FREMONT MUTUAL FUNDS, INC.(R)
INSTITUTIONAL
U.S. MICRO-CAP FUND
SEMI-ANNUAL REPORT
[GRAPHIC]
April 30, 1998
Fremont
Funds [LOGO]
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FREMONT FUNDS
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TABLE OF CONTENTS
Fund Profile and Letter to Shareholders
Fremont Institutional U.S. Micro-Cap Fund .................................. 1
Statement of Investments
Fremont Institutional U.S. Micro-Cap Fund .................................. 3
Combined Financial Statements
Statement of Assets and Liabilities ........................................ 5
Statement of Operations .................................................... 6
Statement of Changes in Net Assets ......................................... 7
Financial Highlights ....................................................... 7
Notes to Financial Statements .............................................. 8
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FREMONT FUNDS
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
Robert E. Kern, Portfolio Manager
Kern Capital Management LLC
[PHOTO]
Robert E. Kern
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FUND PROFILE
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The U.S. micro-cap stock market (stocks with market capitalizations in the
bottom 5% of the equities market) is a breeding ground for
entrepreneurially-managed companies with exceptional growth prospects. With
minimal Wall Street research coverage and low institutional ownership, micro-cap
stocks represent the least efficient sector of the domestic equities market.
This inefficiency creates attractive investment opportunities for the
research-driven stock pickers managing the Fremont Institutional U.S. Micro-Cap
Fund.
Since the investment potential of micro-cap stocks is largely determined by
the business prospects for individual companies rather than macro-economic
trends, the Fund's focus is on bottom-up stock selection. Fund management
analyzes financial statements, the company's competitive position, and meets
with key corporate decision makers to discuss strategies for future growth. The
Fund's goal is to find "winners" early in their growth cycle and, more
importantly, to minimize fundamental investment mistakes.
Successful micro-cap investing also involves minimizing transaction costs.
The Fund's experienced senior trader, Michael Murphy, works hand-in-hand with
the portfolio management team to execute strategies that will enhance the Fund's
performance.
Robert E. Kern is nationally recognized as a pioneer and leading
practitioner of micro-cap research and portfolio management.
To Our Shareholders,
For the six months ended April 30, 1998, the Fund returned 7.22% compared
to the Russell 2000's 11.88% gain.
We are disappointed, but not discouraged, by the Fund's performance during
this reporting period. Although we have posted competitive performance relative
to our benchmark in the first four months of 1998, we lagged the index in
November/December 1997. The primary culprit was our technology holdings. The
technology stock group was hit hard in October on the heels of the Asian
currency crisis. While many of the larger technology stocks have done well
recently, the Fund's technology invest-
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND INVESTMENT RETURNS
ANNUAL RETURNS
05/01/88-10/31/88* -1.66%
11/01/88-10/31/89 +25.28%
11/01/89-10/31/90 -10.25%
11/01/90-10/31/91 +84.70%
11/01/91-10/31/92 -0.65%
11/01/92-10/31/93 +42.08%
11/01/93-10/31/94 -10.62%
11/01/94-10/31/95 +29.21%
11/01/95-10/31/96 +41.99%
11/01/96-10/31/97 +34.19%
11/01/97- 4/30/98* +7.22%
GROWTH OF $10,000+
[GRAPHIC OMITTED]
Comparison of the change in value since May 1, 1998 of a $10,000 investment in
the Fremont Institutional U.S. Micro-Cap Fund and the Russell 2000 Index.
4/30/98
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Fremont Institutional U.S. Micro-Cap Fund $68,013
Russell 2000 Index $39,257
* Unannualized
+ Assumes initial investment of $10,000 on May 1, 1988. Performance data
illustrated is historical. Past performance is not predictive of future
performance. Share price and return will vary so that a gain or loss may be
realized when shares are sold. All performance figures assume reinvestment of
dividends. Performance for the Fremont Institutional U.S. Micro-Cap Fund
reflects the performance of the post-venture fund of Fund A of the Bechtel Trust
& Thrift--whose assets were transferred into the Fremont Institutional U.S.
Micro-Cap Fund on 8/6/97, net of actual fees and expenses. The post-venture fund
imposed higher fees and expenses than that of the Fremont Institutional U.S.
Micro-Cap Fund and was not registered with the Securities and Exchange
Commission and therefore was not subject to the investment restrictions imposed
on registered mutual funds. Management fees and other expenses are included in
the Fund's performance; however, fees and expenses are not incorporated in the
Russell 2000 Index.
1
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FREMONT FUNDS
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ments have underperformed. In addition, earnings disappointments have hurt the
Fund's overall performance.
Since the Institutional U.S. Micro Cap Fund was introduced as a mutual fund
just seven months ago, shareholders may not be aware of our long history with
the Bechtel Corporation Profit Sharing Retirement Plan--by far the Fund's single
largest shareholder. The charts on the previous page show the performance of the
micro-cap portfolio in the Bechtel Plan for the nine plus years prior to the
inception of the Fremont Institutional U.S. Micro-Cap Fund on August 4, 1997.
Under our stewardship, the plan's micro-cap portfolio enjoyed very strong
absolute and relative returns. Bechtel has been very supportive during this long
relationship and we believe this will continue in the future.
Regarding the broad micro-cap market, we have been undergoing a period in
which "big" has been beautiful. The Dow and S&P 500 have outperformed mid- and
small cap indices. Within the small cap sector itself, larger companies have
excelled relative to smaller ones. During first quarter 1998, the 100 largest
companies on NASDAQ returned 23.2% compared to the NASDAQ Composite's 16.9%
gain. Gains in big small cap companies, if you will forgive the oxymoron, have
given investors little incentive to move down the capitalization ladder into
micro-caps. We don't know when this will change.
We do think we have a portfolio of excellent small companies in which
favorable business developments will, over the longer term, impact stock prices
more than macro-economic or stock market trends. We offer the following
examples:
Orckit Communications has developed proprietary digital subscriber line
(xDSL) technology for improving the capacity of copper telephone lines to
transmit digital information. This technology is designed to provide what
everyone wants-a faster internet. GTE recently announced it has chosen Orckit's
technology. This win, combined with other successes in the international market,
is a very strong endorsement from leading communications companies around the
world. Judging from the stock's current price, Wall Street does not yet know or
care about Orckit. We expect this to change.
Star Buffet is a tiny ($90 million market cap) restaurant company spun off
from CKE Restaurants. The buffet style restaurant field has been very crowded
and the marginal competitors have been struggling. Star Buffet has been picking
them off at very cheap prices. They clean them up, install new management,
generate cost efficiencies through purchasing clout, and start making money.
Star Buffet management wants to build a big profitable company and we think they
are going to succeed.
NuCO2 is attempting to revolutionize its industry. The carbon dioxide used
in beverage dispensers in bars and restaurants has traditionally been delivered
in small, but very heavy high pressure cylinders. These are expensive to
transport to sites and retrieve for refilling, take up valuable storage space,
and are inconvenient for restaurant workers to change when they run out of gas.
NuCO2 provides bulk tanks of carbon dioxide for carbonated beverage dispensers.
This service reduces the hassle for restaurant owners and through an aggressive
acquisition program, NuCO2 has developed a strong national franchise. Management
is now emphasizing improving profitability and we anticipate the stock will
start to reflect this change.
In closing, we are not pleased with the Fund's return in this reporting
period. Going forward, we plan on doing what we've always done-work hard to
identify small companies with big growth potential. We remain confident in our
ability to do so and to provide long-term "value-added" performance for the
Fund's shareholders.
Sincerely,
/S/ Robert E. Kern
Robert E. Kern
Portfolio Manager
Fremont Institutional U.S. Micro-Cap Fund
2
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
April 30, 1998 (Unaudited)
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STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Value
Shares Security Description (Note 1)
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STOCKS 84.1%
BUSINESS EQUIPMENT & SERVICES 17.6%
* 60,000 Able Telecom Holding Corp. $ 746,250
* 58,600 AmeriLink Corp. 1,355,125
* 29,600 Arguss Holdings, Inc. 527,250
* 7,000 DA Consulting Group, Inc. 123,375
* 85,000 Hospitality Worldwide Services 823,438
* 49,050 International Total Services, Inc. 999,394
* 39,000 Market Facts, Inc. 897,000
* 96,600 NuCO2, Inc. 1,074,675
* 47,700 Pentacon, Inc. 632,025
* 27,000 Rental Service Corp. 784,688
* 139,500 Richey Electronics, Inc. 1,325,250
* 10,150 Specialty Teleconstructors, Inc. 378,088
* 45,500 UOL Publishing, Inc. 494,813
* 107,100 Warrantech Corp. 702,844
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10,864,215
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CAPITAL GOODS 6.2%
* 7,000 AFC Cable Systems, Inc. 243,250
* 96,000 AVTEAM, Inc. 1,032,000
* 100,000 Channell Commercial Corp. 1,156,250
* 62,500 IMPCO Technologies, Inc. 781,250
* 80,000 Miller Industries, Inc. 630,000
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3,842,750
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CONSUMER DURABLES 0.1%
1,800 Craftmade International, Inc. 27,450
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27,450
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CONSUMER NON-DURABLES 6.8%
* 43,900 Il Fornaio (America) Corp. 592,650
* 33,400 RARE Hospitality International, Inc. 434,200
* 56,000 Star Buffet, Inc. 896,000
* 56,000 Steven Madden Ltd. 570,500
* 117,500 Taco Cabana, Inc. 778,438
* 25,100 Tefron Ltd. 672,994
* 8,800 USANA, Inc. 239,800
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4,184,582
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CONSUMER SERVICES 9.1%
* 108,700 Alliance Gaming Corp. 512,928
* 47,650 American Classic Voyages Co. 1,036,388
* 39,000 Cinar Films, Inc. (Class B) 750,750
* 63,100 Movie Gallery, Inc. 504,800
* 60,000 Precision Auto Care, Inc. 645,000
* 23,300 Royal Olympic Cruise Lines, Inc. 428,138
* 24,385 Saga Communications, Inc. (Class A) 556,283
* 17,300 Servico, Inc. 337,350
* 35,600 Silverleaf Resorts, Inc. 845,500
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5,617,137
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Value
Shares Security Description (Note 1)
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ENERGY 2.2%
* 34,800 KTI, Inc. $ 643,800
* 66,800 TransCoastal Marine Services, Inc. 768,200
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1,412,000
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HEALTH CARE 6.2%
* 7,050 Advance Paradigm, Inc. 281,119
* 59,200 Cytyc Corp. 858,400
* 61,500 Del Global Technologies Corp. 753,375
* 28,400 Gene Logic, Inc. 230,750
* 123,000 Genelabs Technologies, Inc. 445,875
* 10,000 Horizon Medical Products, Inc. 148,750
* 60,000 Intensiva Healthcare Corp. 487,500
* 16,000 Monarch Dental Corp. 262,000
* 12,600 Perclose, Inc. 382,725
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3,850,494
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RAW MATERIALS 1.1%
50,000 Northern Technologies International 415,625
* 23,300 Scheid Vineyards, Inc. (Class A) 227,175
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642,800
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RETAIL 10.0%
* 21,000 A.C. Moore Arts & Crafts, Inc. 399,000
* 67,000 Chico's Fas, Inc. 619,750
34,500 Delta Woodside Industries, Inc. 209,156
* 27,200 Elder-Beerman Stores Corp. 734,400
* 24,400 Finlay Enterprises, Inc. 667,950
* 18,600 Gadzooks, Inc. 488,250
* 31,100 Garden Ridge Corp. 594,788
* 4,200 Genesco, Inc. 71,138
* 58,500 Media Arts Group, Inc. 1,418,625
* 79,750 Successories, Inc. 438,625
* 19,800 Tractor Supply Co. 509,850
* 2,100 Urban Outfitters, Inc. 34,388
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6,185,920
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TECHNOLOGY (COMPONENTS) 9.7%
* 40,300 Anaren Microwave, Inc. 730,438
* 79,100 Ancor Communications, Inc. 474,600
* 85,700 Interlink Electronics, Inc. 428,500
* 11,200 Micrel, Inc. 439,600
* 155,100 Orckit Communications Ltd. 3,208,631
* 110,200 Southwall Technologies, Inc. 674,975
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5,956,744
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TECHNOLOGY (EQUIPMENT) 1.8%
* 45,000 Barringer Technologies, Inc. 540,000
* 26,900 Integrated Process Equipment Corp. 489,244
* 15,900 Schmitt Industries, Inc. 99,375
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1,128,619
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* Non-income producing securities
The accompanying notes are an integral part of these financial statements.
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Fremont Institutional U.s. Micro-cap Fund
April 30, 1998 (Unaudited)
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STATEMENT OF INVESTMENTS IN SECURITIES AND NET ASSETS
Value
Shares Security Description (Note 1)
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TECHNOLOGY (SOFTWARE) 13.3%
* 90,000 Acclaim Entertainment, Inc. $ 686,250
* 14,600 Broadvision, Inc. 270,100
* 20,500 Credit Management Solutions, Inc. 151,186
* 21,300 Document Sciences Corp. 69,890
* 42,700 Geoworks Corp. 202,824
* 1,800 Go2net, Inc. 48,600
* 93,400 ISG International Software Group Ltd. 957,350
* 95,700 MDSI Mobile Data Solutions, Inc. 1,459,423
* 49,800 OrCAD, Inc. 498,000
* 128,500 Peerless Systems Corp. 2,256,780
* 25,600 Peregrine Systems, Inc. 617,600
* 29,600 Template Software, Inc. 344,100
* 9,900 TSI International Software Ltd. 217,800
* 147,200 V-One Corp. 432,400
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8,212,303
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TOTAL STOCKS (Cost $50,871,607) 51,925,014
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Shares/Face Amount/Issuer/Discount Rate/Stated Maturity
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SHORT-TERM SECURITIES 16.6%
55,056 Benchmark Funds-Diversified Assets Portfolio 55,056
$10,200,000 Federal Home Loan Mortgage Corp.
Discount Note, 5.450%, 05/01/98 10,200,000
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TOTAL SHORT-TERM SECURITIES (Cost $10,255,056) 10,255,056
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TOTAL INVESTMENTS (Cost $61,126,663), 100.7% 62,180,070
OTHER ASSETS AND LIABILITIES, NET, (0.7)% (411,117)
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NET ASSETS, 100.0% $ 61,768,953
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* Non-income producing securities
The accompanying notes are an integral part of these financial statements.
4
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
April 30, 1998 (Unaudited)
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STATEMENT OF ASSETS AND LIABILITIES
(All numbers in thousands except net asset value per share)
Assets:
Investments in securities at cost $ 61,127
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Investments in securities at value (Note 1) 62,180
Dividends and interest receivable 25
Receivable for securities sold 1,439
Receivable from sale of fund shares 874
Unamortized organization costs (Note 3) 18
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Total assets 64,536
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Liabilities:
Payable for securities purchased 2,677
Accrued expenses:
Investment advisory, administrative and
shareholder servicing fees 78
Other 12
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Total liabilities 2,767
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Net assets $ 61,769
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Net assets consist of:
Paid in capital $ 53,500
Undistributed net investment loss (82)
Unrealized appreciation on investments 1,053
Accumulated net realized gain 7,298
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Net assets $ 61,769
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Shares of capital stock outstanding 6,050
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Net asset value per share $ 10.21
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The accompanying notes are an integral part of these financial statements.
5
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
April 30, 1998 (Unaudited)
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STATEMENT OF OPERATIONS
(All numbers in thousands)
Investment Income:
Interest $ 232
Dividends 10
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Total income 242
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Expenses:
Investment advisory and administrative fees (Note 2) 297
Shareholder servicing fees 14
Custody fees 11
Accounting fees 10
Audit and legal fees 9
Directors' fees (Note 2) 3
Registration fees 9
Other 9
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Total expenses before reductions 362
Expenses waived and/or reimbursed by Advisor (Note 2) (38)
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Total net expenses 324
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Net investment loss (82)
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Realized and unrealized gain (loss) from investments:
Net realized gain from investments 7,304
Net unrealized depreciation on investments (3,231)
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Net realized and unrealized gain from investments 4,073
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Net increase in net assets resulting from operations $ 3,991
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The accompanying notes are an integral part of these financial statements.
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
April 30, 1998 (Unaudited)
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STATEMENT OF CHANGES IN NET ASSETS
(All numbers in thousands)
<TABLE>
<CAPTION>
(Unaudited) Period from
Six Months ended August 4, 1997 to
April 30, 1998 October 31, 1997
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Increase (decrease) in net assets:
From operations:
<S> <C> <C>
Net investment loss $ (82) $ (20)
Net realized gain from investments 7,304 2,498
Net unrealized depreciation on investments (3,231) (2,226)
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Net increase in net assets from operations 3,991 252
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Distributions to shareholders from:
Net realized gains (1,255) (1,229)
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Total distributions to shareholders (1,255) (1,229)
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From capital share transactions:
Proceeds from shares sold (Note 2) 25,847 40,322
Payments for shares redeemed (8,499) --
Reinvested dividends 1,140 1,200
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Net increase in net assets
from capital share transactions 18,488 41,522
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Net increase in net assets 21,224 40,545
Net assets at beginning of period 40,545 --
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Net assets at end of period $ 61,769 $ 40,545
========= =========
Capital transactions in shares:
Sold (Note 2) 2,643 4,022
Redeemed (865) --
Reinvested dividends 127 123
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Net increase from capital share transactions 1,905 4,145
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</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(Unaudited) Period from
Six Months ended August 4, 1997 to
April 30, 1998 October 31, 1997
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Selected Per Share Data
for one share outstanding during the period
<S> <C> <C>
Net asset value, beginning of period $ 9.78 $ 10.00
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Income from Investment Operations
Net investment loss (.01) --
Net realized and unrealized gain .68 .09
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Total investment operations .67 .09
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Less Distributions
From net realized gains (.24) (.31)
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Total distributions (.24) (.31)
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Net asset value, end of period $ 10.21 $ 9.78
========= =========
Total Return 1 7.22% 0.90%
Ratios and Supplemental Data
Net assets, end of period (000s omitted) $ 61,769 $ 40,545
Ratio of net expenses to average net assets 2 1.25%* 1.25%*
Ratio of gross expenses to average net assets 2 1.40%* 1.49%*
Ratio of net investment loss to average net assets 2 (0.31)%* (0.21)%*
Portfolio turnover rate 91% 28%
Average commission rate paid $ .0525 $ .0521
</TABLE>
1 Total return would have been lower had the advisor not waived and/or
reimbursed expenses.
2 See Note 2 of "Notes to Financial Statements."
* Annualized
The accompanying notes are an integral part of these financial statements.
7
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
Notes to Financial Statements - April 30, 1998 (Unaudited)
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1. SIGNIFICANT ACCOUNTING POLICIES
Fremont Mutual Funds, Inc. (the "Investment Company") is an open-end
investment company authorized to issue ten billion shares of $.0001 par
value capital stock. These shares are currently offered in thirteen
series, one of which, the Institutional U.S. Micro-Cap Fund (the Fund), is
covered by this report. The Fund has its own investment objective and
policies and operates as a separate mutual fund.
Significant accounting policies followed by the Fund are in conformity
with generally accepted accounting principles for investment companies and
are summarized below.
A. Security Valuation
Investments, including options, are stated at value based on recorded
closing sales on a national securities exchange or, in the absence of a
recorded sale, at the mean between the last reported bid and asked prices
or at fair value as determined by the Board of Directors. Short-term notes
and similar securities are included in investments at amortized cost,
which approximates value. Securities which are primarily traded on foreign
exchanges are generally valued at the closing values of such securities on
their respective exchanges or the most recent price available where no
closing value is available.
B. Security Transactions
Security transactions are accounted for as of trade date. Realized gains
and losses on security transactions are determined on the basis of
specific identification for both financial statement and federal income
tax purposes.
C. Investment Income, Expenses and Distributions
Dividends are recorded on the ex-dividend date. Interest income and
estimated expenses are accrued daily. Bond discount and premium are
amortized as required by the Internal Revenue Code, as amended.
Distributions to shareholders are recorded on the ex-dividend date. The
Investment Company accounts for the assets of the Fund and allocates
general expenses of the Investment Company to the Fund based upon the
relative net assets of the Fund or the nature of the services performed
and their applicability to the Fund.
D. Income Taxes
The Fund's policy is to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all taxable income and net capital gains, if any, to share
holders. Therefore, no income tax provision is required. The Fund is
treated as a separate entity in the determination of compliance with the
Internal Revenue Code and distributes taxable income and net realized
gains, if any, in accordance with schedules described in the prospectus.
Income dividends and capital gain distributions paid to shareholders are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles and, therefore, may differ from
the information presented in the financial statements. These differences
are generally referred to as "book/tax" differences and are primarily due
to differing treatments for losses deferred due to wash sale rules,
classification of gains/losses related to certain futures and options
transactions.
Permanent book/tax differences causing payments to shareholders of income
dividends which are in excess of the net investment income reported in the
financial statements will result in reclassification of such excess to
paid in capital from undistributed net investment income. Temporary
book/tax differences, which will reverse in subsequent periods, will not
be reclassified and will remain in undistributed net investment income.
Any taxable income or gain remaining at fiscal year end is distributed in
the following year.
E. Accounting Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the amounts of income and expense
during the reporting period. Actual results could differ from those
estimates.
2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
Investment Advisor
The Fund has entered into an investment management and administrative
services agreement with Fremont Investment Advisors, Inc. (the Advisor), a
majority-owned subsidiary of Fremont Investors, Inc. Under this agreement,
the Advisor supervises and implements the Fund's investment activities and
provides administrative services as necessary to conduct Fund business.
For its advisory and administrative services, the Advisor receives a
management fee based on the average daily net assets of the Fund at an
annual rate of 1.15%.
The Advisor has agreed to limit the Fund's total operating expenses to
1.25% of average daily net assets. The Fund may reimburse the Advisor for
any reductions in the Fund's expenses during the three years following
that reduction if such reimbursement is requested by the Advisor, if such
reimbursement can be achieved within the foregoing expense limit, and if
the Board of Directors approves the reimbursement at the time of the
request as not inconsistent with the best interests of the Fund. Because
of these substantial contingencies, the potential reimbursements will be
accounted for as contingent liabilities that are not recordable on the
balance sheet of the Fund until payment is probable. The Advisor has not
recouped $22,911 of prior period expense waivers and reimbursements as of
April 30, 1998.
8
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FREMONT INSTITUTIONAL U.S. MICRO-CAP FUND
Notes to Financial Statements - April 30, 1998 (Unaudited)
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Ratios of expenses have been disclosed both before and after the impact of
these various waivers and/or reimbursements under the Fund's Financial
Highlights table.
The Fund is also required to comply with the limitations set forth in the
laws, regulations, and administrative interpretations of the states in
which it is registered. For the six months ended April 30, 1998, no
reimbursements were required or made to the Fund by the Advisor to comply
with these limitations.
Other Related Parties
At April 30, 1998, Fremont Investors, Inc. and its affiliated companies
including their employee retirement plans, its principal shareholder and
members of his family, including trusts, owned directly or indirectly
approximately 79% of the Fund.
On August 6, 1997, the Fund commenced operations upon the transfer of
assets from a separate account of an employee retirement plan. This
transfer was accomplished by a tax-free exchange of 3,785,450 shares of
the Fund for investments with a market value and cost of $37,854,505 and
$31,344,942, respectively.
Certain officers and/or directors of the Fund are also officers and/or
directors of the Advisor and/or Fremont Investors, Inc. None of the
officers and/or directors so affiliated receive compensation for services
as officers and/or directors of the Fund.
3. ORGANIZATION COSTS
Costs incurred by the Fund, if any, in connection with its organization
have been deferred and are amortized on a straight-line basis over a
period of five years (60 months).
4. PURCHASES AND SALES OF INVESTMENT SECURITIES
Aggregate purchases and aggregate proceeds from sales of securities for
the six months ended April 30, 1998 were as follows:
Purchases Proceeds
--------- --------
Long-term securities: $52,890,809 $39,824,226
5. PORTFOLIO CONCENTRATIONS
Although the Fund has a diversified investment portfolio, there are
certain investment concentrations of risk which may subject the Fund more
significantly to economic changes occurring in certain segments or
industries.
6. UNREALIZED APPRECIATION (DEPRECIATION) - TAX BASIS
At April 30, 1998, the cost of securities for federal income tax purposes
was $61,133,669 and the net unrealized appreciation based on that cost
were as follows:
Unrealized appreciation $ 5,922,217
Unrealized depreciation (4,875,816)
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Net unrealized appreciation $ 1,046,401
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9
<PAGE>
Fremont
Funds [LOGO]
50 Beale Street, Suite 100
San Francisco, CA 94105
www.fremontfunds.com
This report, including the statement of investments and financial statements, is
submitted for the general information of the shareholders of Fremont Mutual
Funds, Inc. This report is not authorized for distribution, and may not be used
as sales literature, unless preceded or accompanied by a prospectus.
Distributed by First Fund Distributors, Inc., San Francisco, CA 94105
BR040-9806
