<PAGE> 1
[CONCORDE FUNDS LOGO]
November 16, 2000
Dear Shareholders,
Concorde's investment styles -- value-oriented equities and
income-generating securities -- are more conservative than momentum investing
and other valuation models based on optimistic future growth. Our approach of
looking for predictable results and intrinsic values tends to produce consistent
performance, a result that is in strong contrast to the volatile markets of the
recent year. We are currently observing a transition back to recognizing
traditional valuation analysis that should bode well for our future performance.
We are pleased to present the Annual Report of Concorde Funds, Inc., for
the fiscal year ended September 30, 2000.
CONCORDE VALUE FUND
The total return for the Concorde Value Fund (the "Value Fund") for the
fiscal year ended September 30, 2000 was 19.71%. The Value Fund gained
significantly during the second half of the fiscal year as the U.S. markets rose
from April through August and then declined in September. We are pleased to
report that the Value Fund has outperformed its most relevant peer group, the
Morningstar Mid Cap Value Funds, for the second year in a row.
<TABLE>
<S> <C>
CONCORDE VALUE FUND 19.71%
Morningstar Mid Cap Value Funds 16.59%
S&P 500 13.27%
Russell 2000 23.39%
Value Line (Geometric) Index 0.53%
</TABLE>
Performance for the year varied widely among individual stocks and industry
groups. We believe our fundamental valuation methodology was confirmed as five
fund holdings received merger or buyout proposals during the year. Energy,
finance, conglomerates, services and technology recorded the largest sector
gains while consumer durables and entertainment generated losses. The use of
covered calls to hedge appreciated positions had a net negative contribution to
performance.
Our two conglomerate holdings, Seagram and Tyco International, contributed
significant gains. Seagram agreed to merge with the French company Vivendi,
which initially boosted the stock price, and Tyco continued to report strong
corporate earnings and cash flow. Burlington Resources, Weatherford
International and Santa Fe Snyder generated large gains in the energy sector and
Maaxam fell as aluminum prices and activity fell. Santa Fe Snyder was acquired
by Devon Energy at a premium price during the year, validating our asset
analysis.
<PAGE> 2
In the finance sector -- our largest industry gainer --, all four holdings
contributed significantly. Lehman Brothers, Delphi Financial and MBIA all rose
as company performance was strong, and First American's stock price recovered
from severely undervalued levels despite lackluster earnings. The technology
sector, despite a drop in the second half of the year, turned in a large gain.
Arrow Electronics, Dallas Semiconductor, C-Cube Microsystems and Motorola all
registered gains. Positions in all four of these stocks were either eliminated
or reduced as prices reached valuation levels that we considered high. Worldcom,
a new position, dropped during the second half of the year as concerns over
pricing in the consumer business drove valuations of telecom stocks lower.
In the entertainment sector, Hasbro dropped severely as 2000 results
disappointed the company and investors. We believe that at current levels the
stock price is discounting too severely short term business weakness and
continue to hold our position in this worldwide franchise operator. Disney
contributed positively before sale of our full position when the stock reached
our valuation targets.
The consumer staples sector recorded a small overall gain as individual
stocks posted mixed results. Philip Morris and Suiza Foods contributed gains as
investors began to recognize low valuations in defensive oriented businesses.
Two long term fund holdings, SuperValu and Playtex Products, contributed
negative returns. Playtex reported slower growth and increased competition in
key product areas, depressing earnings results, and SuperValu dropped as
investors shunned food wholesalers and retailers.
Among industrial cyclicals, new holding Delphi Automotive had a moderate
loss as we were building a position and Lockheed Martin and Republic Group,
another of our buyout stocks, produced good gains. In the services sector,
Chris-Craft Industries received a buyout offer from NewsCorp in 2000 at a nice
premium and Waste Management showed a moderate loss as we accumulated a new
position. In other industry groups, Johnson & Johnson, Merck, First Industrial,
VICORP Restaurants, and Columbia/HCA posted gains as a result of good earnings
and U.S. Oncology dropped significantly as earnings disappointed as a result of
pricing pressures and troubles with the merger with Physicians Resources
continued.
Overall fiscal year 2000 was very rewarding as rational behavior began to
return to the stock market in the spring of 2000. The significant number of
mergers and buyouts of fund holdings not only increased performance but
validates our long term approach to analyzing equity securities. In addition,
our discipline in reducing or eliminating stocks as they reach full valuations
proved valuable as the markets experienced sharp drops in the spring and late
summer. We will continue to focus on a select number of reasonably valued stocks
and strive to maintain a fully invested portfolio.
CONCORDE INCOME FUND
The Concorde Income Fund (the "Income Fund") generated a total return of
8.32% during the 2000 fiscal year as all major asset classes held by the Income
Fund contributed to the gain.
<TABLE>
<S> <C>
CONCORDE INCOME FUND 8.32%
Three Month U.S. Treasury Bill 6.00%
Lehman Brothers Intermediate Gov/Corp. 6.23%
Lehman Brothers Government Bond 7.17%
</TABLE>
2
<PAGE> 3
Long term U.S. Treasury securities produced significant gains as interest
rates not only dropped as a result of the slowing economy, but were aided by the
government buyback of Treasuries beginning in early 2000. Our U.S. agency
holdings rose moderately, however, as rate spreads to U.S. Treasury yields
remained high on a historical basis. During the first half of the fiscal year we
lengthened the average maturities of bonds in anticipation of a drop in rates,
enhancing second half total returns. The ratio of Treasury to agency securities
was not changed significantly during the year.
The equity oriented income securities in the portfolio contributed
significantly to performance, recovering from disappointing results in the prior
year. In particular, real estate investment trusts and utilities increased as
investors flocked to more conservative stocks that had been overlooked the past
two years. Industry fundamentals also continued to be strong in these two areas.
LG&E Energy was a large gainer as a result of a takeover offer. Two
specialty closed-end fund holdings -- PIMCO Commercial Mortgage Trust and
Strategic Global Income Fund -- generated nice total returns. El Paso Energy
Partners, a new holding, also rose in price soon after initial purchases.
The preferred stocks held by the Income Fund, which tend to perform
similarly to corporate bonds, recorded a slight positive total return as
dividends received exceeded the net depreciation of share price.
As we look toward 2001, we will continue to seek total returns emphasizing
current income with increasing attention paid to higher quality credits as
economic concerns rise. Our focus on medium term, high quality government and
agency notes and bonds creates the potential for rewarding total returns as we
enter a potentially weaker economic environment.
SUMMARY
Thank you for your past and future support as we strive to maintain the
highest standards in managing Concorde Funds, Inc.
Sincerely,
/s/ GARY B. WOOD, Ph.D
Gary B. Wood, Ph.D.
President
3
<PAGE> 4
[VALUE FUND CHART]
NOTE; The Russell 2000 Index is an index comprised of 2000 publicly traded small
capitalization common stocks that are ranked in terms of capitalization
below the large and mid-range capitalization sectors of the United States
equity market. This index attempts to accurately capture the performance
of the universe of small capitalization common stocks. The Morningstar Mid
Cap Value is an index representing performance of a universe of equity
mutual funds primarily investing in medium size stocks with relatively
lower price valuations.
[INCOME FUND]
NOTE: The Lehman Brothers Intermediate Government/Corporate Index is
representative of returns from medium term U.S. government and corporate
bonds.
4
<PAGE> 5
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Concorde Funds, Inc.
We have audited the accompanying statement of assets and liabilities of the
Concorde Value Fund portfolio of Concorde Funds, Inc., including the schedules
of investments in securities and covered call options written, as of September
30, 2000, and the related statements of operations and changes in net assets and
the financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The statement of changes in net assets
for the year ended September 30, 1999 and financial highlights for the three
years then ended were audited by Wallace Sanders & Company and/or its
predecessors, independent accountants, whose partners merged with McGladrey &
Pullen, LLP on August 1, 2000, and whose report dated October 14, 1999,
expressed an unqualified opinion on the statement of changes in net assets and
financial highlights. The financial highlights for the year ended September 30,
1996 were audited by other auditors whose report dated November 4, 1996
expressed an unqualified opinion on the financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Concorde Value Fund portfolio of Concorde Funds, Inc. as of September 30, 2000,
the results of its operations, the changes in its net assets and the financial
highlights for the year then ended in conformity with generally accepted
accounting principles.
/s/ MCGLADREY & PULLEN,LLP
McGLADREY & PULLEN, LLP
Irving, Texas
October 19, 2000
5
<PAGE> 6
CONCORDE VALUE FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ----------- ----------
<S> <C> <C> <C>
COMMON STOCKS
CONGLOMERATES
The Seagram Company Ltd................................... 15,500 $ 890,281 5.63%
Tyco International Ltd.................................... 10,600 549,875 3.48
----------- ------
1,440,156 9.11
----------- ------
CONSUMER DURABLES
Fedders Corporation Class A............................... 58,500 193,781 1.23
----------- ------
CONSUMER STAPLES
ConAgra Foods, Inc. ...................................... 6,836 137,147 0.87
Philip Morris Companies, Inc. ............................ 20,000 588,750 3.72
Playtex Products, Inc.(a)................................. 45,000 531,562 3.36
Suiza Foods Corporation................................... 9,700 491,669 3.11
SUPERVALU INC............................................. 28,000 421,750 2.67
----------- ------
2,170,878 13.73
----------- ------
ENERGY AND NATURAL RESOURCES
Burlington Resources Inc.(b).............................. 7,000 257,688 1.63
Devon Energy Corporation.................................. 9,900 595,485 3.77
Weatherford International, Inc.(a)(c)..................... 12,000 516,000 3.26
----------- ------
1,369,173 8.66
----------- ------
ENTERTAINMENT
Hasbro Inc. .............................................. 33,000 377,438 2.39
----------- ------
FINANCE AND INSURANCE
Delphi Financial Group, Inc. ............................. 11,048 447,444 2.83
Lehman Brothers Holdings Inc.(c).......................... 8,000 1,182,000 7.47
MBIA Inc. ................................................ 9,000 640,125 4.05
The First American Corporation............................ 20,400 425,850 2.69
----------- ------
2,695,419 17.04
----------- ------
</TABLE>
See notes to financial statements.
6
<PAGE> 7
CONCORDE VALUE FUND
INVESTMENTS IN SECURITIES (CONTINUED)
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ----------- ----------
<S> <C> <C> <C>
COMMON STOCKS (CONTINUED)
HEALTH
Johnson & Johnson......................................... 8,000 $ 751,500 4.75%
Merck & Co., Inc. ........................................ 10,000 744,375 4.71
US Oncology, Inc.(a)...................................... 38,580 174,816 1.11
----------- ------
1,670,691 10.57
----------- ------
INDUSTRIAL CYCLICALS
Delphi Automotive Systems Corporation..................... 17,500 264,688 1.67
Lockheed Martin Corporation............................... 17,000 560,320 3.54
Republic Group Incorporated............................... 16,375 300,891 1.90
----------- ------
1,125,899 7.11
----------- ------
REAL ESTATE
First Industrial Realty Trust, Inc. ...................... 15,000 461,250 2.92
----------- ------
RETAIL TRADE
VICORP Restaurants, Inc.(a)............................... 15,601 304,219 1.92
----------- ------
SERVICES
Chris-Craft Industries, Inc. ............................. 11,037 909,173 5.75
Waste Management, Inc. ................................... 20,000 348,750 2.20
----------- ------
1,257,923 7.95
----------- ------
TECHNOLOGY
Arrow Electronics, Inc.(a)................................ 16,500 562,031 3.55
Dallas Semiconductor Corporation(d)....................... 19,000 624,625 3.95
Intel Corporation......................................... 2,500 103,906 0.66
Motorola, Inc.(e)......................................... 10,200 288,150 1.82
WorldCom, Inc. ........................................... 8,000 243,000 1.54
----------- ------
1,821,712 11.52
----------- ------
TOTAL COMMON STOCKS (cost $9,035,037)....................... 14,888,539 94.15
----------- ------
</TABLE>
See notes to financial statements.
7
<PAGE> 8
CONCORDE VALUE FUND
INVESTMENTS IN SECURITIES (CONTINUED)
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ----------- ----------
<S> <C> <C> <C>
FEDERAL AGENCY OBLIGATIONS
Federal Home Loan Bank, 6.7%, Due 09/05/2002.............. 200,000 $ 199,278 1.26%
Federal Home Loan Bank, 5.76%, Due 10/15/2002(f).......... 200,000 196,828 1.24
------- ----------- ------
TOTAL FEDERAL AGENCY OBLIGATIONS (cost $396,188)............ 396,106 2.50
----------- ------
SHORT TERM DEMAND NOTES
American Family Financial Services, 6.24%................. 586,228 586,228 3.71
Sara Lee Corporation, 6.22%............................... 200,806 200,806 1.27
Wisconsin Corporate Central Credit Union, 6.29%........... 131,623 131,623 0.83
Wisconsin Electric Power Company, 6.24%................... 155,193 155,193 0.98
----------- ------
TOTAL SHORT TERM DEMAND NOTES (cost $1,073,850)............. 1,073,850 6.79
----------- ------
CERTIFICATE OF DEPOSIT
Firstar Bank Milwaukee, 4.16%, due 1/13/2001 (cost
$3,756)................................................ 3,756 3,756 0.03
----------- ------
TOTAL INVESTMENTS IN SECURITIES (cost $10,508,831).......... $16,362,251 103.47%
=========== ======
</TABLE>
---------------------
Notes:
(a) Presently non-income producing
(b) 5,000 shares subject to option
(c) 4,000 shares subject to option
(d) 6,000 shares subject to option
(e) 10,000 shares subject to option
(f) Callable on any October, January, April, or July 15th at 100
See notes to financial statements.
8
<PAGE> 9
CONCORDE VALUE FUND
COVERED CALL OPTIONS WRITTEN
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES SUBJECT
TO CALL VALUE
-------------- --------
<S> <C> <C>
COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE
Burlington Resources Inc./November/30..................... 5,000 $ 36,875
Dallas Semiconductor Corporation/October/30............... 6,000 18,000
Lehman Brothers Holdings Inc./October/80.................. 4,000 270,500
Motorola, Inc./January/20................................. 10,000 92,500
Weatherford International, Inc./November/35............... 4,000 35,000
--------
TOTAL (premiums received $527,327).......................... $452,875
========
</TABLE>
See notes to financial statements.
9
<PAGE> 10
CONCORDE VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $10,508,831).... $16,362,251
Receivables
Dividends.............................................. 31,142
Interest............................................... 9,923
Other assets.............................................. 3,611
-----------
TOTAL ASSETS................................................ 16,406,927
-----------
LIABILITIES
Covered call options written, at value (premiums received
$527,327).............................................. 452,875
Payable for securities purchased.......................... 111,738
Investment advisory fee payable........................... 12,191
Accrued expenses.......................................... 17,127
-----------
TOTAL LIABILITIES........................................... 593,931
-----------
NET ASSETS
Equivalent to $17.95 per share on 881,168 shares of
capital stock outstanding.............................. $15,812,996
===========
</TABLE>
See notes to financial statements.
10
<PAGE> 11
CONCORDE VALUE FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Investment income
Dividends.............................................. $ 184,886
Interest............................................... 81,516
----------
Total investment income................................... 266,402
----------
Expenses
Investment advisory fee................................ 144,154
Custodian fees......................................... 6,328
Printing, postage and delivery......................... 10,009
Accounting fees........................................ 23,570
Transfer agent fees.................................... 15,041
Legal fees............................................. 12,562
Registration fees...................................... 1,855
Audit fees............................................. 16,360
Other expenses......................................... 3,874
----------
Total expenses............................................ 233,753
----------
NET INVESTMENT INCOME..................................... 32,649
----------
REALIZED GAIN AND UNREALIZED APPRECIATION ON INVESTMENTS AND
REALIZED LOSS AND UNREALIZED APPRECIATION ON COVERED CALL
OPTIONS WRITTEN
Net realized gain on investments in securities............ 1,330,654
Net realized loss on covered call options written......... (589,895)
Net change in unrealized appreciation of investments in
securities............................................. 2,127,850
Net change in unrealized appreciation of covered call
options written........................................ (29,017)
----------
NET GAIN ON INVESTMENTS................................... 2,839,592
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $2,872,241
==========
</TABLE>
See notes to financial statements.
11
<PAGE> 12
CONCORDE VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
CHANGE IN NET ASSETS FROM OPERATIONS
Net investment income..................................... $ 32,649 $ 18,875
Net realized gain on investments.......................... 740,759 485,151
Net change in unrealized appreciation of investments...... 2,098,833 2,116,971
----------- -----------
Net increase in net assets resulting from operations...... 2,872,241 2,620,997
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income..................................... (19,828) (3,628)
Net realized gains on investments......................... (485,788) (2,310,012)
CAPITAL SHARE TRANSACTIONS -- NET........................... (2,040,726) 812,794
----------- -----------
Total increase in net assets.............................. 325,899 1,120,151
NET ASSETS
Beginning of year......................................... 15,487,097 14,366,946
----------- -----------
End of year (including undistributed net investment income
of $28,068 and $17,373 respectively)................... $15,812,996 $15,487,097
=========== ===========
</TABLE>
See notes to financial statements.
12
<PAGE> 13
CONCORDE VALUE FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED SEPTEMBER 30,
------------------------------------------------
2000 1999 1998 1997 1996
------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA(1):
Net asset value, beginning of year........... $ 15.50 $ 15.36 $ 19.66 $ 14.95 $ 13.33
------- ------- -------- ------- -------
Income from investment operations:
Net investment income...................... 0.03 0.02 0.02 0.06 0.07
Net realized and unrealized gain (loss) on
investments in securities............... 2.93 2.64 (2.73) 5.66 1.73
------- ------- -------- ------- -------
Total income (loss) from investment
operations.............................. 2.96 2.66 (2.71) 5.72 1.80
------- ------- -------- ------- -------
Less distributions:
Distributions from net investment income... (0.02) -- (0.06) (0.09) (0.06)
Distributions from net realized gains...... (0.49) (2.52) (1.53) (0.92) (0.12)
------- ------- -------- ------- -------
Total from distributions................... (0.51) (2.52) (1.59) (1.01) (0.18)
------- ------- -------- ------- -------
Net asset value, end of year................. $ 17.95 $ 15.50 $ 15.36 $ 19.66 $ 14.95
======= ======= ======== ======= =======
TOTAL RETURN................................. 19.71% 18.38% (14.76%) 40.53% 13.64%
======= ======= ======== ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in thousands)..... $15,813 $15,487 $ 14,367 $17,532 $12,580
Ratio of expenses to average net assets.... 1.46% 1.47% 1.39% 1.60% 1.62%
Ratio of net investment income to average
net assets.............................. 0.20% 0.11% 0.12% 0.38% 0.53%
Portfolio turnover rate.................... 34.08% 25.87% 44.62% 30.62% 26.10%
</TABLE>
---------------------
(1) Per share information has been calculated using the average number of shares
outstanding.
See notes to financial statements.
13
<PAGE> 14
CONCORDE VALUE FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Concorde Value Fund (Fund) is a separate series of shares of common stock
of Concorde Funds, Inc. (Company). The Company was incorporated in the state of
Texas in September of 1987, and is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund is
subject to various investment restrictions as set forth in the Statement of
Additional Information. The effective date of the Fund's Registration Statement
under the Securities Act of 1933 was December 4, 1987. The primary investment
objective of the Fund is to produce long-term growth of capital. The Company may
designate one or more series of common stock. Presently, the Company has
designated only one additional series, Concorde Income Fund. Each capital share
in the Fund represents an equal, proportionate interest in the net assets of the
Fund with each other capital share in such series and no interest in any other
series.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
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 the assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
VALUATION OF SECURITIES
Securities are valued at the close of each business day. Bonds and notes
are valued at the last quoted bid price obtained from independent pricing
services. Securities traded on national securities exchanges or on the national
market systems are valued at the last reported sales price on the day of
valuation, except for call options written for which the last quoted bid price
is used. Short-term demand notes and certificates of deposit are stated at
amortized cost, which is equivalent to value. Securities for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by the Board of Directors.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend income is recognized on the ex-dividend date, and interest
income is recognized on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
INCOME TAXES
The Fund's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gains on
investments, to its shareholders. Therefore, no federal income or excise tax
provision is required.
Net investment income (loss), net realized gains (losses) and the cost of
investments in securities may differ for financial statement
14
<PAGE> 15
and income tax purposes. The character of distributions from net investment
income or net realized gains may differ from their ultimate characterization for
income tax purposes. At September 30, 2000, there were no material differences.
Also, due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends declared and paid from net investment income or net realized
gains are recorded on the ex-dividend date.
NOTE 2 -- COVERED CALL OPTIONS WRITTEN
As of September 30, 2000, investment securities valued at $1,426,813 were
held by the custodian in connection with covered call options written by the
Fund.
Transactions in covered call options written for the year ended September
30, 2000 were as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS AMOUNTS
--------- -----------
<S> <C> <C>
Beginning............ 440 $ 669,845
Written.............. 1,530 2,861,101
Expired.............. -- --
Exercised............ (20) (34,279)
Closed............... (1,660) (2,969,340)
------ -----------
Ending............... 290 $ 527,327
====== ===========
</TABLE>
NOTE 3 -- DISTRIBUTION TO SHAREHOLDERS
A distribution to shareholders of $.51 per share aggregating $505,616 was
declared on December 16, 1999 from net investment income and net realized gains
from investment transactions. The distribution was paid on December 23, 1999 to
shareholders of record on December 21, 1999.
At September 30, 2000, the Fund had undistributed net realized gains of
$740,122, of which none are short term.
NOTE 4 -- CAPITAL SHARE TRANSACTIONS
As of September 30, 2000, there were 30,000,000 shares of $1 par value
capital stock authorized of which 9,841,293 shares are classified as the Fund's
series (Series A), 10,000,000 shares are classified as Concorde Income Fund
series (Series B), and the remaining balance is unallocated for future use. As
of September 30, 2000, capital paid-in aggregated $9,116,934.
Transactions in shares of capital stock for the years ended September 30,
2000 and 1999 were as follows:
<TABLE>
<CAPTION>
2000
----------------------
SHARES AMOUNT
-------- -----------
<S> <C> <C>
Shares sold.......... 28,833 $ 458,603
Shares issued in
reinvestment of
dividends.......... 33,176 502,283
-------- -----------
62,009 960,886
Shares redeemed...... 179,816 3,001,612
-------- -----------
Net decrease......... (117,807) $(2,040,726)
======== ===========
</TABLE>
<TABLE>
<CAPTION>
1999
--------------------
SHARES AMOUNT
------- ----------
<S> <C> <C>
Shares sold........... 36,080 $ 571,248
Shares issued in
reinvestment of
dividends........... 157,991 2,297,191
------- ----------
194,071 2,868,439
Shares redeemed....... 130,473 2,055,645
------- ----------
Net increase.......... 63,598 $ 812,794
======= ==========
</TABLE>
15
<PAGE> 16
NOTE 5 -- INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities
(excluding short-term securities) aggregated $5,286,121 and $8,239,313,
respectively, for common stock, and $0 and $0, respectively, for U.S. government
obligations for the year ended September 30, 2000. As of September 30, 2000, the
aggregate unrealized appreciation and depreciation of investment securities and
covered call options written was as follows:
<TABLE>
<S> <C>
Unrealized appreciation........ $6,543,139
Unrealized depreciation........ (615,267)
----------
Net unrealized appreciation.... $5,927,872
==========
</TABLE>
NOTE 6 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Advisory Agreement (Advisory Agreement) with
Concorde Financial Corporation dba Concorde Investment Management (Advisor) to
act as the Fund's investment advisor. The Advisor provides the Fund with
investment advice and recommendations consistent with the Fund's investment
objectives, policies and restrictions, and supervises the purchase and sale of
investment transactions on behalf of the Fund. For such services, the Advisor
receives an annual fee of 0.9% of the Fund's average daily net assets, computed
daily and paid on a monthly basis. The investment advisory fee was $144,154 for
the year ended September 30, 2000, of which $12,191 was payable at year end.
Certain directors and officers of the Company are also directors, officers
and/or employees of the Advisor.
16
<PAGE> 17
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Shareholders
Concorde Funds, Inc.
We have audited the accompanying statement of assets and liabilities of the
Concorde Income Fund portfolio of Concorde Funds, Inc., including the schedule
of investments in securities, as of September 30, 2000, and the related
statements of operations and changes in net assets and the financial highlights
for the year then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended September 30,
1999 and financial highlights for the three years then ended, were audited by
Wallace Sanders & Company and/or its predecessors, independent accountants,
whose partners merged with McGladrey & Pullen, LLP on August 1, 2000, and whose
report dated October 14, 1999, expressed an unqualified opinion on the statement
of changes in net assets and financial highlights. The financial highlights for
the period ended September 30, 1996 were audited by other auditors whose report
dated November 4, 1996 expressed an unqualified opinion on the financial
highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 2000, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Concorde Income Fund portfolio of Concorde Funds, Inc. as of September 30, 2000,
the results of its operations, the changes in its net assets and the financial
highlights for the year then ended in conformity with generally accepted
accounting principles.
/s/ MCGLADREY & PULLEN,LLP
McGLADREY & PULLEN, LLP
Irving, Texas
October 19, 2000
17
<PAGE> 18
CONCORDE INCOME FUND
INVESTMENTS IN SECURITIES
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ---------- ----------
<S> <C> <C> <C>
BONDS AND NOTES
FEDERAL AGENCY OBLIGATIONS
Federal Farm Credit Bank, 5.92%, due 2/24/2003, callable
2/24/2001.............................................. 100,000 $ 98,494 2.01%
Federal Home Loan Bank, 6.2%, due
6/2/2009............................................... 200,000 191,887 3.92
Federal Home Loan Bank, 7.625%, due 5/14/2010............. 100,000 105,938 2.16
Federal Home Loan Mortgage Corporation, 5.9%, due
2/14/2006.............................................. 150,000 145,293 2.97
Federal Home Loan Mortgage Corporation, 6.99%, due
7/26/2006.............................................. 200,000 203,471 4.16
Federal National Mortgage Association, 5.9%, due
2/17/2004(a)........................................... 100,000 97,661 2.00
Federal National Mortgage Association, 6.85%, due
8/22/2005.............................................. 200,000 202,049 4.13
Federal National Mortgage Association, 6.41%, due
3/08/2006.............................................. 200,000 197,842 4.04
Federal National Mortgage Association, 6.7%, due
6/19/2007.............................................. 200,000 199,482 4.08
Federal National Mortgage Association, 7.25%, due
1/15/2010.............................................. 200,000 206,247 4.21
---------- -----
1,648,364 33.68
---------- -----
U.S. TREASURY OBLIGATIONS
U.S. Treasury Note, 5.625%, due 5/15/2008................. 600,000 588,563 12.03
U.S. Treasury Bond, 7.25%, due 5/15/2016.................. 600,000 667,688 13.64
---------- -----
1,256,251 25.67
---------- -----
TOTAL BONDS AND NOTES (cost $2,870,301)..................... 2,904,615 59.35
---------- -----
CLOSED-END FIXED INCOME FUNDS
Pimco Commercial Mortgage Securities Trust Inc. .......... 10,700 128,400 2.62
Strategic Global Income Fund Inc. ........................ 12,300 131,456 2.69
---------- -----
TOTAL CLOSED-END FIXED INCOME FUNDS (cost $288,468)......... 259,856 5.31
---------- -----
</TABLE>
See notes to financial statements.
18
<PAGE> 19
CONCORDE INCOME FUND
INVESTMENTS IN SECURITIES (CONTINUED)
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ---------- ----------
<S> <C> <C> <C>
COMMON STOCKS
ENERGY AND NATURAL RESOURCES
El Paso Energy Partners, L.P.............................. 4,000 $ 107,000 2.19%
---------- -----
REAL ESTATE
Corporate Office Properties Trust......................... 10,400 103,350 2.11
First Industrial Realty Trust, Inc. ...................... 5,500 169,125 3.46
Hospitality Properties Trust.............................. 2,400 56,100 1.15
Host Marriott Corporation................................. 9,000 101,250 2.07
---------- -----
429,825 8.79
---------- -----
UTILITIES
American States Water Company............................. 2,000 60,500 1.24
LG&E Energy Corp.......................................... 3,000 73,312 1.50
TECO Energy, Inc. ........................................ 6,000 172,500 3.52
---------- -----
306,312 6.26
---------- -----
TOTAL COMMON STOCKS (cost $740,423)......................... 843,137 17.24
---------- -----
PREFERRED STOCKS
Alabama Power, 7% Preferred............................... 4,200 91,612 1.87
Allstate Financial, 7.95% Series A Preferred.............. 2,800 67,550 1.38
Conseco Finance, 9.16% Preferred.......................... 3,500 47,687 0.97
First Industrial Realty Trust, 8.75% Series B Preferred... 4,000 91,250 1.86
Lehman Brothers Cap Tr, 8% Preferred...................... 3,660 86,400 1.77
Merrill Lynch Capital Trust, 8% Class C Preferred......... 3,300 81,263 1.66
Phillips 66 Capital, 8.24% Preferred...................... 4,000 94,500 1.93
Public Storage, Inc., 8.45% Series H Preferred............ 3,600 81,900 1.67
Time Warner Capital, 8.87% Preferred...................... 3,000 73,980 1.51
Transamerica Finance Corp., 7.10% Preferred............... 3,000 66,187 1.35
---------- -----
TOTAL PREFERRED STOCKS (cost $856,081)...................... 782,329 15.97
---------- -----
</TABLE>
See notes to financial statements.
19
<PAGE> 20
CONCORDE INCOME FUND
INVESTMENTS IN SECURITIES (CONTINUED)
SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL PERCENT OF
AMOUNT VALUE NET ASSETS
--------- ---------- ----------
<S> <C> <C> <C>
SHORT TERM DEMAND NOTES
American Family, 6.24%.................................... 16,596 $ 16,596 0.34%
Sara Lee Corporation, 6.22%............................... 1,901 1,901 0.04
Wisconsin Electric Power Company, 6.24%................... 28,823 28,823 0.59
---------- -----
TOTAL SHORT TERM DEMAND NOTES (cost $47,320)................ 47,320 0.97
---------- -----
TOTAL INVESTMENTS IN SECURITIES (cost $4,802,593)........... $4,837,257 98.84%
========== =====
</TABLE>
---------------------
(a) Security is callable at any time at 100 with 10 days notice from the issuer.
See notes to financial statements.
20
<PAGE> 21
CONCORDE INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $4,802,593)..... $4,837,257
Cash...................................................... 1,261
Receivables
Dividends.............................................. 24,140
Interest............................................... 51,298
Expense reimbursement due from Advisor................. 917
Other assets.............................................. 1,481
----------
TOTAL ASSETS................................................ 4,916,354
----------
LIABILITIES
Investment advisory fee payable........................... 2,992
Accrued expenses.......................................... 19,353
----------
TOTAL LIABILITIES........................................... 22,345
----------
NET ASSETS
Equivalent to $9.49 per share on 515,721 shares of capital
stock outstanding...................................... $4,894,009
==========
</TABLE>
See notes to financial statements.
21
<PAGE> 22
CONCORDE INCOME FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Investment income
Dividends.............................................. $ 151,877
Interest............................................... 216,576
---------
Total investment income................................... 368,453
---------
Expenses
Investment advisory fee................................ 35,937
Custodian fees......................................... 1,610
Printing, postage and delivery......................... 10,870
Accounting fees........................................ 25,182
Transfer agent fees.................................... 9,025
Legal fees............................................. 11,395
Registration fees...................................... 2,023
Audit fees............................................. 10,427
Amortization........................................... 5,172
Other expenses......................................... 1,694
---------
Total expenses............................................ 113,335
Expense reimbursement by Advisor.......................... (23,699)
---------
Expenses, net of reimbursement by Advisor................. 89,636
---------
NET INVESTMENT INCOME..................................... 278,817
---------
REALIZED LOSS AND UNREALIZED APPRECIATION ON INVESTMENTS
Net realized loss on investments in securities............ (126,530)
Net change in unrealized appreciation of investments in
securities............................................. 264,196
---------
NET GAIN ON INVESTMENTS................................... 137,666
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...... $ 416,483
=========
</TABLE>
See notes to financial statements.
22
<PAGE> 23
CONCORDE INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
2000 1999
---------- ----------
<S> <C> <C>
CHANGE IN NET ASSETS FROM OPERATIONS
Net investment income..................................... $ 278,817 $ 239,123
Net realized loss on investments.......................... (126,530) (125,879)
Net change in unrealized appreciation of investments...... 264,196 (251,436)
---------- ----------
Net increase (decrease) in net assets resulting from
operations............................................. 416,483 (138,192)
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income..................................... (276,385) (235,797)
CAPITAL SHARE TRANSACTIONS -- NET........................... (283,594) 593,914
---------- ----------
Total increase (decrease) in net assets................... (143,496) 219,925
NET ASSETS
Beginning of year......................................... 5,037,505 4,817,580
---------- ----------
End of the year (including undistributed net investment
income of $5,976 and $3,544, respectively)............. $4,894,009 $5,037,505
========== ==========
</TABLE>
See notes to financial statements.
23
<PAGE> 24
CONCORDE INCOME FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD ENDED SEPTEMBER 30,
------------------------------------------------
2000 1999 1998 1997 1996(2)
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA(1):
Net asset value, beginning of period....... $ 9.26 $ 10.01 $ 10.41 $ 9.94 $ 10.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income.................... 0.50 0.49 0.49 0.49 0.25
Net realized and unrealized gain (loss)
on investments in securities.......... 0.24 (0.76) (0.39) 0.52 (0.18)
------- ------- ------- ------- -------
Total income (loss) from investment
operations............................ 0.74 (0.27) 0.10 1.01 0.07
------- ------- ------- ------- -------
Less distributions:
Distributions from net investment
income................................ (0.51) (0.48) (0.50) (0.54) (0.13)
------- ------- ------- ------- -------
Net asset value, end of period............. $ 9.49 $ 9.26 $ 10.01 $ 10.41 $ 9.94
======= ======= ======= ======= =======
TOTAL RETURN............................... 8.32% (2.80%) 0.92% 10.41% 0.71%
======= ======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................ $ 4,894 $ 5,038 $ 4,818 $ 3,920 $ 2,217
Ratio of expenses (before reimbursement)
to average net assets................. 2.21% 2.38% 2.46% 3.27% 3.17%
Ratio of expenses (net of reimbursement)
to average net assets................. 1.75% 1.88% 1.89% 1.99% 2.01%
Ratio of net investment income to average
net assets............................ 5.43% 5.01% 4.78% 4.86% 2.51%
Portfolio turnover rate.................. 35.47% 29.63% 18.84% 20.07% 29.77%
</TABLE>
---------------------
(1) Per share information has been calculated using the average number of shares
outstanding.
(2) Period from January 22, 1996 (commencement of operations) through September
30, 1996. Total return and other ratios are not annualized.
See notes to financial statements.
24
<PAGE> 25
CONCORDE INCOME FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Concorde Income Fund (Fund) is a separate series of shares of common stock
of Concorde Funds, Inc. (Company). The Company was incorporated in the state of
Texas in September of 1987, and is registered under the Investment Company Act
of 1940 as a diversified, open-end management investment company. The Fund is
subject to various investment restrictions as set forth in the Statement of
Additional Information. The effective date of the Fund's Registration Statement
under the Securities Act of 1933 was December 4, 1995 and the Fund was initially
capitalized on January 22, 1996. The primary investment objective of the Fund is
to produce current income. The Company may designate one or more series of
common stock. Presently, the Company has designated only one additional series,
Concorde Value Fund. Each capital share in the Fund represents an equal,
proportionate interest in the net assets of the Fund with each other capital
share in such series and no interest in any other series.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
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 the assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
VALUATION OF SECURITIES
Securities are valued at the close of each business day. Bonds and notes
are valued at the last quoted bid price obtained from independent pricing
services. Securities traded on national securities exchanges or on the national
market systems are valued at the last reported sales price on the day of
valuation, except for call options written for which the last quoted bid price
is used. Short-term demand notes and certificates of deposit are stated at
amortized cost, which is equivalent to value. Securities for which
representative market quotations are not readily available are valued at fair
value as determined in good faith by the Board of Directors.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the trade date. Realized gains
and losses from securities transactions are reported on an identified cost
basis. Dividend income is recognized on the ex-dividend date, and interest
income is recognized on the accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
INCOME TAXES
The Fund's policy is to comply with the requirements of the Internal
Revenue Code that are applicable to regulated investment companies and to
distribute all of its net taxable income, including any net realized gains on
investments, to its shareholders. Therefore, no federal income or excise tax
provision is required.
Net investment income (loss), net realized gains (losses) and the cost of
investments in securities may differ for financial statement
25
<PAGE> 26
and income tax purposes. The character of distributions from net investment
income or net realized gains may differ from their ultimate characterization for
income tax purposes. At September 30, 2000, there were no material differences.
Also, due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or realized
gains were recorded by the Fund.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends declared and paid from net investment income or net realized
gains are recorded on the ex-dividend date.
NOTE 2 -- DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders from net investment income were as follows:
<TABLE>
<CAPTION>
PER
RECORD PAID SHARE AMOUNT
------ ------------- ----- --------
<S> <C> <C> <C>
December 23,
December 21, 1999 1999 $0.13 $ 70,415
March 23,
March 21, 2000 2000 0.12 67,995
June 20, 2000 June 23, 2000 0.12 69,255
September 28,
September 26, 2000 2000 0.14 68,720
----- --------
$0.51 $276,385
===== ========
</TABLE>
At September 30, 2000, the Fund had available for federal income tax
purposes a capital loss carryforward of $306,836 of which $25,959 expires in
2004, $20,770 expires in 2005, $7,697 expires in 2006, $125,879 expires in 2007,
and $126,531 expires in 2008.
NOTE 3 -- CAPITAL SHARE TRANSACTIONS
As of September 30, 2000, there were 30,000,000 shares of $1 par value
capital stock authorized of which 10,000,000 shares are classified as the Fund's
series (Series B), 9,841,293 shares are classified as Concorde Value Fund series
(Series A), and the remaining balance is unallocated for future use. As of
September 30, 2000, capital paid-in aggregated $5,160,205.
Transactions in shares of capital stock for the years ended September 30,
2000 and 1999 were as follows:
<TABLE>
<CAPTION>
2000
-------------------
SHARES AMOUNT
------- ---------
<S> <C> <C>
Shares sold............ 33,714 $ 306,266
Shares issued in
reinvestment of
dividends............ 30,116 275,115
------- ---------
63,830 581,381
Shares redeemed........ 92,025 864,975
------- ---------
Net decrease........... (28,195) $(283,594)
======= =========
</TABLE>
<TABLE>
<CAPTION>
1999
--------------------
SHARES AMOUNT
------- ----------
<S> <C> <C>
Shares sold............ 91,597 $ 881,113
Shares issued in
reinvestment of
dividends............ 24,712 235,322
------- ----------
116,309 1,116,435
Shares redeemed........ 53,734 522,521
------- ----------
Net increase........... 62,575 $ 593,914
======= ==========
</TABLE>
NOTE 4 -- INVESTMENT TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities
(excluding short-term securities) aggregated $631,473 and $475,464,
respectively, for fixed income funds, common stocks, preferred stocks and
convertible preferred stocks, and $1,109,617 and $1,287,071, respectively, for
U.S. government obligations for the year ended September 30, 2000. As of
September 30, 2000, the aggregate unrealized appreciation
26
<PAGE> 27
and depreciation of investment securities was as follows:
<TABLE>
<S> <C>
Unrealized appreciation.......... $ 174,737
Unrealized depreciation.......... (140,073)
---------
Net unrealized appreciation...... $ 34,664
=========
</TABLE>
NOTE 5 -- INVESTMENT ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund has an Investment Advisory Agreement (Advisory Agreement) with
Concorde Financial Corporation dba Concorde Investment Management (Advisor) to
act as the Fund's investment advisor. The Advisor provides the Fund with
investment advice and recommendations consistent with the Fund's investment
objectives, policies and restrictions, and supervises the purchase and sale of
investment transactions on behalf of the Fund. For such services, the Advisor
receives an annual fee of 0.7% of the Fund's average daily net assets, computed
daily and paid on a monthly basis. The investment advisory fee was $35,937 for
the year ended September 30, 2000, of which $2,992 was payable at year end.
Under an expense reimbursement agreement the Advisor is required to reimburse
the Fund for expenses in excess of 1.75% of average daily net assets, computed
daily and reimbursed monthly. The expense reimbursement under this agreement for
the year ended September 30, 2000 was $23,699, of which $917 was due from
Advisor at year end.
Certain directors and officers of the Company are also directors, officers
and/or employees of the Advisor.
27
<PAGE> 28
INVESTMENT ADVISOR
Concorde Investment Management
1500 Three Lincoln Centre
5430 LBJ Freeway
Dallas, Texas 75240
OFFICERS
Gary B. Wood, Ph.D.
President and Treasurer
John A. Stetter
Secretary
DIRECTORS
John R. Bradford, Ph.D.
John H. Wilson
Gary B. Wood, Ph.D.
CUSTODIAN
Firstar Bank, N.A.
777 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
Firstar Mutual Fund Services, LLC
Mutual Fund Services, 3rd Floor
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
McGladrey & Pullen, LLP
511 E. John Carpenter Freeway
Suite 200
Irving, Texas 75062
LEGAL COUNSEL
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
TELEPHONE
(972) 387-8258
(Fund information)
(800) 294-1699
(Shareholder account information)
[CONCORDE FUNDS LOGO]
A FAMILY OF NO-LOAD
MUTUAL FUNDS
ANNUAL REPORT
DATED SEPTEMBER 30, 2000
[CONCORDE FUNDS LOGO]
