- --------------------------------------------------------------------------------
THE SCHNEIDER
SMALL CAP
VALUE FUND
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SEMI-ANNUAL
REPORT
February 28, 1999
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SCHNEIDER CAPITAL MANAGEMENT
[GRAPHIC OMITTED]
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
SEMI-ANNUAL INVESTMENT ADVISER'S REPORT
FEBRUARY 28, 1999
Dear Fellow Shareholder:
It is with great pleasure that we provide you with the report of the
Schneider Small Cap Value Fund for the six month period ended February 28, 1999.
The US economy expanded at a steady pace during the past six months
overcoming fears of serious financial trouble abroad. The S&P 500 Index climbed
to near record levels, fueled primarily by a steady increase in consumer
spending, low unemployment and a low inflation rate. Large cap growth stocks led
the advance as the small and mid-cap stocks returned only modest gains.
While the market favored the large cap growth stocks, the Schneider Small
Cap Value Fund still performed very well, returning a generous 25.32% for the
period and outperforming its benchmark, the Russell 2000 Value Index, by more
than 22%. The fund's positive return was a result of an outperformance by many
of its commodity semi-conductor holdings, which were overweighted in the
portfolio. Strong end-user demand for PC's and a reduction in inventory
increased the valuation of these companies. Stocks in the paper sector produced
attractive returns from increased consolidation and capacity reduction. We also
benefited from good stock picks in the retail and HMO groups, which added
meaningfully to the funds results.
CURRENT OUTLOOK
Assuming all factors remain the same, Schneider Capital Management believes
the economic outlook will begin to improve around the globe by the second half
of 1999. However, domestically, we expect to be locked into a slow growth mode.
Recent Federal Reserve interest rate cuts may forestall a recession, but with
the consumer savings rate at zero, we don't foresee a period of strong growth.
Therefore, we will continue to pay strict attention to the fundamentals and
valuations of the companies in which we invest. In spite of overall high market
valuations, we believe there is an abundance of inexpensive small cap value
stocks as their valuations, relative to the broad market,are as low as they have
been in 25 years.
Thank you for your investment in the Schneider Small Cap Value Fund.
/S/ARNOLD C. SCHNEIDER
Arnold C. Schneider III, CFA
Portfolio Manager and CIO
Schneider Capital Management
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
SEMI-ANNUAL INVESTMENT ADVISER'S REPORT
FEBRUARY 28, 1999(UNAUDITED)
Comparison of Change in Value of $10,000 Investment in
Schneider Small Cap Value Fund (1)(2) vs. Russell 2000 Value Index
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
Russell Schneider
9/2/98 $10,000 $10,000
9/30/98 10,362 10,000
10/31/98 10,670 11,930
11/30/98 10,959 12,410
12/31/98 11,303 12,471
1/31/99 11,046 13,786
2/28/99 10,292 12,532
- --------------------------------------------------------------------------------
Total Returns
VALUE ON SINCE
FEBRUARY 28, 1999 INCEPTION (3)
----------------- -------------
Schneider Small Cap Value $12,532 25.32%
Russell 2000 Value Index $10,292 2.92%
- --------------------------------------------------------------------------------
The Fund's return is based on an increase in net asset value from $10.00
per share on September 1, 1998 to $12.39 per share on February 28, 1999,
adjusted for dividends totaling $.13 per share paid from net realized gains.
- ----------
(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 a
professionally managed mutual fund while the indices are unmanaged, do not
incur sales charges and/or expenses and are not available for investment.
(2) Schneider Capital Management waived a portion of its advisory fee and
voluntarily agreed to reimburse a portion of the Fund's operating expenses,
as 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 September 2, 1998 (commencement of
operations) through February 28, 1999.
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
SHARES VALUE
------ --------
COMMON STOCKS -- 94.5%
ALUMINUM -- 0.5%
Commonwealth Industries, Inc. ............ 3,000 $ 32,437
--------
APPAREL -- 1.4%
J. Baker, Inc. ........................... 20,600 97,850
--------
AUTOMOBILE PARTS & EQUIPMENT -- 1.5%
Exide Corp. .............................. 5,000 75,000
OEA, Inc. ................................ 2,400 26,700
--------
101,700
--------
BANKS -- 0.8%
Local Financial Corp.* ................... 5,400 54,675
--------
CHEMICALS -- 1.6%
M.A. Hanna Co. ........................... 10,000 110,000
--------
COMMUNICATIONS -- 3.6%
CellStar Corp.* .......................... 8,000 91,000
Clearnet Communications, Inc.,
Class A* .............................. 7,000 77,000
Paging Network, Inc.* .................... 19,300 77,200
--------
245,200
--------
COMPUTER COMPONENTS -- 5.2%
Hutchinson Technology, Inc.* ............. 4,000 124,500
Silicon Storage Technology* .............. 33,500 117,250
Ultratech Stepper, Inc.* ................. 4,000 63,125
Western Digital Corp.* ................... 5,000 48,125
--------
353,000
--------
COMPUTERS -- 1.0%
Integrated Measurement System* ........... 9,000 67,500
--------
DIVERSIFIED -- 0.9%
Varian Associates, Inc. .................. 2,000 64,000
--------
ELECTRIC & OTHER SERVICES -- 1.2%
Sensormatic Electronics Corp.* ........... 8,100 85,050
--------
ELECTRIC PRODUCTS -- 1.2%
UCAR International, Inc.* ................ 5,000 79,375
--------
ELECTRICAL EQUIPMENT -- 1.3%
Magnatek, Inc.* .......................... 8,000 87,000
--------
SHARES VALUE
------ --------
ELECTRICAL MACHINERY, EQUIPMENT
& SUPPLIES -- 0.9%
Tektronix, Inc. .......................... 3,000 $ 58,500
--------
ELECTRONIC COMPONENTS & ACCESSORIES-- 4.9%
Arrow Electronics, Inc. .................. 8,000 113,500
International Rectifier Corp.* ........... 9,000 61,875
Pioneer-Standard Electronics, Inc. ....... 6,600 51,150
Vishay Intertechnology, Inc.* ............ 8,630 111,651
--------
338,176
--------
ENVIRONMENTAL SERVICES -- 0.8%
Kaiser Ventures, Inc.* ................... 6,000 55,500
--------
FINANCIAL SERVICES -- 5.8%
Arcadian Financial Corp. ................. 20,000 76,250
Billing Information Concepts Corp.* ...... 4,000 40,125
Union Acceptance Corp., Class A* ......... 11,000 88,000
Westcorp, Inc. ........................... 23,000 189,750
--------
394,125
--------
FOODS -- 3.6%
Chiquita Brands International, Inc. ...... 7,000 60,375
Corn Products International, Inc. ........ 4,200 98,700
Imperial Sugar Co. ....................... 800 5,750
WLR Foods, Inc. .......................... 9,000 79,312
--------
244,137
--------
FOOTWEAR -- 1.0%
Barry (R.G.) Corp. ....................... 8,000 71,000
--------
GAS & OTHER SERVICES COMBINED -- 1.5%
Tesoro Petroleum Corp.* .................. 6,400 51,200
Western Gas Resources, Inc. .............. 10,000 49,375
--------
100,575
--------
GENERAL INDUSTRIAL MACHINERY &
EQUIPMENT -- 1.2%
Intevac, Inc.* ........................... 10,000 85,000
--------
GLASS CONTAINERS -- 0.3%
Vitro SA - ADR (Mexico) .................. 4,800 21,600
--------
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
SHARES VALUE
------ --------
HEALTHCARE -- 6.1%
Foundation Health Systems, Inc.* ......... 9,500 $ 76,000
Integrated Health Services, Inc. ......... 4,000 23,750
Medpartners, Inc.* ....................... 11,300 67,094
Mid-Atlantic Medical Services, Inc.*...... 10,000 78,125
Trigon Healthcare, Inc.* ................. 3,000 105,187
United Wisconsin Services, Inc. .......... 10,100 70,700
--------
420,856
--------
INSURANCE -- 0.5%
Scottish Annuity & Life Holdings* ........ 3,700 36,537
--------
MACHINERY (MINING) -- 1.1%
Harnischfeger Industries, Inc. ........... 10,000 76,875
--------
MANUFACTURING INDUSTRIES -- 1.4%
Oakwood Homes Corp. ...................... 6,000 96,750
--------
MORTGAGES -- 0.3%
Anthracite Capital, Inc. ................. 3,200 23,400
--------
OIL -- 0.9%
UTI Energy Corp.* ........................ 10,000 58,125
--------
OIL & GAS FIELD EXPLORATION -- 2.5%
Gulf Canada Resources, LTD.* ............. 20,000 46,250
Patterson Energy, Inc.* .................. 11,000 30,937
Pennzenergy Co. .......................... 10,000 93,750
--------
170,937
--------
OIL AND GAS -- 4.3%
EEX Corp. ................................ 6,833 41,425
Harken Energy Corp.* ..................... 10,000 15,000
Hurricane Hydrocarbons, Ltd.* ............ 31,200 27,300
Newpark Resources, Inc.* ................. 27,700 145,425
Ocean Energy, Inc.* ...................... 15,000 63,750
--------
292,900
--------
OPTICAL INSTRUMENTS & LENSES -- 0.7%
BMC Industries, Inc. ..................... 10,600 51,675
--------
PACKAGING / CONTAINERS -- 2.8%
Gaylord Containers Corp., Class A* ....... 28,000 189,000
--------
SHARES VALUE
------ --------
PAPER -- 3.1%
Mercer International, Inc. ............... 28,500 $213,750
--------
PAPERBOARD MILLS -- 1.5%
Longview Fibre Co. ....................... 9,000 101,813
--------
PETROLEUM REFINING -- 1.3%
Valero Energy Corp. ...................... 5,000 87,813
--------
REAL ESTATE -- 2.0%
Newhall Land & Farming Co. ............... 5,900 137,544
--------
RETAIL - EATING & DRINKING PLACES -- 1.2%
Avado Brands, Inc. ....................... 12,000 81,750
--------
RETAIL - RADIO, TV & CONSUMER
ELECTRONICS STORES -- 3.8%
Intertan, Inc.* .......................... 27,000 263,250
--------
RETAIL - SPECIALTY -- 1.2%
Michaels Stores, Inc.* ................... 5,000 85,625
--------
SAVINGS & LOAN ASSOCIATIONS -- 1.1%
Bank Plus Corp.* ......................... 17,000 74,375
--------
SEMI-CONDUCTORS & RELATED PRODUCTS-- 10.7%
Credence Systems Corp.* .................. 7,500 158,438
Cypress Semiconductor Corp.* ............. 8,100 77,456
General Semiconductor, Inc. .............. 16,000 104,000
Integrated Device Technology, Inc.* ...... 27,300 175,744
Integrated Silicon Solution, Inc.* ....... 33,500 93,172
Lam Research Corp.* ...................... 2,000 59,125
LTX Corp.* ............................... 17,000 68,000
--------
735,935
--------
STEEL -- 2.0%
Birmingham Steel Corp. ................... 20,000 82,500
LTV Corp. (The) .......................... 10,000 55,000
--------
137,500
--------
TELECOMMUNICATIONS -- 3.3%
Metromedia International Group, Inc.* .... 29,600 172,050
PLD Telekom, Inc.* ....................... 28,000 52,500
--------
224,550
--------
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1999 (UNAUDITED)
SHARES VALUE
------ --------
TRANSPORT -- 1.8%
Alexander & Baldwin, Inc. ................. 3,000 $ 59,250
Sea Containers Ltd., Class A .............. 3,000 65,625
----------
124,875
----------
WHOLESALE - PAPER & PAPER PRODUCTS -- 0.7%
Unisource Worldwide, Inc. ................. 6,700 46,900
----------
TOTAL COMMON STOCKS
(Cost $6,487,982) .................... 6,479,135
----------
CANADIAN COMMON STOCKS -- 3.4%
BUILDING PRODUCTS - WOOD -- 0.3%
Ainsworth Lumber, LTD.* ................... 10,000 23,186
----------
HOTEL / RESTAURANTS -- 1.9%
Canadian Hotel, Inc. ...................... 25,000 132,490
----------
PAPERBOARD -- 1.2%
St. Laurent Paperboard Inc.* .............. 10,200 79,395
----------
TOTAL CANADIAN COMMON STOCKS
(Cost $223,948) ...................... 235,071
----------
UNITED KINGDOM COMMON STOCKS -- 0.9%
PIC International Group PLC ............... 60,000 61,997
----------
TOTAL UNITED KINGDOM COMMON
STOCKS (Cost $76,324) ................ 61,997
----------
PAR
(000) VALUE
----- ----------
CONVERTIBLE BONDS -- 1.2%
Asia Pulp & Paper Convertible
(CAA1, CCC+/*)
3.500%, 04/30/03 ....................... $170 $ 83,725
----------
TOTAL CONVERTIBLE BONDS
(Cost $77,139) ......................... 83,725
----------
TOTAL INVESTMENTS -- 100.0%
(Cost $6,865,393) ...................... 6,859,928
----------
OTHER ASSETS IN EXCESS
OF LIABILITIES-- 0.0% .................. 1,483
----------
NET ASSETS-- 100.0% ....................... $6,861,411
==========
- ------------
*Non-income producing.
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999 (UNAUDITED)
ASSETS
Investments at value (cost - $6,865,393)....................... $6,859,928
Cash........................................................... 27,397
Receivable for investments sold................................ 84,832
Dividends and interest receivable.............................. 12,098
Receivable from advisor........................................ 7,404
----------
Total Assets................................................. 6,991,659
----------
LIABILITIES
Payable for investment purchased............................... 112,800
Accrued expenses payable....................................... 17,448
----------
Total Liabilities............................................ 130,248
----------
NET ASSETS
Capital stock, $0.001 par value................................ 553
Paid-in capital................................................ 6,125,946
Undistributed net investment income............................ 849
Accumulated net realized gain from investments
and foreign exchange transactions, if any .................. 739,545
Net unrealized depreciation on investments and
foreign currency, if any ................................... (5,482)
----------
Net assets applicable to shares outstanding.................... $6,861,411
==========
Shares outstanding................................................ 553,803
==========
Net asset value, offering and redemption price per share.......... $12.39
==========
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE PERIOD
SEPTEMBER 2, 1998*
THROUGH
FEBRUARY 28, 1999
------------------
Investment Income
Dividends................................................. $ 18,861**
Interest.................................................. 5,973
--------
24,834
--------
Expenses
Administration fees....................................... 49,297
Advisory fees............................................. 21,803
Transfer agent fees and expenses.......................... 11,440
Custodian fees and expenses............................... 9,330
Printing.................................................. 6,357
Federal and state registration fees....................... 5,427
Administrative service fees............................... 3,270
Audit and legal fees...................................... 568
Other..................................................... 296
--------
Total expenses before waivers and reimbursements........ 107,788
Less: waivers and reimbursements.......................... (83,803)
--------
Total expenses after waivers and reimbursements......... 23,985
--------
Net investment income........................................ 849
--------
Net realized and unrealized gain on investments
and foreign transactions:
Net realized gain from:
Investments............................................. 791,802
Foreign exchange transactions........................... 26
Net change in unrealized (depreciation) on:
Investments............................................. (5,465)
Foreign exchange transactions........................... (17)
--------
Net realized and unrealized gain on investments and
foreign currency................................. 786,346
--------
Net increase in net assets resulting from operations......... $787,195
========
- ------------------
* Commencement of operations.
** Net of foreign withholding taxes of $1,142.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
FOR THE PERIOD
SEPTEMBER 2, 1998*
THROUGH
FEBRUARY 28, 1999
------------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
Net investment income....................................... $ 849
Net realized gain from investments and foreign currency
transactions, if any ..................................... 791,828
Net change in unrealized depreciation on investments and
foreign currency transactions, if any .................... (5,482)
----------
Net increase in net assets resulting from operations........ 787,195
----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income....................................... --
Net realized capital gains.................................. (52,283)
----------
Total dividends and distributions to shareholders......... (52,283)
----------
INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS. 6,126,499
----------
Total increase in net assets.............................. 6,861,411
----------
NET ASSETS
Beginning of period......................................... --
End of period............................................... $6,861,411**
==========
- ------------------
* Commencement of operations.
** Includes undistributed net investment income of $849.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
FINANCIAL HIGHLIGHTS
(UNAUDITED)
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each share
outstanding, total investment return, ratios to average net assets and other
supplemental data for the period. This information has been derived from
information provided in the financial statements.
- --------------------------------------------------------------------------------
FOR THE PERIOD
SEPTEMBER 2, 1998*
THROUGH
FEBRUARY 28, 1999
------------------
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period............................ $10.00
Net investment income(1)........................................ 0.00
Net realized and unrealized gain on investments
and foreign exchange transactions, if any(2).................. 2.52
------
Net increase in net assets resulting from operations............ 2.52
------
Dividends and distributions to shareholders from:
Net investment income........................................... 0.00
Net realized capital gains...................................... (0.13)
------
Total dividends and distributions to shareholders............... (0.13)
------
Net asset value, end of period.................................. $12.39
======
Total investment return(3)...................................... 25.32%
RATIO/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)....................... $6,861
Ratio of expenses to average net assets(1)(4)................... 1.10%(5)
Ratio of net investment income to average net assets(1)......... 0.04%(5)
Portfolio turnover rate......................................... 106.99%
- ------------------
* Commencement of operations.
** Calculated based on shares outstanding on the first and last day of the
period, except for dividends and distributions, if any, which are based on
actual shares outstanding on the dates of distributions.
(1) Reflects waivers and reimbursements of ($0.17).
(2) The amounts shown for each share outstanding throughout the period are not
in accord with the changes in the aggregate gains and losses on
investments during the period because of 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
includes reinvestments of dividends and distributions, if any. Total
investment returns are not annualized.
(4) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets annualized for the period September 2, 1998
through February 28, 1999 would have been 4.94%.
(5) Annualized.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS
FEBRUARY 28, 1999 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of
Maryland on February 29, 1988 and is registered under the Investment Company Act
of 1940, as amended, (the "Investment Company Act") as an open-end management
investment company. RBB is a "series fund", which is a mutual fund divided into
separate portfolios. Each portfolio is treated as a separate entity for certain
matters under the Investment Company Act, and for other purposes, and a
shareholder of one portfolio is not deemed to be a shareholder of any other
portfolio. Currently RBB has sixteen investment portfolios, including the
Schneider Small Cap Value Fund (the "Fund"). As of the date hereof, the Fund
offers the Institutional Class.
RBB has authorized capital of thirty billion shares of common stock of
which 19.83 billion are currently classified into ninety-seven classes. Each
class represents an interest in one of sixteen investment portfolios of RBB. The
classes have been grouped into fifteen separate "families", nine of which have
begun investment operations, including the Schneider Small Cap Value Fund, which
commenced investment operations on September 2, 1998.
PORTFOLIO VALUATION -- The net asset value of the Fund is determined as of
4:00 p.m. Eastern Standard Time on each business day. The 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, the 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 Fund.
REPURCHASE AGREEMENTS -- The Fund has agreed to purchase securities from
financial institutions subject to the seller's agreement to repurchase them at
an agreed-upon time and price ("repurchase agreements"). The financial
institutions with whom the Fund enters into repurchase agreements are banks and
broker/dealers which Schneider Capital Management, LP (the Fund's investment
adviser or "SCM") 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. SCM 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 Fund to possible loss because of adverse market action or delays in
connection with the disposition of the underlying securities.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME -- Transactions are accounted
for on the trade date. The cost of investments sold is determined by use of the
specific identification method for both financial reporting and income tax
purposes in determining realized gains and losses on investments. Interest
income is recorded on the accrual basis. Dividend income is recorded on the
ex-dividend date.
10
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
DIVIDENDS AND DISTRIBUTIONS-- Dividends from net investment income, if any,
will be declared and paid at least annually to shareholders. Distributions from
net realized capital gains, if any, will be distributed at least annually.
Income and capital gain distributions are determined in accordance with U.S.
federal income tax regulations which may differ from generally accepted
accounting principles.
U.S. FEDERAL TAX STATUS -- No provision is made for U.S. federal income
taxes as it is the Fund's 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
SCM serves as the Fund's investment adviser. For its advisory services, SCM
is entitled to receive 1.00% of the Fund's average daily net assets, computed
daily and payable monthly.
The adviser has voluntarily agreed to limit the Fund's total operating
expenses for the current and the following fiscal year to the extent that such
expenses exceeded 1.10% of the 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 period September 2, 1998* through
February 28, 1999, investment advisory fees, waivers and reimbursements of
expenses were as follows:
<TABLE>
<CAPTION>
EXPENSE
GROSS ADVISORY FEES WAIVERS NET ADVISORY FEES REIMBURSEMENTS
------------------- --------- ----------------- --------------
<S> <C> <C> <C> <C>
Schneider Small Cap Value Fund $21,803 $(21,803) $ -- $(29,016)
</TABLE>
- ------------------
* Commencement of operations.
The Fund will not pay SCM at a later time for any amounts it may waive or
any amounts which SCM has assumed.
PFPC Trust Company serves as custodian of the Fund. PFPC Inc. ("PFPC"), an
indirect wholly-owned subsidiary of PNC Bank, National Association, serves as
administrator for the Fund. For providing administrative services PFPC is
entitled to receive a monthly fee equal to an annual rate of 0.125% of the
Fund's average daily net assets, subject to a minimum monthly fee of $8,333 per
Fund.
For the period September 2, 1998* through February 28, 1999, PFPC, at their
discretion, voluntarily agreed to waive a portion of their administration fees
for the Fund. During this period, PFPC's administration fees and related waivers
were as follows:
<TABLE>
<CAPTION>
GROSS NET
ADMINISTRATION FEES WAIVERS ADMINISTRATION FEES
------------------- --------- -------------------
<S> <C> <C> <C>
Schneider Small Cap Value Fund $49,297 $(24,648) $24,649
</TABLE>
- ------------------
* Commencement of operations.
11
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
In addition, PFPC serves as the Fund's transfer and disbursing agent. PFPC,
at its discretion, voluntarily agreed to waive a portion of their transfer
agency fees for the Fund. During the period September 2, 1998* through February
28, 1999, transfer agency fees and waivers were as follows:
<TABLE>
<CAPTION>
GROSS TRANSFER NET TRANSFER
AGENCY FEES WAIVERS AGENCY FEES
----------------- -------- ------------
<S> <C> <C> <C>
Schneider Small Cap Value Fund $11,440 $(5,720) $5,720
</TABLE>
- ------------------
* Commencement of operations.
Provident Distributors "PDI" provides certain administrative services to
the Fund. As compensation for such administrative services, PDI is entitled to
receive a monthly fee equal to an annual rate of 0.15% of the Fund's average
daily net assets.
For the period September 2, 1998* through February 28, 1999 PDI has, at its
discretion, voluntarily agreed to waive a portion of its administrative services
fees for the Fund. During this period, administrative services fees and waivers
were as follows:
<TABLE>
<CAPTION>
GROSS
ADMINISTRATIVE NET ADMINISTRATIVE
SERVICES FEES WAIVERS SERVICES FEES
-------------- -------- ------------------
<S> <C> <C> <C>
Schneider Small Cap Value Fund $3,270 $(2,616) $654
</TABLE>
- ------------------
* Commencement of operations.
These fees are computed daily and paid monthly.
3. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at
February 28, 1999 was $6,874,668. Accordingly, the net unrealized
appreciation/(depreciation) of investments was as follows:
<TABLE>
<CAPTION>
GROSS GROSS NET APPRECIATION/
APPRECIATION DEPRECIATION (DEPRECIATION)
------------ ------------ ----------------
<S> <C> <C> <C>
Schneider Small Cap Value Fund $747,345 $(762,102) $(14,757)
</TABLE>
For the period September 2, 1998* through February 28, 1999, aggregate
purchases and sales of investment securities (excluding short-term investments)
were as follows:
PURCHASES SALES
---------- ----------
Schneider Small Cap Value Fund $7,370,137 $1,122,828
- ------------------
* Commencement of operations.
12
<PAGE>
SCHNEIDER
SMALL CAP VALUE FUND
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
FEBRUARY 28, 1999 (UNAUDITED)
4. CAPITAL SHARE TRANSACTIONS
As of February 28, 1999 the Fund has 100,000,000 shares of $0.001 par value
common stock authorized.
Transactions in capital shares for the period September
2, 1998 (commencement of operations) through February 28, 1999 were as follows:
SHARES AMOUNT
------- ----------
Sales............................... 581,141 $6,503,039
Reinvestments....................... 4,305 49,685
Repurchases......................... (31,643) (426,225)
------- ----------
Net increase........................ 553,803 $6,126,499
======- ==========
13
<PAGE>
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<PAGE>
INVESTMENT ADVISOR
Schneider Capital Management
460 E. Swedesford Rd.
Wayne, PA 19087
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
PFPC Trust Company
400 Bellevue Parkway
Wilmington, DE 19809
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
The financial information included herein is taken from the records of the Fund
without examination by independent accountants who do not express an opinion
thereon.
This report is submitted for the general information of the shareholders of the
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 Fund will fluctuate, so that an investor's
shares, when redeemed, may be worth more or less than original cost.
