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Previous: RBB FUND INC, N-30D, 1995-05-01 |
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[LOGO]
LAFFER/CANTO
EQUITY
FUND
RBBFUND, INC.
SEMI-ANNUAL REPORT
February 28, 1995
<PAGE>
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
Semi-Annual Investment Adviser's Report
For the six-month period ending 2/28/95, the Fund modestly
underperformed the market as measured by the Standard & Poors 500 Index.
This modest underperformance reflected in part the increased rotational
effect in the market resulting from a number of factors that were not fully
appraised by the Conditional Forecaster. Such events as the derivative
debacle in Orange County and currency volatility superimposed on an
unusually active Federal Reserve Board created a rotational affect in stocks
that seemed to offset the forecasting abilities of this tool to some extent.
For the period ending 2/28/95, only 18 S&P industry groups were represented
in the Portfolio versus a more normal industry representation in the mid
20s.
Comparison of change in value of $10,000 Investment in the Laffer/Canto
Equity Portfolio at applicable sales charge of 4.75%, and the S&P 500 Index
from Initial Investment Date 1/14/94, at Period Ended 4/30/94, and at
each Quarter End.
Average Annual Total Return
One Year 1.85%
From Inception 1.44%
[Graphic Omitted]
S&P 500 Index Laffer/Canto Equity Portfolio
1/14/94 $ 10,000 $ 9,525
4/30/94 $ 9,560 $ 9,134
8/31/94 $ 10,200 $ 9,811
11/30/94 $ 9,796 $ 9,249
2/28/95 $ 10,596 $ 9,662
Note: Past performance is not predictive of future performance.
<PAGE>1
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
Statement of Assets and Liabilities
February 28, 1995
(Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments at value (cost $561,550) $572,607
Cash 39,069
Dividends and interest receivable 1,549
Other assets 85,098
--------
Total ASSETS 698,323
--------
Liabilities:
Payable for fund shares redeemed 19,907
--------
Total LIABILITIES 19,907
--------
NET ASSETS (Applicable to 67,551 shares) $678,416
========
NET ASSET VALUE PER SHARE
($678,416 / 67,551) $10.04
======
OFFERING PRICE PER SHARE
($10.04 / .9525) $10.54
======
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>2
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
Schedule of Investments
February 28, 1995
(Unaudited)
<TABLE>
<CAPTION>
Number
of Shares Value
---------- ------------
<S> <C> <C>
Common Stocks--82.2%
Chemicals Diversified--4.5%
Avery Dennison Corp. 90 $ 3,375
Engelhard Corp. 250 6,594
FMC Corp.** 60 3,510
First Mississippi Corp. 30 728
PPG Industries, Inc. 440 16,170
----------
30,377
----------
Computers, Software and Servicing--5.2%
Autodesk, Inc. 20 785
Automatic Data Processing, Inc. 90 5,535
Ceridian Corp.** 30 945
Computer Associates International, Inc. 100 5,700
Computer Sciences Corp.** 30 1,474
First Data Corp. 40 2,150
Lotus Development Corp.** 30 1,253
Microsoft Corp.** 190 11,970
Novell, Inc.** 90 1,884
Oracle Systems Corp.** 105 3,308
Shared Medical Systems Corp. 10 344
----------
35,348
----------
Electronics and Instrumentation--5.1%
Hewlett Packard Co. 280 32,200
Perkin Elmer Corp. 50 1,431
Tektronix, Inc. 30 1,028
----------
34,659
----------
Financial--3.9%
American Express Co. 220 7,425
American General Corp. 50 1,581
Dean Witter, Discover and Co. 40 1,615
Federal Home Loan Mortgage Corp. 40 2,320
Federal National Mortgage Association 70 5,399
MBNA Corp. 40 1,055
Merrill Lynch & Co., Inc. 50 2,050
Salomon, Inc. 30 1,080
Transamerica Corp. 20 1,093
Travelers, Inc. 80 3,110
----------
26,728
----------
Food Distribution Wholesalers--5.0%
Fleming Companies, Inc. 170 3,315
Supervalu, Inc. 340 8,755
Sysco Corp. 760 21,565
----------
33,635
----------
Hardware & Tools--4.9%
Black & Decker Corp. 450 12,038
Snap-On, Inc. 280 9,520
Stanley Works 290 11,709
----------
33,267
----------
Health Care Diversified--5.3%
Abbott Laboratories, Inc. 220 7,810
Allergan, Inc. 20 578
American Home Products Corp. 80 5,720
Bristol-Myers Squibb Co. 140 8,680
Johnson & Johnson 170 9,648
Mallinckrodt Group, Inc. 20 655
Warner-Lambert Co. 40 3,055
----------
36,146
----------
Health Care Miscellaneous--4.1%
Alza Corp.** 80 1,820
Amgen, Inc.** 130 8,970
Beverly Enterprises, Inc.** 80 1,040
Manor Care, Inc. 60 1,778
United Healthcare Corp. 170 7,310
U.S. Healthcare, Inc. 160 6,880
----------
27,798
----------
Hospital Management--5.2%
Columbia Hospital Corp. 730 30,204
Community Psychiatric Centers 50 581
National Medical Enterprises, Inc.** 310 4,805
----------
35,590
----------
Machine Tools--4.6%
Cincinnati Milacron, Inc. 820 17,220
Giddings & Lewis, Inc. 820 13,940
----------
31,160
----------
<PAGE>3
Oil Domestic--3.7%
Amerada Hess Corp. 40 1,960
Ashland Oil, Inc. 20 648
Atlantic Richfield Co. 60 6,578
Kerr-McGee Corp. 20 1,008
Louisiana Land & Exploration Co. 10 346
Occidental Petroleum Corp. 220 4,373
Pennzoil Co. 20 948
Phillips Petroleum Co. 100 3,338
Sun Co., Inc. 40 1,165
Unocal Corp. 100 2,838
USX-Marathon Group 110 1,788
----------
24,990
----------
Oil International--4.6%
Amoco Corp. 60 3,555
Chevron Corp. 80 3,800
Exxon Corp. 150 9,600
Mobil Corp. 50 4,350
Royal Dutch Petroleum Co. 70 7,848
Texaco, Inc. 30 1,914
----------
31,067
----------
Paper & Forest Products--3.4%
Boise Cascade Corp. 10 321
Champion International Corp. 40 1,645
Federal Paper Board Co. 20 595
Georgia-Pacific Corp. 40 2,995
International Paper Co. 50 3,819
James River Corp. 30 739
Louisiana-Pacific Corp. 40 1,130
Mead Corp. 20 1,095
Potlatch Corp. 10 431
Union Camp Corp. 30 1,545
Westvaco Corp. 30 1,185
Weyerhaeuser Co. 180 7,335
----------
22,835
----------
Restaurants--5.4%
Luby's Cafeterias, Inc. 50 1,138
McDonald's Corp. 960 31,908
Ryan's Family Steak Houses, Inc.** 70 543
Restaurants--(continued)
Shoney's Inc.** 50 550
Wendys International, Inc. 150 2,325
----------
36,464
----------
Retail Stores-Specialty Apparel--4.4%
Gap, Inc. 340 11,050
Limited, Inc. 890 15,575
TJX Companies, Inc. 220 2,970
----------
29,595
----------
Retail-Specialty--4.0%
Circuit City Stores, Inc. 40 865
Home Depot, Inc. 280 12,565
Lowes Companies, Inc. 60 2,018
Melville Corp. 40 1,300
Pep Boys-Manny, Moe & Jack 20 655
Price/Costco, Inc.** 90 1,226
Tandy Corp. 30 1,343
Toys R Us, Inc.** 220 6,133
Woolworth Corp. 50 763
----------
26,868
----------
Steel--4.5%
Bethlehem Steel Corp.** 300 4,688
Inland Steel Industries, Inc.** 100 2,875
Nucor Corp. 250 14,031
USX-U.S. Steel Group 150 4,988
Worthington Industries, Inc. 200 4,025
----------
30,607
----------
Tobacco--4.4%
American Brands, Inc. 70 2,616
Philip Morris Companies, Inc. 420 25,515
UST, Inc. 70 2,083
----------
30,214
----------
TOTAL COMMON STOCKS
(Cost $546,291) 557,348
----------
<PAGE>4
SHORT-TERM Investment--2.2%
T C W Primecash Money Fund 15,259
----------
TOTAL SHORT-TERM INVESTMENT
(Cost $15,259) 15,259
----------
TOTAL INVESTMENTS--84.4%
(Cost $561,550*) 572,607
OTHER ASSETS IN EXCESS OF
LIABILITIES--15.6% 105,809
----------
NET ASSETS--100.0%
(Applicable to 67,551 shares) $ 678,416
==========
<FN>
* Also cost for Federal income tax purposes at February 28, 1995. The gross appreciation
(depreciation) on a tax basis is as follows:
Gross Appreciation $ 38,168
Gross Depreciation (27,111)
---------
Net Appreciation $ 11,057
=========
** Non-Income Producing.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>5
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended
February 28, 1995 (Unaudited)
<S> <C>
INVESTMENT INCOME
Dividends $ 6,384
Interest 1,634
---------
TOTAL INVESTMENT INCOME 8,018
---------
EXPENSES
Transfer agent fees 10,450
Custodian fees 9,940
Organization expense 5,899
Registration fees 5,822
Printing fees 5,641
Miscellaneous fees 3,730
Investment advisory fees 2,156
Distribution fees 1,437
Administration fee 359
Audit fees 20
Legal fees 17
Insurance expense 10
Directors fees 3
---------
45,484
Less fees waived (5,616)
Less expense reimbursement from
advisor and sub-advisor (34,478)
---------
TOTAL EXPENSES 5,390
---------
NET INVESTMENT INCOME 2,628
---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain on investments 2,646
Net unrealized depreciation
on investments (17,862)
---------
NET LOSS ON INVESTMENTS (15,216)
---------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ (12,588)
=========
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
For the For the Period
Six Months Ended November 22, 1993(1) to
February 28, 1995 August 31, 1994
------------------ -----------------------
(Unaudited)
<S> <C> <C>
Increase (decrease) in net assets:
Operations:
Net investment income $ 2,628 $ 3,330
Net gain (loss)
on investments (15,216) 24,910
--------- --------
Net increase (decrease)
in net assets resulting
from operations (12,588) 28,240
--------- --------
Dividends to shareholders from:
Net investment income:
($.0682 per share) (5,094) --
Distributions to shareholders from:
Net realized capital gains:
($.0316 per share) (2,360) --
--------- --------
Total distributions
to shareholders (7,454) --
--------- --------
Increase (decrease)
in net assets derived
from capital share
transactions (82,014) 752,132
--------- --------
Total increase (decrease)
in net assets (102,056) 780,372
--------- --------
Net Assets:
Beginning of period 780,472 100
--------- --------
End of period $ 678,416 $780,472
========= ========
<FN>
(1) Commencement of Operations.
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>6
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
Financial Highlights
(For a Share Outstanding Throughout the Period)
<TABLE>
<CAPTION>
For the For the Period
Six Months Ended November 22, 1993* to
February 28, 1995 August 31, 1994
----------------- ----------------------
(Unaudited)
<S> <C> <C>
Net asset value, beginning of period $ 10.30 $ 10.00
---------- ----------
Income from investment operations
Net investment income (loss) 0.04 0.044
Net gains on securities (both
realized and unrealized) (0.20) 0.256
---------- ----------
Total from investment operations (0.16) 0.300
---------- ----------
Less Distributions
Distributions from net investment
income (0.07) --
Distributions from capital gains (0.03) --
---------- ----------
Total distributions (0.10) --
---------- ----------
Net asset value, end of period $ 10.04 $ 10.30
========== ==========
Total Return (1.51%)(c)(d) 3.00%(c)(d)
Ratio/Supplemental Data
Net assets, end of period $678,416 $780,472
Ratio of expenses to average
net assets 1.50%(a)(b) 1.50%(a)(b)
Ratio of net investment income
to average net assets .73%(b) .95%(b)
Portfolio turnover rate 32%(c) 58%(c)
<FN>
(a) Without the waiver of various fees and reimbursement of expenses, the ratios of
expenses to average net assets would have been 11.09% annualized for the six months
ended February 28, 1995 and 7.12% annualized for the period ended August 31, 1994.
(b) Annualized.
(c) Not annualized.
(d) Sales load not reflected in total return.
* Commencement of operations
</FN>
</TABLE>
See Accompanying Notes to Financial Statements.
<PAGE>7
LAFFER/CANTO EQUITY PORTFOLIO
THE RBB FUND, INC.
Notes to Financial Statements
February 28, 1995
(Unaudited)
Note 1. Summary of Significant Accounting Policies
The RBB Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940, as amended, as an open-end management investment
company. The Fund was incorporated in Maryland on February 29, 1988.
The Fund has authorized capital of thirty billion shares of common
stock of which 10.7 billion shares are currently classified into sixty-two
classes. Each class represents an interest in one of eighteen investment
portfolios of the Fund, sixteen of which are currently in operation. The
classes have been grouped into sixteen separate "families", eight of which
have begun investment operations: the RBB Family, the BEA Family, the Sansom
Street Family, the Bedford Family, the Cash Preservation Family, the
Bradford Family, the Laffer/Canto Family, and the Warburg Pincus Family. The
Laffer/Canto Family is covered in this report.
A) SECURITY VALUATION -- Portfolio securities traded on a national
securities exchange are valued at the closing price on the exchange
where they are primarily traded. Securities for which there were no
trades on a particular day and securities traded on other
over-the-counter markets are valued at the mean of the bid and asked
prices. If no quotations are readily available, securities are valued
at fair market value as determined in good faith by or under the
direction of the Fund's Board of Directors. At February 28, 1995, no
securities were Board valued. Short-term obligations with maturities of
60 days or less are valued at amortized cost which approximates market
value.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security
transactions are accounted for on the trade date. The cost of
investments sold is determined by use of the specific identification
method for both financial reporting and income tax purposes. Interest
Income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
C) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- The Portfolio
will declare and pay dividends from net investment income annually. Net
realized capital gains, if any, will be distributed at least annually.
Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally
accepted accounting principals.
D) FEDERAL INCOME TAXES -- No provision is made for Federal taxes
as it is the Fund's intention to have each portfolio to continue to
qualify for and elect the tax treatment applicable to regulated
investment companies under the Internal Revenue Code and make the
requisite distributions to its shareholders which will be sufficient to
relieve it from Federal income and excise taxes.
E) ORGANIZATION COSTS -- Costs incurred by the Fund in connection
with its organization and initial registration and public offering of
shares have been deferred by the Fund. Organization costs are being
amortized on a straight-line basis for a five-year period which began
upon the commencement of operations of the Fund.
F) REPURCHASE AGREEMENTS -- Money market instruments may be
purchased subject to the seller's agreement to repurchase them at an
agreed upon date and price. The Seller will be required on a daily
basis to maintain the value of the securities subject to the agreement
at not less than the repurchase price. The agreements are conditioned
upon the collateral being deposited under the Federal Reserve
book-entry system or with the fund's custodian or a third party
sub-custodian.
<PAGE>8
Note 2. Transactions with Affiliates and Related Parties
Pursuant to Investment Advisory Agreements, Laffer Advisors Inc. (the
"Advisor"), a wholly owned subsidiary of A. B. Laffer, V. A. Canto &
Associates, serves as investment advisor to the Portfolio.
For its advisory services, the Advisor is entitled to receive a fee,
computed daily and payable monthly, at an annual rate of .50% of the
Portfolio's average net assets. The Advisor may, at its discretion from time
to time agree to waive voluntarily all or any portion of its advisory fee
for the Portfolio. For the period ended February 28, 1995, all advisory fees
were waived.
PNC Institutional Management Corporation (sometimes hereinafter
referred to as "PIMC" or the "Sub-Adviser"), a wholly owned subsidiary of
PNC Bank, National Association ("PNC Bank"), serves as the investment
sub-adviser to the Portfolio.
For its sub-advisory services, PIMC is entitled to receive a fee,
computed daily and payable monthly, at an annual rate of .10% of the
Portfolio's average net assets. The Sub-Adviser may, at its discretion from
time to time agree to waive voluntarily all or any portion of its
sub-advisory fee for the Portfolio. For the period ended February 28, 1995,
all sub-advisory fees were waived.
PNC Bank serves as the Fund's custodian. PFPC, an indirect wholly owned
subsidiary of PNC Bank Corp., serves as transfer agent and dividend
disbursing agent.
In addition, PFPC serves as administrator to the Portfolio. For its
administrative services, PFPC is entitled to receive the following fees,
computed daily and payable monthly based on the Portfolio's average daily
net assets:
.10% of first $200 million of net assets;
.075% of next $200 million of net assets;
.05% of next $200 million of net assets;
.03% of net assets in excess of $600 million.
The administrator may, at its discretion from time to time agree to
waive voluntarily all or any portion of its administrative fee for the
portfolio. For the period ended February 28, 1995, all administrative fees
were waived.
The Fund has adopted a Plan of Distribution and pursuant thereto has
entered into an agreement under which the distributors, Counsellors
Securities Inc. (the "Distributor"), a wholly owned subsidiary of Warburg,
Pincus Counsellors, Inc., is entitled to receive from the Portfolio a
distribution fee, which is accrued daily and paid monthly, of up to .65% of
daily net assets. Under the Distribution contract, the Distributor has
agreed to accept compensation for its services under the Plan in the amount
of .40% of daily net assets. Counsellors Securities Inc. may, at its
discretion from time to time, waive voluntarily all or any portion of its
distribution fee. For the period ended February 28, 1995, distribution fees
were $1,437.
<PAGE>9
Note 3. Purchases and Sales of Securities
For the period ended February 28, 1995, purchases and sales of
investment securities (other than short-term investments) were as follows:
Investment Securities
---------------------------
Purchases Sales
---------- --------
$192,322 $291,278
Note 4. Capital Shares
Transactions in capital shares for the period ended February 28, 1995
were as follows:
<TABLE>
<CAPTION>
For the For the period November 22, 1993
Six Months Ended (commencement of operations) to
February 28, 1995 August 31, 1994
------------------------------ ---------------------------------
(Unaudited)
Shares Value Shares Value
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Shares sold 9,808 $ 97,999 82,774 $ 821,118
Shares issued in reinvestment
of dividends 528 5,087 -- --
Shares redeemed (18,541) (185,100) (7,028) (68,986)
-------- --------- ------- ---------
Net increase (decrease) (8,205) $ (82,014) 75,746 $ 752,132
======== ========= ======= =========
</TABLE>
Note 5. Net Assets
At February 28, 1995, net assets consisted of the following:
Capital Paid-In $670,218
Accumulated Undistributed Net
Investment Income 864
Accumulated Net Realized Loss
on Security Transactions (3,723)
Accumulated Net Unrealized
Appreciation on Investments 11,057
--------
$678,416
========
<PAGE>10
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