SEMIANNUAL REPORT
FASCIANO FUND, INC.
(FASCIANO FUND LOGO)
December 31, 1997
FASCIANO FUND, INC.
February 20, 1998
Dear Shareholder:
1997 shaped up to be an above-average year. For the six months ended
December 31, Fasciano Fund gained 15.6%. The total return for calendar 1997 was
21.5%. Since the fund's beginning more than ten years ago, shareholders have
earned a compounded average annual return of 15.8%*<F1>.
Performance results for various periods ending December 31, 1997 are
summarized below.
Average Annual
---------- ------------
Six months One year Three year Five year Ten year**<F2>
----------- -------- ---------- --------- ----------
Fasciano Fund 15.6% 21.5% 26.3% 17.7% 16.9%
Small Company
Funds Average+<F3>11.0% 21.4% 24.2% 17.4% 17.3%
S&P 500 10.6% 33.4% 31.2% 20.3% 18.0%
Russell 2000 11.0% 22.4% 22.3% 16.4% 15.8%
In addition to these strong investment returns, Fasciano shareholders
experienced lower share price volatility because our portfolio emphasizes small-
cap equities that have reduced risks. These companies have the following
qualities:
Sound financial condition Steady growth in low-tech or soft-tech
businesses
Strong cash flows Heavy insider ownership
Demonstrated profitability Conservative valuations
The analytical checkpoints listed above are important to our strategy going
forward. We are targeting a conservative balance between risk and reward. This
approach keeps your investment dollars working hard, but with some measure of
safety. As financial markets gyrate, remember our process for selecting smaller
companies for the portfolio screens out companies that are chronically troubled,
unproven or highly speculative.
This rational approach to selecting investments yields a residual benefit.
Companies that look attractive to long-term investors like us may look inviting
to acquirers of whole companies as well, often times
*<F1>From August 1, 1987 (commencement of operations).
**<F2>From January 1, 1988. The performance data shown includes the performance
of the Fund for the period before November 10, 1988, the date the Fund's
registration statement became effective with the Securities and Exchange
Commission. The Fund began operations as a private investment company on August
1, 1987. Prior to that date, the Fund was not registered under the Investment
Company Act of 1940 (the "1940 Act") and therefore was not subject to certain
investment restrictions that are imposed by the 1940 Act. If the Fund had been
registered during that period, the Fund's return may have been lower. The S&P
500 is a broad market-weighted average of U.S. blue-chip companies. The Russell
2000 is formed by taking the 3,000 largest U.S. companies and then eliminating
the largest 1,000. The performance data shown represents past performance and
is no guarantee of future results. The investment return and principal value of
an investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
+<F3>Source: Morningstar, Inc. See Performance Distribution Summary.
at significant premiums. In recent months, we have seen several of our holdings
acquired. International Dairy Queen was bought by Berkshire Hathaway, Regal
Cinemas was acquired by KKR/Hicks Muse, Culligan Water Technologies was
purchased by U.S. Filter, Advantage Bank was absorbed into Marshall & Ilsley,
Heritage Financial was targeted by First Midwest and Trimas was bought by
MascoTech.
Also, discipline plays an important role in managing money. Investors must
buy when others are fearful. The Asian financial and economic crisis, which
injected a heavy dose of fear into the market's mindset toward the end of last
year, gave us the opportunity to put our cash to work at attractive prices. Our
purchases targeted smaller niche companies with little or no Asian exposure.
As Fasciano Fund enters its second decade, I am gratified with our progress
to date and excited about our future. Looking back to August 1987,
Fasciano Fund was founded with assets of one million dollars, the capital of
twenty confident investors residing in Illinois and Wisconsin. Today,
Fasciano Fund has grown to $65 million in assets with 2,300 shareholders across
the country. During this period, our expense ratio has declined even as
important administrative and operational services have been added. The fund's
performance record speaks for itself, though I am most proud of the year of
worst performance: In 1990, Fasciano Fund was down 1.2%, its only down year.
While we have made significant strides, I know Fasciano Fund is closer to the
beginning than to the end of its story. Going forward, we will stay focused on
smaller-cap equities. Our one fund, one philosophy strategy will prevent us
from trying to do too much. We will not dilute the quality of our
investment effort.
I am pleased to announce several new shareholder-friendly features we have
added to Fasciano Fund. Telephone purchase and redemption of shares is now
available for your convenience. Also, we have added Roth and Education IRA's to
enhance your planning options. And starting in 1998, if you have $10,000 or
more invested in your Fasciano IRA's, you pay no annual maintenance fees. To
learn more about these features, please call us toll-free at 800-848-6050.
Thank you for selecting Fasciano Fund to achieve your long-term financial
goals. As always, I am totally committed to providing you with the long-term
performance and service you expect.
Sincerely,
/s/ Michael F. Fasciano
Michael F. Fasciano, CFA
President
190 South LaSalle Street, Suite 2800, Chicago, Illinois 60603 o 800-848-6050
PERFORMANCE AND DISTRIBUTION SUMMARY
<TABLE>
<CAPTION>
FASCIANO FUND
--------------------------------------------------------------------
Distributions Annual Small U.S.
-----------------
Calendar Beginning Capital Ending Total S&P Company Treasury
Year NAV Income Gains NAV Return 500 Funds*<F4> Bills
-------- --------- ------ ------ ------ ------ ------ -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1989 $11.45 $0.24 $0.59 $13.16 22.5% 31.7% 23.6% 8.1%
1990 $13.16 $0.12 $0.38 $12.50 (1.2)% (3.1)% (9.5)% 7.5%
1991 $12.50 $0.02 $0.36 $16.40 35.1% 30.5% 50.3% 5.4%
1992 $16.40 $0.00 $0.46 $17.29 7.7% 7.6% 13.7% 3.5%
1993 $17.29 $0.00 $1.00 $17.68 8.1% 10.1% 17.1% 3.0%
1994 $17.68 $0.00 $1.14 $17.18 3.7% 1.3% (0.7)% 4.3%
1995 $17.18 $0.00 $1.34 $21.18 31.1% 37.5% 31.3% 5.5%
1996 $21.18 $0.00 $0.59 $26.20 26.5% 23.0% 20.1% 5.0%
1997 $26.20 $0.00 $1.49 $30.31 21.5% 33.4% 21.4% 4.9%
<F4>The Morningstar Small Company Funds Index consists of funds that seek
capital appreciation by investing primarily in stocks of companies with market
capitalizations of less than $1 billion.
</TABLE>
TOP TEN HOLDINGS AT A GLANCE
<TABLE>
<CAPTION>
% OF TOTAL % OF COMMON
TOP TEN NET ASSETS AS INDUSTRY SUMMARY NET STOCK OWNED BY
HOLDINGS OF 12/31/97 GROUPING DESCRIPTION SALES*<F6>INCOME*<F6> MANAGEMENT
- -------- ------------- --------- ------------ ------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Pulitzer 4.5% Communications Newspapers, television, $580.5 $64.5 68.6%
Publishing Co. & Media radio broadcasting
Central 4.3% Consumer Operates parking facili- $222.9 $20.2 44.5%
Parking Corp. Products ties in 34 states as well
as internationally
Cardinal 4.0% Health Care Value-added pharme- $11,409.8 $195.5 5.2%
Health, Inc. Products ceutical distribution
services
Ocwen 3.5% Specialty Specializes in acquiring $249.0 $81.1 61.0%
Financial Corp. Finance and resolving troubled
loans
Emmis 3.3% Communications Radio broadcasting - $121.1 $13.4 34.4%
Broadcasting & Media involved in advertising
Corp. broadcast tower leasing
International 3.2% Entertainment Produces automobile $123.4 $26.1 54.9%
Speedway Corp. & Leisure races and owns auto
racing tracks
Concord 3.1% Business Provides electronic $216.4 $38.1 6.4%
EFS, Inc. Services transaction authori-
zation and processing
Keane, Inc. 2.9% Business Application development $590.4 $39.9 18.1%
Services and integration services;
provides Year 2000
solutions
Resource 2.9% Specialty Involved in real estate $32.0 $10.9 38.7%
America, Inc. Finance and equipment leasing
finance
CDW 2.8% Distributor Sells microcomputer $1,188.4 $47.8 56.7%
Computer hardware, peripherals,
Centers networking products,
software
Total in Top ------
Ten Holdings 34.5%
*<F6>Trailing 12 months, in $ millions
</TABLE>
SCHEDULE OF PORTFOLIO INVESTMENTS
December 31, 1997 (unaudited)
Market
Shares Common Stocks Value
------ ------------- ------
COMMON STOCKS - 95.4%
HEALTH CARE PRODUCTS & SERVICES - 12.8%
30,000 Cardinal Health, Inc. $2,253,750
40,000 Dentsply International, Inc. 1,220,000
30,000 Landauer, Inc. 840,000
30,000 Serologicals Corp. *<F7> 780,000
40,000 Brookdale Living Communities, Inc. * <F7> 690,000
35,000 Sterile Recoveries, Inc. *<F7> 599,375
30,000 Kendle International, Inc. *<F7> 502,500
10,000 Vencor, Inc. *<F7> 244,375
-----------
7,130,000
-----------
BUSINESS SERVICES - 12.7%
70,000 Concord EFS, Inc. * <F7> 1,741,250
40,000 Keane, Inc. *<F7> 1,625,000
60,000 Interim Services, Inc. *<F7> 1,552,500
25,000 Lason Holdings, Inc. *<F7> 665,625
15,000 G & K Services, Inc. - Class A 630,000
35,000 Execustay Corporation * <F7> 341,250
10,000 Envoy Corporation *<F7> 291,250
10,000 Alternative Resources Corp. *<F7> 230,625
-----------
7,077,500
-----------
COMMUNICATIONS & MEDIA - 12.0%
40,000 Pulitzer Publishing Co. 2,512,500
40,000 Emmis Broadcasting Corporation *<F7> 1,825,000
40,000 McClatchy Newspapers - Class A 1,087,500
13,400 Central Newspapers, Inc. 990,763
10,000 LCI International, Inc. *<F7> 307,500
-----------
6,723,263
-----------
SPECIALTY FINANCE - 8.5%
80,000 Ocwen Financial Corporation *<F7> 2,035,000
35,000 Resource America, Inc. - Class A 1,601,250
50,000 American Capital Strategies, Ltd. 906,250
13,000 Friedman, Billings, Ramsey Group, Inc. *<F7> 233,187
-----------
4,775,687
-----------
CONSUMER PRODUCTS AND SERVICES - 8.2%
52,500 Central Parking Corp. 2,378,906
20,000 Culligan Water Technologies, Inc. *<F7> 1,005,000
20,000 International Dairy Queen, Inc. *<F7> 535,625
10,000 Viking Office Products, Inc. *<F7> 218,125
15,000 LaCrosse Footwear, Inc. 217,500
10,500 Monro Muffler Brake, Inc. *<F7> 150,938
10,000 Harold's Stores, Inc. *<F7> 68,125
-----------
4,574,219
-----------
ENTERTAINMENT & LEISURE - 7.1%
75,000 International Speedway Corp. - Class A 1,767,187
50,625 Regal Cinemas, Inc. *<F7> 1,411,172
14,800 Marcus Corporation 272,875
10,000 Speedway Motorsports, Inc. *<F7> 248,125
5,000 Penske Motorsports, Inc. *<F7> 124,375
4,100 Carmike Cinemas, Inc. - Class A *<F7> 117,619
-----------
3,941,353
-----------
REAL ESTATE INVESTMENT TRUSTS (REIT'S) - 5.9%
100,000 Imperial Credit Commercial Mortgage Investment Corp. 1,462,500
50,000 Ocwen Asset Investment Corp. 1,025,000
75,000 Annaly Mortgage Management, Inc. 825,000
-----------
3,312,500
-----------
COMMERCIAL PRODUCTS AND SERVICES - 5.9%
30,000 Zebra Technologies Corp. - Class A *<F7> 892,500
19,500 IDEX Corp. 680,062
20,000 Inacom Corp. *<F7> 561,250
20,000 Juno Lighting, Inc. 350,000
10,000 Modine Manufacturing Co. 341,250
10,000 Superior Services, Inc. *<F7> 288,750
10,000 Communications Systems, Inc. 177,500
-----------
3,291,312
-----------
DISTRIBUTOR - 5.1%
30,000 CDW Computer Centers, Inc. *<F7> 1,563,750
60,000 Miami Computer Supply Corp. *<F7> 862,500
20,000 Valley National Gases Corporation *<F7> 213,750
10,000 TESSCO Technologies, Inc. *<F7> 195,000
-----------
2,835,000
-----------
SAVINGS & LOAN - 4.8%
75,000 ITLA Capital Corporation *<F7> 1,443,750
30,000 Alliance Bancorp., Inc. 795,000
6,250 Advantage Bancorp., Inc. 442,969
-----------
2,681,719
-----------
ELECTRONICS - 4.0%
60,000 Methode Electronics, Inc. - Class A 975,000
30,000 Kent Electronics Corp.*<F7> 753,750
50,000 Richey Electronics, Inc. * <F7> 512,500
-----------
2,241,250
-----------
BANK & BANK HOLDING - 4.0%
25,000 Cass Commercial Corporation 618,750
9,562 Associated Banc-Corp. 527,105
10,000 Corus Bankshares, Inc. 395,625
10,000 Heritage Financial Services, Inc. 290,000
20,000 Atlantic Bank & Trust Company *<F7> 280,000
4,000 AMBANC Corp. 100,000
-----------
2,211,480
-----------
MACHINERY - INDUSTRIAL - 2.0%
25,000 Regal-Beloit Corporation 739,063
10,000 Robbins & Myers, Inc. 396,250
-----------
1,135,313
-----------
TRANSPORTATION - 1.3%
10,000 Eagle USA Airfreight, Inc. *<F7> 285,000
10,000 Simon Transportation Services, Inc. * <F7> 240,000
10,000 Arnold Industries, Inc. 172,500
-----------
697,500
-----------
INSURANCE - 1.1%
30,000 HCC Insurance Holdings, Inc. 637,500
-----------
MISCELLANEOUS - 0.0%
6,667 FRM Nexus, Inc. *<F7> 6,667
20,000 Programming & Systems Inc. *<F7> 5,000
-----------
11,667
-----------
TOTAL COMMON STOCKS (cost: $35,510,147) 53,277,263
-----------
Principal Market
Amount Short-Term Investments Value
-------- ---------------------- ------
SHORT-TERM INVESTMENTS - 4.4%
VARIABLE RATE DEMAND NOTES - 4.4%
$ 990,177 American Family Financial Services, Inc., 5.64% $990,177
796,000 Warner Lambert, 5.49% 796,000
382,428 Wisconsin Electric Power Co., 5.49% 382,428
306,979 Johnson Controls, 5.33% 306,979
-----------
TOTAL SHORT-TERM INVESTMENTS (cost: $2,475,584) 2,475,584
-----------
TOTAL INVESTMENTS - 100.0% (cost: $37,985,731) 55,752,847
OTHER ASSETS, LESS LIABILITIES - 0.2% 89,615
-----------
TOTAL NET ASSETS - 100.0% $55,842,462
===========
* <F7>non-income producing security
The accompanying notes to financial statements are an integral part of this
statement.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997 (unaudited)
ASSETS
Common stocks, at market value (cost: $35,510,146) $53,277,263
Variable rate demand notes, at market value (cost: $2,475,584) 2,475,584
Receivables
Dividends 82,414
Interest 23,330
Prepaid expenses 38,259
Other assets 4,442
-----------
Total assets $55,901,292
===========
LIABILITIES AND NET ASSETS
Payables and accrued expenses
Accrued expenses $13,692
Due to adviser 45,138
-----------
Total liabilities 58,830
-----------
Net assets
Common stock, $.01 par value; 10,000,000 shares authorized,
1,842,561 shares issued and outstanding, and paid-in capital 36,621,591
Accumulated net investment (loss) (297,754)
Accumulated undistributed net realized gain 1,751,508
Net unrealized appreciation on investments 17,767,117
-----------
Total net assets 55,842,462
-----------
Total liabilities and net assets $55,901,292
===========
Net asset value per share $30.31
=======
The accompanying notes to financial statements are an integral part of this
statement.
STATEMENT OF OPERATIONS
For the six months ended December 31, 1997 (unaudited)
INCOME
Dividends $162,950
Interest 237,568
---------
400,518
---------
EXPENSES
Management fee 250,855
Transfer and disbursing agent fees 21,098
Registration fees 3,586
Accounting fee 12,098
Printing expense 6,346
Legal fees 7,050
Audit and tax consulting fees 6,562
Administration fees 11,752
Custodian fees 4,033
Other operating expenses 2,326
---------
Total expenses 325,706
---------
Net investment income 74,812
---------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investments 1,790,218
Net change in unrealized appreciation 5,092,648
---------
Net gain on investments 6,882,866
---------
Net increase in net assets resulting from operations $6,957,678
=========
The accompanying notes to financial statements are an integral part of this
statement.
STATEMENT OF CHANGES IN NET ASSETS
For the six months ended December 31, 1997 (unaudited) and the year ended June
30, 1997
December 31, June 30,
1997 1997
------------ --------
OPERATIONS:
Net investment income (loss) $74,812 $(121,302)
Net realized gain on investments 1,790,218 2,418,008
Net change in unrealized appreciation 5,092,648 2,910,692
---------- ----------
Net increase in net assets resulting from operations 6,957,678 5,207,398
---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net investment income 0 0
Distributions from net capital gains (2,597,640) (742,586)
---------- ----------
Total distributions (2,597,640) (742,586)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued (300,002
and 395,751 shares, respectively) 9,037,653 10,121,818
Increase in shares issued in reinvested distributions
(84,945 and 27,861 shares, respectively) 2,512,667 716,874
Cost of shares redeemed (72,224 and 84,925 shares,
respectively) (2,188,619) (2,163,323)
---------- ----------
Net increase in assets derived from capital
share transactions 9,361,701 8,675,369
---------- ----------
Net increase in net assets 13,721,739 13,140,181
---------- ----------
NET ASSETS AT BEGINNING OF PERIOD 42,120,723 28,980,542
---------- ----------
NET ASSETS AT END OF PERIOD (including accumulated
undistributed net investment loss of ($297,754) and
($372,566), respectively) $55,842,462 $42,120,723
========== ==========
The accompanying notes to financial statements are an integral part of this
statement.
FINANCIAL HIGHLIGHTS
Condensed financial information per share of capital stock outstanding
throughout the period is presented below:
<TABLE>
<CAPTION>
(unaudited)
Six Months
Ended
December 31, Year ended June 30,
--------------------------------------------------------
1997 1997 1996 1995 1994 1993
----------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Net asset value at beginning of year $27.53 $24.33 $20.17 $17.34 $17.74 $16.30
Income from investment operations:
Net investment income (loss) 0.08 (0.03) (0.05) (0.24) (0.05) (0.05)
Net realized and unrealized gain on
securities 4.19 3.82 5.55 4.21 0.65 1.95
------- ------- ------- ------- ------- -------
Total from investment operations 4.27 3.79 5.50 3.97 0.60 1.90
Less distribution:
Dividends from net investment income 0.00 0.00 0.00 0.00 0.00 0.00
Distributions from realized gains on
securities (1.49) (0.59) (1.34) (1.14) (1.00) (0.46)
------- ------- ------- ------- ------- -------
Total distributions (1.49) (0.59) (1.34) (1.14) (1.00) (0.46)
------- ------- ------- ------- ------- -------
Net asset value at end of period $30.31 $27.53 $24.33 $20.17 $17.34 $17.74
======= ======= ======= ======= ======= =======
Total return 15.6% (1)<F8> 15.8% 28.3% 24.1% 3.3% 11.8%
Ratios/Supplemental Data:
Net assets at end of period (in thousands) $55,842 $42,121 $28,981 $20,868 $16,582 $15,458
Expenses, excluding provision for
taxes, to average net assets 1.3% (2)<F9> 1.4% 1.5% 1.7% 1.7% 1.7%
Net investment income (loss) before
taxes to average net assets 0.3% (2)<F9> (0.4)% (0.3)% (0.6)% (0.3)% (0.3)%
Portfolio turnover rate 16.9% 41.0% 45.6% 37.9% 99.0% 43.2%
Average commission rate per share $0.0605 $0.0634 n/a n/a n/a n/a
(1)<F8>Not annualized
(2)<F9>Annualized
The accompanying notes to financial statements are an integral part of this
statement.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 (unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES:
Fasciano Fund, Inc. (the "Fund"), a Maryland corporation, commenced
operations on August 1, 1987 as a private investment company. On June 30, 1988,
the Fund registered with the Securities and Exchange Commission as a diversified
open-end management investment company under the Investment Company Act of 1940
and began offering its shares to the public on November 10, 1988. The primary
objective of the Fund is long-term capital growth.
The fiscal year end of the Fund is June 30. The following is a summary of
significant accounting policies followed by the Fund in the preparation of its
financial statements in accordance with generally accepted accounting
principles.
(a) Investment and shareholder transactions are recorded on a trade date
basis.
(b) Each security traded on a national securities exchange or traded over the
counter and quoted on the Nasdaq National Market will be valued at the last sale
price on the day of valuation. Securities for which there was no sale on the
day of valuation will be valued at the current bid prices. Each money market
instrument having a maturity of 60 days or less from the date of purchase is
valued on an amortized cost basis, which approximates market value. Other assets
and securities will be valued at a fair value, as determined in good faith by
the Board of Directors.
(c) Dividends are recognized as income on the ex-dividend date. Interest
income and operating expenses are recorded on the accrual basis.
(d) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets
from operations during the reporting period. Actual results could differ from
those estimates.
(2) RELATED PARTIES:
Michael F. Fasciano is an officer and director of the Fund and also an
officer, director and sole shareholder of the investment adviser, Fasciano
Company, Inc. Mr. Fasciano held 16,551 shares or 1.1% of the outstanding common
stock of the Fund at December 31, 1997.
The non-affiliated directors receive a fee of $2,000 annually.
The management fee was paid to Fasciano Company, Inc. for its services as
investment adviser. This fee is paid monthly at the rate of 1/12 of 1% (an
annual rate of 1.0%) of the average daily net asset value of the Fund.
Total annual operating expenses of the Fund shall not exceed 2% of average
net assets, and the adviser has agreed to pay any excess operating expenses or
to reimburse the Fund for any sums expended for such expenses in excess of that
amount. For this purpose, brokers' commissions and other charges relative to the
purchase and sale of portfolio securities, interest charges, taxes and
litigation and other extraordinary expense shall not be regarded as operating
expenses.
(3) INVESTMENTS:
During the six months ended December 31, 1997, purchases of securities other
than short-term investments were $20,312,200. Sales of such securities for that
period were $6,995,807.
Cost of investments is the same for financial reporting purposes as for
Federal income tax purposes. At December 31, 1997, on a tax basis, gross
unrealized appreciation of investments was $18,666,545 and unrealized
depreciation of investments was $899,428.
(4) INCOME TAXES:
No provision for federal income taxes has been made. The Fund has complied
to date with the provisions of the Internal Revenue Code applicable to regulated
investment companies and intends to distribute substantially all of its net
investment income and realized capital gains in order to avoid payment of all
future federal income taxes.
(5) DISTRIBUTIONS TO SHAREHOLDERS:
On December 29, 1997, the Fund distributed short-term and long-term capital
gains of approximately $0.09 and $1.40 per share, respectively.
INVESTMENT ADVISER
Fasciano Company, Inc.
ADDRESS OF FUND & ADVISER
190 South LaSalle Street
Suite 2800
Chicago, Illinois 60603
(312) 444-6050
(800) 848-6050
TRANSFER AGENT, DIVIDEND DISBURSING
AGENT, ADMINISTRATOR AND CUSTODIAN
Firstar Trust Company
P.O. Box 701
Milwaukee, Wisconsin 53201
(414) 765-4124
(800) 982-3533
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
Chicago, Illinois
Legal Counsel
Bell, Boyd & Lloyd
Chicago, Illinois
This report is submitted for the information
of shareholders of the Fund. It is not
authorized for distribution to prospective
investors unless preceded or accompanied
by an effective prospectus.
MEMBER OF
100% NO-LOAD
MUTUAL FUND COUNCIL
Printed on Recycled Paper
