<PAGE>
ANNUAL REPORT
[GRAPHIC]
ROBERTSON STEPHENS MUTUAL FUNDS
For the Year Ended
December 31, 1998
<PAGE>
ROBERTSON STEPHENS FUNDS
555 California Street, Suite 2500
San Francisco, California 94104
1-800-766-3863
CURRENT INFORMATION
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OPTION 1
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PORTFOLIO MANAGER HOTLINE
- - Updated commentary on each of the funds from
our portfolio managers. Accessible through our
Web site or our toll free number.
OPTION 5
- ------------------------------------------------------
[LOGO]
ON THE WEB
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<PAGE>
Robertson Stephens Mutual Funds
The Contrarian Fund-TM-
The Diversified Growth Fund
The Emerging Growth Fund
The Global Natural Resources Fund
The Global Value Fund
The Growth & Income Fund
The Information Age Fund-TM-
The MicroCap Growth Fund
The Partners Fund
The Value + Growth Fund
Robertson Stephens Funds
<PAGE>
ANNUAL REPORT
February, 1999
DEAR SHAREHOLDER:
[PHOTO]
When I wrote to you in our last quarterly, I proudly announced that the
senior management of Robertson Stephens Investment Management had reached an
agreement to buy back our firm from Bank of America. Since that time we have
been working hard to recreate the partnership feel to our new firm. We
believe we have put together a first class firm owned by all the key
employees and portfolio managers in the firm and with a strong balance sheet.
As you can read in the following portfolio manager reports, most of our funds
had excellent returns in the fourth quarter both on an absolute and relative
basis. Within the quarter, however, the market and the funds exhibited some
dramatic volatility, especially in October, first on the downside and then a
reversal on the upside. In such volatile times, we believe shareholders do
best staying fully invested and not trying to time the market. This is
particularly true with investments in small and mid-cap growth funds. These
funds rarely show consistent outperformance of the large cap indexes. Rather,
the group historically has beaten the larger cap indexes through a shockingly
limited number of sharp, random days of relative price strength. As an
example, for the two-year period from June 1994 through May 1996, small cap
growth portfolios delivered a 99% return versus a 51% gain for the Dow Jones
Industrial Average. However, this obviously sharp outperformance was confined
to 19 random days, or 4% of available trading days, within the two year
period. Similar findings can be obtained through other periods of similar
outperformance. The conclusion that I draw from this is that it may be in the
shareholder's best interest to stay invested over the long term.
I hope you find our reports informative and enjoyable. We try to make these
reports as timely as possible given the regulatory constraints. For more up
to the moment information and reports from our managers please visit our web
site at www.rsim.com. If you haven't tried our site please do. You will also
find daily NAV's, archived news reports on our funds and managers,
descriptions by the managers of what their investment philosophy is in the
way they manage their funds and other useful investor information.
Thank you for your support as a fellow shareholder with us.
Sincerely
/s/ G. Randy Hecht
G. Randy Hecht
President
Robertson Stephens Funds
[email protected]
2
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
TABLE OF CONTENTS
<TABLE>
<S> <C>
FUND INFORMATION
The Contrarian Fund-TM-................................... 4
The Diversified Growth Fund............................... 6
The Emerging Growth Fund.................................. 8
The Global Natural Resources Fund......................... 10
The Global Value Fund..................................... 12
The Growth & Income Fund.................................. 14
The Information Age Fund-TM-.............................. 16
The MicroCap Growth Fund.................................. 18
The Partners Fund......................................... 20
The Value + Growth Fund................................... 22
FINANCIALS
Schedule of Investments................................... 24
Statement of Assets and Liabilities....................... 42
Statement of Operations................................... 44
Statement of Changes in Net Assets........................ 46
Financial Highlights (A+C)................................ 50
Notes to Financial Statements............................. 56
</TABLE>
3
<PAGE>
ANNUAL REPORT [LOGO]
THE CONTRARIAN FUND-TM-
FUND PHILOSOPHY
<TABLE>
<S> <C>
SENIOR PORTFOLIO The Contrarian Fund-TM- seeks to achieve maximum
MANAGERS long-term growth of capital by investing worldwide in
growing companies that are attractively priced. The Fund
PAUL H. STEPHENS invests on a global basis in an effort to make timely
investments in new discovery ideas or in companies and
ANDREW P. PILARA, JR. industries that are neglected, unpopular or overlooked.
When appropriate, the Fund will short sell stocks.
RICK BARRY
</TABLE>
- -------------------------------------------------------------------------------
Q & A
Q. HOW DID THE CONTRARIAN FUND PERFORM DURING THE YEAR?
A. The Fund had positive performance for the fourth quarter, but was down
for 1998. This was after a 58-cent capital gains distribution, largely due
to a spillback of capital gains realized in the last two months of 1997.
The Fund's asset base is now $125.5 million but it has $63 million of
realized tax losses that have carried over into 1999 as well as
$132 million in net unrealized tax losses. The Fund may be able to use
these realized tax losses (and, when realized, the unrealized tax losses)
to offset future taxable gains that we hope to realize when our contrarian
style does come back into favor. The Fund's ability to use these losses
would allow the Fund to retain those gains rather than distribute them
currently, without giving rise to any current tax liability in its
shareholders' hands.
Q. WHAT MAIN FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE YEAR?
A. Many of the trends that characterized the market earlier in the year
continued in the last three months of 1998. Our contrarian investments
remained out of favor while the largest and most expensive U.S. stocks
continued to gain momentum. Investors seem to be speculating in the same
40 to 50 companies primarily because their stocks continue to go up.
Q. WHAT, IF ANY, CHANGES HAVE YOU MADE TO THE FUND?
A. Although we have obviously been early in our contrarian approach, we are
remaining disciplined to our charter. In fact, we have added many new
contrarian positions over the last few months. Co-portfolio managers
Andy Pilara and Rick Barry have helped diversify the Fund by buying
their favorite larger capitalization names in such areas as the building
materials, real estate, technology and tobacco sectors. In addition,
Rick recently increased the Fund's net short position as the ebullient U.S.
stock market has presented us with more attractive short opportunities.
Q. WHAT IS ONE OF THE PORTFOLIO'S LARGER HOLDINGS AND THE FACTORS THAT MAKE
IT AN ATTRACTIVE INVESTMENT TO YOU?
A. CD Radio, Inc. is our second largest holding. The company is developing a
subscription-based satellite radio system that will feature 30 channels of
programming ranging from all-talk to all-music formats. Its shares have
appreciated over the past few months with a series of positive
announcements. CD Radio's management recently removed most of the company's
financing risk by raising $100 million from Sid Bass and $200 million from
Leon Black's Apollo Group, two very sophisticated investors. CD Radio
should launch its three satellites in the third and fourth quarters of 1999
and should be operational in the first quarter of 2000. We have a very
positive view of the company's future prospects. In fact, we expect it to
revolutionize the U.S. radio industry just as cable TV did thirty years ago
to the traditional TV network industry.
12/31/98
- --------------------------------------------------------------------------------
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.
4
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $125.45 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
<TABLE>
<S> <C>
Computer Hardware................................. 2.0%
Convertible/Preferred............................. 2.1%
Copper & Gold Mining.............................. 2.4%
Consumer & Business Svcs. ........................ 2.5%
Insurance......................................... 3.6%
Real Estate....................................... 3.8%
Nickel Mining..................................... 4.5%
Construction/Infrastructure....................... 6.3%
Financial Services................................ 7.6%
Energy............................................ 9.0%
Diamond Mining.................................... 1.8%
Data Communciations............................... 1.8%
Other & Other Liabilities, Net.................... 0.6%
Short Positions (Net)............................. 19.1%
Media & Telecom. ................................. 14.3%
Gold Mining....................................... 9.4%
Consumer & Specialty Retail....................... 9.2%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Dundee Bancorp, Inc., Class A..................... 7.62%
CD Radio, Inc. ................................... 6.56%
Philip Morris Companies, Inc. .................... 5.87%
Metromedia International Group, Inc. ............. 4.79%
Inco, Ltd., VBN Shares............................ 4.55%
Loews Corporation................................. 3.59%
PennzEnergy Company............................... 2.76%
Lone Star Industries, Inc. ....................... 2.65%
Pennzoil-Quaker State Company..................... 2.48%
Consolidated African Mines, Ltd. ................. 2.39%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 6/30/93)
[GRAPHIC]
<TABLE>
<CAPTION>
CF % S&P 500 DIV. MSCI AC CF S&P 500 MSCI AC
DATE CUMULATIV CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
6/93 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
9/93 -4.41% 2.59% 4.39% $ 9,559 $ 10,259 $ 10,439
12/93 11.86% 4.97% 7.56% $ 11,186 $ 10,497 $ 10,756
3/94 20.98% 0.99% 7.30% $ 12,098 $ 10,099 $ 10,730
6/94 16.18% 1.39% 9.87% $ 11,618 $ 10,139 $ 10,987
9/94 10.78% 6.36% 13.48% $ 11,078 $ 10,636 $ 11,348
12/94 5.68% 6.34% 11.01% $ 10,568 $ 10,634 $ 11,101
3/95 7.39% 16.73% 13.91% $ 10,739 $ 11,673 $ 11,391
6/95 26.26% 27.70% 18.31% $ 12,626 $ 12,770 $ 11,831
9/95 33.08% 37.99% 23.84% $ 13,308 $ 13,799 $ 12,384
12/95 38.30% 46.25% 28.47% $ 13,830 $ 14,625 $ 12,847
3/96 67.31% 54.13% 33.08% $ 16,731 $ 15,413 $ 13,308
6/96 60.38% 60.94% 36.82% $ 16,038 $ 16,094 $ 13,682
9/96 64.40% 65.98% 37.41% $ 16,440 $ 16,598 $ 13,741
12/96 68.28% 79.87% 42.40% $ 16,828 $ 17,987 $ 14,240
3/97 70.62% 84.68% 43.26% $ 17,062 $ 18,468 $ 14,326
6/97 60.36% 116.81% 63.89% $ 16,036 $ 21,681 $ 16,389
9/97 52.44% 133.08% 66.95% $ 15,244 $ 23,308 $ 16,695
12/97 18.62% 139.85% 60.36% $ 11,862 $ 23,985 $ 16,036
3/98 21.27% 173.29% 81.86% $ 12,127 $ 27,329 $ 18,186
6/98 7.69% 182.14% 82.26% $ 10,769 $ 28,214 $ 18,226
9/98 -24.80% 154.15% 59.16% $ 7,520 $ 25,415 $ 15,916
12/98 -20.16% 208.38% 91.94% $ 7,984 $ 30,838 $ 19,194
</TABLE>
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
FIVE-YEAR TOTAL AVERAGE ANNUAL
ONE-YEAR AVERAGE RETURN SINCE RETURN SINCE
TOTAL RETURN ANNUAL RETURN INCEPTION(6) INCEPTION(6)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contrarian Fund Class A(1) -32.69% -6.52% -20.16% -4.01%
Contrarian Fund Class C(2),(3) -34.76% NA -52.95% -35.57%
MSCI AC World Index(4) 19.69% 12.28% 91.94% 12.57%
S&P 500 Index(5) 28.57% 24.05% 208.38% 22.69%
Performance data quoted represents past performance, and past performance is no guarantee of future results.
You should realize that investment return and principal value will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for Class A was 6/30/93.
(2) Inception date for Class C was 4/14/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) 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.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. It is widely recognized as
representative of the stock market in general. Investment results
assume the reinvestment of dividends paid on the stocks constituting
the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for
the Morgan Stanley Capital International (MSCI) All Country World Index
and S&P 500 Index are calculated from the Class A Share inception date,
6/30/93.
5
<PAGE>
ANNUAL REPORT [LOGO]
DIVERSIFIED GROWTH FUND
[PHOTO OF JOHN L. WALLACE]
[PHOTO OF JOHN H. SEABERN]
FUND PHILOSOPHY
The Diversified Growth Fund seeks to achieve long-term capital growth by
investing primarily in small- and mid-cap stocks. Our flexible, bottom-up
approach is based on our search for a growth catalyst and trend analysis. We
look for well-managed companies with improving fundamentals that may be
positioned for growth. We also may engage in short sales of securities we
expect to decline in price. Our formula for long-term success also includes a
disciplined approach to risk: losses are eliminated quickly, and we are
constantly looking for attractive new opportunities.
- -------------------------------------------------------------------------------
Q & A
Q. HOW DID THE DIVERSIFIED GROWTH FUND PERFORM DURING THE FOURTH QUARTER OF
1998 AND THE YEAR AS A WHOLE?
A. The Fund benefited from a strong fourth quarter and ended the year with
very positive performance. Once again, we were able to outperform our
primary benchmark, the Russell 2000 Index(4), which was actually down for
the year.
Q. WHAT MAIN FACTORS AFFECTED THE FUND'S PERFORMANCE DURING 1998?
A. The past year was a volatile and difficult period for small-cap
investors. It was punctuated by a short but major bear market in which
most small caps on average dropped 30% to 60% from their April highs to
their October lows. By comparison, both the Dow Jones Industrial Average
and S&P 500 Index(5) posted less severe losses of about 20% over that
period.
Despite a challenging environment for small caps, the Fund did benefit from
its 10% weighting in media stocks, specifically cable and programming/
content companies. Technology was another strong sector for the Fund.
Q. Were there any disappointments?
A. Energy and some of our telecom and paging service stocks underperformed
during the year. We continue to feel that these investments offer
excellent risk/reward potential, but we will not hesitate to cut our
losses if we believe that industry or company fundamentals are
deteriorating.
Q. WHAT'S YOUR OUTLOOK FOR 1999? DO YOU EXPECT A RESURGENCE IN THE
SMALL-CAP MARKET?
A. We believe that large caps could cede market leadership to small
caps in 1999, especially if the profits of blue-chip companies begin to
decline at a time when their stocks are sporting record valuations. The
deflationary forces of global excess capacity, coupled with slowing
demand in most emerging markets, are already weighing on the profitability
of many multinationals. In fact, market analysts are expecting the
S&P 500's earnings growth to slow to less than 5% in 1999.
Not only do we expect the profitability of smaller, more-domestically
oriented companies to be stronger, but we believe there are several other
factors that may enable small caps to assume market leadership for a
prolonged period. First, we believe the interest rate environment will
continue to be favorable for all equities, but especially for small caps,
in 1999. A second factor is the current valuation gap between small- and
large-cap companies. The last time this wide a valuation gap existed was in
1974, a year that was followed by seven years of small-cap outperformance.
12/31/98
- --------------------------------------------------------------------------------
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.
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>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $70.16 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
<TABLE>
<S> <C>
Internet Services................................. 2.0%
Short Positions................................... 2.5%
Convertible Preferred............................. 3.1%
Security Equipment................................ 3.1%
Business/Commercial Services...................... 5.8%
Data Communications............................... 6.0%
Financial......................................... 6.7%
Health/Medical/Biotechnology...................... 9.3%
Options........................................... 1.8%
Lodging........................................... 1.6%
Other & Other Liabilities, Net..................... 0.2%
Computer Technology............................... 22.6%
Telecom Equipment & Services...................... 13.1%
Consumer & Specialty Retail....................... 12.0%
Media............................................. 10.2%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
American Bank Note Holographics, Inc. ............ 3.12%
DSET Corporation.................................. 2.74%
MediaOne Group, Inc. ............................. 2.68%
Discreet Logic, Inc. ............................. 2.29%
Century Communications Corp., Class A............. 2.26%
National Media Corporation........................ 2.21%
Novell, Inc. ..................................... 2.20%
Inso Corporation.................................. 2.14%
East-West Bank Corporation, Restricted............ 1.98%
FORE Systems, Inc. ............................... 1.96%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 8/1/96)
[GRAPHIC]
<TABLE>
<CAPTION>
DG % S&P 500 DIV. R 2000 DG S&P 500 R 2000
DATE CUMULATIVE CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
8/1/96 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
9/96 11.10% 6.13% 8.73% $ 11,110 $ 10,613 $ 10,873
12/96 24.20% 15.01% 14.39% $ 12,420 $ 11,501 $ 11,439
3/97 18.70% 18.08% 8.47% $ 11,870 $ 11,808 $ 10,847
6/97 33.20% 38.63% 26.06% $ 13,320 $ 13,863 $ 12,606
9/97 66.70% 49.03% 44.82% $ 16,670 $ 14,903 $ 14,482
12/97 60.77% 53.36% 39.97% $ 16,077 $ 15,336 $ 13,997
3/98 86.65% 74.74% 54.05% $ 18,665 $ 17,474 $ 15,405
6/98 71.99% 80.39% 46.87% $ 17,199 $ 18,039 $ 14,687
9/98 44.05% 62.50% 17.28% $ 14,405 $ 16,250 $ 11,728
12/98 86.94% 97.17% 36.41% $ 18,694 $ 19,717 $ 13,641
</TABLE>
The Russell 2000 Index replaced the Russell 2000 Growth Index as our primary
fund benchmark to more accurately reflect the Fund's investments in companies
with larger average market capitalizations than those represented by the
Russell 2000 Growth Index. A hypothetical $10,000 investment in the Russell
2000 Growth Index, if invested on 8/1/96, would have grown to $12,767 as of
12/31/98.
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL AVERAGE ANNUAL
ONE-YEAR RETURN SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Diversified Growth Fund Class A(1) 16.28% 86.94% 29.55%
Diversified Growth Fund Class C(2),(3) 11.82% 14.06% 10.54%
Russell 2000 Index(4) -2.55% 36.41% 13.71%
S&P 500 Index(5) 28.57% 97.17% 32.44%
Performance data quoted represents past performance, and past performance is no guarantee
of future results. You should realize that investment return and principal value will
fluctuate so that shares, when redeemed, may be worth more or less than their original
cost.
- -------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for Class A was 8/1/96.
(2) Inception date for Class C was 9/8/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell 2000 Index is an unmanaged market capitalization-weighted
index composed of 2,000 U.S. companies with an average market
capitalization of $467 million. Investment results assume the
reinvestment of dividends paid on the stocks constituting the index.
You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index of
500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. It is widely recognized as representative of the
stock market in general. Investment results assume the reinvestment of
dividends paid on the stocks constituting the index. You cannot invest in
an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Russell 2000 Index and S&P 500 Index are calculated from the Class A Share
inception date, 8/1/96.
7
<PAGE>
ANNUAL REPORT [LOGO]
EMERGING GROWTH FUND
[PHOTO OF JAMES L. CALLINAN]
FUND PHILOSOPHY
The Robertson Stephens Emerging Growth Fund seeks capital appreciation by
investing primarily in small, rapidly growing companies. The Fund is actively
managed, involving hands-on fundamental research that includes extensive
travel and visits with company managements. The Fund seeks to invest in
companies that are growing at least 20% annually, are market share leaders,
and are managed by executives who can leverage a competitive advantage and
consistently execute in today's business environment. The Fund is intended
for investors with long-term investment goals.
- -------------------------------------------------------------------------------
Q & A
Q. HOW DID THE EMERGING GROWTH FUND PERFORM DURING 1998?
A. With a large gain in 1998, the Fund had an exceptional year in an
environment that wasn't very favorable for small-cap stocks. In fact, the
Fund's performance even rivaled the S&P 500's(5) in 1998. The Fund also
ended the year with a huge lead over its benchmark, the Russell 2000
Growth Index(4), which had only a slight gain in 1998.
Q. WHAT MAIN FACTORS CONTRIBUTED TO THE FUND'S STRONG PERFORMANCE DURING
THE YEAR?
A. Although the year was volatile for the U.S. Stock Market, it rallied
in October, led at first by lower-quality small caps. The Fund's high-
quality bias put it at somewhat of a disadvantage during this period,
but its relative performance improved significantly as high-quality
companies re-took the lead in November. When Internet stocks pushed all
others aside in the last two weeks of December, the Fund really flew.
Q. SOME MARKET PUNDITS HAVE QUESTIONED WHETHER THE RALLY IN INTERNET STOCKS
CAN LAST. WHAT'S YOUR VIEW?
A. In our opinion, this is just the beginning for the Internet sector. We
see a parallel in the huge wave of acquisitions that took place in the
banking industry a few years ago. Why did so many banks rush to buy one
another? At the time, most bank CEOs probably didn't have any more
compelling reason than that their competitors were acquiring other banks.
That forced their hands. We think the same forces are now at work on the
Internet, and should provide a tremendous amount of fuel for the Web's
long-term growth. We believe that CEOs across all sorts of industries
will push to make sure their company's Web site has the capability to
handle transactions and sell products.
We think the growing acceptance of e-commerce will create tremendous
opportunities for those who invest in technology companies. After all, it's
one thing for these firms to sell Web software, computer hardware and
networking equipment to help corporate America set up and maintain tiny
information-only Web sites. Until recently, that was the main function of
having a corporate Internet presence. But it's another thing altogether
when technology companies can look forward to a virtual tidal wave of
demand for the "plumbing" of the Web, as corporate America rapidly embraces
e-commerce. That wave is just beginning to gain momentum, and we think
there's much more to come.
Q. SO, DO YOU PLAN TO MAINTAIN THE FUND'S SIGNIFICANT TECHNOLOGY WEIGHTING?
A. Yes. In one swoop, we think, IT spending on Web initiatives could
explode, especially when companies no longer have to spend as much on
solving the Year 2000 problem. To run profitable e-commerce sites,
corporations increasingly will require things like Web hosting, software
development services, firewalls, encryption software, servicing centers,
intrusion detection software, and network management control systems.
The Emerging Growth Fund invests in companies active in each of these areas.
12/31/98
- --------------------------------------------------------------------------------
Investing in smaller companies can involve risks such as less publicly
available information than larger companies, volatility, and illiquidity.
8
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $404.44 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
<TABLE>
<S> <C>
Education......................................... 1.9%
Contract Manufacturing............................ 2.1%
Advertising....................................... 2.9%
Network Systems................................... 3.1%
Business Services................................. 3.4%
Cash & Cash Equivalents........................... 3.8%
Media............................................. 4.9%
Medical/Healthcare/Biotech........................ 4.9%
Financial Services................................ 5.1%
Travel Services................................... 1.5%
Other Services.................................... 1.0%
Computer Technology............................... 27.1%
Internet Commerce & Services...................... 17.9%
Consumer & Specialty Retail....................... 8.0%
Telecom Equip./Svcs. ............................. 7.1%
Other & Other Assets, Net......................... 5.3%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Network Solutions, Inc. .......................... 2.78%
ECsoft Group ADR.................................. 2.36%
TSI International Software, Ltd. ................. 2.10%
Macromedia, Inc. ................................. 2.08%
Amazon.com, Inc. ................................. 1.99%
Network Appliance, Inc. .......................... 1.90%
Gemstar International............................. 1.87%
AmeriTrade Holding Corp., Class A................. 1.67%
Knight/Trimark Group, Inc. ....................... 1.58%
ResMed, Inc. ..................................... 1.50%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT-- CLASS A SHARES
(IF INVESTED ON 11/30/87)
[GRAPHIC]
<TABLE>
<CAPTION>
EGF % S&P 500 R 2000 GROWTH EGF S&P 500 R 2000 DIV
DATE CUMULATIVE CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
11/30 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
12/87 26.11% 7.63% 10.40% $ 12,611 $ 10,763 $ 11,040
3/88 38.92% 13.75% 29.63% $ 13,892 $ 11,375 $ 12,963
6/88 52.22% 21.32% 37.86% $ 15,222 $ 12,132 $ 13,786
9/88 41.14% 21.74% 34.06% $ 14,114 $ 12,174 $ 13,406
12/88 43.83% 25.46% 32.89% $ 14,383 $ 12,546 $ 13,289
3/89 57.28% 34.32% 42.76% $ 15,728 $ 13,432 $ 14,276
6/89 67.09% 46.19% 52.00% $ 16,709 $ 14,619 $ 15,200
9/89 89.24% 61.44% 65.58% $ 18,924 $ 16,144 $ 16,558
12/89 107.76% 65.16% 59.70% $ 20,776 $ 16,516 $ 15,970
3/90 111.39% 60.17% 55.45% $ 21,139 $ 16,017 $ 15,545
6/90 146.38% 70.23% 65.26% $ 24,638 $ 17,023 $ 16,526
9/90 92.90% 46.82% 22.14% $ 19,290 $ 14,682 $ 12,214
12/90 127.65% 59.98% 31.89% $ 22,765 $ 15,998 $ 13,189
3/91 193.39% 83.16% 72.19% $ 29,339 $ 18,316 $ 17,219
6/91 168.62% 82.75% 66.22% $ 26,862 $ 18,275 $ 16,622
9/91 215.44% 92.54% 84.15% $ 31,544 $ 19,254 $ 18,415
12/91 261.40% 108.69% 99.40% $ 36,140 $ 20,869 $ 19,940
3/92 255.61% 103.09% 104.86% $ 35,561 $ 20,309 $ 20,486
6/92 194.28% 107.26% 80.26% $ 29,428 $ 20,726 $ 18,026
9/92 189.74% 113.81% 83.75% $ 28,974 $ 21,381 $ 18,375
12/92 252.18% 124.59% 114.90% $ 35,218 $ 22,459 $ 21,490
3/93 208.91% 134.51% 111.05% $ 30,891 $ 23,451 $ 21,105
6/93 207.44% 135.48% 117.13% $ 30,744 $ 23,548 $ 21,713
9/93 253.65% 141.62% 137.40% $ 35,365 $ 24,162 $ 23,740
12/93 277.59% 147.25% 143.64% $ 37,759 $ 24,725 $ 24,364
3/94 285.78% 137.80% 133.71% $ 38,578 $ 23,780 $ 23,371
6/94 254.28% 138.62% 118.98% $ 35,428 $ 23,862 $ 21,898
9/94 310.14% 150.51% 139.44% $ 41,014 $ 25,051 $ 23,944
12/94 307.65% 150.40% 137.72% $ 40,765 $ 25,040 $ 23,772
3/95 332.13% 174.87% 150.76% $ 43,213 $ 27,487 $ 25,076
6/95 323.92% 200.70% 175.63% $ 42,392 $ 30,070 $ 27,563
9/95 391.80% 224.93% 206.98% $ 49,180 $ 32,493 $ 30,698
12/95 390.45% 244.38% 211.51% $ 49,045 $ 34,438 $ 31,151
3/96 407.30% 262.94% 229.41% $ 50,730 $ 36,294 $ 32,941
6/96 470.62% 278.97% 248.66% $ 57,062 $ 37,897 $ 34,866
9/96 478.84% 290.85% 245.69% $ 57,884 $ 39,085 $ 34,569
12/96 495.85% 323.56% 246.60% $ 59,585 $ 42,356 $ 34,660
3/97 412.42% 334.87% 210.25% $ 51,242 $ 43,487 $ 31,025
6/97 529.69% 410.54% 264.71% $ 62,969 $ 51,054 $ 36,471
9/97 662.40% 448.85% 326.42% $ 76,240 $ 54,885 $ 42,642
12/97 606.33% 464.80% 291.47% $ 70,633 $ 56,480 $ 39,147
3/98 735.44% 543.53% 337.98% $ 83,544 $ 64,353 $ 43,798
6/98 752.80% 564.37% 312.82% $ 85,280 $ 66,437 $ 41,282
9/98 553.47% 498.46% 220.52% $ 65,347 $ 59,846 $ 32,052
12/98 804.24% 626.17% 296.28% $ 90,424 $ 72,617 $ 39,628
</TABLE>
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
FIVE-YEAR TEN-YEAR
AVERAGE AVERAGE TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR ANNUAL ANNUAL SINCE RETURN SINCE
TOTAL RETURN RETURN RETURN INCEPTION(6) INCEPTION(6)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Emerging Growth Fund Class A(1) 28.02% 19.09% 20.18% 804.24% 21.96%
Emerging Growth Fund Class C(2),(3) 21.86% N/A N/A 53.33% 29.58%
Russell 2000 Growth Index(4) 1.23% 10.22% 11.54% 296.28% 13.22%
S&P 500 Index(5) 28.57% 24.05% 19.19% 626.17% 19.57%
Performance data quoted represents past performance, and past performance is no guarantee of future results. You should
realize that investment return and principal value will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for Class A was 11/30/87.
(2) Inception date for Class C was 5/8/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell 2000 Growth Index is an unmanaged market
capitalization-weighted index containing those securities in the
Russell 2000 Index with higher price-to-book ratios and higher forecasted
growth values. Investment results assume the reinvestment of dividends
paid on the stocks constituting the index. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. It is widely recognized as
representative of the stock market in general. Investment results
assume the reinvestment of dividends paid on the stocks constituting
the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for
the Russell 2000 Growth Index and S&P 500 Index are calculated from the
Class A Share inception date, 11/30/87.
9
<PAGE>
ANNUAL REPORT [LOGO]
GLOBAL NATURAL RESOURCES FUND
[PHOTO OF ANDREW P. PILARA, JR.]
FUND PHILOSOPHY
The Global Natural Resources Fund seeks to achieve long-term capital
appreciation by investing in companies 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.
- -------------------------------------------------------------------------------
Q & A
Q. HOW DID THE FUND PERFORM IN 1998, AND WHY?
A. The Fund had negative performance for the year. Two main factors worked
against the Fund in 1998: the underperformance of small-cap stocks and
the ongoing slump in natural resources. We continue to believe, however,
that small caps and natural resource stocks are two of the most
undervalued sectors in the market.
Q. THE FUND CONTINUES TO HAVE A SIGNIFICANT WEIGHTING IN ENERGY. WHAT DO YOU
FIND SO ATTRACTIVE ABOUT THAT SECTOR?
A. After several years of depressed crude oil prices, we think the energy
sector's outlook will improve in 1999. Not only do we expect oil and
natural gas companies to reduce their capital spending, but we also
think they will cut supply in response to a 25-year low in real oil
prices. That should create a tighter and more favorable supply/demand
balance for the oil industry. We also believe the industry will benefit
from modest growth in Asian demand, as well as from more normal winter
weather in the United States than during last year's El Nino. Colder
weather, of course, increases demand for heating oil.
Underpinning our view is some very encouraging data from the International
Energy Agency. The IEA estimates that in 1998 the call on OPEC oil was
approximately 26.8 million barrels per day (B/D). Meanwhile, OPEC members
produced an average of about 27.8 million B/D. For the same period, world
oil demand was 74.3 million B/D. In other words, OPEC produced one million
B/D more than demand necessitated. That overproduction, which amounted to
1.3% of the world's total daily demand for oil, drove down the price of oil
by 40%. So if OPEC or non-OPEC production comes up short in 1999, or Asian
demand picks up, we think the price of oil could increase.
Q. WHAT ABOUT NATURAL GAS, ANOTHER SIGNIFICANT WEIGHTING IN THE PORTFOLIO?
A. We believe that natural gas, our favorite commodity, has even better
fundamentals. At current prices, it is not economical for producers
outside North America to ship liquid natural gas into the region.
Therefore, we don't think that North American gas producers are directly
exposed to an OPEC-type supply threat. Despite increased capital
expenditures and new technology, the United States has not been able to
significantly increase its gas reserves in the past 10 years. As a result,
we expect the price of natural gas to rise over the next two years,
assuming that the weather reverts to more normal patterns than we've seen
over the past few years. This should be very positive for our investments
in Canadian natural-gas producers.
Q. HAVE YOU ADDED ANY NEW STOCKS TO THE PORTFOLIO RECENTLY?
A. Yes, a few. We think PennzEnergy Company (4.20%), a recent spin-off of
Pennzoil, is very attractive. PennzEnergy has reserves of more than 400
million barrels and a new management team. In addition, its shares are
selling at a discount to the company's net asset value. We also recently
initiated a position in Western Gas Resources, Inc. (3.18%), which gathers
and processes natural gas. The significant decline in the price of liquid
natural gas has driven down WGR's stock price to very attractive levels. In
fact, we believe the stock is currently trading at about one third the
company's net asset value.
12/31/98
- --------------------------------------------------------------------------------
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can involve
more volatility, less liquidity, and less publicly available information.
Investing in a more limited number of issuers and sectors can be subject to
greater market fluctuation. Options and futures may not be perfectly
correlated to the underlying index or security.
10
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $23.51 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
<TABLE>
<S> <C>
Other & Other Liabilities, Net.................... 0.6%
Financial Services................................ 3.1%
Utilities/Pipeline................................ 3.2%
Energy Services................................... 3.5%
Consumer & Business Services...................... 3.8%
Food.............................................. 5.5%
Aluminum.......................................... 6.4%
Real Estate....................................... 9.9%
Paper & Forest.................................... 11.8%
Energy............................................ 52.2%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Canadian Hunter Exploration, Ltd. ................ 9.69%
MAXXAM, Inc. ..................................... 6.39%
Fresh Del Monte Produce, Inc. .................... 5.54%
Brookfield Properties Corporation................. 5.47%
Place Resources Corporation....................... 5.16%
Petro-Canada...................................... 4.50%
Canadian Hotel Income Properties REIT............. 4.43%
Fletcher Challenge Canada, Ltd. .................. 4.26%
Oiltec Resources, Ltd. ........................... 4.22%
The TimberWest Timber Trust....................... 4.21%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 11/15/95)
[GRAPHIC]
<TABLE>
<CAPTION>
NR % LIPPER NR LIPPER NR
DATE CUMULATIVE NATURAL RESOURCES 10K 10K
<S> <C> <C> <C> <C>
11/15/95 0.00% 0.00% $ 10,000 $ 10,000
12/95 1.20% 8.24% $ 10,120 $ 10,824
3/96 18.60% 17.06% $ 11,860 $ 11,706
6/96 23.30% 22.45% $ 12,330 $ 12,245
9/96 31.40% 27.05% $ 13,140 $ 12,705
12/96 42.90% 39.49% $ 14,290 $ 13,949
3/97 33.40% 34.14% $ 13,340 $ 13,414
6/97 37.20% 47.93% $ 13,720 $ 14,793
9/97 47.70% 72.74% $ 14,770 $ 17,274
12/97 18.40% 60.05% $ 11,840 $ 16,005
3/98 24.59% 66.10% $ 12,459 $ 16,610
6/98 11.10% 55.28% $ 11,110 $ 15,528
9/98 -13.86% 30.11% $ 8,614 $ 13,011
12/98 -22.39% 23.05% $ 7,761 $ 12,305
</TABLE>
The Lipper Natural Resources Index replaced the S&P 500 Index as our primary
fund benchmark to more accurately reflect the Fund's investment in the
natural resource sector. A hypothetical $10,000 investment in the S&P 500
Index, if invested on 11/15/95, would have grown to $21,925 as of 12/31/98.
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Natural Resources Fund Class A(1) -34.45% -22.39% -7.78%
Global Natural Resources Fund Class C(2),(3) -37.37% -45.67% -34.89%
Lipper Natural Resources Index(4) -23.12% 23.05% 6.85%
S&P 500 Index(5) 28.57% 119.25% 28.52%
Performance data quoted represents past performance, and past performance is no guarantee of future results.
You should realize that investment return and principal value will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for Class A was 11/15/95.
(2) Inception date for Class C was 7/30/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Lipper Natural Resources Index is an equally weighted index of the
largest mutual funds in the Lipper Natural Resources investment
objective, adjusted for the reinvestment of capital gains distributions
and income dividends. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. It is widely recognized as
representative of the stock market in general. Investment results
assume the reinvestment of dividends paid on the stocks constituting
the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Lipper Natural Resources Index and S&P 500 Index are calculated from the
Class A Share inception date, 11/15/95.
11
<PAGE>
ANNUAL REPORT [LOGO]
GLOBAL VALUE FUND
[PHOTO OF ANDREW P. PILARA, JR.]
FUND PHILOSOPHY
The Global Value Fund seeks to achieve long-term capital growth by investing
primarily in equity securities of mid- and large-cap companies worldwide
using a value methodology combining Graham & Dodd balance sheet analysis with
cash flow analysis.
- --------------------------------------------------------------------------------
Q & A
Q. HOW DID THE ROBERTSON STEPHENS GLOBAL VALUE FUND PERFORM DURING THE
FOURTH QUARTER OF 1998 AND THE YEAR AS A WHOLE?
A. The Robertson Stephens Global Value Fund continued to deliver solid
performance with relatively low volatility in 1998. The Fund had positive
performance for both the fourth quarter and the year. This was due in part
to a core of dividend-paying utilities (30% of the portfolio at year end),
which provided the Fund with stability and total returns ranging from 12%
to 33%. Some of our European investments also contributed gains, though
there were also a few disappointments. Our valuation models, which are
based on comparisons of implied discount rates, led us to sell nearly
all of the Fund's European investments around mid-year, with the exception
of Telecom Italia (5.03%).
Q. ARE THERE ANY NEW PORTFOLIO HOLDINGS THAT YOU'D CARE TO DISCUSS?
A. A recent purchase that helps to illustrate our investment philosophy is
Steelcase, Inc. (3.42%), a leading manufacturer of office furniture. The
company has approximately $3 billion in revenues. Its real rate of return
on capital is 7% (compared to 6% for the average industrial company) and
its "market implied" cash-flow return is less than 1%. Recently, however,
the company reported slower quarterly revenue growth and investors have
put the stock in the penalty box. Despite potentially slower revenue
growth in the short term, we believe Steelcase will continue to earn a
premium return on capital. We expect the company to benefit as its new
furniture systems come on stream and corporate furniture sales rebound.
In the meantime, it remains a leading brand-name company, with an
excellent balance sheet and good rates of return. We estimate that it is
selling at 50% of its business value.
Q. THE PAST YEAR WAS DIFFICULT FOR VALUE INVESTORS. WHAT IS YOUR OUTLOOK
FOR 1999?
A. In 1998, capitalization once again overwhelmed fundamentals in the market.
Even the most expensive large caps outperformed smaller caps with
potentially more favorable prospects. In fact, according to data from
Sanford C. Bernstein & Co., in 1998 even large-cap stocks (in the top 50)
for which analysts cut their earnings estimates outperformed stocks drawn
from the remainder of the market for which analysts increased their
estimates. And not by a small margin, but by about 30 percentage points! We
believe that in 1999 we will return to a stock picker's market where
valuations do make a difference. With our cash-flow model, we feel that we
are well prepared to make good valuation judgments in 1999.
12/31/98
- --------------------------------------------------------------------------------
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.
12
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $8.64 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PRINTED GRAPHIC]
<TABLE>
<S> <C>
Cash/Cash Equivalents............................. 1.7%
Consumer & Business Services...................... 3.3%
Furniture/Home Appliance.......................... 3.4%
Precious Metals................................... 4.0%
Healthcare/HMO.................................... 5.0%
Other & Other Assets, Net......................... 6.5%
Telecom........................................... 6.5%
Real Estate....................................... 7.5%
Construction/Infrastructure....................... 9.7%
Utilities......................................... 29.7%
Insurance......................................... 13.0%
Energy............................................ 9.7%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Kinder Morgan Energy Partners, L.P. .............. 8.81%
Unicom Corporation................................ 8.03%
Edison International.............................. 7.74%
Brookfield Properties Corporation................. 7.51%
The Coastal Corporation........................... 6.07%
Nevada Power Company.............................. 5.09%
Telecom Italia S.p.A., ADR........................ 5.03%
HEALTHSOUTH Corporation........................... 5.00%
Southdown, Inc. .................................. 5.00%
SAFECO Corporation................................ 4.92%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 4/1/97)
[GRAPHIC]
<TABLE>
<CAPTION>
GV % S&P 500 MSCI WORLD GV S&P 500 MSCI WORLD
DATE CUMULATIV CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
4/1/97 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
4/97 1.20% 5.63% 2.72% $ 10,120 $ 10,563 $ 10,272
5/97 2.60% 11.98% 9.23% $ 10,260 $ 11,198 $ 10,923
6/97 6.90% 17.00% 13.91% $ 10,690 $ 11,700 $ 11,391
7/97 13.10% 26.31% 18.95% $ 11,310 $ 12,631 $ 11,895
8/97 9.60% 19.21% 11.73% $ 10,960 $ 11,921 $ 11,173
9/97 15.80% 25.78% 17.24% $ 11,580 $ 12,578 $ 11,724
10/97 12.80% 21.66% 12.24% $ 11,280 $ 12,166 $ 11,224
11/97 16.31% 27.24% 13.18% $ 11,631 $ 12,724 $ 11,318
12/97 19.97% 29.43% 14.72% $ 11,997 $ 12,943 $ 11,472
1/98 20.29% 30.92% 16.95% $ 12,029 $ 13,092 $ 11,695
2/98 24.49% 40.29% 23.76% $ 12,449 $ 14,029 $ 12,376
3/98 34.93% 47.48% 29.77% $ 13,493 $ 14,748 $ 12,977
4/98 35.25% 48.95% 31.36% $ 13,525 $ 14,895 $ 13,136
5/98 35.25% 46.31% 29.34% $ 13,525 $ 14,631 $ 12,934
6/98 31.48% 52.25% 29.73% $ 13,148 $ 15,225 $ 12,973
7/98 29.33% 50.73% 29.34% $ 12,933 $ 15,073 $ 12,934
8/98 20.08% 28.92% 9.66% $ 12,008 $ 12,892 $ 10,966
9/98 24.81% 37.15% 10.89% $ 12,481 $ 13,715 $ 11,089
10/98 28.58% 48.38% 21.10% $ 12,858 $ 14,838 $ 12,110
11/98 31.16% 57.34% 27.51% $ 13,116 $ 15,734 $ 12,751
12/98 33.30% 66.42% 30.39% $ 13,330 $ 16,642 $ 13,039
</TABLE>
The MSCI World Value Index replaced the MSCI World Index as our primary fund
benchmark to reflect more accurately the Fund's value investment style. A
hypothetical $10,000 investment in the MSCI World Index, if invested on
4/1/97, would have grown to $14,132 as of 12/31/98.
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Value Fund Class A(1) 11.11% 33.30% 17.84%
Global Value Fund Class C(2),(3) 8.02% 21.18% 13.62%
MSCI World Value Index(4) 13.66% 30.39% 16.37%
S&P 500 Index(5) 28.57% 66.42% 33.77%
Performance data quoted represents past performance, and past performance is no guarantee of future results.
You should realize that investment return and principal value will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inception date for Class A was 4/1/97.
(2) Inception date for Class C was 6/30/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Morgan Stanley Capital International (MSCI) World Value Index is a
market capitalization-weighted index composed of companies representative
of the market structure of 22 developed market countries in North America,
Europe, and the Pacific Basin. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. It is widely recognized as
representative of the stock market in general. Investment results
assume the reinvestment of dividends paid on the stocks constituting
the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
MSCI World Value Index and S&P 500 Index are calculated from the Class A
Share inception date, 4/1/97.
13
<PAGE>
ANNUAL REPORT [LOGO]
GROWTH & INCOME FUND
FUND PHILOSOPHY
The Growth & Income Fund seeks to achieve long-term total return by investing
primarily in small- and mid-cap stocks, convertible bonds, and preferreds. Our
flexible, bottom-up approach is based on value recognition and trend analysis.
We look for well-managed companies with improving fundamentals that may be
positioned for growth. Our formula for long-term success also includes a
disciplined approach to managing risk: losses are eliminated quickly, and we are
constantly looking for new opportunities.
[PHOTO]
JOHN L. WALLACE
- -------------------------------------------------------------------------------
Q & A
Q. HOW DID THE GROWTH & INCOME FUND PERFORM DURING THE FOURTH QUARTER OF
1998? DURING THE YEAR AS A WHOLE?
A. The Fund benefited from a strong fourth quarter and had positive
performance both for the quarter and the year.
Q. WHAT MARKET TRENDS MOST AFFECTED THE FUND'S PERFORMANCE IN 1998?
A. The past year was very volatile and difficult for small- and mid-cap
investors. In fact, it was marked by a major bear market in which small caps
on average lost 30% to 60% from their April highs to their October lows. By
comparison, both the Dow Jones Industrial Average and S&P 500 Index(5) posted
less severe losses of about 20% over that same period.
Q. DID ANY SPECIFIC AREAS OF THE PORTFOLIO UNDERPERFORM YOUR EXPECTATIONS IN
1998? IF SO, WHAT IS YOUR CURRENT STRATEGY IN THOSE AREAS?
A. Investments that had a negative impact on our portfolio during 1998
included energy, real estate investment trusts (REITs) and our 17% weighting
in convertible bonds and preferreds. Convertible securities were especially
weak from April to October, when widening credit spreads, liquidation by
leveraged hedge funds and a collapse in their underlying common shares drove
the price of convertibles down. We continue to feel that our convertible
investments offer excellent risk/reward potential, however, and should
help dampen the Fund's volatility over time.
Q. WHAT AREAS OF THE PORTFOLIO WERE ESPECIALLY STRONG LAST YEAR?
A. Despite the difficult environment, the Growth & Income Fund did benefit
from its 13% weighting in media stocks, specifically cable and
programming/content companies. Winners here included Liberty Media Group
(1.61%), TCI Ventures Group (2.15%) and MediaOne Group, Inc. (3.16%). Another
area that contributed strong gains was technology. This sector represented
15% to 20% of the portfolio throughout the year and included winners like
Compuware Corp. (1.05%), Electronics for Imaging, Inc. (1.62%), and EMC Corp.
(1.23%).
Q. WHAT IS YOUR OUTLOOK FOR 1999?
A. We believe market leadership could shift to small caps in 1999, especially
if the profits of large caps begin declining at a time when their stocks are
sporting record valuations. The deflationary force of global excess capacity,
coupled with slowing demand in most emerging markets, are already weighing on
the profitability of many multinationals. In fact, the S&P 500's earnings
growth is expected to slow to less than 5% in 1999.
Not only do we expect the profitability of smaller, more-domestically
oriented companies to be stronger, but we believe there are several other
factors that may enable small caps to assume market leadership for a
prolonged period. First, we believe the interest rate environment will
continue to be favorable for all equities, but especially for small caps, in
1999. A second factor is the current valuation gap between small- and
large-cap companies. The last time this wide a valuation gap existed was in
1974, a year that was followed by seven years of small-cap outperformance.
12/31/98
- ------------------------------------------------------------------------------
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.
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.
14
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $186.15 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PIE CHART]
<TABLE>
<S> <C>
Internet Services........................ 1.2%
Food Retail/Wholesale.................... 1.3%
Security Equipment....................... 1.4%
Network Systems.......................... 1.7%
Distributors............................. 1.9%
Aerospace................................ 2.4%
Business/Commercial Services............. 2.8%
Utilities................................ 3.2%
Data Communications...................... 3.3%
Other & Other Assets, Net................ 4.0%
Biotechnology............................ 5.0%
Healthcare............................... 1.1%
Transportation........................... 1.0%
Cash & Cash Equivalents.................. 0.8%
Convertible Bonds/Preferred.............. 17.1%
Media.................................... 12.7%
Computer Technology...................... 11.2%
Telecom. Equip. & Svcs................... 10.8%
Consumer & Specialty Retail.............. 9.5%
Financial................................ 7.6%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
MediaOne Group, Inc...................... 3.16%
Trans World Airlines, Inc................ 2.95%
Alliant Techsystems, Inc................. 2.44%
Tele-Communications Int., Inc., Class A.. 2.23%
Tele-Comm. TCI Ventures Group - A........ 2.15%
System Software & Associates, Inc........ 2.14%
Comcast Corporation, Class A............. 1.89%
Bergen Brunswig Corporation.............. 1.87%
Philip Morris Companies, Inc............. 1.87%
BJ's Wholesale Club, Inc................. 1.87%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT-- CLASS A SHARES
(IF INVESTED ON 7/12/95)
[GRAPHIC]
<TABLE>
<CAPTION>
G&I % S&P 500 DIV. RUSSELL G&I S&P 500 RUSSELL
DATE CUMULATIVE CUMULATIVE GROWTH % 10K 10K GROWTH 10K
<S> <C> <C> <C> <C> <C> <C>
7/12 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
9/95 7.60% 4.88% 5.19% $ 10,760 $ 10,488 $ 10,519
12/9 12.40% 11.16% 7.18% $ 11,240 $ 11,116 $ 10,718
3/96 22.00% 17.15% 14.09% $ 12,200 $ 11,715 $ 11,409
6/96 33.30% 22.33% 18.35% $ 13,330 $ 12,233 $ 11,835
9/96 33.40% 26.16% 22.37% $ 13,340 $ 12,616 $ 12,237
12/9 39.56% 36.72% 25.91% $ 13,956 $ 13,672 $ 12,591
3/97 35.26% 40.37% 21.32% $ 13,526 $ 14,037 $ 12,132
6/97 52.16% 64.79% 39.17% $ 15,216 $ 16,479 $ 13,917
9/97 78.50% 77.16% 58.65% $ 17,850 $ 17,716 $ 15,865
12/9 70.82% 82.31% 54.29% $ 17,082 $ 18,231 $ 15,429
3/98 91.03% 107.72% 72.70% $ 19,103 $ 20,772 $ 17,270
6/98 83.96% 114.45% 72.60% $ 18,396 $ 21,445 $ 17,260
9/98 59.07% 93.17% 43.78% $ 15,907 $ 19,317 $ 14,378
12/9 90.71% 134.39% 81.85% $ 19,071 $ 23,439 $ 18,185
</TABLE>
The Russell Midcap Growth Index replaced the Lipper Growth & Income Index as
our primary fund benchmark to more accurately reflect the Fund's investments
in mid-cap growth companies. A hypothetical $10,000 investment in the Lipper
Growth & Income Index, if invested on 7/12/95, would have grown to $19,009 as
of 12/31/98.
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
------------ ------------ --------------
<S> <C> <C> <C>
Growth & Income Fund Class A(1) 11.65% 90.71% 20.42%
Growth & Income Fund Class C(2,3) 8.11% 31.11% 17.88%
Russell Midcap Growth Index(4) 17.86% 81.85% 18.78%
S&P 500 Index(5) 28.57% 134.39% 27.79%
</TABLE>
Performance data quoted represents past performance, and past performance is
no guarantee of future results. You should realize that investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- ------------------------------------------------------------------------------
(1) Inception date for Class A was 7/12/95.
(2) Inception date for Class C was 5/9/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell Midcap Growth Index is an unmanaged market
capitalization-weighted index which measures the performance of those Russell
Midcap companies (defined as the 800 smallest companies in the Russell 1000
Index) with a higher than average growth orientation as determined by
price-to-book ratios and forecasted growth values. Investment results assume
the reinvestment of dividends paid on the stocks constituting the index. You
cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index of
500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. It is widely recognized as representative of the stock
market in general. Investment results assume the reinvestment of dividends
paid on the stocks constituting the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Russell Midcap Growth Index and S&P 500 Index are calculated from the Class A
Share inception date, 7/12/95.
15
<PAGE>
ANNUAL REPORT
THE INFORMATION AGE FUND-TM-
FUND PHILOSOPHY
The Information Age Fund-TM- seeks to achieve long-term capital appreciation
by aggressively investing in companies primarily within the information
technology sector. The Fund is designed for investors who believe that
aggressive investment in these companies provides significant opportunities
for capital appreciation.
PORTFOLIO MANAGERS
RONALD E. ELIJAH
RODERICK R. BERRY
CATHERINE BAKER
- --------------------------------------------------------------------------------
Q & A
Q. HOW DID THE INFORMATION AGE FUND PERFORM DURING THE YEAR?
A. The Fund benefited from a strong fourth quarter, out-performing its
benchmark, the Pacific Stock Exchange Technology Index.(4) The Fund also had
very positive performance for the year.
Q. WHAT MAJOR TRENDS AFFECTED THE FUND DURING THE FOURTH QUARTER?
A. The Fund is invested in a variety of sectors and was subject to market
forces in these areas during the year. Investor sentiment toward the
technology sector quickly changed in the second half of October, as strong
third quarter earnings began rolling in. Most technology firms reported
continued strength in the U.S. market as well as Europe. In addition, the
inventory issues that had plagued the semiconductor and personal computer
sectors during 1998 began to reverse. The communications sector also posted a
strong fourth quarter as global deregulation, growing demand for wireless
communications and growth in data traffic combined to result in unprecedented
network buildouts.
Q. WERE THERE ANY DISAPPOINTMENTS?
A. After showing strength for much of 1998, software stocks underperformed in
the fourth quarter. With many companies around the world tightening their IT
budgets, the earnings outlook for the sector has become more uncertain. In
addition, software makers face slackening demand from the financial industry
and from consumers and corporations in Asia. That, combined with Year 2000
budget diversions, appear to be placing a near-term ceiling on the software
sector.
Q. INTERNET STOCKS HAVE ATTRACTED MUCH ATTENTION LATELY. WHAT IS YOUR VIEW ON
THE SECTOR?
A. With global telecommunications deregulation, higher-speed-access
technologies, a favorable U.S. tax environment for e-commerce and the obvious
benefits of business-to-business e-commerce, we believe that the Internet can
continue to grow at its present rate. Further, we believe that we are in the
very early stages of worldwide growth of the Internet. We have maintained a
significant weighting in stocks that are directly related to the Internet
(such as America Online, Inc. and Yahoo!, Inc.), as well as related stocks
that we believe will benefit from the buildout of the Internet backbone (such
as Cisco Systems, Inc. 3.44%, Ascend Communications, Inc. 2.26% and MCI
WorldCom, Inc. 4.12%). We have chosen to focus predominantly on
industry-leading companies that have strong brand identities.
Q. WHAT IS YOUR OUTLOOK FOR 1999?
A. Looking forward into 1999, we are more bullish than we have been in over a
year. First, we are seeing a more favorable supply/demand balance for the
semiconductor industry, fueled by strong end-user demand for computing
hardware. In addition, we expect the PC industry to have a healthy 1999,
given the supply constraints that began to emerge in the fourth quarter. We
also believe that rapidly declining wireless tariff rates brought about by
increasing competition will ultimately push wireless penetration rates toward
the levels of basic wireline service. Finally, we think software and
consulting services will enjoy an early 1999 resurgence as Year 2000 projects
pick up momentum. In addition, technology bellwether Microsoft is due to roll
out a series of upgrades, including its SQL Server 7.0, Office 2000 and
Windows 2000 products.
12/31/98
- ------------------------------------------------------------------------------
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.
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. Investing in a particular sector can
involve greater market fluctuation.
16
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $159.73 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PIE CHART]
<TABLE>
<S> <C>
Other & Other Assets, Net............. 12.6%
Cash & Cash Equivalents............... 0.7%
Commercial Services................... 1.7%
Contract Manufacturing................ 2.7%
Internet Commerce..................... 13.7%
Computer Hardware..................... 6.8%
Computer Software & Services.......... 23.6%
Semiconductors........................ 23.3%
Communications Equipment & Services... 14.9%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
America Online, Inc................... 9.14%
Intel Corporation..................... 4.64%
Yahoo! Inc............................ 4.52%
Legato Systems, Inc................... 4.38%
MCI WorldCom, Inc..................... 4.12%
Microsoft Corporation................. 4.08%
Micron Technologies, Inc.............. 3.95%
Cisco Systems, Inc.................... 3.44%
Compaq Computer Corporation........... 3.36%
Oracle Corporation.................... 3.35%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 11/15/95)
[GRAPHIC]
<TABLE>
<CAPTION>
IA % S&P 500 DIV. PSE % IA S&P 500 PSE
DATE CUMULATIVE CUMULATIVE 10K 10K TECHNOLOGY
<S> <C> <C> <C> <C> <C> <C>
11/15/95 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
12/95 -7.00% 3.98% -1.81% $ 9,300 $ 10,398 $ 9,819
3/96 -6.60% 9.58% -2.10% $ 9,340 $ 10,958 $ 9,790
6/96 7.10% 14.42% 1.23% $ 10,710 $ 11,442 $ 10,123
9/96 17.90% 18.01% 8.03% $ 11,790 $ 11,801 $ 10,803
12/96 17.85% 27.88% 17.86% $ 11,785 $ 12,788 $ 11,786
3/97 3.51% 31.30% 17.75% $ 10,351 $ 13,130 $ 11,775
6/97 22.76% 54.15% 37.35% $ 12,276 $ 15,415 $ 13,735
9/97 59.82% 65.71% 63.60% $ 15,982 $ 16,571 $ 16,360
12/97 25.09% 70.53% 41.40% $ 12,509 $ 17,053 $ 14,140
3/98 42.69% 94.30% 68.37% $ 14,269 $ 19,430 $ 16,837
6/98 49.58% 100.59% 68.34% $ 14,958 $ 20,059 $ 16,834
9/98 34.21% 80.69% 55.62% $ 13,421 $ 18,069 $ 15,562
12/98 90.40% 119.25% 118.60% $ 19,040 $ 21,925 $ 21,860
</TABLE>
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Information Age Fund Class A(1) 52.20% 90.40% 22.85%
Information Age Fund Class C(2,3) 41.25% 28.69% 18.66%
PSE Technology Index(4) 54.60% 118.60% 28.40%
S&P 500 Index(5) 28.57% 119.25% 28.52%
</TABLE>
Performance data quoted represents past performance, and past performance is
no guarantee of future results. You should realize that investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- ------------------------------------------------------------------------------
(1) Inception date for Class A was 11/15/95.
(2) Inception date for Class C was 7/11/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Pacific Stock Exchange (PSE) Technology Index is an unmanaged,
price-weighted index of the top 100 U.S. technology stocks. You cannot invest
in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index of
500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. It is widely recognized as representative of the stock
market in general. Investment results assume the reinvestment of dividends
paid on the stocks constituting the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
PSE Technology Index and S&P 500 Index are calculated from the Class A Share
inception date, 11/15/95.
17
<PAGE>
ANNUAL REPORT
MICROCAP GROWTH FUND
FUND PHILOSOPHY
The Robertson Stephens MicroCap Growth Fund invests in a diversified portfolio
of equity securities of companies with market capitalizations of $250 million or
less. We seek micro-cap companies that we believe have the potential for
long-term capital appreciation based on superior or niche products or services,
operating characteristics, management, or other factors.
[PHOTO] [PHOTO]
DAVID J. EVANS RAINERIO J. REYES
- --------------------------------------------------------------------------------
Q & A
Q. HOW DID THE MICROCAP GROWTH FUND PERFORM DURING THE YEAR?
A. The Fund had a very positive fourth quarter, which helped it overcome
market volatility earlier in 1998 and post only a modest loss for the full
year.
Q. WHAT WERE THE MAJOR MARKET TRENDS DURING THE YEAR, AND HOW DID THEY AFFECT
THE FUND?
A. Like the year as a whole, the fourth quarter of 1998 was a turbulent
period in world financial markets. This was particularly true in the
micro-cap sector. The oversold conditions of early October were followed by a
furious rally that pulled the sector back to almost even by Thanksgiving.
After this period of outperformance, larger stocks--especially those of
Internet-related companies--dominated the market for the balance of the year.
It appears that the focus of individual investors, especially oline
investors, on Internet stocks diverted some of the attention that they
otherwise might have directed toward high growth micro-cap stocks. (The
capitalization of most Internet stocks, even those newly public, places them
far outside the micro-cap universe.) In addition, institutional investors
continued to direct new cash flows to previous winners--in most cases,
large-cap stocks.
Q. YOU'VE SAID IN THE PAST THAT YOUR INVESTMENT PROCESS OCCASIONALLY LEADS YOU
TO PURSUE CERTAIN THEMES. WHICH ONES ARE YOU CURRENTLY FOLLOWING?
A. Among our current investments in the aging theme are CareMatrix
Corporation (1.93%) and Balanced Care Corporation (0.21%), both operators of
assisted living facilities. The Fund also invests in several outsourcing
firms, which enable corporations to focus on their core competencies.
These include Metro One Telecommunications, Inc. (2.09% a provider of
directory assistance for cellular and PCS carriers), Novacare Employee
Services Corporation (1.31% human resources and employee-benefits
administration) and Kendle International, Inc. (1.72% management of clinical
trials for pharmaceutical companies). The common thread running through these
investments and the portfolio as a whole is that these stocks are
underfollowed, underowned and, in our opinion, undervalued.
Q. WHAT'S YOUR OUTLOOK FOR THE COMING YEAR? WHY SHOULD AN INVESTOR CONTINUE
TO INVEST IN THE MICRO-CAP SECTOR AFTER SUCH A CHALLENGING YEAR?
A. Although small caps again lagged the major indices in 1998, we believe
that macroeconomic variables may help to reverse that trend. Interest rates
remain low, which should continue to be very positive for micro caps. In
addition, we expect corporate earnings growth to become increasingly
dependent on revenue growth in 1999. This should work to the advantage of
small firms with niche strategies--the kind of companies the MicroCap Growth
Fund owns. Many large companies, in contrast, have relied disproportionately
on restructuring, share repurchases and other financial engineering
techniques for much of their earnings growth over the past few years. We
believe they will find it more challenging to maintain this advantage in
1999. Large multinationals may face further earnings pressure as a result of
continued weakness in overseas markets. If, as we expect, the S&P 500's(5)
profit growth does begin to flatten out in the coming months, we believe
investors will turn to small- and micro-cap stocks capable of achieving 20%
and better annual earnings growth.
In addition, investors have paid such a high premium for liquidity that we
believe an unsustainable gap has developed between the relative valuation
of small and large stocks. We expect that investors will begin to recognize
this and close the gap in 1999.
12/31/98
- ------------------------------------------------------------------------------
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.
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.
18
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $95.29 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PIE CHART]
<TABLE>
<S> <C>
Manufacturing......................... 1.6%
Education............................. 1.7%
Data Processing Services.............. 1.8%
Broadcast/Radio/TV.................... 1.8%
Network Systems....................... 2.1%
Consulting Services................... 2.3%
Financial Services.................... 3.1%
Misc./Other Svcs...................... 3.9%
Restaurants/Lodging................... 4.5%
Telecommunications.................... 5.2%
Electronic Components................. 5.3%
Other & Other Assets, Net............. 5.5%
Chemicals............................. 1.0%
Cash & Cash Equivalents............... 0.2%
Computer Technology................... 25.9%
Health/Medical/Biotechnology.......... 14.2%
Consumer/Retail....................... 11.4%
Business/Commercial Services.......... 8.5%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Pervasive Software, Inc.............. 2.83%
Cybex Corporation.................... 2.54%
Superior Consultant Holdings Corp.... 2.28%
Molecular Devices Corporation........ 2.28%
Cree Research, Inc................... 2.26%
Coinstar, Inc........................ 2.26%
Res-Care, Inc........................ 2.20%
QLogic Corporation................... 2.20%
ATMI, Inc............................ 2.12%
Metro One Telecommunications, Inc.... 2.09%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 8/15/96)
[GRAPHIC]
<TABLE>
<CAPTION>
MCG % S&P 500 DIV. R2000G DIV. MCG S&P 500 R2000G DIV.
DATE CUMULATIVE CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
8/15/96 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
9/96 5.70% 4.07% 7.94% $ 10,570 $ 10,407 $ 10,794
12/96 10.00% 12.78% 8.22% $ 11,000 $ 11,278 $ 10,822
3/97 2.00% 15.79% -3.13% $ 10,200 $ 11,579 $ 9,687
6/97 25.70% 35.94% 13.88% $ 12,570 $ 13,594 $ 11,388
9/97 59.90% 46.14% 33.15% $ 15,990 $ 14,614 $ 13,315
12/97 43.50% 50.38% 22.23% $ 14,350 $ 15,038 $ 12,223
3/98 65.70% 71.35% 36.76% $ 16,570 $ 17,135 $ 13,676
6/98 54.20% 76.90% 28.90% $ 15,420 $ 17,690 $ 12,890
9/98 16.30% 59.35% 0.08% $ 11,630 $ 15,935 $ 10,008
12/98 42.60% 93.35% 23.74% $ 14,260 $ 19,335 $ 12,374
</TABLE>
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MicroCap Growth Fund Class A(1) -0.63% 42.60% 16.09%
MicroCap Growth Fund Class C(2,3) -4.76% 12.40% 7.90%
Russell 2000 Growth Index(4) 1.23% 23.74% 9.37%
S&P 500 Index(5) 28.57% 93.35% 31.95%
</TABLE>
Performance data quoted represents past performance, and past performance is
no guarantee of future results. You should realize that investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- -------------------------------------------------------------------------------
(1) Inception date for Class A was 8/15/96.
(2) Inception date for Class C was 6/18/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell 2000 Growth Index is an unmanaged market
capitalization-weighted index containing those securities in the Russell
2000 Index with higher price-to-book ratios and higher forecasted growth
values. Investment results assume the reinvestment of dividends paid on
the stocks constituting the index. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index of
500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing
all major industries. It is widely recognized as representative of the
stock market in general. Investment results assume the reinvestment of
dividends paid on the stocks constituting the index. You cannot invest in
an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Russell 2000 Growth Index and S&P 500 Index are calculated from the
Class A Share inception date, 8/15/96.
19
<PAGE>
ANNUAL REPORT [LOGO]
PARTNERS FUND
FUND PHILOSOPHY
The Partners Fund seeks long-term capital growth by investing in equity
securities primarily of companies with market capitalization of up to $1
billion, using a cash flow value methodology combining Graham & Dodd balance
sheet analysis with cash flow analysis.
[PHOTO]
ANDREW P. PILARA, JR.
- --------------------------------------------------------------------------------
Q & A
Q. HOW DID THE PARTNERS FUND PERFORM DURING 1998?
A. The past year was not a good one for value, especially small-cap value,
and it certainly was not a good year for the Partners Fund. The Fund had
negative performance for both the fourth quarter and the year.
Q. ARE YOU PLANNING TO SIGNIFICANTLY ALTER THE FUND'S STRATEGY IN ANY WAY?
A. We do not plan to deviate dramatically from the core cash-flow methodology
that we have employed since the Fund's inception. We are, however, fine
tuning our investment process by making some refinements. First, we are
planning to adhere more strictly to buy/sell points according to our
Holt/Value Search cash-flow model. We are also striving to balance the
portfolio by adding more "soft asset" companies (such as those in the health
care and consumer business services industries). In addition, we plan to
diversify the portfolio across more economic sectors. Finally, we are
considering additional inputs for our oil and gas cash-flow model.
Q. THE FUND CONTINUES TO HAVE A RELATIVELY LARGE WEIGHTING IN THE ENERGY
SECTOR, EVEN THOUGH IT HAS BEEN DEPRESSED FOR SOME TIME. WHAT DO YOU FIND
ATTRACTIVE ABOUT THIS SECTOR?
A. We think valuations in the energy area are so compelling--it is now one of
the cheapest sectors of the market--that it won't be long before these stocks
begin to rebound.
Most of the energy companies in which we invest are selling not only below
their net asset value but also at historically low cash-flow multiples.
That's why we like the outlook for our energy investments (many of which are
now trading below our purchase price) over the next 18 months to two years.
These are good businesses trading at going out of business prices.
Q. HAVE YOU MADE ANY CHANGES TO THE PORTFOLIO RECENTLY?
A. We have continued to take advantage of market volatility to invest in
several new companies, including health-care firm Medpartners, Inc. (6.55%),
which is restructuring its physician practice management division to
emphasize its very profitable pharmacy division. We also added Paging
Network, Inc. (4.88%) to the portfolio. The company is generating significant
cash flow from its paging operations and is preparing to offer two-way paging
services. Another recent addition to the portfolio is Pennzoil-Quaker State
Company (2.87%), a newly merged company with the dominant share in the U.S.
car-care market. We also initiated a position in Sobeys Canada, Inc. (2.10%),
which we believe is one of the cheapest stocks in the North American food
distribution industry.
Q. WHAT IS YOUR OUTLOOK FOR 1999?
A. Looking ahead, we like the business fundamentals of the companies in our
portfolio, which in our opinion are extremely cheap! In fact, we believe the
fundamentals are in place for a substantial appreciation in small-cap value
stocks such as the one that occurred from 1974 to 1983.
12/31/98
- -------------------------------------------------------------------------------
International investing can involve greater currency fluctuations and less
political and economic stability. Investing in smaller companies can involve
more volatility, less liquidity, and less publicly available information.
Investing in a more limited number of issuers and sectors can be subject to
greater market fluctuation. Options and futures may not be perfectly
correlated to the underlying index or security.
20
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $48.07 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PIE CHART]
<TABLE>
<S> <C>
Publishing...................... 2.7%
Other & Other Liabilities, Net.. 0.6%
Energy.......................... 25.9%
Consumer & Business Svcs. ...... 17.4%
Food/Food Retail................ 12.2%
Aluminum........................ 7.8%
Insurance....................... 7.3%
Health Care..................... 6.6%
Construction/Infrastructure..... 6.6%
Telecommunication Services...... 4.9%
Cash and Cash Equivalents....... 4.8%
Manufacturing................... 3.2%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Fresh Del Monte Produce, Inc. .......... 9.02%
Midas, Inc. ............................ 8.09%
MAXXAM, Inc. ........................... 7.76%
Medpartners, Inc. ...................... 6.55%
Paging Network, Inc. ................... 4.88%
The Pittston Company.................... 4.64%
Desjardins Laurentian Financial Corp. .. 4.46%
Canadian Conquest Exploration, Inc. .... 3.81%
Place Resources Corporation............. 3.48%
PennzEnergy Company..................... 3.18%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 7/12/95)
[GRAPHIC]
<TABLE>
<CAPTION>
PF % S&P 500 DIV. RUSSELL PF S&P 500 DIV. RUSSELL
DATE CUMULATIVE CUMULATIVE VALUE DIV 10K 10K VALUE DIV.
<S> <C> <C> <C> <C> <C> <C>
7/12/95 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
9/95 1.90% 4.88% 5.32% $ 10,190 $ 10,488 $ 10,532
12/95 3.90% 11.16% 8.39% $ 10,390 $ 11,116 $ 10,839
3/96 23.00% 17.15% 13.14% $ 12,300 $ 11,715 $ 11,314
6/96 36.40% 22.33% 17.77% $ 13,640 $ 12,233 $ 11,777
9/96 40.70% 26.16% 19.52% $ 14,070 $ 12,616 $ 11,952
12/96 48.73% 36.72% 31.55% $ 14,873 $ 13,672 $ 13,155
3/97 49.75% 40.37% 31.22% $ 14,975 $ 14,037 $ 13,122
6/97 61.77% 64.79% 51.03% $ 16,177 $ 16,479 $ 15,103
9/97 81.73% 77.16% 70.49% $ 18,173 $ 17,716 $ 17,049
12/97 75.61% 82.31% 73.36% $ 17,561 $ 18,231 $ 17,336
3/98 89.99% 107.72% 87.84% $ 18,999 $ 20,772 $ 18,784
6/98 71.46% 114.45% 81.05% $ 17,146 $ 21,445 $ 18,105
9/98 31.67% 93.17% 48.69% $ 13,167 $ 19,317 $ 14,869
12/98 27.79% 134.39% 62.18% $ 12,779 $ 23,439 $ 16,218
</TABLE>
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR SINCE RETURN SINCE
TOTAL RETURN INCEPTION(6) INCEPTION(6)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Partners Fund Class A(1) -27.23% 27.79% 7.31%
Partners Fund Class C(2,3) -29.28% -15.71% -9.48%
Russell 2000 Value Index(4) -6.45% 62.18% 14.93%
S&P 500 Index(5) 28.57% 134.39% 27.79%
</TABLE>
Performance data quoted represents past performance, and past performance is
no guarantee of future results. You should realize that investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- -------------------------------------------------------------------------------
(1) Inception date for Class A was 7/12/95.
(2) Inception date for Class C was 4/14/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell 2000 Value Index is an unmanaged market
capitalization-weighted index composed of those securities in the Russell
2000 Index with lower price-to-book ratios and lower forecasted growth
values. Investment results assume the reinvestment of dividends paid on the
stocks constituting the index. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. It is widely recognized as representative of the stock
market in general. Investment results assume the reinvestment of dividends
paid on the stocks constituting the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Russell 2000 Value Index and S&P 500 Index are calculated from the Class A
Share inception date, 7/12/95.
21
<PAGE>
ANNUAL REPORT
VALUE + GROWTH FUND
FUND PHILOSOPHY
The Robertson Stephens Value + Growth Fund seeks capital appreciation by
investing primarily in companies with favorable relationships between
price/earnings ratios and growth rates, in sectors offering above-average
growth potential. We seek to identify specific business sectors poised to
benefit from major changes in the marketplace and societal trends. Within
these sectors, we conduct bottom-up research, looking for well-managed
companies that have low-multiple valuations relative to their peers and are
poised to leverage growth opportunities.
[PHOTO]
RONALD E. ELIJAH
- --------------------------------------------------------------------------------
Q & A
Q. HOW DID THE VALUE + GROWTH FUND PERFORM DURING THE YEAR?
A. The Fund had very positive performance for both the fourth quarter and the
year.
Q. WHAT MAIN FACTORS DROVE THE FUND'S PERFORMANCE OVER THE YEAR?
A. 1998 was a volatile year for the U.S. Stock Market, and as the fourth
quarter began, global economic turmoil created more volatility for equity
investors. But the market soon stabilized and, as we expected, resumed its
ascent. Despite some naysayers last fall, we believed the market was
positioned to appreciate further, as inflation remained low and interest
rates declined. Fortunately, we were well rewarded for our patience.
Q. WHAT IS ONE INVESTMENT THEME THAT PLAYS AN IMPORTANT ROLE IN YOUR STRATEGY?
A. We continued to pursue one of our favorite investment themes during the
fourth quarter. For quite some time, the Fund has focused on investments that
we believe will benefit from the aging of Baby Boomers, a generation of
roughly 75 to 80 million Americans. This far-reaching trend has led us to
concentrate the portfolio primarily within the healthcare, consumer,
financial services and technology sectors. (The only significant change we
made within these sectors during the fourth quarter was to increase the
Fund's semiconductor weighting.)
One of the more obvious implications of this trend is its potentially
forceful impact on the U.S. healthcare system.
We also think the aging of the Baby Boomers will have a profound impact on
the U.S. retail sector. Americans between the ages of 45 and 54--a peak
period of earning and spending--are now the fastest-growing segment of the
U.S. population. In addition, Americans are currently enjoying the strongest
growth in real purchasing power in more than 25 years. Finally, we believe
that the aging of the Baby Boomers is creating investment opportunity in
financial services. In this sector, we have focused on companies that we
think will benefit from the huge number of Baby Boomers investing for
retirement, as well as on specialized credit and credit-card providers.
Q. WHAT IS YOUR OUTLOOK FOR THE YEAR AHEAD?
A. We think that the Fund's technology investments in particular are poised
for exceptional growth in 1999. After grappling with excess inventory from
the fourth quarter of 1997 through the middle of 1998, the sector seems to be
resuming its long-term trend of strong secular growth. In fact, we believe
the inventory-reduction process that took place over the past year could give
way to an inventory-building process in 1999. Furthermore, several technology
companies have announced plans to bring new products to market in 1999 at
very attractive prices--an encouraging sign, as new products tend to
stimulate demand for technology.
On a broader level, we believe the U.S. stock market will be favorable to
investors in 1999, assuming the U.S. economy continues to grow at a modest
pace while inflation remains subdued. This is not to say that the market does
not face some challenges in 1999, such as ongoing turmoil in the emerging
markets. But we think the fallout will be minimal. As a result, we believe
that U.S. equities will move higher in 1999.
12/31/98
- -------------------------------------------------------------------------------
Investing in smaller companies may involve risks such as less publicly
available information than larger companies, volatility, and illiquidity.
Short selling is the sale of a borrowed security and may involve the risk
that the price of the security may increase between the date it is sold and
the date the fund must replace the borrowed security. Options and futures
involve the risk that their value may not be perfectly correlated to that of
the underlying index or security.
22
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
ASSETS UNDER MANAGEMENT: $679.08 million
ASSET ALLOCATION
[EDGAR REPRESENTATION OF PIE CHART]
<TABLE>
<S> <C>
Retail............................. 31.7%
Computer Technology................ 22.6%
Financial.......................... 16.4%
Pharmaceuticals.................... 7.8%
Commercial Services................ 6.3%
Telecom Equipment & Services....... 5.7%
Media.............................. 3.9%
HMO's.............................. 3.3%
Other & Other Liabilities, Net..... 2.3%
</TABLE>
DATA AS OF DECEMBER 31, 1998
TOP TEN HOLDINGS
<TABLE>
<S> <C>
Micron Technologies, Inc. ......... 4.74%
Intel Corporation.................. 4.63%
MCI WorldCom, Inc. ................ 4.02%
Safeway, Inc. ..................... 3.61%
Compaq Computer Corporation........ 3.32%
Best Buy Company, Inc. ............ 3.25%
Costco Companies, Inc. ............ 3.19%
CVS Corporation.................... 3.17%
Merrill Lynch & Co., Inc. ......... 3.14%
Oracle Corporation................. 3.06%
</TABLE>
RESULTS OF A HYPOTHETICAL $10,000 INVESTMENT -- CLASS A SHARES
(IF INVESTED ON 5/12/92)
[GRAPHIC]
<TABLE>
<CAPTION>
S&P 500 R1000 S&P 500 R1000
V+G % DIV. % GROWTH V+G DIV. GROWTH
DATE CUMULATIVE CUMULATIVE CUMULATIVE 10K 10K 10K
<S> <C> <C> <C> <C> <C> <C>
5/12/92 0.00% 0.00% 0.00% $ 10,000 $ 10,000 $ 10,000
6/92 -1.99% -1.54% -2.34% $ 9,801 $ 9,846 $ 9,766
9/92 0.99% 1.57% 1.93% $ 10,099 $ 10,157 $ 10,193
12/92 10.04% 6.69% 9.03% $ 11,004 $ 10,669 $ 10,903
3/93 19.33% 11.40% 8.10% $ 11,933 $ 11,140 $ 10,810
6/93 19.43% 11.86% 6.43% $ 11,943 $ 11,186 $ 10,643
9/93 28.43% 14.78% 8.01% $ 12,843 $ 11,478 $ 10,801
12/93 33.78% 17.46% 12.17% $ 13,378 $ 11,746 $ 11,217
3/94 38.90% 12.97% 7.22% $ 13,890 $ 11,297 $ 10,722
6/94 32.76% 13.35% 6.11% $ 13,276 $ 11,335 $ 10,611
9/94 55.60% 19.00% 14.28% $ 15,560 $ 11,900 $ 11,428
12/94 64.69% 18.95% 15.11% $ 16,469 $ 11,895 $ 11,511
3/95 89.27% 30.58% 26.07% $ 18,927 $ 13,058 $ 12,607
6/95 130.86% 42.85% 38.45% $ 23,086 $ 14,285 $ 13,845
9/95 175.36% 54.36% 51.02% $ 27,536 $ 15,436 $ 15,102
12/95 135.01% 63.60% 57.90% $ 23,501 $ 16,360 $ 15,790
3/96 126.51% 72.41% 66.38% $ 22,651 $ 17,241 $ 16,638
6/96 134.29% 80.03% 76.96% $ 23,429 $ 18,003 $ 17,696
9/96 149.64% 85.67% 83.34% $ 24,964 $ 18,567 $ 18,334
12/96 168.19% 101.21% 94.41% $ 26,819 $ 20,121 $ 19,441
3/97 161.98% 106.59% 95.45% $ 26,198 $ 20,659 $ 19,545
6/97 204.83% 142.53% 132.42% $ 30,483 $ 24,253 $ 23,242
9/97 255.11% 160.73% 149.89% $ 35,511 $ 26,073 $ 24,989
12/97 205.23% 168.31% 153.68% $ 30,523 $ 26,831 $ 25,368
3/98 244.86% 205.71% 192.12% $ 34,486 $ 30,571 $ 29,212
6/98 260.66% 215.61% 205.38% $ 36,066 $ 31,561 $ 30,538
9/98 213.52% 184.30% 177.64% $ 31,352 $ 28,430 $ 27,764
12/98 288.98% 244.97% 251.87% $ 38,898 $ 34,497 $ 35,187
</TABLE>
The Russell 1000 Growth Index replaced the S&P 500 Index as our primary fund
benchmark to reflect more accurately the Fund's investment style which
includes growth stocks. A hypothetical $10,000 investment in the S&P 500
Index, if invested on 5/12/92, would have grown to $34,497 as of 12/31/98.
PERFORMANCE UPDATE
<TABLE>
<CAPTION>
FIVE-YEAR
AVERAGE TOTAL RETURN AVERAGE ANNUAL
ONE-YEAR ANNUAL SINCE RETURN SINCE
TOTAL RETURN RETURN INCEPTION(6) INCEPTION(6)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Value + Growth Class A(1) 27.44% 23.80% 288.98% 22.70%
Value + Growth Class C(2,3) 23.06% N/A 22.18% 13.39%
Russell 1000 Growth Index(4) 38.71% 25.69% 251.87% 20.86%
S&P 500 Index(5) 28.57% 24.05% 244.97% 20.50%
</TABLE>
Performance data quoted represents past performance, and past performance is
no guarantee of future results. You should realize that investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
- -------------------------------------------------------------------------------
(1) Inception date for Class A was 5/12/92.
(2) Inception date for Class C was 5/28/97.
(3) Reflects the 1% contingent deferred sales charge on redemptions made
within the first year of purchasing shares.
(4) The Russell 1000 Growth Index is an unmanaged market
capitalization-weighted index containing those securities in the Russell 1000
Index with higher price-to-book ratios and higher forecasted growth values.
Investment results assume the reinvestment of dividends paid on the stocks
constituting the index. You cannot invest in an index.
(5) The S&P 500 Index is an unmanaged market capitalization-weighted index
of 500 stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of 500 stocks representing all
major industries. It is widely recognized as representative of the stock
market in general. Investment results assume the reinvestment of dividends
paid on the stocks constituting the index. You cannot invest in an index.
(6) The Total and Average Annual Return Since Inception percentages for the
Russell 1000 Growth Index and S&P 500 Index are calculated from the Class A
Share inception date, 5/12/92.
23
<PAGE>
ANNUAL REPORT
SCHEDULE OF INVESTMENTS -- THE CONTRARIAN FUND-TM-
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ---------------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 2.0%
Cypress Semiconductor Corporation 56,900 $ 472,981
Micron Electronics, Inc. 121,500 2,103,469
- ---------------------------------------------------------------------------------------------
2,576,450
- ---------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 6.3%
Lafarge Corporation(1) 30,000 1,215,000
Lone Star Industries, Inc.(1) 90,000 3,313,125
Southdown, Inc.(1) 20,000 1,183,750
USG Corporation(1) 42,800 2,180,125
- ---------------------------------------------------------------------------------------------
7,892,000
- ---------------------------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES - 2.5%
Pennzoil-Quaker State Company(1) 210,000 3,110,625
- ---------------------------------------------------------------------------------------------
3,110,625
- ---------------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 9.2%
CompUSA, Inc. 215,600 2,816,275
Deere & Company(1) 40,000 1,325,000
Philip Morris Companies Inc.(1) 137,500 7,356,250
- ---------------------------------------------------------------------------------------------
11,497,525
- ---------------------------------------------------------------------------------------------
COPPER/GOLD MINING - 2.4%
Indochina Goldfields, Ltd. CAD 4,294,840 2,125,328
Indochina Goldfields, Ltd., 144A(7) CAD 1,700,000 841,255
- ---------------------------------------------------------------------------------------------
2,966,583
- ---------------------------------------------------------------------------------------------
DATA COMMUNICATIONS - 1.8%
FORE Systems, Inc. 125,000 2,289,063
- ---------------------------------------------------------------------------------------------
2,289,063
- ---------------------------------------------------------------------------------------------
DIAMOND MINING - 1.8%
Diamond Fields International Note(4) CAD 1,671,900 816,464
DiamondWorks, Ltd. CAD 10,923,485 1,493,640
- ---------------------------------------------------------------------------------------------
2,310,104
- ---------------------------------------------------------------------------------------------
ENERGY - 9.0%
Abacan Resource Corporation CAD 878,500 282,459
Anderson Exploration, Ltd. CAD 200,000 1,810,132
Anzoil N.L. AUD 3,577,471 482,851
Beau Canada Exploration, Ltd. CAD 700,000 879,672
GTL Resources PLC GBP 3,948,232 656,867
Black Sea Energy, Ltd. CAD 2,807,880 694,748
Black Sea Energy, Ltd., 144A(7) CAD 2,772,000 685,871
Eurogas Corporation, 144A(7) CAD 5,762,400 637,849
PennzEnergy Company 210,000 3,451,875
Petroleum Securities Australia, Ltd. AUD 226,000 70,712
Petroleum Securities Australia, Ltd., ADR(3) 195,100 329,231
Vastar Resources, Inc.(1) 31,000 1,338,813
- ---------------------------------------------------------------------------------------------
11,321,080
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 7.6%
Dundee Bancorp, Inc., Class A CAD 888,600 9,546,751
- ---------------------------------------------------------------------------------------------
9,546,751
- ---------------------------------------------------------------------------------------------
GOLD MINING - 9.4%
Consolidated African Mines, Ltd. SAR 22,000,000 2,991,798
Emperor Mines, Ltd. AUD 4,317,979 1,589,448
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Etruscan Resources, Inc. CAD 2,968,900 $ 1,179,209
First Dynasty Mines, Ltd. CAD 2,324,550 249,740
First Dynasty Mines, Ltd., 144A(7) CAD 1,760,000 189,087
Golden Star Resources, Ltd. CAD 1,000,000 1,009,246
Guyanor Resources, S.A., Class B CAD 602,600 235,421
Harmony Gold Mining Company, Ltd., ADR(3) 400,000 1,900,000
Queenstake Resources, Ltd. CAD 1,001,000 384,549
Randgold and Exploration Company, Ltd. SAR 200,000 91,794
Randgold Resources, Ltd., GDR(3) 405,256 1,001,573
Vengold, Inc. CAD 1,477,000 904,011
- ---------------------------------------------------------------------------------------------
11,725,876
- ---------------------------------------------------------------------------------------------
INSURANCE - 3.6%
Loews Corporation(1) 45,800 4,499,850
- ---------------------------------------------------------------------------------------------
4,499,850
- ---------------------------------------------------------------------------------------------
MEDIA & TELECOMMUNICATION SERVICES - 12.1%
CD Radio, Inc. 240,000 8,220,000
Central European Media Enterprises, Ltd., Class A 140,000 918,750
Metromedia International Group, Inc. 1,102,900 5,997,019
- ---------------------------------------------------------------------------------------------
15,135,769
- ---------------------------------------------------------------------------------------------
NICKEL MINING - 4.5%
Inco, Ltd., VBN Shares(1) CAD 1,121,150 5,694,081
- ---------------------------------------------------------------------------------------------
5,694,081
- ---------------------------------------------------------------------------------------------
PLATINUM GROUP METALS - 0.1%
African Minerals Ltd., 144A, Restricted(4)(5)(7) 698,422 103,366
- ---------------------------------------------------------------------------------------------
103,366
- ---------------------------------------------------------------------------------------------
REAL ESTATE - 3.8%
Atlantic Gulf Communities Corporation 638,130 478,598
Avatar Holdings, Inc. 70,000 1,120,000
Brookfield Properties Corporation(1) CAD 188,000 2,301,341
Catellus Development Corporation 58,800 841,575
- ---------------------------------------------------------------------------------------------
4,741,514
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 2.2%
QUALCOMM, Inc. 52,700 2,730,519
- ---------------------------------------------------------------------------------------------
2,730,519
- ---------------------------------------------------------------------------------------------
TEXTILES - 0.4%
PT Apac Centertex Corporation, Foreign(8) IDR 17,668,000 441,700
- ---------------------------------------------------------------------------------------------
441,700
- ---------------------------------------------------------------------------------------------
TRANSPORTATION SERVICES - 0.7%
China Yuchai International, Ltd. 1,481,725 833,470
- ---------------------------------------------------------------------------------------------
833,470
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 79.4% (Cost $251,874,248) 99,416,326
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- ---------------------------------------------------------------------------------------------
Atlantic Gulf Communities Corporation, Series B 206,778 1,292,360
- ---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 1.0% (Cost $2,049,780) 1,292,360
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONVERTIBLE BONDS
- ---------------------------------------------------------------------------------------------
Randgold and Exploration Company, Ltd.,
7.00%, Due 10/3/01(1) 2,750,000 $ 1,416,250
- ---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 1.1% (Cost $2,750,000) 1,416,250
- ---------------------------------------------------------------------------------------------
<CAPTION>
WARRANTS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS
- ---------------------------------------------------------------------------------------------
Atlantic Gulf Communities Corporation,
Warrants, Strike $5.75,
Expire 6/23/04(6) 413,556 155,084
DiamondWorks, Ltd., Warrants,
Strike CAD 1.65, Expire 7/15/98(4)(6) CAD 848,485 2,326
Etruscan Resources, Ltd., Warrants,
Strike CAD 8.475, Expire 4/23/99(4)(6) CAD 722,150 -
PT Apac Centertex Corporation,
Warrants, Strike IDR 1,000,
Expire 7/14/01(6) IDR 2,700,000 6,919
Vengold, Inc., Warrants, Strike $1.30,
Expire 6/30/00(6) CAD 1,286,000 171,656
- ---------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.3% (Cost $1,726,588) 335,985
- ---------------------------------------------------------------------------------------------
OPTIONS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPTIONS
- ---------------------------------------------------------------------------------------------
Harmony Gold Mining Company, Ltd.,
Options, Strike SAR 6,000,
Expire 7/31/01(6) SAR 9,900 8,078
Normandy Mining, Ltd., Options,
Strike AUD 2.50, Expire 4/30/01(6) AUD 1,673,426 123,198
- ---------------------------------------------------------------------------------------------
TOTAL OPTIONS - 0.1% (Cost $43,533) 131,276
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 81.9% (Cost $258,444,149) 102,592,197
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT - 39.6% 49,591,066
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (19.1)% (Proceeds $42,195,171) (23,944,030)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (2.4)% (3,003,851)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 125,235,382
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
ANNUAL REPORT
SCHEDULE OF SECURITIES SOLD SHORT -- THE CONTRARIAN FUND-TM-
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ---------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 1.4%
AgriBioTech, Inc. 75,700 $ 979,369
Centocor, Inc. 17,400 785,175
- ---------------------------------------------------------------------------------------------
1,764,544
- ---------------------------------------------------------------------------------------------
COMPUTER GRAPHICS - 1.3%
ATI Technologies, Inc. CAD 143,400 1,629,333
- ---------------------------------------------------------------------------------------------
1,629,333
- ---------------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 0.1%
Iomega Corporation 8,900 65,081
- ---------------------------------------------------------------------------------------------
65,081
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 3.1%
Baan Company, N.V. 15,200 159,600
Egghead.com, Inc. 53,200 1,107,225
Engineering Animation, Inc. 18,870 1,018,980
JetForm Corporation 800 10,300
Open Text Corporation 15,000 364,688
QuadraMed Corporation 31,800 651,900
Software AG Systems, Inc. 34,600 627,125
- ---------------------------------------------------------------------------------------------
3,939,818
- ---------------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 2.5%
Action Performance Companies, Inc. 46,100 1,630,788
French Fragrances, Inc. 52,400 379,900
Recoton Corporation 35,500 636,781
West Marine, Inc. 52,600 519,425
- ---------------------------------------------------------------------------------------------
3,166,894
- ---------------------------------------------------------------------------------------------
DATA PROCESSING SERVICES/SYSTEM INTEGRATION - 0.5%
Intelligroup, Inc. 27,800 496,925
LHS Group Inc. 2,700 139,388
- ---------------------------------------------------------------------------------------------
636,313
- ---------------------------------------------------------------------------------------------
ELECTRONICS - 1.0%
SMART Modular Technologies, Inc. 24,200 671,550
Lernout & Hauspie Speech Products, N.V. 15,200 495,900
Zenith Electronics Corporation 226,000 60,031
- ---------------------------------------------------------------------------------------------
1,227,481
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 1.8%
Delta Financial Corporation 374,918 2,226,076
- ---------------------------------------------------------------------------------------------
2,226,076
- ---------------------------------------------------------------------------------------------
HEALTHCARE - 0.7%
Integrated Health Services, Inc. 65,900 930,838
- ---------------------------------------------------------------------------------------------
930,838
- ---------------------------------------------------------------------------------------------
LIFE SCIENCES - 0.4%
Cerner Corporation 20,000 535,000
- ---------------------------------------------------------------------------------------------
535,000
- ---------------------------------------------------------------------------------------------
MACHINERY-GENERAL INDUSTRIAL - 1.3%
Zoltek Companies, Inc. 177,400 1,629,862
- ---------------------------------------------------------------------------------------------
1,629,862
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MEDICAL INSTRUMENTS & DEVICES - 1.5%
ADAC Laboratories 39,100 $ 780,778
Schick Technologies, Inc. 27,800 281,475
Ventana Medical Systems, Inc. 36,100 780,660
- ---------------------------------------------------------------------------------------------
1,842,913
- ---------------------------------------------------------------------------------------------
MEDICAL SERVICES - 0.5%
STERIS Corporation 20,300 577,281
- ---------------------------------------------------------------------------------------------
577,281
- ---------------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 0.7%
Enzo Biochem, Inc. 92,085 949,627
- ---------------------------------------------------------------------------------------------
949,627
- ---------------------------------------------------------------------------------------------
OTHER SERVICES - 1.1%
Sylvan Learning Systems, Inc. 46,000 1,403,000
- ---------------------------------------------------------------------------------------------
1,403,000
- ---------------------------------------------------------------------------------------------
SPECIALTY WHOLESALE - 0.9%
Rexall Sundown, Inc. 77,100 1,079,400
- ---------------------------------------------------------------------------------------------
1,079,400
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 0.3%
InteliData Technologies Corporation 159,100 208,819
SmarTalk TeleServices, Inc. 49,600 131,750
- ---------------------------------------------------------------------------------------------
340,569
- ---------------------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT - 19.1% (Proceeds $42,195,171) $ 23,944,030
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
Schedule of Investments-- The Diversified Growth Fund
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ---------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 3.1%
Alkermes, Inc. 40,000 $ 887,500
Millennium Pharmaceuticals, Inc. 50,000 1,293,750
- ---------------------------------------------------------------------------------------------
2,181,250
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES - 2.1%
Cendant Corporation 45,000 857,813
U-Ship, Inc. 327,586 614,224
- ---------------------------------------------------------------------------------------------
1,472,037
- ---------------------------------------------------------------------------------------------
CLOSED END FUNDS - 1.7%
World Equity Benchmark Share -
Hong Kong Index Series(1) 45,000 421,875
World Equity Benchmark Share -
Japan Index Series(1) 75,000 768,750
- ---------------------------------------------------------------------------------------------
1,190,625
- ---------------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 3.7%
CellNet Data Systems, Inc. 100,000 500,000
Condor Technology Solutions, Inc. 75,000 750,000
National Data Corporation(1) 27,500 1,338,906
- ---------------------------------------------------------------------------------------------
2,588,906
- ---------------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 1.6%
Adaptec, Inc. 65,000 1,141,562
- ---------------------------------------------------------------------------------------------
1,141,562
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 9.5%
Check Point Software Technologies, Ltd. 20,000 916,250
Egghead.com, Inc. 35,000 728,438
Hyperion Solutions Corporation 40,000 720,000
IMRglobal Corporation 30,000 883,125
Information Advantage, Inc. 158,000 1,194,875
JDA Software Group, Inc. 70,000 678,125
Secure Computing Corporation 45,000 857,812
System Software Associates, Inc. 100,000 703,125
- ---------------------------------------------------------------------------------------------
6,681,750
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES - 10.2%
Complete Business Solutions, Inc. 20,000 677,500
CSG Systems International, Inc. 13,300 1,050,700
Discreet Logic, Inc. 85,000 1,604,375
Electronics for Imaging, Inc. 25,000 1,004,688
InfoNow Corporation 277,215 693,038
Inso Corporation 60,000 1,500,000
Viasoft, Inc. 90,000 630,000
- ---------------------------------------------------------------------------------------------
7,160,301
- ---------------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 11.0%
Acclaim Entertainment, Inc. 60,000 735,000
Chico's Fas, Inc. 50,000 1,168,750
Claire's Stores, Inc.(1) 30,000 615,000
Creative Computers, Inc. 32,500 1,031,875
Hollywood Entertainment Corporation 47,500 1,294,375
Krause's Furniture, Inc. 398,100 671,794
Paul Harris Stores, Inc. 140,000 1,137,500
PETsMART, Inc. 95,000 1,045,000
- ---------------------------------------------------------------------------------------------
7,699,294
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DATA COMMUNICATIONS - 6.0%
Digi International, Inc. 50,000 $ 556,250
FORE Systems, Inc. 75,000 1,373,437
Newbridge Networks Corporation 25,000 759,375
Novell, Inc. 85,000 1,540,625
- ---------------------------------------------------------------------------------------------
4,229,687
- ---------------------------------------------------------------------------------------------
ENERGY SERVICES - 1.0%
Bonus Resources Services Corporation CAD 705,000 688,566
- ---------------------------------------------------------------------------------------------
688,566
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 4.5%
AMRESCO, Inc. 120,000 1,050,000
East-West Bank Corporation, Restricted(4)(5) 150,000 1,387,500
Franchise Mortgage Acceptance Company 92,000 713,000
- ---------------------------------------------------------------------------------------------
3,150,500
- ---------------------------------------------------------------------------------------------
FOOD RETAIL/WHOLE-SALE - 0.7%
Omega Protein Corporation 47,300 478,913
- ---------------------------------------------------------------------------------------------
478,913
- ---------------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 4.6%
Alternative Living Services, Inc. 30,000 1,027,500
Balanced Care Corporation 95,000 760,000
Brookfield Living Communities, Inc. 45,000 877,500
King Pharmaceuticals, Inc. 22,500 587,813
- ---------------------------------------------------------------------------------------------
3,252,813
- ---------------------------------------------------------------------------------------------
INSURANCE - 0.5%
Core Cap, Inc., Class A, Restricted(4)(5) 25,000 315,000
- ---------------------------------------------------------------------------------------------
315,000
- ---------------------------------------------------------------------------------------------
INTERNET SERVICES - 2.0%
Digital Courier Technologies, Inc. 50,000 356,250
FaxSav, Inc. 87,000 538,313
USWeb Corporation 20,000 527,500
- ---------------------------------------------------------------------------------------------
1,422,063
- ---------------------------------------------------------------------------------------------
LODGING - 1.6%
Global Vacation Group, Inc. 36,000 310,500
Prime Hospitality Corporation 75,000 792,188
- ---------------------------------------------------------------------------------------------
1,102,688
- ---------------------------------------------------------------------------------------------
MEDIA - 10.2%
Adelphia Communications Corporation 30,000 1,372,500
Century Communications Corporation, Class A 50,000 1,585,937
MediaOne Group, Inc. 40,000 1,880,000
National Media Corporation 144,800 1,547,550
The Kushner-Locke Company, Inc. 100,000 743,750
- ---------------------------------------------------------------------------------------------
7,129,737
- ---------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS & DEVICES - 1.6%
Endocardial Solutions, Inc. 115,000 1,150,000
- ---------------------------------------------------------------------------------------------
1,150,000
- ---------------------------------------------------------------------------------------------
SECURITY EQUIPMENT - 3.1%
American Bank Note Holographics, Inc. 125,000 2,187,500
- ---------------------------------------------------------------------------------------------
2,187,500
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial
27
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SEMICONDUCTORS - 1.3%
Galileo Technology, Ltd. 35,000 $ 945,000
- ---------------------------------------------------------------------------------------------
945,000
- ---------------------------------------------------------------------------------------------
SPECIALTY RETAIL - 1.0%
OfficeMax, Inc. 55,000 673,750
- ---------------------------------------------------------------------------------------------
673,750
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 2.5%
Advanced Fibre Communications, Inc. 60,000 656,250
CommScope, Inc. 65,000 1,092,810
- ---------------------------------------------------------------------------------------------
1,749,060
- ---------------------------------------------------------------------------------------------
Telecommunications Services - 10.6%
CapRock Communications Corporation 140,000 936,250
DSET Corporation 185,000 1,919,375
Metrocall, Inc. 235,000 1,028,125
PageMart Wireless, Inc. 135,000 750,938
Powerwave Technologies, Inc. 50,000 931,250
Skytel Communications, Inc. 37,500 829,687
STARTEC Global Communication Corporation 107,000 1,029,875
- ---------------------------------------------------------------------------------------------
7,425,500
- ---------------------------------------------------------------------------------------------
TRANSPORTATION EQUIPMENT AND SERVICES - 1.5%
Simon Transportation Services, Inc. 182,000 1,057,875
- ---------------------------------------------------------------------------------------------
1,057,875
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 95.6% (Cost $59,294,770) 67,074,377
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES - 0.5%
U-Ship, Inc., 5.00% 200,000 375,000
- ---------------------------------------------------------------------------------------------
375,000
- ---------------------------------------------------------------------------------------------
COAL - 1.8%
Westmoreland Coal, Inc., 8.50%,
Expires 12/31/49, Series A 70,000 1,242,500
- ---------------------------------------------------------------------------------------------
1,242,500
- ---------------------------------------------------------------------------------------------
INSURANCE - 0.8%
Core Cap, Inc., Series A Preferred, 10.00%,
Expires 12/31/49, Restricted(4)(5) 25,000 583,750
- ---------------------------------------------------------------------------------------------
583,750
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 3.1% (Cost: $1,562,901) 2,201,250
- ---------------------------------------------------------------------------------------------
<CAPTION>
CONTRACTS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CALL OPTIONS
- ---------------------------------------------------------------------------------------------
America Online, Inc., Strike 160, Expire 1/16/99(6) 350 280,000
Cisco Systems, Inc., Strike 80, Expire 1/16/99(6) 300 438,750
Microsoft Corporation, Strike 130, Expire 1/16/99(6) 450 466,875
Microsoft Corporation, Strike 145, Expire 1/16/99(6) 250 51,563
- ---------------------------------------------------------------------------------------------
TOTAL CALL OPTIONS - 1.8% (Cost: $702,488) 1,237,188
- ---------------------------------------------------------------------------------------------
<CAPTION>
WARRANTS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS
- ---------------------------------------------------------------------------------------------
U-Ship, Inc., Warrants, Strike $1.75,
Expire 4/30/01(4)(6) 100,000 $ 131,186
- ---------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.2% (Cost: $39,646) 131,186
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.7% (Cost $61,599,805) 70,644,001
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES
SOLD SHORT AND WRITTEN OPTIONS - 2.6% 1,807,762
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (2.5)% (Proceeds: $1,652,403) (1,765,556)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.8)% (527,823)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $70,158,384
- ---------------------------------------------------------------------------------------------
SCHEDULE OF SECURITIES SOLD SHORT
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMPUTER HARDWARE & COMPONENTS - 1.2%
Rambus, Inc. 9,000 $ 866,250
- ---------------------------------------------------------------------------------------------
866,250
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 0.4%
FirstCity Financial Corporation 20,900 270,393
- ---------------------------------------------------------------------------------------------
270,393
- ---------------------------------------------------------------------------------------------
OTHER - 0.2%
Multiple Zones International, Inc. 7,500 132,188
- ---------------------------------------------------------------------------------------------
132,188
- ---------------------------------------------------------------------------------------------
OTHER SERVICES - 0.1%
Creditrust Corporation 2,200 56,100
- ---------------------------------------------------------------------------------------------
56,100
- ---------------------------------------------------------------------------------------------
WASTE MANAGEMENT SERVICES - 0.5%
Stericycle, Inc. 25,000 403,125
- ---------------------------------------------------------------------------------------------
403,125
- ---------------------------------------------------------------------------------------------
TOTAL SHORT COMMON STOCK - 2.4% (Proceeds: $1,526,457) 1,728,056
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 CONTRACTS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT CALL OPTIONS
Philadelphia Stock Exchange/KBW Bank Index,
Strike 850, Expire 1/16/99(6) 100 37,500
- ---------------------------------------------------------------------------------------------
TOTAL SHORT CALL OPTIONS - 0.1% (Proceeds: $125,946) 37,500
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT - 2.5% (Proceeds: $1,652,403) $ 1,765,556
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
SCHEDULE OF INVESTMENTS-- THE EMERGING GROWTH FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ADVERTISING - 2.9%
Lamar Advertising Company 160,250 $ 5,969,313
TMP Worldwide, Inc. 138,800 5,829,600
- ---------------------------------------------------------------------------------------------
11,798,913
- ---------------------------------------------------------------------------------------------
AIRLINES - 0.6%
Atlantic Coast Airlines, Inc. 8,600 215,000
SkyWest, Inc.(1) 62,300 2,036,431
- ---------------------------------------------------------------------------------------------
2,251,431
- ---------------------------------------------------------------------------------------------
BIOTECHNOLOGY - 0.9%
Incyte Pharmaceuticals, Inc. 49,500 1,850,063
MedImmune, Inc. 16,000 1,591,000
- ---------------------------------------------------------------------------------------------
3,441,063
- ---------------------------------------------------------------------------------------------
BUSINESS SERVICES - 3.4%
Consolidated Graphics, Inc. 34,400 2,324,150
DA Consulting Group, Inc. 47,900 1,047,813
Data Processing Resources Corporation 108,400 3,170,700
Global Imaging Systems, Inc. 10,000 242,500
Knoll, Inc. 67,800 2,008,575
Labor Ready, Inc. 97,250 1,914,609
On Assignment, Inc. 54,000 1,863,000
Select Appointments Holdings PLC, ADR(1)(3) 53,600 1,152,400
- ---------------------------------------------------------------------------------------------
13,723,747
- ---------------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 0.7%
Seagate Technology, Inc. 99,400 3,006,850
- ---------------------------------------------------------------------------------------------
3,006,850
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 9.2%
Actuate Software Corporation 25,000 493,750
Aspect Development, Inc. 10,000 443,125
Check Point Software Technologies, Ltd. 50,000 2,290,625
Concur Technologies, Inc. 900 27,450
IMRglobal Corporation 83,500 2,458,031
Macromedia, Inc. 250,100 8,425,244
Macrovision Corporation 70,900 2,995,525
New Era of Networks, Inc. 103,800 4,567,200
Peregrine Systems, Inc. 62,500 2,898,438
Pervasive Software, Inc. 131,500 2,531,375
Security Dynamics Technologies, Inc. 241,500 5,554,500
Segue Software, Inc. 80,900 1,638,225
Timberline Software Corporation(1) 53,200 731,500
VERITAS Software Corporation 25,000 1,498,438
Verity, Inc. 25,000 662,500
- ---------------------------------------------------------------------------------------------
37,215,926
- ---------------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES - 13.1%
Business Objects S.A., ADR(3) 101,900 3,311,750
Cognizant Technology Solutions Corporation 94,800 2,879,550
Compuware Corporation 65,400 5,109,375
Concord Communications, Inc. 66,600 3,779,550
ECsoft Group, ADR(3) 270,700 9,542,175
Electronic Processing, Inc. 91,600 916,000
Inso Corporation 91,100 2,277,500
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ISS Group, Inc. 83,700 $ 4,603,500
MAPICS, Inc. 78,200 1,290,300
MASTECH Corporation 156,800 4,488,400
Sapient Corporation 20,000 1,120,000
SCM Microsystems, Inc. 48,800 3,467,850
TSI International Software, Ltd. 177,000 8,473,875
Wind River Systems, Inc. 36,700 1,724,900
- ---------------------------------------------------------------------------------------------
52,984,725
- ---------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 0.3%
Intrawest Corporation(1) 73,500 1,240,313
- ---------------------------------------------------------------------------------------------
1,240,313
- ---------------------------------------------------------------------------------------------
CONSULTING SERVICES - 0.1%
Professional Detailing, Inc. 15,600 440,700
- ---------------------------------------------------------------------------------------------
440,700
- ---------------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 8.0%
Abercrombie & Fitch Company 67,200 4,754,400
Bebe Stores, Inc. 70,000 2,476,250
Bed Bath & Beyond, Inc. 57,500 1,962,188
D.M. Management Company 201,150 3,821,850
USANA, Inc. 59,000 597,375
Linens 'n Things, Inc. 126,500 5,012,563
Meade Instruments Corporation 184,750 2,251,641
Select Comfort Corporation 12,500 330,469
Steiner Leisure, Ltd. 156,500 5,008,000
The Wet Seal, Inc. 75,000 2,264,063
Williams-Sonoma, Inc. 92,500 3,728,906
- ---------------------------------------------------------------------------------------------
32,207,705
- ---------------------------------------------------------------------------------------------
CONTRACT MANUFACTURING - 2.1%
Jabil Circuit, Inc. 61,600 4,596,900
Sanmina Corporation 60,700 3,793,750
- ---------------------------------------------------------------------------------------------
8,390,650
- ---------------------------------------------------------------------------------------------
DATA PROCESSING SVCS./SYSTEM INTEGRATION - 0.9%
International Network Services, Inc. 35,900 2,387,350
Keane, Inc. 32,100 1,281,994
- ---------------------------------------------------------------------------------------------
3,669,344
- ---------------------------------------------------------------------------------------------
EDUCATION & TRAINING - 1.2%
Education Management Corporation 89,000 2,102,625
ITT Educational Services, Inc. 86,800 2,951,200
- ---------------------------------------------------------------------------------------------
5,053,825
- ---------------------------------------------------------------------------------------------
EDUCATIONAL SERVICES - 0.7%
Bright Horizons Family Solutions, Inc. 108,855 2,939,085
- ---------------------------------------------------------------------------------------------
2,939,085
- ---------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 0.2%
Artisan Components, Inc. 110,800 588,625
Power Integrations, Inc. 15,000 375,938
- ---------------------------------------------------------------------------------------------
964,563
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 5.1%
EVEREN Capital Corporation(1) 35,000 796,250
Financial Federal Corporation 204,700 5,066,325
Greater Bay Bancorp(1) 2,000 67,500
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
ANNUAL REPORT
SCHEDULE OF INVESTMENTS -- THE EMERGING GROWTH FUND -- CONTINUED
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Knight/Trimark Group, Inc. 266,200 $ 6,372,163
MBNA Corporation(1) 192,100 4,790,494
Telebanc Financial Corporation 14,000 476,000
Waddell & Reed Financial, Inc.(1) 136,100 3,223,869
- ---------------------------------------------------------------------------------------------
20,792,601
- ---------------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 0.9%
Cardinal Health, Inc.(1) 33,000 2,503,875
Province Healthcare Company 31,000 1,112,125
- ---------------------------------------------------------------------------------------------
3,616,000
- ---------------------------------------------------------------------------------------------
INTERNET COMMERCE - 5.1%
Amazon.com, Inc. 25,000 8,031,250
America Online, Inc.(1) 10,000 1,600,000
AmeriTrade Holding Corporation, Class A 214,500 6,756,750
Beyond.com Corporation 203,100 4,214,325
- ---------------------------------------------------------------------------------------------
20,602,325
- ---------------------------------------------------------------------------------------------
INTERNET CAPITAL SERVICES -12.8%
24/7 Media, Inc. 178,400 4,995,200
CMG Information Services, Inc. 39,700 4,228,050
EarthLink Network, Inc. 77,300 4,406,100
Lycos, Inc. 91,200 5,067,300
MindSpring Enterprises, Inc 48,900 2,985,956
Network Solutions, Inc. 85,900 11,242,163
VeriSign, Inc. 95,600 5,652,350
Excite, Inc. 30,000 1,261,875
Exodus Communications, Inc. 78,900 5,069,325
PSINet, Inc. 231,500 4,832,563
USWeb Corporation 71,000 1,872,625
Xoom.com, Inc. 3,100 102,300
- ---------------------------------------------------------------------------------------------
51,715,807
- ---------------------------------------------------------------------------------------------
MEDIA - 4.9%
Emmis Broadcasting Corporation, Class A 85,900 3,725,913
Gemstar International, Inc. 131,900 7,551,275
Infinity Broadcasting Corporation 1,800 49,275
Jacor Communications, Inc., Class A 63,600 4,094,250
Univision Communications, Inc. 123,500 4,469,156
- ---------------------------------------------------------------------------------------------
19,889,869
- ---------------------------------------------------------------------------------------------
MEDICAL INSTRUMENTS & DEVICES - 3.0%
Biomatrix, Inc. 7,000 407,750
Cytyc Corporation 137,200 3,532,900
Ocular Sciences, Inc. 66,300 1,773,525
ResMed, Inc. 133,300 6,048,488
Xomed Surgical Products, Inc. 14,300 457,600
- ---------------------------------------------------------------------------------------------
12,220,263
- ---------------------------------------------------------------------------------------------
INTERNET SOFTWARE - 0.0%
AboveNet Communications, Inc. 3,200 67,200
- ---------------------------------------------------------------------------------------------
67,200
- ---------------------------------------------------------------------------------------------
NETWORK SYSTEMS - 3.1%
Network Appliance, Inc. 170,400 7,668,000
Visual Networks, Inc. 125,700 4,713,750
- ---------------------------------------------------------------------------------------------
12,381,750
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OTHER SERVICES - 1.0%
- ---------------------------------------------------------------------------------------------
Rental Service Corporation 85,500 $ 1,341,281
US Liquids, Inc. 114,200 2,569,500
- ---------------------------------------------------------------------------------------------
3,910,781
- ---------------------------------------------------------------------------------------------
PHARMACEUTICALS - 0.1%
King Pharmaceuticals, Inc. 17,100 446,738
- ---------------------------------------------------------------------------------------------
446,738
- ---------------------------------------------------------------------------------------------
REAL ESTATE - 0.7%
CB Richard Ellis Services, Inc. 156,400 2,834,750
- ---------------------------------------------------------------------------------------------
2,834,750
- ---------------------------------------------------------------------------------------------
RESTAURANTS - 0.2%
PJ America, Inc. 39,000 706,875
- ---------------------------------------------------------------------------------------------
706,875
- ---------------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 0.3%
Novellus Systems, Inc. 25,000 1,237,500
- ---------------------------------------------------------------------------------------------
1,237,500
- ---------------------------------------------------------------------------------------------
SEMICONDUCTORS - 3.8%
Applied Micro Circuits Corporation 76,648 2,603,637
Micron Technologies, Inc. 69,200 3,498,925
Semtech Corporation 30,000 1,076,250
TranSwitch Corporation 112,000 4,361,000
Vitesse Semiconductor Corporation 80,600 3,677,375
- ---------------------------------------------------------------------------------------------
15,217,187
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES 1.2%
DSET Corporation 112,300 1,165,113
ICG Communications, Inc. 142,300 3,059,450
Viatel, Inc. 20,500 468,935
- ---------------------------------------------------------------------------------------------
4,693,498
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 3.4%
Allegiance Telecom, Inc. 261,700 3,173,110
EchoStar Communications Corporation 109,600 5,301,900
Midcom Communications, Inc. 60,000 290
Primus Telecommunications Group, Inc. 317,800 5,243,700
- ---------------------------------------------------------------------------------------------
13,719,000
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 2.5%
Com21, Inc. 191,200 4,015,200
Excel Switching Corporation 58,800 2,234,400
E-Tek Dynamics, Inc. 21,900 585,825
RF Micro Devices, Inc. 72,200 3,348,275
- ---------------------------------------------------------------------------------------------
10,183,700
- ---------------------------------------------------------------------------------------------
TRAVEL SERVICES - 1.5%
Four Seasons Hotels, Inc.(1) 151,300 4,425,525
Global Vacation Group, Inc. 109,900 947,885
ResortQuest International, Inc. 58,000 848,250
- ---------------------------------------------------------------------------------------------
6,221,660
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 93.9% (Cost, $261,259,910) 379,786,344
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
30
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
<TABLE>
<CAPTION>
DECEMBER 31, 1998 PAR VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONVERTIBLE BONDS
- ---------------------------------------------------------------------------------------------
Midcom Communications, Inc. 8.250%
Due 8/15/03, 144A(4)(7)(10) 1,000,000 $ 180,000
- ---------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 0.1% (Cost: $1,000,000) 180,000
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
SHORT-TERM SECURITIES
- ---------------------------------------------------------------------------------------------
Repurchase Agreement 15,538,000
State Street Bank & Trust Company, 4.45%, dated 12/31/98,
due 1/4/99, maturity value $15,545,683 (collateralized by
U.S. Treasury Note, 13.25%, due 5/15/14, maturity value
$16,008,457)
- ---------------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 3.8% (Cost $15,538,000) 15,538,000
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
Total Investments - 97.8% (Cost $277,797,910) 395,504,344
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 2.2% 8,931,379
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 404,435,723
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
31
<PAGE>
SCHEDULE OF INVESTMENTS -- THE GLOBAL NATURAL RESOURCES FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ---------------------------------------------------------------------------------------------
ALUMINUM - 6.4%
MAXXAM, Inc. 26,200 $ 1,503,225
- ---------------------------------------------------------------------------------------------
1,503,225
- ---------------------------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES - 3.8%
Pennzoil-Quaker State Company 60,000 888,750
- ---------------------------------------------------------------------------------------------
888,750
- ---------------------------------------------------------------------------------------------
ENERGY - 52.2%
Alberta Energy Company, Ltd.(1) CAD 13,000 279,333
Anderson Exploration, Ltd. CAD 100,000 905,066
Beau Canada Exploration, Ltd. CAD 504,600 634,118
Burlington Resources, Inc.(1) 23,000 823,688
Calahoo Petroleum, Ltd. CAD 633,333 676,303
Canadian Conquest Exploration, Inc. CAD 1,281,550 567,427
Canadian Hunter Exploration, Ltd.(9) CAD 350,000 2,278,943
Encal Energy, Ltd. CAD 40,000 148,457
Eurogas Corporation CAD 637,514 70,567
Howell Corporation(1) 253,100 522,019
Oiltec Resources, Ltd. CAD 1,730,000 991,275
PennzEnergy Company(1) 60,000 986,250
Petro-Canada CAD 100,000 1,058,080
Petroleum Securities Australia, Ltd. AUD 179,452 56,148
Petroleum Securities Australia, Ltd., ADR(3) 121,487 205,009
Place Resources Corporation CAD 642,100 1,212,456
Vastar Resources, Inc.(1) 20,000 863,750
- ---------------------------------------------------------------------------------------------
12,278,889
- ---------------------------------------------------------------------------------------------
ENERGY SERVICES - 3.5%
Bowridge Resource Group, Inc. CAD 361,000 138,683
Computalog, Ltd. CAD 170,000 680,753
- ---------------------------------------------------------------------------------------------
819,436
- ---------------------------------------------------------------------------------------------
FINANCIAL SERVICES - 3.1%
Dundee Bancorp, Inc., Class A CAD 68,000 730,564
- ---------------------------------------------------------------------------------------------
730,564
- ---------------------------------------------------------------------------------------------
FOOD - 5.5%
Fresh Del Monte Produce, Inc. 60,000 1,301,250
- ---------------------------------------------------------------------------------------------
1,301,250
- ---------------------------------------------------------------------------------------------
GOLD MINING - 0.7%
Conquistador Mines, Ltd., Restricted(4)(5) CAD 126,563 31,315
St. Jude Resources, Ltd. CAD 135,000 78,233
St. Jude Resources, Ltd., 144A(7) CAD 82,500 47,809
- ---------------------------------------------------------------------------------------------
157,357
- ---------------------------------------------------------------------------------------------
PAPER & FOREST - 11.8%
Fletcher Challenge Canada, Ltd.(1) CAD 90,000 1,002,084
Fletcher Challenge Paper, Ltd. NZD 1,150,000 771,217
The TimberWest Timber Trust CAD 170,000 990,689
- ---------------------------------------------------------------------------------------------
2,763,990
- ---------------------------------------------------------------------------------------------
PLATINUM GROUP METALS - 0.1%
African Minerals, Ltd., Restricted(4)(5) 203,624 30,136
- ---------------------------------------------------------------------------------------------
30,136
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REAL ESTATE - 9.9%
- ---------------------------------------------------------------------------------------------
Brookfield Properties Corporation(1) CAD 105,000 $ 1,285,324
Canadian Hotel Income Properties REIT(1) CAD 200,000 1,041,802
- ---------------------------------------------------------------------------------------------
2,327,126
- ---------------------------------------------------------------------------------------------
UTILITIES/PIPELINES - 3.2%
Western Gas Resources, Inc.(1) 130,000 747,500
- ---------------------------------------------------------------------------------------------
747,500
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 100.2% (Cost: $31,586,122) 23,548,223
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) WARRANTS VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
WARRANTS
- ---------------------------------------------------------------------------------------------
Brazilian Resources, Inc., 1/2 Warrants,
Strike CAD0.50, Expire 3/4/99(6) CAD 61,218 683
Etruscan Resources, Ltd., Warrants,
Strike CAD8.475, Expire 4/23/99(6) CAD 420,000 -
Solomon Resources, Ltd., 1/2 Warrants,
Strike CAD1.05, Expire 7/19/99(6) CAD 75,000 522
St. Jude Resources, Ltd., 1/2 Warrants,
Strike CAD3.75, Expire 3/27/99(6) CAD 82,500 1
- ---------------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.0% (Cost: $41,611) 1,206
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.2% (Cost:$31,627,733) 23,549,429
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.2)% (42,628)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 23,506,801
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
32
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
SCHEDULE OF INVESTMENTS-- THE GLOBAL VALUE FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ---------------------------------------------------------------------------------------------
CONSUMER & BUSINESS SERVICES - 3.3%
Pennzoil-Quaker State Company 19,000 $ 281,438
- ---------------------------------------------------------------------------------------------
281,438
- ---------------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 9.7%
Lafarge Corporation(1) 10,000 405,000
Southdown, Inc.(1) 7,300 432,069
- ---------------------------------------------------------------------------------------------
837,069
- ---------------------------------------------------------------------------------------------
ENERGY - 9.7%
PennzEnergy Company(1) 19,000 312,313
The Coastal Corporation(1) 15,000 524,062
- ---------------------------------------------------------------------------------------------
836,375
- ---------------------------------------------------------------------------------------------
FURNITURE/HOME APPLIANCE - 3.4%
Steelcase, Inc.(1) 18,000 295,875
- ---------------------------------------------------------------------------------------------
295,875
- ---------------------------------------------------------------------------------------------
HEALTHCARE/HMO - 5.0%
HEALTHSOUTH Corporation 28,000 432,250
- ---------------------------------------------------------------------------------------------
432,250
- ---------------------------------------------------------------------------------------------
HOTELS - 0.5%
Host Marriott Corporation 3,045 42,059
- ---------------------------------------------------------------------------------------------
42,059
- ---------------------------------------------------------------------------------------------
INSURANCE - 13.0%
Aetna Life Insurance and Annuity Company(1) 4,000 314,500
CIGNA Corporation(1) 5,000 386,563
SAFECO Corporation(1) 9,900 425,081
- ---------------------------------------------------------------------------------------------
1,126,144
- ---------------------------------------------------------------------------------------------
PRECIOUS METALS - 4.0%
Noranda, Inc.(1) CAD 35,000 347,539
- ---------------------------------------------------------------------------------------------
347,539
- ---------------------------------------------------------------------------------------------
REAL ESTATE - 7.5%
Brookfield Properties Corporation(1) CAD 53,000 648,782
- ---------------------------------------------------------------------------------------------
648,782
- ---------------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 6.5%
Telecom Italia S.p.A., ADR(1)(3) 5,000 435,000
Telecom Italia S.p.A.(1) ITL 15,000 127,911
- ---------------------------------------------------------------------------------------------
562,911
- ---------------------------------------------------------------------------------------------
UTILITIES - 20.9%
Edison International(1) 24,000 669,000
Nevada Power Company(1) 16,900 439,400
Unicom Corporation(1) 18,000 694,125
- ---------------------------------------------------------------------------------------------
1,802,525
- ---------------------------------------------------------------------------------------------
UTILITIES/PIPELINES - 8.8%
Kinder Morgan Energy Partners, L.P.(1) 21,000 761,250
- ---------------------------------------------------------------------------------------------
761,250
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 92.3% (Cost: $7,380,029) 7,974,217
- ---------------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 VALUE
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
SHORT-TERM SECURITIES
- ---------------------------------------------------------------------------------------------
Repurchase Agreement $ 150,000
State Street Bank & Trust Company,
4.45%, dated 12/31/98, due 1/4/99,
maturity value $150,074 (collateralized
by U.S. Treasury Note, 13.25%, due
5/15/14, maturity value $158,914)
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 1.7% (Cost $150,000) 150,000
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 94.0% (Cost $7,530,029) 8,124,217
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
OTHER ASSETS, NET - 6.0% 516,423
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 8,640,640
- ---------------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
33
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE GROWTH & INCOME FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ----------------------------------------------------------------------------------------
AEROSPACE - 2.4%
Alliant Techsystems, Inc. 55,000 $ 4,534,062
- ----------------------------------------------------------------------------------------
4,534,062
- ----------------------------------------------------------------------------------------
BIOTECHNOLOGY - 5.0%
Alkermes, Inc. 80,000 1,775,000
Amgen, Inc. 20,000 2,091,250
Genzyme Corporation 60,000 2,985,000
Millenium Pharmaceuticals, Inc. 95,000 2,458,125
- ----------------------------------------------------------------------------------------
9,309,375
- ----------------------------------------------------------------------------------------
BUSINESS SERVICES - 0.2%
U-Ship, Inc. 225,000 421,875
- ----------------------------------------------------------------------------------------
421,875
- ----------------------------------------------------------------------------------------
CLOSED-END FUNDS - 1.2%
World Equity Benchmark Share -
Hong Kong Index Series(1) 80,000 750,000
World Equity Benchmark Share -
Japan Index Series(1) 150,000 1,537,500
- ----------------------------------------------------------------------------------------
2,287,500
- ----------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 2.6%
ACNielsen Corporation 67,500 1,906,875
National Data Corporation(1) 60,000 2,921,250
- ----------------------------------------------------------------------------------------
4,828,125
- ----------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 5.9%
Adaptec, Inc. 95,000 1,668,437
EMC Corporation 27,000 2,295,000
Micron Electronics, Inc. 75,000 1,298,438
Seagate Technology, Inc. 65,000 1,966,250
Splash Technology Holdings, Inc. 100,000 743,750
Sun Microsystems, Inc. 35,000 2,996,875
- ----------------------------------------------------------------------------------------
10,968,750
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 1.7%
Netscape Communications Corporation 35,000 2,126,250
Network Solutions, Inc., Class A 8,000 1,047,000
- ----------------------------------------------------------------------------------------
3,173,250
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES - 3.3%
Compuware Corporation 25,000 1,953,125
Discreet Logic, Inc. 60,000 1,132,500
Electronics for Imaging, Inc. 75,000 3,014,062
- ----------------------------------------------------------------------------------------
6,099,687
- ----------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 8.7%
Acclaim Entertainment, Inc. 170,000 2,082,500
BJ's Wholesale Club, Inc. 75,000 3,473,438
Claire's Stores, Inc.(1) 80,000 1,640,000
Creative Computers, Inc. 47,500 1,508,125
Philip Morris Companies, Inc.(1) 65,000 3,477,500
Pier 1 Imports, Inc.(1) 200,000 1,937,500
The Kroger Company, Inc. 35,000 2,117,500
- ----------------------------------------------------------------------------------------
16,236,563
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER RETAIL - 0.8%
Sotheby's Holdings, Inc.(1) 43,200 $ 1,382,400
- ----------------------------------------------------------------------------------------
1,382,400
- ----------------------------------------------------------------------------------------
DATA COMMUNICATIONS - 3.3%
FORE Systems, Inc. 110,000 2,014,375
Newbridge Networks Corporation 75,000 2,278,125
Novell, Inc. 100,000 1,812,500
- ----------------------------------------------------------------------------------------
6,105,000
- ----------------------------------------------------------------------------------------
DISTRIBUTORS - 1.9%
Bergen Brunswig Corporation, Class A(1) 100,000 3,487,500
- ----------------------------------------------------------------------------------------
3,487,500
- ----------------------------------------------------------------------------------------
FINANCIAL SERVICES - 2.4%
Countrywide Credit Industries, Inc.(1) 45,000 2,258,438
Fannie Mae(1) 30,000 2,220,000
- ----------------------------------------------------------------------------------------
4,478,438
- ----------------------------------------------------------------------------------------
FOOD RETAIL/WHOLESALE - 1.3%
U.S. Foodservice, Inc. 50,000 2,450,000
- ----------------------------------------------------------------------------------------
2,450,000
- ----------------------------------------------------------------------------------------
INSURANCE - 3.3%
Core Cap, Inc., Class A, Restricted(4,5) 75,000 945,000
Scottish Annuity & Life Holdings, Ltd. 100,000 1,375,000
The MONY Group, Inc. 55,000 1,722,188
W.R. Berkley Corporation(1) 60,000 2,043,750
- ----------------------------------------------------------------------------------------
6,085,938
- ----------------------------------------------------------------------------------------
INTERNET SERVICES - 1.2%
Amazon.com, Inc. 1,500 481,875
USWeb Corporation 65,000 1,714,375
- ----------------------------------------------------------------------------------------
2,196,250
- ----------------------------------------------------------------------------------------
LONG TERM HEALTHCARE - 1.1%
Sunrise Assisted Living, Inc. 40,000 2,075,000
- ----------------------------------------------------------------------------------------
2,075,000
- ----------------------------------------------------------------------------------------
MEDIA - 12.7%
Adelphia Communications Corporation 68,000 3,111,000
Comcast Corporation, Class A(1) 60,000 3,521,250
Liberty Media Group, Grade A 65,000 2,994,062
MediaOne Group, Inc. 125,000 5,875,000
Tele-Communications International, Inc., Class A 75,000 4,148,438
Tele-Communications, Inc., TCI Ventures Group - A 169,999 4,005,601
- ----------------------------------------------------------------------------------------
23,655,351
- ----------------------------------------------------------------------------------------
NETWORK SYSTEMS - 1.7%
3Com Corporation 70,000 3,136,875
- ----------------------------------------------------------------------------------------
3,136,875
- ----------------------------------------------------------------------------------------
PUBLISHING - 0.6%
Ziff-Davis, Inc. 70,000 1,106,875
- ----------------------------------------------------------------------------------------
1,106,875
- ----------------------------------------------------------------------------------------
R.E.I.T. - 0.7%
FBR Asset Investment Corporation 75,000 1,200,000
- ----------------------------------------------------------------------------------------
1,200,000
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
34
<PAGE>
ROBERTSON STEPHENS MUTUAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
SECURITY EQUIPMENT - 1.4%
American Bank Note Holographics, Inc. 151,000 $ 2,642,500
- ----------------------------------------------------------------------------------------
2,642,500
- ----------------------------------------------------------------------------------------
SEMICONDUCTORS - 0.3%
Conexant Systems, Inc. 36,600 613,050
- ----------------------------------------------------------------------------------------
613,050
- ----------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 9.8%
CapRock Communications Corporation 200,000 1,337,500
Comsat Corporation(1) 90,000 3,240,000
GTE Corporation(1) 35,000 2,360,312
Metrocall, Inc. 126,700 554,313
Saville Systems ADR(3) 80,000 1,520,000
SBC Communications, Inc.(1) 45,000 2,413,125
Skytel Communications, Inc. 55,000 1,216,875
Sprint Corporation(1) 35,000 2,944,375
Sprint Corporation, PCS Group(1) 111,250 2,572,656
- ----------------------------------------------------------------------------------------
18,159,156
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 1.0%
CommScope, Inc. 110,000 1,849,375
- ----------------------------------------------------------------------------------------
1,849,375
- ----------------------------------------------------------------------------------------
TRANSPORTATION - 1.0%
Knightsbridge Tankers Limited(1) 90,000 1,873,125
- ----------------------------------------------------------------------------------------
1,873,125
- ----------------------------------------------------------------------------------------
UTILITIES - 2.3%
Central & South West Corporation(1) 70,000 1,920,625
Montana Power Company(1) 42,500 2,403,906
- ----------------------------------------------------------------------------------------
4,324,531
- ----------------------------------------------------------------------------------------
UTILITIES/ELECTRIC - 0.9%
Southern Company(1) 60,000 1,743,750
- ----------------------------------------------------------------------------------------
1,743,750
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 78.7% (Cost: $106,728,647) 146,424,301
- ----------------------------------------------------------------------------------------
SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCKS
COMMERCIAL SERVICES - 1.4%
Cendant Corporation, 7.50%, Expires 2/16/01 75,000 2,503,125
- ----------------------------------------------------------------------------------------
2,503,125
- ----------------------------------------------------------------------------------------
DATA TELECOMMUNICATIONS - 0.7%
Cellnet Funding LLC, 7.00%, Expires 6/1/10 102,200 1,328,600
- ----------------------------------------------------------------------------------------
1,328,600
- ----------------------------------------------------------------------------------------
INSURANCE - 0.9%
Core Cap, Inc., Series A, 10.00%
Expires 12/31/49, Restricted(4,5) 75,000 1,751,250
- ----------------------------------------------------------------------------------------
1,751,250
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS & MEDIA - 1.7%
Houston Industries, Inc., 7.00%, Expires 7/1/00 30,000 3,191,250
- ----------------------------------------------------------------------------------------
3,191,250
- ----------------------------------------------------------------------------------------
TRANSPORTATION - 3.0%
Trans World Airlines, Inc., 4.625%
Expires 12/31/49 56,000 2,296,000
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Trans World Airlines, Inc., 144A, 4.625%
Expires 12/31/49(7) 40,000 $ 1,660,000
Trans World Airlines, Inc., 8.00%, Expires 12/31/49 68,000 1,530,000
- ----------------------------------------------------------------------------------------
5,486,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS - 7.7% (Cost: $14,724,912) 14,260,225
- ----------------------------------------------------------------------------------------
<CAPTION>
PAR VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CONVERTIBLE BONDS
- ----------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 0.9%
Hutchinson Technology, Inc., 6.00%
Due 3/15/05 1,250,000 1,681,250
- ----------------------------------------------------------------------------------------
1,681,250
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 3.3%
Tele-Communications International, Inc.
4.50%, Due 2/15/06 2,000,000 2,120,000
System Software & Associates, Inc.
7.00%, Due 9/15/02 5,500,000 3,987,500
- ----------------------------------------------------------------------------------------
6,107,500
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES - 0.4%
Premier Technology, Inc., 5.75%, Due 7/1/04 1,500,000 765,000
- ----------------------------------------------------------------------------------------
765,000
- ----------------------------------------------------------------------------------------
CONSUMER & SPECIALTY RETAIL - 0.8%
The Sports Authority, Inc., 5.25%, Due 9/15/01 2,250,000 1,530,000
- ----------------------------------------------------------------------------------------
1,530,000
- ----------------------------------------------------------------------------------------
ENERGY SERVICES - 0.5%
Halter Marine Corporation, 4.50%
Due 9/15/04 1,750,000 1,006,250
- ----------------------------------------------------------------------------------------
1,006,250
- ----------------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES - 0.1%
Molten Metal Technology, Inc., 5.50%
Due 5/1/06 5,000,000 100,000
- ----------------------------------------------------------------------------------------
100,000
- ----------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 0.7%
Alternative Living Services, Inc., 5.25%
Due 12/15/02 1,000,000 1,247,500
- ----------------------------------------------------------------------------------------
1,247,500
- ----------------------------------------------------------------------------------------
HEALTHCARE/HMO - 1.0%
Assisted Living Concepts, Inc., 6.00%
Due 11/1/02 750,000 618,750
Sabratek Corporation, 144A, 6.00%
Due 4/15/05(7) 2,000,000 1,240,000
- ----------------------------------------------------------------------------------------
1,858,750
- ----------------------------------------------------------------------------------------
INTERNET COMMERCE - 0.6%
Beyond.com Corporation, 144A, 7.25%
Due 12/1/03(7) 1,000,000 1,150,000
- ----------------------------------------------------------------------------------------
1,150,000
- ----------------------------------------------------------------------------------------
MEDICAL SERVICES - 0.7%
American Retirement Corporation, 5.75%
Due 10/1/02 1,400,000 1,225,000
- ----------------------------------------------------------------------------------------
1,225,000
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
35
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE GROWTH & INCOME FUND--CONTINUED
<TABLE>
<CAPTION>
DECEMBER 31, 1998 PAR VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
OIL/GAS DRILLING - 0.4%
Key Energy Group, Inc., 144A, 5.00%
Due 9/15/04(7) 1,750,000 $ 735,000
Key Energy Group, Inc., 5.00%, Due 9/15/04 250,000 105,000
- ----------------------------------------------------------------------------------------
840,000
- ----------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS - 9.4% (Cost: $18,922,602) 17,511,250
- ----------------------------------------------------------------------------------------
<CAPTION>
CONTRACTS VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CALL OPTIONS
- ----------------------------------------------------------------------------------------
America Online, Inc., Strike 160, Expire 1/16/99(6) 500 400,000
Cisco Systems, Inc., Strike 80, Expire 1/16/99(6) 500 731,250
Microsoft Corporation, Strike 130, Expire 1/16/99(6) 500 518,750
Microsoft Corporation, Strike 145, Expire 1/16/99(6) 300 61,875
- ----------------------------------------------------------------------------------------
TOTAL CALL OPTIONS - 0.9% (Cost: $941,963) 1,711,875
- ----------------------------------------------------------------------------------------
SHORT-TERM SECURITIES
Repurchase Agreement 1,498,000
State Street Bank & Trust Company, 4.45%, dated 12/31/98,
due 1/4/99, maturity value $1,498,740 (collateralized by
U.S. Treasury Note, 13.25%, due 5/15/14, maturity value
$1,547,317)
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 0.8% (Cost $1,498,000) 1,498,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 97.5% (Cost: $142,816,124) 181,405,651
- ----------------------------------------------------------------------------------------
DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR SECURITIES SOLD SHORT
- ----------------------------------------------------------------------------------------
Cash 4,141,398
- ----------------------------------------------------------------------------------------
TOTAL DEPOSITS WITH BROKERS AND CUSTODIAN BANK FOR 4,141,398
SECURITIES SOLD SHORT - 2.2%
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
RECEIVABLE FROM BROKERS FOR SECURITIES SOLD SHORT
AND WRITTEN OPTIONS - 0.8% 1,395,262
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
SECURITIES SOLD SHORT - (0.4)% (Proceeds: $727,030) (646,500)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.1)% (144,187)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $186,151,624
- ----------------------------------------------------------------------------------------
SCHEDULE OF SECURITIES SOLD SHORT
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
OTHER SERVICES - 0.1%
Credit Trust Corporation 10,500 $ 267,750
- ----------------------------------------------------------------------------------------
267,750
- ----------------------------------------------------------------------------------------
WASTE MANAGEMENT SERVICES - 0.2%
Stericycle 20,000 322,500
- ----------------------------------------------------------------------------------------
322,500
- ----------------------------------------------------------------------------------------
TOTAL SHORT COMMON STOCK - 0.3% (Proceeds: $538,111) 590,250
- ----------------------------------------------------------------------------------------
<CAPTION>
CONTRACTS VALUE
- ----------------------------------------------------------------------------------------
<C> <C> <C>
SHORT CALL OPTIONS
- ----------------------------------------------------------------------------------------
Philadelphia Stock Exchange, KBW Bank Index,
Strike 850, Expire 1/16/99(6) 150 56,250
- ----------------------------------------------------------------------------------------
TOTAL SHORT CALL OPTIONS - 0.1% (Proceeds: $188,919) 56,250
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL SECURITIES SOLD SHORT - 0.4% (Proceeds: $727,030) $ 646,500
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
36
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE INFORMATION AGE FUND-TM-
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ----------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 1.7%
Robert Half International, Inc. 60,600 $ 2,708,062
- ----------------------------------------------------------------------------------------
2,708,062
- ----------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT & SERVICES - 14.9%
3Com Corporation 91,700 4,109,306
Ascend Communications, Inc. 55,000 3,616,250
Cisco Systems, Inc. 59,200 5,494,500
MCI WorldCom, Inc. 91,800 6,586,650
Nokia Corporation, Class A, ADR(3) 32,900 3,962,394
- ----------------------------------------------------------------------------------------
23,769,100
- ----------------------------------------------------------------------------------------
Computer Hardware & Manufacturing - 6.8%
Compaq Computer Corporation(1) 128,000 5,368,000
Dell Computer Corporation 29,600 2,166,350
Gateway 2000, Inc. 65,000 3,327,187
- ----------------------------------------------------------------------------------------
10,861,537
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 19.0%
BMC Software, Inc. 48,700 2,170,194
HMC Software, Inc. 85,000 3,437,188
I2 Technologies, Inc. 68,000 2,065,500
Legato Systems, Inc. 106,000 6,989,375
Microsoft Corporation 47,000 6,518,312
Oracle Corporation 124,000 5,347,500
Synopsys, Inc. 45,000 2,441,250
Visio Corporation 40,000 1,462,500
- ----------------------------------------------------------------------------------------
30,431,819
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE & SERVICES - 4.6%
Compuware Corporation 50,200 3,921,875
Concord Communications, Inc. 59,400 3,370,950
- ----------------------------------------------------------------------------------------
7,292,825
- ----------------------------------------------------------------------------------------
CONTRACT MANUFACTURING - 2.7%
Solectron Corporation 47,200 4,386,650
- ----------------------------------------------------------------------------------------
4,386,650
- ----------------------------------------------------------------------------------------
INTERNET COMMERCE - 13.7%
Yahoo!, Inc. 30,700 7,216,419
America Online, Inc.(1) 91,200 14,592,000
- ----------------------------------------------------------------------------------------
21,808,419
- ----------------------------------------------------------------------------------------
SEMICONDUCTOR EQUIPMENT - 5.1%
Novellus Systems, Inc. 66,000 3,267,000
Teradyne, Inc. 117,000 4,957,875
- ----------------------------------------------------------------------------------------
8,224,875
- ----------------------------------------------------------------------------------------
SEMICONDUCTORS & COMPONENTS - 18.2%
Altera Corporation 20,000 1,217,500
Intel Corporation(1) 62,500 7,410,156
Micrel, Inc. 30,000 1,650,000
Microchip Technology, Inc. 30,000 1,110,000
Micron Technologies, Inc. 124,700 6,305,144
Maxim Integrated Products, Inc. 30,000 1,310,625
Texas Instruments, Inc.(1) 55,000 4,705,937
Vitesse Semiconductor Corporation 59,300 2,705,563
Xilinx, Inc. 40,000 2,605,000
- ----------------------------------------------------------------------------------------
29,019,925
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 VALUE
- ----------------------------------------------------------------------------------------
<S> <C>
TOTAL COMMON STOCKS - 86.7% (COST $82,974,411) $138,503,212
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
SHORT-TERM SECURITIES
- ----------------------------------------------------------------------------------------
Repurchase Agreement 1,083,000
State Street Bank & Trust Company, 4.45%, dated 12/31/98,
due 1/4/99, maturity value $1,083,535 (collateralized by
U.S. Treasury Note, 13.25%, due 5/15/14, maturity
value $1,120,759)
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 0.7% (Cost $1,083,000) 1,083,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 87.4% (Cost $84,057,411) 139,586,212
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
OTHER ASSETS NET - 12.6% 20,145,413
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $159,731,625
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE MICROCAP GROWTH FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS
- ----------------------------------------------------------------------------------------
AIRLINES - 0.9%
Atlantic Coast Airlines, Inc. 35,000 $ 875,000
- ----------------------------------------------------------------------------------------
875,000
- ----------------------------------------------------------------------------------------
BIOTECHNOLOGY - 0.9%
LifeCell Corporation 200,000 875,000
- ----------------------------------------------------------------------------------------
875,000
- ----------------------------------------------------------------------------------------
BROADCAST/RADIO/TV - 1.8%
Medialink Worldwide, Inc. 102,500 1,742,500
- ----------------------------------------------------------------------------------------
1,742,500
- ----------------------------------------------------------------------------------------
BUSINESS SERVICES - 1.3%
Best Software, Inc. 50,000 1,187,500
- ----------------------------------------------------------------------------------------
1,187,500
- ----------------------------------------------------------------------------------------
CHEMICALS - 1.0%
Eco Soil Systems, Inc. 110,000 962,500
- ----------------------------------------------------------------------------------------
962,500
- ----------------------------------------------------------------------------------------
COLLECTIBLES - 1.3%
Racing Champions Corporation 90,000 1,203,750
- ----------------------------------------------------------------------------------------
1,203,750
- ----------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 7.2%
Abacus Direct Corporation 20,000 910,000
Coinstar, Inc. 200,000 2,150,000
Cornell Corrections, Inc. 95,000 1,805,000
Rent-Way, Inc. 60,000 1,458,750
Vivid Technologies, Inc. 90,000 545,625
- ----------------------------------------------------------------------------------------
6,869,375
- ----------------------------------------------------------------------------------------
COMPUTER HARDWARE/COMPONENTS - 2.5%
Cybex Corporation 82,500 2,423,437
- ----------------------------------------------------------------------------------------
2,423,437
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 10.4%
Credit Management Solutions, Inc. 90,000 495,000
InterVU, Inc. 65,000 828,750
Pervasive Software, Inc. 140,000 2,695,000
QRS Corporation 15,000 720,000
QuadraMed Corporation 50,000 1,025,000
Restrac, Inc. 35,000 227,500
Secure Computing Corporation 80,000 1,525,000
Summit Design, Inc. 165,000 1,536,562
Towne Services, Inc. 125,000 875,000
- ----------------------------------------------------------------------------------------
9,927,812
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES - 5.8%
Faroudja, Inc. 210,000 656,250
Sanchez Computer Associates, Inc. 45,000 1,316,250
SCB Computer Technology, Inc. 50,000 493,750
Tier Technologies, Inc. 90,000 1,552,500
Vista Information Solutions, Inc. 200,000 1,550,000
- ----------------------------------------------------------------------------------------
5,568,750
- ----------------------------------------------------------------------------------------
CONSULTING SERVICES - 2.3%
Superior Consultant Holdings Corporation 50,000 2,175,000
- ----------------------------------------------------------------------------------------
2,175,000
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER & SPECIALTY RETAIL - 8.9%
Cost Plus, Inc. 30,000 $ 941,250
Enamelon, Inc. 120,000 697,500
Happy Kids, Inc. 110,000 1,402,500
Hot Topic, Inc. 60,000 772,500
Natrol, Inc. 130,000 1,430,000
Party City Corporation 90,000 1,299,375
The Maxim Group, Inc. 20,000 480,000
U.S. Home & Garden, Inc. 290,000 1,450,000
- ----------------------------------------------------------------------------------------
8,473,125
- ----------------------------------------------------------------------------------------
CONSUMER GOODS - 1.2%
Tweeter Home Entertainment Group, Inc. 40,000 1,150,000
- ----------------------------------------------------------------------------------------
1,150,000
- ----------------------------------------------------------------------------------------
DATA PROCESSING SERVICES - 1.8%
Inspire Insurance Solutions, Inc. 10,000 183,750
Transaction Network Services, Inc. 75,000 1,504,688
- ----------------------------------------------------------------------------------------
1,688,438
- ----------------------------------------------------------------------------------------
EDUCATION & TRAINING - 1.7%
Career Education Corporation 54,000 1,620,000
- ----------------------------------------------------------------------------------------
1,620,000
- ----------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS - 5.3%
Aavid Thermal Technologies, Inc. 90,000 1,518,750
Cree Research, Inc. 45,000 2,154,375
Power Integrations, Inc. 55,000 1,378,438
- ----------------------------------------------------------------------------------------
5,051,563
- ----------------------------------------------------------------------------------------
FINANCIAL SERVICES - 1.4%
Rock Financial Corporation(1) 105,000 1,365,000
- ----------------------------------------------------------------------------------------
1,365,000
- ----------------------------------------------------------------------------------------
HEALTH CARE SERVICES - 4.5%
Balanced Care Corporation 25,000 200,000
MedQuist, Inc. 50,000 1,975,000
Res-Care, Inc. 85,000 2,098,437
- ----------------------------------------------------------------------------------------
4,273,437
- ----------------------------------------------------------------------------------------
HOME BUILDING - 0.8%
American Homestar Corporation 50,000 750,000
- ----------------------------------------------------------------------------------------
750,000
- ----------------------------------------------------------------------------------------
Insurance - 1.7%
Annuity and Life Re (Holdings), Ltd.(1) 60,000 1,620,000
- ----------------------------------------------------------------------------------------
1,620,000
- ----------------------------------------------------------------------------------------
LIFE SCIENCES - 1.9%
CareMatrix Corporation 60,000 1,837,500
- ----------------------------------------------------------------------------------------
1,837,500
- ----------------------------------------------------------------------------------------
LODGING - 2.0%
Execustay Corporation 145,000 1,885,000
- ----------------------------------------------------------------------------------------
1,885,000
- ----------------------------------------------------------------------------------------
MANUFACTURING - 1.6%
FARO Technologies, Inc. 138,000 552,000
ZEVEX International, Inc. 210,000 997,500
- ----------------------------------------------------------------------------------------
1,549,500
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
38
<PAGE>
ROBERTSON STEPHENS MUTUAL FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
MEDICAL INSTRUMENTS & DEVICES - 2.9%
Bioanalytical Systems, Inc. 90,000 $ 354,375
Closure Medical Corporation 65,000 1,937,813
Photoelectron Corporation 110,000 481,250
- ----------------------------------------------------------------------------------------
2,773,438
- ----------------------------------------------------------------------------------------
MEDICAL SUPPLIES - 2.3%
Molecular Devices Corporation 100,000 2,175,000
- ----------------------------------------------------------------------------------------
2,175,000
- ----------------------------------------------------------------------------------------
MISCELLANEOUS - 1.6%
Rainbow Rentals, Inc. 150,000 1,481,250
- ----------------------------------------------------------------------------------------
1,481,250
- ----------------------------------------------------------------------------------------
NETWORK SYSTEMS - 2.1%
Performance Technologies, Inc. 150,000 1,968,750
- ----------------------------------------------------------------------------------------
1,968,750
- ----------------------------------------------------------------------------------------
OTHER SERVICES - 2.3%
Keystone Automotive Industries, Inc. 45,000 942,187
Novacare Employee Services Corporation 232,500 1,249,688
- ----------------------------------------------------------------------------------------
2,191,875
- ----------------------------------------------------------------------------------------
PHARMACEUTICALS - 1.7%
Kendle International, Inc. 70,000 1,636,250
- ----------------------------------------------------------------------------------------
1,636,250
- ----------------------------------------------------------------------------------------
RECREATION - 0.8%
Travis Boats & Motors, Inc. 35,000 717,500
- ----------------------------------------------------------------------------------------
717,500
- ----------------------------------------------------------------------------------------
RESTAURANTS - 2.5%
Garden Fresh Restaurant Corporation 85,000 1,221,875
PJ America, Inc. 65,000 1,178,125
- ----------------------------------------------------------------------------------------
2,400,000
- ----------------------------------------------------------------------------------------
SEMICONDUCTORS - 7.2%
American Xtal Technology, Inc. 125,000 1,140,625
ATMI, Inc. 80,000 2,020,000
Cerprobe Corporation 120,000 1,612,500
QLogic Corporation 16,000 2,094,000
- ----------------------------------------------------------------------------------------
6,867,125
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 1.7%
CapRock Communications Corporation 130,000 869,375
Powerwave Technologies, Inc. 40,000 745,000
- ----------------------------------------------------------------------------------------
1,614,375
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 3.4%
Metro One Telecommunications, Inc. 150,000 1,987,500
RF Monolithics, Inc. 60,000 558,750
STAR Telecommunications, Inc. 60,000 731,250
- ----------------------------------------------------------------------------------------
3,277,500
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS EQUIPMENT - 0.1%
Premiere Technologies, Inc. 15,000 110,625
- ----------------------------------------------------------------------------------------
110,625
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCKS - 96.8% (Cost $80,280,474) 92,287,875
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 VALUE
- ----------------------------------------------------------------------------------------
<S> <C>
SHORT-TERM SECURITIES
- ----------------------------------------------------------------------------------------
Repurchase Agreement $ 150,000
State Street Bank & Trust Company, 4.45%, dated
12/31/98, due 1/4/99, maturity value $150,074 (collateralized by U.S.
Treasury Note, 13.25%, due 5/15/14, maturity value $158,914)
- -----------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 0.2% (Cost $150,000) 150,000
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 97.0% (Cost $80,430,474) 92,437,875
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
OTHER ASSETS, NET - 3.0% 2,848,915
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $ 95,286,790
- -----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
39
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE PARTNERS FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS
- ----------------------------------------------------------------------------------------
ALUMINUM - 7.8%
MAXXAM, Inc. 65,000 $ 3,729,375
- ----------------------------------------------------------------------------------------
3,729,375
- ----------------------------------------------------------------------------------------
CLOSED-END FUNDS - 0.3%
Cathay Investment Fund, Ltd.(4) HKD 525,000 131,466
- ----------------------------------------------------------------------------------------
131,466
- ----------------------------------------------------------------------------------------
CONSTRUCTION/INFRASTRUCTURE - 6.6%
Giant Cement Holding, Inc. 20,000 495,000
Meritage Corporation 121,200 1,499,850
Southdown, Inc.(1) 20,000 1,183,750
- ----------------------------------------------------------------------------------------
3,178,600
- ----------------------------------------------------------------------------------------
CONSUMER/BUSINESS SERVICES - 17.4%
Midas, Inc.(1) 125,000 3,890,625
Payless ShoeSource, Inc. 18,500 876,438
Pennzoil-Quaker State Company 93,000 1,377,563
The Pittston Company(1) 70,000 2,231,250
- ----------------------------------------------------------------------------------------
8,375,876
- ----------------------------------------------------------------------------------------
ENERGY - 20.7%
Alliance Energy, Inc., 144A(7) CAD 1,500,000 322,308
Best Pacific Resources, Ltd. CAD 1,500,000 488,345
Calahoo Petroleum, Ltd. CAD 247,866 264,683
Canadian Conquest Exploration, Inc. CAD 4,138,050 1,832,188
Houston Exploration Company 70,000 1,391,250
Oiltec Resources, Ltd., 144A(7) CAD 1,536,400 880,344
PennzEnergy Company(1) 93,000 1,528,688
Petsec Energy Ltd., ADR(3) AUS 179,452 302,825
Place Resources Corporation CAD 884,800 1,670,738
Ryan Energy Technologies, Inc. CAD 269,000 464,155
Symmetry Resources, Inc. CAD 1,892,100 800,798
- ----------------------------------------------------------------------------------------
9,946,322
- ----------------------------------------------------------------------------------------
ENERGY SERVICES - 5.2%
Bowridge Resource Group, Inc. CAD 1,700,000 653,080
Computalog, Ltd. CAD 127,500 510,565
NQL Drilling Tools, Inc., Class A CAD 188,900 491,991
NQL Drilling Tools, Inc., 144A(7) CAD 175,000 455,789
Northstar Drilling Systems, Inc. CAD 500,000 341,841
Northstar Drilling Systems, Inc., 144A(7) CAD 100,000 68,368
- ----------------------------------------------------------------------------------------
2,521,634
- ----------------------------------------------------------------------------------------
FOOD - 10.1%
Fresh Del Monte Produce, Inc. 200,000 4,337,500
Kamps AG DEM 8,000 518,141
- ----------------------------------------------------------------------------------------
4,855,641
- ----------------------------------------------------------------------------------------
FOOD RETAIL/WHOLE-SALE - 2.1%
Sobeys Canada, Inc. CAD 91,000 1,007,293
- ----------------------------------------------------------------------------------------
1,007,293
- ----------------------------------------------------------------------------------------
HEALTHCARE SERVICES - 6.6%
Medpartners, Inc. 600,000 3,150,000
- ----------------------------------------------------------------------------------------
3,150,000
- ----------------------------------------------------------------------------------------
HOLDING COMPANIES, DIVERSIFIED - 1.6%
Jascan Resources, Inc. CAD 854,500 461,802
Onex Corporation(1) CAD 10,600 300,234
- ----------------------------------------------------------------------------------------
762,036
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 FOREIGN CURRENCY(2) SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
INSURANCE - 7.3%
CorVel Corporation 19,000 $ 669,750
Desjardins Laurentian Financial
Corporation, Class A(1) CAD 178,000 2,144,159
The MONY Group, Inc. 23,000 720,188
- ----------------------------------------------------------------------------------------
3,534,097
- ----------------------------------------------------------------------------------------
MANUFACTURING - 3.2%
Stoneridge, Inc. 15,000 341,250
TB Wood's Corporation(1) 100,000 1,206,250
- ----------------------------------------------------------------------------------------
1,547,500
- ----------------------------------------------------------------------------------------
PUBLISHING - 2.7%
Poligrafici Editoriale S.p.A.(1) ITL 583,500 1,305,690
- ----------------------------------------------------------------------------------------
1,305,690
- ----------------------------------------------------------------------------------------
REAL ESTATE - 1.5%
Canadian Hotel Income Properties REIT(1) CAD 137,400 715,718
- ----------------------------------------------------------------------------------------
715,718
- ----------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES - 4.9%
Paging Network, Inc. 500,000 2,343,749
- ----------------------------------------------------------------------------------------
2,343,749
- ----------------------------------------------------------------------------------------
UTILITIES - 1.6%
Washington Water Power Company 40,000 770,000
- ----------------------------------------------------------------------------------------
770,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL COMMON STOCK - 99.6% (Cost: $46,091,747) 47,874,997
- ----------------------------------------------------------------------------------------
Warrants
- ----------------------------------------------------------------------------------------
Brazilian Resources, Inc., 1/2 Warrants,
Strike CAD 0.50, Expire 3/4/99(4,6) CAD 91,828 512
Etruscan Resources, Ltd., Warrants,
Strike CAD 8.48, Expire 4/23/99(4,6) CAD 17,360 -
Magin Energy, Inc., Warrants, Strike
CAD 9.50, Expire 9/1/00(4,6) CAD 217,310 707
Solomon Resources, Ltd., 1/2 Warrants,
Strike CAD 1.05, Expire 7/19/99(4,6) CAD 75,000 522
- ----------------------------------------------------------------------------------------
TOTAL WARRANTS - 0.0% (Cost: $116,356) 1,741
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
SHORT-TERM SECURITIES
- ----------------------------------------------------------------------------------------
Repurchase Agreement 2,285,000
State Street Bank & Trust Company, 4.45%, dated 12/31/98,
due 1/4/99, maturity value $2,286,130 (collateralized by U.S.
Treasury Note, 13.25%, due 5/15/14, maturity value $2,358,513)
- ----------------------------------------------------------------------------------------
TOTAL SHORT-TERM SECURITIES - 4.8% (Cost $2,285,000) 2,285,000
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 104.4% (Cost: $48,493,103) 50,161,738
- ----------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (4.4)% (2,091,831)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $48,069,907
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to Schedule of Investments on page 41.
The accompanying notes are an integral part of these financial statements.
40
<PAGE>
ROBERTSON STEPHENS MUTUAL FUND
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS--THE VALUE + GROWTH FUND
<TABLE>
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks
- ----------------------------------------------------------------------------------------
BANKS - 1.9%
Chase Manhattan Corporation(1) 193,100 $ 13,142,869
- ----------------------------------------------------------------------------------------
13,142,869
- ----------------------------------------------------------------------------------------
COMMERCIAL SERVICES - 6.3%
National Data Corporation(1) 309,400 15,063,912
Omnicare, Inc.(1) 443,300 15,404,675
Robert Half International, Inc. 279,600 12,494,625
- ----------------------------------------------------------------------------------------
42,963,212
- ----------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT - 2.4%
3Com Corporation 364,200 16,320,712
- ----------------------------------------------------------------------------------------
16,320,712
- ----------------------------------------------------------------------------------------
COMPUTER HARDWARE & COMPONENTS - 5.0%
Applied Materials, Inc. 262,800 11,218,275
Compaq Computer Corporation(1) 538,400 22,579,150
- ----------------------------------------------------------------------------------------
33,797,425
- ----------------------------------------------------------------------------------------
COMPUTER SOFTWARE - 5.9%
Microsoft Corporation 140,100 19,430,119
Oracle Corporation 482,300 20,799,187
- ----------------------------------------------------------------------------------------
40,229,306
- ----------------------------------------------------------------------------------------
FINANCIAL SERVICES - 8.6%
Capital One Financial Corporation(1) 57,700 6,635,500
Donaldson, Lufkin & Jenrette, Inc.(1) 233,000 9,553,000
Household International, Inc.(1) 390,000 15,453,750
MBNA Corporation(1) 513,300 12,800,419
Morgan Stanley Dean Witter & Co.(1) 200,000 14,200,000
- ----------------------------------------------------------------------------------------
58,642,669
- ----------------------------------------------------------------------------------------
HEALTH MAINTENANCE ORGANIZATIONS - 3.3%
United Healthcare Corporation(1) 320,500 13,801,531
Wellpoint Health Networks, Inc. 94,100 8,186,700
- ----------------------------------------------------------------------------------------
21,988,231
- ----------------------------------------------------------------------------------------
INVESTMENT MANAGEMENT - 5.9%
Merrill Lynch & Co., Inc.(1) 319,538 21,329,161
The Charles Schwab Corporation(1) 180,000 10,113,750
The Equitable Companies, Inc.(1) 144,000 8,334,000
- ----------------------------------------------------------------------------------------
39,776,911
- ----------------------------------------------------------------------------------------
MEDIA - 3.9%
Comcast Corporation, Class A(1) 200,000 11,737,500
Time Warner, Inc.(1) 240,000 14,895,000
- ----------------------------------------------------------------------------------------
26,632,500
- ----------------------------------------------------------------------------------------
PHARMACEUTICALS - 7.8%
Eli Lilly & Company(1) 220,000 19,552,500
Merck & Company, Inc.(1) 113,300 16,732,994
Pfizer, Inc.(1) 133,100 16,695,731
- ----------------------------------------------------------------------------------------
52,981,225
- ----------------------------------------------------------------------------------------
RETAILERS/BUSINESS - 4.7%
Office Depot, Inc. 323,000 11,930,812
Staples, Inc. 450,000 19,659,375
- ----------------------------------------------------------------------------------------
31,590,187
- ----------------------------------------------------------------------------------------
<CAPTION>
DECEMBER 31, 1998 SHARES VALUE
- ----------------------------------------------------------------------------------------
<S> <C> <C>
RETAILERS/DISCOUNT - 14.1%
Costco Companies, Inc. 300,000 $ 21,656,250
Rite Aid Corporation(1) 365,000 18,090,313
Safeway, Inc. 402,600 24,533,438
Wal-Mart Stores, Inc.(1) 168,200 13,697,788
Walgreen Company(1) 300,000 17,568,750
- ----------------------------------------------------------------------------------------
95,546,539
- ----------------------------------------------------------------------------------------
RETAILERS/SPECIALTY - 12.9%
Bed Bath & Beyond Inc. 483,600 16,502,850
Best Buy Company, Inc. 359,900 22,088,863
Circuit City Stores, Inc. 310,300 15,495,606
CVS Corporation(1) 391,200 21,516,000
Electronic Arts, Inc. 216,600 12,156,675
- ----------------------------------------------------------------------------------------
87,759,994
- ----------------------------------------------------------------------------------------
SEMICONDUCTORS & EQUIPMENT - 11.7%
Intel Corporation(1) 265,000 31,419,063
Micron Technologies, Inc. 636,000 32,157,750
Texas Instruments, Inc.(1) 187,700 16,060,081
- ----------------------------------------------------------------------------------------
79,636,894
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS - 1.7%
AirTouch Communications, Inc. 156,000 11,251,500
- ----------------------------------------------------------------------------------------
11,251,500
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES - 4.0%
MCI WorldCom, Inc. 380,800 27,322,400
- ----------------------------------------------------------------------------------------
27,322,400
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL INVESTMENTS - 100.1% (Cost: $466,361,947) 679,582,574
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
OTHER LIABILITIES, NET - (0.1)% (497,739)
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS - 100.0% $679,084,835
- ----------------------------------------------------------------------------------------
</TABLE>
(1) Income producing security.
(2) Foreign denominated security; AUD-Australian Dollar, CAD-Canadian
Dollar, DEM-German Mark, GBP-British Pound, HKD-Hong Kong Dollar,
IDR-Indonesian Rupiah, ITL-Italian Lira, NZD-New Zealand Dollar,
SAR-South African Rand
(3) ADR-American Depository Receipt; GDR-Global Depository Receipt
(4) Fair-Value Security. See 1.a. in Notes to Financial Statements
(5) Restricted security. See 4.e. in Notes to Financial Statements
(6) See 4.f. in Notes to Financial Statements
(7) These securities may be resold in transactions under rule 144A of
the Securities Act of 1933, normally to qualified institutional buyers
(8) Shares registered for foreign investors
(9) When-issued security
(10) Defaulted security
The accompanying notes are an integral part of these financial statements.
41
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS & LIABILITIES
- ---------------------------------
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998 THE CONTRARIAN DIVERSIFIED EMERGING
(ALL NUMBERS IN THOUSANDS EXCEPT FOR PRICING OF SHARES SECTION) FUND-TM- GROWTH GROWTH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value $102,592 $70,644 $395,504
Deposits with brokers and custodian bank for securities sold short 1,268 7,228 -
Cash - - -
Receivable from brokers for securities sold short 49,388 1,682 -
Receivable from brokers for written options - 126 -
Receivable for investments sold 60 4,341 -
Receivable for fund shares subscribed 30 323 14,913
Receivable from adviser 164 104 -
Dividends/interest receivable 315 1 135
Prepaid insurance - - -
Organization cost - 15 -
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 153,817 84,464 410,552
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
Securities sold short 23,944 1,728 -
Written options - 38 -
Payable to custodian bank 1,948 7,626 -
Payable for investments purchased 1,053 4,507 513
Payable for fund shares redeemed 1,329 185 5,090
Payable to adviser 174 57 75
Payable to distributor 30 15 299
Accrued expenses 104 150 139
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 28,582 14,306 6,116
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $125,235 $70,158 $404,436
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 322,025 55,412 318,237
Accumulated undistributed net investment income/(loss) (3,564) (34) (2,983)
Accumulated net realized gain/(loss) from investments and options sold
short, and foreign currency transactions (55,611) 5,849 (28,524)
Net unrealized appreciation/(depreciation) on investments and options
sold short, and on translation of assets and liabilities in foreign
currencies (137,615) 8,931 117,706
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $125,235 $70,158 $404,436
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT COST $258,444 $61,600 $277,798
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SECURITIES SOLD SHORT $42,195 $1,526 -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREMIUMS FROM WRITTEN OPTIONS - $126 -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share -
Class A Shares $7.23 $15.89 $22.95
Net assets $124,665,954 $69,031,259 $403,329,725
Shares of beneficial interest outstanding with no par value 17,236,496 4,345,463 17,575,490
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share -
Class C Shares (1) $7.02 $15.28 $21.69
Net assets $569,428 $1,127,125 $1,105,998
Shares of beneficial interest outstanding with no par value 81,124 73,783 50,996
- -----------------------------------------------------------------------------------------------------------------------------------
</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.
42
<PAGE>
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GLOBAL
AS OF DECEMBER 31, 1998 NATURAL GLOBAL GROWTH &
(ALL NUMBERS IN THOUSANDS EXCEPT FOR PRICING OF SHARES SECTION) RESOURCES VALUE INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value $23,549 $8,124 $181,406
Deposits with brokers and custodian bank for securities sold short - - 4,141
Cash 1,220 - 1
Receivable from brokers for securities sold short - - 1,206
Receivable from brokers for written options - - 189
Receivable for investments sold 1,225 562 5,502
Receivable for fund shares subscribed 26 29 562
Receivable from adviser - 10 -
Dividends/interest receivable 62 85 568
Prepaid insurance - - -
Organization cost 16 - -
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 26,098 8,810 193,575
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
Securities sold short - - 591
Written options - - 56
Payable to custodian bank 88 - -
Payable for investments purchased 2,178 40 6,197
Payable for fund shares redeemed 191 27 377
Payable to adviser 2 - 109
Payable to distributor 5 2 40
Accrued expenses 127 100 53
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,591 169 7,423
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $23,507 $8,641 $186,152
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 52,106 7,937 135,994
Accumulated undistributed net investment income/(loss) (24) 23 330
Accumulated net realized gain/(loss) from investments and options sold
short, and foreign currency transactions (20,497) 85 11,155
Net unrealized appreciation/(depreciation) on investments and options
sold short, and on translation of assets and liabilities in foreign
currencies (8,078) 596 38,673
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $23,507 $8,641 $186,152
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT COST $31,628 $7,530 $142,816
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SECURITIES SOLD SHORT - - $538
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREMIUMS FROM WRITTEN OPTIONS - - $189
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share -
Class A Shares $7.46 $9.03 $14.04
Net assets $23,475,705 $8,269,139 $183,909,498
Shares of beneficial interest outstanding with no par value 3,146,676 916,124 13,095,563
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share -
Class C Shares (1) $7.13 $8.89 $13.55
Net assets $31,096 $371,501 $2,242,126
Shares of beneficial interest outstanding with no par value 4,363 41,809 165,501
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
THE
AS OF DECEMBER 31, 1998 INFORMATION MICROCAP
(ALL NUMBERS IN THOUSANDS EXCEPT FOR PRICING OF SHARES SECTION) AGE FUND-TM- GROWTH PARTNERS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Investments, at value $139,586 $92,438 $50,162
Deposits with brokers and custodian bank for securities sold short - - -
Cash - - -
Receivable from brokers for securities sold short - - -
Receivable from brokers for written options - - -
Receivable for investments sold 17,064 1,245 2,505
Receivable for fund shares subscribed 5,843 3,174 71
Receivable from adviser - - -
Dividends/interest receivable 10 - 37
Prepaid insurance - - -
Organization cost 14 2 -
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 162,517 96,859 52,775
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -----------------------------------------------------------------------------------------------------------------------------------
Securities sold short - - -
Written options - - -
Payable to custodian bank - - 195
Payable for investments purchased - - 4,001
Payable for fund shares redeemed 2,558 1,337 401
Payable to adviser 116 105 25
Payable to distributor 29 21 11
Accrued expenses 82 109 72
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,785 1,572 4,705
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $159,732 $95,287 $48,070
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- -----------------------------------------------------------------------------------------------------------------------------------
Paid-in capital 100,657 94,462 49,605
Accumulated undistributed net investment income/(loss) (36) (32) (70)
Accumulated net realized gain/(loss) from investments and options sold
short, and foreign currency transactions 3,582 (11,150) (3,134)
Net unrealized appreciation/(depreciation) on investments and options
sold short, and on translation of assets and liabilities in foreign
currencies 55,529 12,007 1,669
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS $159,732 $95,287 $48,070
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENTS, AT COST $84,057 $80,430 $48,493
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PROCEEDS FROM SECURITIES SOLD SHORT - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PREMIUMS FROM WRITTEN OPTIONS - - -
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share -
Class A Shares $17.96 $14.26 $11.53
Net assets $159,604,167 $94,723,400 $47,936,056
Shares of beneficial interest outstanding with no par value 8,885,595 6,641,815 4,156,444
- -----------------------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share -
Class C Shares (1) $16.60 $13.69 $11.25
Net assets $127,458 $563,390 $133,851
Shares of beneficial interest outstanding with no par value 7,679 41,140 11,901
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
AS OF DECEMBER 31, 1998 VALUE +
(ALL NUMBERS IN THOUSANDS EXCEPT FOR PRICING OF SHARES SECTION) GROWTH
- ----------------------------------------------------------------------------------------
<S> <C>
ASSETS
- ----------------------------------------------------------------------------------------
Investments, at value $679,583
Deposits with brokers and custodian bank for securities sold short -
Cash -
Receivable from brokers for securities sold short -
Receivable from brokers for written options -
Receivable for investments sold 1,823
Receivable for fund shares subscribed 651
Receivable from adviser -
Dividends/interest receivable 206
Prepaid insurance 14
Organization cost -
- ----------------------------------------------------------------------------------------
TOTAL ASSETS 682,277
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------
Securities sold short -
Written options -
Payable to custodian bank 946
Payable for investments purchased -
Payable for fund shares redeemed 1,353
Payable to adviser 551
Payable to distributor 138
Accrued expenses 204
- ----------------------------------------------------------------------------------------
TOTAL LIABILITIES 3,192
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS $679,085
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
NET ASSETS CONSIST OF:
- ----------------------------------------------------------------------------------------
Paid-in capital 455,561
Accumulated undistributed net investment income/(loss) -
Accumulated net realized gain/(loss) from investments and options sold
short, and foreign currency transactions 10,303
Net unrealized appreciation/(depreciation) on investments and options
sold short, and on translation of assets and liabilities in foreign
currencies 213,221
- ----------------------------------------------------------------------------------------
TOTAL NET ASSETS $679,085
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
INVESTMENTS, AT COST $466,362
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
PROCEEDS FROM SECURITIES SOLD SHORT -
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
PREMIUMS FROM WRITTEN OPTIONS -
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
PRICING OF SHARES:
Net Asset Value, offering, and redemption price per share -
Class A Shares $25.92
Net assets $677,504,682
Shares of beneficial interest outstanding with no par value 26,134,363
- ----------------------------------------------------------------------------------------
Net Asset Value, offering, and redemption price per share -
Class C Shares (1) $24.89
Net assets $1,580,153
Shares of beneficial interest outstanding with no par value 63,477
- ----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
43
<PAGE>
ANNUAL REPORT
Statement of Operations
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1998 THE CONTRARIAN DIVERSIFIED EMERGING
(ALL NUMBERS IN THOUSANDS) FUND-TM- GROWTH GROWTH
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
- ------------------------------------------------------------------------------------------------------------------------------
Interest $4,509 $264 $1,110
Dividends 893 178 130
Withholding taxes on foreign dividends (38) (1) (3)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 5,364 441 1,237
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 3,978 735 2,833
Distribution fees - Class A Shares 1,051 182 707
Transfer agent fees 325 96 249
Dividend expense for securities sold short 15 1 -
Custodian fees 119 136 135
Administrative service fees - 82 -
Shareholder reports 188 33 108
Professional fees 111 70 90
Registration and filing fees 58 42 18
Interest expense 1,600 137 -
Trustees' fees and expenses 28 15 15
Insurance 9 1 3
Organization expense - 8 -
Merger fees - - -
Distribution fees - Class C Shares 19 5 4
Shareholder servicing fees - Class C Shares 6 2 2
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 7,507 1,545 4,164
Less: Expense waiver by adviser - (151) -
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 7,507 1,394 4,164
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME/(LOSS) (2,143) (953) (2,927)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN /(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- ------------------------------------------------------------------------------------------------------------------------------
Net realized gain/(loss) from investments and foreign currency
transactions (69,899) 6,579 (14,071)
Net realized gain/(loss) from securities sold short 16,087 1,385 -
Net change in unrealized appreciation/(depreciation) on
investments and on translation on assets and liabilities in
foreign currency (37,723) 2,763 100,440
Net change in unrealized appreciation/(depreciation) on
securities sold short (3,940) (519) -
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN/(LOSS) AND UNREALIZED APPRECIATION
(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT (95,475) 10,208 86,369
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS: $(97,618) $9,255 $83,442
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
44
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
<TABLE>
<CAPTION>
GLOBAL THE
FOR THE YEAR ENDED DECEMBER 31, 1998 NATURAL GLOBAL GROWTH & INFORMATION MICROCAP VALUE+
(ALL NUMBERS IN THOUSANDS) RESOURCES VALUE INCOME AGE FUND-TM- GROWTH PARTNERS GROWTH
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------------------------------------
Interest $220 $154 $1845 $102 $482 $612 $118
Dividends 473 434 3,798 114 15 1,496 3,290
Withholding taxes on foreign dividends (56) (25) (9) (1) - (170) (35)
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 637 563 5,634 215 497 1,938 3,373
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES
- ---------------------------------------------------------------------------------------------------------------------------------
Investment advisory fees 507 169 2,451 1,177 1,387 1,496 7,016
Distribution fees - Class A Shares 127 42 609 294 274 298 1,750
Transfer agent fees 93 69 179 100 125 198 644
Dividend expense for securities sold
short - - 2 - - - -
Custodian fees 88 62 145 78 112 107 190
Administrative service fees 70 22 288 127 126 - -
Shareholder reports 66 13 132 65 31 99 350
Professional fees 87 66 94 78 72 87 101
Registration and filing fees 54 22 51 60 49 60 83
Interest expense 4 2 65 42 28 - 91
Trustees' fees and expenses 15 15 15 15 15 15 15
Insurance 4 1 7 2 - 6 6
Organization expense 7 22 - 7 3 - -
Merger fees - - - - - 115 -
Distribution fees - Class C Shares - 2 13 1 10 5 11
Shareholder servicing fees - Class C
Shares - 1 4 - 3 1 3
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 1,122 508 4,055 2,046 2,235 2,487 10,260
Less: Expense waiver by adviser (133) (176) (854) - (104) (237) -
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES, NET 989 332 3,201 2,046 2,131 2,250 10,260
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME/(LOSS) (352) 231 2,433 (1,831) (1,634) (312) (6,887)
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
REALIZED GAIN /(LOSS) AND UNREALIZED APPRECIATION/(DEPRECIATION) ON INVESTMENTS AND SECURITIES SOLD SHORT
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized gain/(loss) from investments
and foreign currency transactions (20,494) 2,072 20,462 11,928 (7,901) (3,585) 74,024
Net realized gain/(loss) from securities
sold short - - (2,859) - - - -
Net change in unrealized appreciation/
(depreciation) on investments and on
translation on assets and liabilities
in foreign currency 3,193 (571) 1,306 42,133 9,287 (24,734) 98,703
Net change in unrealized appreciation/
(depreciation) on securities sold
short - - 96 - - - -
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NET REALIZED GAIN/(LOSS) AND
UNREALIZED APPRECIATION (DEPRECIATION)
ON INVESTMENTS AND SECURITIES SOLD
SHORT (17,301) 1,501 19,005 54,061 1,386 (28,319) 172,727
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS: $(17,653) $1,732 $21,438 $52,230 $(248) $(28,631) $165,840
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
45
<PAGE>
ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
THE CONTRARIAN FUND-TM-
---------------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
(ALL NUMBERS IN THOUSANDS) DEC. 31, 1998 DEC. 31, 1997
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $(2,143) $53
Net realized gain/(loss) from investments and foreign currency transactions (69,899) 52,049
Net realized gain/(loss) from securities sold short 16,087 (48,987)
Net change in unrealized appreciation/(depreciation) on investments and
on translation on assets and liabilities in foreign currency (37,723) (267,380)
Net change in unrealized appreciation/(depreciation) on securities sold short (3,940) 13,335
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (97,618) (250,930)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income - Class A Shares - -
Net investment income - Class C Shares(1) - -
Realized gain on investments - Class A Shares (9,423) (3,087)
Realized gain on investments - Class C Shares(1) (45) (28)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (9,468) (3,115)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ---------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets resulting from capital share transactions (169,975) (407,097)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) FROM CAPITAL SHARE TRANSACTIONS (169,975) (407,097)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS (277,061) (661,142)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ---------------------------------------------------------------------------------------------------------------------------
Beginning of year 402,296 1,063,438
End of year $125,235 $402,296
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS (13,564) 53
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
46
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIVERSIFIED GROWTH EMERGING GROWTH GLOBAL NATURAL RESOURCES GLOBAL VALUE
---------------------- ----------------------- ------------------------ ------------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
(ALL NUMBERS IN THOUSANDS) 1998 1997 1998 1997 1998 1997 1998 1997(2)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Operations
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $(953) $(774) $(2,927) $(1,540) $(352) $(542) $231 $447
Net realized gain/(loss)
from investments and
foreign currency
transactions 6,579 10,971 (14,071) 51,023 (20,494) 1,421 2,072 1,406
Net realized gain/(loss)
from securities sold
short 1,385 945 - - - - - -
Net change in unrealized
appreciation/(depreciation)
on investments and on
translation on assets
and liabilities in
foreign currency 2,763 (567) 100,440 (10,596) 3,193 (23,435) (571) 1,167
Net change in unrealized
appreciation/(depreciation)
on securities sold short (519) 233 - - - - - -
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE)
IN NET ASSETS RESULTING
FROM OPERATIONS 9,255 10,808 83,442 38,887 (17,653) (22,556) 1,732 3,020
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income -
Class A Shares - - - - - - (55) (418)
Net investment income -
Class C Shares(1) - - - - - - (1) (1)
Realized gain on investments -
Class A Shares (1,605) (10,204) (14,201) (54,805) (628) (1,426) (2,344) (1,123)
Realized gain on investments -
Class C Shares(1) (25) (37) (38) (66) (1) - (98) (10)
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (1,630) (10,241) (14,239) (54,871) (629) (1,426) (2,498) (1,552)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in
net assets resulting
from capital share
transactions (18,121) 20,499 86,173 54,640 (36,612) (18,138) (11,805) 19,744
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE)
FROM CAPITAL SHARE
TRANSACTIONS (18,121) 20,499 86,173 54,640 (36,612) (18,138) (11,805) 19,744
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE)
IN NET ASSETS (10,496) 21,066 155,376 38,656 (54,894) (42,120) (12,571) 21,212
- -------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Beginning of year 80,654 59,588 249,060 210,404 78,401 120,521 21,212 -
End of year $70,158 $80,654 $404,436 $249,060 $23,507 $78,401 $8,641 $21,212
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET
INVESTMENT INCOME/(LOSS)
INCLUDED IN NET ASSETS (34) - (2,983) - (24) - 23 27
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first issued on 4/14/97 for The Contrarian Fund-TM-
Class C shares were first issued on 9/8/97 for The Diversified Growth Fund
Class C shares were first issued on 5/8/97 for The Emerging Growth Fund
Class C shares were first issued on 7/30/97 for The Global Natural
Resources Fund
Class C shares were first issued on 6/30/97 for The Global Value Fund
(2) From commencement of investment operations on April 1, 1997.
The accompanying notes are an integral part of these financial statements.
47
<PAGE>
ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
<TABLE>
<CAPTION>
GROWTH & INCOME
-----------------------------
FOR THE FOR THE
YEAR ENDED YEAR ENDED
(ALL NUMBERS IN THOUSANDS) DEC. 31, 1998 DEC. 31, 1997
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $2,433 $1,343
Net realized gain/(loss) from investments 20,462 55,409
Net realized gain/(loss) from securities sold short (2,859) 655
Net change in unrealized appreciation/(depreciation) on investments 1,306 (1,108)
Net change in unrealized appreciation/(depreciation) on securities sold short 96 (186)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 21,438 56,113
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- ------------------------------------------------------------------------------------------------------------------------------
Net investment income - Class A Shares (2,455) (686)
Net investment income - Class C Shares(1) (25) (5)
Realized gain on investments - Class A Shares (9,852) (56,382)
Realized gain on investments - Class C Shares(1) (115) (216)
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (12,447) (57,289)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- ------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net assets resulting from capital share transactions (122,897) (8,541)
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) FROM CAPITAL SHARE TRANSACTIONS (122,897) (8,541)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE/(DECREASE) IN NET ASSETS (113,906) (9,717)
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
Beginning of year 300,058 309,775
End of year $186,152 $300,058
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET INVESTMENT INCOME/(LOSS) INCLUDED IN NET ASSETS 330 652
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
48
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
<TABLE>
<CAPTION>
INFORMATION AGE MICROCAP GROWTH PARTNERS VALUE + GROWTH
----------------------- ----------------------- ------------------------ -----------------------
FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE FOR THE
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
(ALL NUMBERS IN THOUSANDS) 1998 1997 1998 1997 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income/(loss) $(1,831) $(2,111) $(1,634) $(574) $(312) $1,697 $(6,887) $(7,184)
Net realized gain/(loss)
from investments 11,928 (6,024) (7,901) (3,122) (3,585) 10,689 74,024 146,756
Net realized gain/(loss) from
securities sold short - - - - - - - -
Net change in unrealized
appreciation/(depreciation)
on investments 42,133 8,110 9,287 2,103 (24,734) 19,202 98,703 (66,096)
Net change in unrealized
appreciation/(depreciation)
on securities sold short - - - - - - - -
- -----------------------------------------------------------------------------------------------------------------------------------
NET INCREASE/(DECREASE) IN
NET ASSETS RESULTING
FROM OPERATIONS 52,230 (25) (248) (1,593) (28,631) 31,588 165,840 73,476
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income -
Class A Shares - - - - (2,472) (1,526) - -
Net investment income -
Class C Shares(1) - - - - (10) (4) - -
Realized gain on investments -
Class A Shares - (4,383) - - (1,523) (7,913) (79,376) (126,111)
Realized gain on investments -
Class C Shares(1) - (3) - - (6) (38) (188) (240)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS - (4,386) - - (4,011) (9,481) (79,564) (126,351)
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in net
assets resulting from capital
share transactions (11,409) 17,058 (10,727) 98,391 (114,422) 45,759 (161,431) 163,958
NET INCREASE/(DECREASE)
FROM CAPITAL SHARE
TRANSACTIONS (11,409) 17,058 (10,727) 98,391 (114,422) 45,759 (161,431) 163,958
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE/(DECREASE)
IN NET ASSETS 40,821 12,647 (10,975) 96,798 (147,064) 67,866 (75,155) 111,083
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
Beginning of year 118,911 106,264 106,262 9,464 195,134 127,268 754,240 643,157
End of year $159,732 $118,911 $95,287 $106,262 $48,070 $195,134 $679,085 $754,240
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
UNDISTRIBUTED NET
INVESTMENT INCOME/(LOSS)
INCLUDED IN NET ASSETS (36) - (32) - (70) 167 - -
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Class C shares were first issued on 5/9/97 for The Growth & Income Fund
Class C shares were first issued on 7/11/97 for The Information Age Fund
Class C shares were first issued on 6/18/97 for The MicroCap Growth Fund
Class C shares were first issued on 4/14/97 for The Partners Fund
Class C shares were first issued on 5/28/97 for The Value + Growth Fund
The accompanying notes are an integral part of these financial statements.
49
<PAGE>
ANNUAL REPORT
Financial Highlights -- Class A & C
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
NET ASSET VALUE, NET NET REALIZED FROM NET FROM NET
BEGINNING INVESTMENT AND UNREALIZED TOTAL INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) GAIN/(LOSS) OPERATIONS INCOME CAPITAL GAINS
- ----------------------------------------------------------------------------------------------------------------------------------
CONTRARIAN -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended 12/31/98 $11.61 $(0.08) $(3.72) $(3.80) $ - $ (0.58)
Year Ended 12/31/97 16.57 - (4.88) (4.88) - (0.08)
Year Ended 12/31/96 13.78 - 2.99 2.99 - (0.20)
Nine Months Ended 12/31/95 10.70 (0.01) 3.09 3.08 - -
Year Ended 3/31/95 12.34 (0.04) (1.35) (1.39) - (0.25)
Period Ended 3/31/94(3) 10.00 (0.02) 2.36 2.34 - -
CONTRARIAN -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.54 (0.14) (3.80) (3.94) - (0.58)
Period Ended 12/31/97(2) 16.26 (0.03) (4.61) (4.64) - (0.08)
DIVERSIFIED GROWTH FUND -- CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 14.04 (0.19) 2.43 2.24 - (0.39)
Year Ended 12/31/97 12.42 (0.17) 3.72 3.55 - (1.93)
Period Ended 12/31/96(5) 10.00 (0.05) 2.47 2.42 - -
DIVERSIFIED GROWTH FUND -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 13.93 (0.29) 2.03 1.74 - (0.39)
Period Ended 12/31/97(2) 15.79 (0.08) 0.15 0.07 - (1.93)
EMERGING GROWTH FUND -- CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 18.71 (0.20) 5.32 5.12 - (0.88)
Year Ended 12/31/97 20.07 (0.14) 3.80 3.66 - (5.02)
Year Ended 12/31/96 19.21 (0.17) 4.23 4.06 - (3.20)
Nine Months Ended 12/31/95 18.36 (0.15) 2.58 2.43 - (1.58)
Year Ended 3/31/95 18.37 (0.17) 2.26 2.09 - (2.10)
Year Ended 3/31/94 14.71 (0.40) 4.06 3.66 - -
EMERGING GROWTH FUND -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 18.47 (0.34) 4.44 4.10 - (0.88)
Period Ended 12/31/97(2) 18.86 (0.23) 4.86 4.63 - (5.02)
GLOBAL NATURAL RESOURCES -- CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.67 (0.07) (3.95) (4.02) - (0.19)
Year Ended 12/31/97 14.29 (0.05) (2.39) (2.44) - (0.18)
Year Ended 12/31/96 10.12 (0.06) 4.24 4.18 (0.01) -
Period Ended 12/31/95(6) 10.00 0.02 0.10 0.12 - -
GLOBAL NATURAL RESOURCES -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.57 (0.14) (4.11) (4.25) - (0.19)
Period Ended 12/31/97(2) 13.67 (0.05) (1.87) (1.92) - (0.18)
</TABLE>
See notes to Financial Highlights on page 55.
The accompanying notes are an integral part of these financial statements.
50
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET RATIO GROSS RATIO
NET ASSET, NET ASSETS OF EXPENSES OF EXPENSES
VALUE END TOTAL END OF TO AVERAGE TO AVERAGE
OF PERIOD RETURN(1) PERIOD (000s) NET ASSETS(1) NET ASSETS(1)
- -------------------------------------------------------------------------------------------------------------
CONTRARIAN -- CLASS A
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Year Ended 12/31/98 $7.23 (32.69)% $124,666 2.83% 2.83%
Year Ended 12/31/97 11.61 (29.51)% 398,242 2.48% 2.48%
Year Ended 12/31/96 16.57 21.68% 1,063,438 2.46% 2.46%
Nine Months Ended 12/31/95 13.78 28.79% 507,477 2.54% 2.54%
Year Ended 3/31/95 10.70 (11.23)% 397,646 2.46% 2.58%
Period Ended 3/31/94(3) 12.34 23.40% 484,951 2.22% 2.22%
CONTRARIAN -- CLASS C
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 7.03 (34.10)% 569 3.43% 3.43%
Period Ended 12/31/97(2) 11.54 (28.60)% 4,053 2.73% 2.73%
DIVERSIFIED GROWTH FUND -- CLASS A
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 15.89 16.28% 69,031 1.89% 1.95%
Year Ended 12/31/97 14.04 29.45% 80,278 1.94% 2.14%
Period Ended 12/31/96(5) 12.42 24.20% 59,588 2.28% 2.44%
DIVERSIFIED GROWTH FUND -- CLASS C
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 15.28 12.82% 1,127 2.65% 2.71%
Period Ended 12/31/97(2) 13.93 1.10% 376 2.69% 2.89%
EMERGING GROWTH FUND -- CLASS A
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 22.95 28.02% 403,330 1.47% 1.47%
Year Ended 12/31/97 18.71 18.54% 248,730 1.50% 1.50%
Year Ended 12/31/96 20.07 21.53% 210,404 1.60% 1.60%
Nine Months Ended 12/31/95 19.21 13.50% 167,728 1.64% 1.64%
Year Ended 3/31/95 18.36 12.01% 182,275 1.56% 1.56%
Year Ended 3/31/94 18.37 24.88% 168,192 1.60% 1.60%
EMERGING GROWTH FUND -- CLASS C
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 21.69 22.86% 1,106 2.22% 2.22%
Period Ended 12/31/97(2) 18.47 24.80% 330 2.25% 2.25%
GLOBAL NATURAL RESOURCES -- CLASS A
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 7.46 (34.45)% 23,476 1.95% 2.21%
Year Ended 12/31/97 11.67 (17.14)% 78,371 1.81% 1.82%
Year Ended 12/31/96 14.29 41.21% 120,521 1.94% 2.16%
Period Ended 12/31/95(6) 10.12 1.20% 792 2.60% 14.25%
GLOBAL NATURAL RESOURCES -- CLASS C
- -------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 7.13 (36.74)% 31 2.70% 2.96%
Period Ended 12/31/97(2) 11.57 (14.12)% 30 2.56% 2.57%
<CAPTION>
NET RATIO OF GROSS RATIO OF
NET INVESTMENT NET INVESTMENT PORTFOLIO
INCOME/(LOSS) TO INCOME/(LOSS) TO TURNOVER
AVERAGE NET ASSETS(1) AVERAGE NET ASSETS(1) RATE(1)
- --------------------------------------------------------------------------------------------
CONTRARIAN -- CLASS A
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Year Ended 12/31/98 (0.80)% (0.80)% 39%
Year Ended 12/31/97 0.01% 0.01% 36%
Year Ended 12/31/96 (0.02)% (0.02)% 44%
Nine Months Ended 12/31/95 (0.20)% (0.20)% 29%
Year Ended 3/31/95 (0.27)% (0.27)% 79%
Period Ended 3/31/94(3) (0.77)% (0.77)% 14%
CONTRARIAN -- CLASS C
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (1.40)% (1.40)% 39%
Period Ended 12/31/97(2) (0.32)% (0.32)% 36%
DIVERSIFIED GROWTH FUND -- CLASS A
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (1.29)% (1.35)% 403%
Year Ended 12/31/97 (1.20)% (1.40)% 370%
Period Ended 12/31/96(5) (1.05)% (1.21)% 69%
DIVERSIFIED GROWTH FUND -- CLASS C
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (2.06)% (2.13)% 403%
Period Ended 12/31/97(2) (2.17)% (2.37)% 370%
EMERGING GROWTH FUND -- CLASS A
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (1.03)% (1.03)% 291%
Year Ended 12/31/97 (0.68)% (0.68)% 462%
Year Ended 12/31/96 (0.83)% (0.83)% 270%
Nine Months Ended 12/31/95 (0.99)% (0.99)% 147%
Year Ended 3/31/95 (0.96)% (0.96)% 280%
Year Ended 3/31/94 (1.27)% (1.27)% 274%
EMERGING GROWTH FUND -- CLASS C
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (1.78)% (1.78)% 291%
Period Ended 12/31/97(2) (1.81)% (1.81)% 462%
GLOBAL NATURAL RESOURCES -- CLASS A
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (0.69)% (0.96)% 63%
Year Ended 12/31/97 (0.38)% (0.38)% 97%
Year Ended 12/31/96 (0.45)% (0.67)% 82%
Period Ended 12/31/95(6) 1.84% (9.81)% 0%
GLOBAL NATURAL RESOURCES -- CLASS C
- --------------------------------------------------------------------------------------------
Year Ended 12/31/98 (1.44)% (1.71)% 63%
Period Ended 12/31/97(2) (1.02)% (1.03)% 97%
</TABLE>
See notes to Financial Highlights on page 55.
The accompanying notes are an integral part of these financial statements.
51
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
Financial Highlights -- Class A & C CONTINUED
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
NET ASSET VALUE, NET NET REALIZED FROM NET FROM NET
BEGINNING INVESTMENT AND UNREALIZED TOTAL INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) GAIN/(LOSS) OPERATIONS INCOME CAPITAL GAINS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
GLOBAL VALUE FUND -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 $11.15 $0.16 $1.03 $1.19 $(0.08) $(3.23)
Period Ended 12/31/97(7) 10.00 0.28 1.69 1.97 (0.22) (0.60)
GLOBAL VALUE FUND -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.18 0.07 0.89 0.96 (0.02) (3.23)
Period Ended 12/31/97(2) 10.69 0.02 1.15 1.17 (0.08) (0.60)
GROWTH & INCOME -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 13.52 0.14 1.34 1.48 (0.19) (0.77)
Year Ended 12/31/97 13.62 0.07 2.90 2.97 (0.04) (3.03)
Year Ended 12/31/96 11.24 0.02 2.70 2.72 (0.02) (0.32)
Period Ended 12/31/95(8) 10.00 - 1.24 1.24 - -
GROWTH & INCOME-- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 13.36 0.04 1.09 1.13 (0.17) (0.77)
Period Ended 12/31/97(2) 13.73 (0.03) 2.73 2.70 (0.04) (3.03)
INFORMATION AGE FUND-TM- -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.80 (0.20) 6.36 6.16 - -
Year Ended 12/31/97 11.51 (0.22) 0.95 0.73 - (0.44)
Year Ended 12/31/96 9.30 (0.20) 2.68 2.48 - (0.27)
Period Ended 12/31/95(6) 10.00 (0.01) (0.69) (0.70) - -
INFORMATION AGE FUND-TM- -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.67 (0.33) 5.26 4.93 - -
Period Ended 12/31/97(2) 13.36 (0.20) (1.05) (1.25) - (0.44)
MICROCAP GROWTH -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 14.35 (0.21) 0.12 (0.09) - -
Year Ended 12/31/97 11.00 (0.19) 3.54 3.35 - -
Period Ended 12/31/96(9) 10.00 (0.08) 1.08 1.00 - -
MICROCAP GROWTH -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 14.23 (0.32) (0.22) (0.54) - -
Period Ended 12/31/97(2) 12.18 (0.15) 2.20 2.05 - -
</TABLE>
See notes to Financial Highlights on page 55.
The accompanying notes are an integral part of these financial statements.
52
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET NET RATIO GROSS RATIO NET RATIO OF GROSS RATIO OF
ASSETS OF EXPENSES OF EXPENSES NET INVESTMENT NET INVESTMENT
NET ASSET, TOTAL END OF TO AVERAGE TO AVERAGE INCOME/(LOSS) INCOME/(LOSS) PORTFOLIO
VALUE END RETURN PERIOD NET NET TO AVERAGE TO AVERAGE TURNOVER
OF PERIOD (1) (000s) ASSETS(1) ASSETS(1) NET ASSETS(1) NET ASSETS(1) RATE(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C> <C> <C>
GLOBAL VALUE FUND -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 $9.03 11.11% $8,269 1.95% 2.99% 1.37% 0.33% 279%
Period Ended 12/31/97(7) 11.15 19.97% 21,019 1.95% 3.21% 3.50% 2.24% 234%
GLOBAL VALUE FUND -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 8.89 9.02% 371 2.70% 3.74% 0.62% (0.42)% 279%
Period Ended 12/31/97(2) 11.18 11.15% 193 2.70% 3.97% 0.33% (0.94)% 234%
GROWTH & INCOME -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 14.04 11.65% 183,910 1.30% 1.64% 1.00% 0.65% 212%
Year Ended 12/31/97 13.52 22.40% 298,669 1.30% 1.72% 0.45% 0.03% 236%
Year Ended 12/31/96 13.62 24.16% 309,775 1.71% 1.76% 0.18% 0.13% 212%
Period Ended 12/31/95(8) 11.24 12.40% 136,902 1.94% 1.94% (0.01)% (0.01)% 97%
GROWTH & INCOME-- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 13.55 9.11% 2,242 2.05% 2.40% 0.25% (0.10)% 212%
Period Ended 12/31/97(2) 13.36 20.16% 1,369 2.05% 2.48% (0.31)% (0.74)% 236%
INFORMATION AGE FUND-TM- -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 17.96 52.20% 159,604 1.74% 1.74% (1.55)% (1.55)% 224%
Year Ended 12/31/97 11.80 6.15% 118,832 1.82% 1.82% (1.71)% (1.71)% 369%
Year Ended 12/31/96 11.51 26.72% 106,264 2.03% 2.03% (1.85)% (1.85)% 452%
Period Ended 12/31/95(6) 9.30 (7.00)% 32,826 2.13% 2.13% (0.89)% (0.89)% 89%
INFORMATION AGE FUND-TM- -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 16.60 42.25% 128 2.49% 2.49% (2.30)% (2.30)% 224%
Period Ended 12/31/97(2) 11.67 (9.53)% 79 2.57% 2.57% (2.50)% (2.50)% 369%
MICROCAP GROWTH -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 14.26 (0.63)% 94,723 1.91% 2.01% (1.46)% (1.56)% 108%
Year Ended 12/31/97 14.35 30.45% 104,858 1.95% 2.60% (1.35)% (2.00)% 170%
Period Ended 12/31/96(9) 11.00 10.00% 9,464 3.08% 6.40% (2.13)% (5.45)% 22%
MICROCAP GROWTH -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 13.69 (3.79)% 563 2.66% 2.76% (2.21)% (2.31)% 108%
Period Ended 12/31/97(2) 14.23 16.83% 1,404 2.70% 3.35% (2.20)% (2.85)% 170%
</TABLE>
See notes to Financial Highlights on page 55.
The accompanying notes are an integral part of these financial statements.
53
<PAGE>
ANNUAL REPORT
- -------------------------------------------------------------------------------
Financial Highlights -- Class A & C CONTINUED
<TABLE>
<CAPTION>
DISTRIBUTIONS DISTRIBUTIONS
NET ASSET VALUE, NET NET REALIZED FROM NET FROM NET
BEGINNING INVESTMENT AND UNREALIZED TOTAL INVESTMENT REALIZED
OF PERIOD INCOME/(LOSS) GAIN/(LOSS) OPERATIONS INCOME CAPITAL GAINS
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PARTNERS FUND -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 $16.49 $(0.04) $(4.31) $(4.35) $(0.38) $(0.23)
Year Ended 12/31/97 14.60 0.13 2.52 2.65 (0.12) (0.64)
Year Ended 12/31/96 10.39 0.13 4.36 4.49 (0.06) (0.22)
Period Ended 12/31/95(8) 10.00 0.06 0.33 0.39 - -
PARTNERS FUND -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 16.40 (0.16) (4.38) (4.54) (0.38) (0.23)
Period Ended 12/31/97(2) 14.49 - 2.62 2.62 (0.07) (0.64)
VALUE + GROWTH -- CLASS A
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 23.18 (0.25) 6.33 6.08 - (3.34)
Year Ended 12/31/97 24.16 (0.26) 3.71 3.45 - (4.43)
Year Ended 12/31/96 22.66 (0.24) 3.47 3.23 - (1.73)
Nine Months Ended 12/31/95 18.25 (0.16) 4.57 4.41 - -
Year Ended 3/31/95 13.56 (0.18) 5.07 4.89 - (0.20)
Year Ended 3/31/94 11.94 (0.04) 1.99 1.95 (0.03) (0.30)
VALUE + GROWTH -- CLASS C
- ----------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 22.98 (0.43) 5.68 5.25 - (3.34)
Period Ended 12/31/97(2) 27.71 (0.24) (0.06) (0.30) - (4.43)
</TABLE>
See notes to Financial Highlights on page 55.
The accompanying notes are an integral part of these financial statements.
54
<PAGE>
ROBERTSON STEPHENS MUTUAL FUNDS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET RATIO GROSS RATIO NET RATIO OF GROSS RATIO OF
NET ASSET, NET ASSETS OF EXPENSES OF EXPENSES NET INVESTMENT NET INVESTMENT
VALUE END TOTAL END OF TO AVERAGE TO AVERAGE INCOME/(LOSS) INCOME/(LOSS) PORTFOLIO
OF PERIOD RETURN PERIOD NET NET TO AVERAGE TO AVERAGE TURNOVER
(1) (000S) ASSETS(1) ASSETS(1) NET ASSETS(1) NET ASSETS(1) RATE (1)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PARTNERS FUND -- CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 $11.53 (27.38)% $47,936 1.88% 2.07% (0.26)% (0.46)% 73%
Year Ended 12/31/97 16.49 18.08% 194,133 1.78% 1.78% 0.82% 0.82% 78%
Year Ended 12/31/96 14.60 43.15% 127,268 1.93% 2.15% 0.95% 0.73% 101%
Period Ended 12/31/95(8) 10.39 3.90% 7,480 2.41% 5.12% 1.34% (1.37)% 71%
PARTNERS FUND -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 11.25 (28.72)% 134 2.63% 2.82% (1.01)% (1.21)% 73%
Period Ended 12/31/97(2) 16.40 18.00% 1,000 2.53% 2.53% (0.25)% (0.25)% 78%
VALUE + GROWTH -- CLASS A
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 25.92 27.44% 677,505 1.46% 1.46% (0.96)% (0.96)% 190%
Year Ended 12/31/97 23.18 13.81% 752,994 1.44% 1.44% (0.96)% (0.96)% 228%
Year Ended 12/31/96 24.16 14.12% 643,157 1.51% 1.51% (1.06)% (1.06)% 221%
Nine Months Ended 12/31/95 22.66 24.16% 1,140,151 1.45% 1.45% (1.04)% (1.04)% 104%
Year Ended 3/31/95 18.25 36.27% 428,903 1.68% 1.68% (1.09)% (1.09)% 232%
Year Ended 3/31/94 13.56 16.32% 44,500 1.55% 2.35% (0.51)% (1.31)% 250%
VALUE + GROWTH -- CLASS C
- ---------------------------------------------------------------------------------------------------------------------------------
Year Ended 12/31/98 24.89 24.06% 1,580 2.20% 2.20% (1.71)% (1.71)% 190%
Period Ended 12/31/97(2) 22.98 (1.52)% 1,246 2.19% 2.19% (1.69)% (1.69)% 228%
</TABLE>
Per-share data with respect to Class A and Class C shares for each of the
periods has been determined by using the respective average number of
Class A and Class C shares outstanding throughout the period. Distributions
reflect actual per-share amounts distributed for the period.
(1) Ratios, except for total return and portfolio turnover rate, have been
annualized. For the Class C shares, total return does not include the 1%
contingent deferred sales charge.
(2) See pages 47 and 49, Notes to Statement of Changes in Net Assets, for date
of initial issuance of Class C shares.
(3) The Contrarian Fund-TM- Class A shares were first issued on 6/30/93.
(4) Developing Countries Fund Class A shares were first issued on 5/2/94.
(5) Diversified Growth Fund Class A shares were first issued on 8/1/96.
(6) Global Low-Priced Stock, Global Natural Resources, and The Information Age
Fund-TM- Class A shares were first issued on 11/15/95.
(7) Global Value Fund Class A shares were first issued on 4/1/97.
(8) Growth & Income and Partners Fund Class A shares were first issued
on 7/12/95.
(9) MicroCap Growth Fund Class A shares were first issued on 8/15/96.
The accompanying notes are an integral part of these financial statements.
55
<PAGE>
ANNUAL REPORT
NOTES TO FINANCIAL STATEMENTS
The Robertson Stephens Mutual Funds (the "Funds") are a series of the
Robertson Stephens Investment Trust (the "Trust"), a Massachusetts business
trust organized on May 11, 1987. The Funds are registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as open-end
management investment companies. The Trust currently offers ten series of
shares. The Robertson Stephens Emerging Growth Fund, The Robertson Stephens
Value + Growth Fund, The Robertson Stephens Growth & Income Fund, The
Information Age Fund-TM-, The Robertson Stephens Global Natural Resources Fund,
The Robertson Stephens Diversified Growth Fund, and The Robertson Stephens
MicroCap Growth Fund are registered as diversified funds. The Contrarian
Fund-TM-, The Robertson Stephens Partners Fund, and The Robertson Stephens
Global Value Fund are registered as non-diversified funds. 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 Funds, designated as Class A and C, respectively.
The shares of each class represent an interest in the same portfolio of
investments of the Funds. Expenses of the Funds 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 each fund, if the fund was liquidated. In
addition, the Board of Trustees declares separate distributions on each class
of shares. The Trust is no longer offering Class C shares of the Funds for
sale. It is anticipated that Class C shares will be converted into Class A
shares of equal value in April 1999.
On October 30, 1998, the Robertson Stephens Developing Countries Fund
(previously a series of the Trust) made final net investment income and
capital gain distributions and returned paid in capital to shareholders thus
liquidating the Fund.
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES:
The following policies are in conformity with generally accepted accounting
principles. The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
a. INVESTMENT VALUATIONS:
Marketable securities are valued at the last sale price on the principal
exchange or market on which they are traded; or, if there were no sales that
day, at the mean between the closing bid and asked prices. Short-term
investments that will mature in 60 days or less are stated at amortized cost,
which approximates market value. Foreign securities 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 each Funds' net asset value is next determined.
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 Funds' Board of Trustees. The guidelines and
procedures use fundamental valuation methods which include, but are not
limited to, the analysis of: the effect of any restrictions on the sale of
the security, product development and trends of the security's issuer,
changes in the industry and other competing companies, significant changes in
the issuer's financial position, and any other event that could have a
significant impact on the value of the security. The approximate percentages
of each Funds' long positions valued using these guidelines and procedures at
December 31, 1998, were as follows:
<TABLE>
<CAPTION>
PERCENTAGE
OF LONG
FUND POSITIONS
- -----------------------------------------
<S> <C>
The Contrarian Fund-TM- 0.9%
Diversified Growth 3.4%
Emerging Growth 0%
Global Natural Resources 0.3%
Global Value 0%
Growth & Income 1.5%
The Information Age Fund-TM- 0%
MicroCap Growth 0%
Partners 0.3%
Value + Growth 0%
- -----------------------------------------
</TABLE>
In their normal course of business, some of the Funds may invest a
significant portion of their assets in companies concentrated within a number
of industries. 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.
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 Funds' Board of Trustees.
b. REPURCHASE AGREEMENTS:
Repurchase agreements are fully collateralized by U.S. government securities.
All collateral is held by the Funds' 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. Each Funds' 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 Funds intend to comply with requirements of the Internal Revenue Code,
qualifying as a regulated investment company and to distribute all net
investment income and realized net capital gains, if any, to shareholders.
Therefore, the Funds do 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.
56
<PAGE>
e. FOREIGN CURRENCY TRANSLATION:
The accounting records of the Funds are maintained in U.S. dollars.
Investments securities and all other assets and liabilities of the Funds
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 Funds do 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, except certain cash
dividends from foreign securities that are recorded as soon as the Funds are
informed of the ex-dividend date. Interest income, which includes accretion,
is accrued and recorded daily.
g. EXPENSES:
Most expenses of the Trust can be directly attributed to a specific Fund.
Expenses that cannot be directly attributed to a specific fund are
apportioned between the Funds in the Trust, based on relative net assets.
h. DISTRIBUTIONS TO SHAREHOLDERS:
Dividends to shareholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments of income and
gains on various investment securities held by the Funds, timing differences
and differing characterizations of distributions made by the Funds. Permanent
book and tax basis differences relating to shareholder distributions will
result in reclassifications to paid in capital. Undistributed net investment
income and accumulated undistributed net realized gain/(loss) on investments
and foreign currency transactions may include temporary book and tax
differences which will reverse in a subsequent period. During any particular
year net realized gains from investment transactions, in excess of available
capital loss carryforwards, would be taxable to the Funds if not distributed
and, therefore, would be distributed to shareholders annually.
At December 31, 1998 the Funds had the following capital loss carryovers
available:
<TABLE>
<CAPTION>
EXPIRING 2004 2005 2006 TOTAL
- -----------------------------------------------------------------
<S> <C> <C> <C> <C>
MicroCap Growth 80,838 1,072,261 7,549,652 8,702,751
Partners - - 3,133,817 3,133,817
Contrarian - - 49,471,550 49,471,550
- -----------------------------------------------------------------
</TABLE>
The Information Age Fund-TM- utilized $3,945,517 of previously deferred capital
losses during the year ended December 31, 1998.
i. 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.
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.
j. 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 Funds.
k. TEMPORARY BORROWINGS:
All Funds within the Trust share in a $125 million, uncommitted revolving
credit and/or overdraft protection facility (expiring February 22, 1999) from
the Funds' custodian bank for temporary purposes, including the meeting of
redemption requests that otherwise might require the untimely disposition of
securities. Interest is calculated based on the market rates at the time of
borrowing. The Funds may borrow up to a maximum of 10 percent of their total
assets under the agreement.
NOTE 2 CAPITAL SHARES:
a. TRANSACTIONS:
The Funds have authorized an unlimited number of shares of beneficial
interest with no par value divided into two classes designated Class A and
Class C. Transactions in capital shares for Class A for the year ended
December 31, 1998, and the year ended December 31, 1997 are outlined below.
Transactions in capital shares for Class C for the year ended December 31,
1998, and the period from each Funds' respective initial offering of Class C
shares through December 31, 1997, are also detailed on the following page.
57
<PAGE>
ANNUAL REPORT
<TABLE>
<CAPTION>
(ALL NUMBERS IN THOUSANDS) TRANSACTIONS IN CAPITAL SHARES
- -----------------------------------------------------------------------------------------------------------------------------------
THE CONTRARIAN FUND-TM- DIVERSIFIED GROWTH FUND
----------------------- -----------------------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 4,353 $45,839 24,871 $405,584 10,171 $146,788 8,500 $127,513
Shares Reinvested 1,248 8,922 234 2,919 110 1,563 735 9,789
Shares Redeemed (22,667) (222,337) (54,963) (821,238) (11,654) (167,133) (8,316) (117,219)
Net Increase/(Decrease) (17,066) (167,576) (29,858) (412,735) (1,373) (18,782) 919 20,083
<CAPTION>
CLASS C 1/1/98 - 12/31/98 4/14/97* - 12/31/97 1/1/98 - 12/31/98 9/8/97* - 12/31/97
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 115 $1,118 418 $6,482 49 $694 24 $385
Shares Reinvested 6 42 2 27 2 21 3 37
Shares Redeemed (391) (3,559) (69) (871) (4) (54) - (6)
Net Increase/(Decrease) (270) (2,399) 351 5,638 47 661 27 416
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EMERGING GROWTH
---------------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 27,699 $547,574 11,340 $243,171
Shares Reinvested 665 13,368 2,817 52,112
Shares Redeemed (24,081) (475,458) (11,348) (241,038)
Net Increase/(Decrease) 4,283 85,484 2,809 54,245
<CAPTION>
CLASS C 1/1/98 - 12/31/98 5/8/97* - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 51 $1,021 16 $354
Shares Reinvested 2 35 3 63
Shares Redeemed (20) (367) (1) (22)
Net Increase/(Decrease) 33 689 18 395
- -------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GLOBAL NATURAL RESOURCES GLOBAL VALUE
------------------------ ------------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97 1/1/98 - 12/31/98 4/1/97** - 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 2,776 $29,887 11,041 $156,745 535 $6,360 2,703 $28,682
Shares Reinvested 81 615 106 1,313 264 2,352 133 1,440
Shares Redeemed (6,428) (67,134) (12,866) (176,232) (1,769) (20,777) (951) (10,515)
Net Increase/(Decrease) (3,571) (36,632) (1,719) (18,174) (970) (12,065) 1,885 19,607
<CAPTION>
CLASS C 1/1/98 - 12/31/98 7/30/97* - 12/31/97 1/1/98 - 12/31/98 6/30/97* - 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 2 $20 4 $ 59 24 $279 89 $962
Shares Reinvested - - - - 11 98 1 11
Shares Redeemed - - (1) (23) (10) (117) (73) (836)
Net Increase/(Decrease) 2 20 3 36 25 260 17 137
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
GROWTH & INCOME
---------------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 7,689 $105,065 8,696 $130,701
Shares Reinvested 931 11,976 4,209 55,648
Shares Redeemed (17,613) (240,743) (13,562) (196,456)
Net Increase/(Decrease) (8,993) (123,702) (657) (10,107)
<CAPTION>
CLASS C 1/1/98 - 12/31/98 5/9/97* - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 88 $1,152 90 $1,413
Shares Reinvested 11 13 516 217
Shares Redeemed (36) (482) (4) (64)
Net Increase/(Decrease) 63 805 102 1,566
- -------------------------------------------------------------------------
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
THE INFORMATION AGE FUND-TM- MICROCAP GROWTH
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 22,508 $304,952 25,505 $335,204 14,939 $213,493 16,945 $249,080
Shares Reinvested - - 344 4,278 - - - -
Shares Issued*** - - - - - - - -
Shares Redeemed (23,704) (316,347) (25,010) (322,525) (15,604) (223,561) (10,499) (152,209)
Net Increase/(Decrease) (1,196) (11,395) 839 16,957 (665) (10,068) 6,446 96,871
<CAPTION>
CLASS C 1/1/98 - 12/31/98 7/11/97* - 12/31/97 1/1/98 - 12/31/98 6/18/97* - 12/31/97
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares Sold 22 $277 7 $116 37 $584 103 $1,578
Shares Reinvested - - 1 3 - - - -
Shares Issued*** - - - - - - - -
Shares Redeemed (21) (291) (1) (18) (95) (1,243) (4) (58)
Net Increase/(Decrease) 1 (14) 7 101 (58) (659) 99 1,520
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Partners
--------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 3,638 $56,348 18,004 $283,216
Shares Reinvested 263 3,912 550 9,196
Shares Issued*** 310 4,608 - -
Shares Redeemed (11,828) (178,562) (15,500) (247,605)
Net Increase/(Decrease) (7,617) (113,694) 3,054 44,807
<CAPTION>
CLASS C 1/1/98 - 12/31/98 4/14/97* - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 2 $25 70 $1,113
Shares Reinvested 1 14 3 42
Shares Issued*** 3 37 - -
Shares Redeemed (54) (804) (12) (203)
Net Increase/(Decrease) (48) (728) 61 952
- -------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------
VALUE + GROWTH
--------------
CLASS A 1/1/98 - 12/31/98 1/1/97 - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 9,535 $243,579 20,071 $566,128
Shares Reinvested 3,151 75,308 5,104 121,415
Shares Redeemed (19,034) (480,538) (19,315) (525,191)
Net Increase/(Decrease) (6,348) (161,651) 5,860 162,352
<CAPTION>
CLASS C 1/1/98 - 12/31/98 5/28/97* - 12/31/97
- -------------------------------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
Shares Sold 22 $531 69 $1,989
Shares Reinvested 8 185 10 228
Shares Redeemed (21) (496) (25) (611)
Net Increase/(Decrease) 9 220 54 1,606
</TABLE>
* First issuance of Class C shares
** Inception date of Class A shares
***Shares issued in connection with tax-free merger
58
<PAGE>
NOTE 3 TRANSACTIONS WITH AFFILIATES:
a. ADVISORY FEES AND EXPENSE LIMITATION:
Under the terms of advisory agreements, which are reviewed and approved
annually by the Board of Trustees, after an initial two-year term, the Funds
pay Robertson Stephens & Company Investment Management, L.P. ("RSIM, L.P.")
and Robertson Stephens & Company Investment Management, Inc. ("RSIM, Inc.")
an investment advisory fee calculated at an annual rate of the average daily
net assets of the Funds as disclosed below.
<TABLE>
<CAPTION>
INVESTMENT ADMINISTRATIVE
FUND ADVISORY FEES SERVICE FEES
- ----------------------------------------------------------------
<S> <C> <C>
The Contrarian Fund-TM- 1.50% 0.00%
Diversified Growth 1.00% 0.00%
Emerging Growth 1.00% 0.00%
Global Natural Resources 1.00% 0.00%
Global Value 1.00% 0.00%
Growth & Income 1.00% 0.00%
The Information Age Fund-TM- 1.00% 0.00%
MicroCap Growth 1.25% 0.00%
Partners 1.25% 0.00%
Value + Growth 1.00% 0.00%
- ----------------------------------------------------------------
</TABLE>
Note: Effective May 26, 1998, the Administrative Services Agreement for all
funds was amended to provide that no fee is payable by the Funds under such
agreement. Prior to such date certain funds paid an administrative services
fee at an annual rate of 0.25% of net asset value.
RSIM, L.P. and RSIM, Inc. may voluntarily agree to waive any annual operating
expenses, excluding class-specific expenses and dividend expenses related to
short sales, of the Funds Class A and Class C shares exceeding the annual
expense ratio of any Fund.
RSIM, L.P. and RSIM, Inc. may recoup waived or reimbursed operating expenses
over the succeeding two years, subject to expense limitations then applicable
to the Funds. No previous expense waivers or reimbursements of operating
expenses were recouped by RSIM, L.P. or RSIM, Inc. from the Funds during the
year ended December 31, 1998.
At December 31, 1998, affiliates of the Funds held 20.7% of the Global Value
Class A total outstanding shares for a total of 189,638 with a value of
$1,712,435.
At December 31, 1998, the balance of recoupable expenses for each fund was:
<TABLE>
<CAPTION>
FUND 1997 1998 Total
- ------------------------------------------------------------------
<S> <C> <C> <C>
The Contrarian Fund-TM- - - -
Diversified Growth 126,477 46,618 173,095
Emerging Growth - - -
Global Natural Resources 9,044 132,665 141,709
Global Value 163,698 175,876 339,574
Growth & Income 1,235,367 853,895 2,089,262
The Information Age Fund-TM- - - -
MicroCap Growth 274,052 104,172 378,224
Partners 1,746 236,741 238,487
Value + Growth - - -
- ------------------------------------------------------------------
</TABLE>
b. COMPENSATION OF TRUSTEES AND OFFICERS:
Trustees and officers of the Funds who are affiliated persons receive no
compensation from the Funds. Trustees of the Funds who are not interested
persons of the Trust, as defined in the 1940 Act, did collectively receive
compensation and reimbursement of expenses for the period ended December 31,
1998.
c. DISTRIBUTION FEES:
Provident Distributors, Inc., a non-affiliate, has been designated as the
Funds' distributor, as of 12/31/98. Prior to such date, Edgewood Services,
Inc., also a non-affiliate, was the Funds' distributor.
The Funds have entered into agreements with Provident Distributors, Inc. for
distribution services with respect to its Class A and Class C shares and
adopted Plans of Distribution pursuant to Rule 12b-1 under the 1940 Act,
where continuance is reviewed annually by the Funds' Board of Trustees.
Under these Plans, Provident Distributors, Inc. is compensated for services
in such capacity including its expenses in connection with the promotion and
distribution of the Funds' Class A and Class C shares. The distribution fees
for Class A and Class C shares are calculated at annual rates based on the
average daily net assets attributed to each class of shares. The following
chart details the rate at which each fund pays fees under the plans
(calculated as a percentage of the average daily net assets attributed to the
class of shares in question).
<TABLE>
<CAPTION>
CLASS A CLASS C
FUND 12b-1 FEE 12b-1 FEE**
- ----------------------------------------------------------------
<S> <C> <C>
The Contrarian Fund-TM-* 0.25% 0.75%
Diversified Growth 0.25% 0.75%
Emerging Growth 0.25% 0.75%
Global Natural Resources 0.25% 0.75%
Global Value 0.25% 0.75%
Growth & Income 0.25% 0.75%
The Information Age Fund-TM- 0.25% 0.75%
MicroCap Growth 0.25% 0.75%
Partners 0.25% 0.75%
Value + Growth 0.25% 0.75%
- ----------------------------------------------------------------
</TABLE>
*Note: Effective June 10, 1998, the distribution fee calculated for the Class
A shares of the Contrarian Fund was reduced from 0.50% to 0.25% of the daily
average net assets attributable to Class A shares. This reduction is
voluntary and can be discontinued at any time. The maximum allowable
distribution fee for Class A shares of the Contrarian Fund under the Plan is
0.75%.
**Under the Plan, the Funds may pay Class C share distribution fees up to
1.00% of the daily average net assets attributable to Class C shares. The
Trustees have currently limited such payments to 0.75%. This reduction may
be discontinued at any time.
The Trust has adopted a Shareholder Servicing Plan for the Class C shares of
each Fund. Under the Plan, each Fund pays fees to Provident Distributors,
Inc. at a current annual rate of up to 0.25% of the Fund's average daily net
assets of the Class C shares. The Plan contemplates that financial
institutions will enter into shareholder service agreements 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 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.
d. BROKERAGE COMMISSIONS:
RSIM, L.P. and RSIM, Inc. may direct orders for investment transactions to
affiliated broker-dealers, subject to fund policies and regulatory
constraints, and the ability of these affiliates to provide competitive
prices and commission rates. All investment transactions in which an
affiliate acts as a broker may only be executed on an agency basis. Subject
to certain constraints, the Funds may make purchases of securities from
offerings or underwritings in which an affiliate has been retained by the
issuer. The amount of brokerage commissions paid to affiliates per Fund and
their respective percentages of the total commissions paid during the year
ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
BROKERAGE PERCENTAGE OF TOTAL
FUND COMMISSIONS COMMISSIONS
- -----------------------------------------------------------------
<S> <C> <C>
The Contrarian Fund-TM- $2,370 0.3%
Diversified Growth 40,890 4.3%
Emerging Growth 74,833 12.3%
Global Natural Resources 1,000 0.4%
Global Value 1,555 0.9%
Growth & Income 139,293 8.0%
The Information Age Fund-TM- 16,610 6.4%
MicroCap Growth 1,332 2.3%
Partners - 0.0%
Value + Growth 139,451 6.1%
- -----------------------------------------------------------------
</TABLE>
59
<PAGE>
ANNUAL REPORT
COST OF INVESTMENTS AND PROCEEDS FROM SECURITIES SOLD SHORT (SEE NOTE 4c BELOW)
<TABLE>
<CAPTION>
ACCUMULATED UNREALIZED
COST OF INVESTMENTS/ APPRECIATION/DEPRECIATION
PROCEEDS OF ON INVESTMENTS AND GROSS UNREALIZED GROSS UNREALIZED
FUND SECURITIES SOLD SHORT SECURITIES SOLD SHORT APPRECIATION DEPRECIATION
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Contrarian Fund-TM- 216,248,978 (137,600,811) 40,220,509 177,821,320
Diversified Growth 59,947,402 8,931,043 14,449,823 5,518,780
Emerging Growth 277,797,910 117,706,434 125,529,400 7,822,966
Global Natural Resources 31,627,733 (8,078,304) 1,915,222 9,993,526
Global Value 7,530,029 594,188 930,067 335,879
Growth & Income 142,089,094 38,670,057 46,512,786 7,842,729
The Information Age Fund-TM- 84,057,411 55,528,801 61,112,050 5,583,249
MicroCap Growth 80,430,474 12,007,401 20,628,047 8,620,646
Partners 48,493,103 1,668,635 8,932,285 7,263,650
Value + Growth 466,361,947 213,220,623 213,369,323 148,700
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
e. CONTINGENT DEFERRED SALES CHARGE:
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 are subject to a 1% contingent deferred
sales charge (CDSC) if those shares are redeemed within one year of purchase.
At December 31, 1998, CDSC retained by the Funds were as follows:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE (CDSC)
- ----------------------------------------------------------------
<S> <C>
The Contrarian Fund-TM- $18,058
Diversified Growth 344
Emerging Growth 2,564
Global Natural Resources -
Global Value 663
Growth & Income 2,154
The Information Age Fund-TM- 2,106
MicroCap Growth 2,579
Partners 1,543
Value + Growth 3,006
- ----------------------------------------------------------------
</TABLE>
NOTE 4 INVESTMENTS:
a. TAX BASIS OF INVESTMENTS:
The cost of investments purchased and proceeds of securities sold short for
federal income tax purposes at December 31, 1998, for each Fund is listed
above. The net unrealized appreciation/(depreciation) on investments and
securities sold short which consists of gross unrealized appreciation and
depreciation are also disclosed in the chart above.
b. INVESTMENT PURCHASES AND SALES:
The cost of investments purchased and the proceeds from investments sold
(excluding options, securities sold short and short-term investments) for the
period ended December 31, 1998, were as follows:
<TABLE>
<CAPTION>
COST OF INVESTMENTS PROCEEDS FROM
FUND PURCHASED INVESTMENTS SOLD
- -----------------------------------------------------------------------------
<S> <C> <C>
The Contrarian Fund-TM- 80,690,657 238,238,691
Diversified Growth 284,233,783 299,571,707
Emerging Growth 829,977,278 772,760,612
Global Natural Resources 31,456,309 64,197,140
Global Value 37,523,304 46,267,978
Growth & Income 505,794,881 640,188,581
The Information Age Fund-TM- 260,893,457 294,064,565
MicroCap Growth 113,975,572 107,833,840
Partners 79,763,161 174,720,229
Value + Growth 1,325,849,726 1,574,217,108
- -----------------------------------------------------------------------------
</TABLE>
c. FOREIGN SECURITIES:
Foreign securities investments involve special risks and considerations not
typically associated with those of U.S. origin. These risks include, but are
not limited to, revaluation of currencies, adverse political, social, and
economic developments, and less reliable information about issuers. Moreover,
securities of many foreign companies and markets may be less liquid and their
prices more volatile than those of U.S. companies and markets.
d. 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, 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. All
Funds may sell securities short, except Emerging Growth, Global Value, and
Partners Funds. The Funds 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 Funds replace the borrowed security. The Funds will typically realize a
gain if the security declines in value between those dates. All short sales
must be fully collateralized. The Funds maintain their collateral in a
segregated account consisting of cash, equities, and/or U.S. government
securities sufficient to collateralize the obligation on the short positions.
The Funds may also sell short "against the box" (i.e., the Funds enter into a
short sale as described above while holding an offsetting long position in
the security which is sold short). If the Funds enter into a short sale
against the box, they will hold an equivalent amount of the securities to
cover their position while the short sale is outstanding. The Funds limit the
value of short sale positions (excluding short sales against the box) to 25%
(The Contrarian Fund-TM- is allowed up to 40%) of the Fund's total assets in
short positions. For the year ended December 31, 1998, the cost of
investments purchased to cover short sales and proceeds from investments sold
short were as follows:
<TABLE>
<CAPTION>
COST OF INVESTMENTS PROCEEDS FROM
PURCHASED TO INVESTMENTS
FUND COVER SHORT SELLS SOLD SHORT
- ------------------------------------------------------------------------------
<S> <C> <C>
The Contrarian Fund-TM- 104,619,760 50,678,484
Diversified Growth 12,831,208 13,929,285
Emerging Growth 0 0
Global Natural Resources 0 0
Global Value 0 0
Growth & Income 25,277,421 20,756,904
The Information Age Fund-TM- 0 0
MicroCap Growth 0 0
Partners 0 0
Value + Growth 0 0
- ------------------------------------------------------------------------------
</TABLE>
60
<PAGE>
The Contrarian Fund-TM-
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
$6,296,333 for these short positions. At December 31, 1998, the cost of the
associated long positions and the unrealized depreciation of investments and
securities sold short are $6,925,383 and ($629,050), respectively. At
December 31, 1998, 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.
<TABLE>
<CAPTION>
SECURITIES SHARES VALUE
- -------------------------------------------------------------------------
<S> <C> <C>
Baan Company, N.V. 34,900 $366,450
Lernout and Hauspie Speech Products 100 3,263
Rexall Sundown, Inc. 149,400 2,091,600
Schick Technologies 11,800 119,475
Smart Modular Technologies 13,500 374,625
Tel-Save Holdings, Inc. 22,200 371,850
Zoltek Companies, Inc. 16,100 147,919
- -------------------------------------------------------------------------
$3,475,182
- -------------------------------------------------------------------------
</TABLE>
e. 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. Restricted securities are valued
according to the guidelines and procedures adopted by the Funds' Board of
Trustees as outlined in Note 1.a., paragraph 2. See detail of transactions in
restricted securities below.
f. OPTIONS AND WARRANTIES
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. When a fund is the writer of index or
security options, the writer of the option grants the buyer of the option the
right to purchase from (call option), or sell to (put option), the writer a
designated instrument at a specified price within a specified period of time.
Certain options, including options on indices, will require cash settlement
by the Fund if the option is exercised.
At December 31, 1998, the Funds held the below restricted securities:
<TABLE>
<CAPTION>
RESTRICTED SECURITIES
- -----------------------------------------------------------------------------------------------------------------------------------
% OF FUNDS'
FUND SECURITY SHARES COST VALUE ACQUISITION DATE NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Contrarian African Minerals, Ltd. 698,422 2,837,499 103,366 4/25/97 - 5/7/98
- -----------------------------------------------------------------------------------------------------------------------------------
2,837,499 103,366 0.08%
- -----------------------------------------------------------------------------------------------------------------------------------
Growth & Income Core Cap, Inc., Class A Common 75,000 1,500,000 945,000 10/29/97
Core Cap, Inc., Series A Pref 75,000 1,875,000 1,751,250 10/29/97
- -----------------------------------------------------------------------------------------------------------------------------------
3,375,000 2,696,250 1.45%
- -----------------------------------------------------------------------------------------------------------------------------------
Natural Resources Conquistador Mines, Ltd. 126,563 102,443 31,315 2/4/98
African Minerals, Ltd. 203,624 784,997 30,136 4/25/97 - 5/7/98
- -----------------------------------------------------------------------------------------------------------------------------------
887,440 61,451 0.26%
- -----------------------------------------------------------------------------------------------------------------------------------
Diversified Growth Core Cap, Inc., Class A Common 25,000 500,000 315,000 10/29/97
Core Cap, Inc., Series A Pref 25,000 625,000 583,750 10/29/97
East West Bank Corporation 150,000 1,500,000 1,387,500 6/9/98
- -----------------------------------------------------------------------------------------------------------------------------------
2,625,000 2,286,250 3.26%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
DIVERSIFIED GROWTH: WRITTEN OPTIONS
Transactions in written options for the year ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
NUMBER
AMOUNT OF OF CONTRACTS
PREMIUMS OPTIONED
- --------------------------------------------------------------------
<S> <C> <C>
Outstanding at 12/31/97 $ 629,854 1,375
Options written 20,293,509 29,465
Options expired (3,093,961) (6,145)
Options exercised - -
Options closed (17,703,456) (24,595)
- --------------------------------------------------------------------
Outstanding at 12/31/98 $ 125,946 100
- --------------------------------------------------------------------
</TABLE>
GROWTH & INCOME: WRITTEN OPTIONS
Transactions in written options for the year ended December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
NUMBER
AMOUNT OF OF CONTRACTS
PREMIUMS OPTIONED
- --------------------------------------------------------------------
<S> <C> <C>
Outstanding at 12/31/97 $ 883,195 1,550
Options written 26,573,869 37,375
Options expired (4,492,020) (8,068)
Options exercised - -
Options closed (22,776,125) (30,707)
- --------------------------------------------------------------------
Outstanding at 12/31/98 $ 188,919 150
- --------------------------------------------------------------------
</TABLE>
NOTE 5 MERGER OF PARTNERS AND GLOBAL LOW-PRICED STOCK FUNDS:
On July 24, 1998, the Partners Fund acquired the net assets of the Global
Low-Priced Stock Fund pursuant to a plan of reorganization approved by the
shareholders of the Global Low-Priced Stock Fund. The merger was accomplished
by a tax-free exchange of 309,954 Class A shares (valued at 14.87) and 2,561
Class C shares (valued at 14.65) of the Partners Fund for the net assets of
the Global Low-Priced Stock Fund which aggregated $4,645,619, including
$(355,103) of unrealized depreciation. The merger was accounted for as a
pooling-of-interests without restatement for financial reporting purposes.
The combined net assets of the Partners Fund immediately after the merger
were $106,638,978.
61
<PAGE>
ANNUAL REPORT
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF THE ROBERTSON STEPHENS
INVESTMENT TRUST
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, 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 Contrarian
Fund, The Diversified Growth Fund, The Emerging Growth Fund, The Global
Natural Resources Fund, The Global Value Fund, The Growth & Income Fund, The
Information Age Fund, The MicroCap Growth Fund, The Partners Fund, and The
Value + Growth Fund (constituting The Robertson Stephens Mutual Funds,
hereafter referred to as the "Funds") at December 31, 1998, the results of
each of their operations for the year then ended, and the changes in each of
their net assets and the financial highlights for 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 Funds' 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, 1998 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.
PricewaterhouseCoopers LLP
San Francisco, California
February 25, 1999
62
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ROBERTSON STEPHENS MUTUAL FUNDS
63
<PAGE>
ANNUAL REPORT
ADMINISTRATION
OFFICERS AND TRUSTEES
Andrew P. Pilara, Jr., Trustee
President
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 Investment
Management of the IBM Retirement Funds
Andrew C. Morrison
Treasurer
Secretary
INVESTMENT ADVISER
Robertson, Stephens & Company
Investment Management, L.P.
555 California Street, Suite 2500
San Francisco, CA 94104
RS Investment Management, Inc.
(Emerging Growth Fund)
555 California Street, Suite 2500
San Francisco, CA 94104
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA
TRANSFER AGENT AND DISBURSING AGENT
State Street Bank & Trust Company
c/o National Financial Data Services
Kansas City, MO
1-800-624-8025
CUSTODIAN
State Street Bank & Trust Company
Boston, MA
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
San Francisco, CA
LEGAL COUNSEL
Ropes & Gray
Boston, MA
This report is submitted for the information of shareholders of The Robertson
Stephens Funds. It is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective prospectus.
Published February 25, 1999
The views expressed in this report were those of the Funds' portfolio
managers as of the date specified, and may not reflect the views of the
portfolio managers 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 funds, 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
FUNDS IN UNDERSTANDING THEIR INVESTMENT IN THE FUNDS AND DO NOT CONSTITUTE
INVESTMENT ADVICE; INVESTORS SHOULD CONSULT THEIR OWN INVESTMENT
PROFESSIONALS AS TO THEIR INDIVIDUAL INVESTMENT PROGRAMS.
- --------------------------------------------------------------------------------
MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC OR ANY OTHER GOVERNMENTAL
ENTITY; ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY BANK OF
AMERICA OR ANY OF ITS AFFILIATES; AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
- --------------------------------------------------------------------------------
64
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The Robertson Stephens Mutual Funds
GROWTH
The Diversified Growth Fund
FOCUSING ON SMALL- AND MID-CAP COMPANIES
Managed by John Wallace
and John Seabern.
The computer quotation symbol is RSDGX.
The Emerging Growth Fund
SEEKING TO INVEST IN AMERICA'S MOST DYNAMIC, GROWTH-ORIENTED COMPANIES
Managed by Jim Callinan.
The computer quotation symbol is RSEGX.
The Information Age Fund-TM-
TARGETING INVESTMENTS IN THE INFORMATION TECHNOLOGY SECTOR
Managed by Ron Elijah,
Rod Berry, and Cathy Baker.
The computer quotation symbol is RSIFX.
The MicroCap Growth Fund
FOCUSING ON COMPANIES WITH MARKET CAPS OF LESS THAN $250 MILLION
Managed by Dave Evans
and Rainerio Reyes.
The computer quotation symbol is RSMGX.
The Value + Growth Fund
A GROWTH FUND FOR THE LONG-TERM INVESTOR
Managed by Ron Elijah.
The computer quotation symbol is RSVPX.
GROWTH & INCOME
The Growth & Income Fund
SEEKING GROWTH WHILE ATTEMPTING TO MODERATE RISK
Managed by John Wallace.
The computer quotation symbol is RSGIX.
VALUE
The Global Value Fund
SEEKING UNDERVALUED INVESTMENTS WORLDWIDE
Managed by Andy Pilara.
The computer quotation symbol is RSGAX.
The Partners Fund
A SMALL-CAP FUND USING A CASH FLOW VALUE METHODOLOGY
Managed by Andy Pilara.
The computer quotation symbol is RSPFX.
GLOBAL
The Contrarian Fund-TM-
A GLOBAL HEDGE FUND
Managed by a team of investment
professionals at Robertson Stephens Investment Management.
The computer quotation symbol is RSCOX.
The Global Natural Resources Fund
PRIMARILY FOCUSING ON HARD ASSET COMPANIES
Managed by Andy Pilara.
The computer quotation symbol is RSNRX.
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.
FUND LISTINGS
Our Funds are listed in THE WALL STREET JOURNAL, USA TODAY, INVESTOR'S
BUSINESS DAILY, and most local newspapers under the heading Robertson
Stephens.
<PAGE>
ROBERTSON Bulk Rate
STEPHENS U.S. Postage
FUNDS PAID
555 California Street, Suite 2500 Permit #4118
San Francisco, California 94104 San Francisco, CA
