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BOSTON PARTNERS ASSET MANAGEMENT, L.P.
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BOSTON PARTNERS
LARGE CAP
VALUE FUND
BOSTON PARTNERS
MID CAP
VALUE FUND
BOSTON PARTNERS
MICRO CAP
VALUE FUND
BOSTON PARTNERS
MARKET NEUTRAL FUND
BOSTON PARTNERS
BOND FUND
Semi-Annual Report
February 28, 1999
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
PORTFOLIO MANAGER'S LETTER
February 28, 1999
Dear Shareholder:
1998 and the first two months of 1999 have provided very disappointing
investment results for value managers and Boston Partners shared in this
disappointment. In order to communicate some of the issues behind these results,
we thought it best to make a list of questions we have been asked by
shareholders, consultants, and ourselves concerning performance.
We hope that these questions and answers will serve as an initial step in
the discussions about recent performance in your portfolio, the expectations we
have for the future, and why we feel confident in our ability to meet these
expectations.
"WHY DID VALUE MANAGERS UNDERPERFORM THE S&P 500 INDEX OVER THE LAST SIX
MONTHS?"
The S&P 500 Index ("S&P 500") continues to be heavily influenced by large
cap growth stocks and as such, the index was a very difficult benchmark for
value managers to beat. Similar to a period in the early 1970's, value stocks
severely lagged as investors chose to invest in the perceived safety of mega-cap
growth stocks whose earnings were growing at a premium to the market. Because
these mega-cap growth stocks were such a large percentage of the S&P 500 in 1998
and continue to be in 1999, they influenced its return more than at any other
time in history. The persistent underperformance of the value style and a
narrowness of performance in a small number of mega-sized companies created both
a growth style and capitalization bias.
"WHAT DO YOU MEAN BY NARROWNESS OF THE MARKET PERFORMANCE?"
Narrowness refers to the small number of companies that led the market in
its 1998 and 1999 advance. Of all the companies in the Russell 1000 Value Index,
the 20 largest contributors accounted for 73% of the return. Over the previous
three years, this figure averaged 35%. Also indicative of the lack of breadth in
the large cap value universe is the median return of the Russell 1000 Value
Index of 2.32%. In the broader market, the return of the average NYSE stock was
negative 6%.
"COULD YOU BE MORE SPECIFIC, AND GIVE SOME DETAIL?"
We estimate that a value style, defined as low Price to Earnings (P/E) and
low Price to Book (P/B), accounted for approximately one-half of our shortfall
vs. the S&P 500 (measured simply by the difference between the S&P 500 and the
Russell 1000 Value Index). The difference between our lower market
capitalization and that of the relevant indexes contributed approximately
one-quarter of the shortfall. Finally, poor stock selection contributed to the
remaining quarter.
"COULD YOU BE SPECIFIC ABOUT SOME OF THE PROBLEMS OF STOCK SELECTION IN 1998 AND
EARLY 1999?"
Throughout 1998 and into 1999, companies with positive business momentum
were selling at historically high levels. In our research process we were able
to identify companies that were undergoing changes which we thought would create
business momentum. Most of the companies we uncovered were undertaking corporate
restructurings as a way to create this business momentum and strengthen
earnings. Since some of the restructurings were taking place in commodities
businesses, the low level of inflation and lack of purchasing power made the
success of the restructurings only marginal at best. Other companies, such as
Venator (Woolworth), never achieved success. Another example of poor stock
selection that affected our performance this year was Northrop Grumman. Northrop
Grumman was on track to merge with Lockheed Martin during the first quarter of
'98, a merger that would have been accretive to earnings. However, anti-trust
concerns in the 11th hour of the merger caused the deal to fall apart, and the
stock tumbled. A significant position at the time, Northrop Grumman was one of
the biggest detractors of the year.
<PAGE>
"WHY DO YOU BELIEVE GROWTH AND SIZE DID SO EXTRAORDINARILY WELL OVER THE PAST
SIX MONTHS?"
Experience has shown that it is always easier to explain the past than it
is to forecast the future. In looking back over the last six months, many of the
companies that performed well had excellent brandname recognition around the
world, were very liquid stocks, and, in general, had good financial profiles. In
times of economic uncertainty many investors choose to pay substantial premiums
for these characteristics. With political problems here in the U.S., and
economic problems in Asia, the emerging markets, and much of Europe, 1998 and
early 1999 were clearly a period of uncertainty. With a move to indexing, money
flowing into these stocks has also increased, further lifting their prices.
"WHY DID YOU UNDERPERFORM YOUR COMPETITORS?"
Although it is impossible to know with certainty how our competitors
structured their portfolios in 1998, we believe that the primary reason for
underperformance was our unwillingness to stray from our value discipline. A
preliminary year-end comparison versus other value managers shows our portfolios
to have stronger value characteristics, i.e., lower average weighted P/E's,
P/B's and Price to Sales. This adherence to value, coupled with a lower average
weighted market capitalization was a significant reason for lagging the
competition. We believe that the same reason should provide a recipe for success
when the events of 1998 and early 1999 return to some normalcy.
"HAVE YOU CHANGED ANYTHING ABOUT YOUR INVESTMENT PROCESS IN THE LAST YEAR?"
We have not changed course either in our value orientation, our emphasis on
fundamental analysis, or our belief in the benefits of diversification. We
continue to believe that the fundamental premises upon which our investment
philosophy has been built remain sound. It is a regular routine of ours,
however, to review the process by which we execute this philosophy, irrespective
of near term performance.
Given the heightened volatility of the markets as well as the dramatically
changed complexion of our benchmarks, we have increased the frequency with which
we review the risk profile of our large capitalization equity product versus
both the S&P 500 and the Russell 1000 Value Indexes. On a weekly basis we review
the sources of risk relative to both indexes not only from a sector and stock
specific over/underweight position, but also with respect to non-industry
factors such as Beta, capitalization, earnings volatility, etc. Included in our
analysis is performance attribution of our portfolios by both market
capitalization and price/earnings deciles.
In terms of personnel, we hired two new fundamental analysts within the
last twelve months and will likely hire two more in 1999. We have had no
departures of investment professionals since our inception.
"WHAT ABOUT THE FUTURE? WHY WON'T THE THINGS YOU HAVE OUTLINED CONTINUE IN 1999
AS THEY DID IN 1998?"
We would like to answer this in three parts. First, it is always difficult
to predict when particular styles of investing will shift in and out of favor.
We do believe, however, that value investing is a winning strategy over the long
term. Therefore, while it is certainly possible that 1999 may be a year in which
growth again beats value, we are firmly committed to our discipline of buying
what we believe are undervalued securities with prospects for appreciation.
Second, while it is difficult to time the performance of various
capitalization segments, it is our opinion that today there exists the widest
dispersion in the past thirty years between the largest 20% of the market and
the remaining 80%. We believe this valuation spread to be unsustainable over the
long term. This would mean that value exists not in the mega-cap companies, but
in the large to mid-cap companies.
Third, in regards to stock selection, we will continue to employ a
disciplined sell process whereby we exit securities that we believe to be
overvalued. While this strategy worked against us in 1998 (Merck, Wal-Mart,
Bristol-Myers), we think it could be dangerous and imprudent to assume that
expensive stocks will continue to appreciate. As we re-deploy capital from
overvalued securities we will be disciplined in our assessments of the catalyst
required to unlock intrinsic value. Moreover, in the face of an activist
Administration, we increasingly weigh the potential impact to our portfolio from
political/regulatory risks, e.g., Northrop Grumman.
2
<PAGE>
"IS VALUE INVESTING ALIVE AND WELL?"
Absolutely. The reason we believe value investing produces superior
long-run returns is complex and not easily explained in a few sentences. But at
its core is the notion that a value strategy takes advantage of what has been
termed the "status-quo bias" of investors. This refers to investors' tendency to
look at a company's recent financial and share price trends and extrapolate them
far into the future. In so doing, they overpay for strong current trends and
underpay for recent disappointments. History has shown, however, that only a
relatively small percentage of stocks can sustain high growth rates in sales and
earnings for long periods of time and the penalty inflicted on "fallen growth
stocks" is typically severe. In the meantime, the managements of companies
producing less than acceptable returns are under intense pressure to "fix" their
problems or find themselves out of a job. As these problems are addressed,
investor confidence is restored and share price performance improves.
We think this status-quo bias was taken to unprecedented extremes over the
past six months. In the face of a slowing profit growth environment and
lingering concerns about Asian and Latin American economies, investors flocked
in droves to the perceived security of the mega-capitalization growth stocks,
driving them to valuation levels that are in most cases well beyond even those
seen in the "Nifty-Fifty" era of the early 1970's.
Some believe that value investing has no future, and that these richly
valued growth stocks can universally sustain double-digit sales and earnings
growth well into the next decade and that the interest rate environment will
remain benign for years to come. We're skeptical of this scenario.
Some of the market's darlings of 1998 may navigate their way through the
uncertain times ahead and continue to reward their shareholders, but many may
disappoint as well. Given what we believe to be their lofty current valuations,
their fall from grace is apt to be very painful for investors. We believe it is
far more prudent to invest in those companies that are in our opinion sensibly
priced, possess a strong business franchise and are taking the necessary steps
to enhance their earnings potential.
In summary, not only do we believe that value investing is alive and well,
we believe that its exceptionally poor relative performance in 1998 and early
1999 could nonetheless set the stage for a very rewarding period ahead.
At February 28, 1999, the Large Cap Value Fund's Institutional Shares and
the Large Cap Value Fund's Investor Shares Net Asset Value performance was as
follows:
SIX MONTHS ENDING SINCE INCEPTION* THROUGH
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
----------------- ------------------------
Large Cap Value Fund
Institutional Shares 10.70% 10.41%
S&P 500 Index(1) 30.28% 28.93%
Large Cap Value Fund
Investor Shares 10.62% 9.46%
S&P 500 Index(1) 30.28% 26.67%
* Large Cap Value Fund Institutional Shares Inception Date - January 2, 1997
* Large Cap Value Fund Investor Shares Inception Date - January 16, 1997
(1) The S&P 500 Index is an unmanaged 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.
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.
3
<PAGE>
WHAT ABOUT THE MID CAP VALUE FUND AND THE MICRO CAP VALUE FUND?
Mid cap stocks have excelled in the last six months as the Russell 2500
Index moved up 17.27% for the period. When The Federal Reserve eased interest
rates on October 15th, the added liquidity precipitated by the cut brought
investors back into the smaller end of the market where tremendous value could
be found. The last six months has also brought a change of investment style
preference in the mid cap arena. In the fourth quarter and into 1999, the growth
investment style surpassed value, which had been winning in previous quarters.
There were no major changes to the portfolio composition of the Mid Cap
Value Fund. There were slight increases in Capital Goods, Energy, and
Technology. Consumer Durables and Healthcare decreased. As Boston Partners
follows a bottom up investment process, sector weightings are regulated by
internal guidelines, which insure that the portfolio is diversified. However,
sector weightings are not dictated by top-down analysis, as we do not attempt to
predict the market's movements. Sector weights fluctuated as a residual of our
individual stock selection process. The portfolio's strongest sectors were
Capital Goods, Consumer Durables, Consumer Services, Health Care, and
Technology. Energy and Utilities, strong sectors during the third quarter, were
weaker during the fourth quarter. Considerable gains came from the following
holdings:
BJ'S WHOLESALE CLUB ("BJ's") was a strong contributor for the six months
ending February 28, 1999. The company is the nation's third largest membership
warehouse club selling food goods (60% of sales), as well as general
merchandise. BJ's continues to sell at a deep discount on a price to earnings
basis to its competitors. We feel this discount is not justified by the
fundamentals. BJ's continues to expand its store base at a 10% annual rate, with
10 new stores currently planned in 1999. BJ's is less cyclically exposed, with
65% of all sales coming from food merchandise, which could bode well for them
should the US economy slow in 1999. Finally, management continues to use free
cash to buy back stock which is accretive to earning.
In Health Care, IVAX CORPORATION proved to be a strong holding in the fund.
Ivax Corporation is a pharmaceutical company specializing in generic
pharmaceuticals, respiratory, and oncology. The company's proprietary products
include Paxene, a cancer treatment, and the Easi-Breathe inhaler. The company,
which once included a chemicals business, now concentrates solely on
pharmaceuticals.
Detractors from the portfolio's performance include PITTSTON BRINKS GROUP
in the Capital Goods sector. The company provides armored car services, currency
and deposit processing, ATM servicing and air courier services worldwide.
Additionally, Brinks Home Security installs, maintains and monitors electronic
home security systems in the US and Canada. Although the company's returns for
the period were negative, we believe that the company is strong fundamentally,
sells at a discount to its peers, and has strong organic growth.
4
<PAGE>
At February 28, 1999, the Mid Cap Value Fund's Institutional Shares and the
Mid Cap Value Fund's Investor Shares Net Asset Value performance was as follows:
SIX MONTHS ENDING SINCE INCEPTION* THROUGH
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
----------------- ------------------------
Mid Cap Value Fund
Institutional Shares 10.00% 3.23%
Russell 2500 Index(1) 17.27% 5.03%
Mid Cap Value Fund
Investor Shares 9.88% 3.14%
Russell 2500 Index(1) 17.27% 5.03%
* Mid Cap Value Fund Institutional and 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 Corporation.
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.
MICRO CAP VALUE FUND
The micro cap stocks that were struggling alongside the small and mid cap
securities for much of the last six months continue to struggle. The Federal
Reserve's easing of interest rates in October created added liquidity, which
flowed into the smaller capitalization stocks that had been previously
neglected, but their advances have been short-lived. As in the larger
capitalizations, the stocks that prompted the most interest were the technology
growth stocks. As measured by the Russell 2000 Value Index and the Russell 2000
Growth Index, the smaller capitalizations reversed their prior trend;
growth-style investing beat value-style investing in the fourth quarter and
continues so far in 1999. The Russell 2000 Growth Index returned 29.28% for the
quarter, while the Russell 2000 Value Index returned 4.93%, a difference of
2,435 basis points. The CRSP 9-10, our micro cap benchmark, returned 17.80% for
the six month period.
The Boston Partners Micro Cap Value Fund was overweighted in the Finance
and Consumer Services sector as compared with the CRSP 9-10 Index. The fund was
underweighted in Health Care and Technology, as there was less value in these
sectors. The Health Care and Technology Sectors, which combined totaled 33.03%
of the CRSP 9-10 Index, were very strong contributors to the benchmark's return.
The technology sector in particular, returning 32.61% (CRSP 9-10 Index) for the
quarter, illustrates what we believe to be the large gap in valuation between
the growth technology stocks, and the overall micro cap environment. Our
underweighting in these growth-driven sectors hurt our performance in comparison
to the benchmark. One of the fund's greatest weightings, Finance, returned well
above the benchmark's Finance return with a 430 basis points difference. The
fund's returns in the Transportation, Consumer Durables, Energy, Capital Goods,
Basics and Utilities were also above the benchmark's returns for these sectors.
The fund continues to closely follow Boston Partners' value investing
process that selects companies believed to be undervalued with good business
fundamentals and a catalyst for change. A previous contributor to the portfolio
includes Group 1 Automotive.
Group 1 Automotive, a company the fund has held since inception, was the
second greatest contributor for the quarter. Group 1 Automotive, a consolidator
of car dealership businesses, currently owns over 60 dealerships in 6 states. We
think the company has strong fundamentals and continues to grow through
acquisitions of large dealer groups. The company, which went public in October
of 1997, was initially hit hard by the market, but now seems to have gained its
footing. With a positive earnings surprise in October of 1998, analysts at that
time put a "buy" recommendation on the stock. The stock reached our target price
and was sold.
5
<PAGE>
At February 28, 1999, the Micro Cap Value Fund's Institutional Shares and
the Micro Cap Value Fund's Investor Shares Net Asset Value performance was as
follows:
SIX MONTHS ENDING SINCE INCEPTION* THROUGH
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
----------------- ------------------------
Micro Cap Value Fund
Institutional Shares 0.25% (23.61)%
CRSP 9-10 Index 17.80% (13.05)%
Micro Cap Value Fund
Investor Shares 0.13% (23.61)%
CRSP 9-10 Index 17.80% (13.05)%
* Micro Cap Value Fund Institutional and Investor Shares Inception Date -
July 1, 1998.
(1) The CRSP 9-10 Index represents the bottom two deciles of stocks in the
CRSP Universe. This universe includes all of the common U.S. stocks traded
on the NYSE, and the NASDAQ-Amex National Market System, with limited
partnerships excluded. The size cutoffs are determined by ranking all NYSE
stocks by market cap (with shares outstanding provided by Interactive Data
Corporation), forming deciles, and then adding the issues that fit the size
ranges from other exchanges. CRSP, the Center for Research in Securities
Prices, is affiliated with the University of Chicago.
Micro Cap Companies, as defined by our product, are those with a market
capitalization of less than $500 million. These companies tend to be new, in
early development, or in transition. Usually, micro caps are rapidly evolving,
generating a new product or service, or taking advantage of a new market.
However, returns may be inconsistent and may fluctuate widely over the
short-term, and small stock valuations tend to be more sensitive to market
psychology. As a result, an investment in Boston Partners Micro Cap Value Fund
should only be a part of a carefully diversified portfolio.
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.
YOU JUST STARTED THE BOSTON PARTNERS MARKET NEUTRAL FUND. HOW HAS IT PERFORMED?
Our Market Neutral Fund started November 17, 1998, in the wake of this
volatile market that hasn't been kind to value managers. The fund aims to
produce 15% annualized returns over a four year market cycle independent of
market direction. In order to achieve this goal in a market neutral fashion, we
attempt to minimize the portfolio's beta (market sensitivity.) We do not,
however, neutralize all sources of portfolio risk. This last point was painfully
evident during our first three and one half months of operation. While we
believe that the market neutral product is a relatively low risk approach to
investing, we do not believe that market neutral portfolio structures offer
returns for no risk. There is no free lunch in market neutral investing any more
than there is in long-only investing. One of the primary advantages we see of
market neutral investing is that it allows the managers to target which sources
of return (and risk) they wish to employ. Like all of Boston Partners
portfolios, the market neutral portfolio is based on a value philosophy and
process.
Our Market Neutral Fund invests in stocks that we believe are undervalued
with sound business fundamentals and positive business momentum. We will sell
short stocks that we think are overvalued with deteriorating business
fundamentals and declining business trends. In the first three and one half
months, technology stocks (more specifically internet stocks) that we felt were
overvalued with no strong balance sheets or earnings continued to perform well.
While we do not know when this phenomena will change, we do believe that these
companies' prices cannot continue to grow. At some point in time,we expect that
fundamentals will become important again. Assuming this happens, this is when
the Boston Partners Market Neutral Fund could excel.
6
<PAGE>
At February 28, 1999, the Market Neutral Fund's Institutional Shares and
the Market Neutral Fund's Investor Shares Net Asset Value performance was as
follows:
SINCE INCEPTION*
THROUGH FEBRUARY 26, 1999
(UNAUDITED)
-------------------------
Market Neutral Fund Institutional Shares (9.20)%
Salomon Brothers 1-Month T-Bill Rate 1.27%
Market Neutral Fund Investor Shares (9.10)%
Salomon Brothers 1-Month T-Bill Rate 1.27%
* Market Neutral Fund Institutional and Investor Shares Inception Date -
November 17, 1998.
The Salomon Smith Barney U. S. Treasury Bill Index is an unmanaged index
containing monthly return equivalents of yield averages that are not marked to
market. The 1-Month Treasury Bill Index consists of the last one month treasury
bill issues.
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.
HOW DID THE BOSTON PARTNERS BOND FUND PERFORM?
Following a tumultuous third quarter, the bond market calmed down during
the fourth quarter. The Federal Reserve eased monetary policy 25 basis points on
September 29th, amid overseas turmoil and distress among certain hedge funds,
banks, and broker-dealers. They eased again in both October and November, at 25
basis points each time. The encouragement of lower short term interest rates, a
subsequent rally in the stock market to new highs, and data indicating robust
3%-4% GDP growth in the quarter all helped alleviate investor fears. As a
result, the flight to quality that benefited Treasuries in the third quarter
reversed somewhat in the fourth quarter.
Treasury rates rose 13-32 basis points depending on maturity with 1-5 year
rates yielding 4.5% and the thirty year bond at 5.1%. In the government sector
these higher rates erased coupon income for the quarter. However, the corporate
and mortgage sectors performed better, lifting the broad Lehman Aggregate Index
to a .34% return for the period.
Inflation for 1998 was about 1.6% and may rise somewhat in 1999, but we
expect it to remain relatively low. Corporates and mortgages recovered during
the quarter, but their relative risk-adjusted performance still lags for the
year.
7
<PAGE>
During the first two months of 1999, the main theme was the recovery of all
spread sectors. All non-Treasury sectors posted impressive excess returns during
the period. This occurred during a period of rising interest rates, most of
which occurred in February. At that time, the Lehman U. S. Treasury Index posted
its worst one month performance since December 1981 with a total return of
- -2.55%. Much of this can be attributed to Federal Reserve Chairman Greenspan's
comments questioning recent interest rate cuts in the face of recent economic
strength.
The rebound in corporates, mortgages, and high yield was substantial,
driven by renewed liquidity in the markets and decreased volatility after the
tumultuous last half of 1998. Year to date 1999, U. S. Treasuries posted a loss
of 1.99%. Investment grade corporates, mortgages, and high yield returned
- -1.41%, 0.31% and 0.89% respectively. We continue to overweight spread product
based upon what we believe to be superior long term return potential.
At February 28, 1999, 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
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
----------------- ------------------------
Bond Fund Institutional Shares 1.67% 5.49%
Lehman Aggregate Index 1.61% 6.44%
Bond Fund Investor Shares 1.54% 5.23%
Lehman Aggregate Index 1.61% 6.44%
* Bond Fund Institutional and Investor Shares Inception Date - December 30,
1997.
(1) The Lehman Aggregate Index is an unmanaged index containing fixed rate
debt securities rated investment grade or higher by Moody's Investors
Service, Standard & Poor's Corporation, or Fitch Investors Service. 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 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.
8
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
-------- -----------
COMMON STOCK--95.8%
AEROSPACE/DEFENSE--1.4%
Litton Industries, Inc.* ...................... 20,080 $1,126,990
----------
AUTOMOBILE-MANUFACTURING--3.4%
Ford Motor Co. ................................ 20,100 1,192,181
General Motors Corp. .......................... 19,000 1,568,687
----------
2,760,868
----------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--0.9%
Lear Corp.* ................................... 21,100 745,094
----------
CHEMICALS--1.8%
Agrium, Inc. .................................. 37,980 303,840
Rhone-Poulenc S.A. ............................ 25,000 1,150,000
----------
1,453,840
----------
COMPUTERS, SOFTWARE AND SERVICING--4.1%
Computer Associates
International, Inc. ......................... 34,100 1,432,200
International Business
Machines Corp. .............................. 5,100 867,000
Silicon Graphics, Inc.* ....................... 22,400 357,000
Wang Laboratories, Inc.* ...................... 26,330 628,629
----------
3,284,829
----------
CONSTRUCTION & BUILDING MATERIALS--1.6%
Ingersoll-Rand Co. ............................ 25,000 1,187,500
MacMillan Bloedel Ltd. ........................ 8,400 83,737
----------
1,271,237
----------
CONTAINERS--0.9%
Smurfit-Stone Container Corp.* ................ 38,200 689,987
----------
DIVERSIFIED--0.1%
Fortune Brands, Inc. .......................... 4,030 121,404
----------
ELECTRIC UTILITIES--4.5%
Consolidated Edison, Inc. ..................... 11,000 514,250
Niagara Mohawk Power Corp.* ................... 45,000 658,125
PECO Energy Co. ............................... 21,400 758,362
Reliant Energy, Inc. .......................... 19,100 512,119
Unicom Corp. .................................. 32,400 1,152,225
----------
3,595,081
NUMBER
OF SHARES VALUE
--------- -----------
ELECTRONICS--0.5%
Emerson Electric Co. .......................... 7,300 $ 419,294
-----------
ENVIRONMENTAL SERVICES--3.8%
Waste Management, Inc. ........................ 62,392 3,049,409
-----------
FINANCIAL SERVICES--10.5%
Ambac Financial Group, Inc. ................... 8,856 495,936
BankAmerica Corp. ............................. 21,700 1,417,281
Citigroup, Inc. ............................... 37,300 2,191,375
Fannie Mae .................................... 34,465 2,412,550
Freddie Mac ................................... 32,600 1,919,325
-----------
8,436,467
-----------
FOOD & BEVERAGE--7.5%
Albertson's, Inc. ............................. 11,100 632,700
American Stores Co. ........................... 27,800 938,250
Anheuser-Busch Companies, Inc. ................ 13,000 996,937
Food Lion, Inc., Class A ...................... 57,500 548,047
General Mills, Inc. ........................... 10,600 855,287
Nabisco Holdings Corp., Class A ............... 27,500 1,220,312
Quaker Oats Co. (The) ......................... 7,200 393,300
Sara Lee Corp. ................................ 15,100 410,531
-----------
5,995,364
-----------
HOTELS--0.2%
MeriStar Hospitality Corp. .................... 10,630 189,347
-----------
INSURANCE--14.8%
Ace Ltd. ...................................... 59,695 1,626,689
Aetna, Inc. ................................... 20,700 1,533,094
Allmerica Financial Corp. ..................... 29,780 1,589,507
Allstate Corp. ................................ 45,800 1,717,500
American International Group, Inc. ............ 16,500 1,879,969
CIGNA Corp. ................................... 26,500 2,080,250
Everest Reinsurance Holdings, Inc. ............ 31,200 1,035,450
PartnerRe Ltd. ................................ 8,775 379,519
-----------
11,841,978
-----------
MANUFACTURING--0.4%
Tenneco, Inc. ................................. 11,800 353,262
-----------
MEDICAL SUPPLIES--1.9%
American Home Products Corp. .................. 25,400 1,511,300
-----------
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
LARGE CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- ----------
OFFICE EQUIPMENT & SUPPLIES--2.6%
Avery Dennison Corp. ............................. 8,500 $ 456,344
Office Depot, Inc.* .............................. 44,700 1,595,231
----------
2,051,575
----------
OIL & GAS EXPLORATION--1.2%
El Paso Energy Corp. ............................. 22,500 819,844
Kerr-McGee Corp. ................................. 4,400 125,675
----------
945,519
----------
OIL SERVICES--8.6%
Atlantic Richfield Co. ........................... 12,000 655,500
Conoco, Inc., Class A ............................ 47,600 966,875
Elf Aquitaine SA ................................. 13,570 700,551
Mobil Corp. ...................................... 19,300 1,605,519
Oryx Energy Co.* ................................. 25,500 264,563
Texaco, Inc. ..................................... 13,900 647,219
Tosco Corp. ...................................... 49,005 1,013,791
Total S.A. ....................................... 11,200 578,200
YPF Sociedad Anonima ............................. 16,800 487,200
----------
6,919,418
----------
PAPER & FOREST PRODUCTS--0.6%
Temple-Inland, Inc. .............................. 7,700 461,519
----------
PHARMACEUTICALS--1.0%
Abbott Laboratories .............................. 16,700 775,506
----------
PUBLISHING--3.4%
Harcourt General, Inc. ........................... 34,200 1,566,788
New York Times Co. (The), Class A ................ 37,600 1,165,600
----------
2,732,388
----------
REAL ESTATE--0.5%
Prentiss Property Trust .......................... 9,740 194,800
RFS Hotel Investors, Inc. ........................ 14,540 169,936
----------
364,736
----------
RETAIL-DEPARTMENT STORE--1.8%
Federated Department Stores, Inc.* ............... 37,100 1,412,119
----------
STEEL--0.7%
Nucor Corp. ...................................... 12,200 543,663
----------
NUMBER
OF SHARES VALUE
-------- ----------
TELECOMMUNICATIONS--12.0%
Ameritech Corp. .................................. 14,100 $ 921,788
AT&T Corp. ....................................... 12,300 1,010,138
BCE, Inc. ........................................ 24,200 978,588
Bell Atlantic Corp. .............................. 18,300 1,051,106
Chris-Craft Industries, Inc.* .................... 8,070 341,966
GTE Corp. ........................................ 21,700 1,407,788
MCI WorldCom, Inc.* .............................. 9,580 790,350
Northern Telecom Ltd. ............................ 19,700 1,143,831
Sprint Corp. ..................................... 14,000 1,201,375
Tele-Communications, Inc., Class A* .............. 12,900 810,281
-----------
9,657,211
-----------
TEXTILES & APPAREL--1.7%
Liz Claiborne, Inc. .............................. 25,100 845,556
Warnaco Group, Inc. (The), Class A ............... 22,700 510,750
-----------
1,356,306
-----------
TOBACCO--2.8%
Loews Corp. ...................................... 21,350 1,669,303
Philip Morris Companies, Inc. .................... 14,000 547,750
-----------
2,217,053
-----------
TOYS--0.6%
Mattel, Inc. ..................................... 17,000 448,375
-----------
TOTAL COMMON STOCK
(Cost $76,413,407) ........................... 76,731,139
-----------
PAR
(000)
--------
SHORT-TERM INVESTMENT--4.5%
Rodney Square Cash Reserve
4.41% 03/01/99 ................................. 3,600 3,600,146
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $3,600,146) ............................ 3,600,146
-----------
TOTAL INVESTMENTS--100.3%
(Cost $80,013,553) ............................... 80,331,285
-----------
LIABILITIES IN EXCESS
OF OTHER ASSETS--(0.3)% .......................... (199,181)
-----------
NET ASSETS--100.0% .................................. $80,132,104
===========
- -------------
*Non-income producing.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- ----------
COMMON STOCK--95.2%
AEROSPACE/DEFENSE--5.2%
Coltec Industries, Inc.* .................... 108,800 $1,958,400
Litton Industries, Inc.* .................... 64,956 3,645,655
Northrop Grumman Corp. ...................... 17,600 1,096,700
----------
6,700,755
----------
AIR TRANSPORT--2.5%
Continental Airlines, Inc. Class B* ......... 29,400 1,017,975
Gulfstream Aerospace Corp.* ................. 16,300 729,425
Northwest Airlines Corp.* ................... 57,300 1,432,500
----------
3,179,900
----------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--3.3%
Federal-Mogul Corp. ......................... 48,633 2,392,136
Lear Corp.* ................................. 51,500 1,818,594
----------
4,210,730
----------
BUSINESS SERVICES--0.1%
United Stationers, Inc.* .................... 3,200 58,600
----------
COMMERCIAL BANKS--2.8%
Compass Bancshares, Inc. .................... 14,000 512,750
North Fork Bancorp., Inc. ................... 85,500 1,881,000
UnionBanCal Corp. ........................... 36,700 1,153,756
----------
3,547,506
----------
COMPUTERS, SOFTWARE & SERVICING--7.3%
Adaptec, Inc.* .............................. 106,800 2,129,325
Learning Company, Inc. (The)* ............... 80,300 2,333,719
Silicon Graphics, Inc.* ..................... 132,200 2,106,937
Symantec Corp.* ............................. 74,700 1,349,269
Wang Laboratories, Inc. ..................... 59,900 1,430,112
----------
9,349,362
----------
CONSTRUCTION & BUILDING MATERIALS--1.1%
D.R. Horton, Inc. ........................... 42,900 683,719
MacMillan Bloedel Ltd. ...................... 78,200 779,556
----------
1,463,275
----------
CONSUMER DURABLES--1.5%
Cooper Tire & Rubber Co. .................... 94,700 1,870,325
NUMBER
OF SHARES VALUE
------- ----------
CONSUMER PRODUCTS & SERVICES--0.5%
Premark International, Inc. ................. 21,200 $ 677,075
----------
CONTAINERS--4.9%
Ball Corp. .................................. 47,400 1,984,875
Smurfit-Stone Container Corp.* .............. 235,900 4,260,944
----------
6,245,819
----------
DIVERSIFIED--3.9%
Viad Corp. .................................. 189,930 5,021,274
----------
ELECTRIC UTILITIES--6.7%
GPU, Inc. ................................... 47,400 1,890,075
New England Electric System ................. 74,600 3,632,087
Niagara Mohawk Power Corp.* ................. 206,100 3,014,212
----------
8,536,374
----------
ELECTRONICS--0.8%
Conexant Systems, Inc.* ..................... 59,300 1,008,100
----------
FERTILIZERS--1.2%
IMC Global, Inc. ............................ 76,200 1,519,237
----------
FINANCIAL SERVICES--3.6%
Astoria Financial Corp. ..................... 44,010 1,994,203
Bear Stearns
Companies, Inc. (The) ..................... 55,045 2,356,614
Coast Federal Litigation Contingent
Payment Rights Trust* ..................... 41,900 285,444
----------
4,636,261
----------
FOOD & BEVERAGE--5.5%
Aurora Foods, Inc.* ......................... 117,700 1,905,269
Food Lion, Inc., Class A .................... 218,600 2,083,531
Hannaford Bros. Co. ......................... 18,500 869,500
International Home Foods, Inc.* ............. 67,500 1,054,687
Whitman Corp. ............................... 60,200 1,143,800
----------
7,056,787
----------
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MID CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- -----------
INSURANCE--10.2%
Ace Ltd. .................................... 101,100 $ 2,754,975
Allmerica Financial Corp. ................... 85,500 4,563,563
Everest Reinsurance Holdings, Inc. .......... 64,292 2,133,691
ReliaStar Financial Corp. ................... 55,200 2,504,700
Scor* ....................................... 22,000 1,133,000
----------
13,089,929
----------
MANUFACTURING--1.4%
Crane Co. ................................... 37,900 1,039,881
Tenneco, Inc. ............................... 25,800 772,388
----------
1,812,269
----------
MEDICAL EQUIPMENT--0.9%
Mallinckrodt, Inc. .......................... 37,600 1,163,250
----------
OIL & GAS EXPLORATION--2.8%
Apache Corp. ................................ 43,200 861,300
Enron Oil & Gas Co. ......................... 52,100 859,650
Kerr-McGee Corp. ............................ 38,000 1,085,375
Union Pacific Resources
Group, Inc. ............................... 91,900 821,356
----------
3,627,681
----------
OIL SERVICES--1.0%
Tosco Corp. ................................. 60,000 1,241,250
----------
PAPER & FOREST PRODUCTS--1.2%
Temple-Inland, Inc. ......................... 25,300 1,516,419
----------
PHARMACEUTICALS--1.1%
IVAX Corp.* ................................. 98,600 1,454,350
----------
PUBLISHING--3.7%
Harcourt General, Inc. ...................... 75,000 3,435,938
Valassis Communications, Inc.* .............. 25,800 1,238,400
----------
4,674,338
----------
RESTAURANTS--2.7%
Wendy's International, Inc. ................. 144,400 3,456,575
----------
RETAIL-DEPARTMENT STORE--0.5%
Dillard's Inc., Class A ..................... 27,700 689,038
NUMBER
OF SHARES VALUE
----------- ----------
RETAIL-DISCOUNT--6.7%
BJ's Wholesale Club, Inc.* .................. 94,311 $ 4,108,423
ShopKo Stores, Inc.* ........................ 142,194 4,479,111
------------
8,587,534
------------
RETAIL-SPECIALTY APPAREL--2.3%
Payless ShoeSource, Inc.* ................... 21,400 1,174,325
Ross Stores, Inc. ........................... 39,500 1,807,125
------------
2,981,450
------------
SECURITY SERVICES--1.1%
Pittston Brink's Group ...................... 55,270 1,354,115
------------
SHIPBUILDING--1.5%
Newport News Shipbuilding, Inc. ............. 67,500 1,953,281
------------
STEEL--1.6%
USX-U.S. Steel Group ........................ 79,200 2,004,750
------------
TEXTILES & APPAREL--5.1%
Jones Apparel Group, Inc.* .................. 70,400 1,966,800
Liz Claiborne, Inc. ......................... 25,600 862,400
Shaw Industries, Inc.* ...................... 110,000 2,413,125
Warnaco Group, Inc. (The), Class A .......... 60,400 1,359,000
------------
6,601,325
------------
WASTE MANAGEMENT--0.5%
Safety-Kleen Corp.* ......................... 48,600 677,363
------------
TOTAL COMMON STOCK
(Cost $126,201,711) ..................... 121,966,297
------------
PAR
(000)
-------
SHORT-TERM INVESTMENT--4.5%
Rodney Square Cash Reserve
4.41% 03/01/99 ............................ 5,791 5,791,201
------- ------------
TOTAL SHORT-TERM INVESTMENT
(Cost $5,791,201) ....................... 5,791,201
------------
TOTAL INVESTMENTS--99.7%
(Cost $131,992,912) ......................... 127,757,498
------------
ASSETS IN EXCESS
OF OTHER LIABILITIES--0.3% .................. 367,385
------------
NET ASSETS--100.0% ............................. $128,124,883
============
- --------------
*Non-income producing.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
COMMON STOCK--93.9%
ADVERTISING--1.2%
R.H. Donnelley Corp. ........................ 1,100 $ 16,500
--------
AEROSPACE/DEFENSE--0.5%
Fairchild Corp. (The)* ...................... 600 7,237
--------
AGRICULTURE--1.3%
Agribrands International, Inc.* ............. 600 18,600
--------
AIR TRANSPORT--1.2%
Midwest Express Holdings, Inc.* ............. 600 16,125
--------
AUTOMOBILE-MANUFACTURING--0.6%
Monro Muffler Brake, Inc.* .................. 1,300 10,887
--------
AUTOMOTIVE--1.4%
Durakon Industries, Inc.* ................... 700 8,225
--------
BUSINESS SERVICES--6.7%
Ennis Business Forms, Inc. .................. 1,600 14,300
Navigant International, Inc.* ............... 2,700 15,187
RemedyTemp, Inc.* ........................... 600 9,525
Right Management
Consultants, Inc.* ........................ 2,400 40,800
Staff Leasing, Inc.* ........................ 1,200 13,500
--------
93,312
--------
CHEMICALS--0.6%
Aceto Corp. ................................. 700 8,837
--------
COMMUNICATIONS & MEDIA--0.6%
@Entertainment, Inc.* ....................... 800 8,050
--------
COMPUTERS, SOFTWARE & SERVICING--0.5%
Stac Software, Inc.* ........................ 7,400 7,169
--------
CONSTRUCTION & BUILDING MATERIALS--4.8%
Beazer Homes USA, Inc.* ..................... 600 13,050
Drew Industries, Inc.* ...................... 1,200 14,475
M/I Schottenstein Homes, Inc. ............... 800 15,300
Standard Pacific Corp. ...................... 900 11,137
U.S. Home Corp.* ............................ 400 13,800
--------
67,762
Number
OF SHARES VALUE
------- --------
CONSUMER SERVICES--1.2%
Veterinary Centers of America, Inc.* ........ 1,100 $ 16,500
--------
DISTRIBUTION--2.3%
Bell Microproducts, Inc.* ................... 900 6,862
Jean Philippe Fragrances, Inc.* ............. 2,600 15,762
SCP Pool Corp.* ............................. 600 8,625
--------
31,249
--------
DIVERSIFIED--0.9%
Chemed Corp. ................................ 400 11,825
--------
ELECTRONICS--3.7%
Align-Rite International, Inc.* ............. 600 7,500
NU Horizons Electronics Corp.* .............. 3,700 16,187
Optek Technology, Inc.* ..................... 1,700 27,200
--------
50,887
--------
ENGINEERING & CONSTRUCTION--0.8%
URS Corp.* .................................. 600 11,775
--------
ENVIRONMENTAL SERVICES--0.9%
Group Maintenance America Corp.* ............ 900 12,319
--------
FINANCIAL SERVICES--11.9%
American Captial Strategies Ltd. ............ 700 12,162
Amerin Corp.* ............................... 700 15,137
Apex Mortgage Capital, Inc. ................. 1,100 13,544
BNC Mortgage, Inc.* ......................... 1,800 10,350
Brookline Bancorp, Inc. ..................... 600 6,975
Federal Agricultural
Mortgage Corp.* ........................... 200 8,500
Golden State Bancorp
Litigation Warrants ....................... 6,450 32,653
ITLA Capital Corp.* ......................... 1,100 17,050
Local Financial Corp.* ...................... 600 6,075
Long Beach Financial Corp.* ................. 2,500 23,750
Richmond County Financial Corp. ............. 400 6,175
Seacoast Financial Services Corp.* .......... 1,277 12,531
--------
164,902
--------
FOOD & BEVERAGE--3.7%
Carr Gottstein Foods Co.* ................... 2,000 24,125
J & J Snack Foods Corp.* .................... 1,300 27,462
--------
51,587
--------
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
FOOTWEAR--2.5%
K-Swiss, Inc. ........................... 400 $ 19,388
Nine West Group, Inc.* .................. 700 15,706
--------
35,094
--------
HEALTHCARE--1.4%
National Dentex Corp.* .................. 300 4,800
NovaCare, Inc.* ......................... 1,900 4,037
United Wisconsin Services, Inc. ......... 1,600 11,200
--------
20,037
--------
INDUSTRIAL EQUIPMENT & SUPPLIES--2.9%
K-Tron International, Inc.* ............. 400 7,175
O.I. Corp.* ............................. 2,100 12,075
Quixote Corp. ........................... 1,700 21,144
--------
40,394
--------
INSURANCE--16.0%
ARM Financial Group, Inc., Class A ...... 700 10,894
Chartwell Re Corp. ...................... 600 12,975
CNA Surety Corp. ........................ 900 9,450
ESG Re Ltd. ............................. 1,600 27,100
Farm Family Holdings, Inc.* ............. 600 19,725
Financial Industries Corp.* ............. 900 12,713
Highlands Insurance Group, Inc.* ........ 1,400 18,988
Hilb, Rogal & Hamilton Co. .............. 300 5,194
Insurance Auto Auctions, Inc.* .......... 2,500 29,063
Intercargo Corp. ........................ 600 6,825
IPC Holdings Ltd. ....................... 700 14,700
LaSalle Re Holdings Ltd. ................ 400 7,650
NYMAGIC, Inc. ........................... 300 4,444
Risk Capital Holdings, Inc.* ............ 900 17,100
Scottish Annuity &
Life Holdings Ltd.* ................... 1,000 9,875
Stewart Information Services Corp. ...... 200 6,663
Terra Nova (Bermuda)
Holdings Ltd. Class A ................. 400 9,550
--------
222,909
--------
NUMBER
OF SHARES VALUE
--------- ---------
MEDICAL PRODUCTS--2.9%
Empi, Inc.* ............................. 700 $ 16,975
ICU Medical, Inc.* ...................... 800 16,800
Maxxim Medical, Inc.* ................... 300 6,825
--------
40,600
--------
METALS & MINING--0.5%
Rock of Ages Corp.* ..................... 600 7,500
--------
OIL SERVICES--5.8%
Evergreen Resources, Inc.* .............. 900 14,119
Giant Industries, Inc. .................. 1,000 6,875
Mallon Resources Corp.* ................. 2,200 13,888
Swift Energy Co.* ....................... 3,000 18,000
Unit Corp.* ............................. 4,400 18,150
Varco International, Inc.* .............. 1,200 9,300
--------
80,332
--------
REAL ESTATE--4.5%
AMRESCO Capital Trust ................... 1,100 9,625
Annaly Mortgage Management, Inc. ........ 1,800 16,650
Asset Investors Corp. ................... 800 10,400
Capital Automotive REIT ................. 2,200 26,125
--------
62,800
--------
RETAIL-SPECIALTY APPAREL--5.2%
Catherines Stores Corp.* ................ 4,300 35,475
Dress Barn, Inc. (The)* ................. 800 10,400
Finish Line, Inc. (The)* ................ 1,100 13,269
Wilsons, The Leather Experts, Inc.* 1,200 12,900
--------
72,044
--------
RETAIL-TRADE--2.8%
Barbeques Galore Ltd.* .................. 2,000 14,250
HomeBase, Inc.* ......................... 2,700 14,006
Jan Bell Marketing, Inc.* ............... 2,200 10,450
--------
38,706
--------
STEEL--0.6%
Oregon Steel Mills, Inc. ................ 900 8,606
--------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MICRO CAP VALUE FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
TELECOMMUNICATIONS--0.9%
TCSI Corp.* ............................ 6,000 $ 12,094
----------
TEXTILES & APPAREL--1.0%
Dan River, Inc., Class A* .............. 1,600 10,500
Hartmarx Corp.* ........................ 900 3,881
----------
14,381
----------
TRANSPORTATION--2.7%
Arnold Industries, Inc. ................ 500 7,625
Fritz Companies, Inc.* ................. 1,700 12,644
Knightsbridge Tankers Ltd. ............. 400 6,850
Railtex, Inc.* ......................... 900 9,788
----------
36,907
----------
TOTAL COMMON STOCK
(Cost $1,455,389) .................. 1,306,152
----------
PAR
(000)
-------
SHORT-TERM INVESTMENT--1.2%
Rodney Square Cash Reserve
4.41% 03/01/99 ....................... 16 16,750
----------
TOTAL SHORT-TERM INVESTMENT
(Cost $16,750) ..................... 16,750
----------
TOTAL INVESTMENTS--95.1%
(Cost $1,472,139) ...................... 1,322,902
----------
ASSETS IN EXCESS
OF OTHER LIABILITIES--4.9% ............. 67,371
----------
NET ASSETS--100.0% ........................ $1,390,273
==========
- ---------------
*Non-income producing.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- -------
INVESTMENTS IN SECURITIES--107.5%
COMMON STOCK--87.6%
AEROSPACE/DEFENSE--5.2%
B.F. Goodrich Co. (The) ............... 600 $20,475
Cordant Technologies, Inc. ............ 200 7,788
Gulfstream Aerospace Corp.* ........... 200 8,950
Kaman Corp. Class A ................... 700 9,450
Litton Industries, Inc.* .............. 100 5,613
Moog, Inc., Class A* .................. 200 6,375
-------
58,651
-------
AUTOMOBILE-MANUFACTURING--1.1%
Ford Motor Co. ........................ 200 11,863
-------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--3.7%
Federal-Mogul Corp. ................... 600 29,513
Standard Motor Products, Inc. ......... 200 4,288
Tower Automotive, Inc.* ............... 400 7,450
-------
41,251
-------
BANKS AND SAVINGS & LOANS--3.2%
Banknorth Group, Inc. ................. 200 5,350
Golden State Bancorp, Inc.* ........... 600 10,688
Hibernia Corp. ........................ 900 14,569
JSB Financial, Inc. ................... 100 5,588
-------
36,195
-------
BUILDING & BUILDING MATERIALS--3.0%
Champion Enterprises, Inc.* ........... 500 9,844
Pulte Corp. ........................... 700 16,844
U.S. Home Corp.* ...................... 200 6,900
-------
33,588
-------
BUSINESS SERVICES--1.9%
Fair, Isaac and Co., Inc. ............. 200 9,200
Galileo International, Inc. ........... 100 5,050
Right Management
Consultants, Inc.* .................. 400 6,800
-------
21,050
-------
NUMBER
OF SHARES VALUE
--------- --------
COMPUTERS, SOFTWARE & SERVICING--3.2%
Apple Computer, Inc.* ............... 200 $ 6,963
Computer Horizons Corp.* ............ 200 2,988
Computer Task Group, Inc. ........... 200 4,050
Progress Software Corp.* ............ 700 21,525
-------
35,526
-------
CONSUMER PRODUCTS--1.8%
Furniture Brands International, Inc.* 200 4,275
Premark International, Inc. ......... 500 15,969
-------
20,244
-------
CONTAINERS--0.8%
Sea Containers Ltd., Class A ........ 400 8,750
-------
DISTRIBUTION--2.0%
Amway Japan Ltd. .................... 2,300 9,488
Department 56, Inc.* ................ 400 13,275
-------
22,763
-------
DIVERSIFIED--3.7%
U.S. Industries, Inc. ............... 100 1,625
Viad Corp. .......................... 1,500 39,656
-------
41,281
-------
ELECTRIC UTILITIES--1.3%
Niagara Mohawk Power Corp.* ......... 600 8,775
Public Service Co. of New Mexico .... 400 6,135
-------
14,910
-------
ENGINE MANUFACTURING--0.4%
Briggs & Stratton Corp. ............. 100 4,881
-------
ENTERTAINMENT--0.3%
Harrah's Entertainment, Inc.* ....... 200 3,338
-------
FERTILIZERS--0.4%
IMC Global, Inc. .................... 200 3,988
-------
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- -------
FINANCIAL SERVICES--8.9%
Ambac Financial Group, Inc. ........ 200 $11,200
Astoria Financial Corp. ............ 200 9,063
Coast Federal Litigation Contingent
Payment Rights Trust* ............ 500 3,406
Deluxe Corp. ....................... 500 16,938
Donaldson, Lufkin & Jenrette, Inc. . 100 5,700
Financial Security Assurance
Holdings Ltd. .................... 200 10,563
Golden State Bancorp
Litigation Warrants .............. 1,750 8,859
Imperial Credit Commercial Mortgage
Investment Corp. ................. 800 7,250
ITLA Capital Corp.* ................ 600 9,300
Morgan Stanley Dean Witter & Co. ... 100 9,050
Resource Bancshares Mortgage
Group, Inc. ...................... 600 8,400
------
99,729
------
HEALTHCARE--1.8%
Integrated Health Services, Inc.* .. 700 4,156
NovaCare, Inc.* .................... 800 1,700
Trigon Healthcare, Inc.* ........... 200 7,013
Wellpoint Health Networks, Inc.* ... 100 7,888
------
20,757
------
INDUSTRIAL EQUIPMENT AND SUPPLIES--2.3%
ACX Technologies, Inc.* ............ 200 2,488
Ingersoll-Rand Co. ................. 200 9,500
Thomas Industries, Inc. ............ 800 13,650
------
25,638
------
INSURANCE--9.8%
Ace Ltd. ........................... 200 5,450
Aetna, Inc. ........................ 100 7,406
Allmerica Financial Corp. .......... 100 5,338
Allstate Corp. ..................... 200 7,500
ARM Financial Group, Inc., Class A . 500 7,781
Arthur J. Gallagher & Co. .......... 200 9,550
Everest Reinsurance Holdings, Inc. . 200 6,638
Horace Mann Educators Corp. ........ 700 16,406
Merchants Group, Inc. .............. 700 15,225
NUMBER
OF SHARES VALUE
--------- --------
INSURANCE--(CONTINUED)
Old Republic International Corp. ... 200 $ 3,763
PartnerRe Ltd. ..................... 200 8,650
PMI Group, Inc. .................... 100 4,313
Stewart Information Services Corp... 200 6,663
XL Capital Ltd. .................... 100 6,125
--------
110,808
--------
MANUFACTURING--2.3%
Crane Co. .......................... 400 10,975
A.O. Smith Corp. ................... 700 14,919
--------
25,894
--------
MEDICAL EQUIPMENT--1.1%
Mallinckrodt, Inc. ................. 400 12,375
--------
PAPER & FORESTRY PRODUCTS--0.6%
Louisiana-Pacific Corp. ............ 400 7,350
--------
PHARMACEUTICALS--3.5%
Bristol-Myers Squibb Co. ........... 200 25,188
PharMerica, Inc.* .................. 2,600 14,625
--------
39,813
--------
PLASTIC SERVICES--1.7%
Spartech Corp. ..................... 800 18,900
--------
PUBLISHING--3.0%
Big Flower Holdings, Inc.* ......... 500 12,063
Valassis Communications, Inc.* ..... 200 9,600
World Color Press, Inc.* ........... 500 12,406
--------
34,069
--------
REAL ESTATE--0.4%
Home Properties of New York, Inc. .. 200 4,913
--------
RETAIL-DEPARTMENT STORE--0.7%
Federated Department Stores, Inc.* . 200 7,613
--------
RETAIL-DISCOUNT--0.6%
ShopKo Stores, Inc.* ............... 200 6,300
--------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
-------- --------
RETAIL-OFFICE SUPPLIES--1.8%
Boise Cascade Office Products*....... 1,100 $13,200
Office Depot, Inc.* ................. 200 7,138
-------
20,338
-------
RETAIL-SPECIALTY APPAREL--1.4%
Payless ShoeSource, Inc.* ........... 200 10,975
Ross Stores, Inc. ................... 100 4,575
-------
15,550
-------
RETAIL-TRADE--1.2%
HomeBase, Inc.* ..................... 1,800 9,338
Jan Bell Marketing, Inc.* ........... 1,000 4,750
-------
14,088
-------
SHIPBUILDING--0.5%
Avondale Industries, Inc.* .......... 200 6,175
-------
TELECOMMUNICATIONS--6.2%
AT&T Corp. .......................... 200 16,425
Chris-Craft Industries, Inc.* ....... 200 8,475
Northern Telecom, Ltd. .............. 200 11,613
Saville Systems PLC ADR* ............ 700 13,956
Superior TeleCom, Inc. .............. 700 19,819
-------
70,288
-------
TEXTILES & APPAREL--4.5%
Jones Apparel Group, Inc.* .......... 700 19,556
Liz Claiborne, Inc. ................. 600 20,213
Nautica Enterprises, Inc.* .......... 400 6,000
Warnaco Group, Inc. (The),
Class A ........................... 200 4,500
-------
50,269
-------
TOBACCO--1.7%
Loews Corp. ......................... 100 7,819
RJR Nabisco Corp.* .................. 400 10,925
-------
18,744
-------
TOYS--1.6%
Hasbro, Inc. ........................ 500 18,500
-------
TOTAL COMMON STOCK
(Cost $1,026,864) ............... 986,390
-------
Par
(000) VALUE
-------- -------
REPURCHASE AGREEMENT--17.8%
PNC Capital Markets
(Agreement dated 02/26/99
to be repurchased at $200,073,
collateralized by $195,000
U.S. Treasury Note 7.125% due
03/11/99. Market value is
$203,226.)
4.350% 03/01/99 ................ $200 $ 200,000
----------
TOTAL REPURCHASE AGREEMENT
(Cost $200,000) ................ 200,000
----------
SHORT-TERM INVESTMENT--2.1%
Rodney Square Cash Reserve
4.41% 03/01/99 ................... 23 23,256
----------
TOTAL SHORT-TERM INVESTMENT
(Cost $23,256) ................. 23,256
----------
TOTAL INVESTMENTS IN SECURITIES
(Cost $1,250,120) .............. 1,209,646
----------
NUMBER
OF SHARES
---------
SECURITIES SOLD SHORT--(78.1)%
AEROSPACE/DEFENSE--(0.4)%
Kellstrom Industries, Inc.* ........ (300) (4,856)
--------
AUDIO/VIDEO--(0.5)%
Imax Corp.* ........................ (100) (1,788)
Polycom, Inc.* ..................... (200) (4,050)
--------
(5,838)
--------
AUTOMOBILE/TRUCK PARTS & EQUIPMENT--(0.7)%
OEA, Inc.* ......................... (500) (5,563)
Safety Components International,
Inc.* ............................ (300) (2,644)
--------
(8,207)
--------
BANKS AND SAVINGS & LOANS--(2.2)%
Fifth Third Bancorp ................ (100) (6,606)
First Virginia Banks, Inc. ......... (100) (4,769)
Seacoast Banking Corp. ............. (100) (2,688)
SunTrust Banks, Inc. ............... (100) (6,794)
Susquehanna Bancshares, Inc. ....... (200) (3,613)
--------
(24,470)
--------
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
BUSINESS SERVICES--(3.1)%
Acxiom Corp.* .............................. (300) $ (7,181)
Analytical Surveys, Inc.* .................. (600) (15,600)
BUSINESS SERVICES--(CONTINUED)
Primark Corp.* ............................. (100) (2,044)
ProBusiness Services, Inc.* ................ (200) (6,650)
Robert Half International, Inc.* ........... (100) (3,600)
--------
(35,075)
--------
CHEMICALS--(0.6)%
Rohm & Haas Co. ............................ (200) (6,250)
Terra Industries, Inc. ..................... (200) (988)
--------
(7,238)
--------
COMMUNICATIONS & MEDIA--(0.4)%
Clearnet Communications,
Inc., Class A* .......................... (100) (1,100)
Source Media, Inc.* ........................ (200) (3,237)
--------
(4,337)
--------
COMPUTERS, SOFTWARE & SERVICES--(8.2)%
Artificial Life, Inc.* ..................... (300) (3,694)
Baan Co., N.V.* ............................ (100) (944)
BARRA, Inc.* ............................... (200) (4,400)
Black Box Corp.* ........................... (200) (6,450)
ConSyGen, Inc.* ............................ (200) (438)
Globix Corp.* .............................. (100) (2,544)
Identix, Inc.* ............................. (200) (1,288)
JetForm Corp.* ............................. (700) (2,800)
MICROS Systems, Inc.* ...................... (200) (5,575)
ModaCAD, Inc* .............................. (200) (3,325)
Open Market, Inc.* ......................... (600) (7,800)
Pixar, Inc.* ............................... (300) (12,338)
Rambus, Inc.* .............................. (200) (14,538)
SCM Microsystems, Inc.* .................... (50) (4,150)
Storage Technology Corp.* .................. (200) (6,963)
Take-Two Interactive
Software, Inc.* .......................... (400) (4,350)
Vitech America, Inc.* ...................... (200) (2,088)
Wind River Systems, Inc.* .................. (400) (9,125)
--------
(92,810)
NUMBER
OF SHARES VALUE
--------- --------
CONSUMER DURABLES--(0.7)%
Bassett Furniture Industries, Inc. ......... (200) $ (4,300)
Bush Industries, Inc. Class A .............. (300) (3,150)
--------
(7,450)
--------
CONSUMER PRODUCTS--(1.3)%
Kimberly-Clark Corp. ....................... (100) $ (4,725)
Minnesota Mining &
Manufacturing Co. ........................ (100) (7,406)
Toro Co. (The) ............................. (100) (2,988)
--------
(15,119)
--------
CONSUMER SERVICES--(0.2)%
Rent-A-Center, Inc.* ....................... (100) (2,538)
--------
CONTAINERS--(0.3)%
Bemis Co., Inc. ............................ (100) (3,406)
--------
DIVERSIFIED--(0.7)%
Cooper Industries, Inc. .................... (100) (4,375)
National Service Industries, Inc. .......... (100) (3,213)
--------
(7,588)
--------
ELECTRONICS--(7.9)%
Advanced Micro Devices, Inc.* .............. (300) (5,363)
Aetrium, Inc.* ............................. (300) (2,175)
Atmel Corp.* ............................... (300) (5,156)
Cree Research, Inc.* ....................... (300) (9,806)
Cymer, Inc.* ............................... (200) (4,575)
Dupont Photomasks, Inc.* ................... (200) (7,850)
General Motors Corp., Class H* ............. (200) (9,438)
GenRad, Inc.* .............................. (500) (8,563)
II-VI, Inc.* ............................... (200) (1,850)
Itron, Inc.* ............................... (900) (6,300)
Littlefuse, Inc.* .......................... (200) (3,413)
Micron Technology, Inc.* ................... (100) (5,762)
Molex, Inc. ................................ (200) (5,350)
Recoton Corp.* ............................. (300) (4,200)
STMicroelectronics NV - New York
Registered Shares* ....................... (50) (4,369)
Ultratech Stepper, Inc.* ................... (300) (4,734)
--------
(88,904)
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
ENERGY--(0.1)%
Trigen Energy Corp. (100) $ (1,350)
--------
ENVIRONMENTAL SERVICES--(0.7)%
Donaldson Co., Inc. ........................ (200) (3,613)
Osmonics, Inc.* ............................ (200) (1,635)
Pall Corp. ................................. (100) (2,119)
--------
(7,367)
--------
ENTERTAINMENT--(0.1)%
CCA Companies, Inc.* ....................... (600) (619)
--------
FINANCIAL SERVICES--(4.3)%
AmeriCredit Corp.* ......................... (600) (6,675)
Century Business Services,
Inc.* .................................... (400) (4,675)
Household International, Inc. .............. (200) (8,125)
PIMCO Advisors Holdings L.P. ............... (300) (8,625)
Profit Recovery Group
International, Inc. (The)* ............... (200) (6,600)
Siebert Financial Corp. .................... (100) (2,806)
T. Rowe Price Associates, Inc. ............. (200) (6,163)
United Asset Management Corp. .............. (200) (4,538)
--------
(48,207)
--------
FOOD & BEVERAGE--(1.3)%
Beringer Wine Estates Holdings,
Inc., Class B* ........................... (100) (4,031)
Campbell Soup Co. .......................... (100) (4,019)
Coca-Cola Enterprises, Inc. ................ (100) (3,100)
ConAgra, Inc. .............................. (100) (3,013)
--------
(14,163)
--------
FOOTWEAR--(0.5)%
Nike, Inc., Class B ........................ (100) (5,362)
--------
HEALTH CARE--(5.0)%
Alternative Living Services, Inc.* ......... (300) (6,150)
Covance, Inc.* ............................. (300) (8,269)
Emeritus Corp.* ............................ (400) (4,375)
Health Management Associates,
Inc., Class A* .......................... (400) (5,175)
Lincare Holdings, Inc.* .................... (200) (7,125)
Photogen Technologies, Inc.* ............... (200) (2,600)
Province Healthcare Co.* ................... (300) (4,556)
NUMBER
OF SHARES VALUE
--------- --------
HEALTH CARE--(CONTINUED)
Sunrise Assisted Living, Inc.* ............. (200) $ (7,725)
United HealthCare Corp. .................... (200) (9,863)
--------
(55,838)
--------
HOTELS AND MOTELS--(0.4)%
Hilton Hotels Corp. (300) (4,744)
--------
INDUSTRIAL EQUIPMENT & SUPPLIES--(3.2)%
ABC-NACO, Inc.* ............................ (300) (4,238)
Alamo Group, Inc. .......................... (400) (3,900)
Case Corp. ................................. (200) (3,900)
Caterpillar, Inc. .......................... (200) (9,113)
Cognex Corp.* .............................. (200) (5,000)
Metrika Systems Corp.* ..................... (200) (1,600)
Nordson Corp. .............................. (100) (5,950)
Thermo Power Corp.* ........................ (300) (2,850)
--------
(36,551)
--------
INSURANCE--(2.1)%
Chubb Corp. (The) .......................... (100) (5,975)
Markel Corp.* .............................. (100) (18,000)
--------
(23,975)
--------
LODGING & RESTAURANTS--(0.5)%
American Skiing Co.* ....................... (500) (2,094)
Vail Resorts, Inc.* ........................ (200) (3,450)
--------
(5,544)
--------
MEDICAL EQUIPMENT--(7.5)%
Acuson Corp.* .............................. (400) (6,000)
ADAC Laboratories .......................... (200) (3,575)
Beckman Coulter, Inc. ...................... (200) (9,663)
Cambridge Heart, Inc.* ..................... (1,100) (8,938)
CryoLife, Inc.* ............................ (100) (1,050)
Cytyc Corp.* ............................... (100) (1,813)
Hillenbrand Industries, Inc. ............... (100) (4,188)
IGEN International, Inc.* .................. (300) (9,075)
Millipore Corp. ............................ (300) (8,363)
PLC Systems, Inc.* ......................... (500) (2,000)
Sabratek Corp.* ............................ (800) (15,100)
Schick Technologies, Inc.* ................. (300) (1,425)
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
MEDICAL EQUIPMENT--(CONTINUED)
St. Jude Medical, Inc.* .................... (300) $ (7,538)
Thermo Cardiosystems, Inc.* ................ (600) (5,663)
--------
(84,391)
--------
MEDICAL SUPPLIES--(5.5)%
Genzyme Transgenics Corp.* ................. (700) (3,434)
Inhale Therapeutic Systems,
Inc.* .................................... (300) (8,250)
MacroChem Corp.* ........................... (600) (6,038)
MiniMed, Inc.* ............................. (100) (8,525)
Myriad Genetics, Inc.* ..................... (100) (938)
Possis Medical, Inc.* ...................... (200) (2,175)
PSS World Medical, Inc.* ................... (100) (1,138)
Safeskin Corp.* ............................ (500) (11,625)
Serologicals Corp.* ........................ (400) (7,150)
STERIS Corp.* .............................. (300) (9,863)
Trankaryotic Therapies, Inc.* .............. (100) (2,925)
--------
(62,061)
--------
METALS & MINING--(0.6)%
Alcan Aluminium Ltd. ....................... (200) (4,863)
ASARCO, Inc. ............................... (100) (1,413)
--------
(6,276)
--------
OFFICE EQUIPMENT & SUPPLIES--(0.5)%
John H. Harland Co. ........................ (400) (5,375)
--------
OIL & GAS EXPLORATION--(3.3)%
Amerada Hess Corp. ......................... (100) (4,537)
Anadarko Petroleum Corp. ................... (300) (8,250)
Cabot Oil & Gas Corp. ...................... (300) (3,281)
Genesis Energy, L.P. ....................... (200) (2,750)
Harken Energy Corp.* ....................... (500) (750)
Murphy Oil Corp. ........................... (200) (6,838)
Penn Virginia Corp. ........................ (200) (3,688)
Plains Resources, Inc.* .................... (200) (1,850)
Unocal Corp. ............................... (100) (2,819)
USX-Marathon Group ......................... (100) (2,069)
--------
(36,832)
--------
NUMBER
OF SHARES VALUE
--------- --------
OPTICAL SUPPLIES--(0.3)%
Oakley, Inc.* .............................. (400) $ (3,325)
--------
PHARMACEUTICALS--(5.4)%
Algos Pharmaceutical Corp.* ................ (400) (12,000)
Elan Corp. PLC ADR* ........................ (200) (15,337)
Ergo Science Corp.* ........................ (1,000) (1,000)
GelTex Pharmaceuticals, Inc.* .............. (300) (5,156)
Isis Pharmaceuticals, Inc.* ................ (400) (4,825)
Kendle International, Inc.* ................ (300) (7,237)
SangStat Medical Corp.* .................... (100) (2,237)
Shaman Pharmaceuticals, Inc.* .............. (1,000) (344)
Vertex Pharmaceuticals, Inc.* .............. (400) (9,400)
Vion Pharmaceuticals, Inc.* ................ (700) (3,566)
--------
(61,102)
--------
PRINTING SERVICES--(0.3)%
Presstek, Inc.* ............................ (400) (3,300)
--------
RESTAURANTS--(0.5)%
Landry's Seafood
Restaurants, Inc.* ....................... (600) (4,087)
Planet Hollywood
International, Inc.* ..................... (700) (1,706)
--------
(5,793)
--------
RETAIL-DISCOUNT--(0.5)%
Cost-U-Less, Inc.* ......................... (500) (3,437)
Smart & Final, Inc.* ....................... (300) (2,644)
--------
(6,081)
--------
RETAIL-TRADE--(2.2)%
Duane Reade, Inc.* ......................... (300) (9,075)
Guitar Center, Inc.* ....................... (500) (8,344)
Party City Corp.* .......................... (500) (5,469)
PETCO Animal Supplies, Inc.* ............... (200) (1,612)
--------
(24,500)
--------
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
MARKET NEUTRAL FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- --------
SCHOOLS--(0.3)%
Apollo Group, Inc.* ........................ (100) $ (3,006)
--------
STEEL--(1.3)%
AK Steel Holding Corp. ..................... (300) (6,544)
Reliance Steel & Aluminum Corp.* ........... (200) (5,112)
Valmont Industries, Inc. ................... (200) (2,356)
--------
(14,012)
--------
TELECOMMUNICATIONS--(2.4)%
Active Voice Corp.* ........................ (200) (1,875)
ADC Telecommunications, Inc.* .............. (300) (12,150)
ADTRAN, Inc.* .............................. (100) (2,050)
Coyote Network Systems, Inc. ............... (600) (3,412)
McLeodUSA, Inc., Class A* .................. (200) (7,700)
--------
(27,187)
--------
TEXTILES & APPAREL--(0.6)%
Collins & Aikman Corp.* .................... (200) (1,013)
Polo Ralph Lauren Corp.* ................... (300) (5,981)
--------
(6,994)
--------
NUMBER
OF SHARES VALUE
--------- --------
TOBACCO--(0.2)%
General Cigar Holdings,
Inc.* .................................... (100) $ (731)
Swisher International
Group, Inc.* ............................. (200) (1,787)
----------
(2,518)
----------
TRAVEL SERVICES--(1.3)%
American Classic Voyages Co.* .............. (300) (6,975)
Pegasus Systems, Inc.* ..................... (200) (7,500)
----------
(14,475)
----------
TOTAL SECURITIES SOLD SHORT
(Proceeds $937,823) .................... (878,784)
----------
ASSETS IN EXCESS
OF OTHER LIABILITIES--70.6% ................ 794,455
----------
NET ASSETS--100.0% ............................ $1,125,317
==========
- --------------
*Non-income producing.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS
FEBRUARY 28, 1999 (UNAUDITED)
NUMBER
OF SHARES VALUE
--------- ----------
PREFERRED STOCK--7.7%
INDUSTRIAL GOODS & MATERIALS--1.4%
Amcor Ltd. (Australia) 4,000 $ 186,500
----------
REAL ESTATE--6.3%
Crescent Real Estate ....................... 10,100 160,337
Equity Office Properties Trust
Series 144A .............................. 3,900 161,850
Equity Office Properties Trust
Series B ................................. 3,500 145,250
Equity Residential Properties
Series G ................................. 10,400 225,550
Reckson Associates Realty
Series A ................................. 7,000 143,062
----------
836,049
----------
TOTAL PREFERRED STOCK
(Cost $1,175,767) ...................... 1,022,549
----------
PAR
(000)
---------
CORPORATE BONDS--37.2%
BANKS AND SAVINGS & LOANS--8.0%
BankAmerica Corp. Subordinated
Notes (Aa3, A)
6.375% 02/15/08 .......................... $125 125,312
BankBoston NA Subordinated Notes
(A2, A-)
7.375% 09/15/06 .......................... 120 126,750
BB&T Corp. Subordinated Notes
(A3, BBB+)
7.250% 06/15/07 .......................... 150 156,187
Old Kent Bank Subordinated Notes
(Baa1, A-)
6.625% 11/15/05 .......................... 110 109,862
Riggs Capital Trust Series A Company
Guarantee Notes (baa3, BB)
8.625% 12/31/26 .......................... 90 89,325
Riggs National Corp. Subordinated
Debentures (Ba1, BB+)
9.650% 06/15/09 .......................... 120 133,050
PAR
(000) VALUE
--------- ----------
BANKS AND SAVINGS & LOANS--(CONTINUED)
Sovereign Bancorp Series MTN
Subordinated Notes
(N/R, BB+)
8.000% 03/15/03 .......................... $100 $ 102,625
Sovereign Capital Trust I Company
Guarantee Notes (Ba2, BB)
9.000% 04/01/27 .......................... 100 113,125
Zions Institutional Capital Trust
Series A Company Guarantee
Notes (A3, BBB-)
8.536% 12/15/26 .......................... 100 106,625
----------
1,062,861
----------
CANADIAN GOVERNMENT BONDS--0.9%
Hydro-Quebec Local Government
Guarantee Notes (A2, A+)
8.625% 06/15/29 .......................... 100 123,375
----------
ELECTRIC UTILITIES--4.1%
Consumers Energy Company First
Mortgage Notes (Baa3, BBB+)
6.375% 09/15/03 .......................... 100 100,000
Niagara Mohawk Power Series G
Senior Notes (Ba2, BB+)
7.750% 10/01/08 .......................... 150 161,063
Ohio Edison First Mortgage Notes
(Baa2, BBB-)
8.250% 04/01/02 .......................... 210 221,813
Texas-New Mexico Power Senior
Notes (Baa2, BBB)
6.250% 01/15/09 .......................... 60 58,875
----------
541,751
----------
FINANCIAL SERVICES--3.8%
Citigroup Capital III Company
Guarantee Notes (AA3, A+)
7.625% 12/01/36 .......................... 100 104,250
Equitable Companies, Inc.
Debentures (A2, A)
7.000% 04/01/28 .......................... 75 71,906
Equitable Companies, Inc.
Senior Notes (A2, A)
9.000% 12/15/04 .......................... 80 90,080
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
PAR
(000) VALUE
--------- ----------
FINANCIAL SERVICES--(CONTINUED)
Ford Motor Credit Corp. Senior
Unsubordinated Notes (A1, A)
7.200% 06/15/07 .......................... $100 $ 106,500
Security Capital U.S. Realty Bonds
Series 144A (Baa3, N/R)
2.500% 05/22/03 .......................... 170 127,500
----------
500,236
----------
GAS UTILITIES--0.6%
KN Capital Trust III Company
Guarantee Notes (Baa3, BB)
7.630% 04/15/28 .......................... 75 74,468
----------
INDUSTRIAL GOODS & MATERIALS--15.9%
Adaptec, Inc. Subordinated Notes
(B1, BB-)
4.750% 02/01/04 .......................... 260 211,250
Bayard Drilling Technology Series B
Company Guarantee Notes
(B2, B+)
11.000% 06/30/05 ......................... 75 82,500
Fred Meyer, Inc. Company
Guarantee Notes (Ba2, BB+)
7.375% 03/01/05 .......................... 50 51,875
HMT Technology Corp.
Subordinated Notes (B3, B-)
5.750% 01/15/04 .......................... 220 142,725
Jones Intercable, Inc.
Senior Notes (Ba2, BB+)
9.625% 03/15/02 .......................... 100 107,250
Lenfest Communications, Inc.
Senior Notes (Ba3, BB+)
8.375% 11/01/05 .......................... 100 109,750
Louis Dreyfus Natural Gas Senior
Subordinated Notes (Ba3, BB+)
9.250% 06/15/04 .......................... 100 106,500
News America Holdings Debentures
(Baa3, BBB-)
8.875% 04/26/23 .......................... 45 53,606
Philip Morris Companies, Inc. Notes
(A2, A)
6.800% 12/01/03 .......................... 150 152,625
PAR
(000) VALUE
--------- ----------
INDUSTRIAL GOODS & MATERIALS--(CONTINUED)
Southdown, Inc. Series B Senior
Subordinated Notes (Baa3, BBB-)
10.000% 03/01/06 ......................... $100 $ 110,709
Tele-Communications, Inc.
Debentures (A2, AA-)
9.800% 02/01/12 .......................... 125 163,594
Tenet Healthcare Corp. Senior Notes
(Ba1, BB+)
8.625% 12/01/03 .......................... 175 180,469
Total Renal Care Holdings
Subordinated Notes (B1, B)
5.625% 07/15/06 .......................... 150 102,000
Unisys Corp. Senior Notes
(Ba3, BB-)
11.750% 10/15/04 ......................... 225 260,719
USG Corp. Series B Senior Notes
(Baa3, BBB)
9.250% 09/15/01 .......................... 105 111,694
Waste Management, Inc. Senior
Notes (Baa3, BBB+)
7.125% 10/01/07 .......................... 150 155,625
----------
2,102,891
----------
SOVERIGN GOVERNMENT BONDS--2.2%
Panama (Republic Of) Notes
(Ba1, BB+)
7.875% 02/13/02 .......................... 300 290,250
----------
TELECOMMUNICATIONS--1.5%
LCI International, Inc. Senior Notes
(Ba1, BB+)
7.250% 06/15/07 .......................... 150 153,375
MCI Worldcom, Inc. Senior Notes
(Baa2, BBB+)
6.950% 08/15/06 .......................... 50 52,063
----------
205,438
----------
U.S. GOVERNMENT BONDS--0.2%
Federal Home Loan Mortgage Corp.
5.750% 04/15/08 .......................... 25 24,806
----------
TOTAL CORPORATE BONDS
(Cost $5,022,349) ...................... 4,926,076
----------
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
FEBRUARY 28, 1999 (UNAUDITED)
PAR
(000) VALUE
--------- ----------
AGENCY OBLIGATIONS--43.8%
FEDERAL NATIONAL MORTGAGE ASSOCIATION--12.8%
FMNA 190945
6.000% 05/01/24 .......................... $393 $ 381,527
FNMA 251967
6.500% 09/01/28 .......................... 83 82,356
FNMA 252212
6.500% 01/01/29 .......................... 126 125,083
FNMA 281054
6.500% 04/01/24 .......................... 368 366,193
FNMA 434957
6.000% 07/01/28 .......................... 137 132,497
FNMA 437946
6.000% 07/01/13 .......................... 486 481,273
FNMA 481426
6.000% 01/01/29 .......................... 131 127,361
----------
1,696,290
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--31.0%
GNMA 354662
6.500% 09/15/08 .......................... 104 105,396
GNMA 366816
7.000% 06/15/24 .......................... 108 109,620
GNMA 372475
7.000% 01/15/28 .......................... 367 371,965
GNMA 376528
7.000% 05/15/09 .......................... 232 237,665
GNMA 407234
6.500% 01/15/13 .......................... 89 89,756
GNMA 433435
6.500% 02/15/12 .......................... 328 331,636
GNMA 447928
6.500% 05/15/28 .......................... 39 39,018
GNMA 449474
7.500% 09/15/27 .......................... 88 90,977
GNMA 450446
7.000% 12/15/27 .......................... 53 53,604
GNMA 453892
7.500% 11/15/27 .......................... 250 257,284
GNMA 454925
7.000% 12/15/12 .......................... 332 340,757
GNMA 457737
6.500% 03/15/13 .......................... 111 112,000
PAR
(000) VALUE
--------- ----------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--(CONTINUED)
GNMA 461450
7.000% 04/15/28 .......................... $ 66 $ 66,686
GNMA 465540
6.000% 07/15/28 .......................... 221 214,524
GNMA 468090
6.500% 07/15/28 .......................... 35 34,929
GNMA 469128
6.500% 02/15/28 .......................... 401 399,015
GNMA 469129
7.000% 02/15/28 .......................... 81 81,705
GNMA 471949
7.000% 06/15/28 .......................... 273 277,276
GNMA 473797
6.500% 06/15/28 .......................... 33 32,680
GNMA 482119
6.500% 08/15/28 .......................... 100 99,295
GNMA 780303
6.500% 02/15/09 .......................... 286 289,392
GNMA 780687
8.000% 12/15/12 .......................... 303 315,966
GNMA 780921
7.000% 11/15/13 .......................... 145 148,906
----------
4,100,052
----------
TOTAL AGENCY OBLIGATIONS
(Cost $5,803,677) ...................... 5,796,342
----------
ASSET BACKED SECURITIES--0.8%
Illinois Power Special Purpose Trust,
Series 1998-1, Class A6
5.540% 06/25/09 .......................... 50 48,220
MBNA Master Credit Card Trust,
Series 1995-C, Class A
6.450% 02/15/08 .......................... 60 61,758
----------
TOTAL ASSET BACKED SECURITIES
(Cost $111,500) ........................ 109,978
----------
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
BOND FUND
PORTFOLIO OF INVESTMENTS (CONCLUDED)
FEBRUARY 28, 1999 (UNAUDITED)
PAR
(000) VALUE
--------- ----------
U.S. TREASURY OBLIGATIONS--9.3%
U.S. TREASURY BONDS--7.8%
U.S. Treasury Bonds
7.250% 05/15/16 .......................... $280 $ 323,459
7.125% 02/15/23 .......................... 600 700,486
-----------
1,023,945
-----------
U.S. TREASURY NOTES--0.1%
U.S. Treasury Notes
5.750% 10/31/00 .......................... 10 10,094
-----------
U.S. TREASURY STRIP--1.4%
U.S. Treasury Strip 11/15/21 ............... 720 189,326
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,239,264) ...................... 1,223,365
-----------
SHORT-TERM INVESTMENT--0.4%
Rodney Square Cash Reserve
4.41% 03/01/99 ........................... 53 53,232
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $53,232) ......................... 53,232
-----------
TOTAL INVESTMENTS--99.2%
(Cost $13,405,789) ......................... 13,131,542
-----------
ASSETS IN EXCESS
OF OTHER LIABILITIES--0.8% ................. 105,869
-----------
NET ASSETS--100.0% ............................ $13,237,411
===========
- --------------------------------------------------------------------------------
The Moody's Investor Service, Inc. and Standard & Poor's Rating Group's ratings
indicated are the most recent ratings available at February 28, 1999.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP MID CAP MICRO CAP MARKET NEUTRAL
VALUE FUND VALUE FUND VALUE FUND FUND BOND FUND
----------- ------------ ---------- -------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at value (cost -- $80,013,553,
$131,992,912, $1,472,139, $312,297 and
$13,405,789, respectively) ..................... $80,331,285 $127,757,498 $1,322,902 $1,209,646 $13,131,542
Cash ............................................. -- -- 85,242 48,987 55,622
Deposits with brokers and custodian bank for
securities sold short .......................... -- -- -- 812,117 --
Receivable for investments sold .................. 1,766,548 1,705,697 15,645 146,158 65,093
Receivable for Fund shares sold .................. 11,918 18,433 -- -- --
Dividends and interest receivable ................ 138,383 105,866 428 2,043 144,267
----------- ------------ ---------- ---------- -----------
Total assets ................................... 82,248,134 129,587,494 1,424,217 2,218,951 13,396,524
----------- ------------ ---------- ---------- -----------
LIABILITIES
Payable for investments purchased ................ 1,966,029 1,250,290 -- 180,080 83,335
Securities Sold-Short (proceeds $937,823) ........ -- -- -- 878,784 --
Payable for Fund share redeemed .................. 8,478 -- 158 -- --
Accrued expenses payable ......................... 141,523 212,321 33,786 33,388 75,778
Payable for dividends on securities sold short ... -- -- -- 1,382 --
----------- ------------ ---------- ---------- -----------
Total liabilities .............................. 2,116,030 1,462,611 33,944 1,093,634 159,113
----------- ------------ ---------- ---------- -----------
NET ASSETS
Capital stock, $0.001 par value .................. 6,917 12,345 182 124 1,345
Paid-in capital .................................. 82,719,464 139,231,090 1,773,149 1,217,876 13,505,904
Undistributed net investment income/(loss) ....... 240,871 12,504 (1,989) (1,887) 13,734
Accumulated net realized loss from investments ... (3,152,880) (6,895,642) (231,832) (109,361) (9,325)
Net unrealized appreciation/(depreciation)
on investments ................................. 317,732 (4,235,414) (149,237) 18,565 (274,247)
----------- ------------ ---------- ---------- -----------
Net assets ..................................... $80,132,104 $128,124,883 $1,390,273 $1,125,317 $13,237,411
=========== ============ ========== ========== ===========
INSTITUTIONAL CLASS
Net assets ....................................... $73,470,363 $126,074,616 $1,153,436 $ 903,214 $13,036,664
----------- ------------ ---------- ---------- -----------
Shares outstanding ............................... 6,347,343 12,094,994 150,917 99,500 1,325,224
----------- ------------ ---------- ---------- -----------
Net asset value, offering and redemption
price per share ................................ $11.57 $10.42 $7.64 $9.08 $9.84
=========== ============ ========== ========== ===========
INVESTOR CLASS
Net assets ....................................... $ 6,661,741 $ 2,050,267 $ 236,837 $ 222,103 $ 200,747
----------- ------------ ---------- ---------- -----------
Shares outstanding ............................... 569,334 198,091 30,984 24,429 20,282
----------- ------------ ---------- ---------- -----------
Net asset value, offering and redemption
price per share ................................ $11.70 $10.35 $7.64 $9.09 $9.90
=========== ============ ========== ========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
LARGE CAP MID CAP MICRO CAP MARKET NEUTRAL
VALUE FUND VALUE FUND VALUE FUND FUND* BOND FUND
----------- ---------- ---------- -------------- ---------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends ........................................ $ 576,225 $ 447,053 $ 8,963 $ 2,989 $ 36,728
Interest ......................................... 76,852 123,550 637 1,871 455,491
----------- ---------- -------- --------- ---------
653,077 570,603 9,600 4,860 492,219
----------- ---------- -------- --------- ---------
EXPENSES
Advisory fees .................................... 302,627 408,539 8,399 4,040 29,360
Administration fees. ............................. 105,702 138,953 38,363 25,396 48,360
Federal and state registration fees .............. 10,149 16,063 14,075 5,269 21,074
Directors ........................................ 230 378 378 132 373
Insurance ........................................ 208 272 271 120 373
Transfer agent fees and expenses ................. 41,471 38,534 37,142 23,828 36,583
Custodian fees and expenses ...................... 19,190 27,002 7,020 7,698 7,078
Printing ......................................... 27,863 20,802 27,150 16,010 21,720
Audit and legal fees ............................. 8,730 1,616 1,616 4,324 3,181
Distribution fees ................................ 8,839 2,566 241 13 249
Dividend expense ................................. -- -- -- 1,382 --
Other. ........................................... 2,194 918 918 1,260 4,427
----------- ---------- -------- --------- ---------
Total expenses before waivers and
reimbursements ............................... 527,203 655,643 135,573 89,472 172,778
Less: waivers and reimbursements ............... (114,862) (142,403) (124,918) (82,725) (128,489)
----------- ---------- -------- --------- ---------
Total expenses after waivers and
reimbursements ............................... 412,341 513,240 10,655 6,747 44,289
----------- ---------- -------- --------- ---------
Net investment income/(loss) ..................... 240,736 57,363 (1,055) (1,887) 447,930
----------- ---------- -------- --------- ---------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON INVESTMENTS
Net realized gain/(loss) from investments ........ (3,669,583) (5,182,493) (199,069) (109,361) 16,769
Net change in unrealized appreciation/
(depreciation) on investments .................. 11,886,156 11,813,260 203,996 18,565 (200,591)
----------- ---------- -------- --------- ---------
Net realized and unrealized gain/(loss)
from investments ............................... 8,216,573 6,630,767 4,927 (90,796) (183,822)
----------- ---------- -------- --------- ---------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS ....................................... $ 8,457,309 $6,688,130 $ 3,872 $ (92,683) $ 264,108
=========== ========== ======== ========= =========
<FN>
- ---------------
* Commenced operations November 17, 1998.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<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 FOR THE
SIX MONTHS FOR THE SIX MONTHS FOR THE
ENDED YEAR ENDED ENDED YEAR ENDED
FEBRUARY 28, 1999 AUGUST 31, 1998 FEBRUARY 28, 1999 AUGUST 31, 1998
----------------- --------------- ----------------- ---------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income/(loss) ..................... $ 240,736 $ 415,084 $ 57,363 $ 51,577
Net realized gain/(loss) from investments ........ (3,669,583) 1,829,756 (5,182,493) (1,636,807)
Net change in unrealized appreciation/
(depreciation) on investments .................. 11,886,156 (13,105,143) 11,813,260 (16,102,116)
----------- ----------- ------------ ------------
Net increase/(decrease) in net assets resulting
from operations ................................ 8,457,309 (10,860,303) 6,688,130 (17,687,346)
----------- ----------- ------------ ------------
LESS DIVIDEND AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income institutional shares ....... (274,092) (216,811) (90,185) (10,109)
Net investment income Investor shares ............ (20,133) (4,064) -- (992)
Net realized capital gains Institutional shares .. (727,345) (1,561,759) (2,283) (92,752)
Net realized capital gains Investor shares ....... (64,741) (32,030) (40) (19,252)
----------- ----------- ------------ ------------
Total dividends and distributions to
shareholders ................................... (1,086,311) (1,814,664) (92,508) (123,105)
----------- ----------- ------------ ------------
INCREASE/(DECREASE) IN NET ASSETS DERIVED FROM
CAPITAL SHARE TRANSACTIONS ....................... 15,887,630 44,262,908 52,132,877 82,858,741
----------- ----------- ------------ -------------
Total increase/(decrease) in net assets .......... 23,258,628 31,587,941 58,728,499 65,048,290
NET ASSETS
Beginning of period .............................. 56,873,476 25,285,535 69,396,384 4,348,094
----------- ----------- ------------ ------------
End of period .................................... $80,132,104 $56,873,476 $128,124,883 $ 69,396,384
=========== =========== ============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
MICRO CAP VALUE FUND MARKET NEUTRAL FUND BOND FUND
--------------------------------- ------------------- ------------------------------------
FOR THE FOR THE PERIOD FOR THE PERIOD FOR THE FOR THE PERIOD
SIX MONTHS JULY 1, 1998* NOVEMBER 17, 1998* SIX MONTHS DECEMBER 30, 1997*
ENDED THROUGH THROUGH ENDED THROUGH
FEBRUARY 28, 1999 AUGUST 31, 1998 FEBRUARY 28, 1999 FEBRUARY 28, 1999 AUGUST 31, 1998
----------------- --------------- ------------------- ----------------- ------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income/(loss) ........... $ (1,055) $ (934) $ (1,887) $ 447,930 $ 518,176
Net realized gain/(loss) from
investments .......................... (199,069) (32,763) (109,361) 16,769 125,896
Net change in unrealized
appreciation/(depreciation)
on investments ....................... 203,996 (353,233) 18,565 (200,591) (73,656)
---------- ---------- ---------- ----------- -----------
Net increase/(decrease) in net
assets resulting from operations ..... 3,872 (386,930) (92,683) 264,108 570,416
---------- ---------- ---------- ----------- -----------
LESS DIVIDEND AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income
Institutional shares ................. -- -- -- (436,597) (506,561)
Net investment income
Investor shares ...................... -- -- -- (4,976) (4,238)
Net realized capital
gains Institutional shares ........... -- -- -- (149,870) --
Net realized capital gains
Investor shares ...................... -- -- -- (2,120) --
---------- ---------- ---------- ----------- -----------
Total dividends and distributions
to shareholders ..................... -- -- -- (593,563) (510,799)
---------- ---------- ---------- ----------- -----------
INCREASE/(DECREASE) IN NET ASSETS DERIVED
FROM CAPITAL SHARE TRANSACTIONS ........ 137,973 1,635,358 1,218,000 (2,140,353) 15,647,602
---------- ---------- ---------- ----------- -----------
Total increase/(decrease)
in net assets ........................ 141,845 1,248,428 1,125,317 (2,469,808) 15,707,219
NET ASSETS
Beginning of period .................... 1,248,428 -- -- 15,707,219 --
---------- ---------- ---------- ----------- -----------
End of period .......................... $1,390,273 $1,248,428 $1,125,317 $13,237,411 $15,707,219
========== ========== ========== =========== ===========
<FN>
- --------------
* Commencement of operations.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for each class of shares
outstanding, total investment return, ratios to average net assets and other
supplemental 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 FOR THE PERIOD
SIX MONTHS ENDED YEAR JANUARY 2, 1997*
FEBRUARY 28, 1999 ENDED THROUGH
(UNAUDITED) AUGUST 31, 1998 AUGUST 31, 1997
---------------- --------------- ---------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS CLASS
---------------- --------------- ---------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............................. $ 10.58 $ 12.46 $ 10.00
------- ------- -------
Net investment income/(loss)(1) .................................. (0.01) 0.12 0.05
Net realized and unrealized gain/(loss) on investments(2) ........ 1.15 (1.31) 2.41
------- ------- -------
Net increase/(decrease) in net assets resulting from operations .. 1.14 (1.19) 2.46
------- ------- -------
Dividends to shareholders from:
Net investment income ............................................ (0.04) (0.08) --
Net realized capital gains ....................................... (0.11) (0.61) --
------- ------- -------
Net asset value, end of period ................................... $ 11.57 $ 10.58 $ 12.46
======= ======= =======
Total investment return(3) ....................................... 10.71% (10.23%) 24.60%
======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) ........................ $73,470 $50,724 $24,603
Ratio of expenses to average net assets(1)(4) .................... 1.00%(5) 1.00% 1.00%(5)
Ratio of expenses to average net assets without waivers and
expense reimbursements(1)(4) .................................. 1.28%(5) 1.49% 2.64%(5)
Ratio of net investment income to average net assets(1) .......... 0.63%(5) 0.87% 1.19%(5)
Portfolio turnover rate .......................................... 76.33% 111.68% 67.16%
LARGE CAP VALUE FUND
---------------------------------------------------------
FOR THE FOR THE FOR THE PERIOD
SIX MONTHS ENDED YEAR JANUARY 16, 1997*
FEBRUARY 28, 1999 ENDED THROUGH
(UNAUDITED) AUGUST 31, 1998 AUGUST 31, 1997
----------------- --------------- ----------------
INVESTOR INVESTOR INVESTOR
CLASS CLASS CLASS
----------------- --------------- ----------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............................. $ 10.70 $ 12.45 $ 10.20
------- ------- -------
Net investment income/(loss)(1) .................................. 0.02 0.06 0.02
Net realized and unrealized gain/(loss) on investments(2) ........ 1.12 (1.27) 2.23
------- ------- -------
Net increase/(decrease) in net assets resulting from operations .. 1.14 (1.21) 2.25
------- ------- -------
Dividends to shareholders from:
Net investment income ............................................ (0.03) (0.06) --
Net realized capital gains ....................................... (0.11) (0.48) --
------- ------- -------
Net asset value, end of period ................................... $ 11.70 $ 10.70 $ 12.45
======= ======= =======
Total investment return(3) ....................................... 10.62% (10.28%) 22.06%
======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) ........................ $ 6,662 $ 6,150 $ 683
Ratio of expenses to average net assets(1)(4) .................... 1.25%(5) 1.19% 1.11%(5)
Ratio of expenses to average net assets without waivers and
expense reimbursements(1)(4) .................................. 1.53%(5) 1.74% 3.05%(5)
Ratio of net investment income to average net assets(1) .......... 0.27%(5) 0.68% 0.91%(5)
Portfolio turnover rate .......................................... 76.33% 111.68% 67.16%
<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 return iscalculated 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 return is not
annualized.
(4) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets annualized for the periods ended February 28,
1999, August 31, 1998 and August 31, 1997 would have been 1.28%, 1.49% and
2.64%, respectively, for the Large Cap Value Fund Institutional Class,
1.53%, 1.74% and 3.05% for the Large Cap Value Fund Investor Class.
(5) Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
32&33
<PAGE>
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
supplemental data for the respective periods. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MID CAP VALUE FUND
---------------------------------------------------------
FOR THE FOR THE FOR THE PERIOD
SIX MONTHS ENDED YEAR JUNE 2, 1997*
FEBRUARY 28, 1999 ENDED THROUGH
(UNAUDITED) AUGUST 31, 1998 AUGUST 31, 1997
----------------- --------------- ---------------
INSTITUTIONAL INSTITUTIONAL INSTITUTIONAL
CLASS CLASS CLASS
----------------- --------------- ---------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............................. $ 9.48 $ 11.01 $ 10.00
-------- ------- -------
Net investment income/(loss)(1) .................................. 0.01 0.01 0.01
Net realized and unrealized gain/(loss) on investments(2) ........ 0.94 (1.39) 1.00
-------- ------- -------
Net increase/(decrease) in net assets resulting from operations .. 0.95 (1.38) 1.01
-------- ------- -------
Dividends to shareholders from:
Net investment income ............................................ (0.01) (0.01) --
Net realized capital gains ....................................... -- (0.14) --
-------- ------- -------
Net asset value, end of period ................................... $ 10.42 $ 9.48 $ 11.01
======== ======= =======
Total investment return(3) ....................................... 10.00% (12.73%) 10.10%
======== ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) ........................ $126,075 $67,568 $ 3,750
Ratio of expenses to average net assets(1)(4) .................... 1.00%(5) 1.00% 1.00%(5)
Ratio of expenses to average net assets without waivers and
expense reimbursements(1)(4) .................................. 1.28%(5) 1.57% 12.37%(5)
Ratio of net investment income to average net assets(1) .......... 0.12%(5) 0.13% 1.08%(5)
Portfolio turnover rate .......................................... 111.54% 167.86% 21.80%
MID CAP VALUE FUND
---------------------------------------------------------
FOR THE FOR THE FOR THE PERIOD
SIX MONTHS ENDED YEAR JUNE 2, 1997*
FEBRUARY 28, 1999 ENDED THROUGH
(UNAUDITED) AUGUST 31, 1998 AUGUST 31, 1997
----------------- --------------- ---------------
INVESTOR INVESTOR INVESTOR
CLASS CLASS CLASS
---------------- --------------- ---------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............................. $ 9.42 $ 11.01 $ 10.00
------- ------- -------
Net investment income/(loss)(1) .................................. (0.01) 0.01 0.01
Net realized and unrealized gain/(loss) on investments(2) ........ 0.94 (1.38) 1.00
------- ------- -------
Net increase/(decrease) in net assets resulting from operations .. 0.93 (1.37) 1.01
------- ------- -------
Dividends to shareholders from:
Net investment income ............................................ -- (0.01) --
Net realized capital gains ....................................... -- (0.21) --
------- ------- -------
Net asset value, end of period ................................... $ 10.35 $ 9.42 $ 11.01
======= ======= =======
Total investment return(3) ....................................... 9.87% (12.77%) 10.10%
======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) ........................ $ 2,050 $ 1,828 $ 598
Ratio of expenses to average net assets(1)(4) .................... 1.25%(5) 1.15% 1.10%(5)
Ratio of expenses to average net assets without waivers and
expense reimbursements(1)(4) .................................. 1.53%(5) 1.82% 12.62%(5)
Ratio of net investment income to average net assets(1) .......... (0.13%)(5) (0.02%) 0.61%(5)
Portfolio turnover rate .......................................... 111.54% 167.86% 21.80%
<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 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 return
is not annualized.
(4) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets annualized for the periods ended February 28,
1999, August 31, 1998 and August 31, 1997 would have been 1.28%, 1.57% and
12.37%, respectively, for the Mid Cap Value Fund Institutional Class, and
1.53%, 1.66% and 12.62% for the Mid Cap Value Fund Investor Class.
(5) Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
34&35
<PAGE>
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
supplemental data for the respective periods. This information has been derived
from information provided in the financial statements.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MICRO CAP VALUE FUND
-----------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
SIX MONTHS ENDED JULY 1, 1998* SIX MONTHS ENDED JULY 1, 1998*
FEBRUARY 28, 1999 THROUGH FEBRUARY 28, 1999 THROUGH
(UNAUDITED) AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1998
----------------- --------------- ----------------- ---------------
INSTITUTIONAL INSTITUTIONAL INVESTOR INVESTOR
CLASS CLASS CLASS CLASS
----------------- --------------- ----------------- ---------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............... $ 7.62 $ 10.00 $ 7.63 $ 10.00
------ ------- -------- -------
Net investment income/(loss)(1) .................... 0.00 (0.01) (0.01) (0.01)
Net realized and unrealized gain/(loss)
on investments(2) ................................ 0.02 (2.37) 0.02 (2.36)
------ ------- -------- -------
Net increase/(decrease) in net assets
resulting from operations ........................ 0.02 (2.38) 0.01 (2.37)
------ ------- -------- -------
Dividends to shareholders from:
Net investment income .............................. -- -- -- --
Net realized capital gains ......................... -- -- -- --
------ ------- -------- -------
Net asset value, end of period ..................... $ 7.64 $ 7.62 $ 7.64 $ 7.63
====== ======= ====== =======
Total investment return(3) ......................... 0.26% (23.80%) 0.13% (23.70%)
====== ======= ====== =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .......... $1,153 $ 1,120 $ 237 $ 129
Ratio of expenses to average
net assets(1)(4) ................................. 1.55%(5) 1.55%(5) 1.80%(5) 1.80%(5)
Ratio of expenses to average net assets without
waivers and expense reimbursements(1)(4) ......... 20.14%(5) 17.63%(5) 20.39%(5) 18.61%(5)
Ratio of net investment income to
average net assets(1) ............................ (0.11%)(5) (0.34%)(5) (0.45%)(5) (0.66%)(5)
Portfolio turnover rate ............................ 40.91% 11.97% 40.91% 11.97%
MARKET NEUTRAL FUND
-----------------------------------
FOR THE PERIOD FOR THE PERIOD
NOVEMBER 17, 1998 NOVEMBER 17, 1998
THROUGH THROUGH
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
----------------- -----------------
INSTITUTIONAL INVESTOR
CLASS CLASS
----------------- -----------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............... $10.00 $ 10.00
------ -------
Net investment income/(loss)(1) .................... (0.02) --
Net realized and unrealized gain/(loss)
on investments(2) ................................ (0.90) (0.91)
------ -------
Net increase/(decrease) in net assets
resulting from operations ........................ (0.92) (0.91)
------ -------
Dividends to shareholders from:
Net investment income .............................. -- --
Net realized capital gains ......................... -- --
------ -------
Net asset value, end of period ..................... $ 9.08 $ 9.09
====== =======
Total investment return(3) ......................... (9.20%) (9.10%)
====== =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .......... $ 903 $ 222
Ratio of expenses to average
net assets(1)(4) ................................. 2.50%(5) 2.75%(5)
Ratio of expenses to average net assets without
waivers and expense reimbursements(1)(4) ......... 32.71%(5) 32.96%(5)
Ratio of net investment income to
average net assets(1) ............................ (0.70)%(5) (0.92)%(5)
Portfolio turnover rate ............................ 46.02% 46.02%
BOND FUND
-------------------------------------------------------------------------
FOR THE FOR THE PERIOD FOR THE FOR THE PERIOD
SIX MONTHS ENDED DECEMBER 30, 1997* SIX MONTHS ENDED DECEMBER 30, 1997*
FEBRUARY 28, 1999 THROUGH FEBRUARY 28, 1999 THROUGH
(UNAUDITED) AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1998
----------------- ------------------ ----------------- ------------------
INSTITUTIONAL INSTITUTIONAL INVESTOR INVESTOR
CLASS CLASS CLASS CLASS
----------------- ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE**
Net asset value, beginning of period ............... $ 10.08 $ 10.00 $ 10.10 $ 10.00
------- ------- ------- -------
Net investment income/(loss)(1) .................... 0.30 0.78 0.34 0.62
Net realized and unrealized gain/(loss)
on investments(2) ................................ (0.13) (0.31) (0.18) (0.16)
------- ------- ------- -------
Net increase/(decrease) in net assets
resulting from operations ........................ 0.17 0.47 0.16 0.46
------- ------- ------- -------
Dividends to shareholders from:
Net investment income .............................. (0.30) (0.39) (0.25) (0.36)
Net realized capital gains ......................... (0.11) -- (0.11) --
------- ------- ------- -------
Net asset value, end of period ..................... $ 9.84 $ 10.08 $ 9.90 $ 10.10
======= ======= ======= =======
Total investment return(3) ......................... 1.67% 4.79% 1.54% 4.63%
======= ======= ======= =======
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000's omitted) .......... $13,037 $15,509 $ 201 $ 198
Ratio of expenses to average
net assets(1)(4) ................................. 0.60%(5) 0.60%(5) 0.85%(5) 0.85%(5)
Ratio of expenses to average net assets without
waivers and expense reimbursements(1)(4) ......... 2.35%(5) 2.82%(5) 2.60%(5) 2.72%(5)
Ratio of net investment income to
average net assets(1) ............................ 6.10%(5) 6.06%(5) 6.03%(5) 5.83%(5)
Portfolio turnover rate ............................ 38.05% 45.27% 38.05% 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 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 return
is not annualized.
(4) Without the waiver of advisory, administration and transfer agent fees and
without the reimbursement of certain operating expenses, the ratio of
expenses to average net assets annualized for the periods ended February 28,
1999 and August 31, 1998 would have been 20.14% and 17.63%, respectively,
for the Micro Cap Value Fund Institutional Class and 20.39% and 18.61% for
the Micro Cap Value Fund Investor Class. The ratio of expenses to average
net assets annualized for the period ended February 28, 1999 would have been
32.71% and 32.98%, (excluding dividend expense) and 33.23% and 33.50%
(including dividend expense), for the Market Neutral Fund Institutional
Class and Investor Class, respectively. The ratio of expenses to average net
assets annualized for the periods ended February 28, 1999 and August 28,
1998 would have been 2.35% and 2.82% for the Bond Fund Institutional Class
and 2.60% and 2.72% for the Bond Fund Investor Class.
(5) Annualized.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
36&37
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of
Maryland on February 29, 1988 and is registered under the Investment Company Act
of 1940, as amended, (the "Investment Company Act") as an open-end management
investment company. RBB is a "series fund", which is a mutual fund divided into
separate portfolios. 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 sixteen 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"),
Boston Partners Market Neutral Fund ("Market Neutral 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,
the Market Neutral 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 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, 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 operations on June 2, 1997, the Micro Cap Fund,
which commenced investment operations on July 1, 1998, the Market Neutral Fund,
which commenced investment operations on November 17, 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.
38
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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.
SHORT SALES -- When the Adviser anticipates that a security is overvalued,
it may sell the security short by borrowing the same security from a broker or
other institution and selling the security. A Fund will incur a loss as a result
of a short sale if the price of the borrowed security increases between the date
of the short sale and the date on which the Fund replaces such security. A Fund
will realize a gain if there is a decline in price of the security between those
dates, which decline exceeds the costs of the borrowing the security and other
transaction costs. There can be no assurance that a Fund will be able to close
out a short position at any particular time or at an acceptable price. Although
a Fund's gain is limited to the amount at which it sold a security short, its
potential loss is limited only by the maximum attainable price of the security
less the price at which the security was sold. Until a Fund replaces a borrowed
security, it will maintain at all times cash, U.S. Government securities, or
other liquid securities in an amount which, when added to any amount deposited
with a broker as collateral will at least equal the current market value of the
security sold short. Depending on arrangements made with brokers, a Fund may not
receive any payments (including interest) on collateral deposited with them. The
Funds will not make a short sale if, after giving effect to such sale, the
market value of all securities sold short exceeds 100% of the value of a Fund's
net assets.
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, 1.50% of the Market Neutral 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 advisor has voluntarily agreed to limit
the Market Neutral Fund's total operating expenses for the current and the
following fiscal year to the extent that such expenses exceed 2.50% of the
Market Neutral
39
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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
six months ended February 28, 1999, (unless otherwise indicated) investment
advisory fees, waivers and reimbursements of expenses were as follows:
GROSS NET EXPENSE FUND
FUND ADVISORY FEES WAIVERS ADVISORY FEES REIMBURSEMENT
- ---- ------------- -------- ------------- -------------
Large Cap Fund $302,627 $(43,484) $259,143 --
Mid Cap Fund 408,539 (55,108) 353,431 --
Micro Cap Fund 8,399 (8,399) -- $(66,178)
Market Neutral Fund* 4,040 (4,040) -- (48,987)
Bond Fund 29,360 (29,360) -- (44,691)
- --------------
*Commenced investment operations on November 17, 1998.
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.
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 six months ended February 28, 1999, (unless otherwise indicated)
PFPC, at their discretion, voluntarily agreed to waive a portion of their
administration fees for the Funds. For the six months ended February 28, 1999,
(unless otherwise indicated) PFPC's administration fees and related waivers were
as follows:
PFPC GROSS NET PFPC
FUND ADMINISTRATION FEES WAIVERS ADMINISTRATION FEES
- ---- ------------------- -------- -------------------
Large Cap Fund $50,480 -- $50,480
Mid Cap Fund 63,834 -- 63,834
Micro Cap Fund 37,500 $(18,750) 18,750
Market Neutral Fund* 25,000 (11,800) 13,200
Bond Fund 37,500 (18,750) 18,750
- --------------
*Commenced investment operations on November 17, 1998.
40
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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 six months ended February 28, 1999, (unless
otherwise indicated) transfer agency fees and waivers were as follows:
GROSS TRANSFER NET TRANSFER
FUND AGENCY FEES WAIVERS AGENCY FEES
- ---- -------------- -------- ------------
Large Cap Fund $41,471 $(27,200) $14,271
Mid Cap Fund 38,534 (27,200) 11,334
Micro Cap Fund 37,142 (27,000) 10,142
Market Neutral Fund* 23,828 (11,800) 12,028
Bond Fund 36,583 (27,000) 9,583
- ----------------
*Commenced investment operations on November 17, 1998.
Provident Distributors, Inc. ("PDI"), provides certain administrative
services to the Funds. 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 six months ended February 28, 1999 (unless otherwise indicated),
PDI has, at its discretion, voluntarily agreed to waive a portion of its
administrative services fees for the Funds. For the six months ended February
28, 1999 (unless otherwise indicated), administrative services fees and waivers
were as follows:
GROSS ADMINISTRATIVE NET ADMINISTRATIVE
FUND SERVICES FEES WAIVERS SERVICES FEES
- ---- -------------------- -------- ------------------
Large Cap Fund $55,222 $(44,178) $11,044
Mid Cap Fund 75,119 (60,095) 15,024
Micro Cap Fund 863 (691) 172
Market Neutral Fund* 396 (317) 79
Bond Fund 10,860 (8,688) 2,172
- --------------
*Commenced investment operations on November 17, 1998.
41
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the costs of securities owned at
February 28, 1999 were $80,195,770, $132,636,170, $1,474,499, $312,297 and
$13,405,789, respectively, for the Large Cap Fund, the Mid Cap Fund, the Micro
Cap Fund, the Market Neutral Fund and the Bond Fund. Accordingly, the net
unrealized appreciation/(depreciation) of investments are as follows:
NET APPRECIATION/
FUND APPRECIATION DEPRECIATION (DEPRECIATION)
- ---- ------------ ------------ -----------------
Large Cap Fund $4,975,473 $(4,839,958) $ 135,515
Mid Cap Fund 4,261,033 (9,139,705) (4,878,672)
Micro Cap Fund 64,221 (215,818) (151,597)
Market Neutral Fund 92,537 (73,972) 18,565
Bond Fund 75,889 (350,136) (274,247)
For the six months ended February 28, 1999 (unless otherwise indicated),
aggregate purchases and sales of investment securities (excluding short-term
investments) were as follows:
INVESTMENT SECURITIES SHORT SECURITIES
------------------------------- ----------------
FUND PURCHASES SALES SALES
- ---- ----------- -------------- ----------------
Large Cap Fund $73,530,713 $60,729,869
Mid Cap Fund 156,944,362 111,353,319
Micro Cap Fund 611,352 540,402
Market Neutral Fund 1,450,584 426,463 $1,437,805
Bond Fund 6,447,165 2,992,428
4. CAPITAL SHARE TRANSACTIONS
As of February 28, 1999 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 SIX MONTHS FOR THE SIX MONTHS
ENDED FOR THE ENDED FOR THE
FEBRUARY 28, 1999 YEAR ENDED FEBRUARY 28, 1999 YEAR ENDED
(UNAUDITED) AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1998
----------------------- ----------------------- --------------------- ---------------------
INSTITUTIONAL CLASS INSTITUTIONAL CLASS INVESTOR CLASS INVESTOR CLASS
----------------------- ----------------------- --------------------- ---------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
--------- ----------- --------- ----------- ------- ----------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ............ 2,256,331 $24,236,998 3,041,088 $40,050,134 140,474 $ 1,641,818 619,068 $ 8,408,773
Repurchases ...... (785,519) (9,186,662) (366,654) (4,685,359) (152,935) (1,889,348) (101,913) (1,312,572)
Reinvestments .... 82,453 1,000,152 145,610 1,766,251 6,901 84,672 2,908 35,680
--------- ----------- --------- ----------- ------- ----------- ------ -----------
Net Increase ..... 1,553,265 $16,050,488 2,820,044 $37,131,026 (5,560) $ (162,858) 520,063 $ 7,131,881
========= =========== ========= =========== ======= =========== ======= ===========
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
MID CAP VALUE FUND
--------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED FOR THE ENDED FOR THE
FEBRUARY 28, 1999 YEAR ENDED FEBRUARY 28, 1999 YEAR ENDED
(UNAUDITED) AUGUST 31, 1998 (UNAUDITED) AUGUST 31, 1998
--------------------------- -------------------------- ------------------------ -----------------------
INSTITUTIONAL CLASS INSTITUTIONAL CLASS INVESTOR CLASS INVESTOR CLASS
--------------------------- -------------------------- ------------------------ -----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
---------- ----------- ---------- ----------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ............ 6,326,144 $66,359,324 7,123,576 $85,121,556 33,270 $ 335,617 189,066 $2,285,116
Repurchases ...... (1,363,701) (14,330,474) (347,553) (4,063,621) (29,304) (305,119) (51,049) (607,185)
Reinvestments .... 6,849 73,490 9,224 102,668 4 39 1,797 19,870
---------- ----------- --------- ----------- ------- --------- ------- ----------
Net Increase ..... 4,969,292 $52,102,340 6,785,247 $81,160,603 3,970 $ 30,537 139,814 $1,697,801
========== =========== ========= =========== ======= ========= ======= ==========
</TABLE>
<TABLE>
<CAPTION>
MICRO CAP VALUE FUND
-------------------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED FOR THE PERIOD ENDED FOR THE PERIOD
FEBRUARY 28, 1999 JULY 1, 1998* FEBRUARY 28, 1999 JULY 1, 1998*
(UNAUDITED) THROUGH AUGUST 31, 1998 (UNAUDITED) THROUGH AUGUST 31, 1998
-------------------------- -------------------------- ------------------------ -----------------------
INSTITUTIONAL CLASS INSTITUTIONAL CLASS INVESTOR CLASS INVESTOR CLASS
-------------------------- -------------------------- ------------------------ ------------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
--------- ----------- ---------- ----------- ---------- ------------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales ............ 4,088 $32,100 146,905 $1,468,400 15,945 $120,000 16,857 $167,453
Repurchases ...... (21) (152) (56) (500) (1,818) (13,975) -- --
----- ------- ------- ---------- ------ -------- ------ --------
Net Increase ..... 4,067 $31,948 146,549 $1,467,900 14,127 $106,025 16,857 $167,453
===== ======= ======= ========== ====== ======== ====== ========
- ---------------
*Commencement of operations.
</TABLE>
MARKET NEUTRAL FUND
------------------------------------------------
FOR THE PERIOD FOR THE PERIOD
NOVEMBER 17, 1998* NOVEMBER 17, 1998*
THROUGH THROUGH
FEBRUARY 28, 1999 FEBRUARY 28, 1999
(UNAUDITED) (UNAUDITED)
------------------- -----------------------
INSTITUTIONAL CLASS INVESTOR CLASS
------------------- -----------------------
SHARES VALUE SHARES VALUE
-------- -------- ---------- -----------
Sales ............ 99,500 $995,000 24,429 $223,000
Repurchases ...... -- -- -- --
------ -------- ------ --------
Net Increase ..... 99,500 $995,000 24,429 $223,000
====== ======== ====== ========
- ----------------
*Commencement of operations.
43
<PAGE>
BOSTON PARTNERS FAMILY OF MUTUAL FUNDS
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
<TABLE>
<CAPTION>
BOND FUND
------------------------------------------------------------------------------------------------
FOR THE SIX MONTHS FOR THE SIX MONTHS
ENDED FOR THE PERIOD ENDED FOR THE PERIOD
FEBRUARY 28, 1999 DECEMBER 30, 1997* FEBRUARY 28, 1999 DECEMBER 30, 1997*
(UNAUDITED) THROUGH AUGUST 31, 1998 (UNAUDITED) THROUGH AUGUST 31, 1998
---------------------- ----------------------- ------------------- -----------------------
INSTITUTIONAL CLASS INSTITUTIONAL CLASS INVESTOR CLASS INVESTOR CLASS
---------------------- ----------------------- ------------------- -----------------------
SHARES VALUE SHARES VALUE SHARES VALUE SHARES VALUE
---------- ----------- --------- ----------- -------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales .............. 155,536 $ 1,561,747 1,981,162 $19,941,980 -- -- 18,299 $195,000
Repurchases ........ (427,427) (4,295,310) (492,757) (5,000,000) -- -- (5) (47)
Reinvestments ...... 58,466 586,467 50,245 506,561 669 $6,743 1,319 4,108
-------- ----------- --------- ----------- --- ------ ------ --------
Net Increase ....... (213,425) $(2,147,096) 1,583,650 $15,448,541 669 $6,743 19,613 $199,061
======== =========== ========= =========== === ====== ====== ========
- ----------------
*Commencement of operations.
</TABLE>
44
<PAGE>
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<PAGE>
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<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
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 LLP
1345 Chestnut Street
Philadelphia, PA 19107
The finanical information included herein is taken from the records of each 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 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.
