NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
n/i Micro Cap Fund
n/i Growth Fund
n/i Growth & Value Fund
Semi-Annual Report
February 28, 1997
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
LETTER TO SHAREHOLDERS
March 17, 1997
Fellow Shareholder:
We are pleased to report the semi-annual results for the n/i FAMILY OF MUTUAL
FUNDS for the period ending February 28, 1997 (the funds' fiscal year ends on
August 31).
MARKET ENVIRONMENT
After a difficult first few months for our fund family, in which the stock
market in general and smaller and medium capitalization stocks in particular
were extremely volatile, the most recent six months were much more rewarding.
Notable market events of the last six months included the Federal Reserve
Chairman's apparent attempts to "talk down" the level of the stock market (to
little avail), and the continued strength of the stock prices of the largest
U.S. companies relative to the prices of smaller and midcap stocks. These events
caused some modest volatility in the returns of your portfolio over the last six
months.
Our stock selection models worked well in finding many stocks which outperformed
our benchmarks. Our Estrend(TM) model, which favors companies that have rapidly
rising Wall Street earnings forecasts, worked productively through the Fall, but
suffered a mild period of underperformance in February. Our Fair Value model,
which is designed to find stocks selling for market prices lower than the prices
of stocks with comparable fundamentals, performed well through most of this six
month period. Its contribution to excess returns was especially helpful during
February when Estrend(TM) was weak.
PORTFOLIO RETURNS
The six month returns through February 28, 1997 for the n/i Growth portfolio
were +7.17%, compared to its benchmark the Russell 2500 Growth Index, an
unmanaged index of smaller company growth stocks, which returned +4.68%. Most of
our successful investments during the period were made in technology, financial,
consumer cyclical and noncyclical stocks.
Our Growth & Value portfolio delivered very strong absolute and market-relative
returns over the last six months, generating a +17.65% return which compares
favorably with the also strong returns of the Standard & Poor's 400 Index return
of +13.89%. Financial and consumer cyclical stocks contributed to much of this
good performance.
The Micro Cap portfolio returned +17.50% over the same period, which compares
extremely favorably with the more modest +1.54% return of its benchmark, the
Russell 2000 Growth Index of small company growth stocks. Technology, energy,
financial and consumer cyclical stocks provided many of our most successful
investment ideas during the last six months.
PERFORMANCE ATTRIBUTION
Good absolute performance over the last six months is attributed to a generally
robust stock market which continues to benefit from extremely benign economic
data showing low inflationary pressure and strong corporate earnings. Our strong
market-relative performance benefited from the productive insights of both our
Estrend(TM) and Fair Value stock selection models. Also extremely helpful to our
returns was the small amount of assets we are managing. Recall that an important
component of our business plan is to strictly limit the amount of assets we will
accept in our investment strategies to minimize the negative impact that larger
trades have on investment performance.
1
<PAGE>
We will continue our unusual approach to the investment business. This strategy
entails keeping assets under management at low, manageable levels, performing
innovative investment research to constantly improve our stock selection models,
and keeping the operating expenses of the funds to a minimum.
Thank you for your investment and your continuing confidence in our investment
and business approaches. Any questions or comments are always welcome. Please
write us or send an e-mail message to [email protected].
Respectfully,
(/S/ JOHN C. BOGLE, JR.)
John C. Bogle, Jr., CFA
Director of Portfolio Management
2
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NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--94.8%
ADVERTISING--1.4%
13,300 CKS Group, Inc.* ................. $ 445,550
----------
AIR TRANSPORT--2.6%
27,800 Atlantic Coast Airlines,
Inc.*/** ....................... 423,950
6,700 Expeditors International of
Washington, Inc.** ............. 167,500
12,900 Offshore Logistics, Inc.* ........ 235,425
----------
826,875
----------
APPAREL--0.0%
300 Gargoyles, Inc.* ................. 2,100
----------
AUTOMOBILE PARTS & EQUIPMENT--2.0%
24,900 Excel Industries Inc.** .......... 407,737
10,600 Standard Products Co. (The) ...... 249,100
----------
656,837
----------
BICYCLES--1.8%
13,500 Cannondale Corp. ................. 275,062
27,100 GT Bicycles, Inc.* ............... 318,425
----------
593,487
----------
BUILDING SUPPLIES--0.5%
4,600 NCI Building Systems, Inc.* ...... 154,100
----------
CHEMICALS--1.1%
15,700 Carbide/Graphite Group, Inc.* .... 345,400
----------
COMMERCIAL SERVICES--0.6%
5,200 CDI Corp.* ....................... 170,300
700 U.S. Rentals, Inc.*/** ........... 13,300
----------
183,600
----------
COMPUTER & OFFICE EQUIPMENT--1.0%
16,000 In Focus Systems, Inc.*/** ....... 330,000
----------
COMPUTER COMPONENTS--4.3%
13,600 Chips & Technologies, Inc.* ...... 173,400
16,200 Cyrix Corp.* ..................... 451,575
7,200 STB Systems, Inc.* ............... 208,800
13,300 Trident Microsystems, Inc.*/** ... 297,587
13,000 Xircom, Inc.* .................... 258,375
----------
1,389,737
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTERS--0.7%
9,500 Pomeroy Computer Resources,
Inc.*/** ....................... $ 235,125
----------
COMPUTERS, SOFTWARE & SERVICING--11.5%
23,400 Applied Voice Technology, Inc.* .. 389,025
6,800 Digital Link Corp.* .............. 102,000
19,800 Franklin Electronic Publishers,
Inc.* ......................... 240,075
11,500 Hyperion Software Corp.* ......... 227,844
8,700 JDA Software Group, Inc.*/** ..... 224,025
11,000 Legato Systems, Inc.* ............ 222,750
24,200 MetaTools, Inc. .................. 326,700
16,000 Orcad, Inc.* ..................... 130,000
7,800 Project Software & Development,
Inc.* .......................... 276,900
8,250 Scopus Technology, Inc.*/** ...... 180,469
11,500 Vantive Corp. (The)*/** .......... 255,875
18,200 Verity, Inc.* .................... 178,587
18,400 Viewlogic Systems, Inc.* ......... 271,400
7,300 Visio Corp.* ..................... 308,425
23,700 Wall Data Inc.*/** ............... 367,350
----------
3,701,425
----------
ELECTRICAL EQUIPMENT--2.7%
31,000 Magnatek, Inc.*/** ............... 515,375
13,100 Robbins & Myers, Inc.** .......... 360,250
----------
875,625
----------
ELECTRONICS--5.9%
18,700 Aavid Thermal Technologies
Inc.*/** ...................... 243,100
11,200 DII Group, Inc.* ................. 305,200
6,100 Hadco Corp.* ..................... 247,050
19,500 Kuhlman Corp. .................... 458,250
20,400 Sierra Semiconductor Corp.* ...... 326,400
7,400 Technitrol, Inc. ................. 331,150
----------
1,911,150
----------
FINANCIAL SERVICES--5.0%
10,100 Haven Bancorp, Inc. .............. 335,825
17,500 North American Mortgage Corp. .... 356,562
11,300 RAC Financial Group, Inc.*/** .... 368,662
14,400 Southern Pacific Funding
Corp.*/** ..................... 315,000
9,000 Trans Financial Bancorp, Inc. .... 231,750
----------
1,607,799
----------
The accompanying notes are an integral part of the financial statements.
3
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NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
FOOD & AGRICULTURE--0.8%
5,600 Interstate Bakeries Corp. ........ $ 261,800
----------
FOOD - DAIRY PRODUCTS--0.6%
8,000 Morningstar Group, Inc.* ......... 184,000
----------
HOUSEHOLD PRODUCTS--1.0%
11,000 Libbey Inc.** .................... 330,000
----------
HOUSING--1.2%
18,900 Continental Homes Holding
Corp.** ........................ 401,625
----------
INSURANCE - LIFE--1.3%
16,400 Pioneer Financial Services, Inc. . 424,350
----------
INSURANCE - PROPERTY & CASUALTY--2.7%
15,900 Commerce Group Inc.** ............ 419,362
10,400 Selective Insurance Group, Inc. .. 436,800
----------
856,162
----------
LASER SYSTEMS--0.8%
18,800 Rofin-Sinar Technologies, Inc. ... 263,200
----------
LEISURE & ENTERTAINMENT--1.8%
16,000 Coastcast Corp.*/** .............. 252,000
21,700 Harveys Casino Resorts ........... 336,350
----------
588,350
----------
MACHINERY--2.0%
9,800 Graco Inc. ....................... 305,025
26,700 Semitool, Inc.*/** ............... 328,744
----------
633,769
----------
MANUFACTURING INDUSTRIES--1.0%
15,600 Innovex, Inc.** .................. 333,450
----------
MEDICAL & MEDICAL SERVICES--3.2%
34,300 Advocat Inc.* .................... 334,425
9,200 HCIA Inc.*/** .................... 315,100
20,300 RoTech Medical Corp.*/** ......... 375,550
----------
1,025,075
----------
MEDICAL INSTRUMENTS & SUPPLIES--3.4%
5,900 Advanced Technologies
Laboratories, Inc.* ............ 209,450
11,200 Hologic, Inc.* ................... 291,200
10,600 Patterson Dental Co.* ............ 360,400
11,900 Safeskin Corp.* .................. 220,150
----------
1,081,200
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
METAL FABRICATING--0.9%
12,700 Amcast Industrial Corp. .......... $ 293,687
----------
METALS--0.5%
8,200 Commonwealth Aluminum Corp. ...... 147,600
----------
OFFICE PRODUCTS--1.0%
9,700 US Office Products Co.*/** ....... 310,400
----------
OIL & GAS FIELD EXPLORATION--2.9%
10,800 Belden & Blake Corp. ............. 243,000
40,000 Comstock Resources, Inc.* ........ 360,000
23,300 HS Resources, Inc.* .............. 320,375
----------
923,375
----------
OIL EQUIPMENT & SERVICES--2.0%
7,600 Trico Marine Services, Inc.* ..... 307,800
20,700 Veritas DGC Inc.* ................ 344,138
----------
651,938
----------
PACKAGING--0.3%
2,200 Aptargroup, Inc. 87,450
----------
PAPER & FOREST PRODUCTS--0.4%
4,000 Mosinee Paper Corp.** ............ 133,000
----------
PHARMACEUTICALS--2.9%
16,200 Bindley Western Industries,
Inc.** ......................... 309,825
6,400 Medicis Pharmaceutical Corp.
Class A* ....................... 274,800
27,500 Roberts Pharmaceutical Corp.*/** . 360,938
----------
945,563
----------
PRINTING & PUBLISHING--1.1%
14,200 Merrill Corp. .................... 340,800
----------
RESTAURANTS--1.0%
16,800 CKE Restaurants, Inc. ............ 325,500
----------
RETAIL - CATALOG & MAIL ORDER HOUSES--0.0%
300 Brylane, Inc.* ................... 7,200
----------
RETAIL - DEPARTMENT STORES--1.3%
14,400 Tuesday Morning Corp.*/** ........ 411,300
----------
RETAIL - FURNITURE STORES--0.8%
5,600 Ethan Allen Interiors Inc. ....... 256,900
----------
The accompanying notes are an integral part of the financial statements.
4
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NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
RETAIL - GROCERY STORES--1.1%
11,300 Riser Foods, Inc. Class A** ...... $ 353,125
----------
RETAIL - SPECIALTY --1.4%
29,500 Friedman's, Inc. Class A* ........ 446,188
----------
RETAIL - SPECIALTY APPAREL--5.4%
10,300 Footstar, Inc.* .................. 260,075
21,100 Genesco, Inc.* ................... 200,450
18,100 Haggar Corp. ..................... 266,975
16,400 Pacific Sunwear of California,
Inc.*/** ....................... 459,200
10,300 Paul Harris Stores, Inc.* ........ 185,400
18,700 Wet Seal, Inc. (The) Class A* .... 371,663
----------
1,743,763
----------
STEEL PIPE & TUBES--1.0%
20,200 Maverick Tube Corp.*/** .......... 315,625
----------
TELECOMMUNICATIONS--1.8%
10,100 ACC Corp.* ....................... 282,800
9,000 P-Com, Inc.* ..................... 289,125
----------
571,925
----------
TELECOMMUNICATIONS EQUIPMENT--3.4%
4,000 Boston Technology, Inc.*/** ...... 99,500
24,500 Emulex Corp.* .................... 379,750
17,800 Harmonic Lightwaves, Inc.* ....... 298,150
11,000 Ortel Corp.*/** .................. 143,000
7,400 Tollgrade Communications, Inc.* .. 164,650
----------
1,085,050
----------
TELEMARKETING--0.7%
18,200 CMG Information Services,
Inc.*/** ....................... 241,150
----------
TEXTILES--0.5%
7,300 Kellwood Co. ..................... 172,463
----------
TOBACCO--0.0%
600 Swisher International Group
Inc. Class A* .................. 9,750
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION - RAIL--0.2%
3,300 USFreightways Corp. .............. $ 79,613
-----------
WHOLESALE - PACKAGING SUPPLIES--0.0%
700 Silgan Holdings Inc.* ............ 17,850
----------
WHOLESALE - SPECIALTY EQUIPMENT--3.3%
9,400 Brightpoint, Inc.*/** ............ 253,800
10,700 Inacom Corp.*/** ................. 278,200
24,100 MicroAge, Inc.*/** ............... 313,300
8,700 Tech Data Corp.*/** .............. 208,800
-----------
1,054,100
-----------
Total Common Stocks
(Cost $30,148,854) ............. 30,567,106
-----------
PRINCIPAL
AMOUNT
- -----------
SHORT-TERM INVESTMENT--6.3%
REPURCHASE AGREEMENT--6.3%
2,018,153 Bear, Stearns Securities Corp.
(Agreement dated 02/28/97
to be repurchased at $2,019,038,
collateralized by $6,570,000
Resolution Trust Corp. Bonds 7.127%
due 04/26/21. Market value of
collateral is $2,067,547)
5.250%, 03/03/97
(Cost $2,018,153) .............. 2,018,153
-----------
Total Investments -- 101.1%
(Cost $32,167,007) ............. 32,585,259
-----------
Liabilities in Excess of
Other Assets -- (1.1%) ......... (357,957)
-----------
Net Assets -- 100.0% ............. $32,227,302
===========
- ------------
* Non-income producing.
** Security or a portion thereof is out on loan.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--95.5%
AIR TRANSPORT--0.7%
12,000 Expeditors International of
Washington, Inc.** ............. $ 300,000
12,700 Offshore Logistics, Inc.* ........ 231,775
----------
531,775
----------
APPAREL--1.1%
28,700 Burlington Industries, Inc.* ..... 369,512
33,800 Designer Holdings Ltd.*/** ....... 435,175
700 Gargoyles, Inc.* ................. 4,900
----------
809,587
----------
AUTOMOBILE PARTS & EQUIPMENT--1.1%
15,600 Arvin Industries, Inc. ........... 366,600
27,400 Excel Industries Inc.** .......... 448,675
----------
815,275
----------
BANKS--0.7%
11,600 ONBANCorp, Inc. .................. 517,650
----------
BEVERAGES--0.9%
21,400 Canandaigua Wine Company, Inc.
Class A* ....................... 658,050
----------
BROKERAGE--0.4%
8,100 Lehman Brothers Holdings Inc. .... 272,362
----------
CHEMICALS--1.0%
8,900 Arcadian Corp. ................... 232,512
19,600 Mississippi Chemical Corp.** ..... 480,200
----------
712,712
----------
COMMERCIAL PRINTING--0.6%
22,600 Mail-Well Corporation* ........... 449,175
----------
COMMERCIAL SERVICES--0.0%
1,200 U.S. Rentals, Inc.*/** ........... 22,800
----------
COMPUTER & OFFICE EQUIPMENT--1.9%
26,200 In Focus Systems, Inc.*/** ....... 540,375
30,400 Lexmark International Group,
Inc. Class A* .................. 847,400
----------
1,387,775
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTER COMPONENTS--6.7%
14,200 American Power Conversion Corp.* . $ 296,425
29,234 Applied Magnetics Corp.*/** ...... 1,136,472
8,700 Chips & Technologies, Inc.* ...... 110,925
25,400 Hutchinson Technology Inc.* ...... 815,975
21,900 Quantum Corp.* ................... 870,525
13,300 STB Systems, Inc.* ............... 385,700
21,100 Western Digital Corp.*/** ........ 1,244,900
----------
4,860,922
----------
COMPUTERS--1.1%
11,600 Dell Computer Corp.* ............. 825,050
----------
COMPUTERS, SOFTWARE & SERVICING--9.8%
4,900 BancTec, Inc.*/** ................ 124,950
9,100 Citrix Systems, Inc.* ............ 114,887
24,300 Compuware Corp.* ................. 1,512,675
35,200 Hyperion Software Corp.* ......... 697,400
16,700 JDA Software Group, Inc.*/** ..... 430,025
16,400 Learning Company, Inc. (The)* .... 157,850
23,200 McAfee Associates, Inc.*/** ...... 1,064,300
8,700 Scopus Technology, Inc.*/** ...... 190,312
15,300 Stratus Computer, Inc.* .......... 518,287
28,600 Symantec Corp.* .................. 446,875
26,200 Vantive Corp. (The)* ............. 582,950
15,600 Visio Corp.* ..................... 659,100
21,800 Yahoo! Inc.*/** .................. 659,450
----------
7,159,061
----------
COSMETICS--0.4%
16,400 NBTY, Inc.* ...................... 295,200
----------
ELECTRICAL EQUIPMENT--1.3%
40,000 Magnetek, Inc.* .................. 665,000
10,400 Robbins & Myers, Inc.** .......... 286,000
----------
951,000
----------
ELECTRONICS--8.2%
9,300 DuPont Photomasks, Inc.*/** ...... 437,100
54,500 ESS Technology, Inc.* ............ 1,434,031
23,600 Hadco Corp.* ..................... 955,800
46,500 Innovex, Inc. ** ................. 993,937
27,300 Jabil Circuit, Inc.*/** .......... 904,312
47,700 Kulicke & Soffa Industries,
Inc.*/** ....................... 1,264,050
----------
5,989,230
----------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
FINANCIAL SERVICES--5.5%
42,400 Aames Financial Corp.** .......... $1,277,300
26,800 North American Mortgage Corp. .... 546,050
45,000 RAC Financial Group, Inc.*/** .... 1,468,125
34,000 Southern Pacific Funding Corp.* .. 743,750
----------
4,035,225
----------
FOOD & AGRICULTURE--0.5%
7,400 Interstate Bakeries Corp. ........ 345,950
----------
HOSPITAL MANAGEMENT--0.7%
15,200 Universal Health Services
Class B** ...................... 518,700
----------
HOTELS--4.2%
21,600 HFS Inc.*/** ..................... 1,479,600
31,900 Prime Hospitality Corp.*/** ...... 526,350
29,200 Promus Hotel Corp.* .............. 1,032,950
----------
3,038,900
----------
HOUSEHOLD FURNITURE--0.5%
33,200 O'Sullivan Industries Holdings,
Inc.* ......................... 356,900
----------
HOUSEHOLD PRODUCTS--1.0%
12,100 Blyth Industries, Inc.*/** ....... 396,275
17,100 Eagle Hardware & Garden, Inc.* ... 333,450
----------
729,725
----------
HOUSING--0.4%
13,700 Continental Homes Holding
Corp.** ........................ 291,125
----------
INSURANCE--0.9%
23,300 Fremont General Corp. ............ 672,787
----------
INSURANCE - PROPERTY & CASUALTY--1.5%
15,000 CMAC Investment Corp. ............ 525,000
14,800 Vesta Insurance Group, Inc. ...... 579,050
----------
1,104,050
----------
LEISURE & ENTERTAINMENT--0.6%
25,000 North Face, Inc.*/** ............. 434,375
----------
MEDICAL & MEDICAL SERVICES--3.8%
18,900 ADAC Laboratories, Inc.* ......... 401,625
8,500 FPA Medical Management, Inc.* .... 218,875
18,500 HCIA Inc.*/** .................... 633,625
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
MEDICAL & MEDICAL SERVICES--(CONTINUED)
32,700 RoTech Medical Corp.*/** ......... $ 604,950
5,200 Vivus, Inc.* ..................... 287,300
14,100 Wellpoint Health Networks,
Inc.*/** ...................... 604,537
----------
2,750,912
----------
MEDICAL INSTRUMENTS & SUPPLIES--2.5%
26,500 Hologic, Inc.* ................... 689,000
32,900 Safeskin Corp.* .................. 608,650
16,800 Waters Corp.* .................... 506,100
----------
1,803,750
----------
METAL FABRICATING--0.7%
41,800 LTV Corp. (The) .................. 522,500
----------
METAL MINING--0.6%
12,300 AK Steel Holding Corp.** ......... 442,800
----------
OFFICE PRODUCTS--1.8%
39,800 US Office Products Co.*/** ....... 1,273,600
----------
OIL & GAS--0.4%
9,300 Vintage Petroleum, Inc. .......... 280,162
----------
OIL & GAS FIELD EXPLORATION--1.4%
32,900 Comstock Resources, Inc.* ........ 296,100
17,300 Nuevo Energy Co.* ................ 717,950
----------
1,014,050
----------
OIL EQUIPMENT & SERVICES--2.8%
31,800 Camco International, Inc. ........ 1,228,275
7,000 Trico Marine Services, Inc.* ..... 283,500
31,400 Veritas DGC Inc.* ................ 522,025
----------
2,033,800
----------
PACKAGING--0.4%
7,000 Aptargroup, Inc. ................. 278,250
----------
PAPER & FOREST PRODUCTS--0.9%
22,800 Fort Howard Corp.* ............... 678,300
----------
PAPERBOARD MILLS--0.4%
10,300 Caraustar Industries, Inc. ....... 306,425
----------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
PHARMACEUTICALS--3.4%
24,200 Medicis Pharmaceutical Corp.
Class A * ...................... $1,039,088
22,700 Paraxel International Corp.*/** .. 635,600
39,500 Roberts Pharmaceutical Corp.*/** . 518,438
7,000 Watson Pharmaceuticals, Inc.*/** . 305,375
----------
2,498,501
----------
PULP MILLS--0.3%
7,500 Buckeye Cellulose Corp.* ......... 225,938
----------
RADIO BROADCASTING STATIONS--1.4%
27,100 Evergreen Media Corp.*/** ........ 813,000
7,600 Jacor Communications, Inc.*/** ... 223,725
----------
1,036,725
----------
RESTAURANTS--0.8%
29,750 CKE Restaurants, Inc. ............ 576,406
----------
RETAIL--0.7%
21,000 Price/Costco, Inc.* .............. 538,125
----------
RETAIL - BOOK STORES--1.4%
24,200 Borders Group, Inc.*/** .......... 1,019,425
----------
RETAIL - CATALOG & MAIL ORDER HOUSES--0.0%
600 Brylane, Inc.* ................... 14,400
----------
RETAIL - DEPARTMENT STORES--0.2%
5,100 Tuesday Morning Corp.*/** ........ 145,669
----------
RETAIL - FURNITURE STORES--0.5%
21,300 Pier 1 Imports, Inc. ............. 370,088
----------
RETAIL - SHOE STORES--1.2%
29,100 Footstar, Inc.* .................. 734,775
6,000 Just For Feet, Inc.*/** .......... 129,750
----------
864,525
----------
RETAIL - SPECIALTY--1.1%
5,400 CDW Computer Centers, Inc.*/** ... 283,838
34,700 Friedman's, Inc. * ............... 524,838
----------
808,676
----------
RETAIL - SPECIALTY APPAREL--5.5%
23,600 Claire's Stores, Inc. ............ 333,350
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
RETAIL - SPECIALTY APPAREL--(CONTINUED)
28,100 Pacific Sunwear of California,
Inc.*/** ....................... $ 786,800
7,600 Ross Stores, Inc. ................ 364,800
19,200 TJX Cos., Inc. ................... 801,600
15,900 Tommy Hilfiger Corp.* ............ 868,538
42,000 Wet Seal, Inc. (The) Class A* .... 834,750
----------
3,989,838
----------
SAVINGS & LOAN ASSOCIATION--0.6%
9,345 Charter One Financial, Inc. ...... 445,056
----------
SERVICES - COMPUTER PROCESSING &
DATA PREPARATION--0.4%
17,900 Sitel Corp.* ..................... 297,588
----------
SERVICES - EMPLOYMENT AGENCIES--1.5%
34,400 Accustaff Inc.* .................. 713,800
8,900 Robert Half International Inc.* .. 370,463
----------
1,084,263
----------
TELECOMMUNICATIONS--2.2%
23,600 ACC Corp.* ....................... 660,800
100 RMH Teleservices, Inc.* .......... 725
32,000 Tel-Save Holdings, Inc.*/** ...... 572,000
37,500 U.S. Long Distance Corp.*/** ..... 375,000
----------
1,608,525
----------
TELECOMMUNICATIONS EQUIPMENT--1.9%
5,100 Andrew Corp.* .................... 280,500
7,800 Ascend Communications, Inc.* ..... 407,550
43,200 Harmonic Lightwaves, Inc.* ....... 723,600
----------
1,411,650
----------
TOBACCO--0.0%
1,100 Swisher International Group Inc.
Class A* ....................... 17,875
----------
TRANSPORTATION--0.6%
9,700 Seacor Holdings, Inc.*/** ........ 449,837
----------
UTILITIES--0.5%
20,300 Public Service Co. of New Mexico . 373,013
----------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
WHOLESALE - PACKAGING SUPPLIES--0.1%
1,200 Silgan Holdings Inc.* ............ $ 30,600
-----------
WHOLESALE - SPECIALTY EQUIPMENT--3.8%
40,900 Inacom Corp.*/** ................. 1,063,400
45,100 MicroAge, Inc.*/** ............... 586,300
46,000 Tech Data Corp.*/** .............. 1,104,000
-----------
2,753,700
-----------
Total Common Stocks
(Cost $70,845,378) ............. 69,730,333
-----------
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT--28.9%
REPURCHASE AGREEMENT--28.9%
21,091,867 Bear, Stearns Securities Corp.
(Agreement dated 02/28/97 to
be repurchased at $ 21,029,080,
collateralized by $45,220,000
Resolution Trust Corp. Bonds
6.342% due 02/25/20. Market
value of collateral is $ 21,496,872)
5.250%, 03/03/97
(Cost $21,091,867) ........... $ 21,091,867
------------
Total Investments -- 124.4%
(Cost $91,937,245) ........... 90,822,200
------------
Liabilities in Excess of
Other Assets -- (24.4%) ...... (17,828,590)
------------
Net Assets -- 100.0% ........... $ 72,993,610
============
- -----------
* Non-income producing.
** Security or a portion thereof is out on loan.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH & VALUE FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCKS--97.0%
AIR TRANSPORT--3.1%
16,600 Continental Airlines, Inc.
Class B*/** ................... $ 475,175
2,600 Delta Air Lines, Inc. ............ 209,300
4,400 UAL Corp.* ....................... 249,700
----------
934,175
----------
AUTOMOBILE PARTS & EQUIPMENT--1.2%
9,000 Borg-Warner Automotive, Inc. ..... 355,500
----------
AUTOMOBILES & TRUCKS--2.1%
17,900 Chrysler Corp. ................... 606,362
300 Paccar, Inc. ..................... 19,687
----------
626,049
----------
BROKERAGE--3.1%
14,030 Bear Stearns Companies Inc.
(The) .......................... 420,900
14,900 Lehman Brothers Holdings Inc. .... 501,012
----------
921,912
----------
CHEMICALS--1.3%
25,800 Ethyl Corp. ...................... 235,425
11,000 Terra Industries Inc. ............ 149,875
----------
385,300
----------
COMMERCIAL SERVICES--0.9%
12,900 Ogden Corp.** .................... 262,837
----------
COMPUTER & OFFICE EQUIPMENT--0.9%
9,200 Lexmark International Group, Inc.
Class A* ....................... 256,450
----------
COMPUTER COMPONENTS--2.4%
4,600 Quantum Corp .* .................. 182,850
9,000 Western Digital Corp.* ........... 531,000
----------
713,850
----------
COMPUTERS--4.4%
7,300 Compaq Computer Corp.*/** ........ 578,525
2,500 Dell Computer Corp.* ............. 177,812
8,500 Sun Microsystems, Inc.* .......... 262,437
23,500 Tandem Computers Inc.* ........... 293,750
----------
1,312,524
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
COMPUTERS, SOFTWARE & SERVICING--4.0%
1,300 Cisco Systems, Inc.* ............. $ 72,312
15,600 Citrix Systems, Inc * ............ 196,950
3,100 Computer Associates International,
Inc. ........................... 134,850
7,100 Compuware Corp.* ................. 441,975
7,400 McAfee Associates, Inc.* ......... 339,475
----------
1,185,562
----------
ELECTRICAL MACHINERY, EQUIPMENT
& SUPPLIES--0.6%
3,100 Tecumseh Products Co. Class A .... 177,475
----------
ELECTRONICS--3.8%
2,300 Eastman Kodak Co. ................ 206,137
15,400 ESS Technology, Inc.* ............ 405,213
3,600 Intel Corp.** .................... 510,750
----------
1,122,100
----------
ENTERTAINMENT--0.7%
5,900 Carnival Corp. Class A ........... 207,975
----------
FINANCIAL SERVICES--4.6%
3,300 American Bankers Insurance
Group, Inc. .................... 181,913
7,500 Franklin Resources, Inc . ........ 438,750
8,300 Southtrust Corp. ................. 328,888
7,900 Travelers Group Inc. ............. 423,638
----------
1,373,189
----------
FOOD & AGRICULTURE--0.8%
4,900 Interstate Bakeries Corp. ........ 229,075
----------
HOTELS--1.8%
7,600 HFS Inc.*/** ..................... 520,600
----------
HOUSEHOLD PRODUCTS--1.9%
6,100 Blyth Industries, Inc.*/** ....... 199,775
7,800 Lancaster Colony Corp. ........... 356,850
----------
556,625
----------
HOUSING--1.3%
11,000 USG Corp.* ....................... 387,750
----------
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH & VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
INSURANCE--3.2%
1,800 Aetna Inc.** ..................... $ 149,175
800 Cigna Corp. ...................... 122,300
5,400 Conseco, Inc. .................... 211,950
2,500 ITT Hartford Group, Inc. ......... 187,500
5,000 Torchmark Corp. .................. 294,375
----------
965,300
----------
INSURANCE - PROPERTY & CASUALTY--1.1%
8,400 American Financial Group, Inc. ... 315,000
----------
MACHINERY--1.0%
13,000 Premark International, Inc. ...... 307,125
----------
MEDICAL & MEDICAL SERVICES--3.3%
10,400 Medpartners, Inc.* ............... 228,800
2,100 Vivus, Inc.* ..................... 116,025
14,800 Wellpoint Health Networks
Inc.*/** ....................... 634,550
----------
979,375
----------
MEDICAL INSTRUMENTS & SUPPLIES--0.6%
4,500 Beckman Instruments, Inc. ........ 186,750
----------
METAL FABRICATING--2.4%
26,100 LTV Corp. (The) .................. 326,250
7,200 Timken Co. ....................... 377,100
----------
703,350
----------
METAL MINING--1.3%
4,500 AK Steel Holding Corp.** ......... 162,000
7,100 Asarco Inc. ...................... 221,875
----------
383,875
----------
NATIONAL COMMERCIAL BANKS--2.3%
3,300 First Bank System, Inc. .......... 259,050
5,500 National City Corp. .............. 277,750
5,500 Washington Federal, Inc. ......... 140,250
----------
677,050
----------
NATURAL GAS--0.5%
2,500 Columbia Gas System, Inc. (The) .. 146,875
----------
OFFICE PRODUCTS--1.1%
5,300 Xerox Corp. ...................... 331,250
----------
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
OIL & GAS FIELD EXPLORATION--4.3%
25,900 Oryx Energy Co.* ................. $ 518,000
11,700 Parker & Parsley Petroleum Co.** . 345,150
10,800 Seagull Energy Corp.* ............ 198,450
11,900 Union Texas Petroleum Holdings,
Inc. ........................... 220,150
----------
1,281,750
----------
OIL DOMESTIC--2.8%
12,200 National Fuel Gas Co.** .......... 524,600
9,400 Valero Energy Corp. .............. 296,100
----------
820,700
----------
OIL, GAS FIELD SERVICES--0.4%
2,800 Williams Companies, Inc. (The)** . 122,500
----------
OIL INTERNATIONAL--2.8%
8,100 Amerada Hess Corp. ............... 432,338
4,100 Helmerich & Payne, Inc. .......... 173,225
8,600 USX-Marathon Group ............... 228,975
----------
834,538
----------
PAPER & FOREST PRODUCTS--1.3%
13,100 Fort Howard Corp.* ............... 389,725
----------
PHARMACEUTICALS--5.2%
12,300 Bergen Brunswig Corp. ............ 395,138
3,400 Bristol-Myers Squibb Co. ......... 443,700
6,200 Johnson & Johnson, Inc. .......... 357,275
2,600 Schering-Plough Corp. ............ 199,225
3,400 Watson Pharmaceuticals, Inc.*/** . 148,325
----------
1,543,663
----------
PRIMARY METAL PRODUCTS--1.2%
11,400 Trinity Industries, Inc. ......... 367,650
----------
RADIO BROADCASTING STATIONS--0.9%
8,800 Evergreen Media Corp.*/** ........ 264,000
----------
RETAIL - BOOK STORES--1.2%
8,400 Borders Group, Inc.*/** .......... 353,850
----------
RETAIL - GENERAL MERCHANDISE--0.4%
3,000 Dayton Hudson Corp. .............. 126,000
----------
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
GROWTH & VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1997 (UNAUDITED)
- --------------------------------------------------------------------------------
MARKET
SHARES VALUE
- --------------------------------------------------------------------------------
RETAIL - SPECIALTY--0.5%
2,700 CDW Computer Centers, Inc.*/** ... $ 141,919
-----------
RETAIL - SPECIALTY APPAREL--3.1%
2,800 Nike, Inc. Class B ............... 201,250
5,600 Ross Stores, Inc. ................ 268,800
2,100 TJX Cos., Inc. ................... 87,675
7,000 Tommy Hilfiger Corp.* ............ 382,375
-----------
940,100
-----------
SAVINGS & LOAN ASSOCIATION--2.2%
7,265 Charter One Financial, Inc. ...... 345,996
5,600 Standard Federal Bancorporation,
Inc. ........................... 322,700
-----------
668,696
-----------
SERVICES - EMPLOYMENT AGENCIES--0.5%
7,400 Accustaff Inc.* .................. 153,550
-----------
TOBACCO--2.0%
16,000 RJR Nabisco Holdings Corp. ....... 586,000
-----------
TRANSPORTATION EQUIPMENT--2.4%
5,600 CSX Corp.* ....................... 258,300
9,200 GATX Corp. ....................... 450,800
-----------
709,100
-----------
UTILITIES--5.7%
3,900 AES Corp.* ....................... 254,963
5,200 Ameritech Corp. .................. 331,500
9,300 Entergy Corp. .................... 245,288
12,400 Montana Power Co.** .............. 271,250
16,300 Unicom Corp.** ................... 362,675
10,800 Washington Gas & Light Co. ....... 238,950
-----------
1,704,626
-----------
WHOLESALE - GROCERIES & GENERAL LINE--1.5%
14,300 Supervalu, Inc. .................. 443,300
-----------
WHOLESALE - SPECIALTY EQUIPMENT--2.9%
14,700 Tech Data Corp.* ................. 352,800
16,300 US Office Products Co.*/** ....... 521,600
-----------
874,400
-----------
Total Common Stocks
(Cost $28,655,270) ............. 28,850,965
-----------
- --------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT--3.3%
REPURCHASE AGREEMENT--3.3%
989,604 Bear, Stearns Securities Corp.
(Agreement dated 02/28/97
to be repurchased at $990,038,
collateralized by $2,130,000
Resolution Trust Corp.Bonds
6.342% due 02/25/20. Market value
of collateral is $1,012,568)
5.250%, 03/03/97
(Cost $989,604). ............... $ 989,604
-----------
Total Investments -- 100.3%
(Cost $29,644,874) ............. 29,840,569
-----------
Liabilities in Excess of
Other Assets -- (0.3%) ......... (77,826)
-----------
Net Assets -- 100.0% ............. $29,762,743
===========
- ----------
* Non-income producing.
** Security or a portion thereof is out on loan.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MICRO CAP GROWTH GROWTH & VALUE
FUND FUND FUND
------------- ------------- --------------
<S> <C> <C> <C>
ASSETS
Investments, at value (cost -- $32,167,007, $91,937,245,
$29,644,874, respectively) .................................. $32,585,259 $90,822,200 $29,840,569
Receivable for investments sold ................................ 296,832 631,959 1,304,534
Receivable for Fund shares sold ................................ 172,461 125,462 127,448
Receivable from investment adviser ............................. -- -- 971
Dividends and interest receivable .............................. 19,664 27,786 35,392
Prepaid expenses and other assets .............................. 11,004 15,496 9,043
----------- ----------- -----------
Total assets 33,085,220 91,622,903 31,317,957
----------- ----------- -----------
LIABILITIES
Payable for investments purchased .............................. 684,808 18,441,297 1,324,435
Payable for Fund shares redeemed ............................... 139,556 55,751 199,358
Accrued expenses and other liabilities ......................... 33,554 132,245 31,421
----------- ----------- -----------
Total liabilities 857,918 18,629,293 1,555,214
----------- ----------- -----------
NET ASSETS
Capital stock, $0.001 par value ................................ 2,353 5,755 2,198
Paid-in capital ................................................ 29,708,147 71,532,919 28,651,941
Undistributed net investment income/(loss) ..................... (4,699) (64,591) 21,116
Accumulated net realized gain from investments ................. 2,103,249 2,634,572 891,793
Net unrealized appreciation/(depreciation) on investments ...... 418,252 (1,115,045) 195,695
----------- ----------- -----------
Net assets applicable to shares outstanding ................. $32,227,302 $72,993,610 $29,762,743
=========== =========== ===========
Net assets ..................................................... $32,227,302 $72,993,610 $29,762,743
----------- ----------- -----------
Shares outstanding ............................................. 2,353,184 5,754,544 2,198,216
----------- ----------- -----------
Net asset value, offering and redemption price per share ....... $13.70 $12.68 $13.54
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
MICRO CAP GROWTH GROWTH & VALUE
FUND FUND FUND
------------- ------------- --------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends ..................................................... $ 52,776 $ 49,354 $ 97,288
Interest ...................................................... 72,445 129,875 29,790
---------- ----------- ----------
125,221 179,229 127,078
---------- ----------- ----------
EXPENSES
Advisory fees ................................................. 90,048 171,888 50,123
Co-Administration fees ........................................ 43,502 48,959 40,842
Administrative services fees .................................. 18,010 34,378 10,025
Federal and state registration fees ........................... 17,005 16,885 11,638
Transfer agent fees and expenses .............................. 29,686 38,594 24,477
Custodian fees and expenses ................................... 8,828 26,828 10,659
Printing ...................................................... 10,855 10,855 10,855
Audit and legal fees .......................................... 1,037 2,005 569
Other ......................................................... 2,475 2,949 2,319
---------- ----------- ----------
Total expenses before waivers and reimbursements ........... 221,446 353,341 161,507
Less: waivers and reimbursements ........................... (101,402) (124,157) (94,676)
---------- ----------- ----------
Total expenses after waivers and reimbursements ............ 120,044 229,184 66,831
---------- ----------- ----------
Net investment income/(loss) .................................. 5,177 (49,955) 60,247
---------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from investments ............................ 2,754,650 3,189,343 906,850
Net change in unrealized appreciation on investments .......... (205,574) (2,172,242) 186,594
---------- ----------- ----------
Net realized and unrealized gain on investments ............... 2,549,076 1,017,101 1,093,444
---------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $2,554,253 $ 967,146 $1,153,691
========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MICRO CAP FUND GROWTH FUND
---------------------------------- ----------------------------------
FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996* MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996 (UNAUDITED) AUGUST 31, 1996
----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income/(loss) ............ $ 5,177 $ 13,553 $ (49,955) $ 22,490
Net realized gain/(loss) from
investments .......................... 2,754,650 (651,401) 3,189,343 (554,771)
Net change in unrealized
appreciation on investments .......... (205,574) 623,826 (2,172,242) 1,057,198
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations ............ 2,554,253 (14,022) 967,146 524,917
----------- ----------- ----------- -----------
Dividends to shareholders from:
Net investment income ................ (23,429) -- (37,127) --
----------- ----------- ----------- -----------
Increase in net assets derived from
capital share transactions .............. 15,596,378 14,114,122 45,307,859 26,230,815
----------- ----------- ----------- -----------
Total increase in net assets ............ 18,127,202 14,100,100 46,237,878 26,755,732
NET ASSETS
Beginning of period ..................... 14,100,100 -- 26,755,732 --
----------- ----------- ----------- -----------
End of period ........................... $32,227,302 $14,100,100 $72,993,610 $26,755,732
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
GROWTH & VALUE FUND
----------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income/(loss) ............ $ 60,247 $ 9,319
Net realized gain/(loss) from
investments .......................... 906,850 (15,057)
Net change in unrealized
appreciation on investments .......... 186,594 9,101
----------- ----------
Net increase/(decrease) in net assets
resulting from operations ............ 1,153,691 3,363
----------- ----------
Dividends to shareholders from:
Net investment income ................ (48,450) --
----------- ----------
Increase in net assets derived from
capital share transactions .............. 24,844,352 3,809,787
----------- ----------
Total increase in net assets ............ 25,949,593 3,813,150
NET ASSETS
Beginning of period ..................... 3,813,150 --
----------- ----------
End of period ........................... $29,762,743 $3,813,150
=========== ==========
<FN>
- ------------
*Commencement of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each share
outstanding, total investment return, ratios to average net assets and other
supplemental data for each period indicated. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MICRO CAP FUND GROWTH FUND
---------------------------------- ----------------------------------
FOR THE SIX FOR THE PERIOD FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996* MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996 (UNAUDITED) AUGUST 31, 1996
----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ....... $ 11.67 $ 12.00 $ 11.84 $ 12.00
------- ------- ------- -------
Net investment income/(loss)(1) ............ -- 0.01 (0.01) 0.01
Net realized and unrealized gain/
(loss) on investments(2) ................ 2.04 (0.34) 0.86 (0.17)
------- ------- ------- -------
Net increase/(decrease) in net assets
resulting from operations. .............. 2.04 (0.33) 0.85 (0.16)
------- ------- ------- -------
Dividends to shareholders from:
Net investment income ...................... (0.01) -- (0.01) --
------- ------- ------- -------
Net asset value, end of period ............. $ 13.70 $ 11.67 $ 12.68 $ 11.84
======= ======= ======= =======
Total investment return(3) ................. 17.50% (2.75)% 7.17% (1.33)%
======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .. $32,227 $14,100 $72,994 $26,756
Ratio of expenses to average net
assets***(1)(4) ......................... 1.00% 1.00% 1.00% 1.00%
Ratio of net investment income
to average net assets***(1). ............ 0.04% 0.73% (0.22)% 0.71%
Portfolio turnover rate**** ................ 116.51% 42.92% 121.84% 19.21%
Average commission rate per share(5) ....... $0.0347 $0.0339 $0.0394 $0.0365
</TABLE>
<TABLE>
<CAPTION>
GROWTH & VALUE FUND
----------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ....... $ 11.56 $ 12.00
------- -------
Net investment income/(loss)(1) ............ 0.04 0.03
Net realized and unrealized gain/
(loss) on investments(2) ................ 2.00 (0.47)
------- -------
Net increase/(decrease) in net assets
resulting from operations. .............. 2.04 (0.44)
------- -------
Dividends to shareholders from:
Net investment income ...................... (0.06) --
------- -------
Net asset value, end of period ............. $ 13.54 $ 11.56
======= =======
Total investment return(3) ................. 17.65% (3.67)%
======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .. $29,763 $3,813
Ratio of expenses to average net
assets***(1)(4) ......................... 1.00% 1.00%
Ratio of net investment income
to average net assets***(1). ............ 0.90% 1.89%
Portfolio turnover rate**** ................ 112.04% 5.25%
Average commission rate per share(5) ....... $0.0486 $0.0363
<FN>
- ----------
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
respective periods, except for dividends and distributions, if any, which
are based on actual shares outstanding on the dates of distributions.
*** Annualized.
**** Not annualized.
(1) Reflects waivers and reimbursements.
(2) The amounts shown for a share outstanding throughout the respective periods
are not in accord with the changes in the aggregate gains and losses in
investments during the respective periods because of the timing of sales
and repurchases of Fund shares in relation to fluctuating net asset value
during the respective periods.
(3) Total investment return is calculated assuming a purchase of shares on the
first day and a sale of shares on the last day of each period reported and
includes reinvestments of dividends and distributions, if any. Total
investment returns are not annualized.
(4) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets annualized for the periods ended February
28, 1997 and August 31, 1996, respectively, would have been 1.84% and 3.45%
for the n/i Micro Cap Fund, 1.54% and 2.62% for the n/i Growth Fund and
2.42% and 8.98% for the n/i Growth & Value Fund.
(5) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period subject to such
commissions.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
NUMERIC INVESTORS
[LOGO OMITTED]
FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of
Maryland on February 29, 1988 and is registered under the Investment Company Act
of 1940, as amended, (the "Investment Company Act") as an open-end management
investment company. RBB is a "series fund", which is a mutual fund divided into
separate portfolios. Each portfolio is treated as a separate entity for certain
matters under the Investment Company Act, and for other purposes, and a
shareholder of one portfolio is not deemed to be a shareholder of any other
portfolio. Currently RBB has nineteen investment portfolios, including the n/i
family of mutual funds ("n/i Family") which consists of three diversified
portfolios: n/i Micro Cap Fund, n/i Growth Fund and n/i Growth & Value Fund
(each a "Fund", collectively the "Funds").
RBB has authorized capital of thirty billion shares of common stock of which
13.48 billion are currently classified into seventy-seven classes. Each class
represents an interest in one of nineteen investment portfolios of RBB. The
classes have been grouped into sixteen separate "families", nine of which have
begun investment operations, including the n/i Family, which commenced
operations on June 3, 1996.
PORTFOLIO VALUATION -- The net asset value of each Fund is determined as of 4:00
p.m. eastern time on each business day. Each Fund's securities are valued at the
last reported sales price on the national securities exchange or national
securities market on which such shares are primarily traded. If no sales are
reported, as in the case of some securities traded over-the-counter, portfolio
securities are valued at the mean between the last reported bid and asked
prices. Securities for which market quotations are not readily available are
valued at fair market value as determined in good faith by or under the
direction of RBB's Board of Directors. With the approval of the RBB's Board of
Directors, each Fund may use a pricing service, bank or broker-dealer
experienced in such matters to value its securities. The preparation of
financial statements requires the use of estimates by management. Short-term
obligations with maturities of 60 days or less are valued at amortized cost
which approximates market value. Expenses and fees, including investment
advisory and administration fees are accrued daily and taken into account for
the purpose of determining the net asset value of each Fund.
REPURCHASE AGREEMENTS -- Each Fund has agreed to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The financial
institutions with whom each Fund enters into repurchase agreements are banks and
broker/dealers which Numeric Investors L.P. (the Funds' investment adviser or
"Numeric") considers creditworthy pursuant to criteria approved by RBB's Board
of Directors. The seller under a repurchase agreement will be required to
maintain the value of the securities as collateral, subject to the agreement at
not less than the repurchase price plus accrued interest. Numeric marks to
market daily the value of the collateral, and, if necessary, requires the seller
to maintain additional securities, to ensure that the value is not less than the
repurchase price. Default by or bankruptcy of the seller would, however, expose
each Fund to possible loss because of adverse market action or delays in
connection with the disposition of the underlying securities.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- 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 in determining realized gains and losses on investments. Interest
income is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date. Expenses not directly attributable to a specific Fund are
allocated based on relative net assets of each Fund.
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NUMERIC INVESTORS
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FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income, if any,
will be declared and paid at least annually to shareholders. Distributions from
net realized capital gains, if any, will be distributed at least annually.
Income and capital gain distributions are determined in accordance with U.S.
federal income tax regulations which may differ from generally accepted
accounting principles.
U.S. FEDERAL TAX STATUS -- No provision is made for U.S. federal income taxes as
it is each Fund's intention to continue to qualify for and elect the tax
treatment applicable to regulated investment companies under Subchapter M of the
Internal Revenue Code of 1986, as amended, and make the requisite distributions
to its shareholders which will be sufficient to relieve it from U.S. federal
income and excise taxes.
2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Numeric Investors L.P. serves as each Fund's investment adviser. For its
advisory services, Numeric is entitled to receive 0.75% of each Fund's average
daily net assets, computed daily and payable monthly.
The adviser has voluntarily agreed to limit each Fund's total operating expenses
for the current and the following fiscal year to the extent that such expenses
exceeded 1.00% of each Fund's average daily net assets. As necessary, this
limitation is effected in waivers of advisory fees and reimbursements of
expenses exceeding the advisory fee. For the six months ended February 28, 1997,
investment advisory fees, waivers and reimbursements of expenses were as
follows:
GROSS NET EXPENSE
FUND ADVISORY FEES WAIVERS ADVISORY FEES REIMBURSEMENT
- ---- ------------- --------- ------------- -------------
n/i Micro Cap Fund ....... $90,048 $(59,243) $30,805 --
n/i Growth Fund .......... 171,888 (76,022) 95,866 --
n/i Growth & Value Fund .. 50,123 (37,977) 12,146 $20,928
The Funds will not pay Numeric at a later time for any amounts it may waive or
any amounts which Numeric has reimbursed to the Funds.
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank, National
Association, and Bear Stearns Funds Management Inc. ("BSFM"), a wholly-owned
subsidiary of The Bear Stearns Companies Inc., serve as co-administrators for
each of the Funds. For providing administrative services PFPC is entitled to
receive a monthly fee equal to an annual rate of 0.125% of each Fund's average
daily net assets, subject to a minimum monthly fee of $6,250 per Fund. BSFM is
entitled to receive a monthly fee equal to an annual rate of 0.05% of each
Fund's average daily net assets.
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NUMERIC INVESTORS
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FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
For the six months ended February 28, 1997, PFPC, at it's discretion,
voluntarily agreed to waive a portion of it's co-administration fees for each of
the Funds. For the six months ended February 28, 1997, PFPC's co-administration
fees and related waivers were as follows:
GROSS PFPC NET PFPC
CO-ADMINISTRATION CO-ADMINISTRATION
FUND FEES WAIVERS FEES
- ---- ----------------- --------- -----------------
n/i Micro Cap Fund ........... $37,500 $(18,750) $18,750
n/i Growth Fund .............. 37,500 (11,632) 25,868
n/i Growth & Value Fund ...... 37,500 (18,750) 18,750
In addition, PFPC serves as each Fund's transfer and disbursing agent. PFPC, at
its discretion, voluntarily agreed to waive a portion of its transfer agency
fees for each of the Funds. For the six months ended February 28, 1997, transfer
agency fees and waivers were as follows:
GROSS NET
TRANSFER AGENCY TRANSFER AGENCY
FUND FEES WAIVERS FEES
- ---- ----------------- --------- -----------------
n/i Micro Cap Fund ........... $29,686 $(9,000) $20,686
n/i Growth Fund .............. 38,594 (9,000) 29,594
n/i Growth & Value Fund ...... 24,477 (9,000) 15,477
Counsellors Funds Services, Inc. ("Counsellors"), a wholly-owned subsidiary of
Warburg, Pincus Counsellors, Inc., provides certain administrative services to
each of the Funds. As compensation for such administrative services, Counsellors
is entitled to receive a monthly fee equal to an annual rate of 0.15% of each
Funds average daily net assets.
For the six months ended February 28, 1997, Counsellors has, at its discretion,
voluntarily agreed to waive a portion of its administrative services fees for
each of the Funds. For the six months ended February 28, 1997, administrative
services fees and waivers were as follows:
GROSS
ADMINISTRATIVE NET ADMINISTRATIVE
FUND SERVICES FEES WAIVERS SERVICES FEES
- ---- ----------------- --------- -----------------
n/i Micro Cap Fund ............ $18,010 $(14,409) $3,601
n/i Growth Fund ............... 34,378 (27,503) 6,875
n/i Growth & Value Fund ....... 10,025 (8,021) 2,004
These fees are computed daily and paid monthly, and are subject to reduction in
any year to the extent that any Funds' expenses exceed the most stringent limits
prescribed by the laws or regulations of any state in which the Funds' shares
are offered for sale.
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NUMERIC INVESTORS
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FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the costs of securities owned at February
28, 1997 were $32,167,361, $92,063,316 and $29,688,512 for n/i Micro Cap Fund,
n/i Growth Fund, and n/i Growth & Value Fund, respectively. Accordingly, the net
unrealized appreciation/(depreciation) of investments are as follows:
NET APPRECIATION/
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- ---- ------------ ------------ -----------------
n/i Micro Cap Fund .......... $2,343,556 $(1,925,658) $ 417,898
n/i Growth Fund ............. 2,917,265 (4,158,381) (1,241,116)
n/i Growth & Value Fund ..... 1,451,131 (1,299,074) 152,057
For the six months ended February 28, 1997, aggregate purchases and sales of
investment securities (excluding short-term investments) were as follows:
FUND PURCHASES SALES
- ---- ----------- -----------
n/i Micro Cap Fund .................. $40,452,655 $25,229,657
n/i Growth Fund ..................... 99,019,184 54,211,431
n/i Growth & Value Fund ............. 38,903,786 14,619,234
For the six months ended February 28, 1997, purchases include $2,843,688 of
investment securities received from shareholders in exchange for 214,507 shares
sold by the n/i Growth & Value Fund.
4. CAPITAL SHARE TRANSACTIONS
As of February 28, 1997, each Fund has 50,000,000 shares of $0.001 par value
common stock authorized.
Transactions in capital shares were as follows:
n/i MICRO CAP FUND
------------------------------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996
----------------------- ------------------------
SHARE VALUE SHARE VALUE
--------- ----------- --------- -----------
Sales .................. 1,649,698 $22,628,630 1,217,175 $14,212,327
Repurchases ............ (506,440) (7,054,024) (8,810) (98,205)
Reinvestments .......... 1,561 21,772 -- --
--------- ----------- --------- -----------
Net increase ........... 1,144,819 $15,596,378 1,208,365 $14,114,122
========= =========== ========= ===========
20
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NUMERIC INVESTORS
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FAMILY OF MUTUAL FUNDS
MICRO CAP FUND
GROWTH FUND
GROWTH & VALUE FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONCLUDED)
4. CAPITAL SHARE TRANSACTIONS (CONTINUED)
n/i GROWTH FUND
------------------------------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996
----------------------- ------------------------
SHARE VALUE SHARE VALUE
--------- ----------- --------- -----------
Sales .................. 4,177,232 $54,338,094 2,384,034 $27,674,950
Repurchases ............ (684,771) (9,065,906) (124,620) (1,444,135)
Reinvestments .......... 2,669 35,671 -- --
--------- ----------- --------- -----------
Net increase ........... 3,495,130 $45,307,859 2,259,414 $26,230,815
========= =========== ========= ===========
n/i GROWTH & VALUE FUND
------------------------------------------------------
FOR THE SIX FOR THE PERIOD
MONTHS ENDED JUNE 3, 1996*
FEBRUARY 28, 1997 THROUGH
(UNAUDITED) AUGUST 31, 1996
----------------------- ------------------------
SHARE VALUE SHARE VALUE
--------- ----------- --------- -----------
Sales 1,983,806 $26,378,445 336,865 $3,890,583
Repurchases (118,804) (1,579,906) (7,078) (80,796)
Reinvestments 3,427 45,813 -- --
--------- ----------- --------- -----------
Net increase 1,868,429 $24,844,352 329,787 $3,809,787
========= =========== ========= ===========
- ----------
*Commencement of operations.
5. SECURITIES LENDING
Loans of securities are required at all times to be secured by collateral at
least equal to 102% of the market value of the securities on loan. However, in
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral may be subject to legal
proceedings. In the event that the borrower fails to return securities, and cash
collateral being maintained by the borrower is insufficient to cover the value
of loaned securities and provided such collateral insufficiency is not the
result of investment losses, the lending agent has agreed to pay the amount of
the shortfall to the Funds. The market value of securities on loan to brokers
and the related collateral cash and indemnification received at February 28,
1997, was as follows:
VALUE OF SECURITIES VALUE OF COLLATERAL
FUND ON LOAN AND INDEMNIFICATION
- ---- ------------------- -------------------
n/i Micro Cap Fund ............... $8,640,924 $8,817,399
n/i Growth Fund .................. 16,932,493 17,317,477
n/i Growth & Value Fund .......... 4,056,453 4,150,104
The cash collateral was reinvested into repurchase agreements which was in turn
collateralized by Resolution Trust Corp. Mortgage Backed Obligations.
21
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NUMERIC INVESTORS
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FAMILY OF MUTUAL FUNDS
One Memorial Drive
Cambridge, MA 02142
1-800-numeric [686-3742]
http://www.numeric.com
INVESTMENT ADVISER
Numeric Investors L.P.
One Memorial Drive
Cambridge, MA 02142
CO-ADMINISTRATORS
Bear Stearns Funds Management Inc.
245 Park Avenue, 15th floor
New York, NY 10167
PFPC Inc.
Bellevue Corporate Center
400 Bellevue Parkway
Wilmington, DE 19809
DISTRIBUTOR
Counsellors Funds Services, Inc.
466 Lexington Avenue
New York, NY 10017
CUSTODIAN
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 05840
TRANSFER AGENT
PFPC Inc.
Bellevue Corporate Center
400 Bellevue Parkway
Wilmington, DE 19809
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand, L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
COUNSEL
Drinker Biddle & Reath
1345 Chestnut Street
Philadelphia, PA 19107
The financial information included herein is taken from the records of each Fund
without examination by independent auditors who do not express an opinion
thereon.
This report is submitted for the general information of the shareholders of each
Fund.It is not authorized for the distribution to prospective investors in each
Fund unless it is preceded or accompanied by a current prospectus which includes
details regarding each Fund's objectives, policies and other information. Total
investment return is based on historical results and is not intended to indicate
future performance. The investment return and principal value of an investment
in each Fund will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than original cost.
