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BOSTON PARTNERS ASSET MANAGEMENT, L. P.
----------------
BOSTON PARTNERS
LARGE CAP
VALUE FUND
BOSTON PARTNERS
MIDCAP
VALUE FUND
BOSTON PARTNERS
MICRO CAP
VALUE FUND
BOSTON PARTNERS
BOND FUND
Annual Report
August 31, 1998
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
PORTFOLIO MANAGER'S LETTER
September 15, 1998
Dear Shareholders:
We are pleased to provide the report on the results of the Boston Partners
Large Cap Value, Mid Cap Value, Micro Cap Value and Bond Funds for the six month
period ended August 31, 1998. Our objective in each letter will be to update you
on the results of the Funds, the stock market, and the economy over the past
period and to provide you with our insights as to what you may expect in the
future.
PORTFOLIO REVIEW
LARGE CAP VALUE FUND
At August 31, 1998, the Large Cap Value Fund's Institutional Shares and the
Large Cap Value Fund's Investor Shares Net Asset Value performance was as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDING SINCE INCEPTION* THROUGH
AUGUST 31, 1998 AUGUST 31, 1998
----------------- ------------------------
<S> <C> <C>
Large Cap Value Fund Institutional Shares (18.87)% 6.97%
S&P500 Index(1) (8.10)% 18.63%
Large Cap Value Fund Investor Shares (18.88)% 5.75%
S&P 500 Index(1) (8.10)% 15.69%
<FN>
* Large Cap Value Fund Institutional Shares Inception Date - January 2, 1997
* Large Cap ValueFund Investor Shares Inception Date - January 16, 1997
(1) The S&P 500 Index is an unmanged index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of the Standard and Poor's Corporation.
</FN>
</TABLE>
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
that the original cost. More complete information about the Fund, including
charges and expenses, is provided in the prospectus, which must precede or
accompany this fact sheet and which should be read carefully before investing.
You may obtain additional copies by calling Boston Partners Asset Management, L.
P. at 1-888-261-4073.
In July and August 1998, the world economy further proved that a
substantial economic earthquake in one part of the world, can generate waves
strong enough to shake the entire globe. With the epicenter being the corruption
of the Japanese banks which erupted almost one year ago, the turmoil made its
way through Russia, South America, and the United States. The U.S. equity
markets were hurt through a series of events including insufficient Japanese
financial restructuring, worries in the White House, and concerns over corporate
earnings.
For the six months ending August 1998, value-style investing continued to
underperform growth-style investing. The underperformance of value investing
during a period of downside volatility is not unprecedented; the poor relative
performance of low P/E stocks often precedes a business cycle peak by six months
and this year it has been exacerbated by the weak performance of finance stocks.
In the initial stages of a market sell-off, every stock gets hit with some
exceptions such as Utilities, a defensive sector, and the liquid, mega cap
securities. As investors move in droves to these defensive assets, Boston
Partners believes our portfolios can benefit from the resulting pockets of value
left behind from the exodus.
<PAGE>
The market's poor overall performance and, more specifically, the
underperformance of the value investment style hurt the Large Cap Value Equity
Fund. The Fund also lagged the benchmark because of the "market cap effect." To
explain the "market cap effect," it is important to look more closely at the
stocks that drove the S&P 500 Index in the third quarter. As in the second
quarter, the S&P 500 Index's top decile in market capitalization size ($36
billion and up) drove the index. For example, the top decile in the third
quarter of 1998 returned 16.5%. In stark contrast, the smallest market
capitalization decile in the S&P 500 Index had a return of -35.8% for the
quarter. The largest, large caps were the winners throughout the six months
ending August 31, 1998; however, there are signs that the rise of the mega caps
may not continue. The Large Cap Value Equity Fund did not hold the mega caps
that continued to climb because of their growth-like characteristics. The Fund
is built through an individual stock selection process. We look to build the
portfolio by investing in companies that offer value and positive business
momentum. In managing the Fund, we have found that the stocks that offered the
characteristics appropriate to our investment process were stocks in the $10-$20
billion capitalization range. Additionally, the mega cap stocks may have
performed well, even as their bottom lines looked grim, partially as a result of
the rush of nervous investors into stocks which provide substantial liquidity.
However, the once untouchable mega cap stocks are beginning to show signs of
weakness with big names such as Coca Cola, General Electric, Gillette and Lucent
Technologies posting negative returns for the third quarter of 1998. These mega
caps negative returns seem to suggest a change in the trend.
The Large Cap Value Equity Fund was slightly over weighted in the Finance
sector which hurt the overall portfolio; this is in sharp contrast to the
sector's performance earlier in the year where Finance was the greatest
contributor to the portfolio. Consumer Non-Durables, though negative, helped
buoy the portfolio as the strongest performer with the sector return surpassing
the index's performance. Some of the contributors to the Fund include: Johnson &
Johnson and Abbot Laboratories in the Healthcare sector; American Stores,
Albertsons Inc., and Tele-Comm TCI Group in Consumer Services; AT&T Corporation
and MCI Communications in Telecommunications, and Niagara Mohawk Power in
Energy.
CURRENT OUTLOOK
While braving the economic earthquake shaking the world economy, Boston
Partners is confident that by sticking to our value discipline, we are building
and maintaining a portfolio of companies with business foundations strong enough
to withstand the tremors. We are building your portfolio based on three
fundamentals: companies that are undervalued, have strong business fundamentals,
and positive business momentum. The companies in the portfolio are selected for
investment because they fit our criteria. As long term investment managers, we
believe the portfolio we have built continues to honor our value philosophy.
Furthermore, we believe that our philosophy will provide competitive returns
over time.
MID CAP VALUE FUND
At August 31, 1998, the Mid Cap Value Fund's Institutional Shares and the
Mid Cap Value Fund's Investor Shares Net Asset Value performance was as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDING SINCE INCEPTION*
AUGUST 31, 1998 THROUGH AUGUST 31, 1998
----------------- -----------------------
<S> <C> <C>
Mid Cap Value Fund Institutional Shares (23.98)% (3.15)%
Mid Cap Value Fund Investor Shares (23.91)% (3.19)%
Russell 2500 Growth Index(1) (24.41)% (5.74)%
<FN>
* Mid Cap Value Fund Institutional Shares and Mid Cap Value Investor Shares
Inception Date - June 2, 1997
(1) The Russell 2500 Index is an unmanaged Index (with no defined investment
objective) of common stocks, includes reinvestment of dividends, and is a
registered trademark of the Frank Russell Company.
</FN>
</TABLE>
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
that the original cost. More complete information about the Fund, including
charges and expenses, is provided in the prospectus, which must precede or
accompany this fact sheet and which should be read carefully before investing.
You may obtain additional copies by calling Boston Partners Asset Management, L.
P. at 1-888-261-4073.
2
<PAGE>
The six months ended August 1998 proved to be another rocky period for mid
cap securities. With the Russell 2500 Growth Index and the Russell 2000 Growth
Index trailing the S&P 500 Index by 1631 basis points and 1838 basis points
respectively, the disheartened milieu that permeated all areas of the market
increased as the market cap decreased. The contamination which spread from the
Asian economies through Russia and Latin America continued to plague the U.S.
markets, and the overall effect hurt smaller capitalization securities which
are, by character, more volatile and more sensitive to market mayhem. Fear
triggered by substantial corrections throughout the second and third quarters of
1998 sent investors fleeing into the very large, seemingly secure, liquid equity
securities. The sell-off has allowed prices to fall; however, the falling prices
have also created a climate in which undervalued securities are abundant.
The Fund's performance can be attributed primarily to good stock selection
within Consumer Services, an underweighting in Technology, and an increase in
Utilities. Although generally overweighted, we began to trim the finance sector.
The trimming of the Finance sector can be attributed primarily to a
deterioration in many of the holdings' fundamentals, or a slowing-to-negative
business momentum. The Utility sector, a popular "safe haven" during falling
markets, was increased due to added investments in companies with strong
business fundamentals and positive business momentum. Consumer Non-Durables, an
overweighted sector, performed poorly which hurt the portfolio. Similarly,
Consumer Durables, a slightly overweighted sector, performed poorly primarily
due to major price drops in fundamentally strong companies such as Black &
Decker Corporation, Federal Mogul Corporation, Lear Corporation, and Lennar
Corporation. Despite the strong fundamentals of these companies, these holdings
lost significant ground during the month of August.
The contributors to the Fund include: Louisiana-Pacific Corporation in
Basic Industries; Litton Industries Inc. and Newport News Shipbuilding in
Capital Goods; Performance Food Group Co. in Consumer Non-Durables; Valassis
Communications Inc. and ShopKo Stores in Consumer Services; and Allergan Inc. in
Health Care. Some of the new holding and increased holdings include: Ball
Corporation, Clayton Homes Inc., D.R. Horton Inc., Dillard Department Stores
Inc., Food Lion, Lear Group, Niagara Mohawk Power Corporation, and Viad
Corporation. Some of the portfolio's sells, partial or total, include AMBAC
Financial Group, Burlington Coat Factory, First Virginia Banks, and Whirlpool
Corporation.
CURRENT OUTLOOK
Boston Partners does not attempt to time the market, nor can we predict
when the market will turn. We do know, however, that the recent market
corrections have created substantial buying opportunities, and we plan to take
advantage of this positive aspect of a tough market. Additionally, as markets
move in cycles, what goes down, should also go up. We strive to hold companies
that have laid the groundwork to prosper when the market cycles turns.
Additionally, because of the volatility in the domestic market, and the
trouble in overseas markets, Boston Partners is carefully evaluating all of the
Fund's current holdings. We are analyzing the companies' exposure to the
troubles overseas. An important fundamental required of our investments is
business momentum; therefore, we are continuing to carefully examine our
holdings in that respect. In a period of declining corporate profits, it is
important to hold companies whose earnings can be readily identified.
Most importantly, Boston Partners remains committed to strict value
investing. We pick stocks individually based on three criteria: value, solid
business fundamentals, and positive business momentum. We carefully watch our
holdings to be sure that the companies meet these three criteria while held in
the Fund. As long term investors, Boston Partners views the market's current
drop as an opportunity to find new companies that fulfill our value-driven
investment criteria.
3
<PAGE>
MICRO CAP VALUE FUND
At August 31, 1998, the Micro Cap Value Fund's Institutional Shares and the
Micro Cap Value Fund's Investor Shares Net Asset Value performance was as
follows:
SINCE INCEPTION*
THROUGH AUGUST 31, 1998
-----------------------
Micro Cap Value Fund Institutional Shares (23.80)%
Micro Cap Value Fund Investor Shares (23.70)%
Russell 2000 Growth Index(1) (25.94)%
* Micro Cap Value Fund Institutional Shares and Micro Cap Value Investor
Shares Inception Date - July 1, 1998
(1) The Russell 2000 Growth Index is an unmanged index (with no defined
investment objective) of common stocks, includes reinvestment of dividends,
and is a registered trademark of the Frank Russell Company.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
that the original cost. More complete information about the Fund, including
charges and expenses, is provided in the prospectus, which must precede or
accompany this fact sheet and which should be read carefully before investing.
You may obtain additional copies by calling Boston Partners Asset Management, L.
P. at 1-888-261-4073.
In July and August 1998, the corruption of the Asian economies contaminated
economies worldwide. From mega capitalizations to micro capitalizations, the
disparity across the broad market was tremendous. It was apparent that the more
volatile, smaller capitalization securities responded more dramatically to the
down market. As the small caps fell, so went the micro caps. The first two
months for the Boston Partners' Micro Cap Value Fund were difficult.
At the inception of the Micro Cap Value Fund, we built a value-based
portfolio of companies with solid business fundamentals and positive business
momentum. For the first two months, the portfolio was overweighted in the
financial sector, a sector where we found attractive valuations and sound
business momentum. However, from the very large companies to the small, the
financial sector underperformed expectations as it was effected by overseas
problems and domestic worries. The portfolio was underweighted in Technology as
we found a general slowing of business momentum throughout the sector, and
therefore, few companies could fulfill our investment criteria. Despite
especially difficult market conditions, the Micro Cap Value Fund maintains a
portfolio with long term inherent value. With the average weighted price to book
ratio at 1.1x, and the price to earning ratio at 10.6x, the portfolio is true to
our value investing style.
In the Consumer Service sector, Boston Partners' Micro Cap Value Fund is
finding select undervalued companies with strong fundamentals in the retail
industry. Catherine's Stores Corporation, a specialized women's clothing
retailer, sells at 72% of book value, and 9x earnings. As a result of changes in
merchandise and a strong marketing campaign, Catherine's Stores Corporation has
continued to beat estimates in 1998 and same store sales have grown in excess of
9%. Catherine's Stores fulfills our investing criteria substantially; it is a
company with strong fundamentals and positive business momentum. In the Consumer
Durables sector, M/I Schottenstein, a homebuilder located in the mid-west, was
selling at 1.2x book value, and 7x earnings as of August 31, 1998. The company
has surpassed earnings estimates this year as the company's strong business
fundamentals led the company to benefit from a boost in the home building
industry. Both Catherine's Stores and M/I Schottenstein are in the Fund's top
ten holdings.
CURRENT OUTLOOK
Boston Partners' Micro Cap Value Fund remains committed to strict value
investing. We pick stocks individually based on three criteria: value, solid
business fundamentals, and positive business momentum. We carefully watch our
holdings to be sure that the companies in the Fund meet these three criteria. As
long term investors, Boston Partners views the market's current drop as an
opportunity to find new companies that fulfill our value-driven investment
criteria. Within the Micro Cap universe, we expect to find value in companies
that we believe will withstand down markets and prosper when the market cycle
reverses.
4
<PAGE>
BOND FUND
At August 31, 1998, the Bond Fund's Institutional Shares and the Bond
Fund's Investor Shares Net Asset Value performance was as follows:
SIX MONTHS ENDING SINCE INCEPTION* THROUGH
AUGUST 31, 1998 AUGUST 31, 1998
----------------- ------------------------
Bond Fund Institutional Shares 3.11% 4.79%
Bond Fund Investor Shares 3.00% 4.63%
Lehman Aggregate Index(1) 4.58% 5.84%
* Bond Fund Institutional Shares and Bond Fund Investor Shares Inception Date
- December 30, 1997
(1) The Lehman Aggregate Index is an unmanged index (with no defined investment
objective) containing fixed rate debt securities rated investment grade or
higher by Moody's Investors Service, Standard & Poors Corporation, or Fitch
Investors Service, in that order. All issues have at least one year to
maturity and an outstanding par value of at least $100 million. The Index
is a registered trademark of the Lehman Brothers, Inc.
Returns are historical and include change in share price and reinvestment of
dividends and capital gains. Past performance cannot guarantee future results.
Returns and share price will fluctuate, and redemption value may be more or less
that the original cost. More complete information about the Fund, including
charges and expenses, is provided in the prospectus, which must precede or
accompany this fact sheet and which should be read carefully before investing.
You may obtain additional copies by calling Boston Partners Asset Management, L.
P. at 1-888-261-4073.
The flight to quality seen early in the year, escalated with a vengeance
during July and August 1998. While U.S. Treasury rates dropped to record lows,
producing large price gains, interest rates on emerging market and lower quality
high yield issues moved higher, producing large losses for the holders of such
debt. The spark was a moratorium on debt payments in Russia, and the damage
spread to Latin America and ultimately to most lower quality and/or less liquid
debt issues worldwide. As a result, Treasury prices vaulted higher and nearly
all other sectors lagged during the quarter.
Turmoil in overseas markets rippled through U.S. financial markets, hurting
leveraged entities such as banks, broker dealers, and hedge funds. Stock prices
fell. With Treasuries yielding less than the Federal Funds rate, the market was
anticipating a rate cut (which did occur in September). While the rapid drop in
Treasury rates and weakness in corporate debt issues appear at odds with an
economy humming along at full employment, the market is discounting much worse.
The sharp drop in new issues for both equities and bonds and general absence of
liquidity could make this self-fulfilling. The higher cost of borrowing, for
example, will hurt Latin America countries, boosting their fiscal deficits,
pressuring their currencies, further slowing their economies, inhibiting
external investment, and creating a vicious circle. In this troubled environment
Treasuries have been the safe haven.
CURRENT OUTLOOK
As a result of the realignment of prices and risk premiums throughout the
bond market, we have adjusted portfolios but not our overall strategies. We
remain overweighted in the corporate and mortgage sectors and have thereby
increased the yield advantage over our benchmarks. The adjustments involve
upgrading quality and liquidity in our corporate segment and moving down in
mortgage coupon in the mortgage segment in order to limit prepayment risk. Our
portfolios remain duration and yield curve neutral. These moves have helped our
performance.
The views of the Funds' management are as of the date of the letters and
portfolio holdings described in this annual report are as of August 31, 1998.
These views and portfolio holdings may have changed subsequent to these dates.
Nothing in this annual report is a recommendation to purchase or sell
securities.
5
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
Comparison of Change in Value of $10,000 investment in
Boston Partners Large Cap Value Institutional Class (1)(2) vs.
S&P 500 Stock Index
Large Cap Value Fund -- S&P 500
Institutional Class Stock Index
- --------------------------------------------------------------------------------
1/2/97 10,000 10,000
2/28/97 10,620 10,708
5/31/97 11,360 11,543
8/31/97 12,460 12,291
11/30/97 12,810 13,112
2/28/98 13,786 14,458
5/31/98 13,828 15,088
8/31/98 11,185 13,288
Past performance is not predictive of future performance
- --------------------------------------------------------------------------------
Total Returns
One Year Ended Average
August 31, 1998 Annual(3)
--------------- ---------
Large Cap Value Fund -- Institutional Class (10.23%) 6.97%
S&P 500 Stock Index 8.11% 18.64%
- --------------------------------------------------------------------------------
- ---------------
(1) The chart assumes a hypothetical $10,000 initial investment in the Fund and
reflects all Fund expenses.Investors should note that the Fund is an
aggressively managed mutual fund while the index is either unmanaged and
does not incur expenses and/or is not available for investment.
(2) Boston Partners Asset Management L.P. waived a portion of its advisory fee
and voluntarily agreed to reimburse a portion of the Fund's operating
expenses, if necessary, to maintain the expense limitation as set forth in
the notes to the financial statements. Total returns shown include fee
waivers and expense reimbursements, if any; total returns would have been
lower had there been no assumption of fees and expenses in excess of
expense limitations.
(3) Aggregate return for the period January 2, 1997 (commencement of
operations) through August 31, 1998.
6
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
Comparison of Change in Value of $10,000 investment in
Boston Partners Large Cap Value Investor Class (1)(2) vs. S&P 500 Stock Index
Large Cap Value Fund -- S&P 500
Investor Class Stock Index
- --------------------------------------------------------------------------------
01/16/97 10,000 10,000
02/28/97 10,412 10,300
05/31/97 11,127 11,103
08/31/97 12,206 11,823
11/30/97 12,549 12,612
2/28/98 13,500 13,907
5/31/98 13,551 14,513
8/31/98 10,951 12,781
Past performance is not predictive of future performance
- --------------------------------------------------------------------------------
Total Returns
One Year Ended Average
August 31, 1998 Annual(3)
--------------- ---------
Large Cap Value Fund -- Investor Class (10.28%) 5.75%
S&P 500 Stock Index 8.11% 16.30%
- --------------------------------------------------------------------------------
- ---------------
(1) The chart assumes a hypothetical $10,000 initial investment in the Fund and
reflects all Fund expenses.Investors should note that the Fund is an
aggressively managed mutual fund while the index is either unmanaged and
does not incur expenses and/or is not available for investment.
(2) Boston Partners Asset Management L.P. waived a portion of its advisory fee
and voluntarily agreed to reimburse a portion of the Fund's operating
expenses, if necessary, to maintain the expense limitation as set forth in
the notes to the financial statements. Total returns shown include fee
waivers and expense reimbursements, if any; total returns would have been
lower had there been no assumption of fees and expenses in excess of
expense limitations.
(3) Aggregate return for the period January 16, 1997 (commencement of
operations) through August 31, 1998.
7
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
Comparison of Change in Value of $10,000 investment in
Boston Partners Mid Cap Value Institutional Class (1)(2) vs. Russell 2500 Index
Mid Cap Value Fund -- S&P 500
Institutional Class Stock Index
- --------------------------------------------------------------------------------
6/3/97 10,000 10,000
8/31/97 11,010 11,172
11/30/97 11,240 11,420
2/28/98 12,632 12,289
5/31/98 12,857 12,280
8/31/98 9,604 9,290
Past performance is not predictive of future performance
- --------------------------------------------------------------------------------
Total Returns
One Year Ended Average
August 31, 1998 Annual(3)
--------------- ---------
Mid Cap Value Fund -- Institutional Class (12.73%) (3.15%)
Russell 2500 Index (16.84%) (5.74%)
- --------------------------------------------------------------------------------
- --------------
(1) The chart assumes a hypothetical $10,000 initial investment in the Fund and
reflects all Fund expenses.Investors should note that the Fund is an
aggressively managed mutual fund while the index is either unmanaged and
does not incur expenses and/or is not available for investment.
(2) Boston Partners Asset Management L.P. waived a portion of its advisory fee
and voluntarily agreed to reimburse a portion of the Fund's operating
expenses, if necessary, to maintain the expense limitation as set forth in
the notes to the financial statements. Total returns shown include fee
waivers and expense reimbursements, if any; total returns would have been
lower had there been no assumption of fees and expenses in excess of
expense limitations.
(3) Aggregate return for the period June 2, 1997 (commencement of operations)
through August 31, 1998.
8
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
Comparison of Change in Value of $10,000 investment in
Boston Partners Mid Cap Value Investor Class (1)(2) vs. Russell 2500 Index
Mid Cap Value Fund -- S&P 500
Investor Class Stock Index
- --------------------------------------------------------------------------------
6/3/97 10,000 10,000
8/31/97 11,010 11,172
11/30/97 11,240 11,420
2/28/98 12,632 12,289
5/31/98 12,857 12,280
8/31/98 9,604 9,290
Past performance is not predictive of future performance
- --------------------------------------------------------------------------------
Total Returns
One Year Ended Average
August 31, 1998 Annual(3)
--------------- ---------
Mid Cap Value Fund -- Investor Class (12.77%) (3.19%)
Russell 2500 Index (16.84%) (5.74%)
- --------------------------------------------------------------------------------
- -----------------
(1) The chart assumes a hypothetical $10,000 initial investment in the Fund and
reflects all Fund expenses.Investors should note that the Fund is an
aggressively managed mutual fund while the index is either unmanaged and
does not incur expenses and/or is not available for investment.
(2) Boston Partners Asset Management L.P. waived a portion of its advisory fee
and voluntarily agreed to reimburse a portion of the Fund's operating
expenses, if necessary, to maintain the expense limitation as set forth in
the notes to the financial statements. Total returns shown include fee
waivers and expense reimbursements, if any; total returns would have been
lower had there been no assumption of fees and expenses in excess of
expense limitations.
(3) Aggregate return for the period June 2, 1997 (commencement of operations)
through August 31, 1998.
9
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
COMMON STOCK--98.0%
AEROSPACE/DEFENSE--3.9%
Litton Industries, Inc.* ...................... 15,680 $ 752,640
Lockheed Martin Corp. ......................... 8,300 725,731
Northrop Grumman Corp. ........................ 11,225 711,384
----------
2,189,755
----------
AIR TRANSPORT--2.0%
Delta Air Lines, Inc. ......................... 11,200 1,142,400
----------
AUTOMOBILE-MANUFACTURING--3.4%
Chrysler Corp. ................................ 9,100 406,087
Fiat SpA ...................................... 16,600 253,150
Ford Motor Co. ................................ 29,100 1,280,400
----------
1,939,637
----------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--1.4%
Federal-Mogul Corp. ........................... 9,900 528,413
Lear Corp.* ................................... 6,900 279,881
----------
808,294
----------
BANKS & SAVINGS & LOANS--3.4%
Chase Manhattan Corp. ......................... 10,300 545,900
First Union Corp. ............................. 8,900 431,650
PNC Bank Corp. ................................ 6,000 258,000
Republic New York Corp. ....................... 17,200 709,500
----------
1,945,050
----------
BROKERAGE SERVICES--2.1%
Bear Stearns Companies, Inc. .................. 13,200 487,575
Lehman Brothers Holdings, Inc. ................ 3,700 145,688
Morgan Stanley, Dean Witter & Co. ............. 9,900 574,819
----------
1,208,082
----------
BUILDING PRODUCTS--0.4%
Clayton Homes, Inc. ........................... 13,000 200,687
----------
CHEMICALS--1.3%
Agrium, Inc. .................................. 54,080 456,300
Union Carbide Corp. ........................... 7,600 305,425
----------
761,725
----------
NUMBER
OF SHARES VALUE
--------- ----------
COMPUTERS--4.8%
Compaq Computer Corp. ....................... 31,100 $ 868,856
International Business Machines
Corp. ..................................... 9,800 1,103,725
Wang Laboratories, Inc.* .................... 39,030 761,085
----------
2,733,666
----------
CONSTRUCTION & BUILDING MATERIALS--1.8%
Ingersoll-Rand Co. .......................... 19,400 771,150
MacMillan Bloedel Ltd. ...................... 30,800 234,850
----------
1,006,000
----------
CONSUMER DURABLES--1.4%
Whirlpool Corp. ............................. 15,900 789,037
----------
DIVERSIFIED--0.5%
Fortune Brands, Inc. ........................ 9,730 268,183
----------
ELECTRIC UTILITIES--3.6%
Niagara Mohawk Power Corp.* ................. 35,000 542,500
Southern Co. ................................ 20,600 579,375
Unicom Corp. ................................ 25,100 894,187
----------
2,016,062
----------
ENTERTAINMENT--0.5%
Harrah's Entertainment, Inc.* ............... 21,000 303,187
----------
ENVIRONMENTAL SERVICES--3.3%
Waste Management, Inc.* ..................... 42,392 1,870,547
----------
FERTILIZERS--0.7%
IMC Global, Inc. ............................ 21,000 385,875
----------
FINANCIAL SERVICES--8.1%
Ambac Financial Group, Inc. ................. 6,856 323,517
Fannie Mae .................................. 27,365 1,554,674
Freddie Mac ................................. 17,200 679,400
SLM Holding Corp. ........................... 12,000 430,500
Travelers Group, Inc. ....................... 37,170 1,649,419
----------
4,637,510
----------
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
FOOD & BEVERAGE--4.1%
Albertson's, Inc. ........................... 15,600 $ 788,775
American Stores Co. ......................... 21,700 629,300
Anheuser-Busch Co., Inc. .................... 9,900 456,638
Food Lion, Inc., Class A .................... 46,900 483,656
----------
2,358,369
----------
HEALTHCARE--2.0%
Columbia/HCA Healthcare Corp. ............... 28,800 649,800
Foundation Health Systems, Inc.,
Class A* .................................. 25,000 279,688
Quorum Health Group, Inc.* .................. 10,600 201,400
----------
1,130,888
----------
HOTELS--0.3%
Meristar Hospitality Corp.* ................. 10,030 169,256
----------
INSURANCE--13.1%
Ace, Ltd. ................................... 23,395 678,455
Allmerica Financial Corp. ................... 25,080 1,495,395
Allstate Corp. .............................. 35,600 1,335,000
Everest Reinsurance Holdings, Inc. .......... 24,300 850,500
Hartford Financial Services
Group, Inc. ............................... 10,560 472,560
Loews Corp. ................................. 18,350 1,548,281
PartnerRe Ltd. .............................. 13,775 554,444
Renaissance Re Holdings Ltd. ................ 12,000 502,500
----------
7,437,135
----------
OIL SERVICES--6.8%
British Petroleum Co. PLC ................... 8,677 634,506
Elf Aquitaine SA ............................ 10,570 516,609
Royal Dutch Petroleum Co. ................... 17,800 707,550
Sun Co., Inc. ............................... 18,800 621,575
Tosco Corp. ................................. 38,105 838,310
Total SA .................................... 11,400 547,913
----------
3,866,463
----------
PAPER & FOREST PRODUCTS--0.7%
Fort James Corp. ............................ 14,700 428,138
----------
PHARMACEUTICALS--2.2%
Abbott Laboratories ......................... 24,300 935,550
Johnson & Johnson ........................... 4,700 324,300
----------
1,259,850
----------
NUMBER
OF SHARES VALUE
--------- ----------
PUBLISHING COMPANIES--2.3%
Harcourt General, Inc. ...................... 26,600 $1,291,763
----------
REAL ESTATE--0.9%
Equity Inns, Inc. ........................... 10,000 100,000
Mid-America Apartment
Communities, Inc. ......................... 2,420 55,660
Prentiss Property Trust ..................... 8,240 184,370
RFS Hotel Investors, Inc. ................... 12,340 169,675
----------
509,705
----------
RESTAURANTS--0.7%
McDonald's Corp. ............................ 7,200 403,650
----------
RETAIL-DEPARTMENT STORE--3.1%
Dillard's Inc., Class A ..................... 18,300 528,413
Federated Department Stores, Inc.* .......... 28,100 1,224,106
----------
1,752,519
----------
RETAIL TRADE--0.1%
Venator Group, Inc.* ........................ 6,900 62,531
----------
TELECOMMUNICATIONS--13.6%
Ameritech Corp. ............................. 30,700 1,446,738
AT&T Corp. .................................. 19,600 982,450
Chris-Craft Industries, Inc.* ............... 10,670 444,139
GTE Corp. ................................... 9,000 450,000
MCI Communications Corp. .................... 25,600 1,280,000
Sprint Corp. ................................ 15,700 1,052,881
Tele Danmark A/S ............................ 6,600 339,900
Tele-Communications, Inc.,
Class A* .................................. 17,800 587,400
Telecomunicacoes Brasileiras SA* ............ 12,500 897,656
Telefonos de Mexico SA, Class L ............. 6,400 228,400
----------
7,709,564
----------
TEXTILES & APPAREL--1.6%
Liz Claiborne, Inc. ......................... 15,400 438,900
Warnaco Group, Inc. ......................... 17,700 482,325
----------
921,225
----------
TOBACCO--3.9%
Philip Morris Companies, Inc. ............... 53,100 2,206,969
----------
TOTAL COMMON STOCK
(Cost $67,282,147) ...................... 55,713,722
----------
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
AUGUST 31, 1998
PAR
(000) VALUE
--------- ----------
SHORT-TERM INVESTMENT--1.9%
Rodney Square Cash Reserve
5.10% 09/01/98 ........................ 1,105 $ 1,105,138
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $1,105,138) ................... 1,105,138
-----------
TOTAL INVESTMENTS--99.9%
(Cost $68,387,285) ...................... 56,818,860
-----------
ASSETS IN EXCESS OF
OTHER LIABILITIES--0.1% ................. 54,616
-----------
NET ASSETS--100.0% ......................... $56,873,476
===========
* Non-income producing
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
COMMON STOCK--100.5%
AEROSPACE/DEFENSE--2.5%
Coltec Industries, Inc.* ...................... 24,000 $ 345,000
Litton Industries, Inc.* ...................... 28,956 1,389,888
----------
1,734,888
----------
AUTOMOBILE-MANUFACTURING--0.5%
Fiat SpA ...................................... 24,600 375,150
----------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--5.6%
Federal-Mogul Corp. ........................... 39,033 2,083,386
Lear Corp.* ................................... 25,900 1,050,569
Tower Automotive, Inc.* ....................... 41,200 754,475
----------
3,888,430
----------
BANKS AND SAVINGS & LOANS--3.6%
Commercial Federal Corp. ...................... 28,114 618,508
Golden State Bancorp, Inc.* ................... 48,000 762,000
Long Island Bancorp, Inc. ..................... 29,100 1,091,250
----------
2,471,758
----------
BUILDING & BUILDING MATERIALS--1.0%
Eagle Hardware & Garden, Inc.* ................ 32,200 688,275
----------
BUILDING PRODUCTS--2.5%
Clayton Homes, Inc. ........................... 61,000 941,687
Lennar Corp. .................................. 45,600 826,500
----------
1,768,187
----------
COMMERCIAL BANKS--3.7%
Compass Bancshares, Inc. ...................... 16,700 551,100
First Virginia Banks, Inc. .................... 32,594 1,401,542
Hibernia Corp. ................................ 44,000 594,000
----------
2,546,642
----------
COMPUTERS--3.2%
Compaq Computer Corp. ......................... 28,700 801,806
CompUSA, Inc.* ................................ 33,500 397,812
Quantum Corp.* ................................ 30,900 353,419
The Learning Company, Inc.* ................... 38,000 672,125
----------
2,225,162
----------
NUMBER
OF SHARES VALUE
--------- ----------
CONSTRUCTION & BUILDING MATERIALS--1.0%
D.R. Horton, Inc. ........................... 27,000 $ 432,000
MacMillan Bloedel Ltd. ...................... 30,500 232,562
----------
664,562
----------
CONSUMER PRODUCTS & SERVICES--3.3%
Black & Decker Corp. ........................ 28,300 1,177,987
Sherwin-Williams Co. ........................ 47,900 1,143,612
----------
2,321,599
----------
CONTAINERS--1.8%
Ball Corp. .................................. 17,900 669,013
Stone Container Corp.* ...................... 55,000 574,062
----------
1,243,075
----------
DIVERSIFIED--2.7%
Viad Corp. .................................. 89,230 1,851,522
----------
ELECTRIC UTILITIES--10.1%
DTE Energy Co. .............................. 37,400 1,575,475
GPU, Inc. ................................... 30,200 1,134,388
Kansas City Power & Light Co. ............... 18,800 534,625
New England Electric System ................. 20,800 839,800
Niagara Mohawk Power Corp.* ................. 75,900 1,176,450
PP&L Resources, Inc. ........................ 35,700 841,181
Sierra Pacific Resources .................... 24,800 906,750
----------
7,008,669
----------
ELECTRONICS--1.6%
Advanced Micro Devices, Inc.* ............... 21,300 280,894
Varian Associates, Inc. ..................... 23,700 807,281
----------
1,088,175
----------
ENTERTAINMENT--1.8%
Harrah's Entertainment, Inc.* ............... 38,600 557,288
Midway Games, Inc.* ......................... 70,300 663,456
----------
1,220,744
----------
FINANCIAL SERVICES--0.7%
Coast Federal Litigation Contingent
Payment Rights Trust* ..................... 48,600 489,037
----------
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
FOOD & BEVERAGE--6.0%
American Stores Co. ......................... 30,600 $ 887,400
Aurora Foods, Inc.* ......................... 46,200 672,788
International Home Foods, Inc.* ............. 50,000 837,500
Ralcorp Holdings, Inc.* ..................... 65,800 1,270,763
Richfood Holdings, Inc. ..................... 23,000 472,938
----------
4,141,389
----------
HEALTHCARE--4.0%
C.R. Bard, Inc. ............................. 25,400 831,850
Foundation Health Systems, Inc.,
Class A* .................................. 31,600 353,525
NovaCare, Inc.* ............................. 115,500 844,594
Quorum Health Group, Inc.* .................. 37,700 716,300
----------
2,746,269
----------
INDUSTRIAL GOODS & MATERIALS--1.1%
Harsco Corp. ................................ 21,500 788,781
----------
INSURANCE--10.0%
Allmerica Financial Corp. ................... 56,700 3,380,738
Everest Reinsurance Holdings, Inc. .......... 38,292 1,340,220
Old Republic International Corp. ............ 54,442 1,214,737
ReliaStar Financial Corp. ................... 26,500 1,040,125
----------
6,975,820
----------
LUMBER & BUILDING SUPPLIES--1.7%
Louisiana-Pacific Corp. ..................... 62,065 1,171,477
----------
METALS & MINING--0.6%
Trinity Industries, Inc. .................... 12,900 390,225
----------
OIL SERVICES--1.3%
Tosco Corp. ................................. 30,000 660,000
Valero Energy Corp. ......................... 14,209 253,986
----------
913,986
----------
PHARMACEUTICALS--4.5%
Allergan, Inc. .............................. 52,200 2,466,450
IVAX Corp.* ................................. 88,800 688,200
----------
3,154,650
----------
NUMBER
OF SHARES VALUE
--------- ----------
PUBLISHING & INFORMATION SERVICES--2.2%
Valassis Communications, Inc.* .............. 51,500 $1,535,344
----------
RESTAURANTS--0.8%
Tricon Global Restaurants, Inc.* ............ 14,400 533,700
----------
RETAIL-APPAREL--1.4%
Burlington Coat Factory
Warehouse Corp. ........................... 45,689 962,325
----------
RETAIL-DEPARTMENT STORE--4.1%
Dillard's Inc., Class A ..................... 48,800 1,409,100
Harcourt General, Inc. ...................... 30,400 1,476,300
----------
2,885,400
----------
RETAIL-DISCOUNT--6.5%
BJ's Wholesale Club, Inc.* .................. 80,511 2,717,246
ShopKo Stores, Inc.* ........................ 71,094 1,826,227
----------
4,543,473
----------
RETAIL-TRADE--1.3%
Maxim Group, Inc.* .......................... 47,200 879,100
----------
SECURITY SERVICES--1.3%
Pittston Brink's Group ...................... 28,670 899,521
----------
SHIPBUILDING--1.1%
Newport News Shipbuilding, Inc. ............. 33,300 782,550
----------
TEXTILES & APPAREL--7.0%
Fruit of the Loom, Inc.* .................... 31,000 695,563
Liz Claiborne, Inc. ......................... 57,400 1,635,900
Shaw Industries, Inc. ....................... 80,700 1,220,588
Warnaco Group, Inc. ......................... 47,800 1,302,550
----------
4,854,601
----------
TOTAL COMMON STOCK
(Cost $85,793,161) ...................... 69,744,486
----------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
AUGUST 31, 1998
PAR
(000) VALUE
--------- ----------
SHORT-TERM INVESTMENT--1.5%
Rodney Square Cash Reserve
5.10% 09/01/98 ....................... 1,019 $ 1,018,987
------------
TOTAL SHORT-TERM INVESTMENT
(Cost $1,018,987) .................. 1,018,987
------------
TOTAL INVESTMENTS--102.0%
(Cost $86,812,148) ..................... 70,763,473
------------
LIABILITIES IN EXCESS OF
OTHERASSETS--(2.0%) .................... (1,367,089)
------------
NET ASSETS--100.0% ........................ $ 69,396,384
============
* Non-income producing
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
COMMON STOCK--96.2%
AEROSPACE/DEFENSE--0.7%
Fairchild Corp.* .............................. 600 $ 8,325
-------
AGRICULTURAL PRODUCTS--0.7%
Sylvan, Inc.* ................................. 600 8,550
-------
AUTOMOBILE-MANUFACTURING--0.5%
Durakon Industries, Inc. * .................... 700 6,650
-------
AUTOMOTIVE--3.7%
Group 1 Automotive, Inc.* ..................... 1,000 11,875
Sonic Automotive, Inc.* ....................... 700 12,906
Smart Choice Automotive Group,
Inc.* ....................................... 1,000 4,875
Strattec Security Corp.* ...................... 600 16,650
-------
46,306
-------
BUILDING & BUILDING MATERIALS--1.5%
Drew Industries, Inc.* ........................ 600 7,125
U. S. Home Corp.* ............................. 400 11,325
-------
18,450
-------
BUSINESS SERVICES--6.1%
Day Runner, Inc.* ............................. 400 6,850
Ennis Business Forms, Inc. .................... 1,600 16,100
Merrill Corp. ................................. 1,100 21,862
Navigant International, Inc.* ................. 1,600 9,500
RemedyTemp, Inc.* ............................. 1,000 22,375
-------
76,687
-------
CHEMICALS--0.8%
Aceto Corp. ................................... 700 9,537
-------
COMMUNICATIONS & MEDIA--0.6%
@Entertainment, Inc.* ......................... 800 7,000
-------
COMPUTERS, SOFTWARE & SERVICES--2.8%
MicroAge, Inc.* ............................... 1,100 13,337
Periphonics Corp.* ............................ 600 3,075
Project Software & Development,
Inc.* ....................................... 600 8,625
Software Spectrum, Inc.* ...................... 600 9,375
-------
34,412
-------
NUMBER
OF SHARES VALUE
--------- ----------
CONSTRUCTION & BUILDING MATERIALS--4.9%
American Residential Services,
Inc.* ......................................... 700 $ 4,287
Beazer Homes USA, Inc.* ......................... 600 12,825
Group Maintenance America Corp.* ................ 900 12,319
M/I Schottenstein Homes, Inc. ................... 1,600 31,800
-------
61,231
-------
CONSUMER SERVICES--1.5%
Veterinary Centers of America, Inc.* ............ 1,100 18,150
-------
DISTRIBUTION--4.4%
Advanced Marketing Services, Inc. ............... 400 6,550
Allou Health and Beauty, Inc.* .................. 1,500 7,219
French Fragrances, Inc.* ........................ 1,000 6,250
Jean Phillipe Fragrances, Inc.* ................. 3,900 27,300
SCP Pool Corp.* ................................. 600 7,350
-------
54,669
-------
DIVERSIFIED--0.9%
Chemed Corp. .................................... 400 11,775
-------
ELECTRIC PRODUCTS--0.5%
Align-Rite International, Inc.* ................. 600 5,925
-------
ELECTRONICS--4.2%
NU Horizons Electronics Corp.* .................. 3,700 15,031
Optek Technology, Inc.* ......................... 1,700 28,794
Pioneer-Standard Electronics, Inc. .............. 1,100 8,319
-------
52,144
-------
ENERGY--1.3%
Calpine Corp.* .................................. 900 16,706
-------
ENGINEERING & CONSTRUCTION--0.7%
URS Corp.* ...................................... 600 8,250
-------
FINANCIAL SERVICES--10.2%
American Captial Strategies Ltd. ................ 700 8,312
Anthracite Capital, Inc. ........................ 1,500 14,531
Apex Mortgage Capital, Inc. ..................... 1,100 11,412
Bank Plus Corp.* ................................ 1,000 7,625
Chastain Capital Corp. .......................... 1,100 11,550
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
FINANCIAL SERVICES--(CONTINUED)
Coast Federal Litigation Contingent
Payment Rights Trust* ....................... 1,800 $ 18,112
First Sierra Financial, Inc.* ................. 900 14,062
ITLA Capital Corp.* ........................... 300 5,250
Local Financial Corp.* ........................ 600 5,175
Long Beach Financial Corp.* ................... 2,500 20,000
Phoenix Investment Partners Ltd. .............. 1,000 6,625
Richmond County Financial Corp. ............... 400 4,750
--------
127,404
--------
FOOD & BEVERAGE--1.1%
J & J Snack Foods Corp.* ...................... 900 14,175
--------
HEALTHCARE--1.1%
American HomePatient, Inc.* ................... 400 2,450
ICU Medical, Inc.* ............................ 500 6,375
National Dentex Corp.* ........................ 300 4,800
--------
13,625
--------
INDUSTRIAL GOODS & MATERIALS--4.3%
Federal Screw Works ........................... 100 5,000
K-Tron International, Inc.* ................... 400 7,050
National Presto Industries, Inc. .............. 300 11,006
O.I. Corp.* ................................... 2,100 9,450
Quixote Corp. ................................. 1,700 21,463
--------
53,969
--------
INSURANCE--14.6%
ARM Financial Group, Inc., Class A ............ 700 10,150
Centris Group, Inc. (The) ..................... 1,100 10,313
Chartwell Re Corp. ............................ 400 10,525
ESG Re Ltd. ................................... 1,000 17,375
Farm Family Holdings, Inc.* ................... 600 18,450
Financial Industries Corp.* ................... 900 13,950
Highlands Insurance Group, Inc.* .............. 1,400 17,500
Insurance Auto Auctions, Inc.* ................ 2,500 30,781
Intercargo Corp. .............................. 600 6,000
Motor Club of America, Inc.* .................. 900 11,025
Nymagic, Inc. ................................. 300 6,525
Risk Capital Holdings, Inc.* .................. 900 19,575
Stewart Information Services Corp. ............ 200 10,425
--------
182,594
--------
NUMBER
OF SHARES VALUE
--------- ----------
OFFICE EQUIPMENT & SUPPLIES--0.9%
Kentek Information Systems, Inc. .............. 1,700 $ 10,838
--------
OIL SERVICES--4.6%
Berry Petroleum Co., Class A .................. 400 4,900
Giant Industries, Inc. ........................ 1,500 20,250
Lufkin Industries, Inc. ....................... 700 16,144
Mallon Resources Corp.* ....................... 1,100 9,075
Swift Energy Co.* ............................. 400 3,525
Unit Corp.* ................................... 1,000 4,125
--------
58,019
--------
RAILROADS--0.4%
RailAmerica, Inc.* ............................ 1,000 5,313
--------
REAL ESTATE--5.2%
AMRESCO Capital Trust, Inc. ................... 1,100 11,825
Annaly Mortgage Management, Inc. .............. 700 5,075
Capital Automotive REIT ....................... 2,200 26,675
Ocwen Asset Investment Corp. .................. 900 8,775
Storage Trust Realty Co. ...................... 600 13,013
--------
65,363
--------
RESTAURANTS, HOTELS & GAMING--0.9%
Jackpot Enterprises, Inc.* .................... 1,100 10,863
--------
RETAIL/SPECIALTY PRODUCTS--2.6%
Drypers Corp.* ................................ 4,800 15,600
Gibson Greetings, Inc. ........................ 900 17,494
--------
33,094
--------
RETAIL TRADE--11.1%
Barbeques Galore Ltd.* ........................ 2,000 10,000
Brookstone, Inc.* ............................. 600 6,450
Carr Gottstein Foods Co.* ..................... 2,000 21,875
Catherine's Stores Corp.* ..................... 4,300 33,325
Chromcraft Revington, Inc.* ................... 400 7,050
Finish Line, Inc.* ............................ 1,100 9,488
HomeBase, Inc.* ............................... 2,700 16,538
Jan Bell Marketing, Inc.* ..................... 2,200 11,550
Lechters Corp.* ............................... 3,100 9,106
Midas, Inc. ................................... 600 13,575
--------
138,957
--------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
STEEL--0.4%
Schnitzer Steel Industries, Inc.,
Class A ................................... 300 $ 4,500
---------
TEXTILES & APPAREL--2.4%
Dan River, Inc., Class A* ................... 900 11,756
Fab Industries, Inc. ........................ 400 9,200
K-Swiss, Inc. ............................... 400 8,875
---------
29,831
---------
TRANSPORTATION--0.6%
Pittston BAX Group, Inc. .................... 1,000 7,938
---------
TOTAL COMMON STOCK
(Cost $1,549,824) ....................... 1,201,250
---------
WARRANTS--2.3%
Golden State Bancorp* ....................... 6,450 29,025
---------
TOTAL WARRANTS
(Cost $33,685) .......................... 29,025
---------
PAR
(000) VALUE
------- -----------
SHORT-TERM INVESTMENT--0.5%
Rodney Square Cash Reserve
5.10% 09/01/98 .......................... 6 $ 6,076
----------
TOTAL SHORT-TERM INVESTMENT
(Cost $6,076) ......................... 6,076
----------
TOTAL INVESTMENTS--99.0%
(Cost $1,589,585) ......................... 1,236,351
----------
ASSETS IN EXCESS OF
OTHER LIABILITIES--1.0% ................... 12,077
----------
NET ASSETS--100.0% ........................... $1,248,428
==========
* Non-income producing
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1998
NUMBER
OF SHARES VALUE
--------- ----------
PREFERRED STOCK--4.7%
INDUSTRIAL GOODS & MATERIALS--1.2%
Amcor Ltd. (Australia) ...................... 4,000 $191,000
--------
REAL ESTATE--3.5%
Crescent Real Estate ........................ 10,100 179,906
Equity Residential Properties ............... 10,400 223,600
Reckson Associates .......................... 7,000 147,000
--------
550,506
--------
TOTAL PREFERRED STOCK
(Cost $884,952) ......................... 741,506
--------
PAR
(000)
-------
CORPORATE BONDS--35.7%
BANKS AND SAVINGS & LOANS--4.0%
BB&T Corp. Subordinated Notes
(A3, BBB+)
7.250% 06/15/07 ................................. $ 150 159,000
Old Kent Financial Corp.
Subordinated Notes (Baa1, A-)
6.625% 11/15/05 ................................. 110 113,850
Riggs National Corp. Debentures
(Ba1, BB-)
9.650% 06/15/09 ................................. 120 137,700
Sovereign Bancorp Subordinated
Notes (N/R, BB+)
8.000% 03/15/03 ................................. 100 105,750
Sovereign Capital Trust I Company
Guarantee Notes (N/A, N/A)
9.000% 04/01/27 ................................. 100 115,500
-------
631,800
-------
ELECTRIC UTILITIES--4.6%
CMS Energy Corp. Senior Notes
(Ba3, BB)
7.375% 11/15/00 ................................. 145 148,316
Consumers Energy Company
(Baa3, BBB+)
6.375% 09/15/03 ................................. 200 202,500
PAR
(000) VALUE
------- ---------
ELECTRIC UTILITIES--(CONTINUED)
Niagara Mohawk Power Series G
Senior Notes (Ba3, BB-)
7.750% 10/01/08 ............................. $ 150 $ 153,750
Ohio Edison (Baa2, BBB-)
8.250% 04/01/02 ............................. 210 225,487
----------
730,053
----------
FINANCIAL SERVICES--7.5%
Bank Boston NA Subordinated
Notes (A2, A-)
7.375% 09/15/06 ............................. 120 130,050
Equitable Companies Inc. (A2, A)
7.000% 04/01/28 ............................. 75 78,562
Equitable Companies, Inc.
Senior Notes (A2, A)
9.000% 12/15/04 ............................. 80 93,000
Ford Motor Credit Corp. Senior
Unsubordinated Notes (A1, A)
7.200% 06/15/07 ............................. 150 162,937
Lehman Brothers, Inc. Senior
Subordinated Notes (Baa1, A)
7.625% 06/01/06 ............................. 125 137,031
NationsBank Corp. Subordinated
Notes (A1, A)
6.375% 02/15/08 ............................. 125 126,250
Riggs Capital Trust (Baa3, BB-)
8.625% 12/31/26 ............................. 90 98,663
Security Capital U.S. Realty Bonds
(NA, NA)
2.000% 05/22/03 ............................. 170 130,050
Travelers Capital III Company
Guarantee Notes (Aa3, A+)
7.625% 12/01/36 ............................. 100 113,000
Zions Institutional Capital Trust Co.
Guarantee Notes, Series A (A3, BBB-)
8.536% 12/15/26 ............................. 100 112,375
----------
1,181,918
----------
FOREIGN GOVERNMENT BONDS--2.5%
Hydro-Quebec Government
Guarantee Yankee Notes (A2, A+)
8.625% 06/15/29 ............................. 100 122,125
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 1998
PAR
(000) VALUE
------- ---------
FOREIGN GOVERNMENT BONDS--(CONTINUED)
Panama (Republic Of) Notes (Ba1, BB+)
7.875% 02/13/02 ............................. $ 300 $271,125
--------
393,250
--------
INDUSTRIAL GOODS & MATERIALS--15.0%
Adaptec, Inc. Subordinated Notes
(B1, BB-)
4.750% 02/01/04 ............................. 260 199,875
Agco Corp. Senior Subordinated
Notes (Ba1, BB+)
8.500% 03/15/06 ............................. 20 19,575
D.R. Horton, Inc. Senior Notes
(Ba2, BB)
8.375% 06/15/04 ............................. 35 34,606
Fred Meyer, Inc. Company
Guarantee Notes (Ba2, BB+)
7.375% 03/01/05 ............................. 100 100,625
HMT Technology Corp. Subordinated
Notes (B3, B-)
5.750% 01/15/04 ............................. 300 207,000
Jones Intercable, Inc. Senior Notes
(Ba2, BB)
9.625% 03/15/02 ............................. 100 107,000
Lenfest Communications, Inc.
Senior Notes (Ba3, BB+)
8.375% 11/01/05 ............................. 100 104,625
Louis Dreyfus Natural Gas Senior
Subordinated Notes (Ba3, BB+)
9.250% 06/15/04 ............................. 100 111,500
News America Holdings Debentures
(Baa3, BBB-)
8.875% 04/26/23 ............................. 45 53,550
Northrop-Gruman Corp. Notes
(Baa3, BBB-)
7.000% 03/01/06 ............................. 115 119,169
Philip Morris Co., Inc. Notes (A2, A)
6.800% 12/01/03 ............................. 150 156,000
Southdown, Inc. Senior Subordinated
Notes, Series B (Ba2, BB-)
10.000% 03/01/06 ............................ 100 108,625
TCI Communications, Inc.
Senior Notes (Ba1, BBB-)
8.650% 09/15/04 ............................. 50 56,625
PAR
(000) VALUE
------- ---------
INDUSTRIAL GOODS & MATERIALS--(CONTINUED)
Tele-Communications, Inc.
Debentures (Ba1, BBB-)
9.800% 02/01/12 ............................. $125 $ 162,969
Tenet Healthcare Corp. Senior Notes
(Ba1, BB)
8.625% 12/01/03 ............................. 175 179,375
TKR Cable, Inc. Debentures
(Ba3, BBB-)
10.500% 10/30/07 ............................ 25 27,406
Unisys Corp. Senior Notes (Ba3, B+)
11.750% 10/15/04 ............................ 225 257,906
Unisys Corp. Senior Notes, Series B
(B1, B+)
12.000% 04/15/03 ............................. 20 22,375
USA Waste Services, Inc.
(Baa3, BBB+)
7.125% 10/01/07 ............................. 150 159,375
USG Corp. Senior Notes (Ba1, BBB)
9.250% 09/15/01 ............................. 105 112,744
Westpoint Stevens Series 144A
Senior Notes (Ba3, BB)
7.875% 06/15/05 ............................. 50 48,813
----------
2,349,738
----------
TELECOMMUNICATIONS--1.9%
GTE South, Inc. (A2, AA-)
6.125% 06/15/07 ............................. 150 151,313
LCI International, Inc. Senior Notes
(Ba1, BB+)
7.250% 06/15/07 ............................. 150 147,230
----------
298,543
----------
U.S. GOVERNMENT BONDS--0.2%
Fannie Mae (Aaa, NR)
5.750% 04/15/08 ............................. 25 25,237
----------
TOTAL CORPORATE BONDS
(Cost $5,690,577) ......................... 5,610,539
----------
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
AUGUST 31, 1998
PAR
(000) VALUE
------- ---------
AGENCY OBLIGATIONS--47.9%
FEDERAL NATIONAL MORTGAGE ASSOCIATION--11.2%
FMNA 190945
6.000% 05/01/24 ............................... $418 $ 411,285
FNMA 251499
7.000% 02/01/28 ............................... 376 382,654
FNMA 251967
6.500% 08/01/28 ............................... 85 85,398
FNMA 281054
6.500% 04/01/24 ............................... 399 400,465
FNMA 411518
7.500% 10/01/27 ............................... 469 482,438
----------
1,762,240
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--36.7%
GNMA 354662
6.500% 09/15/08 ............................... 121 122,713
GNMA 372475
7.000% 01/15/28 ............................... 387 395,434
GNMA 376528
7.000% 05/15/09 ............................... 263 270,242
GNMA 407234
6.500% 01/15/13 ............................... 98 99,647
GNMA 410122
7.500% 10/15/25 ............................... 295 304,049
GNMA 433435
6.500% 02/15/12 ............................... 367 373,938
GNMA 447928
6.500% 05/15/28 ............................... 39 39,772
GNMA 449474
7.500% 09/15/27 ............................... 109 112,581
GNMA 450446
7.000% 12/15/27 ............................... 58 59,633
GNMA 451439
7.500% 09/15/27 ............................... 452 465,542
GNMA 453892
7.500% 11/15/27 ............................... 251 258,894
GNMA 454925
7.000% 12/15/12 ............................... 384 394,913
PAR
(000) VALUE
------- ---------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--(CONTINUED)
GNMA 456970
6.500% 06/15/28 ................................. $ 94 $ 94,574
GNMA 457737
6.500% 03/15/13 ................................. 122 124,033
GNMA 460143
7.000% 04/15/28 ................................. 349 356,525
GNMA 461450
7.000% 04/15/28 ................................. 75 77,125
GNMA 467736
6.500% 04/15/28 ................................. 326 327,985
GNMA 468090
6.500% 07/15/28 ................................. 35 35,577
GNMA 469128
6.500% 02/15/28 ................................. 404 406,626
GNMA 469129
7.000% 02/15/28 ................................. 98 99,714
GNMA 471949
7.000% 06/15/28 ................................. 504 515,511
GNMA 473797
6.500% 06/15/28 ................................. 35 34,850
GNMA 482119
6.500% 08/15/28 ................................. 101 101,758
GNMA 780303
6.500% 02/15/09 ................................. 320 325,953
GNMA 780687
8.000% 12/15/12 ................................. 353 365,911
----------
5,763,500
----------
TOTAL AGENCY OBLIGATIONS
(Cost $7,455,485) ............................. 7,525,740
----------
ASSET BACKED SECURITIES--0.4%
MBNA Master Credit Card Trust,
Series 1995-C, Class A
6.450% 02/15/08 ................................. 60 62,592
----------
TOTAL ASSET BACKED SECURITIES
(Cost $61,605) ................................ 62,592
----------
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
AUGUST 31, 1998
PAR
(000) VALUE
------- ---------
U.S. TREASURY OBLIGATIONS--10.2%
U.S. TREASURY STRIP--1.4%
U.S. Treasury Strip
0.000% 11/15/21 ......................... $790 $ 221,798
-----------
U.S. TREASURY BONDS--8.8%
U.S. Treasury Bonds
7.250% 05/15/16 ......................... 340 409,781
7.125% 02/15/23 ......................... 795 971,226
-----------
1,381,007
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,524,219) ..................... 1,602,805
-----------
SHORT-TERM INVESTMENT--0.2%
Rodney Square Cash Reserve
5.10% 09/01/98 .......................... 22 22,221
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $22,221) ........................ 22,221
-----------
TOTAL INVESTMENTS--99.1%
(Cost $15,639,059) ........................ 15,565,403
-----------
ASSETS IN EXCESS OF
OTHER LIABILITIES--0.9% ................... 141,816
-----------
NET ASSETS--100.0% ........................... $15,707,219
===========
The Moody's Investor Service, Inc. and Standard & Poor's Ratings Group's ratings
indicated are the most recent ratings available at August 31, 1998. These
ratings have not been audited by the Independent Accountants, and, therefore,
are not covered by the Report of Independent Accountants.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1998
<TABLE>
<CAPTION>
LARGE CAP MID CAP MICRO CAP
VALUE FUND VALUE FUND VALUE FUND BOND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (cost - $68,387,285, $86,812,148,
$1,589,812 and $15,639,059, respectively) ........... $ 56,818,860 $ 70,763,473 $ 1,236,351 $ 15,565,402
Receivable for investments sold ....................... 652,649 1,174,332 46,486 91,501
Receivable for Fund shares sold ....................... 2,374 -- -- --
Receivable from investment advisor .................... -- 5,124 19,063 10,931
Dividends and interest receivable ..................... 86,253 56,033 782 171,493
------------ ------------ ------------ ------------
Total assets ........................................ 57,560,136 71,998,962 1,302,682 15,839,327
------------ ------------ ------------ ------------
LIABILITIES
Payable for investments purchased ..................... 577,412 2,475,084 39,362 90,991
Payable for Fund share redeemed ....................... 11,285 1,878 -- --
Accrued expenses and other liabilities ................ 97,963 125,616 14,892 41,117
------------ ------------ ------------ ------------
Total liabilities ................................... 686,660 2,602,578 54,254 132,108
------------ ------------ ------------ ------------
NET ASSETS
Capital stock, $0.001 par value ....................... 5,365 7,372 164 1,558
Paid-in capital ....................................... 66,833,383 87,103,188 1,634,260 15,646,044
Undistributed net investment income ................... 294,360 45,326 -- 7,377
Accumulated net realized gain/(loss) from investments . 1,308,788 (1,710,827) (32,763) 125,896
Net unrealized depreciation on investments ............ (11,568,424) (16,048,675) (353,233) (73,656)
------------ ------------ ------------ ------------
Net assets .......................................... $ 56,873,476 $ 69,396,384 $ 1,248,428 $ 15,707,219
============ ============ ============ ============
INSTITUTIONAL CLASS
Net assets ............................................ $ 50,723,586 $ 67,568,452 $ 1,119,567 $ 15,509,128
------------ ------------ ------------ ------------
Shares outstanding .................................... 4,794,078 7,125,702 146,849 1,538,650
------------ ------------ ------------ ------------
Net asset value, offering and redemption
price per share .................................... $10.58 $9.48 $7.62 $10.08
============ ============ ============ ============
INVESTOR CLASS
Net assets ............................................ $ 6,149,890 $ 1,827,932 $ 128,634 $ 198,090
------------ ------------ ------------ ------------
Shares outstanding .................................... 574,895 194,122 16,857 19,613
------------ ------------ ------------ ------------
Net asset value, offering and redemption
price per share .................................... $10.70 $9.42 $7.63 $10.10
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED AUGUST 31, 1998
<TABLE>
<CAPTION>
LARGE CAP MID CAP MICRO CAP
VALUE FUND VALUE FUND VALUE FUND BOND FUND
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends .............................................. $ 785,884 $ 362,961 $ 1,575 $ 27,974
Interest ............................................... 117,619 94,962 1,459 542,007
------------ ------------ --------- ---------
903,503 457,923 3,034 569,981
------------ ------------ --------- ---------
EXPENSES
Advisory fees .......................................... 363,116 319,705 3,155 34,418
Administration fees .................................... 147,199 138,352 12,845 63,083
Federal and state registration fees .................... 19,545 26,132 4,821 28,000
Directors .............................................. 562 677 130 505
Insurance .............................................. 619 534 93 505
Transfer agent fees and expenses ....................... 80,600 74,476 12,374 48,781
Custodian fees and expenses ............................ 43,861 31,597 1,072 4,090
Printing ............................................... 45,380 35,170 9,300 21,736
Audit and legal fees ................................... 13,663 4,186 554 3,918
Distribution fees ...................................... 5,603 3,762 54 179
Other .................................................. 4,554 2,757 315 5,978
------------ ------------ --------- ---------
Total expenses before waivers and reimbursements ..... 724,702 637,348 44,713 211,193
Less: waivers and reimbursements ..................... (236,283) (231,002) (40,745) (159,388)
------------ ------------ --------- ---------
Total expenses after waivers and reimbursements ...... 488,419 406,346 3,968 51,805
------------ ------------ --------- ---------
Net investment income/(loss) ........................... 415,084 51,577 (934) 518,176
------------ ------------ --------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) from investments .............. 1,829,755 (1,636,807) (32,763) 125,896
Net change in unrealized depreciation on investments ... (13,105,142) (16,102,116) (353,233) (73,656)
------------ ------------ --------- ---------
Net realized and unrealized gain/(loss) from
investments ......................................... (11,275,387) (17,738,923) (385,996) 52,240
------------ ------------ --------- ---------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS $(10,860,303) $(17,687,346) $(386,929) $ 570,416
============ ============ ========= =========
<FN>
- --------------
** Commenced operations July 1, 1998.
** Commenced operations December 30, 1997.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
LARGE CAP VALUE FUND MID CAP VALUE FUND
--------------------------------- ---------------------------------
FOR THE PERIOD FOR THE PERIOD
FOR THE JANUARY 2, 1997* FOR THE JUNE 2, 1997*
YEAR ENDED THROUGH YEAR ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1998 AUGUST 31, 1997
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income ................................. $ 415,084 $ 100,151 $ 51,577 $ 4,850
Net realized gain/(loss) from investments ............. 1,829,756 1,072,821 (1,636,807) 37,984
Net change in unrealized appreciation/(depreciation)
on investments ...................................... (13,105,143) 1,536,718 (16,102,116) 53,442
------------ ------------ ------------ ------------
Net increase/(decrease) in net assets resulting
from operations ..................................... (10,860,303) 2,709,690 (17,687,346) 96,276
------------ ------------ ------------ ------------
LESS DIVIDEND AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income Institutional shares ............ (216,811) -- (10,109) --
Net investment income Investor shares ................. (4,064) -- (992) --
Net realized capital gains Institutional shares ....... (1,561,759) -- (92,752) --
Net realized capital gains Investor shares ............ (32,030) -- (19,252) --
------------ ------------ ------------ ------------
Total dividends and distributions to
shareholders ........................................ (1,814,664) -- (123,105) --
------------ ------------ ------------ ------------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ............................ 44,262,908 22,575,845 82,858,741 4,251,818
------------ ------------ ------------ ------------
Total increase in net assets .......................... 31,587,941 25,285,535 65,048,290 4,348,094
NET ASSETS
Beginning of period ................................... 25,285,535 -- 4,348,094 --
------------ ------------ ------------ ------------
End of period ......................................... $ 56,873,476 $ 25,285,535 $ 69,396,384 $ 4,348,094
============ ============ ============ ============
<FN>
- -----------
* Commencement of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MICRO CAP VALUE FUND BOND FUND
-------------------- ------------------
FOR THE PERIOD FOR THE PERIOD
JULY 1, 1998* DECEMBER 30, 1997*
THROUGH THROUGH
AUGUST 31, 1998 AUGUST 31, 1998
--------------- ------------------
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income ....................................................... $ (934) $ 518,176
Net realized gain/(loss) from investments ................................... (32,763) 125,896
Net change in unrealized depreciation on investments ........................ (353,233) (73,656)
------------ ------------
Net increase/(decrease) in net assets resulting
from operations ........................................................... (386,930) 570,416
------------ ------------
LESS DIVIDEND AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income Institutional shares .................................. -- (506,561)
Net investment income Investor shares ....................................... -- (4,238)
------------ ------------
Total dividends and distributions to
shareholders .............................................................. -- (510,799)
------------ ------------
INCREASE IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS .................................................. 1,635,358 15,647,602
------------ ------------
Total increase in net assets ................................................ 1,248,428 15,707,219
NET ASSETS
Beginning of period ......................................................... -- --
------------ ------------
End of period ............................................................... $ 1,248,428 $ 15,707,219
============ ============
<FN>
- ----------------
* Commencement of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total investment return, ratios to average net assets and other
suppemental data for the respective periods. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LARGE CAP VALUE FUND
---------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
YEAR JANUARY 2, 1997* YEAR JANUARY 16, 1997*
ENDED THROUGH ENDED THROUGH
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1998 AUGUST 31, 1997
--------------- ---------------- --------------- ----------------
INSTITUTIONAL INSTITUTIONAL INVESTOR INVESTOR
CLASS CLASS CLASS CLASS
--------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............... $ 12.46 $ 10.00 $ 12.45 $ 10.20
------- ------- ------- -------
Net investment income(1) ........................... 0.12 0.05 0.06 0.02
Net realized and unrealized gain/(loss)
on investments(2) ............................... (1.31) 2.41 (1.27) 2.23
------- ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations ................................. (1.19) 2.46 (1.21) 2.25
------- ------- ------- -------
Dividends to shareholders from:
Net investment income .............................. (0.08) -- (0.06) --
Net realized capital gains ......................... (0.61) -- (0.48) --
------- ------- ------- -------
Net asset value, end of period ..................... $ 10.58 $ 12.46 $ 10.70 $ 12.45
======= ======= ======= =======
Total investment return(3) ......................... (10.23%) 24.60% (10.28%) 22.06%
======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .......... $50,724 $24,603 $ 6,150 $ 683
Ratio of expenses to average net assets(1)(4) ...... 1.00% 1.00%(5) 1.19% 1.11%(5)
Ratio of net investment income to average
net assets(1) ................................... 0.87% 1.19%(5) 0.68% 0.91%(5)
Portfolio turnover rate ............................ 111.68% 67.16%(6) 111.68% 67.16%(6)
</TABLE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
MID CAP VALUE FUND
---------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
YEAR JUNE 2, 1997* YEAR JUNE 2, 1997*
ENDED THROUGH ENDED THROUGHT
AUGUST 31, 1998 AUGUST 31, 1997 AUGUST 31, 1998 AUGUST 31, 1997
--------------- ---------------- --------------- ---------------
INSTITUTIONAL INSTITUTIONAL INVESTOR INVESTOR
CLASS CLASS CLASS CLASS
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............... $ 11.01 $ 10.00 $ 11.01 $ 10.00
------- ------- ------- -------
Net investment income(1) ........................... 0.01 0.01 0.01 0.01
Net realized and unrealized gain/(loss)
on investments(2) ............................... (1.39) 1.00 (1.38) 1.00
------- ------- ------- -------
Net increase/(decrease) in net assets resulting
from operations ................................. (1.38) 1.01 (1.37) 1.01
------- ------- ------- -------
Dividends to shareholders from:
Net investment income .............................. (0.01) -- (0.01) --
Net realized capital gains ......................... (0.14) -- (0.21) --
------- ------- ------- -------
Net asset value, end of period ..................... $ 9.48 $ 11.01 $ 9.42 $ 11.01
======= ======= ====== =======
Total investment return(3) ......................... (12.73%) 10.10% (12.77%) 10.10%
======= ======= ====== =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .......... $67,568 $ 3,750 $ 1,828 $ 598
Ratio of expenses to average net assets(1)(4) ...... 1.00% 1.00%(5) 1.15% 1.10%(5)
Ratio of net investment income to average
net assets(1) ................................... 0.13% 1.08%(5) (0.02)% 0.61%(5)
Portfolio turnover rate ............................ 167.86% 21.80%(6) 167.86% 21.80%(6)
<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.
(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 on
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
will include 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 period ended August 31,
1997 and August 31, 1998, respectively, would have been 2.64% and 1.49% for
the Large Cap Value Fund Institutional Class, 3.05% and 1.74% for the Large
Cap Value Fund Investor Class, 12.37% and 1.57% for the Mid Cap Value Fund
Institutional Class, 12.62% and 1.82% for the Mid Cap Value Fund Investor
Class, respectively.
(5) Annualized.
(6) Not annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
28-29
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total investment return, ratios to average net assets and other
suppemental data for the respective periods. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MICRO CAP VALUE FUND BOND FUND
---------------------------------- ---------------------------------------
FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD
JULY 1, 1998* JULY 1, 1998* DECEMBER 30, 1997* DECEMBER 30, 1997*
THROUGH THROUGH THROUGH THROUGH
AUGUST 31, 1998 AUGUST 31, 1998 AUGUST 31, 1998 AUGUST 31, 1998
--------------- --------------- ------------------ ------------------
INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR
CLASS CLASS CLASS CLASS
--------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ................... $ 10.00 $ 10.00 $ 10.00 $ 10.00
------- ------- ------- -------
Net investment income/(loss)(1) ........................ (0.01) (0.01) 0.78 0.62
Net realized and unrealized loss on investments(2) ..... (2.37) (2.36) (0.31) (0.16)
------- ------- ------- -------
Net decrease in net assets resulting from operations ... (2.38) (2.37) 0.47 0.46
------- ------- ------- -------
Dividends to shareholders from:
Net investment income .................................. -- -- (0.39) (0.36)
Net realized capital gains ............................. -- -- -- --
------- ------- ------- -------
Net asset value, end of period ......................... $ 7.62 $ 7.63 $ 10.08 $ 10.10
======= ======= ======= =======
Total investment return(3)(7) .......................... (23.80%) (23.70%) 4.79% 4.63%
======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .............. $ 1,120 $ 129 $15,509 $ 198
Ratio of expenses to average net assets(1)(4)(5) ....... 1.55% 1.80% 0.60% 0.85%
Ratio of net investment loss to average
net assets(1)(5) .................................... (0.34)% (0.66)% 6.06% 5.83%
Portfolio turnover rate(6) ............................. 11.97% 11.97% 45.27% 45.27%
<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.
(1) Reflects waivers and reimbursements.
(2) The amount shown for a share outstanding throughout the period is not in
accord with the change in the aggregate gains and losses in investments
during the period because the timing of sales and repurchases of Fund
shares in relation to fluctuating net asset value during the period.
(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
will include 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 period ended August 31,
1998 would have been 17.69% and 17.94% for the Micro Cap Value Fund
Institutional Class and Investor Class, respectively. The ratio of expenses
to average net assets annualized for the period ended August 31, 1998 would
have been 2.47% and 2.72% for the Bond Fund Institutional Class and
Investor Class, respectively.
(5) Annualized.
(6) Not annualized.
(7) Redemption fee of 1.00% is not reflected in total return calculations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
30-31
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
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. The 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 twenty-three investment portfolios, including
Boston Partners Large Cap Value Fund ("Large Cap Fund"), Boston Partners Mid Cap
Value Fund ( "Mid Cap Fund"), Boston Partners Micro Cap Value Fund ( "Micro Cap
Fund") and Boston Partners Bond Fund ("Bond Fund") (each a "Fund", collectively
the "Funds"). As of the date hereof,the Large Cap Fund offers three classes of
shares, Institutional Class, Investor Class and Advisor Class. The Mid Cap Fund,
the Micro Cap Fund and the Bond Fund each offer two classes of shares,
Institutional Class and Investor Class.
RBB has authorized capital of thirty billion shares of common stock of
which 16.27 billion are currently classified into ninety-seven classes. Each
class represents an interest in one of twenty-six investment portfolios of RBB.
The classes have been grouped into fifteen separate "families," nine of which
have begun investment operations. The Boston Partners Family of Funds includes
the Large Cap Fund, which commenced investment operations on January 2, 1997,
the Mid Cap Fund, which commenced investment operations on June 2, 1997, the
Micro Cap Fund, which commenced investment operations on July 1, 1998 and the
Bond Fund, which commenced investment operations on December 30, 1997.
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 the Funds.
REPURCHASE AGREEMENTS -- The Funds have 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 the Funds enter into repurchase agreements are banks and
broker/dealers which Boston Partners Asset Management, L.P. (the Funds'
investment adviser or "Boston Partners") 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. Boston Partners 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 the Funds to
possible loss because of adverse market action or delays in connection with the
disposition of the underlying securities.
32
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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. The Funds' net investment income (other than class specific
distribution fees) and unrealized and realized gains and losses are allocated
daily to each class of shares based upon the relative proportion of net assets
of each class at the beginning of the day (after adjusting for current capital
share activity of the respective classes).
DIVIDENDS AND DISTRIBUTIONS -- Dividends from net investment income, if
any, will be declared and paid at least annually to shareholders. Dividends from
net investment income of the Bond Fund are declared and paid monthly.
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 the Funds' intention 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
substantially all excise taxes.
2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Boston Partners Asset Management, L.P. serves as the Funds' investment
adviser. For its advisory services, Boston Partners is entitled to receive,
0.75% of the Large Cap Fund's average daily net assets, 0.80% of the Mid Cap
Fund's average daily net assets, 1.25% of the Micro Cap Fund's average daily net
assets, and 0.40% of the Bond Fund's average daily net assets, each computed
daily and payable quarterly.
The adviser has voluntarily agreed to limit the Large Cap Fund and the Mid
Cap Fund's total operating expenses for the current and the following fiscal
year to the extent that such expenses exceeded 1.00% of the Large Cap Fund and
the Mid Cap Funds' average daily net assets. The adviser has voluntarily agreed
to limit the Micro Cap Fund's total operating expenses for the current and the
following fiscal year to the extent that such expenses exceed 1.55% of the Micro
Cap Fund's average daily net assets. The adviser has voluntarily agreed to limit
the Bond Fund's total operating expenses for the current and the following
fiscal year to the extent that such expenses exceeded 0.60% of the Bond 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 year ended August 31, 1998, (unless otherwise indicated) investment advisory
fees, waivers and reimbursements of expenses were as follows:
GROSS NET
ADVISORY ADVISORY EXPENSE FUND
FUND FEES WAIVER FEES REIMBURSEMENT
- ---- -------- ---------- -------- -------------
Large Cap Value Fund $363,116 $(112,482) $250,634 --
Mid Cap Value Fund 319,705 (84,082) 235,623 $(30,520)
Micro Cap Value Fund* 3,155 (3,155) -- (19,063)
Bond Fund** 34,418 (34,418) -- (54,244)
* Commenced investment operations on July 1, 1998.
** Commenced investment operations on December 30, 1997.
The Funds will not pay Boston Partners at a later time for any amounts they
may waive or any amounts which Boston Partners has assumed.
33
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
PFPC Inc. ("PFPC"), an indirect wholly-owned subsidiary of PNC Bank,
National Association, serves as administrator for the Funds. For providing
administrative services PFPC is entitled to receive a monthly fee equal to an
annual rate of 0.125% of the Funds' average daily net assets.
For the year ended August 31, 1998, (unless otherwise indicated) PFPC, at
their discretion, voluntarily agreed to waive a portion of their administration
fees for the Funds. For the year ended August 31, 1998, (unless otherwise
indicated) PFPC's administration fees and related waivers were as follows:
PFPC GROSS PFPC NET PFPC
FUND ADMINISTRATION FEES WAIVERS ADMINISTRATION FEES
- ---- ------------------- --------- -------------------
Large Cap Value Fund $77,934 $(22,142) $55,792
Mid Cap Value Fund 80,005 (22,352) 57,653
Micro Cap Value Fund* 12,500 (6,250) 6,250
Bond Fund** 50,403 (25,202) 25,201
* Commenced investment operations on July 1, 1998.
** Commenced investment operations on December 30, 1997.
In addition, PFPC serves as the Funds' transfer and disbursing agent. PFPC,
at their discretion, voluntarily agreed to waive a portion of their transfer
agency fees for the Funds. For the year ended August 31, 1998, (unless otherwise
indicated) transfer agency fees and waivers were as follows:
GROSS TRANSFER NET TRANSFER
FUND AGENCY FEES WAIVERS AGENCY FEES
- ---- -------------- -------- ------------
Large Cap Value Fund $80,599 $(48,000) $32,599
Mid Cap Value Fund 74,476 (48,000) 26,476
Micro Cap Value Fund* 12,372 (12,000) 372
Bond Fund** 48,782 (36,000) 12,782
* Commenced investment operations on July 1, 1998.
** Commended investment operations on December 30, 1997.
Provident Distributors, Inc. ("PDI"), provides certain administrative
services to the Funds. Prior to May 29, 1998 Counsellors Funds Services, Inc., a
wholly owned subsidiary of Warburg Pincus Counsellors, Inc. provided these
services. As compensation for such administrative services, PDI is entitled to
receive a monthly fee equal to an annual rate of 0.15% of the Funds' average
daily net assets. Additionally, PDI receives a fee at an annual rate of .25% of
the average daily net assets of each Funds' Investor Class Shares pursuant to a
distribution plan adopted by each Fund pursuant to Rule 12b-1 under the 1940
Act.
For the year ended August 31, 1998 (unless otherwise indicated), PDI has,
at its discretion, voluntarily agreed to waive a portion of its administrative
services fees for the Funds. For the year ended August 31, 1998 (unless
otherwise indicated), administrative services fees and waivers were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE
FUND SERVICE FEES WAIVERS SERVICE FEES
- ---- -------------------- --------- ------------------
Large Cap Value Fund $69,265 $(52,320) $16,945
Mid Cap Value Fund 58,347 (44,606) 13,741
Micro Cap Value Fund* 346 (277) 69
Bond Fund** 12,679 (9,524) 3,155
* Commenced investment operations on July 1, 1998.
** Commenced investment operations on December 30, 1997.
34
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the costs of securities owned at
August 31, 1998 were $67,870,714, $86,931,074, $1,590,112 and 15,639,058,
respectively, for the Large Cap Value Fund, the Mid Cap Value Fund, the Micro
Cap Value Fund and the Bond Fund. Accordingly, the net unrealized
appreciation/(depreciation) of investments are as follows:
NET APPRECIATION/
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- ---- ------------ ------------ -----------------
Large Cap Value Fund $630,303 $(11,682,157) $(11,051,854)
Mid Cap Value Fund 424,660 (16,592,262) (16,167,602)
Micro Cap Value Fund 3,277 (357,038) (353,761)
Bond Fund 211,165 (284,821) (73,656)
For the year ended August 31, 1998 (unless otherwise indicated), aggregate
purchases and sales of investment securities (excluding short-term investments)
were as follows:
FUND PURCHASES SALES
- ---- ------------ -----------
Large Cap Value Fund $ 94,661,688 $52,602,277
Mid Cap Value Fund 147,789,408 64,405,259
Micro Cap Value Fund 1,779,831 163,462
Bond Fund 21,384,325 5,882,927
4. CAPITAL SHARE TRANSACTIONS
As of August 31, 1998 the Funds each have 50,000,000 shares of $0.001 par
value common stock authorized.
Transactions in capital shares for the respective periods were as follows:
<TABLE>
<CAPTION>
LARGE CAP VALUE FUND
-------------------------------------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
YEAR ENDED JANUARY 2, 1997* YEAR ENDED JANUARY 16, 1997*
AUGUST 31, 1998 THROUGH AUGUST 31, 1997 AUGUST 31, 1998 THROUGH AUGUST 31, 1997
----------------------- ----------------------- ------------------- -----------------------
INSTITUTIONAL CLASS INVESTOR CLASS
------------------------------------------------ ---------------------------------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
--------- ----------- --------- ----------- ------- ----------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ............ 3,041,088 $40,050,134 2,039,851 $22,696,509 619,068 $ 8,408,773 54,832 $645,780
Repurchases ...... (366,654) (4,685,359) (65,817) (766,445) (101,913) (1,312,572) -- --
Reinvestments .... 145,610 1,766,251 -- -- 2,908 35,680 -- --
--------- ----------- --------- ----------- ------- ----------- ------ --------
Net Increase ..... 2,820,044 $37,131,026 1,974,034 $21,930,064 520,063 $ 7,131,881 54,832 $645,780
========= =========== ========= =========== ======= =========== ====== ========
<FN>
* Commencement of operations
</FN>
</TABLE>
35
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
MID CAP VALUE FUND
-------------------------------------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
YEAR ENDED JUNE 2, 1997* YEAR ENDED JUNE 2, 1997*
AUGUST 31, 1998 THROUGH AUGUST 31, 1997 AUGUST 31, 1998 THROUGH AUGUST 31, 1997
----------------------- ----------------------- ------------------- -----------------------
INSTITUTIONAL CLASS INVESTOR CLASS
------------------------------------------------ ---------------------------------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
--------- ----------- --------- ----------- ------- ----------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ............ 7,123,576 $85,121,556 340,455 $ 3,678,511 189,066 $2,285,116 55,944 $591,595
Repurchases ...... (347,553) (4,063,621) -- -- (51,049) (607,185) (1,636) (18,289)
Reinvestments .... 9,224 102,668 -- -- 1,797 19,870 -- --
--------- ----------- ------- ----------- ------- ----------- ------ --------
Net Increase ..... 6,785,247 $81,160,603 340,455 $ 3,678,511 139,814 $1,697,801 54,308 $573,306
========= =========== ======= =========== ======= =========== ====== ========
<FN>
* Commencement of operations
</FN>
</TABLE>
MICRO CAP VALUE FUND
---------------------------------------------
FOR THE PERIOD FOR THE PERIOD
JULY 1, 1998* JULY 1, 1998*
THROUGH THROUGH
AUGUST 31, 1998 AUGUST 31, 1998
-------------------- -------------------
INSTITUTIONAL CLASS INVESTOR CLASS
-------------------- -------------------
SHARES VALUE SHARES VALUE
------- ---------- ------ --------
Sales .............. 146,905 $1,468,400 16,857 $167,453
Repurchases ........ (56) (500) -- --
------- ---------- ------ --------
Net Increase ....... 146,849 $1,467,900 16,857 $167,453
======= ========== ====== ========
- -------------
* Commencement of operations
BOND FUND
----------------------------------------------
FOR THE PERIOD FOR THE PERIOD
DECEMBER 30, 1997* DECEMBER 30, 1997*
THROUGH THROUGH
AUGUST 31, 1998 AUGUST 31, 1998
---------------------- --------------------
INSTITUTIONAL CLASS INVESTOR CLASS
---------------------- --------------------
SHARES VALUE SHARES VALUE
--------- ----------- ------ --------
Sales ..................... 1,981,162 $19,941,980 18,299 $195,000
Repurchases ............... (492,757) (5,000,000) (5) (47)
Reinvestments ............. 50,245 506,561 1,319 4,108
--------- ----------- ------ --------
Net Increase .............. 1,538,650 $15,448,541 19,613 $199,061
========= =========== ====== ========
- -----------------
* Commencement of operations
36
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
There is a 1.00% redemption fee on shares redeemed, which have been held
365 days or less on the Micro Cap Value Fund. For the period July 1, 1998
(commencement of investment operations) through August 31, 1998, these fees
amounted to $5. The redemption fees are collected and retained by the Fund for
the benefit of the remaining shareholders.
On August 31, 1998 four shareholders held approximately 39% of the
outstanding shares of the Large Cap Value Fund Institutional Class, one
shareholder held approximately 5% of the outstanding shares of the Mid Cap Value
Investor Class, four shareholders held approximately 100% of the outstanding
shares of the Bond Fund Institutional Class, one shareholder held approximately
15% of the Bond Fund Investor Class, four shareholders held approximately 88% of
the outstanding shares of the Micro Cap Value Fund Institutional Class and one
shareholder held approximately 61% of the outstanding shares of the Micro Cap
Value Investor Class.
5. CAPITAL LOSS CARRYOVER
At August 31, 1998, Capital loss carryovers were available to offset future
realized gains as follows: $1,534,804 in the Mid Cap Value Fund which expires in
2006 and $32,463 in the Micro Cap Value Fund which expires in 2006.
37
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of The RBB Fund, Inc.:
In our opinion, the accompanying statements of assets and liabilities, including
the portfolio of investments, of the Boston Partners Large Cap Value Fund,
Boston Partners Mid Cap Value Fund, Boston Partners Micro Cap Value Fund and
Boston Partners Bond Fund of The RBB Fund, Inc. (the "Fund"), and the related
statements of operations and changes in net assets, and the financial highlights
present fairly, in all material respects, the financial position of the Boston
Partners Large Cap Value Fund, Boston Partners Mid Cap Value Fund, Boston
Partners Micro Cap Value Fund and Boston Partners Bond Fund of The RBB Fund,
Inc. at August 31, 1998, the results of their operations for the year (or
period) then ended, their net assets for each of the two years (or periods) in
the period then ended, and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities owned at
August 31, 1998 by correspondence with the custodian and brokers, provide a
reasonable basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
October 2, 1998
38
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
MID CAP VALUE FUND
MICRO CAP VALUE FUND
BOND FUND
SHAREHOLDER TAX INFORMATION (UNAUDITED)
Each Fund is required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise its shareholders within 60 days of each Fund's fiscal year
end (August 31, 1998) as to the U.S. federal tax status of distributions
received by each Fund's shareholders in respect of such fiscal year.During the
fiscal year ended August 31, 1998, the following dividends and distributions per
share were paid by each of the Funds:
<TABLE>
<CAPTION>
ORDINARY INCOME SHORT-TERM GAINS
------------------------ -------------------------
INSTITUTIONAL INVESTOR INSTITUTIONAL INVESTOR
FUND CLASS CLASS CLASS CLASS
- ---- ------------- -------- ------------- --------
<S> <C> <C> <C> <C>
Boston Partners Large Cap Value Fund ....... $0.08 $0.06 $0.61 $0.48
Boston Partners Mid Cap Value Fund ......... 0.01 0.01 0.14 0.21
Boston Partners Micro Cap Fund ............. -- -- -- --
Boston Partners Bond Fund .................. 0.39 0.36 -- --
</TABLE>
The percentage of total ordinary income dividends from the Large Cap Value Fund
and Mid Cap Value Fund qualifying for the corporate dividends received deduction
for each Fund is 100%.
These amounts were reported to shareholders as income in 1997. Because each
Fund's fiscal year is not the calendar year, another notification will be sent
with respect to calendar year 1998. The second notification, which will reflect
the amount, if any, to be used by calendar year taxpayers on their U.S. federal
income tax returns, will be made in conjunction with Form 1099-DIV and will be
mailed in January 1999.
Foreign shareholders will generally be subject to U.S. withholding tax on the
amount of their dividend. They will generally not be entitled to a foreign tax
credit or deduction for the withholding taxes paid by the Funds, if any.
In general, dividends received by tax-exempt recipients (e.g., IRAs and Keoghs)
need not be reported as taxable income for U.S. federal income tax purposes.
However, some retirement trusts (e.g., corporate,Keogh and 403(b)(7) plans) may
need this information for their annual information reporting.
Shareholders are advised to consult their own tax advisers with respect to the
tax consequences of their investment in the Funds.
39
<PAGE>
INVESTMENT ADVISOR
Boston Partners Asset Management, L.P.
28 State Street
Boston, MA 02109
ADMINISTRATOR
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
DISTRIBUTOR
Provident Distributors, Inc.
Four Falls Corporate Center, 6th Floor
West Conshohocken, PA 19428-2961
CUSTODIAN
PNC Bank, N.A.
200 Stevens Drive
Lester, PA 19113
TRANSFER AGENT
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
INDEPENDENT ACCOUNTANTS
PriceWaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, PA 19103
COUNSEL
Drinker Biddle & Reath
1345 Chestnut Street
Philadelphia, PA 19107
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 the
Funds unless it is preceded or accompanied by a current prospectus which
includes details regarding the 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 the Funds will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than original cost.
