------------------------------------------------------------------------
behalf to take advantage of any of the waivers described above. Please instruct
your broker-dealer or other financial institution accordingly.
Because of the relatively high cost of maintaining accounts, the Fund
reserves the right to redeem, upon not less than 60 days notice, any Fund
account whose account balance falls below $500 as a result of redemptions. A
shareholder may, however, avoid such a redemption by a Fund by increasing his
investment in shares of the Fund to a value of $500 or more during such 60-day
period.
Each Fund reserves the right to reject any purchase, in whole or in part,
and to suspend the offering of its shares for any period of time and to change
or waive the minimum investment amounts specified in this prospectus. No share
certificates for Class C shares will be issued.
EXCHANGE PRIVILEGE
- -------------------------------------
Except as otherwise described below, you can exchange your shares in any
Fund worth at least $1,000 for Class C shares of the other Robertson Stephens
Funds offering such shares, at net asset value beginning 15 days after purchase.
If you exchange shares subject to a CDSC, the transaction will not be subject to
a CDSC. However, when you redeem the shares acquired through the exchange, the
redemption may be subject to the CDSC, depending upon when you originally
purchased the shares. For purposes of determining whether the CDSC applies, the
length of time you have owned your shares will be measured from the date of
original purchase and will not be affected by any exchange.
Shares may be exchanged only if the amount being exchanged satisfies the
minimum investment required and the shareholder is a resident of a state where
shares of the appropriate Fund are qualified for sale. However, you may not
without the consent of RS&Co. exchange your investment in shares of any Fund
more than four times in any twelve-month period (including the initial exchange
of your investment from that Fund during the period, and subsequent exchanges of
that investment from other Funds during the same twelve-month period).
The exchange privilege is not intended as a vehicle for short-term trading.
Excessive exchange activity may interfere with portfolio management and have an
adverse effect on all shareholders. In order to limit excessive exchange
activity and in other circumstances where RS&Co. or the Trustees believe doing
so would be in the best interests of the Fund, the Fund reserves the right to
revise or terminate the exchange privilege, limit the amount or number of
exchanges, or reject any exchange. Shareholders would be notified of any such
action to the extent required by law. Consult your financial institution before
requesting an exchange.
Investors should note that an exchange will result in a taxable event.
Exchange privileges may be terminated, modified, or suspended by a Fund upon 60
days prior notice to shareholders.
Unless you have indicated that you do not wish to establish telephone
exchange privileges (see the Account Application or call the Funds for details),
you may make exchanges by telephone.
HOW TO REDEEM SHARES
You can sell your Class C shares in a Fund to that Fund any day the New York
Stock Exchange is open, either through your financial institution or directly to
the Fund. A Fund will only redeem shares for which it has received payment.
SELLING SHARES THROUGH YOUR
FINANCIAL INSTITUTION
- -------------------------------------
Your financial institution and RS&Co. must receive your request before the
close of regular trading on the New York Stock Exchange to receive that day's
net asset value. Your financial
19
<PAGE>
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- --------------------------------------------------------------------------------
institution will be responsible for furnishing all necessary documentation to
RS&Co., and may charge you for its services.
SELLING SHARES DIRECTLY TO A FUND
- -------------------------------------
BY MAIL. You may redeem your shares of a Fund by mailing a written request
for redemption to the Transfer Agent that:
(1) states the number of shares or dollar amount to be redeemed;
(2) identifies your account number; and
(3) is signed by you and all other owners of the account exactly as their names
appear on the account.
If you request that the proceeds from your redemption be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each such signature by an eligible signature
guarantor, such as a member firm of a national securities exchange or a
commercial bank or trust company located in the United States. If you are a
resident of a foreign country, another type of certification may be required.
Please contact National Financial Data Services (the "Transfer Agent") for more
details at 1-800-272-6944. Corporations, fiduciaries, and other types of
shareholders may be required to supply additional documents which support their
authority to effect a redemption.
BY TELEPHONE. Unless you have indicated that you do not wish to establish
telephone redemption privileges (see the Account Application or contact your
financial institution for details), you may redeem shares by calling the
Transfer Agent at 1-800-272-6944 by 4:00 p.m. New York time on any day the New
York Stock Exchange is open for business.
If an account has more than one owner, the Transfer Agent may rely on the
instructions of any one owner. Each Fund employs reasonable procedures in an
effort to confirm the authenticity of telephone instructions, which currently
include the recording of shareholders' calls, the mailing of confirmation
statements, and the use of a personal identification test (which may, for
example, require the caller to give a special authorization number or to verify
the account owner's address and social security number). If procedures
established by the Trust are not followed, the Funds and the Transfer Agent may
be responsible for any losses because of unauthorized or fraudulent
instructions. By not declining telephone redemption privileges, you authorize
the Transfer Agent to act upon any telephone instructions it believes to be
genuine, (1) to redeem shares from your account and (2) to mail or wire the
redemption proceeds. If you recently opened an account by wire, you cannot
redeem shares by telephone until the Transfer Agent has received your completed
Application.
Telephone redemption is not available for shares held in IRAs. Each Fund may
change, modify, or terminate its telephone redemption services at any time upon
30 days notice.
BY WIRE TRANSFER. If your financial institution receives Federal Reserve
wires, you may instruct that your redemption proceeds be forwarded to your
account with your financial institution or to you by a wire transfer. Please
indicate your financial institution's or your own complete wiring instructions.
The Funds will forward proceeds from telephone redemptions only to the bank or
brokerage account that you have authorized in writing. A $9.00 wire fee will be
paid either by redeeming shares from your account, or upon a full redemption,
deducting the fee from the proceeds.
GENERAL REDEMPTION POLICIES
- -------------------------------------
The redemption price per share is the net asset value per share next
determined after the Transfer Agent receives the request for redemption in
proper form, and each Fund will make payment for redeemed shares within seven
days thereafter. Under unusual circumstances, a Fund may suspend repurchases, or
postpone payment of redemption proceeds for more than seven days, as permitted
by federal securities law. If you purchase shares of a Fund by check (including
certified check) and redeem them shortly thereafter, the Fund will delay payment
of the redemption proceeds for up to fifteen days
20
<PAGE>
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- --------------------------------------------------------------------------------
after the Fund's receipt of the check or until the check has cleared, whichever
occurs first. If you redeem shares through your financial institution, your
financial institution is responsible for ensuring that the Transfer Agent
receives your redemption request in proper form at the appropriate time.
You may experience delays in exercising telephone redemptions during periods
of abnormal market activity. Accordingly, during periods of volatile economic
and market conditions, you may wish to consider transmitting redemption orders
to the Transfer Agent by an overnight courier service.
THE FUNDS' DISTRIBUTOR
Each of the Funds has adopted a Distribution Plan under Rule 12b-1 with
respect to its Class C shares (each, a "Plan") providing for payments by the
Fund to RS&Co. from the assets attributable to the Fund's Class C shares.
Payments under the Plan are intended to compensate RS&Co. for services provided
and expenses incurred by it as principal underwriter of the Fund's Class C
shares, including the payments to financial institutions described below.
In order to compensate broker-dealers and certain other financial
institutions for services provided in connection with sales of Class C shares,
RS&Co. makes quarterly payments to qualifying broker-dealers and other financial
institutions at an annual rate of up to 0.75% of the average net asset value of
Class C shares attributable to shareholders for whom the broker-dealers or
financial institutions are the intermediaries of record. RS&Co. may suspend or
modify such payments. Such payments are also subject to the continuation of the
relevant Plan, the terms of any agreements between financial institutions and
RS&Co., and any applicable limits imposed by the National Association of
Securities Dealers, Inc.
Each of the Funds currently makes payments to RS&Co. under its Plan at the
annual rate of 0.75% of the assets of the Fund attributable to its Class C
shares (although the Plans contemplate payments at a rate of up to 1.00% of a
Fund's average net assets attributable to Class C shares). The Plans also by
their terms relate to payments under the Funds' Shareholder Servicing Plan, to
the extent such payments may be seen as primarily intended to result in the sale
of a Fund's Class C shares. The Trustees may reduce the amount of payments or
suspend the Plan for such periods as they may determine. RS&Co. also receives
the proceeds of any CDSC imposed on redemptions of shares.
RS&Co., Robertson Stephens Investment Management, and their affiliates, at
their own expense and out of their own assets, may also provide other
compensation to financial institutions in connection with sales of the Funds'
shares or the servicing of shareholders or shareholder accounts. Such
compensation may include, but is not limited to, financial assistance to
financial institutions in connection with conferences, sales or training
programs for their employees, seminars for the public, advertising or sales
campaigns, or other financial institution-sponsored special events. In some
instances, this compensation may be made available only to certain financial
institutions whose representatives have sold or are expected to sell significant
amounts of shares. Dealers may not use sales of the Funds' shares to qualify for
this compensation to the extent such may be prohibited by the laws of any state
or any self-regulatory agency, such as the National Association of Securities
Dealers, Inc.
Each Fund has agreed to indemnify RS&Co. against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan (the "Service Plan") for
the Class C shares of each Fund. Under the Service Plan, each Fund pays fees to
RS&Co. at an annual rate
21
<PAGE>
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- --------------------------------------------------------------------------------
of up to 0.25% of the Fund's average daily net assets. 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. These
administrative services may include, but are not limited to, the following
functions: providing office space, equipment, telephone facilities, and various
personnel, including clerical, supervisory, and computer personnel, as necessary
or beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries regarding the
Funds; assisting clients in changing dividend options, account designations, and
addresses; and providing such other services as RS&Co. reasonably requests.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
Each Fund distributes substantially all of its net investment income and net
capital gains to shareholders at least once a year (or more often if necessary
to avoid certain excise or income taxes on the Fund). All distributions by a
Fund will be automatically reinvested in Class C shares of the Fund unless the
shareholder (or the shareholder's financial institution) requests cash payment
on at least 10 days prior written notice to the Transfer Agent.
Each Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements that are necessary for it
to be relieved of federal taxes on income and gains it distributes to
shareholders. A Fund will distribute substantially all of its net investment
income and net capital gain income on a current basis.
All Fund distributions will be taxable to you as ordinary income, except
that any distributions of net long-term capital gains will be taxed as such,
regardless of how long you have held your shares. Distributions will be taxable
as described above, whether received in cash or in shares through the
reinvestment of distributions. Early in each year, the Trust will notify you of
the amount and tax status of distributions paid to you by each of the Funds for
the preceding year.
The foregoing is a summary of certain federal income tax consequences of
investing in a Fund. You should consult your tax adviser to determine the
precise effect of an investment in a Fund on your particular tax situation.
HOW NET ASSET VALUE IS DETERMINED
Each Fund calculates the net asset value of its Class C shares by dividing
the total value of its assets attributable to its Class C shares, less its
liabilities attributable to those shares, by the number of its Class C shares
outstanding. Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Fund securities for which
market quotations are readily available are stated at market value. Short-term
investments that will mature in 60 days or less are stated at amortized cost,
which approximates market value. All other securities and assets are valued at
their fair values determined by Robertson Stephens Investment Management. The
net asset value of a Fund's Class C shares will generally differ from that of
its other classes of shares due to the variance in daily net income realized by
and dividends paid on each class of shares, and any differences in the expenses
of the different classes.
22
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HOW PERFORMANCE IS DETERMINED
Yield and total return data may from time to time be included in
advertisements about the Funds' Class C shares. The "yield" of a Fund's Class C
shares is calculated by dividing the annualized net investment income per Class
C share during a recent 30-day period by the net asset value per Class C share
on the last day of that period. "Total return" for the period during which Class
C shares of a Fund have been offered, through the most recent calendar quarter,
represents the average annual compounded rate of return (or, in the case of a
period of one year or less, the actual rate of return) on an investment of
$1,000 in Class C shares of that Fund. Total return may also be presented for
other periods. Quotations of yield or total return for a period when an expense
limitation was in effect will be greater than if the limitation had not been in
effect. A Fund's performance may be compared to various indices. See the
Statement of Additional Information. Information may be presented in
advertisements about a Fund describing the background and professional
experience of the Fund's investment adviser or any portfolio manager.
All data are based on a Fund's past investment results and do not predict
future performance. Investment performance, which will vary, is based on many
factors, including market conditions, the composition of the Fund's portfolio,
and the Fund's expenses. Investment performance also often reflects the risks
associated with a Fund's investment objective and policies. These factors should
be considered when comparing a Fund's investment results to those of other
mutual funds and other investment vehicles.
ADDITIONAL INFORMATION
Each Fund is a series of the Trust, which was organized on May 11, 1987
under the laws of The Commonwealth of Massachusetts and is a business entity
commonly known as a "Massachusetts business trust." A copy of the Agreement and
Declaration of Trust, which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts.
When matters are submitted for shareholder vote, shareholders of each series
will have one vote for each full share owned and proportionate, fractional votes
for fractional shares held. Generally, shares of each series vote separately as
a class on all matters except (1) matters affecting only the interests of one or
more of the series, in which case only shares of the affected series would be
entitled to vote, or (2) when the Investment Company Act requires that shares of
all series be voted in the aggregate. Each series offered by this Prospectus
issues shares of two classes, Class A shares and Class C shares. Although the
Trust is not required to hold annual shareholder meetings, shareholders have the
right to call a meeting to elect or remove Trustees, or to take other actions as
provided in the Agreement and Declaration of Trust.
State Street Bank and Trust Company, c/o National Financial Data Services,
P.O. Box 419717, Kansas City, Missouri 64141, acts as each Fund's transfer agent
and dividend paying agent. State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, also acts as the custodian of each Fund's
portfolio.
23
<PAGE>
- ----------------------------------------------------
- ----------------------------------------------------
ROBERTSON STEPHENS & COMPANY
BRINGING THE FUND MANAGER TO YOU
ADDRESS
555 California Street
San Francisco, CA 94104
1-800-270-5829
INVESTMENT ADVISERS
Robertson, Stephens & Company
Investment Management, L.P.
Robertson Stephens Investment
Management, Inc.
555 California Street
San Francisco, CA 94104
1-800-270-5829
DISTRIBUTOR
Robertson, Stephens & Company LLC
555 California Street
San Francisco, CA 94104
1-800-270-5829
TRANSFER AGENT
State Street Bank and Trust Company
c/o National Financial Data Services
P. O. Box 419717
Kansas City, MO 64141
1-800-272-6944
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
San Francisco, CA 94104
LEGAL COUNSEL
Ropes & Gray
Boston, MA 02110
CUSTODIAN
State Street Bank and Trust Company
Boston, MA 02110
No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Fund. This Prospectus does not constitute an
offering in any state or jurisdiction in which such offering may not lawfully be
made.
- ---------------------------------------------------
- ---------------------------------------------------
---------------------------------------------------
ROBERTSON
STEPHENS
MUTUAL
FUNDS
--------------------
THE CONTRARIAN FUND-TM-
THE ROBERTSON STEPHENS
DEVELOPING COUNTRIES FUND
THE ROBERTSON STEPHENS
DIVERSIFIED GROWTH FUND
THE ROBERTSON STEPHENS
EMERGING GROWTH FUND
THE ROBERTSON STEPHENS
GLOBAL LOW-PRICED
STOCK FUND
THE ROBERTSON STEPHENS
GLOBAL NATURAL
RESOURCES FUND
THE ROBERTSON STEPHENS
GROWTH & INCOME FUND
THE ROBERTSON STEPHENS
MICROCAP GROWTH FUND
THE INFORMATION AGE FUND-TM-
THE ROBERTSON STEPHENS
PARTNERS FUND
THE ROBERTSON STEPHENS
VALUE + GROWTH FUND
PROSPECTUS
March , 1997
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
POST-EFFECTIVE AMENDMENT TO THE TRUST'S REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS
NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY
BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 21, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ROBERTSON STEPHENS MUTUAL FUNDS
555 California Street, Suite 2600 PROSPECTUS
San Francisco, CA 94104 CLASS C SHARES
800-270-5829 March , 1997
- --------------------------------------------------------------------------------
ROBERTSON STEPHENS INVESTMENT TRUST makes available to investors the
expertise of the investment professionals at Robertson Stephens Investment
Management. The Trust is offering Class C shares of ten mutual funds by this
Prospectus: The Robertson Stephens DEVELOPING COUNTRIES FUND, The Robertson
Stephens DIVERSIFIED GROWTH FUND, The Robertson Stephens EMERGING GROWTH FUND,
The Robertson Stephens GLOBAL LOW-PRICED STOCK FUND, The Robertson Stephens
GLOBAL NATURAL RESOURCES FUND, The Robertson Stephens GROWTH & INCOME FUND, The
INFORMATION AGE FUND-TM-, The Robertson Stephens MICROCAP GROWTH FUND, The
Robertson Stephens PARTNERS FUND, and The Robertson Stephens VALUE + GROWTH
FUND.
THIS PROSPECTUS EXPLAINS CONCISELY THE INFORMATION ABOUT THE TRUST THAT A
PROSPECTIVE INVESTOR SHOULD KNOW BEFORE INVESTING IN THE FUNDS' CLASS C SHARES.
Please read it carefully and keep it for future reference. Investors can find
more detailed information about the Funds in the March __, 1997 Statement of
Additional Information, as amended from time to time. For a free copy of the
Statement of Additional Information, please call 1-800-270-5829. The Statement
of Additional Information has been filed with the Securities and Exchange
Commission and is incorporated into this Prospectus by reference.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
PAGE
-----
Expense Summary........................ 2
Investment Objectives and Policies..... 4
Management of the Funds................ 15
Portfolio Managers..................... 16
How to Purchase Shares................. 17
How to Redeem Shares................... 19
The Fund's Distributor................. 20
Shareholder Servicing Plan............. 21
Dividends, Distributions, and Taxes.... 21
How Net Asset Value is Determined...... 22
How Performance Is Determined.......... 22
Additional Information................. 22
</TABLE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPENSE SUMMARY
The following table summarizes an investor's maximum transaction costs from
investing in Class C shares of each of the Funds and expenses each of the Funds
expects to incur in respect of its Class C shares. The Example shows the
cumulative expenses attributable to a $1,000 investment in Class C shares of the
Funds over specified periods.
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fee* None
Exchange Fee None
Contingent Deferred Sales Charge 1.0% in the
(as a percentage of the original purchase price first year,
or the current net asset value, whichever is less) and
eliminated
thereafter.
</TABLE>
- --------------------------
* A $9.00 FEE IS CHARGED FOR REDEMPTIONS MADE BY BANK WIRE.
<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
GLOBAL GLOBAL GROWTH
DEVELOPING DIVERSIFIED EMERGING LOW-PRICED NATURAL & INFORMATION
COUNTRIES GROWTH GROWTH STOCK RESOURCES INCOME AGE-TM-
-------------- ------------- ----------- -------------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Management Fees 1.25% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Rule 12b-1 Expenses 0.75% 0.75% 0.75% 0.75% 0.75% 0.75% 0.75%
Shareholder Service Fee 0.25% 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
Other Expenses* 0.35%(1) 0.70%(1) 0.35% 0.70%(1) 0.70%(1) 0.05%(1) 0.78%
------ ------ ----------- ------ ------------- ----------- ------
Total Fund Operating
Expenses* 2.60%(1) 2.70%(1) 2.35% 2.70%(1) 2.70%(1) 2.05%(1) 2.78%
<CAPTION>
ANNUAL FUND OPERATING EXP
(as a percentage of avera
MICRO
CAP VALUE +
GROWTH PARTNERS GROWTH
----------- ------------ -----------
<S> <C> <C> <C>
Management Fees 1.25% 1.25% 1.00%
Rule 12b-1 Expenses 0.75% 0.75% 0.75%
Shareholder Service Fee 0.25% 0.25% 0.25%
Other Expenses* 0.45%(1) 0.45%(1) 0.33%
----------- ------ -----------
Total Fund Operating
Expenses* 2.70%(1) 2.70%(1) 2.33%
</TABLE>
- ----------------------------------------
(1) REFLECTING VOLUNTARY EXPENSE LIMITATIONS.
* ESTIMATED BASED ON EXPECTED EXPENSES OF CLASS C SHARES.
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EXAMPLE
An investment of $1,000 in Class C shares of the Funds would incur the following
expenses, assuming 5% annual return and redemption at the end of each period:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS
----------- -----------
<S> <C> <C>
The Developing Countries Fund $ 26 $ 81
The Diversified Growth Fund $ 27 $ 84
The Emerging Growth Fund $ 24 $ 73
The Global Low-Priced Stock Fund $ 27 $ 84
The Global Natural Resources Fund $ 27 $ 84
The Growth & Income Fund $ 21 $ 64
The Information Age Fund-TM- $ 28 $ 86
The MicroCap Growth Fund $ 27 $ 84
The Partners Fund $ 27 $ 84
The Value + Growth Fund $ 24 $ 73
</TABLE>
This information is provided to help investors understand the operating expenses
of the Funds. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
PERFORMANCE. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE SHOWN. Other
Expenses and Total Fund Operating Expenses for the Funds are estimated based on
the expenses the Funds expect to incur with respect to their Class C shares;
they also reflect voluntary expense limitations currently in effect for some of
the Funds. In the absence of those expense limitations, Other Expenses and Total
Fund Operating Expenses, respectively, of those Funds would be as follows:
Developing Countries Fund, 1.21% and 3.46%; Diversified Growth Fund, 1.19% and
3.19%; Global Low-Priced Stock Fund, 1.65% and 3.65%; Global Natural Resources
Fund, 0.92% and 2.92%; Growth & Income Fund, 0.51% and 2.51%; MicroCap Growth
Fund, 4.90% and 7.15%; and Partners Fund, 0.67% and 2.92%. The Management Fees
paid by the Funds are higher than those paid by most other mutual funds. Because
of Rule 12b-1 fees paid by the Funds, long-term shareholders may pay more than
the economic equivalent of the maximum front-end sales load permitted under
applicable broker-dealer sales rules.
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INVESTMENT OBJECTIVES AND POLICIES
The Robertson Stephens Mutual Funds are designed to make available to mutual
fund investors the expertise of the investment professionals at Robertson,
Stephens & Company Investment Management, L.P. and Robertson Stephens Investment
Management, Inc. (Robertson, Stephens & Company Investment Management, L.P. and
Robertson Stephens Investment Management, Inc. are referred to collectively in
this Prospectus as "Robertson Stephens Investment Management").
None of the Funds, other than the Growth & Income Fund, invests for current
income. Each of the Funds may hold a portion of its assets in cash or money
market investments.
The investment policies of each Fund may, unless otherwise specifically
stated, be changed by the Trustees of the Trust without shareholder approval, as
may each Fund's investment objective. All percentage limitations on investments
will apply at the time of investment and will not be considered violated unless
an excess or deficiency occurs or exists immediately after and as a result of
the investment. There can, of course, be no assurance that a Fund will achieve
its investment objective.
For a description of certain risks associated with the Funds' investment
practices, see "Other Investment Practices and Risk Considerations," below.
THE DEVELOPING COUNTRIES FUND
- -------------------------------------
The Developing Countries Fund's investment objective is long-term capital
appreciation. The Fund invests primarily in a non-diversified portfolio of
publicly traded developing country equity securities. The Fund may also, to a
lesser degree, invest in private placements of developing country equity
securities.
Developing country equity securities are securities which are principally
traded in the capital markets of a developing country; securities of companies
that derive at least 50% of their total revenues from either goods produced or
services performed in developing countries or from sales made in developing
countries, regardless of where the securities of such companies are principally
traded; securities of companies organized under the laws of, and with a
principal office in, a developing country; securities of investment companies
(such as country funds) that principally invest in developing country
securities; and American Depository Receipts (ADRs) and Global Depository
Receipts (GDRs) with respect to the securities of such companies. Developing
countries are countries that in the opinion of Robertson Stephens Investment
Management are generally considered to be developing countries by the
international financial community. The Fund will normally invest at least 65% of
its assets in developing country equity securities. The Fund may also borrow
money to purchase additional portfolio securities. The Fund is a non-diversified
mutual fund.
The Developing Countries Fund may invest up to 10% of its total assets in
shares of other investment companies. Such other investment companies would
likely pay expenses similar to those paid by the Fund, including, for example,
advisory and administrative fees. Robertson Stephens Investment Management will
waive its investment advisory fees on the Fund's assets invested in other
open-end investment companies, to the extent of the advisory fees of those
investment companies attributable to the Fund's investment.
In selecting investments for the Fund, Robertson Stephens Investment
Management may consider a number of factors in evaluating potential investments,
including political risks, classic macroeconomic variables, and equity market
valuations. Robertson Stephens Investment Management may also focus on the
quality of a company's management, the company's growth prospects, and the
financial well being of the company. The Developing Countries Fund's investments
generally will reflect a broad cross-section of countries, industries, and
companies in order to minimize risk. In situations where the market for a
particular security is determined by
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Robertson Stephens Investment Management to be sufficiently liquid, the Fund may
engage in short sales.
THE DIVERSIFIED GROWTH FUND
- -------------------------------------
The Diversified Growth Fund's investment objective is to seek long-term
capital growth. In selecting investments for the Fund, Robertson Stephens
Investment Management focuses on small- and mid-cap companies, to create a
portfolio of investments broadly diversified over industry sectors and
companies.
The Fund will invest principally in common and preferred stocks and
warrants. Although the Fund intends to focus on companies with market
capitalizations of up to $3 billion, the Fund will remain flexible and may
invest in securities of larger companies. The Fund may also purchase debt
securities Robertson Stephens Investment Management believes are consistent with
the Fund's investment objective, and may engage in short sales of securities it
expects to decline in price.
Small- and mid-cap companies may present greater opportunities for
investment return than do larger companies, but also involve greater risks. They
may have limited product lines, markets, or financial resources, or may depend
on a limited management group. Their securities may trade less frequently and in
limited volume. As a result, the prices of these securities may fluctuate more
than prices of securities of larger, widely traded companies. See "Investments
in Smaller Companies," below.
THE EMERGING GROWTH FUND
- -------------------------------------
The Emerging Growth Fund's investment objective is capital appreciation. The
Fund invests in an actively managed diversified portfolio of equity securities
(principally common stocks) of emerging growth companies. Emerging growth
companies are companies that, in the opinion of Robertson Stephens Investment
Management, have the potential, based on superior products or services,
operating characteristics, and financing capabilities, for more rapid growth
than the overall economy.
The Emerging Growth Fund's investments generally are held in a portfolio of
securities of companies in industry segments that are experiencing rapid growth
and in companies with proprietary advantages. Robertson Stephens Investment
Management may consider a number of factors in evaluating potential investments,
including, for example, the rate of earnings growth, the quality of management,
the extent of proprietary operating advantage, the return on equity, and/or the
financial condition of the company.
Smaller companies may present greater opportunities for investment return
than do larger companies, but may also involve greater risks. They may have
limited product lines, markets, or financial resources, or may depend on a
limited management group. Their securities may trade less frequently and in
limited volume. As a result, the prices of these securities may fluctuate more
than prices of securities of larger, widely traded companies. See "Investments
in Smaller Companies," below.
THE GLOBAL LOW-PRICED STOCK FUND
- -------------------------------------
The Global Low-Priced Stock Fund's investment objective is long-term growth.
The Fund intends to invest in "low-priced" stocks (prices no greater than $10
per share) of companies worldwide that have future growth potential, but are
overlooked or underappreciated by other investors.
Robertson Stephens Investment Management believes there are substantial
opportunities to discover and invest in undervalued companies that have
long-term growth prospects. Such companies include attractively priced
businesses that have not yet been discovered by other investors, previously
out-of-favor companies with growth potential due to changing circumstances,
companies that have declined in value and no longer command an investor
following, and companies temporarily out of favor due to short-term factors. In
most cases there will
5
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be little coverage by Wall Street analysts of the companies in which the Fund
invests. Institutional ownership will also usually be limited.
It has been the experience of Robertson Stephens Investment Management that
attractive investment opportunities often exist in companies whose stock price
is $10 or less per share. For many reasons, including limits on purchasing the
stocks "on margin" (with borrowed money), many investors do not buy low-priced
stocks. The result is less competition from other investors, and the potential
that a company's value may not be reflected fully in its stock price.
In selecting securities for the Fund's portfolio, Robertson Stephens
Investment Management uses a "bottom-up" analysis, looking at companies of all
sizes, and in all industries and geographical markets. Robertson Stephens
Investment Management focuses on a company's financial condition, profitability
prospects, and capital needs going forward.
Robertson Stephens Investment Management will likely invest in certain
stocks before other investors recognize their value. The result could be a lack
of stock price movement in the near term. Investors should therefore have a
long-term investment horizon when investing in the Fund.
Although the Fund will seek to invest principally in common stocks, it may
also invest any portion of its assets in preferred stocks, warrants, and debt
securities if Robertson Stephens Investment Management believes they would help
achieve the Fund's objective. The Fund will normally invest substantially all of
its assets in low-priced stocks, and will normally invest in securities of
issuers located in at least three countries, one of which may be the United
States.
Smaller companies may present greater opportunities for investment return
than do larger companies, but may also involve greater risks. They may have
limited product lines, markets, or financial resources, or may depend on a
limited management group. Their securities may trade less frequently and in
limited volume. As a result, the prices of these securities may fluctuate more
than prices of securities of larger, more widely traded companies. See
"Investments in Smaller Companies," below.
THE GLOBAL NATURAL
RESOURCES FUND
- -------------------------------------
The Global Natural Resources Fund's investment objective is long-term
capital appreciation. The Fund will invest primarily in securities of issuers in
the natural resources industries. The Fund is designed for investors who believe
that investment in securities of such companies provides the opportunity for
capital appreciation, while offering the potential over the long term to limit
the adverse effects of inflation. The Fund may invest in securities of issuers
located anywhere in the world if Robertson Stephens Investment Management
believes they offer the potential for capital appreciation.
Although the Fund will seek to invest principally in common stocks, it may
also invest in preferred stocks, securities convertible into common stocks or
preferred stocks, and warrants to purchase common stocks or preferred stocks.
The Fund will seek to invest in companies with strong potential for earnings
growth, and whose earnings and tangible assets could benefit from accelerating
inflation. Robertson Stephens Investment Management believes that companies in
the natural resources industries with the flexibility to adjust prices or
control operating costs offer attractive opportunities for capital growth when
inflation is rising.
Companies in the natural resources industries include companies that
Robertson Stephens Investment Management considers to be principally engaged in
the discovery, development, production, or distribution of natural resources,
the development of technologies for the production or efficient use of natural
resources, or the furnishing of related supplies or services. Natural resources
include, for example, energy sources, precious metals, forest products, real
estate, nonferrous metals, and other basic commodities.
Companies in the natural resources industries may include, for example:
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- Companies that participate in the discovery and development of natural
resources from new or conventional sources.
- Companies that own or produce natural resources such as oil, natural gas,
precious metals, and other commodities.
- Companies that engage in the transportation, distribution, or processing
of natural resources.
- Companies that contribute new technologies for the production or efficient
use of natural resources, such as systems for energy conversion,
conservation, and pollution control.
- Companies that provide related services such as mining, drilling,
chemicals, and related parts and equipment.
A particular company will be considered to be principally engaged in the
natural resources industries if at the time of investment Robertson Stephens
Investment Management determines that at least 50% of the company's assets,
gross income, or net profits are committed to, or derived from, those
industries. A company will also be considered to be principally engaged in the
natural resources industries if Robertson Stephens Investment Management
considers that the company has the potential for capital appreciation primarily
as a result of particular products, technology, patents, or other market
advantages in those industries.
The Fund will normally invest at least 65% of its assets in securities of
companies in the natural resources industries. The Fund may invest the remainder
of its assets in securities of companies in any industry if Robertson Stephens
Investment Management believes they would help achieve the Fund's objective of
long-term capital appreciation. The portion of the Fund's assets invested in
such securities will vary depending on Robertson Stephens Investment
Management's evaluation of economic conditions, inflationary expectations, and
other factors affecting companies in the natural resources industries and other
sectors. The Fund may also sell securities short if it expects their market
price to decline. The Fund will normally invest in securities of issuers located
in at least three countries, one of which may be the United States.
Because the Fund's investments are concentrated in the natural resources
industries, the value of its shares will be especially affected by factors
peculiar to those industries and may fluctuate more widely than the value of
shares of a portfolio which invests in a broader range of industries. For
example, changes in commodity prices may affect both the industries which
produce, refine, and distribute them and industries which supply alternate
sources of commodities. In addition, certain of these industries are generally
subject to greater government regulation than many other industries; therefore,
changes in regulatory policies may have a material effect on the business of
companies in these industries.
THE GROWTH & INCOME FUND
- -------------------------------------
The Growth & Income Fund's investment objective is long-term total return.
The Fund will pursue this objective primarily by investing in equity and debt
securities, focusing on small- and mid-cap companies that offer the potential
for capital appreciation, current income, or both.
The Fund will normally invest the majority of its assets in common and
preferred stocks, convertible securities, bonds, and notes. Although the Fund
intends to focus on companies with market capitalizations of up to $3 billion,
the Fund will remain flexible and may invest in securities of larger companies.
The Fund may also engage in short sales of securities it expects to decline in
price. The Fund intends to pay divi-
dends quarterly; the amount of any dividends will fluctuate.
Small- and mid-cap companies may present greater opportunities for
investment return than do larger companies, but may also involve greater risks.
They may have limited product lines, markets, or financial resources, or may
depend on a limited management group. Their securities may trade less frequently
and in limited volume. As a result, the prices of these securities may fluctuate
more than prices of securities of larger, widely traded companies. See
"Investments in Smaller Companies," below.
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THE INFORMATION AGE FUND-TM-
- -------------------------------------
The Information Age Fund's-TM- investment objective is long-term capital
appreciation. The Fund is designed for investors who believe that aggressive
investment in common stocks of companies in the information technology
industries provides significant opportunities for capital appreciation. While
ordinary mutual funds may place some of their investments in securities of
companies in the information technology sector, the Information Age Fund-TM-
focuses its investments in that sector.
Although the Fund will seek to invest principally in common stocks, it may
also invest any portion of its assets in preferred stocks and warrants if
Robertson Stephens Investment Management believes they would help achieve the
Fund's objective. The Fund may also engage in short sales of securities it
expects to decline in price.
Companies in the information technology industries include companies that
Robertson Stephens Investment Management considers to be principally engaged in
the development, production, or distribution of products or services related to
the processing, storage, transmission, or presentation of information or data.
The following examples illustrate the wide range of products and services
provided by these industries:
- Computer hardware and software of any kind, including, for example,
semiconductors, minicomputers, and peripheral equipment.
- Telecommunications products and services.
- Multimedia products and services, including, for example, goods and
services used in the broadcast and media industries.
- Data processing products and services.
- Financial services companies that collect or disseminate market, economic,
and financial information.
A particular company will be considered to be principally engaged in the
information technology industries if at the time of investment Robertson
Stephens Investment Management determines that at least 50% of the company's
assets, gross income, or net profits are committed to, or derived from, those
industries. A company will also be considered to be principally engaged in the
information technology industries if Robertson Stephens Investment Management
considers that the company has the potential for capital appreciation primarily
as a result of particular products, technology, patents, or other market
advantages in those industries. The Fund will normally invest at least 65% of
its assets in securities of companies in the information technology industries.
Because the Fund's investments are concentrated in the information
technology industries, the value of its shares will be especially affected by
factors peculiar to those industries and may fluctuate more widely than the
value of shares of a portfolio which invests in a broader range of industries.
For example, many products and services are subject to risks of rapid
obsolescence caused by technological advances. Competitive pressures may have a
significant effect on the financial condition of companies in the information
technology industries. For example, if information technology continues to
advance at an accelerated rate, and the number of companies and product
offerings continues to expand, these companies could become increasingly
sensitive to short product cycles and aggressive pricing. In addition, many of
the activities of companies in the information technology industries are highly
capital intensive, and it is possible that a company which invests substantial
amounts of capital in the development of new products or services will be unable
to recover its investment or otherwise to meet its obligations.
THE MICROCAP GROWTH FUND
- -------------------------------------
The MicroCap Growth Fund's investment objective is long-term capital
appreciation. The Fund will invest in a diversified portfolio of equity
securities of "micro-cap" companies that Robertson Stephens Investment
Management believes offer the potential for long-term capital appreciation.
"Micro-cap" companies are companies with market capitalizations of $250
million or less.
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Robertson Stephens Investment Management seeks to identify micro-cap
companies that have the potential, based on superior or niche products or
services, operating characteristics, management, or other factors, for long-term
capital appreciation. Equity securities in which the Fund may invest include
common stocks, preferred stocks, and warrants, and securities convertible into
common or preferred stocks. Under normal circumstances, the Fund will invest at
least 65% of its assets in securities which Robertson Stephens Investment
Management determines at the time of investment to be micro-cap companies. The
Fund may invest the remainder of its assets in securities of companies of any
size if Robertson Stephens Investment Management believes such investments are
consistent with the Fund's investment objective. The Fund may also engage in
short sales of securities it expects to decline in price.
Micro-cap and other small companies may offer greater opportunities for
capital appreciation than other companies but may also involve greater risks.
They may have limited product lines, markets, or financial resources, or may
depend on a limited management group. Their securities may trade less frequently
and in limited volume. As a result, the prices of these securities may fluctuate
more sharply than those of other securities, and the Fund may experience some
difficulty in establishing or closing out positions in these securities at
prevailing market prices. See "Investments in Smaller Companies," below.
THE PARTNERS FUND
- -------------------------------------
The Partners Fund's investment objective is long-term growth. The Fund will
employ a value methodology to invest in equity securities primarily of companies
with market capitalizations of up to $750 million. This traditional value
methodology combines Graham & Dodd balance sheet analysis with cash flow
analysis.
In selecting investments for the Fund, Robertson Stephens Investment
Management will:
- Perform fundamental research focusing on business analysis;
- Observe how management allocates capital;
- Strive to understand the unit economics of the business of the company;
- Key on the cash flow rate of return on capital employed;
- Discern the sources and uses of cash;
- Consider how management is compensated; and
- Ask how the stock market is pricing the entire company.
At times, the Fund may invest all or most of its assets in securities of
U.S. issuers. At other times, the Fund may invest any portion of its assets in
foreign securities, if Robertson Stephens Investment Management believes they
offer attractive investment values.
Small companies may present greater opportunities for investment return than
do larger companies, but may also involve greater risks. They may have limited
product lines, markets, or financial resources, or may depend on a limited
management group. Their securities may trade less frequently and in limited
volume. As a result, the prices of these securities may fluctuate more than
prices of securities of larger, widely traded companies. See "Investments in
Smaller Companies," below.
Although the Fund will seek to invest principally in common stocks, it may
also invest in preferred stocks, warrants, and debt securities if Robertson
Stephens Investment Management believes they would help achieve the Fund's
objective. The Fund may also hold a portion of its assets in cash or money
market instruments. The Fund is a non-diversified mutual fund.
THE VALUE + GROWTH FUND
- -------------------------------------
The Value + Growth Fund's investment objective is capital appreciation. The
Fund invests primarily in growth companies with favorable relationships between
price/earnings ratios and growth rates, in sectors offering the potential for
above-average returns. The Fund may invest in
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securities of larger or smaller companies, if Robertson Stephens Investment
Management believes they offer the potential for capital appreciation.
In selecting investments for the Fund, Robertson Stephens Investment
Management's primary emphasis is typically on evaluating a company's management,
growth prospects, business operations, revenues, earnings, cash flows, and
balance sheet in relation to its share price. Robertson Stephens Investment
Management may select stocks which it believes are undervalued relative to the
current stock price. Undervaluation of a stock can result from a variety of
factors, such as a lack of investor recognition of (1) the value of a business
franchise and continuing growth potential, (2) a new, improved or upgraded
product, service or business operation, (3) a positive change in either the
economic or business condition for a company, (4) expanding or changing markets
that provide a company with either new earnings direction or acceleration, or
(5) a catalyst, such as an impending or potential asset sale or change in
management, that could draw increased investor attention to a company. Robertson
Stephens Investment Management also may use similar factors to identify stocks
which it believes to be overvalued, and may engage in short sales of such
securities.
OTHER INVESTMENT PRACTICES AND RISK CONSIDERATIONS
- -------------------------------------
The Funds may also engage in the following investment practices, each of
which involves certain special risks. The Statement of Additional Information
contains more detailed information about these practices (some of which,
including, for example, options and futures contracts, and certain debt
securities, may be considered "derivative" investments), including limitations
designed to reduce these risks.
INVESTMENTS IN SMALLER COMPANIES. Each of the Funds may invest a
substantial portion of its assets in securities issued by small companies. Such
companies may offer greater opportunities for capital appreciation than larger
companies, but investments in such companies may involve certain special risks.
Such companies may have limited product lines, markets, or financial resources
and may be dependent on a limited management group. While the markets in
securities of such companies have grown rapidly in recent years, such securities
may trade less frequently and in smaller volume than more widely held
securities. The values of these securities may fluctuate more sharply than those
of other securities, and a Fund may experience some difficulty in establishing
or closing out positions in these securities at prevailing market prices. There
may be less publicly available information about the issuers of these securities
or less market interest in such securities than in the case of larger companies,
and it may take a longer period of time for the prices of such securities to
reflect the full value of their issuers' underlying earnings potential or
assets.
Some securities of smaller issuers may be restricted as to resale or may
otherwise be highly illiquid. The ability of a Fund to dispose of such
securities may be greatly limited, and a Fund may have to continue to hold such
securities during periods when Robertson Stephens Investment Management would
otherwise have sold the security. It is possible that Robertson Stephens
Investment Management or its affiliates or clients may hold securities issued by
the same issuers, and may in some cases have acquired the securities at
different times, on more favorable terms, or at more favorable prices, than a
Fund.
SHORT SALES. (ALL FUNDS EXCEPT THE EMERGING GROWTH, GLOBAL LOW-PRICED STOCK,
AND PARTNERS FUNDS.) When Robertson Stephens Investment Management anticipates
that the price of a security will decline, it may sell the security short and
borrow the same security from a broker or other institution to complete the
sale. A Fund may make a profit or incur a loss depending upon whether the market
price of the security decreases or increases between the date of the short sale
and the date on which the Fund must replace the borrowed security. An increase
in the value of a security sold short by a Fund over the price at which it was
sold short will result in a loss to the Fund, and there can be no assurance that
a Fund will be able to close out the position at any particular time or at an
acceptable price.
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FOREIGN SECURITIES. The Funds may invest in securities principally traded
in foreign markets. Because foreign securities are normally denominated and
traded in foreign currencies, the value of a Fund's assets may be affected
favorably or unfavorably by currency exchange rates and exchange control
regulations. There may be less information publicly available about a foreign
company than about a U.S. company, and foreign companies are not generally
subject to accounting, auditing, and financial reporting standards and practices
comparable to those in the United States. The securities of some foreign
companies are less liquid and at times more volatile than securities of
comparable U.S. companies. Foreign brokerage commissions and other fees are also
generally higher than in the United States. Foreign settlement procedures and
trade regulations may involve certain risks (such as delay in payment or
delivery of securities or in the recovery of a Fund's assets held abroad) and
expenses not present in the settlement of domestic investments.
In addition, there may be a possibility of nationalization or expropriation
of assets, imposition of currency exchange controls, confiscatory taxation,
political or financial instability, and diplomatic developments that could
affect the value of a Fund's investments in certain foreign countries. Legal
remedies available to investors in certain foreign countries may be more limited
than those available with respect to investments in the United States or in
other foreign countries. In the case of securities issued by a foreign
governmental entity, the issuer may in certain circumstances be unable or
unwilling to meet its obligations on the securities in accordance with their
terms, and a Fund may have limited recourse available to it in the event of
default. The laws of some foreign countries may limit a Fund's ability to invest
in securities of certain issuers located in those foreign countries. Special tax
considerations apply to foreign securities. A Fund may buy or sell foreign
currencies and options and futures contracts on foreign currencies for hedging
purposes in connection with its foreign investments. Except as otherwise
provided in this Prospectus, there is no limit on the amount of a Fund's assets
that may be invested in foreign securities.
Each of the Funds may invest in securities of issuers in developing
countries. Certain Funds may at times invest a substantial portion of their
assets in such securities. Investments in developing countries are subject to
the same risks applicable to foreign investments generally, although those risks
may be increased due to conditions in such countries. For example, the
securities markets and legal systems in developing countries may only be in a
developmental stage and may provide few, or none, of the advantages or
protections of markets or legal systems available in more developed countries.
Although many of the securities in which the Funds may invest are traded on
securities exchanges, they may trade in limited volume, and the exchanges may
not provide all of the conveniences or protections provided by securities
exchanges in more developed markets. The Funds may also invest a substantial
portion of their assets in securities traded in the over-the-counter markets in
such countries and not on any exchange, which may affect the liquidity of the
investment and expose the Funds to the credit risk of their counterparties in
trading those investments.
DEBT SECURITIES. Each of the Funds may invest in debt securities from time
to time, if Robertson Stephens Investment Management believes investing in such
securities might help achieve the Fund's objective. The Growth & Income Fund and
the Partners Fund may invest without limit in debt securities and other fixed-
income securities. Each of the other Funds may invest in debt securities to the
extent consistent with its investment policies, although Robertson Stephens
Investment Management expects that under normal circumstances those Funds would
not likely invest a substantial portion of their assets in debt securities.
THE DIVERSIFIED GROWTH FUND, AND THE GROWTH & INCOME FUND may invest in
lower-quality, high-yielding debt securities. Lower-rated debt securities
(commonly called "junk bonds") are considered to be of poor standing and
predominantly speculative. Securities in the lowest rating categories may have
extremely poor prospects of attaining any real investment standing, and some of
those securities in which a Fund may invest may be in default. The rating
services'
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descriptions of securities in the lower rating categories, including their
speculative characteristics, are set forth in the Statement of Additional
Information.
Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. In addition, the
lower ratings of such securities reflect a greater possibility that adverse
changes in the financial condition of the issuer, or in general economic
conditions, or both, or an unanticipated rise in interest rates, may impair the
ability of the issuer to make payments of interest and principal. Changes by
recognized rating services in their ratings of any fixed-income security and in
the ability or perceived inability of an issuer to make payments of interest and
principal may also affect the value of these investments. See the Statement of
Additional Information.
Each of the OTHER FUNDS will invest only in securities rated "investment
grade" or considered by Robertson Stephens Investment Management to be of
comparable quality. Investment grade securities are rated Baa or higher by
Moody's Investors Service, Inc. or BBB or higher by Standard & Poor's.
Securities rated Baa or BBB lack outstanding investment characteristics, have
speculative characteristics, and are subject to greater credit and market risks
than higher-rated securities. Descriptions of the securities ratings assigned by
Moody's and Standard & Poor's are described in the Statement of Additional
Information.
Any of the Funds may at times invest in so-called "zero-coupon" bonds and
"payment-in-kind" bonds. Zero-coupon bonds are issued at a significant discount
from face value and pay interest only at maturity rather than at intervals
during the life of the security. Payment-in-kind bonds allow the issuer, at its
option, to make current interest payments on the bonds either in cash or in
additional bonds. The values of zero-coupon bonds and payment-in-kind bonds are
subject to greater fluctuation in response to changes in market interest rates
than bonds which pay interest currently, and may involve greater credit risk
than such bonds.
A Fund will not necessarily dispose of a security when its debt rating is
reduced below its rating at the time of purchase, although Robertson Stephens
Investment Management will monitor the investment to determine whether continued
investment in the security will assist in meeting the Fund's investment
objective. If a security's rating is reduced below investment grade, an
investment in that security may entail the risks of lower-rated securities
described below.
BORROWING AND LEVERAGE. The DEVELOPING COUNTRIES FUND may borrow money to
invest in additional portfolio securities. This practice, known as "leverage,"
increases the Fund's market exposure and its risk. When a Fund has borrowed
money for leverage and its investments increase or decrease in value, the Fund's
net asset value will normally increase or decrease more than if it had not
borrowed money. The interest the Fund must pay on borrowed money will reduce the
amount of any potential gains or increase any losses. The extent to which a Fund
will borrow money, and the amount it may borrow, depend on market conditions and
interest rates. Successful use of leverage depends on Robertson Stephens
Investment Management's ability to predict market movements correctly. A Fund
may at times borrow money by means of reverse repurchase agreements. Reverse
repurchase agreements generally involve the sale by a Fund of securities held by
it and an agreement to repurchase the securities at an agreed-upon price, date,
and interest payment. Reverse repurchase agreements will increase a Fund's
overall investment exposure and may result in losses. The amount of money
borrowed by a Fund for leverage may generally not exceed one-third of the Fund's
assets (including the amount borrowed).
OPTIONS AND FUTURES. A Fund may buy and sell call and put options to hedge
against changes in net asset value or to attempt to realize a greater current
return. In addition, through the purchase and sale of futures contracts and
related options, a Fund may at times seek to hedge against fluctuations in net
asset value and to attempt to increase its investment return.
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A Fund's ability to engage in options and futures strategies will depend on
the availability of liquid markets in such instruments. It is impossible to
predict the amount of trading interest that may exist in various types of
options or futures contracts. Therefore, there is no assurance that a Fund will
be able to utilize these instruments effectively for the purposes stated above.
Options and futures transactions involve certain risks which are described below
and in the Statement of Additional Information.
Transactions in options and futures contracts involve brokerage costs and
may require a Fund to segregate assets to cover its outstanding positions. For
more information, see the Statement of Additional Information.
INDEX FUTURES AND OPTIONS. A Fund may buy and sell index futures contracts
("index futures") and options on index futures and on indices (or may purchase
investments whose values are based on the value from time to time of one or more
securities indices) for hedging purposes. An index future is a contract to buy
or sell units of a particular bond or stock index at an agreed price on a
specified future date. Depending on the change in value of the index between the
time when the Fund enters into and terminates an index futures or option
transaction, the Fund realizes a gain or loss. A Fund may also buy and sell
index futures and options to increase its investment return.
LEAPS AND BOUNDS. The VALUE + GROWTH FUND may purchase long-term
exchange-traded equity options called Long-Term Equity Anticipation Securities
("LEAPs") and Buy-Write Options Unitary Derivatives ("BOUNDs"). LEAPs provide a
holder the opportunity to participate in the underlying securities' appreciation
in excess of a fixed dollar amount, and BOUNDs provide a holder the opportunity
to retain dividends on the underlying securities while potentially participating
in the underlying securities' capital appreciation up to a fixed dollar amount.
The VALUE + GROWTH FUND will not purchase these options with respect to more
than 25% of the value of its net assets.
RISKS RELATED TO OPTIONS AND FUTURES STRATEGIES. Options and futures
transactions involve costs and may result in losses. Certain risks arise because
of the possibility of imperfect correlations between movements in the prices of
futures and options and movements in the prices of the underlying security or
index of the securities held by a Fund that are the subject of a hedge. The
successful use by a Fund of the strategies described above further depends on
the ability of Robertson Stephens Investment Management to forecast market
movements correctly. Other risks arise from a Fund's potential inability to
close out futures or options positions. Although a Fund will enter into options
or futures transactions only if Robertson Stephens Investment Management
believes that a liquid secondary market exists for such option or futures
contract, there can be no assurance that a Fund will be able to effect closing
transactions at any particular time or at an acceptable price. Certain
provisions of the Internal Revenue Code may limit a Fund's ability to engage in
options and futures transactions.
Each Fund expects that its options and futures transactions generally will
be conducted on recognized exchanges. A Fund may in certain instances purchase
and sell options in the over-the-counter markets. A Fund's ability to terminate
options in the over-the-counter markets may be more limited than for
exchange-traded options, and such transactions also involve the risk that
securities dealers participating in such transactions would be unable to meet
their obligations to the Fund. A Fund will, however, engage in over-the-counter
transactions only when appropriate exchange-traded transactions are unavailable
and when, in the opinion of Robertson Stephens Investment Management, the
pricing mechanism and liquidity of the over-the-counter markets are satisfactory
and the participants are responsible parties likely to meet their obligations.
A Fund will not purchase futures or options on futures or sell futures if,
as a result, the sum of the initial margin deposits on the Fund's existing
futures positions and premiums paid for outstanding options on futures contracts
would exceed 5% of the Fund's assets. (For options that
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are "in-the-money" at the time of purchase, the amount by which the option is
"in-the-money" is excluded from this calculation.)
NON-DIVERSIFICATION AND SECTOR CONCENTRATION. THE DEVELOPING COUNTRIES FUND
AND THE PARTNERS FUND are "non-diversified" investment companies, and may invest
their assets in a more limited number of issuers than may other investment
companies. Under the Internal Revenue Code, an investment company, including a
non-diversified investment company, generally may not invest more than 25% of
its assets in obligations of any one issuer other than U.S. Government
obligations and, with respect to 50% of its total assets, a Fund may not invest
more than 5% of its total assets in the securities of any one issuer (except
U.S. Government securities). Thus, each of those Funds may invest up to 25% of
its total assets in the securities of each of any two issuers. This practice
involves an increased risk of loss to a Fund if the market value of a security
should decline or its issuer were otherwise not to meet its obligations.
At times a Fund may invest more than 25% of its assets in securities of
issuers in one or more market sectors such as, for example, the technology
sector. A market sector may be made up of companies in a number of related
industries. A Fund would only concentrate its investments in a particular market
sector if Robertson Stephens Investment Management were to believe the
investment return available from concentration in that sector justifies any
additional risk associated with concentration in that sector. When a Fund
concentrates its investments in a market sector, financial, economic, business,
and other developments affecting issuers in that sector will have a greater
effect on the Fund than if it had not concentrated its assets in that sector.
Currently, the VALUE + GROWTH FUND has invested a significant portion of its
assets in companies within a number of industries in the technology and
telecommunications sectors. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
SECURITIES LOANS AND REPURCHASE AGREEMENTS. Each of the Funds may lend
portfolio securities to broker-dealers and may enter into repurchase agreements.
These transactions must be fully collateralized at all times, but involve some
risk to a Fund if the other party should default on its obligations and the Fund
is delayed or prevented from recovering the collateral.
DEFENSIVE STRATEGIES. At times, Robertson Stephens Investment Management
may judge that market conditions make pursuing a Fund's basic investment
strategy inconsistent with the best interests of its shareholders. At such
times, Robertson Stephens Investment Management may temporarily use alternative
strategies, primarily designed to reduce fluctuations in the values of the
Fund's assets. In implementing these "defensive" strategies, a Fund may invest
in U.S. Government securities, other high-quality debt instruments, and other
securities Robertson Stephens Investment Management believes to be consistent
with the Fund's best interests.
PORTFOLIO TURNOVER. The length of time a Fund has held a particular
security is not generally a consideration in investment decisions. The
investment policies of a Fund may lead to frequent changes in the Fund's
investments, particularly in periods of volatile market movements. A change in
the securities held by a Fund is known as "portfolio turnover." Portfolio
turnover generally involves some expense to a Fund, including brokerage
commissions or dealer mark-ups and other transaction costs on the sale of
securities and reinvestment in other securities. Such sales may result in
realization of taxable capital gains. Portfolio turnover rates for each of the
following Funds during their fiscal periods ended December 31, 1995 were as
follows: Developing Countries Fund, 103%; Emerging Growth Fund, 147%;
Value+Growth Fund, 104%. Portfolio turnover rates for the following Funds for
the nine months ended September 30, 1996 (unannualized) were as follows: Global
Low-Priced Stock Fund, 38%; Global Natural Resources Fund, 60%; Growth & Income
Fund, 160%; Information Age Fund, 256%; Partners Fund, 55%. Annual portfolio
turnover for the Diversified Growth and MicroCap Growth Funds is expected to be
less than 200%.
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MANAGEMENT OF THE FUNDS
The Trustees of the Trust are responsible for generally overseeing the
conduct of the Trust's business. ROBERTSON, STEPHENS & COMPANY INVESTMENT
MANAGEMENT, L.P., 555 California Street, San Francisco, CA 94104, is the
investment adviser for each of the Funds other than the Emerging Growth Fund.
Robertson, Stephens & Company Investment Management, L.P., a California limited
partnership, was formed in 1993 and is registered as an investment adviser with
the Securities and Exchange Commission. The general partner of Robertson,
Stephens & Company Investment Management, L.P. is Robertson, Stephens & Company,
Inc., and the principal limited partner is Robertson, Stephens & Company LLC,
the Funds' distributor and a major investment banking firm specializing in
emerging growth companies that has developed substantial investment research,
underwriting, and venture capital expertise. Since 1978, Robertson, Stephens &
Company LLC has managed underwritten public offerings for over $26 billion of
securities of emerging growth companies. Robertson, Stephens & Company
Investment Management, L.P. and its affiliates have in excess of $4.1 billion
under management in public and private investment funds. Robertson, Stephens &
Company LLC, its general partner, Robertson, Stephens & Company, Inc., and
Sanford R. Robertson may be deemed to be control persons of Robertson, Stephens
& Company Investment Management, L.P.
ROBERTSON STEPHENS INVESTMENT MANAGEMENT, INC., 555 California Street, San
Francisco, CA 94104 is the investment adviser for the Emerging Growth Fund.
Robertson Stephens Investment Management, Inc. commenced operations in March
1986 and is registered as an investment adviser with the Securities and Exchange
Commission and is an indirect wholly-owned subsidiary of Robertson, Stephens &
Company LLC.
Subject to such policies as the Trustees may determine, Robertson Stephens
Investment Management furnishes a continuing investment program for the Funds
and makes investment decisions on their behalf pursuant to Investment Advisory
Agreements with each Fund. Robertson Stephens Investment Management is also
responsible for overall management of the Funds' business affairs, subject to
the authority of the Board of Trustees, and for providing office space and
officers for the Trust. The Trust pays all expenses not assumed by Robertson
Stephens Investment Management including, among other things, Trustees' fees,
auditing, accounting, legal, custodial, investor servicing, and shareholder
reporting expenses, and payments under the Funds' Distribution Plans.
Robertson Stephens Investment Management places all orders for purchases and
sales of the Funds' investments. In selecting broker-dealers, Robertson Stephens
Investment Management may consider research and brokerage services furnished to
it and its affiliates. Robertson, Stephens & Company LLC may receive brokerage
commissions from the Funds in accordance with procedures adopted by the Trustees
under the Investment Company Act of 1940 which require periodic review of these
transactions. Subject to seeking the most favorable price and execution
available, Robertson Stephens Investment Management may consider sales of shares
of the Funds as a factor in the selection of broker-dealers.
Robertson Stephens Investment Management may at times bear certain expenses
of the Funds. The Investment Advisory Agreements between each of the Diversified
Growth Fund, the Global Low-Priced Stock Fund, the Global Natural Resources
Fund, the Growth & Income Fund, The Information Age Fund-TM-, the MicroCap
Growth Fund, the Partners Fund, and the Value + Growth Fund and Robertson
Stephens Investment Management permit Robertson Stephens Investment Management
to seek reimbursement for those expenses within the succeeding two-year period,
subject to any expense limitations then applicable to the Fund in question.
ADMINISTRATIVE SERVICES. Each of the Diversified Growth, Growth & Income,
Global Low-Priced Stock, Global Natural Resources, and MicroCap Growth Funds,
and The Information Age Fund-TM- has entered into an agreement with
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Robertson Stephens Investment Management pursuant to which Robertson Stephens
Investment Management provides administrative services to the Fund. Each Fund
pays Robertson Stephens Investment Management a fee for such services at the
annual rate of 0.25% of its average daily net assets.
PORTFOLIO MANAGERS
James Callinan is responsible for managing the Emerging Growth Fund's
portfolio. Mr. Callinan has more than nine years of investment research and
management experience. From 1986 until June 1996, Mr. Callinan was employed by
Putnam Investments, where, beginning in June 1994, he served as portfolio
manager of the Putnam OTC Emerging Growth Fund. Mr. Callinan received an A.B. in
economics from Harvard College, an M.S. in accounting from New York University,
and an M.B.A. from Harvard Business School, and is a Chartered Financial
Analyst.
Ronald E. Elijah has managed the Value + Growth Fund's portfolio since that
Fund's inception in April 1992. Mr. Elijah is also the portfolio manager for The
Information Age Fund-TM-. From August 1985 to January 1990, Mr. Elijah was a
securities analyst for Robertson, Stephens & Company LLC. From January 1990 to
January 1992, Mr. Elijah was an analyst and portfolio manager for Water Street
Capital, which managed short selling investment funds. He holds a master's
degree in economics from Humboldt State University and an M.B.A. with an
emphasis in finance from Golden Gate University.
David Evans is responsible for managing the portfolio of the MicroCap Growth
Fund. Mr. Evans has more than fifteen years of investment research and
management experience, and has been a part of the management team at Robertson
Stephens Investment Management since 1989. Mr. Evans was an analyst and
portfolio manager at CIGNA before joining Robertson Stephens Investment
Management. He holds a B.A. from Muskingum College and an M.B.A. from the
Wharton School of the University of Pennsylvania.
Michael Hoffman has been responsible for managing the Developing Countries
Fund's portfolio since that Fund's inception in April 1994. From August 1990 to
April 1994, Mr. Hoffman was a portfolio manager with CIGNA International
Investment Advisors, where he managed four portfolios with net assets ranging
from $25 million to $100 million. He holds a B.S. from Pennsylvania State
University and a master's degree in international business from the University
of South Carolina.
Andrew P. Pilara, Jr. has been responsible for managing the Partners Fund
since the Fund's inception in July 1995 and is responsible for managing the
Global Natural Resources Fund. Mr. Pilara has been involved in the securities
business for over 25 years, with experience in portfolio management, research,
trading, and sales. Prior to joining Robertson, Stephens & Company Investment
Management, L.P., he was president of Pilara Associates, an investment
management firm he established in 1974. He holds a B.A. in economics from St.
Mary's College.
M. Hannah Sullivan is responsible for managing the Global Low-Priced Stock
Fund. She holds a B.A. in Spanish literature from Cornell University and an
M.B.A. from the University of California at Berkeley.
John L. Wallace has been responsible for managing the Growth & Income Fund
since its inception in July 1995 and is responsible for managing the Diversified
Growth Fund. Prior to joining Robertson, Stephens & Company Investment
Management, L.P., Mr. Wallace was Vice President of Oppenheimer Management
Corp., where he was portfolio manager of the Oppenheimer Main Street Income and
Growth Fund. He holds a B.A. from the University of Idaho and an M.B.A. from
Pace University.
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HOW TO PURCHASE SHARES
Class C shares of any Fund may be purchased through your financial
institution, which may be a broker-dealer, a bank, or another institution. You
can open an account for Class C shares of a Fund with as little as $5,000
($1,000 for IRA and for gift/transfer-to-minor accounts) and make additional
investments at any time with as little as $100 ($1 for IRAs).
Your financial institution can assist you in establishing your account and
making your investment. Your financial institution is responsible for forwarding
all of the necessary documentation to the Trust, and may charge for its
services. If you do not have a financial institution, Robertson, Stephens & Co.
LLC, the Funds' principal underwriter ("RS&Co."), can refer you to one.
Once you have made the initial minimum investment in a Fund, you can make
regular investments in that Fund of $100 or more on a monthly or quarterly basis
through automatic deductions from your bank checking account. Application forms
are available from your financial institution or through RS&Co.
OTHER INFORMATION
ABOUT PURCHASING SHARES
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Each Fund's Class C shares are sold at the Fund's net asset value per share
next determined after the Fund receives your purchase order. In most cases, in
order to receive that day's public offering price, your financial institution
must ensure that the Trust receives your order before the close of regular
trading on the New York Stock Exchange.
CONTINGENT DEFERRED SALES CHARGE. Class C shares are sold without an initial
sales charge, although a contingent deferred sales charge ("CDSC") of 1.00% is
imposed on redemptions of such shares within the first year after purchase,
based on the lower of the shares' cost or current net asset value.
In determining whether a CDSC is payable in respect of the Class C shares
redeemed, a Fund will first redeem the Class C shares held longest (together
with any Class C shares received upon reinvestment of distributions with respect
to those shares). Any of the shares being redeemed which were acquired by
reinvestment of distributions will be redeemed without a CDSC, and amounts
representing capital appreciation will not be subject to a CDSC. RS&Co. receives
the entire amount of any CDSC you pay. The amount of any CDSC is determined as a
percentage of the lesser of the current market value and the cost of the shares
being redeemed.
REINVESTMENT PRIVILEGE. If you redeem Class C shares of a Fund, you have a
one-time right, within 90 days, to reinvest the redemption proceeds plus the
amount of CDSC you paid, if any, at the next-determined net asset value. RS&Co.
must be notified in writing by you or by your financial institution of the
reinvestment for you to recover the CDSC. If you redeem shares in a Fund, there
may be tax consequences.
GENERAL
- -------------------------------------
If you are considering redeeming or exchanging shares of a Fund or
transferring shares to another person shortly after purchase, you should pay for
those shares with a certified check to avoid any delay in redemption, exchange,
or transfer. Otherwise a Fund may delay payment until the purchase price of
those shares has been collected or, if you redeem by telephone, until 15
calendar days after the purchase date.
A Fund may waive the CDSC on Class C shares redeemed by the Trust's current
and retired Trustees (and their families), current and retired employees (and
their families) of RS&Co., Robertson Stephens Investment Management, and their
affiliates, registered representatives and other employees (and their families)
of broker-dealers having sales agreements with RS&Co., employees (and their
families) of financial institutions having sales agreements with RS&Co. (or
otherwise having an arrangement with a broker-dealer or financial institution
with
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respect to sales of Fund shares), financial institution trust departments
investing an aggregate of $1 million or more in one or more funds in the
Robertson Stephens family, clients of certain administrators of tax-qualified
plans, employer-sponsored retirement plans, and tax-qualified plans when
proceeds from repayments of loans to participants are invested (or reinvested)
in the Robertson Stephens Funds. A Fund may sell shares not subject to any CDSC
in connection with the acquisition by the Fund of assets of an investment
company or personal holding company. In addition, the CDSC may be waived in the
case of (i) redemptions of shares held at the time a shareholder dies or becomes
disabled, including the shares of a shareholder who owns the shares with his or
her spouse as joint tenants with right of survivorship, provided that the
redemption is requested within one year of the death or initial determination of
disability; and (ii) redemptions in connection with the following retirement
plan distributions: (a) lump-sum or other distributions from a qualified
retirement plan following retirement or separation from service; (b)
distributions from an IRA, Keogh Plan, or Custodial Account under Section
403(b)(7) of the Internal Revenue Code following attainment of age 59 1/2; (c) a
tax-free return on an excess contribution to an IRA; and (d) distributions to
make "substantially equal periodic payments" as described in Section 72(t) of
the Internal Revenue Code. The minimum initial investment may be waived for
current and retired Trustees, and current and retired employees of the Trust,
RS&Co., or their affiliates. Contact your financial institution or RS&Co. for
information. If you invest through a broker-dealer or other financial
institution, your broker-dealer or other financial institution will be
responsible for electing on your behalf to take advantage of any of the waivers
described above. Please instruct your broker-dealer or other financial
institution accordingly.
Because of the relatively high cost of maintaining accounts, the Fund
reserves the right to redeem, upon not less than 60 days notice, any Fund
account whose account balance falls below $500 as a result of redemptions. A
shareholder may, however, avoid such a redemption by a Fund by increasing his
investment in shares of the Fund to a value of $500 or more during such 60-day
period.
Each Fund reserves the right to reject any purchase, in whole or in part,
and to suspend the offering of its shares for any period of time and to change
or waive the minimum investment amounts specified in this prospectus. No share
certificates for Class C shares will be issued.
EXCHANGE PRIVILEGE
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Except as otherwise described below, you can exchange your shares in any
Fund worth at least $1,000 for Class C shares of the other Robertson Stephens
Funds offering such shares, at net asset value beginning 15 days after purchase.
If you exchange shares subject to a CDSC, the transaction will not be subject to
a CDSC. However, when you redeem the shares acquired through the exchange, the
redemption may be subject to the CDSC, depending upon when you originally
purchased the shares. For purposes of determining whether the CDSC applies, the
length of time you have owned your shares will be measured from the date of
original purchase and will not be affected by any exchange.
Shares may be exchanged only if the amount being exchanged satisfies the
minimum investment required and the shareholder is a resident of a state where
shares of the appropriate Fund are qualified for sale. However, you may not
without the consent of RS&Co. exchange your investment in shares of any Fund
more than four times in any twelve-month period (including the initial exchange
of your investment from that Fund during the period, and subsequent exchanges of
that investment from other Funds during the same twelve-month period).
The exchange privilege is not intended as a vehicle for short-term trading.
Excessive exchange activity may interfere with portfolio management and have an
adverse effect on all shareholders. In order to limit excessive exchange
activity and in other circumstances where RS&Co. or the Trustees believe doing
so would be in the best interests of the Fund, the Fund reserves the right to
revise or terminate the exchange privilege, limit the amount or number
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of exchanges, or reject any exchange. Shareholders would be notified of any such
action to the extent required by law. Consult your financial institution before
requesting an exchange.
Investors should note that an exchange will result in a taxable event.
Exchange privileges
may be terminated, modified, or suspended by a Fund upon 60 days prior notice to
shareholders.
Unless you have indicated that you do not wish to establish telephone
exchange privileges (see the Account Application or call the Funds for details),
you may make exchanges by telephone.
HOW TO REDEEM SHARES
You can sell your Class C shares in a Fund to that Fund any day the New York
Stock Exchange is open, either through your financial institution or directly to
the Fund. A Fund will only redeem shares for which it has received payment.
SELLING SHARES THROUGH YOUR
FINANCIAL INSTITUTION
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Your financial institution and RS&Co. must receive your request before the
close of regular trading on the New York Stock Exchange to receive that day's
net asset value. Your financial institution will be responsible for furnishing
all necessary documentation to RS&Co., and may charge you for its services.
SELLING SHARES DIRECTLY TO A FUND
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BY MAIL. You may redeem your shares of a Fund by mailing a written request
for redemption to the Transfer Agent that:
(1) states the number of shares or dollar amount to be redeemed;
(2) identifies your account number; and
(3) is signed by you and all other owners of the account exactly as their names
appear on the account.
If you request that the proceeds from your redemption be sent to you at an
address other than your address of record, or to another party, you must include
a signature guarantee for each such signature by an eligible signature
guarantor, such as a member firm of a national securities exchange or a
commercial bank or trust company located in the United States. If you are a
resident of a foreign country, another type of certification may be required.
Please contact National Financial Data Services (the "Transfer Agent") for more
details at 1-800-272-6944. Corporations, fiduciaries, and other types of
shareholders may be required to supply additional documents which support their
authority to effect a redemption.
BY TELEPHONE. Unless you have indicated that you do not wish to establish
telephone redemption privileges (see the Account Application or contact your
financial institution for details), you may redeem shares by calling the
Transfer Agent at 1-800-272-6944 by 4:00 p.m. New York time on any day the New
York Stock Exchange is open for business.
If an account has more than one owner, the Transfer Agent may rely on the
instructions of any one owner. Each Fund employs reasonable procedures in an
effort to confirm the authenticity of telephone instructions, which currently
include the recording of shareholders' calls, the mailing of confirmation
statements, and the use of a personal identification test (which may, for
example, require the caller to give a special authorization number or to verify
the account owner's address and social security number). If procedures
established by the Trust are not followed, the Funds and the Transfer Agent may
be responsible for any losses because of unauthorized or fraudulent
instructions. By not declining telephone redemption privileges, you authorize
the Transfer Agent to act upon any telephone instructions it believes to be
genuine, (1) to redeem shares from your account and (2) to mail or wire the
redemption proceeds. If you recently opened an account by wire, you cannot
redeem shares by telephone until the Transfer Agent has received your completed
Application.
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Telephone redemption is not available for shares held in IRAs. Each Fund may
change, modify, or terminate its telephone redemption services at any time upon
30 days notice.
BY WIRE TRANSFER. If your financial institution receives Federal Reserve
wires, you may instruct that your redemption proceeds be forwarded to your
account with your financial institution or to you by a wire transfer. Please
indicate your financial institution's or your own complete wiring instructions.
The Funds will forward proceeds from telephone redemptions only to the bank or
brokerage account that you have authorized in writing. A $9.00 wire fee will be
paid either by redeeming shares from your account, or upon a full redemption,
deducting the fee from the proceeds.
GENERAL REDEMPTION POLICIES
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The redemption price per share is the net asset value per share next
determined after the Transfer Agent receives the request for redemption in
proper form, and each Fund will make payment for redeemed shares within seven
days thereafter. Under unusual circumstances, a Fund may suspend repurchases, or
postpone payment of redemption proceeds for more than seven days, as permitted
by federal securities law. If you purchase shares of a Fund by check (including
certified check) and redeem them shortly thereafter, the Fund will delay payment
of the redemption proceeds for up to fifteen days after the Fund's receipt of
the check or until the check has cleared, whichever occurs first. If you redeem
shares through your financial institution, your financial institution is
responsible for ensuring that the Transfer Agent receives your redemption
request in proper form at the appropriate time.
You may experience delays in exercising telephone redemptions during periods
of abnormal market activity. Accordingly, during periods of volatile economic
and market conditions, you may wish to consider transmitting redemption orders
to the Transfer Agent by an overnight courier service.
THE FUNDS' DISTRIBUTOR
Each of the Funds has adopted a Distribution Plan under Rule 12b-1 with
respect to its Class C shares (each, a "Plan") providing for payments by the
Fund to RS&Co. from the assets attributable to the Fund's Class C shares.
Payments under the Plan are intended to compensate RS&Co. for services provided
and expenses incurred by it as principal underwriter of the Fund's Class C
shares, including the payments to financial institutions described below.
In order to compensate broker-dealers and certain other financial
institutions for services provided in connection with sales of Class C shares,
RS&Co. makes quarterly payments to qualifying broker-dealers and other financial
institutions at an annual rate of up to 0.75% of the average net asset value of
Class C shares attributable to shareholders for whom the broker-dealers or
financial institutions are the intermediaries of record. RS&Co. may suspend or
modify such payments. Such payments are also subject to the continuation of the
relevant Plan, the terms of any agreements between financial institutions and
RS&Co., and any applicable limits imposed by the National Association of
Securities Dealers, Inc.
Each of the Funds currently makes payments to RS&Co. under its Plan at the
annual rate of 0.75% of the assets of the Fund attributable to its Class C
shares (although the Plans contemplate payments at a rate of up to 1.00% of a
Fund's average net assets attributable to Class C shares). The Plans also by
their terms relate to payments under the Funds' Shareholder Servicing Plan, to
the extent such payments may be seen as primarily intended to result in the sale
of a Fund's Class C shares. The Trustees may reduce the amount of payments or
suspend the Plan for such periods as they may determine. RS&Co. also receives
the proceeds of any CDSC imposed on redemptions of shares.
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RS&Co., Robertson Stephens Investment Management, and their affiliates, at
their own expense and out of their own assets, may also provide other
compensation to financial institutions in connection with sales of the Funds'
shares or the servicing of shareholders or shareholder accounts. Such
compensation may include, but is not limited to, financial assistance to
financial institutions in connection with conferences, sales or training
programs for their employees, seminars for the public, advertising or sales
campaigns, or other financial institution-sponsored special events. In some
instances, this compensation may be made available only to certain
financial institutions whose representatives have sold or are expected to sell
significant amounts of shares. Dealers may not use sales of the Funds' shares to
qualify for this compensation to the extent such may be prohibited by the laws
of any state or any self-regulatory agency, such as the National Association of
Securities Dealers, Inc.
Each Fund has agreed to indemnify RS&Co. against certain liabilities,
including liabilities under the Securities Act of 1933, as amended.
SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Servicing Plan (the "Service Plan") for
the Class C shares of each Fund. Under the Service 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.
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.
These administrative services may include, but are not limited to, the following
functions: providing office space, equipment, telephone facilities, and various
personnel, including clerical, supervisory, and computer personnel, as necessary
or beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions and automatic investments of
client account cash balances; answering routine client inquiries regarding the
Funds; assisting clients in changing dividend options, account designations, and
addresses; and providing such other services as RS&Co. reasonably requests.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
Each Fund distributes substantially all of its net investment income and net
capital gains to shareholders at least once a year (or more often if necessary
to avoid certain excise or income taxes on the Fund). All distributions by a
Fund will be automatically reinvested in Class C shares of the Fund unless the
shareholder (or the shareholder's financial institution) requests cash payment
on at least 10 days prior written notice to the Transfer Agent.
Each Fund intends to qualify as a "regulated investment company" for federal
income tax purposes and to meet all other requirements that are necessary for it
to be relieved of federal taxes on income and gains it distributes to
shareholders. A Fund will distribute substantially all of its net investment
income and net capital gain income on a current basis.
All Fund distributions will be taxable to you as ordinary income, except
that any distributions of net long-term capital gains will be taxed as such,
regardless of how long you have held your shares. Distributions will be taxable
as described above, whether received in cash or in shares through the
reinvestment of distributions. Early in each year, the Trust will notify you of
the amount and tax status of distributions paid to you by each of the Funds for
the preceding year.
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The foregoing is a summary of certain federal income tax consequences of
investing in a Fund. You should consult your tax adviser to determine the
precise effect of an investment in a Fund on your particular tax situation.
HOW NET ASSET VALUE IS DETERMINED
Each Fund calculates the net asset value of its Class C shares by dividing
the total value of its assets attributable to its Class C shares, less its
liabilities attributable to those shares, by the number of its Class C shares
outstanding. Shares are valued as of the close of regular trading on the New
York Stock Exchange each day the Exchange is open. Fund securities for which
market quotations are readily available are stated at market value. Short-term
investments that will mature in 60 days or less are stated at amortized cost,
which approximates market value. All other securities and assets are valued at
their fair values determined by Robertson Stephens Investment Management. The
net asset value of a Fund's Class C shares will generally differ from that of
its other classes of shares due to the variance in daily net income realized by
and dividends paid on each class of shares, and any differences in the expenses
of the different classes.
HOW PERFORMANCE IS DETERMINED
Yield and total return data may from time to time be included in
advertisements about the Funds' Class C shares. The "yield" of a Fund's Class C
shares is calculated by dividing the annualized net investment income per Class
C share during a recent 30-day period by the net asset value per Class C share
on the last day of that period. "Total return" for the period during which Class
C shares of a Fund have been offered, through the most recent calendar quarter,
represents the average annual compounded rate of return (or, in the case of a
period of one year or less, the actual rate of return) on an investment of
$1,000 in Class C shares of that Fund. Total return may also be presented for
other periods. Quotations of yield or total return for a period when an expense
limitation was in effect will be greater than if the limitation had not been in
effect. A Fund's performance may be compared to various indices. See the
Statement of Additional Information. Information may be presented in
advertisements about a Fund describing the background and professional
experience of the Fund's investment adviser or any portfolio manager.
All data are based on a Fund's past investment results and do not predict
future performance. Investment performance, which will vary, is based on many
factors, including market conditions, the composition of the Fund's portfolio,
and the Fund's expenses. Investment performance also often reflects the risks
associated with a Fund's investment objective and policies. These factors should
be considered when comparing a Fund's investment results to those of other
mutual funds and other investment vehicles.
ADDITIONAL INFORMATION
Each Fund is a series of the Trust, which was organized on May 11, 1987
under the laws of The Commonwealth of Massachusetts and is a business entity
commonly known as a "Massachusetts business trust." A copy of the Agreement and
Declaration of Trust, which is governed by Massachusetts law, is on file with
the Secretary of State of The Commonwealth of Massachusetts.
When matters are submitted for shareholder vote, shareholders of each series
will have one vote for each full share owned and proportionate,
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fractional votes for fractional shares held. Generally, shares of each series
vote separately as a class on all matters except (1) matters affecting only the
interests of one or more of the series, in which case only shares of the
affected series would be entitled to vote, or (2) when the Investment Company
Act requires that shares of all series be voted in the aggregate. Each series
offered by this Prospectus issues shares of two classes, Class A shares and
Class C shares. Although the Trust is not required to hold annual shareholder
meetings, shareholders have the right to call a meeting to elect or remove
Trustees, or to take other actions as provided in the Agreement and Declaration
of Trust.
State Street Bank and Trust Company, c/o National Financial Data Services,
P.O. Box 419717, Kansas City, Missouri 64141, acts as each Fund's transfer agent
and dividend paying agent. State Street Bank and Trust Company, 225 Franklin
Street, Boston, Massachusetts 02110, also acts as the custodian of each Fund's
portfolio.
23
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ROBERTSON STEPHENS & COMPANY
BRINGING THE FUND MANAGER TO YOU
ADDRESS
555 California Street
San Francisco, CA 94104
1-800-270-5829
INVESTMENT ADVISERS
Robertson, Stephens & Company
Investment Management, L.P.
Robertson Stephens Investment
Management, Inc.
555 California Street
San Francisco, CA 94104
1-800-270-5829
DISTRIBUTOR
Robertson, Stephens & Company LLC
555 California Street
San Francisco, CA 94104
1-800-270-5829
TRANSFER AGENT
State Street Bank and Trust Company
c/o National Financial Data Services
P. O. Box 419717
Kansas City, MO 64141
1-800-272-6944
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
San Francisco, CA 94104
LEGAL COUNSEL
Ropes & Gray
Boston, MA 02110
CUSTODIAN
State Street Bank and Trust Company
Boston, MA 02110
No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer contained in this Prospectus, and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Fund. This Prospectus does not constitute an
offering in any state or jurisdiction in which such offering may not lawfully be
made.
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---------------------------------------------------
ROBERTSON
STEPHENS
MUTUAL
FUNDS
--------------------
THE ROBERTSON STEPHENS
DEVELOPING COUNTRIES FUND
THE ROBERTSON STEPHENS
DIVERSIFIED GROWTH FUND
THE ROBERTSON STEPHENS
EMERGING GROWTH FUND
THE ROBERTSON STEPHENS
GLOBAL LOW-PRICED
STOCK FUND
THE ROBERTSON STEPHENS
GLOBAL NATURAL
RESOURCES FUND
THE ROBERTSON STEPHENS
GROWTH & INCOME FUND
THE ROBERTSON STEPHENS
MICROCAP GROWTH FUND
THE INFORMATION AGE FUND-TM-
THE ROBERTSON STEPHENS
PARTNERS FUND
THE ROBERTSON STEPHENS
VALUE + GROWTH FUND
PROSPECTUS
March , 1997
<PAGE>
_____________________________________
FORM N-lA
PART B
______________________________________
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A POST-
EFFECTIVE AMENDMENT TO THE TRUST'S REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION BUT HAS
NOT YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO
BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE.
THIS STATEMENT OF ADDITIONAL INFORMATION SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED JANUARY 21, 1996
STATEMENT OF ADDITIONAL INFORMATION
ROBERTSON STEPHENS MUTUAL FUNDS
MARCH __, 1996
CLASS C SHARES
Robertson Stephens Investment Trust (the "Trust") is an open-end series
investment company. This Statement of Additional Information is not a
prospectus and should be read in conjunction with the Prospectus of the Trust
dated March __, 1996. This Statement relates to the Fund's Class A and Class
Shares. A copy of the Trust's Prospectus for its Class A or Class C Shares can
be obtained upon request made to Robertson, Stephens & Company LLC ("RS&Co."),
the Trust's distributor, 555 California Street, San Francisco, California
94104, telephone 1-800-766-FUND.
TABLE OF CONTENTS
CAPTION PAGE
------- ----
INVESTMENT OBJECTIVES AND POLICIES . . . . . . . . . . . . . . . . . . 2
THE FUNDS' INVESTMENT LIMITATIONS. . . . . . . . . . . . . . . . . . . 15
MANAGEMENT OF THE FUNDS. . . . . . . . . . . . . . . . . . . . . . . . 20
THE FUNDS' DISTRIBUTOR . . . . . . . . . . . . . . . . . . . . . . . . 33
HOW NET ASSET VALUE IS DETERMINED. . . . . . . . . . . . . . . . . . . 34
TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
HOW PERFORMANCE IS DETERMINED. . . . . . . . . . . . . . . . . . . . . 36
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 39
APPENDIX A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 44
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives and policies of the Funds are described in detail
in the Prospectus. The following discussion provides supplemental information
concerning certain investment techniques in which one or more of the Funds may
engage, and certain of the risks they may entail. Certain of the investment
techniques may not be available to all of the Funds.
All of the Funds, except for the Emerging Growth Fund, are managed by
Robertson, Stephens & Company Investment Management, L.P. ("RSIM, L.P."). The
Emerging Growth Fund is managed by Robertson Stephens Investment Management,
Inc. ("RSIM, Inc."). RSIM, L.P. and RSIM, Inc. are sometimes referred to in
this Statement collectively as "Robertson Stephens Investment Management."
Class A shares and Class C shares are offered through two separate
prospectuses. Any reference to the "Prospectus" in this Statement is a
reference to each such prospectus unless the context requires otherwise or
unless otherwise specified.
LOWER-RATED DEBT SECURITIES
Certain of the Funds may purchase lower-rated debt securities, sometimes
referred to as "junk bonds" (those rated BB or lower by Standard & Poor's
("S&P") or Ba or lower by Moody's Investor Service, Inc. ("Moody's")). See
APPENDIX A for a description of these ratings. None of the Funds intends, under
current circumstances, to purchase such securities if, as a result, more than
35% of the Fund's assets would be invested in securities rated below BB or Ba.
The lower ratings of certain securities held by a Fund reflect a greater
possibility that adverse changes in the financial condition of the issuer, or in
general economic conditions, or both, or an unanticipated rise in interest
rates, may impair the ability of the issuer to make payments of interest and
principal. The inability (or perceived inability) of issuers to make timely
payment of interest and principal would likely make the values of securities
held by the Fund more volatile and could limit the Fund's ability to sell its
securities at prices approximating the values a Fund had placed on such
securities. It is possible that legislation may be adopted in the future
limiting the ability of certain financial institutions to purchase lower rated
securities; such legislation may adversely affect the liquidity of such
securities. In the absence of a liquid trading market for securities held by
it, the Fund may be unable at times to establish the fair market value of such
securities. The rating assigned to a security by Moody's or S&P does not
reflect an assessment of the volatility of the security's market value or of the
liquidity of an investment in the security.
Like those of other fixed-income securities, the values of lower-rated
securities fluctuate in response to changes in interest rates. Thus, a decrease
in interest rates generally will result in an increase in the value of a Fund's
fixed-income securities. Conversely, during periods of rising interest rates,
the value of a Fund's fixed-income securities generally will decline. In
addition, the values of such securities are also affected by changes in general
economic conditions and business conditions affecting the specific industries of
their issuers. Changes by recognized rating services in their ratings of any
fixed-income security and in the ability of an issuer to make payments of
interest and principal may also affect the value of these investments. Changes
in the value of portfolio securities generally will not affect cash income
derived from such securities, but will affect the Fund's net asset value. A
Fund will not necessarily dispose of a security when its rating is reduced below
its rating at the time of purchase, although Robertson Stephens Investment
Management will monitor the investment to determine whether continued investment
in the security will assist in meeting the Fund's investment objective.
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Issuers of lower-rated securities are often highly leveraged, so that their
ability to service their debt obligations during an economic downturn or during
sustained periods of rising interest rates may be impaired. In addition, such
issuers may not have more traditional methods of financing available to them,
and may be unable to repay debt at maturity by refinancing. The risk of loss
due to default in payment of interest or principal by such issuers is
significantly greater because such securities frequently are unsecured and
subordinated to the prior payment of senior indebtedness. Certain of the lower-
rated securities in which the Funds may invest are issued to raise funds in
connection with the acquisition of a company, in so-called "leveraged buy-out"
transactions. The highly leveraged capital structure of such issuers may make
them especially vulnerable to adverse changes in economic conditions.
Under adverse market or economic conditions or in the event of adverse
changes in the financial condition of the issuer, a Fund could find it more
difficult to sell lower-rated securities when Robertson Stephens Investment
Management believes it advisable to do so or may be able to sell such securities
only at prices lower than if such securities were more widely held. In many
cases, such securities may be purchased in private placements and, accordingly,
will be subject to restrictions on resale as a matter of contract or under
securities laws. Under such circumstances, it may also be more difficult to
determine the fair value of such securities for purposes of computing a Fund's
net asset value. In order to enforce its rights in the event of a default under
such securities, a Fund may be required to take possession of and manage assets
securing the issuer's obligations on such securities, which may increase the
Fund's operating expenses and adversely affect the Fund's net asset value. A
Fund may also be limited in its ability to enforce its rights and may incur
greater costs in enforcing its rights in the event an issuer becomes the subject
of bankruptcy proceedings.
Certain securities held by a Fund may permit the issuer at its option to
"call," or redeem, its securities. If an issuer were to redeem securities held
by a Fund during a time of declining interest rates, the Fund may not be able to
reinvest the proceeds in securities providing the same investment return as the
securities redeemed.
OPTIONS
The Funds may purchase and sell put and call options on their portfolio
securities to enhance investment performance and to protect against changes in
market prices. There is no assurance that a Fund's use of put and call options
will achieve its desired objective, and a Fund's use of options may result in
losses to the Fund.
COVERED CALL OPTIONS. A Fund may write covered call options on its
securities to realize a greater current return through the receipt of premiums
than it would realize on its securities alone. Such option transactions may
also be used as a limited form of hedging against a decline in the price of
securities owned by the Fund.
A call option gives the holder the right to purchase, and obligates the
writer to sell, a security at the exercise price at any time before the
expiration date. A call option is "covered" if the writer, at all times while
obligated as a writer, either owns the underlying securities (or comparable
securities satisfying the cover requirements of the securities exchanges), or
has the right to acquire such securities through immediate conversion of
securities.
In return for the premium received when it writes a covered call option, a
Fund gives up some or all of the opportunity to profit from an increase in the
market price of the securities covering the call option during the life of the
option. The Fund retains the risk of loss should the price of such securities
decline. If the option expires unexercised, the Fund realizes a gain equal to
the premium, which may be offset by a decline in price of the underlying
security. If the option is exercised, the Fund realizes a gain or loss equal to
the difference between the Fund's cost for the underlying security and the
proceeds of sale (exercise price minus commissions) plus the amount of the
premium.
A Fund may terminate a call option that it has written before it expires by
entering into a closing purchase transaction. A Fund may enter into closing
purchase transactions in order to free itself to sell the underlying security or
to write another call on the security, realize a profit on a previously written
call option, or protect a
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security from being called in an unexpected market rise. Any profits from a
closing purchase transaction may be offset by a decline in the value of the
underlying security. Conversely, because increases in the market price of a
call option will generally reflect increases in the market price of the
underlying security, any loss resulting from a closing purchase transaction is
likely to be offset in whole or in part by unrealized appreciation of the
underlying security owned by the Fund.
COVERED PUT OPTIONS. A Fund may write covered put options in order to
enhance its current return. Such options transactions may also be used as a
limited form of hedging against an increase in the price of securities that the
Fund plans to purchase. A put option gives the holder the right to sell, and
obligates the writer to buy, a security at the exercise price at any time before
the expiration date. A put option is "covered" if the writer segregates cash
and high-grade short-term debt obligations or other permissible collateral equal
to the price to be paid if the option is exercised.
In addition to the receipt of premiums and the potential gains from
terminating such options in closing purchase transactions, a Fund also receives
interest on the cash and debt securities maintained to cover the exercise price
of the option. By writing a put option, the Fund assumes the risk that it may
be required to purchase the underlying security for an exercise price higher
than its then current market value, resulting in a potential capital loss unless
the security later appreciates in value.
A Fund may terminate a put option that it has written before it expires by
a closing purchase transaction. Any loss from this transaction may be partially
or entirely offset by the premium received on the terminated option.
PURCHASING PUT AND CALL OPTIONS. A Fund may also purchase put options to
protect portfolio holdings against a decline in market value. This protection
lasts for the life of the put option because the Fund, as a holder of the
option, may sell the underlying security at the exercise price regardless of any
decline in its market price. In order for a put option to be profitable, the
market price of the underlying security must decline sufficiently below the
exercise price to cover the premium and transaction costs that the Fund must
pay. These costs will reduce any profit the Fund might have realized had it
sold the underlying security instead of buying the put option.
A Fund may purchase call options to hedge against an increase in the price
of securities that the Fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs. These costs will reduce any profit the Fund might have
realized had it bought the underlying security at the time it purchased the call
option.
A Fund may also purchase put and call options to attempt to enhance its
current return.
OPTIONS ON FOREIGN SECURITIES. A Fund may purchase and sell options on
foreign securities if Robertson Stephens Investment Management believes that the
investment characteristics of such options, including the risks of investing in
such options, are consistent with the Fund's investment objective. It is
expected that risks related to such options will not differ materially from
risks related to options on U.S. securities. However, position limits and other
rules of foreign exchanges may differ from those in the U.S. In addition,
options markets in some countries, many of which are relatively new, may be less
liquid than comparable markets in the U.S.
RISKS INVOLVED IN THE SALE OF OPTIONS. Options transactions involve
certain risks, including the risks that Robertson Stephens Investment Management
will not forecast interest rate or market movements correctly, that a Fund may
be unable at times to close out such positions, or that hedging transactions may
not accomplish their purpose because of imperfect market correlations. The
successful use of these strategies depends on the ability of Robertson Stephens
Investment Management to forecast market and interest rate movements correctly.
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<PAGE>
An exchange-listed option may be closed out only on an exchange which
provides a secondary market for an option of the same series. There is no
assurance that a liquid secondary market on an exchange will exist for any
particular option or at any particular time. If no secondary market were to
exist, it would be impossible to enter into a closing transaction to close out
an option position. As a result, a Fund may be forced to continue to hold, or
to purchase at a fixed price, a security on which it has sold an option at a
time when Robertson Stephens Investment Management believes it is inadvisable to
do so.
Higher than anticipated trading activity or order flow or other unforeseen
events might cause The Options Clearing Corporation or an exchange to institute
special trading procedures or restrictions that might restrict a Fund's use of
options. The exchanges have established limitations on the maximum number of
calls and puts of each class that may be held or written by an investor or group
of investors acting in concert. It is possible that the Trust and other clients
of Robertson Stephens Investment Management may be considered such a group.
These position limits may restrict the Funds' ability to purchase or sell
options on particular securities.
Options which are not traded on national securities exchanges may be closed
out only with the other party to the option transaction. For that reason, it
may be more difficult to close out unlisted options than listed options.
Furthermore, unlisted options are not subject to the protection afforded
purchasers of listed options by The Options Clearing Corporation.
Government regulations, particularly the requirements for qualification as
a "regulated investment company" under the Internal Revenue Code, may also
restrict the Funds' use of options.
SPECIAL EXPIRATION PRICE OPTIONS
Certain of the Funds may purchase over-the-counter ("OTC") puts and calls
with respect to specified securities ("special expiration price options")
pursuant to which the Funds in effect may create a custom index relating to a
particular industry or sector that Robertson Stephens Investment Management
believes will increase or decrease in value generally as a group. In exchange
for a premium, the counterparty, whose performance is guaranteed by a broker-
dealer, agrees to purchase (or sell) a specified number of shares of a
particular stock at a specified price and further agrees to cancel the option at
a specified price that decreases straight line over the term of the option.
Thus, the value of the special expiration price option is comprised of the
market value of the applicable underlying security relative to the option
exercise price and the value of the remaining premium. However, if the value of
the underlying security increases (or decreases) by a prenegotiated amount, the
special expiration price option is canceled and becomes worthless. A portion of
the dividends during the term of the option are applied to reduce the exercise
price if the options are exercised. Brokerage commissions and other transaction
costs will reduce these Funds' profits if the special expiration price options
are exercised. A Fund will not purchase special expiration price options with
respect to more than 25% of the value of its net assets, and will limit premiums
paid for such options in accordance with state securities laws.
LEAPs AND BOUNDs
The Value + Growth Fund may purchase certain long-term exchange-traded
equity options called Long-Term Equity Anticipation Securities ("LEAPs") and
Buy-Right Options Unitary Derivatives ("BOUNDs"). LEAPs provide a holder the
opportunity to participate in the underlying securities' appreciation in excess
of a fixed dollar amount. BOUNDs provide a holder the opportunity to retain
dividends on the underlying security while potentially participating in the
underlying securities' capital appreciation up to a fixed dollar amount. The
Value + Growth Fund will not purchase these options with respect to more than
25% of the value of its net assets.
LEAPs are long-term call options that allow holders the opportunity to
participate in the underlying securities' appreciation in excess of a specified
strike price, without receiving payments equivalent to any cash dividends
declared on the underlying securities. A LEAP holder will be entitled to
receive a specified number of shares of the underlying stock upon payment of the
exercise price, and therefore the LEAP will be exercisable at any
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time the price of the underlying stock is above the strike price. However, if
at expiration the price of the underlying stock is at or below the strike price,
the LEAP will expire worthless.
BOUNDs are long-term options which are expected to have the same economic
characteristics as covered call options, with the added benefits that BOUNDs can
be traded in a single transaction and are not subject to early exercise.
Covered call writing is a strategy by which an investor sells a call option
while simultaneously owning the number of shares of the stock underlying the
call. BOUND holders are able to participate in a stock's price appreciation up
to but not exceeding a specified strike price while receiving payments
equivalent to any cash dividends declared on the underlying stock. At
expiration, a BOUND holder will receive a specified number of shares of the
underlying stock for each BOUND held if, on the last day of trading, the
underlying stock closes at or below the strike price. However, if at expiration
the underlying stock closes above the strike price, the BOUND holder will
receive a payment equal to a multiple of the BOUND's strike price for each BOUND
held. The terms of a BOUND are not adjusted because of cash distributions to
the shareholders of the underlying security. BOUNDs are subject to the position
limits for equity options imposed by the exchanges on which they are traded.
The settlement mechanism for BOUNDs operates in conjunction with that of
the corresponding LEAPs. For example, if at expiration the underlying stock
closes at or below the strike price, the LEAP will expire worthless, and the
holder of a corresponding BOUND will receive a specified number of shares of
stock from the writer of the BOUND. If, on the other hand, the LEAP is "in the
money" at expiration, the holder of the LEAP is entitled to receive a specified
number of shares of the underlying stock from the LEAP writer upon payment of
the strike price, and the holder of a BOUND on such stock is entitled to the
cash equivalent of a multiple of the strike price from the writer of the BOUND.
An investor holding both a LEAP and a corresponding BOUND, where the underlying
stock closes above the strike price at expiration, would be entitled to receive
a multiple of the strike price from the writer of the BOUND and, upon exercise
of the LEAP, would be obligated to pay the same amount to receive shares of the
underlying stock. LEAPs are American-style options (exercisable at any time
prior to expiration), whereas BOUNDs are European-style options (exercisable
only on the expiration date).
FUTURES CONTRACTS
INDEX FUTURES CONTRACTS AND OPTIONS. A Fund may buy and sell stock index
futures contracts and related options for hedging purposes or to attempt to
increase investment return. A stock index futures contract is a contract to buy
or sell units of a stock index at a specified future date at a price agreed upon
when the contract is made. A unit is the current value of the stock index.
The following example illustrates generally the manner in which index
futures contracts operate. The Standard & Poor's 100 Stock Index (the "S&P 100
Index") is composed of 100 selected common stocks, most of which are listed on
the New York Stock Exchange. The S&P 100 Index assigns relative weightings to
the common stocks included in the Index, and the Index fluctuates with changes
in the market values of those common stocks. In the case of the S&P 100 Index,
contracts are to buy or sell 100 units. Thus, if the value of the S&P 100 Index
were $180, one contract would be worth $18,000 (100 units x $180). The stock
index futures contract specifies that no delivery of the actual stocks making up
the index will take place. Instead, settlement in cash must occur upon the
termination of the contract, with the settlement being the difference between
the contract price and the actual level of the stock index at the expiration of
the contract. For example, if a Fund enters into a futures contract to buy 100
units of the S&P 100 Index at a specified future date at a contract price of
$180 and the S&P 100 Index is at $184 on that future date, the Fund will gain
$400 (100 units x gain of $4). If the Fund enters into a futures contract to
sell 100 units of the stock index at a specified future date at a contract price
of $180 and the S&P 100 Index is at $182 on that future date, the Fund will lose
$200 (100 units x loss of $2).
Positions in index futures may be closed out only on an exchange or board
of trade which provides a secondary market for such futures.
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In order to hedge its investments successfully using futures contracts and
related options, a Fund must invest in futures contracts with respect to indexes
or sub-indexes the movements of which will, in its judgment, have a significant
correlation with movements in the prices of the Fund's securities.
Options on index futures contracts give the purchaser the right, in return
for the premium paid, to assume a position in an index futures contract (a long
position if the option is a call and a short position if the option is a put) at
a specified exercise price at any time during the period of the option. Upon
exercise of the option, the holder would assume the underlying futures position
and would receive a variation margin payment of cash or securities approximating
the increase in the value of the holder's option position. If an option is
exercised on the last trading day prior to the expiration date of the option,
the settlement will be made entirely in cash based on the difference between the
exercise price of the option and the closing level of the index on which the
futures contract is based on the expiration date. Purchasers of options who
fail to exercise their options prior to the exercise date suffer a loss of the
premium paid.
As an alternative to purchasing and selling call and put options on index
futures contracts, each of the Funds which may purchase and sell index futures
contracts may purchase and sell call and put options on the underlying indexes
themselves to the extent that such options are traded on national securities
exchanges. Index options are similar to options on individual securities in
that the purchaser of an index option acquires the right to buy (in the case of
a call) or sell (in the case of a put), and the writer undertakes the obligation
to sell or buy (as the case may be), units of an index at a stated exercise
price during the term of the option. Instead of giving the right to take or
make actual delivery of securities, the holder of an index option has the right
to receive a cash "exercise settlement amount." This amount is equal to the
amount by which the fixed exercise price of the option exceeds (in the case of a
put) or is less than (in the case of a call) the closing value of the underlying
index on the date of the exercise, multiplied by a fixed "index multiplier."
A Fund may purchase or sell options on stock indices in order to close out
its outstanding positions in options on stock indices which it has purchased. A
Fund may also allow such options to expire unexercised.
Compared to the purchase or sale of futures contracts, the purchase of call
or put options on an index involves less potential risk to a Fund because the
maximum amount at risk is the premium paid for the options plus transactions
costs. The writing of a put or call option on an index involves risks similar
to those risks relating to the purchase or sale of index futures contracts.
MARGIN PAYMENTS. When a Fund purchases or sells a futures contract, it is
required to deposit with its custodian an amount of cash, U.S. Treasury bills,
or other permissible collateral equal to a small percentage of the amount of the
futures contract. This amount is known as "initial margin." The nature of
initial margin is different from that of margin in security transactions in that
it does not involve borrowing money to finance transactions. Rather, initial
margin is similar to a performance bond or good faith deposit that is returned
to a Fund upon termination of the contract, assuming the Fund satisfies its
contractual obligations.
Subsequent payments to and from the broker occur on a daily basis in a
process known as "marking to market." These payments are called "variation
margin" and are made as the value of the underlying futures contract fluctuates.
For example, when a Fund sells a futures contract and the price of the
underlying index rises above the delivery price, the Fund's position declines in
value. The Fund then pays the broker a variation margin payment equal to the
difference between the delivery price of the futures contract and the value of
the index underlying the futures contract. Conversely, if the price of the
underlying index falls below the delivery price of the contract, the Fund's
futures position increases in value. The broker then must make a variation
margin payment equal to the difference between the delivery price of the futures
contract and the value of the index underlying the futures contract.
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When a Fund terminates a position in a futures contract, a final
determination of variation margin is made, additional cash is paid by or to the
Fund, and the Fund realizes a loss or a gain. Such closing transactions involve
additional commission costs.
SPECIAL RISKS OF TRANSACTIONS IN FUTURES CONTRACTS AND RELATED OPTIONS
LIQUIDITY RISKS. Positions in futures contracts may be closed out only on
an exchange or board of trade which provides a secondary market for such
futures. Although the Funds intend to purchase or sell futures only on
exchanges or boards of trade where there appears to be an active secondary
market, there is no assurance that a liquid secondary market on an exchange or
board of trade will exist for any particular contract or at any particular time.
If there is not a liquid secondary market at a particular time, it may not be
possible to close a futures position at such time and, in the event of adverse
price movements, a Fund would continue to be required to make daily cash
payments of variation margin. However, in the event financial futures are used
to hedge portfolio securities, such securities will not generally be sold until
the financial futures can be terminated. In such circumstances, an increase in
the price of the portfolio securities, if any, may partially or completely
offset losses on the financial futures.
The ability to establish and close out positions in options on futures
contracts will be subject to the development and maintenance of a liquid
secondary market. It is not certain that such a market will develop. Although
a Fund generally will purchase only those options for which there appears to be
an active secondary market, there is no assurance that a liquid secondary market
on an exchange will exist for any particular option or at any particular time.
In the event no such market exists for particular options, it might not be
possible to effect closing transactions in such options, with the result that a
Fund would have to exercise the options in order to realize any profit.
HEDGING RISKS. There are several risks in connection with the use by a
Fund of futures contracts and related options as a hedging device. One risk
arises because of the imperfect correlation between movements in the prices of
the futures contracts and options and movements in the underlying securities or
index or movements in the prices of a Fund's securities which are the subject of
a hedge. Robertson Stephens Investment Management will, however, attempt to
reduce this risk by purchasing and selling, to the extent possible, futures
contracts and related options on securities and indexes the movements of which
will, in its judgment, correlate closely with movements in the prices of the
underlying securities or index and the Fund's portfolio securities sought to be
hedged.
Successful use of futures contracts and options by a Fund for hedging
purposes is also subject to Robertson Stephens Investment Management's ability
to predict correctly movements in the direction of the market. It is possible
that, where a Fund has purchased puts on futures contracts to hedge its
portfolio against a decline in the market, the securities or index on which the
puts are purchased may increase in value and the value of securities held in the
portfolio may decline. If this occurred, the Fund would lose money on the puts
and also experience a decline in value in its portfolio securities. In
addition, the prices of futures, for a number of reasons, may not correlate
perfectly with movements in the underlying securities or index due to certain
market distortions. First, all participants in the futures market are subject
to margin deposit requirements. Such requirements may cause investors to close
futures contracts through offsetting transactions which could distort the normal
relationship between the underlying security or index and futures markets.
Second, the margin requirements in the futures markets are less onerous than
margin requirements in the securities markets in general, and as a result the
futures markets may attract more speculators than the securities markets do.
Increased participation by speculators in the futures markets may also cause
temporary price distortions. Due to the possibility of price distortion, even a
correct forecast of general market trends by Robertson Stephens Investment
Management still may not result in a successful hedging transaction over a very
short time period.
OTHER RISKS. Funds will incur brokerage fees in connection with their
futures and options transactions. In addition, while futures contracts and
options on futures will be purchased and sold to reduce certain risks, those
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transactions themselves entail certain other risks. Thus, while a Fund may
benefit from the use of futures and related options, unanticipated changes in
interest rates or stock price movements may result in a poorer overall
performance for the Fund than if it had not entered into any futures contracts
or options transactions. Moreover, in the event of an imperfect correlation
between the futures position and the portfolio position which is intended to be
protected, the desired protection may not be obtained and the Fund may be
exposed to risk of loss.
INDEXED SECURITIES
Certain of the Funds may purchase securities whose prices are indexed to
the prices of other securities, securities indices, currencies, precious metals,
or other commodities, or other financial indicators. Indexed securities
typically, but not always, are debt securities or deposits whose value at
maturity or coupon rate is determined by reference to a specific instrument or
statistic. Gold-indexed securities, for example, typically provide for a
maturity value that depends on the price of gold, resulting in a security whose
price tends to rise and fall together with gold prices. Currency-indexed
securities typically are short-term to intermediate-term debt securities whose
maturity values or interest rates are determined by reference to the values of
one or more specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities of equivalent issuers. Currency-indexed
securities may be positively or negatively indexed; that is, their maturity
value may increase when the specified currency value increases, resulting in a
security whose price characteristics are similar to a put option on the
underlying currency. Currency-indexed securities also may have prices that
depend on the values of a number of different foreign currencies relative to
each other.
The performance of indexed securities depends to a great extent on the
performance of the security, currency, commodity or other instrument to which
they are indexed, and also may be influenced by interest rate changes in the
U.S. and abroad. At the same time, indexed securities are subject to the credit
risks associated with the issuer of the security, and their values may decline
substantially if the issuer's creditworthiness deteriorates. Recent issuers of
indexed securities have included banks, corporations, and certain U.S.
Government agencies.
REPURCHASE AGREEMENTS
A Fund may enter into repurchase agreements. A repurchase agreement is a
contract under which the Fund acquires a security for a relatively short period
(usually not more than one week) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time and price
(representing the Fund's cost plus interest). It is the Trust's present
intention to enter into repurchase agreements only with member banks of the
Federal Reserve System and securities dealers meeting certain criteria as to
creditworthiness and financial condition established by the Trustees of the
Trust and only with respect to obligations of the U.S. Government or its
agencies or instrumentalities or other high-quality, short-term debt
obligations. Repurchase agreements may also be viewed as loans made by a Fund
which are collateralized by the securities subject to repurchase. Robertson
Stephens Investment Management will monitor such transactions to ensure that the
value of the underlying securities will be at least equal at all times to the
total amount of the repurchase obligation, including the interest factor. If
the seller defaults, a Fund could realize a loss on the sale of the underlying
security to the extent that the proceeds of sale including accrued interest are
less than the resale price provided in the agreement including interest. In
addition, if the seller should be involved in bankruptcy or insolvency
proceedings, a Fund may incur delay and costs in selling the underlying security
or may suffer a loss of principal and interest if the Fund is treated as an
unsecured creditor and required to return the underlying collateral to the
seller's estate.
LEVERAGE
Leveraging a Fund creates an opportunity for increased net income but, at
the same time, creates special risk considerations. For example, leveraging may
exaggerate changes in the net asset value of a Fund's shares and in the yield on
a Fund's portfolio. Although the principal of such borrowings will be fixed, a
Fund's assets may change in value during the time the borrowing is outstanding.
Since any decline in value of a Fund's investments will be borne entirely by the
Fund's shareholders (and not by those persons providing the leverage to the
Fund),
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the effect of leverage in a declining market would be a greater decrease in net
asset value than if the Fund were not so leveraged. Leveraging will create
interest expenses for a Fund, which can exceed the investment return from the
borrowed funds. To the extent the investment return derived from securities
purchased with borrowed funds exceeds the interest a Fund will have to pay, the
Fund's investment return will be greater than if leveraging were not used.
Conversely, if the investment return from the assets retained with borrowed
funds is not sufficient to cover the cost of leveraging, the investment return
of the Fund will be less than if leveraging were not used.
REVERSE REPURCHASE AGREEMENTS
In connection with its leveraging activities, a Fund may enter into reverse
repurchase agreements, in which the Fund sells securities and agrees to
repurchase them at a mutually agreed date and price. A reverse repurchase
agreement may be viewed as a borrowing by the Fund, secured by the security
which is the subject of the agreement. In addition to the general risks
involved in leveraging, reverse repurchase agreements involve the risk that, in
the event of the bankruptcy or insolvency of the Fund's counterparty, the Fund
would be unable to recover the security which is the subject of the agreement,
that the amount of cash or other property transferred by the counterparty to the
Fund under the agreement prior to such insolvency or bankruptcy is less than the
value of the security subject to the agreement, or that the Fund may be delayed
or prevented, due to such insolvency or bankruptcy, from using such cash or
property or may be required to return it to the counterparty or its trustee or
receiver.
SECURITIES LENDING
A Fund may lend its portfolio securities, provided: (1) the loan is
secured continuously by collateral consisting of U.S. Government securities,
cash, or cash equivalents adjusted daily to have market value at least equal to
the current market value of the securities loaned; (2) the Fund may at any time
call the loan and regain the securities loaned; (3) a Fund will receive any
interest or dividends paid on the loaned securities; and (4) the aggregate
market value of securities of any Fund loaned will not at any time exceed one-
third (or such other limit as the Trustees may establish) of the total assets of
the Fund. In addition, it is anticipated that a Fund may share with the
borrower some of the income received on the collateral for the loan or that it
will be paid a premium for the loan.
Before a Fund enters into a loan, Robertson Stephens Investment Management
considers all relevant facts and circumstances, including the creditworthiness
of the borrower. The risks in lending portfolio securities, as with other
extensions of credit, consist of possible delay in recovery of the securities or
possible loss of rights in the collateral should the borrower fail financially.
Although voting rights or rights to consent with respect to the loaned
securities pass to the borrower, a Fund retains the right to call the loans at
any time on reasonable notice, and it will do so in order that the securities
may be voted by a Fund if the holders of such securities are asked to vote upon
or consent to matters materially affecting the investment. A Fund will not lend
portfolio securities to borrowers affiliated with the Fund.
SHORT SALES
Certain of the Funds may seek to hedge investments or realize additional
gains through short sales. Short sales are transactions in which a Fund sells a
security it does not own, in anticipation of a decline in the market value of
that security. To complete such a transaction, a Fund must borrow the security
to make delivery to the buyer. A Fund then is obligated to replace the security
borrowed by purchasing it at the market price at or prior to the time of
replacement. The price at such time may be more or less than the price at which
the security was sold by a Fund. Until the security is replaced, a Fund is
required to repay the lender any dividends or interest that accrue during the
period of the loan. To borrow the security, a Fund also may be required to pay
a premium, which would increase the cost of the security sold. The net proceeds
of the short sale will be retained by the broker (or by the Fund's custodian in
a special custody account), to the extent necessary to meet margin
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requirements, until the short position is closed out. A Fund also will incur
transaction costs in effecting short sales.
A Fund will incur a loss as a result of the short sale if the price of the
security increases between the date of the short sale and the date on which a
Fund replaces the borrowed security. A Fund will realize a gain if the security
declines in price between those dates. The amount of any gain will be
decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a Fund may be required to pay in connection with
a short sale. An increase in the value of a security sold short by a Fund over
the price at which it was sold short will result in a loss to the Fund, and
there can be no assurance that a Fund will be able to close out the position at
any particular time or at an acceptable price.
FOREIGN INVESTMENTS
Investments in foreign securities may involve considerations different from
investments in domestic securities due to limited publicly available
information, non-uniform accounting standards, lower trading volume and possible
consequent illiquidity, greater volatility in price, the possible imposition of
withholding or confiscatory taxes, the possible adoption of foreign governmental
restrictions affecting the payment of principal and interest, expropriation of
assets, nationalization, or other adverse political or economic developments.
Foreign companies may not be subject to auditing and financial reporting
standards and requirements comparable to those which apply to U.S. companies.
Foreign brokerage commissions and other fees are generally higher than in the
United States. It may be more difficult to obtain and enforce a judgment
against a foreign issuer.
In addition, to the extent that a Fund's foreign investments are not U.S.
dollar-denominated, the Fund may be affected favorably or unfavorably by changes
in currency exchange rates or exchange control regulations and may incur costs
in connection with conversion between currencies.
DEVELOPING COUNTRIES. The considerations noted above for foreign
investments generally are intensified for investments in developing countries.
These risks include (i) volatile social, political and economic conditions; (ii)
the small current size of the markets for such securities and the currently low
or nonexistent volume of trading, which result in a lack of liquidity and in
greater price volatility; (iii) the existence of national policies which may
restrict a Fund's investment opportunities, including restrictions on investment
in issuers or industries deemed sensitive to national interests; (iv) foreign
taxation; (v) the absence of developed structures governing private or foreign
investment or allowing for judicial redress for injury to private property; (vi)
the absence, until recently in certain developing countries, of a capital market
structure or market-oriented economy; (vii) economies based on only a few
industries; and (viii) the possibility that recent favorable economic
developments in certain developing countries may be slowed or reversed by
unanticipated political or social events in such countries.
FOREIGN CURRENCY TRANSACTIONS
A Fund may engage in currency exchange transactions to protect against
uncertainty in the level of future foreign currency exchange rates and to
increase current return. A Fund may engage in both "transaction hedging" and
"position hedging."
When it engages in transaction hedging, a Fund enters into foreign currency
transactions with respect to specific receivables or payables of the Fund
generally arising in connection with the purchase or sale of its portfolio
securities. A Fund will engage in transaction hedging when it desires to "lock
in" the U.S. dollar price of a security it has agreed to purchase or sell, or
the U.S. dollar equivalent of a dividend or interest payment in a foreign
currency. By transaction hedging, a Fund will attempt to protect against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the applicable foreign currency during the period between the
date on which the security is purchased or sold or on which the dividend or
interest payment is declared, and the date on which such payments are made or
received.
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A Fund may purchase or sell a foreign currency on a spot (I.E., cash) basis
at the prevailing spot rate in connection with transaction hedging. A Fund may
also enter into contracts to purchase or sell foreign currencies at a future
date ("forward contracts") and purchase and sell foreign currency futures
contracts.
For transaction hedging purposes, a Fund may also purchase exchange-listed
and over-the-counter call and put options on foreign currency futures contracts
and on foreign currencies. A put option on a futures contract gives a Fund the
right to assume a short position in the futures contract until expiration of the
option. A put option on currency gives a Fund the right to sell a currency at a
specified exercise price until the expiration of the option. A call option on a
futures contract gives a Fund the right to assume a long position in the futures
contract until the expiration of the option. A call option on currency gives a
Fund the right to purchase a currency at the exercise price until the expiration
of the option. A Fund will engage in over-the-counter transactions only when
appropriate exchange-traded transactions are unavailable and when, in the
opinion of Robertson Stephens Investment Management, the pricing mechanism and
liquidity are satisfactory and the participants are responsible parties likely
to meet their contractual obligations.
When it engages in position hedging, a Fund enters into foreign currency
exchange transactions to protect against a decline in the values of the foreign
currencies in which securities held by the Fund are denominated or are quoted in
their principle trading markets or an increase in the value of currency for
securities which the Fund expects to purchase. In connection with position
hedging, a Fund may purchase put or call options on foreign currency and foreign
currency futures contracts and buy or sell forward contracts and foreign
currency futures contracts. A Fund may also purchase or sell foreign currency
on a spot basis.
The precise matching of the amounts of foreign currency exchange
transactions and the value of the portfolio securities involved will not
generally be possible since the future value of such securities in foreign
currencies will change as a consequence of market movements in the values of
those securities between the dates the currency exchange transactions are
entered into and the dates they mature.
It is impossible to forecast with precision the market value of a Fund's
portfolio securities at the expiration or maturity of a forward or futures
contract. Accordingly, it may be necessary for a Fund to purchase additional
foreign currency on the spot market (and bear the expense of such purchase) if
the market value of the security or securities being hedged is less than the
amount of foreign currency a Fund is obligated to deliver and if a decision is
made to sell the security or securities and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security or
securities of a Fund if the market value of such security or securities exceeds
the amount of foreign currency the Fund is obligated to deliver.
To offset some of the costs to a Fund of hedging against fluctuations in
currency exchange rates, the Fund may write covered call options on those
currencies.
Transaction and position hedging do not eliminate fluctuations in the
underlying prices of the securities which a Fund owns or intends to purchase or
sell. They simply establish a rate of exchange which one can achieve at some
future point in time. Additionally, although these techniques tend to minimize
the risk of loss due to a decline in the value of the hedged currency, they tend
to limit any potential gain which might result from the increase in the value of
such currency.
A Fund may also seek to increase its current return by purchasing and
selling foreign currency on a spot basis, by purchasing and selling options on
foreign currencies and on foreign currency futures contracts, and by purchasing
and selling foreign currency forward contracts.
CURRENCY FORWARD AND FUTURES CONTRACTS. A forward foreign currency
exchange contract involves an obligation to purchase or sell a specific currency
at a future date, which may be any fixed number of days from the date of the
contract as agreed by the parties, at a price set at the time of the contract.
In the case of a
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cancelable forward contract, the holder has the unilateral right to cancel the
contract at maturity by paying a specified fee. The contracts are traded in the
interbank market conducted directly between currency traders (usually large
commercial banks) and their customers. A forward contract generally has no
deposit requirement, and no commissions are charged at any stage for trades. A
foreign currency futures contract is a standardized contract for the future
delivery of a specified amount of a foreign currency at a future date at a price
set at the time of the contract. Foreign currency futures contracts traded in
the United States are designed by and traded on exchanges regulated by the
Commodity Futures Trading Commission (the "CFTC"), such as the New York
Mercantile Exchange.
Forward foreign currency exchange contracts differ from foreign currency
futures contracts in certain respects. For example, the maturity date of a
forward contract may be any fixed number of days from the date of the contract
agreed upon by the parties, rather than a predetermined date in a given month.
Forward contracts may be in any amounts agreed upon by the parties rather than
predetermined amounts. Also, forward foreign exchange contracts are traded
directly between currency traders so that no intermediary is required. A
forward contract generally requires no margin or other deposit.
At the maturity of a forward or futures contract, a Fund may either accept
or make delivery of the currency specified in the contract, or at or prior to
maturity enter into a closing transaction involving the purchase or sale of an
offsetting contract. Closing transactions with respect to forward contracts are
usually effected with the currency trader who is a party to the original forward
contract. Closing transactions with respect to futures contracts are effected
on a commodities exchange; a clearing corporation associated with the exchange
assumes responsibility for closing out such contracts.
Positions in foreign currency futures contracts and related options may be
closed out only on an exchange or board of trade which provides a secondary
market in such contracts or options. Although a Fund will normally purchase or
sell foreign currency futures contracts and related options only on exchanges or
boards of trade where there appears to be an active secondary market, there is
no assurance that a secondary market on an exchange or board of trade will exist
for any particular contract or option or at any particular time. In such event,
it may not be possible to close a futures or related option position and, in the
event of adverse price movements, a Fund would continue to be required to make
daily cash payments of variation margin on its futures positions.
FOREIGN CURRENCY OPTIONS. Options on foreign currencies operate similarly
to options on securities, and are traded primarily in the over-the-counter
market, although options on foreign currencies have recently been listed on
several exchanges. Such options will be purchased or written only when
Robertson Stephens Investment Management believes that a liquid secondary market
exists for such options. There can be no assurance that a liquid secondary
market will exist for a particular option at any specific time. Options on
foreign currencies are affected by all of those factors which influence exchange
rates and investments generally.
The value of a foreign currency option is dependent upon the value of the
foreign currency and the U.S. dollar, and may have no relationship to the
investment merits of a foreign security. Because foreign currency transactions
occurring in the interbank market involve substantially larger amounts than
those that may be involved in the use of foreign currency options, investors may
be disadvantaged by having to deal in an odd lot market (generally consisting of
transactions of less than $1 million) for the underlying foreign currencies at
prices that are less favorable than for round lots.
There is no systematic reporting of last-sale information for foreign
currencies and there is no regulatory requirement that quotations available
through dealers or other market sources be firm or revised on a timely basis.
Available quotation information is generally representative of very large
transactions in the interbank market and thus may not reflect relatively smaller
transactions (less than $1 million) where rates may be less favorable. The
interbank market in foreign currencies is a global, around-the-clock market. To
the extent that the U.S. options markets are closed while the markets for the
underlying currencies remain open, significant price and rate movements may take
place in the underlying markets that cannot be reflected in the U.S. options
markets.
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FOREIGN CURRENCY CONVERSION. Although foreign exchange dealers do not
charge a fee for currency conversion, they do realize a profit based on the
difference (the "spread") between prices at which they buy and sell various
currencies. Thus, a dealer may offer to sell a foreign currency to a Fund at
one rate, while offering a lesser rate of exchange should a Fund desire to
resell that currency to the dealer.
PRECIOUS METALS
The value of the investments of certain Funds may be affected by changes in
the price of gold and other precious metals. Gold has been subject to
substantial price fluctuations over short periods of time and may be affected by
unpredictable international monetary and other governmental policies, such as
currency devaluations or revaluations; economic and social conditions within a
country; trade imbalances; or trade or currency restrictions between countries.
Because much of the world's known gold reserves are located in South Africa,
political and social conditions there may pose special risks to investments in
gold. For instance, social upheaval and related economic difficulties in South
Africa could cause a decrease in the share values of South African issuers.
Many institutions have rescinded policies that preclude investments in companies
doing business in South Africa. In July 1991, the United States lifted the
prohibition on new U.S. investment in South Africa, including the purchase of
newly-issued securities of South African companies.
In addition to its investments in securities, a Fund may, as described from
time to time in the Prospectus, invest a portion of its assets in precious
metals, such as gold, silver, platinum, and palladium, and precious metal
options and futures. The prices of precious metals are affected by broad
economic and political conditions, but are less subject to local and company-
specific factors than securities of individual companies. As a result, precious
metals and precious metal options and futures may be more or less volatile in
price than securities of companies engaged in precious metals-related
businesses. Precious metals may be purchased in any form, including bullion and
coins, provided that Robertson Stephens Investment Management intends to
purchase only those forms of precious metals that are readily marketable and
that can be stored in accordance with custody regulations applicable to mutual
funds. A Fund may incur higher custody and transaction costs for precious
metals than for securities. Also, precious metals investments do not pay
income.
Under current federal income tax law, gains from selling precious metals
(and certain other assets) may not exceed 10% of a Fund's annual gross income.
This tax requirement could a Fund to hold or sell precious metals, securities,
options, or futures when it would not otherwise do so.
ZERO-COUPON DEBT SECURITIES AND PAY-IN-KIND SECURITIES
Zero-coupon securities in which a Fund may invest are debt obligations
which are generally issued at a discount and payable in full at maturity, and
which do not provide for current payments of interest prior to maturity. Zero-
coupon securities usually trade at a deep discount from their face or par value
and are subject to greater market value fluctuations from changing interest
rates than debt obligations of comparable maturities which make current
distributions of interest. As a result, the net asset value of shares of a Fund
investing in zero-coupon securities may fluctuate over a greater range than
shares of other mutual funds investing in securities making current
distributions of interest and having similar maturities.
When debt obligations have been stripped of their unmatured interest
coupons by the holder, the stripped coupons are sold separately. The principal
or corpus is sold at a deep discount because the buyer receives only the right
to receive a future fixed payment on the security and does not receive any
rights to periodic cash interest payments. Once stripped or separated, the
corpus and coupons may be sold separately. Typically, the coupons are sold
separately or grouped with other coupons with like maturity dates and sold in
such bundled form. Purchasers of stripped obligations acquire, in effect,
discount obligations that are economically identical to the zero-coupon
securities issued directly by the obligor.
B-14
<PAGE>
Zero-coupon securities allow an issuer to avoid the need to generate cash
to meet current interest payments. Even though zero-coupon securities do not
pay current interest in cash, a Fund is nonetheless required to accrue interest
income on them and to distribute the amount of that interest at least annually
to shareholders. Thus, a Fund could be required at times to liquidate other
investments in order to satisfy its distribution requirement.
A Fund also may purchase pay-in-kind securities. Pay-in-kind securities
pay all or a portion of their interest or dividends in the form of additional
securities.
THE FUNDS' INVESTMENT LIMITATIONS
The Trust has adopted the following fundamental investment restrictions
which (except to the extent they are designated as nonfundamental as to any
Fund) may not be changed without the affirmative vote of a majority of the
outstanding voting securities of the affected Fund.
THE CONTRARIAN FUND-TM-, THE DEVELOPING COUNTRIES FUND, THE EMERGING GROWTH
FUND AND THE VALUE + GROWTH FUND.
A Fund may not:
1. purchase or sell commodities or commodity contracts, or interests in
oil, gas, or other mineral leases, or other mineral exploration or
development programs, although it may invest in companies that engage
in such businesses to the extent otherwise permitted by a Fund's
investment policies and restrictions and by applicable law, except as
required in connection with otherwise permissible options, futures and
commodity activities as described elsewhere in the Prospectus and this
Statement;
2. purchase or sell real estate, although it may invest in securities
secured by real estate or real estate interests, or issued by
companies, including real estate investment trusts, that invest in
real estate or real estate interests;
3. make short sales or purchases on margin, although it may obtain short-
term credit necessary for the clearance of purchases and sales of its
portfolio securities and except as required in connection with
permissible options, futures, short selling and leverage activities as
described elsewhere in the Prospectus and this Statement;
4. (a) for the Contrarian Fund-TM- and the Developing Countries Fund
only: with respect to 50% of its total assets, invest in the
securities of any one issuer (other than the U.S. Government and its
agencies and instrumentalities), if immediately after and as a result
of such investment more than 5% of the total assets of the Fund would
be invested in such issuer (the remaining 50% of its total assets may
be invested without restriction except to the extent other investment
restrictions may be applicable);
(b) for the Emerging Growth Fund and Value + Growth Fund only: with
respect to 75% of its total assets, invest in the securities of any
one issuer (other than the U.S. Government and its agencies and
instrumentalities), if immediately after and as a result of such
investment more than 5% of the total assets of the Fund would be
invested in such issuer (the remaining 25% of its total assets may be
invested without restriction except to the extent other investment
restrictions may be applicable);
5. mortgage, hypothecate, or pledge any of its assets as security for any
of its obligations, except as required for otherwise permissible
borrowings (including reverse repurchase agreements), short sales,
financial options and other hedging activities;
B-15
<PAGE>
6. make loans of the Fund's assets, including loans of securities
(although it may, subject to the other restrictions or policies stated
herein, purchase debt securities or enter into repurchase agreements
with banks or other institutions to the extent a repurchase agreement
is deemed to be a loan), except that the Contrarian Fund-TM- and
Developing Countries Fund each may lend up to one-third of its total
assets to other parties;
7. borrow money, except from banks for temporary or emergency purposes or
in connection with otherwise permissible leverage activities, and then
only in an amount not in excess of (a) one-third of the value of the
Contrarian Fund's-TM- or Developing Countries Fund's total assets, or
(b) 5% of the Emerging Growth Fund's or Value + Growth Fund's total
assets (in any case as determined at the lesser of acquisition cost or
current market value and excluding collateralized reverse repurchase
agreements);
8. underwrite securities of any other company, although it may invest in
companies that engage in such businesses if it does so in accordance
with policies established by the Trust's Board of Trustees (the
Board's current policy permits a Fund to invest in companies that
directly or through subsidiaries execute portfolio transactions for a
Fund or have entered into selling agreements with the Distributor to
sell Fund shares, to the extent permitted by applicable law), and
except to the extent that the Fund may be considered an underwriter
within the meaning of the Securities Act of 1933, as amended, in the
disposition of restricted securities;
9. invest more than 25% of the value of the Fund's total assets in the
securities of companies engaged in any one industry (except securities
issued by the U.S. Government, its agencies and instrumentalities);
10. issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Fund from making any
otherwise permissible borrowings, mortgages or pledges, or entering
into permissible reverse repurchase agreements, and options and
futures transactions;
11. purchase the securities of any company for the purpose of exercising
management or control (nonfundamental restriction for the Contrarian
Fund-TM-, the Developing Countries Fund and the Value + Growth Fund);
12. (a) purchase more than 10% of the outstanding voting securities of any
one issuer (fundamental restriction for the Emerging Growth Fund and
nonfundamental restriction for the Value + Growth Fund);
(b) own, directly or indirectly, more than 25% of the voting
securities of any one issuer or affiliated person of the issuer
(nonfundamental restriction of the Contrarian Fund-TM- and the
Developing Countries Fund);
13. (a) purchase the securities of any registered investment company,
except as part of a merger or similar reorganization transaction
(Emerging Growth Fund only);
(b) purchase the securities of other investment companies, except as
permitted by the 1940 Act or as part of a merger, consolidation,
acquisition of assets or similar reorganization transaction (Value +
Growth Fund only);
(c) purchase the securities of other investment companies, except as
permitted by the 1940 Act (and then only in the open market where no
commission except the ordinary broker's commission is paid) or as part
of a merger, consolidation, acquisition of assets or similar
reorganization transaction (nonfundamental for the Contrarian
Fund-TM-);
B-16
<PAGE>
(d) purchase the securities of other investment companies, except as
permitted by the 1940 Act and except as otherwise provided in the
Prospectus (nonfundamental for the Developing Countries Fund);
14. (a) invest more than 5% of the value of its total assets in securities
of any issuer which has not had a record, together with its
predecessors, of at least three years of continuous operations
(Emerging Growth Fund only); and
(b) invest more than 50% of its total assets in the securities of
issuers which, together with any predecessors, have a record of less
than three years of continuous operation or in restricted securities
(nonfundamental restriction for The Contrarian Fund-TM- and the
Developing Countries Fund);
15. invest more than 10% of the value of its total assets in securities
that are not readily marketable or that would require registration
under the Securities Act of 1933, as amended, upon disposition (as a
matter of operating policy, the Fund interprets this restriction as
including venture capital investments such as venture capital
partnerships whose securities are not registered under the Securities
Act of 1933 and unregistered securities of companies which are not yet
publicly held; furthermore, and as an additional matter of operating
policy, the Board of Trustees has adopted a further restriction that
no more than 5% of the Fund's total assets may be held in such
restricted securities) (Emerging Growth Fund only).
ALL OTHER FUNDS.
As fundamental investment restrictions, which may not be changed with
respect to a Fund without approval by the holders of a majority of the
outstanding shares of that Fund, a Fund may not:
1. issue any class of securities which is senior to the Fund's shares of
beneficial interest, except that each of the Funds may borrow money to
the extent contemplated by Restriction 3 below;
2. purchase securities on margin (but a Fund may obtain such short-term
credits as may be necessary for the clearance of transactions).
(Margin payments or other arrangements in connection with transactions
in short sales, futures contracts, options, and other financial
instruments are not considered to constitute the purchase of
securities on margin for this purpose.);
3. borrow more than one-third of the value of its total assets less all
liabilities and indebtedness (other than such borrowings) not
represented by senior securities;
4. act as underwriter of securities of other issuers except to the extent
that, in connection with the disposition of portfolio securities, it
may be deemed to be an underwriter under certain federal securities
laws;
5. (i) (as to 75% of the Diversified Growth Fund's, the Global Low-Priced
Stock Fund's, the Global Natural Resources Fund's, the Growth & Income
Fund's, the Information Age Fund's-TM-, and the MicroCap Growth
Fund's total assets and 50% of the Partners Fund's total assets)
purchase any security (other than obligations of the U.S. Government,
its agencies or instrumentalities) if as a result more than 5% of the
Fund's total assets (taken at current value) would then be invested in
securities of a single issuer, or (ii) purchase any security if as a
result 25% or more of the Fund's total assets (taken at current value)
would be invested in a single industry, except that the Information
Age Fund-TM- will invest without limit in any one or more information
technology industries and the Global Natural Resources Fund will
invest without limit in any one or more natural resources industries,
as described in the Trust's Prospectus at the time;
B-17
<PAGE>
6. invest in securities of any issuer if any officer or Trustee of the
Trust or any officer or director of RSIM, L.P. or RSIM, Inc., as the
case may be, owns more than 1/2 of 1% of the outstanding securities
of such issuer, and such officers, Trustees and directors who own more
than 1/2 of 1% own in the aggregate more than 5% of the outstanding
securities of such issuer (This policy is non-fundamental as to the
MicroCap Growth Fund);
7. make loans, except by purchase of debt obligations or other financial
instruments in which the Fund may invest consistent with its
investment policies, by entering into repurchase agreements, or
through the lending of its portfolio securities;
8. purchase or sell commodities or commodity contracts, except that a
Fund may purchase or sell financial futures contracts, options on
financial futures contracts, and futures contracts, forward contracts,
and options with respect to foreign currencies, and may enter into
swap transactions or other financial transactions, and except as
required in connection with otherwise permissible options, futures,
and commodity activities as described elsewhere in the Prospectus or
this Statement at the time;
9. purchase or sell real estate or interests in real estate, including
real estate mortgage loans, although (i) it may purchase and sell
securities which are secured by real estate and securities of
companies, including limited partnership interests, that invest or
deal in real estate and it may purchase interests in real estate
investment trusts, and (ii) the Global Natural Resources Fund may
invest in any issuers in the natural resources industries, as
described in the Prospectus at the time. (For purposes of this
restriction, investments by a Fund in mortgage-backed securities and
other securities representing interests in mortgage pools shall not
constitute the purchase or sale of real estate or interests in real
estate or real estate mortgage loans.).
In addition, it is contrary to the current policy of each of the
Diversified Growth, Global Low-Priced Stock, Global Natural Resources, Growth &
Income, Information Age-TM-, MicroCap Growth, and Partners Funds, which policy
may be changed without shareholder approval, to invest more than 15% of its net
assets in securities which are not readily marketable, including securities
restricted as to resale (other than securities restricted as to resale but
determined by the Trustees, or persons designated by the Trustees to make such
determinations, to be readily marketable).
All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above as fundamental or to the extent
designated as such in a Prospectus, the other investment policies described in
this Statement or in the Prospectus are not fundamental and may be changed by
approval of the Trustees. As a matter of policy, the Trustees would not
materially change a Fund's investment objective without shareholder approval.
The Investment Company Act of 1940, as amended (the "1940 Act"), provides
that a "vote of a majority of the outstanding voting securities" of the Fund
means the affirmative vote of the lesser of (1) more than 50% of the outstanding
shares of a Fund, or (2) 67% or more of the shares present at a meeting if more
than 50% of the outstanding shares are represented at the meeting in person or
by proxy.
B-18
<PAGE>
MANAGEMENT OF THE FUNDS
TRUSTEES AND OFFICERS
Set forth below is certain information about the Trust's trustees and
executive officers:
*G. RANDY HECHT, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Hecht, 45, has served as the Chief Operating Officer of Robertson,
Stephens & Company, Inc. since January 1993, as Chief Financial Officer of
Robertson, Stephens & Company LLC (and its predecessors) from June 1984 to
January 1993 and as the head of the firm's Investment Management Group
since 1988. He is a limited partner of Robertson, Stephens & Company LLC,
and a member of the Management and Executive Committees of Robertson,
Stephens & Company, Inc. As of October 18, 1988, Mr. Hecht assumed the
responsibilities of President and Chief Executive Officer of the Trust.
From May 1987 through May 1995, he served as Chief Financial Officer of
the Trust. Mr. Hecht has been a Director of RSIM, Inc., and of Robertson,
Stephens & Company, Inc., the sole general partner of RSIM, L.P., one of
the Trust's Advisers, from June 1989 to January 1993, and since January
1993, respectively. Mr. Hecht served as the Trust's Secretary from May
1987 through January 1989, as RSIM, L.P.'s Secretary from 1993 to the
present, and as RSIM, Inc.'s Secretary from May 1987 through June 1989. He
has been a Trustee of the Trust since June 1987.
LEONARD B. AUERBACH, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Auerbach, 49, is the President and Chairman of the Board of Auerbach
Associates, Inc., a management consulting firm which he founded in 1979.
Mr. Auerbach is also the sole shareholder and director of a company that is
a general partner of Tuttle & Company, which provides mortgage pipeline
interest rate hedging services to a variety of institutional clients. Mr.
Auerbach is the President of Tuttle & Auerbach Securities, Inc., an
introducing broker trading futures on behalf of institutional hedging
clients and individuals. He also is a Director of Roelof Mining, Inc. He
was a professor of Business Administration at St. Mary's College, Moraga,
California until June 1992. He is the co-founder, and served as the
Chairman until March 1986, of Intraview Systems Corporation, a privately-
held company whose assets were acquired by Worlds of Wonder, Inc. He has
been a Trustee of the Trust since June 1987.
DANIEL R. COONEY, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Cooney, 71, is retired. He had a consulting agreement with Lord Abbett
& Co., a mutual fund adviser, from January 1987 until December 1989. From
September 1985 through December 1986 he was an Executive Vice President and
Senior Adviser of the Lord Abbett Developing Growth Fund, a mutual fund.
Mr. Cooney was the portfolio manager of the Lord Abbett Developing Growth
Fund from its inception (October 1973) through September 1985, at which
time the Lord Abbett Developing Growth Fund had assets of approximately
$250 million. He has been a Trustee of the Trust since April 1989.
TERRY R. OTTON, CHIEF FINANCIAL OFFICER
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Otton, 42, has served as Treasurer, Chief Financial Officer, and
Principal Accounting Officer of Robertson, Stephens & Company LLC (and its
predecessors) since January 1993, and has been a Managing Director since
January 1992. Prior to becoming Chief Financial Officer of Robertson,
Stephens & Company LLC, he served as Controller from January 1988 to
December 1992. Mr. Otton is a Certified Public
- ---------------
* Denotes a Trustee who is an "interested person," as defined in the 1940
Act.
B-19
<PAGE>
Accountant, and prior to joining Robertson, Stephens & Company LLC in 1982, was
employed by Arthur Anderson.
JAMES K. PETERSON, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Peterson, 55, is a private consultant; he served as Director of the IBM
Retirement Funds from April 1988 until October 1996. Mr. Peterson was a
Manager of the IBM Retirement Funds from March 1981 until April 1988. Mr.
Peterson has been a Trustee of the Trust since June 1987.
*JOHN P. ROHAL, TRUSTEE
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Mr. Rohal, 49, has served as Managing Director and Director of Research for
Robertson, Stephens & Company LLC (and its predecessors) since April 1993.
From November 1987 to April 1993 he was Managing Director and co-head of
the technology research group for Alex. Brown & Sons, an investment banking
firm. He has been a Trustee of the Trust since July 1993.
DANA K. WELCH, SECRETARY
c/o Robertson, Stephens & Company LLC, 555 California Street, San Francisco, CA
94104
Ms. Welch, 45, has served as General Counsel of Robertson, Stephens &
Company LLC (and its predecessors) since June 1995. Prior to joining
Robertson, Stephens & Company LLC, Ms. Welch was Special Counsel at
O'Melveny & Myers, a Los Angeles based law firm. She has served as
Secretary of the Trust since August 1996.
Pursuant to the terms of the Advisory Agreements with the Funds, Robertson
Stephens Investment Management pays all compensation of officers of the Trust as
well as the fees and expenses of all Trustees of the Trust who are affiliated
persons of Robertson Stephens Investment Management. The Trust pays each
unaffiliated Trustee an annual fee of $30,000 and reimburses their actual out-
of-pocket expenses relating to attendance at meetings of the Board of Trustees.
CONTROL PERSONS AND SHARE OWNERSHIP
Shareholders of record who owned on December 15, 1996 more than 5% of the
outstanding shares of any Fund were as follows:
PERCENTAGE OF FUND'S
SHAREHOLDER SHARES OWNED OUTSTANDING SHARES
----------- ------------ --------------------
CONTRARIAN FUND-TM-
Charles Schwab & Co., Inc. 23,442,021.812 36.34%
Cash Account Special Custody
FBO Customers Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 7,999,606.048 12.40%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
B-20
<PAGE>
DEVELOPING COUNTRIES FUND
Charles Schwab & Co., Inc. 2,679,884.727 51.52%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 625,662.656 12.03%
Attn: Mutual Funds, 5th Floor
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
DIVERSIFIED GROWTH FUND
Jupiter & Co. 314,290.127 7.23%
c/o Investors Bank & Trust
330 Commerce Street
Nashville, TN 37201-1805
Charles Schwab & Co., Inc. 1,922,512.028 44.20%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 545,881.351 12.55%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
EMERGING GROWTH FUND
Charles Schwab & Co., Inc. 2,420,867.592 22.74%
Cash Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 605,614.654 5.69%
FBO The Exclusive Benefit of
our Customers
P.O. Box 3908 Church Street Station
New York, NY 10008-3908
B-21
<PAGE>
GLOBAL LOW-PRICED STOCK FUND
National Financial Services Corp. 254,320.179 10.92%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
FTC & Co. 199,890.604 8.58%
Attn: Datalynx #003
P.O. Box 173736
Denver, CO 80217-3736
Charles Schwab & Co., Inc. 643,660.789 27.64%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94101-4122
GLOBAL NATURAL RESOURCES FUND
National Financial Services Corp. 1,298,726.435 16.85%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
Charles Schwab & Co., Inc. 3,358,439.213 43.58%
Reinvest Account
Attn: Mutual Funds Department
101 Montgomery Street
San Francisco, CA 94101-4122
GROWTH & INCOME FUND
Charles Schwab & Co., Inc. 10,282,915.495 44.71%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 3,115,811.039 13.55%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
INFORMATION AGE FUND-TM-
B-22
<PAGE>
National Financial Services Corp. 1,889,416.728 21.34%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
Charles Schwab & Co., Inc. 2,891,187.560 32.66%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
MICRO CAP GROWTH FUND
Charles Schwab & Co., Inc. 114,994.402 11.62%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 112,700.679 11.35%
FBO The Exclusive Benefit of
Our Clients
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
PARTNERS FUND
Charles Schwab & Co., Inc. 3,677,515.478 44.21%
Reinvest Account
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 1,062,499.139 12.77%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
FTC & Co. 434,766.749 5.23%
Attn: Datalynx #082
P.O. Box 5508
Denver, CO 80217-5508
VALUE + GROWTH FUND
Charles Schwab & Co., Inc. 8,880,115.966 33.08%
Cash Account
B-23
<PAGE>
Attn: Mutual Fund Department
101 Montgomery Street
San Francisco, CA 94104-4122
National Financial Services Corp. 1,935,293.343 14.66%
FBO The Exclusive Benefit of
Our Customers
P.O. Box 3908
Church Street Station
New York, NY 10008-3908
To the Funds' knowledge, there were no shareholders who owned beneficially
5% or more of a Fund's shares on December 15, 1996.
On December 15, 1996 the officers and trustees of the Trust, as a group,
beneficially owned less than 1% of the outstanding shares of each Fund.
The Trust's Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, except if it is determined in the manner specified in the Declaration of
Trust that they have not acted in good faith in the reasonable belief that their
actions were in the best interests of the Trust or that such indemnification
would relieve any officer or Trustee of any liability to the Trust or its
shareholders by reason of willful misfeasance, bad faith, gross negligence, or
reckless disregard of his or her duties. The Trust, at its expense, provides
liability insurance for the benefit of its Trustees and officers.
ROBERTSON STEPHENS INVESTMENT MANAGEMENT
Pursuant to Investment Advisory Agreements (the "Advisory Agreements"),
Robertson Stephens Investment Management determines the composition of the
Funds' portfolios, the nature and timing of the changes to the Funds'
portfolios, and the manner of implementing such changes. Robertson Stephens
Investment Management also (a) provides the Funds with investment advice,
research, and related services for the investment of their assets, subject to
such directions as it may receive from the Board of Trustees; (b) pays all of
the Trust's executive officers' salaries and executive expenses (if any); (c)
pays all expenses incurred in performing its investment advisory duties under
the Advisory Agreements; and (d) furnishes the Funds with office space and
certain administrative services (pursuant, in the case of the Diversified Growth
Fund, the Global Low-Price Stock Fund, the Global Natural Resources Fund, the
Growth & Income Fund, the Information Age Fund-TM-, and the MicroCap Growth
Fund, Administrative Services Agreements with the Funds, as described below).
The services of Robertson Stephens Investment Management to the Funds are not
deemed to be exclusive, and Robertson Stephens Investment Management or any
affiliate may provide similar services to other series of the Trust, other
investment companies, and other clients, and may engage in other activities.
The Funds may reimburse Robertson Stephens Investment Management (on a cost
recovery basis only) for any services performed for a Fund by it outside its
duties under the Advisory Agreements.
Investment decisions for the Funds and for the other investment advisory
clients of Robertson Stephens Investment Management and its affiliates are made
with a view to achieving their respective investment objectives. Investment
decisions are the product of many factors in addition to basic suitability for
the particular client involved. Thus, a particular security may be bought or
sold for certain clients even though it could have been bought or sold for other
clients at the same time. Likewise, a particular security may be bought for one
or more clients when one or more other clients are selling the security. In
some instances, one client may sell a particular security to another client. It
also sometimes happens that two or more clients simultaneously purchase or sell
the same security, in which event each day's transactions in such security are,
insofar as possible, averaged as to price and allocated between such clients in
a manner which in Robertson Stephens Investment Management's opinion is
equitable to each and in accordance with the amount being purchased or sold by
each. There may be circumstances when purchases or sales of portfolio
securities for one
B-24
<PAGE>
or more clients will have an adverse effect on other clients. Robertson
Stephens Investment Management employs professional staffs of portfolio managers
who draw upon a variety of resources, including RS&Co., for research information
for the Funds.
MANAGEMENT FEES. The Funds pay Robertson Stephens Investment Management
fees as compensation for the services provided by it under the Advisory
Agreements. The amount of these management fees is calculated daily and payable
monthly at the following annual rates based on the average daily net assets of
each Fund:
Contrarian Fund-TM- 1.50%
Developing Countries Fund 1.25%
Diversified Growth Fund 1.00%
Emerging Growth Fund 1.00%
Global Low-Priced Stock Fund 1.00%
Global Natural Resources Fund 1.00%
Growth & Income Fund 1.00%
Information Age Fund-TM- 1.00%
MicroCap Growth Fund 1.25%
Partners Fund 1.25%
Value + Growth Fund 1.00%
These management fees are higher than those paid by most other investment
companies. Robertson Stephens Investment Management also may at its discretion
from time to time pay Fund expenses from its own assets, or reduce the
management fee of a Fund.
ADMINISTRATIVE FEES. The Diversified Growth Fund, Global Low-Priced Stock
Fund, Global Natural Resources Fund, Growth & Income Fund, Information Age Fund-
TM-, and MicroCap Growth Fund have entered into Administrative Services
Agreements with RSIM, L.P., pursuant to which RSIM, L.P. continuously provides
business management services to the Funds and generally manages all of the
business and affairs of the Funds, subject to the general oversight of the
Trustees. The Funds pay RSIM, L.P. a fee, calculated daily and payable monthly,
at the annual rate of 0.25% of their respective average daily net assets.
The proceeds received by each Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to the
rights of creditors, will be specifically allocated to such Fund, and constitute
the underlying assets of that Fund. The underlying assets of each Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of such Fund and with a share of the general liabilities
of the Trust. Expenses with respect to any two or more Funds may be allocated
in proportion to the net asset values of the respective Funds except where
allocations of direct expenses can otherwise be fairly made.
Each of the Advisory Agreements is subject to annual approval (in the case
of the Global Low-Priced Stock Fund, the Global Natural Resources Fund, the
Growth & Income Fund, the Information Age Fund-TM-, and the Partners Fund,
commencing in 1997, and in the case of the Diversified Growth Fund and the
MicroCap Growth Fund, in 1998) by (i) the vote of the Trustees or of a majority
of the outstanding voting securities (as defined in the 1940 Act) of the
affected Fund, and (ii) the vote of a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of the Trust, RSIM, L.P., or
RSIM, Inc. Each is terminable by Robertson Stephens Investment Management or
the Trust, without penalty, on 60 days written notice to the other and will
terminate automatically in the event of its assignment.
Each of the Administrative Services Agreements is subject to annual
approval (in the case of the Global Low-Priced Stock Fund, the Global Natural
Resources Fund, the Growth & Income Fund, the Information Age Fund-TM- and the
Partners Fund, commencing in 1997, and in the case of the Diversified Growth
Fund and the MicroCap Growth Fund, in 1998) by (i) the Board of Trustees, and
(ii) the vote of a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act). The Administrative Services Agreements may be
terminated without penalty, by the Trust
B-25
<PAGE>
or by the vote of a majority of the outstanding voting securities (as defined in
the 1940 Act) of the affected Fund, on 30 days notice to RSIM, L.P.
RECENT MANAGEMENT AND ADMINISTRATIVE FEES PAID BY THE FUNDS.
REIMBURSEMENT ADMINISTRATION
CONTRARIAN FUND-TM- MANAGEMENT FEES(1) OF EXPENSES(2) FEES
- ------------------- ----------------- -------------- --------------
6/3/93 - 3/31/94 $1,476,494
Year ended 3/31/95 $8,053,129 $785,897
Nine Months Ended $5,648,970
12/31/95
DEVELOPING COUNTRIES
FUND
- --------------------
5/2/94 - 3/31/95
Nine months ended $174,084 $ 44,177
12/31/95 $145,517 $282,462
EMERGING GROWTH FUND
- --------------------
Year ended 3/31/94 $1,084,284
Year ended 3/31/95 $1,736,763
Nine Months Ended $1,288,465
12/31/95
GLOBAL LOW-PRICED STOCK
FUND
- ------------------------
11/15/95 - 12/31/95 $854 $6,440 $213
GLOBAL NATURAL RESOURCES
FUND
- ------------------------
11/15/95 - 12/31/95 $470 $5,748 $117
B-26
<PAGE>
GROWTH & INCOME FUND
- --------------------
7/12/95 - 12/31/95 $415,116
Information Age Fund-TM-
- ------------------------
11/15/95 - 12/31/95 $25,307 $6,327
PARTNERS FUND
- -------------
7/12/95 - 12/31/95 $42,710 $93,846
VALUE + GROWTH FUND
- -------------------
Year ended 3/31/94 $288,116 $191,672
Year ended 3/31/95 $1,260,821
Nine Months Ended $9,702,327
12/31/95
(1) Before giving effect to any reimbursement or waiver by RSIM.
(2) Includes amount of management fees waived or reimbursed by RSIM, plus
the amount of any other expenses for which RSIM reimbursed the Fund
or which RSIM bore on behalf of the Fund.
B-27
<PAGE>
EXPENSES
Each Fund will pay all expenses related to its operation which are not
borne by Robertson Stephens Investment Management or RS&Co., including but not
limited to taxes, interest, brokerage fees and commissions, compensation paid to
RS&Co. under a Fund's 12b-1 Plans and its Shareholder Service Plans, fees paid
to members of the Board of Trustees who are not officers, directors,
stockholders, or employees of Robertson Stephens Investment Management or
RS&Co., SEC fees and related expenses, state Blue Sky qualification fees,
charges of custodians, transfer agents, registrars or other agents, outside
auditing, accounting, and legal services, charges for the printing of
prospectuses and statements of additional information for regulatory purposes or
for distribution to shareholders, certain shareholder report charges, and
charges relating to corporate matters.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Transactions on U.S. stock exchanges, commodities markets, and futures
markets and other agency transactions involve the payment by a Fund of
negotiated brokerage commissions. Such commissions vary among different
brokers. A particular broker may charge different commissions according to such
factors as the difficulty and size of the transaction. Transactions in foreign
investments often involve the payment of fixed brokerage commissions, which may
be higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Trust usually includes an undisclosed dealer commission or
mark-up. In underwritten offerings, the price paid by the Trust includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the Securities
Exchange Act of 1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, Robertson Stephens Investment Management receives brokerage and
research services and other similar services from many broker-dealers with which
Robertson Stephens Investment Management places a Fund's portfolio transactions
and from third parties with which these broker-dealers have arrangements. These
services include such matters as general economic and market reviews, industry
and company reviews, evaluations of investments, recommendations as to the
purchase and sale of investments, newspapers, magazines, pricing services,
quotation services, news services, and personal computers utilized by Robertson
Stephens Investment Management's managers and analysts. Where the services
referred to above are not used exclusively by Robertson Stephens Investment
Management for research purposes, Robertson Stephens Investment Management,
based upon its own allocations of expected use, bears that portion of the cost
of these services which directly relates to its non-research use. Some of these
services are of value to Robertson Stephens Investment Management and its
affiliates in advising various of its clients (including the Funds), although
not all of these services are necessarily useful and of value in managing the
Funds. The management fee paid by a Fund is not reduced because Robertson
Stephens Investment Management or its affiliates receive these services even
though Robertson Stephens Investment Management might otherwise be required to
purchase some of these services for cash.
Robertson Stephens Investment Management places all orders for the purchase
and sale of portfolio investments for the Funds and buys and sells investments
for the Funds through a substantial number of brokers and dealers. Robertson
Stephens Investment Management seeks the best overall terms available for the
Funds, except to the extent Robertson Stephens Investment Management may be
permitted to pay higher brokerage commissions as described below. In doing so,
Robertson Stephens Investment Management, having in mind a Fund's best
interests, considers all factors it deems relevant, including, by way of
illustration, price, the size of the transaction, the nature of the market for
the security or other investment, the amount of the commission, the timing of
the transaction taking into account market prices, and trends, the reputation,
experience, and financial stability of the broker-dealer involved and the
quality of service rendered by the broker-dealer in other transactions.
As permitted by Section 28(e) of the 1934 Act, and by the Advisory
Agreements, Robertson Stephens Investment Management may cause a Fund to pay a
broker-dealer which provides "brokerage and research services" (as defined in
B-28
<PAGE>
the 1934 Act) to Robertson Stephens Investment Management an amount of disclosed
commission for effecting securities transactions on stock exchanges and other
transactions for the Fund on an agency basis in excess of the commission which
another broker-dealer would have charged for effecting that transaction.
Robertson Stephens Investment Management's authority to cause a Fund to pay any
such greater commissions is also subject to such policies as the Trustees may
adopt from time to time. Neither RSIM, L.P. nor RSIM, Inc. currently intends to
cause the Funds to make such payments. It is the position of the staff of the
Securities and Exchange Commission that Section 28(e) does not apply to the
payment of such greater commissions in "principal" transactions. Accordingly,
RSIM, L.P. and RSIM, Inc. will use their best efforts to obtain the best overall
terms available with respect to such transactions.
The following tables provide information regarding brokerage commissions
paid by the Funds for the periods indicated.
PERIOD FISCAL YEAR PERIOD
CONTRARIAN FUND-TM- 3/31/95-12/31/95 ENDED 3/31/95 6/3/93 - 3/31/94
- ------------------- ---------------- ------------- ----------------
Percentage of total 62% 69% 83%
transactions involving
brokerage commissions
Dollar amount of commissions $1,026,683 $1,959,452 $1,140,692
Percentage (dollar amount) 1% ($6,840) 14.8% 18%
paid to RS&Co. ($289,074) ($210,807)
Percentage of brokerage 1% 14% 26%
transactions effected through
RS&Co.
Percentage of transactions 38% 31% 17%
effected without brokerage
commissions
PERIOD PERIOD
DEVELOPING COUNTRIES FUND 3/31/95-12/31/95 5/2/94 - 3/31/95
---------------- ----------------
Percentage of total transactions 87% 76%
involving brokerage commissions
Dollar amount of commissions $228,245 $170,919
Percentage (dollar amount) paid
to RS&Co. 0% ($0) .73% ($1,250)
Percentage of brokerage
transactions effected through RS&Co. 0% 2%
Percentage of transactions
effected without brokerage
commissions 13% 24%
<TABLE>
<CAPTION>
FISCAL YEAR FISCAL YEAR
PERIOD ENDED ENDED PERIOD
EMERGING GROWTH FUND 3/31/95-12/31/95 3/31/95 3/31/94 1/1/94-3/31/94
- -------------------- ----------------- -------- --------- --------------
<S> <C> <C> <C> <C>
Percentage of total
transactions involving
brokerage commissions 21% 21% 37% 10%
Dollar amount of commissions $300,963 $559,915 $1,007,880 $105,582
B-29
<PAGE>
Percentage (dollar amount)
paid to RS&Co. 24% ($71,498) 29.2% ($163,607) 21% ($216,575) 8% ($8,442)
Percentage of brokerage
transactions effected through
RS&Co. 4% 24% 16% 5%
Percentage of transactions
effected without brokerage
commissions 79% 79% 63% 92%
FISCAL FISCAL
PERIOD YEAR ENDED YEAR ENDED PERIOD
VALUE + GROWTH FUND 3/31/95-12/31/95 3/31/95 3/31/94 4/21/92-3/31/93
-------------------- ---------------- ---------- ---------- ---------------
Percentage of total transactions
involving brokerage commissions 77% 49% 69% 50%
Dollar amount of commissions $1,707,929 $665,354 $295,284 $105,025
Percentage (dollar amount) paid to
RS&Co. 21% ($356,240) 12.4% ($82,270) 35% ($102,015) 40% ($41,493)
Percentage of brokerage transactions
effected through RS&Co. 9% 13% 39% 38%
Percentage of transactions effected
without brokerage commissions 23% 51% 31% 50%
</TABLE>
PERIOD
GLOBAL LOW-PRICED STOCK FUND 11/15/95-12/31/95
- ---------------------------- -----------------
Percentage of total transactions involving brokerage
commissions 51%
Dollar amount of commissions $1,595
Percentage (dollar amount) paid to RS&Co. 0% ($0)
Percentage of brokerage transactions effected through
RS&Co. 0%
Percentage of transactions effected without
brokerage commissions 49%
PERIOD
GLOBAL NATURAL RESOURCES FUND 11/15/95-12/31/95
- ----------------------------- -----------------
Percentage of total transactions involving brokerage
commissions 84%
Dollar amount of commissions $1,242
Percentage (dollar amount) paid to RS&Co. 41% ($515)
Percentage of brokerage transactions effected
through RS&Co. 39%
Percentage of transactions effected without
brokerage commissions 16%
PERIOD
GROWTH & INCOME FUND 7/12/95-12/31/95
- -------------------- ----------------
Percentage of total transactions involving
brokerage commissions 45%
Dollar amount of commissions $282,119
Percentage (dollar amount) paid to RS&Co. 18% ($49,415)
B-30
<PAGE>
Percentage of brokerage transactions effected through
RS&Co. 7%
Percentage of transactions effected without
brokerage commissions 55%
PERIOD
INFORMATION AGE FUND-TM- 11/15/95-12/31/95
- ------------------------ -----------------
Percentage of total transactions involving
brokerage commissions 75%
Dollar amount of commissions $21,166
Percentage (dollar amount) paid to RS&Co. 25% ($5,200)
Percentage of brokerage transactions effected
through RS&Co. 8%
Percentage of transactions effected without
brokerage commissions 25%
PERIOD
PARTNERS FUND 7/12/95-12/31/95
- ------------- ----------------
Percentage of total transactions involving brokerage
commissions 70%
Dollar amount of commissions $21,979
Percentage (dollar amount) paid to RS&Co. 0.1% ($25)
Percentage of brokerage transactions effected
through RS&Co. 1%
Percentage of transactions effected without
brokerage commissions 30%
THE FUNDS' DISTRIBUTOR
Each of the Funds has adopted a Distribution Plan under Rule 12b-l of the
1940 Act (each, a "Plan") in respect of its Class A and Class C Shares.
CLASS A SHARES. Pursuant to the Plans adopted in respect of the Funds'
Class A Shares (the "Class A Plans"), each Fund may pay RS&Co. (also referred to
as the "Distributor"), from the assets attributable to the Fund's Class A
Shares, distribution fees, for services the Distributor renders and costs and
expenses it incurs in connection with the continuous offering of the Fund's
shares, at an annual rate of 0.75% of the Fund's average daily net assets, in
the case of The Contrarian Fund-TM-, 0.50% of the Fund's average daily net
assets, in the case of the Developing Countries Fund, and 0.25% of the Fund's
average daily net assets, in the case of each of the other Funds. (Payments
under the Distribution Plan for the Developing Countries Fund are currently
being waived to 0.25% of the Fund's average daily net assets). These expenses
may include, but are not limited to, costs of advertising and promoting the sale
of shares of the Funds and payments to dealers, financial institutions,
advisers, or other firms. The Plans also permit the Distributor to receive
compensation based on a prorated portion of its overhead expenses attributable
to the distribution of each Fund's shares, which include leases, communications,
salaries, training, supplies, photocopying, and any other category of the
Distributor's expenses attributable to the distribution of these Funds' shares.
CLASS C SHARES. Pursuant to the Plans adopted in respect of the Funds'
Class C Shares (the "Class C Plans"), each Fund may pay the Distributor fees for
services provided and expenses incurred by it as the principal underwriter of
the Class C shares. The Plans by their terms also relate to payments under the
Funds' shareholder service plans, to the extent such payments may be seen as
primarily intended to result in the sale of the Funds' Class C Shares. The
Plans provide for payments by each Fund to the Distributor from the assets
attributable to the Funds' Class C Shares at an annual rate of up to 1.00%.
B-31
<PAGE>
RECENT PAYMENTS UNDER THE FUNDS' CLASS A DISTRIBUTION PLANS*.
CONTRARIAN FUND-TM- DISTRIBUTION FEES WAIVER
- ------------------- ----------------- ------
6/3/93 - 3/31/94 $738,247
Year ended 3/31/95 $4,026,498
Nine months ended 12/31/95 $2,824,481
DEVELOPING COUNTRIES FUND
- -------------------------
5/2/94 - 3/31/95 $69,633
Nine months ended 12/31/95 $37,616
EMERGING GROWTH FUND
- --------------------
Year ended 3/31/94 $451,071
Year ended 3/31/95 $434,190
Nine months ended 12/31/95 $322,116
GLOBAL LOW-PRICED STOCK FUND
- ----------------------------
11/15/95 - 12/31/95 $213 $213
GLOBAL NATURAL RESOURCES FUND
- -----------------------------
11/15/95 - 12/31/95 $117
GROWTH & INCOME FUND
- --------------------
7/25/95 - 12/31/95 $103,780
INFORMATION AGE FUND-TM-
- ------------------------
11/15/95 - 12/31/95 $6,327
PARTNERS FUND
- -------------
7/12/95 - 12/31/95 $8,542
- ---------------------------
* No payments were made under the Funds' Class C Plans during fiscal 1995.
HOW NET ASSET VALUE IS DETERMINED
Each Fund determines the net asset value per share of each class of its
shares once daily, as of 4:30 p.m. eastern time on each day the New York Stock
Exchange (the "Exchange") is open. The Exchange is closed Saturdays, Sundays,
New Year's Day, Presidents' Day, Good Friday, Memorial Day, the Fourth of July,
Labor Day, Thanksgiving, and Christmas.
Securities for which market quotations are readily available are valued
using the last reported sale price or, if no sales are reported (as in the case
of some securities traded over-the-counter), at the mean between the closing bid
and asked prices, except that certain U.S. Government securities are stated at
the mean between the last reported bid and
B-32
<PAGE>
asked prices. Short-term investments having remaining maturities of 60 days or
less are stated at amortized cost, which approximates market value. All other
securities and assets are valued at their fair value following procedures
approved by the Trustees.
Reliable market quotations are not considered to be readily available for
long-term corporate bonds and notes, certain preferred stocks, or certain
foreign securities. These investments are stated at fair value on the basis of
valuations furnished by pricing services, which determine valuations for normal,
institutional-size trading units of such securities using methods based on
market transactions for comparable securities and various relationships between
securities which are generally recognized by institutional traders.
If any securities held by a Fund are restricted as to resale, Robertson
Stephens Investment Management determines their fair values. The fair value of
such securities is generally determined as the amount which a Fund could
reasonably expect to realize from an orderly disposition of such securities over
a reasonable period of time. The valuation procedures applied in any specific
instance are likely to vary from case to case. However, consideration is
generally given to the financial position of the issuer and other fundamental
analytical data relating to the investment and to the nature of the restrictions
on disposition of the securities (including any registration expenses that might
be borne by the Fund in connection with such disposition). In addition,
specific factors are also generally considered, such as the cost of the
investment, the market value of any unrestricted securities of the same class
(both at the time of purchase and at the time of valuation), the size of the
holding, the prices of any recent transactions or offers with respect to such
securities, and any available analysts' reports regarding the issuer.
Generally, trading in certain securities (such as foreign securities) is
substantially completed each day at various times prior to the close of the
Exchange. The values of these securities used in determining the net asset
value of a Fund's shares are computed as of such times. Also, because of the
amount of time required to collect and process trading information as to large
numbers of securities issues, the values of certain securities (such as
convertible bonds and U.S. Government securities) are determined based on market
quotations collected earlier in the day at the latest practicable time prior to
the close of the Exchange. Occasionally, events affecting the value of such
securities may occur between such times and the close of the Exchange which will
not be reflected in the computation of a Fund's net asset value. If events
materially affecting the value of such securities occur during such period, then
these securities will be valued at their fair value following procedures
approved by the Trustees.
REDEMPTIONS
During any 90-day period, the Trust is committed to pay in cash all
requests to redeem shares by any one shareholder, up to the lesser of $250,000
and 1% of the value of a Fund's net assets at the beginning of the period.
Should redemptions by any shareholder of a Fund exceed this limitation, the
Trust reserves the right to redeem the excess amount in whole or in part in
securities or other assets. If shares are redeemed in this manner, the
redeeming shareholder typically will incur brokerage and other costs in
converting the securities to cash.
TAXES
Each Fund intends to qualify each year and elect to be taxed as a regulated
investment company under Subchapter M of the United States Internal Revenue Code
of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, a Fund would not be subject to federal income tax
on any of its net investment income or net realized capital gains that are
distributed to shareholders. As long as each Fund maintains its status as a
regulated investment company and distributes all of its income, it will not,
under present law, be subject to any excise or income taxes in Massachusetts or
to franchise
B-33
<PAGE>
or income taxes in California.
In order to qualify as a "regulated investment company," a Fund must, among
other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including gains from options, futures, or forward contracts) derived with
respect to its business of investing in such stock, securities, or currencies;
(b) derive less than 30% of its gross income from the sale or other disposition
of certain assets (including stock and securities) held less than three months;
(c) diversify its holdings so that, at the close of each quarter of its taxable
year, (i) at least 50% of the value of its total assets consists of cash, cash
items, U.S. Government securities, and other securities limited generally with
respect to any one issuer to not more than 5% of the total assets of the Fund
and not more than 10% of the outstanding voting securities of such issuer, and
(ii) not more than 25% of the value of its assets is invested in the securities
of any issuer (other than U.S. Government securities). In order to receive the
favorable tax treatment accorded regulated investment companies and their
shareholders, moreover, a Fund must in general distribute at least 90% of its
interest, dividends, net short-term capital gain, and certain other income each
year.
An excise tax at the rate of 4% will be imposed on the excess, if any, of
each Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 (or December 31, if
the Fund so elects) plus undistributed amounts from prior years. Each Fund
intends to make distributions sufficient to avoid imposition of the excise tax.
Distributions declared by a Fund during October, November, or December to
shareholders of record on a date in any such month and paid by the Fund during
the following January will be treated for federal tax purposes as paid by the
Fund and received by shareholders on December 31 of the year in which declared.
With respect to investment income and gains received by a Fund from sources
outside the United States, such income and gains may be subject to foreign taxes
which are withheld at the source. The effective rate of foreign taxes to which
a Fund will be subject depends on the specific countries in which its assets
will be invested and the extent of the assets invested in each such country and
therefore cannot be determined in advance.
A Fund's ability to use options, futures, and forward contracts and other
hedging techniques, and to engage in certain other transactions, including short
sales, may be limited by tax considerations, in particular, the requirement that
less than 30% of the Fund's gross income be derived from the sale or disposition
of assets held for less than three months. A Fund's transactions in foreign
currency-denominated debt instruments and its hedging activities will likely
produce a difference between its book income and its taxable income. This
difference may cause a portion of the Fund's distributions of book income to
constitute returns of capital for tax purposes or require the Fund to make
distributions exceeding book income in order to permit the Fund to continue to
qualify, and be taxed under Subchapter M of the Code, as a regulated investment
company.
Under federal income tax law, a portion of the difference between the
purchase price of zero-coupon securities in which a Fund has invested and their
face value ("original issue discount") is considered to be income to the Fund
each year, even though the Fund will not receive cash interest payments from
these securities. This original issue discount (imputed income) will comprise a
part of the net investment income of the Fund which must be distributed to
shareholders in order to maintain the qualification of the Fund as a regulated
investment company and to avoid federal income tax at the level of the Fund.
Each Fund is required to withhold 31% of all income dividends and capital
gain distributions, and 31% of the gross proceeds of all redemptions of Fund
shares, in the case of any shareholder who does not provide a correct taxpayer
identification number, about whom a Fund is notified that the shareholder has
under reported income in the past, or who
B-34
<PAGE>
fails to certify to a Fund that the shareholder is not subject to such
withholding. Tax-exempt shareholders are not subject to these back-up
withholding rules so long as they furnish the Fund with a proper certification.
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative actions. Dividends and distributions also may be subject to
state and federal taxes. Shareholders are urged to consult their tax advisers
regarding specific questions as to federal, state, or local taxes. The
foregoing discussion relates solely to U.S. federal income tax law. Non-U.S.
investors should consult their tax advisers concerning the tax consequences of
ownership of shares of the Fund, including the possibility that distributions
may be subject to a 30% United States withholding tax (or a reduced rate of
withholding provided by treaty). Statements as to the tax status of
distributions will be mailed annually.
HOW PERFORMANCE IS DETERMINED
STANDARDIZED PERFORMANCE INFORMATION
Average annual total return of a class of shares of a Fund for one-, five-,
and ten-year periods (or for such shorter periods as shares of that class of
shares of the Fund have been offered) is determined by calculating the actual
dollar amount of investment return on a $1,000 investment in that class of
shares at the beginning of the period, and then calculating the annual
compounded rate of return which would produce that amount. Total return for a
period of one year or less is equal to the actual return of that class of shares
during that period. Total return calculations assume reinvestment of all Fund
distributions at net asset value on their respective reinvestment dates. Total
return may be presented for other periods.
A contingent deferred sales charge may apply to certain redemptions of
Class C shares in the first year after purchase. Accordingly, performance
information for Class C shares relating to periods of up to one year will
reflect deduction of the contingent deferred sales charge. The Funds may at
times also present performance for such periods not reflecting deduction of the
contingent deferred sales charge. The calculation of total return assumes that
all dividends, if any, and distributions paid by a Fund would be reinvested at
the net asset value on the day of payment.
At times, Robertson Stephens Investment Management may reduce its
compensation or assume expenses of the Fund in order to reduce the Fund's
expenses. Any such fee reduction or assumption of expenses would increase the
Fund's total return during the period of the fee reduction or assumption of
expenses.
All data are based on past performance and do not predict future
results.
PERFORMANCE INFORMATION
The average annual total returns of the Class A shares of each of the Funds
for the periods indicated through December 31, 1996 are set forth below. (No
Class C shares were outstanding during those periods.)
CONTRARIAN FUND-TM-
-------------------
Year ended December 31, 1996 21.68%
From inception (6/30/93) through December 31, 1996 16.00%
DEVELOPING COUNTRIES FUND
-------------------------
Year ended December 31, 1996 21.07%
B-35
<PAGE>
From inception (5/2/94) through December 31, 1996 (.60)%
EMERGING GROWTH FUND
--------------------
Year ended December 31, 1996 21.53%
Five years ended December 31, 1996 10.53%
From inception (11/30/87) through December 31, 1996 21.69%
GLOBAL LOW-PRICED STOCK FUND
----------------------------
From inception (11/15/95) through December 31, 1996 30.64%
GLOBAL NATURAL RESOURCES FUND
-----------------------------
From inception (11/15/95) through December 31, 1996 37.20%
GROWTH & INCOME FUND
--------------------
From inception (7/12/95) through December 31, 1996 25.38%
INFORMATION AGE FUND-TM-
------------------------
From inception (11/15/95) - December 31, 1996 15.66%
PARTNERS FUND
-------------
From inception (7/12/95) through December 31, 1996 30.91%
VALUE + GROWTH
--------------
Year ended December 31, 1996 14.07%
From inception (5/12/92) through December 31, 1996 23.67%
NON-STANDARDIZED TOTAL RETURN INFORMATION
From time to time, a Fund may present non-standardized total return
information, in addition to standardized performance information, which may
include such results as the growth of a hypothetical $10,000 investment in a
class of the Fund's shares, and cumulative total return. Cumulative total
return is calculated in a similar manner to average annual total return, except
that the results are not annualized. Each calculation assumes that all
dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period.
INDICES AND PUBLICATIONS
A Fund may compare its performance with that of appropriate indices such as
the Standard & Poor's Composite Index of 500 stocks ("S&P 500"), Standard &
Poor's MidCap 400 Index ("S&P 400"), the NASDAQ Industrial Index, the NASDAQ
Composite Index, Russell 2000 Index, or other unmanaged indices so that
investors may compare such results with those of a group of unmanaged
securities. The S&P 500, the S&P 400, the NASDAQ Industrial Index, the NASDAQ
Composite Index, and the Russell 2000 Index are unmanaged groups of common
stocks traded principally on national securities exchanges and the over the
counter market, as the case may be. A Fund may also, from time to time, compare
its performance to other mutual funds with similar investment objectives and to
the industry as a whole, as quoted by rating services and publications, such as
Lipper Analytical Services, Inc., Morningstar Mutual Funds, Forbes, Money, and
Business Week.
In addition, one or more portfolio managers or other employees of Robertson
Stephens Investment Management
B-36
<PAGE>
may be interviewed by print media, such as THE WALL STREET JOURNAL or BUSINESS
WEEK, or electronic news media, and such interviews may be reprinted or
excerpted for the purpose of advertising regarding the Fund.
RELATIVE VOLATILITY - BETA
From time to time a Fund may present a statistical measure of the
volatility of a Fund's performance relative to the volatility of the performance
of the S&P 500. A Fund calls this comparative measure its "beta." Beta is
approximate, because it is statistical, and is not necessarily indicative of
future fund performance volatility. Thus, if a Fund's portfolio volatility
perfectly represents that of the S&P 500, a Fund's beta would be 1.0. If a
Fund's beta is greater than 1.0, a Fund's portfolio would tend to represent a
greater market risk than the S&P 500 because a Fund's portfolio would tend to be
more sensitive to movements in the securities markets. For example, if a Fund's
beta is 1.1, a Fund's performance would tend to vary approximately 10% more than
would the performance of the S&P 500. If a Fund's beta is 0.9, a Fund's
performance would tend to vary 10% less than the performance of the S&P 500.
The correlation is not usually exact because, depending upon the diversification
of a Fund's portfolio, a beta of less than 1.0 may indicate only that the
portfolio is less sensitive to market movements, not that the Fund's portfolio
has low overall risk.
The beta included with any presentation of the Fund's performance data will be
calculated according to the following formula:
n
R R R
Sigma FT MT R
n F M
Beta = -----------------------
n
2 2
Sigma R R
MT n M
Where: n = number of months measured
R = rate of return on the Fund in month T
FT
R = rate of return on the market index, I.E., the S&P
MT 500, in month T
R = arithmetic average monthly rate of return of the
F Fund
R = arithmetic average monthly rate of return on the
M market index, I.E., the S&P 500
ADDITIONAL INFORMATION
GENERAL
Robertson Stephens Investment Trust (the "Trust") is an open-end series
investment company, which was organized on May 11, 1987 as a Massachusetts
business trust.
TRANSFER AGENT AND CUSTODIAN
State Street Bank and Trust Company, c/o National Financial Data Services,
at P.O. Box 419717, Kansas City, MO 64141, serves as the Funds' transfer agent.
State Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
02110, serves as the Funds' Custodian. As transfer agent, State Street Bank and
Trust Company maintains records of shareholder accounts, processes purchases and
redemptions of shares, acts as dividend and distribution disbursing agent, and
performs other related shareholder functions. As custodian, it and
subcustodians approved by the
B-37
<PAGE>
Board of Trustees hold the securities in the Funds' portfolios and other assets
for safekeeping. The Transfer Agent and Custodian do not participate in making
investment decisions for the Funds.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 555 California Street, San Francisco, California
94104, are the Trust's independent accountants, providing audit services, tax
return review, and other tax consulting services and assistance and consultation
in connection with the review of various Securities and Exchange Commission
filings. The Financial Highlights included in the Trust's combined prospectus
for the Contrarian, Developing Countries, Emerging Growth, Global Low-Priced
Stock, Global Natural Resources, Growth & Income, Information Age-TM-, Partners,
and Value + Growth Funds and the financial statements incorporated by reference
therein and included in this Statement have been so included and incorporated in
reliance upon the report of Price Waterhouse LLP, the independent accountants,
given on the authority of said firm as experts in auditing and accounting.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain circumstances,
be held personally liable for the obligations of the Trust. However, the
Agreement and Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and requires that notice of such disclaimer be given in
each agreement, obligation, or instrument entered into or executed by the Trust
or the Trustees. The Agreement and Declaration of Trust provides for
indemnification out of a Fund's property for all loss and expense of any
shareholder held personally liable for the obligations of that Fund. Thus the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations.
OTHER INFORMATION
The Prospectuses and this Statement, together, do not contain all of the
information set forth in the Registration Statement of Robertson Stephens
Investment Trust, as amended, filed with the Securities and Exchange Commission.
Certain information is omitted in accordance with rules and regulations of the
Commission. The Registration Statement may be inspected at the Public Reference
Room of the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549, and copies thereof may be obtained from the Commission
at prescribed rates.
B-38
<PAGE>
APPENDIX A
DESCRIPTION OF SECURITIES RATINGS
This Appendix describes ratings applied to corporate bonds by Standard & Poor's
("S&P"), Moody's Investors Service, Inc. ("Moody's") and Fitch Investor
Services, Inc. ("Fitch").
S&P'S RATINGS
AAA: Debt rated 'AAA' has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA: Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in small degree.
A: Debt rated 'A' has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher-rated categories.
BBB: Debt rated 'BBB' is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.
Debt rated 'BB,' 'B,' 'CCC,' 'CC,' and 'C' is regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and repay
principal. 'BB' indicates the least degree of speculation and 'C' the highest.
While such debt will likely have some quality and protective characteristics,
these are outweighed by large uncertainties of major exposures to adverse
markets.
BB: Debt rated 'BB' has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The 'BB'
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied 'BBB-' rating.
B: Debt rated 'B' has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial, or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The B rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied 'BB' or 'BB-'
rating.
CCC: Debt rated 'CCC' has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial, and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial, or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The 'CCC' rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
'B' or 'B-' rating.
CC: The rating 'CC' typically is applied to debt subordinated to senior debt
that is assigned an actual or implied 'CCC' rating.
C: The rating 'C' typically is applied to debt subordinated to senior debt that
is assigned an actual or implied 'CCC-' rating. The 'C' rating may be used to
cover a situation where a bankruptcy petition has been filed, but debt service
B-39
<PAGE>
payments are continued.
CI: The rating 'CI' is reserved for income bonds on which no interest is being
paid.
D: Debt rated 'D' is in payment default. The 'D' rating category is used when
interest payments or principal payments are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The 'D' rating will also be used upon
the filing of a bankruptcy petition if debt service payments are jeopardized.
The ratings from 'AA' to 'CCC' may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
MOODY'S RATINGS
Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A: Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
Baa: Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba: Bonds which are Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.
B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
C: Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.
B-40
<PAGE>
Moody's applies numerical modifiers, 1, 2, and 3, in each generic rating
classification from AA through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
FITCH RATINGS
AAA: Bonds considered to be investment grade and of the highest credit quality.
The obligor has an exceptionally strong ability to pay interest and repay
principal, which is unlikely to be affected by reasonably foreseeable events.
AA: Bonds considered to be investment grade and of very high credit quality.
The obligor's ability to pay interest and repay principal is very strong,
although not quite as strong as bonds rated 'AAA.' Because bonds rate in the
'AAA' and 'AA' categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated 'F-1+.'
A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.
BBB: Bonds considered to be investment grade and of satisfactory credit quality.
The obligor's ability to pay interest and repay principal is considered to be
adequate. Adverse changes in economic conditions and circumstances, however,
are more likely to have adverse impact on these bonds, and therefore impair
timely payment. The likelihood that the rating of these bonds will fall below
investment grade is higher than for bonds with higher ratings.
BB: Bonds are considered to be speculative. The obligor's ability to pay
interest and repay principal may be affected over time by adverse economic
changes. However, business and financial alternatives can be identified which
could assist the obligor in satisfying its debt service requirements.
B: Bonds are considered highly speculative. While bonds in this class are
currently meeting debt service requirements, the probability of continued timely
payment of principal and interest reflects the obligor's limited margin of
safety and the need for reasonable business and economic activity throughout the
life of the issues.
CCC: Bonds have certain identifiable characteristics that, if not remedied, may
lead to default. The ability to meet obligations requires an advantageous
business and economic environment.
CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable.
C: Bonds are in imminent default in payment of interest or principal.
DDD, DD, and D: Bonds in default on interest and/or principal payments. Such
bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. 'DDD'
represents the highest potential for recovery on these bonds, and 'D' represents
the lowest potential for recovery.
Note: Fitch ratings (other than the 'AAA,' 'DDD,' 'DD,' or 'D' categories) may
be modified by the addition of a plus (+) or minus (-) sign to show relative
position of a credit within the rating category.
B-41
<PAGE>
FINANCIAL STATEMENTS
Attached are financial statements of Robertson Stephens Investment Trust
for the specified periods. No Class C shares were outstanding during any of
those periods.
B-42
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Contrarian
Fund:
In our opinion, the accompanying statement of net assets, including the
schedules of net assets and of securities sold short, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Robertson
Stephens Contrarian Fund (one of the series constituting The Robertson Stephens
Investment Trust, hereinafter referred to as the "Fund") at December 31, 1995,
the results of its operations for the nine months then ended, and the changes in
its net assets and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-43
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ALUMINUM - 6.0%
Kaiser Aluminum Corporation(1) 759,100 $ 9,868,300
MAXXAM, Inc. 517,800 18,252,450
Western Mining Holdings, Ltd.(1) 350,000 2,247,658
- --------------------------------------------------------------------------------
30,368,408
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 6.3%
American Buildings Company 296,000 6,660,000
Easco, Inc.(1) 110,500 953,062
Royal Plastics Group, Ltd. 1,666,300 24,100,641
- ------------------------------------------------------------------------------
31,713,703
- --------------------------------------------------------------------------------
COPPER MINING - 3.3%
Adrian Resources, Ltd. 1,713,003 6,272,439
Chase Resources Corporation 212,900 249,462
Indochina Goldfields, Ltd. - Restricted(2) 1,700,000 10,200,000
- --------------------------------------------------------------------------------
16,721,901
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 4.9%
Anderson Exploration, Ltd. 282,100 2,892,274
Anzoil N.L. 45,842,000 3,918,411
Louisiana Land & Exploration(1) 60,000 2,572,500
McMoRan Oil & Gas Company 1,412,420 4,855,194
Nescor Energy - Restricted(2) 375,000 1,125,000
Petro-Canada Installment Receipts 500,000 2,875,000
Tide West Oil Company 505,000 6,754,375
- --------------------------------------------------------------------------------
24,992,754
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.9%
Dundee Bancorp, Inc., Class A 1,956,000 19,696,081
- --------------------------------------------------------------------------------
19,696,081
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-44
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
GOLD MINING - 13.0%
Ashanti Goldfields - GDS(1,4) 600,000 $12,000,000
Bakyrchik Gold PLC 504,500 2,162,480
Cambior, Inc.(1) 1,159,900 12,635,307
Carson Gold Corporation 978,500 988,890
Central Fund of Canada, Class A(1) 487,300 2,192,850
Delta Gold Mining Corporation 1,142,600 794,925
El Callao Mining Corporation 450,000 197,730
Golden Shamrock Mines, Ltd. 6,477,000 3,995,771
Golden Star Resources, Ltd.(1) 1,677,500 8,906,535
Guyanor Resources, S.A. 335,500 835,372
MK Gold Company 636,000 1,590,000
Newmont Mining Corporation(1) 325,000 14,706,250
Queenstake Resources, Ltd. 2,039,300 746,723
Tombstone Explorations Co., Ltd. 244,500 170,102
Vengold, Inc. 4,756,400 3,831,593
Vengold, Inc., Series A Warrants(5) 1,286,000 473,238
- --------------------------------------------------------------------------------
66,227,766
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INTERNATIONAL CONGLOMERATE - 1.8%
Lonrho PLC(1) 7,310,950 9,266,035
- --------------------------------------------------------------------------------
9,266,035
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICKEL MINING - 25.6%
Diamond Fields Resources, Inc. 6,897,600 130,071,915
- --------------------------------------------------------------------------------
130,071,915
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REAL ESTATE - 4.0%
Atlantic Gulf Communities 371,700 2,508,975
Avatar Holdings, Inc. 262,600 9,191,000
Catellus Development Corporation 1,471,400 8,828,400
- --------------------------------------------------------------------------------
20,528,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 0.7%
Intertape Polymer Group(1) 49,000 1,537,375
NL Industries, Inc. 160,800 1,989,900
- --------------------------------------------------------------------------------
3,527,275
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-45
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION SERVICES - 1.9%
China Yuchai International, Ltd.(1) 388,800 $ 3,159,000
Harper Group(1) 367,700 6,526,675
- --------------------------------------------------------------------------------
9,685,675
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 71.5%
(COST: $259,092,818) $ 362,799,888
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS
- --------------------------------------------------------------------------------
Golden Star Resources, Ltd. - Warrants(5) 75,000 0
Queenstake Resources, Ltd. - Warrants(5) 500,000 0
- --------------------------------------------------------------------------------
TOTAL WARRANTS - 0.1% (COST: $13,000) 0
SHARES VALUE
- --------------------------------------------------------------------------------
PREFERRED STOCKS
- --------------------------------------------------------------------------------
United Services Advisors, Pfd. 279,860 454,773
Catellus Development, 3.625%, Conv. Pfd.,
12/31/99, Series B(1) 30,000 1,200,000
- --------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS - 0.3%
(Cost: $2,852,690) 1,654,773
- --------------------------------------------------------------------------------
CONTRACTS VALUE
- --------------------------------------------------------------------------------
PUT OPTIONS
- --------------------------------------------------------------------------------
RUSSELL 2000 INDEX PUT OPTIONS
March 96 300 300 91,875
June 96 300 1000 625,000
S&P 500 INDEX PUT OPTIONS
March 96 500 525 19,687
March 96 525 350 21,875
March 96 540 975 103,594
March 96 565 450 101,250
March 96 600 1,700 1,168,750
June 96 525 250 59,375
June 96 550 250 96,875
June 96 565 350 205,625
TECHNOLOGY PUT BASKET
March 96 100 20 121,309
June 96 100 10 694,693
September 96 100 9 1,293,067
August 96 100 7 2,338,230
May 96 100 7 1,491,573
- --------------------------------------------------------------------------------
TOTAL PUT OPTIONS - 1.7% (Cost: $11,816,723) 8,432,778
The accompanying notes are an integral part of these financial statements.
B-46
<PAGE>
ROBERTSON, STEPHENS & COMPANY
- -------------------------------------------------------------------------------
TOTAL INVESTMENTS - 73.5% (COST: $273,762,231) $ 372,887,439
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- -------------------------------------------------------------------------------
Cash 35,870
Repurchase Agreement 4,506,000
State Street Bank and Trust Company, 5.00%, dated
12/29/95, due 1/02/96, maturity value $4,508,503
(collateralized by $3,515,000 par value U.S. Treasury
Notes, 8.75%, due 05/15/17)
- -------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 0.9% 4,541,870
- -------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR
SECURITIES SOLD SHORT
- -------------------------------------------------------------------------------
Cash 2,000,000
U.S. Treasury Bills, 5.3%, due 01/25/96 88,692,060
Repurchase Agreement (Segregated) 27,000,000
State Street Bank and Trust Company, 5.00%, dated
12/29/95, due 1/02/96, maturity value $27,015,000
(collateralized by $20,900,000 par value U.S. Treasury
Notes, 8.75%, due 05/15/17)
- -------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK
FOR SECURITIES SOLD SHORT - 23.2% 117,692,060
- -------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 24.8% 126,091,492
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (22.2)% (Proceeds: $118,970,688) (112,746,628)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.2)% (989,492)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 507,476,741
- -------------------------------------------------------------------------------
(1) Income-producing securities.
(2) See 4.f. in Notes to Financial Statements.
(3) ADR - American Depository Receipts.
(4) GDS - Global Depository Shares.
(5) See 4.g. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-47
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
SCHEDULE OF SECURITIES SOLD SHORT
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
HEALTHCARE/MEDICAL TECHNOLOGY/HMO - (2.0)%
Cerner Corporation 279,000 $ 5,719,500
Integrated Health Services, Inc. 185,800 4,645,000
- --------------------------------------------------------------------------------
10,364,500
- --------------------------------------------------------------------------------
MEDICAL SUPPLIES - (3.5)%
Biomet, Inc. 371,500 6,640,562
Enzo Biochem, Inc. 175,100 3,370,675
MediSense, Inc. 236,900 7,491,962
- --------------------------------------------------------------------------------
17,503,199
- --------------------------------------------------------------------------------
MEDICAL SERVICES - (0.4)%
Isolyser Company, Inc. 142,300 1,992,200
- --------------------------------------------------------------------------------
1,992,200
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - (0.9)%
Silicon Graphics, Inc. 171,700 4,721,750
- --------------------------------------------------------------------------------
4,721,750
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - (2.0)%
Avid Technology, Inc. 114,500 2,175,500
FTP Software, Inc. 187,400 5,434,600
Imnet Systems, Inc. 73,500 1,764,000
Seventh Level, Inc. 23,000 322,000
- --------------------------------------------------------------------------------
9,696,100
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - (0.9)%
DSC Communications Corporation 123,100 4,539,312
- --------------------------------------------------------------------------------
4,539,312
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - (0.8)%
Identix, Inc. 148,800 1,581,000
X Rite, Inc. 175,900 2,484,588
- --------------------------------------------------------------------------------
4,065,588
- --------------------------------------------------------------------------------
PERIPHERALS - (1.4)%
InFocus Systems, Inc. 137,500 4,967,188
Proxima Corporation 96,500 2,135,062
- --------------------------------------------------------------------------------
7,102,250
- --------------------------------------------------------------------------------
SEMICONDUCTORS - (0.4)%
Atmel Corporation 84,900 1,899,638
- --------------------------------------------------------------------------------
1,899,638
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - (1.9)%
Cidco, Inc. 167,900 4,281,450
Colonial Data Technologies Corp. 232,200 4,760,100
Equalnet Holding Corporation 86,500 627,125
- --------------------------------------------------------------------------------
9,668,675
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-48
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
TECHNOLOGY/NETWORK SYSTEMS - (0.1)%
American Power Conversion Corporation 72,000 $ 684,000
- --------------------------------------------------------------------------------
684,000
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - (4.3)%
Bed Bath & Beyond, Inc. 192,200 7,459,762
Best Buy Company, Inc. 70,000 1,137,500
Callaway Golf Company 165,000 3,733,125
First Alert, Inc. 103,500 892,688
Gymboree Corporation 137,700 2,840,062
Micro Warehouse, Inc. 135,700 5,869,025
- --------------------------------------------------------------------------------
21,932,162
- --------------------------------------------------------------------------------
RESTAURANTS - (1.7)%
IHOP Corporation 120,000 3,120,000
Papa John's International, Inc. 136,000 5,601,500
- --------------------------------------------------------------------------------
8,721,500
- --------------------------------------------------------------------------------
CONSUMER TECHNOLOGY - (1.9)%
Acclaim Entertainment, Inc. 295,171 1,313,867
Electronic Arts, Inc. 200,000 5,225,000
Sensormatic Electronics Corporation 190,900 3,316,887
- --------------------------------------------------------------------------------
9,855,754
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT - (22.2)%
(PROCEEDS: $118,970,688) $112,746,628
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-49
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $273,762,231) $ 372,887,439
Cash and Cash Equivalents 4,432,484
Deposits with brokers and custodian bank for
securities sold short 117,801,446
Receivable from brokers for securities sold short 126,091,492
Receivable for investments sold 1,102,973
Receivable for fund shares subscribed 1,370,360
Receivables, other 39,752
- --------------------------------------------------------------------------------
TOTAL ASSETS 623,725,946
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Securities sold short (Proceeds: $118,970,688) 112,746,628
Payable for investments purchaseed 335,490
Payable for fund shares redeemed 2,011,165
Accrued expenses 1,128,693
Payables, other 27,229
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 116,249,205
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 507,476,741
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 448,475,149
Accumulated net realized gain from investments 30,514,626
Accumulated net realized loss from options (63,862,419)
Accumulated net realized loss from securities sold short (12,999,883)
Net unrealized appreciation on investments 102,509,153
Net unrealized depreciation on options (3,383,945)
Net unrealized appreciation on securities sold short 6,224,060
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 507,476,741
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 13.78
Net Asset Value, offering and redemption price
per share (net assets of $507,476,741 applicable
to 36,817,846 shares of beneficial interest
outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-50
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- -------------------------------------------------------------------------------
INVESTMENT INCOME
- -------------------------------------------------------------------------------
Interest $ 7,423,520
Dividends (Net of foreign tax withheld of $48,403) 1,406,931
- -------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 8,830,451
- -------------------------------------------------------------------------------
EXPENSES
- -------------------------------------------------------------------------------
Investment advisory fees 5,648,970
Distribution fees 2,824,481
Custodian and transfer agent fees 629,651
Professional fees 204,044
Shareholder reports 119,775
Registration and filing fees 79,621
Dividend expense for securities sold short 65,042
Trustees' fees and expenses 16,875
Other 16,500
- -------------------------------------------------------------------------------
TOTAL EXPENSES 9,604,959
- -------------------------------------------------------------------------------
NET INVESTMENT LOSS (774,508)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT
- -------------------------------------------------------------------------------
Net realized gain from investments 59,125,328
Net realized loss from options (36,060,843)
Net realized loss from securities sold short (12,590,530)
Net change in unrealized appreciation on investments 99,776,939
Net change in unrealized appreciation on options 12,067,990
Net change in unrealized depreciation on securities sold short (3,688,560)
- -------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON
INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT 118,630,324
- -------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $ 117,855,816
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-51
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- --------------------------------------------------------------------------------------------------------------------
Net investment loss $ (774,508) $ (1,464,747)
Net realized gain/(loss) from investments 59,125,328 (17,429,453)
Net realized loss from options (36,060,843) (27,569,968)
Net realized (loss)/gain from securities sold short (12,590,530) 1,299,923
Net change in unrealized appreciation/(depreciation) on investments 99,776,939 (10,936,753)
Net change in unrealized appreciation/(depreciation) on options 12,067,990 (28,287,843)
Net change in unrealized (depreciation)/appreciation on securities sold short (3,688,560) 1,117,823
- --------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 117,855,816 (83,271,018)
- --------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------------------------------------------
Realized gains on investments - (12,605,850)
- --------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (12,605,850)
- --------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------------------------------------------
Net (decrease)/increase in net assets resulting from capital share transactions (8,025,100) 8,572,147
- --------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (8,025,100) 8,572,147
- --------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS 109,830,716 (87,304,721)
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------------------------------------------
Beginning of period 397,646,025 484,950,746
End of period $ 507,476,741 $ 397,646,025
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-52
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT EACH ERIOD: 12/31/95(2) 3/31/95 3/31/94(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 10.70 $ 12.34 $ 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.01) (0.04) (0.02)
Net realized gain/(loss) and unrealized appreciation/(depreciation) on investments 3.09 (1.35) 2.36
- ----------------------------------------------------------------------------------------------------------------------------------
Total Increase/(Decrease) in Net Assets Resulting From Operations 3.08 (1.39) 2.34
- ----------------------------------------------------------------------------------------------------------------------------------
Distribution from realized gains on investments - (0.25) -
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.78 $ 10.70 $ 12.34
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 28.79% (11.23)% 23.40%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $507,476,741 $397,646,025 $484,950,746
Ratio of Expenses to Average Net Assets 2.54% 2.46%(3) 2.22%
Ratio of Net Investment Loss to Average Net Assets (0.20)% (0.27)%(3) (0.77)%
Portfolio Turnover Rate 29% 79% 14%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 The Fund commenced operations on 6/3/93.
2 Represents a 9-month period then ended.
3 If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, the ratio of expenses to average net assets
for the year ended March 31, 1995 would have been 2.58% and the ratio of
net investment loss to average net assets would have been (0.42)%.
Per-share data for each period has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-53
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Contrarian Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on June 30, 1993. Prior to the public offering, shares were offered in a
private placement offering on June 3, 1993, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
nine series of shares -- The Robertson Stephens Emerging Growth Fund, The
Robertson Stephens Value + Growth Fund, The Robertson Stephens Contrarian Fund,
The Robertson Stephens Developing Countries Fund, The Robertson Stephens Growth
& Income Fund, The Robertson Stephens Partners Fund, The Robertson Stephens
Information Age Fund, The Robertson Stephens Global Natural Resources Fund, and
The Robertson Stephens Global Low-Priced Stock Fund. The assets for each series
are segregated and accounted for separately.
The Contrarian Fund, for book and tax purposes, has a calendar (12/31) year-end.
These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable equity securities including options and foreign securities are valued
at the last sale price on the principal exchange or market on which they are
traded; or, if there were no sales that day, at the mean between the closing bid
and asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 97.7% of
the Fund's long positions and 100% of its short positions were valued in this
manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which could have a significant impact on the value of the security. At
December 31, 1995, 2.3% of the Fund's long positions were valued using these
guidelines and procedures.
Principally as a result of significant stock price appreciation, on December 31,
1995, and on February 14, 1996, approximately 25.6% and 25.4%, respectively, of
the Contrarian Fund's net assets were invested in the common stock of Diamond
Fields Resources, a Canadian corporation. Shares of Diamond Fields Resources are
freely traded on the Toronto Stock Exchange; the shares held by the Fund are
currently restricted as to resale within the U.S.
B-54
<PAGE>
ROBERTSON, STEPHENS & COMPANY
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries involving base metals,
precious metals, and oil/energy. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized gain or loss and unrealized appreciation or depreciation from
investments, options, and securities sold short.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
B-55
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995, and the year ended March 31, 1995, were as follows:
<TABLE>
<CAPTION>
4/1/95 - 12/31/95 SHARES AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 27,676,642 $ 349,025,223
Shares reinvested - -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares redeemed (28,017,625) (357,050,323)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net (340,983) $ (8,025,100)
- -------------------------------------------------------------------------------
<CAPTION>
4/1/94 - 3/31/95 SHARES AMOUNT
- -------------------------------------------------------------------------------
<S> <C> <C>
Shares sold 50,424,429 $ 580,777,746
Shares reinvested 1,072,034 11,311,877
- -------------------------------------------------------------------------------
51,496,463 592,089,623
- -------------------------------------------------------------------------------
Shares redeemed (53,652,411) (583,517,476)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net (2,155,948) $ 8,572,147
- -------------------------------------------------------------------------------
</TABLE>
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee calculated at
an annual rate of 1.50% of the average daily net assets of the Fund. For the
nine months ended December 31, 1995, the Fund incurred investment advisory fees
of $5,648,970. When applicable, RSIM agrees to reimburse the Fund for any annual
operating expenses, including investment advisory fees but excluding
distribution fees and dividend expense for short sales, which exceed the most
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. The Fund has obtained a waiver from the State of California to exclude
a portion of its advisory fees for purposes of determining the compliance by the
Fund with the State's Expense Limitations. For the nine months ended December
31, 1995, there was no expected reimbursement of the advisory fees and other
expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Paul H. Stephens, Portfolio Manager, is a Member of RS Group and
Chief Investment Officer of RS & Co. All affiliated and access persons, as
defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
B-56
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,875 for the nine months ended
December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed annually by the Fund's Board of Trustees. Under this
Plan, RS & Co. is compensated for services in such capacity including its
expenses in connection with the promotion and distribution of the Fund's shares.
The distribution fee is calculated at an annual rate of 0.75% of the average
daily net assets of the Fund. For the nine months ended December 31, 1995, the
Fund incurred distribution fees of $2,824,481.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended December 31, 1995, the
Fund paid brokerage commissions of $6,840 to RS & Co. which represented 1% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short, and short-term investments) measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 29%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $391,364,722. Accumulated net unrealized appreciation on investments was
$110,748,961, consisting of gross unrealized appreciation and depreciation of
$177,228,106, and $(66,479,145), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $160,842,180 and $217,827,823,
respectively.
d. OPTIONS:
At December 31, 1995, 1.0% of the Fund's net assets consisted of premiums paid
for the purchase of S&P 500 Index put options to hedge portfolio long
investments against adverse price fluctuations. In addition, 1.3% of the Fund's
net assets represent premiums paid for the purchase of put options on baskets of
securities of issuers in the technology sector of the overall market.
B-57
<PAGE>
THE CONTRARIAN FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The risk associated with the purchase of these put options is limited to the
premium originally paid. The premium paid for the purchase of these options is
included in the Fund's "Statement of Net Assets" as an investment and
subsequently marked-to-market daily to reflect the market value of the options.
TECHNOLOGY PUT BASKET OPTIONS:
The Technology Put Basket Options (the "Options") are European-style put
options. The Options, customized for the Fund, are based on the underlying price
of different groups of high technology stocks. The market value of the Options
is determined daily based on the price of the underlying stocks, market
volatility, exercise date, and other relevant parameters.
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The Fund
will realize a gain if the security declines in value between those dates. All
short sales must be fully collateralized. The Fund maintains the collateral in a
segregated account consisting of cash and/or U.S. government securities
sufficient to collateralize its obligation on the short positions. The Fund may
also sell short "against the box" (i.e., the Fund enters into a short sale as
described above, while holding an offsetting long position in the security which
is sold short). If the Fund enters into a short sale against the box, it will
hold an equivalent amount of the securities to cover its position while the
short sale is outstanding. The Fund limits the value of short sale positions
(excluding short sales "against the box") to 25% of the Fund's total assets. At
December 31, 1995, the Fund had 18% of its total assets in short positions. For
the nine months ended December 31, 1995, the cost of investments purchased to
cover short sales and the proceeds from investments sold short were $142,564,487
and $150,129,469, respectively.
Included in the "Other Assets, Net" category in the Schedule of Net Assets are
the following securities sold short where the Fund has purchased the underlying
securities to effectively close out the short positions. At December 31, 1995,
the Fund chose not to complete the transactions which would have required
delivery of the purchased securities to the lender. The Fund does not consider
these boxed positions as investments.
SECURITIES SHARES VALUE
- --------------------------------------------------------------------------------
Acclaim Entertainment 94,500 $ 1,169,438
- --------------------------------------------------------------------------------
Avid Technology 35,000 665,000
- --------------------------------------------------------------------------------
Cidco, Inc. 13,500 344,250
- --------------------------------------------------------------------------------
Colonial Data Technologies 105,900 2,170,950
- --------------------------------------------------------------------------------
Electronic Arts 24,500 640,062
- --------------------------------------------------------------------------------
Isolyser Company, Inc. 153,200 2,144,800
- --------------------------------------------------------------------------------
$ 7,134,500
- --------------------------------------------------------------------------------
B-58
<PAGE>
ROBERTSON, STEPHENS & COMPANY
f. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. At December 31, 1995, the Fund held restricted
securities with an aggregate value of $11,325,000, which represented 2.2% of the
Fund's total net assets. Restricted securities are valued according to the
guidelines and procedures adopted by the Fund's Board of Trustees.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- --------------------------------------------------------------------------------
Indochina Goldfields 233 $ 233 $ 1,398 3/24/94
117 117 702 3/28/94
750 1,469 4,500 5/26/94
600 3,000 3,600 8/18/95
- --------------------------------------------------------------------------------
Nescor Energy 125 125 375 4/18/94
250 500 750 5/05/94
- --------------------------------------------------------------------------------
g. WARRANTS:
A warrant is an option which normally entitles the holder to purchase a
proportionate amount of a particular class of the issuer's securities at a
predetermined price during a specific period.
The following warrants were valued such that when the exercise price of the
warrant was less than that of the underlying common stock, the warrant was
priced using the modified Black-Scholes Valuation Formula. The Black-Scholes
Valuation Formula values a warrant by determining the differential between the
exercise price of the warrant and the current price of the underlying stock
based on a number of factors. These factors include, but are not limited to,
current price of the underlying stock, exercise price of the warrant, time to
expiration, assumed riskless rate of interest, compounded rate of return on the
stock, and standard deviation of the return on the stock. If the exercise price
was greater than that of the underlying common stock, the warrant was valued at
zero. This valuation method is subject to frequent review and is in accordance
with the guidelines and procedures adopted by the Fund's Board of Trustees.
SHARES COST VALUE EXPIRATION
SECURITY (000) (000) (000) DATE
- --------------------------------------------------------------------------------
Golden Star Resources -
Warrants 75 0 0 7/31/96
- --------------------------------------------------------------------------------
Queenstake Resources -
Warrants 500 0 0 3/18/97
- --------------------------------------------------------------------------------
Vengold, Inc. - Series A
Warrants 1,286 13 473 6/30/00
- --------------------------------------------------------------------------------
h. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, revalue of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets. At December 31, 1995, the
Fund had its largest concentrated investments, worth 33% of the Fund's total
assets, in Canada.
B-59
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Developing
Countries Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Developing Countries Fund (one
of the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian, provides a reasonable basis for the opinion
expressed above.
As explained in Note 1, the financial statements include securities, valued at
$1,878,230 (13 percent of net assets), whose values have been estimated by the
Board of Trustees in the absence of readily ascertainable market values. We
have reviewed the procedures used by the Board of Trustees in arriving at their
estimate of value and have inspected the underlying documentation, and, in the
circumstances, we believe the procedures are reasonable and the documentation
appropriate. However, because of the inherent uncertainty of valuation, those
estimated values may differ significantly from the values that would have been
used had a ready market for the securities existed, and the differences could be
material to the financial statements.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-60
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
Czech Republic - 15.1%
Ceske Energeticke Zavody A.S. 12,300 $ 444,656
Komercni Banka A.S., GDR(3) 40,000 728,000
SPT Telecom A.S. 4,000 378,009
Tabak A.S. 3,985 612,709
- --------------------------------------------------------------------------------
2,163,374
- --------------------------------------------------------------------------------
HONG KONG - 8.5%
ASM Pacific Technology, Ltd.(1) 460,000 398,577
Cathay Investment Fund, Ltd. 750,000 824,442
- --------------------------------------------------------------------------------
1,223,019
- --------------------------------------------------------------------------------
INDONESIA - 10.7%
First Dynasty Mines, Ltd. 100,000 476,016
PT Dynaplast, Foreign(1),(5),(6) 510,000 446,097
PT Japfa Comfeed Indonesia, Foreign(1),(5) 500,000 246,009
PT Multibreeder Adirama, Foreign(1),(5),(6) 749,000 262,060
PT Sumalindo Lestari Jaya, Foreign (1),(5) 130,000 105,182
- --------------------------------------------------------------------------------
1,535,364
- --------------------------------------------------------------------------------
KOREA - 9.5%
LG Electronics, Inc., GDR(3) 70,000 813,750
Samsung Electronics, GDS(4) 9,202 545,218
- --------------------------------------------------------------------------------
1,358,968
- --------------------------------------------------------------------------------
MALAYSIA - 8.7%
Aokam Perdana Berhad(1) 300,000 484,309
Land and General Berhad(1) 100,000 216,561
Lingui Developments Berhad(1) 300,000 555,184
Malaysian Ringgit 5,250 2,067
- --------------------------------------------------------------------------------
1,258,121
- --------------------------------------------------------------------------------
MEXICO - 4.5%
Cementos de Mexico, S.A., ADR(1),(2) 40,000 287,092
Vitro Sociedad Anonima, ADR(1),(2) 75,000 356,250
- --------------------------------------------------------------------------------
643,342
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-61
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
PHILIPPINES - 6.5%
Filinvest Land, Inc. 1,910,000 $ 611,666
International Container Terminal Services, Inc. 600,000 314,525
Negros Navigation Company, Inc. 50,500 5,969
- --------------------------------------------------------------------------------
932,160
- --------------------------------------------------------------------------------
POLAND - 7.4%
Bank Rozwolo Eksportu, S.A. 9,250 140,692
Exbud, S.A. 15,553 164,645
Huta Szkla Gospodarczego Irena 24,300 280,896
Mostostal Zabrze, S.A. 45,500 153,174
Stomil Olsztyn, S.A. 34,200 319,043
- --------------------------------------------------------------------------------
1,058,450
- --------------------------------------------------------------------------------
THAILAND - 11.1%
Alphatec Electronics Company, Ltd., Foreign(1),(5),(6) 38,000 543,073
GSS Array Technologies Company, Ltd., Foreign(1),(5) 230,000 1,050,450
- --------------------------------------------------------------------------------
1,593,093
- --------------------------------------------------------------------------------
VENEZUELA - 5.7%
Corimon C.A. Sponsored, ADR(1),(2) 50,000 187,500
Siderugica Venezolana Sivensa, ADR(1),(2),(6) 330,000 627,000
- --------------------------------------------------------------------------------
814,500
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 87.7% (COST: $14,787,089) 12,580,391
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash 959
Repurchase Agreement 1,661,000
State Street Bank and Trust Comapny, 5.00%, dated
12/29/95, due 1/2/96, maturity value $1,661,923
(collateralized by $1,290,000 par value U.S.
Treasury Notes, 8.75%, due 5/5/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 11.6% 1,661,959
The accompanying notes are an integral part of these financial statements.
B-62
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.7% $ 101,069
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 14,343,420
- --------------------------------------------------------------------------------
(1) Income-producing security.
(2) ADR - American Depository Receipt.
(3) GDR - Global Depository Receipt.
(4) GDS - Global Depository Shares.
(5) Foreign - Foreign Shares.
(6) Fair-valued securities, see 1.a. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-63
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $14,787,089) $ 12,580,391
Cash and cash equivalents 1,661,959
Receivable for fund shares subscribed 47,474
Receivable from Adviser 326,639
Receivables, other 15,436
- --------------------------------------------------------------------------------
TOTAL ASSETS 14,631,899
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for fund shares redeemed 221,858
Accrued expenses 66,621
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 288,479
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 14,343,420
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 19,051,696
Accumulated net realized loss from investments (2,321,733)
Accumulated net realized loss from options (464,150)
Accumulated net realized gain from securities sold short 284,305
Net unrealized depreciation on investments (2,206,698)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 14,343,420
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 8.02
Net Asset Value, offering and redemption price per
share (net assets of $14,343,420 applicable to
1,787,486 share of beneficial interest outstanding
with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-64
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 47,012
Dividends (Net of foreign tax withheld $14,794) 107,568
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 154,580
- --------------------------------------------------------------------------------
Investment advisory fees 145,517
Custodian and transfer agent fees 107,471
Professional fees 77,948
Registration and filing fees 56,369
Shareholder reports 43,796
Distribution fees 37,616
Trustees' fees and expenses 16,882
Other 10,126
Dividend expense for securities sold short 551
- --------------------------------------------------------------------------------
Total Expenses 496,276
Less: Reimbursement from Adviser (282,462)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 213,814
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (59,234)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DECPRECIATION)
ON INVESTMENTS, OPTIONS AND SECURITIES SOLD SHORT
- --------------------------------------------------------------------------------
Net realized loss from investments (1,302,128)
Net realized loss from options (464,150)
Net realized loss from securities sold short (17,500)
Net change in unrealized appreciation on investments 112,264
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS,
OPTIONS AND SECURITIES SOLD SHORT (1,671,514)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,730,748)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-65
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NINE MONTHS ENDED PERIOD ENDED
12/31/95 3/31/95
- ------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------
Net investment (loss)/income $ (59,234) $ 103,473
Net realized loss from investments (1,302,128) (880,354)
Net realized loss from options (464,150) -
Net realized (loss)/gain from securities sold short (17,500) 344,728
Net change in unrealized appreciation/(depreciation) on
investments 112,264 (2,318,966)
- ------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (1,730,748) (2,751,119)
- ------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------
Net investment income - (77,099)
Realized gains on investments - (182,173)
- ------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (259,272)
- ------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions 7,729,040 11,355,519
- ------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 7,729,040 11,355,519
- ------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,998,292 8,345,128
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------
Beginning of period 8,345,128 0
End of period $ 14,343,420 $ 8,345,128
- ------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
B-66
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 12/31/95(2) 3/31/95(1)
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, beginning of period $ 8.57 $ 10.00
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
Net investment (loss)/income (0.03) 0.06
Net realized loss and unrealized depreciation on investments (0.52) (1.36)
- ----------------------------------------------------------------------------------------------
Total Decrease in Net Assets Resulting From Operations (0.55) (1.30)
- -----------------------------------------------------------------------------------------------
Distributions from net investment income - (0.04)
Distributions from realized gains on investments - (0.09)
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 8.02 $ 8.57
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
TOTAL RETURN (6.42)% (13.14)%
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------
Net Assets, end of Period $ 14,343,420 $ 8,345,128
Ratio of Expenses to Average Net Assets 1.83%(2) 3.15%(2)
Ratio of Net Investment (Loss)/Income to Average Net Assets (0.51)%(2) 0.72%(2)
Portfolio Turnover Rate 103% 124%
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on 5/2/94.
(2) Represents a 9-month period then ended.
(3) If the Fund had paid all of its expenses and there had been no reimbursement
by the Adviser, the ratio of expenses to average net assets for the nine
months ended December 31, 1995, and the period ended March 31, 1995, would
have been 4.24% and 3.46%, respectively, and the ratio of net investment
(loss)/income to average net assets would have been (2.92)% and 0.41%,
respectively.
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
B-67
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Developing Countries Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on April 29, 1994, and it started to offer shares to the public on May 2,
1994. The Trust offers nine series of shares -- The Robertson Stephens Emerging
Growth Fund, The Robertson Stephens Value + Growth Fund, The Robertson Stephens
Contrarian Fund, The Robertson Stephens Developing Countries Fund, The Robertson
Stephens Growth & Income Fund, The Robertson Stephens Partners Fund, The
Robertson Stephens Information Age Fund, The Robertson Stephens Global Natural
Resources Fund, and The Robertson Stephens Global Low-Priced Stock Fund. The
assets for each series are segregated and accounted for separately.
The Developing Countries Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 87% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 13% of the Fund's long positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date).
B-68
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
Notes to Financial Statements
Realized gains and losses on securities transactions are determined on the basis
of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period ended December
31, 1995, and for the period ended March 31, 1995, were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 2,510,903 $ 23,109,743
Shares reinvested - -
- --------------------------------------------------------------------------------
2,510,903 23,109,743
- --------------------------------------------------------------------------------
Shares redeemed (1,687,748) (15,380,702)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 813,155 $ 7,729,040
- --------------------------------------------------------------------------------
5/2/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 3,093,680 $ 30,436,016
Shares reinvested 26,976 252,773
- --------------------------------------------------------------------------------
3,120,656 30,688,789
- --------------------------------------------------------------------------------
Shares redeemed (2,146,325) (19,333,270)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 974,331 $ 11,355,519
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the nine months ended December 31, 1995, the Fund incurred investment
advisory fees of $145,517. In addition, to limit the Fund's annual expense ratio
at 1.85%, RSIM has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees but excluding distribution fees and
dividend expense for short sales that exceed the most stringent limits
prescribed by any state in which the Fund's shares are offered for sale. For the
nine months period ended December 31, 1995, the Adviser agreed to reimburse
$282,462 of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's
B-69
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Distributor and RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief
Executive Officer and a Trustee of the Fund, is also a Director of RSIM, a
Member of RS Group, and Chief Operating Officer of RS & Co. Terry R. Otton,
Chief Financial Officer of the Fund, is a Member of RS Group and Chief Financial
Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS
Group and Director of Research for RS & Co. All affiliated and access persons,
as defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,882 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended December 31, 1995, the Fund
incurred distribution fees of $37,616.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-
dealer, subject to Fund policies as stated in the prospectus, regulatory
constraints, and the ability of RS & Co. to provide competitive prices and
commission rates. All investment transactions in which RS & Co. acts as a broker
may only be executed on an agency basis. Subject to certain constraints, the
Fund may make purchases of securities from offerings or underwritings in which
RS & Co. has been retained by the issuer. For the nine months ended December 31,
1995, the Fund paid no brokerage commissions to RS & Co.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short and short-term investments), measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 103%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $14,787,089. Accumulated net unrealized depreciation on investments was
$(2,206,698), consisting of gross unrealized appreciation and depreciation of
$665,060 and $(2,871,758), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold short
and short-term investments) were $19,507,366 and $13,996,457, respectively.
d. OPTIONS:
At December 31, 1995, the Fund had no hedge position in put options.
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which
B-70
<PAGE>
THE DEVELOPING COUNTRIES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the Fund replaces the borrowed security. The Fund will realize a gain if the
security declines in value between those dates. All short sales must be fully
collateralized. The Fund maintains the collateral in a segregated account
consisting of cash and/or U.S. government securities sufficient to collateralize
its obligations on the short positions. The Fund may also sell short "against
the box" (i.e., the Fund enters into a short sale as described above, while
holding an offsetting long position in the security which is sold short). If the
Fund enters into a short sale "against the box," it will hold an equivalent
amount of the securities to cover its position while the short sale is
outstanding. The Fund limits the value of short sale positions (excluding short
sales "against the box") to 25% of the Fund's total assets. At December 31,
1995, none of the Funds total assets were in short positions. For the nine
months ended December 31, 1995, the cost of investments purchased to cover short
sales and the proceeds from investments sold short were $70,500 and $0,
respectively.
f. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets. At December 31, 1995, the
Fund had its largest concentrated foreign investments, worth 15% of the Fund's
total assets, in the Czech Republic.
B-71
<PAGE>
Independent Accountants' Report
To the Shareholders and Board of Trustees of The Robertson Stephens Emerging
Growth Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Emerging Growth Fund (one of
the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audit of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-72
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.6%
Cephalon, Inc. 65,300 $ 2,660,975
- --------------------------------------------------------------------------------
2,660,975
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 2.5%
Seagate Technology, Inc. 40,000 1,900,000
Sun Microsystems, Inc. 50,000 2,281,250
- --------------------------------------------------------------------------------
4,181,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 12.2%
Adobe Systems, Inc.1 15,400 954,800
Broderbund Software, Inc. 45,000 2,733,750
Citrix Systems, Inc. 7,050 229,125
Davidson & Associates, Inc. 45,000 990,000
FTP Software, Inc. 75,000 2,175,000
Informix Corporation 40,000 1,200,000
Legato Systems, Inc. 13,400 415,400
NetManage, Inc. 20,200 469,650
Number Nine Visual Technology Corporation 52,700 461,125
Premenos Technology Corporation 36,400 960,050
Remedy Corporation 22,400 1,327,200
Sierra On-Line, Inc. 103,300 2,969,875
Spectrum HoloByte, Inc. 216,900 1,409,850
Symantec Corporation 108,900 2,531,925
Tivoli Systems, Inc. 23,600 796,500
Verity, Inc. 18,400 814,200
- --------------------------------------------------------------------------------
20,438,450
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 10.6%
Baby Superstore, Inc. 22,450 1,279,650
Books-A-Million, Inc. 156,400 2,013,650
Cannondale Corporation 91,700 1,455,738
Creative Computers, Inc. 28,700 523,775
Garden Ridge Corp. 25,000 968,750
Gucci 10,000 388,750
Just For Feet, Inc. 25,000 893,750
Kohl's Corporation 74,100 3,890,250
The accompanying notes are an integral part of these financial statements.
B-73
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
Micro Warehouse, Inc. 47,400 $2,050,050
PETsMART, Inc. 102,150 3,166,650
Tiffany & Co.(1) 23,000 1,158,625
- --------------------------------------------------------------------------------
17,789,638
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER TECHNOLOGY - 3.4%
Acclaim Entertainment, Inc. 176,700 2,186,663
CDW Computer Centers, Inc. 21,200 858,600
Electronic Arts 98,700 2,578,537
- --------------------------------------------------------------------------------
5,623,800
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DATA COMMUNICATIONS/TELECOMMUNICATIONS - 8.1%
3Com Corporation 55,400 2,583,025
Ascend Communications, Inc. 5,000 405,625
Bay Networks, Inc. 55,500 2,282,437
Cascade Communications Corporation 10,000 852,500
Colonial Data Technologies 111,600 2,287,800
Netcom On Line Communications 10,000 360,000
Network General Corporation 63,300 2,112,637
P-COM, Inc. 102,600 2,052,000
UUNET Technologies, Inc. 10,000 630,000
- --------------------------------------------------------------------------------
13,566,024
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 1.2%
Credit Acceptance Corporation 100,000 2,075,000
- --------------------------------------------------------------------------------
2,075,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HEALTH CARE SERVICES - 3.2%
Emeritus Corporation 60,000 697,500
Express Scripts, Inc., Class A 20,000 1,020,000
Pediatrix Medical Group, Inc. 30,000 825,000
PhyCor, Inc. 46,050 2,328,403
United Dental Care, Inc. 11,500 474,375
- --------------------------------------------------------------------------------
5,345,278
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-74
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 17.3%
Coventry Corporation 216,200 $ 4,459,125
Endosonics Corporation 35,000 529,375
Healthsource, Inc. 115,200 4,147,200
Healthwise of America 41,400 1,614,600
Mid Atlantic Medical Services, Inc. 186,800 4,529,900
Oxford Health Plans, Inc. 34,800 2,570,850
PacifiCare Health Systems, Inc. 25,200 2,192,400
Physician Healthcare 71,500 2,645,500
Quintiles Transnational Corporation 46,400 1,902,400
Sierra Health Services 139,800 4,438,650
- --------------------------------------------------------------------------------
29,030,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LODGING - 1.1%
Bristol Hotel Company 74,300 1,811,063
- --------------------------------------------------------------------------------
1,811,063
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEDICAL SERVICES - 5.2%
American Oncology Resources, Inc. 19,000 923,875
Compdent Corporation 51,000 2,116,500
Exogen, Inc. 97,400 1,874,950
HBO & Company(1) 49,100 3,762,287
- --------------------------------------------------------------------------------
8,677,612
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER SERVICES - 4.0%
Corporate Express, Inc. 63,600 1,915,950
Landstar Systems, Inc. 51,800 1,385,650
Sylvan Learning Systems, Inc. 114,700 3,412,325
- --------------------------------------------------------------------------------
6,713,925
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESTAURANTS - 3.3%
Boston Chicken, Inc. 63,000 2,023,875
Daka International, Inc. 78,600 2,161,500
Landry's Seafood Restaurants 80,000 1,365,000
- --------------------------------------------------------------------------------
5,550,375
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-75
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 6.1%
Act Manufacturing 207,500 $ 2,308,438
Burr-Brown Corporation 124,200 3,167,100
Cypress Semiconductor Corporation 150,000 1,912,500
LSI Logic Corporation 50,000 1,637,500
Synopsys, Inc. 30,800 1,170,400
- --------------------------------------------------------------------------------
10,195,938
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 79.8% (Cost: $114,977,657) 133,659,328
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- --------------------------------------------------------------------------------
Applied Micro Circuits Corporation Series 3 -
Restricted(2) 2,381 43,953
Managed Health Network, Inc. Series B - Restricted(2) 500 72,930
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 0.1%
(Cost: $100,001) 116,883
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 79.9% (Cost: $115,077,658) 133,776,211
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 408
Repurchase Agreement 29,680,000
State Street Bank and Trust Company, 5.00%,
dated 12/29/95, due 01/2/96, maturity value
$29,696,489 (collateralized by $22,995,000
par value U.S. Treasury Notes, 8.75%, due
05/15/17).
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 17.6% 29,680,408
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 2.5% 4,271,868
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 167,728,487
- --------------------------------------------------------------------------------
(1)Income-producing security.
(2)See 4.d. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-76
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Statement of Net Assets
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $115,077,658) $ 133,776,211
Cash and cash equivalents 29,680,408
Receivable for investments sold 4,998,114
Receivable for fund shares subscribed 376,473
Dividends/interest receivable 20,330
- --------------------------------------------------------------------------------
TOTAL ASSETS 168,851,536
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 114,030
Payable for fund shares redeemed 429,171
Accrued expenses 259,379
Capital gains distribution payable 320,469
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,123,049
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 167,728,487
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 132,299,996
Accumulated net realized gain from investments 16,729,938
Net unrealized appreciation on investments 18,698,553
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 167,728,487
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 19.21
Net Asset Value, offering and redemption price per share
(net assets of $167,728,487 applicable to 8,732,520 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-77
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Operations
FOR THE NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 783,216
Dividends 28,264
Other Income 31,441
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 842,921
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 1,288,465
Distribution fees 322,116
Custodian and transfer agent fees 268,320
Shareholder reports 82,824
Professional fees 80,395
Registration and filing fees 45,702
Trustees' fees and expenses 16,875
Other 14,040
- --------------------------------------------------------------------------------
TOTAL EXPENSES 2,118,737
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,275,816)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized gain from investments 22,504,993
Net change in unrealized depreciation on investments (731,214)
- --------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED DEPRECIATION ON INVESTMENTS 21,773,779
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 20,497,963
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-78
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Statement of Changes in Net Assets
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (1,275,816) $ (1,654,135)
Net realized gain from investments 22,504,993 6,598,824
Net change in unrealized
(depreciation)/appreciation on investments (731,214) 15,035,796
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS 20,497,963 19,980,485
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments (13,460,981) (19,811,863)
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (13,460,981) (19,811,863)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net (decrease)/increase in net assets
resulting from capital share transactions (21,583,831) 13,915,017
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (21,583,831) 13,915,017
- --------------------------------------------------------------------------------
TOTAL (DECREASE)/INCREASE IN NET ASSETS (14,546,849) 14,083,639
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 182,275,336 168,191,697
End of period $ 167,728,487 $ 182,275,336
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-79
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Financial Highlights
<TABLE>
<CAPTION>
THREE-MONTH
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED YEAR ENDED YEAR ENDED
THROUGHOUT EACH PERIOD: 12/31/95(1) 3/31/95 3/31/94 3/31/93 12/31/92 12/31/91
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 $ 11.67
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.15) (0.17) (0.40) (0.02) (0.15) (0.09)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain/(loss) and unrealized
appreciation/(depreciation)
on investments 2.58 2.26 4.06 (2.04) (0.31) 6.82
- -----------------------------------------------------------------------------------------------------------------------------------
Total Increase/(Decrease) in Net Assets
Resulting From Operations 2.43 2.09 3.66 (2.06) (0.46) 6.73
- -----------------------------------------------------------------------------------------------------------------------------------
Distribution from realized gains
on investments (1.58) (2.10) - - (0.27) (0.90)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 13.50% 12.01% 24.88% (12.28)% (2.55)% 58.70%
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period (000s) $ 167,728 $ 182,275 $ 168,192 $ 228,893 $ 277,531 $ 141,929
Ratio of Expenses to
Average Net Assets 1.64% 1.56% 1.60% 1.54% 1.49% 1.59%
Ratio of Net Investment Loss to
Average Net Assets (0.99)% (0.96)% (1.27)% (0.61)% (0.92)% (0.68)%
Portfolio Turnover Rate 147% 280% 274% 43% 124% 147%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents a 9-month period then ended.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-80
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements
The Robertson Stephens Emerging Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 30, 1987. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Emerging Growth Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At December 31, 1995,
99.9% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, approximately 0.1% of the Fund's
portfolio was valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Advisor to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital
B-81
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Gain and Return of Capital Distributions by Investment Companies" ("SOP"). The
purpose of this SOP is to report undistributed net investment income and
accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995, and for the year ended March 31, 1995, were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 2,181,298 $ 41,669,243
Shares reinvested 686,387 13,000,659
- --------------------------------------------------------------------------------
2,867,685 54,669,902
- --------------------------------------------------------------------------------
Shares redeemed (4,060,471) (76,253,733)
- --------------------------------------------------------------------------------
Net (decrease) (1,192,786) $ (21,583,831)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
4/1/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 5,163,070 $ 94,127,247
Shares reinvested 1,070,767 18,663,580
- --------------------------------------------------------------------------------
6,233,837 112,790,827
- --------------------------------------------------------------------------------
Shares redeemed (5,463,027) (98,875,810)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 770,810 $ 13,915,017
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens Investment
Management, Inc. ("RSIM Inc.") an investment advisory fee calculated at an
annual rate of 1.00% of the average daily net assets of the Fund. For the nine
months ended December 31, 1995, the Fund incurred investment advisory fees of
$1,288,465. RSIM Inc. has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees, but excluding distribution fees
that exceed the most stringent limits prescribed by any state in which the
Fund's shares are offered for sale. For the nine months ended December 31, 1995,
there was no expected reimbursement of the advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM
Inc., the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer
and a Trustee of the Fund, is also a Director of RSIM Inc., a Member of RS
Group, and Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial
Officer of the Fund, is a Member of RS Group and Chief Financial Officer of RS &
Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director
of Research for RS & Co. All affiliated and access persons, as defined in the
1940 Act, follow strict guidelines and policies on personal trading as outlined
in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation
and reimbursement of expenses of $16,875 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an
B-82
<PAGE>
THE EMERGING GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
annual rate of 0.25% of the average daily net assets of the Fund. For the nine
months ended December 31, 1995, the Fund incurred distribution fees of $322,116.
e. BROKERAGE COMMISSIONS:
RSIM Inc. may direct orders for investment transactions to RS & Co. as
broker-dealer, subject to Fund policies as stated in the prospectus,
regulatory constraints, and the ability of RS & Co. to provide competitive
prices and commission rates. All investment transactions in which RS & Co.
acts as a broker may only be executed on an agency basis. Subject to certain
constraints, the Fund may make purchases of securities from offerings or
underwritings in which RS & Co. has been retained by the issuer. For the nine
months ended December 31, 1995, the Fund paid brokerage commissions of
$71,498 to RS & Co. which represented 24% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the
cost of investments purchased or the proceeds from investments sold
(excluding short-term investments) measured as a percentage of the Fund's
average monthly investment portfolio for the nine months ended December 31,
1995, was 147%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $116,066,463. Accumulated net unrealized appreciation on investments was
$17,709,748, consisting of gross unrealized appreciation and depreciation of
$29,507,196 and $(11,797,448), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period ended December 31, 1995, the cost of investments purchased and
the proceeds from investments sold (excluding short-term investments) were
$219,859,671 and $278,926,405, respectively.
d. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At December 31, 1995, the Fund held restricted securities with an
aggregate value of $116,883, which represented 0.1% of the Fund's total net
assets.
ACQUISITION
SECURITY SHARES COST VALUE DATE
- --------------------------------------------------------------------------------
Applied Micro
Circuits
Corporation
Convertible
Preferred Stock,
Series 3 2,381 $50,001 $43,953 9/14/87
- --------------------------------------------------------------------------------
Managed Health
Network, Inc.
Convertible
Preferred Stock,
Series B 500 $50,000 $72,930 12/30/87
- --------------------------------------------------------------------------------
Each of the above securities was valued based on its common share price
equivalent. Each common share was valued at its fair value according to the
guidelines and procedures adopted by the Fund's Board of Trustees as outlined in
Note 1.a., paragraph 2.
At December 31, 1995, Applied Micro Circuits Corporation Convertible Preferred
Stock, Series 3, was valued at the common share price equivalent of $1.75,
assuming the 2,381 shares of the Convertible Preferred Stock were converted to
25,116 shares of common stock. Managed Health Network, Inc. Convertible
Preferred Stock, Series B, was valued at the common share price equivalent of
$1.6336, assuming the 500 shares of the Convertible Preferred Stock were
converted to 44,642 shares of common stock.
B-83
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of
The Robertson Stephens Global Low-Priced Stock Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Global Low-Priced Stock Fund
(one of the series constituting The Robertson Stephens Investment Trust,
hereinafter referred to as the "Fund") at December 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
period from November 15, 1995 (Commencement of Operations) through December 31,
1995, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at December
31, 1995, by correspondence with the custodian and brokers and the application
of alternative auditing procedures where confirmations from brokers were not
received, provides a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-84
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.8%
Pharmos Corporation 20,000 $ 29,375
- --------------------------------------------------------------------------------
29,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLOSED-END FUNDS - 3.8%
Cathay Investment Fund, Ltd. 10,000 10,993
Greenchip Development Capital, Ltd. 12,026 7,866
Greenchip Emerging Growth, Ltd. 25,439 24,202
Greenchip Investments, Ltd. 30,000 19,845
- --------------------------------------------------------------------------------
62,906
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS SERVICES - 0.8%
CD Radio, Inc. 3,000 13,313
- --------------------------------------------------------------------------------
13,313
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 3.8%
Overseas and General, Ltd. 102,500 24,761
Van Der Horst, Ltd.(1) 4,000 20,219
Vietnam Industrial Investments, Ltd. 80,000 17,095
- --------------------------------------------------------------------------------
62,075
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.9%
AER Energy Resources, Inc. 5,000 14,375
- --------------------------------------------------------------------------------
14,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 2.3%
Canadian Conquest Exploration, Inc. 10,000 7,836
Nugas, Ltd. 10,000 15,526
Olympia Energy, Inc., Class A 25,000 14,280
- --------------------------------------------------------------------------------
37,642
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-85
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
ENERGY SERVICES - 2.4%
Grant Geophysical, Inc. 14,000 $35,000
Veritas Energy Services, Inc. 700 3,845
- --------------------------------------------------------------------------------
38,845
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLD MINING - 2.3%
Bakyrchik Gold PLC 9,000 38,577
- --------------------------------------------------------------------------------
38,577
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MEDIA - 1.3%
Valuevision International, Inc. 4,000 22,250
- --------------------------------------------------------------------------------
22,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REAL ESTATE - 2.9%
Catellus Development Corporation 8,000 48,000
- --------------------------------------------------------------------------------
48,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RESTAURANTS - 2.4%
Taco Cabana, Class A 8,000 40,000
- --------------------------------------------------------------------------------
40,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RETAIL - 1.8%
Kmart Corporation(1) 4,000 29,000
- --------------------------------------------------------------------------------
29,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT AND SERVICES - 1.6%
China Yuchai International, Ltd.(1) 3,200 26,000
- --------------------------------------------------------------------------------
26,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 28.1% (Cost: $411,549) 462,358
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-86
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash $ 927
Federal Mortgage Corporation Discount Note, 5.65% due 1/4/96 999,529
Repurchase Agreement
State Street Bank and Trust Company, 5.00%, dated 12/29/95,
due 1/2/96,maturity value $316,176 (collateralized by $245,000
par value U.S. Treasury Notes, 8.75%, due 5/5/17) 316,000
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 80.1% 1,316,456
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (8.2)% (135,426)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 1,643,388
- --------------------------------------------------------------------------------
(1) Income-producing securities.
The accompanying notes are an integral part of these financial statements.
B-87
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $441,549) $ 462,358
Cash and cash equivalents 1,316,456
Receivable for fund shares subscribed 7,000
Receivable from Adviser 6,440
Receivables, other 19,283
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,811,537
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 147,835
Accrued expenses 20,314
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 168,149
- --------------------------------------------------------------------------------
TOTAL NET ASSETS 1,643,388
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------
Paid-in capital 1,620,721
Accumulated undistributed investment income 1,858
Net unrealized appreciation on investments 20,809
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 1,643,388
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.45
Net Asset Value, offering and redemption price per share
(Net assets of $1,643,388 applicable to 157,267 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-88
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 3,584
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,584
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Professional fees 2,307
Shareholder reports 1,667
Investment advisory fees 854
Trustees' fees and expenses 813
Custodian and transfer agent fees 706
Registration and filing fees 640
Organizational expenses 500
Other 253
Distribution fees 213
Administration fees 213
- --------------------------------------------------------------------------------
Total Expenses 8,166
Less: Reimbursement from Adviser (6,440)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 1,726
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 1,858
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 20,809
- --------------------------------------------------------------------------------
TOTAL UNREALIZED APPRECIATION ON INVESTMENTS 20,809
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,667
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-89
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- -------------------------------------------------------------------------------
Net investment income $ 1,858
Net change in unrealized appreciation on investments 20,809
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 22,667
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- -------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions 1,620,721
- -------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 1,620,721
- -------------------------------------------------------------------------------
Total Increase in Net Assets 1,643,388
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------
Beginning of year 0
End of year $ 1,643,388
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-89
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.03
Unrealized appreciation on investments 0.42
- --------------------------------------------------------------------------------
Total increase in net assets resulting from operations 0.45
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.45
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 4.50%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 1,643,388
Ratio of Expenses to Average Net Assets 1.91%(2)
Ratio of Net Investment Income to Average Net Assets 2.06%(2)
Portfolio Turnover Rate 0%
- --------------------------------------------------------------------------------
(1) The Fund commenced operations on 11/15/95.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995, would have been 9.04%, and the ratio of net investment
loss to average net assets would have been (5.07)%.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-91
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Low-Priced Stock Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Global Low-Priced Stock Fund, for book and tax purposes, has a calendar
(12/31) year-end. These financial statements reflect operations for the period
from November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 0% of the Fund's long positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income taxes for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
B-92
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995, were as
follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 164,230 $ 1,691,739
Shares reinvested - -
- --------------------------------------------------------------------------------
164,230 1,691,739
- --------------------------------------------------------------------------------
Shares redeemed (6,963) (71,018)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 157,267 $ 1,620,721
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION: Under the terms of an advisory
agreement, which is reviewed and approved annually by the Fund's Board of
Trustees, the Fund pays Robertson, Stephens & Company Investment Management,
L.P. ("RSIM"), an investment advisory fee and an administrative services fee
calculated respectively at an annual rate of 1.00% and 0.25% of the average
daily net assets of the Fund. For the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, the Fund incurred
investment advisory fees and administrative fees of $854 and $213, respectively.
RSIM has agreed to reimburse the Fund for any annual operating expenses,
including investment advisory fees but excluding distribution fees which exceed
the most stringent limits prescribed by any state in which the Fund's shares are
offered for sale. For the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, the Adviser agreed to reimburse $6,440 of
its fees and other expenses.
b. AFFILIATED PERSONS: Certain officers and Trustees of the Fund are also
Members and/or officers of Robertson, Stephens & Company Group, L.L.C. ("RS
Group"), the parent of Robertson, Stephens & Company LLC (RS & Co.), the
Fund's Distributor and RSIM, the Fund's Adviser. G. Randy Hecht, President,
Chief Executive Officer, and a Trustee of the Fund, is also a Director of
RSIM, a Member of RS Group, and Chief Operating Officer of RS & Co. Terry R.
Otton, Chief Financial Officer of the Fund, is a Member of RS Group and
Chief Financial Officer of
B-93
<PAGE>
ROBERTSON, STEPHENS & COMPANY
RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group
and Director of Research for RS & Co. All affiliated and access persons,
as defined in the 1940 Act, follow strict guidelines and policies on personal
trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $813 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, RS & Co. agreed to waive distribution
fees worth $213.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid no brokerage commissions
to RS & Co.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options and short-term investments), measured as a percentage of the Fund's
average monthly investment portfolio for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, was 0%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $441,549. Accumulated net unrealized appreciation on investments was
$20,809, consisting of gross unrealized appreciation and depreciation of $22,945
and $(2,136), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $441,549 and $0,
respectively.
d. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At December 31, 1995, the Fund had its largest concentrated
foreign investments, worth 5% of the Fund's total assets, in Australia.
B-94
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of
The Robertson Stephens Global Natural Resources Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Global Natural Resources Fund
(one of the series constituting The Robertson Stephens Investment Trust,
hereinafter referred to as the "Fund") at December 31, 1995, the results of its
operations, the changes in its net assets and the financial highlights for the
period from November 15, 1995 (Commencement of Operations), through December 31,
1995, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with generally accepted auditing standards, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audit, which included confirmation of
securities at December 31, 1995, by correspondence with the custodian and
brokers and the application of alternative auditing procedures where
confirmations from brokers were not received, provides a reasonable basis for
the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-95
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
ALUMINUM - 12.6%
Aluminum Company of America(1) 600 $ 31,725
Kaiser Aluminum Corporation 1,300 16,900
MAXXAM, Inc. 700 24,675
Western Mining Holdings, Ltd. - ADR(1,2) 1,000 26,125
- --------------------------------------------------------------------------------
99,425
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COAL MINING - 3.5%
Zeigler Coal Holding Company(1) 2,000 27,750
- --------------------------------------------------------------------------------
27,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY - 14.8%
Alberta Energy Company, Ltd.(1) 900 14,400
Amerada Hess Corporation(1) 600 31,800
New Cache Petroleums, Ltd. 8,000 25,192
Olympia Energy, Inc., Class A 25,000 14,280
Suncor, Inc.(1) 1,000 31,875
- --------------------------------------------------------------------------------
117,547
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENERGY SERVICES - 1.7%
Ryan Energy Technologies, Inc. 16,000 9,374
Veritas Energy Services, Inc. 700 3,845
- --------------------------------------------------------------------------------
13,219
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GOLD MINING - 5.5%
Ashanti Goldfields - GDR(1,3) 727 14,540
Bakyrchik Gold PLC 1,000 4,287
Emperor Mines, Ltd. 5,000 7,990
Golden Shamrock Mines, Ltd. 10,000 6,169
Golden Star Resources, Ltd.(1) 2,000 10,250
- --------------------------------------------------------------------------------
43,236
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NICKEL MINING - 4.2%
Inco, Ltd.(1) 1,000 33,250
- --------------------------------------------------------------------------------
33,250
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-96
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
REAL ESTATE - 4.5%
Catellus Development Corporation 6,000 $ 36,000
- --------------------------------------------------------------------------------
36,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 3.1%
NL Industries, Inc. 2,000 24,750
- --------------------------------------------------------------------------------
24,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 49.9% (Cost: $389,087) 395,177
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 81,423
Federal Mortgage Corporation Discount Note, 5.65%,
due 1/4/96 499,765
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 73.4% 581,188
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (23.3)% (184,621)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 791,744
- --------------------------------------------------------------------------------
(1) Income - producing security.
(2) ADR - American Depository Receipts.
(3) GDR - Global Depository Receipts.
The accompanying notes are an integral part of these financial statements.
B-97
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $389,087) $ 395,177
Cash and cash equivalents 581,188
Receivable for fund shares subscribed 7,000
Receivable from Adviser 5,748
Receivables, other 32,538
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,021,651
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 209,659
Accrued expenses 20,248
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 229,907
- --------------------------------------------------------------------------------
TOTAL NET ASSETS 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 784,748
Accumulated undistributed investment income 906
Net unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.12
Net Asset Value, offering and redemption price per share
(Net assets of $791,744 applicable to 78,211 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-98
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 2,139
Dividends 50
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 2,189
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Professional fees 2,104
Shareholder reports 1,521
Trustees' fees and expenses 742
Custodian and transfer agent fees 645
Registration and filing fees 584
Organizational expenses 500
Investment advisory fees 470
Other 231
Distribution fees 117
Administration fees 117
- --------------------------------------------------------------------------------
Total Expenses 7,031
Less: Reimbursement from Adviser (5,748)
- --------------------------------------------------------------------------------
TOTAL EXPENSES, NET 1,283
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 906
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION)
ON INVESTMENTS
- --------------------------------------------------------------------------------
Net change in unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
TOTAL UNREALIZED APPRECIATION ON INVESTMENTS 6,090
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 6,996
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-99
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment income $ 906
Net change in unrealized appreciation on investments 6,090
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 6,996
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 784,748
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 784,748
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 791,744
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 0
End of year $ 791,744
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-100
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.02
Unrealized appreciation on investments 0.10
- --------------------------------------------------------------------------------
Total increase in net assets resulting from operations 0.12
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.12
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 1.20%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 791,744
Ratio of Expenses to Average Net Assets 2.60%(2)
Ratio of Net Investment Income to Average Net Assets 1.84%(2)
Portfolio Turnover Rate 0%
- --------------------------------------------------------------------------------
(1) The Fund commenced operations on 11/15/95.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995 would have been 14.25%, and the ratio of net investment
loss to average net assets would have been (9.81)%.
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period. Ratios, except for total
return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
B-101
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Natural Resources Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Global Natural Resources Fund, for book and tax purposes, has a calendar
(12/31) year-end. These financial statements reflect operations for the period
from November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, none of the Fund's long positions were valued using these
guidelines and procedures.
B-102
<PAGE>
ROBERTSON, STEPHENS & COMPANY
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
E. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
F. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
G. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995, were as
follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 79,226 $ 794,930
Shares reinvested - -
- --------------------------------------------------------------------------------
79,226 794,930
- --------------------------------------------------------------------------------
Shares redeemed (1,015) (10,182)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 78,211 $ 784,748
- --------------------------------------------------------------------------------
B-103
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred investment advisory fees and administrative fees of $470 and $117,
respectively. RSIM has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees but excluding distribution fees
which exceed the most stringent limits prescribed by any state in which the
Fund's shares are offered for sale. For the period from November 15, 1995
(Commencement of Operations) through December 31, 1995, the Advisor agreed to
reimburse $5,748 of its fees and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer, and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. All affiliated and access persons, as defined in the 1940 Act,
follow strict guidelines and policies on personal trading as outlined in the
Fund's Code of Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $742 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund incurred distribution fees of
$117.
B-104
<PAGE>
ROBERTSON, STEPHENS & COMPANY
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid brokerage commissions of
$515 to RS & Co. which represented 41% of total commissions paid for the period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, was 0%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $389,087. Accumulated net unrealized appreciation on investments was $6,090,
consisting of gross unrealized appreciation and depreciation
of $9,940 and $(3,850), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $389,087 and $0,
respectively.
D. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At December 31, 1995, the Fund had its largest
concentration of foreign investments, worth 13% of the Fund's total assets, in
Canada.
B-105
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Growth &
Income Fund
In our opinion, the accompanying statement of net assets, including the
schedules of net assets and of securities sold short, and the related statements
of operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of The Robertson
Stephens Growth & Income Fund (one of the series constituting The Robertson
Stephens Investment Trust, hereinafter referred to as the "Fund") at December
31, 1995, and the results of its operations, the changes in its net assets and
the financial highlights for the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with generally accepted auditing standards,
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at December 31, 1995, by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provides a reasonable basis
for the opinion expressed above.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-106
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- -------------------------------------------------------------------------------
COMMON STOCKS
- -------------------------------------------------------------------------------
ALUMINUM - 0.9%
MAXXAM, Inc.(1) 35,000 $1,233,750
- --------------------------------------------------------------------------------
1,233,750
- --------------------------------------------------------------------------------
BANKS - 6.3%
Bank of New York - Warrants(2), Expire 11/29/98 30,000 1,113,750
Commercial Federal Corporation 50,000 1,887,500
Corestates Financial Corporation 41,500 1,571,813
Mellon Bank Corporation 27,500 1,478,125
Meridian Bancorp 5,000 232,500
Norwest Corporation 25,500 841,500
Premier Bancorp, Inc. 10,000 233,750
UJB Financial Corporation 35,000 1,251,250
- --------------------------------------------------------------------------------
8,610,188
- --------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.9%
Genzyme Corporation(1) 28,500 1,777,687
Molecular Dynamics, Inc.(1) 125,000 781,250
- --------------------------------------------------------------------------------
2,558,937
- --------------------------------------------------------------------------------
BUSINESS SERVICES - 2.3%
Moore Corporation, Ltd. 75,000 1,396,875
NuCO2, Inc.(1) 32,500 422,500
U.S. Office Products Company(1) 60,000 1,365,000
- --------------------------------------------------------------------------------
3,184,375
- --------------------------------------------------------------------------------
CLOTHING/RETAIL - 3.3%
Adidas AG, 144A 42,000 1,126,125
Sport-Haley, Inc.(1) 75,000 726,562
Vans, Inc.(1) 169,000 1,415,375
Warnaco Group, Inc., Class A 50,000 1,250,000
- --------------------------------------------------------------------------------
4,518,062
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.0%
ADT, Ltd.(1) 70,000 1,050,000
CKS Group, Inc.(1) 2,500 97,500
Learning Tree International, Inc.(1) 40,000 625,000
National Education Corporation(1) 185,000 1,503,125
Prepaid Legal Services, Inc.(1) 85,000 881,875
- --------------------------------------------------------------------------------
4,157,500
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 2.4%
Seagate Technology, Inc.(1) 30,000 1,425,000
Sun Microsystems, Inc.(1) 31,500 1,437,188
Truevision, Inc.(1) 80,000 395,000
- --------------------------------------------------------------------------------
3,257,188
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-107
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Shares Value
- -------------------------------------------------------------------------------
COMPUTER SOFTWARE - 7.2%
- --------------------------------------------------------------------------------
Adobe Systems, Inc. 27,000 $1,674,000
Citrix Systems, Inc.(1) 5,100 165,750
Computervision Corporation 90,000 1,383,750
Dialogic Corporation(1) 35,000 1,347,500
Expert Software, Inc.(1) 60,000 840,000
Informix Corporation(1) 35,000 1,050,000
Oracle Corporation(1) 25,000 1,059,375
Project Software & Development, Inc.(1) 10,000 348,750
Secure Computing Corporation(1) 4,500 252,000
Sybase, Inc.(1) 31,000 1,116,000
Vantive Corporation(1) 30,000 675,000
- --------------------------------------------------------------------------------
9,912,125
- --------------------------------------------------------------------------------
COSMETICS/PERSONAL CARE - 0.6%
Estee Lauder Companies, Class A(1) 23,000 802,125
- --------------------------------------------------------------------------------
802,125
- --------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 3.5%
Affiliated Computer Services, Inc., Class A(1) 50,000 1,875,000
Computer Management Sciences, Inc.(1) 20,400 362,100
DST Systems, Inc.(1) 30,000 855,000
Reynolds & Reynolds Company 43,000 1,671,625
- --------------------------------------------------------------------------------
4,763,725
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 1.3%
Data Translation, Inc.(1) 105,000 1,706,250
Sync Research, Inc.(1) 2,000 90,500
- --------------------------------------------------------------------------------
1,796,750
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 2.3%
Diebold, Inc. 24,000 1,329,000
ITI Technologies, Inc.(1) 60,000 1,785,000
- --------------------------------------------------------------------------------
3,114,000
- --------------------------------------------------------------------------------
ENERGY SERVICES - 5.7%
Diamond Offshore Drilling, Inc.(1) 40,000 1,350,000
Falcon Drilling Company, Inc.(1) 90,000 1,350,000
Halliburton Company 30,000 1,518,750
Kerr-McGee Corporation 18,000 1,143,000
Schlumberger, Ltd. 18,000 1,246,500
Western Atlas, Inc.(1) 25,000 1,262,500
- --------------------------------------------------------------------------------
7,870,750
- --------------------------------------------------------------------------------
ENTERTAINMENT - 1.9%
National Gaming Corporation(1) 57,500 682,812
Stratosphere Corporation(1) 200,000 1,975,000
- --------------------------------------------------------------------------------
2,657,812
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-108
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 0.7%
Continental Waste Industries, Inc.(1) 87,500 $1,017,183
- --------------------------------------------------------------------------------
1,017,183
- --------------------------------------------------------------------------------
FINANCIAL SERVICE - 2.8%
Federal Home Loan Mortgage Corporation 16,000 1,336,000
Federal National Mortgage Association 12,500 1,551,563
Sirrom Capital Corporation 50,000 943,750
- --------------------------------------------------------------------------------
3,831,313
- --------------------------------------------------------------------------------
FOOD PROCESSING - 0.8%
Smithfield Foods, Inc.(1) 35,000 1,111,250
- --------------------------------------------------------------------------------
1,111,250
- --------------------------------------------------------------------------------
HEALTHCARE/HMO - 3.3%
American Oncology Resources, Inc.(1) 15,000 729,375
Community Health Systems, Inc.(1) 35,000 1,246,875
Mid Atlantic Medical Services, Inc.(1) 45,000 1,091,250
Oxford Health Plans, Inc.(1) 13,500 997,313
Surgical Care Affiliates, Inc. 12,500 425,000
- --------------------------------------------------------------------------------
4,489,813
- --------------------------------------------------------------------------------
INSURANCE - 4.3%
GCR Holdings, Ltd.(1) 57,000 1,282,500
Lincoln National Corporation 21,500 1,155,625
Prudential Reinsurance Holdings, Inc. 65,000 1,519,375
W. R. Berkley Corporation 35,000 1,881,250
- --------------------------------------------------------------------------------
5,838,750
- --------------------------------------------------------------------------------
MANUFACTURING - 2.6%
Fleetwood Enterprises, Inc. 67,000 1,725,250
Millipore Corporation 45,000 1,850,625
- --------------------------------------------------------------------------------
3,575,875
- --------------------------------------------------------------------------------
MEDIA - 2.2%
Emmis Broadcasting Corporation(1) 42,500 1,317,500
US West Media Group 40,000 760,000
United International Holdings, Inc., Class A(1) 62,500 921,875
- --------------------------------------------------------------------------------
2,999,375
- --------------------------------------------------------------------------------
MEDICAL INSTRUMENTS & DEVICES - 3.6%
Dentsply International, Inc. 32,000 1,280,000
Guidant Corporation 55,000 2,323,750
Ventritex, Inc.(1) 80,000 1,390,000
- --------------------------------------------------------------------------------
4,993,750
- --------------------------------------------------------------------------------
Motor Vehicles and Parts Suppliers - 1.0%
Strattec Security Corporation(1) 75,000 1,350,000
- --------------------------------------------------------------------------------
1,350,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-109
<PAGE>
ROBERTSON, STEPHENS & COMPANY
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 4.6%
Bay Networks, Inc.(1) 24,500$ $1,007,563
Cisco Systems, Inc.(1) 20,000 1,492,500
Madge Networks N.V.(1) 24,000 1,074,000
NetManage, Inc.(1) 61,000 1,418,250
NetStar, Inc.(1) 23,000 419,750
Newbridge Networks Corporation(1) 20,000 827,500
- --------------------------------------------------------------------------------
6,239,563
- --------------------------------------------------------------------------------
PHARMACEUTICALS - 4.9%
Alteon, Inc.(1) 25,000 403,125
Bergen Brunswig Corporation 47,500 1,181,563
Biochem Pharma, Inc.(1) 17,000 682,125
Martek Biosciences Corporation 35,000 883,750
Matrix Pharmaceutical, Inc.(1) 68,000 1,275,000
North American Biologicals, Inc.(1) 71,100 764,325
Pharmacia & Upjohn, Inc. 39,000 1,511,250
- --------------------------------------------------------------------------------
6,701,138
- --------------------------------------------------------------------------------
REITs - 2.4%
Bay Apartment Communities, Inc. 50,000 1,212,500
Hospitality Properties Trust 30,000 802,500
Prime Residential, Inc. 65,000 1,202,500
- --------------------------------------------------------------------------------
3,217,500
- --------------------------------------------------------------------------------
RESTAURANTS - 1.2%
Consolidated Products, Inc.(1) 71,000 1,047,250
Main Street & Main, Inc.(1) 235,000 660,937
- --------------------------------------------------------------------------------
1,708,187
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 3.7%
IMC Global, Inc 36,000 1,471,500
Mississippi Chemical Corporation 50,000 1,162,500
Monsanto Company 14,000 1,715,000
Vigoro Corporation 12,500 771,875
- --------------------------------------------------------------------------------
5,120,875
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 3.6%
Applied Digital Access, Inc.(1) 75,000 881,250
Davox Corporation(1) 57,500 682,812
VTEL Corporation(1) 50,000 925,000
AT&T Corporation 18,000 1,165,500
MFS Communications Company(1) 301 16,028
Sprint Corporation 30,000 1,196,250
- --------------------------------------------------------------------------------
4,866,840
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-110
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION - 2.3%
Airborne Freight Corporation 25,000 $ 665,625
Atlantic Southeast Airlines, Inc. 72,500 1,558,750
Canada National Railway Company 64,500 967,500
- --------------------------------------------------------------------------------
3,191,875
- --------------------------------------------------------------------------------
UTILITIES - 1.8%
Equitable Resources, Inc. 42,500 1,328,125
US West Communications Group 30,000 1,072,500
- --------------------------------------------------------------------------------
2,400,625
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 88.4% (Cost: $108,160,639) 121,091,199
- --------------------------------------------------------------------------------
SHARES VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
Energy - 0.9%
Enron Corporation, 6.25%, 12/13/98 Series 50,000 1,200,000
- --------------------------------------------------------------------------------
1,200,000
- --------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS - 2.3%
Atlantic Richfield Company, 9%, 9/15/97 Series 40,000 940,000
Noble Drilling Company, $1.5 Series 22,000 566,500
Westinghouse Electric Corporation, Pfd Series C, $1.30 100,000 1,650,000
- --------------------------------------------------------------------------------
3,156,500
- --------------------------------------------------------------------------------
REAL ESTATE - 0.6%
Catellus Development Corporation, $3.625, Class B 22,000 880,000
- --------------------------------------------------------------------------------
880,000
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.4%
MFS Communications Company, 8%, 5/31/99 Series 10,000 486,875
- --------------------------------------------------------------------------------
486,875
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 4.2% (Cost: $5,496,837) 5,723,375
- --------------------------------------------------------------------------------
PAR VALUE
- --------------------------------------------------------------------------------
CONVERTIBLE BONDS
Computer Hardware & Components - 0.4%
Telxon Corporation, 5.75%, Due 01/01/03 500,000 537,500
- --------------------------------------------------------------------------------
537,500
- --------------------------------------------------------------------------------
CONSUMER & SPECIALITY RETAIL - 0.9%
Staples, Inc. 144A, 4.50%, Due 10/01/00 1,200,000 1,200,000
- --------------------------------------------------------------------------------
1,200,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-111
<PAGE>
ROBERTSON, STEPHENS & COMPANY
PAR VALUE
- --------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.9%
Integrated Device Technology, Inc., 5.50%, Due 06/01/02 700,000 $570,500
Intermagnetics General Corporation, 5.75%, Due 09/15/03 500,000 690,000
- --------------------------------------------------------------------------------
1,260,500
- --------------------------------------------------------------------------------
ENERGY - 0.9%
Box Energy Corporation, 8.25%, Due 12/01/02 600,000 600,000
Cross Timbers Oil Company, 5.25%, Due 11/01/03 650,000 611,000
- --------------------------------------------------------------------------------
1,211,000
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 0.2%
Sandoz Capital, 144A, 2%, Due 10/06/02 250,000 235,625
- --------------------------------------------------------------------------------
235,625
- --------------------------------------------------------------------------------
GENERAL MERCHANDISE STORES - 0.8%
Federated Department Stores, Inc., 5.0%, Due 10/01/03 1,100,000 1,097,250
- --------------------------------------------------------------------------------
1,097,250
- --------------------------------------------------------------------------------
HOME BUILDING - 0.4%
Continental Homes Holding Corporation, 6.875%, Due 11/01/02 500,000 530,000
- --------------------------------------------------------------------------------
530,000
- --------------------------------------------------------------------------------
IRON/STEEL - 0.3%
USX Corporation, 7.0%, Due 06/15/17 500,000 476,250
- --------------------------------------------------------------------------------
476,250
- --------------------------------------------------------------------------------
PRECIOUS METALS - 0.3%
Coeur d'Alene Mines Corporation, 6.375%, Due 01/31/04 500,000 473,750
- --------------------------------------------------------------------------------
473,750
- --------------------------------------------------------------------------------
TRANSPORTATION - 0.4%
Reno Air, Inc. 144A, 9.0%, Due 09/30/02 500,000 485,000
- --------------------------------------------------------------------------------
485,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 5.5% (Cost: $7,303,573) 7,506,875
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 98.1% (Cost: $120,961,049) 134,321,449
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 122
Repurchase Agreement 2,077,000
State Street Bank and Trust Company, 5.0%, dated 12/29/95,
due 01/02/96 maturity value, $2,078,154 (collateralized by
$1,611,000 par value U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 1.5% 2,077,122
The accompanying notes are an integral part of these financial statements.
B-112
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- --------------------------------------------------------------------------------
Cash $ 64,375
Repurchase Agreement (Segregated) 1,700,000
State Street Bank and Trust Company, 5.0%,
dated 12/29/95, due 01/02/96 maturity value,
$1,700,944 (collateralized by $1,319,000
par value U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK
FOR SECURITIES SOLD SHORT - 1.3% 1,764,375
- --------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 1.0% 1,312,937
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (0.9) % (Proceeds: $1,312,937) (1,267,125)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (1.0)% (1,306,792)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 136,901,966
- --------------------------------------------------------------------------------
(1)Non-income-producing security.
(2)See Note 4.e. of Notes to Financial statements.
SCHEDULE OF SECURITIES SOLD SHORT
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE-(0.6)%
Netscape Communications, Inc. 6,000 $ 834,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT-(0.3)%
Applied Materials, Inc. 11,000 433,125
- --------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT-(0.9)%(Procceds:$1,312,937) $1,267,125
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-113
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $120,961,049) $ 134,321,449
Cash and cash equivalents 2,077,122
Deposits with brokers and custodian bank
for securities sold short 1,764,375
Receivable for investments sold 2,147,005
Receivable from brokers for securities sold short 1,312,937
Receivable for fund shares subscribed 937,174
Dividends/interest receivable 233,834
- --------------------------------------------------------------------------------
TOTAL ASSETS 142,793,896
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Securities sold short (Proceeds: $1,312,937) 1,267,125
Payable for investments purchased 4,103,136
Payable for fund shares redeemed 302,007
Accrued expenses 217,547
Payables, other 2,115
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 5,891,930
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 126,943,354
Accumulated net realized loss from investments (3,511,975)
Accumulated net realized gain from securities sold short 64,375
Net unrealized appreciation on investments 13,360,400
Net unrealized appreciation on securities sold short 45,812
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 11.24
Net Asset Value, offering and redemption price per share
(net assets of $136,901,966 applicable to 12,183,332 shares of
beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-114
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 328,706
Dividends (Net of foreign tax withheld of $3,172) 482,644
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 811,350
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 415,116
Distribution fees 103,780
Administrative fees 103,780
Custodian and transfer agent fees 73,989
Professional fees 34,977
Registration and filing fees 28,460
Shareholder reports 17,348
Organizational costs 15,520
Trustees' fees and expenses 11,249
Other 12,255
- --------------------------------------------------------------------------------
TOTAL EXPENSES 816,474
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (5,124)
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED
APPRECIATION/(DEPRECIATION) ON INVESTMENTS
Net realized loss from investments (3,511,975)
Net realized gain from securities sold short 64,375
Net change in unrealized appreciation on investments 13,360,400
Net change in unrealized appreciation on securities sold short 45,812
- -------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS 9,958,612
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 9,953,488
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-115
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (5,124)
Net realized loss from investments (3,511,975)
Net realized gain from securities sold short 64,375
Net change in unrealized appreciation on investments 13,360,400
Net change in unrealized appreciation on securities sold short 45,812
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 9,953,488
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting
from capital share transactions 126,948,478
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 126,948,478
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 136,901,966
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 0
End of period $136,901,966
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-116
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT EACH PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment loss 0.00
Net realized gain and unrealized appreciation from investments 1.24
- --------------------------------------------------------------------------------
Total Increase in Net Assets Resulting From Operations 1.24
- --------------------------------------------------------------------------------
Distribution from realized gains on investments 0.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.24
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 12.40%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $136,901,966
Ratio of Expenses to Average Net Assets 1.94%
Ratio of Net Investment Loss to Average Net Assets (0.01)%
Portfolio Turnover Rate 97%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 7/12/95.
Per-share data for each period has been determined by using the average number
of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-117
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Growth & Income Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers nine series of shares -- The Robertson
Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth Fund, The
Robertson Stephens Contrarian Fund, The Robertson Stephens Developing Countries
Fund, The Robertson Stephens Growth & Income Fund, The Robertson Stephens
Partners Fund, The Robertson Stephens Information Age Fund, The Robertson
Stephens Global Natural Resources Fund, and The Robertson Stephens Global Low-
Priced Stock Fund. The assets for each series are segregated and accounted for
separately.
The Growth & Income Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for the period from July
12, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At December 31, 1995,
99.5% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, approximately 0.5% of the Fund's long
portfolio was valued using these guidelines and procedures.
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Advisor to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from July
12, 1995 (Commencement of Operations) through December 31, 1995. The Fund
complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
E. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
B-118
<PAGE>
THE GROWTH & INCOME FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
F. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from July 12,
1995 (Commencement of Operations) through December 31, 1995 were as follows:
7/12/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 14,440,164 $150,810,508
Share reinvested 0 0
- --------------------------------------------------------------------------------
14,440,164 150,810,508
- -------------------------------------------------------------------------------
Shares redeemed (2,256,832) (23,862,030)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 12,183,332 $126,948,478
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from July
12, 1995 (Commencement of Operations), through December 31, 1995, the Fund
incurred investment advisory fees and administrative fees of $415,116 and
$103,780, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding
distribution fees which exceed the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale. At December 31, 1995, there was
no expected reimbursement of advisory fees and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. John L. Wallace, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $11,249 for the period from July 12, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co., for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an annual rate of 0.25% of the
average daily net assets of the Fund. For the period from July 12, 1995
(Commencement of Operations) through December 31, 1995, the Fund incurred
distribution fees of $103,780.
B-119
<PAGE>
ROBERTSON, STEPHENS & COMPANY
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund paid brokerage commissions of
$49,415 to RS & Co., which represented 18% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the period for the period
from July 12, 1995 (Commencement of Operations) through December 31, 1995, was
97%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $122,418,733. Accumulated net unrealized appreciation on investments was
$13,261,465 consisting of gross unrealized appreciation and depreciation of
$15,555,488 and $(2,294,023), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from July 12, 1995 (Commencement of Operations), through December
31, 1995, the cost of investments purchased and the proceeds from investments
sold (excluding securities sold short and short-term investments) were
$213,718,729 and $89,250,840, respectively.
D. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not
want, in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to deliver to the
buyer upon the short sale; the Fund then is obligated to replace the security
borrowed by purchasing it in the open market at some later date. The Fund will
incur a loss if the market price of the security increases between the date of
the short sale and the date on which the Fund replaces the borrowed security.
The Fund will realize a gain if the security declines in value between those
dates. All short sales must be fully collateralized. The Fund maintains the
collateral in a segregated account consisting of cash and/or U.S. government
securities sufficient to collateralize its obligation on the short positions.
The Fund may also sell short against the box (i.e., the Fund enters into a short
sale as described above, while holding an offsetting long position in the
security which is sold short). If the Fund enters into a short sale against the
box, it will hold an equivalent amount of the securities to cover its position
while the short sale is outstanding. The Fund limits the value of short sale
positions (excluding short sales "against the box") to 25% of the Fund's total
assets. At December 31, 1995, the Fund had 0.8% of its total assets in short
positions. For the period from July 12, 1995 (Commencement of Operations)
through December 31, 1995, the cost of investments purchased to cover short
sales and proceeds from investments sold short were $205,625 and $1,582,937,
respectively.
E. WARRANTS:
A warrant is an option which normally entitles the holder to purchase a
proportionate amount of a particular class of the issuer's securities at a
predetermined price during a specific period.
The Bank of New York Warrants held by the Fund at December 31, 1995, were valued
at the last sale price on the principal exchange or market on which they are
traded, or, if there were no sales that day, at the mean between the closing bid
and asked prices.
B-120
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Independent Accountants' Report
To the Shareholders and Board of Trustees of The Robertson Stephens Information
Age Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Information Age Fund (one of
the series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations,
the changes in its net assets and the financial highlights for the period from
November 15, 1995 (Commencement of Operations), through December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-121
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 11.7%
Adaptec, Inc. 15,000 $ 615,000
Compaq Computer Corporation 18,000 864,000
Gateway 2000, Inc. 20,000 490,000
Seagate Technology, Inc. 20,000 950,000
Sun Microsystems, Inc. 20,000 912,500
- --------------------------------------------------------------------------------
3,831,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 22.9%
Adobe Systems Incorporated(1) 15,000 930,000
Cadence Design Systems, Inc. 15,000 630,000
FTP Software, Inc. 30,000 870,000
HNC Software, Inc. 10,000 477,500
Informix Corporation 30,000 900,000
Microsoft Corporation 9,500 833,625
Objective Systems Integrators, Inc. 1,300 71,175
Oracle Corporation 20,000 847,500
Parametric Technology, Inc. 15,000 997,500
Progress Software Corporation 10,000 375,000
Symantec Corporation 25,000 581,250
- --------------------------------------------------------------------------------
7,513,550
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 11.1%
ALANTEC Corporation 20,000 1,165,000
Bay Networks, Inc. 21,750 894,469
PairGain Technologies, Inc. 10,000 547,500
Shiva Corp. 10,000 727,500
UUNET Technologies, Inc. 5,000 315,000
- --------------------------------------------------------------------------------
3,649,469
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DATA COMMUNICATIONS - 5.6%
Ascend Communications, Inc. 10,000 811,250
Cabletron Systems, Inc. 12,500 1,012,500
- --------------------------------------------------------------------------------
1,823,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 3.6%
3Com Corporation 25,500 1,188,938
- --------------------------------------------------------------------------------
1,188,938
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-122
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 7.3%
Cisco Systems, Inc. 15,000 $ 1,119,375
DSC Communications Corporation 15,000 553,125
Stratacom, Inc.(1) 10,000 735,000
- --------------------------------------------------------------------------------
2,407,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 5.1%
Applied Materials, Inc. 15,000 590,625
KLA Instruments Corporation 12,500 325,781
Lam Research Corporation 5,000 228,750
Novellus Systems, Inc. 5,000 270,000
Ultratech Stepper, Inc. 10,000 257,500
- --------------------------------------------------------------------------------
1,672,656
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 7.6%
Altera Corporation 22,500 1,119,375
Analog Devices, Inc. 20,000 707,500
LSI Logic Corporation 20,000 655,000
- --------------------------------------------------------------------------------
2,481,875
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 5.5%
Cascade Communications Corporation 6,000 511,500
Nokia Corporation, ADR(1),(2) 15,000 583,125
QUALCOMM, Incorporated 15,000 645,000
Westell Technologies, Inc. 2,600 65,325
- --------------------------------------------------------------------------------
1,804,950
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 1.7%
ADC Telecommunications 15,000 547,500
- --------------------------------------------------------------------------------
547,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 1.6%
MFS Communications Company, Inc. 10,000 532,500
- --------------------------------------------------------------------------------
532,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TECHNOLOGY/NETWORK SYSTEMS - 1.2%
Synopsys, Inc. 10,000 380,000
- --------------------------------------------------------------------------------
380,000
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-123
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 1.9%
CompUSA, Inc. 20,000 $ 622,500
- --------------------------------------------------------------------------------
622,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - 1.7%
America Online, Inc. 15,000 562,500
- --------------------------------------------------------------------------------
562,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER SOFTWARE - 2.1%
Intuit, Inc. 9,000 702,000
- --------------------------------------------------------------------------------
702,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 90.6% (Cost: $29,423,102) 29,721,188
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WARRANTS
- --------------------------------------------------------------------------------
Intel Corp. - Warrants(3), Expire 3/14/98 20,000 535,000
- --------------------------------------------------------------------------------
TOTAL WARRANTS - 1.6% (Cost: $577,500) 535,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 92.2% (Cost: $30,000,602) 30,256,188
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 500
Repurchase Agreement
State Street Bank and Trust Company, 5.00%,
dated 12/29/95, due 1/02/96, maturity value
$2,071,725 (collateralized by $1,605,000 par
value U.S. Treasury Notes, 8.75%, due 05/15/17) 2,070,000
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 6.3% 2,070,500
- --------------------------------------------------------------------------------
OTHER ASSETS, NET - 1.5% 498,948
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 32,825,636
- --------------------------------------------------------------------------------
(1) Income-producing security.
(2) ADR -- American Depository Receipts.
(3) See 4.e. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
B-124
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Net Assets
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $30,000,602) $ 30,256,188
Cash and cash equivalents 2,070,500
Receivable for investments sold 1,493,250
Receivable for fund shares subscribed 927,454
Receivables, other 33,350
- --------------------------------------------------------------------------------
TOTAL ASSETS 34,780,742
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 1,313,975
Payable for fund shares redeemed 581,621
Accrued expenses 59,510
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,955,106
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 34,686,571
Accumulated net realized loss from investments (2,116,521)
Net unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 9.30
Net Asset Value, offering and redemption price per share
(Net assets of $32,825,636 applicable to 3,530,635 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-125
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Statement of Operations
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Interest $ 32,484
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 32,484
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 25,307
Custodian and transfer agent fees 7,032
Distribution fees 6,327
Administrative fees 6,327
Professional fees 3,691
Shareholder reports 2,901
Registration and filing fees 1,744
Trustees' fees and expenses 1,120
Other 1,046
Organizational expense 500
- --------------------------------------------------------------------------------
TOTAL EXPENSES 55,995
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (23,511)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/LOSS AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized loss from investments (2,116,521)
Net change in unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS (1,860,935)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (1,884,446)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-126
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Changes in Net Assets
FOR THE PERIOD FROM 11/15/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (23,511)
Net realized loss from investments (2,116,521)
Net change in unrealized appreciation on investments 255,586
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (1,884,446)
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from capital share
transactions 34,710,082
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 34,710,082
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 32,825,636
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 0
End of year $ 32,825,636
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-127
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Financial Highlights
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $ 10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment loss (0.01)
Net realized loss and unrealized appreciation on investments (0.69)
- --------------------------------------------------------------------------------
Total decrease in net assets resulting from operations (0.70)
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gain on investments -
- --------------------------------------------------------------------------------
Total Distributions -
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.30
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN (7.00)%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $32,825,636
Ratio of Expenses to Average Net Assets 2.13%
Ratio of Net Investment Loss to Average Net Assets (0.89)%
Portfolio Turnover Rate 89%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 11/15/95.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-128
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Notes to Financial Statements
The Robertson Stephens Information Age Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers nine series of shares -- The
Robertson Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth
Fund, The Robertson Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Global Natural Resources Fund, and The Robertson Stephens
Global Low-Priced Stock Fund. The assets for each series are segregated and
accounted for separately.
The Information Age Fund, for book and tax purposes, has a calendar (12/31)
year-end. These financial statements reflect operations for the period from
November 15, 1995 (Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
December 31, 1995, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, no security of the Fund was valued using
these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries in the technology and
telecommunications sectors. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Advisor
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995. The
Fund complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
B-129
<PAGE>
THE INFORMATION AGE FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date
the securities are purchased, sold, or sold short (trade date). Realized gains
and losses on securities transactions are determined on the basis of specific
identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from November
15, 1995 (Commencement of Operations) through December 31, 1995 were as follows:
11/15/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 3,937,648 $ 38,546,017
- --------------------------------------------------------------------------------
3,937,648 38,546,017
- --------------------------------------------------------------------------------
Shares redeemed (407,013) (3,835,935)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 3,530,635 $ 34,710,082
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred investment advisory fees and administrative fees of $25,307 and
$6,327, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding
distribution fees that exceed the most stringent limits prescribed by any state
in which the Fund's shares are offered for sale. At December 31, 1995, there was
no expected reimbursement of advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & CompanyLLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Ronald E. Elijah, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
B-130
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $1,120 for the period from November 15, 1995
(Commencement of Operations) through December 31, 1995.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution
services and has adopted a Plan of Distribution pursuant to Rule 12b-1 under
the 1940 Act, which is approved annually by the Fund's Board of Trustees.
Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of
the Fund's shares. The distirbution fee is calculated at an annual rate of
0.25% of the average daily net assets of the Fund. For the period from
November 15, 1995 (Commencement of Operations) through December 31, 1995, the
Fund incurred distribution fees of $6,327.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from November 15, 1995 (Commencement
of Operations) through December 31, 1995, the Fund paid brokerage commissions of
$5,200 to RS & Co., which represented 25% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments) measured as a percentage of the Fund's average monthly
investment portfolio for the period from November 15, 1995 (Commencement of
Operations) through December 31, 1995, was 89%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $30,721,627. Accumulated net unrealized depreciation on investments was
$(465,439), consisting of gross unrealized appreciation and depreciation of
$1,169,474 and $(1,634,913), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period from November 15, 1995 (Commencement of Operations) through
December 31, 1995, the cost of investments purchased and the proceeds from
investments sold (excluding short-term investments) were $46,256,105 and
$14,138,982, respectively.
d. WARRANTS: A warrant is an option which normally entitles the holder to
purchase a proportionate number of a particular class of the issuer's
securities at a predetermined price during a specific period.
The Intel Corp. Warrants held by the Fund at December 31, 1995, were valued at
the last sale price on the principal exchange or market on which they are
traded, or, if there were no sales that day, at the mean between the closing bid
and asked prices.
B-131
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
INDEPENDENT ACCOUNTANTS' REPORT
To the Shareholders and Board of Trustees of The Robertson Stephens Partners
Fund:
In our opinion, the statement of net assets, including the schedules of net
assets, and the related statements of operations and of changes in net assets
and the financial highlights present fairly, in all material respects, the
financial position of The Robertson Stephens Partners Fund (one of the series
constituting The Robertson Stephens Investment Trust, hereinafter referred to
as the "Fund") at December 31, 1995, and the results of its operations,
the changes in its net assets and the financial highlights for the period
from July 12, 1995 (Commencement of Operations), through December 31, 1995, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards, which require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provides
a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-132
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
SCHEDULE OF NET ASSETS
DECEMBER 31, 1995 SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS
ALUMINUM -- 7.7%
Kaiser Aluminum Corporation 20,000 $ 260,000
MAXXAM, Inc. 9,000 317,250
- ------------------------------------------------------------------------
577,250
- ------------------------------------------------------------------------
AUTOMOBILE PARTS/EQUIPMENT -- 1.6%
Wescast Industries, Inc., Class A(1) 12,500 120,312
- ------------------------------------------------------------------------
120,312
- ------------------------------------------------------------------------
Construction/Infrastructure -- 6.0%
American Buildings Company 20,000 450,000
- ------------------------------------------------------------------------
450,000
- ------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES -- 10.9%
Barefoot, Inc.(1) 11,000 115,500
Harper Group(1) 18,000 319,500
Pittston Services Group(1) 12,000 376,500
- ------------------------------------------------------------------------
811,500
- ------------------------------------------------------------------------
ENERGY -- 20.8%
Aztec Resources, Ltd. 29,000 47,785
Berkley Petroleum Corporation 50,000 302,087
CS Resources 10,000 72,318
Canadian 88 Energy Corporation 209,300 343,341
Canadian Conquest Exploration, Inc. 475,000 372,208
Discovery West Corporation 49,400 148,327
New Cache Petroleums, Ltd. 46,200 142,102
Nugas, Ltd. 50,000 77,627
Olympia Energy, Inc., Class A 75,000 42,841
- ------------------------------------------------------------------------
1,548,636
- ------------------------------------------------------------------------
ENERGY SERVICES -- 7.9%
EnServ Corporation 14,000 $ 120,469
Veritas Energy Services, Inc. 85,000 466,862
- ------------------------------------------------------------------------
587,331
The accompanying notes are integral part of these financial statements.
B-133
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MANUFACTURING -- 2.5%
Gardner Denver Machinery, Inc. 10,000 190,000
- ------------------------------------------------------------------------
190,000
- ------------------------------------------------------------------------
REAL ESTATE -- 5.6%
Catellus Development Corporation 70,000 420,000
- ------------------------------------------------------------------------
420,000
- ------------------------------------------------------------------------
OTHER COMMON STOCK-0.1% 600 6,450
- ------------------------------------------------------------------------
6,450
- ------------------------------------------------------------------------
TOTAL COMMON STOCKS-63.1% (COST: $4,535,499) 4,711,479
- ------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Cash 142
Federal Mortgage Corporation Discount Note, 5.65%, 01/04/95 1,799,152
Repurchase Agreement 1,665,000
State Street Bank and Trust Company, 5.00%, 12/29/95
due 01/2/96, maturity value $1,665,925 (collateralized
by $1,290,000 par value U.S. Treasury Notes, 8.75%,
due 05/15/17)
- ------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS -- 46.3% 3,464,294
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
OTHER LIABILITIES, NET - (9.4%) (695,429)
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 7,480,344
- ------------------------------------------------------------------------
- ------------------------------------------------------------------------
(1) Income-producing security.
The accompanying notes are an integral part of these financial statements.
B-134
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSETS
Investments, at value (Cost: $4,535,499) $ 4,711,479
Cash and cash equivalents 3,464,294
Receivable for investments sold 378,000
Receivable for fund shares subscribed 10,050
Receivable from Adviser 93,846
Dividends/interest receivable 694
- --------------------------------------------------------------------------------
TOTAL ASSETS 8,658,363
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 1,141,652
Accrued expenses 36,367
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 1,178,019
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF
Paid-in capital 7,248,887
Accumulated undistributed net investment income 46,395
Accumulated net realized gain from investments 36,775
Accumulated net realized loss from options (27,693)
Net unrealized appreciation on investments 175,980
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $ 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.39
Net Asset Value, offering and redemption
price per share (net assets of $7,480,344
applicable to 720,218 shares of beneficial
interest outstanding with no par value)
The accompanying notes are an integral part of these financial statements.
B-135
<PAGE>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE PERIOD 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividend Income $ 692
Interest 129,179
TOTAL INVESTMENT INCOME 129,871
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 42,710
Organizational expenses 32,420
Professional fees 28,841
Custodian and transfer agent fees 20,574
Shareholder reports 20,254
Trustees' fees and expenses 11,251
Registration and filing fees 9,441
Distribution fees 8,542
Other 3,289
- --------------------------------------------------------------------------------
Total Expenses 177,322
Less: Reimbursement from Adviser (93,846)
TOTAL EXPENSES, NET 83,476
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET INVESTMENT INCOME 46,395
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
AND OPTIONS
Net realized gain from investments 36,775
Net realized loss from options (27,693)
Net change in unrealized appreciation on investments 175,980
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 185,062
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 231,457
The accompanying notes are an integral part of these financial statements.
B-136
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM 7/12/95
(COMMENCEMENT OF OPERATIONS)
THROUGH 12/31/95
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment income $ 46,395
Net realized gain from investments 36,775
Net realized loss from options (27,693)
Net change in unrealized appreciation on investments 175,980
- -------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 231,457
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Net investment income
Realized gains on investments
- -------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net increase in net assets resulting from capital share transactions 7,248,887
- -------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 7,248,887
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 7,480,344
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of period 0
End of period $7,480,344
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-137
<PAGE>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95 (1)
- --------------------------------------------------------------------------------
Net Asset Value, beginning of period $10.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net investment income 0.06
Net realized gain and unrealized appreciation on investments 0.33
- --------------------------------------------------------------------------------
Total Increase in Net Assets Resulting From Operations 0.39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.39
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL RETURN 3.90%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------------------------------------
Net Assets, end of period $ 7,480,344
Ratio of Expenses to Average Net Assets 2.41%(2)
Ratio of Net Investment Income to Average Net Assets 1.34%(2)
Portfolio Turnover Rate 71%
- --------------------------------------------------------------------------------
(1)The Fund commenced operations on 7/12/95.
(2)If the Fund had paid all of its expenses and there had been no reimbursement
by the Adviser, the ratio of expenses to average net assets for the period
ended December 31, 1995, would have been 5.12%, and the ratio of net
investment loss to average net assets would have been (1.37)%
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-138
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Partners Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act") as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers nine series of shares -- The Robertson
Stephens Emerging Growth Fund, The Robertson Stephens Value + Growth Fund, The
Robertson Stephens Contrarian Fund, The Robertson Stephens Developing Countries
Fund, The Robertson Stephens Growth & Income Fund, The Robertson Stephens
Partners Fund, The Robertson Stephens Information Age Fund, The Robertson
Stephens Global Natural Resources Fund, and The Robertson Stephens Global Low-
Priced Stock Fund. The assets for each series are segregated and accounted for
separately.
The Partners Fund, for book and tax purposes, has a calendar (12/31) year-end.
These financial statements reflect operations for the period from July 12, 1995
(Commencement of Operations), through December 31, 1995.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At December 31, 1995, 100% of the
Fund's long positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
December 31, 1995, 0% of the Fund's long positions were valued using these
guidelines and procedures.
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from July
12, 1995 (Commencement of Operations), through December 31, 1995. The Fund
complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
E. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign
B-139
<PAGE>
ROBERTSON, STEPHENS & COMPANY
currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
F. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
G. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares
of beneficial interest with no par value. Transactions in capital shares for the
period from July 12, 1995 (Commencement of Operations), through December 31,
1995 were as follows:
7/12/95 - 12/31/95 SHARES AMOUNT
- -----------------------------------------------
Shares sold 993,987 $ 10,001,278
Shares reinvested - -
- -----------------------------------------------
993,987 10,001,278
- -----------------------------------------------
Shares redeemed (273,769) (2,752,391)
- ------------------------------------------------
Net increase 720,218 $ 7,248,887
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the period from July 12, 1995 (Commencement of Operations), through
December 31, 1995, the Fund incurred investment advisory fees of $42,710. RSIM
has agreed to reimburse the Fund for any annual operating expenses, including
investment advisory fees but excluding distribution fees, which exceed the most
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. For the period from July 12, 1995 (Commencement of Operations),
through December 31, 1995, the Adviser agreed to reimburse $93,846 of its fees
and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Andrew P. Pilara, Jr., Portfolio Manager, is a Member of RS Group.
All affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation
B-140
<PAGE>
THE PARTNERS FUND ANNUAL RESULTS
NOTES TO FINANCIAL STATEMENTS
and reimbursement of expenses of $11,251 for the period from July 12, 1995
(Commencement of Operations) through December 31, 1995.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund incurred distribution fees of
$8,542.
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, the Fund paid brokerage commissions of
$25 to RS & Co., which represented 0.1% of the total commissions paid for the
period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, was 71%.
B. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $4,535,499. Accumulated net unrealized appreciation on investments was
$175,980, consisting of gross unrealized appreciation and depreciation of
$403,307 and $(227,327), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the period from July 12, 1995 (Commencement of Operations), through December
31, 1995, the cost of investments purchased and the proceeds from investments
sold (excluding options and short-term investments) were $6,038,159 and
$1,539,435, respectively.
D. OPTIONS:
At December 31, 1995, the Fund had no hedge positions in put options.
E. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
At December 31, 1995, the Fund had its largest concentrated foreign investments,
worth 25% of the Fund's total assets, in Canada.
B-141
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Independent Accountants' Report
To the Shareholders and Board of Trustees of
The Robertson Stephens Value + Growth Fund
In our opinion, the accompanying statement of net assets, including the schedule
of net assets, and the related statements of operations and of changes in net
assets and the financial highlights present fairly, in all material respects,
the financial position of The Robertson Stephens Value + Growth Fund (one of the
series constituting The Robertson Stephens Investment Trust, hereinafter
referred to as the "Fund") at December 31, 1995, the results of its operations
for the nine-month period then ended and the changes in its net assets and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1995, by
correspondence with the custodian and brokers and the application of alternative
auditing procedures where confirmations from brokers were not received, provide
a reasonable basis for the opinion expressed above.
/s/Price Waterhouse LLP
Price Waterhouse LLP
San Francisco, California
February 15, 1996
B-142
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets
DECEMBER 31,1995 SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS
- --------------------------------------------------------------------------------
Biotechnology - 1.8%
Amgen, Inc. 350,000 $ 20,781,250
- --------------------------------------------------------------------------------
20,781,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 4.5%
3Com Corporation 1,100,000 51,287,500
- --------------------------------------------------------------------------------
51,287,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 13.4%
Adaptec, Inc. 368,000 15,088,000
Compaq Computer Corporation 906,000 43,488,000
Dell Computer 380,000 13,157,500
Hewlett-Packard Company(1) 390,000 32,662,500
Seagate Technology, Inc. 638,000 30,305,000
Sun Microsystems, Inc. 400,000 18,250,000
- --------------------------------------------------------------------------------
152,951,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMPUTER SOFTWARE - 12.5%
Adobe Systems Incorporated(1) 312,000 19,344,000
Cadence Design Systems, Inc. 690,000 28,980,000
Computer Sciences Corporation 400,000 28,100,000
Microsoft Corporation 500,000 43,875,000
Parametric Technology Corporation 340,000 22,610,000
- --------------------------------------------------------------------------------
142,909,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 6.6%
CompUSA, Inc. 400,000 12,450,000
Nike, Inc.(1) 900,000 62,662,500
- --------------------------------------------------------------------------------
75,112,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONSUMER ELECTRONICS - 1.3%
Kemet Corporation 510,000 12,176,250
Vishay Intertechnology, Inc. 82,300 2,592,450
- --------------------------------------------------------------------------------
14,768,700
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-143
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SHARES VALUE
- --------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 7.7%
Cabletron Systems, Inc. 595,000 $ 48,195,000
Cisco Systems, Inc. 530,000 39,551,250
- --------------------------------------------------------------------------------
87,746,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES - 6.6%
Charles Schwab Corporation(1) 821,900 16,540,737
First USA, Inc.(1) 184,000 8,165,000
Green Tree Financial Corporation(1) 510,000 13,451,250
Household International, Inc.(1) 385,000 22,763,125
MBNA Corporation(1) 250,000 9,218,750
Merrill Lynch & Company, Inc.(1) 100,000 5,100,000
- --------------------------------------------------------------------------------
75,238,862
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 15.4%
Columbia/HCA Healthcare Corporation(1) 500,000 25,375,000
Healthsource, Inc. 1,162,000 41,832,000
Horizon/CMS Healthcare Corporation 100,000 2,525,000
Oxford Health Plans 630,000 46,541,250
PacifiCare Health Systems, Class B 70,000 6,090,000
U.S. Healthcare, Inc.(1) 300,000 13,950,000
United Healthcare Corporation(1) 545,000 35,697,500
Vencor, Inc. 100,000 3,250,000
- --------------------------------------------------------------------------------
175,260,750
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LODGING/RECREATION - 3.2%
Hospitality Franchise Systems, Inc. 215,000 17,576,250
La Quinta Inns, Inc.(1) 235,000 6,433,125
Mirage Resorts, Inc. 350,000 12,075,000
- --------------------------------------------------------------------------------
36,084,375
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NETWORK SYSTEMS - 3.4%
Bay Networks 942,000 38,739,750
- --------------------------------------------------------------------------------
38,739,750
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-144
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Schedule of Net Assets (CONTINUED)
SHARES VALUE
- --------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 11.5%
Applied Materials, Inc.(1) 1,410,000 $55,518,750
KLA Instruments Corporation 547,400 14,266,613
Lam Research Corporation 424,200 19,407,150
Novellus Systems, Inc. 403,300 21,778,200
Teradyne, Inc. 788,600 19,715,000
- --------------------------------------------------------------------------------
130,685,713
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMICONDUCTORS - 8.4%
Altera Corporation 629,000 31,292,750
Atmel Corporation 365,000 8,166,875
Intel Corporation(1) 500,000 28,375,000
LSI Logic Corporation 300,000 9,825,000
Microchip Technology, Inc. 454,200 16,578,300
VLSI Technology, Inc. 80,000 1,450,000
- --------------------------------------------------------------------------------
95,687,925
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS - 2.8%
Allen Group(1) 354,000 7,920,750
Frontier Corporation(1) 450,000 13,500,000
LCI International, Inc. 495,000 10,147,500
- --------------------------------------------------------------------------------
31,568,250
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.1%(Cost: $948,763,109) 1,128,821,825
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- --------------------------------------------------------------------------------
Cash 233
- --------------------------------------------------------------------------------
Repurchase Agreement 16,544,000
State Street Bank and Trust Company, 5.00%, dated 12/29/95, due 01/2/96,
maturity value $16,553,191 (collateralized by $12,820,000 par value
U.S. Treasury Notes, 8.75%, due 05/15/17)
- --------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 1.4% 16,544,233
- --------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.5)% (5,214,891)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSESTS - 100% $1,140,151,167
- --------------------------------------------------------------------------------
(1) Income-producing security
The accompanying notes are an integral part of these financial statements.
B-145
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Net Assets
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value (Cost: $948,763,109) $ 1,128,821,825
Cash and cash equivalents 16,544,233
Receivable for investments sold 46,500
Receivable for fund shares subscribed 5,695,678
Receivables, other 417,093
- --------------------------------------------------------------------------------
TOTAL ASSETS 1,151,525,329
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payable for investments purchased 2,023,749
Payable for fund shares redeemed 7,969,344
Accrued expenses 1,381,069
- --------------------------------------------------------------------------------
TOTAL LIABILITIES 11,374,162
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $1,140,151,167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid-in capital 986,869,159
Accumulated net realized loss from investments (26,776,708)
Net unrealized appreciation on investments 180,058,716
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TOTAL NET ASSETS $1,140,151,167
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRICING OF SHARES: $ 22.66
Net Asset Value, offering and redemption price per share
(Net assets of $1,140,151,167 applicable to 50,318,588 shares
of beneficial interest outstanding with no par value)
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-146
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Statement of Operations
NINE MONTHS ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME
- --------------------------------------------------------------------------------
Dividends (net of foreign tax withheld of $21,089) $ 1,998,900
Interest 1,143,886
Other Income 6,776
- --------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,149,562
- --------------------------------------------------------------------------------
EXPENSES
- --------------------------------------------------------------------------------
Investment advisory fees 9,702,327
Custodian and transfer agent fees 834,156
Registration and filing fees 305,986
Interest expense 148,037
Shareholder reports 142,430
Professional fees 79,985
Trustees' fees and expenses 41,401
Other 17,598
- --------------------------------------------------------------------------------
TOTAL EXPENSES 11,271,920
- --------------------------------------------------------------------------------
NET INVESTMENT LOSS (8,122,358)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- --------------------------------------------------------------------------------
Net realized loss from investments (25,249,381)
Net change in unrealized appreciation on investments 139,393,491
- --------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS 114,144,110
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $106,021,752
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-147
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Statement of Changes in Net Assets
NINE MONTHS ENDED YEAR ENDED
12/31/95 3/31/95
- --------------------------------------------------------------------------------
OPERATIONS
- --------------------------------------------------------------------------------
Net investment loss $ (8,122,358) $ (1,115,225)
Net realized loss from investments (25,249,381) (1,344,592)
Net realized gain from options - 455,848
Net realized gain from securities sold short - 73,750
Net change in unrealized appreciation
on investments 139,393,491 39,217,602
Net change in unrealized depreciation on
securities sold short - (103,750)
- --------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 106,021,752 37,183,633
- --------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Realized gains on investments - (1,566,892)
- --------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (1,566,892)
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Net increase in net assets resulting from
capital share transactions 605,226,408 348,785,903
- --------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 605,226,408 348,785,903
- --------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 711,248,160 384,402,644
- --------------------------------------------------------------------------------
NET ASSETS
- --------------------------------------------------------------------------------
Beginning of year 428,903,007 44,500,363
End of year $1,140,151,167 $428,903,007
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
B-148
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Financial Highlights
<TABLE>
<CAPTION>
FOR A SHARE OUTSTANDING PERIOD ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT THE PERIOD: 12/31/95(2) 3/31/95 3/31/94 3/31/93(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 18.25 $ 13.56 $ 11.94 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income (0.16) (0.18) (0.04) 0.12
Net realized gain and unrealized appreciation on investments 4.57 5.07 1.99 1.88
- ------------------------------------------------------------------------------------------------------------------------------
Total increase in net assets resulting from operations 4.41 4.89 1.95 2.00
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - (0.03) (0.06)
Distributions from realized gain on investments - (0.20) (0.30) -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Distributions - (0.20) (0.33) (0.06)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 22.66 $ 18.25 $ 13.56 $ 11.94
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 24.16% 36.27% 16.32% 20.05%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 1,140,151,167 $ 428,903,007 $44,500,363 $ 17,833,350
Ratio of Expenses to Average Net Assets 1.45% 1.68% 1.55%(3) 1.33%(3)
Ratio of Net Investment (Loss)/Income to Average Net Assets (1.04)% (1.09)% (0.51)%(3) 1.26%(3)
Portfolio Turnover Rate 104% 232% 250% 210%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) From April 21, 1992 (Commencement of Operations) to 3/31/93.
(2) Represents a 9-month period then ended.
(3) If the Fund had paid all of its expenses and had received no
reimbursement from the Adviser, the ratio of expenses to average
net assets for the periods ended March 31, 1994 and March 31, 1993 would
have been 2.35% and 2.71%, respectively, and the ratio of net
investment income/(loss) to average net assets would have been (1.31)%
and (0.12)%, respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
B-149
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Notes to Financial Statements
The Robertson Stephens Value + Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on May 12, 1992. Prior to the public offering, shares were offered in a
private placement offering on April 21, 1992, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
nine series of shares -- The Robertson Stephens Emerging Growth Fund, The
Robertson Stephens Value + Growth Fund, The Robertson Stephens Contrarian Fund,
The Robertson Stephens Developing Countries Fund, The Robertson Stephens Growth
& Income Fund, The Robertson Stephens Partners Fund, The Robertson Stephens
Information Age Fund, The Robertson Stephens Global Natural Resources Fund, and
The Robertson Stephens Global Low-Priced Stock Fund. The assets for each series
are segregated and accounted for separately.
The Value + Growth Fund, for book and tax purposes, has a calendar (12/31) year-
end. These financial statements reflect operations for a nine-month period.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
December 31, 1995, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At December 31, 1995, no security of the Fund was valued using
these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries in the technology and
telecommunications sectors. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
B-150
<PAGE>
THE VALUE + GROWTH FUND ANNUAL RESULTS
Notes to Financial Statements (CONTINUED)
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the nine months ended
December 31, 1995. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
December 31, 1995 and for the year ended March 31, 1995 were as follows:
4/1/95 - 12/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 71,111,212 $1,642,177,404
Shares reinvested 2,182 54,597
- --------------------------------------------------------------------------------
71,113,394 1,642,232,001
- --------------------------------------------------------------------------------
Shares redeemed (44,296,835) (1,037,005,593)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Net increase 26,816,559 $ 605,226,408
4/1/94 - 3/31/95 SHARES AMOUNT
- --------------------------------------------------------------------------------
Shares sold 34,759,244 $ 574,001,458
Shares reinvested 79,555 1,276,754
- --------------------------------------------------------------------------------
34,838,799 575,278,212
- --------------------------------------------------------------------------------
Shares redeemed (14,619,427) (226,492,309)
- --------------------------------------------------------------------------------
Net increase 20,219,372 $ 348,785,903
- --------------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund paid Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee during fiscal
1995 calculated at an annual rate of 1.25% of the average daily net assets of
the Fund. (As of January 1, 1996, that rate was reduced to 1% of the average
daily net assets of the Fund.) For the nine months ended December 31, 1995, the
Fund incurred investment advisory fees of $9,702,327. RSIM has agreed to
reimburse the Fund for any annual operating expenses, including investment
advisory fees, but excluding dividend expense for short sales, which exceed the
most stringent limits prescribed by any state in which the Fund's shares are
offered for sale. For the nine months ended December 31, 1995, there was no
expected reimbursement of advisory fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial
B-151
<PAGE>
ROBERTSON, STEPHENS & COMPANY
Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a Member of RS
Group and Director of Research for RS & Co. Ronald E. Elijah, Portfolio Manager,
is a Member of RS Group. All affiliated and access persons, as defined in the
1940 Act, follow strict guidelines and policies on personal trading as outlined
in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $41,401 for the nine months ended December 31,
1995.
d. DISTRIBUTION FEES:
Effective on January 1, 1996, the Fund has entered into an agreement with RS &
Co. for distribution services and has adopted a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act, which is approved annually by the Fund's Board of
Trustees. Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of the
Fund's shares. The distribution fee is calculated at an annual rate of 0.25% of
the average daily net assets of the Fund.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended December 31, 1995, the
Fund paid brokerage commissions of $356,240 to RS & Co. which represented 21% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options, securities sold short, and short-term investments) measured as a
percentage of the Fund's average monthly investment portfolio for the nine
months ended December 31, 1995, was 104%.
b. TAX BASIS OF INVESTMENTS:
At December 31, 1995, the cost of investments for federal income tax purposes
was $951,916,535. Accumulated net unrealized appreciation on investments was
$176,905,290, consisting of gross unrealized appreciation and depreciation of
$205,497,759 and $(28,592,469), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended December 31, 1995, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $1,619,932,751 and $1,035,627,673,
respectively.
d. OPTIONS:
At December 31, 1995, the Fund had no hedge position in put options.
e. SHORT SALES:
At December 31, 1995, the Fund did not sell any securities short.
B-152
<PAGE>
<TABLE>
<CAPTION>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
SEPTEMBER 30, 1996 FOREIGN CURRENCY(7) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Aerospace - 0.2%
Lockheed Martin Corporation(1) 20,000 $ 1,802,500
- ------------------------------------------------------------------------------------------------------------------------------
1,802,500
- ------------------------------------------------------------------------------------------------------------------------------
ALUMINUM - 6.7%
Alumax, Inc. 678,100 22,716,350
Kaiser Aluminum Corporation(1) 1,760,100 20,461,162
MAXXAM, Inc. 517,800 22,912,650
- ------------------------------------------------------------------------------------------------------------------------------
66,090,162
- ------------------------------------------------------------------------------------------------------------------------------
BASE METALS - 1.0%
Teck Corporation, Class B(1) 500,000 10,186,477
- ------------------------------------------------------------------------------------------------------------------------------
10,186,477
- ------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 6.3%
American Buildings Company 292,000 7,738,000
Royal Plastics Group, Ltd. CAD 3,203,200 54,676,162
- ------------------------------------------------------------------------------------------------------------------------------
62,414,162
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/BUSINESS SERVICES - 0.5%
The Pittston Brink's Group(1) 150,000 4,706,250
- ------------------------------------------------------------------------------------------------------------------------------
4,706,250
- ------------------------------------------------------------------------------------------------------------------------------
COPPER MINING - 4.7%
Adrian Resources, Ltd. CAD 1,150,403 3,293,864
Armada Copper, Inc. CAD 593,400 840,806
Cambior, Inc.(1) CAD 1,044,400 14,338,360
Indochina Goldfields, Ltd. CAD 2,547,900 18,986,260
Indochina Goldfields, Ltd., Restricted(2,3) CAD 1,700,000 8,867,557
- ------------------------------------------------------------------------------------------------------------------------------
46,326,847
- ------------------------------------------------------------------------------------------------------------------------------
DIAMOND MINING - 0.4%
DiamondWorks, Ltd. CAD 978,500 1,846,226
Diamond Fields International Note(2) CAD 6,687,600 2,602,179
- ------------------------------------------------------------------------------------------------------------------------------
4,448,405
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 6.5%
Alberta Energy Corporation(1) CAD 150,000 2,984,362
Anderson Exploration, Ltd. CAD 382,100 3,843,161
Anzoil NL AUD 59,997,000 7,361,886
Basin Exploration, Inc. 110,600 774,200
Beau Canada Exploration, Ltd. CAD 685,000 1,252,221
Burlington Resources, Inc.(1) 125,000 5,546,875
Encal Energy, Ltd. CAD 361,600 902,606
Louisiana Land & Exploration(1) 60,000 3,157,500
McMoRan Oil & Gas Company 1,303,420 3,584,405
Nescor Energy, Restricted(2,3) 375,000 243,750
Noble Affiliates, Inc.(1) 150,000 6,337,500
Petro-Canada CAD 500,000 4,827,105
Petroleum Securities Australia, Ltd., ADR(4) 100,000 2,325,000
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(7) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY - 6.5% (CONTINUED)
Tarragon Oil & Gas, Ltd. CAD 500,000 $ 4,790,397
Union Pacific Resources Group, Inc.(1) 200,000 5,600,000
United Meridian Corporation 3,000 136,500
Vastar Resources, Inc.(1) 175,000 5,643,750
- ------------------------------------------------------------------------------------------------------------------------------
59,311,218
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES - 4.0%
Coastal Corporation(1) 50,000 2,062,500
Enron Corporation(1) 75,000 3,056,250
KN Energy, Inc.(1) 125,000 4,406,250
NGC Corporation(1) 374,400 5,850,000
Roper Industries, Inc.(1) 20,500 968,625
Sonat, Inc.(1) 150,000 6,637,500
USX-Delhi Group(1) 260,300 3,676,737
Williams Companies, Inc.(1) 250,000 12,750,000
- ------------------------------------------------------------------------------------------------------------------------------
39,407,862
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 2.7%
Dundee Bancorp, Inc., Class A CAD 1,735,500 26,565,726
U.S. Global Investor, Inc., Class A 279,860 752,124
- ------------------------------------------------------------------------------------------------------------------------------
27,317,850
- ------------------------------------------------------------------------------------------------------------------------------
GOLD MINING - 11.5%
Bakyrchik Gold PLC GBP 2,782,932 11,978,499
Central Fund of Canada, Class A(1) CAD 184,600 842,238
Delta Gold Mining Corporation CAD 807,900 871,899
El Callao Mining Corporation CAD 450,000 564,936
Euro-Nevada Mining Corporation(1) CAD 100,000 2,896,263
First Dynasty Mines, Ltd. CAD 339,400 1,083,907
First Dynasty Mines, Ltd., Restricted(2,3) CAD 1,600,000 4,087,806
Franco-Nevada Mining Corporation, Ltd.(1) CAD 80,000 2,998,311
Golden Knight Resources, Inc., Restricted(2,3) CAD 325,000 1,723,901
Golden Star Resources, Ltd.(1) CAD 1,787,500 27,952,243
Guyanor Ressources, S.A., Class B CAD 585,700 4,729,976
Harmony Gold Mining Company Ltd., ADR(1,4) 855,000 7,160,625
Lydenburg Exploration, Ltd. SAR 22,000 33,219
MK Gold Company 714,500 1,027,094
New East Daggafontein Mines, Ltd.(1) SAR 229,100 767,622
Newmont Mining Corporation(1) 331,300 15,653,925
Normandy Mining, Ltd.(1) AUD 11,131,180 15,156,452
Queenstake Resources, Ltd. CAD 1,988,900 3,285,386
Randgold & Exploration Company, Ltd.(1) SAR 664,700 4,798,617
Tombstone Explorations Company, Ltd. CAD 244,500 359,004
Vengold, Inc. CAD 4,756,400 5,936,333
- ------------------------------------------------------------------------------------------------------------------------------
113,908,256
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(7) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTERNATIONAL CONGLOMERATE - 2.6%
Companhia Vale Do Rio Doce, ADR(1,4) 700,000 $ 18,000,000
Gencor, Ltd.(1) SAR 1,544,100 5,514,035
Government of Poland Privatisation Certificates PLZ 53,000 2,810,320
- ------------------------------------------------------------------------------------------------------------------------------
26,324,355
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES - 0.0%
Fresenius Medical Care AG, ADR(4) 3,609 83,909
- ------------------------------------------------------------------------------------------------------------------------------
83,909
- ------------------------------------------------------------------------------------------------------------------------------
NICKEL MINING - 11.2%
Inco, Ltd.(1) CAD 1,840,657 56,485,913
Voisey Bay Nickel, Ltd. CAD 1,971,900 55,012,260
- ------------------------------------------------------------------------------------------------------------------------------
111,498,173
- ------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 3.0%
Atlantic Gulf Communities 371,700 1,812,038
Avatar Holdings, Inc. 210,100 6,565,625
Catellus Development Corporation 1,471,400 14,530,075
Horsham Corporation(1) 400,000 6,500,000
- ------------------------------------------------------------------------------------------------------------------------------
29,407,738
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 1.0%
NL Industries, Inc. 152,600 1,602,300
W.R. Grace & Company 150,000 7,875,000
- ------------------------------------------------------------------------------------------------------------------------------
9,477,300
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION/MEDIA - 1.4%
Metromedia International Group, Inc. 1,060,600 11,268,875
Tele-Communications Liberty Media, Inc., Class A 77,500 2,218,438
- ------------------------------------------------------------------------------------------------------------------------------
13,487,313
- ------------------------------------------------------------------------------------------------------------------------------
TEXTILES - 0.7%
PT Apac Centertex Corporation, Foreign(1,2,6) IDR 17,668,000 6,845,114
- ------------------------------------------------------------------------------------------------------------------------------
6,845,114
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION SERVICES - 1.9%
China Yuchai International, Ltd.(1) 609,900 3,125,738
Harper Group(1) 332,850 6,823,425
Pittston Burlington Group(1) 518,900 9,405,063
- ------------------------------------------------------------------------------------------------------------------------------
19,354,226
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(7) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL COMMON STOCKS - 65.8% (Cost: $521,386,162) $ 652,398,117
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Fresenius Medical Care AG, Series D(2) 100,000 23,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS - 0.0% (Cost $16,829) 23,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 0.5%
Mesa, Inc., 8.00%, 6/30/08 Series A(1) 1,012,163 5,187,335
- ------------------------------------------------------------------------------------------------------------------------------
5,187,335
- ------------------------------------------------------------------------------------------------------------------------------
NICKEL MINING - 2.3%
Inco, Ltd., 5.50%, 12/31/49 Series E(1) 448,372 22,979,045
- ------------------------------------------------------------------------------------------------------------------------------
22,979,045
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 2.8% (Cost $5,752,662) 28,166,380
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------
Apac Centertex Corporation, Warrants, Strike IDR1000,
Expire 7/14/01(5) IDR 2,700,000 249,892
First Dynasty Mines, Ltd., Warrants, Strike CAD4.50,
Expire 9/13/97(2,5) CAD 1,600,000 626,591
Golden Star Resources, Ltd., Warrants, Strike CAD11.00,
Expire 3/7/97(5) CAD 55,000 454,262
Vengold, Inc., Warrants, Strike $1.30, Expire 6/30/00(2,5) CAD 1,286,000 844,582
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.2% (Cost: $155,436) 2,175,327
- ------------------------------------------------------------------------------------------------------------------------------
OPTIONS
Normandy Mining, Ltd., Options, Strike AUD2.50, Expire 4/30/01 AUD 1,673,426 569,643
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS - 0.1% (Cost $0) 569,643
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 CONTRACTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
[caad 214]S&P 500 INDEX PUT OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
December 96 625 874 $ 371,450
December 96 640 703 404,225
December 96 660 493 437,538
December 96 665 176 184,800
December 96 675 271 335,363
December 96 750 581 443,013
March 97 575 900 360,000
March 97 600 1,517 967,088
March 97 625 3,307 2,893,625
March 97 640 590 700,625
March 97 650 322 434,700
March 97 750 1,962 2,575,125
March 97 760 436 703,050
March 97 770 1,415 2,582,375
March 97 775 824 1,668,600
March 97 780 445 967,875
March 97 785 405 956,813
March 97 800 330 928,125
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PUT OPTIONS - 1.8% (Cost $26,946,550) 17,914,390
<CAPTION>
PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
- ------------------------------------------------------------------------------------------------------------------------------
Randgold and Exploration Company, Ltd., 7.00%, Due 10/3/01(1) 3,250,000 3,266,250
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.3% (Cost $3,318,250) 3,266,250
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 71.0% (Cost: $557,575,889) 704,513,107
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 232
South African Rand 61,267
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/1/96,
maturity value $27,779,742 (collateralized by $20,075,000 par value
U.S. Treasury Note, 12.00%, due 8/15/13) 27,776,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 2.8% 27,837,499
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Cash $ 35,263,522
U.S. Treasury Bills, 4.96%, due 10/17/96, $187,000,000 par value 186,587,769
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT - 22.4% 221,851,291
- ------------------------------------------------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 23.6% 233,951,090
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (21.1)% (PROCEEDS: $215,140,581) (209,377,343)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 1.3% 12,716,318
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 991,491,962
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) Fair-value security. See 1.a. in Notes to Financial Statements.
(3) See 4.f. in Notes to Financial Statements.
(4) ADR - American Depository Receipt.
(5) See 4.g. in Notes to Financial Statements.
(6) Shares registered for foreign investors.
(7) Foreign-denominated security: AUD - Australian Dollar; CAD - Canadian
Dollar; GBP - British Pound; IDR - Indonesian Rupiah; PLZ - Polish Zloty;
SAR - South African Rand.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $557,575,889) $ 704,513,107
Cash and cash equivalents 27,837,499
Deposits with brokers and custodian bank for securities sold short 221,851,291
Receivable from brokers for securities sold short 233,951,090
Receivable for investments sold 18,066,881
Receivable for fund shares subscribed 12,630,622
Dividends/interest receivable 226,913
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,219,077,403
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Securities sold short (Proceeds: $215,140,581) 209,377,343
Payable for investments purchased 14,378,711
Payable for fund shares redeemed 1,684,067
Payable to adviser 1,196,278
Payable to distributor 599,229
Accrued expenses 349,813
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 227,585,441
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 991,491,962
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 832,335,709
Accumulated undistributed net investment income 925,407
Accumulated net realized gain from investments 2,346,066
Accumulated net realized loss from securities sold short (1,542,136)
Net unrealized appreciation on investments 147,612,769
Net unrealized appreciation on securities sold short 9,814,147
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Net Assets $ 991,491,962
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 16.38
Net Asset Value, offering and redemption price per share
(net assets of $991,491,962 applicable to 60,512,656 shares of
beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 14,533,733
Dividends (net of foreign tax withheld of $74,926) 2,098,957
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 16,632,690
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 9,580,121
Distribution fees 4,790,061
Custodian and transfer agent fees 742,272
Shareholder reports 236,500
Dividend expense for securities sold short 139,532
Professional fees 136,886
Registration and filing fees 61,880
Trustees' fees and expenses 16,714
Insurance fees 3,317
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 15,707,283
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 925,407
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 35,693,860
Net realized gain from securities sold short 11,431,578
Net change in unrealized appreciation on investments 48,484,425
Net change in unrealized appreciation on short sales 3,616,255
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS AND SECURITIES SOLD SHORT 99,226,118
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 100,151,525
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE NINE FOR THE NINE
MONTHS ENDED MONTHS ENDED
9/30/96 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $ 925,407 $ (774,508)
Net realized gain from investments 35,693,860 23,064,485
Net realized gain/(loss) from securities sold short 11,431,578 (12,590,530)
Net change in unrealized appreciation on investments 48,484,425 111,844,929
Net change in unrealized appreciation/(depreciation) on securities sold short 3,616,255 (3,688,560)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 100,151,525 117,855,816
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets resulting from capital share transactions 383,863,696 (8,025,100)
- ------------------------------------------------------------------------------------------------------------------------------
Total Capital Share Transactions 383,863,696 (8,025,100)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 484,015,221 109,830,716
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 507,476,741 397,646,025
End of period $ 991,491,962 $ 507,476,741
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE NINE FOR THE NINE FOR THE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED MONTHS ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 9/30/96 12/31/95 3/31/95 3/31/94(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 13.78 $ 10.70 $ 12.34 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) 0.02 (0.01) (0.04) (0.02)
Net realized gain/(loss) and unrealized
appreciation/(depreciation) on investments
and securities sold short 2.58 3.09 (1.35) 2.36
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets
Resulting from Operations 2.60 3.08 (1.39) 2.34
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - - -
Distributions from realized gains on investments - - (0.25) -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 16.38 $ 13.78 $ 10.70 $ 12.34
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 18.87% 28.79% (11.23)% 23.40%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 991,491,962 $ 507,476,741 $ 397,646,025 $ 484,950,746
Ratio of Expenses to Average Net Assets 2.45% 2.54% 2.46%(2) 2.22%
Ratio of Net Investment Income/
(Loss) to Average Net Assets 0.14% (0.20)% (0.27)%(2) (0.77)%
Portfolio Turnover Rate 37% 29% 79% 14%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on 6/3/93.
(2) If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, the ratio of expenses to average net assets
for the year ended March 31, 1995, would have been 2.58%, and the ratio of
net investment loss to average net assets would have been (0.42)%.
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Contrarian Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a nondiversified, open-end
management investment company. The Fund became effective to offer shares to the
public on June 30, 1993. Prior to the public offering, shares were offered in a
private placement offering on June 3, 1993, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
eleven 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, and The
Robertson Stephens MicroCap Growth. The assets for each series are segregated
and accounted for separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable equity securities, including options and foreign securities, are
valued at the last sale price on the principal exchange or market on which they
are traded; or, if there were no sales that day, at the mean between the closing
bid and asked prices. Foreign securities prices are generally denominated in
foreign currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At September 30, 1996, 96% of the
Fund's long positions and 100% of its short positions were valued in this
manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources, including quotations from market-makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer; changes in the industry and other competing
companies; significant changes in the issuer's financial position; and any other
event which could have a significant impact on the value of the security. At
September 30, 1996, 4% of the Fund's long positions were valued using these
guidelines and procedures.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
As its normal course of business, the Fund has invested a significant portion of
its assets in companies within a number of industries involving base metals,
precious metals, and oil/energy. Accordingly, the performance of the Fund may be
subject to a greater risk of market fluctuation than that of a fund invested in
a wider spectrum of market or industrial sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund intends to comply with requirements of the Internal
Revenue Code for qualifying as a regulated investment company so as not to be
subject to federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized gain or loss and unrealized appreciation or depreciation from
investments and securities sold short.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and accumulated net realized gain or loss accounts in such a
manner as to approximate amounts available for future distributions to
shareholders, if any.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and the nine months ended December 31, 1995, were as
follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 49,021,100 $ 795,232,824
Shares reinvested - -
- ----------------------------------------------------------------------------
49,021,100 795,232,824
- ----------------------------------------------------------------------------
Shares redeemed (25,326,290) (411,369,128)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net 23,694,810 $ 383,863,696
- ----------------------------------------------------------------------------
4/1/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 27,676,642 $ 349,025,223
Shares reinvested - -
- ----------------------------------------------------------------------------
27,676,642 349,025,223
- ----------------------------------------------------------------------------
Shares redeemed (28,017,625) (357,050,323)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net (340,983) $ (8,025,100)
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee calculated at an
annual rate of 1.50% of the average daily net assets of the Fund. For the nine
months ended September 30, 1996, the Fund incurred investment advisory fees of
$9,580,121. When applicable, RSIM agrees to reimburse the Fund for any annual
operating expenses, including investment advisory fees but excluding
distribution fees and dividend expense for short sales that exceed the most
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. The Fund has obtained a waiver from the State of California to exclude
a portion of its advisory fees for purposes of determining the compliance by the
Fund with the State's expense limitations. For the nine months ended September
30, 1996, there was no expected reimbursement of the advisory fees and other
expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor, and
RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer,
and a Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and
Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of
the Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John
P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director of
Research for RS & Co. Paul H. Stephens, Portfolio Manager, is a Member of RS
Group and Chief Investment Officer of RS & Co. All affiliated and access
persons, as defined in the 1940 Act, follow strict guidelines and policies on
personal trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined
<PAGE>
ROBERTSON, STEPHENS & COMPANY
in the 1940 Act, collectively received compensation and reimbursement of
expenses of $16,714 for the nine months ended September 30, 1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed annually by the Fund's Board of Trustees. Under this
Plan, RS & Co. is compensated for services in such capacity including its
expenses in connection with the promotion and distribution of the Fund's shares.
The distribution fee is calculated at an annual rate of 0.75% of the average
daily net assets of the Fund. For the nine months ended September 30, 1996, the
Fund incurred distribution fees of $4,790,061.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions of $24,730 to RS & Co., which represented 1.0%
of total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the nine months ended
September 30, 1996, was 37%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments and securities sold short for
federal income tax purposes was $805,627,661. Accumulated net unrealized
appreciation on investments and securities sold short was $157,410,283,
consisting of gross unrealized appreciation and depreciation of $246,001,647,
and $(88,591,364), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $420,785,564 and $218,255,166,
respectively.
d. PUT OPTIONS:
At September 30, 1996, 2.7% of the Fund's net assets consisted of premiums paid
for the purchase of S&P 500 Index put options to hedge portfolio long
investments against adverse price fluctuations.
The risk associated with the purchase of these put options is limited to the
premium originally paid. The premium paid for the purchase of these options is
included in the Fund's "Statement of Net Assets" as an investment and
subsequently mark-to-market daily to reflect the market value of the options.
<PAGE>
THE CONTRARIAN FUND-TM- THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The Fund
will typically realize a gain if the security declines in value between those
dates. All short sales must be fully collateralized. The Fund maintains the
collateral in a segregated account consisting of cash and/or U.S. government
securities sufficient to collateralize its obligation on the short positions.
The Fund may also sell short "against the box" (i.e., the Fund enters into a
short sale as described above while holding an offsetting long position in the
security which is sold short). If the Fund enters into a short sale against the
box, it will hold an equivalent amount of the securities to cover its position
while the short sale is outstanding. The Fund limits the value of short sale
positions (excluding short sales against the box) to 25% of the Fund's total
assets. At September 30, 1996, the Fund had 17% of its total assets in short
positions. For the nine months ended September 30, 1996, the cost of investments
purchased to cover short sales and the proceeds from investments sold short were
$271,690,917 and $391,093,724, respectively.
Included in the "Other Assets, Net" category in the Schedule of Net Assets are
the following securities sold short where the Fund has purchased the underlying
securities to effectively close out the short positions. Included in Receivable
from Brokers for Securities Sold Short is $18,710,509 for these short positions.
At September 30, 1996, the cost of the associated long positions and the
unrealized appreciation of investments and securities sold short are $14,100,682
and $4,609,827, respectively. At September 30, 1996, the Fund chose not to
complete the transactions which would have required delivery of the purchased
securities to the lender. The Fund does not consider these boxed positions as
investments.
SECURITIES SHARES VALUE
- ----------------------------------------------------------------------------
Colonial Data Technologies 142,000 $ 2,112,250
Imnet Systems, Inc. 17,200 335,400
IMP, Inc. 30,000 148,125
Iomega Corporation 363,700 8,819,725
Isolyser Company, Inc. 153,200 1,206,450
Micron Technology, Inc. 83,000 2,531,500
Vista 2000, Inc. 206,300 103,150
- ----------------------------------------------------------------------------
$14,759,600
f. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. At September 30, 1996, the Fund held
restricted secu-
<PAGE>
rities with an aggregate value of $15,549,605, which represented 1.6% of the
Fund's total net assets. Restricted securities are valued according to the
guidelines and procedures adopted by the Fund's Board of Trustees as outlined in
Note 1.a., paragraph 2.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- ----------------------------------------------------------------------------
First Dynasty Mines, Ltd. 1,600 $ 4,959 $ 4,088 9/13/96
- ----------------------------------------------------------------------------
First Dynasty Mines,
Ltd., Warrants 1,600 0 627 9/13/96
- ----------------------------------------------------------------------------
Golden Knight
Resources, Inc. 325 1,958 1,724 9/10/96
- ----------------------------------------------------------------------------
Indochina Goldfields, Ltd. 233 233 1,215 3/24/94
117 117 610 3/28/94
750 1,469 3,912 5/26/94
600 3,000 3,130 8/18/95
- ----------------------------------------------------------------------------
Nescor Energy 125 25 81 4/18/94
250 100 163 5/05/94
g. 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 are
not readily available were valued such that when the exercise price of the
option or warrant was less than that of the underlying common stock, the option
or warrant was 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. If the exercise price was greater than that of the
underlying common stock, the option or warrant was valued at zero. This
valuation method is subject to frequent review and is in accordance with the
guidelines and procedures adopted by the Fund's Board of Trustees.
h. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, revalue of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At September 30, 1996, the Fund had its largest
concentrated investments, worth 25% of the Fund's total assets, in Canada.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
AFRICA - 0.2%
General Gold Resources NL 240,220 $ 93,182
Ghana Gold Mines, Ltd. 307,500 58,423
- -----------------------------------------------------------------------------------------------------------------------------
- - 151,605
- ------------------------------------------------------------------------------------------------------------------------------
ARGENTINA - 3.9%
Astra Cia Argentina de Petroleo, S.A.(1) 273,437 440,310
Inversiones y Representaciones,, S.A.(1) 200,000 594,119
Perez Companc S.A., ADR(1,2) 80,000 1,030,000
YPF Sociedad Anonima, ADR(1,2) 25,000 353,125
- ------------------------------------------------------------------------------------------------------------------------------
2,417,554
- ------------------------------------------------------------------------------------------------------------------------------
AUSTRALIA - 1.1%
Anzoil NL 5,700,000 699,414
- ------------------------------------------------------------------------------------------------------------------------------
699,414
- ------------------------------------------------------------------------------------------------------------------------------
BRAZIL - 4.3%
Companhia Vale Do Rio Doce, ADR(1,2) 132,000 2,640,000
- ------------------------------------------------------------------------------------------------------------------------------
2,640,000
- ------------------------------------------------------------------------------------------------------------------------------
CANADA - 1.2%
Golden Knight Resources, Inc., Restricted(6,7) 112,000 594,083
NDU Resources, Ltd., Restricted(6,7) 75,000 75,848
Solomon Resources, Ltd., Restricted(6,7) 75,000 86,723
- ------------------------------------------------------------------------------------------------------------------------------
756,654
- ------------------------------------------------------------------------------------------------------------------------------
CHINA - 4.8%
China Yuchai International, Ltd.(1) 93,100 477,137
Royal Plastics Group, Ltd. 25,000 426,731
Sino Forest Corporation, Class A 710,900 756,776
Wuxi Little Swan Company, Ltd., Class B 1,881,000 1,264,865
- ------------------------------------------------------------------------------------------------------------------------------
2,925,509
- ------------------------------------------------------------------------------------------------------------------------------
CZECH REPUBLIC - 9.7%
Alpha-Effect 6,000 116,719
Bohemia Crystal, I.F., A.S. 12,000 61,512
Czech Industries, Inc. 44,000 203,500
Czech Value Fund(6) 125,000 1,172,500
I.F. Yse 2 8,850 65,913
Komercni Banka A.S., GDR(3) 60,000 1,687,500
Komercni Banka, I.F. 11,000 286,942
PF YSE Akcionara 9,300 106,136
PPF Cesky Podilovy 1,425 18,797
PPF Investicni Holding 3,667 39,540
Privatzacni Investicni Fond, I.F. 5,250 58,943
Restirucni Investicni Fond Ceske 4,684 150,475
SPT Telecom, A.S. 11,100 1,369,609
Sporitelni Privat Vseobecny 40,000 100,815
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CZECH REPUBLIC - 9.7% (CONTINUED)
Sporitelni Vynosovy Investic 18,429 $ 98,263
Stavby Silinic a Zeleznic, A.S. 4,300 220,194
Zivnobanka-Investicni Fond 7,250 134,856
Zivnobanka-Podilovy Fond 6,218 85,478
- ------------------------------------------------------------------------------------------------------------------------------
5,977,692
- ------------------------------------------------------------------------------------------------------------------------------
ECUADOR - 0.2%
Overseas and General, Ltd. 575,077 102,432
- ------------------------------------------------------------------------------------------------------------------------------
102,432
- ------------------------------------------------------------------------------------------------------------------------------
EGYPT - 1.1%
Commercial International Bank of Egypt, 144A, GDR(3,4) 42,100 654,655
- ------------------------------------------------------------------------------------------------------------------------------
654,655
- ------------------------------------------------------------------------------------------------------------------------------
GHANA - 0.8%
Leo Shield Exploration NL 1,000,000 467,068
- ------------------------------------------------------------------------------------------------------------------------------
467,068
- ------------------------------------------------------------------------------------------------------------------------------
HONG KONG - 1.7%
Cathay Investment Fund, Ltd.(1) 900,000 1,047,459
- ------------------------------------------------------------------------------------------------------------------------------
1,047,459
- ------------------------------------------------------------------------------------------------------------------------------
HUNGARY - 3.6%
Compagnie Financiere Pour L'Europe Central 12,000 330,000
Pannonplast Muanjagipari(1) 15,000 498,596
Tisza Vegyi Kombinat Rt, GDR, 144A(3,4) 153,000 1,361,700
- ------------------------------------------------------------------------------------------------------------------------------
2,190,296
- ------------------------------------------------------------------------------------------------------------------------------
INDONESIA - 7.7%
First Dynasty Mines, Ltd. 326,100 1,041,432
First Dynasty Mines, Ltd., Restricted(6,7) 100,000 255,488
PT Apac Centertex Corporation, Foreign(1,5,6) 2,977,000 1,153,379
PT Dynaplast, Foreign(1,5,6) 829,000 910,009
PT Multibreeder Adirama, Foreign(1,5,6) 872,500 338,033
PT Perdanacipta Multi Finance, Foreign(1,5,6) 550,000 426,173
PT Sumalindo Lestari Jaya, Foreign(1,5,6) 362,500 358,911
PT Tambang Timah, Foreign(1,5,6) 170,000 289,066
- ------------------------------------------------------------------------------------------------------------------------------
4,772,491
- ------------------------------------------------------------------------------------------------------------------------------
ISRAEL - 2.5%
Blue Square Israel, Ltd., ADR(2) 104,400 1,539,900
- ------------------------------------------------------------------------------------------------------------------------------
1,539,900
- ------------------------------------------------------------------------------------------------------------------------------
KOREA - 1.3%
LG Electronics, Inc., 144A, GDR(3,4) 80,000 472,000
Samsung Electronics, 144A, GDR, non-voting(3,4) 8,987 222,428
Samsung Electronics, 144A, GDR, non-voting bonus shares(3,4) 2,708 53,483
Samsung Electronics, 144A. GDR, voting(3,4) 479 23,950
Samsung Electronics, 144A, GDR, voting bonus shares(3,4) 144 5,292
- ------------------------------------------------------------------------------------------------------------------------------
777,153
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MEXICO - 12.9%
Acer Comutech Latino America, ADR(2) 62,300 $ 1,113,613
Amarc Resources, Ltd. 35,000 87,365
Amarc Resources, Ltd., Restricted(6,7) 65,000 105,462
Anooraq Resources Corporation, Restricted(6,7) 65,000 125,266
Bufete Industrial, S.A., ADR(2) 75,400 1,319,500
Cifra, S.A. de C.V., Class B, ADR(2) 600,000 840,000
Corporacion GEO, S.A. de C.V., Series B 85,000 393,935
Corporacion Industrial Sanluis, S.A. de C.V., 144A, ADR(2,4,6) 30,000 1,027,500
Empresas ICA Sociedad Controladora, S.A., de C.V., ADR(1,2) 68,500 1,044,625
Farallon Resources, Ltd. 85,000 904,853
Grupo Mexicano de Desarrollo, S.A., Class L, ADR(2) 63,900 127,800
Grupo Tribasa, S.A. de C.V., ADR(2) 41,900 230,450
Transportacion Maritima Mexicana, S.A. de C.V., ADR(1,2) 79,300 624,487
- ------------------------------------------------------------------------------------------------------------------------------
7,944,856
- ------------------------------------------------------------------------------------------------------------------------------
MYANMAR - 2.1%
Indochina Goldfields, Ltd. 177,000 1,318,956
- ------------------------------------------------------------------------------------------------------------------------------
1,318,956
- ------------------------------------------------------------------------------------------------------------------------------
PHILIPPINES - 3.7%
Manila Mining Corporation, Class B(1) 300,000,000 194,397
Paper Industries Corporation of the Philippines 4,122,000 746,312
Philex Mining Corporation, Class B(1) 2,731,000 322,702
Uniwide Holdings, Ltd. 5,762,000 1,043,244
- ------------------------------------------------------------------------------------------------------------------------------
2,306,655
- ------------------------------------------------------------------------------------------------------------------------------
POLAND - 12.6%
Bank Rozwolo Eksportu, S.A.(1) 10,500 358,719
Budimex, S.A., Series D 9,570 76,628
Exbud, S.A. 28,566 254,146
FX Energy, Inc. 130,000 1,267,500
Fleming Poland Fund 89,200 981,200
Government of Poland Privatisation Certificates 35,000 1,855,872
Huta Szkla Gospodarczego Irena 24,300 194,573
Mostostal Zabrze Holding, S.A.(1) 45,500 199,164
Mostostal-Export, S.A.(1) 200,000 569,395
Okocimskie Zaklady Piwowarskie, S.A. 175,000 1,307,829
Polifarb-Cieszyn, S.A.(1) 61,950 304,238
Stalexport, S.A.(1) 27,700 384,448
- ------------------------------------------------------------------------------------------------------------------------------
7,753,712
- ------------------------------------------------------------------------------------------------------------------------------
RUSSIA - 5.4%
Bakyrchik Gold PLC 174,000 748,944
Chernogorneft, ADR(2) 95,000 650,750
Lukoil Holding, ADR(2) 25,000 912,500
Mosenergo, ADR(2) 35,000 936,250
Star Mining Corporation NL 500,000 61,352
- ------------------------------------------------------------------------------------------------------------------------------
3,309,796
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SINGAPORE - 2.1%
ABR Holdings, Ltd.(1) 390,000 $ 445,888
L & M Group Investments, Ltd.(1) 555,500 714,000
Want Want Holdings, Ltd. 58,000 138,040
- ------------------------------------------------------------------------------------------------------------------------------
1,297,928
- ------------------------------------------------------------------------------------------------------------------------------
SLOVAKIA - 0.1%
Ferro Fond, I.F. 14,545 79,645
- ------------------------------------------------------------------------------------------------------------------------------
79,645
- ------------------------------------------------------------------------------------------------------------------------------
THAILAND - 0.8%
Alphatec Electronics Company, Ltd., Foreign(1,5,6) 38,000 361,606
Muramoto Electronic Thai PLC, Foreign(1,5,6) 79,200 142,480
- ------------------------------------------------------------------------------------------------------------------------------
504,086
- ------------------------------------------------------------------------------------------------------------------------------
TURKEY - 4.4%
Akal Tekstil Sanayii(1) 11,980,000 807,523
Altinyildiz Mensucat ve Konfeksiyon Fabriklari, A.S.(1) 2,868,000 358,578
Bolu Cimento Sanayii, A.S.(1) 9,018,000 250,010
Eczacibasi Ilac Sanayi ve Ticaret, A.S. 12,101,000 519,667
Eczacibasi Yatirim Holding Ortaklig, A.S.(1) 4,828,041 383,178
Yapi ve Kredi Bankasi, A.S.(1) 16,065,000 401,712
- ------------------------------------------------------------------------------------------------------------------------------
2,720,668
- ------------------------------------------------------------------------------------------------------------------------------
VIETNAM - 0.6%
Vietnam Industrial Investments, Ltd. 2,016,000 383,027
- ------------------------------------------------------------------------------------------------------------------------------
383,027
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS- 88.8% (Cost: $56,816,515) 54,739,211
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
WARRANTS
Amarc Resources, Ltd., Warrants, Strike CAD2.05, Expire 7/16/97(6,7,8,9) 65,000 55,742
Anooraq Resources Corporation, Warrants, Strike CAD2.07, Expire 9/12/97(6,7,8,9) 65,000 65,220
Farallon Resources, Ltd., Warrants, Strike CAD6.25, Expire 5/7/97(6,8,9) 85,000 538,025
First Dynasty Mines, Ltd., Warrants, Strike CAD4.50, Expire 3/13/97(6,7,8,9) 100,000 39,162
Fleming Poland Fund, Warrants, Strike $10, Expire 1/1/99(8) 17,840 53,520
NDU Resources, Ltd., Warrants, Strike CAD2.31, Expire 5/17/98(6,7,8,9) 75,000 -
PT Apac Centertex Corporation, Warrants, Strike IDR1000, Expire 7/14/01(8,9) 450,000 41,649
Solomon Resources, Ltd., 1/2 Warrants, Strike CAD1.05, Expire 1/3/98(6,7,8,9) 75,000 51,466
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 1.4% (Cost: $0) 844,784
<CAPTION>
CONTRACTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
KOSPI 200 Index, Strike $0.13742, Expire April 97(8) 100,000,000 152,500
Taiwan Blue Chip, Strike $100.00, Expire November 97(8) 10,000 196,750
Taiwan Weighted Index 1, Strike $180.16, Expire March 97(8) 20,000 1,227,500
Taiwan Weighted Index 2, Strike $198.17, Expire March 98(8) 15,000 961,500
- ------------------------------------------------------------------------------------------------------------------------------
Total Options - 4.1% (Cost: $1,754,250) 2,538,250
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
TOTAL INVESTMENTS - 94.3% (Cost: $58,570,765) $58,122,245
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 66,118
Argentine Peso 581,931
Turkish Lira 494,499
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/1/96,
maturity value $2,438,328 (collateralized by $1,765,000 par value
U.S. Treasury Bond, 12.00%, due 8/15/13) 2,438,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 5.8% 3,580,548
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, Net - (0.1)% (69,925)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Total Net Assets - 100.0% $61,632,868
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) ADR - American Depository Receipt.
(3) GDR - Global Depository Receipt.
(4) These securities may be resold in transactions exempt from registration,
under Rule 144A of the Securities Act of 1933, normally to qualified
institutional buyers.
(5) Shares registered for foreign investors.
(6) Fair-valued security. See 1.a. in Notes to Financial Statements.
(7) See 4.g. in Notes to Financial Statements.
(8) See 4.f. in Notes to Financial Statements.
(9) Foreign-denominated security. CAD - Canadian Dollar; IDR - Indonesian
Rupiah.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $58,570,765) $ 58,122,245
Cash and cash equivalents 3,580,548
Receivable for investments sold 633,371
Receivable for fund shares subscribed 460,153
Receivable from adviser 240,858
Interest/dividends receivable 57,071
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 63,094,246
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 1,163,076
Payable for fund shares redeemed 191,720
Accrued expenses 65,395
Payable to distributor 41,187
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,461,378
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 61,632,868
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 62,159,318
Accumulated undistributed net investment income 248,258
Accumulated net realized loss from investments (637,269)
Accumulated net realized gain from securities sold short 317,146
Net unrealized depreciation on investments (454,585)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 61,632,868
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 9.69
Net Asset Value, offering and redemption price per share
(net assets of $61,632,868 applicable to 6,358,751 shares of
beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Dividends (Net of foreign tax withheld of $27,091) $ 608,887
Interest 184,914
Other 25,409
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 819,210
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 385,171
Custodian and transfer agent fees 214,745
Distribution fees 77,033
Professional fees 62,272
Shareholder reports 45,620
Registration and filing fees 38,908
Trustees' fees and expenses 16,714
Other 4,756
Insurance 247
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 845,466
Less: Reimbursement from adviser (274,514)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 570,952
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 248,258
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 2,148,614
Net realized gain from short sales 32,841
Net change in unrealized appreciation on investments 1,752,113
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS AND SECURITIES SOLD SHORT 3,933,568
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,181,826
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE NINE FOR THE NINE
MONTHS ENDED MONTHS ENDED
9/30/96 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $ 248,258 $ (59,234)
Net realized gain/(loss) from investments 2,148,614 (1,766,278)
Net realized gain/(loss) from securities sold short 32,841 (17,500)
Net change in unrealized appreciation on investments 1,752,113 112,264
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 4,181,826 (1,730,748)
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 43,107,622 7,729,040
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 43,107,622 7,729,040
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 47,289,448 5,998,292
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 14,343,420 8,345,128
End of period $ 61,632,868 $ 14,343,420
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
FINANCIAL HIGHLIGHTS
FOR THE NINE FOR THE NINE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED MONTHS ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 9/30/96 12/31/95 3/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.02 $ 8.57 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) 0.06 (0.03) 0.06
Net realized gain/(loss) and unrealized appreciation/
(depreciation) on investments and securities sold short 1.61 (0.52) (1.36)
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets Resulting From Operations 1.67 (0.55) (1.30)
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - (0.04)
Distributions from realized gains on investments - - (0.09)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.69 $ 8.02 $ 8.57
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 20.82% (6.42%) (13.14)%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 61,632,868 $ 14,343,420 $ 8,345,128
Ratio of Expenses to Average Net Assets 1.84%(2) 1.83%(2) 3.15%(2)
Ratio of Net Investment Income/(Loss) to Average Net Assets 0.80%(2) (0.51)%(2) 0.72%(2)
Portfolio Turnover Rate 99% 103% 124%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on May 2, 1994.
(2) If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, the ratio of expenses to average net assets
for the nine months ended September 30, 1996, the nine months ended
December 31, 1995, and the period from March 31, 1994 (commencement of
operations), to March 31, 1995, would have been 2.73%, 4.24%, and 3.46%,
respectively, and the ratio of net investment income/(loss) to average net
assets would have been (0.09)%, (2.92)%, and 0.41%, respectively.
Per-share data has been determined by using the average number of shares
outstanding throughout the period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Developing Countries Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a nondiversified, open-end
management investment company. The Fund became effective to offer shares to the
public on April 29, 1994, and it started to offer shares to the public on May 2,
1994. The Trust offers eleven 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, and The Robertson Stephens MicroCap Growth Fund. The
assets for each series are segregated and accounted for separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At September 30, 1996, 88% of the
Fund's positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources including quotations from market makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
September 30, 1996, 12% of the Fund's positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
repurchase agreement transactions to those parties deemed by the Fund's
Investment Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day
and included in unrealized gain or loss from investments until realized.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as
to approximate amounts available for future distributions to shareholders, if
any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the nine months ended December 31, 1995, were as
follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 10,540,738 $100,041,283
Shares reinvested - -
- ----------------------------------------------------------------------------
10,540,738 100,041,283
- ----------------------------------------------------------------------------
Shares redeemed (5,969,473) (56,933,656)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 4,571,265 $ 43,107,627
- ----------------------------------------------------------------------------
4/1/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 2,510,903 $ 23,109,743
Shares reinvested - -
- ----------------------------------------------------------------------------
2,510,903 23,109,743
- ----------------------------------------------------------------------------
Shares redeemed (1,697,748) (15,380,703)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 813,155 $ 7,729,040
- ----------------------------------------------------------------------------
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the nine months ended September 30, 1996, the Fund incurred investment
advisory fees of $385,171. RSIM has voluntarily agreed to reimburse the Fund for
any annual operating expenses exceeding an annual expense ratio of 1.85%. For
the nine months ended September 30, 1996, the Adviser agreed to reimburse
$274,514 of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor, and
RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer,
and a Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and
Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of
the Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John
P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director of
Research for RS & Co. All affiliated and access persons, as defined in the 1940
Act, follow strict guidelines and policies on personal trading as outlined in
the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended September 30, 1996, the Fund
incurred distribution fees of $77,033.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions $50 to RS & Co., which represented 0.0% of total
commissions paid for the period.
<PAGE>
THE DEVELOPING COUNTRIES FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments), measured as a percentage of
the Fund's average monthly investment portfolio for the nine months ended
September 30, 1996, was 99%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $58,579,765. Accumulated net unrealized depreciation on investments was
$448,520, consisting of gross unrealized appreciation and depreciation of
$5,970,273 and $(6,418,793), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold short
and short-term investments) were $76,369,501 and $36,272,675, respectively.
d. PUT OPTIONS:
At September 30, 1996, the Fund had no hedge position in put options.
e. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The Fund
will typically realize a gain if the security declines in value between those
dates. All short sales must be fully collateralized. The Fund maintains the
collateral in a segregated account consisting of cash and/or U.S. government
securities sufficient to collateralize its obligations on the short positions.
The Fund may also sell short "against the box" (i.e., the Fund enters into a
short sale as described above while holding an offsetting long position in the
security which is sold short). If the Fund enters into a short sale against the
box, it will hold an equivalent amount of the securities to cover its position
while the short sale is outstanding. The Fund limits the value of short sale
positions (excluding short sales against the box) to 25% of the Fund's total
assets. At September 30, 1996, none of the Fund's total assets were in short
positions. For the nine months ended September 30, 1996, the cost of investments
purchased to cover short sales and the proceeds from investments sold short were
$1,879,109 and $1,912,688, respectively.
f. 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 are not readily available were
valued such that when the exercise price of the option or warrant was less than
that of the underlying common stock, the option or warrant was priced using the
modified Black-Scholes Valuation
<PAGE>
ROBERTSON, STEPHENS & COMPANY
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, and standard
deviation of the return on the stock. If the exercise price was greater than
that of the underlying common stock, the option or warrant was valued at zero.
This valuation method is subject to frequent review and in accordance with the
guidelines and procedures adopted by the Fund's Board of Trustees.
g. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At September 30, 1996, the Fund held restricted securities with an
aggregate value of $1,454,459, which represented 2.3% 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 1.a.,
paragraph 2.
ACQUISITION
SECURITY SHARES COST VALUE DATE
- ----------------------------------------------------------------------------
Amarc Resources, Ltd. 65,000 $ 97,192 $ 105,462 7/17/96
Amarc Resources, Ltd.,
Warrants 65,000 0 55,742 7/17/96
Anooraq Resources, Ltd. 65,000 98,175 125,266 9/12/96
Anooraq Resources, Ltd.,
Warrants 65,000 0 65,220 9/12/96
First Dynasty Mines, Ltd. 100,000 309,925 255,488 9/13/96
First Dynasty Mines,
Ltd., Warrants 100,000 0 39,162 9/13/96
Golden Knight
Resources, Ltd. 112,000 674,650 594,083 9/10/96
NDU Resources, Ltd. 75,000 109,649 75,848 5/17/96
NDU Resources, Ltd.,
Warrants 75,000 0 0 5/17/96
Solomon Resources, Ltd. 75,000 46,868 86,723 7/3/96
Solomon Resources, Ltd.,
1/2 Warrants 75,000 0 51,466 7/3/96
h. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign currency. At September 30, 1996, the Fund had its largest
concentrated foreign investments, worth 13% of the Fund's total assets, in
Mexico.
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Advertising - 0.1%
Snyder Communications, Inc. 500 $ 9,500
- ------------------------------------------------------------------------------------------------------------------------------
9,500
- ------------------------------------------------------------------------------------------------------------------------------
AGRICULTURAL SERVICES - 1.4%
Delta & Pine Land Company(1) 15,000 438,750
- ------------------------------------------------------------------------------------------------------------------------------
438,750
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 1.8%
Mercantile Bancorporation(1) 11,000 572,000
- ------------------------------------------------------------------------------------------------------------------------------
572,000
- ------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.7%
Intercardia, Inc. 22,000 544,500
- ------------------------------------------------------------------------------------------------------------------------------
544,500
- ------------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES - 2.8%
International Imaging Materials, Inc. 20,000 437,500
Wallace Computer Services, Inc.(1) 15,000 423,750
- ------------------------------------------------------------------------------------------------------------------------------
861,250
- ------------------------------------------------------------------------------------------------------------------------------
CLOTHING/RETAIL - 5.4%
Brown Group, Inc.(1) 4,000 93,000
J.C. Penney Company, Inc.(1) 10,000 541,250
Sport-Haley, Inc. 30,000 375,000
Vans, Inc. 14,000 267,750
Warnaco Group, Inc., Class A(1) 17,000 403,750
- ------------------------------------------------------------------------------------------------------------------------------
1,680,750
- ------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.2%
ADT, Ltd. 15,000 286,875
ICTS International NV 10,000 122,500
Mail Boxes Etc. 15,000 339,375
Pittston Brink's Group(1) 7,500 235,312
- ------------------------------------------------------------------------------------------------------------------------------
984,062
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 3.5%
Applied Magnetics Corporation 8,000 142,000
Data Translation, Inc. 15,000 168,750
Raster Graphics, Inc. 10,000 90,000
Southern Electronics Corporation 42,500 361,250
Sun Microsystems, Inc. 5,000 310,625
- ------------------------------------------------------------------------------------------------------------------------------
1,072,625
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE - 6.2%
BMC Software, Inc. 3,500 $ 278,250
Ciber, Inc. 7,000 266,000
Computer Associates International, Inc.(1) 8,000 478,000
Dynamic Healthcare Technologies, Inc. 60,000 352,500
Microsoft Corporation 3,000 395,625
Platinum Technology, Inc. 12,000 151,500
- ------------------------------------------------------------------------------------------------------------------------------
1,921,875
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 4.9%
Compuware Corporation 11,000 503,250
Information Resources Engineering, Inc. 26,000 507,000
National TechTeam, Inc. 7,900 214,288
Wall Data, Inc. 13,000 295,750
- ------------------------------------------------------------------------------------------------------------------------------
1,520,288
- ------------------------------------------------------------------------------------------------------------------------------
DATA COMMUNICATIONS - 3.5%
Cabletron Systems, Inc. 7,000 478,625
FORE Systems, Inc. 15,000 620,625
- ------------------------------------------------------------------------------------------------------------------------------
1,099,250
- ------------------------------------------------------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 0.8%
Electronic Data Systems Corporation(1) 4,000 245,500
Industri-Matematik International Corporation 500 6,187
- ------------------------------------------------------------------------------------------------------------------------------
251,687
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 1.2%
American Power Conversion Corporation 25,000 365,625
- ------------------------------------------------------------------------------------------------------------------------------
365,625
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 3.1%
El Paso Natural Gas Company(1) 6,000 264,000
Nuevo Energy Company 6,000 243,750
Questar Corporation(1) 13,000 459,875
- ------------------------------------------------------------------------------------------------------------------------------
967,625
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES - 3.7%
Pride Petroleum Services, Inc. 25,000 353,125
Tejas Gas Corporation 10,000 363,750
Veritas DGC, Inc. 24,500 441,000
- ------------------------------------------------------------------------------------------------------------------------------
1,157,875
- ------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 3.3%
Ascent Entertainment Group, Inc. 15,000 356,250
Hollywood Entertainment Corporation 20,000 410,000
Signature Resorts, Inc. 11,000 261,250
- ------------------------------------------------------------------------------------------------------------------------------
1,027,500
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ENVIRONMENTAL SERVICES - 0.9%
Philip Environmental, Inc. 30,000 $ 285,000
- ------------------------------------------------------------------------------------------------------------------------------
285,000
FINANCIAL SERVICES - 3.4%
Conseco, Inc.(1) 6,500 320,125
Federal National Mortgage Association(1) 10,000 348,750
J.P. Morgan & Company, Inc.(1) 4,500 399,938
- ------------------------------------------------------------------------------------------------------------------------------
1,068,813
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE/HMOS - 0.8%
Diagnostic Health Services, Inc. 30,000 251,250
- ------------------------------------------------------------------------------------------------------------------------------
251,250
- ------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 0.9%
Liberty Corporation(1) 8,000 281,000
- ------------------------------------------------------------------------------------------------------------------------------
281,000
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 5.1%
AlliedSignal, Inc.(1) 5,000 329,375
Applied Power Inc., Class A(1) 12,000 382,500
Kimball International, Inc., Class B(1) 22,000 805,750
Oregon Metallurgical Corporation(1) 2,000 65,000
- ------------------------------------------------------------------------------------------------------------------------------
1,582,625
- ------------------------------------------------------------------------------------------------------------------------------
MEDIA - 1.2%
Lin Television Corporation 8,000 328,000
Univision Communications, Inc. 1,000 33,500
- ------------------------------------------------------------------------------------------------------------------------------
361,500
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/DEVICES - 2.5%
Novoste Corporation 15,000 198,750
Ventritex, Inc. 32,500 568,750
- ------------------------------------------------------------------------------------------------------------------------------
767,500
- ------------------------------------------------------------------------------------------------------------------------------
NETWORK SYSTEMS - 1.0%
3Com Corporation 5,000 300,313
- ------------------------------------------------------------------------------------------------------------------------------
300,313
- ------------------------------------------------------------------------------------------------------------------------------
OIL/GAS DRILLING - 5.8%
Diamond Offshore Drilling, Inc. 8,500 467,500
ENSCO International, Inc. 15,000 487,500
Noble Drilling Corporation 25,000 378,125
Transocean Offshore, Inc.(1) 7,500 459,375
- ------------------------------------------------------------------------------------------------------------------------------
1,792,500
- ------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS -1.3%
Allergan, Inc.(1) 10,000 381,250
Applied Analytical Industries, Inc. 500 11,375
- ------------------------------------------------------------------------------------------------------------------------------
392,625
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RESTAURANTS - 1.0%
Wendy's International, Inc.(1) 14,000 $ 301,000
- ------------------------------------------------------------------------------------------------------------------------------
301,000
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 0.7%
Memc Electronic Materials, Inc. 10,000 231,250
- ------------------------------------------------------------------------------------------------------------------------------
231,250
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS - 1.0%
National Semiconductor Corporation 15,000 301,875
- ------------------------------------------------------------------------------------------------------------------------------
301,875
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 0.9%
Potash Corporation of Saskatchewan, Inc.(1) 4,000 292,500
- ------------------------------------------------------------------------------------------------------------------------------
292,500
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 7.4%
Abercrombie & Fitch Company, Class A 500 12,250
CompUSA, Inc. 5,000 270,000
Herman Miller, Inc.(1) 12,000 486,000
Regal Cinemas, Inc. 27,500 687,500
Sports and Recreation, Inc. 25,000 209,375
TAG Heuer International SA, ADR(4) 500 9,875
Video Update, Inc., Class A 125,000 601,562
- ------------------------------------------------------------------------------------------------------------------------------
2,276,562
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY WHOLESALE - 1.3%
Fisher Scientific International(1) 10,000 412,500
- ------------------------------------------------------------------------------------------------------------------------------
412,500
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 1.4%
Metro One Telecommunications 8,500 114,750
Orckit Communications, Ltd. 500 9,187
WorldCom, Inc. 15,000 320,625
- ------------------------------------------------------------------------------------------------------------------------------
444,562
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 2.3%
Loral Space & Communications 20,000 315,000
Paging Network, Inc. 20,000 400,000
- ------------------------------------------------------------------------------------------------------------------------------
715,000
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.3%
Hvide Marine, Inc., Class A 11,000 143,000
Mesa Airlines, Inc. 30,000 273,750
- ------------------------------------------------------------------------------------------------------------------------------
416,750
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 86.8% (COST $25,231,642) 26,950,287
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Energy - 1.0%
Mesa, Inc., 8.00%, Expires 6/30/08, Series A(1) 60,462 $ 309,869
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 1.0% (COST $280,785) 309,869
- ------------------------------------------------------------------------------------------------------------------------------
PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
- ------------------------------------------------------------------------------------------------------------------------------
Telecommunications - 1.5%
Midcom Communications, Inc., 8.25%, Due 8/15/03, 144A(1,2,3) 400,000 456,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 1.5% (COST $400,000) 456,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT BONDS - 3.5%
- ------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Note, 6.625%, Due 7/31/01(1) 818,000 822,982
U.S. Treasury Strip, Due 11/15/24(1) 1,850,000 260,054
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL GOVERNMENT BONDS - 3.5% (COST $1,076,894) 1,083,036
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 92.8% (COST $26,989,321) 28,799,192
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/01/96,
maturity value $915,123 (collateralized by $710,000 par value
U.S. Treasury Bond, 12.00%, due 8/15/13) 915,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Cash and Cash Equivalents - 2.9% 915,000
- ------------------------------------------------------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/01/96,
maturity value $1,741,235 (collateralized by $1,240,000 par value
U.S. Treasury Bond, 12.00%, due 8/15/13) 1,741,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT - 5.6% 1,741,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 3.7% $ 1,142,711
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (3.9)% (PROCEEDS: $1,142,711) (1,221,563)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (1.1)% (359,204)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $31,017,136
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) These securities may be resold in transactions exempt from registration,
under Rule 144A of the Securities Act of 1933, normally to qualified
institutional buyers.
(3) Fair-value security. See 1.a. in Notes to Financial Statements.
(4) ADR - American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $26,989,321) $ 28,799,192
Cash and cash equivalents 915,000
Deposits with brokers and custodian bank for securities sold short 1,741,000
Receivable from brokers for securities sold short 1,142,711
Receivable for investments sold 725,215
Receivable for fund shares subscribed 569,985
Receivable from adviser 53,503
Dividend/interest receivable 27,388
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 33,973,994
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Securities sold short (Proceeds $1,142,711) 1,221,563
Payable for investments purchased 1,582,074
Payable for fund shares redeemed 9,437
Payable to distributor 4,197
Accrued expenses 61,013
Payable, other 78,574
- ------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 2,956,858
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $31,017,136
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 29,481,294
Accumulated undistributed net investment loss (4,139)
Accumulated net realized loss from investments (113,725)
Accumulated net realized loss from securities sold short (77,313)
Net unrealized appreciation on investments 1,809,871
Net unrealized depreciation on short sales (78,852)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 31,017,136
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 11.11
Net Asset Value, offering and redemption price per share
(Net assets of $31,017,136 applicable to 2,793,057 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FOR THE PERIOD FROM AUGUST 1, 1996 (COMMENCEMENT OF OPERATIONS), THROUGH SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 43,681
Dividends 17,426
- ------------------------------------------------------------------------------------------------------------------------------
Total Investment Income 61,107
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees 24,827
Investment advisory fees 22,046
Professional fees 10,736
Shareholder reports 8,235
Administrative expense 5,512
Distribution fees 5,512
Trustees' fees and expenses 3,721
Organizational expense 3,707
Registration and filing fees 3,660
Insurance fees 61
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 88,017
Less: Reimbursement from adviser (22,771)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 65,246
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (4,139)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investments (113,725)
Net realized loss from securities sold short (77,313)
Net change in unrealized appreciation on investments 1,809,871
Net change in unrealized depreciation on securities sold short (78,852)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 1,539,981
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 1,535,842
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD FROM AUGUST 1, 1996 (COMMENCEMENT OF OPERATIONS), THROUGH SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (4,139)
Net realized loss from investments (113,725)
Net realized loss from securities sold short (77,313)
Net change in unrealized appreciation on investments 1,809,871
Net change in unrealized depreciation on securities sold short (78,852)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,535,842
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTION TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income -
Realized gain on investments -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 29,481,294
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 29,481,294
- ------------------------------------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS 31,017,136
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of year 0
End of year $ 31,017,136
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 9/30/96(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.01)
Net realized loss and net change in unrealized appreciation on investments 1.12
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations 1.11
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gain on investments -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $11.11
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 11.10%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 31,017,136
Ratio of Expenses to Average Net Assets 2.80%(2)
Ratio of Net Investment Loss to Average Net Assets (0.18)%(2)
Portfolio Turnover Rate 27%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on August 1, 1996.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the
period ended September 30, 1996, would have been 3.78%, respectively, and
the ratio of net investment loss to average net assets would have been
(1.16)%, respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period. Ratios, except
for total return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Diversified 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 August 1, 1996. The Trust offers eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At September 30,
1996, 98.4% of the Fund's long 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
develop-
<PAGE>
ment and trends of the security's issuer, changes in the industry and other
competing companies, significant changes in the issuer's financial position, and
any other event which could have a significant impact on the value of the
security. At September 30, 1996, approximately 1.6% of the Fund's long portfolio
was valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the period from August
1, 1996 (Commencement of Operations), through September 30, 1996. The Fund
complied with requirements of the Internal Revenue Code for qualifying as a
regulated investment company so as not to be subject to federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Companies" ("SOP"). The purpose of this SOP is to report undistributed net
investment income or loss and accumulated net realized gain or loss accounts in
such a manner as to approximate amounts available for future distributions to
shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from August 1,
1996 (Commencement of Operations), through September 30, 1996, was as follows:
8/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 3,291,169 $ 34,826,214
Share reinvested - -
- ----------------------------------------------------------------------------
3,291,169 34,826,214
- ----------------------------------------------------------------------------
Shares redeemed (498,112) (5,344,920)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 2,793,057 $ 29,481,294
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
August 1, 1996 (Commencement of Operations), through September 30, 1996, the
Fund incurred investment advisory fees and administrative fees of $22,046 and
$5,512, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding
distribution fees and dividend expense for short sales that exceed the most
<PAGE>
stringent limits prescribed by any state in which the Fund's shares are offered
for sale. For the period from August 1, 1996 (Commencement of Operations),
through September 30, 1996, the Adviser agreed to reimburse $22,771 of its fees
and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. John L. Wallace, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $3,721 for the period from August 1, 1996
(Commencement of Operations), through September 30, 1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's
<PAGE>
THE DIVERSIFIED GROWTH FUND THIRD-QUARTER REPORT
Notes to Financial Statements (continued)
Board of Trustees. Under this Plan, RS & Co. is compensated for services in such
capacity including its expenses in connection with the promotion and
distribution of the Fund's shares. The distribution fee is calculated at an
annual rate of 0.25% of the average daily net assets of the Fund. For the period
from August 1, 1996 (Commencement of Operations), through September 30, 1996,
the Fund incurred distribution fees of $5,512.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from August 1, 1996 (Commencement of
Operations), through September 30, 1996, the Fund paid brokerage commissions of
$10,823 to RS & Co., which represented 23.8% of total commissions paid for the
period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the period from August 1,
1996 (Commencement of Operations), through September 30, 1996, was 27%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $26,989,321. Accumulated net unrealized appreciation on investments was
$1,809,871, consisting of gross unrealized appreciation and depreciation of
$2,012,708 and $(202,837), respectively.
<PAGE>
c. INVESTMENT PURCHASES AND SALES:
For the period from August 1, 1996 (Commencement of Operations), through
September 30, 1996, the cost of investments purchased and the proceeds from
investments sold (excluding securities sold short and short-term investments)
were $30,578,920 and $3,476,769, respectively.
d. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not
own, in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to deliver to
the buyer upon the short sale; the Fund then is obligated to replace the
security borrowed by purchasing it in the open market at some later date. The
Fund will incur a loss if the market price of the security increases between
the date of the short sale and the date on which the Fund replaces the
borrowed security. The Fund will typically realize a gain if the security
declines in value between those dates. All short sales must be fully
collateralized. The Fund maintains the collateral in a segregated account
consisting of cash and/or U.S. government securities sufficient to
collateralize its obligation on the short positions. The Fund may also sell
short "against the box" (i.e., the Fund enters into a short sale as described
above while holding an offsetting long position in the security which is sold
short). If the Fund enters into a short sale against the box, it will hold an
equivalent amount of the securities to cover its position while the short
sale is outstanding. The Fund limits the value of short sale positions
(excluding short sales against the box) to 25% of the Fund's total assets. At
September 30, 1996, the Fund had 3.6% of its total assets in short positions.
For the period from August 1, 1996 (Commencement of Operations), through
September 30, 1996, the cost of investments purchased to cover short sales
and proceeds from investments sold short were $1,878,130 and $2,943,528,
respectively.
<PAGE>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Advertising - 4.3%
Lamar Advertising Company, Class A 89,100 $ 3,697,650
Outdoor Systems, Inc. 62,000 2,914,000
Snyder Communications, Inc. 1,200 22,800
The Leap Group, Inc. 24,500 248,062
Universal Outdoor Holdings, Inc. 47,500 1,710,000
- ------------------------------------------------------------------------------------------------------------------------------
8,592,512
- ------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 4.2%
Alteon, Inc. 115,000 977,500
Applied Analytical Industries, Inc. 500 11,375
Dura Pharmaceuticals, Inc. 99,800 3,680,125
Jones Medical Industries, Inc. 10,000 485,000
Gensia, Inc.(1) 1,175 5,728
Medicis Pharmaceutical Corporation, Class A 200 9,650
Parexel International Corporation 21,600 1,360,800
Vertex Pharmaceuticals, Inc. 60,600 1,787,700
- ------------------------------------------------------------------------------------------------------------------------------
8,317,878
- ------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 7.8%
Abacus Direct Corporation 20,000 420,000
Alternative Resources Corporation 500 14,062
American Residential Services, Inc. 1,200 22,950
CellNet Data Systems, Inc. 13,700 215,775
Computer Learning Centers, Inc. 50,000 1,400,000
Mail Boxes Etc. 15,000 339,375
National Education Corporation 20,000 382,500
PhyMatrix Corporation 20,000 380,000
Precision Response Corporation 10,000 385,000
Romac International, Inc. 106,200 3,239,100
Service Experts, Inc. 35,000 708,750
Sitel Corporation 50,000 2,225,000
Staffmark, Inc. 60,000 847,500
Teletech Holdings, Inc. 35,000 1,277,500
The Vincam Group, Inc. 52,500 2,008,125
Whittman-Hart Inc. 35,000 1,653,750
- ------------------------------------------------------------------------------------------------------------------------------
15,519,387
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 21.5%
America Online, Inc. 35,000 1,246,875
CBT Group PLC, ADR(5) 27,000 1,269,000
Ciber, Inc. 50,000 1,900,000
Citrix Systems, Inc. 8,000 410,000
Claremont Technology Group, Inc. 95,000 3,420,000
Clarify, Inc. 37,400 2,318,800
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMPUTER SOFTWARE/SERVICES - 21.5% (CONTINUED)
Data Dimensions, Inc. 15,000 $ 562,500
Document Sciences Corporation 29,500 372,437
Dynamic Healthcare Technologies, Inc. 80,000 470,000
Excite, Inc. 240,000 2,010,000
Industri-Matematik International Corporation 81,500 1,008,565
Infoseek Corporation 25,000 228,125
Intelligroup, Inc. 1,200 16,650
International Network Services 8,300 291,537
i2 Technologies, Inc. 40,000 1,520,000
Legato Systems, Inc. 25,000 1,187,500
National TechTeam, Inc. 45,400 1,231,475
PeopleSoft, Inc. 30,000 2,497,500
Rational Software Corporation 60,000 2,047,500
Remedy Corporation 35,700 2,856,000
Saville Systems Ireland, ADR(5) 10,000 352,500
Scopus Technology, Inc. 20,000 605,000
Security Dynamics Technologies, Inc. 22,000 1,578,500
Siebel Systems, Inc. 30,000 1,248,750
SQA, Inc. 66,100 1,784,700
Sterling Software, Inc. 25,000 1,909,375
Technology Modeling Associates, Inc. 5,000 65,000
Vanstar Corporation 110,000 2,667,500
Vantive Corporation 80,000 5,180,000
Viasoft, Inc. 10,000 420,000
Xionics Document Technologies, Inc. 1,000 15,000
- ------------------------------------------------------------------------------------------------------------------------------
42,690,789
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL - 7.2%
Abercrombie & Fitch Company, Class A 500 12,250
Barnett, Inc. 68,200 1,611,225
Bed Bath & Beyond, Inc. 60,000 1,642,500
Coinmach Laundry Corporation 10,000 208,750
Cross Continent Auto Retailers, Inc. 1,400 32,200
Henry Schein, Inc. 52,500 2,021,250
The North Face, Inc. 40,000 1,130,000
Opta Food Ingredients, Inc. 50,000 450,000
PETsMART, Inc. 104,300 2,698,762
Regal Cinemas, Inc. 43,650 1,091,250
Rental Service Corporation 42,000 908,250
Renter's Choice, Inc. 77,100 1,445,625
Rockshox, Inc. 1,500 22,500
Sport-Haley, Inc. 80,000 1,000,000
TAG Heuer International, ADR(5) 4,400 86,900
- ------------------------------------------------------------------------------------------------------------------------------
14,361,462
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DATA COMMUNICATIONS/TELECOMMUNICATIONS - 9.9%
APAC Teleservices, Inc. 10,000 $ 512,500
Cascade Communications Corporation 54,000 4,401,000
IXC Communications, Inc. 50,000 1,025,000
LCI International, Inc. 45,000 1,417,500
LCC International Inc., Class A 12,500 228,125
Lightbridge, Inc. 4,000 47,000
Midcom Communications, Inc. 96,000 1,320,000
Natural Microsystems Corporation 38,000 1,828,750
Orckit Communications, Ltd. 1,400 25,725
Pacific Gateway Exchange, Inc. 65,000 1,917,500
PairGain Technologies, Inc. 32,000 2,500,000
Sync Research, Inc. 30,000 465,000
Tellabs, Inc. 55,000 3,884,375
- ------------------------------------------------------------------------------------------------------------------------------
19,572,475
- ------------------------------------------------------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 15.3%
Affiliated Computer Services, Inc., Class A 115,000 6,756,250
Billing Information Concepts 35,000 778,750
Computer Management Sciences, Inc. 153,250 3,639,688
Concord EFS, Inc. 47,500 1,223,125
Envoy Corporation 25,000 968,750
First Data Corporation(1) 46,000 3,754,750
First USA Paymentech, Inc. 68,000 2,762,500
National Data Corporation(1) 25,000 1,090,625
NOVA Corporation 53,000 1,749,000
Renaissance Solutions, Inc. 85,000 3,601,875
Transaction Network Services 45,000 646,875
Transaction Systems Architects, Inc., Class A 79,000 3,337,750
- ------------------------------------------------------------------------------------------------------------------------------
30,309,938
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 0.8%
Sawtek, Inc. 64,000 1,664,000
- ------------------------------------------------------------------------------------------------------------------------------
1,664,000
- ------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 0.5%
Hollywood Entertainment Corporation 45,000 922,500
- ------------------------------------------------------------------------------------------------------------------------------
922,500
- ------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 0.2%
Cuno Inc. 10,000 155,000
Tetra Technologies, Inc. 10,000 237,500
- ------------------------------------------------------------------------------------------------------------------------------
392,500
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES - 3.4%
Bank United Corporation, Class A 3,100 $ 77,112
Financial Federal Corporation 10,000 157,500
First USA, Inc.(1) 30,000 1,661,250
MBNA Corporation(1) 60,000 2,085,000
RAC Financial Group, Inc. 20,000 912,500
Southern Pacific Funding Corporation 70,000 1,767,500
- ------------------------------------------------------------------------------------------------------------------------------
6,660,862
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 4.8%
Emeritus Corporation 17,700 278,775
Foundation Health Corporation(3) 73 0
IDX Systems Corporation 10,000 350,000
Lincare Holdings, Inc. 40,000 1,600,000
Pediatrix Medical Group, Inc. 45,000 2,255,625
Quintiles Transnational Corporation 20,100 1,472,325
Renal Care Group, Inc. 67,800 2,508,600
Renal Treatment Centers, Inc. 20,000 665,000
TheraTx, Inc. 25,000 296,875
- ------------------------------------------------------------------------------------------------------------------------------
9,427,200
- ------------------------------------------------------------------------------------------------------------------------------
LODGING - 1.4%
Doubletree Corporation 35,000 1,395,625
Renaissance Hotel Group N.V. 30,000 600,000
Signature Resorts, Inc. 35,000 831,250
- ------------------------------------------------------------------------------------------------------------------------------
2,826,875
- ------------------------------------------------------------------------------------------------------------------------------
MEDIA - 2.2%
American Radio Systems Corporation, Class A 62,400 2,324,400
Cox Radio, Inc., Class A 10,000 220,000
Emmis Broadcasting Corporation, Class A 22,000 1,017,500
Jacor Communications, Inc. 20,000 690,000
Univision Communications, Inc., Class A 5,400 180,900
- ------------------------------------------------------------------------------------------------------------------------------
4,432,800
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES - 0.7%
Endosonics Corporation 100,000 1,400,000
- ------------------------------------------------------------------------------------------------------------------------------
1,400,000
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SERVICES - 6.7%
Cardiac Pathways Corporation 500 6,625
Enterprise Systems, Inc. 66,300 1,707,225
HBO & Company(1) 65,000 4,338,750
NCS Healthcare, Inc., Class A 33,500 1,051,063
Physician Sales & Services, Inc. 73,300 1,722,550
Shared Medical Systems Corporation(1) 80,000 4,560,000
- ------------------------------------------------------------------------------------------------------------------------------
13,386,213
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RESTAURANTS - 1.5%
Landry's Seafood Restaurants, Inc. 81,600 $2,040,000
Rainforest Cafe, Inc. 30,000 930,000
- ------------------------------------------------------------------------------------------------------------------------------
2,970,000
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 0.3%
Etec Systems, Inc. 20,000 680,000
- ------------------------------------------------------------------------------------------------------------------------------
680,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 92.7% (Cost: $146,992,090) 184,127,391
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
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
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
Midcom Communications, 8.25%, Due 8/15/03, 144A(1,3,4) 1,000,000 1,140,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.6% (Cost: $1,000,000) 1,140,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 93.3% (Cost: $148,042,091) 185,311,344
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash $ 922
Repurchase Agreement
State Street Bank & Trust Company, 4.85%, dated 9/30/96,
due 10/1/96, maturity value $17,874,408 (collateralized by
$12,915,000 par value U.S. Treasury Note, 12.00%, due 8/15/13) 17,872,000
- ------------------------------------------------------------------------------------------------------------------------------
Total Cash and Cash Equivalents - 9.0% 17,872,922
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (2.3)% (4,606,281)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 198,577,985
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) See 4.d. 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, normally to qualified
buyers.
(5) ADR - American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $148,042,091) $ 185,311,344
Cash and cash equivalents 17,872,922
Receivable for investments sold 5,736,043
Receivable for fund shares subscribed 2,365,985
Dividends/interest receivable 41,353
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 211,327,647
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 10,914,203
Payable for fund shares redeemed 1,514,404
Payable to adviser 165,518
Accrued expenses 114,823
Payable to distributor 40,714
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 12,749,662
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 198,577,985
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 143,645,659
Accumulated net investment loss (1,186,764)
Accumulated net realized gain from investments 18,849,837
Net unrealized appreciation on investments 37,269,253
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 198,577,985
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 22.68
Net Asset Value, offering and redemption price per share
(net assets of $198,577,985 applicable to 8,754,983 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 714,168
Dividends 100,522
Other 102,175
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 916,865
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 1,284,519
Distribution fees 321,130
Custodian and transfer agent fees 240,140
Professional fees 108,080
Shareholder reports 94,470
Registration and filing fees 38,576
Trustees' fees and expenses 16,714
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 2,103,629
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (1,186,764)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 7,615,228
Net change in unrealized appreciation on investments 18,570,700
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 26,185,928
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 24,999,164
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
FOR THE NINE FOR THE NINE
MONTHS ENDED MONTHS ENDED
9/30/96 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (1,186,764) $ (1,275,816)
Net realized gain from investments 7,615,228 22,504,993
Net change in unrealized appreciation/(depreciation) on investments 18,570,700 (731,214)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 24,999,164 20,497,963
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - (13,460,981)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (13,460,981)
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets resulting from capital share transactions 5,850,334 (21,583,831)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 5,850,334 (21,583,831)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS 30,849,498 (14,546,849)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 167,728,487 182,275,336
End of period $ 198,577,985 $ 167,728,487
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE FOR THE FOR THE
NINE MONTHS NINE MONTHS FOR THE FOR THE THREE MONTHS FOR THE FOR THE
FOR A SHARE OUTSTANDING ENDED ENDED YEAR ENDED YEAR ENDED ENDED YEAR ENDED YEAR ENDED
THROUGHOUT EACH PERIOD: 9/30/96 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>
Net Asset Value, beginning of period $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50 $ 11.67
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.14) (0.15) (0.17) (0.40) (0.02) (0.15) (0.09)
Net realized gain/(loss) and net change
in unrealized appreciation/
(depreciation) on investments 3.61 2.58 2.26 4.06 (2.04) (0.31) 6.82
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets
Resulting From Operations 3.47 2.43 2.09 3.66 (2.06) (0.46) 6.73
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - - - - - -
Distributions from realized gains on
investments - (1.58) (2.1) - - (0.27) (0.90)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 22.68 $ 19.21 $ 18.36 $ 18.37 $ 14.71 $ 16.77 $ 17.50
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 18.06% 13.50% 12.01% 24.88% (12.28)% (2.55)% 58.70%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period (000s) $198,578 $167,728 $182,275 $168,192 $228,893 $277,531 $141,929
Ratio of Expenses to Average Net Assets 1.64% 1.64% 1.56% 1.60% 1.54% 1.49% 1.59%
Ratio of Net Investment Loss to
Average Net Assets (0.92)% (0.99)% (0.96)% (1.27)% (0.61)% (0.92)% (0.68)%
Portfolio Turnover Rate 170% 147% 280% 274% 43% 124% 147%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Per-share data for each of the periods has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
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 eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At September 30,
1996, 99.9% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At September 30, 1996, approximately 0.1% of the Fund's
portfolio was valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to
<PAGE>
ROBERTSON, STEPHENS & COMPANY
report undistributed net investment income and accumulated net realized gain or
loss accounts in such a manner as to approximate amounts available for future
distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the nine months ended December 31, 1995, were as
follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 6,157,872 $ 131,953,433
Shares reinvested 5,517 107,188
- ----------------------------------------------------------------------------
6,163,389 132,060,621
- ----------------------------------------------------------------------------
Shares redeemed (6,140,926) (126,210,287)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase/(decrease) (22,463) $5,850,334
- ----------------------------------------------------------------------------
4/1/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 2,181,298 $41,669,243
Shares reinvested 686,387 13,000,659
- ----------------------------------------------------------------------------
2,867,685 54,669,902
- ----------------------------------------------------------------------------
Shares redeemed (4,060,471) (76,253,733)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net decrease (1,192,786) $(21,583,831)
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson Stephens Investment
Management, Inc. ("RSIM Inc.") an investment advisory fee calculated at an
annual rate of 1.00% of the average daily net assets of the Fund. For the nine
months ended September 30, 1996, the Fund incurred investment advisory fees of
$1,284,519. RSIM Inc. has agreed to reimburse the Fund for any annual operating
expenses, including investment advisory fees, but excluding distribution fees
that exceed the most stringent limits prescribed by any state in which the
Fund's shares are offered for sale. For the nine months ended September 30,
1996, there was no expected reimbursement of the advisory fees and other
expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM
Inc., the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer,
and a Trustee of the Fund, is also a Director of RSIM Inc., a Member of RS
Group, and Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial
Officer of the Fund, is a Member of RS Group and Chief Financial Officer of RS &
Co. John P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director
of Research for RS & Co. All affiliated and access persons, as defined in the
1940 Act, follow strict guidelines and policies on personal trading as outlined
in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an annual rate of 0.25% of the
average daily net assets of the Fund. For the nine months ended September 30,
1996, the Fund incurred distribution fees of $321,130.
<PAGE>
THE EMERGING GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
e. BROKERAGE COMMISSIONS:
RSIM Inc. may direct orders for investment transactions to RS & Co. as broker-
dealer, subject to Fund policies as stated in the prospectus, regulatory
constraints, and the ability of RS & Co. to provide competitive prices and
commission rates. All investment transactions in which RS & Co. acts as a broker
may only be executed on an agency basis. Subject to certain constraints, the
Fund may make purchases of securities from offerings or underwritings in which
RS & Co. has been retained by the issuer. For the nine months ended September
30, 1996, the Fund paid brokerage commissions of $8,055 to RS & Co., which
represented 3.1% of the total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments) measured as a percentage of the Fund's average monthly
investment portfolio for the nine months ended September 30, 1996, was 170%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $148,042,091. Accumulated net unrealized appreciation on investments was
$37,269,253, consisting of gross unrealized appreciation and depreciation of
$38,575,601 and ($1,306,348), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding short-term investments) were
$292,043,746 and $266,694,542, respectively.
d. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At September 30, 1996, the Fund held restricted securities with an
aggregate value of $43,953. Restricted securities are valued according to the
guidelines and procedures adopted by the Fund's Board of Trustees as outlined in
Note 1.a., paragraph 2.
ACQUISITION
SECURITY SHARES COST VALUE DATE
- ----------------------------------------------------------------------------
Applied Micro Circuits
Corporation, Convertible
Preferred Stock, Series 3 2,381 $50,001 $43,953 9/14/87
- ----------------------------------------------------------------------------
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
Automobile Parts/Equipment - 2.8%
Sudbury, Inc. 72,500 $ 879,063
- ------------------------------------------------------------------------------------------------------------------------------
879,063
- ------------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES - 2.5%
Enterprise Solutions Asia Pacific, Ltd. AUD 40,000 36,415
Insignia Systems, Inc. 181,500 431,062
U-Ship, Inc. 100,000 325,000
- ------------------------------------------------------------------------------------------------------------------------------
792,477
- ------------------------------------------------------------------------------------------------------------------------------
CLOSED-END FUNDS - 5.7%
Cathay Investment Fund, Ltd.(1) HKD 1,173,000 1,365,188
Fleming Poland Fund 15,500 170,500
Greenchip Development Capital, Ltd.(1) AUD 33,640 21,571
Greenchip Emerging Growth, Ltd. AUD 40,610 28,934
Greenchip Investments, Ltd.(1) AUD 30,722 15,565
Sporitelni Privatiz Cesky CZK 9,625 120,544
Sporitelni Privatiz Vseobecny CZK 14,999 37,803
- ------------------------------------------------------------------------------------------------------------------------------
1,760,105
- ------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS SERVICES - 1.8%
CD Radio, Inc. 61,000 442,250
Telecard, Ltd. PKR 98,500 122,682
- ------------------------------------------------------------------------------------------------------------------------------
564,932
- ------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 4.0%
L&M Group Investments, Ltd.(1) SGD 210,000 269,919
Overseas & General, Ltd. AUD 678,751 120,898
PT Super Indah Makmur, Foreign(1,3,6) IDR 125,000 197,751
Van Der Horst, Ltd.(1) SGD 100,000 376,367
Vietnam Industrial Investments, Ltd. AUD 1,521,301 289,037
- ------------------------------------------------------------------------------------------------------------------------------
1,253,972
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER GOODS - 2.4%
Royal Appliance Manufacturing Company 50,000 318,750
Wuxi Little Swan Company, Ltd. HKD 649,300 436,617
- ------------------------------------------------------------------------------------------------------------------------------
755,367
- ------------------------------------------------------------------------------------------------------------------------------
DIAMOND MINING - 0.2%
Carson Gold Corporation CAD 33,800 63,774
- ------------------------------------------------------------------------------------------------------------------------------
63,774
- ------------------------------------------------------------------------------------------------------------------------------
EDUCATION/TRAINING - 0.3%
Industrial Training Corporation 15,900 103,350
- ------------------------------------------------------------------------------------------------------------------------------
103,350
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 1.8%
AER Energy Resources, Inc. 46,000 140,875
Benchmarq Microelectronics, Inc. 15,000 155,625
Spectrum Control, Inc. 70,000 271,250
- ------------------------------------------------------------------------------------------------------------------------------
567,750
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY - 8.2%
Aztec Resources, Ltd. CAD 79,700 $ 140,430
Basin Exploration, Inc. 25,000 175,000
Calahoo Petroleum, Ltd. CAD 494,000 250,245
Canadian Conquest Exploration, Inc. CAD 295,100 454,967
Discovery West Corporation CAD 116,500 295,077
Highridge Exploration, Ltd. CAD 156,800 379,884
Nugas, Ltd. CAD 30,000 49,556
Olympia Energy, Inc., Class A CAD 400,000 208,501
Paragon Petroleum Corporation CAD 95,600 178,974
Place Resources Corporation CAD 294,200 431,980
- ------------------------------------------------------------------------------------------------------------------------------
2,564,614
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY SERVICES - 4.6%
3-D Geophysical, Inc. 14,000 115,500
Computalog, Ltd. CAD 68,400 665,370
DI Industries, Inc. 60,400 98,150
Grant Geophysical, Inc. 205,000 294,687
Veritas DGC, Inc. 14,000 253,359
- ------------------------------------------------------------------------------------------------------------------------------
1,427,066
- ------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 1.5%
Stake Technology, Ltd. 225,000 478,125
- ------------------------------------------------------------------------------------------------------------------------------
478,125
- ------------------------------------------------------------------------------------------------------------------------------
FOOD SERVICE - 2.8%
ABR Holdings, Ltd.(1) SGD 271,000 309,835
New World Coffee, Inc. 213,000 479,250
Want Want Holdings, Ltd., 144A(5) 39,000 92,820
- ------------------------------------------------------------------------------------------------------------------------------
881,905
- ------------------------------------------------------------------------------------------------------------------------------
FOREST PRODUCTS - 2.4%
Sino-Forest Corporation, Class A CAD 689,500 733,995
- ------------------------------------------------------------------------------------------------------------------------------
733,995
- ------------------------------------------------------------------------------------------------------------------------------
GOLD MINING - 6.2%
Bakyrchik Gold PLC GBP 61,000 262,561
Brazilian Resources, Inc. CAD 91,828 31,012
Emperor Mines, Ltd. AUD 151,000 306,016
First Dynasty Mines, Ltd. CAD 105,000 335,328
First Dynasty Mines, Ltd., Restricted(3,7) CAD 100,000 255,488
General Gold Resources NL1 AUD 490,220 190,158
Ghana Gold Mines, Ltd. AUD 337,500 64,123
Guyanor Resources, S.A. CAD 49,900 402,981
Solomon Resources, Ltd., Restricted(3,7) CAD 75,000 86,723
- ------------------------------------------------------------------------------------------------------------------------------
1,934,390
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANY - 1.0%
Techniche, Ltd. AUD 226,700 314,063
- ------------------------------------------------------------------------------------------------------------------------------
314,063
- ------------------------------------------------------------------------------------------------------------------------------
MEDIA - 2.4%
Valuevision International, Inc. 131,000 736,875
- ------------------------------------------------------------------------------------------------------------------------------
736,875
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL SERVICES - 1.8%
In Home Health, Inc. 250,000 $ 546,875
- ------------------------------------------------------------------------------------------------------------------------------
546,875
- ------------------------------------------------------------------------------------------------------------------------------
OTHER BASE METALS - 1.3%
Farallon Resources, Ltd. CAD 20,000 212,907
NDU Resources, Ltd. CAD 100,000 106,453
NDU Resources, Ltd., Restricted(3,7) CAD 75,000 75,848
- ------------------------------------------------------------------------------------------------------------------------------
395,208
- ------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 0.1%
PT Bayer Indonesia, Foreign(1,3,6) IDR 40,000 32,071
- ------------------------------------------------------------------------------------------------------------------------------
32,071
- ------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 2.4%
Catellus Development Corporation 76,700 757,412
- ------------------------------------------------------------------------------------------------------------------------------
757,412
- ------------------------------------------------------------------------------------------------------------------------------
RESTAURANTS - 2.2%
New York Bagel Enterprises 40,000 360,000
Taco Cabana, Inc. 55,000 316,250
- ------------------------------------------------------------------------------------------------------------------------------
676,250
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY PAPER - 2.9%
Climax International Company(1) HKD 3,770,400 589,962
Geographics, Inc. 100,000 306,250
- ------------------------------------------------------------------------------------------------------------------------------
896,212
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 7.5%
Paul Harris Stores, Inc. 120,000 1,200,000
Topps Company, Inc. 150,000 637,500
Video Update, Inc. 100,000 481,250
- ------------------------------------------------------------------------------------------------------------------------------
2,318,750
- ------------------------------------------------------------------------------------------------------------------------------
TEXTILES - 2.7%
Crown Crafts, Inc.(1) 50,000 475,000
PT Apac Centertex Corporation, Foreign(1,6) IDR 962,000 372,708
- ------------------------------------------------------------------------------------------------------------------------------
847,708
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT/SERVICES - 4.2%
China Yuchai International, Ltd.(1) 80,000 410,000
PST Vans, Inc. 100,000 337,500
PT Steady Safe Transportation Services, Foreign(1,3,6) IDR 605,333 560,252
- ------------------------------------------------------------------------------------------------------------------------------
1,307,752
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 75.7% (Cost $24,256,648) 23,590,061
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK
- ------------------------------------------------------------------------------------------------------------------------------
Energy - 1.8%
Mesa, Inc., 8.00%, Expires 6/30/08, Series A(1) 106,214 544,346
- ------------------------------------------------------------------------------------------------------------------------------
544,346
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 1.2%
Tyco Toys Inc., 8.25%, Expires 7/1/00, Series C(1) 60,000 375,000
- ------------------------------------------------------------------------------------------------------------------------------
375,000
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL CONVERTIBLE PREFERRED STOCK - 3.0% (Cost $801,959) $ 919,346
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
WARRANTS
Brazilian Resources, Inc., 1/2 Warrants, Strike CAD 0.50,
Expire 3/4/99(3,4,7) CAD 45,914 12,749
Calahoo Petroleum, Ltd., 3/4 Warrants, Strike CAD 0.65,
Expire 6/28/97(3,4) CAD 292,500 68,860
Farallon Resources, Ltd., Warrants, Strike CAD 6.25,
Expire 5/7/97(3,4) CAD 20,000 126,594
First Dynasty Mines, Ltd., Warrants, Strike CAD 4.50, Expire
3/13/97(3,4,7) CAD 100,000 39,162
Fleming Poland Fund, Warrants, Strike $10.00, Expire 1/1/99(4) 3,100 9,300
Help At Home, Inc., Warrants, Strike $6.00, Expire 12/5/00(4) 239,500 508,938
NDU Resources, Ltd., 1/2 Warrants, Strike CAD 2.31,
Expire 5/17/98(3,4,7) CAD 75,000 -
PT Apac Centertex Corporation Warrants, Strike IDR 1000,
Expire 1/16/97(4) IDR 150,000 13,883
Solomon Resources Ltd., 1/2 Warrants, Strike CAD 1.05,
Expire 1/3/98(3,4,7) CAD 75,000 51,466
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 2.7% (Cost $466,483) 830,952
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 81.4% (Cost $25,525,090) 25,340,359
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 574
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/01/96,
maturity value $5,438,732 (collateralized by $3,930,000 par value
U.S. Treasury Bond, 12.00%, due 8/15/13) 5,438,000
U.S. Treasury Bill, 4.60%, due 10/3/96, $1,000,000 par value 999,744
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 20.7% 6,438,318
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (2.1)% (636,833)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 31,141,844
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) Foreign-denominated security; AUD - Australian Dollar; CAD - Canadian
Dollar; CZK - Czech Koruna; GBP - British Pound; HKD - Hong Kong Dollar;
IDR - Indonesian Rupiah; PKR - Pakistani Rupee; SGD - Singapore Dollar.
(3) Fair-value security. See 1.a. in Notes to Financial Statements.
(4) See 4.e. in Notes to Financial Statements.
(5) These securities may be resold in transactions exempt from registration,
under Rule 144A of the Securities Act of 1933, normally to qualified
institutional buyers.
(6) Shares registered for foreign investors.
(7) See 4.d. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $25,525,090) $ 25,340,359
Cash and cash equivalents 6,438,318
Receivable for investments sold 402,459
Receivable for fund shares subscribed 199,808
Receivable from adviser 132,051
Dividend/interest receivable 16,268
Organizational cost 16,681
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 32,545,944
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 1,227,348
Payable for fund shares redeemed 92,171
Accrued expenses 84,581
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,404,100
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 31,141,844
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 31,178,732
Accumulated net investment loss (61,086)
Accumulated net realized gain from investments 209,264
Net unrealized depreciation on investments (185,066)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 31,141,844
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 12.99
Net Asset Value, offering and redemption price per share
(Net assets of $31,141,844 applicable to 2,397,674 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 137,159
Dividends (net of foreign tax withheld of $3,228) 36,143
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 173,302
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 120,664
Custodian and transfer agent fees 102,452
Professional fees 65,201
Shareholder reports 31,675
Administrative expense 30,166
Distribution fees 30,166
Registration and filing fees 28,152
Trustees' fees and expenses 16,714
Organizational expense 2,882
Insurance fees 283
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 428,355
Less: Reimbursement from adviser (192,109)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 236,246
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (62,944)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 209,264
Net change in unrealized depreciation on investments (205,875)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 3,389
- ------------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($59,555)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE NINE FOR THE
MONTHS ENDED PERIOD ENDED
9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income $ (62,944) $ 1,858
Net realized gain from investments 209,264 -
Net change in unrealized (depreciation)/appreciation on investments (205,875) 20,809
- ------------------------------------------------------------------------------------------------------------------------------
Net (Decrease)/Increase in Net Assets Resulting From Operations (59,555) 22,667
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gain on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 29,558,011 1,620,721
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 29,558,011 1,620,721
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 29,498,456 1,643,388
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,643,388 0
End of period $31,141,844 $1,643,388
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE NINE FOR THE
MONTHS ENDED PERIOD ENDED
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD: 9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.45 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income (0.05) 0.03
Net realized gain and net change in unrealized appreciation on investments 2.59 0.42
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations 2.54 0.45
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - -
Distributions from realized gain on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 12.99 $ 10.45
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 24.31% 4.50%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $31,141,844 $1,643,388
Ratio of Expenses to Average Net Assets 1.94%(2) 1.91%(2)
Ratio of Net Investment (Loss)/Income to Average Net Assets (0.52)%(2) 2.06%(2)
Portfolio Turnover Rate 38% 0%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the nine
months ended September 30, 1996, and the period ended December 31, 1995,
would have been 3.53% and 9.04%, respectively, and the ratio of net
investment loss to average net assets would have been (2.11%) and (5.07)%,
respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Low-Priced Stock Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options and foreign securities are valued at the
last sale price on the principal exchange or market on which they are traded;
or, if there were no sales that day, at the mean between the closing bid and
asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At September 30, 1996, 94.8% of
the Fund's positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources, including quotations from market-makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
September 30, 1996, 5.2% of the Fund's positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterpart to the agreement, realization and/or retention of the collateral may
be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income taxes for the nine months
ended, September 30, 1996. The Fund complied with requirements of the Internal
Revenue Code for qualifying as a regulated investment company so as not to be
subject to federal income tax.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions.
The Fund does not isolate the portion of the fluctuations on investments
resulting from changes in foreign currency exchange rates from the fluctuations
in market prices of investments held. Such fluctuations are included with the
net realized and unrealized gain or loss from investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income and accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996 and for the period from November 15, 1995 (Commencement of
Operations), through December 31, 1995, were as follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 3,720,970 $ 48,862,128
Shares reinvested - -
- ----------------------------------------------------------------------------
3,720,970 48,862,128
- ----------------------------------------------------------------------------
Shares redeemed (1,480,563) (19,304,117)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 2,240,407 $ 29,558,011
- ----------------------------------------------------------------------------
11/15/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 164,230 $1,691,739
Shares reinvested - -
- ----------------------------------------------------------------------------
164,230 1,691,739
- ----------------------------------------------------------------------------
Shares redeemed (6,963) (71,018)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 157,267 $1,620,721
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, LP ("RSIM"), of which Robertson, Stephens &
Company LLC ("RS & Co."), the Fund's Distributor, is the sole Limited Partner,
an investment advisory fee and an administrative services
<PAGE>
THE GLOBAL LOW-PRICED STOCK FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
fee calculated respectively at an annual rate of 1.00% and 0.25% of the average
daily net assets of the Fund. For the nine months ended September 30, 1996, the
Fund incurred investment advisory fees and administrative fees of $120,664 and
$30,166, respectively. RSIM has voluntarily agreed to reimburse the Fund for any
annual operating expenses exceeding an annual expense ratio of 1.95%. For the
nine months ended September 30, 1996, the Adviser agreed to reimburse $192,109
of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, LLC ("RS Group"), the managing member of RS
& Co., the Fund's Distributor and RSIM, the Fund's Adviser. G. Randy Hecht,
President, Chief Executive Officer, and a Trustee of the Fund, is also a
Director of RSIM, a Member of RS Group, and Chief Operating Officer of RS & Co.
Terry R. Otton, Chief Financial Officer of the Fund, is a Member of RS Group and
Chief Financial Officer of RS & Co. John P. Rohal, a Trustee of the Fund, is a
Member of RS Group and Director of Research for RS & Co. All affiliated and
access persons, as defined in the 1940 Act, follow strict guidelines and
policies on personal trading as outlined in the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended September 30, 1996, RS & Co.
agreed to waive distribution fees worth $30,166.
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 underwriting in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions $1,910 to RS & Co., which represented 2.0% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
options and short-term investments), measured as a percentage of the Fund's
average monthly investment portfolio for the nine months ended September 30,
1996, was 38%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $25,525,090. Accumulated net unrealized depreciation on investments was
$185,066,
<PAGE>
ROBERTSON, STEPHENS & COMPANY
consisting of gross unrealized appreciation and depreciation of $3,153,479 and
$(3,338,545), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding short-term investments) were
$29,495,463 and $4,803,571, respectively.
d. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At September 30, 1996, the Fund held restricted securities with an
aggregate value of $521,436, which represented 1.6% 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 1.a., paragraph 2.
ACQUISITION
SHARES COST VALUE DATE
SECURITY (000) (000) (000) (000)
- ----------------------------------------------------------------------------
Brazilian Resources,
Inc., 1/2 Warrants 46 $ 0 $ 13 3/01/96
First Dynasty Mines, Ltd. 100 310 255 9/13/96
First Dynasty Mines,
Ltd., Warrants 100 0 39 9/13/96
NDU Resources, Ltd. 75 110 76 5/16/96
NDU Resources,
Ltd., 1/2 Warrants 75 0 0 5/16/96
Solomon Resources Ltd. 75 47 87 7/03/96
Solomon Resources
Ltd., 1/2 Warrants 75 0 51 7/03/96
- ----------------------------------------------------------------------------
e. OPTIONS AND WARRANTS:
Options and warrants normally entitle the holder to purchase a proportionate
number 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
valued such that when the exercise price of the option or warrant was less than
that of the underlying common stock, the option or warrant was 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. If the exercise
price was greater than that of the underlying common stock, the option or
warrant was valued at zero. This valuation method is subject to frequent review
and is in accordance with the guidelines and procedures adopted by the Fund's
Board of Trustees.
f. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At September 30, 1996, the Fund had its largest
concentrated foreign investments, worth 15.1% of the Fund's total assets, in
Canada.
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(4) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
Aluminum - 4.7%
Alumax, Inc. 19,000 $ 636,500
Kaiser Aluminum Corporation 98,500 1,145,062
MAXXAM, Inc. 47,600 2,106,300
- ------------------------------------------------------------------------------------------------------------------------------
3,887,862
- ------------------------------------------------------------------------------------------------------------------------------
COPPER & MINING - 0.4%
Indochina Goldfields, Ltd. CAD 43,000 320,424
- ------------------------------------------------------------------------------------------------------------------------------
320,424
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 30.1%
Abacan Corporation CAD 200,000 1,365,538
Alberta Energy Company, Ltd.(1) CAD 23,400 465,560
Alberta Energy Company, Ltd.(1) 13,000 258,375
Aztec Resources, Ltd. CAD 411,500 725,057
Basin Exploration, Inc. 80,000 560,000
Beau Canada Exploration, Ltd. CAD 509,600 931,579
Burlington Resources, Inc.(1) 30,000 1,331,250
Burner Exploration, Ltd. CAD 473,038 524,402
Calahoo Petroleum, Ltd. CAD 2,070,000 1,048,600
Canadian Conquest Exploration, Inc. CAD 721,600 1,112,517
Discovery West Corporation CAD 163,000 412,855
Encal Energy, Ltd. CAD 39,100 97,599
Morrison Petroleum, Ltd.(1) CAD 280,400 1,821,849
New Cache Petroleums, Ltd. CAD 18,000 105,058
Noble Affiliates, Inc.(1) 10,000 422,500
Olympia Energy, Inc., Class A CAD 465,000 242,383
Paloma Petroleum, Ltd. CAD 40,800 71,889
Paragon Petroleum, Ltd. CAD 294,300 550,962
Petro-Canada Installment Receipts CAD 177,800 1,716,519
Petroleum Securities Australia, Ltd., ADR(2) 51,500 1,197,375
Place Resources Corporation, Class A CAD 553,100 812,128
Ranger Oil, Ltd.(1) 100,000 750,000
Remington Energy, Ltd. CAD 50,000 321,195
Tarragon Oil & Gas, Ltd. CAD 50,000 479,040
Ulster Petroleums, Ltd. CAD 338,900 2,239,263
United Meridian Corporation 42,000 1,911,000
Vastar Resources, Inc.(1) 100,000 3,225,000
- ------------------------------------------------------------------------------------------------------------------------------
24,699,493
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(4) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY SERVICES - 10.7%
3-D Geophysical, Inc. 5,000 $ 41,250
Coastal Corporation(1) 32,000 1,320,000
Computalog, Ltd. CAD 195,800 1,904,669
Dailey Petroleum Services Corporation 250,000 2,187,500
Enerflex Systems, Ltd.(1) CAD 31,000 716,908
KN Energy, Inc.(1) 35,800 1,261,950
USX Delhi Group(1) 96,400 1,361,650
- ------------------------------------------------------------------------------------------------------------------------------
8,793,927
- ------------------------------------------------------------------------------------------------------------------------------
GOLD MINING - 13.1%
Bakyrchik Gold PLC GBP 265,000 1,140,632
Cambiex Exploration, Inc. CAD 781,500 717,183
Corona Goldfields, Inc., Restricted(3,6) CAD 412,500 302,841
Da Capo Resources, Ltd. CAD 12,000 31,716
Eagle Mining Corporation NL AUD 161,000 354,322
Emperor Mines, Ltd. AUD 128,500 260,418
Euro-Nevada Mining Corporation, Ltd.(1) CAD 11,900 344,655
First Dynasty Mines, Ltd. CAD 224,400 716,643
Franco-Nevada Mining Corporation, Ltd.(1) CAD 36,740 1,376,974
General Gold Resources NL AUD 518,198 201,011
Golden Star Resources, Ltd. CAD 78,000 1,219,734
Guyanor Resources, S.A., Class B CAD 74,400 600,837
Harmony Gold Mining Company, Ltd., ADR(2) 30,000 251,250
Leo Shield Exploration NL AUD 1,479,671 691,105
Menzies Gold NL AUD 492,311 233,840
Normandy Mining Limited(1) AUD 742,969 1,011,642
Randgold and Exploration Company, Ltd.(1) SGD 107,500 776,066
Solomon Resources, Ltd., Restricted(3,6) CAD 75,000 86,723
Tan Range Exploration Corporation CAD 490,000 408,303
- ------------------------------------------------------------------------------------------------------------------------------
10,725,895
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES - 0.5%
Fresenius Medical Care AG, ADR(1) 18,436 428,644
- ------------------------------------------------------------------------------------------------------------------------------
428,644
- ------------------------------------------------------------------------------------------------------------------------------
MINING AND CONSTRUCTION EQUIPMENT - 0.6%
KCI Konecranes International Corporation FIM 18,000 500,087
- ------------------------------------------------------------------------------------------------------------------------------
500,087
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(4) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OTHER BASE METALS - 4.6%
Amarc Resources, Ltd. CAD 30,900 $77,131
Amarc Resources, Ltd., Restricted(3,6) CAD 65,000 105,462
Anooraq Resources Corporation CAD 100,000 256,956
Anooraq Resources Corporation, Restricted(3,6) CAD 65,000 125,266
Farallon Resources, Ltd. CAD 270,800 2,882,755
NDU Resources, Ltd., Restricted(3,6) CAD 75,000 75,848
Valerie Gold Resources, Ltd. CAD 32,000 263,123
- ------------------------------------------------------------------------------------------------------------------------------
3,786,541
- ------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 3.2%
Catellus Development Corporation 148,000 1,461,500
Horsham Corporation(1) 70,000 1,137,500
- ------------------------------------------------------------------------------------------------------------------------------
2,599,000
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY CHEMICALS - 9.0%
Cabot Corporation(1) 50,000 1,393,750
NL Industries, Inc.(1) 21,500 225,750
W. R. Grace & Company 110,000 5,775,000
- ------------------------------------------------------------------------------------------------------------------------------
7,394,500
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 76.9% (Cost: $59,852,697) 63,136,373
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCK
Fresenius Medical Care AG(1) 70,000 16,100
Mesa, Inc. - Series A, 8.000%, 6/30/08(1) 267,557 1,371,227
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCK - 1.7% (Cost: $1,135,603) 1,387,327
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
- ------------------------------------------------------------------------------------------------------------------------------
Randgold and Exploration Company, Ltd., 7.000%, Due 10/03/01(1) 750,000 753,750
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.9% (Cost: $765,750) 753,750
<CAPTION>
FOREIGN CURRENCY(4) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------
Amarc Resources, Ltd., Warrants, Strike CAD2.05,
Expire 07/16/97(3,5,6) CAD 65,000 55,741
Anooraq Resources Corporation, Warrants, Strike CAD2.07,
Expire 09/12/97(3,5,6) CAD 65,000 65,220
Brazilian Resources, Inc., 1/2 Warrants, Strike CAD0.50,
Expire 03/04/99(3,5) CAD 61,218 16,998
Calahoo Petroleum, Ltd., 3/4 Warrants, Strike CAD0.65,
Expire 06/28/97(3,5) CAD 1,327,500 312,517
Farallon Resources, Ltd. Warrants, Strike CAD6.25,
Expire 05/07/97(3,5) CAD 45,000 284,837
NDU Resources, Ltd., Warrants, Strike CAD2.31,
Expire 05/17/98(3,5,6) CAD 75,000 -
Solomon Resources, Ltd., 1/2 Warrants, Strike CAD1.05,
Expire 01/03/98(3,5,6) CAD 75,000 51,466
Valerie Gold Resources, Ltd., 1/2 Warrants, Strike CAD20.00,
Expire 12/27/97(3,5) CAD 3,500 -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 1.0% (Cost: $0.00) 786,779
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(4) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Menzies Gold NL., Options, Strike AUD1.00, Expire 04/30/98(3,5) AUD 57,437 $ -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS - 0.0% (COST: $0.00) -
<CAPTION>
CONTRACTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
S&P 500 INDEX PUT OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
December 96 650 175 133,437
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PUT OPTIONS - 0.2% (Cost: $208,337) 133,437
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 80.7% (Cost: $61,962,387) 66,197,666
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 972
Australian Dollars 1,013
U.S. Treasury Bill, 4.60%, Due 10/03/96, $5,000,000 par 4,998,722
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96, due 10/1/96,
maturity value $12,123,633 (collateralized by $8,760,000 par value
U.S. Treasury Notes, 12.00%, due 8/15/13) 12,122,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 20.9% 17,122,707
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (1.6)% (1,267,205)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 82,053,168
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) ADR - American Depository Receipts.
(3) Fair-valued security. See 1.a. in Notes to Financial Statements.
(4) Foreign-denominated security; AUD - Australian Dollar; CAD - Canadian
Dollar; FIM - Finnish Markka; GBP - British Pound; SGD - Singapore Dollar.
(5) See 4.f. in Notes to Financial Statements.
(6) See 4.e. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $61,962,387) $ 66,197,666
Cash and cash equivalents 17,122,707
Receivable for investments sold 1,636,229
Receivable for fund shares subscribed 1,044,546
Receivable from adviser 51,665
Organizational cost 28,010
Dividend/interest receivable 16,919
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 86,097,742
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 3,816,147
Payable for fund shares redeemed 131,875
Accrued expenses 81,141
Payable to distributor 15,411
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 4,044,574
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 82,053,168
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 77,435,304
Accumulated net investment loss (21,487)
Accumulated net realized gain on investments 404,044
Net unrealized appreciation on investments 4,235,307
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 82,053,168
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 13.14
Net Asset Value, offering and redemption price per share
(Net assets of $82,053,168 applicable to 6,245,663 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 306,356
Dividends (net of foreign tax withheld of $3,692) 122,247
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 428,603
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 231,097
Custodian and transfer agent fees 96,292
Professional fees 62,788
Administrative expense 57,774
Distribution fees 57,774
Shareholder reports 31,800
Registration and filing fees 20,352
Trustees' fees and expenses 16,714
Organizational expense 4,891
Insurance fees 213
Other 22
- ------------------------------------------------------------------------------------------------------------------------------
Total expenses 579,717
Less: Reimbursement from adviser (128,721)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 450,996
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (22,393)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments 404,044
Net change in unrealized appreciation on investments 4,229,217
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 4,633,261
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,610,868
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE NINE FOR THE
MONTHS ENDED PERIOD ENDED
9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income $ (22,393) $ 906
Net realized gain on investments 404,044 -
Net change in unrealized appreciation on investments 4,229,217 6,090
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,610,868 6,996
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gain on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 76,650,556 784,748
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 76,650,556 784,748
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 81,261,424 791,744
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 791,744 0
End of period $82,053,168 $791,744
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE NINE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.12 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment (loss)/income (0.01) 0.02
Net realized gain and change in unrealized appreciation on investments 3.03 0.10
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase In Net Assets Resulting From Operations 3.02 0.12
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS FROM NET INVESTMENT INCOME - -
Distributions from realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.14 $ 10.12
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 29.84% 1.20%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 82,053,168 $ 791,744
Ratio of Expenses to Average Net Assets 1.93%(2) 2.60%(2)
Ratio of Net Investment (Loss)/Income to Average Net Assets (0.10)%(2) 1.84%(2)
Portfolio Turnover Rate 60% 0%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the nine
months ended September 30, 1996, and the period from November 15, 1995
(Commencement of Operations), through December 31, 1995, would have been
2.48% and 14.25%, respectively, and the ratio of net investment loss to
average net assets would have been (0.65)% and (9.81)%, respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Global Natural Resources Fund (the "Fund") is a series of
the Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act") as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on November 15, 1995. The Trust offers eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1
SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities, including options and foreign securities, are valued at
the last sale price on the principal exchange or market on which they are
traded; or, if there were no sales that day, at the mean between the closing bid
and asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At September 30, 1996, 97.9% of
the Fund's positions were valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources, including quotations from market-makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
September 30, 1996, 2.1% of the Fund's positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts, and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions. The Fund does not isolate the portion of the
fluctuations on investments resulting from changes in foreign currency exchange
rates from the fluctuations in market prices of investments held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and accumulated net realized gain or loss accounts in such a
manner as to approximate amounts available for future distributions to
shareholders, if any.
NOTE 2
CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the period from November 15, 1995 (commencement of
operations), through December 31, 1995, were as follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 8,184,634 $101,922,661
Shares reinvested - -
- ----------------------------------------------------------------------------
8,184,634 101,922,661
- ----------------------------------------------------------------------------
Shares redeemed (2,017,182) (25,272,105)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 6,167,452 $ 76,650,556
- ----------------------------------------------------------------------------
11/15/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 79,226 $ 794,930
Shares reinvested - -
- ----------------------------------------------------------------------------
79,226 794,930
- ----------------------------------------------------------------------------
Shares redeemed (1,015) (10,182)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 78,211 $784,748
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the
<PAGE>
THE GLOBAL NATURAL RESOURCES FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
average daily net assets of the Fund. For the nine months ended September 30,
1996, the Fund incurred investment advisory fees and administrative fees of
$231,097 and $57,774, respectively. RSIM has voluntarily agreed to reimburse the
Fund for any annual operating expenses exceeding an annual expense ratio of
1.95%. For the nine months ended September 30, 1996, the Adviser agreed to
reimburse $128,721 of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson Stephens & Company LLC ("RS & Co."), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer, and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Andrew P. Pilara, Jr., Portfolio Manager, is a member of RS Group.
All affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended September 30, 1996, the Fund
incurred distribution fees of $57,774.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions of $2,302 to RS & Co., which represented 0.9% of
total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the nine months ended September 30, 1996, was 60%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $61,962,387. Accumulated net unrealized appreciation on investments was
$4,235,307, consisting of gross unrealized appreciation and depreciation of
$6,914,068 and $(2,678,761), respectively.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options and short-term
investments) were $78,973,852 and $14,655,458, respectively.
d. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers. Moreover, securities
of many foreign companies and markets may be less liquid and their prices more
volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At September 30, 1996, the Fund had its largest
concentration of foreign investments, worth 33% of the Fund's total assets, in
Canada.
e. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At September 30, 1996, the Fund held restricted securities with an
aggregate value of $868,567, which represented 1.0% 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 1.a., paragraph 2.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- ----------------------------------------------------------------------------
Amarc Resources, Ltd. 65 $ 97 $ 105 7/17/96
Amarc Resources, Ltd. Warrants 65 0 56 7/17/96
Anooraq Resources Corporation 65 98 125 9/11/96
Anooraq Resources Corporation
Warrants 65 0 65 9/11/96
Corona Goldfields, Inc. 413 300 303 6/18/96
NDU Resources, Ltd. 75 110 76 5/16/96
NDU Resources, Ltd. Warrants 75 0 0 5/16/96
Solomon Resources, Ltd. 75 47 87 7/03/96
Solomon Resources, Ltd.
Warrants 75 0 51 7/03/96
- ----------------------------------------------------------------------------
f. OPTIONS AND WARRANTS:
Options and warrants normally entitle the holder to purchase a proportionate
number 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
valued such that when the exercise price of the option or warrant was less than
that of the underlying common stock, the option or warrant was 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. If the exercise
price was greater than that of the underlying common stock, the option or
warrant was valued at zero. This valuation method is subject to frequent review
and is in accordance with the guidelines and procedures adopted by the Fund's
Board of Trustees.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 3.3%
Bank United Corporation, Class A(1) 50,000 $ 1,243,750
Collective Bancorp, Inc. 80,000 2,280,000
Commercial Federal Corporation 70,000 3,010,000
Corestates Financial Corporation 80,000 3,460,000
- ------------------------------------------------------------------------------------------------------------------------------
9,993,750
- ------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 0.4%
FemRx, Inc.(1) 130,000 1,072,500
- ------------------------------------------------------------------------------------------------------------------------------
1,072,500
- ------------------------------------------------------------------------------------------------------------------------------
BUILDING PRODUCTS - 2.6%
BMC West Corporation(1) 240,000 3,330,000
Royal Plastics Group, Ltd.(1) CAD 125,000 2,133,654
Texas Industries, Inc. 40,000 2,395,000
- ------------------------------------------------------------------------------------------------------------------------------
7,858,654
- ------------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES - 2.7%
National Education Corporation(1) 220,000 4,207,500
U-Ship, Inc.(1) 250,000 812,500
Wallace Computer Services, Inc. 105,000 2,966,250
- ------------------------------------------------------------------------------------------------------------------------------
7,986,250
- ------------------------------------------------------------------------------------------------------------------------------
CLOTHING/RETAIL - 5.9%
Adidas AG, ADR, 144A(3,4,6) 60,000 2,730,000
Brown Group, Inc. 110,000 2,557,500
Regis Corporation 85,000 2,210,000
Saks Holdings, Inc.(1) 93,000 3,255,000
Sport-Haley, Inc.(1) 230,000 2,875,000
Vans, Inc.(1) 200,000 3,825,000
- ------------------------------------------------------------------------------------------------------------------------------
17,452,500
- ------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.6%
ADT, Ltd.(1) 180,000 3,442,500
Pittston Brink's Group 110,000 3,451,250
Western Staff Services, Inc.(1) 170,000 2,571,250
Youth Services International, Inc.(1) 90,000 1,248,750
- ------------------------------------------------------------------------------------------------------------------------------
10,713,750
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 3.2%
Applied Magnetics Corporation(1) 100,000 1,775,000
Data Translation, Inc.(1) 125,000 1,406,250
Scientific Games Holdings Corporation(1) 145,000 3,026,875
Sun Microsystems, Inc.(1) 55,000 3,416,875
- ------------------------------------------------------------------------------------------------------------------------------
9,625,000
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPUTER SOFTWARE - 4.2%
BMC Software, Inc.(1) 50,000 $ 3,975,000
Computer Associates International, Inc.(1) 47,000 2,808,250
Cylink Corporation(1) 60,000 862,500
Dynamic Healthcare Technologies, Inc.(1) 230,000 1,351,250
Eagle Point Software Corporation(1) 100,000 525,000
Platinum Technology, Inc.(1) 140,000 1,767,500
Synopsys, Inc.(1) 30,000 1,383,750
- ------------------------------------------------------------------------------------------------------------------------------
12,673,250
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 3.0%
Compuware Corporation(1) 85,000 3,888,750
Software 2000, Inc.(1) 135,000 1,316,250
Vanstar Corporation(1) 150,000 3,637,500
- ------------------------------------------------------------------------------------------------------------------------------
8,842,500
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL - 2.1%
Abercrombie & Fitch Company, Class A(1) 9,100 222,950
CompUSA, Inc.(1) 60,000 3,240,000
Gap, Inc. 95,000 2,743,125
- ------------------------------------------------------------------------------------------------------------------------------
6,206,075
- ------------------------------------------------------------------------------------------------------------------------------
DATA COMMUNICATIONS - 1.6%
Cabletron Systems, Inc.(1) 40,000 2,735,000
FORE Systems, Inc.(1) 50,000 2,068,750
- ------------------------------------------------------------------------------------------------------------------------------
4,803,750
- ------------------------------------------------------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 3.2%
Affiliated Computer Services, Inc., Class A(1) 50,000 2,937,500
Electronic Data Systems Corporation 55,000 3,375,625
SunGard Data Systems, Inc.(1) 45,000 2,025,000
Equifax, Inc. 50,000 1,318,750
- ------------------------------------------------------------------------------------------------------------------------------
9,656,875
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS - 1.9%
American Power Conversion Corporation(1) 170,000 2,486,250
Harman International Industries, Inc. 62,500 3,046,875
- ------------------------------------------------------------------------------------------------------------------------------
5,533,125
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 2.8%
El Paso Natural Gas Company 70,000 3,080,000
Noble Affiliates, Inc. 60,000 2,535,000
Questar Corporation 80,500 2,847,688
- ------------------------------------------------------------------------------------------------------------------------------
8,462,688
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY SERVICES - 4.1%
3-D Geophysical, Inc.(1) 100,000 $ 825,000
Drilex International, Inc.(1) 110,000 1,608,750
Smith International, Inc.(1) 100,000 3,512,500
Tuboscope Vetco International Corporation(1) 165,000 2,578,125
Varco International, Inc.(1) 115,000 2,026,875
Veritas DGC, Inc.(1) 90,000 1,620,000
- ------------------------------------------------------------------------------------------------------------------------------
12,171,250
- ------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 2.0%
Anchor Gaming(1) 12,500 778,125
Hollywood Entertainment Corporation(1) 135,000 2,767,500
International Game Technology, Inc.(1) 120,000 2,460,000
- ------------------------------------------------------------------------------------------------------------------------------
6,005,625
- ------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 1.7%
Philip Environmental, Inc.(1) 260,000 2,470,000
Tetra Technologies, Inc.(1) 140,000 2,572,500
- ------------------------------------------------------------------------------------------------------------------------------
5,042,500
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 2.6%
Amresco, Inc.(1) 100,000 2,287,500
Conseco, Inc. 60,000 2,955,000
Federal National Mortgage Association 75,000 2,615,625
- ------------------------------------------------------------------------------------------------------------------------------
7,858,125
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE/HMO - 1.7%
Diagnostic Health Services, Inc.(1) 200,000 1,675,000
Renal Care Group, Inc.(1) 20,000 740,000
TheraTx, Inc.(1) 100,000 1,187,500
Vencor, Inc.(1) 50,000 1,612,500
- ------------------------------------------------------------------------------------------------------------------------------
5,215,000
- ------------------------------------------------------------------------------------------------------------------------------
INSURANCE - 2.5%
Everest Reinsurance Holdings, Inc. 80,000 1,980,000
GCR Holdings, Ltd. 120,000 2,895,000
W.R. Berkley Corporation 55,000 2,516,250
- ------------------------------------------------------------------------------------------------------------------------------
7,391,250
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 3.6%
American Homestar Corporation(1) 42,000 1,021,125
Cavalier Homes, Inc. 120,000 2,220,000
LSI Industries, Inc. 140,000 2,240,000
Oregon Metallurgical Corporation 15,000 487,500
Skyline Corporation 160,000 4,400,000
UNR Industries, Inc. 75,000 496,875
- ------------------------------------------------------------------------------------------------------------------------------
10,865,500
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDIA - 1.7%
Liberty Media Corporation, Grade A(1) 100,000 $ 2,862,500
Lin Television Corporation(1) 40,000 1,640,000
Univision Communications, Inc., Class A(1) 17,000 569,500
- ------------------------------------------------------------------------------------------------------------------------------
5,072,000
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/DEVICES - 2.2%
Meridian Diagnostics, Inc. 155,000 2,073,125
Novoste Corporation(1) 194,000 2,570,500
Spine-Tech, Inc.(1) 65,000 1,820,000
- ------------------------------------------------------------------------------------------------------------------------------
6,463,625
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 1.0%
Biosource International, Inc.(1) 130,000 1,170,000
PLC Systems, Inc.(1) 70,000 1,925,000
- ------------------------------------------------------------------------------------------------------------------------------
3,095,000
- ------------------------------------------------------------------------------------------------------------------------------
MOTOR VEHICLES/PARTS SUPPLIERS - 0.8%
Boyds Wheels, Inc.(1) 190,000 2,493,750
- ------------------------------------------------------------------------------------------------------------------------------
2,493,750
- ------------------------------------------------------------------------------------------------------------------------------
NETWORK SYSTEMS - 2.3%
3Com Corporation(1) 40,000 2,402,500
Storage Technology Corporation(1) 85,000 3,219,375
Teledata Communications, LTD.(1) 75,000 1,378,125
- ------------------------------------------------------------------------------------------------------------------------------
7,000,000
- ------------------------------------------------------------------------------------------------------------------------------
OIL/GAS DRILLING - 4.4%
Diamond Offshore Drilling, Inc.(1) 52,500 2,887,500
Global Marine, Inc.(1) 115,000 1,811,250
Noble Drilling Corporation(1) 220,000 3,327,500
Rowan Companies, Inc.(1) 75,000 1,396,875
Transocean Offshore, Inc. 60,003 3,675,183
- ------------------------------------------------------------------------------------------------------------------------------
13,098,308
- ------------------------------------------------------------------------------------------------------------------------------
PUBLISHING - 1.0%
Deluxe Corporation 75,000 2,831,250
- ------------------------------------------------------------------------------------------------------------------------------
2,831,250
- ------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 2.4%
Allergan, Inc. 70,000 2,668,750
Bergen Brunswig Corporation, Class A 100,000 3,175,000
Cardinal Health, Inc. 15,000 1,239,375
- ------------------------------------------------------------------------------------------------------------------------------
7,083,125
- ------------------------------------------------------------------------------------------------------------------------------
R.E.I.T. - 1.4%
Ambassador Apartments, Inc.(1) 80,000 1,430,000
Bedford Property Investors, Inc. 95,000 1,353,750
Storage Technology Corporation(1) 85,000 1,331,250
- ------------------------------------------------------------------------------------------------------------------------------
4,115,000
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SPECIALTY CHEMICALS - 1.9%
Monsanto Company 100,000 $ 3,650,000
Olin Corporation 25,000 2,100,000
- ------------------------------------------------------------------------------------------------------------------------------
5,750,000
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY WHOLESALE - 1.3%
Fisher Scientific International, Inc. 92,500 3,815,625
- ------------------------------------------------------------------------------------------------------------------------------
3,815,625
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 1.5%
Comsat Corporation 125,000 2,828,125
Loral Space & Communications(1) 100,000 1,575,000
- ------------------------------------------------------------------------------------------------------------------------------
4,403,125
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.4%
Atlantic Southeast Airlines, Inc. 100,000 2,200,000
Genesee & Wyoming, Inc., Class A(1) 100,000 2,725,000
Hvide Marine, Inc., Class A(1) 175,000 2,275,000
- ------------------------------------------------------------------------------------------------------------------------------
7,200,000
- ------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.3%
Houston Industries, Inc. 90,000 1,991,250
Montana Power Company 55,000 1,175,625
Oklahoma Gas and Electric Company 60,000 2,400,000
Unicom Corporation 50,000 1,256,250
Western Resources, Inc. 105,000 3,058,125
- ------------------------------------------------------------------------------------------------------------------------------
9,881,250
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 86.3% (Cost: $229,133,251) 257,731,975
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
CONTRACTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
S&P INDEX PUT OPTIONS
December 96 665 500 525,000
December 96 675 300 371,250
- ------------------------------------------------------------------------------------------------------------------------------
896,250
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PUT OPTIONS - 0.3% (Cost: 1,363,650) 896,250
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 0.4%
The Sakura Bank, Ltd. 7.50%, Expires 10/01/01, 144A(3,4) 18 1,065,530
- ------------------------------------------------------------------------------------------------------------------------------
1,065,530
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 0.8%
Mesa, Inc., 8.00%, Expires 6/30/08, Series A 470,374 2,410,664
- ------------------------------------------------------------------------------------------------------------------------------
2,410,664
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INDUSTRIAL COMPONENTS - 0.7%
Westinghouse Electric Corporation, $1.30, Expires 6/01/97,
Series C(3) 125,000 $ 2,140,625
- ------------------------------------------------------------------------------------------------------------------------------
2,140,625
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 0.9%
Tyco Toys Inc., 8.25%, Expires 7/01/00, Series C 410,000 2,562,500
- ------------------------------------------------------------------------------------------------------------------------------
2,562,500
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.4%
Merrill Lynch 'COX', STRYPES, 6.00%, Expires 6/01/99(5) 60,000 1,200,000
- ------------------------------------------------------------------------------------------------------------------------------
1,200,000
- ------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 0.9%
Trans World Airlines, Inc., 8.00%, Expires 12/31/49, 144A(3,4) 75,000 2,606,250
- ------------------------------------------------------------------------------------------------------------------------------
2,606,250
- ------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 0.6%
CalEnergy Capital Trust, 6.25%, Expires 3/10/16, 144A(3,4) 30,000 1,845,000
- ------------------------------------------------------------------------------------------------------------------------------
1,845,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 4.6% (Cost: $13,633,203) 13,830,569
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 0.4%
SoftKey International, Inc., 5.50%, Due 11/01/00, 144A(3,4) 1,500,000 1,209,375
- ------------------------------------------------------------------------------------------------------------------------------
1,209,375
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL - 0.1%
Sports and Recreation, Inc. 4.25%, Due 11/01/00(3) 500,000 370,000
- ------------------------------------------------------------------------------------------------------------------------------
370,000
- ------------------------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.2%
Intermagnetics General Corporation, 5.75%, Due 9/15/03, 144A(3,4) 500,000 507,500
- ------------------------------------------------------------------------------------------------------------------------------
507,500
- ------------------------------------------------------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 0.8%
Molten Metal Technology, Inc., 5.50%, Due 5/01/06, 144A(3,4) 2,250,000 2,295,000
- ------------------------------------------------------------------------------------------------------------------------------
2,295,000
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE/MEDICAL TECHNOLOGY/HMO - 0.4%
Healthsource, Inc., 5.00% Due 3/01/03, 144A(3,4) 1,750,000 1,371,563
- ------------------------------------------------------------------------------------------------------------------------------
1,371,563
- ------------------------------------------------------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS - 0.8%
Empresas ICA Sociedad 5.00%, Due 3/15/04(3) 3,500,000 2,450,000
- ------------------------------------------------------------------------------------------------------------------------------
2,450,000
- ------------------------------------------------------------------------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL - 0.2%
Robbins & Myers, Inc. 6.50%, Due 09/01/03(3) 500,000 515,000
- ------------------------------------------------------------------------------------------------------------------------------
515,000
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) PAR VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL SERVICES - 0.7%
ARV Assisted Living Concepts, Inc., 6.75%, Due 4/01/06, 144A(3,4) 1,000,000 $ 970,000
Renal Treatment Centers, Inc., 5.625%, Due 7/15/06, 144A3, 4 1,000,000 1,162,500
- ------------------------------------------------------------------------------------------------------------------------------
2,132,500
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 0.4%
Rotech Medical Corporation, 5.25%, Due 6/01/03, 144A(3,4) 1,250,000 1,075,000
- ------------------------------------------------------------------------------------------------------------------------------
1,075,000
- ------------------------------------------------------------------------------------------------------------------------------
OIL/GAS SERVICES - 0.7%
Nabors Industries, Inc., 5.00%, Due 5/15/06(3) 1,500,000 1,528,125
Pride Petroleum Services, Inc., 6.25%, Due 2/15/06 500,000 650,000
- ------------------------------------------------------------------------------------------------------------------------------
2,178,125
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.7%
Midcom Communications, 144A, 8.25%, Due 9/15/03(3,4) 1,900,000 2,166,000
- ------------------------------------------------------------------------------------------------------------------------------
2,166,000
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 0.5%
Broadband Technologies, Inc., 5.00%, Due 5/15/01, 144A(3,4) 1,750,000 1,408,750
- ------------------------------------------------------------------------------------------------------------------------------
1,408,750
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 5.9% (Cost: $17,724,226) 17,678,813
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT BONDS
- ------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury STRIP, Due 11/15/24 9,140,000 1,284,810
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL GOVERNMENT BONDS - 0.4% (Cost:$1,264,231) 1,284,810
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 97.5% (Cost: $263,118,561) 291,422,417
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Cash 1,432,819
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96,
due 10/01/96, maturity value, $7,814,053 (collateralized by
$5,650,000 par value U.S. Treasury Notes, 12.00%, due 8/15/13) 7,813,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES
SOLD SHORT - 3.1% 9,245,819
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 1.8% 5,389,997
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
SECURITIES SOLD SHORT - (2.6)% (Proceeds: $5,389,997) $ (7,852,812)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.2% 621,423
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 298,826,844
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Non-income-producing security.
(2) Foreign-denominated security; CAD - Canadian Dollar.
(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, normally to qualified
institutional buyers.
(5) STRYPES -- Structured Yield Product Exchangeable for Stock. (Cox
Communications), Due 1999.
(6) ADR - American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $263,118,561) $ 291,422,417
Deposits with brokers and custodian bank for securities sold short 9,245,819
Receivable from brokers for securities sold short 5,389,997
Receivable for investments sold 11,376,176
Receivable for fund shares subscribed 1,385,052
Dividends/interest receivable 583,552
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 319,403,013
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Securities sold short (Proceeds: $5,389,997) 7,852,812
Payable for investments purchased 5,660,665
Payable to adviser 232,683
Payable for fund shares redeemed 200,698
Accrued expenses 197,609
Payable to distributor 58,171
Payables, other 6,373,531
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 20,576,169
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 298,826,844
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 262,476,087
Accumulated undistributed net investment income 58,734
Accumulated net realized gain from investments 9,142,947
Accumulated net realized gain from securities sold short 1,308,035
Net unrealized appreciation on investments 28,303,856
Net unrealized depreciation on securities sold short (2,462,815)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 298,826,844
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 13.34
Net Asset Value, offering and redemption price per share
(net assets of $298,826,844 applicable to 22,398,626 shares of
beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Dividends (net of foreign tax withheld of $3,737) $ 2,069,070
Interest 981,366
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,050,436
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 1,682,791
Distribution fees 420,698
Administrative fees 420,698
Custodian and transfer agent fees 228,178
Shareholder reports 80,978
Registration and filing fees 71,580
Professional fees 65,070
Trustees' fees and expense 18,528
Interest expense 2,069
Insurance fees 1,112
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 2,991,702
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 58,734
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 12,654,922
Net realized gain from securities sold short 1,243,660
Net change in unrealized appreciation on investments 14,943,456
Net change in unrealized depreciation on securities sold short (2,508,627)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS AND SECURITIES SOLD SHORT 26,333,411
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 26,392,145
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE NINE FOR THE
MONTHS ENDED PERIOD ENDED
9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $ 58,734 $ (5,124)
Net realized gain/(loss) from investments 12,654,922 (3,511,975)
Net realized gain from securities sold short 1,243,660 64,375
Net change in unrealized appreciation on investments 14,943,456 13,360,400
Net change in unrealized (depreciation)/appreciation on securities sold short (2,508,627) 45,812
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 26,392,145 9,953,488
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 135,532,733 126,948,478
- ------------------------------------------------------------------------------------------------------------------------------
Total Capital Share Transactions 135,532,733 126,948,478
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 161,924,878 136,901,966
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 136,901,966 0
End of period $ 298,826,844 $ 136,901,966
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on July 12, 1995.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE NINE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, beginning of period $ 11.24 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income 0 0
Net realized gain and net change in unrealized appreciation from investments
and securities sold short 2.10 1.24
Net Increase in Net Assets Resulting From Operations 2.10 1.24
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - -
Distributions from realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 13.34 $ 11.24
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 18.68% 12.40%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $298,826,844 $136,901,966
Ratio of Expenses to Average Net Assets 1.77% 1.94%
Ratio of Net Investment Income/(Loss) to Average Net Assets 0.03% (0.01)%
Portfolio Turnover Rate 160% 97%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on July 12, 1995.
Per-share data for each period has been determined by using the average
number of shares outstanding throughout each period.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Growth & Income Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. At September 30,
1996, 91% of the Fund's long positions and 100% of its short positions were
valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At September 30, 1996, approximately 9% of the Fund's long
positions were valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and accumulated net realized gain or loss accounts in such a
manner as to approximate amounts available for future distributions to
shareholders, if any.
Note 2 Capital Shares:
a. Transactions:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the period from July 12, 1995 (Commencement of
Operations), through December 31, 1995, were as follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 20,811,254 $267,827,596
Share reinvested 0 0
- ----------------------------------------------------------------------------
20,811,254 267,827,596
- ----------------------------------------------------------------------------
Shares redeemed (10,595,960) (132,294,863)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 10,215,294 $135,532,733
- ----------------------------------------------------------------------------
7/12/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 14,440,164 $150,810,508
Share reinvested 0 0
- ----------------------------------------------------------------------------
14,440,164 150,810,508
- ----------------------------------------------------------------------------
Shares redeemed (2,256,832) (23,862,030)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 12,183,332 $126,948,478
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
January 1, 1996, through September 30, 1996, the Fund incurred investment
advisory fees and administrative fees of $1,682,791 and $420,698, respectively.
RSIM has agreed to reimburse the Fund for any annual operating expenses,
including investment advisory fees, but excluding distribution fees and dividend
expense for short sales that exceed the most stringent limits prescribed by any
state in which the Fund's shares are offered for sale. At September 30, 1996,
there was no expected reimbursement of advisory fees and other expenses.
Robertson Stephens Investment Management has agreed to waive its fee under its
Administrative Services Agreement with the Growth & Income Fund, and to bear
certain expenses of the Fund, to the extent necessary so that Other Expenses
(excluding any brokerage, interest, taxes, deferred organizational expenses, and
extraordinary expenses) will not exceed 0.05% of the Fund's average daily net
assets.
<PAGE>
THE GROWTH & INCOME FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC (RS & Co.), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. John L. Wallace, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $18,528 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is reviewed and approved annually by the Fund's Board of Trustees.
Under this Plan, RS & Co. is compensated for services in such capacity including
its expenses in connection with the promotion and distribution of the Fund's
shares. The distribution fee is calculated at an annual rate of 0.25% of the
average daily net assets of the Fund. For the period from January 1, 1996,
through September 30, 1996, the Fund incurred distribution fees of $420,698.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions of $118,610 to RS & Co., which represented 13%
of total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold
<PAGE>
ROBERTSON, STEPHENS & COMPANY
short and short-term investments) measured as a percentage of the Fund's average
monthly investment portfolio for the nine months ended September 30, 1996, was
160%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments and securities sold short for
federal income tax purposes was $268,508,558. Accumulated net unrealized
appreciation on investments and securities sold short was $25,841,041,
consisting of gross unrealized appreciation and depreciation of $38,269,088 and
$(12,428,047), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold short
and short-term investments) were $502,834,514 and $355,927,786, respectively.
d. SHORT SALES:
Short sales are transactions in which the Fund sells a security it does not own,
in anticipation of a decline in the market value of that security. To complete
such a transaction, the Fund must borrow the security to deliver to the buyer
upon the short sale; the Fund then is obligated to replace the security borrowed
by purchasing it in the open market at some later date. The Fund will incur a
loss if the market price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The Fund
will typically realize a gain if the security declines in value between those
dates. All short sales must be fully collateralized.
The Fund maintains the collateral in a segregated account consisting of cash
and/or U.S. government securities sufficient to collateralize its obligation on
the short positions. The Fund may also sell short "against the box" (i.e., the
Fund enters into a short sale as described above while holding an offsetting
long position in the security which is sold short). If the Fund enters into a
short sale against the box, it will hold an equivalent amount of the securities
to cover its position while the short sale is outstanding. The Fund limits the
value of short sale positions (excluding short sales against the box) to 25% of
the Fund's total assets. At September 30, 1996, the Fund had 2% of its total
assets in short positions. For the nine months ended September 30, 1996, the
cost of investments purchased to cover short sales and proceeds from investments
sold short were $26,920,978 and $32,241,698, respectively.
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
ADVERTISING - 0.1%
The Leap Group, Inc. 500 $ 5,062
- ------------------------------------------------------------------------------------------------------------------------------
5,062
- ------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 4.0%
Cambridge Technology Partners, Inc. 20,000 605,000
CellNet Data Systems, Inc. 6,700 105,525
Claremont Technology Group, Inc. 25,000 900,000
Omnicare, Inc.(1) 20,000 610,000
Precision Response Corporation 20,000 770,000
Renaissance Solutions, Inc. 25,000 1,059,375
- ------------------------------------------------------------------------------------------------------------------------------
4,049,900
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 9.4%
Adaptec, Inc. 30,000 1,800,000
Compaq Computer Corporation 45,000 2,885,625
Dell Computer Corporation 40,000 3,110,000
Gateway 2000, Inc. 35,000 1,675,625
- ------------------------------------------------------------------------------------------------------------------------------
9,471,250
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 21.7%
Clarify, Inc. 10,000 620,000
Datastream Systems, Inc. 20,000 605,000
Forte Software, Inc. 29,000 1,138,250
Informix Corporation 20,000 557,500
Legato Systems, Inc. 25,000 1,187,500
McAfee Associates, Inc. 20,000 1,380,000
Microsoft Corporation 17,500 2,307,812
Netscape Communications Corporation 45,000 2,086,875
Oracle Corporation 15,000 638,438
PeopleSoft, Inc. 30,000 2,497,500
Rational Software Corporation 54,000 1,842,750
Remedy Corporation 45,000 3,600,000
Synopsys, Inc. 20,000 922,500
Vantive Corporation 37,500 2,428,125
- ------------------------------------------------------------------------------------------------------------------------------
21,812,250
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SERVICES - 1.7%
National TechTeam, Inc. 3,200 86,800
Vanstar Corporation 30,000 727,500
Wind River Systems, Inc. 20,000 885,000
- ------------------------------------------------------------------------------------------------------------------------------
1,699,300
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER/SPECIALTY RETAIL - 1.7%
Abercrombie & Fitch Company, Class A 2,100 $ 51,450
CDW Computer Centers, Inc. 25,000 1,706,250
TAG Heuer International SA, ADR(3) 1,200 23,700
- ------------------------------------------------------------------------------------------------------------------------------
1,781,400
- ------------------------------------------------------------------------------------------------------------------------------
DATA COMMUNICATIONS - 14.3%
3Com Corporation 43,500 2,612,719
Ascend Communications, Inc. 60,000 3,967,500
Cabletron Systems, Inc. 34,500 2,358,937
Cisco Systems, Inc. 40,000 2,482,500
FORE Systems, Inc. 70,000 2,896,250
- ------------------------------------------------------------------------------------------------------------------------------
14,317,906
- ------------------------------------------------------------------------------------------------------------------------------
DESIGN/ENGINEERING - 5.2%
Cadence Design Systems, Inc. 73,000 2,609,750
Parametric Technology Corporation 52,000 2,567,500
- ------------------------------------------------------------------------------------------------------------------------------
5,177,250
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SERVICES - 3.9%
GMIS, Inc. 81,000 1,954,125
HBO & Company(1) 30,000 2,002,500
- ------------------------------------------------------------------------------------------------------------------------------
3,956,625
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 0.8%
PRI Automation, Inc. 25,000 818,750
- ------------------------------------------------------------------------------------------------------------------------------
818,750
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS - 13.6%
Altera Corporation 20,000 1,012,500
Atmel Corporation 57,500 1,775,313
Intel Corporation(1) 10,000 954,375
Level One Communications, Inc. 30,000 1,027,500
Linear Technology Corporation(1) 40,000 1,475,000
Microchip Technology, Inc. 50,000 1,868,750
Micron Technology, Inc.(1) 110,000 3,355,000
S3, Incorporated 30,000 592,500
Triquint Semiconductor, Inc. 34,000 790,500
Vitesse Semiconductor Corporation 20,000 772,500
- ------------------------------------------------------------------------------------------------------------------------------
13,623,938
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS EQUIPMENT - 16.0%
ADC Telecommunications, Inc. 20,000 $ 1,280,000
Andrew Corporation 20,000 997,500
Cascade Communications Corporation 40,000 3,260,000
DSP Communications, Inc. 20,000 1,117,500
Newbridge Networks Corporation 30,000 1,912,500
PairGain Technologies, Inc. 56,800 4,437,500
Sawtek, Inc. 35,000 910,000
Tellabs, Inc. 30,000 2,118,750
- ------------------------------------------------------------------------------------------------------------------------------
16,033,750
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 92.4% (Cost: $79,421,664)
- ------------------------------------------------------------------------------------------------------------------------------
WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------
Intel Corporation, Warrants, Strike $40.75, Expire 3-14-97(2) 34,500 1,957,875
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 1.9% (Cost $1,202,469) 1,957,875
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 94.3% (Cost $80,624,133) 94,705,256
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 401,314
Repurchase Agreement
State Street Bank & Trust Company, 4.85%, dated 9/30/96, due 10/01/96,
maturity value $13,790,847 (collateralized by $9,905,000 par value
U.S. Treasury Note, 12.00%, due 8/15/13) 13,708,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 14.1% 14,109,314
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (8.4)% (8,427,186)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 100,387,384
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) See 4.d. in Notes to Financial Statements.
(3) ADR - American Depository Receipt.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $80,624,133) $ 94,705,256
Cash and cash equivalents 14,109,314
Receivable for investments sold 4,946,395
Receivable for fund shares subscribed 2,644,205
Receivable, other 29,857
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 116,435,027
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 15,537,181
Payable for fund shares redeemed 316,803
Payable to adviser 77,998
Payable to distributor 15,600
Accrued expenses 100,061
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 16,047,643
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS 100,387,384
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 88,633,976
Accumulated net investment loss (873,743)
Accumulated net realized loss from investments (1,453,972)
Net unrealized appreciation on investments 14,081,123
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 100,387,384
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 11.79
Net Asset Value, offering, and redemption price per share
(Net assets of $100,387,384 applicable to 8,516,174 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 90,500
Dividends 6,065
Other 2,557
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 99,122
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 454,204
Custodian and transfer agent fees 118,042
Distribution fees 113,551
Administrative expense 113,551
Professional fees 70,627
Shareholder reports 47,103
Registration and filing fees 32,320
Trustees' fees and expenses 16,714
Organizational expense 4,891
Interest expense 1,450
Insurance fee 412
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 972,865
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (873,743)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 662,549
Net change in unrealized appreciation on investments 13,825,537
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 14,488,086
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 13,614,343
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE
NINE MONTHS ENDED PERIOD ENDED
9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (873,743) $ (23,511)
Net realized gain/(loss) from investments 662,549 (2,116,521)
Net change in unrealized appreciation on investments 13,825,537 255,586
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 13,614,343 (1,884,446)
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 53,947,405 34,710,082
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 53,947,405 34,710,082
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 67,561,748 32,825,636
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of year 32,825,636 0
End of year $ 100,387,384 $ 32,825,636
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE FOR THE
FOR A SHARE OUTSTANDING NINE MONTHS ENDED PERIOD ENDED
THROUGHOUT THE PERIOD: 9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 9.30 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.14) (0.01)
Net realized gain/(loss) and net change in unrealized
appreciation/(depreciation) on investments 2.63 (0.69)
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase/(Decrease) in Net Assets
Resulting From Operations 2.49 (0.70)
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 11.79 $ 9.30
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 26.77% (7.00)%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 100,387,384 $ 32,825,636
Ratio of Expenses to Average Net Assets 2.14% 2.13%
Ratio of Net Investment Loss to Average Net Assets (1.93)% (0.89)%
Portfolio Turnover Rate 256% 89%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on November 15, 1995.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period. Ratios, except
for total return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Information Age Fund-TM- (the "Fund") is a series of the Robertson Stephens
Investment Trust (the "Trust"), a Massachusetts business trust organized on
May 11, 1987. The Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as a diversified, open-end management investment
company. The Fund became effective to offer shares to the public on November 15,
1995. The Trust offers eleven 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, and The Robertson Stephens MicroCap Growth Fund. The
assets for each series are segregated and accounted for separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities, including options, are valued at the last sale price on
the principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
September 30, 1996, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
develop-
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ment and trends of the security's issuer, changes in the industry and other
competing companies, significant changes in the issuer's financial position, and
any other event which could have a significant impact on the value of the
security. At September 30, 1996, no security of the Fund was valued using these
guidelines and procedures. As its normal course of business, the Fund has
invested a significant portion of its assets in companies within a number of
industries in the technology and telecommunications sectors. Accordingly, the
performance of the Fund may be subject to a greater risk of market fluctuation
than that of a fund invested in a wider spectrum of market or industrial
sectors.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to
<PAGE>
ROBERTSON, STEPHENS & COMPANY
report undistributed net investment income or loss and accumulated net realized
gain or loss accounts in such a manner as to approximate amounts available for
future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the period from November 15, 1995 (commencement of
operations), to December 31, 1995, were as follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 12,526,840 $128,920,361
Shares reinvested - -
- ----------------------------------------------------------------------------
12,526,840 128,920,361
- ----------------------------------------------------------------------------
Shares redeemed (7,541,301) (74,972,956)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 4,985,539 $ 53,947,405
- ----------------------------------------------------------------------------
11/15/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 3,937,648 $ 38,546,017
Shares reinvested - -
- ----------------------------------------------------------------------------
3,937,648 38,546,017
- ----------------------------------------------------------------------------
Shares redeemed (407,013) (3,835,935)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 3,530,635 $ 34,710,082
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM") an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the nine months ended
September 30, 1996, the Fund incurred investment advisory fees and
administrative fees of $454,204 and $113,551, respectively. RSIM has agreed to
reimburse the Fund for any annual operating expenses, including investment
advisory fees, but excluding distribution fees that exceed the most stringent
limits prescribed by any state in which the Fund's shares are offered for sale.
For the nine months ended September 30, 1996, there was no expected
reimbursement of advisory fees and other expenses.
<PAGE>
THE INFORMATION AGE FUND-TM- THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the parent of
Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer, and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and Chief
Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of the
Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John P.
Rohal, a Trustee of the Fund, is a Member of RS Group and Director of Research
for RS & Co. Ronald E. Elijah, Portfolio Manager, is a Member of RS Group. All
affiliated and access persons, as defined in the 1940 Act, follow strict
guidelines and policies on personal trading as outlined in the Fund's Code of
Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended September 30, 1996, the Fund
incurred distribution fees of $113,551.
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
<PAGE>
which RS & Co. has been retained by the issuer. For the nine months ended
September 30, 1996, the Fund paid brokerage commissions of $16,455 to RS & Co.,
which represented 13% of total commissions paid for the period.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments) measured as a percentage of the Fund's average monthly
investment portfolio for the nine months ended September 30, 1996, was 256%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $80,624,133. Accumulated net unrealized appreciation on investments was
$14,081,123, consisting of gross unrealized appreciation and depreciation of
$15,319,162 and $(1,238,039), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding short-term investments) were
$205,163,315 and $155,176,367, respectively.
d. WARRANTS:
A warrant is an option which normally entitles the holder to purchase a
proportionate number of a particular class of the issuer's securities at a
predetermined price during a specific period. The Intel Corporation Warrants
held by the Fund at September 30, 1996, were valued at the last sale price on
the principal exchange or market on which they were traded, or, if there were no
sales that day, at the mean between the closing bid and asked prices.
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE PARTS AND EQUIPMENT - 1.7%
Motorcar Parts and Accessories, Inc. 6,000 $ 79,500
- ------------------------------------------------------------------------------------------------------------------------------
79,500
- ------------------------------------------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.1%
Biotransplant, Inc. 7,500 52,500
- ------------------------------------------------------------------------------------------------------------------------------
52,500
- ------------------------------------------------------------------------------------------------------------------------------
CLOTHING-RETAIL - 5.6%
American Eagle Outfitters, Inc. 3,000 63,750
Sport-Haley, Inc. 3,500 43,750
Supreme International Corporation 5,000 83,125
Vans, Inc. 4,000 76,500
- ------------------------------------------------------------------------------------------------------------------------------
267,125
- ------------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 11.4%
Data Processing Resources Corporation 3,500 77,000
E*Trade Group, Inc. 8,000 105,500
Esmor Correctional Services, Inc. 3,000 42,375
Guest Supply, Inc. 3,500 46,375
Rent Way, Inc. 4,500 56,813
Staffmark, Inc. 10,000 141,250
Youth Services International, Inc. 5,500 76,312
- ------------------------------------------------------------------------------------------------------------------------------
545,625
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 1.3%
Transact Technologies, Inc. 6,000 60,750
- ------------------------------------------------------------------------------------------------------------------------------
60,750
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 8.6%
Desktop Data, Inc. 3,000 87,000
Hyperion Software Corporation 4,500 69,188
Imnet Systems, Inc. 4,000 78,000
OrCAD, Inc. 7,000 63,000
Peerless Systems Corporation 6,000 69,000
Smith Micro Software, Inc. 7,500 46,875
- ------------------------------------------------------------------------------------------------------------------------------
413,063
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 8.4%
Excite, Inc. 12,000 100,500
Silicon Valley Research, Inc. 12,000 58,500
SS&C Technologies, Inc. 9,500 96,188
STB Systems, Inc. 3,500 65,625
Visigenic Software, Inc. 7,000 78,750
- ------------------------------------------------------------------------------------------------------------------------------
399,563
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL - 3.1%
Cannondale Corporation 2,500 58,125
Norwood Promotional Products, Inc. 5,000 87,500
- ------------------------------------------------------------------------------------------------------------------------------
145,625
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DATA PROCESSING SERVICES - 0.7%
Transaction Network Systems, Inc. 2,500 $ 35,937
- ------------------------------------------------------------------------------------------------------------------------------
35,937
- ------------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT - 1.5%
Lodgenet Entertainment Corporation 6,000 73,500
- ------------------------------------------------------------------------------------------------------------------------------
73,500
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 1.5%
Willis Lease Finance Corporation 8,000 74,000
- ------------------------------------------------------------------------------------------------------------------------------
74,000
- ------------------------------------------------------------------------------------------------------------------------------
FOOD RETAIL/WHOLESALE - 1.7%
Opta Food Ingredients, Inc. 9,000 81,000
- ------------------------------------------------------------------------------------------------------------------------------
81,000
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE/MEDICAL TECHNOLOGY/HMO - 5.1%
American Oncology Resources, Inc. 4,000 45,000
Assisted Living Concepts, Inc. 5,000 95,000
Summit Medical Systems, Inc. 2,500 56,000
Vitalcom, Inc. 9,000 46,125
- ------------------------------------------------------------------------------------------------------------------------------
242,125
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 1.3%
Horizon Mental Health Management, Inc. 2,500 61,875
- ------------------------------------------------------------------------------------------------------------------------------
61,875
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 1.2%
Rockshox, Inc. 4,000 60,000
- ------------------------------------------------------------------------------------------------------------------------------
60,000
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/DEVICES - 2.0%
Lifeline Systems, Inc. 5,000 93,750
- ------------------------------------------------------------------------------------------------------------------------------
93,750
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SERVICES - 0.8%
Enterprise Systems, Inc. 1,500 38,625
- ------------------------------------------------------------------------------------------------------------------------------
38,625
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 1.8%
Molecular Devices Corporation 8,000 84,000
- ------------------------------------------------------------------------------------------------------------------------------
84,000
- ------------------------------------------------------------------------------------------------------------------------------
PHARMACEUTICALS - 2.9%
Neurocrine Biosciences, Inc. 5,000 56,875
Pharmaceutical Product Development, Inc. 3,000 81,000
- ------------------------------------------------------------------------------------------------------------------------------
137,875
- ------------------------------------------------------------------------------------------------------------------------------
RESTAURANTS - 2.4%
Rock Bottom Restaurants, Inc. 4,000 46,500
Taco Cabana, Inc., Class A 12,000 69,000
- ------------------------------------------------------------------------------------------------------------------------------
115,500
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL - 3.4%
Cost Plus, Inc. 3,000 $ 69,375
The Maxim Group, Inc. 6,000 95,250
- ------------------------------------------------------------------------------------------------------------------------------
164,625
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 2.6%
Asyst Technologies, Inc. 3,000 57,750
PRI Automation, Inc. 2,000 65,500
- ------------------------------------------------------------------------------------------------------------------------------
123,250
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS - 1.9%
ACT Manufacturing, Inc. 5,000 90,000
- ------------------------------------------------------------------------------------------------------------------------------
90,000
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 1.7%
Metro One Telecommunications, Inc. 6,000 81,000
- ------------------------------------------------------------------------------------------------------------------------------
81,000
- ------------------------------------------------------------------------------------------------------------------------------
TEXTILES - 1.6%
Quiksilver, Inc. 3,000 75,000
- ------------------------------------------------------------------------------------------------------------------------------
75,000
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 75.3% (Cost $3,419,564) 3,595,813
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash 86
U.S. Treasury Bill, 5.49%, due 10/3/96, $400,000 par value 399,898
Repurchase Agreement
State Street Bank & Trust Company, 4.85%, dated 9/30/96, due 10/01/96,
maturity value $1,125,152 (collateralized by $815,000 par value
U.S. Treasury Note, 12%, due 8/15/13) 1,125,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 32.0% 1,524,984
- ------------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (7.3)% (348,079)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 4,772,718
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $3,419,564) $ 3,595,813
Cash and cash equivalents 1,524,984
Receivable for fund shares subscribed 440,839
Receivable from adviser 31,272
Receivable, other 4,363
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 5,597,271
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments sold 775,996
Payable for fund shares redeemed 10,783
Accrued expenses 37,239
Payable to distributor 535
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 824,553
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 4,772,718
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 4,620,607
Accumulated net investment loss (3,013)
Accumulated net realized loss from investments (21,125)
Net unrealized appreciation on investments 176,249
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 4,772,718
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 10.57
Net Asset Value, offering, and redemption price per share
(Net assets of $4,772,718 applicable to 451,323 shares of
beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD FROM AUGUST 15, 1996 (COMMENCEMENT OF OPERATIONS), THROUGH SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 5,621
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 5,621
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees 12,220
Professional fees 7,285
Investment advisory fees 3,060
Trustees' fees and expenses 2,867
Registration and filing fees 2,444
Shareholder reports 1,457
Distribution fees 612
Administrative expense 612
Organizational expense 598
Insurance fee 14
- ------------------------------------------------------------------------------------------------------------------------------
Total Expenses 31,169
Less: Reimbursement from adviser (22,535)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 8,634
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (3,013)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized loss from investments (21,125)
Net change in unrealized appreciation on investments 176,249
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS 155,124
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations $ 152,111
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE
PERIOD ENDED
9/30/96(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (3,013)
Net realized loss from investments (21,125)
Net change in unrealized appreciation on investments 176,249
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 152,111
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income -
Realized gains on investments -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 4,620,607
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 4,620,607
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 4,772,718
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period -
End of period $ 4,772,718
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on August 15, 1996.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT THE PERIOD: 9/30/96(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Loss (0.02)
Net realized loss and net change in unrealized appreciation on investments 0.59
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting From Operations 0.57
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income -
Distributions from realized gains on investments -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 10.57
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 5.70%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $4,772,718
Ratio of Expenses to Average Net Assets 3.37%(2)
Ratio of Net Investment Loss to Average Net Assets (1.18)%(2)
Portfolio Turnover Rate 3%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on August 15, 1996.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the
period ended September 30, 1996, would have been 12.15%, and the ratio of
net investment loss to average net assets would have been (9.96)%.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period. Ratios, except
for total return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens MicroCap 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 August 15, 1996. The Trust offers eleven 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, and The Robertson Stephens MicroCap
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
September 30, 1996, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include,
15
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
but are not limited to, the analysis of: the effect of any restrictions on the
sale of the security, product development and trends of the security's issuer,
changes in the industry and other competing companies, significant changes in
the issuer's financial position, and any other event which could have a
significant impact on the value of the security. At September 30, 1996, no
security of the Fund was valued using these guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the period ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
e. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
f. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and
16
<PAGE>
ROBERTSON, STEPHENS & COMPANY
accumulated net realized gain or loss accounts in such a manner as to
approximate amounts available for future distributions to shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the period from August 15,
1996 (Commencement of Operations), through September 30, 1996, were as follows:
8/15/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 492,055 $ 5,035,799
Shares reinvested - -
- ----------------------------------------------------------------------------
492,055 5,035,799
- ----------------------------------------------------------------------------
Shares redeemed (40,732) (415,192)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 451,323 $ 4,620,607
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee and an
administrative services fee calculated respectively at an annual rate of 1.00%
and 0.25% of the average daily net assets of the Fund. For the period from
August 15, 1996 (Commencement of Operations), through September 30, 1996, the
Fund incurred investment advisory fees and administrative fees of $3,060 and
$612, respectively. RSIM has agreed to reimburse the Fund for any annual
operating expenses, including investment advisory fees, but excluding dividend
expense for short sales, which exceed the most stringent limits prescribed by
any state in which the Fund's shares are offered for sale. For the period from
August 15, 1996 (Commencement of Operations), through September 30, 1996, the
Adviser agreed to reimburse $22,535 of its fees and other expenses.
17
<PAGE>
THE MICROCAP GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member of
Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor and RSIM,
the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer, and a
Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and
Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of
the Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John
P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director of
Research for RS & Co. All affiliated and access persons, as defined in the 1940
Act, follow strict guidelines and policies on personal trading as outlined in
the Fund's Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $2,867 for the period from August 15, 1996
(Commencement of Operations), through September 30, 1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
effective on January 1, 1996, and has adopted a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act, which is approved annually by the Fund's Board of
Trustees. Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of the
Fund's shares. The distribution fee is calculated at an annual rate of 0.25% of
the average daily net assets of the Fund. For the period from August 15, 1996
(Commencement of Operations), through September 30, 1996, the Fund incurred
distribution fees of $612.
18
<PAGE>
ROBERTSON, STEPHENS & COMPANY
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the period from August 15, 1996 (Commencement
of Operations), through September 30, 1996, the Fund paid no brokerage
commissions to RS & Co.
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the period from August 15,
1996 (Commencement of Operations), through September 30, 1996, was 3%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $3,419,564. Accumulated net unrealized appreciation on investments was
$176,249, consisting of gross unrealized appreciation and depreciation of
$266,007 and ($89,758), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the period from August 15, 1996 (Commencement of Operations), through
September 30, 1996, the cost of investments purchased and the proceeds from
investments sold (excluding options, securities sold short, and short-term
investments) were $3,521,939 and $40,625, respectively.
19
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
AEROSPACE - 5.7%
Lockheed Martin Corporation(1) 41,500 $ 3,740,188
- ------------------------------------------------------------------------------------------------------------------------------
3,740,188
- ------------------------------------------------------------------------------------------------------------------------------
ALUMINUM - 3.6%
Kaiser Aluminum Corporation 57,500 668,438
MAXXAM, Inc. 38,700 1,712,475
- ------------------------------------------------------------------------------------------------------------------------------
2,380,913
- ------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE PARTS/EQUIPMENT - 0.6%
Wescast Industries, Inc., Class A(1) 20,000 380,000
- ------------------------------------------------------------------------------------------------------------------------------
380,000
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 2.6%
Bank United Corporation, Class A 66,800 1,661,650
- ------------------------------------------------------------------------------------------------------------------------------
1,661,650
- ------------------------------------------------------------------------------------------------------------------------------
CLOSED-END FUNDS - 0.7%
Cathay Investment Fund, Ltd.(1) HKD 375,000 436,441
- ------------------------------------------------------------------------------------------------------------------------------
436,441
- ------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 1.4%
American Buildings Company 35,000 927,500
- ------------------------------------------------------------------------------------------------------------------------------
927,500
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES - 6.9%
Harper Group, Inc.(1) 20,000 410,000
Pittston Burlington Group(1) 50,000 906,250
Ralcorp Holdings, Inc. 110,000 2,282,500
SunSource LP, Class B(1) 200,000 875,000
- ------------------------------------------------------------------------------------------------------------------------------
4,473,750
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 8.1%
Aztec Resources, Ltd. CAD 329,800 581,103
Basin Exploration, Inc. CAD 60,000 420,000
Calahoo Petroleum, Ltd. CAD 431,000 218,332
Calahoo Petroleum, Ltd., Restricted(3,4) CAD 840,000 425,520
Canadian Conquest Exploration, Inc. CAD 619,000 954,335
Discovery West Corporation CAD 144,500 365,997
New Cache Petroleums, Ltd. CAD 46,200 269,650
Nugas, Ltd. CAD 189,500 313,028
Ocelot Energy, Inc., Class B CAD 136,200 749,945
Olympia Energy, Inc., Class A CAD 125,000 65,157
Paloma Petroleum, Ltd. CAD 85,000 149,769
Paragon Petroleum, Ltd. CAD 99,600 186,461
Place Resources Corporation CAD 380,000 557,961
- ------------------------------------------------------------------------------------------------------------------------------
5,257,258
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 FOREIGN CURRENCY(2) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY SERVICES - 7.3%
3-D Geophysical, Inc. 45,000 $ 371,250
Bowridge Corporation CAD 700,000 195,286
Computalog, Ltd. CAD 109,400 1,064,202
Dailey Petroleum Services Corporation 150,000 1,312,500
Enerflex Systems, Ltd.(1) CAD 31,600 730,783
Intertech Minerals Corporation CAD 127,500 191,891
Veritas Energy Services, Inc. CAD 48,000 868,660
- ------------------------------------------------------------------------------------------------------------------------------
4,734,572
- ------------------------------------------------------------------------------------------------------------------------------
HOLDING COMPANIES, DIVERSIFIED - 0.5%
Valhi, Inc.(1) 59,000 354,000
- ------------------------------------------------------------------------------------------------------------------------------
354,000
- ------------------------------------------------------------------------------------------------------------------------------
MANUFACTURING - 0.5%
Gardner Denver Machinery, Inc. 10,000 305,000
- ------------------------------------------------------------------------------------------------------------------------------
305,000
- ------------------------------------------------------------------------------------------------------------------------------
MINING/CONSTRUCTION EQUIPMENT - 1.7%
KCI Konecranes International Corporation FIM 35,000 972,392
NQL Drilling Tools, Inc., Class A CAD 45,600 122,194
- ------------------------------------------------------------------------------------------------------------------------------
1,094,586
- ------------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 1.5%
Catellus Development Corporation 100,000 987,500
- ------------------------------------------------------------------------------------------------------------------------------
987,500
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 41.1% (Cost: $23,297,966) 26,733,358
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
WARRANTS
- ------------------------------------------------------------------------------------------------------------------------------
Calahoo Petroleum, Ltd., 3/4 Warrants, Strike CAD 0.65,
Expire 6/28/97(3,4,5) CAD 630,000 148,313
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.2% (Cost: $0) 148,313
CONTRACTS VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PUT OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index Put Options
December 96 650 75 57,188
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS - 0.1% (Cost $89,287) 57,188
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 41.4% (Cost: $23,387,253) 26,938,859
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS (CONTINUED)
<CAPTION>
SEPTEMBER 30, 1996 VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CASH AND CASH EQUIVALENTS
- ------------------------------------------------------------------------------------------------------------------------------
Cash $ 833
U. S. Treasury Bill, 4.6%, due 10/3/96, $25,000,000 par value 24,993,660
Repurchase Agreement
State Street Bank and Trust Company, 4.85%, dated 9/30/96,
due 10/1/96, maturity value $12,951,745 (collateralized by
$9,360,000 par value U.S. Treasury Note, 12.00%, due 8/15/13) 12,950,000
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 58.2% 37,944,493
- ------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.4% 236,778
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 65,120,130
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) Foreign-denominated security; CAD - Canadian Dollar, FIM - Finnish Markka,
HKD - Hong Kong Dollar.
(3) Fair-value security. See 1.a. in Notes to Financial Statements.
(4) See 4.e. in Notes to Financial Statements.
(5) See 4.f. in Notes to Financial Statements.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF NET ASSETS
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $23,387,253) $ 26,938,859
Cash and cash equivalents 37,944,493
Receivable for investments sold 211,228
Receivable for fund shares subscribed 1,347,983
Receivable from adviser 73,325
Dividends/interest receivable 10,175
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 66,526,063
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 1,247,631
Payable for fund shares redeemed 90,366
Accrued expenses 57,138
Payable to distributor 10,798
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 1,405,933
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 65,120,130
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 59,948,135
Accumulated undistributed net investment income 104,651
Accumulated net realized gain from investments 1,515,724
Net unrealized appreciation on investments 3,551,620
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 65,120,130
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 14.07
Net Asset Value, offering and redemption price per share
(net assets of $65,120,130 applicable to 4,627,654 shares of
beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $ 328,168
Dividends (net of foreign withholding tax of $1,270) 40,461
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 368,629
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 197,742
Custodian and transfer agent fees 88,616
Professional fees 61,409
Distribution fees 39,548
Shareholder reports 19,648
Trustees' fees and expenses 16,714
Registration and filing fees 13,974
Insurance 39
- ------------------------------------------------------------------------------------------------------------------------------
Total Expenses 437,690
Less: Reimbursement from adviser (127,317)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 310,373
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 58,256
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND OPTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 1,506,642
Net change in unrealized appreciation on investments 3,375,640
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 4,882,282
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,940,538
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF CHANGES IN NET ASSETS
FOR THE NINE FOR THE
MONTHS ENDED PERIOD ENDED
9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income $ 58,256 $ 46,395
Net realized gain from investments 1,506,642 9,082
Net change in unrealized appreciation on investments 3,375,640 175,980
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 4,940,538 231,457
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - -
Distributions from realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 52,699,248 7,248,887
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS 52,699,248 7,248,887
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 57,639,786 7,480,344
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 7,480,344 -
End of period $ 65,120,130 $ 7,480,344
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on July 12, 1995.
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR THE NINE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 9/30/96 12/31/95(1)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.39 $ 10.00
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Income 0.04 0.06
Net realized gain and net change in unrealized appreciation on investments 3.64 0.33
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase In Net Assets Resulting From Operations 3.68 0.39
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - -
Distributions from realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 14.07 $ 10.39
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 35.42% 3.90%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $ 65,120,130 $ 7,480,344
Ratio of Expenses to Average Net Assets 1.94%(2) 2.41%(2)
Ratio of Net Investment Income to Average Net Assets 0.37%(2) 1.34%(2)
Portfolio Turnover Rate 55% 71%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Fund commenced operations on July 12, 1995.
(2) If the Fund had paid all of its expenses and there had been no
reimbursement by the Adviser, the ratio of expenses to average net assets
for the nine months ended September 30, 1996, and for the period ended
December 31, 1995, would have been 2.74% and 5.12%, respectively, and the
ratio of net investment loss to average net assets would have been (0.43)%
and (1.37)%, respectively.
Per-share data has been determined by using the average number of shares
outstanding throughout the period. Ratios, except for total return and
portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
14
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Partners Fund (the "Fund") is a series of the Robertson
Stephens Investment Trust (the "Trust"), a Massachusetts business trust
organized on May 11, 1987. The Fund is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as a non-diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on July 12, 1995. The Trust offers eleven 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, and The Robertson Stephens Global Low-Priced Stock Fund, The
Robertson Stephens MicroCap Growth Fund, and The Robertson Stephens Diversified
Growth Fund. The assets for each series are segregated and accounted for
separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities, including options and foreign securities, are valued at
the last sale price on the principal exchange or market on which they are
traded; or, if there were no sales that day, at the mean between the closing bid
and asked prices. Foreign securities prices are generally denominated in foreign
currencies. The currencies are translated into U.S. dollars by using the
exchange rates quoted at the close of The London Stock Exchange prior to when
the Fund's net asset value is next determined. At September 30, 1996, 97.9% of
the Fund's positions were valued in this manner.
15
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use all
available resources, including quotations from market-makers and fundamental
valuation methods which include, but are not limited to, the analysis of: the
effect of any restrictions on the sale of the security, product development and
trends of the security's issuer, changes in the industry and other competing
companies, significant changes in the issuer's financial position, and any other
event which would have a significant impact on the value of a security. At
September 30, 1996, 2.1% of the Fund's positions were valued using these
guidelines and procedures.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund has made no provision for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased and sold (trade date). Realized gains and losses on securities
transactions are determined on the basis of specific identification.
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Fund are maintained in U.S. dollars. Investment
securities and all other assets and liabilities of the Fund denominated in a
foreign currency are translated into U.S. dollars at the exchange rate each day.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the exchange rate in effect on the dates of the
respective transactions. The Fund does not isolate the portion of the
fluctuations on investments resulting from changes in foreign currency exchange
rates from the fluctuations in market prices of investments held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
16
<PAGE>
ROBERTSON, STEPHENS & COMPANY
f. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
g. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and accumulated net realized gain or loss accounts in such a
manner as to approximate amounts available for future distributions to
shareholders, if any.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the period from July 12, 1995 (commencement of
operations), through December 31, 1995, were as follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 4,995,946 $67,183,655
Shares reinvested - -
- ----------------------------------------------------------------------------
4,995,946 67,183,655
- ----------------------------------------------------------------------------
Shares redeemed (1,088,510) (14,484,407)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 3,907,436 $52,699,248
- ----------------------------------------------------------------------------
7/12/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 993,987 $10,001,278
Shares reinvested - -
- ----------------------------------------------------------------------------
993,987 10,001,278
- ----------------------------------------------------------------------------
Shares redeemed (273,769) (2,752,391)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 720,218 $ 7,248,887
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Fund's Board of Trustees, the Fund pays Robertson, Stephens &
Company Investment Management, L.P. ("RSIM") an investment advisory fee
calculated at an annual rate of 1.25% of the average daily net assets of the
Fund. For the nine months ended September 30, 1996, the Fund incurred investment
advisory fees of $197,742. RSIM has voluntarily agreed to reimburse the Fund for
any annual operating expenses exceeding an annual expense ratio of 1.95%. For
the nine months ended September 30, 1996, the Adviser agreed to reimburse
$127,317 of its fees and other expenses.
b. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also Members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing
17
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
member of Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor
and RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer
and a Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and
Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of
the Fund, is a Member of RS Group and Chief Financial Officer of RS & Co. John
P. Rohal, a Trustee of the Fund, is a Member of RS Group and Director of
Research for RS & Co. Andrew P. Pilara, Jr., Portfolio Manager, is a Member of
RS Group. All affiliated and access persons, as defined in the 1940 Act, follow
strict guidelines and policies on personal trading as outlined in the Fund's
Code of Ethics.
c. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
d. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
and has adopted a Plan of Distribution pursuant to Rule 12b-1 under the 1940
Act, which is approved annually by the Fund's Board of Trustees. Under the Plan,
RS & Co. is compensated for services in such capacity, including its expenses in
connection with the promotion and distribution of the Fund's shares. The
distribution fee is calculated at an annual rate of 0.25% of the average daily
net assets of the Fund. For the nine months ended September 30, 1996, the Fund
incurred distribution fees of $39,548.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions of $680 to RS & Co., which represented 1.0% of
the total commissions paid for the period.
18
<PAGE>
ROBERTSON, STEPHENS & COMPANY
NOTE 4 INVESTMENTS:
a. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding short-
term investments), measured as a percentage of the Fund's average monthly
investment portfolio for the nine months ended September 30, 1996, was 55%.
b. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $23,387,253. Accumulated net unrealized appreciation on investments was
$3,551,606, consisting of gross unrealized appreciation and depreciation of
$4,016,402 and $(464,810), respectively.
c. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options and short-term
investments) were $24,026,211 and $6,818,395, respectively.
d. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are not
limited to, reevaluation of currencies, adverse political, social, and economic
developments, and less reliable information about issuers.
Moreover, securities of many foreign companies and markets may be less liquid
and their prices more volatile than those of U.S. companies and markets.
The Fund intends to invest no more than 40% of its total assets exclusively in
one foreign country. At September 30, 1996, the Fund had its largest
concentrated foreign investments, worth 12.9% of the Fund's total assets, in
Canada.
e. RESTRICTED SECURITIES:
A restricted security is a security which has been purchased through a private
offering and cannot be resold to the general public without prior registration
under the Securities Act of 1933. If the security is subsequently registered and
resold, the issuers would bear the expense of all registrations at no cost to
the Fund. At September 30, 1996, the Fund held restricted securities with an
aggregate value of $573,833 which represented 0.9% 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 1.a., paragraph 2.
SHARES COST VALUE ACQUISITION
SECURITY (000) (000) (000) DATE
- ----------------------------------------------------------------------------
Calahoo Petroleum, Ltd. 840 $333 $425 6/28/96
Calahoo Petroleum, Ltd.
3/4 Warrants 630 0 $148 6/28/96
- ----------------------------------------------------------------------------
19
<PAGE>
THE PARTNERS FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
f. 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 are not readily available were
valued such that when the exercise price of the option and warrant was less than
that of the underlying common stock, the option or warrant was 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 return on the stock, option or warrant.
If the exercise price was greater than that of the underlying common stock, the
option or warrant was valued at zero. This valuation method is subject to
frequent review and is in accordance with the guidelines and procedures adopted
by the Fund's Board of Trustees.
20
<PAGE>
THE VALUE + GROWTH FUND THIRD-QUARTER REPORT
SCHEDULE OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
AEROSPACE - 4.9%
Boeing Company 225,000 $ 21,262,500
United Technologies Corporation 87,700 10,534,963
- ------------------------------------------------------------------------------------------------------------------------------
31,797,463
- ------------------------------------------------------------------------------------------------------------------------------
AIRCRAFT COMPONENTS - 1.4%
Precision Castparts Corporation 191,700 9,297,450
- ------------------------------------------------------------------------------------------------------------------------------
9,297,450
- ------------------------------------------------------------------------------------------------------------------------------
AIRLINES - 1.3%
Delta Airlines, Inc. 70,000 5,040,000
UAL Corporation(1) 80,000 3,760,000
- ------------------------------------------------------------------------------------------------------------------------------
8,800,000
- ------------------------------------------------------------------------------------------------------------------------------
BANKS - 8.6%
BankAmerica Corporation 120,000 9,855,000
Boatmen's Bancshares, Inc. 150,000 8,381,250
Chase Manhattan Corporation 120,000 9,615,000
Citicorp 119,400 10,820,625
Comerica, Inc. 175,000 9,012,500
First Bank System, Inc. 100,000 6,687,500
Northern Trust Corporation 25,000 1,643,750
- ------------------------------------------------------------------------------------------------------------------------------
56,015,625
- ------------------------------------------------------------------------------------------------------------------------------
Biotechnology - 4.9%
Amgen, Inc.(1) 350,000 22,093,750
Biogen, Inc.(1) 130,000 9,880,000
- ------------------------------------------------------------------------------------------------------------------------------
31,973,750
- ------------------------------------------------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 9.0%
3Com Corporation(1) 405,000 24,325,312
Cabletron Systems, Inc.(1) 278,200 19,021,925
Cisco Systems, Inc.(1) 250,000 15,515,625
- ------------------------------------------------------------------------------------------------------------------------------
58,862,862
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 8.3%
Compaq Computer Corporation(1) 458,000 29,369,250
Dell Computer Corporation(1) 316,000 24,569,000
- ------------------------------------------------------------------------------------------------------------------------------
53,938,250
- ------------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 8.5%
Cadence Design Systems, Inc.(1) 715,000 25,561,250
Informix Corporation(1) 215,000 5,993,125
Parametric Technology Corporation(1) 482,750 23,835,781
- ------------------------------------------------------------------------------------------------------------------------------
55,390,156
- ------------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL - 13.4%
Abercrombie & Fitch Company, Class A(1) 173,500 4,250,750
CompUSA, Inc.(1) 784,900 42,384,600
Fred Meyer, Inc.(1) 175,000 5,796,875
Nike, Inc. 124,100 15,078,150
Ross Stores, Inc. 200,000 7,200,000
Staples, Inc.(1) 388,500 8,619,844
TAG Heuer International SA, ADR(1,2) 21,700 428,575
Williams-Sonoma, Inc.(1) 125,000 3,546,875
- ------------------------------------------------------------------------------------------------------------------------------
87,305,669
- ------------------------------------------------------------------------------------------------------------------------------
CONTRACT MANUFACTURING - 2.0%
SCI Systems, Inc.(1) 190,000 10,687,500
Solectron Corporation(1) 50,000 2,450,000
- ------------------------------------------------------------------------------------------------------------------------------
13,137,500
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
<PAGE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
SEPTEMBER 30, 1996 SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
DATA PROCESSING SERVICES - 1.2%
Computer Sciences Corporation(1) 100,000 $ 7,687,500
- ------------------------------------------------------------------------------------------------------------------------------
7,687,500
- ------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 6.4%
Charter One Financial, Inc. 100,000 4,000,000
First USA, Inc. 200,000 11,075,000
Household International, Inc. 130,000 10,692,500
MBNA Corporation 252,700 8,781,325
The Money Store, Inc. 300,000 7,950,000
- ------------------------------------------------------------------------------------------------------------------------------
42,498,825
- ------------------------------------------------------------------------------------------------------------------------------
FOOD RETAIL/WHOLESALE - 2.3%
Albertson's, Inc. 150,000 6,318,750
Safeway, Inc.(1) 205,000 8,738,125
- ------------------------------------------------------------------------------------------------------------------------------
15,056,875
- ------------------------------------------------------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 6.0%
Healthsource, Inc.(1) 415,000 6,121,250
Oxford Health Plans, Inc.(1) 409,400 20,367,650
United Healthcare Corporation 300,000 12,487,500
- ------------------------------------------------------------------------------------------------------------------------------
38,976,400
- ------------------------------------------------------------------------------------------------------------------------------
HOSPITALS - 2.9%
Columbia/HCA Healthcare Corporation 204,800 11,648,000
Health Management Associates, Inc.(1) 300,000 7,462,500
- ------------------------------------------------------------------------------------------------------------------------------
19,110,500
- ------------------------------------------------------------------------------------------------------------------------------
INVESTMENT MANAGEMENT - 4.3%
Charles Schwab Corporation 293,000 6,775,625
Merrill Lynch and Company, Inc. 325,000 21,328,125
- ------------------------------------------------------------------------------------------------------------------------------
28,103,750
- ------------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES - 3.2%
Invacare Corporation 287,300 8,044,400
Medtronic, Inc. 200,000 12,825,000
- ------------------------------------------------------------------------------------------------------------------------------
20,869,400
- ------------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS - 8.6%
Atmel Corporation(1) 500,000 15,437,500
Intel Corporation 236,000 22,523,250
Micron Technology, Inc. 600,000 18,300,000
- ------------------------------------------------------------------------------------------------------------------------------
56,260,750
- ------------------------------------------------------------------------------------------------------------------------------
SPECIALTY WHOLESALE - 0.5%
Central Garden & Pet Company(1) 160,000 3,220,000
- ------------------------------------------------------------------------------------------------------------------------------
3,220,000
- ------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 1.7%
LCI International, Inc.(1) 347,800 10,955,700
- ------------------------------------------------------------------------------------------------------------------------------
10,955,700
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 99.4% (Cost: $492,972,168) 649,258,425
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 0.6% 3,679,496
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100% $ 652,937,921
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Non-income-producing security.
(2) ADR - American Depository Receipt
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE VALUE + GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF NET ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $492,972,168) $ 649,258,425
Receivable for investments sold 37,079,723
Receivable for fund shares subscribed 1,401,405
Dividends receivable 248,059
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 687,987,612
- ------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- ------------------------------------------------------------------------------------------------------------------------------
Payable for investments purchased 26,530,058
Payable for fund shares redeemed 3,017,176
Payable to adviser 513,129
Payable to distributor 132,526
Accrued expenses 217,884
Payable, other 4,638,918
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 35,049,691
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 652,937,921
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 474,110,367
Accumulated net investment loss (6,948,668)
Accumulated net realized gain from investments 29,489,965
Net unrealized appreciation on investments 156,286,257
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 652,937,921
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES: $ 24.07
Net Asset Value, offering and redemption price per share
(Net assets of $652,937,921 applicable to 27,122,669 shares
of beneficial interest outstanding with no par value)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Dividends $ 2,861,825
Interest 336,134
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 3,197,959
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 6,539,751
Distribution fees 1,634,843
Custodian and transfer agent fees 1,061,600
Shareholder reports 353,440
Registration and filing fees 322,780
Professional fees 151,000
Interest expense 59,649
Trustees' fees and expenses 16,714
Insurance 6,850
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 10,146,627
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT LOSS (6,948,668)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 56,266,673
Net change in unrealized appreciation on investments (23,772,459)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS 32,494,214
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,545,546
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE VALUE + GROWTH FUND THIRD-QUARTER REPORT
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE FOR THE
NINE MONTHS ENDED NINE MONTHS ENDED
9/30/96 12/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment loss $ (6,948,668) $ (8,122,358)
Net realized gain/(loss) from investments 56,266,673 (25,249,381)
Net change in unrealized appreciation on investments (23,772,459) 139,393,491
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 25,545,546 106,021,752
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - -
Realized gains on investments - -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - -
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net (decrease)/increase in net assets resulting from capital share transactions (512,758,792) 605,226,408
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (512,758,792) 605,226,408
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL (DECREASE)/INCREASE IN NET ASSETS (487,213,246) 711,248,160
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of period 1,140,151,167 428,903,007
End of period $652,937,921 $1,140,151,167
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
ROBERTSON, STEPHENS & COMPANY
FINANCIAL HIGHLIGHTS
FOR THE FOR THE FOR THE FOR THE FOR THE
FOR A SHARE OUTSTANDING NINE MONTHS NINE MONTHS YEAR ENDED YEAR ENDED PERIOD ENDED
THROUGHOUT THE PERIOD: ENDED 9/30/96 ENDED 12/31/95 3/31/95 3/31/94 3/31/93
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period $ 22.66 $ 18.25 $ 13.56 $ 11.94 $ 10.00
Net investment (loss)/income (0.18) (0.16) (0.18) (0.04) 0.12
Net realized gain and net change in
unrealized appreciation on investments 1.59 4.57 5.07 1.99 1.88
- ------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting From Operations 1.41 4.41 4.89 1.95 2.00
- ------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - - (0.03) (0.06)
Distributions from realized gains on investments - - (0.20) (0.30) -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 24.07 $ 22.66 $ 18.25 $ 13.56 $ 11.94
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN 6.22% 24.16% 36.27% 16.32% 20.05%
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period $652,937,921 $1,140,151,167 $428,903,007 $44,500,363 $17,833,350
Ratio of Expenses to Average Net Assets 1.55% 1.45% 1.68% 1.55%(2) 1.33%(2)
Ratio of Net Investment (Loss)/Income to
Average Net Assets (1.06)% (1.04)% (1.09)% (0.51)%(2) 1.26%(2)
Portfolio Turnover Rate 177% 104% 232% 250% 210%
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) From April 21, 1992 (Commencement of Operations), to March 31, 1993.
(2) If the Fund had paid all of its expenses and had received no reimbursement
from the Adviser, the ratio of expenses to average net assets for the
period ended March 31, 1994, and March 31, 1993, would have been 2.35% and
2.71%, respectively, and the ratio of net investment income/(loss) to
average net assets would have been (1.31)% and (0.12)%, respectively.
Per-share data for each of the periods has been determined by using the
average number of shares outstanding throughout each period. Ratios, except
for total return and portfolio turnover rate, have been annualized.
The accompanying notes are an integral part of these financial statements.
<PAGE>
THE VALUE + GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Value + Growth Fund (the "Fund") is a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Fund is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. The Fund became effective to offer shares to the
public on May 12, 1992. Prior to the public offering, shares were offered in a
private placement offering on April 21, 1992, at $10 per share, to sophisticated
investors under Section 4(2) of the Securities Act of 1933. The Trust offers
eleven 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, and The
Robertson Stephens MicroCap Growth Fund. The assets for each series are
segregated and accounted for separately.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. INVESTMENT VALUATIONS:
Marketable securities including options are valued at the last sale price on the
principal exchange or market on which they are traded; or, if there were no
sales that day, at the mean between the closing bid and asked prices. At
September 30, 1996, 100% of the Fund's portfolio was valued in this manner.
Securities for which market quotations are not readily available are valued at
their fair value as determined in accordance with the guidelines and procedures
adopted by the Fund's Board of Trustees. The guidelines and procedures use
fundamental valuation methods which include, but are not limited to, the
analysis of: the effect of any restrictions on the sale of the security, product
development and trends of the security's issuer, changes in the industry and
other competing companies, significant changes in the issuer's financial
position, and any other event which could have a significant impact on the value
of the security. At September 30, 1996, no security of the Fund was valued using
these guidelines and procedures. As its normal course of business, the Fund has
invested a significant portion of its assets in companies within a number of
industries in the technology and telecommunications sectors. Accordingly, the
performance of the Fund may be subject to a greater risk of market fluctuation
than that of a fund invested in a wider spectrum of market or industrial
sectors.
B. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Fund's custodian and is monitored daily to ensure
that the collateral's market value equals at least 100% of the repurchase price
under the agreement. However, in the event of default or bankruptcy by the
counterparty to the agreement, realization and/or retention of the collateral
may be subject to legal proceedings. The Fund's policy is to limit repurchase
agreement transactions to those parties deemed by the Fund's Investment Adviser
to have satisfactory creditworthiness.
C. FEDERAL INCOME TAXES:
The Fund has made no provisions for federal income tax for the nine months ended
September 30, 1996. The Fund complied with requirements of the Internal Revenue
Code for qualifying as a regulated investment company so as not to be subject to
federal income tax.
<PAGE>
ROBERTSON, STEPHENS & COMPANY
D. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date the securities are
purchased, sold, or sold short (trade date). Realized gains and losses on
securities transactions are determined on the basis of specific identification.
E. INVESTMENT INCOME:
Dividend income is recorded on the ex-dividend date. Interest income is accrued
and recorded daily.
F. CAPITAL ACCOUNTS:
The Fund follows the provisions of the AICPA's Statement of Position 93-2
"Determination, Disclosure and Financial Statement Presentation of Income,
Capital Gain and Return of Capital Distributions by Investment Companies"
("SOP"). The purpose of this SOP is to report undistributed net investment
income or loss and accumulated net realized gain or loss accounts in such a
manner as to approximate amounts available for future distributions to
shareholders, if any.
NOTE 2 CAPITAL SHARES:
A. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value. Transactions in capital shares for the nine months ended
September 30, 1996, and for the nine months ended December 31, 1995, were as
follows:
1/1/96 - 9/30/96 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 16,805,719 $ 379,974,681
Shares reinvested - -
- ----------------------------------------------------------------------------
16,805,719 379,974,681
- ----------------------------------------------------------------------------
Shares redeemed (40,001,638) (892,733,473)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net decrease (23,195,919) $ (512,758,792)
- ----------------------------------------------------------------------------
4/1/95 - 12/31/95 SHARES AMOUNT
- ----------------------------------------------------------------------------
Shares sold 71,113,394 $1,642,232,001
Shares reinvested - -
- ----------------------------------------------------------------------------
71,113,394 1,642,232,001
- ----------------------------------------------------------------------------
Shares redeemed (44,296,835) (1,037,005,593)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
Net increase 26,816,559 $ 605,226,408
- ----------------------------------------------------------------------------
NOTE 3 TRANSACTIONS WITH AFFILIATES:
A. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson, Stephens & Company
Investment Management, L.P. ("RSIM"), an investment advisory fee calculated at
an annual rate of 1.00% of the average daily net assets of the Fund. (As of
January 1, 1996, the rate was reduced to 1% of the average daily net assets of
the Fund from an annual rate of 1.25%.) For the nine months ended September 30,
1996, the Fund incurred investment advisory fees of $6,539,751. RSIM has agreed
to reimburse the Fund for any annual operating expenses, including investment
advisory fees, but excluding dividend expense for short sales, which exceed the
most stringent limits prescribed by any state in which the Fund's shares are
offered for sale. For the nine months ended September 30, 1996, there was no
expected reimbursement of advisory fees and other expenses.
B. AFFILIATED PERSONS:
Certain officers and Trustees of the Fund are also members and/or officers of
Robertson, Stephens & Company Group, L.L.C. ("RS Group"), the managing member
of Robertson, Stephens & Company LLC ("RS & Co."), the Fund's Distributor and
RSIM, the Fund's Adviser. G. Randy Hecht, President, Chief Executive Officer,
and a Trustee of the Fund, is also a Director of RSIM, a Member of RS Group, and
Chief Operating Officer of RS & Co. Terry R. Otton, Chief Financial Officer of
the Fund, is a Member of
<PAGE>
THE VALUE + GROWTH FUND THIRD-QUARTER REPORT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
RS Group and Chief Financial Officer of RS & Co. John P. Rohal, a Trustee of the
Fund, is a Member of RS Group and Director of Research for RS & Co. Ronald E.
Elijah, Portfolio Manager, is a Member of RS Group. All affiliated and access
persons, as defined in the 1940 Act, follow strict guidelines and policies on
personal trading as outlined in the Fund's Code of Ethics.
C. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $16,714 for the nine months ended September 30,
1996.
D. DISTRIBUTION FEES:
The Fund has entered into an agreement with RS & Co. for distribution services
effective on January 1, 1996, and has adopted a Plan of Distribution pursuant to
Rule 12b-1 under the 1940 Act, which is approved annually by the Fund's Board of
Trustees. Under the Plan, RS & Co. is compensated for services in such capacity,
including its expenses in connection with the promotion and distribution of the
Fund's shares. The distribution fee is calculated at an annual rate of 0.25% of
the average daily net assets of the Fund. For the nine months ended
September 30, 1996, the Fund incurred distribution fees of $1,634,843.
E. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as broker-dealer,
subject to Fund policies as stated in the prospectus, regulatory constraints,
and the ability of RS & Co. to provide competitive prices and commission rates.
All investment transactions in which RS & Co. acts as a broker may only be
executed on an agency basis. Subject to certain constraints, the Fund may make
purchases of securities from offerings or underwritings in which RS & Co. has
been retained by the issuer. For the nine months ended September 30, 1996, the
Fund paid brokerage commissions of $328,880 to RS & Co., which represented 12%
of total commissions paid for the period.
NOTE 4 INVESTMENTS:
A. PORTFOLIO TURNOVER RATE:
The portfolio turnover rate, which is calculated based on the lesser of the cost
of investments purchased or the proceeds from investments sold (excluding
securities sold short and short-term investments) measured as a percentage of
the Fund's average monthly investment portfolio for the nine months ended
September 30, 1996, was 177%.
B. TAX BASIS OF INVESTMENTS:
At September 30, 1996, the cost of investments for federal income tax purposes
was $492,972,168. Accumulated net unrealized appreciation on investments was
$156,286,257, consisting of gross unrealized appreciation and depreciation of
$161,691,158 and ($5,404,901), respectively.
C. INVESTMENT PURCHASES AND SALES:
For the nine months ended September 30, 1996, the cost of investments purchased
and the proceeds from investments sold (excluding options, securities sold
short, and short-term investments) were $1,554,302,946 and $2,066,001,597,
respectively.
D. SHORT SALES:
For the nine months ended September 30, 1996, the Fund did not sell any
securities short.
<PAGE>
-------------------------
FORM N-lA
PART C
-------------------------
<PAGE>
PART C. OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
1. The following audited financial statements for The Robertson
Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Emerging Growth Fund, The
Robertson Stephens Global Low-Priced Stock Fund, The Robertson
Stephens Global Natural Resources Fund, The Robertson Stephens
Growth & Income Fund, The Information Age Fund, The Robertson
Stephens Partners Fund, and The Robertson Stephens Value + Growth
Fund, each a series of Registrant, are included in Part B:
Schedules of Net Assets as of December 31, 1995; Schedules of
Securities Sold Short as of December 31, 1995 (the Contrarian Fund
and the Growth & Income Fund only); Statements of Assets and
Liabilities as of December 31, 1995; Statements of Operations for
the periods ended December 31, 1995; Statements of Changes in Net
Assets for the periods ended December 31, 1995; Financial
Highlights for each of the periods presented; Notes to Financial
Statements; and Reports of Independent Accountant.
2. The following unaudited financial statements for The Robertson
Stephens Contrarian Fund, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Diversified Growth Fund,
The Robertson Stephens Emerging Growth Fund, The Robertson
Stephens Global Low-Priced Stock Fund, The Robertson Stephens
Global Natural Resources Fund, The Robertson Stephens Growth &
Income Fund, The Information Age Fund, The Robertson Stephens
MicroCap Growth Fund, The Robertson Stephens Partners Fund, and
The Robertson Stephens Value + Growth Fund, each a series of
Registrant, are included in Part B:
Schedules of Net Assets as of September 30, 1996; Schedules of
Securities Sold Short as of September 30, 1996 (the Contrarian
Fund and the Growth & Income Fund only); Statements of Assets and
Liabilities as of September 30, 1996; Statements of Operations for
the periods ended September 30, 1996; Statements of Changes in Net
Assets for the periods ended September 30, 1996; Notes to
Financial Statements; and Reports of Independent Accountant.
(b) Exhibits
1.(a) Copy of Amended and Restated Agreement and Declaration of Trust of
Registrant.(A)
1.(b) Copy of Certificate of Amendment of Agreement and Declaration of
Trust of Registrant.(C)
1.(c) Copy of Certificate of Amendment of Agreement and Declaration of
Trust of Registrant.(D)
1.(d) Copy of Certificate of Amendment of Agreement and Declaration of
Trust of Registrant.(L)
1.(e) Form of Amended and Restated Agreement and Declaration of Trust of
Registrant.+
2.(a) Copy of Amended and Restated By-Laws of Registrant.(A)
2.(b) Form of Amended and Restated By-Laws of Registrant.+
3. Inapplicable.
4. Specimen Share Certificate.(A)
C-1
<PAGE>
5.(a) Investment Advisory Agreement between Avon Capital Management
Corporation (now Robertson Stephens Investment Management, Inc.)
and Registrant on behalf of Robertson Stephens Emerging Growth
Fund.(B)
5.(b) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, Inc. and Registrant on behalf of Robertson
Stephens Value Plus Fund.(D)
5.(c) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, L.P. and Registrant on behalf of Robertson
Stephens Contrarian Fund.(G)
5.(d) Agreement between Robertson Stephens Investment Management, Inc.,
Robertson Stephens Investment Management, L.P., Robertson,
Stephens & Company, L.P. and Registrant on behalf of Robertson
Stephens Value Plus Fund.(H)
5.(e) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, L.P. and Registrant on behalf of Robertson
Stephens Emerging Markets Fund.(I)
5.(f) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, L.P. and Registrant on behalf of Robertson
Stephens Partners Fund.(L)
5.(g) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, L.P. and Registrant on behalf of Robertson
Stephens Growth & Income Fund.(M)
5.(h) Form of Investment Advisory Agreement between Robertson Stephens
Investment Management, L.P. and Registrant (on behalf of each of
Robertson Stephens Global Low-Priced Stock Fund, Robertson
Stephens Global Natural Resources Fund, and Robertson Stephens
Information Age Fund).(N)
5.(i) Form of Letter Agreement regarding the Investment Advisory
Agreement listed in 5(d), above.(O)
5.(j) Form of Investment Advisory Agreement between Robertson, Stephens
& Company, L.P. and Registrant (on behalf of Robertson Stephens
Asia Fund).(P)
5.(k) Form of Investment Advisory Agreement between Robertson, Stephens
& Company Investment Management, L.P. and Registrant (on behalf of
Robertson Stephens Diversified Growth Fund).(P)
5.(l) Form of Investment Advisory Agreement between Robertson, Stephens
& Company Investment Management, L.P. and Registrant (on behalf of
Robertson Stephens Emerging Europe Fund).(P)
5.(m) Form of Investment Advisory Agreement between Robertson, Stephens
& Company, L.P. and Registrant (on behalf of Robertson Stephens
MicroCap Growth Fund).*
6.(a) Underwriting Agreement and Selling Group Agreement.(F)
6.(b) Consent of the Board of Trustees of Registrant.(H)
7. Inapplicable.
8. Custodian Agreement between Registrant and State Street Bank and
Trust.(E)
9. (A) - Form of Administrative Services Agreement.(P)
(B) - Form of Shareholder Service Plan *
C-2
<PAGE>
10. Inapplicable.
11. Consent of Independent Accountants.*
12. Inapplicable.
13. Letter of Understanding Relating to Initial Capital.(A,J)
14. Disclosure Statement, Custodial Account Agreement and related
documents for an Individual Retirement Account (State Street Bank
and Trust).(E)
15.(a) Distribution Plan Pursuant to Rule 12b-l adopted by Registrant for
Robertson Stephens Emerging Growth Fund.(A)
15.(b) Form of Distribution Plan Pursuant to Rule 12b-l adopted by
Registrant for Robertson Stephens Contrarian Fund.(G)
15.(c) Form of Distribution Plan Pursuant to Rule 12b-l adopted by
Registrant for Robertson Stephens Emerging Markets Fund (now,
Robertson Stephens Developing Countries Fund).(I)
15.(d) Form of Distribution Plan Pursuant to Rule 12b-1 adopted by
Registrant for Robertson Stephens Partners Fund.(L)
15.(e) Form of Distribution Plan Pursuant to Rule 12b-1 adopted by
Registrant for Robertson Stephens Growth & Income Fund.(L)
15.(f) Form of Distribution Plan Pursuant to Rule 12b-1 (in respect of
each of Robertson Stephens Global Low-Priced Stock Fund, Robertson
Stephens Global Natural Resources Fund and Robertson Stephens
Information Age Fund).(N)
15.(g) Form of Distribution Plan Pursuant to Rule 12b-1 (in respect of
Robertson Stephens Value + Growth Fund).(O)
15.(h) Form of Distribution Plan Pursuant to Rule 12b-1 (in respect of
each of Robertson Stephens Asia Fund, Robertson Stephens
Diversified Growth Fund, Robertson Stephens Emerging Europe Fund,
and Robertson Stephens MicroCap Growth Fund).(P)
15.(i) Form of Distribution Plan Pursuant to Rule 12b-1 (in respect of
Class C shares).*
16. Schedule of Computation of Performance Quotation.(D)
17.(a) Power of Attorney.(H)
17.(b) Power of Attorney of Terry R. Otton.(M)
17.(c) Power of Attorney.(P)
27.A-
27.I Financial Data Schedules.
(a) For the fiscal year ended December 31, 1995.(P)
(b) For the periods ended September 30, 1996*
Incorporated by a reference to like-numbered exhibits:
(A) Previously filed as part of the Registration Statement
filed August 12, 1987.
C-3
<PAGE>
(B) Previously filed as part of the Post-Effective Amendment
No. 1 to the Registration Statement on March 3, 1988.
(C) Previously filed as part of the Post-Effective Amendment
No. 4 to the Registration Statement on May 1, 1991.
(D) Previously filed as part of the Post-Effective Amendment
No. 6 to the Registration Statement on March 12, 1992.
(E) Previously filed as part of the Post-Effective Amendment
No. 8 to the Registration Statement on June 30, 1992.
(F) Previously filed as part of the Post-Effective Amendment
No. 11 to the Registration Statement on February 5, 1993.
(G) Previously filed as part of the Post-Effective Amendment
No. 13 to the Registration Statement on April 30, 1993.
(H) Previously filed as part of the Post-Effective Amendment
No. 16 to the Registration Statement on December 8, 1993.
(I) Previously filed as part of the Post-Effective Amendment
No. 18 to the Registration Statement on April 29, 1994.
(J) Previously filed as part of the Post-Effective Amendment
No. 19 to the Registration Statement on July 5, 1994.
(K) Previously filed as part of the Post-Effective Amendment
No. 20 to the Registration Statement on October 14, 1994.
(L) Previously filed as part of the Post-Effective Amendment
No. 21 to the Registration Statement on April 28, 1995.
(M) Previously filed as part of the Post-Effective Amendment
No. 22 to the Registration Statement on July 3, 1995.
(N) Previously filed as part of the Post-Effective Amendment
No. 23 to the Registration Statement on September 1, 1995.
(O) Previously filed as part of the Post-Effective Amendment
No. 24 to the Registration Statement on January 16, 1996.
(P) Previously Filed as part of the Post-Effective Amendment
No. 25 to the Registration Statement on May 17, 1996.
* Filed herewith.
+ To be filed by amendment.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
As of the date of this Registration Statement, there is no person
controlled by or under common control with the Registrant.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES.
On December 15, 1996, Registrant had the following number of security
holders of its Class A shares:
Title of Class Number of Record Holders
-------------- ------------------------
Shares of Beneficial Interest of 0
The Robertson Stephens
Asia Fund
C-4
<PAGE>
Shares of Beneficial Interest of 22,878
The Robertson Stephens
Contrarian Fund
Shares of Beneficial Interest of 1,872
The Robertson Stephens
Developing Countries Fund
Shares of Beneficial Interest of 890
The Robertson Stephens
Diversified Growth Fund
Shares of Beneficial Interest of 0
The Robertson Stephens
Emerging Europe Fund
Shares of Beneficial Interest of 8,233
The Robertson Stephens
Emerging Growth Fund
Shares of Beneficial Interest of 1,043
The Robertson Stephens
Global Low-Priced Stock
Fund
Shares of Beneficial Interest of 2,274
The Robertson Stephens
Global Natural Resources
Fund
Shares of Beneficial Interest of 7,216
The Robertson Stephens
Growth & Income Fund
Shares of Beneficial Interest of 3,209
The Robertson Stephens
Information Age Fund
Shares of Beneficial Interest of 2,310
The Robertson Stephens
Partners Fund
Shares of Beneficial Interest of 0
The Robertson Stephens
Fund
Shares of Beneficial Interest of 24,928
The Robertson Stephens
Value + Growth Fund
C-5
<PAGE>
ITEM 27. INDEMNIFICATION
Under the terms of Registrant's By-laws, Article XI (See Exhibit 2 to
this Registration Statement), Registrant may indemnify and insure its trustees,
officers, employees, agents and other persons who may be indemnified by
Registrant under the Investment Company Act of 1940 (the "1940 Act").
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to trustees and officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised that in the opinion of the Securities and Exchange Commission, such
indemnification by Registrant is against public policy as expressed in the
Securities Act, and therefore may be unenforceable. In the event that a claim
for such indemnification (except insofar as it provides for the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
against Registrant by any trustee, officer or controlling person and the
Securities and Exchange Commission is still of the same opinion, Registrant
will, unless in the opinion of its counsel the matter has been settled by a
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act, and will be governed by the final adjudication
of such issue.
Registrant also participates in a policy of insurance which insures
Registrant, its present, past and future trustees, officers, employees, agents
and investment advisers against any liability incurred on account of any alleged
negligent act, error or omission committed in connection with the operation of
the Trust, but excluding losses incurred by reason of any fraudulent breach of
trust or intention to deceive or defraud, or dishonest, criminal or malicious
act finally adjudicated. Coverage for the insureds generally includes losses
incurred by reason of any actual or alleged breach of duty, neglect, error,
misstatement, misleading statement or other act or omission committed by such
person in such capacity, but generally excludes losses incurred on account of
personal dishonesty, fraudulent breach of trust, lack of good faith or intention
to deceive or defraud or willful failure to act prudently.
ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
Robertson Stephens Investment Management, Inc. ("RSIM, Inc."), a Delaware
corporation, and Robertson, Stephens & Company Investment Management, L.P.
("RSIM, L.P."), a California limited partnership, are the investment advisers to
Registrant. Since they commenced operations in March 1986 and June 1993,
respectively, RSIM Inc.'s and RSIM, L.P.'s principal businesses have been to
render investment advisory services to clients, including Registrant, limited
partnerships and various private accounts.
RSIM, Inc. is wholly owned by Robertson, Stephens & Company LLC, a
Delaware limited liability company, of which Robertson, Stephens & Company
Group, L.L.C., a Delaware limited liability company, is the managing member and
Robertson, Stephens & Company, Inc., a California corporation, is the only other
member. Robertson, Stephens & Company LLC is a registered securities
broker-dealer and the principal underwriter for each of the Funds.
RSIM, L.P.'s sole general partner is Robertson, Stephens & Company, Inc.,
and its sole limited partner is Robertson, Stephens & Company LLC.
Information about G. Randy Hecht, an officer of RSIM, L.P. and a director
of RSIM, Inc., is set forth in Part A herein and under Item 29 below.
Information about David J. Evans, Secretary and Security Analyst of RSIM,
Inc., and Portfolio Manager of RSIM, Inc. for Robertson Stephens Emerging Growth
Fund, is set forth in Part A herein.
C-6
<PAGE>
Information about Paul H. Stephens, Portfolio Manager of RSIM, L.P. for
Robertson Stephens Contrarian Fund, is set forth in Part A herein and under Item
29 below.
Information about Ronald E. Elijah, Portfolio Manager of RSIM, L.P. for
Robertson Stephens Information Age Fund and for Robertson Stephens Value +
Growth Fund, is set forth in Part A herein and under Item 29 below.
Information about Michael Hoffman, Portfolio Manager of RSIM, L.P. for
Robertson Stephens Developing Countries Fund, is set forth in Part A herein.
Information about Andrew P. Pilara, Jr., Portfolio Manager of RSIM, L.P.
for Robertson Stephens Partners Fund and for Robertson Stephens Global Natural
Resources Fund, is set forth in Part A herein and under Item 29 below.
Information about M. Hannah Sullivan, Portfolio Manager of RSIM, L.P. for
Robertson Stephens Global Low-Priced Stock Fund, is set forth in Part A herein.
Information about John L. Wallace, Portfolio Manager of RSIM, L.P. for
Robertson Stephens Growth & Income Fund and for Robertson Stephens Diversified
Growth Fund, is set forth in Part A herein and under Item 29 below.
Herbert L. Damner, Jr., a Director of RSIM, Inc., has been a partner of
Damner, Pike & Co., a real estate firm located at 345 California Street, 21st
Floor, San Francisco, CA 94104, since January 1984.
ITEM 29. PRINCIPAL UNDERWRITERS.
(a) Robertson, Stephens & Company LLC is the principal underwriter of each of
the Funds.
(b) The table below sets forth certain information as of January 2, 1997 as
to the members of Robertson, Stephens & Company LLC, the principal
underwriter of Registrant's shares. The managing member of Robertson,
Stephens & Company LLC is Robertson, Stephens & Company Group, L.L.C., a
Delaware limited liability company. The principal business address for
each of the persons named below is 555 California Street, San Francisco,
CA 94104.
<TABLE>
<CAPTION>
POSITIONS AND OFFICES POSITIONS AND OFFICES
NAME WITH UNDERWRITER WITH REGISTRANT
<S> <C> <C>
Mary Katherine Barger Managing Director and Member None
Brian S. Bean Managing Director and Member None
M. Kathleen Behrens Managing Director and Member None
Keith E. Benjamin Managing Director and Member None
Lars-Christian Brask Managing Director and Member None
Richard G. Bianchina Managing Director and Member None
Frank W. Birnie, Jr. Managing Director and Member None
Clark Callendar Managing Director and Member None
Georgene R. Carambat Managing Director and Member None
Farah H. Champsi Managing Director and Member None
Brendan Dyson Managing Director and Member None
Thomas P. Eddy, Jr. Managing Director and Member None
Richard C. Edwards Managing Director and Member None
Ronald E. Elijah Managing Director and Member None
C-7
<PAGE>
Robert L. Emery Managing Director and Member None
Brian Farr Managing Director and Member None
Kenneth R. Fitzsimmons, Jr. Managing Director and Member None
James P. Foster Managing Director and Member None
David L. Goldsmith Managing Director and Member None
Robert Grady Managing Director and Member None
Tony M. Haertl Managing Director and Member None
Charles A. Hamilton Managing Director and Member None
Kenneth C. Haupt Managing Director and Member None
William Hazen Managing Director and Member None
G. Randy Hecht Managing Director and Member President, Chief
Executive Officer,
and Trustee
E. David Hetz Managing Director and Member None
Thomas E. Hodapp Managing Director and Member None
Paul Johnson Managing Director and Member None
Seymour F. Kaufman Managing Director and Member None
John F. Keating, Jr. Managing Director and Member None
Daniel L. Klesken Managing Director and Member None
Janet J. Kloppenburg Managing Director and Member None
Michael G. McCaffery Managing Director and Member None
Douglas C. Moore Managing Director and Member None
Daniel J. Murphy Managing Director and Member None
Robert J. Nowlin Managing Director and Member None
Terry R. Otton Managing Director and Member Treasurer, Chief
Financial Officer,
and Principal
Accounting Officer
J. Misha Petkevich Managing Director and Member None
Andrew P. Pilara, Jr. Managing Director and Member None
Karl Power Managing Director and Member None
John Powers Managing Director and Member None
William Ring Managing Director and Member None
George V. Robertson Managing Director and Member None
Sanford R. Robertson Managing Director and Member None
Andrew H. Roediger Managing Director and Member None
John P. Rohal Managing Director and Member Trustee
John Rossi Managing Director and Member None
Neil J. Sandler Managing Director and Member None
Stephen Schweich Managing Director and Member None
Thomas Sheedy Managing Director and Member None
Paul G. Sherer Managing Director and Member None
Russell R. Silvestri Managing Director and Member None
Mark J. Simon Managing Director and Member None
Paul C. Slivon Managing Director and Member None
Sheryl R. Skolnick Managing Director and Member None
Michael J. Stark Managing Director and Member None
Paul H. Stephens Managing Director and Member None
John L. Wallace Managing Director and Member None
Dana K. Welch Managing Director and Member Secretary
Edward Weller Managing Director and Member None
C-8
<PAGE>
William S. Wisialowski Managing Director and Member None
Vivian R. Wohl Managing Director and Member None
Joseph Yurman Managing Director and Member None
Donald E. Zimmer Managing Director and Member None
</TABLE>
(c) Inapplicable.
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
The records required by Section 31(a) and Rule 31a-1 through 3 under the
1940 Act will be maintained by Registrant at its offices, 555 California Street,
San Francisco, CA 94104 except that pursuant to Rule 31a-3 under the 1940 Act,
the Transfer Agent (located at 1004 Baltimore, Kansas City, MO 64105) and
Custodian (located at 225 Franklin Street, Boston, MA 02110) for Registrant,
will maintain the records required by subparagraphs (b)(1) and (b)(2)(D) of Rule
31a-1.
ITEM 31. MANAGEMENT SERVICES.
Registrant has entered into an agreement with State Street Bank and Trust
Company for certain transfer agency and shareholder services. Pursuant to the
agreement, State Street Bank and Trust Company, among other things, maintains
accounts for shareholders of record of registrant, processes requests to
purchase and redeem shares and mails communications by Registrant to its
shareholders.
ITEM 32. UNDERTAKINGS.
The Registrant has made the following undertakings which are still
applicable:
(a) Registrant has undertaken to comply with Section 16(a) of the Investment
Company Act of 1940, as amended, which requires the prompt convening of a
meeting of shareholders to elect trustees to fill existing vacancies in
the Registrant's Board of Trustees in the event that less than a majority
of the trustees have been elected to such position by shareholders.
Registrant has also undertaken to promptly call a meeting of shareholders
for the purpose of voting upon the question of removal of any Trustee or
Trustees when requested in writing to do so by the record holders of not
less than 10 percent of the Registrant's outstanding shares and to assist
its shareholders in communicating with other shareholders in accordance
with the requirements of Section 16(c) of the Investment Company Act of
1940, as amended.
(b) Not applicable.
(c) Registrant has undertaken to furnish each person to whom a prospectus is
delivered with a copy of the Registrant's latest annual report to
shareholders when available, upon request and without charge.
C-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the Investment
Company of 1940, the Registrant has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City and County of San Francisco and State of
California, on the 21st day of January, 1997.
ROBERTSON STEPHENS INVESTMENT TRUST
By: G. Randy Hecht*
----------------------------------
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below, on January 21, 1997, by the
following persons in the capacities indicated.
SIGNATURE CAPACITY
G. RANDY HECHT* Principal Executive Officer
- ------------------------- and Trustee
George R. Hecht
/s/ TERRY R. OTTON Treasurer, Chief Financial Officer,
- ------------------------- and Principal Accounting Officer
Terry R. Otton
LEONARD B. AUERBACH* Trustee
- -------------------------
Leonard B. Auerbach
DANIEL R. COONEY* Trustee
- -------------------------
Daniel R. Cooney
JAMES K. PETERSON* Trustee
- -------------------------
James K. Peterson
JOHN P. ROHAL* Trustee
- -------------------------
John P. Rohal
*By /s/ Terry R. Otton
---------------------------------------
Terry R. Otton, Attorney-in-Fact pursuant
to the Powers of Attorney filed herewith.
C-10
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. TITLE PAGE NO.
- ----------- ----- --------
5(m) Form of Investment Advisory Agreement for
Micro Cap Growth Fund
9(B) Form of Shareholder Services Plan
11 Consent of Independent Accountants
15(i) Form of Distribution Plan Pursuant to
Rule 12b-1 in respect of Class C shares
27.A-27.I(b) Financial Data Schedules
C-11
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
INVESTMENT ADVISORY AGREEMENT
This INVESTMENT ADVISORY AGREEMENT ("Agreement") is made as of the 15th day
of August, 1996, by and between ROBERTSON STEPHENS INVESTMENT TRUST, a business
trust organized and existing under the laws of The Commonwealth of Massachusetts
(the "Trust"), with respect to its series of shares known as ROBERTSON STEPHENS
MICROCAP GROWTH FUND (the "Fund"), and ROBERTSON, STEPHENS & COMPANY INVESTMENT
MANAGEMENT, L.P. (the "Adviser")
W I T N E S S E T H :
WHEREAS, the Trust is an open-end, management investment company,
registered as such under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Trust desires to retain the Adviser to render advice and
services to the Trust and Fund pursuant to the terms and provisions of this
Agreement, and the Adviser is interested in furnishing said advice and services;
NOW, THEREFORE, in consideration of the covenants and the mutual
promises hereinafter set forth, the parties hereto mutually agree as follows:
1. EMPLOYMENT OF ADVISER. (a) The Trust hereby employs the Adviser,
and the Adviser hereby accepts such employment, to render investment advice and
investment management services with respect to the assets of the Fund,
consistent with the investment objective and policies of the Fund and subject to
the supervision and direction of the Trust's Board of Trustees. The Adviser
shall, except as otherwise provided for herein, as part of its duties hereunder,
(i) furnish the Trust with investment advice, research and recommendations with
respect to the investment of the Fund's assets and the purchase and sale of its
portfolio securities, including the taking of such other steps as may be
necessary to implement such advice and recommendations, (ii) furnish the Trust
and Fund with reports, statements and other data on securities, economic
conditions and other pertinent subjects in respect of the investment management
of the Fund which the Trust's Board of Trustees may request, and (iii) in
general superintend and manage the investments of the Fund, subject to the
ultimate supervision and direction of the Trust's Board of Trustees.
(b) The Adviser shall determine the securities to be purchased
or sold by the Fund and will place orders pursuant to its determinations with or
through such persons, brokers or dealers (including Robertson, Stephens &
Company) in conformity with
<PAGE>
the policy with respect to brokerage as set forth in the Trust's Registration
Statement and the Fund's Prospectus and Statement of Additional Information or
as the Trustees may direct from time to time.
2. SUB-ADVISERS AND CONSULTANTS. The Adviser may from time to time,
in its discretion, delegate certain of its responsibilities under this Agreement
to one or more qualified companies, each of which is registered under the
Investment Advisers Act of 1940, as amended, provided that the separate costs of
employing such companies and of the companies themselves are borne by the
Adviser and not by the Fund.
3. ADVISER IS INDEPENDENT CONTRACTOR. The Adviser shall, for all
purposes herein, be deemed to be an independent contractor, and shall, unless
otherwise expressly provided and authorized, have no authority to act for or
represent the Trust or Fund in any way, or in any way be deemed an agent for the
Trust or Fund. It is expressly understood and agreed that the services to be
rendered by the Adviser to the Trust and Fund under the provisions of this
Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar or different services to others so long as its ability to render
the services provided for in this Agreement shall not be impaired thereby.
4. RESPONSIBILITIES AND PERSONNEL OF ADVISER. The Adviser agrees to
use its best efforts in the furnishing of investment advice, research and
recommendations to the Fund, in the preparation of reports and information, and
in the management of the Fund's assets, all pursuant to this Agreement, and for
this purpose the Adviser shall, at its own expense, maintain such staff and
employ or retain such personnel and consult with such other persons as it shall
from time to time determine to be necessary to the performance of its
obligations under this Agreement. Without limiting the generality of the
foregoing, the staff and personnel of the Adviser shall be deemed to include
persons employed or retained by the Adviser to furnish statistical, research,
and other factual information, advice regarding economic factors and trends,
information with respect to technical and scientific developments, and such
other information, advice and assistance as the Adviser may desire and request.
5. FURNISHING OF STATEMENTS AND REPORTS. The Trust shall from time
to time furnish to the Adviser detailed statements of the portfolio investments
and assets of the Fund and information as to its investment objectives and
needs, and shall make available to the Adviser such financial reports, business
descriptions and plans, proxy statements, legal and other information relating
to its investments as may be in the possession of the Trust or available to it
and such other information as the Adviser may reasonably request.
6. EXPENSES OF EACH PARTY. (a) The Adviser shall bear all expenses
in connection with the performance of its services under this Agreement. The
Adviser shall also pay (i) all compensation, if any, to the executive officers
of the Fund and their related expenses and (ii) all compensation, if any, and
out-of-pocket expenses of the Trust's trustees, who are "interested persons" of
the Trust (as defined in the Act).
-2-
<PAGE>
(b) The Trust shall bear all expenses of the Fund's
organization, operations, and business not specifically assumed or agreed to be
paid by the Adviser as provided in this Agreement. In particular, but without
limiting the generality of the foregoing, the Trust on behalf of the Fund and
out of its assets shall pay:
(A) CUSTODY AND ACCOUNTING SERVICES. All expenses of the
transfer, receipt, safekeeping, servicing and accounting for the cash,
securities, and other property of the Fund, including all charges of
depositories, custodians, and other agents, if any;
(B) SHAREHOLDER SERVICING. All expenses of maintaining and
servicing shareholder accounts, including all charges for transfer,
shareholder recordkeeping, dividend disbursing, redemption, and other
agents for the benefit of the Fund;
(C) BOOKS AND RECORDS. All costs and expenses associated with
the maintenance of the Fund's books of account and records as required
by the Act;
(D) SHAREHOLDER MEETINGS. All fees and expenses incidental to
holding meetings of shareholders, including the printing of notices
and proxy material, and proxy solicitation therefor, provided that the
Adviser shall be responsible for and assume all expenses and fees with
respect to meetings of the Fund's shareholders held solely for the
benefit of the Adviser;
(E) PROSPECTUSES AND STATEMENTS OF ADDITIONAL INFORMATION. All
expenses of preparing and printing of annual or more frequent
revisions of the Prospectus and Statement of Additional Information
relating to the offering of the Fund's shares and of mailing them to
shareholders;
(F) PRICING. All expenses of computing the Fund's net asset
value per share, including the cost of any equipment or services used
for obtaining price quotations;
(G) COMMUNICATION EQUIPMENT. All charges for equipment or
services used for communication between the Adviser or the Trust and
the custodian, transfer agent or any other agent selected by the
Trust;
(H) LEGAL AND ACCOUNTING FEES AND EXPENSES. All charges for
services and expenses of the Trust's legal counsel and independent
auditors for the benefit of the Trust;
-3-
<PAGE>
(I) TRUSTEES' FEES AND EXPENSES. All compensation of trustees,
other than those who are interested persons of or affiliated with the
Adviser, and all expenses incurred in connection with their service
and meetings;
(J) FEDERAL REGISTRATION FEES. All fees and expenses of
registering and maintaining the registration of the Trust under the
Act and the registration of Fund shares under the Securities Act of
1933, as amended (the "1933 Act"), including all fees and expenses
incurred in connection with the preparation, printing and filing of
any registration statement, Prospectus and Statement of Additional
Information under the 1933 Act or the Act, and any amendments or
supplements thereto that may be made from time to time;
(K) STATE REGISTRATION FEES. All fees and expenses (including
the compensation of personnel who may be employed by the Adviser or an
affiliate) of qualifying and maintaining qualification of the Trust
and of the Fund shares for sale under securities laws of various
states or jurisdictions, and of registration and qualification of the
Trust under all other laws applicable to the Trust or its business
activities (including registering the Trust as a broker-dealer, or any
officer of the Trust or any person as agent or salesman of the Trust
in any state);
(L) ISSUE AND REDEMPTION OF TRUST SHARES. All expenses incurred
in connection with the issue, redemption, and transfer of Fund shares,
including the expense of confirming all Fund share transactions, and
of preparing and transmitting the Fund's share certificates;
(M) BONDING AND INSURANCE. All expenses of bond, liability, and
other insurance coverage required by law or deemed advisable by the
Board of Trustees;
(N) BROKERAGE COMMISSIONS. All brokerage commissions and other
charges incident to the purchase, sale, or lending of the Fund's
portfolio securities;
(O) TAXES. All taxes or governmental fees payable by or in
respect of the Trust or Fund to federal, state, or other governmental
agencies, domestic or foreign, including stamp or other transfer
taxes;
(P) TRADE ASSOCIATION FEES. All fees, dues, and other expenses
incurred in connection with the Trust's membership in any trade
association or other investment organization;
-4-
<PAGE>
(Q) INTEREST. All interest which may accrue and be payable as a
result of the Fund's activities;
(R) STATIONERY AND POSTAGE. The cost of all stationery and
postage required by the Fund, unless otherwise payable by another
party with respect to an activity or expense referred to above; and
(S) NONRECURRING AND EXTRAORDINARY EXPENSES. Such nonrecurring
expenses as may arise, including the costs of actions, suits, or
proceedings to which the Trust on behalf of the Fund is a party and
the expenses the Trust on behalf of the Fund may incur as a result of
its legal obligation to provide indemnification to its officers,
trustees, and agents.
(c) In the event that the Trust offers other series of its
shares in the future, then the Fund shall only be responsible for expenses
directly attributable to it and its operations and for such other costs and
expenses of the Trust as the Board of Trustees may by resolution or otherwise
direct.
7. REIMBURSEMENT FOR ADVANCED COSTS AND EXPENSES. To the extent the
Adviser incurs any costs or performs any services which are an obligation of the
Trust or Fund, as set forth herein, the Trust on behalf of the Fund and out of
the Fund's assets shall promptly reimburse the Adviser for such costs and
expenses. To the extent the services for which the Fund is obligated to pay are
performed by the Adviser, the Adviser shall be entitled to recover from the Fund
only to the extent of its actual costs for such services.
8. FEES. (a) The Trust on behalf of the Fund and out of the Fund's
assets agrees to pay to the Adviser, and the Adviser agrees to accept, as full
compensation for all services furnished or provided to the Trust and Fund
hereunder, and as full reimbursement for all expenses assumed by the Adviser, a
management fee computed at the rate of 1.25% per annum of the average daily net
assets of the Fund.
(b) The management fee shall be accrued daily during each month
by the Trust on behalf of the Fund and paid to the Adviser on the first business
day of the succeeding month. The initial monthly fee under this Agreement shall
be payable on the first business day of the first month following the effective
date of this Agreement. The fee to the Adviser shall be prorated for the
portion of any month in which this Agreement is in effect which is not a
complete month according to the proportion which the number of calendar days in
the month during which the Agreement is in effect bears to the calendar days in
the month. If this Agreement is terminated prior to the end of any month, the
fee to the Adviser shall be payable within ten (10) days after the date of
termination.
(c) The Adviser may reduce or waive any portion of the
compensation due to it hereunder, or for reimbursement of expenses by the Trust
pursuant to
-5-
<PAGE>
Paragraph 7 of this Agreement, and any such reduction or waiver shall be
applicable only with respect to the specific items waived and shall not
constitute a waiver of any future compensation or reimbursement due to the
Adviser hereunder. In the event that expenses of the Fund for any fiscal year
should exceed the expense limitation on investment company expenses imposed by
any statute or regulatory authority of any jurisdiction in which shares of the
Fund are qualified for offer or sale, the compensation due the Adviser for such
fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof, or by the Adviser's assumption of expenses of the Fund. Any fee
withheld pursuant to this paragraph from the Adviser (including by way of the
assumption of expenses by the Adviser) shall be reimbursed by the Trust to the
Adviser in the first fiscal year or the second fiscal year next succeeding the
fiscal year of the withholding to the extent permitted by the applicable state
law to the extent the expenses of the Fund for the next succeeding fiscal year
or second succeeding fiscal year do not exceed any such expense limitation in
effect at the time, or any more restrictive limitation to which the Adviser has
agreed.
(d) The Adviser may agree not to require payment of any portion
of the compensation or reimbursement of expenses otherwise due to it pursuant to
this Agreement prior to the time such compensation or reimbursement has accrued
as a liability of the Trust. Any such agreement shall be applicable only with
respect to the specific items covered thereby and shall not constitute an
agreement not to require payment of any future compensation or reimbursement due
to the Adviser hereunder.
9. SHORT POSITIONS IN FUND'S SHARES. The Adviser agrees that
neither it nor any of its officers or employees shall take any short position in
the shares of the Fund. This prohibition shall not prevent the purchase of such
shares by any of the officers and Trustees or employees of the Adviser or any
trust, pension, profit-sharing or other benefit plan for such persons or
affiliates thereof, at a price not less than the net asset value thereof at the
time of purchase, as allowed pursuant to rules promulgated under the Act.
10. RELATIONSHIP TO PROVISIONS OF AGREEMENT AND DECLARATION OF TRUST.
Nothing herein contained shall be deemed to require the Trust to take any action
contrary to its Agreement and Declaration of Trust or any applicable statute or
regulation, or to relieve or deprive the Board of Trustees of the Trust of its
responsibility for and control of the conduct of the affairs of the Trust and
Fund.
11. DUTIES AND STANDARDS OF CARE. (a) In the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of obligations
or duties hereunder on the part of the Adviser, the Adviser shall not be subject
to liability to the Fund or to any shareholder of the Fund for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security by the Fund.
-6-
<PAGE>
(b) No provision of this Agreement shall be construed to protect
any Trustee or officer of the Trust or director or officer of the Adviser from
liability in violation of Sections 17(h) and (i) of the Act.
(c) A copy of the Agreement and Declaration of Trust of the
Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts and notice is hereby given that this Agreement is executed on
behalf of the Trustees of the Trust as Trustees, and not individually, and that
the obligations arising out of this Agreement are not binding upon the Trustees
or holders of the Trust's shares individually but are binding only upon the
assets and property of the Fund. The Adviser acknowledges that it has received
notice of and accepts the limitations of liability as set forth in the Agreement
and Declaration of Trust of the Trust. The Adviser agrees that the Trust's
obligations hereunder shall be limited to the Fund and to its assets, and that
the Adviser or any affiliated or related party shall not seek satisfaction of
any such obligation from any shareholder of the Fund nor from any trustee,
officer, employee or agent of the Trust.
12. TERM AND RENEWAL. This Agreement shall remain in effect for a
period of two (2) years, unless sooner terminated in accordance with Paragraph
13 hereof, and shall continue in effect from year to year thereafter so long as
such continuation is approved at least annually by (i) the Board of Trustees of
the Trust or by the vote of a majority of the outstanding voting securities of
the Fund, and (ii) the vote of a majority of the Trustees of the Trust who are
not parties to this Agreement or interested persons of any such party, cast in
person at a meeting for the purpose of voting on such approval.
13. TERMINATION. This Agreement may be terminated at any time,
without payment of any penalty, by the Board of Trustees of the Trust or by a
vote of a majority of the Fund's outstanding voting securities, upon sixty (60)
days' written notice to the Adviser, and by the Adviser upon sixty (60) days'
written notice to the Trust. This Agreement shall also terminate in the event
of any transfer or assignment thereof, as defined in the Act.
14. CERTAIN DEFINITIONS. The terms "majority of the outstanding
voting securities" of the Trust or Fund and "interested persons" shall have the
meanings as set forth in the Act. The term "net assets" shall have the meaning
and shall be calculated as set forth in the Trust's Registration Statement from
time to time.
15. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule, or otherwise, the remainder
of this Agreement shall not be affected thereby.
16. HEADINGS. The headings used herein are for convenience and ease
of reference only. No legal effect is intended, nor is to be derived from such
headings.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested by their duly authorized officers, all as of the day
and year first above written.
ROBERTSON STEPHENS INVESTMENT TRUST
------------------------------------
President
ROBERTSON, STEPHENS & COMPANY
INVESTMENT MANAGEMENT, L.P.
------------------------------------
President
-8-
<PAGE>
SHAREHOLDER SERVICE PLAN
This SHAREHOLDER SERVICE PLAN is adopted this ___ day of __________, 1997
in respect of certain classes of shares of the Funds of the Trust set forth on
Schedule A hereto, as supplemented from time to time. In consideration of the
mutual covenants hereinafter contained, it is hereby agreed by and between the
parties hereto as follows:
1. This Plan describes the circumstances under which Robertson, Stephens
& Company LLC (the "Service Agent"), the distributor of the shares of the Trust,
itself, or through other financial institutions or other intermediaries, will
provide shareholder support services to the Trust and its shareholders. These
administrative services may include, but are not limited to, the following
functions: providing office space, equipment, telephone facilities and various
personnel, including clerical, supervisory and computer personnel, as necessary
or beneficial to establish and maintain shareholder accounts and records;
processing purchase and redemption transactions; answering routine shareholder
inquiries regarding the Trust; assisting shareholders in changing dividend
options, account designations, and addresses; and providing such other
shareholder services as the Trust reasonably requests.
2. To compensate the Service Agent for the services it provides and the
expenses it bears hereunder, the Trust will, on behalf of each Fund listed on
Schedule A, pay the Service Agent a service fee (the "Service Fee") accrued
daily and paid promptly (but in any event within three business days) after the
last day of each calendar month at the annual rate of 0.25 of one percent
(0.25%) of the average daily net assets of the class or classes of shares of
such Fund listed on such Schedule A (determined as provided from time to time in
the prospectus of the Trust or as otherwise specified from time to time by the
Board of Trustees). The Service Fee paid under this Plan is intended to qualify
as a "service fee" as defined in Section 26 of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc. (or any successor provision) as
in effect from time to time.
If this Plan is terminated as of any date not the last day of a calendar
month, then the fee payable to the Service Agent shall be paid promptly (but in
any event within three business days) after such date of termination.
3. Quarterly in each year that the Plan remains in effect, the Service
Agent shall provide the Trust for review by the Trustees, and the Trustees shall
review, a written report of the amounts expended under the Plan and the purposes
for which such expenditures were made.
4. This Plan shall continue in effect for one year from the date of its
execution, and thereafter for successive periods of one year if this Plan is
approved at least annually by the Trustees, including a majority of the Trustees
who are not interested persons of the Trust and have no direct or indirect
financial interest in the operation of this Plan (the "Disinterested Trustees").
<PAGE>
5. Notwithstanding paragraph 4, this Plan may be terminated as follows:
(a) at any time, without the payment of any penalty, by the Service
Agent, on the one hand, or by the vote of a majority of the Disinterested
Trustees or by a vote of a majority of the outstanding voting securities of
the affected Fund as defined in the Investment Company Act of 1940, as
amended, on the other, on not more than sixty (60) days written notice; and
(b) automatically in the event of the Plan's assignment as defined in
the Investment Company Act of 1940.
6. Any agreement entered into pursuant to this Plan shall be in writing
and shall be subject to termination as provided in Section 5.
7. This Plan shall be construed in accordance with the laws of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, this Shareholder Service Plan is hereby adopted as of
the date first written above.
ROBERTSON STEPHENS
INVESTMENT TRUST
By:_____________________________
Title:
<PAGE>
EXHIBIT A
to the
Shareholder Service Plan
ROBERTSON STEPHENS INVESTMENT TRUST
Class C Shares of the following Funds:
[Names of Funds]
This Plan is adopted by Robertson Stephens Investment Trust with respect to
the Classes of shares of the Funds set forth above.
Witness the due execution hereof this ____ day of _______, 199_.
ROBERTSON STEPHENS
INVESTMENT TRUST
By:______________________________
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 26 to the registration
statement on Form N-1A of The Robertson Stephens Investment Trust (the
"Registration Statement") of our reports dated February 15, 1996, relating to
the financial statements and financial highlights of The Robertson Stephens
Growth & Income Fund, The Robertson Stephens Emerging Growth Fund, The Robertson
Stephens Partners Fund, The Robertson Stephens Global Natural Resources Fund,
The Robertson Stephens Global Low-Priced Stock Fund, The Robertson Stephens
Developing Countries Fund, The Robertson Stephens Information Age Fund, The
Robertson Stephens Contrarian Fund, and The Robertson Stephens Value + Growth
Fund (hereafter referred to as the "Funds"), which appear in such Statement of
Additional Information, and to the incorporation by reference of our reports
into the combined Prospectus for the Funds which constitutes part of this
Registration Statement. We also consent to the reference to us under the
heading "Independent Accountants" in such Statement of Additional Information
and to the references to us under the "Financial Highlights" headings in the
aforementioned Prospectus.
/s/ Price Waterhouse LLP
San Francisco, California
January 16, 1997
<PAGE>
ROBERTSON STEPHENS INVESTMENT TRUST
CLASS C
DISTRIBUTION PLAN AND AGREEMENT
This Plan and Agreement (the "Plan") constitutes the Distribution Plan for
the Class C shares of the various portfolio series (each a "Fund" and
collectively the "Funds") of Robertson Stephens Investment Trust, a
Massachusetts business trust (the "Trust"), adopted pursuant to the provisions
of Rule 12b-1 (the "Rule") under the Investment Company Act of 1940, as amended
(the "Act"), and the related agreement between the Trust and Robertson, Stephens
& Company LLC ("RS&Co."). During the effective term of this Plan, the Trust may
incur expenses primarily intended to result in the sale of its Class C shares
upon the terms and conditions hereinafter set forth:
SECTION 1. The Trust shall pay to RS&Co. a monthly fee at an annual rate
not to exceed 1.00% of the average net asset value of the Class C shares of the
Funds, as determined at the close of each business day during the month, to
compensate RS&Co. for services provided and expenses incurred by it in
connection with the offering of Class C shares, which may include, without
limitation, payments by RS&Co. to investment dealers or other persons with
respect to Class C shares. Such fees shall be payable for each month within 15
days after the close of such month. A majority of the Qualified Trustees, as
defined below, may, from time to time, reduce the amount of any such payments,
or may suspend the operation of the Plan for such period or periods of time as
they may determine.
SECTION 2. To the extent any payments by the Fund are deemed to be
payments for the financing of any activity primarily intended to result in the
sale of Class C shares of the Fund within the context of the Rule, then such
payments shall be deemed to have been made pursuant to the Plan. The costs and
activities, the payment of which are intended to be within the scope of the Plan
pursuant to this Section, shall include, but shall not be limited to, the
following:
(a) payments to any person under any shareholder services plan or
agreement, or other similar arrangement; and
(b) any other payments to dealers, financial institutions, advisers, or
other firms, any one of whom may receive monies in respect of a Fund's
shares owned by shareholders for whom such firm is the dealer of record or
holder of record in any capacity, or with whom such firm has a servicing,
agency, or distribution relationship. Servicing may include, by way of
example but not of limitation: (A) answering client inquiries regarding the
Fund; (B) assisting clients in changing account designations and addresses;
(C) performing subaccounting; (D) establishing and maintaining shareholder
accounts and records; (E) processing purchase and redemption transactions;
(F) providing periodic statements showing a client's account balance and
integrating such
<PAGE>
statements with those of other transactions and balances in the client's
other accounts serviced by such firm; (G) arranging for bank wire
transfers; and (H) such other services as the Fund may require, to the
extent such firms are permitted by applicable statute, rule, or regulation
to render such services.
SECTION 3. This Plan shall not take effect with respect to a Fund until:
(a) it has been approved by a vote of a majority of the outstanding Class
C shares of the Fund, if required under the Rule;
(b) it has been approved, together with any related agreements, by votes
of the majority (or whatever greater percentage may, from time to time, be
required by Section 12(b) of the Act or the rules and regulations
thereunder) of both (i) the Trustees of the Trust, and (ii) the Qualified
Trustees of the Trust, cast in person at a meeting called for the purpose
of voting on this Plan or such agreement; and
(c) the Fund has received the proceeds of the initial public offering of
its Class C shares.
SECTION 4. This Plan shall continue in effect with respect to a Fund for a
period of more than one year after it takes effect so long as such continuance
is specifically approved at least annually in the manner provided for approval
of this Plan in Section 3(b).
SECTION 5. RS&Co. shall provide to the Trustees of the Trust, and the
Trustees shall review, at least quarterly, a written report of the amounts so
expended and the purposes for which such expenditures were made.
SECTION 6. This Plan may be terminated with respect to a Fund at any time
by vote of a majority of the Qualified Trustees or by vote of the majority of
the outstanding Class C shares of the Fund.
SECTION 7. All agreements with any person relating to implementation of
this Plan shall be in writing, and any agreement related to this Plan shall
provide:
(a) that such agreement may be terminated with respect to a Fund at any
time, without payment of any penalty, by vote of a majority of the
Qualified Trustees or by vote of a majority of the outstanding Class C
shares of the Fund, on not more than 60 days written notice to any other
party to the agreement; and
(b) that such agreement shall terminate automatically in the event of its
assignment.
SECTION 8. This Plan may not be amended to increase materially the amount
of distribution expenses with respect to a Fund permitted pursuant to Section 1
hereof without the
-2-
<PAGE>
approval of a majority of the outstanding Class C shares of the Fund, and all
material amendments to this Plan with respect to a Fund shall be approved in the
manner provided for approval of this Plan in Section 3(b).
SECTION 9. As used in this Plan, (a) the term "Qualified Trustees" shall
mean those Trustees of the Trust who are not interested persons of the Trust,
and have no direct or indirect financial interest in the operation of this Plan
or any agreements related to it, and (b) the term "majority of the outstanding
Class C shares of the Fund" means the affirmative vote, at a duly called and
held meeting of Class C shareholders of the relevant Fund, (i) of the holders of
67% or more of the Class C shares of such Fund present (in person or by proxy)
and entitled to vote at such meeting, if the holders of more than 50% of the
outstanding Class C shares of such Fund entitled to vote at such meeting are
present in person or by proxy, or (ii) of the holders of more than 50% of the
outstanding Class C shares of such Fund entitled to vote at such meeting,
whichever is less, and (c) the terms "assignment" and "interested person" shall
have the respective meanings specified in the Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission.
SECTION 10. A copy of the Agreement and Declaration of Trust of the Trust
is on file with the Secretary of State of The Commonwealth of Massachusetts and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually, and that the obligations
of or arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually but are binding only upon the assets and
property of the relevant Fund.
Executed as of ____________, 1997.
ROBERTSON, STEPHENS ROBERTSON STEPHENS INVESTMENT
& COMPANY LLC TRUST
By: ___________________________ By: ______________________________
-3-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> ROBERTSON STEPHENS CONTRARIAN FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 557,576
<INVESTMENTS-AT-VALUE> 704,513
<RECEIVABLES> 264,876
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 249,688
<TOTAL-ASSETS> 1,219,077
<PAYABLE-FOR-SECURITIES> 14,379
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 213,206
<TOTAL-LIABILITIES> 227,585
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 832,336
<SHARES-COMMON-STOCK> 60,513
<SHARES-COMMON-PRIOR> 36,818
<ACCUMULATED-NII-CURRENT> 925
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 804
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 157,427
<NET-ASSETS> 991,492
<DIVIDEND-INCOME> 2,099
<INTEREST-INCOME> 14,534
<OTHER-INCOME> 0
<EXPENSES-NET> 15,708
<NET-INVESTMENT-INCOME> 925
<REALIZED-GAINS-CURRENT> 47,126
<APPREC-INCREASE-CURRENT> 52,100
<NET-CHANGE-FROM-OPS> 100,151
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 795,233
<NUMBER-OF-SHARES-REDEEMED> 411,369
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 484,015
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 9,580
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 15,707
<AVERAGE-NET-ASSETS> 854,815
<PER-SHARE-NAV-BEGIN> 13.78
<PER-SHARE-NII> .02
<PER-SHARE-GAIN-APPREC> 2.58
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.38
<EXPENSE-RATIO> 2.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> ROBERTSON STEPHENS DEVELOPING COUNTRIES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 58,571
<INVESTMENTS-AT-VALUE> 58,122
<RECEIVABLES> 4,972
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 63,094
<PAYABLE-FOR-SECURITIES> 1,163
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 298
<TOTAL-LIABILITIES> 1,461
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 62,159
<SHARES-COMMON-STOCK> 6,359
<SHARES-COMMON-PRIOR> 1,788
<ACCUMULATED-NII-CURRENT> 248
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (320)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (454)
<NET-ASSETS> 61,633
<DIVIDEND-INCOME> 609
<INTEREST-INCOME> 185
<OTHER-INCOME> 25
<EXPENSES-NET> 571
<NET-INVESTMENT-INCOME> 248
<REALIZED-GAINS-CURRENT> 2,182
<APPREC-INCREASE-CURRENT> 1,752
<NET-CHANGE-FROM-OPS> 4,182
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100,041
<NUMBER-OF-SHARES-REDEEMED> 56,934
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 47,289
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 385
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 845
<AVERAGE-NET-ASSETS> 41,338
<PER-SHARE-NAV-BEGIN> 8.02
<PER-SHARE-NII> .06
<PER-SHARE-GAIN-APPREC> 1.61
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> ROBERTSON STEPHENS DIVERSIFIED GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 26,989
<INVESTMENTS-AT-VALUE> 28,799
<RECEIVABLES> 2,519
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,656
<TOTAL-ASSETS> 33,974
<PAYABLE-FOR-SECURITIES> 1,582
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,375
<TOTAL-LIABILITIES> 2,957
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29,481
<SHARES-COMMON-STOCK> 2,793
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> (4)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (191)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,731
<NET-ASSETS> 31,017
<DIVIDEND-INCOME> 17
<INTEREST-INCOME> 44
<OTHER-INCOME> 0
<EXPENSES-NET> 65
<NET-INVESTMENT-INCOME> (4)
<REALIZED-GAINS-CURRENT> (191)
<APPREC-INCREASE-CURRENT> 1,731
<NET-CHANGE-FROM-OPS> 1,536
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 34,826
<NUMBER-OF-SHARES-REDEEMED> 5,345
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 31,017
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 22
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 88
<AVERAGE-NET-ASSETS> 13,958
<PER-SHARE-NAV-BEGIN> 10
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.12
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.11
<EXPENSE-RATIO> 2.80
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> ROBERTSON STEPHENS EMERGING GROWTH FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 148,042
<INVESTMENTS-AT-VALUE> 185,311
<RECEIVABLES> 8,144
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 17,873
<TOTAL-ASSETS> 211,328
<PAYABLE-FOR-SECURITIES> 10,914
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,836
<TOTAL-LIABILITIES> 12,750
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 143,646
<SHARES-COMMON-STOCK> 8,755
<SHARES-COMMON-PRIOR> 8,777
<ACCUMULATED-NII-CURRENT> (1,187)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18,850
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 37,269
<NET-ASSETS> 198,578
<DIVIDEND-INCOME> 101
<INTEREST-INCOME> 714
<OTHER-INCOME> 102
<EXPENSES-NET> 2,104
<NET-INVESTMENT-INCOME> (1,187)
<REALIZED-GAINS-CURRENT> 7,615
<APPREC-INCREASE-CURRENT> 18,571
<NET-CHANGE-FROM-OPS> 24,999
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 131,954
<NUMBER-OF-SHARES-REDEEMED> 126,211
<SHARES-REINVESTED> 107
<NET-CHANGE-IN-ASSETS> 30,849
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,285
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,104
<AVERAGE-NET-ASSETS> 171,790
<PER-SHARE-NAV-BEGIN> 19.21
<PER-SHARE-NII> (.14)
<PER-SHARE-GAIN-APPREC> 3.61
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 22.68
<EXPENSE-RATIO> 1.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> ROBERTSON STEPHENS GLOBAL LOW-PRICED STOCK
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 25,525
<INVESTMENTS-AT-VALUE> 25,340
<RECEIVABLES> 751
<ASSETS-OTHER> 17
<OTHER-ITEMS-ASSETS> 6,438
<TOTAL-ASSETS> 32,546
<PAYABLE-FOR-SECURITIES> 1,227
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 177
<TOTAL-LIABILITIES> 1,404
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,179
<SHARES-COMMON-STOCK> 2,398
<SHARES-COMMON-PRIOR> 158
<ACCUMULATED-NII-CURRENT> (61)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 209
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (185)
<NET-ASSETS> 31,142
<DIVIDEND-INCOME> 36
<INTEREST-INCOME> 137
<OTHER-INCOME> 0
<EXPENSES-NET> 236
<NET-INVESTMENT-INCOME> (63)
<REALIZED-GAINS-CURRENT> 209
<APPREC-INCREASE-CURRENT> (206)
<NET-CHANGE-FROM-OPS> (60)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 48,862
<NUMBER-OF-SHARES-REDEEMED> 19,304
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 29,498
<ACCUMULATED-NII-PRIOR> 2
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 121
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 428
<AVERAGE-NET-ASSETS> 16,229
<PER-SHARE-NAV-BEGIN> 10.45
<PER-SHARE-NII> (.05)
<PER-SHARE-GAIN-APPREC> 2.59
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.99
<EXPENSE-RATIO> 1.94
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> ROBERTSON STEPHENS GLOBAL NATURAL RESOURCES
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 61,962
<INVESTMENTS-AT-VALUE> 66,198
<RECEIVABLES> 2,749
<ASSETS-OTHER> 28
<OTHER-ITEMS-ASSETS> 17,123
<TOTAL-ASSETS> 86,098
<PAYABLE-FOR-SECURITIES> 3,816
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 229
<TOTAL-LIABILITIES> 4,045
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 77,435
<SHARES-COMMON-STOCK> 6,246
<SHARES-COMMON-PRIOR> 79
<ACCUMULATED-NII-CURRENT> (21)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 404
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,235
<NET-ASSETS> 82,053
<DIVIDEND-INCOME> 122
<INTEREST-INCOME> 307
<OTHER-INCOME> 0
<EXPENSES-NET> 451
<NET-INVESTMENT-INCOME> (22)
<REALIZED-GAINS-CURRENT> 404
<APPREC-INCREASE-CURRENT> 4,229
<NET-CHANGE-FROM-OPS> 4,611
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 101,922
<NUMBER-OF-SHARES-REDEEMED> 25,272
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 81,261
<ACCUMULATED-NII-PRIOR> 1
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 231
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 580
<AVERAGE-NET-ASSETS> 31,193
<PER-SHARE-NAV-BEGIN> 10.12
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 3.03
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.14
<EXPENSE-RATIO> 1.93
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 7
<NAME> ROBERTSON STEPHENS GROWTH AND INCOME
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 263,119
<INVESTMENTS-AT-VALUE> 291,422
<RECEIVABLES> 18,735
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 9,246
<TOTAL-ASSETS> 319,403
<PAYABLE-FOR-SECURITIES> 5,661
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,915
<TOTAL-LIABILITIES> 20,576
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 262,476
<SHARES-COMMON-STOCK> 22,399
<SHARES-COMMON-PRIOR> 12,184
<ACCUMULATED-NII-CURRENT> 59
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 10,451
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 25,841
<NET-ASSETS> 298,827
<DIVIDEND-INCOME> 2,069
<INTEREST-INCOME> 982
<OTHER-INCOME> 0
<EXPENSES-NET> 2,992
<NET-INVESTMENT-INCOME> 59
<REALIZED-GAINS-CURRENT> 13,899
<APPREC-INCREASE-CURRENT> 12,434
<NET-CHANGE-FROM-OPS> 26,392
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 267,828
<NUMBER-OF-SHARES-REDEEMED> 132,295
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 161,925
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,683
<INTEREST-EXPENSE> 2
<GROSS-EXPENSE> 2,992
<AVERAGE-NET-ASSETS> 225,391
<PER-SHARE-NAV-BEGIN> 11.24
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 2.10
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.34
<EXPENSE-RATIO> 1.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> ROBERTSON STEPHENS INFORMATION AGE
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<INVESTMENTS-AT-COST> 80,624
<INVESTMENTS-AT-VALUE> 94,705
<RECEIVABLES> 7,621
<ASSETS-OTHER> 14,109
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 116,435
<PAYABLE-FOR-SECURITIES> 15,537
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 511
<TOTAL-LIABILITIES> 16,048
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 88,634
<SHARES-COMMON-STOCK> 8,516
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> ROBERTSON STEPHENS MICRO CAP GROWTH
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> AUG-15-1996
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<NET-INVESTMENT-INCOME> (3)
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 10
<NAME> ROBERTSON STEPHENS PARTNERS FUND
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<OVERDISTRIBUTION-GAINS> 0
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</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> ROBERTSON STEPHENS VALUE AND GROWTH
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<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
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<PER-SHARE-NII> (.18)
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</TABLE>
