SEMIANNUAL REPORT
MARCH 31, 2000
REYNOLDS FUNDS
NO-LOAD MUTUAL FUNDS
REYNOLDS
FUND
SEEKING LONG-TERM CAPITAL APPRECIATION
REYNOLDS
BLUE CHIP GROWTH FUND
SEEKING LONG-TERM CAPITAL APPRECIATION,
WITH CURRENT INCOME A SECONDARY OBJECTIVE
REYNOLDS
OPPORTUNITY FUND
SEEKING LONG-TERM CAPITAL APPRECIATION
REYNOLDS
U.S. GOVERNMENT BOND FUND
SEEKING A HIGH LEVEL OF CURRENT INCOME
REYNOLDS
MONEY MARKET FUND
SEEKING A HIGH LEVEL OF CURRENT INCOME
CONSISTENT WITH A STABLE NET ASSET VALUE
1-800-773-9665
WWW.REYNOLDSFUNDS.COM
REYNOLDS FUNDS
Dear Fellow Shareholders: April 28, 2000
We appreciate your continued confidence in the Reynolds Funds and would like
to welcome our many new shareholders. The inception of the Reynolds Fund, our
third equity fund, was September 30, 1999. The Reynolds Money Market Fund now
has unlimited check writing with no minimum amount per check. The Web Site for
the Reynolds Funds is reynoldsfunds.com.
The Reynolds, Blue Chip and Opportunity Funds had strong appreciation for the
six months ended March 31, 2000:
October 1, 1999 through March 31, 2000
+51.6%
REYNOLDS
FUND
+42.6%
REYNOLDS
BLUE CHIP
GROWTH FUND
+54.2%
REYNOLDS
OPPORTUNITY FUND
The Blue Chip and Opportunity Funds had strong appreciation for the twelve
months ended March 31, 2000:
Average Annual Total Returns
April 1, 1999 through March 31, 2000
+41.7%
REYNOLDS
BLUE CHIP
GROWTH FUND
+56.2%
REYNOLDS
OPPORTUNITY FUND
The Blue Chip and Opportunity Funds also had strong appreciation for the
three years ended March 31, 2000:
Average Annual Total Returns
April 1, 1997 through March 31, 2000
+47.1%
REYNOLDS
BLUE CHIP
GROWTH FUND
+53.6%
REYNOLDS
OPPORTUNITY FUND
The Blue Chip and Opportunity Funds also had strong appreciation for the five
years ended March 31, 2000:
Average Annual Total Returns
April 1, 1995 through March 31, 2000
+39.4%
REYNOLDS
BLUE CHIP
GROWTH FUND
+37.6%
REYNOLDS
OPPORTUNITY FUND
THE REYNOLDS FUND
The Reynolds Fund is a general stock fund. The Fund may own common stocks of
all types and sizes and will mainly invest in high quality common stocks of U.S.
headquartered companies. While the Reynolds Fund will generally invest in
"growth companies", it may also invest in "value stocks." I am the portfolio
manager of this Fund in addition to continuing to manage the four other No-Load
Reynolds Funds.
The Reynolds Fund's return was +51.6% since its inception on September 30,
1999 through March 31, 2000 and +8.8% for the three months ended March 31, 2000.
The Reynolds Fund had assets of $75.5 million as of March 31, 2000. Its NASDAQ
symbol is REYFX and it is usually listed in the newspapers under the Reynolds
Funds heading as Reyn Fd or Reynlds Fnd.
THE REYNOLDS BLUE CHIP GROWTH FUND
The Reynolds Blue Chip Growth Fund has investments in many of the premier
worldwide growth companies. These companies have proven management, strong
financials including low debt and high return on equity, leading research and
development, and dominant worldwide products with good unit growth. The
probabilities highly favor that the diversified group of industry leading
companies held in the Blue Chip Fund will remain industry leaders over the long-
term, continue to strongly increase their earnings and continue to significantly
increase future shareholder wealth.
The Blue Chip Fund's return was +41.7% for the one year ended March 31, 2000
and +6.8% for the three months ended March 31, 2000. The Blue Chip Fund's
return was +218.0% for the three years ended March 31, 2000 and +426.7% for the
five years ended March 31, 2000. These were average annual compounded rates of
return of +47.1% and +39.4%, respectively. The Blue Chip Fund's return was
+645.3% for the ten years ended March 31, 2000. This was an average annual
compounded rate of return of +22.2%. The Blue Chip Fund increased +772.9% since
inception (August 12, 1988) through March 31, 2000. This was an average annual
compounded rate of return of +20.5%.
The Blue Chip Fund has received many awards for its recent performance
including:
(1) America Online - Will be featured on Sage Online on June 5, 2000 (9 pm
EST).
(2) Business Week - Featured in the January 24, 2000 issue.
(3) CNBC _ Will be featured on Power Lunch on July 28, 2000 (12 pm to 2 pm
EST) and was featured March 2, 2000.
(4) Consumer Reports - Featured in the April 2000 issue.
(5) Investor's Business Daily - The Blue Chip Fund has received an A+
ranking from Investor's Business Daily. Investor's Business Daily ranks
mutual funds on the basis of a moving 36-month performance. The top 5%
of all mutual funds receive an A+ ranking. Investor's Business Daily
considered 5,466 mutual funds for the three years ended March 31, 2000
in determining this ranking.
(6) Louis Ruykeyser's Mutual Funds - Featured in the May 2000 issue.
(7) Mutual Funds Magazine - Chosen as the #1 growth mutual fund for 2000 in
the December 1999 issue. Also featured in the June 2000 issue.
(8) Schwab - Included in their Mutual Fund Select List - First Quarter 2000.
(9) Smart Money - Featured in the February 7, 2000 issue.
(10) Standard & Poor's - Designated as a Standard & Poor's Select Fund in the
April 2000 issue.
(11) USA Today - Featured as one of 25 USA Today All-Star Mutual Funds in the
February 28, 2000 edition. Chosen from 3,950 funds in the Morningstar
universe.
(12) Wall Street Journal - Featured in the May 2, 2000 edition.
THE REYNOLDS OPPORTUNITY FUND
The Reynolds Opportunity Fund generally invests in medium and large size high
quality companies that have proven themselves in the marketplace and are leaders
in their industries. These well-managed companies usually have sales of more
than $500 million and are demonstrating strong earnings growth from proprietary
innovative products.
A long-term investment in the Reynolds Opportunity Fund should be a good
complement to a long-term investment in the Reynolds Blue Chip Growth Fund and
the new Reynolds Fund. We are making a high probability bet with the companies
in the Opportunity Fund, just as we are with the companies in the Blue Chip and
Reynolds Funds, that the majority of the companies within a well diversified
group of proven worldwide leading companies will continue to be leaders and
strongly increase their earnings and shareholder wealth in the future.
The Reynolds Opportunity Fund increased +56.2% for the one-year ended March
31, 2000 and +8.4% for the three months ended March 31, 2000. The Opportunity
Fund increased +262.5% for the three years ended March 31, 2000 and increased
+392.9% for the five years ended March 31, 2000. These were average annual
compounded rates of return of +53.6% and +37.6%, respectively. The Opportunity
Fund increased +439.8% since inception (January 30, 1992) through March 31,
2000. This was an average annual compounded rate of return of +22.9%. The
Opportunity Fund has received an A+ ranking from Investor's Business Daily.
Investor's Business Daily ranks mutual funds on the basis of a moving 36-month
performance. The top 5% of all mutual funds receive an A+ ranking. Investor's
Business Daily considered 5,466 mutual funds for the three years ended March 31,
2000 in determining this ranking. The Opportunity Fund was featured in Louis
Ruykeyser's Mutual Funds in the May 2000 issue and was featured in Mutual Funds
Magazine in the June 2000 issue.
THE REYNOLDS U.S. GOVERNMENT BOND FUND
The Reynolds U.S. Government Bond Fund emphasizes high quality investments in
U.S. Treasury Bonds, Treasury Notes and Treasury Bills of varying maturities.
As of March 31, 2000, the assets were invested approximately 91% in U.S.
Treasury Securities and 9% in high quality cash equivalents.
The Reynolds U.S. Government Bond Fund is designed to satisfy many of the
fixed income objectives of investors. For example, the Bond Fund is actively
managed and is invested in bonds of many different maturities, which reduces the
risk that a large percentage of the bonds in the Fund mature at an inopportune
time for reinvestment. The Bond Fund had a dollar weighted average maturity of
1.3 years on March 31, 2000. The average maturity of the bonds in the Fund is
continually reevaluated and adjusted based on short and long-term economic,
inflation and interest rate forecasts.
The Reynolds U.S. Government Bond Fund's return was +3.2% for the one-year
ended March 31, 2000. The Bond Fund's return was +15.1% for the three years
ended March 31, 2000 and +29.5% for the five years ended March 31, 2000. These
were average annual returns of +4.8% and +5.3%, respectively. The Bond Fund's
return was +47.1% since inception (January 30, 1992) through March 31, 2000.
This was an average annual compounded rate of return of +4.8%.
THE REYNOLDS MONEY MARKET FUND
The Reynolds Money Market Fund now has unlimited check writing with no
minimum amount per check. The Reynolds Money Market Fund is designed to provide
for investor's short-term cash management needs. For ease of redemption, the
Money Market Fund offers: (1) check writing ($.20 printing charge per check);
or (2) telephone redemption where either a check is mailed to the shareholder,
or money may be wired to the shareholder's bank account ($12.00 wiring charge -
no charge if part of the systematic withdrawal plan which has a $100 minimum
withdrawal). As of March 31, 2000, the assets of the Reynolds Money Market Fund
were invested approximately 60% in high quality commercial paper, 18% in U.S.
Treasury Securities and 22% in high quality cash equivalents. As of March 31,
2000, the dollar weighted average days to maturity of the Money Market Fund was
37.5 days.
The Reynolds Money Market Fund's yield should vary with the rate of inflation
over the years. Its yield is usually higher than inflation and higher than or
approximately the same as most brokerage-firm sponsored money market funds.
Brokerage-firm sponsored money market funds typically have higher expense
structures due to their higher marketing costs. The Reynolds Money Market
Fund's yield is almost always higher than rates paid by most short-term bank
accounts. The rates paid by banks are lower because banks typically have higher
overhead.
The Reynolds Money Market Fund's return was +4.8% for the one-year ended
March 31, 2000. The Money Market's return was +15.3% for the three years ended
March 31, 2000 and +27.1% for the five years ended March 31, 2000. These were
average annual compounded rates of returns of +4.9% and +4.9%, respectively.
The Money Market Fund returned +48.0% since inception (January 30, 1991) through
March 31, 2000. This was an average annual compounded rate of return of +4.4%.
ECONOMIC DISCUSSION
THE WORLD ECONOMY
Economic growth has slowed in several regions of the world. However, many of
these economies are beginning to improve and others should improve in the
future. Over the long-term, there are more than 1.5 billion people in the world
who will be experiencing a higher standard of living and using and consuming
many products as capitalism grows and Communism declines in many countries such
as China and Eastern Europe. Many other countries, such as India and Latin
America, have rapidly emerging middle classes, which desire western goods and
services and governments that are encouraging foreign investment.
Worldwide inflation remains low. There are many reasons for this including:
the current slowdown in worldwide growth; committed central bankers; fiscal
restraint by governments; worldwide competition for products and labor is
keeping costs low; and the collapse of Communism is making economic systems more
efficient. In addition, cost cutting and restructuring is spreading to many
countries, more efficient private-sector operations are replacing inefficient
state-run enterprises, and excess capacity exists in many markets. The Blue
Chip and Opportunity Funds and the new Reynolds Fund are well positioned to
participate in these long-term worldwide growth trends through their investments
in U.S. headquartered and foreign headquartered companies.
THE U.S. ECONOMY
The majority of government and private sector data indicate that the U.S.
economy will continue to have moderate, but not excessive, broad based growth.
Gross Domestic Product (GDP) increased 4.2% in 1999 after increasing 4.3% in
1998 and 4.3% in 1997. GDP is estimated to increase 4.8% in 2000. The U.S.
economy is affected by the strengths and weaknesses of other economies, but not
as much as is sometimes implied in the financial press. For example, exports
are only 14% of U.S. GDP.
U.S. inflation is low relative to the last thirty years due to such factors
as global competition, good decisions made by the Federal Reserve, advances in
technology resulting in increasing productivity, better inventory controls, and
the internet is helping to lower costs. U.S. inflation increased at a
manageable 2.2% rate in 1999 after increasing 1.6% in 1998 and 2.3% in 1997.
U.S. inflation is estimated to increase 2.6% in 2000.
INVESTMENT OUTLOOK
There are many investment positives. Among them are: (1) the current
environment of moderate U.S. economic growth, inflation and interest rates is a
positive; (2) U.S. industry is more competitive than at any time in the past
quarter century; (3) U.S. companies are the leaders in the majority of
industries worldwide; (4) the U.S. budget is running a surplus versus a deficit
in the early 1990s; (5) productivity is increasing; and (6) the internet is
beginning to produce efficiencies.
INFORMATION ABOUT THE REYNOLDS FUNDS
FOR AUTOMATIC CURRENT DAILY NET ASSET VALUES: Call 1-800-773-9665 (1-800-
7REYNOLDS) twenty-four hours-a-day, seven days a week and press "1" then "2".
The updated current net asset values for all of the Reynolds Funds are usually
available each business day after 5 P.M. (PST).
FOR REYNOLDS MONEY MARKET FUND AND U.S. GOVERNMENT BOND FUND CURRENT ONE AND
SEVEN DAY YIELDS: Call 1-800-773-9665 and press "1" then "2".
FOR SHAREHOLDERS TO AUTOMATICALLY ACCESS THEIR CURRENT ACCOUNT INFORMATION:
Call 1-800-773-9665 (twenty-four hours-a-day, seven days a week), press "1" then
"3" and enter your 16 digit account number which appears at the top right of
your statement.
TO SPEAK TO A FUND REPRESENTATIVE REGARDING QUESTIONS, CURRENT ACCOUNT
INFORMATION AND CURRENT DAILY NET ASSET VALUES: Call 1-800-773-9665 and press
"1" then "0" from 6 A.M. to 5 P.M. (PST).
REYNOLDSFUNDS.COM WEB SITE: Information available includes most recent
quarterly top ten holdings and industry percentages, current net asset values
(usually available about one hour earlier than by calling the Reynolds Funds 800
number) and detailed financial statistics and graphs of past performance. Also
links to Morningstar and Value Line information regarding the Reynolds Funds.
SHAREHOLDER STATEMENT FREQUENCY: Consolidated statements summarizing all
Reynolds Funds held by a shareholder are sent quarterly. In addition,
individual Fund statements are sent whenever a transaction occurs. These
transactions are: (1) Reynolds Money Market and U.S. Government Bond Fund
statements are sent monthly when each months' accrued dividends are posted; (2)
Reynolds Fund, Blue Chip and Opportunity Fund statements are sent twice a year
when any ordinary income or capital gains are distributed; and (3) statements
are sent for any of the Funds when a shareholder purchases or redeems shares.
TAX REPORTING: Individual 1099 forms, which summarize any dividend income
and any long- or short-term capital gains, are sent annually to shareholders
each January. The percentage of income earned from various government
securities, if any, for the Reynolds Funds are also reported in January.
NEWSPAPER LISTING OF NET ASSET VALUE: The Reynolds, Blue Chip and
Opportunity Funds are listed in many major daily newspapers including Investor's
Business Daily, The New York Times, The Wall Street Journal and USA Today. Many
newspapers have a separate heading listed alphabetically for the Reynolds Funds.
The Reynolds Fund, Blue Chip Fund and Opportunity Funds appear under that
heading. The Reynolds Fund has the symbol Reyn Fd or Reynlds Fnd, the Blue Chip
Fund has the symbol BluChpGr or Blue Chip, and the Opportunity Fund has the
symbol Oppty or Opportunity. The U.S. Government Bond Fund will be listed in
newspapers once it has either $25 million of net assets or 1,000 shareholders.
NASDAQ SYMBOLS: Reynolds Fund - REYFX, Reynolds Blue Chip Growth Fund -
RBCGX, Reynolds Opportunity Fund - ROPPX, Reynolds U.S. Government Bond Fund -
RUSGX, Reynolds Money Market Fund - REYXX.
MINIMUM INVESTMENT: $1,000 for regular and retirement accounts. ($100 for
additional investments for all accounts - except for the Automatic Investment
Plan, which is $50 for regular and retirement plan accounts).
PROTOTYPE PLANS FOR RETIREMENT PLANS: All types are offered including the
Roth IRA, Education IRA, SIMPLE IRA Plan, 401k, SEPIRA, 403b and Keogh Plans.
AUTOMATIC INVESTMENT PLAN: There is no charge to automatically debit your
checking account or your account in any of the Reynolds Funds ($50 minimum) at
periodic intervals to make automatic purchases in any of the Reynolds Funds.
This is useful for dollar cost averaging.
SYSTEMATIC WITHDRAWAL PLAN: For shareholders with a $10,000 minimum starting
balance, there is no charge to automatically redeem shares ($100 minimum) in any
of the Reynolds Funds as often as monthly and send a check to you or transfer
funds electronically to your bank account.
EXCHANGES OR REGULAR REDEMPTIONS: As often as desired - no charge.
PORTFOLIO MANAGER: Frederick Reynolds is the portfolio manager of each of
the Reynolds Funds.
TAX EFFICIENCY: The Reynolds Stock Funds do not attempt to achieve their
investment objectives by active and frequent trading of common stocks. When
making investment decisions, we consider the tax consequences of the Funds'
portfolio transactions. We attempt to be highly tax efficient.
THE REYNOLDS FUNDS ARE NO-LOAD: No front-end sales commissions or redemption
fees "loads" are charged. Over 40% of all mutual funds impose these marketing
charges that are ultimately paid by the shareholder. These marketing charges
are either: (1) a front-end fee or "load" in which up to 5% of a shareholder's
assets are deducted from the original investment (some funds even charge a fee
when a shareholder reinvests capital gains or dividends); or (2) a back-end
penalty fee or "load" which is typically deducted from a shareholder's account
if a shareholder redeems within five years of the original investment. These
fees reduce a shareholder's return. The Reynolds Funds are No-Load as they do
not have these extra charges.
One hundred percent of our company's pension plan is invested in the Reynolds
Funds. We look forward to strong results in the future.
Sincerely,
/s/ Frederick L. Reynolds
Frederick L. Reynolds
President
80 East Sir Francis Drake Blvd. o Larkspur, CA 94939 o 415-461-7860
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of the Reynolds Funds unless accompanied or preceded by
the Funds' current prospectus. Past performance is not indicative of future
performance. Investment return and principal value of an investment may
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
Reynolds Fund
STATEMENT OF NET ASSETS
March 31, 2000 (Unaudited)
SHARES OR QUOTED
PRINCIPAL AMOUNT MARKET VALUE
- ---------------- ------------
LONG-TERM INVESTMENTS -- 98.0% (A)<F2>
COMMON STOCKS -- 98.0% (A)<F2>
APPLICATION SOFTWARE -- 10.3%
4,000 Adobe Systems Inc. $ 445,250
4,000 Business Objects S.A. - SP ADR*<F1> 398,000
2,000 Commerce One, Inc.*<F1> 298,500
5,000 Computer Associates
International, Inc. 295,937
4,000 i2 Technologies, Inc.*<F1> 488,500
8,000 Intuit Inc.*<F1> 435,000
7,000 Legato Systems, Inc.*<F1> 312,375
10,000 Microsoft Corp.*<F1> 1,062,500
19,000 Oracle Corp.*<F1> 1,483,188
2,000 PeopleSoft, Inc.*<F1> 40,000
3,000 Peregrine Systems, Inc.*<F1> 201,188
12,000 Siebel Systems, Inc.*<F1> 1,433,250
2,000 Symantec Corp.*<F1> 150,250
5,750 VERITAS Software Corp.*<F1> 753,250
-----------
7,797,188
BANKS -- 0.1%
1,000 Bank of America Corp. 52,438
BEVERAGES -- 0.8%
9,000 The Coca-Cola Co. 422,438
6,000 PepsiCo, Inc. 207,375
-----------
629,813
BIOTECHNOLOGY -- 1.9%
6,000 Amgen Inc.*<F1> 368,250
2,000 Biogen, Inc.*<F1> 139,750
2,000 Chiron Corp.*<F1> 99,750
1,000 COR Therapeutics, Inc.*<F1> 65,922
500 Genentech, Inc.*<F1> 76,000
1,000 Genzyme Corp.
(General Division)*<F1> 50,125
4,500 Human Genome Sciences, Inc.*<F1> 373,781
1,000 Immunex Corp.*<F1> 63,437
500 MedImmune, Inc.*<F1> 87,063
1,000 PE Corp. - Celera
Genomics Group*<F1> 91,563
-----------
1,415,641
BUILDING -- 0.9%
7,500 The Home Depot, Inc. 483,750
3,000 Lowe's Companies, Inc. 175,125
-----------
658,875
BUSINESS SOFTWARE & SERVICES -- 1.4%
500 Akamai Technologies, Inc.*<F1> 80,406
4,000 Ask Jeeves, Inc.*<F1> 244,500
500 E.piphany, Inc.*<F1> 66,781
1,000 Netcentives Inc.*<F1> 30,000
4,000 Razorfish Inc.*<F1> 110,000
1,500 Sapient Corp.*<F1> 125,813
5,000 TIBCO Software Inc.*<F1> 407,500
-----------
1,065,000
COMMUNICATION EQUIPMENT -- 3.5%
4,000 L.M. Ericsson Telephone Co. ADR 375,250
4,000 General Motors Corp. Cl H*<F1> 498,000
1,000 Netro Corp.*<F1> 65,016
1,000 Proxim, Inc.*<F1> 128,000
9,000 QUALCOMM Inc.*<F1> 1,343,812
4,000 Tellabs, Inc.*<F1> 251,937
-----------
2,662,015
COMPUTER NETWORKING -- 3.5%
5,000 3Com Corp.*<F1> 278,125
23,000 Cisco Systems Inc.*<F1> 1,778,188
1,000 Next Level Communications, Inc.*<F1> 108,750
3,500 Sycamore Networks, Inc.*<F1> 451,500
-----------
2,616,563
COMPUTER & PERIPHERALS -- 8.2%
4,500 Apple Computer, Inc.*<F1> 611,156
2,500 Brocade Communications
Systems, Inc.*<F1> 448,281
8,000 Compaq Computer Corp. 213,000
3,000 Dell Computer Corp.*<F1> 161,812
5,000 EMC Corp. (Mass.)*<F1> 625,000
1,000 Emulex Corp.*<F1> 109,125
1,000 Gateway Inc.*<F1> 53,000
5,500 Hewlett-Packard Co. 729,094
7,000 International Business
Machines Corp. 826,000
11,000 Network Appliance, Inc.*<F1> 910,250
16,000 Sun Microsystems, Inc.*<F1> 1,499,250
-----------
6,185,968
COMPUTER SOFTWARE & SERVICES -- 0.6%
2,000 Computer Sciences Corp.*<F1> 158,250
2,000 Informix Corp.*<F1> 33,875
5,000 MarchFirst, Inc.*<F1> 178,438
1,000 Rational Software Corp.*<F1> 76,500
-----------
447,063
DRUGS -- 2.2%
5,000 Bristol-Myers Squibb Co. 288,750
7,000 Eli Lilly & Co. 441,000
6,000 Merck & Co., Inc. 372,750
6,000 Pfizer Inc. 219,375
6,000 Schering-Plough Corp. 220,500
1,000 Warner-Lambert Co. 97,500
-----------
1,639,875
ELECTRICAL EQUIPMENT -- 4.0%
17,000 EchoStar Communications Corp. 1,343,000
3,000 General Electric Co. 465,563
8,575 Motorola, Inc. 1,220,866
-----------
3,029,429
ELECTRONICS -- 1.7%
4,000 Agilent Technologies, Inc.*<F1> 416,000
6,000 JDS Uniphase Corp.*<F1> 723,375
2,000 Sanmina Corp.*<F1> 135,125
-----------
1,274,500
ENERGY -- 0.6%
1,000 BJ Services Co.*<F1> 73,875
4,000 Schlumberger Ltd. 306,000
580 Transocean Sedco Forex, Inc. 29,761
-----------
409,636
ENTERTAINMENT/MEDIA -- 1.4%
4,000 Walt Disney Co. 165,500
4,000 Emmis Communications Corp.*<F1> 186,000
7,000 Time Warner Inc. 700,000
-----------
1,051,500
FINANCIAL SERVICES -- 1.2%
1,000 American Express Co. 148,937
1,000 AmeriTrade Holding Corp.*<F1> 20,891
1,000 Fannie Mae 56,437
2,000 Knight/Trimark Group, Inc.*<F1> 102,000
1,000 Kansas City Southern
Industries, Inc. 85,938
9,000 Charles Schwab Corp. 511,313
-----------
925,516
HOUSEHOLD PRODUCTS -- 0.7%
1,000 American Home Products Corp. 53,625
3,000 Clorox Co. 97,500
3,000 Colgate-Palmolive Co. 169,125
4,000 Gillette Co. 150,750
1,000 Procter & Gamble Co. 56,250
-----------
527,250
INSURANCE -- 0.4%
3,000 American International Group, Inc. 328,500
INTERNET INFORMATION PROVIDERS -- 7.2%
3,000 About.com, Inc.*<F1> 264,375
17,000 America Online, Inc.*<F1> 1,143,250
4,000 China.com Corp.*<F1> 324,000
2,000 CNET Networks, Inc.*<F1> 101,375
1,000 Go2Net, Inc.*<F1> 80,562
500 InfoSpace.com, Inc.*<F1> 72,719
8,000 Lycos, Inc.*<F1> 562,000
8,000 PSINet Inc.*<F1> 272,125
6,500 VerticalNet, Inc.*<F1> 884,000
10,000 Yahoo! Inc.*<F1> 1,713,750
-----------
5,418,156
INTERNET SERVICE PROVIDERS-- 0.3%
5,000 Verio Inc.*<F1> 225,312
INTERNET SOFTWARE & SERVICES -- 16.6%
4,000 Amazon.com, Inc.*<F1> 268,000
6,500 Ariba, Inc.*<F1> 1,362,562
7,500 BroadVision, Inc.*<F1> 336,562
14,000 Citrix Systems, Inc.*<F1> 927,500
15,500 CMGI Inc.*<F1> 1,756,344
9,500 DoubleClick Inc.*<F1> 889,437
3,500 eBay Inc.*<F1> 616,000
9,500 Exodus Communications, Inc.*<F1> 1,334,750
7,000 Inktomi Corp.*<F1> 1,365,000
4,000 Internet Capital Group, Inc.*<F1> 361,250
2,000 ISS Group, Inc.*<F1> 233,000
1,000 Juniper Networks, Inc.*<F1> 263,562
1,000 MyPoints.com, Inc.*<F1> 26,813
3,000 Network Solutions, Inc.*<F1> 461,109
3,000 Priceline.com Inc.*<F1> 240,000
1,000 Rare Medium Group, Inc.*<F1> 44,125
6,000 RealNetworks, Inc.*<F1> 341,625
8,000 Red Hat, Inc.*<F1> 339,000
3,000 Redback Networks Inc.*<F1> 899,813
3,000 Safeguard Scientifics, Inc.*<F1> 210,938
2,500 Silknet Software, Inc.*<F1> 258,906
-----------
12,536,296
MEDICAL SUPPLIES -- 0.4%
3,000 Abbott Laboratories 105,562
3,000 Johnson & Johnson 210,188
-----------
315,750
OFFICE EQUIPMENT & SUPPLIES -- 0.1%
3,000 Xerox Corp. 78,000
RESTAURANTS -- 0.2%
4,000 McDonald's Corp. 150,250
RETAIL-SPECIALTY -- 0.4%
1,000 Best Buy Co., Inc.*<F1> 86,000
2,000 NIKE, Inc. Cl B 79,250
1,000 Tandy Corp. 50,750
1,000 Tiffany & Co. 83,625
-----------
299,625
RETAIL STORES -- 1.3%
8,000 Costco Wholesale Corp.*<F1> 420,500
5,000 Gap, Inc. 249,063
6,000 Wal-Mart Stores, Inc. 333,000
-----------
1,002,563
SECURITY SOFTWARE & SERVICES -- 2.0%
2,500 Check Point Software
Technologies Ltd.*<F1> 427,656
4,000 Network Associates, Inc.*<F1> 129,000
5,500 VeriSign, Inc.*<F1> 822,250
1,000 Vignette Corp.*<F1> 160,250
-----------
1,539,156
SEMICONDUCTORS -- 11.3%
10,000 Altera Corp.*<F1> 892,500
3,000 Atmel Corp.*<F1> 154,875
2,500 Broadcom Corp.*<F1> 607,187
2,000 Cree, Inc.*<F1> 225,750
500 E-Tek Dynamics, Inc.*<F1> 117,625
10,000 Intel Corp. 1,319,375
1,000 Lattice Semiconductor Corp.*<F1> 67,687
4,000 Linear Technology Corp. 220,000
16,000 LSI Logic Corp.*<F1> 1,162,000
3,000 Maxim Integrated Products Inc.*<F1> 213,188
2,000 PMC-Sierra, Inc.*<F1> 407,375
500 SDL, Inc.*<F1> 106,438
1,000 STMicroelectronics N.V. 187,188
12,500 Texas Instruments Inc. 2,000,000
6,000 TriQuint Semiconductor, Inc.*<F1> 441,000
1,000 Vitesse Semiconductor Corp.*<F1> 96,250
4,000 Xilinx, Inc.*<F1> 331,250
-----------
8,549,688
SEMICONDUCTOR CAPITAL SPENDING -- 4.1%
11,000 Applied Materials, Inc.*<F1> 1,036,750
11,500 KLA-Tencor Corp.*<F1> 968,875
14,000 Novellus Systems, Inc.*<F1> 785,750
4,000 Teradyne, Inc.*<F1> 329,000
-----------
3,120,375
SYSTEM SOFTWARE -- 0.5%
1,000 Autodesk, Inc. 45,500
4,000 Mercury Interactive Corp.*<F1> 317,000
1,000 Parametric Technology Corp.*<F1> 21,063
-----------
383,563
TELECOMMUNICATIONS -- 4.4%
5,000 CIENA Corp.*<F1> 630,625
8,000 Lucent Technologies Inc. 486,000
17,200 Nortel Networks Corp. 2,167,200
-----------
3,283,825
TELECOMMUNICATION SERVICES -- 0.9%
3,000 Global Crossing Ltd.*<F1> 122,812
2,000 Globalstar
Telecommunications Ltd.*<F1> 27,750
3,000 NEXTLINK Communications, Inc.*<F1> 371,063
3,000 Qwest Communications
International, Inc.*<F1> 145,500
-----------
667,125
TELEPHONE SERVICES -- 0.6%
1,000 AT&T Corp. 56,250
3,000 MCI WorldCom Inc.*<F1> 135,937
3,000 Net2Phone, Inc.*<F1> 177,375
1,000 Vodafone AirTouch PLC SP ADR 55,563
-----------
425,125
WIRELESS COMMUNICATION -- 4.3%
8,000 Nextel Communications, Inc.*<F1> 1,186,000
6,000 Nokia Corp. "A" ADR 1,303,500
12,000 Sprint Corp. (PCS Group) 783,750
-----------
3,273,250
-----------
Total common stocks
(cost $60,349,721) 73,984,829
RIGHTS -- 0.0% (A)<F2>
50 Opus360 Corp., Exp. 04/11/00 0
-----------
Total long-term investments
(cost $60,349,721) 73,984,829
SHORT-TERM INVESTMENTS -- 1.2% (A)<F2>
VARIABLE RATE DEMAND NOTE
$894,842 Firstar Bank U.S.A., N.A. 894,842
-----------
Total short-term investments
(cost $894,842) 894,842
-----------
Total investments
(cost $61,244,563) 74,879,671
Cash and receivables, less
liabilities -- 0.8% (A)<F2> 640,344
-----------
NET ASSETS $75,520,015
-----------
-----------
Net Asset Value Per Share
($0.01 par value 40,000,000
shares authorized), offering
and redemption price
($75,520,015 / 4,981,886
shares outstanding) $ 15.16
-----------
-----------
*<F1> Non-income producing security.
(a)<F2> Percentages for the various classifications relate to net assets.
ADR - American Depository Receipt
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Fund
STATEMENT OF OPERATIONS
For the Period September 30, 1999 (Commencement of Operations) to March 31, 2000
(Unaudited)
INCOME:
Dividends $ 41,714
Interest 48,417
-----------
Total income 90,131
-----------
EXPENSES:
Management fees 209,496
Distribution fees 52,374
Registration fees 40,218
Administrative services 32,855
Professional fees 21,222
Transfer agent fees 20,778
Custodian fees 15,309
Printing and postage expense 2,106
Board of Directors fees 2,000
Other expenses 3,115
-----------
Total expenses 399,473
-----------
NET INVESTMENT LOSS (309,342)
-----------
NET REALIZED LOSS ON INVESTMENTS (780,136)
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 13,635,108
-----------
NET GAIN ON INVESTMENTS 12,854,972
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $12,545,630
-----------
-----------
STATEMENT OF CHANGES IN NET ASSETS
For the Period September 30, 1999 (Commencement of Operations) to March 31, 2000
(Unaudited)
OPERATIONS:
Net investment loss $ (309,342)
Net realized loss on investments (780,136)
Net increase in unrealized appreciation on investments 13,635,108
-----------
Net increase in net assets resulting from operations 12,545,630
-----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (5,860,482 shares) 75,391,420
Cost of shares redeemed (878,596 shares) (12,417,035)
-----------
Net increase in net assets derived from Fund
share activities 62,974,385
-----------
TOTAL INCREASE 75,520,015
NET ASSETS AT THE BEGINNING OF THE PERIOD --
-----------
NET ASSETS AT THE END OF THE PERIOD $75,520,015
-----------
-----------
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout the period)
(UNAUDITED)
FOR THE
PERIOD FROM
SEPTEMBER 30, 1999+<F3>
TO
MARCH 31, 2000
--------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 10.00
Income from investment operations:
Net investment loss (0.11)*<F4>
Net realized and unrealized gain on securities 5.27
-------
Total from investment operations 5.16
Less distributions:
Dividend from net investment income --
Distribution from net realized gains --
-------
Total from distributions --
-------
Net asset value, end of period $ 15.16
-------
-------
TOTAL INVESTMENT RETURN 51.6%**<F5>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 75,520
Ratio of expenses to average net assets 1.9%***<F6>
Ratio of net investment loss to average net assets (1.5%)***<F6>
Portfolio turnover rate 15.1%
+<F3> Commencement of operations.
*<F4> Net investment loss per share is calculated using average shares
outstanding.
**<F5> Not Annualized.
***<F6> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Blue Chip Growth Fund
STATEMENT OF NET ASSETS
March 31, 2000 (Unaudited)
SHARES OR QUOTED
PRINCIPAL AMOUNT MARKET VALUE
- ---------------- ------------
COMMON STOCKS -- 96.0% (A)<F8>
APPLICATION SOFTWARE -- 8.5%
29,000 Adobe Systems Inc. $ 3,228,062
11,000 BMC Software, Inc.*<F7> 543,125
4,000 Business Objects S.A.- SP ADR*<F7> 398,000
6,000 Commerce One, Inc.*<F7> 895,500
45,625 Computer Associates
International, Inc. 2,700,430
8,500 i2 Technologies, Inc.*<F7> 1,038,062
36,000 Intuit Inc.*<F7> 1,957,500
47,000 Legato Systems, Inc.*<F7> 2,097,375
191,000 Microsoft Corp.*<F7> 20,293,750
153,432 Oracle Corp.*<F7> 11,977,286
26,000 PeopleSoft, Inc.*<F7> 520,000
10,000 Peregrine Systems, Inc.*<F7> 670,625
12,000 SAP AG ADR 717,000
43,000 Siebel Systems, Inc.*<F7> 5,135,813
45,125 VERITAS Software Corp.*<F7> 5,911,375
------------
58,083,903
BANKS -- 0.4%
4,000 Bank of America Corp. 209,750
29,375 Citigroup Inc. 1,742,305
6,500 J.P. Morgan & Co. Inc. 856,375
4,000 Wells Fargo Co. 163,750
------------
2,972,180
BEVERAGES -- 1.4%
110,000 The Coca-Cola Co. 5,163,125
134,000 PepsiCo, Inc. 4,631,375
------------
9,794,500
BIOTECHNOLOGY -- 1.1%
60,000 Amgen Inc.*<F7> 3,682,500
21,500 Biogen, Inc.*<F7> 1,502,312
16,000 Human Genome Sciences, Inc.*<F7> 1,329,000
7,500 Immunex Corp.*<F7> 475,781
1,500 MedImmune, Inc.*<F7> 261,188
------------
7,250,781
BUILDING -- 1.4%
134,750 The Home Depot, Inc. 8,691,375
16,000 Lowe's Companies, Inc. 934,000
------------
9,625,375
BUSINESS SOFTWARE & SERVICES -- 0.3%
4,500 BEA Systems, Inc.*<F7> 330,187
1,500 E.piphany, Inc.*<F7> 200,344
22,000 Razorfish Inc.*<F7> 605,000
13,500 TIBCO Software Inc.*<F7> 1,100,250
------------
2,235,781
CHEMICALS -- 0.1%
7,500 Minnesota Mining &
Manufacturing Co. 664,219
COMMUNICATION EQUIPMENT -- 3.1%
28,000 L.M. Ericsson Telephone Co. ADR 2,626,750
9,000 General Motors Corp. Cl H*<F7> 1,120,500
83,500 QUALCOMM Inc.*<F7> 12,467,594
77,000 Tellabs, Inc.*<F7> 4,849,791
------------
21,064,635
COMPUTER NETWORKING -- 6.3%
68,000 3Com Corp.*<F7> 3,782,500
471,000 Cisco Systems Inc.*<F7> 36,414,187
4,000 Next Level Communications, Inc.*<F7> 435,000
18,500 Sycamore Networks, Inc.*<F7> 2,386,500
------------
43,018,187
COMPUTER & PERIPHERALS -- 10.3%
21,000 Apple Computer, Inc.*<F7> 2,852,062
9,500 Brocade Communications
Systems, Inc.*<F7> 1,703,469
120,500 Compaq Computer Corp. 3,208,312
156,000 Dell Computer Corp.*<F7> 8,414,250
75,500 EMC Corp. (Mass.)*<F7> 9,437,500
3,500 Emulex Corp.*<F7> 381,938
52,000 Gateway Inc.*<F7> 2,756,000
78,500 Hewlett-Packard Co. 10,406,156
86,500 International Business
Machines Corp. 10,207,000
14,000 Lexmark International Group, Inc.*<F7> 1,480,500
41,000 Network Appliance, Inc.*<F7> 3,392,750
167,000 Sun Microsystems, Inc.*<F7> 15,648,418
------------
69,888,355
COMPUTER SOFTWARE & SERVICES -- 0.3%
21,500 Computer Sciences Corp.*<F7> 1,701,187
9,000 Electronic Data Systems Corp. 577,688
------------
2,278,875
DRUGS -- 4.8%
49,200 Bristol-Myers Squibb Co. 2,841,300
44,000 Eli Lilly & Co. 2,772,000
120,200 Merck & Co., Inc. 7,467,425
203,500 Pfizer Inc. 7,440,469
111,000 Schering-Plough Corp. 4,079,250
81,393 Warner-Lambert Co. 7,935,817
------------
32,536,261
ELECTRICAL EQUIPMENT -- 3.6%
37,000 EchoStar Communications Corp. 2,923,000
52,500 General Electric Co. 8,147,344
3,000 Hitachi Ltd. ADR 365,625
90,975 Motorola, Inc. 12,952,565
------------
24,388,534
ELECTRONICS -- 0.6%
4,000 Agilent Technologies, Inc.*<F7> 416,000
23,000 JDS Uniphase Corp.*<F7> 2,772,937
10,000 Sanmina Corp.*<F7> 675,625
10,000 Solectron Corp.*<F7> 400,625
------------
4,265,187
ENERGY -- 0.7%
44,000 Schlumberger Ltd. 3,366,000
10,000 Smith International, Inc.*<F7> 775,000
8,131 Transocean Sedco Forex, Inc. 417,222
------------
4,558,222
ENTERTAINMENT/MEDIA -- 1.9%
136,147 Walt Disney Co. 5,633,082
21,000 Emmis Communications Corp.*<F7> 976,500
8,000 Sony Corp. ADR 2,241,000
44,000 Time Warner Inc. 4,400,000
------------
13,250,582
FINANCIAL SERVICES -- 1.9%
31,000 American Express Co. 4,617,062
8,500 AmeriTrade Holding Corp.*<F7> 177,570
13,000 E*TRADE Group, Inc.*<F7> 391,625
1,000 The Goldman Sachs Group, Inc. 105,125
13,500 Merrill Lynch & Co., Inc. 1,417,500
20,000 Morgan Stanley Dean
Witter & Co. 1,631,250
77,000 Charles Schwab Corp. 4,374,563
------------
12,714,695
FOODS -- 0.0%
7,000 General Mills, Inc. 253,312
GROCERY STORES -- 0.1%
29,000 The Kroger Co.*<F7> 509,312
HOUSEHOLD PRODUCTS -- 2.1%
51,000 American Home Products Corp. 2,734,875
26,000 Clorox Co. 845,000
103,000 Colgate-Palmolive Co. 5,806,625
47,000 Gillette Co. 1,771,312
55,000 Procter & Gamble Co. 3,093,750
------------
14,251,562
INSTRUMENTS -- 0.1%
5,000 Waters Corp.*<F7> 476,250
INSURANCE -- 0.7%
42,000 American International Group, Inc. 4,599,000
INTERNET INFORMATION PROVIDERS -- 7.8%
500 About.com, Inc.*<F7> 44,063
336,600 America Online, Inc.*<F7> 22,636,350
82,382 At Home Corp. - Series A*<F7> 2,713,457
6,000 China.com Corp.*<F7> 486,000
20,000 CNET Networks, Inc.*<F7> 1,013,750
21,975 go.com*<F7> 458,728
13,000 Go2Net, Inc.*<F7> 1,047,313
81,000 Lycos, Inc.*<F7> 5,690,250
14,000 PSINet Inc.*<F7> 476,218
18,000 VerticalNet, Inc.*<F7> 2,448,000
93,266 Yahoo! Inc.*<F7> 15,983,461
-----------
52,997,590
INTERNET SERVICE PROVIDERS -- 0.2%
32,000 Verio Inc.*<F7> 1,442,000
INTERNET SOFTWARE & SERVICES -- 7.2%
58,000 Amazon.com, Inc.*<F7> 3,886,000
13,500 Ariba, Inc.*<F7> 2,829,937
14,500 BroadVision, Inc.*<F7> 650,688
37,000 Citrix Systems, Inc.*<F7> 2,451,250
68,500 CMGI Inc.*<F7> 7,761,906
57,000 DoubleClick Inc.*<F7> 5,336,625
25,500 eBay Inc.*<F7> 4,488,000
19,500 Exodus Communications, Inc.*<F7> 2,739,750
41,000 Inktomi Corp.*<F7> 7,995,000
6,500 Internet Capital Group, Inc.*<F7> 587,031
11,500 Juniper Networks, Inc.*<F7> 3,030,969
12,000 Network Solutions, Inc.*<F7> 1,844,437
4,000 Priceline.com Inc.*<F7> 320,000
35,000 RealNetworks, Inc.*<F7> 1,992,813
17,000 Red Hat, Inc.*<F7> 720,375
6,500 Redback Networks Inc.*<F7> 1,949,594
-----------
48,584,375
MEDICAL SERVICES -- 0.0%
8,500 Healtheon/WebMD Corp.*<F7> 195,500
MEDICAL SUPPLIES -- 1.6%
95,000 Abbott Laboratories 3,342,813
10,000 Guidant Corp.*<F7> 588,125
94,500 Johnson & Johnson 6,620,906
2,000 Medtronic, Inc. 102,875
-----------
10,654,719
OFFICE EQUIPMENT & SUPPLIES -- 0.2%
50,000 Office Depot, Inc.*<F7> 578,125
28,500 Staples, Inc.*<F7> 570,000
-----------
1,148,125
PAPER & FOREST PRODUCTS -- 0.1%
9,000 Georgia-Pacific Group 356,063
PUBLISHING -- 0.2%
4,000 Reuters Group PLC ADR 477,500
18,000 Tribune Co. 658,125
-----------
1,135,625
RESTAURANTS -- 0.5%
94,000 McDonald's Corp. 3,530,875
RETAIL-SPECIALTY -- 0.9%
55,000 Best Buy Co., Inc.*<F7> 4,730,000
10,000 NIKE, Inc. Cl B 396,250
16,000 Rite Aid Corp.*<F7> 88,000
15,000 Starbucks Corp.*<F7> 672,188
3,000 Tandy Corp. 152,250
-----------
6,038,688
RETAIL STORES -- 4.6%
104,000 Costco Wholesale Corp.*<F7> 5,466,500
110,625 Gap, Inc. 5,510,508
30,000 Kohl's Corp.*<F7> 3,075,000
68,000 Nordstrom, Inc. 2,006,000
57,000 Target Corp. 4,260,750
198,000 Wal-Mart Stores, Inc. 10,989,000
-----------
31,307,758
SECURITY SOFTWARE & SERVICES -- 0.6%
2,500 Check Point Software
Technologies Ltd.*<F7> 427,656
13,000 Network Associates, Inc.*<F7> 419,250
21,000 VeriSign, Inc.*<F7> 3,139,500
-----------
3,986,406
SEMICONDUCTORS -- 9.9%
37,000 Altera Corp.*<F7> 3,302,250
1,000 Applied Micro Circuits Corp.*<F7> 150,062
5,000 Atmel Corp.*<F7> 258,125
16,000 Broadcom Corp.*<F7> 3,886,000
6,000 C-Cube Microsystems, Inc.*<F7> 436,875
7,000 Cypress Semiconductor Corp.*<F7> 345,187
198,440 Intel Corp. 26,181,677
5,000 Lattice Semiconductor Corp.*<F7> 338,438
14,000 Linear Technology Corp. 770,000
58,000 LSI Logic Corp.*<F7> 4,212,250
5,000 Maxim Integrated Products Inc.*<F7> 355,313
8,000 Micron Technology, Inc.*<F7> 1,008,000
7,000 PMC-Sierra, Inc.*<F7> 1,425,813
1,500 Rambus Inc.*<F7> 441,750
1,500 SDL, Inc.*<F7> 319,313
98,500 Texas Instruments Inc. 15,760,000
11,000 TriQuint Semiconductor, Inc.*<F7> 808,500
16,000 Vitesse Semiconductor Corp.*<F7> 1,540,000
66,000 Xilinx, Inc.*<F7> 5,465,625
-----------
67,005,178
SEMICONDUCTOR CAPITAL SPENDING -- 2.8%
98,000 Applied Materials, Inc.*<F7> 9,236,500
47,500 KLA-Tencor Corp.*<F7> 4,001,875
56,500 Novellus Systems, Inc.*<F7> 3,171,063
31,000 Teradyne, Inc.*<F7> 2,549,750
-----------
18,959,188
SERVICES -- 0.1%
14,000 FedEx Corp.*<F7> 546,000
SYSTEM SOFTWARE -- 0.1%
9,000 Autodesk, Inc. 409,500
7,000 Mercury Interactive Corp.*<F7> 554,750
------------
964,250
TELECOMMUNICATIONS -- 3.5%
24,000 CIENA Corp.*<F7> 3,027,000
2,500 Corning Inc. 485,000
34,000 EarthLink, Inc.*<F7> 660,875
115,750 Lucent Technologies Inc. 7,031,812
98,300 Nortel Networks Corp. 12,385,800
------------
23,590,487
TELECOMMUNICATION SERVICES -- 0.2%
9,000 Global Crossing Ltd.*<F7> 368,438
22,000 Qwest Communications
International, Inc.*<F7> 1,067,000
------------
1,435,438
TELEPHONE SERVICES -- 1.5%
25,000 AT&T Corp. 1,406,250
82,000 MCI WorldCom Inc.*<F7> 3,715,625
41,000 Sprint Corp.*<F7> 2,583,000
6,000 Telefonos de Mexico, S.A. -
SP ADR L 402,000
40,500 Vodafone AirTouch PLC SP ADR 2,250,281
------------
10,357,156
WIRELESS COMMUNICATION -- 4.3%
37,000 Nextel Communications, Inc.*<F7> 5,485,250
97,500 Nokia Corp. "A" ADR 21,181,875
35,000 Sprint Corp. (PCS Group) 2,285,938
------------
28,953,063
------------
Total common stocks
(cost $359,962,848) 651,868,192
SHORT-TERM INVESTMENTS -- 2.7% (A)<F8>
VARIABLE RATE DEMAND NOTE
$18,387,142 Firstar Bank U.S.A., N.A. $ 18,387,142
------------
Total short-term investments
(cost $18,387,142) 18,387,142
------------
Total investments
(cost $378,349,990) 670,255,334
Cash and receivables, less
liabilities -- 1.3% (A)<F8> 8,733,621
------------
NET ASSETS $678,988,955
------------
------------
Net Asset Value Per Share
($0.01 par value 40,000,000
shares authorized), offering
and redemption price
($678,988,955 / 8,824,150
shares outstanding) $ 76.95
------------
------------
*<F7> Non-income producing security.
(a)<F8> Percentages for the various classifications relate to net assets.
ADR - American Depository Receipt
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Blue Chip Growth Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2000 (Unaudited)
INCOME:
Dividends $ 1,105,850
Interest 328,955
------------
Total income 1,434,805
------------
EXPENSES:
Management fee 2,754,275
Administrative services 290,427
Distribution fees 238,224
Transfer agent fees 119,973
Custodian fees 87,945
Printing and postage expense 81,330
Registration fees 54,718
Professional fees 21,048
Board of Directors fees 2,000
Other expenses 2,986
------------
Total expenses 3,652,926
------------
NET INVESTMENT LOSS (2,218,121)
------------
NET REALIZED LOSS ON INVESTMENTS (12,201,582)
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 192,686,743
------------
NET GAIN ON INVESTMENTS 180,485,161
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $178,267,040
------------
------------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2000 (Unaudited) and For the Year Ended
September 30, 1999
2000 1999
------------ ------------
OPERATIONS:
Net investment loss $ (2,218,121) $ (1,736,389)
Net realized (loss) gain on investments (12,201,582) 1,586,354
Net increase in unrealized appreciation
on investments 192,686,743 60,282,375
------------ ------------
Net increase in net assets resulting
from operations 178,267,040 60,132,340
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains
($0.00526 and $0.6495 per share,
respectively) (38,019) (1,651,594)*<F9>
------------ ------------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (4,710,497
and 7,038,893 shares, respectively) 326,377,787 357,704,329
Net asset value of shares issued in
distributions (621 and 38,410 shares,
respectively) 34,219 1,473,014
Cost of shares redeemed (3,055,950 and
2,331,430 shares, respectively) (212,602,987) (120,240,381)
------------ ------------
Net increase in net assets derived
from Fund share activities 113,809,019 238,936,962
------------ ------------
TOTAL INCREASE 292,038,040 297,417,708
NET ASSETS AT THE BEGINNING OF THE PERIOD 386,950,915 89,533,207
------------ ------------
NET ASSETS AT THE END OF THE PERIOD $678,988,955 $386,950,915
------------ ------------
------------ ------------
*<F9> See Note 7.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Blue Chip Growth Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
(UNAUDITED)
FOR THE SIX
MONTHS ENDING YEARS ENDED SEPTEMBER 30,
MARCH 31, ------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of period $ 53.98 $ 36.95 $ 32.00 $ 22.69 $ 19.25 $ 14.46
Income from investment operations:
Net investment (loss) income (0.28)*<F10> (0.33)*<F10> (0.12) (0.01) (0.03) 0.02
Net realized and unrealized gain
on investments 23.26 18.01 5.46 9.67 3.52 5.00
------- ------- ------- ------- ------- -------
Total from investment operations 22.98 17.68 5.34 9.66 3.49 5.02
Less distributions:
Dividends from net investment income -- -- (0.01) -- (0.02) (0.06)
Distributions from net realized gains (0.01) (0.65) (0.38) (0.35) (0.03) (0.17)
------- ------- ------- ------- ------- -------
Total from distributions (0.01) (0.65) (0.39) (0.35) (0.05) (0.23)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 76.95 $ 53.98 $ 36.95 $ 32.00 $ 22.69 $ 19.25
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 42.6%**<F11> 48.6% 17.0% 43.2% 18.1% 35.3%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 678,989 386,951 89,533 62,294 30,807 29,357
Ratio of expenses to average net assets 1.3%***<F12> 1.5% 1.4% 1.4% 1.5% 1.5%
Ratio of net investment (loss) income
to average net assets (0.8%)***<F12> (0.6%) (0.4%) (0.1%) (0.1%) 0.1%
Portfolio turnover rate 11.5% 6.2% 35.5% 25.0% 21.5% 49.2%
</TABLE>
*<F10> Net investment loss per share is calculated using average shares
outstanding.
**<F11> Not Annualized.
***<F12> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Opportunity Fund
STATEMENT OF NET ASSETS
March 31, 2000 (Unaudited)
SHARES OR QUOTED
PRINCIPAL AMOUNT MARKET VALUE
- ---------------- ------------
COMMON STOCKS -- 99.2% (A)<F14>
APPLICATION SOFTWARE -- 12.1%
2,000 Adobe Systems Inc. $ 222,625
3,000 BMC Software, Inc.*<F13> 148,125
2,000 Business Objects S.A.- SP ADR*<F13> 199,000
9,187 Computer Associates
International, Inc. 543,756
2,400 Compuware Corp.*<F13> 50,550
1,000 i2 Technologies, Inc.*<F13> 122,125
16,500 Intuit Inc.*<F13> 897,187
5,000 Legato Systems, Inc.*<F13> 223,125
62,500 Microsoft Corp.*<F13> 6,640,625
39,174 Oracle Corp.*<F13> 3,058,020
11,600 PeopleSoft, Inc.*<F13> 232,000
2,000 Peregrine Systems, Inc.*<F13> 134,125
9,000 Siebel Systems, Inc.*<F13> 1,074,938
17,250 VERITAS Software Corp.*<F13> 2,259,750
------------
15,805,951
BEVERAGES -- 0.8%
14,500 The Coca-Cola Co. 680,594
10,000 PepsiCo, Inc. 345,625
------------
1,026,219
BIOTECHNOLOGY -- 0.9%
11,000 Amgen Inc.*<F13> 675,125
2,000 Biogen, Inc.*<F13> 139,750
2,000 Human Genome Sciences, Inc.*<F13> 166,125
3,000 Immunex Corp.*<F13> 190,312
------------
1,171,312
BUILDING -- 1.4%
28,397 The Home Depot, Inc. 1,831,606
BUSINESS SOFTWARE & SERVICES -- 0.4%
500 Akamai Technologies, Inc.*<F13> 80,406
1,000 Ask Jeeves, Inc.*<F13> 61,125
1,000 Critical Path, Inc.*<F13> 85,000
500 E.piphany, Inc.*<F13> 66,781
2,000 Netcentives Inc.*<F13> 60,000
1,000 Razorfish Inc.*<F13> 27,500
1,000 Sapient Corp.*<F13> 83,875
------------
464,687
CABLE TV/BROADCASTING -- 0.1%
2,400 Clear Channel
Communications, Inc.*<F13> 165,750
COMMUNICATION EQUIPMENT -- 5.0%
1,500 Proxim, Inc.*<F13> 192,000
33,500 QUALCOMM Inc.*<F13> 5,001,969
20,000 Tellabs, Inc.*<F13> 1,259,686
------------
6,453,655
COMPUTER NETWORKING -- 9.3%
9,995 3Com Corp.*<F13> 555,972
148,600 Cisco Systems Inc.*<F13> 11,488,637
------------
12,044,609
COMPUTER & PERIPHERALS -- 10.3%
1,000 Apple Computer, Inc.*<F13> 135,813
10,500 Compaq Computer Corp. 279,563
37,200 Dell Computer Corp.*<F13> 2,006,475
17,000 EMC Corp. (Mass.)*<F13> 2,125,000
1,000 Emulex Corp.*<F13> 109,125
10,000 Gateway Inc.*<F13> 530,000
5,300 Hewlett-Packard Co. 702,581
10,900 International Business
Machines Corp. 1,286,200
67,200 Sun Microsystems, Inc.*<F13> 6,296,848
------------
13,471,605
COMPUTER SOFTWARE & SERVICES -- 0.1%
2,000 Computer Sciences Corp.*<F13> 158,250
DRUGS -- 4.3%
7,000 Bristol-Myers Squibb Co. 404,250
8,000 Eli Lilly & Co. 504,000
26,044 Merck & Co., Inc. 1,617,983
32,000 Pfizer Inc. 1,170,000
13,000 Schering-Plough Corp. 477,750
14,200 Warner-Lambert Co. 1,384,500
------------
5,558,483
ELECTRICAL EQUIPMENT -- 3.1%
8,000 EchoStar Communications Corp. 632,000
5,000 General Electric Co. 775,937
18,500 Motorola, Inc. 2,633,938
------------
4,041,875
ELECTRONICS -- 0.4%
8,200 Sanmina Corp.*<F13> 554,012
ENERGY -- 0.5%
7,500 Schlumberger Ltd. 573,750
1,452 Transocean Sedco Forex, Inc. 74,506
------------
648,256
ENTERTAINMENT/MEDIA -- 1.1%
18,000 Walt Disney Co. 744,750
1,000 Emmis Communications Corp.*<F13> 46,500
1,000 Sony Corp. ADR 280,125
4,000 Time Warner Inc. 400,000
------------
1,471,375
FINANCIAL SERVICES -- 2.8%
8,500 American Express Co. 1,265,969
7,000 AmeriTrade Holding Corp.*<F13> 146,234
8,000 E*TRADE Group, Inc.*<F13> 241,000
900 Franklin Resources, Inc. 30,094
2,000 Knight/Trimark Group, Inc.*<F13> 102,000
2,000 Merrill Lynch & Co., Inc. 210,000
2,000 Morgan Stanley
Dean Witter & Co. 163,125
1,200 T. Rowe Price Associates, Inc. 47,400
26,374 Charles Schwab Corp. 1,498,373
------------
3,704,195
HOUSEHOLD PRODUCTS -- 0.9%
4,000 American Home Products Corp. 214,500
12,000 Colgate-Palmolive Co. 676,500
4,000 Procter & Gamble Co. 225,000
------------
1,116,000
INSURANCE -- 0.2%
2,906 American International Group, Inc. 318,207
INTERNET INFORMATION PROVIDERS -- 9.6%
78,700 America Online, Inc.*<F13> 5,292,575
27,962 At Home Corp. - Series A*<F13> 920,998
4,000 CNET Networks, Inc.*<F13> 202,750
8,050 go.com*<F13> 168,044
16,000 Lycos, Inc.*<F13> 1,124,000
4,000 PSINet Inc.*<F13> 136,062
2,000 VerticalNet, Inc.*<F13> 272,000
25,632 Yahoo! Inc.*<F13> 4,392,684
------------
12,509,113
INTERNET SERVICE PROVIDERS -- 0.1%
2,000 Verio Inc.*<F13> 90,125
INTERNET SOFTWARE & SERVICES -- 7.5%
20,000 Amazon.com, Inc.*<F13> 1,340,000
6,000 Citrix Systems, Inc.*<F13> 397,500
22,000 CMGI Inc.*<F13> 2,492,875
12,000 DoubleClick Inc.*<F13> 1,123,500
8,000 eBay Inc.*<F13> 1,408,000
1,000 Exodus Communications, Inc.*<F13> 140,500
9,000 Inktomi Corp.*<F13> 1,755,000
2,500 Juniper Networks, Inc.*<F13> 658,906
1,000 Marimba, Inc.*<F13> 44,125
1,000 Network Solutions, Inc.*<F13> 153,703
1,000 Rare Medium Group, Inc.*<F13> 44,125
1,000 RealNetworks, Inc.*<F13> 56,938
500 Redback Networks Inc.*<F13> 149,969
------------
9,765,141
MEDICAL SERVICES -- 0.1%
6,000 Oxford Health Plans, Inc.*<F13> 91,500
MEDICAL SUPPLIES -- 1.1%
14,000 Abbott Laboratories 492,625
3,000 Boston Scientific Corp.*<F13> 63,937
1,600 Guidant Corp.*<F13> 94,100
11,676 Johnson & Johnson 818,050
------------
1,468,712
OFFICE EQUIPMENT & SUPPLIES -- 0.2%
10,500 Staples, Inc.*<F13> 210,000
RESTAURANTS -- 0.3%
11,600 McDonald's Corp. 435,725
RETAIL-SPECIALTY -- 1.0%
15,000 Best Buy Co., Inc.*<F13> 1,290,000
1,000 Starbucks Corp.*<F13> 44,813
------------
1,334,813
RETAIL STORES -- 2.8%
20,000 Costco Wholesale Corp.*<F13> 1,051,250
17,562 Gap, Inc. 874,807
2,000 Kohl's Corp.*<F13> 205,000
2,000 Nordstrom, Inc. 59,000
5,000 Target Corp. 373,750
20,000 Wal-Mart Stores, Inc. 1,110,000
------------
3,673,807
SECURITY SOFTWARE & SERVICES -- 1.0%
500 Check Point Software
Technologies Ltd.*<F13> 85,531
4,000 Network Associates, Inc.*<F13> 129,000
1,000 RSA Security Inc.*<F13> 51,813
7,000 VeriSign, Inc.*<F13> 1,046,500
------------
1,312,844
SEMICONDUCTORS -- 12.5%
8,200 Altera Corp.*<F13> 731,850
3,000 Broadcom Corp.*<F13> 728,625
500 C-Cube Microsystems, Inc.*<F13> 36,406
43,600 Intel Corp. 5,752,475
13,000 LSI Logic Corp.*<F13> 944,125
5,200 Maxim Integrated Products Inc.*<F13> 369,525
2,000 Micron Technology, Inc.*<F13> 252,000
1,000 PMC-Sierra, Inc.*<F13> 203,687
500 Rambus Inc.*<F13> 147,250
500 STMicroelectronics N.V. 93,594
30,000 Texas Instruments Inc. 4,800,000
1,000 Vitesse Semiconductor Corp.*<F13> 96,250
25,000 Xilinx, Inc.*<F13> 2,070,313
------------
16,226,100
SEMICONDUCTOR CAPITAL SPENDING -- 3.3%
20,000 Applied Materials, Inc.*<F13> 1,885,000
19,200 KLA-Tencor Corp.*<F13> 1,617,600
8,800 Novellus Systems, Inc.*<F13> 493,900
3,000 Teradyne, Inc.*<F13> 246,750
------------
4,243,250
SYSTEM SOFTWARE -- 0.2%
3,000 Mercury Interactive Corp.*<F13> 237,750
TELECOMMUNICATIONS -- 1.8%
500 Comverse Technology, Inc.*<F13> 94,500
7,960 EarthLink, Inc.*<F13> 154,722
22,950 Lucent Technologies Inc. 1,394,213
6,000 Nortel Networks Corp. 756,000
------------
2,399,435
TELECOMMUNICATION SERVICES -- 0.1%
500 Digital Island Inc.*<F13> 30,469
1,000 Qwest Communications
International, Inc.*<F13> 48,500
------------
78,969
TELEPHONE SERVICES -- 0.6%
5,000 MCI WorldCom Inc.*<F13> 226,563
6,000 Sprint Corp.*<F13> 378,000
4,000 Vodafone AirTouch PLC SP ADR 222,250
------------
826,813
WIRELESS COMMUNICATION -- 3.3%
2,000 Nextel Communications, Inc.*<F13> 296,500
18,000 Nokia Corp. "A" ADR 3,910,500
2,000 Sprint Corp. (PCS Group) 130,625
------------
4,337,625
------------
Total common stocks
(cost $47,228,854) 129,247,769
SHORT-TERM INVESTMENTS -- 0.8% (A)<F14>
VARIABLE RATE DEMAND NOTE
$1,091,567 Firstar Bank U.S.A., N.A. $ 1,091,567
------------
Total short-term investments
(cost $1,091,567) 1,091,567
------------
Total investments
(cost $48,320,421) 130,339,336
Liabilities, less cash and
receivables -- (0.0%) (A) (102,835)
------------
NET ASSETS $130,236,501
------------
------------
Net Asset Value Per Share
($0.01 par value 40,000,000
shares authorized), offering
and redemption price
($130,236,501 / 2,475,224
shares outstanding) $ 52.62
------------
------------
*<F13> Non-income producing security.
(a)<F14> Percentages for the various classifications relate to net assets.
ADR - American Depository Receipt
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Opportunity Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2000 (Unaudited)
INCOME:
Dividends $ 139,953
Interest 56,799
-----------
Total income 196,752
-----------
EXPENSES:
Management fees 579,585
Administrative services 72,958
Professional fees 20,280
Transfer agent fees 18,564
Printing and postage expense 16,431
Custodian fees 12,094
Registration fees 11,601
Board of Directors fees 2,000
Distribution fees --
Other expenses 597
-----------
Total expenses 734,110
-----------
NET INVESTMENT LOSS (537,358)
-----------
NET REALIZED GAIN ON INVESTMENTS 448,510
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 48,537,913
-----------
NET GAIN ON INVESTMENTS 48,986,423
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $48,449,065
-----------
-----------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2000 (Unaudited) and For the Year Ended
September 30, 1999
2000 1999
------------ -----------
OPERATIONS:
Net investment loss $ (537,358) $ (768,513)
Net realized gain on investments 448,510 743,672
Net increase in unrealized
appreciation on investments 48,537,913 22,020,669
------------ -----------
Net increase in net assets
resulting from operations 48,449,065 21,995,828
------------ -----------
DISTRIBUTION TO SHAREHOLDERS:
Distributions from net realized gains
($0.10485 and $0.50355 per share,
respectively) (288,280) (689,257)*<F15>
------------ -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (1,931,160
and 2,618,497 shares, respectively) 88,266,573 83,448,456
Net asset value of shares issued in
distributions (7,471 and 27,402 shares,
respectively) 259,533 610,241
Cost of shares redeemed (2,306,391 and
1,135,443 shares, respectively) (103,767,387) (37,202,490)
------------ -----------
Net (decrease) increase in net
assets derived from Fund share
activities (15,241,281) 46,856,207
------------ -----------
TOTAL INCREASE 32,919,504 68,162,778
NET ASSETS AT THE BEGINNING OF THE PERIOD 97,316,997 29,154,219
------------ -----------
NET ASSETS AT THE END OF THE PERIOD $130,236,501 $97,316,997
------------ -----------
------------ -----------
*<F15> See Note 7.
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Opportunity Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
(UNAUDITED)
FOR THE SIX
MONTHS ENDING YEARS ENDED SEPTEMBER 30,
MARCH 31, ------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 34.23 $ 21.88 $ 19.49 $ 15.64 $ 14.17 $ 10.09
Income from investment operations:
Net investment loss (0.21)*<F16> (0.34)*<F16> (0.09)*<F16> (0.13) (0.06) (0.11)
Net realized and unrealized gain
on securities 18.70 13.19 2.48 3.98 1.53 4.19
------- ------- ------- ------- ------- -------
Total from investment operations 18.49 12.85 2.39 3.85 1.47 4.08
Less distributions:
Dividend from net investment income -- -- -- -- -- --
Distribution from net realized gains (0.10) (0.50) -- -- -- --
------- ------- ------- ------- ------- -------
Total from distributions (0.10) (0.50) -- -- -- --
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 52.62 $ 34.23 $ 21.88 $ 19.49 $ 15.64 $ 14.17
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 54.2%**<F17> 60.0% 12.3% 24.6% 10.4% 40.4%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 130,237 97,317 29,154 22,702 17,104 10,983
Ratio of expenses to average net assets 1.3%***<F18> 1.5% 1.5% 1.5% 1.5% 1.9%
Ratio of net investment loss
to average net assets (0.9%)***<F18> (1.1%) (0.8%) (0.9%) (1.1%) (1.5%)
Portfolio turnover rate 4.5% 30.3% 39.4% 60.2% 11.8% 38.4%
</TABLE>
*<F16> In 2000 and 1999, net investment loss per share is calculated using
average shares outstanding. In 1998, net investment loss per share
is calculated using ending balances prior to consideration of
adjustments for permanent book and tax differences.
**<F17> Not Annualized.
***<F18> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds U.S. Government Bond Fund
STATEMENT OF NET ASSETS
March 31, 2000 (Unaudited)
PRINCIPAL QUOTED
AMOUNT MARKET VALUE
------ ------------
LONG-TERM INVESTMENTS -- 75.7% (A)<F19>
FEDERAL AGENCIES -- 75.7%
$500,000 Federal Home Loan Bank,
5.215%, due 05/03/01 $ 492,022
500,000 Federal Home Loan Bank,
5.57%, due 05/25/01 493,426
300,000 Federal Farm Credit,
6.28%, due 6/20/01 298,273
500,000 Federal Home Loan Bank,
5.50%, due 08/13/01 491,472
400,000 Federal Home Loan Bank,
4.66%, due 10/15/01 387,325
300,000 Federal Farm Credit Bank,
6.20%, due 07/01/02 295,134
200,000 Federal Home Loan Bank,
6.00%, due 08/15/02 195,718
300,000 Federal Home Loan Bank,
5.37%, due 01/16/03 287,711
----------
Total long-term investments
(cost $2,989,538) 2,941,081
SHORT-TERM INVESTMENTS -- 23.2% (A)<F19>
U.S. TREASURY SECURITIES -- 15.5%
300,000 U.S. Treasury Notes,
6.00%, due 08/15/00 299,812
300,000 U.S. Treasury Notes,
8.50%, due 11/15/00 303,844
----------
Total U. S. treasury securities
(cost $636,019) 603,656
VARIABLE RATE DEMAND NOTES -- 7.7%
$180,000 Firstar Bank U.S.A., N.A. 180,000
117,017 Wisconsin Corporate Central
Credit Union 117,017
----------
Total variable rate demand notes
(cost $297,017) 297,017
----------
Total short-term investments
(cost $933,036) 900,673
----------
Total investments
(cost $3,922,574) 3,841,754
Cash and receivables, less
liabilities -- 1.1% (A)<F19> 42,637
----------
NET ASSETS $3,884,391
----------
----------
Net Asset Value Per Share
($0.01 par value 20,000,000
shares authorized), offering
and redemption price
($3,884,391 / 406,005
shares outstanding) $ 9.57
----------
----------
(a)<F19> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds U.S. Government Bond Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2000 (Unaudited)
INCOME:
Interest $ 124,213
---------
EXPENSES:
Professional fees 10,591
Management fees 10,542
Transfer agent fees 6,767
Registration fees 4,946
Administrative services 2,109
Printing and postage expense 1,098
Board of Directors fees 500
Custodian fees 467
Other expenses 691
---------
Total expenses before reimbursement and management fee waiver 37,711
Less expenses assumed by adviser (18,735)
---------
Net expenses 18,976
---------
NET INVESTMENT INCOME 105,237
---------
NET REALIZED GAIN ON INVESTMENTS --
NET DECREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (35,411)
---------
NET LOSS ON INVESTMENTS (35,411)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 69,826
---------
---------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2000 (Unaudited) and For the Year Ended
September 30, 1999
2000 1999
----------- -----------
OPERATIONS:
Net investment income $ 105,237 $ 175,974
Net realized loss on investments -- (8,750)
Net decrease in unrealized appreciation
on investments (35,411) (54,979)
----------- -----------
Net increase in net assets resulting
from operations 69,826 112,245
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.2422
and $0.4651 per share, respectively) (105,237) (175,974)
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (74,984 and
172,202 shares, respectively) 720,671 1,676,978
Net asset value of shares issued in
distributions (10,693 and 16,722 shares,
respectively) 102,706 162,660
Cost of shares redeemed (108,288 and 73,473
shares, respectively) (1,038,812) (714,363)
----------- -----------
Net (decrease) increase in net assets
derived from Fund share activities (215,435) 1,125,275
----------- -----------
TOTAL (DECREASE) INCREASE (250,846) 1,061,546
NET ASSETS AT THE BEGINNING OF THE PERIOD 4,135,237 3,073,691
----------- -----------
NET ASSETS AT THE END OF THE PERIOD $ 3,884,391 $ 4,135,237
----------- -----------
----------- -----------
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds U.S. Government Bond Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
(UNAUDITED)
FOR THE SIX
MONTHS ENDING YEARS ENDED SEPTEMBER 30,
MARCH 31, ------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 9.65 $ 9.81 $ 9.76 $ 9.75 $ 9.85 $ 9.61
Income from investment operations:
Net investment income 0.24 0.47 0.53 0.53 0.53 0.54
Net realized and unrealized (loss)
gain on investments (0.08) (0.16) 0.05 0.01 (0.10) 0.24
------- ------- ------- ------- ------- -------
Total from investment operations 0.16 0.31 0.58 0.54 0.43 0.78
Less distributions:
Dividends from net investment income (0.24) (0.47) (0.53) (0.53) (0.53) (0.54)
Distribution from net realized gains -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Total from distributions (0.24) (0.47) (0.53) (0.53) (0.53) (0.54)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 9.57 $ 9.65 $ 9.81 $ 9.76 $ 9.75 $ 9.85
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 1.70%*<F22> 3.18% 6.08% 5.70% 4.49% 8.42%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 3,884 4,135 3,074 2,626 2,766 2,799
Ratio of expenses (after reimbursement)
to average net assets(a)<F20> 0.90%**<F23> 0.90% 0.90% 0.90% 0.90% 0.91%
Ratio of net investment income
to average net assets(b)<F21> 4.99%**<F23> 4.78% 5.40% 5.45% 5.43% 5.59%
Portfolio turnover rate -- -- -- 25.28% 28.65% --
</TABLE>
(a)<F20> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been 1.79%**, 2.15%, 2.37%, 2.33%, 2.24% and 2.02% for
the six months ending March 31, 2000 and for the years ended
September 30, 1999, 1998, 1997, 1996 and 1995, respectively.
(b)<F21> The ratios of net investment income prior to adviser's expense
limitation undertaking to average net assets for the six months
ending March 31, 2000 and for the years ended September 30, 1999,
1998, 1997, 1996 and 1995 would have been 4.10%**, 3.53%, 3.93%,
4.02%, 4.09% and 4.48%, respectively.
*<F22> Not annualized.
**<F23> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Money Market Fund
STATEMENT OF NET ASSETS
March 31, 2000 (Unaudited)
PRINCIPAL
AMOUNT RATING VALUE
------ ------ -----
SHORT-TERM INVESTMENTS -- 100.3% (A)<F24>
COMMERCIAL PAPER -- 59.4%
$500,000 Eastman Kodak Co., 5.78%, due 04/19/00 A1P1 $ 498,555
700,000 Ford Motor Credit Corp.,
5.70%, due 04/19/00 A1P1 698,005
700,000 Morgan Stanley Dean Witter & Co. Inc.,
5.70%, due 04/19/00 A1P1 698,005
673,000 Motorola Credit Corp., 5.70%, due 04/20/00 A1P1 670,975
500,000 Nestle Capital Corp., 5.59%, due 05/02/00 A1+P1 497,593
800,000 Campbell Soup Co., 5.75%, due 05/08/00 A1+P1 795,272
380,000 Coca Cola Co., 5.68%, due 05/12/00 A1P1 377,542
700,000 Merrill Lynch & Co., Inc.,
5.82%, due 05/16/00 A1+P1 694,908
800,000 General Motors Acceptance Corp.,
5.93%, due 06/06/00 A1P1 791,303
800,000 John Deere Capital Corp.,
5.86%, due 06/08/00 A1P1 791,145
750,000 Norwest Financial, Inc.,
5.87%, due 06/08/00 A1P1 741,684
900,000 American General Corp.,
5.90%, due 06/15/00 A1+P1 888,938
750,000 IBM Credit Corp., 5.82%, due 06/19/00 A1P1 740,421
850,000 EI duPont de Nemours, 5.87%. due 07/06/00 A1+P1 836,695
-----------
Total commercial paper 9,721,041
U.S. TREASURY SECURITIES -- 18.2%
2,000,000 U.S. Treasury Bills, 5.72%, due 04/27/00 1,991,738
1,000,000 U.S. Treasury Bills, 5.61%, due 06/08/00 989,403
-----------
Total U.S. treasury securities 2,981,141
VARIABLE RATE DEMAND NOTES -- 22.7%
775,000 American Family Financial Services A1+P1 775,000
775,000 Firstar Bank U.S.A., N.A. A1+P1 775,000
775,000 Warner-Lambert Co. A1+P1 775,000
614,896 Wisconsin Electric Power Co. A1+P1 614,896
775,000 Wisconsin Corporate Central Credit Union A1+P1 775,000
-----------
Total variable rate demand notes 3,714,896
-----------
Total investments
(amortized cost $16,417,078) 16,417,078
Liabilities, less cash
and receivables -- (0.3%) (A)<F24> (57,066)
-----------
NET ASSETS $16,360,012
-----------
-----------
Net Asset Value Per Share ($0.01 par
value 500,000,000 shares authorized),
offering and redemption price
($16,360,012 / 16,360,012 shares outstanding) $ 1.00
-----------
-----------
(a)<F24> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Money Market Fund
STATEMENT OF OPERATIONS
For the Six Months Ending March 31, 2000 (Unaudited)
INCOME:
Interest $437,968
--------
EXPENSES:
Management fees 38,067
Transfer agent fees 13,764
Registration fees 13,676
Professional fees 12,906
Administrative services 7,613
Printing and postage expense 6,608
Custodian fees 2,156
Board of Directors fees 1,500
Other expenses 1,099
--------
Total expenses before reimbursement
and management fee waiver 97,389
Less expenses assumed by adviser (47,902)
--------
Net expenses 49,487
--------
NET INVESTMENT INCOME 388,481
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $388,481
--------
--------
STATEMENTS OF CHANGES IN NET ASSETS
For the Six Months Ending March 31, 2000 (Unaudited) and For the Year Ended
September 30, 1999
2000 1999
----------- -----------
OPERATIONS:
Net investment income $ 388,481 $ 424,025
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.0258
and $0.0437 per share, respectively) (388,481) (424,025)
----------- -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (120,897,819 and
55,837,068 shares, respectively) 120,897,819 55,837,068
Net asset value of shares issued in
distributions (354,737 and 365,895 shares,
respectively) 354,737 365,895
Cost of shares redeemed (121,354,305 and
44,620,471 shares, respectively) (121,354,305) (44,620,471)
----------- -----------
Net (decrease) increase in net assets
derived from Fund share activities. (101,749) 11,582,492
----------- -----------
TOTAL (DECREASE) INCREASE (101,749) 11,582,492
NET ASSETS AT THE BEGINNING OF THE PERIOD 16,461,761 4,879,269
----------- -----------
NET ASSETS AT THE END OF THE PERIOD $16,360,012 $16,461,761
----------- -----------
----------- -----------
The accompanying notes to financial statements are an integral part of these
statements.
Reynolds Money Market Fund
FINANCIAL HIGHLIGHTS
(Selected Data for each share of the Fund outstanding throughout each period)
<TABLE>
(UNAUDITED)
FOR THE SIX
MONTHS ENDING YEARS ENDED SEPTEMBER 30,
MARCH 31, ------------------------------------------------------------------
2000 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income 0.03 0.04 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 2.61%*<F27> 4.46% 4.99% 4.87% 4.87% 5.22%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's $) 16,360 16,462 4,879 3,032 3,980 3,743
Ratio of expenses (after reimbursement)
to average net assets(a)<F25> 0.65%**<F28> 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of net investment income
to average net assets(b)<F26> 5.10%**<F28> 4.35% 4.88% 4.77% 4.78% 5.08%
</TABLE>
(a)<F25> Computed after giving effect to adviser's expense limitation
undertaking. If the Fund had paid all of its expenses, the ratios
would have been 1.28%**, 1.37%, 1.96%, 2.02%, 1.39% and 1.95% for
the six months ending March 31, 2000 and for the years ended
September 30, 1999, 1998, 1997, 1996 and 1995, respectively.
(b)<F26> If the Fund had paid all of its expenses, the ratios would have been
4.47%**, 3.63%, 3.57%, 3.40%, 4.04% and 3.78% for the six months
ending March 31, 2000 and for the years ended September 30, 1999,
1998, 1997, 1996 and 1995, respectively.
*<F27> Not annualized.
**<F28> Annualized.
The accompanying notes to financial statements are an integral part of this
statement.
Reynolds Funds, Inc.
NOTES TO FINANCIAL STATEMENTS
March 31, 2000 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of the
Reynolds Funds, Inc. (the "Company"), which is registered as a diversified,
open-end management investment company under the Investment Company Act of
1940. This Company consists of a series of five funds: the Reynolds Fund
("Reynolds Fund"), the Reynolds Blue Chip Growth Fund ("Blue Chip Fund"),
the Reynolds Opportunity Fund ("Opportunity Fund"), the Reynolds U.S.
Government Bond Fund ("Government Bond Fund") and the Reynolds Money Market
Fund ("Money Market Fund") (collectively the "Funds"). The assets and
liabilities of each Fund are segregated and a shareholder's interest is
limited to the Fund in which the shareholder owns shares. The Company was
incorporated under the laws of Maryland on April 28,1988.
The investment objective of the Reynolds Fund is to produce long-term
growth of capital; the investment objective of the Blue Chip Fund is to
produce long-term growth of capital, with current income as a secondary
objective, by investing in a diversified portfolio of common stocks issued
by well-established growth companies commonly referred to as "blue chip"
companies; the investment objective of the Opportunity Fund is to produce
long-term growth of capital by investing in a diversified portfolio of
common stocks having above average growth characteristics; the investment
objective of the Government Bond Fund is to provide a high level of current
income by investing in a diversified portfolio of securities issued or
guaranteed as to principal and interest by the U.S. Government, its
agencies or instrumentalities; and the investment objective of the Money
Market Fund is to provide a high level of current income, consistent with
liquidity, the preservation of capital and a stable net asset value, by
investing in a diversified portfolio of high-quality, highly liquid money
market instruments.
(a) Each security for the Reynolds Fund, Blue Chip Fund, Opportunity Fund
and Government Bond Fund, excluding short-term investments, is valued at
the last sale price reported by the principal security exchange on which
the issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest bid
price. Short-term investments with maturities of 60 days or less held by
these Funds and all instruments held by the Money Market Fund are valued at
amortized cost which approximates quoted market value. Securities for
which quotations are not readily available are valued at fair value as
determined by the investment adviser under the supervision of the Board of
Directors. For financial reporting purposes, investment transactions are
recorded on trade date. Cost amounts for the Reynolds Fund, the Blue Chip
Fund and the Opportunity Fund, as reported on the statements of net assets
are substantially the same for Federal income tax purposes. Cost amounts,
as reported on the statements of net assets for the Government Bond Fund
and the Money Market Fund, are the same for Federal income tax purposes.
(b) Net realized gains and losses on common stock of the Reynolds Fund,
the Blue Chip Fund and the Opportunity Fund are computed on the identified
cost basis.
(c) Provision has not been made for Federal income taxes since the
Reynolds Fund will elect and all other Funds have elected to be taxed as
"regulated investment companies" and intend to distribute substantially all
income to shareholders and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies. The
Government Bond Fund has $231,244, $19,651, $2,405 and $9,179 of net
capital losses which expire September 30, 2003, 2004, 2005 and 2007,
respectively.
(d) The Reynolds Fund, the Blue Chip Fund and the Opportunity Fund record
dividend income on the ex-dividend date and interest income on the accrual
basis. The Government Bond Fund and the Money Market Fund record interest
income on the accrual basis.
(e) The Funds have investments in short-term variable rate demand notes,
which are unsecured instruments. The Funds may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on its
payment obligation. The Funds' policy is to monitor the creditworthiness
of the issuer and the Funds do not anticipate nonperformance by these
counterparties.
(f) Generally accepted accounting principles require that permanent
differences between income for financial reporting and tax purposes be
reclassified in the capital accounts.
(g) The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these
estimates.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Funds have management agreements with Reynolds Capital Management
("RCM"), with whom certain officers and directors of the Funds are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreements, the Reynolds Fund, the Blue Chip Fund and the Opportunity
Fund will pay RCM a monthly management fee at the annual rate of 1% of such
Funds' daily net assets; from the Government Bond Fund a monthly fee of
0.75% of such Fund's daily net assets; and from the Money Market Fund a
monthly fee of 0.5% of such Fund's daily net assets. For the six months
ending March 31, 2000, RCM voluntarily waived $10,542 and $38,067 of the
management fees due from the Government Bond Fund and the Money Market
Fund, respectively, under the agreements. Additionally, RCM assumed $8,193
and $9,835 of other expenses of the Government Bond Fund and the Money
Market Fund, respectively.
In addition to the reimbursement required under the management agreements,
RCM has voluntarily reimbursed the Government Bond Fund and the Money
Market Fund for expenses over 0.90% and 0.65% of the daily net assets of
the Funds, respectively. These voluntary reimbursements to the Government
Bond Fund and the Money Market Fund may be modified or discontinued at any
time by RCM.
The Funds have administrative agreements with Fiduciary Management, Inc.
("FMI"), with whom certain officers of the Funds are affiliated, to
supervise all aspects of the Funds' operations except those performed by
RCM pursuant to the management agreements. Under the terms of the
agreements, the Reynolds Fund, the Blue Chip Fund and the Opportunity Fund
will pay FMI a monthly administrative fee at the annual rate of 0.2% of
such Funds' daily net assets up to and including $30,000,000 and 0.1% of
such Funds' daily net assets in excess of $30,000,000; and the Government
Bond Fund and the Money Market Fund will pay FMI a monthly administrative
fee at the annual rate of 0.1% of such Funds' daily net assets.
The Reynolds Fund, the Blue Chip Fund and Opportunity Fund have adopted a
Service and Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The Plan provides that each Fund adopting
it may incur certain costs which may not exceed a maximum amount equal to
0.25% per annum of such Fund's average daily net assets. Payments made
pursuant to the Plan may only be used to pay distribution expenses incurred
in the current year.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains, if any, are distributed to
shareholders.
(4) INVESTMENT TRANSACTIONS --
For the six months ending March 31, 2000, purchases and proceeds of sales
of long-term investment securities of the Reynolds Fund (excluding short-
term securities) were $68,060,872 and $6,930,985, respectively; purchases
and proceeds of sales of investment securities of the Blue Chip Fund
(excluding short-term securities) were $155,965,425 and $60,653,738,
respectively; purchases and proceeds of sales of investment securities of
the Opportunity Fund (excluding short-term securities) were $5,067,545 and
$18,908,316, respectively; and purchases and proceeds of sales of long-term
investment securities for the Government Bond Fund (excluding short-term
securities) were $197,953 and $0, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of March 31, 2000, liabilities of the Funds included the following:
<TABLE>
REYNOLDS BLUE CHIP OPPORTUNITY GOVERNMENT MONEY MARKET
FUND FUND FUND BOND FUND FUND
----------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Payable to brokers for investments purchased $ -- $ -- $ -- $ -- $ --
Payable to RCM for management fees 66,561 576,512 113,403 -- --
Payable for distribution fees 40,907 83,507 -- -- --
Payable to shareholders for redemptions -- 475,316 45,832 -- --
Other liabilities 80,840 220,709 63,775 2,215 12,558
</TABLE>
(6) SOURCES OF NET ASSETS --
As of March 31, 2000, the sources of net assets were as follows:
<TABLE>
REYNOLDS BLUE CHIP OPPORTUNITY GOVERNMENT MONEY MARKET
FUND FUND FUND BOND FUND FUND
----------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Fund shares issued and outstanding $62,665,043 $399,534,007 $ 48,100,355 $4,227,691 $16,360,012
Net unrealized appreciation (depreciation)
on investments 13,635,108 291,905,344 82,018,915 (80,820) --
Accumulated net realized (loss) gain
on investments (780,136) (12,450,396) 117,231 (262,480) --
----------- ------------ ------------ ---------- -----------
$75,520,015 $678,988,955 $130,236,501 $3,884,391 $16,360,012
----------- ------------ ------------ ---------- -----------
----------- ------------ ------------ ---------- -----------
</TABLE>
Aggregate net unrealized appreciation (depreciation) for the Funds as of
March 31, 2000 consisted of the following:
<TABLE>
REYNOLDS BLUE CHIP OPPORTUNITY GOVERNMENT
FUND FUND FUND BOND FUND
----------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
Aggregate gross unrealized appreciation $18,114,878 $313,352,293 $83,814,333 $ --
Aggregate gross unrealized depreciation (4,479,770) (21,446,949) (1,795,418) (80,820)
----------- ------------ ----------- --------
Net unrealized appreciation (depreciation) $13,635,108 $291,905,344 $82,018,915 $(80,820)
----------- ------------ ----------- --------
----------- ------------ ----------- --------
</TABLE>
(7) REQUIRED FEDERAL INCOME TAX DISCLOSURES (UNAUDITED) --
In early 1999, shareholders received information regarding all
distributions paid to them by the Funds during the fiscal year ended
September 30, 1999. The Funds hereby designate the following amounts as
long-term capital gains distributions.
BLUE CHIP OPPORTUNITY
FUND FUND
---------- --------
Capital gains taxed at 20% $1,449,438 $689,257
For the Blue Chip Fund, the percentage of ordinary income which is eligible
for the corporate dividend received deduction for the fiscal year ended
September 30, 1999, was 100%.
REYNOLDS FUNDS
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
www.reynoldsfunds.com
BOARD OF DIRECTORS
FREDERICK L. REYNOLDS
ROBERT E. SNADER
ROBERT E. STAUDER
INVESTMENT ADVISER
REYNOLDS CAPITAL MANAGEMENT
Wood Island, Third Floor
80 East Sir Francis Drake Boulevard
Larkspur, California 94939
ADMINISTRATOR
FIDUCIARY MANAGEMENT, INC.
225 East Mason Street
Milwaukee, Wisconsin 53202
TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT
FIRSTAR MUTUAL FUND SERVICES, LLP
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-800-773-9665
OR 1-800-7REYNOLDS
1-414-765-4124
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
100 East Wisconsin Avenue
Suite 1500
Milwaukee, Wisconsin 53202
LEGAL COUNSEL
FOLEY & LARDNER
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
