<PAGE>
[GRAPHIC]
SMALL BOX ABOVE FUND NAME SHOWING
TRADE JOURNALS, POCKET WATCH AND PEN
AND APPOINTMENT BOOK.
SEMI- THE
ANNUAL ADVISORS
REPORT FUND L.P.
.......................................
JUNE 30, 1994
NOTE: THE ADVISORS FUND L.P. HAS CLAIMED
THE
EXEMPTION PROVIDED BY COMMODITY EXCHANGE
ACT REGULATION SECTION4.12(B)(2)(I).
[LOGO]
<PAGE>
The Advisors Fund L.P.
DEAR FELLOW SHAREHOLDER:
The Advisors Fund L.P. ended the first six months of 1994 down
12.6%+, while the Standard & Poor's 500 Composite Stock Price
Index (the "S&P 500"), an unmanaged index of common stock
prices
in the United States, including dividends, posted a loss of 3.5%.
For
the second quarter, the Fund lost 4.5% versus a 0.3% loss for the
S&P
500. During this quarter almost all types of equities came under
selling pressure, especially those in the small to mid-cap areas,
mainly due to another increase in short term interest rates by the
Federal Reserve Board and the weakness in the U.S. dollar. Growth
stocks in general, which account for a good portion of the Fund's
long
positions, continue to underperform. Additionally, leverage,
exposure
to European bonds and investments in emerging markets also created
greater losses for the Fund than those experienced by the broad U.S.
stock market.
During the first half of 1994, several of the Fund's advisers ended their
involvement with the Fund. In light of this development, the Individual
General
Partners thought it was an appropriate point at which to review the Fund's
structure, operations and investment performance since its inception. While
the
results have been satisfactory when compared to alternatives over its history,
the Fund has not achieved the performance levels which were hoped for at the
time of its launch in June of 1990, and as described above, recent relative
performance has been particularly disappointing. The Board also noted that,
largely as a result of its complex structure, the Fund bears a relatively high
expense ratio. After considering these factors, the Board unanimously endorsed
a
proposal to merge the Fund into Smith Barney Shearson Fundamental Value Fund.
The Fundamental Value Fund, managed by John Goode of the Davis Skaggs Division
of Smith Barney Shearson Asset Management, has enjoyed superior performance
over
the past several years. The Individual General Partners also anticipated that
there would be substantial savings in expenses borne by the Fund's
shareholders
as a result of the merger. Accordingly, the Individual General Partners
concluded that the merger would be in the best interest of the Fund's
shareholders.
During the month of October, you will be receiving in the mail proxy material
which will seek your approval of the merger. It will include further
information
on the transaction, including a description of the tax consequences of the
merger. Please review, complete and return your proxy promptly.
1
<PAGE>
We hope that you will remain a shareholder of our mutual funds. We look
forward
to continuing to help you meet your investment needs.
Sincerely,
Heath B. McLendon
INDIVIDUAL GENERAL PARTNER
AUGUST 15, 1994
+As of June 1, 1993, existing shares of the Fund were designated as Class A
shares subject to a maximum 5% front-end sales charge. Prior to June 1, 1993,
shares of the Fund now designated as Class A were subject to a maximum
front-end sales charge of 5.5%. The Fund's average annual total returns,
without the deduction of the applicable front-end sales charge, for the one-
and three-year periods ended June 30, 1994, as well as from commencement of
operations (June 28, 1990) to June 30, 1994, were (8.88)%, 6.01% and 6.59%,
respectively. All average annual total return figures shown reflect
reinvestment of dividends and capital gains.
The Fund began offering Class B shares, subject to a maximum contingent
deferred sales charge (CDSC) of 5% on June 1, 1993. The Fund ceased offering
Class B shares to the public on September 16, 1993. The Fund's cumulative
total
return for Class B shares of the Fund without the deduction of the maximum
CDSC
of 5% for the one-year period ended June 30, 1994, as well as from
commencement
of operations (June 1, 1993) to June 30, 1994, were (9.56)% and (9.51)%,
respectively. Assuming the deduction of the maximum 5% CDSC, these figures
would have been (14.56)% and (14.51)%, respectively. Please consult the Notes
to Financial Statements for complete information on fees and expenses.
NOTE: All figures cited here and on the following pages represent past
performance and are not necessarily indicative of future results. Investment
return and principal value of an investment will fluctuate so that an
investor's shares upon redemption may be worth more or less than original
cost.
2
<PAGE>
The Advisors Fund L.P.
----------------------------------------------------------------------------
PORTFOLIO HIGHLIGHTS (UNAUDITED) JUNE 30,
1994
SUMMARY OF PORTFOLIO OF INVESTMENTS
<TABLE>
<S> <C> <C> <C> <C>
COMMON STOCKS
Domestic 52.4% $43,435,302
Foreign 8.3 6,886,004
- ------------------------------------------------------------------------------
- --
</TABLE>
<TABLE>
<S> <C> <C>
Total Common Stocks 60.7% $50,321,306
Options Purchased 1.0 699,313
U.S. Treasury Obligation 6.9 5,769,579
Commercial Paper 2.8 2,390,000
Mexican Government Obligation 1.6 1,332,255
Corporate Bond 0.5 412,500
Repurchase Agreement 26.0 21,510,000
- ----------------------------------------------------------------------
Total Investments 99.5 82,434,953
- ----------------------------------------------------------------------
Other Assets and Liabilities (Net) 3.1 2,551,518
Call Options Written (0.0) (1,250)
Investments Sold Short (2.6) (2,136,250)
- ----------------------------------------------------------------------
Net Assets 100.0% $82,848,971
- ----------------------------------------------------------------------
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
Percentage
of
Issuer Net
Assets
<S> <C>
------------------------------------------------------------------
U.S. TREASURY BILLS, 4.10% DUE 9/29/94 7.0%
GRUPO TELEVISA ADR 2.3
ORACLE SYSTEMS CORPORATION 2.2
MICROSOFT CORPORATION 1.9
MCDONALD'S CORPORATION 1.7
LEGENT CORPORATION 1.6
MEXICAN GOVERNMENT CETES 1.6
CITICORP 1.6
LENNAR CORPORATION 1.5
COCA-COLA COMPANY 1.5
</TABLE>
3
<PAGE>
The Advisors Fund L.P.
- ------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
SHARES (NOTE 1)
<C> <S> <C>
-----------------------------------------------------------------------------
- -
COMMON STOCKS -- DOMESTIC -- 52.4%
COMPUTER SOFTWARE -- 10.2%
10,000 BMC Software, Inc.+ $ 437,500
25,000 Computer Association International Inc. 1,000,000
25,940 Electronic Arts+ 363,160
50,000 Legent Corporation+ 1,350,000
16,187 Lotus Development Corporation+ 594,872
31,100 Microsoft Corporation+ 1,601,650
48,944 Oracle Systems Corporation+ 1,835,400
25,750 Santa Cruz Operation Inc.+ 141,625
2,539 Sierra On-Line Inc.+ 41,894
11,308 Sybase Inc.+ 554,092
50,000 Symantec Corporation+ 537,500
-----------------------------------------------------------------------------
- -
8,457,693
-----------------------------------------------------------------------------
- -
COMMUNICATIONS -- 7.7%
22,244 AirTouch Communications+ 525,514
500 Cellular Communications Inc. 12,250
32,060 Cellular Communications, International+ 873,635
59,382 Comcast Corporation, Class A, Special 1,068,876
6,764 Comcast Corporation, Class A 121,752
30,000 DSC Communications Corporation+ 586,875
17,659 General Instrument Corporation+ 1,006,563
50,000 IDB Communications Group Inc. 462,500
55,000 Intelcom Group Inc.+ 625,625
7,175 StarSight Telecast Inc.+ 86,100
49,224 Tele-Communications Inc., Class A+ 1,002,939
-----------------------------------------------------------------------------
- -
6,372,629
-----------------------------------------------------------------------------
- -
HEALTH CARE -- 4.4%
65,000 Centocor Inc.+ 731,250
40,000 Cortech, Inc.+ 330,000
40,000 Chronimed Inc. 465,000
30,000 Cytotherapeutics, Inc.+ 168,750
15,000 Healthtrust -- The Hospital Company+ 416,250
6,500 ICOS Corporation+ 28,438
30,000 National Medical Enterprises, Inc. 468,750
40,000 Perseptive Biosystems Inc.+ 650,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
COMMON STOCKS -- DOMESTIC -- (CONTINUED)
HEALTH CARE -- (CONTINUED)
55,000 Ribi ImmunoChemical Research, Inc.+ $ 412,500
-----------------------------------------------------------------------------
- -
3,670,938
-----------------------------------------------------------------------------
- -
FINANCIAL SERVICES -- 4.1%
8,791 American Express Company 226,368
20,000 BankAmerica Corporation 915,000
32,500 Citicorp 1,295,937
6,428 Lehman Brothers Holdings Inc. 97,227
5,875 Wells Fargo & Company 883,453
-----------------------------------------------------------------------------
- -
3,417,985
-----------------------------------------------------------------------------
- -
BROADCASTING AND CABLE TELEVISION -- 3.8%
6,316 International Cablecasting Inc.+ 132,636
34,500 Liberty Media Corporation, Class A+ 681,375
32,500 Preferred Entertainment, Inc.+ 536,250
32,153 QVC Network Inc.+ 1,221,814
2,321 Viacom, Inc., Class A+ 78,334
6,357 Viacom, Inc., Class B** 61,996
13,304 Viacom, Inc., Class B, Non-Voting+ 420,739
-----------------------------------------------------------------------------
- -
3,133,144
-----------------------------------------------------------------------------
- -
RESTAURANTS AND HOTELS -- 3.2%
61,500 Host Marriott Corporation 599,625
23,170 Marriott International, Inc. 616,901
49,500 McDonald's Corporation 1,429,312
2,000 Prime Hospitality Corporation+ 14,750
-----------------------------------------------------------------------------
- -
2,660,588
-----------------------------------------------------------------------------
- -
HOME AND BUILDING SUPPLIES -- 2.9%
20,000 Home Depot Inc. 842,500
21,964 Kaufman & Broad Home Corporation 293,768
67,250 Lennar Corporation 1,269,344
-----------------------------------------------------------------------------
- -
2,405,612
-----------------------------------------------------------------------------
- -
CONSUMER PRODUCTS -- 2.6%
17,500 Gillette Company, Inc. 1,139,687
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
COMMON STOCKS -- DOMESTIC -- (CONTINUED)
CONSUMER PRODUCTS -- (CONTINUED)
16,750 Nike, Inc., Class B $ 1,000,812
-----------------------------------------------------------------------------
- -
2,140,499
-----------------------------------------------------------------------------
- -
OIL AND GAS -- 2.5%
20,000 Associated Natural Gas Corporation 640,000
20,000 Phillips Petroleum Corporation 625,000
75,000 Tesoro Petroleum Corporation 815,625
-----------------------------------------------------------------------------
- -
2,080,625
-----------------------------------------------------------------------------
- -
LEISURE AND ENTERTAINMENT -- 1.9%
8,479 Acclaim Entertainment+ 137,519
21,785 Disney (Walt) Company 906,801
4,101 International Game Technology 77,406
12,250 Time Warner, Inc. 430,281
-----------------------------------------------------------------------------
- -
1,552,007
-----------------------------------------------------------------------------
- -
FOOD AND BEVERAGE -- 1.8%
30,500 Coca-Cola Company 1,239,063
12,480 Snapple Beverage Corporation+ 252,720
-----------------------------------------------------------------------------
- -
1,491,783
-----------------------------------------------------------------------------
- -
COMPUTERS -- 1.7%
6,587 Advanced Micro Devices, Inc.+ 163,852
3,873 Apple Computer, Inc. 102,634
16,352 Creative Technology+ 282,072
12,197 Motorola Inc. 542,767
7,184 Novell Inc.+ 120,332
15,750 Sequent Computer Systems Inc.+ 214,594
-----------------------------------------------------------------------------
- -
1,426,251
-----------------------------------------------------------------------------
- -
ELECTRONICS -- 1.7%
15,000 Arrow Electronics+ 558,750
29,731 Best Buy Company+ 858,483
-----------------------------------------------------------------------------
- -
1,417,233
-----------------------------------------------------------------------------
- -
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
COMMON STOCKS -- DOMESTIC -- (CONTINUED)
CONSUMER DURABLES -- 1.0%
11,200 Duracell International, Inc. $ 436,800
29,750 United International Holdings Inc., Class
A+ 397,906
-----------------------------------------------------------------------------
- -
834,706
-----------------------------------------------------------------------------
- -
REAL ESTATE -- 0.9%
10,000 Spieker Properties, Inc. 220,000
20,000 Staples Inc.+ 540,000
-----------------------------------------------------------------------------
- -
760,000
-----------------------------------------------------------------------------
- -
RETAIL -- 0.6%
15,405 Toys "R" Us Inc.+ 504,514
-----------------------------------------------------------------------------
- -
EDUCATION -- 0.5%
30,000 Education Alternatives+ 382,500
-----------------------------------------------------------------------------
- -
AUTOMOTIVE -- 0.4%
7,443 Chrysler Corporation 350,751
-----------------------------------------------------------------------------
- -
OTHER -- 0.5%
25,000 Relife Inc., Class A 362,500
875 3 Do Company+ 13,344
-----------------------------------------------------------------------------
- -
375,844
-----------------------------------------------------------------------------
- -
TOTAL COMMON STOCKS -- DOMESTIC
(Cost $38,073,431) 43,435,302
-----------------------------------------------------------------------------
- -
COMMON STOCKS -- FOREIGN -- 8.3%
MEXICO -- 5.2%
185,100 Cifra SA, ADR 438,687
10,395 Coca-Cola Femsa ADR+ 261,174
37,895 Grupo Televisa ADR+ 1,923,171
20,000 Nacional Financiera 1,220,000
20,500 Panamerican Beverage Inc. ADR+ 494,562
-----------------------------------------------------------------------------
- -
4,337,594
-----------------------------------------------------------------------------
- -
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
SHARES (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
COMMON STOCKS -- FOREIGN -- (CONTINUED)
HONG KONG -- 2.0%
1,695 Champion Technology Holdings ADR $ 2,966
2,000 Consolidated Electric Power ADR@ 31,750
225,000 Dah SIng Financial Holdings+ 646,209
25,000 Hopewell Holdings Ltd., ADR 97,500
200,000 Hutchison Whampoa 821,506
-----------------------------------------------------------------------------
- -
1,599,931
-----------------------------------------------------------------------------
- -
GREAT BRITAIN -- 0.9%
9,846 Vodafone Group Plc ADR 745,835
-----------------------------------------------------------------------------
- -
LUXEMBOURG -- 0.2%
9,766 Millicom International Cellular SA 202,644
-----------------------------------------------------------------------------
- -
TOTAL COMMON STOCKS -- FOREIGN
(Cost $6,315,017) 6,886,004
-----------------------------------------------------------------------------
- -
<CAPTION>
CONTRACTS
<C> <S> <C>
-----------------------------------------------------------------------------
- -
CALL OPTIONS PURCHASED -- 0.6%
115 Advanced Micro Devices, Inc., July,
$20.00 63,250
94 American Express Company, July, $25.00 36,425
29 Apple Computer, Inc., July, $30.00 544
32 Chrysler Corporation, July, $45.00 8,400
88 Coca-Cola Corporation, August, $35.00 56,100
150 Compaq Computer Corporation, July, $33.00 15,000
34 Disney Walt Company, July, $35.00 25,075
16 Lotus Development Corporation, July,
$45.00 100
15 Lotus Development Corporation, July,
$50.00 0
9 Marriott International, Inc., July,
$25.00 1,631
9 Marriott International, Inc., October,
$25.00 2,475
14 Micron Technology, Inc., July, $30.00 6,475
20 Microsoft Corporation, July, $52.50 1,750
136 Motorola, Inc., July, $40.00 62,900
14 Oracle Systems Corporation, July, $30.00 10,500
28 Oracle Systems Corporation, July, $35.00 8,400
14 Oracle Systems Corporation, August,
$30.00 11,550
9 QVC Network Inc., July, $30.00 7,761
21 QVC Network Inc., July, $35.00 7,613
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
CONTRACTS (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
CALL OPTIONS PURCHASED -- (CONTINUED)
49 Snapple Beverage Corporation, September,
$20.00 $ 11,638
24 Texas Instruments Inc., July, $65.00 34,500
6 Toys "R" Us Inc., July, $30.00 1,875
24 Vodafone Group Plc., July, $70.00 14,100
-----------------------------------------------------------------------------
- -
TOTAL CALL OPTIONS PURCHASED
(Cost $632,817) 388,062
-----------------------------------------------------------------------------
- -
PUT OPTIONS PURCHASED -- 0.4%
453 Standard & Poor's 100 Index, July,
$415.00 300,113
22 Sun Microsystems Inc., July, $20.00 1,238
22 Sun Microsystems Inc., July, $25.00 9,900
-----------------------------------------------------------------------------
- -
TOTAL PUT OPTIONS PURCHASED
(Cost $232,100) 311,251
-----------------------------------------------------------------------------
- -
<CAPTION>
FACE VALUE
<C> <S> <C>
-----------------------------------------------------------------------------
- -
U.S. TREASURY OBLIGATION -- 6.9% (COST $5,769,579)
$ 5,830,000 U.S. Treasury Bills, 4.10%# due 9/29/94++ 5,769,579
-----------------------------------------------------------------------------
- -
COMMERCIAL PAPER -- 2.8%
1,195,000 Ford Motor Company, 4.30% due 7/1/94 1,195,000
1,195,000 General Electric Corporation, 4.30% due
7/1/94 1,195,000
-----------------------------------------------------------------------------
- -
TOTAL COMMERCIAL PAPER
(Cost $2,390,000) 2,390,000
-----------------------------------------------------------------------------
- -
MEXICAN GOVERNMENT OBLIGATION -- 1.6% (COST $1,377,534)
472,485 Cetes, 4.52% due 8/4/94 1,332,255
-----------------------------------------------------------------------------
- -
CORPORATE BOND -- 0.5% (COST $502,736)
500,000 Sierra On-Line Inc., Sub. Note, 6.50% due
4/1/01 412,500
-----------------------------------------------------------------------------
- -
REPURCHASE AGREEMENT -- 26.0% (COST $21,510,000)
21,510,000 Agreement with Morgan Stanley, 4.05%
dated 6/30/94 to be repurchased at
$21,512,420 on 7/1/94, collateralized
by $21,375,000 U.S. Treasury Note,
7.125% due 10/15/98 21,510,000
-----------------------------------------------------------------------------
- -
TOTAL INVESTMENTS (Cost $76,803,214*) 99.5% 82,434,953
-----------------------------------------------------------------------------
- -
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED) JUNE 30,
1994
<TABLE>
<CAPTION>
MARKET VALUE
CONTRACTS (NOTE 1)
-----------------------------------------------------------------------------
- -
<C> <S> <C>
CALL OPTIONS WRITTEN -- (0.0)%
(200) DSC Communications Corporation, July,
$27.50 $ 0
(200) Telefonos de Mexico SA, July, $65.00
(1,250)
-----------------------------------------------------------------------------
- -
TOTAL CALL OPTIONS WRITTEN
(Premiums received $45,981)
(1,250)
-----------------------------------------------------------------------------
- -
<CAPTION>
SHARES
<C> <S> <C>
-----------------------------------------------------------------------------
- -
INVESTMENTS SOLD SHORT -- (2.6)%
(5,000) Apple Computer
(132,500)
(20,000) Aspect Telecommunications
(557,500)
(12,500) Broadband Technology
(237,500)
(10,000) Fresh Choice
(212,500)
(25,000) Glaxo Holdings Plc., ADR
(415,625)
(60,000) Greenwhich Pharmaceuticals
(28,125)
(10,000) Protein Design
(182,500)
(10,000) Sports & Recreation Inc.
(370,000)
-----------------------------------------------------------------------------
- -
TOTAL INVESTMENTS SOLD SHORT
(Contract amount $2,841,063)
(2,136,250)
-----------------------------------------------------------------------------
- -
OTHER ASSETS & LIABILITIES (NET) 3.1% 2,551,518
-----------------------------------------------------------------------------
- -
NET ASSETS 100.0% $ 82,848,971
-----------------------------------------------------------------------------
- -
<FN>
* Aggregate cost for Federal tax purposes.
** When-issued security (see Note 1).
+ Non-income producing securities.
++ U.S. Treasury Bills aggregating $5,769,579 have been pledged to
collateralize
written options and short investment positions in accordance with the
Fund's
Prospectus.
# Annualized yield to maturity.
@ Security exempt from registration under Rule 144A of the Securities Act
of
1933. These securities may be resold in transactions exempt from
registration, to qualified institutional buyers.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) JUNE 30,
1994
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value (Cost
$76,803,214) (Note 1)
See accompanying schedule
Securities $60,924,953
Repurchase agreement 21,510,000
- --------------------------------------------------------------------------
Total Investments 82,434,953
- --------------------------------------------------------------------------
Cash 161,816
Receivable for short sales 2,841,063
Receivable for investment securities
sold 2,412,178
Receivable for short sales closed 373,337
Unamortized organization costs (Note 6) 155,576
Interest and dividends receivable 75,567
Receivable for Fund shares sold 7,421
Other assets 960
- --------------------------------------------------------------------------
TOTAL ASSETS 88,462,871
- --------------------------------------------------------------------------
LIABILITIES:
Payable for investment securities
purchased $2,626,549
Investments sold short, at value
(Contract amount $2,841,063) (Note 1)
See accompanying schedule 2,136,250
Payable for shares redeemed 648,561
Transfer agent fees payable (Note 2) 20,500
Accrued Individual General Partners'
fees and expenses (Note 2) 20,000
Custodian fees payable (Note 2) 18,575
Administration fee payable (Note 2) 18,393
Service fees payable (Note 3) 18,393
Distribution fee payable (Note 3) 1,932
Call options written, at value
(Premiums received $45,981)
(Note 1) See accompanying schedule 1,250
Accrued expenses and other payables 103,497
- --------------------------------------------------------------------------
TOTAL LIABILITIES 5,613,900
- --------------------------------------------------------------------------
NET ASSETS $82,848,971
- --------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
- ------------------------------------------------------------- JUNE 30,
1994
<TABLE>
<S> <C> <C>
SHARES represented by:
Individual General Partners $ 79,370
Shareholders 3,315,851
- --------------------------------------------------------------------------
Total Shares 3,395,221
- --------------------------------------------------------------------------
NET ASSETS consist of:
Accumulated net investment loss (7,674,913)
Accumulated net realized gain on
securities transactions, foreign
currency transactions, futures
contracts, written options and
investments sold short 42,243,642
Net unrealized appreciation of
securities, written options and
short positions 6,381,283
Paid-in capital 41,898,959
- --------------------------------------------------------------------------
TOTAL NET ASSETS $82,848,971
- --------------------------------------------------------------------------
NET ASSETS VALUE:
CLASS A SHARES:
NET ASSET VALUE and redemption price
per share
($79,839,506 DIVIDED BY 3,270,940
shares outstanding) $24.41
- -------------------------------------------------------------
MAXIMUM OFFERING PRICE PER SHARE
($24.41 DIVIDED BY 0.95)
(based on sales charge of 5% of the
offering price at June 30, 1994) $25.69
- -------------------------------------------------------------
CLASS B SHARES:
NET ASSET VALUE and offering price per
share+
($3,009,465 DIVIDED BY 124,281 shares
outstanding) $24.22
- -------------------------------------------------------------
<FN>
+ Redemption price per share is equal to Net Asset Value less any
applicable
contingent deferred sales charge. The Fund ceased selling Class B shares
on
September 16, 1993.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
STATEMENT OF OPERATIONS (UNAUDITED)
- -------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30,
1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest $
575,684
Dividends (net of foreign withholding taxes of
$3,797)
366,492
- ------------------------------------------------------------------------------
- -------
TOTAL INVESTMENT INCOME
942,176
- ------------------------------------------------------------------------------
- -------
EXPENSES:
Investment advisory fee (Note 2) $ 153,577
Administration fee (Note 2) 135,309
Service fees (Note 3) 135,309
Custodian fees (Note 2) 83,891
Amortization of organization costs (Note 6) 76,442
Legal and audit fees 45,562
Transfer agent fees (Note 2) 38,843
Individual General Partners' fees and expenses
(Note 2) 38,410
Distribution fee (Note 3) 13,437
Other 82,163
- ------------------------------------------------------------------------------
- -------
Total Operating Expenses Before Interest Expense
802,943
Interest expense (Note 7)
330,398
- ------------------------------------------------------------------------------
- -------
TOTAL EXPENSES
1,133,341
- ------------------------------------------------------------------------------
- -------
NET INVESTMENT LOSS
(191,165)
- ------------------------------------------------------------------------------
- -------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTES 1 AND 4):
Net realized gain/(loss) on:
Securities transactions
3,578,708
Written options
37,329
Futures contracts
(729,565)
Investments sold short
980,059
Foreign currency transactions
(304,585)
- ------------------------------------------------------------------------------
- -------
Net realized gain on investments during the period
3,561,946
- ------------------------------------------------------------------------------
- -------
Net change in unrealized appreciation/(depreciation) of:
Securities
(18,013,193)
Written options
(35,942)
Futures contracts
952
Investments sold short
722,226
- ------------------------------------------------------------------------------
- -------
Net unrealized depreciation of investments during the period
(17,325,957)
- ------------------------------------------------------------------------------
- -------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
(13,764,011)
- ------------------------------------------------------------------------------
- -------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS
$(13,955,176)
- ------------------------------------------------------------------------------
- -------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR
ENDED
SIX MONTHS
12/31/93
ENDED
6/30/94
(UNAUDITED)
<S> <C>
<C>
Net investment loss $ (191,165)
$ (3,376,413)
Net realized gain on securities, written options,
futures contracts,
investments sold short and foreign currency
transactions
during the period 3,561,946
12,030,444
Net unrealized depreciation of securities, written
options, futures contracts and investments sold
short during the period (17,325,957)
(2,284,561)
- ------------------------------------------------------------------------------
- -------
Net increase/(decrease) in net assets resulting from
operations (13,955,176)
6,369,470
Net increase/(decrease) in net assets from Fund share
transactions (Note 5):
Class A (33,111,724)
(24,034,146)
Class B (658,952)
4,004,568
- ------------------------------------------------------------------------------
- -------
Net decrease in net assets (47,725,852)
(13,660,108)
NET ASSETS:
Beginning of period 130,574,823
144,234,931
- ------------------------------------------------------------------------------
- -------
End of period (including accumulated net investment
loss of $7,674,913 and $7,483,748, respectively) $82,848,971
$130,574,823
- ------------------------------------------------------------------------------
- -------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
STATEMENT OF CASH FLOWS (UNAUDITED)
- -------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30,
1994
<TABLE>
<S> <C> <C>
NET DECREASE IN CASH:
Cash flows from operating activities:
Interest received $ 665,713
Dividends received 407,297
Operating expenses paid (889,998)
Interest expense (330,398)
- ------------------------------------------------------------------------------
- -----
Net cash used in operating activities $
(147,386)
- ------------------------------------------------------------------------------
- -----
Cash flows from investing activities:
Decrease in short-term portfolio
securities, net (4,221,912)
Purchase of investment securities and
purchased options (148,724,627)
Proceeds from disposition of investment
securities and
purchased options 190,873,176
Net proceeds used to close short sales
and written option transactions 641,860
Net proceeds from futures transactions
and forward foreign exchange contracts (825,476)
- ------------------------------------------------------------------------------
- -----
Net cash provided by investing
activities
37,743,021
- ------------------------------------------------------------------------------
- -----
NET CASH PROVIDED BY OPERATING AND
INVESTING ACTIVITIES
37,595,635
- ------------------------------------------------------------------------------
- -----
Cash flows from financing activities:
Proceeds from shares sold
Class A 357,684
Payments on shares redeemed
Class A (32,863,156)
Class B (658,952)
Decrease in loans outstanding (4,601,806)
- ------------------------------------------------------------------------------
- -----
NET CASH USED IN FINANCING ACTIVITIES
(37,766,230)
- ------------------------------------------------------------------------------
- -----
NET DECREASE IN CASH
(170,595)
CASH -- BEGINNING OF PERIOD
332,411
- ------------------------------------------------------------------------------
- -----
CASH -- END OF PERIOD $
161,816
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
STATEMENT OF CASH FLOWS (UNAUDITED) (CONTINUED)
- -------------------------------------------------------------
FOR THE SIX MONTHS ENDED JUNE 30,
1994
<TABLE>
<S> <C> <C>
RECONCILIATION OF NET DECREASE IN NET ASSETS FROM OPERATIONS
TO CASH USED IN OPERATING AND INVESTING ACTIVITIES:
Net decrease in net assets resulting from
operations $
(13,955,176)
Decrease in investments $ 53,554,224
Increase in futures contracts (952)
Decrease in payable securities sold short
and written options (1,587,312)
Increase in receivable for investment
securities sold and
short sales (835,041)
Increase in payable for investment
securities purchased 376,113
Decrease in dividends and interest
receivable 130,834
Decrease in other assets 91,169
Decrease in accrued expenses (178,224)
- ------------------------------------------------------------------------------
- -----
TOTAL ADJUSTMENTS
51,550,811
- ------------------------------------------------------------------------------
- -----
NET CASH PROVIDED BY OPERATING AND
INVESTING ACTIVITIES $
37,595,635
- ------------------------------------------------------------------------------
- -----
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR
YEAR YEAR PERIOD
6/30/94++ ENDED
ENDED ENDED ENDED
(UNAUDITED) 12/31/93++
12/31/92++ 12/31/91 12/31/90*
<S> <C> <C> <C>
<C> <C>
Net Asset Value, beginning of period $ 27.91 $ 26.63 $
24.04 $ 17.51 $ 18.90
- ------------------------------------------------------------------------------
- -------
Investment income from operations:
Net investment loss $ (0.04) $ (0.66) $
(0.24) $ (0.37) $ (0.03)
Net realized and unrealized gain/(loss) on
investments (3.46) 1.94
2.83 6.90 (1.36)
- ------------------------------------------------------------------------------
- -------
Total from investment operations (3.50) 1.28
2.59 6.53 (1.39)
- ------------------------------------------------------------------------------
- -------
Net Asset Value, end of period $ 24.41 $ 27.91 $
26.63 $ 24.04 $ 17.51
- ------------------------------------------------------------------------------
- -------
Total return+++ (12.58)% 4.81%
10.77% 37.29% (7.35)%
- ------------------------------------------------------------------------------
- -------
Ratios to average net assets/ supplemental
data:
Net assets, end of period (000's) $ 79,840 $ 126,428 $
144,235 $ 158,522 $ 140,447
Ratio of expenses to average net assets** 2.07%+ 4.54%
3.12% 3.86% 3.27%+
Ratio of net investment loss to average net
assets (0.33)%+ (2.45)%
(1.00)% (1.60)% (0.31)%+
Portfolio turnover rate 151% 247%
312% 304% 149%
- ------------------------------------------------------------------------------
- -------
<FN>
* The Fund commenced operations on June 28, 1990.
** The annualized operating expense ratio includes interest expense. The
annualized ratio excluding interest expense was 1.46% for the six months
ended June 30, 1994, 3.54%, 2.28%, 3.60% and 2.99% for the years ended
December 31, 1993, 1992, 1991, and for the period ended December 31,
1990,
respectively.
+ Annualized.
++ Per share amounts have been calculated using the monthly average share
method
which more appropriately presents the per share data as the undistributed
income method does not accord with results of operations for these
periods.
+++ Total return represents aggregate total return for the periods indicated
and
does not reflect the deduction of any applicable sales charges.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
The Advisors Fund L.P.
- --------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A CLASS B SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
PERIOD
6/30/94++
ENDED
(UNAUDITED)
12/31/93*++
<S> <C> <C>
Net Asset Value, beginning of period $ 27.80 $
27.01
- ------------------------------------------------------------------------------
- ------
Investment income from operations:
Net investment loss $ (0.14) $
(0.53)
Net realized and unrealized gain/(loss) on
investments (3.44)
1.32
- ------------------------------------------------------------------------------
- ------
Total from investment operations (3.58)
0.79
- ------------------------------------------------------------------------------
- ------
Net Asset Value, end of period $ 24.22 $
27.80
- ------------------------------------------------------------------------------
- ------
Total return+++ (12.91)%
2.92%
- ------------------------------------------------------------------------------
- ------
Ratios to average net assets/supplemental data:
Net assets, end of period (000's) $ 3,009 $
4,147
Ratio of expenses to average net assets** 2.82%+
5.29%+
Ratio of net investment loss to average net assets (1.08)%+
(3.20)%+
Portfolio turnover rate 151%
247%
- ------------------------------------------------------------------------------
- ------
<FN>
* The Fund commenced selling Class B shares on June 1, 1993. The Fund
ceased
all sales of Class B shares on September 16, 1993.
** The annualized operating expense ratio includes interest expense. The
annualized ratio excluding interest expense was 2.21% and 4.29% for the
six
months ended June 30, 1994 and the period ended December 31, 1993,
respectively.
+ Annualized.
++ Per share amounts have been calculated using the monthly average share
method
which more appropriately presents the per share data as the undistributed
income method does not accord with results of operations for these
periods.
+++ Total return represents aggregate total return for the periods indicated
and
does not reflect the deduction of any applicable sales charge.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Advisors Fund L.P. (the "Fund") is registered under the Investment Company
Act of 1940, as amended (the "1940 Act"), as an open-end, non-diversified
management investment company established as a limited partnership under
Delaware law. The Fund issues shares of limited partnership interest and is
governed by a board of Individual General Partners in lieu of a corporate
board
of directors. The Fund commenced operations on June 28, 1990. As of June 1,
1993, the Fund offered two classes of shares to the general public: Class A
shares and Class B shares and those shares already outstanding were classified
as Class A. As of September 16, 1993, the Fund ceased all sales of Class B
shares of the Fund. Class A shares are sold with a front-end sales charge.
Class
B shares may be subject to a contingent deferred sales charge ("CDSC") at the
time of redemption. Class B shares will automatically convert to Class A
shares
eight years after the original purchase date. Each class of shares has
identical
rights and privileges except with respect to the effect of the respective
sales
charges, the distribution and/or service fees borne by each class, expenses
allocable exclusively to each class, voting rights on matters affecting a
single
class, the exchange privilege of each class and the conversion feature of
Class
B shares. The policies described below are followed consistently by the Fund
in
the preparation of its financial statements in conformity with generally
accepted accounting principles.
PORTFOLIO VALUATION: The Fund's investments are valued at market value or, in
the absence of a market value with respect to any investment, at fair market
value as determined by or under the direction of the Individual General
Partners. A security that is primarily traded on a United States or foreign
exchange is valued by reference to the last sale price on the exchange or, if
no
sales occur during the day, at the current quoted bid price. Over-the-counter
securities are valued on the basis of the bid price at the close of business
each day. Debt securities (other than U.S. government securities and short-
term
obligations) are valued by The Boston Company
Advisors, Inc. ("Boston Advisors"), after consultation with independent
valuation services approved by the Individual General Partners. Investments in
U.S. government securities (other than short-term securities) are valued at
the
average of the quoted bid and asked prices in the over-the-counter market.
Options are generally valued at the last sale price or, in the absence of a
last
sale price, the last bid price. The value of a futures contract equals
19
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
the unrealized gain or loss on the contract that is determined by marking it
to
the current settlement price for a like contract acquired on the day on which
the futures contract is being valued. A settlement price may not be used if
the
market makes a limit move with respect to a particular commodity. Forward
contracts and futures contracts, when no market quote is available, are valued
at their fair market value as determined by the Individual General Partners,
upon consultation with their agents. Short-term investments that mature in 60
days or less are valued at amortized cost.
OPTIONS: Upon the purchase of a put option or a call option by the Fund, the
premium paid is recorded as an investment, the value of which is
marked-to-market daily. When a purchased option expires, the Fund will realize
a
loss in the amount of the cost of the option. When the Fund enters into a
closing sale transaction, the Fund will realize a gain or loss depending on
whether the sales proceeds from the closing sale transaction are greater or
less
than the cost of the option. When the Fund exercises a put option, the
proceeds
from such sale will be decreased by the premium originally paid. When the Fund
exercises a call option, the cost of the security which the Fund purchases
upon
exercise will be increased by the premium originally paid. When purchased
index
options are exercised, settlement is made in cash.
When the Fund writes a call option or a put option, an amount equal to the
premium received by the Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, the Fund realizes a
gain
equal to the amount of the premium received. When the Fund enters into a
closing
purchase transaction, the Fund realizes a gain (or loss if the cost of the
closing purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying security
or index, and the liability related to such option is eliminated. When a call
option is exercised, the Fund realizes a gain or loss from the sale of the
underlying security and the proceeds from such sale are increased by the
premium
originally received. When a put option is exercised, the amount of the premium
originally received will reduce the cost of the security which the Fund
purchased upon exercise. When written index options are exercised, settlement
is
made in cash.
20
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The risk associated with purchasing options is limited to the premium
originally
paid. The risk in writing a call option is that the Fund may forego the
opportunity of profit if the market value of the underlying security or index
increases and the option is exercised. The risk in writing a put option is
that
the Fund may incur a loss if the market value of the underlying security or
index decreases and the option is exercised. In addition, there is the risk
the
Fund may not be able to enter into a closing transaction because of an
illiquid
secondary market.
FUTURES CONTRACTS: Upon entering into a futures contract, the Fund is required
to deposit with the broker an amount of cash or cash equivalents equal to a
certain percentage of the contract amount. This is known as the "initial
margin." Subsequent payments ("variation margin") are made or received by the
Fund each day, depending on the daily fluctuation of the value of the
contract.
For financial statement purposes, an amount equal to the settlement amount of
the contract is included in the Fund's Statement of Assets and Liabilities as
an
asset and as an equivalent liability. For long futures positions, the asset is
marked-to-market daily. For short futures positions, the liability is marked-
to-market daily. The daily changes in the contract are recorded as unrealized
gains or losses. The Fund recognizes a realized gain or loss when the contract
is closed.
There are several risks in connection with the use of futures contracts as a
hedging device. The change in value of futures contracts primarily corresponds
with the value of their underlying instruments or index, which may not
correlate
with the change in value of the hedged investments. In addition, there is the
risk that the Fund may not be able to enter into a closing transaction because
of an illiquid secondary market.
FOREIGN CURRENCY: The books and records of the Fund are maintained in United
States dollars. Foreign currencies, investments and other assets and
liabilities
are translated into U.S. dollars at the exchange rates prevailing at the end
of
each business day, and purchases and sales of investment securities, income
and
expenses are translated on the respective dates of such transactions. Net
realized foreign currency gains and losses resulting
21
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
from changes in exchange rates include foreign currency gains and losses on
foreign currency transactions and the difference between the amounts of
interest
and dividends recorded on the books of the Fund and the amount actually
received. The portion of foreign currency gains and losses related to
fluctuation in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gains and losses on
investment securities sold.
FORWARD FOREIGN CURRENCY CONTRACTS: Forward foreign currency contracts are
valued at the forward rate and are marked-to-market daily. The change in
market
value is recorded by the Fund as an unrealized gain or loss. When the contract
is closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the
time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations
in
the underlying prices of the Fund's portfolio securities, but it does
establish
a rate of exchange that can be achieved in the future. Although forward
foreign
currency contracts limit the risk of loss due to a decline in the value of the
currency holdings, they also limit any potential gain that might result should
the value of the currency increase. In addition, the Fund could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
the
contracts.
SHORT SALES: A short sale is a transaction in which the Fund sells securities
it
does not own (but has borrowed) in anticipation of a decline in the market
price
of the securities. To complete a short sale, the Fund must arrange through a
broker to borrow the securities to be delivered to the buyer. The proceeds
received by the Fund from the short sale are retained by the broker until the
Fund replaces the borrowed securities. In borrowing the securities to be
delivered to the buyer, the Fund becomes obligated to replace the securities
borrowed at their market price at the time of replacement, whatever that price
may be.
22
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Possible losses from short sales differ from losses that could be incurred
from
a purchase of a security, because losses from short sales may be unlimited,
whereas losses from purchases can equal only the total amount invested.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Securities purchased or sold on a when-issued
or
delayed-delivery basis may be settled a month or more after the trade date.
Interest income is not accrued until settlement date. The Fund instructs the
custodian to segregate assets in a separate account with a current value at
least equal to the amount of its when-issued purchased commitments. Realized
gains and losses from securities sold are recorded on the identified cost
basis.
Dividend income is recorded on the ex-dividend date. Interest income is
recorded
on the accrual basis. Investment income and realized and unrealized gains and
losses are allocated based upon relative net assets of each class. The Fund
must
pay any dividends or interest payable on securities while those securities are
in short position. During the six months ended June 30, 1994, the Fund paid,
as
an offset to dividend income, dividends totalling $28,803 on securities that
were in short positions.
DISTRIBUTIONS TO SHAREHOLDERS: The Fund intends to make distributions to
shareholders in such amounts and at such times as the Individual General
Partners, in their sole discretion, shall determine.
FEDERAL INCOME TAXES: No Federal income tax provision has been made in the
financial statements because the Fund intends to qualify as a partnership for
Federal income tax purposes. The Fund will only be treated as a partnership
for
Federal income tax purposes through 1997.
DISSOLUTION OF FUND: The term of the Fund shall expire on December 31, 2037,
unless earlier dissolved.
CASH FLOW INFORMATION: The Fund issues and redeems its shares and invests in
securities as reported in the Statement of Changes in Net Assets. Information
on
cash payments is presented in the Statement of Cash Flows. Accounting
practices
that do not affect reporting activity on a cash basis
23
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
include unrealized gain or loss on investment securities. In addition, cash
flows on futures and option contracts are included in the same category as the
cash flows for items being hedged.
REPURCHASE AGREEMENTS: The Fund may engage in repurchase agreement
transactions.
Under the terms of a typical repurchase agreement, the Fund takes possession
of
an underlying debt obligation subject to an obligation of the seller to
repurchase, and the Fund to resell, the obligation at an agreed upon price and
time, thereby determining the yield during the Fund's holding period. This
arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral is
at
least equal at all times to the total amount of the repurchase obligations,
including interest. In the event of counterparty default, the Fund has the
right
to use the collateral to offset losses incurred. There is potential loss to
the
Fund in the event the Fund delayed or was prevented from exercising its rights
to dispose of the collateral securities including the risk of a possible
decline
in the value of the underlying securities during the period while the Fund
seeks
to assert its rights. The Fund's portfolio managers, acting under the
supervision of the Individual General Partners, review the value of the
collateral and the creditworthiness of those banks and dealers with which the
Fund enters into repurchase agreements to evaluate potential risks.
2. INVESTMENT ADVISORY FEE, PORTFOLIO MANAGEMENT FEES,
ADMINISTRATION FEE AND OTHER TRANSACTIONS
Smith Barney Strategy Advisors Inc. ("SBSA"), a division of Mutual Management
Corp., which is controlled by Smith Barney Holdings Inc. ("Holdings"), serves
as
the Fund's investment adviser. Holdings is a wholly owned subsidiary of The
Travelers Inc. The Fund pays SBSA a fee adjusted to reflect the performance of
the Fund's Class B shares relative to the Standard & Poor's 500 Composite
Stock
Price Index ("S&P 500"). This monthly performance adjustment is based upon the
performance of the Class B shares, after deducting all expenses, including the
investment advisory fee, relative to the performance of the S&P 500 on a
rolling
twelve month basis. The investment advisory fee paid to SBSA can range on an
24
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
annual basis from 0% to 4.00% of the value of the Fund's average daily net
assets. For the six months ended June 30, 1994, the effective rate was .28%
for
the Fund.
The Fund and SBSA have entered into portfolio management agreements
("Portfolio
Management Agreements") with various portfolio managers (collectively, the
"Portfolio Managers"). The Fund's current Portfolio Managers are as follows:
Ardsley Advisory Partners and Mark Asset Management Corporation. SBSA pays
each
Portfolio Manager a monthly management fee based upon the Portfolio Manager's
performance compared to the performance of the S&P 500 on a rolling twelve
month
basis. The Fund pays no direct investment advisory fee to any of the Portfolio
Managers.
Tremont Partners, Inc. ("Tremont") assists SBSA in monitoring and evaluating
the
performance of the Portfolio Managers pursuant to a consulting agreement among
the Fund, SBSA and Tremont. SBSA pays Tremont a fee for its services equal to
20% of any investment advisory fee retained by SBSA. The Fund pays no direct
fees to Tremont.
Prior to April 20, 1994, the Fund was party to an administration agreement
(the
"Administration Agreement") with Boston Advisors, an indirect wholly owned
subsidiary of Mellon Bank Corporation ("Mellon"). Under this agreement the
Fund
paid a monthly fee at annual rate of 0.25% of the value of the Fund's average
daily net assets.
As of the close of business on April 20, 1994, Smith, Barney Advisers, Inc.
("SBA") succeeded Boston Advisors as the Fund's administrator. The new
administration agreement contains substantially the same terms and conditions,
including the level of fees, as the predecessor agreement.
As of the close of business on June 2, 1994, the Fund also entered into a
sub-administration agreement (the "Sub-Administration Agreement") with Boston
Advisors. Under the Sub-Administration Agreement, Boston Advisors is paid a
portion of the fee paid by the Fund to SBA at a rate agreed upon from time to
time between SBA and Boston Advisors.
25
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
For the six months ended June 30, 1994, the Fund incurred total brokerage
commissions on portfolio transactions of $565,361, of which $5,959 was paid to
Smith Barney Inc. ("Smith Barney").
For the six months ended June 30, 1994, Smith Barney or its predecessor
received
from investors $15,326 representing commissions (sales charges) on sales of
Class A shares.
A CDSC is generally payable by a shareholder in connection with the redemption
of Class B shares within five years after the date of purchase. In
circumstances
in which the charge is imposed, the amount of the charge ranges between 5% and
1% of net asset value depending on the number of years since the date of
purchase. For the six months ended June 30, 1994, Smith Barney received
$29,370
from investors in CDSCs on the redemption of Class B shares.
No officer, director or employee of Smith Barney, SBSA, the Portfolio
Managers,
SBA, Tremont or any of their affiliates received any compensation from the
Fund
for serving as an Individual General Partner. The Fund pays each Individual
General Partner who is not an officer, director or employee of Smith Barney,
SBSA, the Portfolio Managers, SBA, Tremont or any of their affiliates, a fee
of
$15,000 per annum plus $1,000 per meeting attended, and reimburses each such
Individual General Partner for travel and out-of-pocket expenses.
Boston Safe Deposit and Trust Company, an indirect wholly owned subsidiary of
Mellon, serves as the Fund's custodian. The Shareholder Services Group, Inc.,
a
subsidiary of First Data Corporation, serves as the Fund's transfer agent.
3. DISTRIBUTION AGREEMENT
Smith Barney acts as distributor of the Fund's shares pursuant to a
distribution
agreement with the Fund, and sells shares of the Fund through Smith Barney or
its affiliates.
26
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a services and
distribution plan (the "Plan"). Under this Plan, the Fund compensates Smith
Barney for servicing accounts for Class A and Class B shareholders. Smith
Barney
is paid an annual service fee with respect to Class A and Class B shares of
the
Fund at the rate of 0.25% of the value of the average daily net assets of each
respective class of shares. Smith Barney is also paid an annual distribution
fee
with respect to Class B shares at the rate of 0.75% of the value of the
average
daily net assets attributable to those shares. For the six months ended June
30,
1994, the Fund incurred $130,830 and $4,479 in service fees for Class A and
Class B shares, respectively. For the six months ended June 30, 1994, the Fund
incurred $13,437 in distribution fees for Class B shares.
4. PURCHASES AND SALES OF INVESTMENTS
Purchases and proceeds from sales of securities, excluding U.S. government
securities and short-term obligations, during the six months ended June 30,
1994, were $130,509,846 and $173,513,997, respectively. Written option
activity
for the six months ended June 30, 1994 was as follows:
<TABLE>
<CAPTION>
Number of
Contracts
Premiums
<S> <C> <C>
- ------------------------------------------------------------------------------
- -----
Options outstanding at December 31, 1993 400 $
83,173
Options written during the period 3,351
540,960
Options expired during the period (150)
(21,187)
Options cancelled in closing purchase transactions (3,201)
(556,965)
- ------------------------------------------------------------------------------
- -----
Options outstanding at June 30, 1994 400
45,981
- ------------------------------------------------------------------------------
- -----
</TABLE>
At June 30, 1994, aggregate gross unrealized appreciation of all securities in
which there was an excess of value over tax cost was $8,775,676 and aggregate
gross unrealized depreciation for all securities in which there was an excess
of
tax cost over value was $3,143,937.
5. SHARES OF PARTNERSHIP INTEREST
The Fund has authorized and may issue an unlimited number of shares, divided
into two classes, Class A and Class B. As of September 16, 1993, the
27
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Fund ceased all sales of Class B shares of the Fund. The Individual General
Partners of the Fund reserve the right in their sole discretion to offer Class
B
shares of the Fund for purchase in the future.
Changes in shares outstanding for the Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED
CLASS A SHARES: Shares 6/30/94 Amount
Shares 12/31/93 Amount
<S> <C> <C>
<C> <C>
- ------------------------------------------------------------------------------
- -------
Sold 13,810 $ 365,105
266,743 $ 7,199,559
Redeemed (1,272,184) (33,476,829)
(1,154,680) (31,233,705)
- ------------------------------------------------------------------------------
- -------
Net decrease (1,258,374) (33,111,724)
(887,937) $ (24,034,146)
- ------------------------------------------------------------------------------
- -------
<CAPTION>
SIX MONTHS ENDED
PERIOD ENDED
6/30/94
12/31/93*
CLASS B SHARES:** Shares Amount
Shares Amount
<S> <C> <C>
<C> <C>
- ------------------------------------------------------------------------------
- -------
Sold -- --
151,161 $ 4,058,038
Redeemed (24,906) $ (658,952)
(1,974) (53,470)
- ------------------------------------------------------------------------------
- -------
Net increase/(decrease) (24,906) $ (658,952)
149,187 $ 4,004,568
- ------------------------------------------------------------------------------
- -------
<FN>
* The Fund commenced selling Class B shares on June 1, 1993. Any shares
outstanding prior to June 1, 1993 have been designated as Class A shares.
** The Fund ceased all sales of Class B shares on September 16, 1993.
</TABLE>
6. ORGANIZATION COSTS
All costs incurred in connection with the organization of the Fund, including
the fees and expenses of registering and qualifying its shares for
distribution
under Federal and state securities regulations, are being amortized on the
straight-line method over a period of sixty months from June 28, 1990, the
date
that the Fund commenced operations. In the event that any of the initial
shares
of the Fund are redeemed during such amortization period, the Fund will be
reimbursed for any unamortized organization costs in the same proportion as
the
number of shares redeemed bears to the number of initial shares outstanding at
the time of redemption.
28
<PAGE>
The Advisors Fund L.P.
- -------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
7. LINE OF CREDIT
The Fund has a line of credit agreement (the "Agreement") provided by
Continental Bank N.A. primarily for the purpose of allowing the Fund to
leverage
investments. Under this Agreement, the Fund may borrow up to the lesser of $50
million or 25% of its adjusted net assets. Interest is payable either at the
bank's Money Market Rate or the London Interbank Offered Rate (LIBOR) plus a
percentage ranging from 0.375% to 1.250% based on the aggregate loan
outstanding
balance on an annualized basis. The Fund is charged a commitment fee equal to
0.25% per annum of the credit available under the Agreement. The Fund is
required to maintain a ratio of net assets to aggregate amount of indebtedness
of no less than 3 to 1. At June 30, 1994, the Fund had no outstanding
borrowings. During the six months ended June 30, 1994, the Fund had an average
outstanding daily balance of $11,690,000 with interest rates ranging from
3.313%
to 5.750%. Interest expense totalled $330,398 for the six months ended June
30,
1994.
8. SUBSEQUENT EVENT
On July 27, 1994 the Individual General Partners approved an Agreement and
Plan
of Sale and Liquidation (the "Agreement") pursuant to which Smith Barney
Shearson Fundamental Value Fund Inc. ("Fundamental Value") will purchase all
of
the assets and identified liabilities of the Fund. Pursuant to the Agreement,
shareholders of the Fund will receive shares of Fundamental Value equal in
value
to the net asset value of the shares each shareholder currently holds in the
Fund. The consummation of the transaction contemplated by the Agreement is
subject to receipt of approval of the Fund's shareholders and certain other
express conditions.
29
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
OATH OF THE COMMODITY POOL OPERATORS AUGUST 15,
1994
UNDER REGULATION 4.22(H)(I)
The undersigned hereby certify that, to the best of their knowledge and
belief,
the information contained in The Advisors Fund L.P. Semi-Annual Report dated
June 30, 1994 was accurate and complete as of the date thereof.
Richard P. Roelofs Heath B. McLendon
Chief Executive Officer INDIVIDUAL GENERAL PARTNER
SMITH BARNEY SHEARSON STRATEGY ADVISERS
INC.
30
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
PARTICIPANTS
DISTRIBUTOR
Smith Barney Inc.
388 Greenwich Street
World Financial Center
New York, New York 10285
INVESTMENT ADVISER
Smith Barney Strategy
Advisers Inc.
Two World Trade Center
New York, New York 10048
ADMINISTRATOR
Smith, Barney Advisers, Inc.
1345 Avenue of the Americas
New York, New York 10105
SUB-ADMINISTRATOR
The Boston Company Advisors, Inc.
One Boston Place
Boston, Massachusetts 02108
TRANSFER AGENT
The Shareholder Services
Group, Inc.
Exchange Place
Boston, Massachusetts 02109
AUDITORS AND COUNSEL
Coopers & Lybrand
One Post Office Square
Boston, Massachusetts 02109
Dechert Price & Rhoads
1500 K Street N.W.
Washington, D.C. 20005
CUSTODIAN
Boston Safe Deposit and
Trust Company
One Boston Place
Boston, Massachusetts 02108
31
<PAGE>
The Advisors Fund L.P.
- ---------------------------------------------------------------------------
INVESTOR BENEFITS
AUTOMATIC REINVESTMENT
You may reinvest your dividends and/or capital gains automatically in
additional
shares of your fund at the current net asset value.
UNLIMITED EXCHANGES
If your investment goals change, you may exchange into another Smith Barney
Shearson mutual fund with the same sales charge structure without incurring a
sales charge.*
SYSTEMATIC
INVESTMENT PLAN
This program allows you to invest equal dollar amounts automatically on a
regular basis, monthly or quarterly.
AUTOMATIC CASH
WITHDRAWAL PLAN
With this plan, you may withdraw money on a regular basis while maintaining
your
investment.
MUTUAL FUND
EVALUATION SERVICE
Through your Financial Consultant, you may obtain a free personalized analysis
of how your fund has performed for you, taking into account the effect of
every
transaction. The analysis is based upon month-end data from CDA Investment
Technologies, Inc., a widely recognized mutual fund information service. An
evaluation also gives you other important facts and figures about your
investment.
For more information about these benefits, or if you have any other questions,
please call your Financial Consultant or write:
MUTUAL FUND POLICY GROUP
SMITH BARNEY INC.
388 GREENWICH STREET 37TH FLOOR
NEW YORK, NY 10013
*AFTER WRITTEN NOTIFICATION,
EXCHANGE PRIVILEGE MAY BE
MODIFIED OR TERMINATED AT ANY TIME.
32
<PAGE>
THE
ADVISORS
FUND L.P.
INDIVIDUAL GENERAL PARTNERS
Walter E. Auch, Sr.
Martin Brody
Stephen E. Kaufman
Heath B. McLendon
Madelon DeVoe Talley
THIS REPORT IS SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF
THE
ADVISORS
FUND L.P. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS
UNLESS
ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS FOR THE FUND, WHICH
CONTAINS
INFORMATION CONCERNING THE FUND'S INVESTMENT POLICIES AND APPLICABLE CHARGES,
DISTRIBUTION FEES, RISK OF LOSS AND EXPENSES AS WELL AS OTHER
PERTINENT INFORMATION.
PERFORMANCE CITED IS THROUGH JUNE 30, 1994. PLEASE CONSULT THE SMITH BARNEY
SHEARSON MUTUAL FUNDS QUARTERLY PERFORMANCE UPDATE FOR FIGURES THROUGH THE
MOST
RECENT CALENDAR QUARTER.
[LOGO]
SMITH BARNEY SHEARSON
MUTUAL FUNDS
Two World Trade Center
New York, New York 10048
[LOGO]
Fund 134, 205
FD0610 H4
