<PAGE>
YAMAICHI August 29, 1997
GLOBAL FUND
Dear Shareholders:
The Yarnaichi Global Fund increased by 17.39% in terms of net asset value (NAV)
during the first six months of 1997. For the same period, the Morgan Stanley
Capital International (MSCI) World Index rose 15.35% with net dividends
reinvested. The average global fund, as compiled by Lipper Analytical Services,
gained 12.89%.
North America was the leading market region during the first half of the year
and, by virtue of its benchmark weight, it was the main contributor to the
performance of the world index. Strong money flows set against a backdrop of
low interest rates, benign inflation, and a healthy economy drove the market to
record levels. In Europe, the push to satisfy the economic criteria for
membership in European Monetary Union (EMU) has resulted in record low inflation
rates in some countries and a dramatic dip in interest rates. This, combined
with the strength in the dollar, produced significant market gains on the
continent. Gains were more modest in the United Kingdom (which is not part of
the EMU) as continued strength in consumer demand led to a tightening of
interest rates. The index in Japan lagged due to a sputtering recovery and tax
hikes, but the "nifty fifty" group of electronics and export-oriented companies
far outpaced the overall market. The Pacific ex-Japan region underperformed in
the first half of the year. A host of financial related problems plagued the
region ranging from bad loans in Thailand to curbs on speculative investment in
Malaysia to currency concerns resulting from current account deficits. Other
regions such as Latin America and Eastern Europe, which are not included in the
MSCI World Index, generally registered sharp increases.
While the equity markets performed well in the first half, bond yields continued
to decline thereby leaving the relative value still in favor of equities. We
expect that continental European equity markets will be more volatile this
quarter as liquidity tends to dry up during the summer and questions about EMU
persist. We do not feel that any sustainable tightening of interest rates will
occur given the high unemployment rates and the fragility of EMU. However, we
believe that the collective political will in Europe is intent on bringing about
EMU. The main question is whether we have a "hard" or "soft" EMU (i.e., strict
or weak adherence to membership criteria). We expect EMU to lead to a
consolidation phase generally favoring larger companies. For example, rather
than maintaining banking relationships with institutions in each European
country we would expect many corporate clients to concentrate their business
with one or two banks who can handle all of their needs. The banking industry
is also likely to consolidate due to excess capacity and excess capital. The
recently announced merger between Hypo-Bank and Vereinsbank highlights this
point. We also expect that a greater transparency of prices will result from
EMU which will be favorable for the long term inflation outlook. We think that
the pending changes from monetary union will provide the political cover for
companies to carry out restructurings and plant rationalization programs. These
moves may also help to shore up the pension problems that exist in Europe, but
we still forecast significant growth in the private fund management business in
Europe much like the trend that has occurred in the US. We plan to overweight
companies and sectors that are likely to benefit from the aforementioned trends.
We plan to lower our exposure to the UK market. Higher interest rates and the
rise in Sterling have made the market less appealing. The economy remains firm.
Despite recent news that inflation remains in check, demand remains strong
thanks to the consumer. This prompted the Bank of England to recently raise
base lending rates to 7%. However, the Bank hinted that the level of interest
rates is now consistent with their inflation target. This comment seems to be
aimed at keeping exchange rates from rising in anticipation of further rate
hikes. This should help take some of the pressure off the exporters who have
suffered due to the strength of the pound. Our weighting in the banking sector
has boosted our performance, but we have recently taken some profits there.
In Japan we have moved from an overweight position to an underweighting.
Expectations for corporate profit growth are being adjusted lower. We have
taken some profits in some of the 'nifty fifty' stocks which outperformed the
market and have reinvested some of the proceeds into the banking sector. We
feel that the banks will benefit from the restructuring of their loan
portfolios. We are underweight Asia ex-Japan as we feel that growth rates will
slow in the wake of the currency crises. Some countries are scaling back some
large infrastructure projects in order to improve their current account balance.
The underlying support for the US market remains intact. However, valuations
are at the upper end of their historical range. Still, we expect that corporate
activity will carry the market to new highs. With low inflation, organic
revenue growth is harder to generate. Therefore, companies are looking outward
for growth. By using their appreciated stock as currency and rationalizing
costs, corporate acquirers can justify paying higher share prices than minority
equity investors.
On behalf of the management and staff of Yamaichi Global Fund, I wish to thank
all of you for your ongoing interest and support.
Sincerely,
Edward S. Burke
President
<PAGE>
YAMAICHI GLOBAL FUND
(A PORTFOLIO OF YAMAICHI FUNDS, INC.)
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997 (UNAUDITED)
ASSETS
Investments at value (cost $11,017,432, Note 2A) $ 13,470,247
Foreign currencies 1,750
Cash 119,000
Dividends receivable 23,715
Receivable for securities sold 580,584
Receivable for taxes withheld 5,635
------------
Total assets 14,200,931
LIABILITIES
Payable for investments purchased 260,799
Custodian fee payable 27,928
Professional fees payable 39,483
Payable for Directors' fees (Note 3B) 20,974
Investment Advisory fee payable (Note 3A) 11,156
Accrued expenses and other payables 9,844
Transfer Agent fee payable 3,004
Printing expenses payable 10,000
------------
Total liabilities 383,188
------------
Net assets for 1,306,601 shares outstanding (Note 5) $ 13,817,743
------------
------------
Net assets consist of:
Net investment loss (55,775)
Accumulated net realized gain on investments and foreign
currency transactions (Note 2) 2,925,361
Unrealized appreciation of investments, foreign currency
holdings, and other net assets (Note 2A) 2,451,586
Par value (Note 5) 13,066
Paid-in capital in excess of par value (Notes 1 and 5) 8,483,505
------------
Total net assets at value $ 13,817,743
------------
------------
Net asset value and redemption price per share
($13,817,743 DIVIDED BY 1,306,601 shares) $ 10.58
Maximum offering price per share
((100 DIVIDED BY 95.25) x $10.58) $ 11.11
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
YAMAICHI GLOBAL FUND
(A PORTFOLIO OF YAMAICHI FUNDS, INC.)
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED JUNE 30, 1997 (UNAUDITED)
Income (Note 2D):
Dividends (net of foreign withholding
taxes of $9,519) $ 89,123
Interest 3,880
------------
Total investment income 93,003
Expenses:
Investment Advisory fees (Note 3A) $ 65,725
Custodian expense 64,140
Professional fees (8,362)
Transfer Agent expense 14,347
Directors' fees (Note 3B) 13,463
Other expenses 2,258
Printing and postage expenses (6,915)
Insurance expense 4,122
------------
Total expenses 148,778
------------
Net investment income (loss) (55,775)
Realized and unrealized gain (loss) on
investments and foreign currencies:
Net realized gain (loss) on investments
sold 2,158,160
Net realized gain (loss) on foreign
currency transactions (4,128)
------------
Net realized gain (loss) on investments
and foreign currency transactions 2,154,032
Change in unrealized appreciation
(depreciation) of investments 121,376
Change in unrealized appreciation
(depreciation) of foreign currencies and
other net assets (6,489)
------------
Net change in unrealized appreciation
(depreciation) of investments, foreign
currency holdings and other assets 114,887
------------
Net realized and unrealized gain
(loss) on investments, foreign currency
and other net assets 2,268,919
------------
Net increase (decrease) in net assets
resulting from operations $ 2,213,144
------------
------------
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
YAMAICHI GLOBAL FUND
(A PORTFOLIO OF YAMAICHI FUNDS, INC.)
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIODS ENDED JUNE 30, 1997 AND DECEMBER 31, 1996
SIX MONTHS
ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- ------------------
Net investment income (loss) $ (55,775) $ (21,197)
Net realized gain (loss) on investments
and foreign currency transactions 2,154,032 2,138,530
Net change in unrealized appreciation
(depreciation) of investments, foreign
currency holdings and other net assets 114,887 (616,638)
----------- -----------
Net increase (decrease) in net assets
resulting from operations 2,213,144 1,500,695
Distributions to shareholders from:
Net investment income - -
Funds in excess of net investment income - -
Net realized gains on investments - (1,861,747)
Net increase (decrease) in net assets from Fund
share transactions (Note 5) (1,696,817) (6,514,073)
----------- -----------
Net increase (decrease) in net assets 516,327 (6,875,125)
Net assets:
Beginning of period 13,301,416 20,176,541
----------- -----------
End of period $13,817,743 $13,301,416
----------- -----------
----------- -----------
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
YAMAICHI GLOBAL FUND
(A PORTFOLIO OF YAMAICHI FUNDS, INC.)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED 6/30/97 YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
(UNAUDITED) 12/31/96 12/31/95 12/31/94 2/31/93
------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period $ 8.97 $ 9.32 $ 8.37 $ 9.33 $ 7.35
------------- ---------- ---------- ---------- ----------
Net investment income (loss) (0.06) (0.01) (0.01) (0.05) 0.04
Net realized and unrealized gain (loss) on investments
and foreign currency 1.66 0.92 1.51 (0.56) 2.42
------------- ---------- ---------- ---------- ----------
Total from investment operations 1.61 0.91 1.50 (0.61) 2.46
Distributions to shareholders from:
Capital - (1.26) - - -
Net investment income - - - - (0.04)
Funds in excess of net investment income - - - - (0.02)
Net realized gain on investments - - (0.55) (0.35) (0.42)
------------- ---------- ---------- ---------- ----------
Net asset value:
End of period $ 10.58 $ 8.97 $ 9.32 $ 8.37 $ 9.33
------------- ---------- ---------- ---------- ----------
------------- ---------- ---------- ---------- ----------
Total return @ 17.90% 22.96% 17.99% (6.52)% 33.62%
Ratio of investment advisory fees to average net assets 1.00% 1.00% 1.00%* 1.00% 1.00%
Ratio of expenses to average net assets before reduction - - - 2.10% -
Ratio of expenses to average net assets 2.25% 2.37% 1.93% 2.04% 1.75%
Ratio of net investment income (loss) to average net assets (0.84)% (0.13)% 0.14% (0.37)% 0.35%
Portfolio turnover rate 39.16% 65.07% 73.99% 70.13% 75.50%
Shares outstanding at end of period (000 omitted) 1,307 1,483 2,164 2,249 3,608
Average commission rate paid per share** .001750 .001608
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED PERIOD ENDED
12/31/92 12/31/91 12/31/90 12/31/89 12/31/88
------------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per share operating performance:
Net asset value, beginning of period $ 7.93 $ 7.53 $ 9.95 $ 9.76 $ 9.95
------------- ---------- ---------- ---------- ----------
Net investment income (loss) 0.06 0.04 0.08# 0.11 0.10
Net realized and unrealized gain (loss) on investments
and foreign currency (0.24) 1.00 (2.01) 1.33 (0.21)
------------- ---------- ---------- ---------- ----------
Total from investment operations (0.18) 1.04 (1.93) 1.44 (0.11)
Distributions to shareholders from:
Capital (0.34) (0.60) (0.32) - -
Net investment income (0.06) (0.04) (0.17) - (0.08)
Funds in excess of net investment income - - - - -
Net realized gain on investments - - - (1.25) -
------------- ---------- ---------- ---------- ----------
Net asset value:
End of period $ 7.35 $ 7.93 $ 7.53 $ 9.95 $ 9.76
------------- ---------- ---------- ---------- ----------
------------- ---------- ---------- ---------- ----------
Total return @ (2.28)% 14.22% (19.39)% 15.45% (1.11)%
Ratio of investment advisory fees to average net assets 1.00% 1.00% 1.00% 1.00% 1.00%*
Ratio of expenses to average net assets before reduction - - - - -
Ratio of expenses to average net assets 1.78% 1.94% 1.58% 1.73% 1.92%*
Ratio of net investment income (loss) to average net assets 0.77% 0.48% 0.98% 0.64 % 1.86%
Portfolio turnover rate 58.20% 47.40% 99.20% 136.00% 68.70%
Shares outstanding at end of period (000 omitted) 6,975 7,397 8,696 5,535 10,630
Average commission rate paid per share**
</TABLE>
* Annualized
@ Represents the aggregate total return for the period indicated and does not
reflect any applicable sales charges.
See accompanying notes
# Net investment income has been calculated based on the average share method
** For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for security trades on
which commissions are charged.
This amount may vary from period to period and fund to fund depending on the
mix of trades executed in various markets where trading practices and
commission rate structures may differ.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
YAMAICHI GLOBAL FUND
(A PORTFOLIO OF YAMAICHI FUNDS, INC.)
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND BUSINESS:
Yamaichi Funds, Inc. (the "Company") is an investment company registered
under the Investment Company Act of 1940, as amended. It is organized as a
Maryland corporation and is an open-end, diversified, management company.
The Yamaichi Global Fund portfolio (the "Fund") is currently the only
portfolio of the Company. On June 6, 1988, the initial 10,100 shares of
the Fund were purchased by Yamaichi International (America), Inc. ("YIA"),
the Fund's Distributor. On June 10, 1988, operations of the Fund
commenced. The Funds custodian is Brown Brothers Harriman & Co. The
transfer agent is Shareholder Services Inc.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during
the reporting period. Actual results could differ from those estimates.
The following is a summary of significant accounting policies in conformity
with generally accepted accounting principles consistently followed by the
Fund in the preparation of the financial statements.
2. SIGNIFICANT ACCOUNTING POLICIES:
A. PORTFOLIO VALUATION
Portfolio securities listed on a securities exchange or on the NASDAQ
National Market System ("NASDAQ") are valued by using the last
reported sale price, or, if no sales are reported, the average of the
last reported bid and asked prices. Securities not listed on a
securities exchange or NASDAQ are at the average of the quoted bid and
asked prices in the over-the-counter market. If an extraordinary
event which is likely to affect the value of a security occurs after
the close of an exchange or system on which a portfolio security is
traded, such security will be valued at its fair value as determined
in good faith by the Investment Manager under procedures established
by, and under the general supervision of, the Fund's Board of
Directors. Obligations having remaining maturities of 60 days or less
are valued at amortized cost, which approximates market value. All
other securities and assets, including any restricted securities, will
be valued at their fair value as determined in good faith by the Board
of Directors.
B. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
From time to time the Fund may enter into forward foreign currency
exchange contracts to hedge certain assets denominated in foreign
currencies. Contracts are valued at the forward
CONTINUED
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
rate and are marked-to-market daily. The change in the market value
is recorded by the Fund as an unrealized gain or loss. 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 hedged currency, 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 their
contracts.
C. FOREIGN CURRENCY TRANSACTIONS
Transactions denominated in foreign currencies are recorded in the
Fund's records at the current U.S. dollar exchange rate. Asset and
liability accounts that are denominated in foreign currencies are
adjusted to reflect the current exchange rate at the end of the
period. Transaction gains or losses resulting from changes in the
exchange rate during the reporting period or upon settlement of the
foreign currency transaction are reported in operations for the
current period. Since the net assets of the Fund are presented at the
exchange rate and market values at the close of the period, it is not
practical to isolate the portion of the Fund's unrealized gains or
losses arising as a result of changes in foreign exchange rates from
the fluctuations arising from changes in the market prices of
securities during the period.
D. SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on a trade-date basis. Dividend
income is recorded on an ex-dividend date. Interest income is
recorded on an accruals basis. Realized gains or losses on sales of
investments are determined on the identified cost basis for accounting
and tax purposes. Dividend and interest income are recorded net of
foreign taxes withheld where recovery of such taxes is not assured.
E. FEDERAL TAXES
It is the Fund's policy to qualify as a regulated investment company
by complying with the requirements of the Internal Revenue Code
applicable to regulated investment companies including the
distribution of substantially all of its income to its shareholders.
Therefore, no federal income tax provision is required. In addition,
by distributing during each calendar year substantially all of its net
investment income, capital gains and certain other amounts, the Fund
will not be subject to a Federal excise tax. Income distributions are
determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are
primarily due to differing treatments of income
CONTINUED
7
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by
the Fund.
For Federal income tax purposes the cost of investments is
$(11,017,432). At June 30, 1997 net unrealized appreciation of
investments was $2,451,586. This consists of aggregate gross
unrealized depreciation and appreciation of $(793,983) and $3,245,569,
respectively.
F. REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreement transactions. Under each
repurchase agreement, the selling institution will be required to
maintain the value of the securities subject to the repurchase
agreement at not less than their repurchase price. Repurchase
agreements could involve certain risks in the event of default or
insolvency of the other party, including possible delays or
restrictions upon the Fund's ability to dispose of the underlying
securities. Yamaichi Capital Management, Inc. (YCM), the Fund's
investment adviser, acting under the supervision of the Board of
Directors, reviews the creditworthiness and value of the collateral of
those banks and dealers with which the Fund enters into repurchase
agreements to evaluate potential risks.
G. DISTRIBUTIONS
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with federal income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due
to differing treatments of income and gains on various investment
securities held by the Fund and timing differences.
3. FEES AND RELATED PARTY TRANSACTIONS:
A. INVESTMENT ADVISORY FEES
Under an agreement between the Fund and YCM (the "Management
Contract") YCM reviews and establishes investment policies for the
Fund, and pays all salaries, fees and expenses of officers and
directors of the Fund who are affiliated with YCM or its affiliates.
In addition to reviewing and establishing investment policies for the
Fund, YCM provides executive and other personnel for management of the
Fund and provides investment advice and portfolio management services.
For such services, YCM receives a monthly fee at the annual rate of
1.0% of the average daily net assets of the Fund.
CONTINUED
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(UNAUDITED)
B. DIRECTORS' FEES
Directors, other than those affiliated with YCM or its affiliates,
receive an annual fee of $5,000 plus $500 for each meeting of the
Board of Directors attended as well as reimbursement for travel and
out of pocket costs.
C. BROKERAGE COMMISSION
During the period ended June 30, 1997, the Fund did not engage in any
brokerage transactions with YIA and Yamaichi Securities Co., Ltd.
4. PURCHASES AND SALES OF SECURITIES:
During the period, purchases of securities, other than securities subject
to repurchase transactions, short-term interest bearing securities held to
maturity and U.S. Government Obligations, amounted to $5,136,715. Sales
of such securities during the year amounted to $7,211,458.
5. SHARE CAPITAL:
The Fund has 50,000,000 authorized shares of common stock, par value $.01
share, which may, without shareholder approval, be increased and divided
into an unlimited number of portfolios of such shares. Share capital
transactions during the period ended June 30, 1997 and December 31, 1996 as
follows:
<TABLE>
<CAPTION>
PERIOD ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold 34,131 $ 317,102 251 $ 2,411
Distributions reinvested - - 9,341 82,852
Reacquired (210,352) (2,013,919) (690,828) (6,599,335)
---------- ------------ ---------- ------------
Net increase (decrease) (176,221) $(1,696,817) (681,236) $(6,514,072)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
At June 30, 1997, there was one significant shareholder who individually owned
more than 5% of the shares outstanding. The aggregate total value of shares
held by this investor amounted to $11,388,047.
CONTINUED
9
<PAGE>
PORTFOLIO OF INVESTMENTS
(UNAUDITED)
% OF NET
INDUSTRY DIVERSIFICATION (UNAUDITED) ASSETS
--------
Automotive 1.2 %
Banking/Financial Services 22.2 %
Chemicals 1.2 %
Communications 8.1 %
Conglomerate 2.7 %
Construction 2.5 %
Electronics/Computers 15.3 %
Healthcare/Pharmaceuticals 8.8 %
Industrial/Manufacturing 8.8 %
Insurance 8.6 %
Merchandising 1.6 %
Metals/Glass 1.8 %
Other 7.5 %
Restaurants 1.8 %
Steel 1.0 %
Transportation 2.0 %
Utility 2.4 %
Other net assets 2.5 %
-------
100.0 %
-------
-------
10
<PAGE>
PORTFOLIO OF INVESTMENTS, CONTINUED
(UNAUDITED)
<TABLE>
<CAPTION>
INVESTMENT BY COUNTRY MARKET
SHARES VALUE
------ -------------
<S> <C> <C>
ARGENTINA (1.0%)
Siderca SA A shares (Steel) 4,000 $ 16,443
Siderca 1 vote (Steel) 45,000 116,568
-------------
133,011
-------------
AUSTRIA (1.1%)
Voest Alpine Eisenbabasysteme AG (Industrial/Manufacturing) 1,500 148,282
-------------
148,282
-------------
CANADA (3.8%)
Agrium Inc. (Chemicals) 4,875 55,777
Canadian Imperial Bank of Commerce (Banking/
Financial Services) 15,000 378,001
Dundee Bancorp Inc (Banking/Financial Services)* 3,000 69,517
Westaim Corp (Industrial/Manufacturing)* 4,867 19,032
-------------
522,327
-------------
DENMARK (.8%)
GN Store Nord (Communications) 1,000 106,182
-------------
106,182
-------------
FRANCE (2.8%)
AXA (Insurance) 2,000 124,389
Bouygues (Construction) 1,538 126,538
Cap Gemini SA (Electronics/Computers) 2,600 137,152
-------------
388,079
-------------
GERMANY (3.0%)
Munchener Ruckvers Part Pd Regd (Insurance) 80 224,325
Schmalbach Lubeca (Metals/Glass) 850 190,579
-------------
414,904
-------------
HONG KONG (2.0%)
Henderson Land Development (Construction) 10,000 88,740
HSBC Holdings ORD (Banking/Finanical Services) 6,000 180,450
-------------
269,190
-------------
11
<PAGE>
MARKET
SHARES VALUE
------ ------
ITALY (2.3%)
Telecom Italia SPA (Communications) 70,000 $ 225,572
Istituto Mobilance Italiano (Other) 10,500 94,469
-------------
320,041
-------------
JAPAN (15.3%)
DDI Corporation (Communications) 10 73,816
Makino Milling Machine (Industrial/Manufacturing) 20,000 170,840
Matsushita Electric Ind (Electronics/Computers) 11,000 221,708
Nissan Motor Co (Automotive) 10,000 77,567
Nomura Securities Co Ltd (Banking/Financial Services) 8,000 110,287
Oki Electric Ind (Electronics/Computers) 25,000 126,734
Secom Co (Other) 3,000 220,138
Sumitomo Electric (Industrial/Manufacturing) 10,000 167,525
Takefuji Corp (Banking/Financial Services) 3,000 163,860
Tokyo Mitsubishi Bank (Banking/Financial Services) 12,000 240,817
Tokyo Electron Ltd (Electronics/Computers) 5,500 262,978
Fujikura Ltd (Industrial/Manufacturing) 15,000 140,040
Kansai Electric Power (Utility)* 7,000 134,980
-------------
2,111,290
-------------
MALAYSIA (.6 %)
Commerce Asset Holdings Berhad (Banking/Financial Services) 32,000 84,310
Commerce Asset Holdings wts (Banking/Financial Services) 4,000 618
Commerce Asset Holdings rts (Banking/Financial Services) 6,400 228
-------------
85,156
-------------
NETHERLANDS (4.9%)
ING Groep NV (Banking/Financial Services) 5,000 230,507
Internatio-Muller (Conglomerate) 12,000 378,388
Int'l Nedland GP NV WTS 3/15/0 (Banking/Financial Services)* 6,111 70,385
-------------
679,280
-------------
SINGAPORE (1.1%)
Keppel Corp (Transportation) 15,000 66,622
Singapore Land (Other) 15,000 68,196
Keppel Corp Ltd A (Transportation) 3,750 16,262
-------------
151,080
-------------
12
<PAGE>
MARKET
SHARES VALUE
------ ------
SOUTH AFRICA (2.1%)
Liblife Strategic Investments (Insurance) 75,000 $ 294,247
-------------
294,247
-------------
SWEDEN (.8%)
Sandvik AB (Industrial/Manufacturing) 3,500 99,477
-------------
99,477
-------------
SWITZERLAND (4.2%)
Baloise Holdings Regd (Insurance) 100 238,274
Novartis AG Regd (Healthcare/Pharmaceuticals) 213 340,392
-------------
578,666
-------------
THAILAND (.00%)
Dhana Siam Finance Fgn Regd PCL (Banking/Financial Services) 8,000 4,246
-------------
4,246
-------------
UNITED KINGDOM (3.5%)
British Airways Ord (Transportation) 7,500 85,461
National Power Ord (Utility) 15,000 130,346
Powergen Ord (Utility) 5,000 59,429
United Assurance Group (Insurance) 12,000 85,399
Whitbread (Restaurant) 9,000 113,641
-------------
474,276
-------------
UNITED STATES (48.6%)
Advest Group Inc (Banking/Financial Services) 5,000 118,750
Alcan Aluminum (Metals/Glass) 1,600 55,500
Allegiance Corp (Healthcare/Pharmaceuticals) 2,500 68,125
Analog Devices Inc (Industrial/Manufacturing)* 5,000 132,812
Applied Magnetics (Electronics/Computers)* 2,500 56,563
ARM Financial Group (Insurance)* 6,000 120,000
Bankamerica Corp (Banking/Financial Services) 3,000 193,688
Belco Oil & Gas Corp (Chemicals)* 5,000 107,187
Ben Franklin Retail Stores Inc (Merchandising)* 9 -
Butler Manufacturing Co (Construction) 4,000 132,500
Cabletron Systems Inc (Industrial/Manufacturing)* 4,000 113,250
Centura Banks Inc (Banking/Financial Services) 2,500 114,688
13
<PAGE>
MARKET
SHARES VALUE
------ ------
UNITED STATES, CONTINUED
Cia Anonima Tel De Ven Spn ADR (Communications) 1,500 $ 64,688
Cityscape Financial Corp (Banking/Financial Services)* 5,000 99,688
Computer Assoc Intl Inc (Electronics/Computers) 4,000 222,750
Conseco Inc (Banking/Financial Services) 4,000 148,000
Ford Motor Co. (Automotive) 2,500 94,375
Fresenius Natl Medical Care PF (Healthcare/Pharmaceuticals)* 2,500 144
Geotek Ind Inc (Communications)* 22,500 122,344
Grand Metropolitan PLC Sponsored ADR (other)* 3,000 117,563
GT Global Eastern Europe FD BEN (Banking/Financial Services) 13,206 229,454
GTE Corp (Communications) 3,000 131,625
Intel Corp (Electronics/Computers) 1,000 141,813
International Business Machine (Electronics/Computers) 2,000 180,375
Iridium World Communications (Communications)* 1,800 32,625
Lehman Brothers Hldgs Inc (Banking/Financial Services) 5,000 202,500
Lockheed Martin Corp (Electronics/Computers) 1,500 155,344
Lone Star Steakhouse Saloon (Restaurant)* 5,000 130,000
McDonnell Douglas Corp (Other) 1,500 102,750
Mercantile Bancorporation (Banking/Financial Services) 2,500 157,344
Nynex Corp (Communications) 2,000 115,250
Pacificare Health Systems (Healthcare/Pharmaceuticals)* 4,000 255,500
Pakistan Investment Fund Inc. (Banking/Financial Services) 15,000 78,750
Pharmacia & UpJohn Inc. (Healthcare/Pharmaceuticals) 5,000 173,750
Philip Morris Cos Inc (Merchandising) 5,000 221,875
Philips NV ADR (Industrial/Manufacturing) 3,000 215,625
Pixtech Inc (Electronics/Computers)* 15,000 54,375
Qualix Group Inc. (Other)* 15,000 90,000
Quinenco S.A. Sponsored ADR (Other)* 400 7,400
Ryanair Hldgs Plc Sponsored ADR (Transportation)* 3,500 94,938
Sierra Health Services (Healthcare/Pharmaceuticals)* 12,000 375,000
Star Telecommunications Inc. (Communications)* 4,000 53,000
Startek (Other)* 5,000 75,312
Storage Technology Corp (Electronics/Computers) 4,000 178,000
Sun Microsystems Inc (Electronics/Computers)* 5,000 186,094
Telephone & Data Systems Inc (Communications) 5,000 189,687
3 Com Corp (Other)* 1,750 78,750
TTI Team Telecom (Electronics/Computers)* 10,000 46,250
Unibanco GDR (Banking/Finanical Services)* 2,300 85,387
United States Surgical Corp (Other)* 5,000 186,250
Vermont Financial Services Corp (Banking/Financial Services) 2,500 117,500
14
<PAGE>
MARKET
SHARES VALUE
------ ------
Western Digital Cap (Electronics/Computer)* 5,000 $ 158,125
Western National (Insurance) 4,000 107,250
-------------
6,690,513
-------------
TOTAL INVESTMENTS (COST $11,017,432) (97.5%) $ 13,470,247
-------------
-------------
OTHER ASSETS AND LIABILITIES (2.5%) 347,496
-------------
NET ASSETS $ 13,817,743
-------------
-------------
*Nonincome-producing security
</TABLE>
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