<PAGE>
The Contrarian Fund-TM-Second-Quarter Report
ROBERTSON STEPHENS MUTUAL FUNDS
The Contrarian Fund-TM-
Second-Quarter Report
June 30, 1997
CONTRARIAN
2
<PAGE>
The Contrarian Fund-TM- SECOND QUARTER REPORT
FUND PHILOSOPHY
The Contrarian Fund-TM- seeks to achieve maximum long-term growth of capital by
employing fundamental analysis of business and industry trends. The Fund invests
on a global basis in an effort to make timely investments in new discovery ideas
or in companies and industries that are neglected, hated or forgotten. When
appropriate, the Fund will short sell stocks as a result of its research
discipline.
CONTENTS
Fund Highlights 1
Report to Shareholders 2
Fund Performance - Class A Shares 6
Portfolio Summary 7
Fund Performance - Class C Shares 8
Schedule of Investments 9
Schedule of Securities Sold Short 14
Statement of Assets and Liabilities 16
Statement of Operations 17
Statement of Changes in Net Assets 18
Financial Highlights - Class A Shares 19
Financial Highlights - Class C Shares 20
Notes to Financial Statements 21
Administration 28
<PAGE>
FUND HIGHLIGHTS
MINING INVESTMENTS
Despite recent volatility in the gold mining industry, we remain positive on the
prospects for our growth gold and other natural resource investments.
SHORT POSITION
We have increased the Fund's short position from 22.7% of the portfolio at the
end of the first quarter of 1997 to approximately 26-27% currently.
MARKET ENVIRONMENT
We describe The Contrarian Fund-TM- as a global hedge fund, as we continue to
"hedge" against a straightforward long investment in the U.S. market.
ACQUISITION
During the quarter, BankAmerica agreed to acquire Robertson Stephens. The deal
is subject to regulatory and other approvals, and it is expected to be completed
as early as September 30, 1997.
1
<PAGE>
[PHOTO]
FUND MANAGER
Paul H. Stephens
Portfolio Manager
The Contrarian Fund-TM-
DEAR SHAREHOLDER:
For the second quarter and year to date, The Contrarian Fund-TM- (Class A
shares) had returns of -6.01% and -4.71%, respectively, and for the period from
April 14, 1997 (Commencement of Operations) to June 30, 1997, the Fund's Class
C shares had a return of -3.95%, as we felt the effects of difficulties in the
mining sector and in our short positions.
MINING INVESTMENTS
The gold mining and exploration companies have suffered recently due to an
abrupt decline in the gold price to 12-year lows, near $320 per ounce. This
sell-off in gold comes after the Australian central bank announced that over the
past six months it had reduced its gold reserves by more than five million
ounces. While that selling PER SE was already complete, the announcement put new
downward pressure on the gold price as it raised the question of central banks
holding gold to support their currencies.
This recent gold price decline follows the sell-off in mining stocks during the
first quarter of 1997 after the disclosure of the BRE-X MINERALS fraud. As we
have previously stated, our Fund never owned any BRE-X or related companies.
However, the entire sector suffered such a wide loss that the mining holdings in
the Fund were negatively impacted.
The Fund remains invested in those mining companies that can economically mine
and sell gold at prices ranging as low as $250 to $275 per ounce. In the
exploration sector, we remain focused on companies exploring quality properties
that have a chance of discovering major, low-cost reserves. Recently our chief
"WE STILL BELIEVE THAT NATURAL RESOURCES REPRESENT A VERY STRONG CONTRARIAN
GROUP...."
2
<PAGE>
geologist, Borden Putnam, visited 10 exploration and mine development sites in
western Africa, where some of our portfolio companies are building new mines and
pursuing world-class discoveries.
We still believe that natural resources, including our long-term growth gold
investments, represent a very strong Contrarian group and an attractive one to
be invested in over the next five to 10 years. We also believe natural resource
companies are great vehicles for participating in emerging market economic
growth (for example, our investment in nickel, which is used in stainless steel
consumer products). However, we would like to emphasize that we are not a sector
fund, and five years from now we could be heavily positioned in biotechnology or
pharmaceuticals or semiconductor companies. We are trying to manage our assets
intelligently according to our research and the diverse Contrarian opportunities
we uncover, and to manage risk by making our long-term investments in unknown or
out-of-favor areas.
We will see other short-term events impact stocks and sectors in the future, but
our strategy and investment discipline for The Contrarian Fund will remain
intact as we pursue LONG-TERM CAPITAL APPRECIATION THROUGH A DISCIPLINED RISK
MANAGEMENT METHODOLOGY.
SHORT POSITION
In addition to investing in out-of-favor companies and industries that we
believe will appreciate significantly over time, we continue to short stocks of
companies that we believe are fundamentally flawed. We are not generally
bearish, we simply feel that there are many companies that the market will
eventually believe to be less valuable based on business fundamentals. We have
increased the Fund's short position from 22.7% of the portfolio at the end of
the first quarter of 1997 to approximately 26-27% currently. We have three short
sales specialists who spend 100% of their time researching and discovering these
opportunities.
MARKET ENVIRONMENT
When we describe the Fund as being diversified away from the U.S. market, some
people feel that this means the Fund will go up whenever the U.S. market goes
down (and vice versa). Actually, it means that movements in the Fund are not
linked, or "correlated," to the market, and therefore it tends to move
"independently" of the market, as measured by the S&P 500 Index. Thus, the Fund
is different than the S&P 500, but our returns may sometimes be like the S&P
500's. We are looking for just that -- good performance without immersion in the
same stocks everyone else is buying and being
3
<PAGE>
MARKET ENVIRONMENT
subjected to general investor sentiment, particularly in a downturn. This is at
the heart of being Contrarian, along with other risk management tools such as
short selling. We therefore describe The Contrarian Fund as a global hedge fund,
as we "hedge" against a straightforward long investment in the U.S. market.
PORTFOLIO
The Contrarian Fund often takes large positions in securities we regard as
mispriced or undiscovered. These companies are growing businesses that we
purchase at what we believe are value prices, and our expectations are to own
these positions for five to ten years or longer. Examples of this methodology
are The Contrarian Fund's 11.38% position in ROYAL GROUP TECHNOLOGIES (RYG, U.S.
$26 per share), a 7.23% position in INCO-VBN SHARES (NVB, U.S. $18.75 per
share), a 5.22% position in DUNDEE BANCORP (DBC.A-TO, C $36 per share), a 3.36%
position in INDOCHINA GOLDFIELDS (ING-TO, C $6.50 per share), and a 3.14%
position in METROMEDIA INTERNATIONAL GROUP (MMG, U.S. $11.25 per share).
[PHOTO]
INVESTMENT MANAGEMENT
G. RANDY HECHT
President
Robertson Stephens
Investment Trust
[email protected]
INVESTMENT TEAM
RESEARCH
Rick Barry
Chris Bonomo
Jim Carruthers
Melissa Floren
Sue Gossard
Michael Hoffman
Andy Pilara
Borden Putnam III
RESEARCH (CONTINUED)
Jay Sherwood
M. Hannah Sullivan
SENIOR TRADER
Catherine O'Neill
TRADING
Christopher Beagle
Don Heidary
ADMINISTRATION
Leslie Bauer
Dianny Cabrera
4
<PAGE>
In this quarterly report, we would like to highlight the extraordinary value we
see today in the INCO-VBN SHARES. This unique new investment vehicle was
created in August 1996 by the DIAMOND FIELDS RESOURCES management team during
its acquisition by INCO, LTD. The INCO-VBN SHARES own a 25% share in the cash
flow from this fabulous mineral discovery at Labrador's Voisey's Bay (nickel,
copper, and cobalt), but also a 25% share in all future discoveries on its
properties in both Labrador and Greenland. Therefore, INCO-VBN shareholders
participate in the unlimited upside from one of the world's lowest cost base
metal discoveries. INCO, LTD. is the market share leader of the global nickel
market, and INCO'S future is now anchored by its 75% ownership of Voisey's Bay's
future cash flows. INCO, LTD. paid U.S. $3.1 billion for its 75% ownership, and
today the INCO-VBN SHARES' 25% is valued in the stock market at U.S. $500
million (25.9 million shares outstanding) and trades on the NYSE at U.S. $18.75
per share. Cash flows are estimated to begin in the fourth quarter of 1999 at
approximately U.S. $20 million for the INCO-VBN SHARES and then provide 25 to 40
years of U.S $100 million per year in annuity-like dividend payouts to the
INCO-VBN shareholders (assuming forecast nickel prices of U.S. $3.50 per pound).
Contrarian Fund investors currently own 3,276,350 INCO-VBN SHARES, or 12.7% of
the total 25.9 million shares outstanding. Fifty percent of these shares were
received from the DIAMOND FIELDS acquisition with a U.S. $0.96 per share cost,
and 50% were purchased over the last 12 months at a cost of U.S. $21.45 per
share. We believe this "growth nickel" vehicle is currently not well understood
by the financial community, and to us represents a classic Contrarian Fund
long-term investment.
Going forward, please continue to listen to my hotline recordings at
1-800-766-3863 (option 5). Our Web site also has begun to offer recordings of
portfolio manager conference calls as they occur. You can retrieve them at
www.rsim.com.
If you should have further questions, please call the above 800 number and
choose option 2 to speak to a fund representative or E-mail us at
[email protected]. We will be happy to respond.
Sincerely,
/s/ Paul H. Stephens
PAUL H. STEPHENS
Portfolio Manager
August 13, 1997
"WE ARE LOOKING FOR...GOOD PERFORMANCE WITHOUT INVESTING IN THE STOCKS
EVERYONE ELSE IS BUYING...."
TO HEAR MY ONGOING THOUGHTS ON THE FUND, CALL OUR
PORTFOLIO MANAGER HOTLINE AT 1-800-766-3863.
5
<PAGE>
FUND PERFORMANCE - CLASS A SHARES
Results of a hypothetical $10,000 investment in The Contrarian Fund-TM-,
the S&P 500 Index(1), and the MSCI All Country World Index(2)
IF INVESTED ON JUNE 30, 1993(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
CONTRARIAN S&P 500 MSCI ALL COUNTRY
FOR THE PERIOD ENDED 6/30/97 FUND INDEX(1) WORLD INDEX(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Since inception (6/30/93)(3) 60.36% 116.81% 63.89%
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CONTRARIAN S&P 500 MSCI ALL COUNTRY
FOR THE PERIODS ENDED 6/30/97 FUND INDEX(1) WORLD INDEX(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
One year (0.01)% 34.72% 19.78%
Three years 11.34% 28.83% 14.26%
Since inception (6/30/93)(3) 12.52% 21.33% 13.14%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index") is a
widely recognized, unmanaged index of market activity based on the
aggregate performance of a selected portfolio of publicly traded stocks. It
is widely recognized as representative of the stock market in general.
Investment results assume the reinvestment of dividends paid on the stocks
comprising the index.
(2) The Morgan Stanley Capital International ("MSCI") All Country World Index
is an unmanaged, market capitalization-weighted index composed of companies
representative of the market structure of 47 developed and emerging market
countries. You cannot invest in an index itself.
(3) Date that the Fund's Class A shares were first offered to the public.
Investors should realize that all performance data presented is based upon
past performance during limited periods of time, and that past performance
is no guarantee of future performance. Investors should also realize
that both investment return and principal value will fluctuate so that
shares, when redeemed, may be worth more or less than their original
cost. The correlation of performance between an unmanaged index and
this Fund is not usually exact.
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can
involve more volatility, less liquidity, and less publicly available
information. Investing in a more limited number of issuers and sectors can
be subject to greater market fluctuation. Short selling is the sale of a
borrowed security, and the price of the security can increase between the
date the security is sold and the date when the fund must replace it.
Options and futures may not be perfectly correlated to the underlying index
or security. High-yielding, lower-quality debt securities may be considered
to be of lower standing and more speculative.
6
<PAGE>
PORTFOLIO SUMMARY
AS OF JUNE 30, 1997
[CHART]
International Conglomerate 1.0%
Diamond Mining 1.1%
Real Estate 3.3%
Media 4.1%
Financial Services 4.4%
Copper Mining/Base Metals 5.1%
Aluminum 6.8%
Nickel Mining 8.7%
Energy 9.7%
Other/Other Liabilities, Net 0.1%
Short Positions (Net) 32.4%
Gold Mining 11.9%
Construction/Infrastructure 11.4%
TOP TEN HOLDINGS
1.
ROYAL GROUP TECHNOLOGIES, LTD. (10.29%)
An innovative building technology company that consistently has created new
products out of extruded vinyl to replace traditional wood and metal products.
2.
INCO, LTD. - VBN SHARES (5.54%)
Owns 25% of the free cash flow from the planned Voisey's Bay
nickel-copper-cobalt mine, and a 25% interest in all future discoveries.
3.
DUNDEE BANCORP, INC. (4.23%)
A well-managed natural resource holding company based in Toronto that owns
Goodman & Co.
4.
INCO, LTD. (3.16%)
Number-one nickel producer in North America. Also produces copper, platinum,
silver, cobalt, sulfuric acid, and liquid sulfur dioxide.
5.
METROMEDIA INTERNATIONAL GROUP, INC. (3.16%)
John Kluge's communications company focused on wireless opportunities in the
Former Soviet Union and China.
6.
INDOCHINA GOLDFIELDS, LTD. (2.89%)
Explores for and develops large, low-cost copper and gold deposits, primarily in
Myanmar, Indonesia, Kazakstan, South Korea, and Fiji.
7.
KAISER ALUMINUM CORPORATION (2.59%)
Produces alumina and aluminum products for domestic and international markets. A
63%-owned subsidiary of MAXXAM, Inc.
8.
CATELLUS DEVELOPMENT CORPORATION (2.26%)
A major diversified real estate company. Owns, develops, and manages industrial,
residential, and commercial properties, primarily in California.
9.
MAXXAM, INC. (2.25%)
A large resource holding company with majority ownership and control of Kaiser
Aluminum, Pacific Lumber, and numerous real estate assets.
10.
ALUMAX, INC. (2.00%)
Produces and markets primary aluminum ingot, billet, and slab, and is
a major fabricator of value-added aluminum products for the construction,
transportation, packaging, and consumer durables industries.
7
<PAGE>
FUND PERFORMANCE - CLASS C SHARES
Results of a hypothetical $10,000 investment
in The Contrarian Fund-TM-, the S&P 500 Index(1), and the MSCI All Country World
Index(2)
IF INVESTED ON APRIL 14, 1997(3)
[GRAPH]
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURNS
CONTRARIAN CONTRARIAN S&P 500 MSCI ALL COUNTRY
FOR THE PERIOD ENDED 6/30/97 FUND FUND(4) INDEX(1) WORLD INDEX(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Since inception (4/14/97)(3) (2.95)% (3.95)% 19.42% 17.54%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Standard & Poor's Composite Index of 500 Stocks ("S&P 500 Index") is a
widely recognized, unmanaged index of market activity based on the
aggregate performance of a selected portfolio of publicly traded stocks. It
is widely recognized as representative of the stock market in general.
Investment results assume the reinvestment of dividends paid on the stocks
comprising the index.
(2) The Morgan Stanley Capital International ("MSCI") All Country World Index
is an unmanaged, market capitalization-weighted index composed of companies
representative of the market structure of 47 developed and emerging market
countries. You cannot invest in an index itself.
(3) Date that the Fund's Class C shares were first sold to the public.
(4) Reflects the contingent deferred sales charge imposed on redemptions within
the first year of purchasing shares.
Investors should realize that all performance data presented is
based upon past performance during limited periods of time, and that
past performance is no guarantee of future performance. Investors should
also realize that both investment return and principal value will
fluctuate so that shares, when redeemed, may be worth more or less than
their original cost. The correlation of performance between an unmanaged
index and this Fund is not usually exact.
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can
involve more volatility, less liquidity, and less publicly available
information. Investing in a more limited number of issuers and sectors can
be subject to greater market fluctuation. Short selling is the sale of a
borrowed security, and the price of the security can increase between the
date the security is sold and the date when the fund must replace it.
Options and futures may not be perfectly correlated to the underlying index
or security. High-yielding, lower-quality debt securities may be considered
to be of lower standing and more speculative.
8
<PAGE>
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(7) SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ------------------------------------------------------------------------------------------------------------------------------
ALUMINUM - 6.8%
Alumax, Inc. 500,000 $ 18,968,750
Kaiser Aluminum Corporation 2,000,000 24,500,000
MAXXAM, Inc. 455,500 21,323,094
- ------------------------------------------------------------------------------------------------------------------------------
64,791,844
- ------------------------------------------------------------------------------------------------------------------------------
BASE METALS - 1.0%
Teck Corporation, Class B(1) CAD 449,500 9,106,313
- ------------------------------------------------------------------------------------------------------------------------------
9,106,313
- ------------------------------------------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 11.4%
American Buildings Company 400,000 10,800,000
Royal Group Technologies, Ltd. CAD 3,634,100 97,460,637
- ------------------------------------------------------------------------------------------------------------------------------
108,260,637
- ------------------------------------------------------------------------------------------------------------------------------
COPPER/GOLD MINING - 4.1%
Adrian Resources, Ltd. CAD 1,120,003 1,136,523
Cambior, Inc.(1) CAD 874,800 9,954,960
Indochina Goldfields, Ltd., 144A(5) CAD 1,700,000 8,009,278
Indochina Goldfields, Ltd. CAD 4,108,440 19,356,258
- ------------------------------------------------------------------------------------------------------------------------------
38,457,019
- ------------------------------------------------------------------------------------------------------------------------------
DIAMOND MINING - 1.1%
Diamond Fields International Note(2) CAD 6,687,600 2,181,294
DiamondWorks, Ltd. CAD 1,188,400 1,550,481
DiamondWorks, Ltd., 144A(5) CAD 4,987,500 6,507,087
- ------------------------------------------------------------------------------------------------------------------------------
10,238,862
- ------------------------------------------------------------------------------------------------------------------------------
ENERGY - 7.4%
Abacan Resource Corporation CAD 1,052,500 3,356,649
Anderson Exploration, Ltd. CAD 404,600 5,220,078
Anzoil N.L. AUD 59,997,000 2,516,514
Beau Canada Exploration, Ltd. CAD 740,500 1,663,864
Black Sea Energy, Ltd. CAD 993,000 2,807,056
Black Sea Energy, Ltd., Restricted(2),(3) CAD 2,564,280 5,397,267
Burlington Resources, Inc.(1) 100,000 4,412,500
Eurogas Corporation, 144A(5) CAD 6,254,996 8,523,458
McMoRan Oil & Gas Company 1,277,420 4,311,292
Nescor Energy, Restricted(2),(3) 375,000 243,750
Noble Affiliates, Inc.(1) 125,000 4,835,937
Petro-Canada(1) CAD 150,000 2,435,400
Petroleum Securities Australia, Ltd. AUD 226,000 1,024,108
Petroleum Securities Australia, Ltd., ADR(4) 191,000 4,345,250
Santa Fe Energy Resources, Inc. 183,500 2,695,156
Tarragon Oil & Gas, Ltd. CAD 300,000 3,522,633
Union Pacific Resources Group, Inc.(1) 284,100 7,066,987
Vastar Resources, Inc.(1) 150,000 5,259,375
- ------------------------------------------------------------------------------------------------------------------------------
69,637,274
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
9
<PAGE>
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(7) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ENERGY SERVICES - 2.3%
KN Energy, Inc.(1) 125,000 $ 5,265,625
NGC Corporation(1) 441,400 6,814,112
Santa Fe International Corporation 33,700 1,145,800
Sonat, Inc.(1) 75,000 3,843,750
USX- Delhi Group(1) 350,000 4,593,750
- -----------------------------------------------------------------------------------------------------------------------------
21,663,037
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 4.4%
Dundee Bancorp, Inc., Class A CAD 1,725,500 40,021,744
Peregrine Investment Holdings HKD 495,000 1,019,097
U.S. Global Investors, Inc., Class A 279,860 585,957
- -----------------------------------------------------------------------------------------------------------------------------
41,626,798
- -----------------------------------------------------------------------------------------------------------------------------
GOLD MINING - 11.9%
Bakyrchik Gold PLC GBP 2,653,232 3,685,843
Central Fund of Canada, Class A(1) 184,600 784,550
Chase Resources Corporation CAD 403,950 219,594
Consolidated Mining Corporation, Ltd. SAR 140,686,000 16,750,216
El Callao Mining Corporation CAD 450,000 388,142
Emperor Mines, Ltd. AUD 4,317,979 5,983,208
Etruscan Enterprises Ltd. CAD 1,581,700 6,764,057
Euro-Nevada Mining Corporation(1) CAD 100,000 3,080,491
First Dynasty Mines, Ltd. CAD 2,324,550 2,190,349
First Dynasty Mines, Ltd., Restricted(2),(3) CAD 1,760,000 1,575,473
Franco-Nevada Mining Corporation, Ltd.(1) CAD 80,000 4,015,511
Golden Star Resources, Ltd. CAD 2,175,600 17,976,907
Guyanor Ressources, S.A., Ltd., Class B CAD 591,800 1,672,903
Harmony Gold Mining Company, Ltd.(1) SAR 32,200 147,316
Harmony Gold Mining Company, Ltd. ADR (1),(4) 889,000 4,111,625
MK Gold Company 739,600 1,155,625
New East Daggafontein Mines, Ltd. SAR 224,100 494,102
Newmont Mining Corporation (1) 300,000 11,700,000
Normandy Mining, Ltd.(1) AUD 6,395,802 7,137,779
Queenstake Resources, Ltd. CAD 1,001,000 1,472,859
Randgold Resources, Ltd. 116,666 1,924,989
Randgold Resources, Ltd. GDR(4) 605,400 9,989,100
Randgold and Exploration Company, Ltd. SAR 664,700 2,931,099
Tombstone Explorations Company, Ltd. CAD 180,400 215,750
Vengold, Inc. CAD 4,756,400 6,550,329
- -----------------------------------------------------------------------------------------------------------------------------
112,917,817
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
10
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(7) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INDUSTRIAL MINERALS - 0.4%
China Industrial Minerals Company, 144A(2),(3),(5) 2,183,334 $ 3,275,001
- -----------------------------------------------------------------------------------------------------------------------------
3,275,001
- -----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL CONGLOMERATE - 1.0%
Cia Vale Do Rio Doce, ADR(1),(4) 425,000 9,474,695
- -----------------------------------------------------------------------------------------------------------------------------
9,474,695
- -----------------------------------------------------------------------------------------------------------------------------
MEDIA - 4.1%
Central European Media Enterprises, Ltd. 351,500 9,139,000
Metromedia International Group, Inc. 2,356,300 29,895,556
- -----------------------------------------------------------------------------------------------------------------------------
39,034,556
- -----------------------------------------------------------------------------------------------------------------------------
NICKEL MINING - 8.7%
Inco, Ltd.(1) CAD 1,000,000 29,898,779
Inco, Ltd., VBN Shares(1) CAD 2,564,700 52,515,331
- -----------------------------------------------------------------------------------------------------------------------------
82,414,110
- -----------------------------------------------------------------------------------------------------------------------------
REAL ESTATE - 3.3%
Atlantic Gulf Communities Corporation 371,700 2,369,587
Atlantic Gulf Communities Corporation, Restricted(2),(3) 266,430 1,358,793
Avatar Holdings, Inc. 191,900 6,428,550
Catellus Development Corporation 1,180,600 21,398,375
- -----------------------------------------------------------------------------------------------------------------------------
31,555,305
- -----------------------------------------------------------------------------------------------------------------------------
TEXTILES - 0.6%
PT Apac Centertex Corporation, Foreign(8) IDR 17,668,000 5,813,055
- -----------------------------------------------------------------------------------------------------------------------------
5,813,055
- -----------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT/SERVICES - 2.5%
AMERCO, Inc. 400,000 12,050,000
China Yuchai International, Ltd.(1) 2,266,625 7,083,203
Pittston Burlington Group (1) 175,000 4,921,775
- -----------------------------------------------------------------------------------------------------------------------------
24,054,978
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 71.0% (Cost $554,336,005) 672,321,301
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- -----------------------------------------------------------------------------------------------------------------------------
Atlantic Gulf Communities Corporation, Series B(2) 150,000 1,482,000
Mesa, Inc., 8.00%, 6/30/08, Series A(1) 1,000,000 6,687,502
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 0.9% (Cost $5,118,558) 8,169,502
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
11
<PAGE>
SCHEDULE OF INVESTMENTS (CONTINUED)
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) FOREIGN CURRENCY(7) PAR VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONVERTIBLE BONDS
- -----------------------------------------------------------------------------------------------------------------------------
Randgold and Exploration Company, Ltd., 7.00%, Due 10/3/01(1) 3,250,000 $ 3,201,250
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.3% (Cost $3,250,000) 3,201,250
WARRANTS VALUE
- -----------------------------------------------------------------------------------------------------------------------------
WARRANTS
- -----------------------------------------------------------------------------------------------------------------------------
Atlantic Gulf Communities Corporation,
Warrants, Strike $5.75, Expire 6/23/04(2),(3),(6) 300,000 972,303
Diamondworks, LTD., Warrants, Strike
CAD 2.00, Expire 12/5/972,(6) CAD 4,987,500 1,180,481
Etruscan Enterprises, LTD.,
Warrants, Strike CAD 7.50, Expire 4/21/98(2),(6) CAD 1,031,900 1,043,775
First Dynasty Mines, LTD., Warrants,
Strike CAD 5.00, Expire 9/13/97(2),(3),(6) CAD 1,760,000 0
PT APAC Centertex Corporation, Warrants,
Strike IDR 1,000, Expire 7/14/01(6) IDR 2,700,000 194,324
Vengold, Inc., Warrants, Strike $1.30, Expire 6/30/00(2),(6) CAD 1,286,000 821,742
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.4% (Cost $2,658,315) 4,212,625
OPTIONS VALUE
- -----------------------------------------------------------------------------------------------------------------------------
OPTIONS
- -----------------------------------------------------------------------------------------------------------------------------
Harmony Gold Mining Options, Strike 6,000, Expire 7/31/01(6) SAR 9,900 13,097
Normandy Mining, Ltd., Options, Strike AUD 2.50, Expire 4/30/01(6) AUD 1,673,426 295,801
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS - 0.1% (Cost $43,533) 308,898
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 72.7% (Cost $565,406,411) 688,213,576
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
- -----------------------------------------------------------------------------------------------------------------------------
Cash 5
South African Rand 392
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CASH AND CASH EQUIVALENTS - 0.0% 397
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
12
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- -----------------------------------------------------------------------------------------------------------------------------
Cash $ 2,761,346
Repurchase Agreement
State Street Bank and Trust Company, 5.50%, dated 6/30/97, due 7/1/97,
maturity value $75,384,515 (collateralized by $76,390,000
par value U.S. Treasury Note, 6.375%, due 4/30/99) 75,373,000
U.S. Treasury Bill, due 7/24/97, $163,500,000 par value 163,000,690
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT - 25.5% 241,135,036
- -----------------------------------------------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 38.0% 360,517,244
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (32.4%) (Proceeds: $281,830,513) (306,799,945)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (3.8%) (35,914,260)
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $947,152,048
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Income-producing security.
(2) Fair-value security. See 1.a. in Notes to Financial Statements.
(3) Restricted security. See 4.d. in Notes to Financial Statements.
(4) ADR - American Depository Receipt; GDR - Global Depository Receipt.
(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) See 4.e. in Notes to Financial Statements.
(7) Foreign-denominated security: AUD - Australian Dollar; CAD - Canadian
Dollar; GBP - British Pound; HKD - Hong Kong Dollar; IDR - Indonesian
Rupiah; SAR - South African Rand.
(8) Shares registered for foreign investors.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
13
<PAGE>
SCHEDULE OF SECURITIES SOLD SHORT
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AGRICULTURAL SERVICES-3.6%
Delta & Pine Land Company 944,633 $33,652,563
- -----------------------------------------------------------------------------------------------------------------------------
33,652,563
- -----------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE PARTS/EQUIPMENT-0.6%
Exide Corporation 239,100 5,245,256
- -----------------------------------------------------------------------------------------------------------------------------
5,245,256
- -----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL SERVICES-0.1%
Employee Solutions, Inc. 245,500 1,365,594
- -----------------------------------------------------------------------------------------------------------------------------
1,365,594
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS-1.6%
Komag, Inc. 354,500 5,804,937
Quantum Corporation 251,200 5,102,500
Western Digital Corporation 139,700 4,418,012
- -----------------------------------------------------------------------------------------------------------------------------
15,325,449
- -----------------------------------------------------------------------------------------------------------------------------
COMPUTER SOFTWARE-1.4%
Activision, Inc. 157,600 2,265,500
Avant! Corporation 51,700 1,670,556
Imnet Systems, Inc. 308,820 9,592,721
- -----------------------------------------------------------------------------------------------------------------------------
13,528,777
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER/SPECIALTY RETAIL-0.7%
Gymboree Corporation 69,400 1,665,600
West Marine, Inc. 199,800 5,144,850
- -----------------------------------------------------------------------------------------------------------------------------
6,810,450
- -----------------------------------------------------------------------------------------------------------------------------
CONSUMER TECHNOLOGY-0.9%
Sensormatic Electronics Corporation 639,600 8,234,850
- -----------------------------------------------------------------------------------------------------------------------------
8,234,850
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS-0.7%
Identix, Inc. 261,500 2,892,844
Unitrode Corporation 63,500 3,198,812
X Rite, Inc. 24,700 469,300
- -----------------------------------------------------------------------------------------------------------------------------
6,560,956
- -----------------------------------------------------------------------------------------------------------------------------
ELECTRONICS-0.3%
Zenith Electronics Corporation 257,700 3,044,081
- -----------------------------------------------------------------------------------------------------------------------------
3,044,081
- -----------------------------------------------------------------------------------------------------------------------------
ENTERTAINMENT-1.2%
Signature Resorts, Inc. 112,700 3,895,194
The Walt Disney Company 93,400 7,495,350
- -----------------------------------------------------------------------------------------------------------------------------
11,390,544
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES-3.5%
Capital One Financial Corporation 307,900 11,623,225
Cityscape Financial Corporation 253,300 5,050,169
Delta Financial Corporation 374,200 7,156,575
Hambrecht & Quist Group, Inc. 271,600 8,894,900
- -----------------------------------------------------------------------------------------------------------------------------
32,724,869
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
14
<PAGE>
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED) SHARES VALUE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE/MEDICAL TECHNOLOGY/HMO-3.4%
Integrated Health Services, Inc. 187,400 $ 7,214,900
Stryker Corporation 707,500 24,674,062
- -----------------------------------------------------------------------------------------------------------------------------
31,888,962
- -----------------------------------------------------------------------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL-0.4%
Zoltek Companies, Inc. 93,300 3,568,725
- -----------------------------------------------------------------------------------------------------------------------------
3,568,725
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL DEVICES-2.7%
Medtronic, Inc. 317,800 25,741,800
- -----------------------------------------------------------------------------------------------------------------------------
25,741,800
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS/DEVICES-0.2%
PerSeptive Biosystems, Inc. 292,400 1,790,950
- -----------------------------------------------------------------------------------------------------------------------------
1,790,950
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL SERVICES-3.4%
Genesis Health Ventures, Inc. 394,100 13,300,875
Medaphis Corporation 118,700 1,194,419
Steris Corporation 469,500 17,547,562
- -----------------------------------------------------------------------------------------------------------------------------
32,042,856
- -----------------------------------------------------------------------------------------------------------------------------
MEDICAL SUPPLIES-2.0%
Biomet, Inc. 485,400 9,040,576
Enzo Biochem, Inc. 379,800 6,005,587
Vivus, Inc. 162,200 3,862,387
- -----------------------------------------------------------------------------------------------------------------------------
18,908,550
- -----------------------------------------------------------------------------------------------------------------------------
NETWORK SYSTEMS-0.7%
ODS Networks, Inc. 584,800 6,944,500
- -----------------------------------------------------------------------------------------------------------------------------
6,944,500
- -----------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT-1.0%
Lam Research Corporation 265,100 9,825,269
- -----------------------------------------------------------------------------------------------------------------------------
9,825,269
- -----------------------------------------------------------------------------------------------------------------------------
SEMICONDUCTORS-0.9%
Maxim Integrated Products, Inc. 49,400 2,809,625
Micron Technology, Inc. 150,000 5,990,625
- -----------------------------------------------------------------------------------------------------------------------------
8,800,250
- -----------------------------------------------------------------------------------------------------------------------------
SPECIALTY WHOLESALE-1.5%
Rexall Sundown, Inc. 364,900 14,231,100
- -----------------------------------------------------------------------------------------------------------------------------
14,231,100
- -----------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-1.6%
EchoStar Communications Corporation, Class A 65,300 1,020,313
Intelidata Technologies Corporation 196,100 943,731
Tel-Save Holdings, Inc. 866,200 13,209,550
- -----------------------------------------------------------------------------------------------------------------------------
15,173,594
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT-(32.4)% (Proceeds: $281,830,513) $306,799,945
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
15
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------
Investments, at value (Cost: $565,406,411) $ 688,213,576
Deposits with brokers and custodian bank for securities sold short 241,135,036
Cash and cash equivalents 397
Receivable from brokers for securities sold short 360,517,244
Receivable for investments sold 11,737,035
Receivable for fund shares subscribed 1,206,312
Dividends/interest receivable 453,302
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 1,303,262,902
- -----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------
Securities sold short (Proceeds: $281,830,513) 306,799,945
Payable to custodian bank 29,190,950
Payable for investments purchased 12,653,901
Payable for fund shares redeemed 5,486,218
Payable to adviser 1,165,246
Payable to distributor 584,843
Accrued expenses 229,751
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 356,110,854
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 947,152,048
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------
Paid-in capital 831,141,389
Accumulated undistributed net investment income 530,237
Accumulated net realized gain from investments 21,620,978
Accumulated net realized loss from securities sold short (3,773,951)
Net unrealized appreciation on investments 117,921,889
Net unrealized depreciation on securities sold short (20,288,494)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $ 947,152,048
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price
per share - Class A Shares $ 15.79
(Net assets of $943,378,666 applicable to 59,743,234
shares of beneficial interest outstanding with no par value)
- -----------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption
price per share - Class C Shares $ 15.78
(Net assets of $3,773,382 applicable to 239,117
shares of beneficial interest outstanding with no par value)(1)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Redemption price per share is equal to the net asset value less any
applicable contingent deferred sales charge.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
16
<PAGE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Interest $ 11,767,871
Dividends (net of foreign tax withheld of $114,024) 2,218,386
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 13,986,257
- -----------------------------------------------------------------------------------------------------------------------------
EXPENSES
- -----------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 8,279,025
Distribution fees - Class A Shares 4,135,838
Transfer agent fees 365,041
Dividend expense for securities sold short 225,772
Custodian fees 194,670
Shareholder reports 106,790
Professional fees 61,450
Registration and filing fees 47,629
Interest expense 14,176
Trustees' fees and expenses 11,041
Insurance 9,688
Distribution fees - Class C Shares 3,675
Shareholder servicing fees - Class C Shares 1,225
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 13,456,020
- -----------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 530,237
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN /(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- -----------------------------------------------------------------------------------------------------------------------------
Net realized gain from investments 5,983,270
Net realized loss from securities sold short (306,785)
Net change in unrealized depreciation on investments (27,865,079)
Net change in unrealized depreciation on securities sold short (32,594,827)
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN/(LOSS) AND UNREALIZED DEPRECIATION
ON INVESTMENTS AND SECURITIES SOLD SHORT (54,783,421)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(54,253,184)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
17
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED FOR THE
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $ 530,237 $ (186,383)
Net realized gain from investments 5,983,270 61,594,231
Net realized (loss)/gain from securities sold short (306,785) 9,532,717
Net change in unrealized (depreciation)/appreciation on investments (27,865,079) 46,658,624
Net change in unrealized (depreciation)/appreciation on securities sold short (32,594,827) 6,082,273
- -----------------------------------------------------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN NET ASSETS RESULTING FROM OPERATIONS (54,253,184) 123,681,462
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A Shares - -
Net investment income - Class C Shares(1) - -
Realized gain on investments - Class A Shares - (12,608,730)
Realized gain on investments - Class C Shares(1) - -
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (12,608,730)
- -----------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net (decrease)/increase in net assets resulting from capital share transactions (62,032,446) 444,888,205
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL CAPITAL SHARE TRANSACTIONS (62,032,446) 444,888,205
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL (DECREASE)/INCREASE IN NET ASSETS (116,285,630) 555,960,937
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period 1,063,437,678 507,476,741
End of period $ 947,152,048 $ 1,063,437,678
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first sold on April 14, 1997.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
18
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS A SHARES
<TABLE>
<CAPTION>
FOR THE SIX FOR THE FOR THE FOR THE FOR THE
FOR A SHARE OUTSTANDING MONTHS ENDED YEAR ENDED NINE MONTHS YEAR ENDED PERIOD ENDED
THROUGHOUT EACH PERIOD: 6/30/97 (UNAUDITED) 12/31/96 ENDED 12/31/95 3/31/95 3/31/94(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.57 $13.78 $10.70 $12.34 $10.00
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) 0.01 0.00 (0.01) (0.04) (0.02)
Net realized (loss)/gain and unrealized
(depreciation)/appreciation on
investments and securities sold short (0.79) 2.99 3.09 (1.35) 2.36
- ----------------------------------------------------------------------------------------------------------------------------------
NET (DECREASE)/INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS (0.78) 2.99 3.08 (1.39) 2.34
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income - - - - -
Distributions from realized
gain on investments - (0.20) - (0.25) -
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.79 $16.57 $13.78 $10.70 $12.34
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (4.71)% 21.68% 28.79% (11.23)% 23.40%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period (000s) $943,379 $1,063,438 $507,477 $397,646 $484,951
Ratio of Expenses to Average Net Assets 2.44% 2.46% 2.54% 2.46%(2) 2.22%
Ratio of Net Investment Income/(Loss) to
Average Net Assets 0.10% (0.02)% (0.20)% (0.27)%(2) (0.77)%
Portfolio Turnover Rate 28% 44% 29% 79% 14%
Average Commission Rate Paid(3) $0.0183 $0.0273 - - -
</TABLE>
(1) Class A shares were first issued on June 30, 1993.
(2) If the Fund had paid all of its expenses and there had been no
reimbursement from the Adviser for the year ended march 31, 1995, total
return would have been (11.40)%, the ratio of expenses to average net
assets would have been 2.58%, and the ratio of net investment loss to
average net assets would have been (0.39)%.
(3) A Fund is required to disclose its average commission rate per share for
security trades on which a commission is charged. This amount may vary from
fund to fund and period to period depending on the mix of trades executed
in various markets where trading practices and commission rate structures
may differ. This rate generally does not reflect markups, markdowns or
spreads on shares traded on a principle basis, if any.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
Per-share data with respect to class a shares has been determined by using
the average number of class ashares outstanding throughout the period.
distributions reflect actual per-share amounts distributed for the periods.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
19
<PAGE>
FINANCIAL HIGHLIGHTS - CLASS C SHARES
<TABLE>
<CAPTION>
FOR THE
FOR A SHARE OUTSTANDING PERIOD ENDED
THROUGHOUT EACH PERIOD: 6/30/97(1) (UNAUDITED)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $16.26
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
Net investment income 0.00
Net realized loss and unrealized depreciation on investments and securities sold short (0.48)
- -----------------------------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS (0.48)
- -----------------------------------------------------------------------------------------------------------------------------
Distributions from net investment income --
Distributions from realized gain on investments --
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $15.78
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (2.95)%
- -----------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s) $3,773
Ratio of expenses to average net assets 2.69%
Ratio of net investment income to average net assets 0.16%
Portfolio turnover rate 28%
Average commission rate paid(2) $0.0183
</TABLE>
(1) Class C shares were first sold on April 14, 1997.
(2) A fund is required to disclose its average commission rate per share for
security trades on which a commission is charged. This amount may vary from
fund to fund and period to period depending on the mix of trades executed
in various markets where trading practices and commission rate structures
may differ.This rate generally does not reflect markups, markdowns or
spreads on shares traded on a principle basis, if any.
Ratios, except for total return and portfolio turnover rate, have been
annualized.
Total returns do not include the 1% contingent deferred sales charge.
Per-share data with respect to Class C shares has been determined by using
the average number of Class C shares outstanding throughout the period.
Distributions reflect actual per-share amounts distributed for the year.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
The Contrarian 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 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 twelve series of
shares -- The Robertson Stephens Emerging Growth Fund, The Robertson Stephens
Value + Growth Fund, The Contrarian Fund-TM-, The Robertson Stephens Developing
Countries Fund, The Robertson Stephens Growth & Income Fund, The Robertson
Stephens Partners Fund, The Information Age Fund-TM-, The Robertson Stephens
Global Natural Resources Fund, The Robertson Stephens Global Low-Priced Stock
Fund, The Robertson Stephens Diversified Growth Fund, The Robertson Stephens
MicroCap Growth Fund and The Robertson Stephens Global Value Fund. The assets
for each series are segregated and accounted for separately.
The Trustees have authorized the issuance of two classes of Shares of beneficial
interest of the Fund, designated as Class A and C, respectively. The shares of
each class represent an interest in the same portfolio of investments of the
Fund. Expenses of the Fund are borne pro-rata by the holders of each class of
shares, except that each class may bear expenses unique to that class
(including, but not limited to, distribution expenses applicable to such class).
Shares of each class would receive their pro-rata share of the net assets of the
Fund, if the Fund was liquidated. In addition, The Board of Trustees declares
separate distributions of each class of Shares. Each class votes as a class only
with respect to its own distribution plan or other matters for which a class
vote is required by law or determined by the Board of Trustees. Class C shares
were first sold by the Fund on April 14, 1997. Class C shares are subject to a
1% contingent deferred sales charge if those shares are redeemed within one year
of purchase.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
a. INVESTMENT VALUATIONS:
Marketable equity securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. Short term
investments that will mature in 60 days or less are stated at amortized cost,
which approximates market value. Foreign securities prices are generally
denominated in foreign currencies. The currencies are translated into U.S.
dollars by using the exchange rates quoted at the close of The London Stock
Exchange prior to when the Fund's net asset value is next determined. At June
30, 1997, 97.2% 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 would have a significant impact on the value
of a security. At June 30, 1997, approximately 2.8% of the Fund's long positions
were valued using these guidelines and procedures.
As its normal course of business, the Fund has invested a significant portion of
its assets in companies concentrated 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, realization
and/or retention of the collateral may be subject to legal proceedings. The
Fund's policy is to limit repurchase agreement transactions to those parties
deemed by the Fund's Investment Adviser to have satisfactory creditworthiness.
c. FEDERAL INCOME TAXES:
The Fund intends to comply with requirements of the Internal Revenue Code,
qualifying as a regulated investment company. Therefore, the Fund does not
expect to be subject to income tax, and no provision for such tax will be made.
d. SECURITIES TRANSACTIONS:
Securities transactions are accounted for on the date securities are purchased,
sold, or sold short (trade date). Realized gains or losses on securities
transactions are determined on the basis of specific identification.
22
<PAGE>
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. DISTRIBUTION TO SHAREHOLDERS:
Dividends to shareholders are recorded on the ex-dividend date.
h. CLASS ALLOCATIONS:
Income, common expenses, and realized and unrealized gains/(losses) are
determined at the Fund level and allocated daily to each class of shares
based on the appropriate net assets of the respective classes. Transfer agent
expenses, distribution/shareholder service fees, and any other class specific
expenses, if any, are calculated daily at the class level based on the
appropriate daily net assets of each class and the specific expense rate
applicable to each class.
i. CAPITAL ACCOUNTS:
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains/(losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may
differ from the year in which the income and realized gains/(losses) were
recorded by the portfolio.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Fund has authorized an unlimited number of shares of beneficial interest
with no par value divided into two classes designated Class A and Class C.
Transactions in capital shares for Class A shares for the six months ended June
30, 1997, and for the year ended December 31, 1996, and for Class C shares for
the period from April 14, 1997 (Commencement of Operations) to June 30, 1997,
were as follows:
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Class A
1/1/97 - 6/30/97 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 17,705,548 $ 300,361,170
Shares reinvested - -
- -------------------------------------------------------------------------------
17,705,548 300,361,170
- -------------------------------------------------------------------------------
Shares redeemed (22,122,480) (366,259,131)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net decrease (4,416,932) $ (65,897,961)
- -------------------------------------------------------------------------------
1/1/96 - 12/31/96 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 59,842,647 $ 974,268,575
Shares reinvested 718,331 12,010,500
- -------------------------------------------------------------------------------
60,560,978 986,279,075
- -------------------------------------------------------------------------------
Shares redeemed (33,218,658) (541,390,870)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net increase 27,342,320 $ 444,888,205
- -------------------------------------------------------------------------------
Class C
4/14/97* - 6/30/97 SHARES AMOUNT
- -------------------------------------------------------------------------------
Shares sold 239,117 $ 3,865,515
Shares reinvested - -
- -------------------------------------------------------------------------------
239,117 3,865,515
- -------------------------------------------------------------------------------
Shares redeemed - -
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Net increase 239,117 $ 3,865,515
- -------------------------------------------------------------------------------
* Class C shares were first sold on April 14, 1997.
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of an advisory agreement, which is reviewed and approved
annually by the Board of Trustees, the Fund pays Robertson Stephens Investment
Management, L.P. ("RSIM"), an investment advisory fee calculated at an annual
rate of 1.50% of the average daily net assets of the Fund. For the six months
ended June 30, 1997, the Fund incurred investment advisory fees of $8,279,025.
For the six months ended June 30, 1997, there was no expected reimbursement of
the advisory fees and other expenses.
RSIM may recoup waived or reimbursed operating expenses over the succeeding two
years, subject to expense limitations then applicable to the Fund. No previous
expense waivers or reimbursements of operating expenses were recouped by RSIM
from the Fund during the six months ended June 30, 1997.
b. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Fund who are affiliated persons receive no
compensation from the Fund. Trustees of the Fund who are not interested persons
of the Trust, as defined in the 1940 Act, collectively received compensation and
reimbursement of expenses of $11,041 for the six months ended June 30, 1997.
24
<PAGE>
c. DISTRIBUTION FEES:
The Fund has entered into agreements with Robertson, Stephens & Company LLC ("RS
& Co.") for distribution services with respect to its Class A and Class C shares
and has adopted Plans of Distribution pursuant to Rule 12b-1 under the 1940 Act,
where continuance is reviewed annually by the Fund's Board of Trustees. Under
these Plans, RS & Co. is compensated for services in such capacity including its
expenses in connection with the promotion and distribution of the Fund's Class A
and Class C shares. The distribution fees for Class A and Class C shares are
calculated at an annual rate of 0.75% based on the average net assets
attributable to each class of shares, although the Class C plan contemplates
payments at a rate of up to 1% of the average daily net assets of the Fund
attributable to Class C Shares. For the six months ended June 30, 1997, for
Class A, and for the period from April 14, 1997 (Commencement of Operations)
through June 30, 1997, for Class C, the Fund incurred distribution fees of
$4,135,838 and $3,675, respectively.
d. SHAREHOLDER SERVICING FEE:
The Trust has adopted a Shareholder Servicing Plan for the Class C shares of
each fund. Under the Plan, each fund pays fees to RS & Co. at an annual rate of
up to 0.25% of the Fund's average daily net assets of Class C shares. The Plan
contemplates that financial institutions will enter into shareholder service
agreements with RS & Co. to provide administrative support services to their
customers who are fund shareholders. In return for providing these support
services, a financial institution may receive payments from RS & Co. at a rate
not exceeding 0.25% of the average daily net assets of the Class C shares of
each fund for which the financial institution is the financial institution of
record. For the period from April 14, 1997 (Commencement of Operations) to
June 30, 1997, the Fund incurred shareholder servicing fees of $1,225.
e. BROKERAGE COMMISSIONS:
RSIM may direct orders for investment transactions to RS & Co. as
broker-dealer, subject to Fund policies as stated in the prospectus,
regulatory constraints, and the ability of RS & Co. to provide competitive
prices and commission rates. All investment transactions in which RS & Co.
acts as a broker may only be executed on an agency basis. Subject to certain
constraints, the Fund may make purchases of securities from offerings or
underwritings in which RS & Co. has been retained by the issuer. For the six
months ended June 30, 1997, the Fund paid brokerage commissions of $16,861 to
RS & Co., which represented 1.4% of total commissions paid during this period.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 INVESTMENTS:
a. TAX BASIS OF INVESTMENTS:
At June 30, 1997, the cost of investments purchased and proceeds of securities
sold short for federal income tax purposes was $1,122,736,613. Accumulated net
unrealized appreciation on investments and securities sold short, excluding the
foreign currency fluctuation associated with other assets and liabilities, was
$97,616,846, consisting of gross unrealized appreciation and depreciation of
$270,405,558 and $172,788,712, respectively.
b. INVESTMENT PURCHASES AND SALES:
For the six months ended June 30, 1997, the cost of investments purchased and
the proceeds from investments sold (excluding options, securities sold short and
short-term investments) were $147,255,560 and $227,556,445, respectively.
c. 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, equities, 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. For the six months ended June
30, 1997, the cost of investments purchased to cover short sales and proceeds
from investments sold short were $106,146,112 and $252,901,178, respectively.
Included in the "Other liabilities, Net" category in the Schedule of Investments
are the following securities sold short where the Fund has purchased the
underlying securities to effectively close out the short positions. Included in
Receivables from Brokers for Securities Sold Short is $78,686,731 for these
short positions. At June 30, 1997, the cost of the associated long positions and
the unrealized appreciation of investments and securities sold short are
$48,907,618 and $29,779,113, respectively. At June 30, 1997, 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
- -------------------------------------------------------------------------------
3Com Corporation 713,125 $ 32,090,625
Avant Corporation 507,900 16,411,519
Cyrix Corporation 288,700 6,170,962
EchoStar Communications
Corporation, Class A 30,400 475,000
Employee Solutions, Inc. 393,400 2,188,287
HCIA, Inc. 105,800 3,544,300
Imp., Inc. 30,000 46,875
Intelidata Technologies
Corporation 102,100 491,356
Komag, Inc. 137,000 2,243,375
Mastech Corporation 29,100 1,376,794
Medic Computer Systems, Inc. 223,800 4,979,550
Objective Systems Integrators, Inc. 20,400 175,950
Rexall Sundown, Inc. 60,800 2,371,200
- -------------------------------------------------------------------------------
$ 74,005,793
- -------------------------------------------------------------------------------
26
<PAGE>
d. RESTRICTED SECURITIES:
A restricted security cannot be resold to the general public without prior
registration under the Securities Act of 1933. If the security is subsequently
reregistered and resold, the issuers would bear the expense of all registrations
at no cost to the Fund. At June 30, 1997, the Fund held restricted securities
with an aggregate value of $12,822,587, 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
- ------------------------------------------------------------------------------
Atlantic Gulf Communities
Corporation 266 $ 1,500 $ 1,359 6/24/97
Atlantic Gulf Communities
Corporation, Warrants 300 18 973 6/24/97
Black Sea Energy, Ltd. 2,564 3,448 5,397 2/5/97
China Industrial
Minerals Company 2,183 2,838 3,275 4/25/97 -
4/30/97
First Dynasty Mines, Ltd. 1,760 3,928 1,575 9/12/96 -
1/13/97
First Dynasty Mines, Ltd.,
Warrants 1,760 1,031 0 9/13/96
Nescor Energy 375 125 244 4/18/94 -
5/15/94
- ------------------------------------------------------------------------------
$ 12,888 $ 12,823
- ------------------------------------------------------------------------------
e. OPTIONS AND WARRANTS:
Options and warrants normally entitle the holder to purchase a proportionate
amount of a particular class of the issuer's securities at a predetermined price
during a specific period. Options and warrants for which market quotations were
not readily available were priced using the modified Black-Scholes Valuation
Formula. The Black-Scholes Valuation Formula values an option or warrant by
determining the differential between the exercise price of the option or warrant
and the current price of the underlying stock based on a number of factors.
These factors include, but are not limited to, current price of the underlying
stock, exercise price of the option or warrant, time to expiration, assumed
riskless rate of interest, compounded rate of return on the stock, and standard
deviation of the return on the stock. This valuation method is subject to
frequent review and is in accordance with the guidelines and procedures adopted
by the Fund's Board of Trustees.
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, 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.
NOTE 5 MERGER:
On June 8, 1997, BankAmerica Corporation ("BankAmerica") entered into an
Agreement and Plan of Merger with Robertson, Stephens & Company Group, L.L.C.
and Robertson, Stephens & Company, Inc., pursuant to which each of those
entities would be merged into a subsidiary of BankAmerica. Upon the consummation
of those mergers (expected to occur as early as September 30, 1997), BankAmerica
will become the owner of the entire beneficial interest in RSIM, L.P. and RSIM,
Inc.
27
<PAGE>
ADMINISTRATION
OFFICERS AND TRUSTEES
G. Randy Hecht, Trustee
President, Chief Executive Officer
Leonard B. Auerbach, Trustee
President and Chairman of
Auerbach Associates, Inc.
John W. Glynn, Jr., Trustee
Principal and Chairman of
Glynn Capital Management
James K. Peterson, Trustee
Former Director of the
IBM Retirement Funds
John P. Rohal, Trustee
Managing Director and Director
of Research, Robertson, Stephens & Co.
Terry R. Otton
Chief Financial Officer
Dana K. Welch
Secretary
INVESTMENT ADVISER
Robertson, Stephens & Company
Investment Management, L.P.
555 California Street, Suite 2600
San Francisco, CA 94104
DISTRIBUTOR
Robertson, Stephens & Company LLC
555 California Street, Suite 2600
San Francisco, CA 94104
1-800-766-3863
TRANSFER AGENT AND DISBURSING AGENT
State Street Bank & Trust Company
c/o National Financial Data Services
Kansas City, MO
1-800-272-6944
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
San Francisco, CA
LEGAL COUNSEL
Ropes & Gray
Boston, MA
This report is submitted for the information of shareholders of The Contrarian
Fund-TM-. It is not authorized for distribution to prospective investors unless
preceded or accompanied by an effective prospectus.
Published August 29, 1997
28
<PAGE>
Design: Broom & Broom, Inc., San Francisco
Photography: Jerry Orabona, Bill Zemanek
THE ROBERTSON STEPHENS MUTUAL FUNDS
In addition to THE CONTRARIAN FUND-TM-, Robertson Stephens offers the following
mutual funds:
THE DEVELOPING COUNTRIES FUND
A PORTFOLIO OF GROWING COMPANIES IN EMERGING MARKETS - Invests primarily in
publicly traded equities of developing countries, as well as in private
placement emerging market equity securities. No load. Managed by Michael
Hoffman.
THE DIVERSIFIED GROWTH FUND
FOCUSING ON SMALL- AND MID-CAP COMPANIES - Invests primarily in equity
securities to create a portfolio broadly diversified over industries and
companies. No load. Managed by John Wallace.
THE EMERGING GROWTH FUND
SEEKING TO INVEST IN AMERICA'S MOST DYNAMIC, GROWTH-ORIENTED INDUSTRIES -
Invests primarily in common stocks of emerging growth companies (predominantly
technology, specialty retailing, and health care) with above-average growth
potential. No load. Managed by Jim Callinan.
THE GLOBAL LOW-PRICED STOCK FUND
SEEKING OVERLOOKED AND UNDERVALUED COMPANIES - Invests in companies worldwide
that are low-priced (stock prices no greater than $10 per share), have future
growth potential, but are underappreciated or overlooked by other investors. No
load. Managed by Hannah Sullivan.
THE GLOBAL NATURAL RESOURCES FUND
PRIMARILY FOCUSING ON ATTRACTIVE HARD ASSET COMPANIES - Invests in equities of
companies engaged in the discovery, development, production, or distribution of
natural resources, such as energy, metals, and forest products. No load. Managed
by Andy Pilara.
THE GLOBAL VALUE FUND
APPLYING A CASH FLOW VALUE METHODOLOGY WORLDWIDE - Uses a methodology that
combines traditional Graham & Dodd balance sheet analysis and cash flow
analysis. No load. Managed by Andy Pilara.
THE GROWTH & INCOME FUND
SEEKING HIGH GROWTH WHILE ATTEMPTING TO MANAGE RISK - Invests primarily in
small- and mid-cap company stocks, as well as convertible bonds and preferred
stocks. No load. Managed by John Wallace.
THE INFORMATION AGE FUND-TM-
FOCUSING ON INVESTMENTS IN THE INFORMATION TECHNOLOGY SECTOR - Invests in a wide
range of technology companies with strong fundamentals, market advantage, and
growth potential, including computer hardware and software, telecommunications,
and multimedia. No load. Managed by Ron Elijah.
THE MICROCAP GROWTH FUND
FOCUSING ON COMPANIES WITH MARKET CAPS OF LESS THAN $250 MILLION - Invests
primarily in "micro-cap" companies with the potential for long-term capital
appreciation. No load. Managed by David Evans.
THE PARTNERS FUND
A SMALL-CAP FUND USING A VALUE METHODOLOGY - This methodology combines
traditional Graham & Dodd balance sheet analysis and cash flow analysis. No
load. Managed by Andy Pilara.
THE VALUE + GROWTH FUND
A GROWTH FUND FOR THE LONG-TERM INVESTOR - Invests primarily in growth companies
with favorable price/earnings ratios in sectors with the potential for
above-average growth. No load. Managed by Ron Elijah.
Please read the prospectus to learn about the Funds' objectives, investment
policies, and the special risks associated with The Robertson Stephens Mutual
Funds, including international investing, investing in smaller companies,
investing in a more limited number of issuers and sectors or a particular
sector, short selling, using options and futures, and investing in
high-yielding, lower-quality debt securities.
<PAGE>
ROBERTSON STEPHENS & COMPANY
BRINGING THE FUND MANAGER TO YOU
555 California Street, Suite 2600
San Francisco, California 94104
FUND NEWS & INFORMATION
ROBERTSON STEPHENS INVESTOR SERVICES
- - Knowledgeable mutual fund representatives.
- - Automated access to daily net asset values.
- - Portfolio Manager Hotline, 24 hours a day.
1-800-766-3863
ROBERTSON STEPHENS
MUTUAL FUND E-MAIL
[email protected]
ROBERTSON STEPHENS
ON THE WEB
HTTP://WWW.RSIM.COM
ROBERTSON STEPHENS
ACCOUNTLINK
- - Automated account information, 24 hours a day.
1-800-624-8025
FUND LISTINGS
The Fund is listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S BUSINESS
DAILY, and most local newspapers as Contra under the heading Robertson Stephens.
Its computer quotation symbol is RSCOX.
The views expressed in this report were those of the Fund's portfolio manager as
of the date specified, and may not reflect the views of the portfolio manager on
the date they are first published or at any other time thereafter. RSIM and its
affiliates may buy or sell investments at any time for the Fund, their other
clients or for their own accounts, and may not necessarily do so in a manner
consistent with the views expressed in this report. The prices at which they buy
or sell investments may be affected favorably by the contents of this report or
the timing of its publication. THE VIEWS EXPRESSED IN THIS REPORT ARE INTENDED
TO ASSIST SHAREHOLDERS OF THE FUND IN UNDERSTANDING THEIR INVESTMENT IN THE FUND
AND DO NOT CONSTITUTE INVESTMENT ADVICE; INVESTORS SHOULD CONSULT THEIR OWN
INVESTMENT PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT PROGRAMS.
