<PAGE>
UAM Funds
Semi-Annual Report
Acadian Emerging
Markets Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter
Emerging Markets.......................................................... 1
Portfolio of Investments
Emerging Markets.......................................................... 5
Statement of Assets and Liabilities......................................... 18
Statement of Operations..................................................... 19
Statement of Changes in Net Assets
Emerging Markets.......................................................... 20
Financial Highlights
Emerging Markets.......................................................... 21
Notes to Financial Statements............................................... 22
</TABLE>
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<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
May 18, 1998
Dear Shareholder:
We are pleased to present the semi-annual report for The Acadian Emerging
Markets Portfolio. This commentary covers the most recent quarter, the three
months from February 1, 1998 to April 30, 1998, focusing on the portfolio's
performance and some of the economic and market conditions that impacted
returns.
ACADIAN EMERGING MARKETS PORTFOLIO
PORTFOLIO PERFORMANCE REVIEW
The total return for the Acadian Emerging Markets Portfolio was 0.22% for the
six months ended April 30, 1998. For the three months ended April 30, 1998,
the Acadian Emerging Markets Portfolio returned 14.5%, versus 14.7% for the
IFC Investable Index, a widely followed emerging markets benchmark.
ECONOMIC AND MARKET CONDITIONS
The emerging markets as proxied by the IFC Investable Index were up strongly
for the three month period in dollar terms, the result of sharp gains in
February, with March and April delivering lower but still positive returns.
Emerging Asia started the quarter well, as confidence rose that these troubled
economies were on the road to recovery, but saw turmoil in April that led to
lower but still positive returns for the three months as a whole. Latin
American markets rose approximately 11%, led by Brazil. The Europe/Middle
East/Africa (EMEA) region was up over 20% as European emerging markets shared
in a general sense of "Euro-phoria" leading up to European Monetary Union.
INVESTMENT STRATEGY USED DURING THE QUARTER
Acadian continues to pursue its highly structured and disciplined approach to
the emerging markets, using a database of information on over 60 emerging
markets and 6000 stocks. Our emerging markets process emphasizes country
selection but also examines a variety of factors at the stock level. As a
result, the portfolio was invested in 22 emerging equity markets, compared
with 27 in the benchmark. Key overweightings were China, Brazil, Turkey,
Korea, and Thailand, while key underweightings were Argentina, Hungary,
Israel, and Chile.
The resulting portfolio had very attractive valuation characteristics, with a
price/book value, price/sales ratio, and price/earnings ratio all signifi-
cantly lower than the benchmark index. The portfolio also had a somewhat
smaller orientation than the IFC index, with relatively more assets in the
mid-size $1-$5 billion capitalization range, and fewer assets in the larger-
size range of $5-20 billion in capitalization.
1
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UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
INVESTMENT STRATEGIES AND TECHNIQUES WITH REGARD TO DERIVATIVES
No derivatives were employed by the fund.
COMMENTARY ON THE FUND'S INVESTMENT PERFORMANCE
As noted above, the Acadian Emerging Markets Portfolio returned 14.5% for the
three months ending April 30, 1998, versus a return of 14.7% for the IFC
Investable Index. Country allocations contributed 20 basis points of excess
return, but this was offset by stock selection, which underperformed the index
by 40 basis points.
The portfolio's performance during the period was enhanced by investments in:
. BRAZIL AND MEXICO: Stock selection in Brazil and Mexico added 60 and 30
basis points of excess return respectively.
. GREECE: Up over 73% for the period, Greece benefited strongly from the
progress towards a united Europe. The portfolio's overweighting added 20
basis points, while stock selection also outperformed, for a total value
added of 40 basis points.
. COLOMBIA AND TAIWAN: The portfolio had no holdings in Colombia or Taiwan,
which helped relative returns as these markets significantly underperformed
the benchmark. The result was 40 basis points of value added in Colombia and
80 in Taiwan.
. TURKEY: Stock selection in Turkey added 60 basis points, with the
portfolio's holdings returning 18.6% as a group, versus 3.1% for the Turkey
portion of the index. The country allocation to Turkey had a neutral impact.
HURT PORTFOLIO
. HUNGARY AND POLAND: Hungary and Poland outperformed the benchmark, as
enthusiasm for European shares spread from the developed to the emerging
markets. The portfolio was underweighted in both markets, which detracted
from return slightly. Stock selection also underperformed, for a return that
was below the benchmark by 20-40 basis points in each market.
. KOREA: Korea was down sharply for the three-month period, as confidence
diminished that the currency would stabilize and the government would pursue
the necessary steps to restructure the economy. The portfolio's
overweighting detracted 60 basis points.
. THAILAND: An overweighting in Thailand was neutral for the portfolio as this
market posted a gain in line with the benchmark, but stock selection de-
tracted 70 basis points as the portfolio's selections underperformed the
benchmark index.
2
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UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
. VENEZUELA: The overweighting in Venezuela detracted 30 basis points as this
market dropped sharply on oil price concerns.
CURRENT OUTLOOK
Emerging markets are currently at quite attractive valuation levels as
compared to larger-cap global equity indices such as the S&P 500 or EAFE, as
evidenced by the table below. From current valuation levels, we believe that
the emerging markets could have quite strong absolute performance over the
next several years.
<TABLE>
<CAPTION>
U.S. INT'L INT'L EMERGING
STOCKS LARGE CAP SMALL CAP MARKETS
(S&P 500) (EAFE) (EMI) (EMF)
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Price/Earnings........................... 26.0 26.6 22.4 16.1
Price/Book............................... 4.6 2.8 1.9 1.6
Price/Sales.............................. 1.7 1.0 0.7 1.2
Price/Cash Earnings...................... 14.0 9.9 9.8 7.7
Yield.................................... 1.5% 1.7% 2.0% 2.0%
</TABLE>
Our belief is supported by an expectation that the Asian emerging markets in
particular will continue to discount positively the prospect of economic
recovery from their current slumps looking beyond 1998 into the 1999-2000
period.
If we can provide any further information, please contact me at (617) 946-
3500.
Sincerely,
LOGO
Churchill G. Franklin
Senior Vice President
Acadian Asset Management, Inc.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
3
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UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The IFC Investable Index is an unmanaged index maintained by the
International Finance Corporation. This index consists of 890 companies in 25
emerging equity markets, and is designed to measure more precisely the returns
portfolio managers might receive from investment in emerging markets equity
securities, by focusing on companies and markets that are legally and
practically accessible to foreign investors.
The returns for the UAM Fund-Acadian Emerging Markets Portfolio are net of all
fees and expenses.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 87.7%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
ARGENTINA - 2.9%
Astra Cia Argentina de Petro.......................... 178,280 $ 317,389
Banco de Galicia y Buenos Aires S.A., Class B......... 82,331 498,182
*Bansud S.A., Class B................................. 4,201 39,496
Capex S.A., Class A................................... 8,500 46,502
Central Puerto S.A., Class B.......................... 78,000 242,619
Cia Naviera Perez Companc, Class B.................... 44,900 269,892
*Citicorp Equity Investments S.A., Class B............ 30,567 128,402
Garovaglio y Zorraquin S.A. .......................... 26,100 56,646
Juan Minetti S.A. .................................... 30,266 127,138
Molinos Rio de la Plata S.A., Class B................. 56,583 130,162
Siderar S.A., Class A................................. 9,316 45,190
YPF S.A., Class D..................................... 22,100 770,087
-----------
2,671,705
-----------
BRAZIL - 3.5%
Albarus S.A. ......................................... 205,000 129,077
*Alparagatas S.A. .................................... 980,000 51,421
Antarctica de Nordeste................................ 1,400 91,579
Brahma................................................ 172 102
Brasilit S.A. ........................................ 229,250 380,914
Ceval Alimentos S.A. ................................. 22,091,911 91,768
Cia Siderurgica Nacional.............................. 13,300,000 416,388
Cia Vidraria Santa Marina............................. 37,000 61,478
Cigarros Souza Cruz................................... 11,000 89,943
Eletrobras............................................ 20,000,000 822,038
Gerdau Metalurgica S.A. .............................. 497,729 15,234
Light Servicos Electricas............................. 1,000,000 402,274
Mineracao da Trindade-Samitri......................... 5,209,050 122,995
*Santista Alimentos S.A. ............................. 63,009 52,898
*Serrana S.A. ........................................ 131,000 117,997
*Sociedade de Participacoes Cimente................... 131,000 266,926
Telebras.............................................. 1,511,794 150,056
-----------
3,263,088
-----------
CHILE - 5.7%
A.F.P. Provida S.A. ADR............................... 9,000 160,875
*Banco Santander Chile ADR............................ 14,800 207,200
Banco Santiago S.A. ADR............................... 3,300 68,681
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
CHILE - CONTINUED
Cia Cervecerias Unidas S.A. ADR....................... 13,900 $ 383,988
Cia de Telecomunicaciones de Chile S.A. ADR........... 35,200 882,200
*Distribucion y Servicio D&S S.A. ADR................. 10,800 190,350
EmboteLiadora Andina S.A. ADR......................... 6,900 155,681
Empressa Nacional de Electricidad S.A. ADR............ 50,600 882,338
Enersis S.A. ADR...................................... 25,900 762,431
Gener S.A. ADR........................................ 19,700 440,788
Laboratorio Chile ADR................................. 6,500 128,375
Madeco S.A. ADR....................................... 10,300 164,800
Maderas y Sinteticos S.A. ADR......................... 17,600 168,300
Santa Isabel S.A. ADR................................. 5,100 84,150
Sociedad Quimica y Minera Chile S.A. ADR.............. 8,600 373,563
Vina Concha y Toro S.A. ADR........................... 5,600 182,000
-----------
5,235,720
-----------
CHINA - 2.4%
Guangdong Electric Power Development Co., Ltd., Class
B.................................................... 242,400 134,258
Jilin Chemical Industrial Co., Ltd., Class H.......... 1,500,000 151,055
Maanshan Iron & Steel Co., Class H.................... 2,540,000 190,201
Qingling Motors Co., Class H.......................... 1,074,000 464,515
Shanghai Dajiang Group Co., Ltd., Class B............. 198,979 27,459
*Shanghai Dazhong Taxi Co., Class B................... 346,910 229,654
Shanghai Jinqiao Export Processing Zone Development
Co., Ltd., Class B................................... 365,300 116,896
Shanghai Outer Gaoqiao................................ 353,360 134,277
Shanghai Petrochemical Co., Ltd., Class H............. 2,324,000 309,047
*Shanghai Shangling Electric Appliances Co., Ltd.,
Class B.............................................. 284,000 60,208
Shanghai Tyre & Rubber Co., Ltd., Class B............. 500,000 107,000
Shanghai Yaohua Pilkington Glass Co., Ltd., Class B... 313,000 48,828
*Shenzhen China Bicycle Co., Ltd., Class B............ 624,000 66,062
Tsingtao Brewing Co., Ltd., Class H................... 992,000 193,392
-----------
2,232,852
-----------
CZECH REPUBLIC - 0.7%
*CEZ A.S. ............................................ 4,100 123,368
Ceska Sporitelna A.S. ................................ 4,700 35,212
Komercni Banka A.S. .................................. 2,200 73,702
*SPT Telecom A.S. .................................... 2,000 291,214
*Skoda Plzen A.S. .................................... 4,100 42,829
*Unipetrol A.S. ...................................... 37,400 101,032
-----------
667,357
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
EGYPT - 2.7%
Al-Ahram Beverages Co. S.A.E. ......................... 1,350 $ 87,418
Commercial International Bank.......................... 45,600 784,012
*Egypt American Bank................................... 4,500 115,062
Egypt International Pharmaceutical Industries Co. ..... 1,700 121,411
Middle & West Delta Flour Mills........................ 11,800 206,348
Misr Elgedida Heliopolis Housing....................... 1,600 204,946
Misr International Bank................................ 7,300 188,502
Madinet NASR for Housing & Development................. 2,400 147,414
National Societe Generale Bank......................... 6,600 165,946
Suez Cement Co. ....................................... 23,659 493,692
-----------
2,514,751
-----------
GREECE - 3.4%
Alpha Credit Bank...................................... 8,994 949,335
Commercial Bank of Greece S.A. ........................ 16,440 1,034,958
Hellenic Bottling Co. S.A. ............................ 21,400 797,084
*National Bank of Greece............................... 528 92,953
Titan Cement Co. ...................................... 3,200 274,035
-----------
3,148,365
-----------
HUNGARY - 0.3%
EGIS Rt................................................ 5,900 307,787
-----------
INDONESIA - 0.1%
Argha Karya Prima Industry............................. 27,500 1,297
Dharmaal Intiland...................................... 157,700 4,959
Gajah Tunggal.......................................... 348,000 12,038
Indosat................................................ 29,500 43,415
Putra Surya Perkasa.................................... 1,031,000 29,179
SMART Corp. ........................................... 9,600 1,570
-----------
92,458
-----------
ISRAEL - 2.1%
Bank Hapoalim Ltd. .................................... 177,600 476,885
Bank Leumi Le-Israel................................... 252,000 460,647
Delek Israel Fuel Corp., Ltd. ......................... 4,500 175,712
*Elbit Medical Imaging Ltd. ........................... 16,900 136,183
Elbit Systems Ltd. .................................... 16,200 210,708
Koor Industries Ltd. .................................. 3,500 442,930
-----------
1,903,065
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
KOREA - 4.8%
*Central Investment & Finance............................ 4,957 $ 15,595
Cheil Foods & Chemicals.................................. 7,000 125,843
Daewoo Corp. ............................................ 27,100 83,634
Daewoo Heavy Industries.................................. 44,000 217,858
Dongbu Steel Co. ........................................ 3,960 13,052
Dongkuk Steel Mill Co. .................................. 19,000 91,086
Goldstar Co. ............................................ 32,700 389,461
Hana Bank................................................ 33,397 144,595
*Hanjin Shipping Co., Ltd. .............................. 4,000 18,697
Hansol Paper Co. ........................................ 35,000 267,416
Housing & Commercial Bank, Korea......................... 23,604 141,447
*Hyundai Electronics Industries Co. ..................... 6,000 88,090
Inchon Iron & Steel Co. ................................. 40,000 147,116
Keum Kang Development Industries Co. .................... 17,932 51,714
Korea Electric Power Corp. ADR........................... 40,000 545,318
Korea Express (The) Co. ................................. 8,365 30,828
Korea Iron & Steel Wire Ltd. ............................ 1,000 96,255
Korea Kumho Petrochemical Co. ........................... 16,000 27,805
*Korea Long Term Credit Bank............................. 22,734 78,845
LG Information & Communication Ltd. ..................... 4,000 121,648
*LG International Corp. ................................. 22,000 37,738
*LG Semiconductor Co. ................................... 9,680 113,114
*Mando Machinery Corp. .................................. 2,520 20,386
Pacific Corp. ........................................... 17,000 254,682
SK Corp. ................................................ 53,405 394,037
Samsung Corp. ........................................... 16,000 54,532
Samsung Electric Devices................................. 5,000 249,064
Samsung Electro-Mechanics Co. ........................... 9,000 188,764
Samsung Electronics...................................... 4,212 233,474
*Shinhan Investment & Finance............................ 16,114 --
Shinsegae Department Store Co. .......................... 4,000 50,637
Ssangyong Oil Refining Co., Ltd. ........................ 13,780 97,544
Tai Han Electric Wire Co. ............................... 6,700 26,599
Yuhan Corp. ............................................. 1,349 32,234
-----------
4,449,108
-----------
MALAYSIA - 8.8%
AMMB Holdings Bhd........................................ 180,000 183,644
Angkasa Marketing Bhd. .................................. 103,000 20,850
Austral Enterprises Bhd. ................................ 181,000 214,953
Bandar Raya Developments Bhd. ........................... 563,000 139,800
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- --------
<S> <C> <C>
MALAYSIA - CONTINUED
Bedford Bhd. ............................................ 172,000 $ 46,192
Berjaya Group Bhd. ...................................... 394,000 88,265
Berjaya Textiles......................................... 59,000 93,158
Boustead Holdings Bhd. .................................. 132,000 109,377
Cement Industries of Malaysia Bhd. ...................... 60,000 39,190
*Commerce Asset Holding Bhd. ............................ 120,000 90,688
DCB Holdings............................................. 326,000 243,730
Datuk Keramat Holdings Bhd. ............................. 171,000 48,000
Edaran Otomobil Nasional Bhd. ........................... 55,000 95,007
Genting Bhd. ............................................ 248,000 830,013
Golden Hope Plantations Bhd. ............................ 303,000 377,830
Guinness Anchor Bhd. .................................... 87,000 136,194
Guthrie Ropel Bhd. ...................................... 79,000 63,968
Hicom Holdings Bhd. ..................................... 88,000 35,152
Highlands & Lowlands Bhd. ............................... 160,000 180,513
Ho Hup Construction Co. Bhd. ............................ 44,000 15,320
Hong Leong Credit Bhd. .................................. 46,000 37,495
IOI Corp. Bhd. .......................................... 596,000 450,418
Intiplus................................................. 211,000 72,896
Kuala Lumpur Kepong Bhd. ................................ 139,000 324,521
Kulim (Malaysia) Bhd. ................................... 176,000 111,158
LARUT Consolidated Bhd. ................................. 96,000 24,875
Lam Soon Hua Development................................. 67,000 45,209
Leader Universal Holdings Bhd. .......................... 262,000 84,858
Lion Land Bhd. .......................................... 149,652 19,388
MBF Capital Bhd. ........................................ 143,000 44,000
Malaysian Airline System Bhd. ........................... 285,000 228,462
Malaysian Industrial Development Finance Bhd. ........... 142,000 49,058
Malaysian International Shipping Bhd. (Foreign).......... 149,000 261,403
Malaysian Oxygen Bhd. ................................... 17,000 50,472
Multi-Purpose Holdings Bhd. ............................. 740,000 259,649
Negara Properties (Malaysia) Bhd. ....................... 36,000 41,393
*PPB Oil Palms Bhd. ..................................... 129,000 111,417
Pan Pacific Asia Bhd. ................................... 35,000 13,320
Pelangi Bhd. ............................................ 197,000 88,796
Perlis Plantations Bhd. ................................. 61,750 87,500
Pernas International Holdings Bhd. ...................... 240,000 64,130
Perusahaan Otomobil Nasional Bhd. ....................... 66,000 82,300
Petronas Dagangan Bhd. .................................. 101,000 116,130
Petronas Gas Bhd. ....................................... 147,000 357,085
Pilecon Engineering Bhd. ................................ 53,000 18,453
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
MALAYSIA - CONTINUED
Rashid Hussain Bhd. .................................... 169,000 $ 183,368
Rothmans of Pall Mall Bhd. ............................. 39,000 323,684
Shangri-La Hotels Malaysia Bhd. ........................ 89,000 28,345
Sime Darby Bhd. ........................................ 558,000 497,004
Southern Bank Bhd. (Foreign)............................ 75,375 38,654
Southern Steel Bhd. .................................... 58,000 26,221
Telekom Malaysia Bhd. .................................. 122,000 368,799
*Tongkah Holdings Bhd. ................................. 129,000 38,300
UMW Holdings Bhd. ...................................... 292,000 264,810
Westmont Industries Bhd. ............................... 481,000 115,544
*YTL Power International Bhd............................ 195,000 177,895
-----------
8,158,854
-----------
MEXICO - 11.8%
Apasco S.A. de C.V., Class A............................ 51,000 346,129
*Banacci, Class B....................................... 455,000 1,418,022
Carso Global Telecom, Class A........................... 80,000 306,351
*Cemex S.A. CPO......................................... 191,000 956,463
*Cemex S.A., Class B.................................... 54,837 328,880
Cifra S.A. de C.V., Class C............................. 220,000 373,795
Cifra S.A. de C.V., Series V............................ 25,619 44,736
*Coca-Cola Femsa S.A., Class L.......................... 192,000 328,936
Empresas ICA Sociedad Controladora...................... 208,800 432,509
Grupo Carso S.A. de C.V., Series A1..................... 80,000 499,588
Grupo Casa Autrey S.A. de C.V. ......................... 110,000 146,459
*Grupo Celanese S.A., Class B1.......................... 200,000 494,875
*Grupo Financiero Inbursa S.A. de C.V., Class B......... 87,791 267,914
Grupo Industrial Bimbo S.A. de C.V., Class A............ 88,000 220,855
Grupo Industrial Maseca, Class B........................ 239,000 172,344
Grupo Mexico S.A., Class B.............................. 48,000 155,532
*Grupo Televisa S.A. CPO................................ 30,600 627,359
Industrias Penoles S.A. ................................ 78,000 321,668
Kimberly-Clark de Mexico S.A. de C.V., Class A.......... 200,000 981,501
Telefonos de Mexico S.A. de C.V., Class L............... 885,300 2,503,499
*Transportacion Maritima Mexicana S.A. de C.V., Class
L...................................................... 7,000 54,849
-----------
10,982,264
-----------
PAKISTAN - 2.6%
Engro Chemicals Pakistan Ltd. .......................... 15,500 34,554
*Fauji Fertilizer Co. Ltd. ............................. 50,000 98,638
Hub Power Co. .......................................... 746,000 760,395
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
PAKISTAN - CONTINUED
*ICI Pakistan.......................................... 1,215,000 $ 456,487
Pakistan State Oil Co. Ltd. ........................... 19,500 98,452
Pakistan Telecom Corp., Class A........................ 1,094,000 764,931
Shell Pakistan Ltd. ................................... 25,500 188,717
-----------
2,402,174
-----------
PHILIPPINES - 2.6%
Ayala Corp. ........................................... 136,000 60,275
Equitable Banking Corp. ............................... 193,300 386,117
First Philippine Holdings Corp., Class B............... 50,940 37,522
JG Summit Holding, Inc. ............................... 863,700 66,853
Manila Electric Co. ................................... 166,944 475,197
*Metro Pacific Corp. .................................. 1,798,000 80,809
Metropolitan Bank & Trust Co. ......................... 97,320 759,363
Philippine Long Distance Telephone Co. ................ 19,200 515,356
*Primetown Property Group, Inc. ....................... 445,900 14,028
SM Prime Holdings, Inc. ............................... 149,800 26,930
-----------
2,422,450
-----------
PORTUGAL - 4.4%
Banco Espirito Santo e Comercial de Lisboa............. 18,840 901,779
Banco Portugues de Investimento (Registered)........... 12,352 574,433
Banco Totta & Acores, Class B (Registered)............. 4,690 178,544
Corticeira Amorim S.A. ................................ 16,000 310,688
Credito Predial Portugues, S.A. ....................... 11,550 226,100
Estabelecimentos Jeronimo Martins & Filho SGPS S.A. ... 11,397 533,120
*Inparsa-Industria e Participacoes SGPS S.A. .......... 1,500 73,837
Portugal Telecom S.A. (Registered)..................... 11,842 636,705
*Sonae Imobiliaria S.A. ............................... 120 1,910
Sonae Industria e Investimento......................... 12,000 645,853
-----------
4,082,969
-----------
RUSSIA - 2.8%
Irkutskenergo ADR...................................... 10,700 106,484
Lukoil Holding ADR..................................... 12,910 850,859
Mosenergo S.A. ADR..................................... 4,400 155,549
Surgutneftegaz ADR..................................... 48,300 356,169
Tatneft ADR............................................ 7,500 145,313
*Unified Energy Systems GDR............................ 31,870 1,002,974
-----------
2,617,348
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ----------
<S> <C> <C>
SOUTH AFRICA - 14.7%
ABSA Group Ltd. ......................................... 107,700 $ 932,583
Adcock Ingram Ltd., N Shares............................. 7,986 39,120
Allied Electronics Corp., Ltd. .......................... 40,600 97,231
Anglo-American Gold Investment Co., Ltd. ................ 1,200 63,652
Anglo-American Industrial Corp., Ltd. ................... 14,000 429,490
Anglogold Ltd. .......................................... 1,100 58,347
Anglovaal Industries Ltd. ............................... 89,267 229,683
Barlow Ltd. ............................................. 43,900 424,446
CAN Galla................................................ 12,737 12,983
Delta Electrical Industries Ltd. ........................ 32,600 196,794
Driefontein Consolidated Ltd. ........................... 27,400 194,417
*Eastvaal Gold Holdings Ltd. ............................ 136,100 165,394
Edgars Stores Ltd. ...................................... 2,900 50,797
Ellerine Holdings Ltd. .................................. 17,510 181,945
Engen Ltd. .............................................. 155,600 662,128
First National Bank Holdings Ltd. ....................... 20,200 263,869
*Gold Fields Ltd. ....................................... 1 2
*Harmony Gold Mining Co., Ltd. .......................... 8,500 50,470
Investec Group Ltd. ..................................... 8,200 396,002
Johannesburg Consolidated................................ 34,000 491,242
Kersaf Investments Ltd. ................................. 20,100 137,249
Liberty Life Association of Africa Ltd. ................. 42,800 1,448,550
LibLife Strategic Investments Ltd. ...................... 121,850 500,423
Malbak Ltd. ............................................. 29,625 28,145
Metro Cash & Carry Ltd. ................................. 61,361 68,010
Murray & Roberts Holdings Ltd. .......................... 75,500 140,465
Nampak Ltd. ............................................. 122,700 529,413
Nedcor Ltd. ............................................. 49,000 1,396,536
Pick'n Pay Stores Ltd. .................................. 27,300 51,871
Pick'n Pay Stores Ltd., Class N.......................... 54,600 99,420
Polfin Ltd. ............................................. 103,600 161,987
Premier Group (The) Ltd. ................................ 101,090 16,006
Rembrandt Group Ltd. .................................... 61,300 558,100
Safmarine & Rennies Holdings Ltd. ....................... 39,900 86,868
*Sappi Ltd. ............................................. 36,100 210,062
Sasol Ltd. .............................................. 83,300 840,831
Siltek Ltd. ............................................. 92,800 178,161
South African Breweries Ltd. ............................ 13,400 449,805
*South African Iron & Steel Industrial Corp., Ltd. ...... 218,600 70,523
Standard Bank Investment Corp., Ltd. .................... 13,400 792,994
Sun International (South Africa) Ltd. ................... 251,200 149,154
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
SOUTH AFRICA - CONTINUED
Tongaat-Hulett Group Ltd. .............................. 26,200 $ 312,170
Toyota South Africa Ltd. ............................... 16,700 76,022
Voltex Holdings Ltd. ................................... 279,300 142,069
Wooltru Ltd., Class N................................... 58,800 209,481
Woolworths Holdings Ltd. ............................... 50,568 67,557
-----------
13,662,467
-----------
SRI LANKA - 0.8%
Blue Diamond Jewelry World.............................. 103,890 5,336
*Development Finance Corp. of Ceylon.................... 48,400 233,280
Hayleys Ltd. ........................................... 36,000 131,416
John Keells Holdings Ltd. .............................. 44,406 235,082
*Sampath Bank Ltd. ..................................... 105,000 113,247
-----------
718,361
-----------
THAILAND - 3.5%
*Advance Agro Public Co., Ltd. (Foreign)................ 88,330 89,245
Advanced Info Service Public Co., Ltd. (Foreign)........ 32,600 228,031
*Asia Credit Co., Ltd. (Foreign)........................ 44,800 22,052
BEC World Public Co., Ltd. (Foreign).................... 73,000 385,803
Bangchak Petroleum Public Co., Ltd. (Foreign)........... 80,800 20,723
*Bangkok Expressway Public Co., Ltd. (Foreign).......... 284,500 224,799
Ch. Harnchang Public Co., Ltd. (Foreign)................ 48,900 54,791
*Electricity Generating Public Co., Ltd. (Foreign)...... 30,500 59,262
*First Bangkok City Bank Ltd. (Foreign)................. 272,600 20,480
Hemaraj Land and Development Public Co., Ltd.
(Foreign).............................................. 103,500 46,924
I.C.C. International Public Co., Ltd. (Foreign)......... 34,000 48,886
*Italian-Thai Development Corp. (Foreign)............... 16,300 13,513
*Krungthai Thanakit plc (Foreign)....................... 66,200 19,294
National Finance & Securities Co., Ltd. (Foreign)....... 286,900 128,213
*Nava Finance and Securities Public Co., Ltd.
(Foreign).............................................. 501,900 71,514
*Precious Shipping plc (Foreign)........................ 7,400 4,793
PTT Exploration & Production (Foreign).................. 19,800 209,285
*Samart Corp. plc (Foreign)............................. 29,600 11,886
*Siam City Cement Co., Ltd. (Foreign)................... 11,700 165,497
Siam Commercial Bank Co., Ltd. (Foreign)................ 115,600 137,762
Siam Makro Public Co., Ltd. (Foreign)................... 73,100 117,415
*Siam Pulp & Paper Public Co., Ltd. (Foreign)........... 271,200 235,368
*TelecomAsia Corp. Public Co., Ltd. (Foreign)........... 467,200 169,451
Thai Airways International Ltd. (Foreign)............... 354,000 366,839
Thai Petrochemical Industry Public Co., Ltd. (Foreign).. 708,940 101,015
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
----------- -----------
<S> <C> <C>
THAILAND - CONTINUED
Thai Plastic & Chemical Public Co., Ltd. (Foreign).. 68,200 $ 162,549
*Thai Telephone & Communication Public Co., Ltd.
(Foreign).......................................... 126,450 27,190
*United Communication Industry (Foreign)............ 87,200 65,513
-----------
3,208,093
-----------
TURKEY - 5.2%
*Akbank TAS......................................... 7,931,000 674,810
Aksa Akrilik Kimya Sanayii AS....................... 793,352 53,208
*Cimentas AS........................................ 1,202,670 72,232
Eregli Demir Ve Celik Fabrikalari TAS............... 3,152,000 523,756
*Finans Bank AS..................................... 4,639,881 113,326
*Ihlas Holding AS................................... 2,912,450 466,459
*Netas Telekomunik.................................. 646,000 240,553
Tat Konserve Sanayii AS............................. 1,504,997 60,260
Tofas Turk Otomobil Fabrikasi AS.................... 13,105,500 682,168
Turk Hava Yollari A.O. ............................. 2,157,207 231,052
Turk Sise Ve Cam Fabrikalari AS..................... 3 --
Turkiye Garanti Bankasi AS.......................... 10,553,000 559,869
Yasarbank........................................... 2 --
Yapi ve Kredi Bankasi AS............................ 22,323,000 1,094,922
-----------
4,772,615
-----------
VENEZUELA - 1.9%
Banco Provincial S.A. .............................. 83,000 105,346
Corporacion Venezolana de Cementos, S.A.C.A. ....... 26,020 33,997
Electricidad de Caracas............................. 1,926,511 1,183,034
Manufacturas Textiles............................... 53,130 506
Siderurgica Venezolana Sivensa...................... 1,528 4,306
Siderurgica Venezolana Sivensa, Class A............. 1,060,500 180,128
Telefonos de Venezuela.............................. 45,000 216,701
Venezolana de Cementos.............................. 55,881 72,907
-----------
1,796,925
-----------
TOTAL COMMON STOCKS (Cost $90,435,368).............. 81,310,776
-----------
PREFERRED STOCKS - 12.6%
BRAZIL - 12.6%
Banco Bradesco...................................... 77,265,033 709,473
*Bombril S.A. ...................................... 102,520,000 627,582
Brahma.............................................. 909 592
Brasmotor S.A. ..................................... 1,100,000 152,471
Cia Brasil Petroleo Ipiranga........................ 26,700,000 347,906
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PREFERRED STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
----------- -----------
<S> <C> <C>
BRAZIL - CONTINUED
Cia Brasileira de Petroleo Ipiranga................. 30,600,000 $ 438,863
Cia Energetica de Sao Paulo......................... 1,000,000 48,535
Cia Siderurgica de Tubarao.......................... 6,400,000 110,818
Cia Vale do Rio Doce................................ 19,960 471,290
Electropaulo Electric............................... 2,000,000 235,593
Eletrobras, Class B................................. 9,456,020 421,820
*Empresa Bandeirante de Energia S.A. ............... 2,000,000 68,212
*Empresa Metropolitana de Aguas e Energia S.A. ..... 2,000,000 3,760
*Empresa Paulista de Transmissao de Energia
Electrica S.A. .................................... 2,000,000 13,642
Ericsson Telecomunicacoes S.A. ..................... 40,900,000 1,251,858
Fertilizantes Fosfatados............................ 109,300,000 506,594
Gerdau S.A. ........................................ 20,216,866 394,260
Gerdau Metalurgica S.A. ............................ 8,821,960 380,343
Inepar S.A. Industria e Construcoes................. 95,700,000 168,218
Itausa Investimentos Itau S.A. ..................... 800,000 678,618
Moinho Fluminese.................................... 20,000,000 110,188
Petrobras........................................... 1,358,666 344,568
Petrobras Distribuidora S.A. ....................... 11,250,000 199,716
Refinaria de Petroleo Ipiranga...................... 16,800,000 149,856
Sadia Concordia S.A. ............................... 215,000 152,296
Sadia Frigobras S.A. ............................... 272,000 190,293
Telebras............................................ 17,780,060 2,170,613
Telemig, Class B.................................... 1,300,000 200,656
Telesp S.A. ........................................ 2,669,162 908,005
Uniao de Industrias Pertoquimicas S.A., Class B..... 191,875 50,339
Usiminas............................................ 22,520 155,582
-----------
TOTAL PREFERRED STOCKS (Cost $10,251,813)........... 11,662,560
-----------
</TABLE>
RIGHTS - 0.0%
<TABLE>
<CAPTION>
NO. OF
RIGHTS
-----------
<S> <C> <C>
KOREA - 0.0%
*Cheil Jedang, expiring 5/27/98..................... 1,344 6,040
*Hyundai Engineering & Co., expiring 4/30/98........ 1,148 688
*Samsung Display, expiring 5/8/98................... 723 12,565
*Samsung Electronics, expiring 5/27/98.............. 335 6,474
-----------
25,767
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
RIGHTS - CONTINUED
<TABLE>
<CAPTION>
NO. OF
RIGHTS VALUE+
---------- -----------
<S> <C> <C>
THAILAND - 0.0%
*Dhana Siam Finance and Securities Public Co.,
expiring 5/20/98................................... 100,000 $ 9,067
-----------
TOTAL RIGHTS - 0.1% (Cost $0)....................... 34,834
-----------
</TABLE>
WARRANTS - 0.0%
<TABLE>
<CAPTION>
NO. OF
WARRANTS
----------
<S> <C> <C>
THAILAND - 0.0%
*Nava Finance, expiring 4/21/99 (Cost $0)........... 167,300 --
-----------
</TABLE>
SHORT-TERM INVESTMENTS - 2.8%
<TABLE>
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 2.8%
Chase Securities Inc. 5.37% dated 4/30/98, due
5/1/98, to be repurchased at $2,615,390,
collateralized by $2,280,056 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $2,644,718 (Cost $2,615,000)... $2,615,000 2,615,000
-----------
TOTAL INVESTMENTS - 103.1% (Cost $103,302,181)(a)... 95,623,170
-----------
OTHER ASSETS AND LIABILITIES (NET) - (3.1)%......... (2,854,882)
-----------
NET ASSETS - 100%................................... $92,768,288
===========
</TABLE>
+
See Note A to Financial Statements.
*
Non-Income Producing Security
ADR
-American Depositary Receipt
(a)
The cost for federal income tax purposes was $103,302,181. At April 30,
1998, net unrealized depreciation for all securities based on tax cost was
$7,679,011. This consisted of aggregate gross unrealized appreciation for
all securities of $17,810,241 and aggregate gross unrealized depreciation
for all securities of $25,489,252.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET MARKET
INDUSTRY ASSETS VALUE
- -------- ------ -----------
<S> <C> <C>
Automotive................................................ 1.7 % $ 1,561,513
Banks..................................................... 15.7 14,525,060
Basic Industries.......................................... 1.5 1,413,746
Beverages, Food & Tobacco................................. 4.4 4,108,488
Building Materials........................................ 1.6 1,480,538
Capital Equipment......................................... 0.3 321,668
Chemicals................................................. 2.8 2,642,346
Construction.............................................. 3.6 3,320,860
Consumer Cyclical......................................... 0.2 166,301
Consumer Durables......................................... 0.1 13,422
Electronics............................................... 5.3 4,869,699
Energy.................................................... 4.5 4,174,625
Entertainment & Leisure................................... 1.2 1,116,416
Financial Services........................................ 7.2 6,720,070
Health Care............................................... 0.3 264,558
Holding Company........................................... 6.8 6,331,735
Home Furnishings & Appliances............................. 0.1 60,208
Industrial................................................ 1.4 1,316,936
Insurance................................................. 1.6 1,448,550
Iron and Steel............................................ 1.4 1,295,927
Lodging & Restaurants..................................... 0.1 28,345
Manufacturing............................................. 3.5 3,362,038
Metals.................................................... 1.9 1,786,924
Mining.................................................... 0.6 532,282
Multi-Industry............................................ 2.1 1,974,825
Oil & Gas................................................. 3.6 3,341,457
Paper & Packaging......................................... 2.5 2,313,006
Pharmaceuticals........................................... 0.7 607,892
Real Estate............................................... 0.8 753,972
Repurchase Agreement...................................... 2.8 2,615,000
Retail.................................................... 2.0 1,865,992
Services.................................................. 0.3 310,137
Technology................................................ 0.1 113,114
Telecommunications........................................ 13.7 12,694,815
Textiles & Apparel........................................ 0.1 53,208
Transportation............................................ 1.8 1,655,683
Utilities................................................. 4.8 4,461,814
----- -----------
Total Investments........................................ 103.1 % $95,623,170
Other Assets and Liabilities (Net)........................ (3.1) (2,854,882)
----- -----------
Net Assets............................................... 100.0 % $92,768,288
===== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments at Cost.............................................. $103,302,181
============
Investments, at Value ........................................... 95,623,170
Foreign Currency, at Value (Cost $535,745)....................... 530,357
Receivable for Investments Sold.................................. 112,524
Dividends Receivable............................................. 305,244
Receivable for Portfolio Shares Sold............................. 106,000
Foreign Withholding Tax Reclaim Receivable....................... 248
Interest Receivable.............................................. 390
Deferred Organization Costs-Note A............................... 67
Other Assets..................................................... 3,625
------------
Total Assets.................................................... 96,681,625
------------
LIABILITIES
Payable for Investments Purchased................................ 3,133,562
Payable for Shares Redeemed...................................... 16,193
Payable for Custodian Fees-Note D................................ 346,854
Payable for Investment Advisory Fees-Note B...................... 69,958
Payable for Administrative Fees-Note C........................... 11,819
Payable for Directors' Fees-Note G............................... 650
Payable to Custodian Bank-Note D................................. 320,310
Other Liabilities................................................ 13,991
------------
Total Liabilities............................................... 3,913,337
------------
NET ASSETS....................................................... $ 92,768,288
============
NET ASSETS CONSIST OF:
Paid in Capital.................................................. $102,684,941
Undistributed Net Investment Income.............................. 320,508
Accumulated Net Realized Loss.................................... (2,540,604)
Unrealized Depreciation.......................................... (7,696,557)
------------
NET ASSETS....................................................... $ 92,768,288
============
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)......................................... 8,773,321
Net Asset Value, Offering and Redemption Price Per Share......... $10.57
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends.......................................................... $ 1,169,850
Interest........................................................... 50,908
Less Foreign Taxes Withheld........................................ (87,760)
-----------
TOTAL INCOME...................................................... 1,132,998
-----------
EXPENSES
Investment Advisory Fees - Note B.................................. 381,964
Custodian Fees - Note D............................................ 136,970
Administrative Fees - Note C....................................... 63,228
Printing Fees...................................................... 11,975
Registration and Filing Fees....................................... 7,998
Audit Fees......................................................... 7,973
Legal Fees......................................................... 2,127
Directors' Fees - Note G........................................... 1,598
Amortization of Organizational Costs - Note A...................... 277
Account Services Fees - Note F..................................... 56
Foreign Tax Expense................................................ 10,918
Other Expenses..................................................... 12,961
-----------
Net Expenses...................................................... 638,045
-----------
NET INVESTMENT INCOME.............................................. 494,953
-----------
NET REALIZED LOSS ON:
Investments....................................................... (2,394,728)
Foreign Exchange Transactions..................................... (145,052)
-----------
TOTAL NET REALIZED LOSS............................................ (2,539,780)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments....................................................... 2,848,487
Foreign Exchange Transactions..................................... 81,422
-----------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION........... 2,929,909
-----------
NET GAIN........................................................... 390,129
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 885,082
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
----------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income............................. $ 494,953 $ 1,124,146
Net Realized Gain (Loss).......................... (2,539,780) 3,387,502
Net Change in Unrealized
Appreciation/Depreciation........................ 2,929,909 (11,383,785)
----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................. 885,082 (6,872,137)
----------- ------------
DISTRIBUTIONS:
Net Investment Income............................. (991,001) (690,005)
Net Realized Gain................................. (3,581,762) (195,793)
----------- ------------
TOTAL DISTRIBUTIONS............................... (4,572,763) (885,798)
----------- ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................ 25,253,235 23,222,058
In Lieu of Cash Distributions..................... 4,432,628 855,408
Redemption Fees - Note J.......................... 74,426 14,952
Redeemed.......................................... (13,523,902) (5,764,196)
----------- ------------
Net Increase from Capital Share Transactions...... 16,236,387 18,328,222
----------- ------------
Total Increase.................................... 12,548,706 10,570,287
NET ASSETS:
Beginning of Period............................... 80,219,582 69,649,295
----------- ------------
End of Period (including undistributed net
investment income of $320,508 and $816,556,
respectively).................................... $92,768,288 $ 80,219,582
=========== ============
(1) Shares Issued and Redeemed:
Shares Issued..................................... 2,551,115 1,726,498
In Lieu of Cash Distributions..................... 477,114 73,049
Shares Redeemed................................... (1,366,031) (432,801)
----------- ------------
1,662,198 1,366,746
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31, JUNE 17, 1993**
1998 ------------------------------------ TO OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------- ------- ------- ------ ---------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 11.28 $ 12.12 $ 11.23 $ 14.00 $11.34 $10.00
------- ------- ------- ------- ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss)................. 0.06 0.16 0.13 0.05 (0.03) (0.01)
Net Realized and
Unrealized Gain
(Loss)................. (0.12)++ (0.85) 0.84 (2.82) 2.74 1.35
------- ------- ------- ------- ------ ------
Total from Investment
Operations............. (0.06) (0.69) 0.97 (2.77) 2.71 1.34
------- ------- ------- ------- ------ ------
DISTRIBUTIONS:
Net Investment Income... (0.14) (0.12) (0.02) -- -- --
Net Realized Gain....... (0.51) (0.03) (0.06) -- (0.05) --
------- ------- ------- ------- ------ ------
Total Distributions..... (0.65) (0.15) (0.08) -- (0.05) --
------- ------- ------- ------- ------ ------
NET ASSET VALUE, END OF
PERIOD................. $ 10.57 $ 11.28 $ 12.12 $ 11.23 $14.00 $11.34
======= ======= ======= ======= ====== ======
TOTAL RETURN............ 0.22 % (5.71)% 8.72 % (19.79)% 23.97 %+ 13.40 %+
======= ======= ======= ======= ====== ======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $92,768 $80,220 $69,649 $33,944 $5,558 $3,927
Ratio of Expenses to
Average Net Assets..... 1.67 %*@ 1.50 % 1.79 % 1.78 % 2.07 % 2.43 %*
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... 1.29 %* 1.31 % 1.29 % 0.86 % (0.25)% (0.37)%*
Portfolio Turnover
Rate................... 13 % 28 % 11 % 21 % 9 % 2 %
Average Commission
Rate#.................. $0.0005 $0.0003 $0.0004 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. N/A N/A N/A 0.40% 1.00 % 1.01 %*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.67 %* 1.50 % 1.79 % 1.77 % N/A N/A
</TABLE>
* Annualized
** Commencement of Operations
+ Total return would have been lower had certain fees not been waived during
the periods indicated.
++ The amount shown for the six months ended April 30, 1998 for a share out-
standing throughout the period does not accord with the aggregate net gains
on investments for that period because of the sales and repurchases of
Portfolio shares in relation to fluctuating market value of the investments
of the Portfolio.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
@ The annualized ratio of net operating expenses to average net assets, ex-
cluding foreign tax expense, is 1.64%.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Acadian
Emerging Markets Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc.,
is a non-diversified, open-end management investment company. At April 30,
1998, the UAM Funds were comprised of forty-four active portfolios. The
financial statements of the remaining portfolios are presented separately. The
objective of the Portfolio is to seek long-term capital appreciation by
investing primarily in common stocks of emerging country issuers.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a United States securities
exchange for which market quotations are readily available are valued at
the last quoted sales price as of the close of the exchange on the day the
valuation is made or, of no sale occurred on such day, at the bid price on
such day. Securities listed on a foreign exchange are valued at their
closing price. Price information on listed securities is taken from the
exchange where the securities are primarily traded. Over-the-counter and
unlisted securities are valued at the current bid prices. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the readily available is Board of Directors.
2. INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements. The Portfolio may be subject to taxes imposed by countries in
which it invests. Such taxes are generally based on either income earned
or gains realized or repatriated. The Portfolio accrues such taxes when
the related income is earned or gains are realized.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes
22
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
possession of the underlying securities, the value of which exceeds the
principal amount of the repurchase transaction, including accrued
interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is monitored on a daily basis to
determine the adequacy of the collateral. In the event of default on the
obligation to repurchase, the Portfolio has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio
are maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in
net realized and unrealized gain and loss on investments on the statement
of operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy and sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily using the
current forward rate and the change in market value is recorded by the
Portfolio as unrealized gain or loss. The Portfolio recognizes realized
gain or loss when the contract is closed, equal to the difference between
the value of the contract
23
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
at the time it was opened and the value at the time it was closed. Risks
may arise upon entering into these contracts from the potential inability
of counterparties to meet the terms of their contracts and are generally
limited to the amount of unrealized gain on the contracts, if any, at the
date of default. Risks may also arise from the unanticipated movements in
the value of a foreign currency relative to the U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income annually. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments for
foreign currency transactions and deferred organization costs.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income, accumulated net realized gain and paid in capital.
Permanent book-tax differences are not included in ending undistributed
net investment income for the purpose of calculating net investment income
per share in the financial highlights.
7. ORGANIZATION COST: Costs incurred by the Portfolio in connection with
its organization have been deferred and are being amortized on a straight-
line basis over a five year period.
8. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio have been increased to include expense offsets for
custodian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Acadian Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio for a monthly fee calculated at an
24
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
annual rate of 1.00% of average daily net assets for the month. The Adviser
has voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 2.50% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific annual fee payable monthly of
0.06% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund
Services, Inc. earned $63,228 which $40,320 was paid to CGFSC for its services
as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement. As part of the
custodian agreement, the custodian bank has a lien on the securities of the
Portfolio to cover any advances made by the custodian to the Portfolio. At
April 30, 1998, the payable to the custodian bank represents the amount due
for cash advanced for the settlement of foreign currency purchased.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
25
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant record keeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in
order to keep the Portfolio's total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 2.50% of average daily
net assets.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $23,503,619 and sales of $10,091,146 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government securities.
I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. For the six months ended
April 30, 1998, the Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 75% of total shares outstanding were held by 2
record shareholders owning 10% or greater of the aggregate total shares
outstanding.
The Portfolio retains a redemption fee of 1.00% on redemptions of capital
shares held for less than 90 days in the Portfolio.
26
<PAGE>
UAM FUNDS ACADIAN EMERGING MARKETS PORTFOLIO
- -------------------------------------------------------------------------------
At April 30, 1998, the net assets of the Portfolio were substantially
comprised of foreign denominated securities and/or currency. Changes in
currency exchange rates will affect the value of and investment income from
such securities and currency.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar
denominated transactions as a result of, among other factors, the possibly
lower level of governmental supervision and regulation of foreign securities
markets and the possibility of political or economic instability.
27
<PAGE>
UAM Funds Acadian Emerging
Markets Portfolio
================================================================================
Officers and Directors
William H. Park
Norton H. Reamer Vice President
Director, President and Chairman
Michael E. DeFao
John T. Bennett, Jr. Secretary
Director
Karl O. Hartmann
Nancy J. Dunn Assistant Secretary
Director
Gary L. French
Philip D. English Treasurer
Director
Robert R. Flaherty
William A. Humenuk Assistant Treasurer
Director
Gordon M. Shone
Charles H. Salisbury, Jr. Assistant Treasurer
Director and Executive Vice President
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Acadian Asset Management, Inc.
Two International Place
Boston, MA 02110
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
Acadian International
Equity Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter
International Equity...................................................... 1
Portfolio of Investments
International Equity...................................................... 5
Statement of Assets and Liabilities......................................... 10
Statement of Operations..................................................... 11
Statement of Changes in Net Assets
International Equity...................................................... 12
Financial Highlights
International Equity...................................................... 13
Notes to Financial Statements............................................... 14
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
May 18, 1998
Dear Shareholder:
We are pleased to present the semi-annual report for The Acadian International
Equity Portfolio. This commentary covers the most recent quarter, the three
months from February 1, 1998 to April 30, 1998, focusing on the portfolio's
performance and some of the economic and market conditions that impacted
returns.
THE ACADIAN INTERNATIONAL EQUITY PORTFOLIO
The total return for the Acadian International Equity Portfolio was 6.04% for
the six months ended April 30, 1998. Total return for the three months ended
April 30, 1998 was 7.5% in U.S. dollars. The benchmark, the Morgan Stanley
Capital International Index for Europe, Australia, and the Far East (EAFE),
returned 10.6%.
ECONOMIC AND MARKET CONDITIONS
The developed international equity markets as represented by the MSCI EAFE
index were up strongly in dollar terms for the three months ending April 30,
1998. EAFE's robust return was driven largely by Europe, which continued to
experience booming stock markets as investors anticipated monetary union
(EMU). European markets were up 17.7% in dollar terms for the three-month
period, with the U.K., France, Germany, Italy, Spain, and Portugal all seeing
double-digit returns. Asia, in contrast, slumped -4.5% as the economic outlook
for Japan worsened and regional worries battered Hong Kong. Malaysia and
Singapore saw strong positive returns, however.
INVESTMENT STRATEGY USED DURING THE QUARTER
Acadian continued to pursue its disciplined, value-based strategy, using
quantitative valuation frameworks to identify the most attractive companies in
our 20,000+ security database. This bottom-up stock selection approach led to
the portfolio being overweighted in Australia, Canada, Hong Kong, and the
U.K., and underweighted in Germany, France, Switzerland, and Italy. We
maintained an underweighting in Japan, at approximately 2.5% below the
benchmark weight.
The resulting portfolio had very attractive valuation characteristics, with a
price/book value, price/sales ratio, and price/earnings ratio all lower than
the benchmark index. This value orientation led to the portfolio being
significantly smaller in cap size than the EAFE index, which is dominated by
large, growth-oriented stocks.
INVESTMENT STRATEGIES AND TECHNIQUES WITH REGARD TO DERIVATIVES
No derivatives were employed by the fund.
1
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
COMMENTARY ON THE FUND'S INVESTMENT PERFORMANCE
As noted above, the Acadian International Equity Portfolio returned 7.5% for
the three months ending April 30, 1998, versus a return of 10.6% for the MSCI
EAFE index. This was the result of country allocations underperforming, with
stock selection adding back a small amount of value.
HELPED PORTFOLIO
The portfolio's performance during the three-month period was helped by
investments in:
. JAPAN: Stock selection in Japan contributed 100 basis points of return as
smaller, value-oriented stocks rallied strongly. These stocks had
underperformed in 1997, leading to cheap valuations that proved very
attractive to investors in the early months of 1998. Value oriented stocks
were also boosted by expectations that the government would come forward
with a package to stimulate the domestic economy. There was a small amount
of value added from the country underweighting in Japan, for a net result
that was 110 basis points above the benchmark.
. SWITZERLAND: Stock selection in Switzerland was also positive for the
portfolio, adding 30 basis points of excess return from a mix of financial,
materials, and service-related holdings.
. CANADA: The overweighting in Canada had a positive impact on portfolio
returns, adding 30 basis points, while Canadian stock selection added 20
basis points of excess return. Many of the Canadian holdings were banking
stocks, which performed well in relation to the market as a whole. Total
value added was 50 basis points.
. OTHER: There was also a small amount of value added from stock selection in
France, and the overweighting in Singapore.
HURT PORTFOLIO
The main investments detracting from portfolio performance were the following:
. AUSTRALIA: The portfolio was overweighted in Australia, which detracted 50
basis points from return as the Australian market underperformed the index
by 10 percentage points. The portfolio's stock selection, with its emphasis
on undervalued banking stocks, was neutral.
. FRANCE: The French stock market continued to soar, rising 24.4% over the
course of the three months. The portfolio had positive stock selection in
France, but the underweighting of this market led to a 90-basis-point
underperformance from the country allocation. Acadian continues to find
French stocks generally overvalued in a global context. Net value lost was
60 basis points.
2
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
. ITALY AND SPAIN: The underweightings in Italy and Spain detracted 40-50
basis points each as these markets returned 22% and 32% respectively. Their
strong progress towards meeting criteria for European Monetary Union was
very surprising to investors. As two of the weaker European economies, they
were perceived as being the markets that would benefit most from inclusion
in EMU. This drove unusually strong market returns in the quarter.
CURRENT OUTLOOK
Longer-term analysis of key regions is as follows:
. ASIA: Japan has been a tremendous disappointment during the 1990s, having
outperformed EAFE ex-Japan in only one year of the decade so far (1994).
This market is now selling at the lowest price/sales ratio of any of the
developed markets and is relatively cheap compared to other EAFE markets on
measures such as price/cash earnings or price/book ratio. Our judgemental
appraisal is that the Japanese political leadership will be forced to take
decisive action to "jump-start" their ailing economy and financial system
over the fairly near term. This could lead to a rally in Japanese stocks,
especially smaller ones, over the next several years, though the short-term
outlook is extremely cloudy. Elsewhere in Asia, we find Hong Kong very
attractive currently and also see attractive valuations in Singapore and
Malaysia.
. EUROPE: While European markets are selling at relatively high valuations of
trailing earnings because of strong recent performance, companies in Europe
appear to have good potential to raise profit margins and returns on equity,
which are generally still well below U.S. levels. Current projections of
higher economic growth in Europe than in the U.S., coupled with the positive
impact of EMU, could lead to reasonably strong profits performance in
Europe. This would act to neutralize some of the impact of high current
valuations. Thus while we find Europe less attractive overall than Asia
currently and for the next two to three years, we find it more attractive
than the U.S. market. In addition, the recent market focus on the largest
companies has led to attractive relative valuations in smaller European
stocks.
. NORTH AMERICA: Our current longer-term expectations for smaller U.S.
equities incorporate a forecast that a significant correction or flattening
out of U.S. stock returns will occur at some point during the next three to
five years. Possible triggers for such an outcome could be an overheating of
the U.S. economy and possible dollar weakness that could cause Federal
Reserve policy to turn more restrictive, driving up short-term interest
rates and causing an equity market correction. In this context, we believe
that the standard deviation of U.S.
3
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
stock returns would also move up from recent levels. We continue to find
Canada a more attractive longer-term investment.
If we can provide any further information, please contact me at (617) 946-
3500.
Sincerely,
LOGO
Churchill G. Franklin
Senior Vice President
Acadian Asset Management, Inc.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
The returns for the UAM Fund-Acadian International Equity Portfolio are net of
all fees and expenses.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.9%
<TABLE>
<CAPTION>
SHARES VALUE+
-------- ----------
<S> <C> <C>
AUSTRALIA - 8.1%
Australia & New Zealand Banking Group Ltd. .............. 21,500 $ 150,035
Commonwealth Bank of Australia........................... 12,000 144,040
Westpac Banking Corp. ................................... 23,800 159,832
----------
453,907
----------
BELGIUM - 2.1%
Electrabel S.A. ......................................... 300 79,761
PetroFina S.A. .......................................... 100 39,488
----------
119,249
----------
CANADA - 3.8%
Cascades, Inc. .......................................... 8,100 62,883
Metro-Richeliee, Inc., Class A........................... 2,650 35,215
National Bank of Canada.................................. 2,200 45,391
Onex Corp. .............................................. 2,900 70,380
----------
213,869
----------
FRANCE - 3.7%
Cie Financiere de Paribas................................ 550 58,559
Cie Generale des Eaux.................................... 800 148,794
----------
207,353
----------
GERMANY - 10.7%
Bayerische Hypotheken-und Wechsel-Bank AG................ 2,600 146,458
*Bremer Woll-Kaemmerei AG................................ 250 21,124
Gerry Weber International AG............................. 1,150 28,542
Hoechst AG............................................... 2,950 118,954
Metro AG................................................. 350 17,373
Papierwerke Waldhof-Aschaffenburg AG..................... 800 141,885
Thyssen AG............................................... 550 126,074
----------
600,410
----------
HONG KONG - 5.0%
CLP Holdings Ltd. ....................................... 3,000 14,409
Hang Lung Development Co. ............................... 56,000 73,023
Hong Kong Telecommunications Ltd. ....................... 68,800 128,797
Jardine International Motor Holdings Ltd. ............... 20,000 10,587
Kumagai Gumi Ltd. ....................................... 13,000 8,014
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- ----------
<S> <C> <C>
HONG KONG - CONTINUED
Lai Sun Garment (International) Ltd....................... 32,000 $ 14,047
Semi-Tech (Global) Ltd. .................................. 136,000 11,940
Tai Cheung Holdings Ltd................................... 72,000 22,077
----------
282,894
----------
ITALY - 0.6%
Fiat SpA.................................................. 8,800 34,933
----------
JAPAN - 19.2%
Aoki International Co., Ltd............................... 3,000 17,141
Cesar Co.................................................. 4,000 7,870
Chuetsu Pulp & Paper Co., Ltd............................. 6,000 10,262
Cosmo Oil Co., Ltd........................................ 30,000 59,028
Fuji Heavy Industries Ltd................................. 44,000 197,457
Hitachi Ltd............................................... 16,000 114,908
Itochu Fuel Corp.......................................... 7,000 23,468
Kamei..................................................... 4,000 25,064
Kansai Electric Power Company, Inc........................ 9,000 154,609
Mitsui Wood Systems, Inc.................................. 2,000 6,947
Nichimen Corp............................................. 25,000 32,730
Nintendo Corp., Ltd. ..................................... 500 45,936
Nippon Metal Industry..................................... 9,000 9,127
Nissan Motor Co., Ltd. ................................... 36,000 116,331
Orient Corp. ............................................. 29,000 65,620
Osaka Stadium............................................. 8,000 31,785
Suntelephone Co., Ltd. ................................... 2,000 4,980
Tokyo Electric Power Co................................... 8,000 153,474
----------
1,076,737
----------
MALAYSIA - 0.9%
Perlis Plantations Bhd.................................... 34,750 49,241
----------
NETHERLANDS - 3.6%
Boskalis Westminster N.V. ................................ 3,749 61,468
DSM N.V. ................................................. 200 20,062
KLM Royal Dutch Air Lines N.V. ........................... 3,109 122,278
----------
203,808
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- ----------
<S> <C> <C>
NORWAY - 2.2%
*Nera ASA................................................. 15,500 $ 60,281
*Norske Skogindustrier ASA, Class A....................... 800 28,430
Sparebanken NOR........................................... 1,000 34,599
----------
123,310
----------
SINGAPORE - 3.6%
Fraser & Neave Ltd. ...................................... 12,000 53,856
Hotel Properties Ltd. .................................... 34,000 17,838
Singapore Land Ltd. ...................................... 8,000 20,733
Singapore Telecommunications, Ltd. ....................... 46,000 79,090
Wing Tai Holdings, Ltd. .................................. 40,000 32,617
----------
204,134
----------
SWEDEN - 4.2%
Astra AB, Class B......................................... 2,000 39,807
SSAB Svenkst Stal AB, Class B............................. 6,000 113,992
Sparbanken Sverige AB, Class A............................ 1,400 43,787
Telefonaktiebolaget LM Ericsson, Class B.................. 400 21,092
Volvo AB.................................................. 600 17,525
----------
236,203
----------
SWITZERLAND - 8.4%
*Credit Suisse Group (Registered)......................... 200 44,003
Georg Fischer AG (Registered)............................. 100 38,669
Nestle S.A. (Registered).................................. 80 155,210
Rieter Holdings Ltd. AG................................... 160 96,113
*Sairgroup................................................ 80 104,647
*Von Roll Holding AG...................................... 980 32,342
----------
470,984
----------
UNITED KINGDOM - 22.8%
Abbey National plc........................................ 9,300 174,665
B.A.T. Industries plc..................................... 11,000 103,756
Bank of Scotland.......................................... 13,400 164,715
Boots Company plc......................................... 8,500 131,706
Bristol Water Holding plc................................. 1,100 28,515
Diageo plc................................................ 7,430 88,473
McBride plc............................................... 28,800 93,923
Paragon Group Companies plc............................... 10,237 38,264
Premier Oil plc........................................... 111,200 84,617
Prudential Corp. plc...................................... 6,000 84,992
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- ----------
<S> <C> <C>
UNITED KINGDOM - CONTINUED
RJB Mining plc........................................... 11,700 $ 24,068
Siebe plc................................................ 4,853 108,432
Standard Chartered plc................................... 10,000 153,193
----------
1,279,319
----------
TOTAL COMMON STOCKS (Cost $6,067,958)............................. 5,556,351
----------
</TABLE>
RIGHTS - 0.0%
<TABLE>
<CAPTION>
NO. OF
RIGHTS
--------
<S> <C> <C>
SWEDEN - 0.0%
*Mandamus, expiring 5/29/98 (Cost $0)....................... 1,400 --
----------
</TABLE>
WARRANTS - 0.0%
<TABLE>
<CAPTION>
NO. OF
WARRANTS
--------
<S> <C> <C>
HONG KONG - 0.0%
*Semi-Tech (Global) Ltd. (expiring 7/31/98) (Cost $0)....... 3,400 4
----------
</TABLE>
SHORT-TERM INVESTMENT - 0.4%
<TABLE>
<CAPTION>
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENT - 0.4%
Chase Securities, Inc. 5.37%, dated 4/30/98, due 5/1/98, to
be repurchased at $21,003, collateralized by $18,310 of
various U.S.
Treasury Obligations, 5.50%-14.00% due 5/15/04-11/15/27,
valued at $21,239 (Cost $21,000).......................... $21,000 21,000
----------
TOTAL INVESTMENTS - 99.3% (Cost $6,088,958) (a)............ 5,577,355
----------
OTHER ASSETS AND LIABILITIES (NET) - 0.7%.................. 38,720
----------
NET ASSETS - 100%.......................................... $5,616,075
==========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $6,088,958. At April 30, 1998,
net unrealized depreciation for all securities based on tax cost was
$511,603. This consisted of aggregate gross unrealized appreciation for all
securities of $839,105 and aggregate gross unrealized depreciation for all
securities of $1,350,708.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF MARKET
INDUSTRY NET ASSETS VALUE
- -------- ---------- ----------
<S> <C> <C>
Automotive............................................... 3.9% $ 218,045
Banks.................................................... 17.0 957,491
Beverages, Food & Tobacco................................ 7.1 399,368
Building Materials....................................... 2.4 133,021
Chemicals................................................ 0.8 45,126
Construction............................................. 6.2 351,225
Consumer Durables........................................ 0.8 45,936
Consumer Non-Durables.................................... 2.1 116,000
Electronics.............................................. 2.2 126,853
Energy................................................... 1.7 94,169
Entertainment & Leisure.................................. 0.6 31,784
Financial Services....................................... 8.3 465,671
Holding Company.......................................... 6.1 343,273
Industrial............................................... 5.7 318,694
Insurance................................................ 1.5 84,992
Iron & Steel............................................. 0.6 32,342
Lodging & Restaurants.................................... 0.3 17,838
Metals................................................... 2.2 123,118
Mining................................................... 0.4 24,068
Oil & Gas................................................ 3.7 206,601
Paper & Packaging........................................ 4.3 243,460
Pharmaceuticals.......................................... 2.8 158,761
Real Estate.............................................. 1.1 61,221
Repurchase Agreement..................................... 0.4 21,000
Services................................................. 0.6 32,730
Telecommunications....................................... 5.2 294,240
Textiles & Apparel....................................... 1.2 66,806
Transportation........................................... 4.1 226,925
Utilities................................................ 6.0 336,597
----- ----------
Total Investments....................................... 99.3% $5,577,355
Other Assets and Liabilities (Net)....................... 0.7 38,720
----- ----------
Net Assets.............................................. 100.0% $5,616,075
===== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................ $ 6,088,958
===========
Investments, at Value........................................... $ 5,577,355
Foreign Currency, at Value (Cost $20,637)....................... 20,665
Cash............................................................ 732
Interest Receivable............................................. 3
Dividends Receivable............................................ 31,489
Foreign Withholding Tax Reclaim Receivable...................... 9,647
Receivable for Investments Sold................................. 10,063
Receivable for Portfolio Shares Sold............................ 23
Receivable from Investment Advisor-Note B....................... 28,201
Other Assets.................................................... 164
-----------
Total Assets................................................... 5,678,342
-----------
LIABILITIES
Payable for Custodian Fees-Note D............................... 40,676
Payable for Administrative Fees-Note C.......................... 7,673
Payable for Directors' Fees-Note G.............................. 622
Other Liabilities............................................... 13,296
-----------
Total Liabilities.............................................. 62,267
-----------
NET ASSETS...................................................... $ 5,616,075
===========
NET ASSETS CONSIST OF:
Paid in Capital................................................. $ 7,331,039
Undistributed Net Investment Income............................. 15,039
Accumulated Net Realized Loss................................... (1,217,870)
Unrealized Depreciation......................................... (512,133)
-----------
NET ASSETS...................................................... $ 5,616,075
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value) (Authorized
25,000,000).................................................... 474,563
Net Asset Value, Offering and Redemption Price Per Share........ $11.83
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
ACADIAN INTERNATIONAL EQUITY PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends......................................................... $ 127,154
Interest.......................................................... 7,648
Less Foreign Taxes Withheld....................................... (10,154)
-----------
Total Income...................................................... 124,648
-----------
EXPENSES
Investment Advisory Fees-Note B................................... 39,456
Administrative Fees-Note C........................................ 48,357
Custodian Fees-Note D............................................. 13,740
Printing Fees..................................................... 9,120
Registration and Filing Fees...................................... 7,031
Legal Fees........................................................ 468
Directors' Fees-Note G............................................ 1,295
Audit Fees........................................................ 7,167
Amortization of Organizational Cost............................... 223
Account Services Fees-Note F...................................... 316
Other Expenses.................................................... 2,084
Account Service Fees Waived-Note F................................ (316)
Investment Advisory Fees Waived-Note B............................ (39,456)
Expenses Assumed by the Adviser-Note B............................ (36,940)
-----------
Net Expenses..................................................... 52,545
-----------
NET INVESTMENT INCOME............................................. 72,103
-----------
NET REALIZED LOSS ON:
Investments...................................................... (1,122,284)
Foreign Exchange Transactions.................................... (80,589)
-----------
TOTAL NET REALIZED LOSS .......................................... (1,202,873)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments...................................................... 544,397
Foreign Exchange Translations.................................... (2,642)
-----------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION.......... 541,755
-----------
NET LOSS.......................................................... (661,118)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $ (589,015)
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
------------ -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income.............................. $ 72,103 $ 363,483
Net Realized Gain (Loss)........................... (1,202,873) 923,822
Net Change in Unrealized
Appreciation/Depreciation......................... 541,755 (1,361,166)
------------ -----------
NET DECREASE IN NET ASSETS RESULTING FROM
OPERATIONS........................................ (589,015) (73,861)
------------ -----------
DISTRIBUTIONS:
Net Investment Income.............................. (344,056) (410,681)
Net Realized Gain.................................. (1,027,464) (847,856)
------------ -----------
Total Distributions................................ (1,371,520) (1,258,537)
------------ -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued............................................. 209,651 4,414,711
In Lieu of Cash Distributions...................... 1,371,521 1,235,841
Redemption Fees-Note J............................. -- 825
Redeemed........................................... (13,735,582) (1,667,058)
------------ -----------
Net Increase (Decrease) from Capital Share
Transactions...................................... (12,154,410) 3,984,319
------------ -----------
TOTAL INCREASE (DECREASE).......................... (14,114,945) 2,651,921
NET ASSETS:
Beginning of Period................................ 19,731,020 17,079,099
------------ -----------
End of Period (including undistributed net
investment income of $15,039 and $286,992,
respectively)..................................... $ 5,616,075 $19,731,020
============ ===========
(1) Shares Issued and Redeemed:
Shares Issued...................................... 18,459 355,447
In Lieu of Cash Distributions...................... 128,419 101,883
Shares Redeemed.................................... (1,313,045) (136,493)
------------ -----------
(1,166,167) 320,837
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED MARCH 29,
APRIL 30, YEARS ENDED OCTOBER 31, 1993*** TO
1998 --------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
----------- ------- ------- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $12.03 $12.94 $11.54 $12.37 $11.77 $10.00
------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss)................ 0.07 0.23 0.17 (0.01) (0.04) (0.04)
Net Realized and
Unrealized Gain
(Loss)................ 0.57++ (0.19) 1.44 (0.56) 0.95 1.81
------- ------- ------- ------ ------ ------
Total from Investment
Operations............ 0.64 0.04 1.61 (0.57) 0.91 1.77
------- ------- ------- ------ ------ ------
DISTRIBUTIONS:
Net Investment Income.. (0.21) (0.31) -- -- -- --
Net Realized Gain...... (0.63) (0.64) (0.21) (0.26) (0.31) --
------- ------- ------- ------ ------ ------
Total Distributions.... (0.84) (0.95) (0.21) (0.26) (0.31) --
------- ------- ------- ------ ------ ------
NET ASSET VALUE, END OF
PERIOD................. $11.83 $12.03 $12.94 $11.54 $12.37 $11.77
======= ======= ======= ====== ====== ======
TOTAL RETURN+........... 6.04%** 0.25% 14.13% (4.58)% 8.02% 17.70%**
======= ======= ======= ====== ====== ======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $ 5,616 $19,731 $17,079 $2,475 $2,427 $2,264
Ratio of Expenses to
Average Net Assets..... 1.00%* 1.00% 1.06% 2.54% 2.50% 2.50%*
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... 1.37%* 1.87% 1.87% (0.11)% (0.38)% (0.76)%*
Portfolio Turnover
Rate................... 14% 70% 80% 76% 56% 44%
Average Commission Rate
#...................... $0.0082 $0.0033 $0.0043 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 1.46% 0.74% 1.22% 3.54% 1.98% 2.63%*
Ratio of Expenses to
Average Net
Assets Including
Expense Offsets....... 1.00% 1.00% 1.05% 2.50% N/A N/A
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the periods.
++ The amount shown for the six months ended April 30, 1998 for a share out-
standing throughout the period does not accord with the aggregate net losses
on investments for that period because of sales and repurchases of Portfolio
shares in relation to fluctuating market value of the investments of the
Portfolio.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Acadian
International Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds,
Inc., is a diversified, open-end management investment company. At April 30,
1998, the UAM Funds were comprised of forty-four active portfolios. The
financial statements of the remaining portfolios are presented separately. The
objective of the Portfolio is to provide maximum long-term total return
consistent with reasonable risk to principal that is superior over the long
term to the performance of the Benchmark Index (Morgan Stanley Capital
International Index for Europe, Australia and the Far East or "EAFE") by
investing in a diversified portfolio of equity securities of primarily non-
United States issuers.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a United States securities
exchange for which market quotations are readily available are valued at
the last quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid price on
such day. Securities listed on a foreign exchange are valued at their
closing price. Price information on listed securities is taken from the
exchange where the securities are primarily traded. Over-the-counter and
unlisted securities are valued at the current bid prices. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements. The Portfolio may be subject to taxes imposed by countries in
which it invests. Such taxes are generally based on either income earned
or gains realized or repatriated. The Portfolio accrues such taxes when
the related income is earned or gains are realized.
14
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio
are maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in
net realized and unrealized gain and loss on investments on the statement
of operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The Portfolio may enter
into forward foreign currency exchange contracts to protect the value of
securities held and related receivables and payables against changes in
future foreign exchange rates. A forward currency contract is an agreement
between two parties to buy and sell currency at a set price on a future
date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily using the
current forward rate and the change in market value is recorded by the
Portfolio as
15
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
unrealized gain or loss. The Portfolio recognizes realized gain or loss
when the contract is closed, equal to the difference between the value of
the contract at the time it was opened and the value at the time it was
closed. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and are generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from the
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income annually. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments, foreign
currency transactions, deferred organization costs and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss), and paid
in capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. ORGANIZATION COST: Costs incurred by the Portfolio in connection with
its organization have been deferred and are being amortized on a straight-
line basis over a five year period.
8. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio have been increased to include expense offsets, if
any, for custodian balance credits.
16
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Acadian Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio for a monthly fee calculated at an annual rate of
0.75% of the first $50 million of average daily net assets, 0.65% of the next
$50 million of average daily net assets, 0.50% of the next $100 million of
average daily net assets and 0.40% of the average daily net assets in excess
of $200 million. The Adviser has voluntarily agreed to waive a portion of its
advisory fees and to assume expenses on behalf of the Portfolio, if necessary,
in order to keep the Portfolio's total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 1.00% of average daily
net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific annual fee payable monthly of
0.06% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund
Services, Inc. earned $48,357 from the Portfolio as Administrator of which
$45,200 was paid to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the
17
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Portfolio. The Distributor does not receive any fee or any other compensation
with respect to the Portfolio.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in
order to keep the Portfolio's total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 1.00% of average daily
net assets.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds, and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $1,458,626 and sales of $14,517,598 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government securities.
I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. For the six months ended
April 30, 1998, the Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 85% of total shares outstanding were held by 3
record shareholders owning 10% or greater of the aggregate total shares
outstanding.
18
<PAGE>
UAM FUNDS ACADIAN INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
The Portfolio retains a redemption fee of 1.00% on redemptions of capital
shares held for less than 90 days in the Portfolio.
At April 30, 1998, the net assets of the Portfolio were substantially
comprised of foreign denominated securities and/or currency. Changes in
currency exchange rates will affect the value of and investment income from
such securities and currency.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar
denominated transactions as a result of, among other factors, the possibly
lower level of governmental supervision and regulation of foreign securities
markets and the possibility of political or economic instability.
19
<PAGE>
UAM Funds Acadian International
Equity Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Acadian Asset Management, Inc.
Two International Place
Boston, MA 02110
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
---------------------------------
C & B Balanced Portfolio
---------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
The following report provides a detailed description of the securities held
and the financial statements for the Cooke & Bieler Balanced Portfolio for the
six month period ended April 30, 1998.
For this period, the Cooke & Bieler Balanced Portfolio underperformed its
benchmark index. This Index consists of a blended return of 60% of the S&P 500
Index and 40% of the Lehman Brothers Government/Corporate Index. Over this pe-
riod, the Cooke & Bieler Balanced Portfolio appreciated 10.36% versus 14.95%
for the benchmark index. Given our "high quality, low risk" approach and given
the generous returns for this six month period, these results are not out of
line with the expectations of the Cooke & Bieler style nor inconsistent with
the firm's philosophy.
As of April 30, 1998, common stocks represented 57% of the Portfolio, bonds
were 40% and cash reserves were 3%.
EQUITY ONLY ANALYSIS
Our equity investment philosophy and process is designed to produce competi-
tive results during rising markets and strong relative results in flat and
down periods. During the last six months, the equity only portion of the Cooke
& Bieler Balanced Portfolio lagged the S&P 500 Index, but remained competitive
in a strong up market.
The strong fundamental characteristics of the companies held in the equity
portion of the Cooke & Bieler Balanced Portfolio should provide this downside
protection. These high quality characteristics include (1) balance sheet
strength measured by a relatively low debt to capital ratio, (2) high levels
of return on equity and return on capital, (3) consistent growth in earnings
and dividends, and (4) use of excess cash flow to repurchase stock.
1
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UAM FUNDS C & B BALANCED PORTFOLIO
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FIXED INCOME ONLY ANALYSIS
Cooke & Bieler's fixed income philosophy is designed to produce the same
pattern of results as our equity philosophy. The return on the fixed income
portion of the Cooke & Bieler Balanced Portfolio mirrored the return on the
Lehman Brothers Government/Corporate Index.
Sincerely,
/s/ Peter A. Thompson
Peter A. Thompson
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. Without
the Adviser's temporary fee waiver, total return for the Portfolio would have
been lower. The investment return and principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than their original cost.
DEFINITION OF THE COMPARATIVE INDICES
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
The Lehman Brothers Government/Corporate Index is an unmanaged index composed
of a combination of the Government and Corporate Bond Indices. The Government
Index includes public obligations of the U.S. Treasury, issues of Government
agencies, and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate nonconvertible corporate debt. Also included are
Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or in-
ternational governments and agencies. All issues are investment grade (BBB) or
higher, with maturities of at least one year and outstanding par value of at
least $100 million for U.S. Government issues and $25 million for others. Any
security downgraded during the month is held in the index until month-end and
then removed. All returns are market value weighted inclusive of accrued in-
come.
The Composite Index, a hypothetical combination of unmanaged indices, reflects
the Portfolio's typical mix of 60% stock and 40% bonds. The index combines re-
turns from the S&P 500 Index and the Lehman Brothers Government/Corporate In-
dex.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
2
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 57.3%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 3.8%
Boeing Co. ........................................... 11,000 $ 550,687
Raytheon Co., Class B ................................ 5,800 328,788
-----------
879,475
-----------
AUTOMOTIVE - 4.8%
Dana Corp. ........................................... 6,000 354,750
Eaton Corp. .......................................... 4,600 424,925
Genuine Parts Co. .................................... 9,000 324,000
-----------
1,103,675
-----------
BANKS - 0.9%
Wachovia Corp. ....................................... 2,500 212,344
-----------
BEVERAGES, FOOD & TOBACCO - 4.9%
Anheuser-Busch Cos., Inc. ............................ 8,400 384,825
McDonald's Corp. ..................................... 3,500 216,562
UST, Inc. ............................................ 9,000 248,063
Whitman Corp. ........................................ 14,500 283,656
-----------
1,133,106
-----------
CAPITAL EQUIPMENT - 2.2%
Dover Corp. .......................................... 13,000 513,500
-----------
CHEMICALS - 3.7%
Eastman Chemical Co. ................................. 4,000 275,000
Hercules, Inc. ....................................... 5,000 239,062
Nalco Chemical Co. ................................... 9,000 357,750
-----------
871,812
-----------
CONSTRUCTION - 2.9%
Fluor Corp. .......................................... 3,000 141,750
Sherwin-Williams Co. ................................. 15,000 534,375
-----------
676,125
-----------
CONSUMER DURABLES - 3.9%
Corning, Inc. ........................................ 10,000 400,000
Hussmann International, Inc. ......................... 8,250 143,344
Rubbermaid, Inc. ..................................... 12,300 352,088
-----------
895,432
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
CONSUMER NON-DURABLES - 4.5%
Hasbro, Inc. .......................................... 12,000 $ 441,750
NIKE, Inc., Class B ................................... 9,600 458,400
Pall Corp. ............................................ 8,000 157,000
-----------
1,057,150
-----------
ELECTRONICS - 4.0%
AMP, Inc. ............................................. 9,000 353,813
Grainger (W.W.), Inc. ................................. 2,700 294,131
Motorola, Inc. ........................................ 5,000 278,125
-----------
926,069
-----------
ENERGY - 5.9%
Burlington Resources, Inc. ............................ 10,000 470,000
Exxon Corp. ........................................... 5,000 364,687
Royal Dutch Petroleum Co. (NY Shares) ................. 9,500 537,344
-----------
1,372,031
-----------
FINANCIAL SERVICES - 7.6%
EXEL Ltd. ............................................. 4,500 336,094
Marsh & McLennan Cos., Inc. ........................... 6,800 619,650
MBIA, Inc. ............................................ 6,000 447,750
State Street Corp. .................................... 5,000 357,500
-----------
1,760,994
-----------
METALS - 0.9%
Worthington Industries, Inc. .......................... 12,000 215,250
-----------
MULTI-INDUSTRY - 1.6%
National Service Industries, Inc. ..................... 3,000 162,375
Raychem Corp. ......................................... 5,000 200,937
-----------
363,312
-----------
OFFICE EQUIPMENT - 3.3%
International Business Machines Corp. ................. 3,000 347,625
Pitney Bowes, Inc. .................................... 4,200 201,600
Xerox Corp. ........................................... 2,000 227,000
-----------
776,225
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
PHARMACEUTICALS - 0.8%
Merck & Co., Inc. .................................... 1,600 $ 192,800
-----------
SERVICES - 1.6%
Service Corp. International .......................... 9,000 371,250
-----------
TOTAL COMMON STOCKS (Cost $9,442,876) ........................... 13,320,550
-----------
CORPORATE OBLIGATIONS - 12.3%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
AEROSPACE & DEFENSE - 2.2%
Boeing Co. 6.35%, 6/15/03 ............................ $ 500,000 507,105
-----------
BEVERAGES, FOOD & TOBACCO - 4.3%
Coca Cola Co. 7.875%, 9/15/98 ........................ 1,000,000 1,007,720
-----------
CONSUMER NON-DURABLES - 4.7%
Clorox Co. 8.80%, 7/15/01 ............................ 1,000,000 1,079,150
-----------
ENERGY - 1.1%
Amoco, Canada 7.25%, 12/1/02 ......................... 250,000 261,500
-----------
TOTAL CORPORATE OBLIGATIONS (Cost $2,748,420) ................... 2,855,475
-----------
U.S. GOVERNMENT AND AGENCY SECURITIES - 27.0%
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.8%
7.50%, 2/11/02 ....................................... 1,500,000 1,581,330
-----------
U.S. TREASURY BONDS - 6.8%
8.25%, 5/15/05 ....................................... 400,000 418,936
7.50%, 11/15/16 ...................................... 1,000,000 1,163,910
-----------
1,582,846
-----------
U.S. TREASURY NOTES - 13.4%
7.00%, 4/15/99 ....................................... 500,000 506,640
7.50%, 11/15/01 ...................................... 1,000,000 1,057,970
6.50%, 10/15/06 ...................................... 500,000 523,905
6.125%, 8/15/07 ...................................... 1,000,000 1,027,030
-----------
3,115,545
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Cost $5,968,178) .............................................. 6,279,721
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 2.7%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - 2.7%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $630,094, collateralized
by $549,306 of various U.S. Treasury Obligations,
5.50%-14.00% due from 5/15/04-11/15/27, valued at
$637,160 (Cost $630,000) ............................ $ 630,000 $ 630,000
-----------
TOTAL INVESTMENTS - 99.3% (Cost $18,789,474)(a) ................. 23,085,746
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.7% ....................... 169,258
-----------
NET ASSETS - 100% ............................................... $23,255,004
===========
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax and book purposes was $18,789,474. At April
30, 1998, net unrealized appreciation for all securities was $4,296,272.
This consisted of aggregate gross unrealized appreciation for all
securities of $4,372,759 and aggregate gross unrealized depreciation for
all securities of $76,487.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
ASSETS
Investments, at Cost..................................... $18,789,474
===========
Investments, at Value.................................... $23,085,746
Cash..................................................... 787
Interest Receivable...................................... 180,676
Dividends Receivable..................................... 11,854
Other Assets............................................. 159
-----------
Total Assets............................................ 23,279,222
-----------
LIABILITIES
Payable for Investment Advisory Fees--Note B............. 7,356
Payable for Administrative Fees--Note C.................. 7,051
Payable for Custodian Fees--Note D....................... 2,435
Payable for Directors' Fees--Note F...................... 811
Other Liabilities........................................ 6,565
--- -----------
Total Liabilities....................................... 24,218
--- -----------
NET ASSETS............................................... $23,255,004
===========
NET ASSETS CONSIST OF:
Paid in Capital.......................................... $17,156,440
Undistributed Net Investment Income...................... 67,287
Accumulated Net Realized Gain............................ 1,735,005
Unrealized Appreciation.................................. 4,296,272
-----------
NET ASSETS............................................... $23,255,004
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)................................. 1,752,791
NET ASSET VALUE, Offering and Redemption Price Per
Share................................................... $ 13.27
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30,1998 (UNAUDITED)
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest.................................................. $ 340,240
Dividends................................................. 120,193
----------
Total Income............................................. 460,433
----------
EXPENSES
Investment Advisory
Fees--Note B............................................. 74,084
Administrative Fees--Note
C........................................................ 46,599
Audit Fees................................................ 7,570
Printing Fees............................................. 5,399
Registration and Filing
Fees..................................................... 5,344
Custodian Fees--Note D.................................... 1,384
Directors' Fees--Note F................................... 1,228
Other Expenses............................................ 2,919
Investment Advisory Fees
Waived--Note B........................................... (25,927)
----------
Net Expenses............................................. 118,600
----------
NET INVESTMENT INCOME..................................... 341,833
----------
NET REALIZED GAIN ON
INVESTMENTS.............................................. 1,775,274
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION
ON INVESTMENTS........................................... 244,256
----------
NET GAIN ON INVESTMENTS................................... 2,019,530
----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............................................... $2,361,363
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 341,833 $ 739,022
Net Realized Gain................................ 1,775,274 2,730,755
Net Change in Unrealized
Appreciation/Depreciation....................... 244,256 807,467
----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 2,361,363 4,277,244
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................ (349,596) (766,500)
Net Realized Gain................................ (2,725,232) (1,921,313)
----------- -----------
Total Distributions.............................. (3,074,828) (2,687,813)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 804,197 1,175,046
In Lieu of Cash Distributions.................... 2,996,973 2,546,229
Redeemed......................................... (3,898,531) (3,873,517)
----------- -----------
Net Decrease from Capital Share Transactions..... (97,361) (152,242)
----------- -----------
Total Increase (Decrease)........................ (810,826) 1,437,189
Net Assets:
Beginning of Period.............................. 24,065,830 22,628,641
----------- -----------
End of Period (including undistributed net
investment income of $67,287 and $75,050,
respectively)................................... $23,255,004 $24,065,830
=========== ===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................... 63,018 90,365
In Lieu of Cash Distributions.................... 241,229 209,198
Shares Redeemed.................................. (301,382) (297,984)
----------- -----------
2,865 1,579
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
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FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 13.75 $ 12.94 $ 13.13 $ 11.86 $ 12.68 $ 12.57
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.. 0.20 0.42 0.45 0.52 0.48 0.45
Net Realized and
Unrealized Gain
(Loss)................ 1.09 1.98 1.29 1.51 (0.39) 0.40
------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 1.29 2.40 1.74 2.03 0.09 0.85
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.20) (0.44) (0.45) (0.52) (0.47) (0.44)
Net Realized Gain...... (1.57) (1.15) (1.48) (0.24) (0.44) (0.30)
------- ------- ------- ------- ------- -------
Total Distributions.... (1.77) (1.59) (1.93) (0.76) (0.91) (0.74)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 13.27 $ 13.75 $ 12.94 $ 13.13 $ 11.86 $ 12.68
======= ======= ======= ======= ======= =======
TOTAL RETURN............ 10.36%**+ 20.39%+ 14.70%+ 17.83%+ 0.74%+ 7.01%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $23,255 $24,066 $22,629 $24,146 $32,077 $42,974
Ratio of Expenses to
Average Net Assets..... 1.00%* 1.00% 1.00% 1.00% 1.00% 0.90%
Ratio of Net Investment
Income to Average Net
Assets................. 2.88%* 3.20% 3.51% 3.80% 3.84% 3.65%
Portfolio Turnover
Rate................... 10% 35% 21% 22% 24% 22%
Average Commission
Rate #................. $0.0511 $0.0510 $0.0511 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.22%* 0.24% 0.29% 0.03% 0.01% N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.00%* 1.00% 1.00% 1.00% N/A N/A
</TABLE>
* Annualized
** Not Annualized
+ Total return would have been lower had certain fees not been waived during
the periods indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
10
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UAM FUNDS C & B BALANCED PORTFOLIO
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The C & B Bal-
anced Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a diver-
sified, open-end management investment company. At April 30, 1998, the UAM
Funds were comprised of forty-four active portfolios. The financial statements
of the remaining portfolios are presented separately. The objective of the
Portfolio is to provide maximum long-term total return with minimal risk to
principal by investing in a combined portfolio of common stocks which have a
consistency and predictability in their earnings growth and investment grade
fixed income securities.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Equity securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made or, if no sale occurred on such day, at the mean of the bid
and asked prices. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and un-
listed equity securities are valued at the current bid prices. Fixed in-
come securities are stated on the basis of valuations provided by brokers
and/or a pricing service which uses information with respect to transac-
tions in fixed income securities, quotations from dealers, market transac-
tions in comparable securities and various relationships between securi-
ties in determining value. Short-term investments that have remaining ma-
turities of sixty days or less at time of purchase are valued at amortized
cost, if it approximates market value. The value of other assets and secu-
rities for which no quotations are readily available is determined in good
faith at fair value using methods determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
11
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the effective yield
basis over their respective lives. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net
12
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
assets. Custodian fees for the Portfolio have been increased to include
expense offsets, if any, for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Cooke & Bieler, Inc. (the "Adviser"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), provides investment advisory services to
the Portfolio for a monthly fee calculated at an annual rate of 0.625% of av-
erage daily net assets for the month. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses, if necessary, in
order to keep the Portfolio's total annual operating expenses, after the ef-
fect of expense offset arrangements, from exceeding 1.00% of average daily net
assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee at an annual rate of 0.06% of aver-
age daily net assets of the Portfolio. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned $46,599 from the Portfolio as Administrator of which $39,487 was paid
to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio.
13
<PAGE>
UAM FUNDS C & B BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
The Distributor does not receive any fee or other compensation with respect to
the Portfolio.
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
G. PURCHASES AND SALES: For the six months ended April 30, 1998, the Portfo-
lio made purchases of $2,193,350 and sales of $4,853,216 of investment securi-
ties other than long-term U.S. Government and short-term securities. There
were no purchases of long-term U.S. Government securities. Sales of long-term
U.S. Government securities were $507,500.
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to partici-
pate in a $100 million unsecured line of credit with several banks. Borrowings
will be made solely to temporarily finance the repurchase of Capital shares.
Interest is charged to each participating Portfolio based on its borrowings at
a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the six months ended April 30,
1998, the Portfolio had no borrowings under the agreement.
I. OTHER: At April 30, 1998, 58% of total shares outstanding were held by 3
record shareholders owning 10% or greater of the aggregate total shares out-
standing.
14
<PAGE>
UAM Funds C & B Balanced Portfolio
- -------------------------------------------------------------------
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L.French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- ---------------------------------------------------------------------
Investment Advisor
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 10245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
------------------------------------
Independent Accountants This report has been prepared for
Price Waterhouse LLP shareholders and may be distributed
160 Federal Street to others only if preceded or
Boston, MA 02110 accompanied by a current prospectus.
------------------------------------
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
- -------------------------------
C & B Equity Portfolio
- -------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
The following report provides a detailed description of the securities held
and the financial statements for the Cooke & Bieler Equity Portfolio for the
six month period ended April 30, 1998.
For this period, the Cooke & Bieler Equity Portfolio underperformed its
benchmark index, the S&P 500 Index. Over this period, the Cooke & Bieler Eq-
uity Portfolio rose 14.79% versus 22.50% for the S&P 500. Given Cooke &
Bieler's "high quality, low risk" approach and given the generous returns for
this six month period, these results are not out of line with the expectations
of the Cooke & Bieler style nor inconsistent with the firm's philosophy.
As of April 30, 1998, common stocks represented 94% of the Portfolio, while
cash reserves represented 6%.
Cooke & Bieler continues to employ an investment process designed to produce
above average long-term results, with particularly strong relative results in
flat and down markets. The strong fundamental characteristics of the companies
held in the Cooke & Bieler Equity Portfolio should provide this downside pro-
tection. These high quality characteristics, as compared to the S&P 500, in-
clude (1) balance sheet strength measured by a relatively low debt to capital
ratio, (2) high levels of return on equity and return on capital, (3) consis-
tent growth in earnings and dividends, and (4) use of excess cash flow to re-
purchase stock.
Sincerely,
/s/ Peter A. Thompson
Peter A. Thompson
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. The in-
vestment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their origi-
nal cost.
DEFINITION OF THE COMPARATIVE INDEX
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividends.
Please note than one cannot invest in an unmanaged index.
1
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 94.4%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- ------------
<S> <C> <C>
AEROSPACE & DEFENSE - 6.1%
Boeing Co............................................ 127,000 $ 6,357,938
Raytheon Co., Class B................................ 68,780 3,898,966
------------
10,256,904
------------
AUTOMOTIVE - 7.8%
Dana Corp............................................ 66,985 3,960,488
Eaton Corp. ......................................... 55,855 5,159,606
Genuine Parts Co..................................... 107,660 3,875,760
------------
12,995,854
------------
BANKS - 1.5%
Wachovia Corp........................................ 29,905 2,540,056
------------
BEVERAGES, FOOD & TOBACCO - 7.8%
Anheuser-Busch Cos., Inc............................. 90,710 4,155,652
McDonald's Corp...................................... 41,965 2,596,584
UST, Inc. ........................................... 104,965 2,893,098
Whitman Corp. ....................................... 175,440 3,432,045
------------
13,077,379
------------
CAPITAL EQUIPMENT - 3.5%
Dover Corp........................................... 149,520 5,906,040
------------
CHEMICALS - 5.8%
Eastman Chemical Co.................................. 47,350 3,255,312
Hercules, Inc........................................ 46,850 2,240,016
Nalco Chemical Co. .................................. 106,700 4,241,325
------------
9,736,653
------------
CONSTRUCTION - 5.9%
Fluor Corp........................................... 70,075 3,311,044
Sherwin-Williams Co.................................. 186,305 6,637,115
------------
9,948,159
------------
CONSUMER DURABLES - 5.8%
Corning, Inc. ....................................... 112,465 4,498,600
Hussmann International, Inc.......................... 87,720 1,524,135
Rubbermaid, Inc...................................... 130,580 3,737,852
------------
9,760,587
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- ------------
<S> <C> <C>
CONSUMER NON-DURABLES - 7.8%
Hasbro, Inc.......................................... 143,540 $ 5,284,066
NIKE, Inc., Class B.................................. 118,620 5,664,105
Pall Corp............................................ 106,860 2,097,128
------------
13,045,299
------------
ELECTRONICS - 6.0%
AMP, Inc............................................. 100,680 3,957,982
Grainger (W.W.), Inc................................. 27,910 3,040,446
Motorola, Inc. ...................................... 54,791 3,047,749
------------
10,046,177
------------
ENERGY - 9.9%
Burlington Resources, Inc............................ 110,150 5,177,050
Exxon Corp........................................... 68,000 4,959,750
Royal Dutch Petroleum Co. (NY Shares)................ 114,635 6,484,042
------------
16,620,842
------------
FINANCIAL SERVICES - 12.6%
EXEL Ltd............................................. 51,835 3,871,427
Marsh & McLennan Cos., Inc. ......................... 81,740 7,448,557
MBIA, Inc............................................ 71,770 5,355,836
State Street Corp. .................................. 60,805 4,347,558
------------
21,023,378
------------
METALS - 1.7%
Worthington Industries, Inc.......................... 155,253 2,784,851
------------
MULTI-INDUSTRY - 2.5%
National Service Industries, Inc. ................... 28,610 1,548,516
Raychem Corp. ....................................... 65,990 2,651,973
------------
4,200,489
------------
OFFICE EQUIPMENT - 5.4%
International Business Machines Corp. ............... 31,875 3,693,516
Pitney Bowes, Inc. .................................. 49,840 2,392,320
Xerox Corp. ......................................... 25,520 2,896,520
------------
8,982,356
------------
PAPER & PACKAGING - 0.4%
Sonoco Products Co................................... 17,945 721,165
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- ------------
<S> <C> <C>
PHARMACEUTICALS - 1.2%
Merck & Co., Inc.................................... 16,945 $ 2,041,872
------------
SERVICES - 2.7%
Service Corp. International......................... 110,450 4,556,063
------------
TOTAL COMMON STOCKS (Cost $114,761,505)........................ 158,244,124
------------
SHORT-TERM INVESTMENT - 5.6%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 5.6%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $9,382,399,
collateralized by $8,179,427 of various U.S.
Treasury Obligations, 5.50%-14.00% due from
5/15/04-11/25/27, valued at $9,487,609 (Cost
$9,381,000)........................................ $9,381,000 9,381,000
------------
TOTAL INVESTMENTS - 100% (Cost $124,142,505)(a)................ 167,625,124
------------
OTHER ASSETS AND LIABILITIES (NET) - 0.0%...................... (79,970)
------------
NET ASSETS - 100%.............................................. $167,545,154
============
</TABLE>
+ See Note A to Financial Statements.
(a) The cost for federal income tax and book purposes was $124,142,505. At
April 30, 1998, net unrealized appreciation for all securities was
$43,482,619. This consisted of aggregate gross unrealized appreciation for
all securities of $44,775,916 and aggregate gross unrealized depreciation
for all securities of $1,293,297.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<S> <C>
ASSETS
Investments, at Cost............................................ $124,142,505
============
Investments, at Value........................................... $167,625,124
Cash............................................................ 175
Dividends Receivable............................................ 141,606
Receivable for Portfolio Shares Sold............................ 2,442
Interest Receivable............................................. 1,400
Other Assets.................................................... 1,141
------------
Total Assets................................................... 167,771,888
------------
LIABILITIES
Payable for Portfolio Shares Redeemed........................... 100,000
Payable for Investment Advisory Fees--Note B.................... 86,511
Payable for Administrative Fees--Note C......................... 16,760
Payable for Custodian Fees--Note D.............................. 11,798
Payable for Directors' Fees--Note F............................. 1,224
Other Liabilities............................................... 10,441
------------
Total Liabilities.............................................. 226,734
------------
NET ASSETS...................................................... $167,545,154
============
NET ASSETS CONSIST OF:
Paid in Capital................................................. $111,618,789
Undistributed Net Investment Income............................. 225,682
Accumulated Net Realized Gain................................... 12,218,064
Unrealized Appreciation......................................... 43,482,619
------------
NET ASSETS...................................................... $167,545,154
============
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value) (Authorized
25,000,000)................................................... 11,368,821
NET ASSET VALUE, Offering and Redemption Price Per Share........ $ 14.74
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends........................................................ $1,292,935
Interest......................................................... 235,288
-----------
Total Income.................................................... 1,528,223
-----------
EXPENSES
Investment Advisory Fees--Note B................................. 488,634
Administration Fees--Note C...................................... 104,135
Custodian Fees--Note D........................................... 7,839
Directors' Fees--Note F.......................................... 1,784
Other Expenses................................................... 35,413
-----------
Net Expenses Before Expense Offset.............................. 637,805
Expense Offset--Note A........................................... (1,453)
-----------
Net Expenses After Expense Offset............................... 636,352
-----------
NET INVESTMENT INCOME............................................ 891,871
-----------
NET REALIZED GAIN ON INVESTMENTS................................. 12,258,906
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS..................................................... 8,649,274
-----------
NET GAIN ON INVESTMENTS.......................................... 20,908,180
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $21,800,051
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 891,871 $ 2,080,728
Net Realized Gain............................... 12,258,906 35,177,992
Net Change in Unrealized
Appreciation/Depreciation...................... 8,649,274 242,155
------------ ------------
Net Increase in Net Assets Resulting from
Operations..................................... 21,800,051 37,500,875
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (883,504) (2,213,453)
Net Realized Gain............................... (34,953,376) (39,513,464)
------------ ------------
Total Distributions............................. (35,836,880) (41,726,917)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 6,456,618 25,737,881
In Lieu of Cash Distributions................... 34,975,129 35,929,474
Redeemed........................................ (9,698,082) (76,637,337)
------------ ------------
Net Increase (Decrease) from Capital Share
Transactions................................... 31,733,665 (14,969,982)
------------ ------------
Total Increase (Decrease)....................... 17,696,836 (19,196,024)
Net Assets:
Beginning of Period............................. 149,848,318 169,044,342
------------ ------------
End of Period (including undistributed net
investment income of $225,682 and $217,315,
respectively).................................. $167,545,154 $149,848,318
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 442,066 1,709,189
In Lieu of Cash Distributions................... 2,646,554 2,681,613
Shares Redeemed................................. (689,151) (4,870,660)
------------ ------------
2,399,469 (479,858)
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 ------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD... $ 16.71 $ 17.89 $ 15.68 $ 13.13 $ 13.06 $ 13.29
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.. 0.09 0.25 0.36 0.34 0.31 0.28
Net Realized and
Unrealized Gain....... 1.91 3.82 2.94 2.55 0.28 0.24
-------- -------- -------- -------- -------- --------
Total From Investment
Operations............ 2.00 4.07 3.30 2.89 0.59 0.52
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS:
Net Investment Income.. (0.09) (0.26) (0.35) (0.34) (0.30) (0.26)
Net Realized Gain...... (3.88) (4.99) (0.74) -- (0.18) (0.49)
In Excess of Net
Realized Gain......... -- -- -- -- (0.04) --
-------- -------- -------- -------- -------- --------
Total Distributions.... (3.97) (5.25) (1.09) (0.34) (0.52) (0.75)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD................ $ 14.74 $ 16.71 $ 17.89 $ 15.68 $ 13.13 $ 13.06
======== ======== ======== ======== ======== ========
TOTAL RETURN............ 14.79%** 30.43% 21.99% 22.28% 4.67% 4.05%
======== ======== ======== ======== ======== ========
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands).... $167,545 $149,848 $169,044 $245,813 $208,937 $209,153
Ratio of Expenses to
Average Net Assets.... 0.82%* 0.83% 0.81% 0.79% 0.82% 0.82%
Ratio of Net Investment
Income to Average Net
Assets................ 1.14%* 1.47% 1.92% 2.35% 2.39% 2.28%
Portfolio Turnover
Rate.................. 16% 55% 29% 42% 46% 21%
Average Commission
Rate # ............... $ 0.0515 $ 0.0509 $ 0.0508 N/A N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets............... 0.81%* 0.83% 0.80% 0.78% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The C & B Equity
Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a diversified,
open-end management investment company. At April 30, 1998, the UAM Funds were
comprised of forty-four active portfolios. The financial statements of the re-
maining portfolios are presented separately. The objective of the Portfolio is
to provide maximum long-term total return with minimal risk to principal by
investing in common stocks which have a consistency and predictability in
their earnings growth.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made or, if no sale occurred on such day, at the mean of the bid
and asked prices. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and un-
listed securities are valued at the current bid prices. Short-term invest-
ments that have remaining maturities of sixty days or less at time of pur-
chase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods deter-
mined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to
9
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
liquidate the collateral and apply the proceeds in satisfaction of the ob-
ligation. In the event of default or bankruptcy by the other party to the
agreement, realization and/or retention of the collateral or proceeds may
be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets, if any,
for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Cooke & Bieler, Inc. (the "Adviser"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), provides investment advisory services to
the Portfolio for a monthly fee calculated at an annual rate of 0.625% of av-
erage daily net assets for the month. The Adviser has voluntarily agreed to
waive a
10
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
portion of its advisory fees and to assume expenses, if necessary, in order to
keep the Portfolio's total annual operating expenses, after the effect of ex-
pense offset arrangements, from exceeding 1.00% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee at an annual rate of 0.04% of aver-
age daily net assets of the Portfolio. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned $104,135 from the portfolio as Administrator of which $72,862 was paid
to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
11
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
G. PURCHASES AND SALES: For the six months ended April 30, 1998, the Portfo-
lio made purchases of $24,401,179 and sales of $32,401,680 of investment secu-
rities other than long-term U.S. Government and short-term securities. There
were no purchases or sales of long-term U.S. Government securities.
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to partici-
pate in a $100 million unsecured line of credit with several banks. Borrowings
will be made solely to temporarily finance the repurchase of Capital shares.
Interest is charged to each participating Portfolio based on its borrowings at
a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a
commitment fee of 0.08% per annum, payable at the end of each calendar quar-
ter, is accrued by each participating Portfolio based on its average daily un-
used portion of the line of credit. During the six months ended April 30,
1998, the Portfolio had no borrowings under the agreement.
I. IN-KIND TRANSACTION: For the six monthes ended April 30, 1998, the Port-
folio realized gains from in-kind redemptions of $190,448.
J. OTHER: At April 30, 1998, 25% of total shares outstanding were held by 2
record shareholders owning 10% or greater of the aggregate total shares out-
standing.
12
<PAGE>
UAM Funds C & B Equity Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
- -------------------------------
C & B Equity Portfolio
for Taxable Investors
- -------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
Dear Shareholder:
The following report provides a detailed description of the securities held
and the financial statements for the Cooke & Bieler Equity Portfolio for Tax-
able Investors for the six month period ended April 30, 1998.
For this period, the Cooke & Bieler Equity Portfolio for Taxable Investors
underperformed its benchmark index, the S&P 500 Index. Over this period, the
Cooke & Bieler Equity Portfolio for Taxable Investors increased by 14.88% ver-
sus 22.50% for the S&P 500. Given Cooke & Bieler's "high quality, low risk"
approach, these results are not out of line with the expectations of the Cooke
& Bieler style nor inconsistent with the firm's philosophy.
As of April 30, 1998, common stocks represented 94% of the Portfolio, while
cash reserves represented 6%.
Cooke & Bieler continues to employ an investment process designed to produce
above average, after tax, long-term results, with particularly strong relative
results in flat and down markets. The strong fundamental characteristics of
companies held in the Cooke & Bieler Equity Portfolio for Taxable Investors
should provide this downside protection. These high quality characteristics,
as compared to the S&P 500, include (1) balance sheet strength measured by a
relatively low debt to capital ratio, (2) high levels of return on equity and
return on capital, (3) consistent growth in earnings and dividends, and (4)
use of excess cash flow to repurchase stock.
Sincerely,
/s/ Peter A. Thompson
Peter A. Thompson
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. If the
Adviser did not have temporary fee waivers and did not assume expenses on be-
half of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividends.
Please note than one cannot invest in an unmanaged index.
1
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 93.9%
<TABLE>
<CAPTION>
SHARES VALUE+
------ ----------
<S> <C> <C>
AEROSPACE & DEFENSE - 5.6%
Boeing Co. ................................................. 1,900 $ 95,119
Raytheon Co., Class B....................................... 800 45,350
----------
140,469
----------
AUTOMOTIVE - 4.7%
Dana Corp. ................................................. 600 35,475
Eaton Corp. ................................................ 300 27,712
Genuine Parts Co. .......................................... 600 21,600
Snap-On, Inc. .............................................. 800 33,850
----------
118,637
----------
BEVERAGES, FOOD & TOBACCO - 9.3%
Anheuser-Busch Cos., Inc. .................................. 1,500 68,719
McDonald's Corp. ........................................... 900 55,687
UST, Inc. .................................................. 2,300 63,394
Whitman Corp. .............................................. 2,400 46,950
----------
234,750
----------
CAPITAL EQUIPMENT - 0.9%
Dover Corp. ................................................ 600 23,700
----------
CHEMICALS - 5.8%
Eastman Chemical Co. ....................................... 600 41,250
Hercules, Inc. ............................................. 1,400 66,937
Nalco Chemical Co. ......................................... 1,000 39,750
----------
147,937
----------
CONSTRUCTION - 4.2%
Sherwin-Williams Co. ....................................... 3,000 106,875
----------
CONSUMER DURABLES - 6.3%
Corning, Inc. .............................................. 2,500 100,000
Hussmann International, Inc. ............................... 950 16,506
Rubbermaid, Inc. ........................................... 1,500 42,937
----------
159,443
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ ----------
<S> <C> <C>
CONSUMER NON-DURABLES - 5.6%
Hasbro, Inc. ............................................... 1,000 $ 36,813
NIKE, Inc., Class B......................................... 2,200 105,050
----------
141,863
----------
ELECTRONICS - 8.9%
AMP, Inc. .................................................. 1,800 70,763
Grainger (W.W.), Inc. ...................................... 800 87,150
Motorola, Inc. ............................................. 1,200 66,750
----------
224,663
----------
ENERGY - 11.8%
Burlington Resources, Inc. ................................. 2,100 98,700
Exxon Corp. ................................................ 1,400 102,113
Royal Dutch Petroleum Co. (NY Shares)....................... 1,700 96,156
----------
296,969
----------
FINANCIAL SERVICES - 9.8%
EXEL Ltd. .................................................. 1,000 74,688
Marsh & McLennan Cos., Inc. ................................ 1,100 100,237
MBIA, Inc. ................................................. 600 44,775
State Street Corp. ......................................... 400 28,600
----------
248,300
----------
METALS - 1.8%
Worthington Industries, Inc. ............................... 2,500 44,844
----------
MULTI-INDUSTRY - 4.5%
National Service Industries, Inc. .......................... 600 32,475
Raychem Corp. .............................................. 2,000 80,376
----------
112,851
----------
OFFICE EQUIPMENT - 8.0%
International Business Machines Corp. ...................... 800 92,700
Pitney Bowes, Inc. ......................................... 600 28,800
Xerox Corp. ................................................ 700 79,450
----------
200,950
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- ----------
<S> <C> <C>
PHARMACEUTICALS - 3.5%
Bristol-Myers Squibb Co. .............................. 200 $ 21,175
Merck & Co., Inc. ..................................... 300 36,150
Schering-Plough Corp. ................................. 400 32,050
----------
89,375
----------
SERVICES - 3.2%
Service Corp. International............................ 1,500 61,875
Sysco Corp. ........................................... 800 19,050
----------
80,925
----------
TOTAL COMMON STOCKS (Cost $2,012,394)........................... 2,372,551
----------
SHORT-TERM INVESTMENT - 8.5%
<CAPTION>
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENT - 8.5%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $216,032, collateralized
by $188,333 of various U.S. Treasury Obligations,
5.50%-14.00% due from 5/15/04-11/25/27, valued at
$218,455 (Cost $216,000).............................. $216,000 216,000
----------
TOTAL INVESTMENTS - 102.4% (Cost $2,228,394)(a)................. 2,588,551
----------
OTHER ASSETS AND LIABILITIES (NET) -- (2.4%).................... (61,619)
----------
NET ASSETS - 100%............................................... $2,526,932
==========
</TABLE>
+
See Note A to Financial Statements.
(a)
The cost for federal income tax purposes was $2,228,394. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$360,157. This consisted of aggregate gross unrealized appreciation for all
securities of $376,149 and aggregate gross unrealized depreciation for all
securities of $15,992.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
APRIL 30,1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost......................................... $2,228,394
==========
Investments, at Value........................................ $2,588,551
Cash......................................................... 894
Receivable due from Investment Adviser--Note B............... 7,329
Dividends Receivable......................................... 1,726
Interest Receivable.......................................... 32
Other Assets................................................. 6
----------
Total Assets................................................ 2,598,538
----------
LIABILITIES
Payable for Investments Purchased............................ 40,050
Payable for Administrative Fees--Note C...................... 5,606
Payable for Directors' Fees--Note F.......................... 587
Payable for Custodian Fees--Note D........................... 399
Other Liabilities............................................ 24,964
----------
Total Liabilities........................................... 71,606
----------
NET ASSETS................................................... $2,526,932
==========
NET ASSETS CONSIST OF:
Paid in Capital.............................................. $2,185,698
Undistributed Net Investment Income.......................... 1,776
Accumulated Net Realized Loss................................ (20,699)
Unrealized Appreciation...................................... 360,157
----------
NET ASSETS................................................... $2,526,932
==========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value) (Authorized
25,000,000)................................................. 193,115
NET ASSET VALUE, Offering and Redemption Price Per Share..... $ 13.09
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
FOR THE SIX MONTHS ENDED APRIL 30,
1998 (UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<S> <C>
INVESTMENT INCOME
Dividends............................................................. $ 14,409
Interest.............................................................. 4,664
--------
Total Income......................................................... 19,073
--------
EXPENSES
Investment Advisory Fees--Note B...................................... 5,822
Administrative Fees--Note C........................................... 27,949
Registration and Filing Fees.......................................... 13,299
Printing Fees......................................................... 6,622
Audit Fees............................................................ 3,146
Directors' Fees--Note F............................................... 1,198
Custodian Fees--Note D................................................ 362
Other Expenses........................................................ 868
Investment Advisory Fees Waived--Note B............................... (5,822)
Expenses Assumed by the Adviser--Note B............................... (44,121)
--------
Net Expenses......................................................... 9,323
--------
NET INVESTMENT INCOME................................................. 9,750
--------
NET REALIZED LOSS ON INVESTMENTS...................................... (13,879)
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENTS..... 282,814
--------
NET GAIN ON INVESTMENTS............................................... 268,935
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $278,685
========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 12,
ENDED 1997* TO
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 9,750 $ 7,562
Net Realized Loss................................ (13,879) (6,820)
Net Change in Unrealized
Appreciation/Depreciation....................... 282,814 77,343
---------- --------
Net Increase in Net Assets Resulting from
Operations...................................... 278,685 78,085
---------- --------
DISTRIBUTIONS:
Net Investment Income............................ (9,217) (6,319)
---------- --------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 1,276,081 934,577
In Lieu of Cash Distributions.................... 6,052 3,375
Redeemed......................................... (17,861) (16,526)
---------- --------
Net Increase from Capital Share Transactions..... 1,264,272 921,426
---------- --------
Total Increase................................... 1,533,740 993,192
Net Assets:
Beginning of Period.............................. 993,192 --
---------- --------
End of Period (including undistributed net
investment income of $1,776 and $1,243,
respectively)................................... $2,526,932 $993,192
========== ========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................... 107,278 88,006
In Lieu of Cash Distributions.................... 472 301
Shares Redeemed.................................. (1,348) (1,594)
---------- --------
106,402 86,713
========== ========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 12,
ENDED 1997*** TO,
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 11.45 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................... 0.06 0.11
Net Realized and Unrealized Gain............... 1.65 1.44
------- -------
Total From Investment Operations............... 1.71 1.55
------- -------
DISTRIBUTIONS:
Net Investment Income.......................... (0.07) (0.10)
------- -------
NET ASSET VALUE, END OF PERIOD.................. $ 13.09 $ 11.45
======= =======
TOTAL RETURN.................................... 14.88%+** 15.54%+**
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........... $ 2,527 $ 993
Ratio of Expenses to Average Net Assets......... 1.00%* 1.00%*
Ratio of Net Investment Income to Average Net
Assets......................................... 1.05%* 1.57%*
Portfolio Turnover Rate......................... 7% 3%
Average Commission Rate......................... $0.0504 $0.0502
Ratio of Voluntarily Waived Fees and Expenses
Assumed by the Adviser to Average Net Assets... 5.36%* 17.45%*
Ratio of Expenses to Average Net Assets
Including Expense Offsets...................... 1.00%* 1.00%*
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and as-
sumed during the periods indicated.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The C & B Equity
Portfolio for Taxable Investors (the "Portfolio"), a portfolio of UAM Funds,
Inc., is a diversified, open-end management investment company. At April 30,
1998, the UAM Funds were comprised of forty-four active portfolios. The finan-
cial statements of the remaining portfolios are presented separately. The ob-
jective of the Portfolio is to provide maximum long-term, after tax total re-
turn consistent with minimizing risk to principal by investing in common
stocks of companies which have a consistency and predictability in their earn-
ings growth.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made or, if no sale occurred on such day, at the mean of the bid
and asked prices. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and un-
listed securities are valued at the current bid prices. Short-term invest-
ments that have remaining maturities of sixty days or less at time of pur-
chase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods deter-
mined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
At April 30, 1998 the Portfolio had available a capital loss carryover
for Federal income tax purposes of $6,641 which will expire on October 31,
2005.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of
9
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
the repurchase transaction, including accrued interest. To the extent that
any repurchase transaction exceeds one business day, the value of the col-
lateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets, if any,
for custodian balance credits.
10
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Cooke & Bieler, Inc. (the "Adviser"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), provides investment advisory services to
the Portfolio for a monthly fee calculated at an annual rate of 0.625% of av-
erage daily net assets for the month. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses, if necessary, in
order to keep the Portfolio's total annual operating expenses, after the ef-
fect of expense offset arrangements, from exceeding 1.00% of average daily net
assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee at an annual rate of 0.04% of aver-
age daily net assets of the Portfolio. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned $27,949 from the Portfolio as Administrator of which $27,576 was paid
to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
11
<PAGE>
UAM FUNDS C & B EQUITY PORTFOLIO FOR
TAXABLE INVESTORS
- -------------------------------------------------------------------------------
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
G. PURCHASES AND SALES: For the six months ended April 30, 1998, the Portfo-
lio made purchases of $1,229,255 and sales of $123,238 of investment securi-
ties other than long-term U.S. Government and short-term securities. There
were no purchases or sales of long-term U.S. Government securities.
H. OTHER: At April 30, 1998, 48% of total shares outstanding were held by 2
record shareholders owning 10% or greater of the aggregate total shares out-
standing.
The Portfolio retains a redemption fee of 1.00% on redemptions of capital
shares held for less than 90 days in the Portfolio, at April 30, 1998 there
were no redemption fees.
12
<PAGE>
UAM Funds C & B Equity Portfolio for
Taxable Investors
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
- -------------------------------
C & B Mid Cap Equity
Portfolio
- -------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
The following report provides a detailed description of the securities held
and the financial statements for the Cooke & Bieler Mid Cap Equity Portfolio
for the interim period from February 18, 1998 (inception) to April 30, 1998.
For this interim period, the Cooke & Bieler Mid Cap Equity Portfolio
slightly underperformed its benchmark index, the S&P 500 Index. Over this
shortened, initial period, the Cooke & Bieler Mid Cap Equity Portfolio in-
creased by 6.30% versus 6.42% for the S&P 500. Given Cooke & Bieler's "high
quality, low risk" approach and given the generous returns for this six month
period, these results are not out of line with the expectations of the Cooke &
Bieler style nor inconsistent with the firm's philosophy.
As of April 30, 1998, common stocks represented 96% of the Portfolio, while
cash reserves represented 4%.
Cooke & Bieler continues to employ an investment process designed to produce
above average long-term results, with particularly strong relative results in
flat and down markets. The strong fundamental characteristics of the companies
held in the Cooke & Bieler Mid Cap Equity Portfolio should provide this
downside protection. These high quality characteristics, as compared to the
S&P 500, include (1) balance sheet strength measured by a relatively low debt
to capital ratio, (2) high levels of return on equity and return on capital,
(3) consistent growth in earnings and dividends, and (4) use of excess cash
flow to repurchase stock.
Sincerely,
/s/ Peter A. Thompson
Peter A. Thompson
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Portfolio, total return for the Portfolio would have been lower.
The investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than their
original cost.
DEFINITION OF THE COMPARATIVE INDEX
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividends.
Please note than one cannot invest in an unmanaged index.
1
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.9%
<CAPTION>
SHARES VALUE+
------ --------
<S> <C> <C>
AUTOMOTIVE - 3.9%
Snap-On, Inc. ............................................... 900 $ 38,081
--------
BEVERAGES, FOOD & TOBACCO - 6.1%
IBP, Inc. ................................................... 1,350 27,844
Whitman Corp. ............................................... 1,600 31,300
--------
59,144
--------
CHEMICALS - 11.7%
Eastman Chemical Co. ........................................ 575 39,531
Hercules, Inc. .............................................. 725 34,664
Nalco Chemical Co. .......................................... 1,000 39,750
--------
113,945
--------
CONSUMER DURABLES - 7.2%
Hussmann International, Inc. ................................ 1,800 31,275
Rubbermaid, Inc. ............................................ 1,375 39,359
--------
70,634
--------
CONSUMER NON-DURABLES - 7.3%
Hasbro, Inc. ................................................ 850 31,291
Millipore Corp. ............................................. 1,150 39,675
--------
70,966
--------
ELECTRONICS - 10.8%
Grainger (W.W.), Inc. ....................................... 275 29,958
Molex, Inc., Class A......................................... 1,450 38,969
*Vishay Intertechnology, Inc. ............................... 2,000 36,625
--------
105,552
--------
ENERGY - 3.1%
Burlington Resources, Inc. .................................. 650 30,550
--------
ENTERTAINMENT & LEISURE - 4.1%
Brunswick Corp. ............................................. 1,250 40,625
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
COMMON STOCKS - CONTINUED
<CAPTION>
SHARES VALUE+
------ --------
<S> <C> <C>
FINANCE - 6.2%
Ambac Financial Group, Inc. ................................. 600 $ 34,013
Mid Ocean Ltd. .............................................. 350 26,381
--------
60,394
--------
METALS - 4.0%
Worthington Industries, Inc. ................................ 2,175 39,082
--------
MULTI-INDUSTRY - 8.1%
National Service Industries, Inc. ........................... 725 39,241
Raychem Corp. ............................................... 1,000 40,187
--------
79,428
--------
MULTI-MEDIA - 4.0%
Banta Corp. ................................................. 1,225 39,200
--------
PAPER & PACKAGING - 4.0%
Caraustar Industries, Inc. .................................. 1,150 39,387
--------
PHARMACEUTICALS - 4.9%
*Covance, Inc. .............................................. 1,500 32,156
Mylan Laboratories, Inc. .................................... 575 15,597
--------
47,753
--------
PRINTING & PUBLISHING - 3.1%
McClatchy Co., Class A....................................... 1,000 29,938
--------
SERVICES - 7.4%
*Airgas, Inc. ............................................... 2,125 32,937
Stewart Enterprises, Inc., Class A........................... 1,525 39,269
--------
72,206
--------
TOTAL COMMON STOCKS (Cost $930,861)................................. 936,885
--------
TOTAL INVESTMENTS - 95.9% (Cost $930,861)(a)........................ 936,885
--------
OTHER ASSETS AND LIABILITIES (NET) - 4.1%........................... 40,260
--------
NET ASSETS - 100%................................................... $977,145
========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax and book purposes was $930,861. At April
30, 1998, net unrealized appreciation for all securities based on tax cost
was $6,024. This consisted of aggregate gross unrealized appreciation for
all securities of $15,940 and aggregate gross unrealized depreciation for
all securities of $9,916.
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................... $ 930,861
==========
Investments, at Value.............................................. $ 936,885
Cash............................................................... 291,089
Receivable due from Investment Adviser--Note B..................... 8,404
Dividends Receivable............................................... 122
----------
Total Assets...................................................... 1,236,500
----------
LIABILITIES
Payable for Investments Purchased.................................. 244,794
Payable for Administrative Fees--Note C............................ 2,205
Payable for Custodian Fees--Note D................................. 108
Payable for Directors' Fees--Note F................................ 512
Other Liabilities.................................................. 11,736
----------
Total Liabilities................................................. 259,355
----------
NET ASSETS......................................................... $ 977,145
==========
NET ASSETS CONSIST OF:
Paid in Capital.................................................... $ 970,743
Undistributed Net Investment Income................................ 378
Unrealized Appreciation............................................ 6,024
----------
NET ASSETS......................................................... $ 977,145
==========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)........................................... 92,008
NET ASSET VALUE, Offering and Redemption Price Per Share........... $ 10.62
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
FOR THE PERIOD FROM FEBRUARY 18, 1998*
TO APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Interest............................................................. $ 735
Dividends............................................................ 641
--------
Total Income........................................................ 1,376
--------
EXPENSES
Investment Advisory Fees--Note B..................................... 452
Administrative Fees--Note C.......................................... 6,278
Registration and Filing Fees......................................... 7,524
Audit Fees........................................................... 3,815
Printing Fees........................................................ 3,063
Directors' Fees--Note F.............................................. 512
Custodian Fees--Note D............................................... 108
Other Expenses....................................................... 863
Expenses Assumed By the Adviser--Note B.............................. (21,439)
Investment Advisory Fees Waived--Note B.............................. (452)
--------
Net Expenses........................................................ 724
--------
NET INVESTMENT INCOME................................................ 652
--------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON INVESTMENTS.... 6,024
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $ 6,676
========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FEBRUARY 18,
1998* TO
APRIL 30, 1998
(UNAUDITED)
--------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.......................................... $ 652
Net Change in Unrealized Appreciation/Depreciation............. 6,024
----------
Net Increase in Net Assets Resulting from Operations........... 6,676
----------
DISTRIBUTIONS:
Net Investment Income.......................................... (274)
----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued......................................................... 1,024,068
In Lieu of Cash Distributions.................................. 274
Redeemed....................................................... (53,599)
----------
Net Increase from Capital Share Transactions................... 970,743
----------
Total Increase................................................. 977,145
Net Assets:
Beginning of Period............................................ --
----------
End of Period (including undistributed net investment income of
$378)......................................................... $ 977,145
==========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................................. 96,988
In Lieu of Cash Distributions.................................. 25
Shares Redeemed................................................ (5,005)
----------
92,008
==========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
FEBRUARY 18,
1998*** TO
APRIL 30, 1998
(UNAUDITED)
--------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................... $10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income......................................... 0.01
Net Realized and Unrealized Gain.............................. 0.62
-------
Total From Investment Operations ............................. 0.63
-------
DISTRIBUTIONS:
Net Investment Income......................................... (0.01)
-------
NET ASSET VALUE, END OF PERIOD................................. $ 10.62
=======
TOTAL RETURN................................................... 6.30%**+
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands).......................... $ 977
Ratio of Expenses to Average Net Assets........................ 1.00%*
Ratio of Net Investment Income to Average Net Assets........... 0.90%*
Portfolio Turnover Rate........................................ 0%
Average Commission Rate........................................ $0.0466
Ratio of Voluntarily Waived Fees and Expenses Assumed by the
Adviser to Average Net Assets................................. 30.25%*
Ratio of Expenses to Average Net Assets Including Expense
Offsets....................................................... 1.00%*
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total Return would have been lower had certain fees not been waived and as-
sumed during the period.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The C & B Mid
Cap Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial state-
ments of the remaining portfolios are presented separately. The objective of
the Portfolio is to provide maximum long-term total return with minimal risk
to principal by investing in common stocks which have a consistency and pre-
dictability in their earnings growth.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made or, if no sale occurred on such day, at the mean of the bid
and asked prices. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and un-
listed securities are valued at the current bid prices. Short-term invest-
ments that have remaining maturities of sixty days or less at time of pur-
chase are valued at amortized cost, if it approximates market value. The
value of other assets and securities for which no quotations are readily
available is determined in good faith at fair value using methods deter-
mined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is
8
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
monitored on a daily basis to determine the adequacy of the collateral. In
the event of default on the obligation to repurchase, the Portfolio has
the right to liquidate the collateral and apply the proceeds in satisfac-
tion of the obligation. In the event of default or bankruptcy by the other
party to the agreement, realization and/or retention of the collateral or
proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets, if any,
for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Cooke & Bieler, Inc. (the "Adviser"), a wholly-owned subsidiary of United As-
set Management Corporation ("UAM"), provides investment advisory services
9
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
to the Portfolio for a monthly fee calculated at an annual rate of 0.625% of
average daily net assets for the month. The Adviser has voluntarily agreed to
waive a portion of its advisory fees and to assume expenses, if necessary, in
order to keep the Portfolio's total annual operating expenses, after the ef-
fect of expense offset arrangements, from exceeding 1.00% of average daily net
assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee at an annual rate of 0.04% of aver-
age daily net assets of the Portfolio. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the period ended April 30, 1998, UAM Fund Services, Inc.
earned $6,278 from the Portfolio as Administrator of which $6,249 was paid to
CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active
10
<PAGE>
UAM FUNDS C & B MID CAP EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
portfolio of the UAM Funds and reimbursement of expenses incurred in attending
Board meetings.
G. PURCHASES AND SALES: For the period ended April 30, 1998, the Portfolio
made purchases of $930,861 and there were no sales of investment securities
other than long-term U.S. Government and short-term securities. There were no
purchases or sales of long-term U.S. Government securities.
H. OTHER: At April 30, 1998, 76% of total shares outstanding were held by 1
record shareholder owning 10% or greater of the aggregate total shares
outstanding.
11
<PAGE>
UAM Funds C & B Mid Cap Equity
Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Cooke & Bieler, Inc.
1700 Market Street
Philadelphia, PA 19103
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM FUNDS
Semi-Annual Report
---------------------------
DSI PORTFOLIOS
---------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholder's Letter........................................................ 1
Portfolio of Investments
Disciplined Value......................................................... 7
Limited Maturity Bond..................................................... 10
Money Market.............................................................. 15
Balanced.................................................................. 17
Statement of Assets and Liabilities......................................... 24
Statement of Operations..................................................... 25
Statement of Changes in Net Assets
Disciplined Value......................................................... 26
Limited Maturity Bond..................................................... 27
Money Market.............................................................. 28
Balanced.................................................................. 29
Financial Highlights
Disciplined Value......................................................... 30
Limited Maturity Bond..................................................... 32
Money Market.............................................................. 33
Balanced.................................................................. 34
Notes to Financial Statements............................................... 35
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
Dear Shareholders:
We are pleased to report on the investment results and strategies for the DSI
Disciplined Value Portfolio, the DSI Limited Maturity Bond Portfolio, the DSI
Money Market Portfolio, and the DSI Balanced Portfolio.
UAM: DSI DISCIPLINED VALUE PORTFOLIO
The Disciplined Value Portfolio Institutional Class Shares posted a net per-
formance of 17.51% and 17.45% for the Institutional Service Class Shares for
the six month period ending April 30, 1998. In the same time period the Stan-
dard & Poor's 500 ("S&P 500") returned 22.50% and the Lipper Equity Income
Funds Average (the Portfolio's category) returned 16.34%.
Equity Market Commentary
The stock market in the first six months of the fiscal year showed an immunity
to the Asian flu of last fall as it roared to new heights before falling back
slightly at the very end of the period. There were a few sick patients during
this remarkable rise, however. Disappointing earnings or pre-announcements
usually led to an emergency room visit for that company's stock. As opposed to
the fourth quarter of 1997, the advance in 1998's first four months was quite
broad-based, with all major market indices hitting new all time highs.
The Portfolio outperformed the market comfortably in the first four months of
1998, as our patience with some previously injured players was rewarded. Many
companies that we had identified as good value, with good fundamentals, were
severely hurt in the fourth quarter by fears that the Asian situation would
substantially hamper their prospects. As the quarter came to an end, though,
these fears began to appear unfounded.
Many of the fourth quarter casualties were in the TECHNOLOGY sector. One of
our largest holdings, Xerox, was up only 1% in the fiscal first quarter. When
Xerox reported better than expected earnings in January, however, the stock
recovered nicely. With other recent positive announcements the stock rose 41%
in the second fiscal quarter and has hit a new all time high of $114. United
Technologies, another large holding, rewarded our patience as well. Earnings
estimates turned out to be too low and sloppy stock performance of last fall
turned into a 21% gain this quarter. Earnings estimates are continuing to rise
and we expect further positive contributions from this stock.
Six Month Review
The last six months was remarkable for both the robustness and the breadth of
its returns. All eleven market sectors provided positive returns, with eight
sectors
1
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
actually posting double-digit returns. Some of the highest returns came in those
sectors most punished by the Asian flu in the fourth quarter. In BASIC
INDUSTRIALS (+32%), every stock but one outperformed the index, with Jefferson
Smurfit up 38%, Fort James up 26%, and Imperial Chemical Industries up 24%.
CONSUMER CYCLICALS was also a strong sector (+35%), with Black & Decker up 36%
and LucasVarity up 34%.
Within CAPITAL GOODS (+27%), United Technologies led the way with a return of
42%, followed closely by Cooper Industries (+30%). Waste Management trailed
badly until the end of the quarter when the company announced a merger with USA
Waste that helped the stock to produce a return of 26%.
The UTILITY sector's 29% return was headed by GTE (+40%) and Niagara Mohawk
(+26%). FINANCIAL stocks continued strong (+23%), led by BankBoston, up 35%.
Equity Market Outlook
In what has now become a familiar refrain, we must once again report that the
equity market appears high on an absolute basis by almost any measure of value.
In fact the market's advance this year--far in excess of expected earnings or
sales growth--has only exacerbated the valuation problem. We still, however, are
not predicting any serious correction in the immediate future. The stock market
is very fairly valued relative to a bond market alternative, and as long as
interest rates remain well behaved (as we expect) stock prices should more than
hold their own versus bonds.
Despite a great deal of hand-wringing by forecasters our economy appears to be
surviving the knock-down pitch thrown by the Asian crisis. The first quarter GDP
growth numbers could be as high as 3.5% and we are expecting 2.5% for the full
year. This is well below last year's 3.8%, but still a healthy number. Inflation
continues to shrink, led this quarter by declining energy prices and a drop in
import prices (particularly those from Asia). The Federal Reserve seems content
to let market forces determine the near term course of interest rates.
These are encouraging economic times, but there are warning signs that cannot be
ignored. The US has been creating jobs at even faster rates this year than last
- --310,000 in February alone. This, combined with a low unemployment rate of
4.5%, has already led to accelerating wage costs. While these costs can be
masked for some time by lower raw material prices and continuing productivity
gains, at some point they may cause a problem. Waning Asian demand is beginning
to hurt US manufacturers by lower export demand and higher import competition.
We antici-
2
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
pate that these imbalances will continue, thereby putting pressure on earnings
growth as the year progresses. In fact, our forecast for 1998 earnings is for
only a 6% increase. With valuations as high as they are, any meaningful
shortfall in earnings could prove to be a trigger to an unpleasant fall.
As market appreciation has carried your equity holdings upward, we have been
taking profits in some of the more fully valued stocks. An example of this is
Carnival Corp., which we eliminated in March after a 128% return for the sev-
enteen months we owned it.
UAM: DSI LIMITED MATURITY BOND PORTFOLIO
The Limited Maturity Bond Portfolio posted a net performance of 2.57% for the
six month period ended April 30, 1998. During the same period the Merrill
Lynch 1-5 Year Corporate/Government Bond Index returned 2.98% while the Lipper
1-5 Year Short Investment Grade Debt Funds Average returned 2.56%.
Fixed Income Market Commentary
The six month period in the fixed income market was characterized by trendless
market action amid a cross-current of economic and world events. The US econ-
omy grew above the Fed's targeted trend rate of 2.5-3.0%, however, signs of
inflation did not materialize. Meanwhile the emerging economies of Southeast
Asia suffered a market correction so severe the effects are still undeter-
mined.
The beginning of 1998 brought renewed world volatility. The bubble burst for
many high flying Asian economies. The Japanese economic difficulties were well
known, however as it became apparent that South Korea would suffer economic
crisis (the 11th largest in the World at the time) a rush to the safe haven of
US dollars and bonds drove interest rates to period lows. Consensus that the
Fed would lower rates to protect the US economy and the stock market built
quickly. Short-term interest rates were most affected, with the rate on the
five year treasury reaching a low of 5.21% by mid-January, which was 0.50%
lower than just two weeks prior. In the coming weeks, however, it became ap-
parent the US economy would not be significantly damaged, leaving the Federal
Reserve on hold, and interest rates crept back toward year-end levels.
Domestically the economy remained strong, with GDP posting a 4.1% gain in the
first quarter without signs of inflation. Employment remained high and wage
pressure showed signs of picking up. The warm weather in the Northeast com-
bined with low mortgage rates kept construction booming. Consumers feeling
flush from stock market gains maintained demand for goods and services. The
economic
3
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
strength of the first quarter we believe may have "borrowed" from the remain-
der of 1998, and we believe that a move to slightly below trend growth for the
remainder of the year will materialize.
Fixed Income Market Outlook
Looking forward we believe that the edge will come off domestic demand and
send economic growth toward the trend rate of 2.2-3.0% for the remainder of
1998. The bottlenecks that existed in the 4th quarter have begun to soften. We
further believe that the economic troubles in Southeast Asia could have a
longer lasting structural effect on exports, furthermore domestic manufactur-
ing powers may seek to take advantage of cheap labor and capital in the area
and export production. Japan has failed to show the economic leadership neces-
sary to truly move the region toward steady prosperity.
We maintain a duration neutral to that of the benchmark index of about 2.5
years and will extend that to 110-120% of this level given the opportunity.
Our commitment to higher yielding mortgage related and corporate securities
remains.
UAM: DSI MONEY MARKET PORTFOLIO
The Money Market Portfolio had a 7 day compounded yield of 5.40% on April 30,
1998, versus 5.12% for the IBC's Money Fund Average/All Taxable.
We continue to pursue a strategy of investing in only the highest quality
short-term investments for the Portfolio. We have recently expanded our list
of approved corporate names to include some overlooked programs. Money Market
rates of interest are a direct function of the Federal funds rate and monetary
policy. The Fed Funds rate remained steady over the six month period at 5.50%.
The Portfolio ended the period with 95.7% in discount commercial paper, 3.9%
in corporate bonds and 0.9% in repurchase agreements. The Portfolio's average
days to maturity ended at 32 days. The Money Market Portfolio is neither in-
sured nor guaranteed by the US Government. The Portfolio is managed according
to Rule 2a-7 guidelines, however, there is no assurance that the stable net
asset value of $1.00 will be maintained.
UAM: DSI BALANCED PORTFOLIO
The Balanced Portfolio has returned a net 10.46% for the period from December
22, 1997 (inception of the Portfolio) through April 30, 1998, compared with
the Lipper Balanced Fund Index return of 8.65% for the same period.
4
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
Equity Market Commentary
Our investment strategy for the equity portion of the Balanced Portfolio is
identical to that of the Disciplined Value Portfolio. Please refer to that
section for equity commentary.
Fixed Income Market Commentary
Our fixed income strategy is discussed in the section pertaining to our
management of the Limited Maturity Bond Portfolio. In general, we have a
market weighting in lower coupon mortgage-backed securities and an above
average weighting in investment grade corporate bonds. Less-than-investment
grade corporates are under the prospectus limit of ten percent.
Asset Mix
As market appreciation has carried the Balanced Portfolio's equity holdings
upward, we have been taking profits in some of the more fully valued stocks.
An example of this is Carnival Corp., which we eliminated in March. By
prudently trimming some other holdings, we are keeping the equity exposure at
50%-60% of the Portfolio, which reflects today's more volatile investing
environment. On April 30, 1998, the Portfolio was invested 53.1% equities,
40.4% fixed income, and the remaining 6.5% in cash equivalents.
Sincerely,
/s/ Peter M. Whitman, Jr.
Peter M. Whitman, Jr.
President & Chief Investment Officer
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. Yield
will fluctuate as market conditions change. If it were not for the Adviser's
temporary fee waiver, the yield and total return of the Money Market and Bal-
anced Portfolios, respectively, would be lower. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
5
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITION OF THE COMPARATIVE INDICES
-------------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
The Lipper Equity Income Funds Average is an average of 30 funds which seek
relatively high current income and growth of income through investing 60% or
more of their portfolio in equities.
The Lipper 1-5 Year Short Investment Grade Debt Funds Average is an average of
30 funds that invest at least 65% of assets in investment grade debt issues
(rated in top four grades) with dollar-weighted average maturities of 3 years
or less.
The Merrill Lynch 1-5 Year Corporate/Government Bond Index is an unmanaged
index composed of U.S. Treasuries, agencies and corporates with maturities
from 1 to 5 years. Corporates are investment grade only (rated in the top four
grades).
IBC's Money Fund Average/All Taxable is an average of all major money market
fund yields, published weekly for 7- and 30-day yields.
The Lipper Balanced Fund Index is an average of 30 funds whose primary
objective is to conserve principal by maintaining stock and bond ratios of
approximately 60% and 40%, respectively.
Comparisons of performance assume reinvestment of dividends.
Please note that one can not invest in an unmanaged index.
An investment in the Money Market Portfolio is neither insured nor guaranteed
by the U.S. Government. There can be no assurance that the Money Market
Portfolio will be able to maintain its net asset value of $1.00 per share.
6
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 90.2%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 1.9%
Raytheon Co., Class B.................................. 37,049 $2,100,215
----------
AUTOMOTIVE - 2.7%
LucasVarity plc ADR.................................... 68,348 3,075,660
----------
CHEMICALS - 1.0%
*FMC Corp.............................................. 14,300 1,109,144
----------
COMPUTERS - 2.8%
*CompUSA, Inc. ........................................ 113,700 2,110,556
*Stratus Computer, Inc. ............................... 24,353 1,060,878
----------
3,171,434
----------
CONSUMER NON-DURABLES - 15.0%
American Stores Co..................................... 121,682 2,920,367
Black & Decker Corp. .................................. 30,564 1,577,867
J.C. Penney Co., Inc. ................................. 36,738 2,610,694
*Kmart Corp............................................ 30,097 524,816
Liz Claiborne, Inc. ................................... 49,978 2,458,293
Philip Morris Cos., Inc. .............................. 72,500 2,705,156
RJR Nabisco Holdings Corp.............................. 52,600 1,462,938
*Toys "R' Us, Inc...................................... 90,190 2,485,862
----------
16,745,993
----------
ELECTRONICS - 1.9%
Motorola, Inc. ........................................ 14,000 778,750
Royal Philips Electronics N.V. (NY Shares)............. 14,500 1,305,000
----------
2,083,750
----------
ENERGY - 6.9%
British Petroleum Co. plc ADR.......................... 46,567 4,400,582
Texaco, Inc............................................ 54,520 3,352,980
----------
7,753,562
----------
FINANCIAL SERVICES - 12.3%
BankAmerica Corp. ..................................... 36,796 3,127,660
BankBoston Corp........................................ 24,173 2,609,173
Chase Manhattan Corp. ................................. 32,588 4,515,475
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
FINANCIAL SERVICES - CONTINUED
Transamerica Corp..................................... 10,731 $ 1,239,430
Washington Mutual, Inc. .............................. 31,257 2,187,990
-----------
13,679,728
-----------
HEALTH CARE - 4.4%
*Humana, Inc. ........................................ 83,242 2,247,534
*Tenet Healthcare Corp. .............................. 70,565 2,641,777
-----------
4,889,311
-----------
INDUSTRIAL - 6.9%
Cooper Industries, Inc. .............................. 27,318 1,826,891
Imperial Chemical Industries plc ADR.................. 37,626 2,734,940
United Technologies Corp. ............................ 31,438 3,094,678
*WHX Corp. ........................................... 238 3,734
-----------
7,660,243
-----------
INSURANCE - 6.1%
Aetna, Inc. .......................................... 25,644 2,072,356
Allstate Corp. ....................................... 28,097 2,704,336
Torchmark Corp. ...................................... 44,453 1,980,937
-----------
6,757,629
-----------
PAPER & PACKAGING - 4.9%
Fort James Corp. ..................................... 56,610 2,809,271
*Jefferson Smurfit Corp. ............................. 128,228 2,636,688
-----------
5,445,959
-----------
PHARMACEUTICALS - 1.8%
American Home Products Corp. ......................... 22,076 2,055,828
-----------
TECHNOLOGY - 12.6%
*Digital Equipment Corp. ............................. 55,062 3,062,824
International Business Machines Corp. ................ 32,355 3,749,136
*Micron Technology, Inc. ............................. 46,122 1,432,665
*Sybase, Inc. ........................................ 159,953 1,359,600
Xerox Corp. .......................................... 38,833 4,407,545
-----------
14,011,770
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- ------------
<S> <C> <C>
UTILITIES - 9.0%
GPU, Inc............................................. 33,024 $ 1,308,576
GTE Corp............................................. 52,472 3,066,333
*Niagara Mohawk Power Corp........................... 182,276 2,232,881
Texas Utilities Co. ................................. 26,602 1,064,080
Unicom Corp. ........................................ 66,910 2,325,122
------------
9,996,992
------------
TOTAL COMMON STOCKS (Cost $83,705,338).......................... 100,537,218
------------
CONVERTIBLE PREFERRED STOCKS - 4.0%
FINANCIAL SERVICES - 2.0%
Kmart Financing, 7.75%............................... 33,240 2,185,530
------------
INDUSTRIAL - 0.9%
WHX Corp., Series A, 6.50%........................... 19,200 1,039,200
------------
INSURANCE - 1.1%
Aetna, Inc., 6.25%................................... 16,065 1,261,103
------------
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $3,966,027)............ 4,485,833
------------
SHORT-TERM INVESTMENT - 4.8%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 4.8%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98 to be repurchased at $5,329,795,
collateralized by $4,646,431 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/25/27, valued at $5,389,561 (Cost $5,329,000).... $5,329,000 5,329,000
------------
TOTAL INVESTMENTS - 99.0% (Cost $93,000,365)(a)................. 110,352,051
------------
OTHER ASSETS AND LIABILITIES (NET) - 1.0%....................... 1,100,383
------------
NET ASSETS - 100%............................................... $111,452,434
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $93,000,365. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$17,351,686. This consisted of aggregate gross unrealized appreciation for
all securities of $20,595,897 and aggregate gross unrealized depreciation
for all securities of $3,244,211.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS AND NOTES - 43.0%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
BEVERAGES, FOOD & TOBACCO - 1.5%
General Foods Corp.
7.00%, 6/15/11....................................... $ 500,000 $ 496,585
-----------
CONSUMER NON-DURABLES - 3.1%
Philip Morris Cos., Inc.:
6.95%, 6/1/06........................................ 795,000 812,061
8.625%, 3/1/99....................................... 250,000 254,895
-----------
1,066,956
-----------
ENTERTAINMENT & LEISURE TIME - 0.0%
Time Warner, Inc.
9.125%, 1/15/13...................................... 5,000 5,988
-----------
FINANCIAL SERVICES - 13.0%
Amresco, Inc.
10.00%, 1/15/03...................................... 250,000 259,063
Amresco, Inc., Series 97-A
10.00%, 3/15/04...................................... 250,000 259,063
AT&T Capital Corp., Series 4
6.41%, 8/13/99....................................... 400,000 399,756
Donaldson Lufkin & Jenrette, Inc., FRN
6.70%, 6/30/00....................................... 530,000 536,553
Financial Assistance Corp., Series B-03
9.45%, 11/21/03...................................... 400,000 408,500
General Motors Acceptance Corp., MTN
5.45%, 2/22/00....................................... 900,000 891,918
International Lease Finance Corp.
5.75%, 12/15/99...................................... 600,000 597,936
Phoenix Re Corp.
9.75%, 8/15/03....................................... 750,000 785,295
Salomon, Inc., FRN
5.64%, 2/15/99....................................... 260,000 261,196
-----------
4,399,280
-----------
INDUSTRIAL - 12.4%
Borden, Inc.
8.375%, 4/15/16...................................... 250,000 252,022
Crown Paper Co.
11.00%, 9/1/05....................................... 250,000 268,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
--------- -----------
INDUSTRIAL - CONTINUED
<S> <C> <C>
Ford Motor Credit Co.
7.50%, 1/15/03........................................ $ 10,000 $ 10,521
Fortune Brands, Inc.
8.50%, 10/1/03........................................ 15,000 16,393
Inco Ltd.
9.875%, 6/15/19....................................... 350,000 371,255
ITT Industries
8.55%, 6/15/09........................................ 450,000 516,982
News America Holdings, Inc.
8.45%, 8/1/34......................................... 250,000 282,317
Occidential Petroleum Corp.
8.50%, 9/15/04........................................ 475,000 487,222
Phillips Petroleum Corp.
9.18%, 9/15/21........................................ 600,000 670,176
U.S. Home Corp.
7.95%, 3/1/01......................................... 250,000 254,672
Valassis Communication, Inc.
9.55%, 12/1/03........................................ 500,000 559,035
WMX Technologies, Inc.
7.10%, 8/1/26......................................... 500,000 516,750
-----------
4,206,095
-----------
UTILITIES - 13.0%
Canal Electric Co.
8.85%, 9/1/06......................................... 784,000 807,065
Cleveland Electric Illuminating Co.
8.375%, 12/1/11....................................... 400,000 410,840
Commonwealth Edison Co.
8.625%, 2/1/22........................................ 650,000 699,894
Eastern Edison Co.
5.75%, 7/1/98......................................... 500,000 500,055
Midland Funding Corp. I, Series C-94
10.33%, 7/23/02....................................... 444,395 479,374
Pacific Gas & Electric Corp., Series PP
6.875%, 12/1/99....................................... 500,000 501,365
Peco Energy Co.
8.625%, 6/1/22........................................ 500,000 525,695
Sonat, Inc.
6.625%, 2/1/08........................................ 500,000 496,355
-----------
4,420,643
-----------
TOTAL CORPORATE BONDS AND NOTES (Cost $14,397,396)............... 14,595,547
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - 24.9%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - 4.0%
Deutsche Mortgage & Asset Receiving Corp.,
Series 88-C1 A2
6.538%, 2/15/08....................................... $ 700,000 $ 710,458
Federal National Mortgage Association,
Series 98-M2 B, REMIC
6.247%, 3/17/21....................................... 670,000 672,512
----------
1,382,970
----------
GOVERNMENT AGENCY-BACKED - 20.5%
Federal Home Loan Bank
6.275%, 5/18/01....................................... 1,000,000 1,000,000
Federal Home Loan Mortgage Corp.:
Gold Pools:
7.50%, 4/1/27......................................... 764,953 784,314
8.50%, 11/1/24........................................ 1,127,741 1,178,489
Series 1265 F, PAC(11), REMIC,
7.00%, 10/15/17....................................... 28,457 28,404
Series 1302 PF, PAC(11), REMIC,
7.50%, 2/15/18........................................ 132,016 132,098
TBA:
6.00%, 5/1/13......................................... 956,000 942,855
Federal National Mortgage Association:
Conventional Pools:
7.00%, 10/1/27........................................ 984,836 995,601
7.50%, 1/1/27......................................... 898,145 921,434
9.00%, 6/1/25......................................... 507,569 541,510
9.50%, 8/1/21......................................... 405,366 435,007
----------
6,959,712
----------
NON-GOVERNMENT AGENCY-BACKED - 0.3%
Ryland Acceptance Corp., Series 81-B, PAC, REMIC,
9.00%, 1/1/15......................................... 102,520 102,936
----------
NON-GOVERNMENT NON-AGENCY-BACKED - 0.1%
Merrill Lynch Mortgage Investors, Inc., Series 94-A,
CSI, REMIC
6.412%, 2/15/09....................................... 24,043 24,008
----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $8,378,376)................. 8,469,626
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY SECURITIES - 10.2%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Federal National Mortgage Association, MTN
7.87%, 6/28/06....................................... $ 500,000 $ 510,415
U.S. Treasury Notes
5.375%, 2/15/01...................................... 1,520,000 1,511,138
5.625%, 10/31/99..................................... 1,425,000 1,425,442
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES (Cost $3,447,278)..... 3,446,995
-----------
FOREIGN GOVERNEMENT BOND - 1.4%
Korea Development Bank
7.125%, 9/17/01 (Cost $498,770)...................... 500,000 474,455
-----------
ASSET-BACKED SECURITIES - 4.9%
Security Pacific National Bank, Series 91-2 B
8.15%, 6/15/20....................................... 103,148 105,467
TMS Home Equity Trust:
Series 95-C A3
6.55%, 9/15/21....................................... 585,000 588,130
Series 96-B A7
7.55%, 2/15/20....................................... 525,000 542,042
UCFC Home Equity Loan, Series 97-C A5
6.88%, 9/15/22....................................... 430,000 436,691
-----------
TOTAL ASSET-BACKED SECURITIES (Cost $1,644,650)................... 1,672,330
-----------
MUNICIPAL BOND - 2.5%
New York City, New York, General Obligation Bond,
Series B (Prerefunded) 9.50%, 6/1/09 (Cost $824,162). 750,000 837,187
-----------
SHORT-TERM INVESTMENTS - 14.9%
U.S. TREASURY BILL - 0.1%
+++5.18%, 6/4/98..................................... 25,000 24,885
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - 14.8%
Goldman Sachs 5.30%, dated 4/30/98, due 5/1/98, to be
repurchased at $5,042,742, collateralized by
$3,565,000 U.S. Treasury Bonds, 9.875%, due
11/15/15, valued at $5,215,237...................... $5,042,000 $ 5,042,000
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $5,066,885)................... 5,066,885
-----------
TOTAL INVESTMENTS - 101.8% (Cost $34,257,517)(a)................. 34,563,025
-----------
OTHER ASSETS AND LIABILITIES (NET) - (1.8)%...................... (606,077)
-----------
NET ASSETS - 100%................................................ $33,956,948
===========
</TABLE>
+ See Note A to Financial Statements.
+++ All or a portion of this security was pledged to cover margin
requirements for open futures contracts.
CSI Collateral Strip Interest
FRN Floating Rate Note-rate disclosed is as of April 30, 1998.
MTN Medium Term Note
PAC Planned Amortization Class
REMIC Real Estate Mortgage Investment Conduit
TBA Securities traded under delayed delivery commitments settling after
April 30, 1998. Income on these securities will not be earned until
settlement date.
(a) The cost for Federal income tax purposes was $34,257,517. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $305,508. This consisted of aggregate gross unrealized appreciation
for all securities of $347,703, and aggregate gross unrealized
depreciation for all securities of $42,195.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS DSI MONEY MARKET PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMERCIAL PAPER - 95.7%
<TABLE>
<CAPTION>
FACE AMORTIZED
AMOUNT COST+
---------- -----------
<S> <C> <C>
BANKS - 2.6%
Nordbanken NA, Inc. 7/6/98............................ $3,370,000 $ 3,336,019
-----------
CHEMICALS - 3.9%
Chevron USA, Inc. 5/1/98.............................. 5,000,000 5,000,000
-----------
FINANCIAL SERVICES - 45.4%
Caisse Centrale Dejardins Du Quebec 7/8/98............ 5,000,000 4,948,150
Cooperative Association of Tractor Dealers, Inc.
5/4/98............................................... 6,700,000 6,696,957
Countrywide Home Loans 5/13/98........................ 5,000,000 4,990,783
CSW Credit, Inc. 6/5/98............................... 5,000,000 4,973,069
Delaware Funding Corp. 6/18/98........................ 5,000,000 4,963,266
Ford Motor Credit Co. 6/3/98.......................... 5,000,000 4,974,838
General Electric Capital Services 5/19/98............. 6,500,000 6,482,288
General Motors Acceptance Corp. 6/4/98................ 5,000,000 4,974,028
Goldman Sachs Group LP 5/15/98........................ 5,000,000 4,989,286
Northern Rock plc 6/4/98.............................. 5,000,000 4,973,792
Toyota Motor Credit Corp. 5/18/98..................... 5,000,000 4,987,014
-----------
57,953,471
-----------
FOREIGN GOVERNMENT - 3.9%
Spintab AB 8/7/98..................................... 5,000,000 4,924,731
-----------
INSURANCE - 20.4%
American General Finance Corp. 5/4/98................. 6,000,000 5,997,280
BP America 5/1/98..................................... 5,000,000 5,000,000
Metlife Funding, Inc. 5/28/98......................... 5,000,000 4,979,375
Prudential Funding Corp. 5/1/98....................... 5,000,000 5,000,000
Reliastar Mortgage Corp. 5/20/98...................... 5,000,000 4,985,407
-----------
25,962,062
-----------
PUBLISHING - 3.9%
Pearson, Inc. 5/19/98................................. 5,000,000 4,986,250
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS DSI MONEY MARKET PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMERCIAL PAPER - CONTINUED
<TABLE>
<CAPTION>
FACE AMORTIZED
AMOUNT COST+
---------- ------------
<S> <C> <C>
UTILITIES - 15.6%
Duke Energy Corp. 5/28/98........................... $5,000,000 $ 4,979,525
Jacksonville Electric Utility 7/21/98............... 5,000,000 5,000,000
National Rural Utilities 7/30/98.................... 5,000,000 4,931,625
PacifiCorp. 5/21/98................................. 5,000,000 4,984,722
------------
19,895,872
------------
TOTAL COMMERCIAL PAPER (Cost $122,058,405)...................... 122,058,405
------------
CORPORATE BOND - 3.9%
BANKS - 3.9%
American Express Centurion Bank, FRN 5.716%, 6/25/98
(Cost $5,000,775).................................. 5,000,000 5,000,775
------------
SHORT-TERM INVESTMENT - 0.9%
REPURCHASE AGREEMENT - 0.9%
Goldman Sachs 5.30%, dated 4/30/98, due 5/1/98, to
be repurchased at $1,112,164, collateralized by
$835,000 U.S. Treasury Bonds, 11.625%, due
11/15/04, valued at $1,144,501 (Cost $1,112,000)... 1,112,000 1,112,000
------------
TOTAL INVESTMENTS - 100.5% (Cost $128,171,180)(a)............... 128,171,180
------------
OTHER ASSETS AND LIABILITIES (NET) - (0.5)%..................... (637,805)
------------
NET ASSETS - 100%............................................... $127,533,375
============
</TABLE>
+ See Note A to Financial Statements.
FRN Floating Rate Note-rate disclosed is as of April 30, 1998.
(a) Aggregate cost for Federal tax and book purposes.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS AND NOTES - 15.4%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
CONSUMER DURABLES - 0.6%
American Home Products
6.50%, 10/15/02....................................... $ 225,000 $ 227,610
----------
ENERGY - 3.9%
CalEnergy Co., Inc.
9.50%, 9/15/06........................................ 175,000 187,649
Chesapeake Energy Corp.
9.125%, 4/15/06....................................... 250,000 245,000
Noble Drilling Corp.
9.125%, 7/1/06........................................ 250,000 276,198
Oklahoma Gas & Electric
6.65%, 7/15/27........................................ 150,000 156,478
Potomac Electric Power Co.
6.25%, 10/15/07....................................... 500,000 502,545
----------
1,367,870
----------
FINANCIAL SERVICES - 3.6%
First Colony Corp.
6.625%, 8/1/03........................................ 85,000 86,261
Household Finance Corp.
6.875%, 3/1/07........................................ 500,000 510,040
Leucadia National Corp.
7.75%, 8/15/13........................................ 250,000 258,925
Swiss Bank Corp. (New York)
7.375%, 7/15/15....................................... 200,000 211,758
Western Financial Savings Bank
8.50%, 7/1/03......................................... 200,000 194,426
----------
1,261,410
----------
INDUSTRIAL - 4.2%
Fred Meyer, Inc.
7.15%, 3/1/03......................................... 250,000 249,688
General Motors Corp.
9.125%, 7/15/01....................................... 205,000 222,146
News America Holdings, Inc.
8.50%, 2/23/25........................................ 100,000 112,630
Occidential Petroleum Corp.
8.50%, 9/15/04........................................ 200,000 205,146
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
--------- ----------
<S> <C> <C>
INDUSTRIAL - CONTINUED
Sears Roebuck Acceptance Corp.
6.90%, 8/1/03.......................................... $ 150,000 $ 153,973
7.00%, 6/15/07......................................... 185,000 191,658
Tandy Corp.
6.95%, 9/1/07.......................................... 325,000 331,032
----------
1,466,273
----------
UTILITIES - 2.1%
Boston Edison Co.
6.80%, 3/15/03......................................... 325,000 331,061
GTE Hawaiian Telephone Co., Inc., Series B
7.375%, 9/1/06......................................... 175,000 183,879
Valassis Communication, Inc.
9.55%, 12/1/03......................................... 200,000 223,614
----------
738,554
----------
YANKEE - 1.0%
China International Trust & Investment Corp.
9.00%, 10/15/06........................................ 90,000 94,421
Enterprise Oil plc
6.70%, 9/15/07......................................... 250,000 253,835
----------
348,256
----------
TOTAL CORPORATE BONDS AND NOTES (Cost $5,423,510).................. 5,409,973
----------
MORTGAGE-BACKED SECURITIES - 13.6%
COLLATERALIZED MORTGAGE OBLIGATIONS - 1.8%
Deutsche Mortgage & Asset Receiving Corp.,
Series 88-C1 A2
6.538%, 2/15/08........................................ 300,000 304,482
Federal National Mortgage Association:
Series 98-M2 B, REMIC
6.247%, 3/17/21........................................ 110,000 110,412
Series 98-M4 B, REMIC
6.424%, 12/25/23....................................... 100,000 100,813
MDC Asset Investors Trust,
Series IV 3, REMIC
9.80%, 1/1/13.......................................... 3,825 3,813
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
MORTGAGE-BACKED SECURITIES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS - CONTINUED
Paine Webber Mortgage Acceptance Corp.,
Series 93-6 A8, REMIC
6.90%, 8/25/08........................................ $ 108,580 $ 109,937
----------
629,457
----------
GOVERNMENT AGENCY-BACKED - 11.8%
Federal Home Loan Mortgage Corp.:
Gold Pools:
6.50%, 2/1/26......................................... 416,581 413,586
7.50%, 4/1/27......................................... 275,525 282,498
Series 1751 PG, PAC(11), REMIC
7.80%, 5/15/21........................................ 310,000 318,717
TBA:
6.00%, 5/1/13......................................... 757,000 746,591
Federal National Mortgage Association:
Conventional Pools:
6.50%, 7/1/26......................................... 461,989 458,233
7.00%, 10/1/27........................................ 419,610 424,196
7.50%, 1/1/27-6/1/27.................................. 604,712 620,392
9.00%, 6/1/25......................................... 273,364 291,034
Gold Pools:
7.00%, 11/1/11........................................ 569,747 581,438
Series 91-56 K, PAC, REMIC
8.60%, 2/25/20........................................ 37,632 37,655
----------
4,174,340
----------
TOTAL MORTGAGE-BACKED SECURITIES (Cost $4,832,236)................. 4,803,797
----------
U.S. GOVERNMENT AND AGENCY SECURITIES - 9.3%
U.S. Treasury Bond
6.25%, 8/15/23........................................ 100,000 102,781
U.S. Treasury Notes
5.375%, 2/15/01....................................... 330,000 328,076
5.50%, 2/28/03........................................ 1,000,000 992,970
5.625%, 10/31/99...................................... 155,000 155,048
6.50%, 5/15/05........................................ 605,000 632,364
6.875%, 5/15/06....................................... 100,000 107,062
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY SECURITIES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
U.S. Treasury Strips
11/15/04.............................................. $ 600,000 $ 413,112
8/15/09............................................... 345,000 177,644
2/15/18............................................... 1,150,000 348,082
----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES
(Cost $3,279,242)................................................ 3,257,139
----------
ASSET-BACKED SECURITIES - 2.1%
TMS Home Equity Trust:
Series 95-C A3
6.55%, 9/15/21........................................ 250,000 251,338
Series 96-B A7
7.55%, 2/15/20........................................ 160,000 163,600
UCFC Home Equity Loan:
Series 95-C1 A3
6.775%, 9/10/17....................................... 20,000 20,239
Series 97-C A5
6.88%, 9/15/22........................................ 310,000 314,824
----------
TOTAL ASSET-BACKED SECURITIES (Cost $748,755)...................... 750,001
----------
COMMON STOCKS - 52.1%
<CAPTION>
SHARES
----------
<S> <C> <C>
AEROSPACE & DEFENSE - 1.3%
Raytheon Co., Class B.................................. 8,200 464,837
----------
AUTOMOTIVE - 1.4%
LucasVarity plc ADR.................................... 11,245 506,025
----------
CHEMICALS - 0.6%
*FMC Corp.............................................. 2,715 210,582
----------
COMPUTERS - 1.7%
*CompUSA, Inc.......................................... 20,360 377,932
*Stratus Computer, Inc................................. 5,015 218,466
----------
596,398
----------
CONSUMER NON-DURABLES - 10.4%
American Stores Co..................................... 22,000 528,000
Black & Decker Corp.................................... 5,555 286,777
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
CONSUMER NON-DURABLES - CONTINUED
J.C. Penney Co., Inc...................................... 6,700 $ 476,119
*Kmart Corp............................................... 34,900 608,569
Liz Claiborne, Inc........................................ 9,800 482,037
Philip Morris Cos., Inc................................... 14,700 548,494
RJR Nabisco Holdings Corp................................. 9,600 267,000
*Toys 'R' Us, Inc......................................... 16,300 449,269
-----------
3,646,265
-----------
ELECTRONICS - 1.1%
Motorola, Inc............................................. 2,600 144,625
Royal Philips Electronics N.V. (NY Shares)................ 2,700 243,000
-----------
387,625
-----------
ENERGY - 4.2%
British Petroleum Co. plc ADR............................. 8,998 850,311
Texaco, Inc............................................... 10,340 635,910
-----------
1,486,221
-----------
FINANCIAL SERVICES - 6.2%
BankAmerica Corp.......................................... 6,600 561,000
BankBoston Corp........................................... 3,200 345,400
Chase Manhattan Corp...................................... 4,800 665,100
Transamerica Corp......................................... 1,660 191,730
Washington Mutual, Inc.................................... 5,665 396,550
-----------
2,159,780
-----------
HEALTH CARE - 2.4%
*Humana, Inc.............................................. 13,900 375,300
*Tenet Healthcare Corp.................................... 12,600 471,712
-----------
847,012
-----------
INDUSTRIAL - 4.0%
Cooper Industries, Inc.................................... 4,500 300,938
Imperial Chemical Industries plc ADR...................... 6,800 494,275
United Technologies Corp.................................. 5,270 518,766
*WHX Corp................................................. 7,050 110,597
-----------
1,424,576
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
INSURANCE - 3.1%
Aetna, Inc................................................. 4,300 $ 347,494
Allstate Corp.............................................. 3,820 367,675
Torchmark Corp............................................. 8,190 364,967
-----------
1,080,136
-----------
PAPER & PACKAGING - 2.5%
Fort James Corp............................................ 10,745 533,221
*Jefferson Smurfit Corp.................................... 16,700 343,394
-----------
876,615
-----------
PHARMACEUTICALS - 1.1%
American Home Products Corp................................ 4,100 381,812
-----------
TECHNOLOGY - 7.0%
*Digital Equipment Corp.................................... 8,900 495,062
International Business Machines Corp....................... 5,500 637,312
*Micron Technology, Inc.................................... 8,400 260,925
*Sybase, Inc............................................... 26,200 222,700
Xerox Corp................................................. 7,300 828,550
-----------
2,444,549
-----------
UTILITIES - 5.1%
GPU, Inc................................................... 6,030 238,939
GTE Corp................................................... 9,700 566,844
*Niagara Mohawk Power Corp................................. 33,185 406,516
Texas Utilities Co......................................... 4,900 196,000
Unicom Corp................................................ 11,300 392,675
-----------
1,800,974
-----------
TOTAL COMMON STOCKS (Cost $16,064,557)............................ 18,313,407
-----------
CONVERTIBLE PREFERRED STOCKS - 1.0%
INDUSTRIAL - 0.3%
WHX Corp., Series A, 6.50%................................. 1,700 92,013
-----------
INSURANCE - 0.7%
Aetna, Inc., 6.25%......................................... 3,200 251,200
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $293,950)................ 343,213
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.5%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
U.S. TREASURY BILL - 0.0%
+++5.18%, 6/4/98..................................... $ 10,000 $ 9,954
-----------
REPURCHASE AGREEMENT - 5.5%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98 to be repurchased at $1,928,288,
collateralized by $1,681,051 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/25/27, valued at $1,949,910...................... 1,928,000 1,928,000
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $1,937,954)................... 1,937,954
-----------
TOTAL INVESTMENTS - 99.0% (Cost $32,580,204)(a).................. 34,815,484
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.0%........................ 337,803
-----------
NET ASSETS - 100%................................................ $35,153,287
===========
</TABLE>
+ See Note A to Financial Statements
+++ All or a portion of this security was pledged to cover margin requirements
for open futures contracts.
* Non-Income Producing Security
ADR American Depositary Receipt
PAC Planned Amoritization Class
REMIC Real Estate Mortgage Investment Conduit
TBA Securities traded under delayed delivery commitments settling after
April 30, 1998. Income on these securities will not be earned until
settlement date.
(a) The cost for Federal income tax purposes was $32,580,204. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$2,235,280. This consisted of aggregate gross unrealized appreciation for
all securities of $2,732,218, and aggregate gross unrealized depreciation
for all securities of $496,938.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS DSI PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
DSI
DSI LIMITED DSI
DISCIPLINED MATURITY MONEY DSI
VALUE BOND MARKET BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at Cost...... $ 93,000,365 $34,257,517 $128,171,180 $32,580,204
============ =========== ============ ===========
Investments, at Value
(Including Repurchase
Agreements of $5,329,000,
$5,042,000, $1,112,000
and $1,928,000,
respectively)............ $110,352,051 $34,563,025 $128,171,180 $34,815,484
Foreign Currency, at Value
(Cost $622 and $244,
respectively)............ -- 623 -- 244
Cash...................... 607 338 -- 1,903
Receivable for Investments
Sold..................... 1,239,162 956,000 -- 987,806
Receivable for Portfolio
Shares Sold.............. 57,209 -- -- --
Dividends Receivable...... 146,389 -- -- 25,748
Interest Receivable....... 795 441,034 14,073 140,796
Other Assets.............. 680 239 1,346 --
------------ ----------- ------------ -----------
Total Assets............. 111,796,893 35,961,259 128,186,599 35,971,981
------------ ----------- ------------ -----------
LIABILITIES
Payable for Investments
Purchased................ 139,389 1,947,655 -- 778,293
Payable for Portfolio
Shares Redeemed.......... 95,637 500 -- --
Payable for Investment
Advisory Fees--Note B.... 67,837 12,456 23,162 10,018
Payable for Administrative
Fees--Note C............. 13,403 7,223 14,787 4,424
Payable for Custodian
Fees--Note D............. 7,425 17,696 27,937 977
Distribution and Service
Fees Payable--Note E..... 4,921 -- -- --
Payable for Account
Service Fees--Note F..... 394 34 -- --
Payable for Directors'
Fees--Note G............. 655 621 846 299
Payable for Daily
Variation Margin on
Futures.................. -- 8,937 -- 3,250
Payable for Dividends..... -- -- 578,334 --
Other Liabilities......... 14,798 9,189 8,158 21,433
------------ ----------- ------------ -----------
Total Liabilities........ 344,459 2,004,311 653,224 818,694
------------ ----------- ------------ -----------
NET ASSETS................ $111,452,434 $33,956,948 $127,533,375 $35,153,287
============ =========== ============ ===========
NET ASSETS CONSISTS OF:
Paid in Capital........... $ 88,219,310 $35,408,564 $127,547,635 $32,185,476
Undistributed Net
Investment Income........ 131,964 262,491 94 140,940
Accumulated Net Realized
Gain (Loss).............. 5,749,474 (2,027,022) (14,354) 587,341
Unrealized Appreciation... 17,351,686 312,915 -- 2,239,530
------------ ----------- ------------ -----------
NET ASSETS................ $111,452,434 $33,956,948 $127,533,375 $35,153,287
============ =========== ============ ===========
INSTITUTIONAL CLASS
SHARES:
NET ASSETS................ $ 90,894,259 $33,956,948 $127,533,375 $35,153,287
Shares Issued and
Outstanding ($0.001 par
value) (Authorized
25,000,000).............. 6,435,856 3,600,543 127,546,887 3,206,379
NET ASSET VALUE, Offering
and Redemption Price Per
Share.................... $ 14.12 $ 9.43 $ 1.00 $ 10.96
============ =========== ============ ===========
INSTITUTIONAL SERVICE
CLASS SHARES:
NET ASSETS................ $ 20,558,175 -- -- --
Shares Issued and
Outstanding ($0.001 par
value) (Authorized
10,000,000).............. 1,457,250 -- -- --
NET ASSET VALUE, Offering
and Redemption Price Per
Share.................... $ 14.11 -- -- --
============ =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS DSI PORTFOLIOS
FOR THE PERIOD ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
DSI
DSI LIMITED DSI
DISCIPLINED MATURITY MONEY DSI
VALUE BOND MARKET BALANCED
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................... $ 988,354 $ -- $ -- $ 102,737
Interest..................... 196,311 1,133,245 4,250,005 395,174
----------- ---------- ---------- ----------
Total Income................. 1,184,665 1,133,245 4,250,005 497,911
----------- ---------- ---------- ----------
EXPENSES
Investment Advisory Fees--
Note B...................... 371,855 73,872 300,771 51,563
Administrative Fees--Note C.. 80,185 49,755 87,874 19,207
Custodian Fees--Note D....... 6,737 5,494 15,844 977
Distribution and Service Plan
Fees--Note E
Institutional Service Class.. 21,120 -- -- --
Account Services Fees--Note
F........................... 15,804 346 11,920 --
Directors' Fees--Note G...... 1,706 1,365 2,148 1,006
Audit Fees................... 7,966 6,926 6,691 6,388
Printing Fees................ 14,980 5,092 5,032 4,456
Registration and Filing Fees. 8,331 6,020 8,827 10,076
Other Expenses............... 10,693 3,102 19,266 1,731
Account Services Fees
Waived--Note F.............. -- -- (11,920) --
Investment Advisory Fees
Waived--Note B.............. -- -- (165,424) (10,313)
----------- ---------- ---------- ----------
Net Expenses Before Expense
Offset...................... 539,377 151,972 281,029 85,091
Expense Offset--Note A....... (1,667) (210) -- --
----------- ---------- ---------- ----------
Net Expenses After Expense
Offset...................... 537,710 151,762 281,029 85,091
----------- ---------- ---------- ----------
NET INVESTMENT INCOME......... 646,955 981,483 3,968,976 412,820
----------- ---------- ---------- ----------
NET REALIZED GAIN (LOSS) ON:
Investments.................. 6,014,923 118,376 1,104 583,581
Foreign Exchange Transac-
tions....................... -- (21,285) -- 3,760
Futures Contracts............ -- (151,539) -- --
----------- ---------- ---------- ----------
TOTAL NET REALIZED GAIN
(LOSS)....................... 6,014,923 (54,448) 1,104 587,341
----------- ---------- ---------- ----------
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments.................. 9,748,533 (224,954) -- 2,235,280
Foreign Exchange Transla-
tions....................... -- 30,192 -- --
Futures Contracts............ -- 99,906 -- 4,250
----------- ---------- ---------- ----------
TOTAL NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION.... 9,748,533 (94,856) -- 2,239,530
----------- ---------- ---------- ----------
NET GAIN (LOSS)............... 15,763,456 (149,304) 1,104 2,826,871
----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS RE-
SULTING FROM OPERATIONS...... $16,410,411 $ 832,179 $3,970,080 $3,239,691
=========== ========== ========== ==========
</TABLE>
* The DSI Balanced Portfolio commenced operations on December 22, 1997.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 646,955 $ 1,068,954
Net Realized Gain................................ 6,014,923 14,000,484
Net Change in Unrealized
Appreciation/Depreciation....................... 9,748,533 3,453,214
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERA-
TIONS........................................... 16,410,411 18,522,652
------------ -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.............................. (522,317) (1,082,593)
Institutional Service Class*..................... (76,922) (27,085)
Net Realized Gain:
Institutional Class.............................. (12,032,316) (8,741,247)
Institutional Service Class*..................... (2,097,081) --
------------ -----------
TOTAL DISTRIBUTIONS.............................. (14,728,636) (9,850,925)
------------ -----------
CAPITAL SHARE TRANSACTIONS--NOTE J:
Institutional Class:
Issued........................................... 4,604,424 13,740,810
In Lieu of Cash Distributions.................... 12,497,049 9,778,238
Redeemed......................................... (5,711,463) (17,157,284)
------------ -----------
Net Increase from Institutional Class Shares..... 11,390,010 6,361,764
------------ -----------
Institutional Service Class:*
Issued........................................... 6,386,085 14,980,199
In Lieu of Cash Distributions.................... 2,173,390 27,085
Redeemed......................................... (2,167,391) (1,647,818)
------------ -----------
Net Increase from Institutional Service Class
Shares.......................................... 6,392,084 13,359,466
------------ -----------
Net Increase from Capital Share Transactions..... 17,782,094 19,721,230
------------ -----------
Total Increase................................... 19,463,869 28,392,957
NET ASSETS:
Beginning of Period.............................. 91,988,565 63,595,608
------------ -----------
End of Period (including undistributed net
investment income of $131,964 and $84,248,
respectively)................................... $111,452,434 $91,988,565
============ ===========
</TABLE>
* Initial offering of Institutional Service Class Shares began on May 23,
1997.
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 981,483 $ 1,935,194
Net Realized Loss................................ (54,448) (307,049)
Net Change in Unrealized
Appreciation/Depreciation....................... (94,856) 479,556
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS...................................... 832,179 2,107,701
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................ (943,944) (1,889,501)
----------- -----------
CAPITAL SHARE TRANSACTIONS--NOTE J:
INSTITUTIONAL CLASS:
Issued........................................... 1,275,566 2,415,782
In Lieu of Cash Distributions.................... 928,761 1,863,265
Redeemed......................................... (847,963) (2,217,432)
----------- -----------
Net Increase from Capital Share Transactions..... 1,356,364 2,061,615
----------- -----------
Total Increase................................... 1,244,599 2,279,815
NET ASSETS:
Beginning of Period.............................. 32,712,349 30,432,534
----------- -----------
End of Period (including undistributed net
investment income of $262,491 and $224,952,
respectively)................................... $33,956,948 $32,712,349
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS DSI MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income...................... $ 3,968,976 $ 9,742,027
Net Realized Gain (Loss)................... 1,104 (15,458)
------------- ---------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS................................ 3,970,080 9,726,569
------------- ---------------
DISTRIBUTIONS:
Net Investment Income...................... (3,968,976) (9,742,027)
------------- ---------------
CAPITAL SHARE TRANSACTIONS--NOTE J:
INSTITUTIONAL CLASS:
Issued..................................... 470,448,444 1,562,406,196
In Lieu of Cash Distributions.............. 1,213,187 2,676,039
Redeemed................................... (496,345,297) (1,632,974,872)
------------- ---------------
Net Decrease from Capital Share
Transactions.............................. (24,683,666) (67,892,637)
------------- ---------------
Total Decrease............................. (24,682,562) (67,908,095)
NET ASSETS:
Beginning of Period........................ 152,215,937 220,124,032
------------- ---------------
End of Period (including undistributed net
investment income of $94 and $94,
respectively)............................. $ 127,533,375 $ 152,215,937
============= ===============
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 22,
1997* TO
APRIL 30, 1998
(UNAUDITED)
--------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income......................................... $ 412,820
Net Realized Gain............................................. 587,341
Net Change in Unrealized Appreciation/Depreciation............ 2,239,530
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......... 3,239,691
-----------
DISTRIBUTIONS:
Net Investment Income......................................... (271,880)
-----------
CAPITAL SHARE TRANSACTIONS--NOTE J:
INSTITUTIONAL CLASS:
Issued........................................................ 32,050,912
In Lieu of Cash Distributions................................. 271,880
Redeemed...................................................... (137,316)
-----------
Net Increase from Capital Share Transactions.................. 32,185,476
-----------
Total Increase................................................ 35,153,287
NET ASSETS:
Beginning of Period........................................... --
-----------
End of Period (including undistributed net investment income
of $140,940)................................................. $35,153,287
===========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 14.27 $ 12.99 $ 11.76 $ 11.11 $ 12.72 $ 10.62
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.. 0.09 0.19 0.23 0.25 0.22 0.22
Net Realized and
Unrealized Gain....... 2.04 3.10 2.26 1.70 0.17 2.09
------- ------- ------- ------- ------- -------
Total from Investment
Operations............ 2.13 3.29 2.49 1.95 0.39 2.31
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.09) (0.20) (0.22) (0.25) (0.22) (0.21)
Net Realized Gain...... (2.19) (1.81) (1.04) (1.05) (1.78) --
------- ------- ------- ------- ------- -------
Total Distributions.... (2.28) (2.01) (1.26) (1.30) (2.00) (0.21)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 14.12 $ 14.27 $ 12.99 $ 11.76 $ 11.11 $ 12.72
======= ======= ======= ======= ======= =======
TOTAL RETURN............ 17.51%** 28.99% 22.92% 20.12% 3.48% 21.92%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $90,894 $78,545 $63,596 $47,938 $49,002 $42,170
Ratio of Expenses to
Average Net Assets..... 1.04%* 1.05% 1.04% 1.00% 1.09% 1.04%
Ratio of Net Investment
Income to Average Net
Assets................. 1.35%* 1.42% 1.89% 2.26% 2.02% 1.88%
Portfolio Turnover Rate. 37% 126% 135% 121% 184% 149%
Average Commission Rate
#...................... $0.0591 $0.0594 $0.0588 N/A N/A N/A
Ratio of Expenses to
Average Net
Assets Including
Expense Offsets........ 1.04%* 1.05% 1.04% 0.99% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS DSI DISCIPLINED VALUE PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE CLASS SHARES
------------------------------------------
SIX MONTHS MAY 23,
ENDED 1997*** TO
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
------------------ -----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD......................... $ 14.25 $ 13.10
----------------- -----------------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.......... 0.08 0.07
Net Realized and Unrealized
Gain.......................... 2.04 1.15
----------------- -----------------
Total from Investment
Operations.................... 2.12 1.22
----------------- -----------------
DISTRIBUTIONS:
Net Investment Income.......... (0.07) (0.07)
Net Realized Gain.............. (2.19) --
----------------- -----------------
Total Distributions............ (2.26) (0.07)
----------------- -----------------
NET ASSET VALUE, END OF PERIOD.. $ 14.11 $ 14.25
================= =================
TOTAL RETURN.................... 17.45%** 9.31%**
================= =================
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands).................... $ 20,558 $ 13,444
Ratio of Expenses to Average Net
Assets......................... 1.29%* 1.30%*
Ratio of Net Investment Income
to Average Net Assets.......... 1.07%* 0.68%*
Portfolio Turnover Rate......... 37% 126%
Average Commission Rate......... $ 0.0591 $ 0.0594
Ratio of Expenses to Average Net
Assets Including Expense
Offsets........................ 1.29%* 1.30%*
</TABLE>
* Annualized
** Not Annualized
*** Initial offering of Institutional Service Class Shares.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
UAM FUNDS DSI LIMITED MATURITY BOND PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
-----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 --------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 9.46 $ 9.40 $ 9.51 $ 9.31 $ 9.95 $ 10.56
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.. 0.28 0.58 0.62 0.69 0.56 0.68
Net Realized and
Unrealized Gain
(Loss)................ (0.04) 0.05 (0.13) 0.17 (0.70) (0.16)
------- ------- ------- ------- ------- -------
Total from Investment
Operations............ 0.24 0.63 0.49 0.86 (0.14) 0.52
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.27) (0.57) (0.60) (0.66) (0.50) (0.70)
Net Realized Gain...... -- -- -- -- -- (0.43)
------- ------- ------- ------- ------- -------
Total Distributions.... (0.27) (0.57) (0.60) (0.66) (0.50) (1.13)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 9.43 $ 9.46 $ 9.40 $ 9.51 $ 9.31 $ 9.95
======= ======= ======= ======= ======= =======
TOTAL RETURN............ 2.57%** 6.93% 5.34% 9.58% (1.39)% 5.22%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $33,957 $32,712 $30,433 $29,294 $30,220 $33,724
Ratio of Expenses to
Average Net Assets..... 0.93%* 0.95% 1.00% 0.88% 0.88% 0.79%
Ratio of Net Investment
Income to Average Net
Assets................. 5.98%* 6.17% 6.55% 7.12% 5.68% 6.50%
Portfolio Turnover Rate. 46% 51% 121% 126% 274% 167%
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.92%* 0.94% 0.99% 0.87% N/A N/A
</TABLE>
* Annualized
** Not Annualized
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
UAM FUNDS DSI MONEY MARKET PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
-------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 ---------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income.. 0.026 0.051 0.051 0.053 0.033 0.026
-------- -------- -------- -------- -------- --------
Total from Investment
Operations............ 0.026 0.051 0.051 0.053 0.033 0.026
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS:
Net Investment Income.. (0.026) (0.051) (0.051) (0.053) (0.033) (0.026)
-------- -------- -------- -------- -------- --------
Total Distributions.... (0.026) (0.051) (0.051) (0.053) (0.033) (0.026)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
TOTAL RETURN............ 2.64%**+ 5.26%+ 5.26%+ 5.48%+ 3.30% 2.63%
======== ======== ======== ======== ======== ========
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $127,533 $152,216 $220,124 $124,147 $112,085 $188,419
Ratio of Expenses to
Average Net Assets..... 0.37%* 0.37% 0.38% 0.50% 0.56% 0.58%
Ratio of Net Investment
Income to Average Net
Assets................. 5.28%* 5.14% 5.14% 5.35% 3.07% 2.60%
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.24%* 0.23% 0.22% 0.07% N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.37%* 0.37% 0.38% 0.49% N/A N/A
</TABLE>
* Annualized
** Not Annualized
+ Total return would have been lower had certain expenses not been waived for
the periods indicated.
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
UAM FUNDS DSI BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
CLASS SHARES
--------------
DECEMBER 22,
1997*** TO
APRIL 30, 1998
(UNAUDITED)
--------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............................ $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net Investment Income.......................................... 0.13
Net Realized and Unrealized Gain............................... 0.92
-------
Total from Investment Operations............................... 1.05
-------
DISTRIBUTIONS:
Net Investment Income.......................................... (0.09)
-------
Total Distributions............................................ (0.09)
-------
NET ASSET VALUE, END OF PERIOD.................................. $ 10.96
=======
TOTAL RETURN.................................................... 10.46%**+
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................... $35,153
Ratio of Expenses to Average Net Assets......................... 0.74%*
Ratio of Net Investment Income to Average Net Assets............ 3.57%*
Portfolio Turnover Rate......................................... 29%
Average Commission Rate......................................... $0.0594
Ratio of Voluntarily Waived Fees and Expenses
Assumed by the Adviser to Average Net Assets................... 0.09%*
Ratio of Expenses to Average Net
Assets Including Expense Offsets............................... 0.74%*
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain expenses not been waived for
the period indicated.
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The DSI Disci-
plined Value Portfolio, DSI Limited Maturity Bond Portfolio, DSI Money Market
Portfolio, and DSI Balanced Portfolio (the "Portfolios"), portfolios of UAM
Funds, Inc., are diversified, open-end management investment companies. At
April 30, 1998, the UAM Funds were comprised of forty-four active portfolios.
The financial statements of the remaining portfolios are presented separately.
The portfolios are authorized to offer two separate classes of shares--Insti-
tutional Class Shares and Institutional Service Class Shares. As of April 30,
1998, DSI Disciplined Value Portfolio has issued Institutional Service Class
Shares. Both classes of shares have identical voting rights (except Institu-
tional Service Class shareholders have exclusive voting rights with respect to
matters relating to distribution and shareholder servicing of such shares),
dividend, liquidation and other rights. The objective of the Portfolios are as
follows:
DSI DISCIPLINED VALUE PORTFOLIO seeks to achieve maximum long-term total
return consistent with reasonable risk to principal through diversified
equity investments.
DSI LIMITED MATURITY BOND PORTFOLIO seeks to provide maximum total re-
turn consistent with reasonable risk to principal by investing in invest-
ment grade fixed income securities. The Portfolio will ordinarily maintain
an average weighted maturity of less than six years.
DSI MONEY MARKET PORTFOLIO seeks to provide maximum current income con-
sistent with the preservation of capital and liquidity by investing in
short-term investment grade money market obligations issued or guaranteed
by financial institutions, non-financial corporations, and the United
States Government, as well as repurchase agreements collateralized by such
securities.
DSI BALANCED PORTFOLIO seeks to provide maximum long-term capital growth
consistent with reasonable risk to principal by investing in a diversified
portfolio of equity, primarily investment grade fixed income and money
market securities.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may re-
quire
35
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: The DSI Money Market Portfolio values all securi-
ties utilizing the amortized cost method permitted in accordance with Rule
2a-7 under the Investment Company Act of 1940, as amended, and pursuant to
which the Portfolio must adhere to certain conditions. Securities in each
of the remaining Portfolios are valued in the following manner: Equity se-
curities listed on a securities exchange for which market quotations are
readily available are valued at the last quoted sales price as of the
close of the exchange on the day the valuation is made. Price information
on listed securities is taken from the exchange where the security is pri-
marily traded. Unlisted equity securities are valued at the current bid
prices. Fixed income securities are stated on the basis of valuations pro-
vided by brokers and/or a pricing service which uses information with re-
spect to transactions in fixed income securities, quotations from dealers,
market transactions in comparable securities and various relationships be-
tween securities in determining value. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are valued
at amortized cost, if it approximates market value. The value of other as-
sets and securities for which no quotations are readily available is de-
termined in good faith at fair value using methods determined by the Board
of Directors.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
Each Portfolio, except the DSI Money Market Portfolio, may be subject to
taxes imposed by countries in which they invest. Such taxes are generally
based on either income earned or gains realized or repatriated. These
Portfolios accrue such taxes when the related income is earned or gains
are realized.
At April 30, 1998, the following Portfolios had available capital loss
carryover for Federal income tax purposes, which will expire on the dates
indicated:
<TABLE>
<CAPTION>
OCTOBER 31,
------------------------------------------------------
DSI PORTFOLIO 2001 2002 2003 2004 2005 TOTAL
------------- ------ ---------- ------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Limited Maturity Bond... $8,328 $1,606,712 $68,688 $137,755 $243,544 $2,065,027
Money Market............ -- -- -- -- 15,459 15,459
</TABLE>
36
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of the
underlying securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral
is monitored on a daily basis to determine the adequacy of the collateral. In
the event of default on the obligation to repurchase, each Portfolio has the
right to liquidate the collateral and apply the proceeds in satisfaction of
the obligation. In the event of default or bankruptcy by the other party to
the agreement, realization and/or retention of the collateral or proceeds may
be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the Portfolios may transfer their daily uninvested cash balances
into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collateral
requirements as discussed above.
4. FUTURES AND OPTIONS CONTRACTS: Each Portfolio, except the DSI Money
Market Portfolio, may use futures and options contracts to hedge against
changes in the values of securities the Portfolios own or expect to purchase.
Each Portfolio, except the DSI Money Market Portfolio, may also write covered
options on securities it owns or in which it may invest to increase its
current returns.
The potential risk to the Portfolios is that the change in value of
futures and options contracts may not correspond to the change in value of
the hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is unable
to perform.
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options are
valued at the last sale price, or if no sales are reported, the last bid price
for purchased options and the last ask price for written options. The
following Portfolios had futures contracts open at April 30, 1998:
<TABLE>
<CAPTION>
NET
AGGREGATE UNREALIZED
NUMBER OF FACE EXPIRATION APPRECIATION
CONTRACTS CONTRACTS VALUE DATE (DEPRECIATION)
--------- --------- ---------- ---------- --------------
<S> <C> <C> <C> <C>
Sales:
DSI LIMITED MATURITY BOND
U.S. Treasury 10 Year Note... 11 $1,235,438 June 1998 $7,407
DSI BALANCED
U.S. Treasury 10 Year Note... 4 449,250 June 1998 4,250
</TABLE>
37
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
5. FOREIGN CURRENCY TRANSLATION: The books and records of each Portfolio are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S. dollars
on the date of valuation. The Portfolios do not isolate that portion of
realized or unrealized gains and losses resulting from changes in the foreign
exchange rate from fluctuations arising from changes in the market prices of
the securities. These gains and losses are included in net realized and
unrealized gain and loss on investments on the statement of operations. Net
realized and unrealized gains and losses on foreign currency transactions
represent net foreign exchange gains or losses from forward foreign currency
exchange contracts, disposition of foreign currencies, currency gains or
losses realized between trade and settlement dates on securities transactions
and the difference between the amount of the investment income and foreign
withholding taxes recorded on the Portfolios' books and the U.S. dollar
equivalent amounts actually received or paid.
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: Each Portfolio, except the
DSI Money Market Portfolio, may enter into forward foreign currency exchange
contracts to protect the value of securities held and related receivables and
payables against changes in future foreign exchange rates. A forward currency
contract is an agreement between two parties to buy and sell currency at a set
price on a future date. The market value of the contract will fluctuate with
changes in currency exchange rates. The contract is marked-to-market daily
using the current forward rate and the change in market value is recorded by
the Portfolios as unrealized gain or loss. The Portfolios recognize realized
gain or loss when the contract is closed, equal to the difference between the
value of the contract at the time it was opened and the value at the time it
was closed. Risks may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts and
are generally limited to the amount of unrealized gain on the contracts, if
any, at the date of default. Risks may also arise from the unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
7. DISTRIBUTIONS TO SHAREHOLDERS: The DSI Money Market Portfolio will
normally declare daily and distribute monthly substantially all of its net
investment income. The DSI Disciplined Value, DSI Limited Maturity Bond
and DSI Balanced Portfolios will normally distribute substantially all of
their net investment income quarterly. Any realized net capital gains will
be distributed annually. All distributions are recorded on ex-dividend
date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which
38
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for foreign currency
transactions and the timing of the recognition of gains or losses on
investments.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating net
investment income (loss) per share in the financial highlights.
8. OTHER: Security transactions are accounted for on trade date, the date
the trade was executed. Costs used in determining realized gains and losses on
the sale of investment securities are based on the specific identification
method. Dividend income is recorded on the ex-dividend date, except that
certain dividends from foreign securities are recorded as soon as the
Portfolios are informed of the ex-dividend date. Interest income is recognized
on the accrual basis. Discounts and premiums on securities purchased are
amortized using the effective yield basis over their respective lives. Most
expenses of the UAM Funds can be directly attributed to a particular
portfolio. Expenses which cannot be directly attributed are apportioned among
the portfolios of the UAM Funds based on their relative net assets.
Additionally, certain expenses are apportioned among the portfolios of the UAM
Funds, based on their relative net assets. Custodian fees for the Portfolios
have been increased to include expense offsets, if any, for custodian balance
credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Dewey Square Investors Corporation (the "Adviser"), a wholly-owned subsidiary
of United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolios for a monthly fee calculated at an annual rate of
0.75% of the first $500 million of average daily net assets for the month and
0.65% of average daily net assets for the month in excess of $500 million for
DSI Disciplined Value Portfolio; 0.45% of the first $500 million of average
daily net assets for the month, 0.40% of the next $500 million of average
daily net assets for the month and 0.35% of average daily net assets for the
month in excess of $1 billion for DSI Limited Maturity Bond Portfolio; 0.40%
of the first $500 million of average daily net assets for the month and 0.35%
of average daily net assets for the month in excess of $500 million for DSI
Money Market Portfolio; and 0.45% of average daily net assets for the first
twelve months of operations, 0.55% of average daily net assets for the next
twelve months of operations and 0.65% of average
39
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
daily net assets thereafter for the DSI Balanced Portfolio. In addition, the
Adviser has voluntarily agreed to cap its advisory fees for the DSI Money Market
and DSI Balanced Portfolios at 0.18% of average daily net assets, and 0.36% of
average daily net assets, respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net assets;
plus 0.05% of the combined aggregate net assets in excess of $3 billion. The
fees are allocated among the portfolios of the UAM Funds on the basis of their
relative net assets and are subject to a graduated minimum fee schedule per
portfolio which rises from $2,000 per month, upon inception of a portfolio, to
$70,000 annually after two years. For portfolios with more than one class of
shares, the minimum annual fee increases to $90,000. In addition, the
Administrator receives a Portfolio-specific monthly fee at an annual rate of
0.06%, 0.04%, 0.02% and 0.06% of average daily net assets for DSI Disciplined
Value Portfolio, DSI Limited Maturity Bond Portfolio, DSI Money Market Portfolio
and DSI Balanced Portfolio, respectively. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which CGFSC
agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator pays
CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund Services,
Inc. earned the following amounts from the Portfolios as Administrator and paid
the following portions to CGFSC for its services as sub-Administrator:
<TABLE>
<CAPTION>
ADMINISTRATION PORTION PAID
DSI PORTFOLIOS FEES TO CGFSC
- -------------- -------------- ------------
<S> <C> <C>
Disciplined Value................................... $80,185 $50,437
Limited Maturity Bond............................... 49,755 43,188
Money Market........................................ 87,874 72,888
Balanced............................................ 19,207 12,332
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's assets
held in accordance with the custodian agreement.
40
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
E. DISTRIBUTION AND SERVICE PLAN: UAM Fund Distributors, Inc. (the "Distrib-
utor"), a wholly-owned subsidiary of UAM, distributes the shares of the Port-
folios. The DSI Disciplined Value Portfolio has adopted a Distribution and
Service Plans (the "Plans") on behalf of the Institutional Service Class
Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the Plans, the DSI Disciplined Value Portfolio may not incur distribution and
service fees which exceed an annual rate of 0.75% of the DSI Disciplined Value
Portfolio's net assets, however, the Board has currently limited aggregate
payments under the Plans to 0.50% per annum of the DSI Disciplined Value Port-
folio's net assets. The DSI Disciplined Value Portfolio's Institutional Serv-
ice Class Shares are not currently making payments for distribution fees. In
addition, the DSI Disciplined Value Portfolio's Institutional Service Class
Shares pay service fees at an annual rate of 0.25% of the average daily value
of Institutional Service Class Shares owned by clients of such Service Agents.
The Distributor does not receive any fee or other compensation with respect to
the DSI Limited Maturity Bond, DSI Money Market and DSI Balanced Portfolios.
F. ACCOUNT SERVICES: The UAM Funds entered in an Account Services Agreement
(the "Services Agreement") with UAM Retirement Plan Services, Inc. (the "Serv-
ice Provider"), a wholly-owned subsidiary of UAM. Under the Services Agree-
ment, the Service Provider agrees to perform certain services for participants
in a self-directed, defined contribution plan, and for whom the Service Pro-
vider provides participant recordkeeping. Pursuant to the Services Agreement,
the Service Provider is entitled to receive, after the end of each month, a
fee at the annual rate of 0.15% of the average aggregate daily net asset value
of shares of the UAM Funds in the accounts for which they provide services.
The Service Provider has voluntarily agreed to waive its fees for the DSI
Money Market Portfolio.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government secu-
rities and short-term securities were:
<TABLE>
<CAPTION>
DSI PORTFOLIOS PURCHASES SALES
- -------------- ----------- -----------
<S> <C> <C>
Disciplined Value....................................... $38,124,067 $34,858,863
Limited Maturity Bond................................... 6,928,107 8,280,690
Balanced................................................ 28,442,341 5,977,575
</TABLE>
41
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- -------------------------------------------------------------------------------
Purchases and sales of long-term U.S. Government securities were $10,894,697
and $11,279,515, respectively, for the DSI Limited Maturity Bond Portfolio and
$9,368,144 and $4,334,311, respectively, for the DSI Balanced Portfolio. There
were no purchases or sales of long-term U.S. Government securities for the DSI
Disciplined Value Portfolio. DSI Balanced Portfolio's purchases include in-kind
transactions of securities with a value of $28,126,274, including unrealized
appreciation of $2,523,047.
I. LINE OF CREDIT: The DSI Disciplined Value and DSI Limited Maturity Bond
Portfolios, along with certain other portfolios of UAM Funds, collectively
entered into an agreement which enables them to participate in a $100 million
unsecured line of credit with several banks. Borrowings will be made solely to
temporarily finance the repurchase of Capital shares. Interest is charged to
each participating Portfolio based on its borrowings at a rate per annum equal
to the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per
annum, payable at the end of each calendar quarter, is accrued by each
participating Portfolio based on its average daily unused portion of the line of
credit. During the six months April 30,1998, the Portfolios had no borrowings
under the agreement.
42
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- --------------------------------------------------------------------------------
J. OTHER: Transactions in capital shares for the portfolios, by class, were
as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL CLASS SHARES SERVICE CLASS SHARES
---------------------------- -----------------------
PERIOD SIX MONTHS
ENDED ENDED MAY 23,
APRIL 30, YEAR ENDED APRIL 30, 1997* TO
1998 OCTOBER 31, 1998 OCTOBER 31,
DSI PORTFOLIOS (UNAUDITED) 1997 (UNAUDITED) 1997
- -------------- ------------ -------------- ----------- -----------
<S> <C> <C> <C> <C>
DISCIPLINED VALUE:
Shares Issued............ 343,344 1,054,305 496,143 1,056,772
In Lieu of Cash Distribu-
tions................... 1,026,368 838,649 178,687 1,844
Shares Redeemed.......... (439,406) (1,281,827) (160,944) (115,252)
------------ -------------- -------- ---------
Net Increase from Capital
Share Transactions...... 930,306 611,127 513,886 943,364
============ ============== ======== =========
LIMITED MATURITY BOND:
Shares Issued............ 134,952 257,032 -- --
In Lieu of Cash Distribu-
tions................... 99,071 199,681 -- --
Shares Redeemed.......... (90,106) (235,983) -- --
------------ -------------- -------- ---------
Net Increase from Capital
Share Transactions...... 143,917 220,730 -- --
============ ============== ======== =========
MONEY MARKET:
Shares Issued............ 470,448,444 1,562,406,186 -- --
In Lieu of Cash Distribu-
tions................... 1,213,187 2,676,039 -- --
Shares Redeemed.......... (496,345,297) (1,632,974,857) -- --
------------ -------------- -------- ---------
Net Decrease from Capital
Share Transactions...... (24,683,666) (67,892,632) -- --
============ ============== ======== =========
BALANCED:**
Shares Issued............ 3,194,038 -- -- --
In Lieu of Cash Distribu-
tions................... 24,866 -- -- --
Shares Redeemed.......... (12,525) -- -- --
------------ -------------- -------- ---------
Net Increase from Capital
Share Transactions...... 3,206,379 -- -- --
============ ============== ======== =========
</TABLE>
_____________
* Initial Offering of Institutional Service Class Shares.
** The Balanced Portfolio commenced operations on December 22, 1997.
43
<PAGE>
UAM FUNDS DSI PORTFOLIOS
- --------------------------------------------------------------------------------
At April 30, 1998, the percentage of total shares outstanding held by record
shareholders owning 10% or greater of the aggregate total shares outstanding
for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
DSI PORTFOLIOS SHAREHOLDERS OWNERSHIP
- -------------- ------------ ---------
<S> <C> <C>
Disciplined Value--Institutional Class................... 2 51%
Disciplined Value--Institutional Service Class........... 2 53
Limited Maturity Bond.................................... 1 53
Money Market............................................. 1 66
Balanced................................................. 1 100
</TABLE>
44
<PAGE>
UAM Funds DSI Portfolios
- -------------------------------------------------------------------
Officers And Directors
Norton H. Reamer William H. Park
Trustee, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L.French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- ---------------------------------------------------------------------
Investment Advisor
Dewey Square Investors Corporation
One Financial Center
Boston, MA 02111
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 10260
Legal Counsel
Drinker, Biddle & Reath
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
------------------------------------
Independent Accountants This report has been prepared for
Price Waterhouse LLP shareholders and may be distributed
160 Federal Street to others only if preceded or
Boston, MA 02110 accompanied by a current prospectus.
------------------------------------
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
- -------------------------------------
FMA Small Company Portfolio
- -------------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
Economic woes in Southeast Asia and heavy buying of large capitalization
mutual funds from tax refunds and IRA contributions propelled the unmanaged
Standard & Poor's 500 Index 22.50% higher in the six month period ended April
30, 1998. The liquidity provided by the large capitalization sector of the
market drew investors away from the small capitalization sector contributing
to the unmanaged Russell 2000 Index return of 11.88% for the same period.
Given this challenging investment environment, we are pleased to report that
the FMA Small Company Portfolio returned 12.29% for the Institutional Class
shares and 12.09% for the Institutional Service Class shares, outperforming
the unmanaged Russell 2000 by 0.41% and 0.21%, respectively.
True to our investment style, we continued to invest in high quality
companies with improving earnings growth, healthy balance sheets and strong
cash flow at relatively low valuations. Over the past six months, we have
maintained our overweightings in the financial and consumer staples sectors
while retaining our underweighted positions in the technology and utility
sectors of the market. Recent portfolio shifts include an increase in the
energy and industrial sectors of the portfolio. Following the dramatic sell-
off in the energy group earlier this year, we found that valuations more
adequately reflected the group's fundamentals which appear to be improving as
oil-producing nations recently reached a production reduction agreement. Our
increased weighting in the industrial sector of the market stemmed from our
conviction that the economy will sustain its growth record through the next
several quarters.
We continue to believe that the continued outperformance of large
capitalization stocks has created very attractive relative valuations within
the small capitalization sector of the market. At the same time, corporate
earnings growth of large capitalization companies has slowed to low single
digit rates thus far in 1998. It remains our belief that the convergence of
these two factors will result in an increased investor focus toward the small
capitalization sector of the market, where earnings growth is superior and
relative valuation is increasingly appealing. Finally, the pressure on larger
companies to meet earnings projections will likely drive increased
consolidation of fundamentally strong small capitalization companies. With
this as a backdrop, we continue to find ample opportunities for attractive
investment within the small capitalization sector.
Yours truly,
/s/ Patricia A Falkowski
Patricia A Falkowski
President and Chief Investment Officer
and Portfolio Manager
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers, total return for the Portfolio
would have been lower. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
DEFINITION OF THE COMPARATIVE INDICES
-------------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
The Russell 2000 Index is an unmanaged index composed of the 2000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly traded companies.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
1
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.0%
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 1.6%
*Aviation Sales Co....................................... 80,100 $ 2,853,563
-----------
AUTOMOTIVE - 0.7%
Borg-Warner Automotive, Inc.............................. 21,800 1,355,688
-----------
BANKS - 15.0%
City National Corp. ..................................... 150,840 5,609,362
Community First Bankshares, Inc. ........................ 104,150 5,233,537
*Fidelity National Corp. ................................ 114,100 1,597,400
First Midwest Bancorp, Inc. ............................. 94,700 4,906,644
National Commerce Bancorp................................ 101,470 4,464,680
Premier Bancshares, Inc. ................................ 97,550 2,505,816
Webster Financial Corp. ................................. 84,500 2,862,437
-----------
27,179,876
-----------
BEVERAGES, FOOD & TOBACCO - 9.7%
*Canandaigua Brands, Inc., Class A....................... 78,450 4,079,400
Earthgrains Co. ......................................... 105,300 4,922,775
Lance, Inc. ............................................. 231,860 4,912,534
Smucker (J.M.) Co., Class B.............................. 152,986 3,690,787
-----------
17,605,496
-----------
BROADCASTING & PUBLISHING - 1.8%
Meredith Corp. .......................................... 77,574 3,335,682
-----------
BUILDING MATERIALS - 5.6%
*Giant Cement Holding, Inc. ............................. 77,700 2,175,600
Lone Star Industries, Inc. .............................. 43,500 3,594,188
*Nortek, Inc. ........................................... 150,056 4,379,760
-----------
10,149,548
-----------
ENERGY - 7.1%
*Offshore Logistics, Inc. ............................... 175,600 4,082,700
Santa Fe Energy Resources, Inc. ......................... 306,173 3,157,409
*Veritas DGC, Inc. ...................................... 103,100 5,586,731
-----------
12,826,840
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
FINANCIAL SERVICES - 4.5%
Investors Financial Services Corp. ....................... 85,924 $ 4,596,934
UMB Financial Corp. ...................................... 62,315 3,676,585
-----------
8,273,519
-----------
HEALTH CARE - 6.8%
*IDEXX Laboratories, Inc. ................................ 199,900 4,397,800
*Sierra Health Services, Inc. ............................ 124,450 4,783,547
*Universal Health Services, Inc., Class B................. 54,690 3,148,093
-----------
12,329,440
-----------
INDUSTRIAL - 9.5%
AMETEK, Inc............................................... 147,600 4,492,575
Applied Power, Inc., Class A.............................. 107,340 4,011,832
*Middleby Corp. .......................................... 110,400 869,400
Regal-Beloit Corp......................................... 123,490 3,797,317
Watts Industries, Inc., Class A........................... 159,400 4,084,625
-----------
17,255,749
-----------
INSURANCE - 4.5%
Protective Life Corp. .................................... 119,548 4,438,220
*Triad Guaranty, Inc. .................................... 110,500 3,839,875
-----------
8,278,095
-----------
LODGING & RESTAURANTS - 4.5%
Bob Evans Farm, Inc. ..................................... 215,760 4,342,170
*Brinker International, Inc. ............................. 159,611 3,830,664
-----------
8,172,834
-----------
METALS - 2.5%
*Titanium Metals Corp. ................................... 168,500 4,465,250
-----------
MEDICAL SUPPLIES DISTRIBUTION - 2.9%
Owens & Minor, Inc., Holding Company...................... 295,050 5,255,578
-----------
REAL ESTATE INVESTMENT TRUSTS - 1.5%
Nationwide Health Properties, Inc. ....................... 114,370 2,687,695
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
COMMON STOCKS - CONTINUED
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
RETAIL - 2.6%
*Dominick's Supermarkets, Inc. ......................... 115,710 $ 4,635,632
------------
SAVINGS & LOANS - 4.1%
Commercial Federal Corp. ............................... 72,096 2,613,480
First Financial Holdings, Inc. ......................... 105,800 2,473,075
InterWest Bancorp, Inc.................................. 53,600 2,358,400
------------
7,444,955
------------
SPECIALTY CHEMICALS - 1.0%
Dexter Corp . .......................................... 44,560 1,840,885
------------
TELECOMMUNICATIONS EQUIPMENT - 2.4%
*Coherent Communications Systems Corp. ................. 88,200 4,321,800
------------
TEXTILES & APPAREL - 2.4%
Guilford Mills, Inc. ................................... 153,830 4,345,697
------------
TRANSPORTATION - 1.9%
Werner Enterprises, Inc. ............................... 145,050 3,481,200
------------
UTILITIES - 2.4%
CILCORP, Inc. .......................................... 92,450 4,420,266
------------
TOTAL COMMON STOCKS (Cost $157,137,143).......................... 172,515,288
------------
</TABLE>
<TABLE>
<S> <C> <C>
SHORT TERM INVESTMENT - 4.9%
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENT - 4.9%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $8,848,320,
collateralized by $7,713,825 of various U.S.
Treasury Obligations, 5.50%-14.00% due 5/15/04-
11/25/27, valued at $8,947,540 (Cost $8,847,000).. $8,847,000 8,847,000
------------
TOTAL INVESTMENTS - 99.9% (Cost $165,984,143)(a)............... 181,362,288
------------
OTHER ASSETS AND LIABILITIES (NET) - 0.1%...................... 287,158
------------
NET ASSETS - 100%.............................................. $181,649,446
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $165,984,143. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$15,378,145. This consisted of aggregate gross unrealized appreciation for
all securities of $17,709,444 and aggregate gross unrealized depreciation
for all securities of $2,331,299.
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost............................................ $165,984,143
============
Investments, at Value........................................... $181,362,288
Cash............................................................ 96
Receivable for Portfolio Shares Sold............................ 1,831,123
Dividends Receivable............................................ 112,454
Interest Receivable............................................. 1,320
Other Assets.................................................... 9,196
------------
Total Assets................................................... 183,316,477
------------
LIABILITIES
Payable for Investments Purchased............................... 1,260,813
Payable for Portfolio Shares Redeemed........................... 290,904
Payable for Investment Advisory Fees--Note B.................... 94,025
Payable for Administrative Fees--Note C......................... 13,576
Payable for Custodian Fees--Note D.............................. 5,577
Payable for Distribution Fees--Note E........................... 1,543
Payable for Directors' Fees--Note G............................. 593
------------
Total Liabilities.............................................. 1,667,031
------------
NET ASSETS...................................................... $181,649,446
============
NET ASSETS CONSIST OF:
Paid in Capital................................................. $165,280,991
Undistributed Net Investment Income............................. 82,876
Accumulated Net Realized Gain................................... 907,434
Unrealized Appreciation......................................... 15,378,145
------------
NET ASSETS...................................................... $181,649,446
============
INSTITUTIONAL CLASS SHARES:
NET ASSETS...................................................... $176,623,451
Shares Issued and Outstanding ($0.001 par value) (Authorized
25,000,000).................................................... 10,574,201
NET ASSET VALUE, Offering and Redemption Price Per Share........ $ 16.70
============
INSTITUTIONAL SERVICE CLASS SHARES:
NET ASSETS...................................................... $ 5,025,995
Shares Issued and Outstanding ($0.001 par value) (Authorized
10,000,000).................................................... 301,372
NET ASSET VALUE, Offering and Redemption Price Per Share........ $ 16.68
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends......................................................... $ 489,813
Interest.......................................................... 244,539
----------
Total Income..................................................... 734,352
----------
EXPENSES
Investment Advisory Fees--Note B.................................. 338,170
Administrative Fees--Note C....................................... 68,834
Printing Fees..................................................... 17,912
Registration and Filing Fees...................................... 15,324
Distribution and Service Plan Fees--Note E:
Institutional Service Class...................................... 9,272
Custodian Fees--Note D............................................ 4,330
Directors' Fees--Note G........................................... 1,478
Account Services Fees--Note F..................................... 1,365
Other Expenses.................................................... 27,804
Account Services Fees Waived--Note F.............................. (1,365)
Investment Advisory Fees Waived--Note B........................... (8,017)
----------
Net Expenses Before Expense Offset............................... 475,107
Expense Offset--Note A............................................ (1,298)
----------
Net Expenses After Expense Offset................................ 473,809
----------
NET INVESTMENT INCOME............................................. 260,543
----------
NET REALIZED GAIN ON INVESTMENTS.................................. 909,758
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS...................................................... 7,891,187
----------
NET GAIN ON INVESTMENTS........................................... 8,800,945
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $9,061,488
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 260,543 $ 152,719
Net Realized Gain................................ 909,758 5,652,960
Net Change in Unrealized
Appreciation/Depreciation....................... 7,891,187 4,904,778
------------ -----------
Net Increase in Net Assets Resulting from
Operations...................................... 9,061,488 10,710,457
------------ -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.............................. (198,401) (239,184)
Institutional Service Class*..................... (3,012) (2,725)
Net Realized Gain:
Institutional Class.............................. (5,194,461) (3,781,382)
Institutional Service Class*..................... (458,826) --
------------ -----------
Total Distributions.............................. (5,854,700) (4,023,291)
------------ -----------
CAPITAL SHARE TRANSACTIONS-NOTE J:
Institutional Class:
Issued........................................... 152,402,149 22,664,617
In Lieu of Cash Distributions.................... 5,160,681 4,004,151
Redeemed......................................... (29,140,202) (8,799,304)
------------ -----------
Net Increase from Institutional Class Shares..... 128,422,628 17,869,464
------------ -----------
Institutional Service Class:*
Issued........................................... 208,369 4,074,384
In Lieu of Cash Distributions.................... 461,838 2,724
Redeemed......................................... (24,281) (212,783)
------------ -----------
Net Increase from Institutional Service Class
Shares.......................................... 645,926 3,864,325
------------ -----------
Net Increase from Capital Share Transactions..... 129,068,554 21,733,789
------------ -----------
Total Increase................................... 132,275,342 28,420,955
Net Assets:
Beginning of Period.............................. 49,374,104 20,953,149
------------ -----------
End of Period (including undistributed net
investment income of $82,876 and $23,746,
respectively)................................... $181,649,446 $49,374,104
============ ===========
</TABLE>
* Initial offering of Institutional Service Class Shares began on August 1,
1997.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
----------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 16.60 $ 14.11 $ 13.19 $ 12.13 $ 14.24 $ 10.36
-------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.03 0.06 0.09 0.08 0.01 0.02
Net Realized and
Unrealized Gain....... 1.87 4.97 2.46 1.47 0.50 3.88
-------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 1.90 5.03 2.55 1.55 0.51 3.90
-------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.03) (0.13) (0.09) (0.08) -- (0.02)
Net Realized Gain...... (1.77) (2.41) (1.60) (0.41) (2.62) --
-------- ------- ------- ------- ------- -------
Total Distributions.... (1.80) (2.54) (1.69) (0.49) (2.62) (0.02)
-------- ------- ------- ------- ------- -------
CAPITAL CONTRIBUTION.... -- -- 0.06 -- -- --
-------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 16.70 $ 16.60 $ 14.11 $ 13.19 $ 12.13 $ 14.24
======== ======= ======= ======= ======= =======
TOTAL RETURN+........... 12.29%** 42.33% 22.51% 13.57% 4.54% 37.65%
======== ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $176,623 $45,060 $20,953 $20,847 $19,561 $18,569
Ratio of Expenses to
Average Net Assets..... 1.03%* 1.03% 1.03% 1.03% 1.03% 1.03%
Ratio of Net Investment
Income to Average Net
Assets ................ 0.60%* 0.50% 0.75% 0.66% 0.06% 0.14%
Portfolio Turnover
Rate................... 11% 86% 106% 170% 121% 163%
Average Commission Rate
#...................... $ 0.0598 $0.0583 $0.0600 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.02%* 0.29% 0.48% 0.32% 0.29% 0.26%
Ratio of Expenses to
Average Net
Assets Including
Expense Offsets........ 1.03%* 1.03% 1.03% 1.03% N/A N/A
</TABLE>
* Annualized
** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE
CLASS SHARES
---------------------------
SIX MONTHS AUGUST 1,
ENDED 1997*** TO
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD..... $ 16.59 $ 14.95
------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income... 0.02 0.01
Net Realized and
Unrealized Gain........ 1.85 1.64
------- -------
Total From Investment
Operations............. 1.87 1.65
------- -------
DISTRIBUTIONS:
Net Investment Income... (0.01) (0.01)
Net Realized Gain....... (1.77) --
------- -------
Total Distributions..... (1.78) (0.01)
------- -------
NET ASSET VALUE, END OF
PERIOD.................. $ 16.68 $ 16.59
======= =======
TOTAL RETURN+............ 12.09%** 11.04%**
======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(Thousands)............. $ 5,026 $ 4,314
Ratio of Expenses to
Average Net Assets...... 1.43%* 1.43%*
Ratio of Net Investment
Income to Average Net
Assets.................. 0.26%* 0.24%*
Portfolio Turnover Rate.. 11% 100%
Average Commission Rate.. $0.0598 $0.0583
Ratio of Voluntarily
Waived Fees and Expenses
Assumed by the Adviser
to Average Net Assets... 0.05%* 0.21%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................. 1.43%* 1.43%*
</TABLE>
* Annualized
** Not Annualized
*** Initial offering of Institutional Service Class Shares
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The FMA Small
Company Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial
statements of the remaining portfolios are presented separately. The Portfolio
offers two separate classes of shares--Institutional Class Shares and
Institutional Service Class Shares. Both classes of shares have identical
voting rights (except Institutional Service Class shareholders have exclusive
voting rights with respect to matters relating to distributions and
shareholder servicing of such shares), dividend, liquidation and other rights.
The objective of the FMA Small Company Portfolio is to provide maximum, long-
term total return consistent with reasonable risk to principal by investing
primarily in common stocks of smaller companies in terms of revenues and/or
market capitalization.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid prices
on such day. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued at the current bid prices. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
10
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments for the
timing of the recognition of gains or losses on investments.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Income,
expenses (other than class specific expenses) and realized and unrealized
gains or losses are allocated to each class of shares based upon their
relative net assets. Custodian fees for
11
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
the Portfolio have been increased to include expense offsets, if any, for
custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Fiduciary Management Associates, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio for a monthly fee calculated at an annual
rate of 0.75% of average daily net assets for the month. The Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 1.03% of average daily net assets for the Portfolio's Institutional
Class Shares and 1.43% of the average daily net assets for the Portfolio's
Institutional Service Class Shares.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee at an annual rate
of 0.04% of average daily net assets for the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund
Services, Inc. earned $68,834 from the Portfolio as Administrator of which
$50,799 was paid to CGFSC for its services as sub-Administrator.
12
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Portfolio has adopted Distribution and Service Plans (the "Plans") on behalf
of the Institutional Service Class Shares pursuant to Rule 12b-1 under the
Investment Company Act of 1940. Under the Plans, the Portfolio may not incur
distribution and service fees which exceed an annual rate of 0.75% of the
Portfolio's net assets, however, the Board has currently limited aggregate
payments under the Plans to 0.50% per annum of the Portfolio's net assets. The
Portfolio's Institutional Service Class Shares are currently making payments
for distribution fees at 0.15% of average daily net assets.
In addition, the Portfolio's Institutional Service Class Shares pay service
fees at an annual rate of 0.25% of the average daily value of Institutional
Service Class Shares owned by the clients of the Service Agents.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive a portion of
its fees, if necessary, in order to keep the Portfolio's total annual
operating expenses after the effect of expense offset arrangements, from
exceeding 1.03% and 1.43% of average daily net assets for the Institutional
Class Shares and Institutional Service Class Shares, respectively.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $128,725,498 and sales of $9,526,121 of investment
13
<PAGE>
UAM FUNDS FMA SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government securities.
I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the six months
ended April 30, 1998, the Portfolio had no borrowings under the agreement.
J. OTHER: Transactions in capital shares for the Portfolio, by class, are as
follows:
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL SERVICE
CLASS SHARES CLASS SHARES
-------------------------- --------------------------
SIX MONTHS SIX MONTHS AUGUST 1,
ENDED YEAR ENDED ENDED 1997* TO
APRIL 30, 1998 OCTOBER 31, APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
-------------- ----------- -------------- -----------
<S> <C> <C> <C> <C>
Shares Issued........... 9,308,881 1,477,037 13,023 272,439
In Lieu of Cash
Distributions......... 332,870 329,704 29,875 162
Shares Redeemed......... (1,781,586) (577,834) (1,484) (12,643)
---------- --------- ------ -------
Net Increase from
Capital Share
Transactions.......... 7,860,165 1,228,907 41,414 259,958
========== ========= ====== =======
</TABLE>
At April 30, 1998, 46% and 90% of total shares outstanding were held by 1
and 1 record shareholder of Institutional Class Shares and Institutional
Service Class Shares, respectively, owning 10% or greater of the aggregate
total shares outstanding.
- -----------
* Initial Offering of Institutional Service Class Shares
14
<PAGE>
UAM Funds FMA Small Company
Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Fiduciary Management Associates, Inc.
55 West Monroe Street, Suite 2550
Chicago, IL 60603-5093
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
ICM Equity Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 4
Statement of Assets and Liabilities......................................... 7
Statement of Operations..................................................... 8
Statement of Changes in Net Assets.......................................... 9
Financial Highlights........................................................ 10
Notes to Financial Statements............................................... 11
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
During this year's first half that ended April 30, 1998, the net asset value
per share of the ICM Equity Portfolio increased from $18.27 to $20.02.
Including reinvestment of dividends and capital gains distributions that
amounted to $0.53, the total return achieved in the portfolio was 12.76%. As
seen below, the second quarter, ending April 30, 1998, witnessed a rebound in
value. Nevertheless, the Portfolio trailed the S&P 500 Index during the first
half.
<TABLE>
<CAPTION>
TOTAL RETURN
-------------------------------------------
FIRST QUARTER SECOND QUARTER FIRST HALF
NOV. 1, 1997- FEB. 1, 1998- NOV. 1, 1997-
JAN. 31, 1998 APRIL 30, 1998 APRIL 30, 1998
------------- -------------- --------------
<S> <C> <C> <C>
ICM EQUITY PORTFOLIO................ 0.12% 12.63% 12.76%
S&P 500 Index....................... 7.60% 13.85% 22.50%
</TABLE>
The market's advance has led to record valuations, as measured by most
traditional benchmarks such as price/earnings and price/cash flow ratios. We
believe several forces are at work in this market and that they have served to
focus investor interest primarily on the largest companies. First, there is
the continuing flood of individuals' money into the marketplace, against a
backdrop of a healthy economy and a stable monetary environment. As the market
advances, monies must be put to work relatively quickly, encouraging portfolio
managers to buy the larger and more marketable companies. Secondly, Asia's
problems that unfolded in 1997 have shaken confidence, further encouraging
investors to prefer the largest companies, with presumably the greatest
visibility. Finally, we would note recent merger and acquisition activity
among very large companies. The monies involved are huge and exceed even the
values of all listed securities in a number of emerging markets, which have
fallen in such disfavor. In sum, this focus on the largest companies, with
seemingly greater visibility and financial clout, has worked to the detriment
of investors in smaller companies and/or companies more exposed to the
economic cycle since this past fall.
The market's turbulence in the wake of Asia's problems in 1997 presented
investors with a number of opportunities. Although the second quarter was
impacted by the turbulence that had emerged previously, performance
strengthened as the quarter progressed. Several positions were enlarged during
the quarter, and several positions were initiated; together, they contributed
to the Portfolio's relative performance. The Portfolio's largest holdings as
of April 30, 1998, are listed below:
1
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
% TOTAL EQUITY
TEN LARGEST HOLDINGS MARKET VALUE
- -------------------- --------------
<S> <C>
Philips Electronics N.V. ........................................ 3.9%
Delta Air Lines, Inc. ........................................... 3.9%
GenCorp Inc. .................................................... 3.6%
Wellpoint Health Networks, Inc. ................................. 3.1%
De Beers Centenary AG ADR........................................ 3.0%
Morgan Stanley Dean Witter & Co. ................................ 2.7%
United Dominion Realty Trust, Inc. .............................. 2.7%
Cincinnati Milacron, Inc. ....................................... 2.6%
Rouse Co. ....................................................... 2.6%
Consolidated Edison of New York.................................. 2.6%
</TABLE>
Many observers have expressed repeated concerns about the market's current
valuation. We would note, however, that substantial and sustained market
corrections are nearly always caused by a Federal Reserve determined to slow a
too-strong economy. Our economy, today, is strong, but as yet, there are no
definitive signs of inflation looming nor extraordinary excesses, beyond the
possible "exuberance" of the equity markets. We cannot know with certainty
what the Federal Reserve will do, but we would not be surprised if the market
were both sluggish and volatile in the months immediately ahead. Profit growth
cannot continue to outstrip sales or economic growth indefinitely. Nor is it
likely that interest rates--a key determinate of the market's price/earnings
ratio--will continue to drift lower indefinitely. At the same time, we would
note the immediacy of the concerns in Asia. We expect to see corporate profits
impacted by a slowdown. Slowing earnings growth, even were the Fed not to
tighten, may well be sufficient reason for the market to be less friendly over
the near-to-intermediate term.
Our investment strategy is unaltered: we continue to look for companies with
attractive investment attributes, at prices below their intrinsic value. With
the market trading at historically high levels, we are keenly interested in
persistency in results of those companies in which we have invested your
funds. We want to emphasize companies not only at attractive prices, but those
that also show promise of progress even in a more difficult setting.
2
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
As of April 30, 1998, the ICM Equity Portfolio held 48 stocks, with the
following profile as compared with the S&P 500 Index:
<TABLE>
<CAPTION>
ICM EQUITY S&P 500
PORTFOLIO INDEX
---------- -------
<S> <C> <C>
Average Price to Earnings*................................... 15.6x 24.5x
Average Price to Book Value*................................. 2.9x 4.5x
Average Return on Equity*.................................... 19.8% 18.2%
Median Market Capitalization (billions)...................... $7.3 $7.7
</TABLE>
* Based on estimated data.
Respectfully submitted,
/s/ Robert F. Boyd
Robert F. Boyd, CFA
Principal Investment Counselors of Maryland, Inc.
May 18, 1998
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
DEFINITION OF THE COMPARATIVE INDEX
The returns for the UAM Fund-ICM Equity Portfolio are net of all fees and
expenses.
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 400
industrial, 40 financial, 40 utilities and 20 transportation stocks.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 90.7%
<TABLE>
SHARES VALUE+
------ -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 3.7%
GenCorp Inc. ............................................. 61,000 $ 1,856,687
Lockheed Martin Corp. .................................... 1,540 171,518
Raytheon Co., Class A..................................... 1,166 64,349
-----------
2,092,554
-----------
AUTOMOTIVE - 3.9%
Ford Motor Corp. ......................................... 26,770 1,226,401
TRW, Inc. ................................................ 19,400 1,024,562
-----------
2,250,963
-----------
BASIC RESOURCES - 3.9%
Phelps Dodge Corp. ....................................... 15,370 1,031,711
USX-US Steel Group, Inc. ................................. 30,000 1,173,750
-----------
2,205,461
-----------
BEVERAGES, FOOD & TOBACCO - 1.6%
UST, Inc. ................................................ 32,500 895,781
-----------
CAPITAL EQUIPMENT - 7.2%
AGCO Corp. ............................................... 34,300 917,525
Cincinnati Milacron, Inc. ................................ 43,400 1,348,112
Kennametal, Inc. ......................................... 18,200 970,288
Parker-Hannifin Corp. .................................... 18,910 843,859
-----------
4,079,784
-----------
CHEMICALS - 2.0%
*FMC Corp. ............................................... 14,500 1,124,656
-----------
CONSUMER NON-DURABLES - 2.0%
Guilford Mills, Inc. ..................................... 40,480 1,143,560
-----------
ENERGY - 9.5%
Atlantic Richfield Co. ................................... 7,020 547,560
Equitable Resources, Inc. ................................ 36,500 1,186,250
Tidewater, Inc. .......................................... 33,200 1,315,550
Union Pacific Resources Group, Inc. ...................... 48,000 1,146,000
YPF S.A. ADR.............................................. 35,000 1,220,625
-----------
5,415,985
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
SHARES VALUE+
------- -----------
<S> <C> <C>
FINANCIAL SERVICES - 14.5%
Associates First Capital Corp., Class A.................. 7,016 $ 524,446
BankAmerica Corp. ....................................... 12,120 1,030,200
Chase Manhattan Corp. ................................... 5,730 793,963
Comerica, Inc. .......................................... 17,000 1,137,938
First Union Corp. ....................................... 20,380 1,230,442
Morgan Stanley Dean Witter & Co. ........................ 18,000 1,419,750
NationsBank Corp. ....................................... 13,500 1,022,625
*Omega Worldwide, Inc. .................................. 11,106 93,707
Republic New York Corp. ................................. 7,790 1,041,912
-----------
8,294,983
-----------
HEALTH CARE - 2.8%
*Wellpoint Health Networks, Inc. ........................ 22,000 1,586,750
-----------
INSURANCE - 3.1%
TIG Holdings, Inc. ...................................... 31,000 745,938
Torchmark Corp. ......................................... 22,900 1,020,481
-----------
1,766,419
-----------
MINING - 2.7%
De Beers Centenary AG ADR................................ 60,000 1,530,000
-----------
REAL ESTATE INVESTMENT TRUSTS - 8.6%
Omega Healthcare Investors, Inc. ........................ 33,500 1,164,125
Pacific Gulf Properties, Inc. ........................... 46,800 1,029,600
Rouse Co. ............................................... 43,600 1,346,150
United Dominion Realty Trust, Inc. ...................... 101,000 1,369,812
-----------
4,909,687
-----------
RETAIL - 5.9%
Dillard's Inc., Class A.................................. 27,800 1,018,175
J.C. Penney Co., Inc. ................................... 14,400 1,023,300
*Toys "R" US, Inc. ...................................... 47,500 1,309,219
-----------
3,350,694
-----------
TECHNOLOGY - 9.8%
Hewlett-Packard Co. ..................................... 2,980 224,431
International Business Machines Corp. ................... 9,960 1,154,115
Nokia Corp. ADR.......................................... 14,000 936,250
Philips Electronics N.V. ................................ 22,600 2,034,000
*Seagate Technology...................................... 46,536 1,241,930
-----------
5,590,726
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TRANSPORTATION - 5.7%
Burlington Northern, Inc. ............................ 12,400 $ 1,227,600
Delta Air Lines, Inc. ................................ 17,300 2,011,125
-----------
3,238,725
-----------
UTILITIES - 3.8%
Consolidated Edison of New York....................... 29,200 1,321,300
Edison International.................................. 29,200 870,525
-----------
2,191,825
-----------
TOTAL COMMON STOCKS (Cost $42,417,114)................ 51,668,553
-----------
SHORT TERM INVESTMENTS - 8.7%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 8.7%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $4,927,735,
collateralized by $4,295,921 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-11/15/27,
valued at $4,982,992 (Cost $4,927,000)............... $4,927,000 4,927,000
-----------
TOTAL INVESTMENTS - 99.4% (Cost $47,344,114)(a)....... 56,595,553
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.6%............. 368,292
-----------
NET ASSETS - 100%..................................... $56,963,845
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $47,344,114. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$9,251,439. This consisted of aggregate gross unrealized appreciation for
all securities of $10,514,159 and aggregate gross unrealized depreciation
for all securities of $1,262,720.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.......................................... $47,344,114
===========
Investments, at Value......................................... $56,595,553
Cash.......................................................... 2,571
Receivable for Investments Sold............................... 257,887
Dividends Receivable.......................................... 108,058
Receivable for Shares Sold.................................... 40,414
Interest Receivable........................................... 735
Other Assets.................................................. 224
-----------
Total Assets................................................. 57,005,442
-----------
LIABILITIES
Payable for Investment Advisory Fees -- Note B................ 22,313
Payable for Administrative Fees -- Note C..................... 8,555
Payable for Custodian Fees -- Note D.......................... 4,129
Payable for Directors' Fees -- Note G......................... 584
Other Liabilities............................................. 6,016
-----------
Total Liabilities............................................ 41,597
-----------
NET ASSETS.................................................... $56,963,845
===========
NET ASSETS CONSIST OF:
Paid in Capital............................................... $45,360,656
Undistributed Net Investment Income........................... 247,300
Accumulated Net Realized Gain................................. 2,104,450
Unrealized Appreciation....................................... 9,251,439
-----------
NET ASSETS.................................................... $56,963,845
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)...................................... 2,844,780
Net Asset Value, Offering and Redemption Price Per Share...... $20.02
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
FOR THE SIX MONTHS ENDED APRIL 30,
1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends......................................................... $ 696,826
Interest.......................................................... 80,039
----------
Total Income..................................................... 776,865
----------
EXPENSES
Investment Advisory Fees -- Note B................................ 160,410
Administrative Fees -- Note C..................................... 54,340
Shareholder Servicing Fees........................................ 14,172
Account Services Fees -- Note F................................... 8,808
Registration and Filing Fees...................................... 7,299
Printing Fees..................................................... 6,713
Audit Fees........................................................ 6,649
Custodian Fees -- Note D.......................................... 2,905
Directors' Fees -- Note G......................................... 1,429
Other Expenses.................................................... 3,869
Account Services Fees Waived -- Note F............................ (8,808)
Investment Advisory Fees Waived -- Note B......................... (26,017)
----------
Net Expenses Before Expense Offset............................... 231,769
Expense Offset -- Note A.......................................... (510)
----------
Net Expenses After Expense Offset................................ 231,259
----------
NET INVESTMENT INCOME............................................. 545,606
----------
NET REALIZED GAIN ON INVESTMENTS.................................. 2,106,006
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS...................................................... 3,851,216
----------
NET GAIN ON INVESTMENTS........................................... 5,957,222
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............. $6,502,828
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 545,606 $ 456,750
Net Realized Gain............................... 2,106,006 1,008,509
Net Change in Unrealized
Appreciation/Depreciation...................... 3,851,216 3,935,992
------------ ------------
Net Increase in Net Assets Resulting from
Operations..................................... 6,502,828 5,401,251
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (406,031) (352,820)
Net Realized Gain............................... (995,911) (795,840)
------------ ------------
Total Distributions............................. (1,401,942) (1,148,660)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 11,295,103 34,636,573
In Lieu of Cash Distributions................... 1,342,734 1,125,401
Redeemed........................................ (7,373,094) (1,284,354)
------------ ------------
Net Increase from Capital Share Transactions.... 5,264,743 34,477,620
------------ ------------
Total Increase.................................. 10,365,629 38,730,211
NET ASSETS:
Beginning of Period............................. 46,598,216 7,868,005
------------ ------------
End of Period (including undistributed net
investment income of $247,300 and $107,725,
respectively).................................. $ 56,963,845 $ 46,598,216
============ ============
(1) Shares Issued and Redeemed:
Shares Issued................................... 612,328 2,009,663
In Lieu of Cash Distributions................... 73,617 75,945
Shares Redeemed................................. (391,447) (78,219)
------------ ------------
294,498 2,007,389
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS OCTOBER 1,
ENDED YEARS ENDED OCTOBER 31, 1993*** TO
APRIL 30, 1998 -------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 18.27 $ 14.49 $ 12.14 $10.41 $ 9.94 $10.00
------- ------- ------- ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.19 0.28 0.30 0.26 0.20 0.01
Net Realized and
Unrealized Gain
(Loss)................ 2.09 4.74 2.76 1.75 0.45 (0.07)
------- ------- ------- ------ ------ ------
Total from Investment
Operations............ 2.28 5.02 3.06 2.01 0.65 (0.06)
------- ------- ------- ------ ------ ------
DISTRIBUTIONS
Net Investment Income.. (0.15) (0.25) (0.28) (0.26) (0.18) --
Net Realized Gain...... (0.38) (0.99) (0.43) (0.02) -- --
------- ------- ------- ------ ------ ------
Total Distributions.... (0.53) (1.24) (0.71) (0.28) (0.18) --
------- ------- ------- ------ ------ ------
NET ASSET VALUE, END OF
PERIOD................. $ 20.02 $ 18.27 $ 14.49 $12.14 $10.41 $ 9.94
======= ======= ======= ====== ====== ======
TOTAL RETURN+........... 12.76%** 36.98% 26.23% 19.62% 6.63% (0.60)%**
======= ======= ======= ====== ====== ======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $56,964 $46,598 $ 7,868 $6,865 $3,659 $1,977
Ratio of Expenses to
Average Net Assets..... 0.90%* 0.90% 0.90% 0.92% 0.90% 0.90%*
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... 2.12%* 1.91% 2.30% 2.44% 2.15% 1.06%*
Portfolio Turnover
Rate................... 21% 31% 57% 37% 17% 11%
Average Commission Rate
#...................... $0.0585 $0.0599 $0.0661 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.14%* 0.37% 1.82% 1.49% 2.29% 6.08%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.90%* 0.90% 0.90% 0.90% N/A N/A
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain expenses not been waived and
expenses assumed by the Adviser during the period.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The ICM
Equity Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Portfolio is to provide maximum, long-term total return consistent with
reasonable risk to principal, by investing primarily in common stocks of
relatively large companies measured in terms of revenues, assets and market
capitalization.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made. Price information on listed securities is taken from
the exchange where the security is primarily traded. Unlisted securities
are valued at the current bid prices. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are valued
at amortized cost, if it approximates market value. The value of other
assets and securities for which no quotations are readily available is
determined in good faith at fair value using methods determined by the
Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in
11
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
satisfaction of the obligation. In the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
recognition of income.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income for the purpose of calculating net
investment income per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio have been increased to include expense offsets for
custodian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Investment Counselors of Maryland, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio for a monthly fee calculated at an annual
rate of 0.625% of average daily net assets for the month. The Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses,
12
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
if necessary, in order to keep the Portfolio's total annual operating
expenses, after the effect of expense offset arrangements, from exceeding
0.90% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee at an annual rate
of 0.06% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund
Services, Inc. earned $54,340 from the Portfolio as Administrator of which
$38,941 was paid to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the
13
<PAGE>
UAM FUNDS ICM EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
Service Provider is entitled to receive, after the end of each month, a fee at
the annual rate of 0.15% of the average aggregate daily net asset value of
shares of the UAM Funds in the accounts for which they provide services. The
Service Provider has voluntarily agreed to waive its fees in order to keep the
Portfolio's total annual operating expenses, after the effect of expense
offset arrangements, from exceeding 0.90% of average daily net assets.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $12,104,465 and sales of $10,290,808 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government securities.
I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the six months
ended April 30, 1998, the Portfolio had no borrowings under the agreement.
J. OTHER: At April 30, 1998, 49% of total shares outstanding were held by 3
record shareholders owning 10% or greater of the aggregate total shares
outstanding.
14
<PAGE>
UAM Funds ICM Equity Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed
to others only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
ICM Fixed Income Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 5
Statement of Assets and Liabilities......................................... 11
Statement of Operations..................................................... 12
Statement of Changes in Net Assets.......................................... 13
Financial Highlights........................................................ 14
Notes to Financial Statements............................................... 15
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholders:
Performance results for the ICM Fixed Income Portfolio are shown below. For
the semi-annual period ended April 30, 1998, the Portfolio returned 3.26%
versus 3.59% for the Lehman Brothers Aggregate Index. Performance is presented
after investment advisory and administration fees.
PERFORMANCE--ALL PERIODS ENDED APRIL 30, 1998
<TABLE>
<CAPTION>
3 MONTH 6 MONTH
------- -------
<S> <C> <C>
ICM Fixed Income Portfolio...................................... .47% 3.26%
Lehman Brothers Aggregate Index................................. .79% 3.59%
</TABLE>
THE FIXED INCOME MARKET--SEMI-ANNUAL REVIEW. Returns for the semi-annual
period ended April 30, 1998, are composed mostly of earned coupon interest. A
generally quiet bond market resulted in only modest increases in bond prices.
Only long-term interest rates posted a material decline during the semi-annual
period, and most of the change occurred last fall in response to the initial
Asian financial shock. Stable Federal Reserve policy contributed to little
variance in short-term interest rates. During the semi-annual period ended
April 30, 1998, yields on the U.S. Treasury 30-year bond fell from 6.15% to
5.95%, while the yield on the U.S. Treasury 2-year note declined only slightly
from 5.61% to 5.57%.
Two very powerful market forces are defining boundaries for the yield on the
U.S. Treasury 30-year bond. Keeping a lid on interest rates is low inflation,
which, according to the March CPI, is running at a 1.4% annual rate. As
interest rates climb above 6%, the 4.6% premium above current inflation, or
the real yield, represents compelling value. Market rallies that push rates
lower, however, provoke a different market force that keeps a floor under the
market at 5.75%. Our recent experience has demonstrated that lower rates
stimulate the U.S. economy quickly. Savings from residential mortgage
refinancings, for example, translate into additional consumer spending. Lower
rates also stimulate corporate debt issuance, which is used to finance capital
spending. Fueling an economy operating at low levels of unemployment worries
the inflation-watching Federal Reserve Board. Bond investors, acting on
concerns that the Fed will quickly counter economic stimulus by hiking short-
term interest rates, continue to sell into market rallies.
MARKET SECTOR REVIEW. With few exceptions, securities providing additional
yield above U.S. Treasuries, such as corporates and mortgages, led the returns
of the Lehman Brothers Aggregate Index for the semi-annual period ended April
30, 1998. Relatively low volatility allowed mortgages to outperform comparable
duration Treasuries by over 40 basis points. Corporate returns were not as
1
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
impressive, but they managed to exceed comparable duration Treasuries by 9
basis points. Asset-backed securities never quite recovered the -47 basis
points lost during November, 1997, and underperformed comparable duration
Treasuries by 13 basis points during the six month period ended April 30,
1998. Disparate duration-adjusted returns reflect the fact that the rewards
for assuming different types of risks were not uniform. Mortgage investors
received the most reward for assuming prepayment risk, corporate investors
improved their performance only slightly by assuming credit risk and asset-
backed buyers, particularly in November, were better off avoiding structured
transactions and owning Treasuries.
Foreign bonds produced mixed results on a currency-hedged basis when compared
to the U.S. bond market. According to Lehman Brothers, lower rates in Japan,
Australia and Canada helped bonds in those countries outperform the U.S.
Treasury Index during the semi-annual period ended April 30, 1998. Returns on
U.S. Treasury Index, however, exceeded currency-hedged returns in Germany,
France and the United Kingdom.
THE ICM FIXED INCOME PORTFOLIO OVERVIEW. Adding value to the ICM Fixed Income
Fixed Portfolio during the semi-annual period ended April 30, 1998, proved
difficult. Narrow corporate credit spreads above Treasuries afforded few
opportunities to boost the yield of the Portfolio substantially. Low
volatility also made positioning the Portfolio for changes in interest rates
less fruitful. Several actions, however, contributed to the relative
performance of the Portfolio for the period ended April 30, 1998. Our mortgage
exposure and positions in closed-end bond funds produced solid results. For
example, our 4.4% allocation to closed-end bond funds delivered 3.64% return
over the semi-annual period ended April 30, 1998.
Efforts to enhance returns, however, were offset by several allocations that
hurt the relative returns during the semi-annual period ended April 30, 1998.
Despite relatively stable nominal yields, Treasury Inflation-Protected
Securities (TIPS) have drifted lower in price as investor expectations of
inflation have diminished. In addition, a purchase of US Dollar denominated
Korea paper hurt the relative performance of the Portfolio, as well.
Substantial credit spread widening on AA rated Korea Development Bank
following October's wave of negative Asian news presented, we believed, a
buying opportunity. Further market turbulence, however, led to rapid credit
deterioration, which resulted in rating agency downgrades on Korea to high
yield or junk status. These actions forced us to liquidate the position at
distressed prices during December. A partial hedge of the position using put
option on Japanese Yen mitigated the damage, but overall Portfolio performance
was negatively impacted by 28 basis points.
2
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
DERIVATIVE SECURITIES. The Portfolio uses the following derivative
instruments: Exchange Traded Futures, Exchange Traded Options, Collateralized
Mortgage Obligations (CMOs) and Mortgage Pass-through Securities. Net
positions in exchange traded futures as of April 30, 1998, represent 6.6% of
the market value of the Portfolio. The purchase of ten U.S. bond futures
composes less than 1% of the Portfolio and provides market exposure to our
cash position. The purchase of ten French 10 year bonds, which increases the
foreign exposure of the Portfolio by 2.8%, offers 144 basis points of dollar-
hedged yield spread above comparable duration U.S. Treasuries. Our allocation
to mortgage-backed securities as of April 30, 1998, is 31.2%. Mortgage Pass-
through Securities and CMO holdings compose 20.8% and 8.9% of the Portfolio,
respectively. These high quality securities provide a solid yield component to
the Portfolio.
The Portfolio held the following exchange traded options on April 30, 1998.
The Portfolio has the right to purchase ten U.S. Treasury bond futures at a
price of 121 before May 15, 1998. This position, representing less than 1% of
the Portfolio, will add value in an environment where U.S. Treasury bonds
interest rates decline.
OUTLOOK. In the near-term, we believe the U.S. Treasury 30-year bond yield
will remain in a trading band of between 6.10% and 5.70%. Although the Asian
crisis has improved the outlook for continued low inflation, the U.S. economy
is growing at a pace strong enough to keep the Fed on edge. Employment growth,
which averaged over 200,000 jobs during the quarter ended March 31, 1998,
cannot be sustained without triggering concerns about wage inflation.
We will remain slightly overweight to changes in interest rates as low
inflation currently makes real yields in the U.S. attractive. Nevertheless, we
will focus more of our attention on increasing the yield of the Portfolio as a
means to add value. We are determined to achieve this goal without
compromising our commitment to holding securities with high quality and
liquidity.
Respectively submitted,
LOGO
Dan Shackelford, CFA
3
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
DEFINITION OF THE COMPARATIVE INDEX
-----------------------------------
The returns for the UAM Fund-ICM Fixed Income Portfolio are net of all fees
and expenses.
The Lehman Brothers Aggregate Index is an unmanaged fixed income market value-
weighted index that combines the Lehman Brothers Government/Corporate index
and the Lehman Brothers Mortgage-Backed Securities Index. It includes fixed
rate issues of investment grade (BBB) or higher, with maturities of at least
one year and outstanding par values of at least $100 million for the U.S.
Government issues and $25 million for others.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
4
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS AND NOTES - 23.2%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
--------- -----------
<S> <C> <C>
BANKS - 1.8%
First National Bank of Commerce 6.50%, 1/14/00 ......... $ 350,000 $ 353,176
#State Street Institution Capital Securities,
Series A 7.94%, 12/30/26............................... 250,000 266,875
-----------
620,051
-----------
FINANCIAL SERVICES - 9.8%
American General Finance 8.125%, 8/15/09 ............... 250,000 282,812
Commercial Credit Corp. 8.70%, 6/15/09.................. 100,000 117,875
*Dean Witter Discover 5.543%, 3/2/99 ................... 15,000 15,028
Ford Motor Credit Corp. 6.70%, 8/2/00................... 250,000 253,750
Ford Motor Credit Corp. 7.00%, 9/25/01.................. 500,000 514,375
General Electric Capital Corp. 8.85%, 4/1/05............ 450,000 520,312
General Motors Acceptance Corp. 8.875%, 6/1/10.......... 50,000 59,688
#Jefferson-Pilot Capital Trust A, 8.14%, 1/15/46........ 300,000 318,630
Lehman Brothers Holdings 6.90%, 1/29/01................. 250,000 254,540
Morgan Stanley Dean Witter & Co. 6.09%, 3/9/11.......... 500,000 500,000
Norwest Financial, Inc. 6.20%, 2/15/01.................. 350,000 351,313
U.S. West Capital, Inc. 8.40%, 9/15/99.................. 100,000 102,869
-----------
3,291,192
-----------
INDUSTRIAL - 7.9%
American Home Products 7.70%, 2/15/00 .................. 250,000 257,188
Boston Scientific Corp. 6.625%, 3/15/05................. 300,000 301,500
Dow Chemical Co. 8.55%, 10/15/09........................ 25,000 29,563
EG & G, Inc. 6.80%, 10/15/05............................ 200,000 204,280
IBM Corp. 6.15%, 12/11/98............................... 500,000 501,450
Ingersoll-Rand Co. 6.58%, 12/5/05....................... 500,000 504,375
Martin Marietta 6.50%, 4/15/03.......................... 300,000 304,500
Martin Marietta Materials, Inc. 6.90%, 8/15/07.......... 500,000 518,750
Weyerhaeuser Co. 9.05%, 2/1/03.......................... 50,000 55,562
-----------
2,677,168
-----------
TRANSPORTATION - 1.4%
Federal Express ETC 7.50%, 1/15/18 ..................... 297,452 321,040
Ryder System, Inc. 7.30%, 10/30/00...................... 150,000 153,975
-----------
475,015
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
UTILITIES - 2.3%
Baltimore Gas & Electric 6.73%, 6/12/12 ............. $ 250,000 $ 263,025
Bell Atlantic Corp. 6.30%, 12/16/02.................. 500,000 504,150
-----------
767,175
-----------
TOTAL CORPORATE BONDS AND NOTES (Cost $7,613,404)............... 7,830,601
-----------
ASSET-BACKED SECURITY - 1.5%
Chase Manhattan Auto Owner Trust, Series 1998-B,
Class A4 5.80%, 2/17/03 (Cost $499,453)............. 500,000 498,250
-----------
YANKEE BOND - 0.5%
InterAmerica Development Bank 8.40%, 9/1/09
(Cost $155,451)..................................... 150,000 178,875
-----------
U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH SECURITIES - 20.8%
FEDERAL HOME LOAN MORTGAGE CORP. - 4.4%
Pool #E48794
15 yr. Guarantee 6.50%, 7/1/08...................... 191,059 192,910
Pool #E00292
Gold 6.50%, 4/1/09 ................................. 330,387 333,898
Pool #E64395
15 yr. Guarantee 7.00%, 6/1/11...................... 369,719 378,269
Pool #277196
8.00%, 8/1/16....................................... 1,416 1,487
*Pool #845640
7.815%, 8/1/23 ..................................... 153,435 156,918
Pool #C00449
7.00%, 3/1/26 ...................................... 425,439 432,219
-----------
1,495,701
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.7%
Pool #81817
9.50%, 8/1/02 ...................................... 5,952 6,279
Pool #232847
7.00%, 8/1/08 ...................................... 132,935 135,967
Pool #50904
6.00%, 10/1/08 ..................................... 184,216 182,547
Pool #232361
6.00%, 10/1/08 ..................................... 54,580 54,085
Pool #264441
6.00%, 1/1/09 ...................................... 59,964 59,421
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH SECURITIES-CONTINUED
FEDERAL NATIONAL MORGAGE ASSOCIATION - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Pool #420565
7.00%, 1/1/10 ......................................... $ 396,106 $ 401,255
Pool #250498
6.50%, 3/1/11 ......................................... 236,580 238,502
Pool #346544
7.00%, 5/1/11 ......................................... 319,487 326,775
Pool #50013
9.50%, 10/1/17 ........................................ 2,532 2,721
Pool #55343
9.50%, 10/1/17 ........................................ 2,025 2,180
Pool #50993
7.00%, 2/1/24 ......................................... 535,467 543,834
Pool #298034
8.00%, 11/1/24 ........................................ 178,913 186,069
Pool #322345
7.50%, 9/1/25 ......................................... 406,692 419,020
Pool #330297
7.00%, 11/1/25 ........................................ 372,921 378,515
-----------
2,937,170
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 7.7%
Pool #7414
7.25%, 7/15/05 ........................................ 8,431 8,711
Pool #17084
8.00%, 9/15/07 ........................................ 18,093 19,026
Pool #20335
8.00%, 10/15/07 ....................................... 23,849 24,706
Pool #327371
7.00%, 2/15/08 ........................................ 192,640 197,998
Pool #780159
8.00%, 4/15/08 ........................................ 296,874 314,366
Pool #362234
7.00%, 3/15/09 ........................................ 203,390 209,046
Pool #400216
7.00%, 4/15/09 ........................................ 199,373 204,918
Pool #40824
12.50%, 7/15/10 ....................................... 11,454 13,343
Pool #109599
12.00%, 1/15/14 ....................................... 37,352 42,791
Pool #311575
7.50%, 2/15/23 ........................................ 538,784 557,304
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH SECURITIES-CONTINUED
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ----------
<S> <C> <C>
Pool #387161
7.50%, 10/15/25 ...................................... $ 256,882 $ 265,391
Pool #405183
7.50%, 11/15/25 ...................................... 287,036 296,454
Pool #423836
8.00%, 8/15/26 ....................................... 415,664 432,680
----------
2,586,734
----------
TOTAL U.S. GOVERNMENT AGENCY MORTGAGE PASS-THROUGH SECURITIES
(Cost $6,853,277)................................................ 7,019,605
----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 8.9%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.1%
Series 1544-E PAC(11) REMIC 6.25%, 6/15/08 ............ 200,000 200,644
Series 1577 CL PH PAC-1(11) REMIC 6.30%, 3/15/23 ...... 500,000 500,293
----------
700,937
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.0%
Series 1993-194 CL PG PAC(11) REMIC 5.65%, 4/25/05..... 350,000 348,132
Series 1993-71 CL PG PAC(11) REMIC 6.25%, 7/25/07 ..... 400,000 401,021
Series 1996-M5 CL A1 REMIC 7.141%, 6/25/08 ............ 233,234 239,904
Series 1991 21-H PAC REMIC 7.00%, 12/25/19 ............ 17,997 17,957
Series G92-15 CL G PAC(11) REMIC 7.00%, 4/25/20 ....... 545,000 550,259
Series G19-H PAC REMIC 8.40%, 6/25/20 ................. 198,684 202,816
Series G92-19K PAC(11) REMIC 7.50%, 12/25/20........... 250,000 253,065
----------
2,013,154
----------
OTHER - 0.8%
Merrill Lynch Mortgage Investors, Inc. Series 1998-C1
CL A1
6.31%, 11/15/26....................................... 278,742 279,355
----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $2,970,562)....... 2,993,446
----------
U.S. GOVERNMENT SECURITIES - 32.5%
U.S. TREASURY BONDS - 12.9%
12.75%, 11/15/10....................................... 25,000 35,412
7.50%, 11/15/16........................................ 3,225,000 3,753,674
7.125%, 2/15/23........................................ 500,000 569,205
----------
4,358,291
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES - CONTINUED
<TABLE>
<CAPTION>
FACE AMOUNT VALUE+
----------- -----------
<S> <C> <C>
U.S. TREASURY NOTES - 19.6%
6.875%, 8/31/99..................................... $ 1,600,000 $ 1,626,720
@5.50%, 4/15/00..................................... 100,000 99,887
6.25%, 5/31/00...................................... 1,000,000 1,012,940
++3.625%, 7/15/02................................... 1,010,830 999,458
5.75%, 11/30/02..................................... 1,700,000 1,705,321
7.25%, 8/15/04...................................... 150,000 162,043
6.50%, 10/15/06..................................... 500,000 524,130
++3.375%, 1/15/07................................... 510,900 494,771
-----------
6,625,270
-----------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $10,537,597)............. 10,983,561
-----------
CLOSED-END INVESTMENT COMPANIES - 4.1%
<CAPTION>
SHARES
-----------
<S> <C> <C>
Blackrock 1998 Term Trust........................... 2,800 27,300
Blackrock 1999 Term Trust........................... 30,000 283,125
Blackrock 2001 Term Trust........................... 60,000 517,500
Blackrock Target Term Trust......................... 60,000 566,250
-----------
TOTAL CLOSED-END INVESTMENT COMPANIES (Cost $1,343,745) ........ 1,394,175
-----------
PURCHASED OPTIONS - 0.0%
<CAPTION>
NO. OF
CONTRACTS
-----------
<S> <C> <C>
U.S. Treasury 3 Month Bond, expiring 6/30/98,
strike price $121.00 (Cost $2,575) ................ 10 4,688
-----------
SHORT-TERM INVESTMENT - 0.8%
<CAPTION>
FACE AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENT - 0.8%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $270,040,
collateralized by $235,417 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-11/15/27,
valued at $273,068 (Cost $270,000)................. $ 270,000 270,000
-----------
TOTAL INVESTMENTS - 92.3% (Cost $30,246,064) (a)................ 31,173,201
-----------
OTHER ASSETS AND LIABILITIES (NET) - 7.7%....................... 2,615,066
-----------
NET ASSETS - 100%............................................... $33,788,267
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
+
See Note A to Financial Statements.
++
Par amount is indexed to inflation rate.
*
Variable/Floating rate security--rate disclosed is as of April 30,
1998.
#
144A Security--Certain conditions for public sale may exist.
@
All, or a portion of these shares, were pledged to cover initial
margin requirements on open futures contracts.
ETC
Equipment Trust Certificates
PAC
Planned Amortization Class
REMIC
Real Estate Mortgage Investment Conduit
(a)
The cost for federal income tax purposes was $30,246,064. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $927,137. This consisted of aggregate gross unrealized
appreciation for all securities of $964,632 and aggregate gross
unrealized depreciation for all securities of $37,495.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.......................................... $30,246,064
===========
Investments, at Value......................................... $31,173,201
Cash.......................................................... 3,087
Receivable for Shares Sold.................................... 2,214,132
Interest Receivable........................................... 417,652
Receivable for Daily Variation on Futures Contracts........... 18,173
Receivable from Investment Adviser--Note B.................... 1,466
Other Assets.................................................. 332
-----------
Total Assets................................................. 33,828,043
-----------
LIABILITIES
Payable for Custodian Fees--Note D............................ 12,645
Payable for Administrative Fees--Note C....................... 8,057
Payable for Directors' Fees--Note F........................... 617
Payable for Printing Fees..................................... 11,906
Other Liabilities............................................. 6,551
-----------
Total Liabilities............................................ 39,776
-----------
NET ASSETS.................................................... $33,788,267
===========
NET ASSETS CONSIST OF:
Paid in Capital............................................... $32,733,345
Undistributed Net Investment Income........................... 214,162
Accumulated Net Realized Loss................................. (73,215)
Unrealized Appreciation....................................... 913,975
-----------
NET ASSETS.................................................... $33,788,267
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 50,000,000)...................................... 3,193,649
Net Asset Value, Offering and Redemption Price Per Share...... $10.58
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Interest............................................................ $ 963,934
Dividends........................................................... 35,159
----------
Total Income....................................................... 999,093
----------
EXPENSES
Investment Advisory Fees--Note B.................................... 78,867
Administrative Fees--Note C......................................... 49,570
Printing Fees....................................................... 10,010
Custodian Fees--Note D.............................................. 8,010
Audit Fees.......................................................... 6,850
Registration and Filing Fees........................................ 5,988
Directors' Fees--Note F............................................. 1,361
Other Expenses...................................................... 3,184
Investment Advisory Fees Waived--Note B............................. (78,867)
Expenses Assumed by the Adviser--Note B............................. (5,857)
----------
Net Expenses Before Expense Offset................................. 79,116
Expense Offset--Note A.............................................. (226)
----------
Net Expenses After Expense Offset.................................. 78,890
----------
NET INVESTMENT INCOME............................................... 920,203
----------
NET REALIZED GAIN (LOSS):
Investments........................................................ (16,485)
Futures Contracts.................................................. 57,844
----------
TOTAL NET REALIZED GAIN ............................................ 41,359
----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION:
Investments........................................................ 93,108
Futures............................................................ (17,366)
----------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION............ 75,742
----------
NET GAIN............................................................ 117,101
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $1,037,304
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 920,203 $ 1,744,824
Net Realized Gain................................ 41,359 100,860
Net Change in Unrealized
Appreciation/Depreciation....................... 75,742 554,160
----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 1,037,304 2,399,844
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................ (961,862) (1,729,486)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 4,547,144 6,306,694
In Lieu of Cash Distributions.................... 775,978 1,451,047
Redeemed......................................... (2,728,991) (1,667,639)
----------- -----------
Net Increase from Capital Share Transactions..... 2,594,131 6,090,102
----------- -----------
Total Increase................................... 2,669,573 6,760,460
NET ASSETS:
Beginning of Period.............................. 31,118,694 24,358,234
----------- -----------
End of Period (including undistributed net
investment income of $214,162 and $255,821,
respectively)................................... $33,788,267 $31,118,694
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued.................................... 429,979 611,727
In Lieu of Cash Distributions.................... 73,833 140,942
Shares Redeemed.................................. (256,951) (157,979)
----------- -----------
246,861 594,690
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS NOVEMBER 3,
ENDED YEARS ENDED OCTOBER 31, 1992** TO
APRIL 30, 1998 ---------------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 10.56 $ 10.36 $ 10.43 $ 9.55 $ 10.58 $ 10.00
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.30 0.62 0.59 0.59 0.52 0.51
Net Realized and
Unrealized Gain
(Loss)................ 0.04 0.21 (0.07) 0.82 (0.98) 0.51
------- ------- ------- ------- ------- -------
Total from Investment
Operations............ 0.34 0.83 0.52 1.41 (0.46) 1.02
------- ------- ------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.32) (0.63) (0.59) (0.53) (0.48) (0.44)
Net Realized Gain...... -- -- -- -- (0.09) --
------- ------- ------- ------- ------- -------
Total Distributions.... (0.32) (0.63) (0.59) (0.53) (0.57) (0.44)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 10.58 $ 10.56 $ 10.36 $ 10.43 $ 9.55 $ 10.58
======= ======= ======= ======= ======= =======
TOTAL RETURN+........... 3.26%** 8.31% 5.17% 15.11% (4.43)% 10.38%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $33,788 $31,119 $24,358 $16,765 $12,601 $12,465
Ratio of Expenses to
Average Net Assets..... 0.50%* 0.50% 0.50% 0.63% 0.84% 0.84%*
Ratio of Net Investment
Income to Average Net
Assets................. 5.83%* 6.03% 5.98% 6.04% 5.26% 5.41%*
Portfolio Turnover
Rate................... 21% 34% 46% 49% 82% 65%
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.54%* 0.56% 0.82% 0.77% 0.45% 0.36%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.50%* 0.50% 0.50% 0.61% N/A N/A
</TABLE>
* Annualized
** Not Annualized
+ Total return would have been lower had certain expenses not been waived and
expenses assumed by the Adviser during the period.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The ICM Small
Company Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Portfolio is to provide maximum, long-term total return consistent with
reasonable risk to principal, by investing primarily in investment grade,
fixed income securities of varying maturities.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. The
Portfolio in the preparation of its financial statements consistently follows
such policies. Generally accepted accounting principles may require management
to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results may differ from those
estimates.
1. SECURITY VALUATION: Fixed income securities are stated on the basis
of valuation provided by brokers and/or a pricing service which uses
information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
At April 30, 1998, the Portfolio had available a capital loss carryover
for Federal income tax purposes of $22,494, $381 and $93,355 which will
expire on October 31, 2002 and October 31, 2003, and October 31, 2004,
respectively.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the
15
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
principal amount of the repurchase transaction, including accrued
interest. To the extent that any repurchase transaction exceeds one
business day, the value of the collateral is monitored on a daily basis to
determine the adequacy of the collateral. In the event of default on the
obligation to repurchase, the Portfolio has the right to liquidate the
collateral and apply the proceeds in satisfaction of the obligation. In
the event of default or bankruptcy by the other party to the agreement,
realization and/or retention of the collateral or proceeds may be subject
to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Portfolio
are maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars on the date of valuation. The Portfolio does not isolate that
portion of realized or unrealized gains and losses resulting from changes
in the foreign exchange rate from fluctuations arising from changes in the
market prices of the securities. These gains and losses are included in
net realized and unrealized gain and loss on investments on the statement
of operations. Net realized and unrealized gains and losses on foreign
currency transactions represent net foreign exchange gains or losses from
forward foreign currency exchange contracts, disposition of foreign
currencies, currency gains or losses realized between trade and settlement
dates on securities transactions and the difference between the amount of
the investment income and foreign withholding taxes recorded on the
Portfolio's books and the U.S. dollar equivalent amounts actually received
or paid.
5. FUTURES AND OPTIONS CONTRACTS: The Portfolio may use futures and
options contracts to hedge against changes in the values of securities the
Portfolio owns or expects to purchase. The Portfolio may also write
covered options on securities it owns or in which it may invest to
increase its current returns.
The potential risk to the Portfolio is that the change in value of
futures and options contracts may not correspond to the change in value of
the hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is unable
to perform.
16
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
Futures contracts are valued at the quoted daily settlement prices
established by the exchange on which they trade. Exchange traded options
are valued at the last sale price, or if no sales are reported, the last
bid price for purchased options and the last ask price for written
options.
The Portfolio had the following futures contracts open at April 30,
1998:
<TABLE>
<CAPTION>
U.S. $
FOREIGN AGGREGATE NET UNREALIZED
NUMBER AGGREGATE MARKET EXPIRATION APPRECIATION
CONTRACTS OF CONTRACTS MARKET VALUE VALUE DATE (DEPRECIATION)
--------- ------------ ------------- --------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Purchases:
French 10
Year Bond.. 10 FRF 5,159,000 $858,256 June, 1998 $ (4,256)
U.S. Treasury
20 Year
Bond....... 10 N/A 542,031 June, 1998 (8,906)
--------
$(13,162)
========
</TABLE>
6. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income for the purpose of calculating net
investment income per share in the financial highlights.
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the effective yield
basis over their perspective lives. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Custodian fees for the Portfolio have
been increased to include expense offsets for custodian balance credits,
if any.
17
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Investment Counselors of Maryland, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio for a monthly fee calculated at an annual
rate of 0.50% of average daily net assets for the month. The Adviser has
voluntarily agreed to waive a portion of its advisory fees and to assume
expenses, if necessary, in order to keep the Portfolio's total annual
operating expenses, after the effect of expense offset arrangements, from
exceeding 0.50% of average daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee of 0.04% of
average daily net assets of the Portfolio. The Administrator has entered into
a Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the year ended April 30, 1998, UAM Fund
Services, Inc. earned $49,570 from the Portfolio as Administrator of which
$43,261 was paid to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
18
<PAGE>
UAM FUNDS ICM FIXED INCOME PORTFOLIO
- -------------------------------------------------------------------------------
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
G. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $3,747,945 and sales of $2,454,188 of investment
securities other than long-term U.S. Government and short-term securities.
Purchases and sales of long-term U.S. Government securities were $3,777,717
and $4,121,897, respectively.
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the six months
ended April 30, 1998, the Portfolio had no borrowings under the agreement.
I. OTHER: At April 30, 1998, 28% of total shares outstanding were held by 2
record shareholders owning 10% or greater of the aggregate total shares
outstanding.
19
<PAGE>
UAM FUNDS ICM Fixed Income
Portfolio
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Street
Baltimore, MD 21201
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
ICM Small Company Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 3
Statement of Assets and Liabilities......................................... 9
Statement of Operations..................................................... 10
Statement of Changes in Net Assets.......................................... 11
Financial Highlights........................................................ 12
Notes to Financial Statements............................................... 13
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
Dear Shareholder:
About the only positive thing one can say about small cap stocks during the
last six months is that their absolute return, as measured by the Russell 2000
Index, was quite respectable and equaled what we believed might be achievable
for the entire fiscal year ending October 31, 1998. However, in a relative
sense, small cap stocks lagged far behind large cap stocks represented by the
S&P 500 Index. The ICM Small Company Portfolio managed to eke out a slightly
higher return than its benchmark, the Russell 2000 Index.
<TABLE>
<CAPTION>
TOTAL RETURNS
-----------------------------------------------------
1ST FISCAL QUARTER 2ND FISCAL QUARTER 1ST FISCAL HALF
NOV. 1, 1997- FEB. 1, 1998- NOV. 1, 1997-
JAN. 31, 1998 APRIL 30, 1998 APRIL 30, 1998
------------------ ------------------ ---------------
<S> <C> <C> <C>
ICM SMALL COMPANY
PORTFOLIO............. 0.96% 11.29% 12.36%
Russell 2000 Index...... -0.51% 12.44% 11.88%
S&P 500 Index........... 7.60% 13.85% 22.50%
</TABLE>
The U.S. equity market continues to break through any number of roadblocks
which have arisen over the last six months. The continuing deterioration in
the economies of Japan and much of Southeast Asia appears to have had little,
if any, impact on investors' perception of the risk level of the market. In
fact, the weakness in Southeast Asia is now being looked upon as a positive
event by many of the same people who a year ago cited the region as the growth
engine for the world's economy. The consensus opinion now seems to be that
slow or no growth in Japan and Southeast Asia will keep inflation in check and
interest rates low but will not put much of a crimp in earnings of the big
multinational companies which dominate the S&P 500. We agree with the first
part of this thinking; but we think it is premature to stop worrying about
earnings. We still believe that earnings estimates are too high. It is
difficult for us to see how S&P 500 earnings will grow at the consensus
projection of 15%-20% in the second half of calendar 1998 after a very
sluggish first quarter of about 4% year-over-year earnings growth.
In our opinion, the single most important factor behind the absolute and
relative strength of the S&P 500 is the massive flow of funds into equity
mutual funds from individuals and the apparent significant net buying by
foreign investors of U.S. equities. Both of these trends favor large cap
stocks and their relative strength is not likely to dissipate unless or until
these liquidity factors become more neutral. Small cap stocks appear to offer
significant relative value; but, value is not the primary determinant of stock
prices in today's hyperactive investment environment.
Another emerging trend which seems to favor large cap stocks, is the trend
toward mega-mergers both within and across borders. The search for more cost
cutting
1
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
opportunities in a very low nominal growth environment is the primary driving
force behind these mergers. While merger and takeover activity still exists
within the small cap sector, the impact on the value of the small cap universe
as a whole is far less than that which appears to have occurred in the large
cap sector. The absence of any banks in the Portfolio reflects our belief that
not only are valuations not compelling but also that mergers in the banking
industry will be concentrated among the very large regional and money center
banks. Smaller banks may be casualties of and not the participants in this
consolidation.
Looking forward, we are not ready to abandon our forecast that stocks would
most likely return somewhere near their historic long term average of 12% for
the fiscal year ending October 31, 1998. If we are right about this, it means
that a correction of some significance might occur in the months ahead or that
stock prices will simply level off and drift somewhat lower as earnings
expectations are reduced. This thought process, combined with the increased
difficulty in finding good or great companies whose shares are undervalued in
an absolute sense, accounts for the increase in cash reserves as a percent of
assets to just over 15% of the Portfolio.
Respectfully,
LOGO
Robert D. McDorman, Jr.
Principal Investment Counselors of Maryland
The investment results present in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
This letter is not authorized for distribution unless preceded or accompanied
by a current prospectus. Please read it carefully before you invest or send
money. The ICM Small Company Portfolio is distributed by UAM Fund
Distributors, Inc., 211 Congress Street, Boston, Massachusetts 02110.
DEFINITION OF COMPARATIVE INDICES
---------------------------------
The returns shown for the UAM Fund-ICM Small Company Portfolio are net of all
fees and expenses.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly-traded companies.
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 400
industrial, 40 financial, 40 utilities and 20 transportation stocks.
Comparisons of performance assumes reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
2
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 84.4%
SHARES VALUE+
----------- ------------
<S> <C> <C>
AUTOMOTIVE - 1.7%
Donnelly Corp. .................................... 161,750 $ 3,235,000
*Dorsey Trailers, Inc. ............................. 200,000 775,000
Excel Industries, Inc. ............................ 125,000 2,609,375
*Starcraft Corp. ................................... 90,000 202,500
*Strattec Security Corp. ........................... 150,000 4,500,000
------------
11,321,875
------------
CAPITAL EQUIPMENT - 7.2%
Applied Power, Inc., Class A....................... 120,000 4,485,000
*Astec Industries, Inc. ............................ 130,000 3,835,000
*Avondale Industries, Inc. ......................... 280,000 7,490,000
*BE Aerospace, Inc. ................................ 75,000 2,334,375
CMI Corp., Class A................................. 400,000 3,250,000
*Gradall Industries, Inc. .......................... 250,000 4,312,500
Kennametal, Inc. .................................. 100,000 5,331,250
Owosso Corp. ...................................... 56,500 406,094
Scotsman Industries, Inc. ......................... 150,000 4,293,750
Varlen Corp. ...................................... 255,000 8,861,250
Woodhead Industries, Inc. ......................... 195,000 3,607,500
------------
48,206,719
------------
CHEMICALS - 3.9%
*Applied Extrusion Technologies, Inc. .............. 200,000 1,550,000
Dexter Corp. ...................................... 150,000 6,196,875
Furon Co. ......................................... 300,000 6,281,250
Georgia Gulf Corp. ................................ 131,900 3,388,181
Quaker Chemical Corp. ............................. 100,000 1,981,250
Wynn's International, Inc. ........................ 284,512 6,401,520
------------
25,799,076
------------
CONSTRUCTION - 12.4%
Centex Construction Products, Inc. ................ 300,000 11,025,000
Centex Corp. ...................................... 100,000 3,475,000
*Central Sprinkler Corp. ........................... 24,600 261,375
Granite Construction, Inc. ........................ 250,000 7,390,625
*Griffon Corp. ..................................... 600,000 8,025,000
Juno Lighting, Inc. ............................... 295,000 6,379,375
Martin Marietta Materials, Inc. ................... 150,000 7,040,625
Medusa Corp. ...................................... 61,100 3,757,650
MDC Holdings, Inc. ................................ 500,000 8,593,750
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
----------- ------------
<S> <C> <C>
CONSTRUCTION - CONTINUED
Southdown, Inc. .................................... 200,000 $ 14,150,000
Texas Industries, Inc. ............................. 140,000 9,021,250
*U.S. Home Corp. .................................... 100,000 4,150,000
------------
83,269,650
------------
CONSUMER DURABLES - 3.8%
Aaron Rents, Inc. .................................. 350,000 7,109,375
*Cannondale Corp. ................................... 200,000 3,175,000
*Global Motorsport Group, Inc. ...................... 125,000 2,531,250
*Stanley Furniture Co., Inc. ........................ 75,000 3,450,000
Toro Co. ........................................... 200,000 7,575,000
*Winsloew Furniture, Inc. ........................... 60,000 1,590,000
------------
25,430,625
------------
CONSUMER NON-DURABLES - 1.6%
*CSS Industries, Inc. ............................... 225,000 7,453,125
*Sylvan, Inc. ....................................... 200,000 2,975,000
------------
10,428,125
------------
ENERGY - 4.8%
*Belco Oil & Gas Corp. .............................. 250,000 4,390,625
*Clayton Williams Energy, Inc. ...................... 200,500 2,255,625
*Meridian Resource Corp. ............................ 200,000 1,812,500
*Oceaneering International, Inc. .................... 200,000 4,587,500
*Offshore Logistics, Inc. ........................... 100,000 2,325,000
Penn Virginia Corp. ................................ 150,000 4,453,125
*Seitel, Inc. ....................................... 91,300 1,540,688
*Trico Marine Services, Inc. ........................ 100,000 2,262,500
Trigen Energy Corp. ................................ 150,000 2,062,500
*Tuboscope, Inc. .................................... 50,000 1,184,375
Zeigler Coal Holding Co. ........................... 311,000 5,617,437
------------
32,491,875
------------
ENTERTAINMENT & LEISURE - 1.0%
*Ascent Entertainment Group, Inc. ................... 104,456 1,201,244
*Carmike Cinemas, Inc. Class A....................... 186,500 5,653,281
------------
6,854,525
------------
FINANCIAL SERVICES - 0.0%
*Omega Worldwide, Inc. .............................. 16,577 139,868
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
----------- ------------
<S> <C> <C>
HEALTH CARE - 2.5%
*Bio Rad Labs, Class A............................... 150,000 $ 4,443,750
*Lunar Corp. ........................................ 119,800 2,216,300
*Marquette Medical Systems........................... 100,000 2,662,500
*Sierra Health Services, Inc. ....................... 150,000 5,765,625
*Spacelabs Medical, Inc. ............................ 100,000 1,750,000
------------
16,838,175
------------
INSURANCE - 6.1%
*ACMAT Corp. ........................................ 100,000 1,525,000
Allied Group, Inc. ................................. 187,500 5,601,562
CMAC Investment Corp. .............................. 53,400 3,447,638
Capital Re Corp. ................................... 68,200 5,034,013
LandAmerica Financial Group, Inc. .................. 118,000 6,224,500
Life RE Corp. ...................................... 85,000 6,120,000
*Medical Assurance, Inc. ............................ 74,325 2,201,878
PXRE Corp. ......................................... 160,000 4,820,000
Trenwick Group, Inc. ................................ 163,400 6,250,050
------------
41,224,641
------------
LODGING & RESTAURANTS - 0.6%
*Lone Star Steakhouse & Saloon, Inc. ................ 175,000 3,685,937
------------
MANUFACTURING - 3.1%
Clarcor, Inc. ...................................... 83,250 1,867,922
*Essef Corp. ........................................ 169,400 3,028,025
*Holophane Corp. .................................... 40,000 1,080,000
Hunt Corp. ......................................... 250,000 6,187,500
*Northwest Pipe Co. ................................. 150,000 3,300,000
Smith (A.O.) Corp. ................................. 125,000 5,640,625
------------
21,104,072
------------
METALS - 2.5%
Carpenter Technology Corp. ......................... 100,000 5,806,250
Intermet Corp. ..................................... 150,000 3,093,750
J & L Specialty Steel, Inc. ........................ 225,000 1,828,125
Quanex Corp. ....................................... 150,000 4,396,875
*Steel of West Virginia, Inc. ....................... 125,000 1,375,000
------------
16,500,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
----------- ------------
<S> <C> <C>
PAPER & PACKAGING - 2.7%
*ACX Technologies, Inc. ............................. 200,000 $ 4,775,000
American Business Products, Inc. ................... 220,900 5,108,312
*Fibermark, Inc. .................................... 214,500 4,424,063
Rayonier, Inc. ..................................... 80,000 4,010,000
------------
18,317,375
------------
REAL ESTATE INVESTMENT TRUSTS - 5.1%
CBL & Associates Properties, Inc. .................. 200,000 4,912,500
Healthcare Realty Trust, Inc. ...................... 100,000 2,812,500
Liberty Property Trust.............................. 200,000 5,112,500
Mack-Cali Realty Corp. ............................. 80,000 3,005,000
Mid-Atlantic Realty Trust........................... 200,000 2,800,000
Omega Healthcare Investors, Inc..................... 75,000 2,606,250
Prime Retail, Inc. ................................. 250,000 3,546,875
Shurgard Storage Centers, Inc. ..................... 175,000 4,921,875
Town & Country Trust................................ 100,500 1,739,906
United Dominion Realty Trust, Inc. ................ 225,000 3,051,563
------------
34,508,969
------------
RETAIL - 5.6%
Burlington Coat Factory Warehouse Corp. ............ 67,100 1,300,063
*Finlay Enterprises, Inc. ........................... 175,000 4,725,000
*Lechters, Inc. ..................................... 225,000 1,448,438
*Proffitt's, Inc. ................................... 264,075 10,496,981
*Rex Stores Corp. ................................... 225,000 3,234,375
Ruddick Corp. ...................................... 225,000 4,035,937
*Shopko Stores, Inc. ................................ 350,000 12,118,750
------------
37,359,544
------------
SERVICES - 3.6%
*Ambassadors International, Inc. .................... 99,700 2,991,000
Bowne & Co., Inc. .................................. 160,000 6,610,000
*Devon Group, Inc. .................................. 125,000 7,375,000
*Forensic Technologies International Corp. .......... 100,000 1,750,000
*Guest Supply, Inc. ................................. 175,000 2,537,500
*Unitel Video, Inc. ................................. 120,000 780,000
*VWR Scientific Products Corp. ...................... 65,000 2,096,250
------------
24,139,750
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
----------- ------------
<S> <C> <C>
TECHNOLOGY - 9.4%
AMETEK, Inc. ...................................... 230,000 $ 7,000,625
*BancTec, Inc. ..................................... 325,000 7,089,062
*Bell & Howell Co. ................................. 200,000 5,525,000
C&D Technologies, Inc. ............................ 110,000 6,077,500
*General Scanning, Inc. ............................ 50,000 1,140,625
*Integrated Circuit Systems, Inc. .................. 150,000 2,268,750
*Komag, Inc. ....................................... 75,000 1,157,813
*Lumen Technologies, Inc. .......................... 320,711 3,026,711
*Marshall Industries................................ 150,000 4,865,625
Methode Electronics, Inc., Class A................. 200,000 3,150,000
*Microsemi Corporation.............................. 150,000 2,100,000
National Computer Systems, Inc. ................... 300,000 7,500,000
*Nimbus CD International, Inc. ..................... 350,000 3,675,000
Pioneer Standard Electronics....................... 325,000 4,042,188
Quixote Corp. ..................................... 202,000 2,222,000
*SPACEHAB, Inc. .................................... 225,000 2,503,125
------------
63,344,024
------------
TEXTILES & APPAREL - 2.5%
*Galey & Lord, Inc. ................................ 300,000 7,837,500
Guilford Mills, Inc. .............................. 195,000 5,508,750
Pillowtex Corp. ................................... 24,415 1,225,328
Springs Industries, Inc., Class A.................. 27,000 1,486,687
*Tropical Sportswear International Corp. ........... 40,000 670,000
------------
16,728,265
------------
TRANSPORTATION - 2.6%
ASA Holdings, Inc. ................................ 140,000 5,267,500
Comair Holdings, Inc. ............................. 195,000 5,313,750
Rollins Truck Leasing Corp. ....................... 352,800 4,674,600
USFreightways Corp. ............................... 60,000 2,137,500
------------
17,393,350
------------
UTILITIES - 1.7%
CMS Energy Corp., Class G.......................... 61,100 1,592,419
Comsat Corp. ...................................... 165,000 6,661,875
Public Service Company of North Carolina, Inc. .... 150,000 3,075,000
------------
11,329,294
------------
TOTAL COMMON STOCKS (Cost $367,294,562)........................ 566,415,734
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PREFERRED STOCKS - 0.5%
SHARES VALUE+
----------- ------------
<S> <C> <C>
ENERGY - 0.4%
Belco Oil & Gas Corp. 6.50%, 12/31/49.............. 100,000 $ 2,587,500
------------
INSURANCE - 0.1%
Life RE Capital Trust II 6.00%, 3/15/03 Adjustable
Conversion Rate Equity Security Units............. 7,500 541,406
------------
TOTAL PREFERRED STOCKS (Cost $3,013,992)....................... 3,128,906
------------
CONVERTIBLE BOND - 0.4%
FACE
TECHNOLOGY - 0.4% AMOUNT
-----------
SPACEHAB, Inc. 8.00%, 10/15/07 (Cost $2,190,000)... $ 2,190,000 2,370,675
------------
SHORT-TERM INVESTMENTS - 15.4%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 7.4%
5.40%, 5/29/98..................................... 25,000,000 24,895,000
5.40%, 6/18/98..................................... 25,000,000 24,820,000
------------
49,715,000
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 2.2%
5.35%, 5/5/98...................................... 15,000,000 14,991,000
------------
REPURCHASE AGREEMENT - 5.8%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $38,921,805,
collateralized by $33,931,413 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $39,358,255 .................. 38,916,000 38,916,000
------------
TOTAL SHORT TERM INVESTMENTS (Cost $103,622,084)............... 103,622,000
------------
TOTAL INVESTMENTS - 100.7% (Cost $476,120,638) (a)............. 675,537,315
------------
OTHER ASSETS AND LIABILITIES (NET) - (0.7)%.................... (4,606,913)
------------
NET ASSETS - 100%.............................................. $670,930,402
============
</TABLE>
* See Note A to Financial Statements.
+ Non-Income Producing Security
(a) The cost for federal income tax purposes was $476,120,638. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$199,416,677. This consisted of aggregate gross unrealized appreciation
for all securities of $212,400,974 and aggregate gross unrealized
depreciation for all securities of $12,984,297.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost........................................ $476,120,638
============
Investments, at Value....................................... $675,537,315
Cash........................................................ 678
Receivable for Investments Sold............................. 744,369
Receivable for Portfolio Shares Sold........................ 447,972
Dividends Receivable........................................ 273,991
Interest Receivable......................................... 13,592
Other Assets................................................ 3,397
------------
Total Assets............................................... 677,021,314
------------
LIABILITIES
Payable for Investments Purchased........................... 5,540,465
Payable for Portfolio Shares Redeemed....................... 76,551
Payable for Investment Advisory Fees -- Note B.............. 372,862
Payable for Administrative Fees -- Note C................... 56,678
Payable for Custodian Fees -- Note D........................ 19,530
Payable for Directors' Fees -- Note G....................... 974
Payable for Account Services Fees-- Note F.................. 262
Other Liabilities........................................... 23,590
------------
Total Liabilities.......................................... 6,090,912
------------
NET ASSETS.................................................. $670,930,402
============
NET ASSETS CONSIST OF:
Paid in Capital............................................. $448,592,127
Undistributed Net Investment Income......................... 910,884
Accumulated Net Realized Gain............................... 22,010,714
Unrealized Appreciation..................................... 199,416,677
------------
NET ASSETS.................................................. $670,930,402
============
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value) (Authorized
50,000,000)................................................ 23,176,302
Net Asset Value, Offering and Redemption Price Per Share.... $28.95
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
FOR THE SIX MONTHS ENDEDAPRIL 30, 1998
(UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends........................................................ $ 2,878,013
Interest......................................................... 2,010,600
-----------
Total Income.................................................... 4,888,613
-----------
EXPENSES
Investment Advisory Fees -- Note B............................... 1,955,854
Administrative Fees -- Note C.................................... 360,825
Custodian Fees -- Note D......................................... 18,550
Registration and Filing Fees..................................... 17,989
Legal Fees....................................................... 11,927
Audit Fees....................................................... 7,775
Printing Fees.................................................... 7,302
Directors' Fees -- Note G........................................ 3,798
Account Services Fees -- Note F.................................. 6,962
Other Expenses................................................... 42,226
-----------
Net Expenses Before Expense Offset.............................. 2,433,208
Expense Offset -- Note A......................................... (7,233)
-----------
Net Expenses After Expense Offset .............................. 2,425,975
-----------
NET INVESTMENT INCOME............................................ 2,462,638
-----------
NET REALIZED GAIN ON INVESTMENTS................................. 22,098,042
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON
INVESTMENTS..................................................... 42,175,350
-----------
NET GAIN ON INVESTMENTS.......................................... 64,273,392
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $66,736,030
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 2,462,638 $ 3,963,764
Net Realized Gain............................... 22,098,042 36,350,962
Net Change in Unrealized
Appreciation/Depreciation...................... 42,175,350 105,011,498
------------ ------------
Net Increase in Net Assets Resulting from
Operations..................................... 66,736,030 145,326,224
------------ ------------
DISTRIBUTIONS:
Net Investment Income............................ (2,359,782) (3,327,143)
Net Realized Gain................................ (36,417,577) (17,875,094)
------------ ------------
Total Distributions............................. (38,777,359) (21,202,237)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 114,392,909 142,441,708
In Lieu of Cash Distributions.................... 36,348,251 19,676,534
Redeemed......................................... (26,146,752) (88,847,197)
------------ ------------
Net Increase from Capital Share Transactions.... 124,594,408 73,271,045
------------ ------------
Total Increase.................................. 152,553,079 197,395,032
NET ASSETS:
Beginning of Period............................. 518,377,323 320,982,291
------------ ------------
End of Period (including undistributed net
investment income of $910,884 and $808,028,
respectively).................................. $670,930,402 $518,377,323
============ ============
(1) Shares Issued and Redeemed:
Shares Issued................................ 4,085,959 6,082,066
In Lieu of Cash Distributions................ 1,410,904 939,045
Shares Redeemed.............................. (955,444) (3,882,603)
------------ ------------
4,541,419 3,138,508
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 27.82 $ 20.71 $ 19.04 $ 17.05 $ 18.75 $ 14.96
-------- -------- -------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.12 0.23 0.24 0.16 0.09 0.08
Net Realized and
Unrealized Gain....... 3.06 8.27 2.59 2.70 0.64 4.94
-------- -------- -------- -------- -------- -------
Total from Investment
Operations............ 3.18 8.50 2.83 2.86 0.73 5.02
-------- -------- -------- -------- -------- -------
DISTRIBUTIONS
Net Investment Income.. (0.12) (0.20) (0.24) (0.14) (0.09) (0.07)
Net Realized Gain...... (1.93) (1.19) (0.92) (0.73) (2.34) (1.16)
-------- -------- -------- -------- -------- -------
Total Distributions.... (2.05) (1.39) (1.16) (0.87) (2.43) (1.23)
-------- -------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 28.95 $ 27.82 $ 20.71 $ 19.04 $ 17.05 $ 18.75
======== ======== ======== ======== ======== =======
TOTAL RETURN............ 12.36%** 43.28% 15.62% 17.73% 4.59% 35.20%
======== ======== ======== ======== ======== =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $670,930 $518,377 $320,982 $250,798 $115,761 $81,870
Ratio of Expenses to
Average Net Assets..... 0.87%* 0.89% 0.88% 0.87% 0.93% 0.95%
Ratio of Net Investment
Income to Average Net
Assets................. 0.88%* 0.97% 1.20% 1.02% 0.58% 0.46%
Portfolio Turnover
Rate................... 9% 23% 23% 20% 21% 47%
Average Commission Rate
#...................... $ 0.0596 $ 0.0588 $ 0.0595 N/A N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.87%* 0.88% 0.88% 0.86% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 30, 1995, a portfolio is
required to disclose the average commission rate per share it paid for port-
folio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The ICM Small
Company Portfolio (the "Portfolio"), a portfolio of UAM Funds, Inc., is a
diversified, open-end management investment company. At April 30, 1998, the
UAM Funds were comprised of forty-four active portfolios. The financial
statements of the remaining portfolios are presented separately. The objective
of the Portfolio is to provide maximum, long-term total return consistent with
reasonable risk to principal, by investing primarily in the common stocks of
smaller companies in terms of revenues, assets, and market capitalization.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made. Price information on listed securities is taken from
the exchange where the security is primarily traded. Unlisted securities
are valued at the current bid prices. Short-term investments that have
remaining maturities of sixty days or less at time of purchase are valued
at amortized cost, if it approximates market value. The value of other
assets and securities for which no quotations are readily available is
determined in good faith at fair value using methods determined by the
Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in
13
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
satisfaction of the obligation. In the event of default or bankruptcy by
the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income for the purpose of calculating net
investment income per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolio have been increased to include expense offsets for
custodian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Investment Counselors of Maryland, Inc. (the "Adviser"), a wholly-owned
subsidiary of United Asset Management Corporation ("UAM"), provides investment
advisory services to the Portfolio for a monthly fee calculated at an annual
rate of 0.70% of average daily net assets for the month.
14
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific monthly fee at an annual rate
of 0.04% of average daily net assets of the Portfolio. The Administrator has
entered into a Mutual Funds Service Agreement with Chase Global Funds Services
Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under
which CGFSC agrees to provide certain services, including but not limited to,
administration, fund accounting, dividend disbursing and transfer agent
services. Pursuant to the Mutual Funds Service Agreement, the Administrator
pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM Fund
Services, Inc. earned $360,825 from the Portfolio as Administrator of which
$249,062 was paid to CGFSC for its services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services.
15
<PAGE>
UAM FUNDS ICM SMALL COMPANY PORTFOLIO
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases of $92,864,314 and sales of $46,556,071 of investment
securities other than long-term U.S. Government and short-term securities.
There were no purchases or sales of long-term U.S. Government Securities.
I. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
Capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 1/8th of 1% per annum, payable at the end of
each calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. During the six months
ended April 30, 1998, the Portfolio had no borrowings under the agreement.
16
<PAGE>
UAM Funds ICM Small Company
Portfolio
================================================================================
Officers and Directors
Norton H.Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Investment Counselors of Maryland, Inc.
803 Cathedral Steet
Baltimore, Maryland 21201
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAMFund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS
SEMI-ANNUAL REPORT
------------------------
McKEE PORTFOLIOS
- --------------------------------------------------------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments
U.S. Government........................................................... 10
Domestic Equity........................................................... 13
International Equity...................................................... 16
Small Cap Equity.......................................................... 21
Statement of Assets and Liabilities......................................... 24
Statement of Operations..................................................... 25
Statement of Changes in Net Assets
U.S. Government........................................................... 26
Domestic Equity........................................................... 27
International Equity...................................................... 28
Small Cap Equity.......................................................... 29
Financial Highlights
U.S. Government........................................................... 30
Domestic Equity........................................................... 31
International Equity...................................................... 32
Small Cap Equity.......................................................... 33
Notes to Financial Statements............................................... 34
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
April 30, 1998
MCKEE U.S. GOVERNMENT PORTFOLIO
For the six months ended April 30, 1998, the McKee U.S. Government Portfolio
produced a total return of 2.67 percent. The Portfolio benefited modestly from
changes in duration during the period, but returns were lowered by troubles at
one corporate bond issuer.
Economic Perspective
The economy grew at an annual rate of about 4 percent during the last quarter
of 1997 and the first quarter of 1998. Growth was strong despite the Asian
crisis, which began affecting some manufacturing and export businesses and may
have subtracted as much as one to two percentage points from GDP growth.
Consumer price inflation remained low, at an annualized rate of approximately
1 percent. Falling commodity prices, particularly in the energy sector, as
well as the Asian slowdown and a strong dollar, helped to suppress inflation.
Although wages have been rising, continued U.S. productivity gains helped mit-
igate the effect on unit labor costs.
Despite the strong economy, the Federal Reserve continued to postpone an in-
terest-rate increase. The lack of any sign of rising inflation and the possi-
bility of an Asian-induced slowdown have kept the Fed from acting.
Performance
The Portfolio's performance trailed that of the benchmark Lehman Brothers
Government/Corporate Index, which returned 3.64 percent for the six-month pe-
riod ended April 30, 1998. The Portfolio benefited from a modest shortening of
duration in January (to 1/4 year under the benchmark), followed by a move to a
benchmark-neutral position in early March, when interest rates rose. The lower
return compared to the benchmark index was primarily related to holdings of
Columbia HCA bonds in the corporate sector. The healthcare company's well-pub-
licized troubles significantly affected the value of its bonds, which the
Portfolio sold in February.
Portfolio Structure
As of April 30, 1998, the Portfolio consisted of 31 percent corporate securi-
ties, 52 percent Treasury and government agency securities, 32 percent mort-
gage-backed securities, The ten largest holdings in the Portfolio are listed
below.
1
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
LARGEST HOLDINGS BY SECURITY
AT APRIL 30, 1998
<TABLE>
<CAPTION>
% OF
ISSUER COUPON DUE PORTFOLIO
- ------ ------ -------- ---------
<S> <C> <C> <C>
U.S. Treasury Note.................................... 5.875% 11/30/01 9.5%
U.S. Treasury Bond.................................... 9.375% 02/15/06 6.6%
FNMA 1998-26 PA....................................... 6.000% 11/18/17 6.5%
GNMA.................................................. 7.000% 09/15/24 6.5%
U.S. Treasury Note.................................... 8.500% 02/15/20 5.8%
FNMA.................................................. 5.750% 02/15/08 4.7%
FHLMC................................................. 6.750% 05/30/06 4.6%
FNMA.................................................. 7.500% 04/09/07 3.8%
GNMA.................................................. 7.500% 05/01/13 3.8%
FHLMC 2034............................................ 6.000% 04/15/18 3.6%
</TABLE>
Outlook
We expect interest rates to fluctuate within a narrow range for the near fu-
ture. Our expectation is based on a scenario of strong economic growth, low
inflation and stable monetary policy. Given the present environment, we fore-
see no near-term rate action by the Federal Reserve, which is counting on the
Asian situation to help slow economic growth.
MCKEE DOMESTIC EQUITY PORTFOLIO
The McKee Domestic Equity Portfolio had strong performance for the six months
ended April 30, 1998, with a total return of 18.10 percent. This performance
reflects a rebound in equity prices in the first months of 1998, after fears
ceased about the effects of the Asian crisis.
Economic Perspective
The U.S. economy remained vigorous during the six months ended April 30, 1998.
Inflation continued its decline from already low levels, and corporate earn-
ings remained strong. As investors learned more about the Asian crisis and its
likely effect on the U.S. economy, worst-case fears abated, adding to confi-
dence about domestic equities and helping cyclical stocks rebound. The market
was also aided by a surge in mergers and acquisitions.
2
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Performance
The Portfolio's total return for the six months ended April 30 trailed the
benchmark S&P 500 Index, which returned 22.50 percent. Performance was nega-
tively affected by the Portfolio's substantial holding of cyclical stocks.
More recently, the Portfolio has benefited from rebounds in a number of stocks
that had been undeservedly marked down late in 1997 as a result of the Asian
crisis.
Positions in the healthcare, telecommunications, financial services, retailing
and computer software industries contributed positively to results. The Port-
folio was adversely affected by positions in the tobacco, food retailing and
computer hardware industries.
Among individual stocks, Southern New England Telecom, Sterling Software, Bec-
ton Dickinson, Lehman Brothers, Gap, Inc. and apparel-maker Tommy Hilfiger had
particularly good performance during the period. Below-average performers in-
cluded MEMC Electronic Materials, Loews Corporation, Olsten Corporation, Amer-
ican Stores and Philip Morris.
Portfolio Structure
The Portfolio is broadly diversified, but strategically weighted by economic
sector, industry and capitalization. Compared to the overall market, the Port-
folio emphasizes the capital goods, technology and basic industries sectors,
which should perform well under the reasonably healthy economic conditions we
foresee. The portfolio is relatively under-weighted in the utility, financial
and consumer staples sectors.
By industry, the Portfolio has a significant weighting, compared to the
benchmark, in oil refining, computer software and industrial services. It is
under-weighted in banking, home products and energy. The largest industry
holdings are shown below.
LARGEST HOLDINGS BY INDUSTRY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Technology................................................................ 16.7%
Pharmaceuticals........................................................... 8.4%
Energy.................................................................... 8.2%
Retail.................................................................... 7.7%
Financial Services........................................................ 7.6%
Services.................................................................. 6.2%
Banks..................................................................... 4.9%
Capital Equipment......................................................... 4.9%
Chemicals................................................................. 4.2%
Beverages, Food & Tobacco................................................. 3.9%
</TABLE>
3
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998 the Portfolio held 50 stocks. The ten largest company hold-
ings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Green Tree Financial Corp.................................................. 4.7%
Sequent Computer Systems, Inc. ............................................ 3.7%
Sterling Software, Inc..................................................... 3.6%
Aluminum Company of America................................................ 3.3%
Akzo Nobel N.V. ADR........................................................ 3.0%
Advanced Micro Devices, Inc................................................ 2.9%
Stone Energy Corp. ........................................................ 2.9%
ITT Industries, Inc........................................................ 2.8%
AccuStaff, Inc. ........................................................... 2.7%
American Stores Co......................................................... 2.7%
</TABLE>
Outlook
Although we remain optimistic about the long-term outlook for equity in-
vestment, we have become increasingly concerned about the prospect of a down-
turn in the stock market later this year. The fundamental problem is the mar-
ket's overvaluation following the 150-percent advance of the past three years.
At current levels, the S&P 500 Index is trading at 24 times estimated 1998
earnings, which represent an increase of 8 percent from 1997. Simply put, in-
vestors may not continue buying stocks at three times their growth rate, espe-
cially when earnings are decelerating. Also, most valuation methods suggest
the overall market is about 15-25 percent overvalued. Accordingly, a price de-
cline in 1998 or early 1999 is quite possible.
In this more difficult environment, the Portfolio should perform relatively
well since its structure emphasizes mid-cap stocks with superior valuation and
earnings momentum characteristics rather than large cap growth issues, many of
which are trading in uncharted price territory. As a result, our shareholders
are well positioned to benefit from an important future performance
opportunity.
MCKEE INTERNATIONAL EQUITY PORTFOLIO
The McKee International Equity Portfolio continued to produce healthy returns
for the six months ended April 30, 1998. Total return for the period was 14.45
percent. Although the portfolio was initially penalized by its exposure to
Asian markets, it enjoyed vigorous gains from the partial recovery in some of
those markets beginning in February.
4
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Economic Perspective
Most world stock markets outside Asia have risen strongly during recent
months, benefiting from low inflation, low interest rates and strong earnings
growth. European markets in particular registered high returns. While Japan
continued to exhibit lackluster performance, outstanding recent results in
Thailand, Korea and the Philippines suggests a lessening of investor concern
about Asian problems.
Performance
The benchmark Morgan Stanley Capital International EAFE Index returned 15.44
percent for the six-month period ended April 30, 1998. The Portfolio's rela-
tive performance was hurt by investments in Japan, China and Hong Kong. The
Portfolio benefited from relatively large investments in Canada, Finland, Ire-
land, Korea and Mexico.
The Portfolio also benefited from its investments in the healthcare, technolo-
gy, energy, food and chemicals industries. Comparative results were hurt by
investments in the railroad, airline and auto industries.
Among individual stocks, Montedison, Nokia, Alcatel, Svenska Handelsbanken and
Pohang Iron & Steel were the best performers. Nissan Motors, Guangshen Rail-
way, Mitsui & Company, Cathay Pacific and Amada under-performed.
Portfolio Structure
The Portfolio is structured to benefit from continued global economic growth.
At April 30, 1998, it was invested in 24 world markets. Compared to the bench-
mark index, the Portfolio is over-weighted in Canada, Korea and China, while
Japan, the United Kingdom, Germany and Switzerland are under-represented. The
ten largest country weightings are shown below.
LARGEST HOLDINGS BY COUNTRY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Japan..................................................................... 12.5%
United Kingdom............................................................ 11.5%
Netherlands............................................................... 7.8%
France.................................................................... 7.7%
Hong Kong................................................................. 5.1%
Finland................................................................... 4.9%
Mexico.................................................................... 4.4%
Canada.................................................................... 4.4%
Germany................................................................... 3.9%
Switzerland............................................................... 3.8%
</TABLE>
5
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Holdings are also widely diversified by company, economic sector and industry.
As of April 30, 1998, the Portfolio held stocks of 56 companies and was in-
vested in all global economic sectors and most major world industries. Com-
pared to the benchmark, the portfolio is over-weighted in the materials, capi-
tal equipment and energy sectors. It is under-weighted in the finance and
service sectors. The ten largest company holdings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Nokia Oyj.................................................................. 4.9%
Nestle S.A. ............................................................... 3.8%
Alcatel Alsthom............................................................ 3.1%
Asia Pulp & Paper Co., Ltd. ............................................... 3.0%
Akzo Nobel N.V. ........................................................... 3.0%
B.A.T. Industries.......................................................... 2.8%
Philips Electronics N.V.................................................... 2.8%
Elan Corp. ................................................................ 2.8%
Montedison S.p.A. ......................................................... 2.7%
YPF S.A. .................................................................. 2.5%
</TABLE>
Outlook
While corporate restructuring in Europe has already contributed to signifi-
cantly higher equity prices in that region, we continue to believe the invest-
ment outlook for most of these markets remain positive. In Asia, markets
should show further signs of recovery in coming months and several Latin Amer-
ican markets also appear to offer strong potential. Indeed, we expect non-U.S.
stocks to outperform domestic equities during the remainder of 1998.
From a strategic standpoint, we continue to favor undervalued stocks with
strong earnings momentum. Many of these stocks are cyclically sensitive and
should benefit from the global economic strength we foresee over the next
year.
MCKEE SMALL-CAP EQUITY PORTFOLIO
The McKee Small Cap Equity Portfolio was launched on November 4, 1997. From
its inception through April 30, 1998, the total return for the Portfolio was
10.06 percent which was a healthy return in a market that has recently favored
large capitalization stocks.
6
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Economic Perspective
The continued vigor of the U.S. economy during the period contributed to the
performance of small-cap stocks. Inflation continued its decline from already
low levels, and small-cap company earnings remained strong, even while growth
slowed somewhat at a number of large companies. The easing of fears about the
Asian crisis also contributed to investor confidence. The investor surge in
merger and acquisition activity in the early months of 1998 gave a further
boost to the equity market and to many small cap stocks.
Performance
In the almost six months since inception, the Portfolio's performance compared
well to the benchmark Russell 2000 Index which returned 9.86 percent for the
period November 4 through April 30, 1998. In particular, the Portfolio bene-
fited from positions in the energy, finance and consumer sectors. With respect
to industries, the Portfolio was helped by positions in financial services,
oil and gas and computer software. Results were hurt by the positions in to-
bacco, forest products and computer hardware.
Among individual stocks, First American Financial, Commerce Bancorp, Avid
Technology, Structural Dynamics Research and LA-Z-Boy had the best perfor-
mance. Swisher International Group, Perceptron Inc., System Software Associ-
ates, Gymboree Corporation and Pioneer Standard Electronics under-performed.
Portfolio Structure
The Portfolio is broadly diversified, yet strategically weighted by economic
sector and industry. It has modest concentrations, compared to the benchmark
index, in the financial and basic industries sectors. It is slightly under-
weighted in capital goods and consumer cyclicals.
Among industries, the Portfolio has an emphasis on computer software, elec-
tronic equipment, and mining and metals compared to the benchmark. It is un-
der-weighted in semiconductors, information services and chemicals.
7
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
As of April 30, 1998, there were 44 stocks in the Portfolio. The largest hold-
ings are shown below.
LARGEST HOLDINGS BY COMPANY
PERCENT OF NET ASSETS AT APRIL 30, 1998
<TABLE>
<S> <C>
Delphi Financial Group, Inc. .............................................. 3.4%
Owens & Minor, Inc. ....................................................... 3.3%
Brown & Sharpe Manufacturing Co. .......................................... 3.3%
Commerce Bancorp, Inc. .................................................... 3.2%
Personnel Group of America, Inc. .......................................... 3.1%
Avid Technology, Inc. ..................................................... 3.0%
Stone Energy Corp. ........................................................ 2.9%
Structural Dynamics Research Corp. ........................................ 2.9%
Systems & Computer Technology Corp. ....................................... 2.8%
Mortons Restaurant Group, Inc. ............................................ 2.8%
</TABLE>
Outlook
Our outlook for small-cap stocks remains positive, despite growing concern
about the possibility of a downturn in the broad stock market. Even apart from
their demonstrated superior performance versus large-cap stock over the long
term, small caps are attractive at present because of their better earnings
outlook, their lower valuations and the recent reduction in the capital gains
tax rates, which benefits smaller, growing companies.
Yours truly,
C.S. McKee & Co., Inc.
Note: The investment results presented in the letter above represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
For a complete discussion of the risks associated with international
investing, please refer to the prospectus for the McKee International Equity
Portfolio.
8
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITION OF THE COMPARATIVE INDICES
The Lehman Brothers Government/Corporate Index is an unmanaged index composed
of a combination of the Government and Corporate Bond Indices. The Government
Index includes public obligations of the U.S. Treasury, issues of Government
agencies, and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate nonconvertible corporate debt. Also included are
Yankee bonds and nonconvertible debt issued by or guaranteed by foreign or
international governments and agencies. All issues are investment grade (BBB)
or higher, with maturities of at least one year and outstanding par value of
at least $100 million for U.S. Government issues and $25 million for others.
Any security downgraded during the month is held in the index until month-end
and then removed. All returns are market value weighted inclusive of accrued
income.
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40
financial, 40 utilities and 20 transportation stocks.
The Morgan Stanley Capital International EAFE Index is an unmanaged index
composed of arithmetic, market value weighted averages of the performance of
over 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly companies.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
9
<PAGE>
UAM FUND MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
U.S. GOVERNMENT & AGENCY SECURITIES - 52.1%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Federal Home Loan Bank
JK-01 1, 5.967%, 3/22/01............................. $ 311,048 $ 310,672
-----------
Federal Home Loan Mortgage Corp.
6.75%, 5/30/06....................................... 1,840,000 1,923,628
7.65%, 5/10/05....................................... 85,000 87,683
-----------
2,011,311
-----------
Federal National Mortgage Association
5.625%, 3/15/01...................................... 1,320,000 1,315,050
5.75%, 2/15/08....................................... 2,020,000 1,982,441
6.70%, 8/10/01....................................... 1,075,000 1,085,933
7.37%, 4/14/04....................................... 140,000 141,938
7.50%, 4/9/07........................................ 1,535,000 1,609,693
-----------
6,135,055
-----------
U.S. Treasury Bond
9.375%, 2/15/06...................................... 2,266,000 2,773,969
-----------
U.S. Treasury Notes
5.875%, 11/30/01..................................... 3,983,000 4,011,438
8.50%, 2/15/20....................................... 1,895,000 2,452,679
-----------
6,464,117
-----------
U.S. Treasury Principal Strips
5/15/17.............................................. 2,083,000 663,498
-----------
TOTAL U.S. GOVERNMENT & AGENCY SECURITIES (Cost $18,033,126).... 18,358,622
-----------
MORTGAGE OBLIGATIONS - 31.7%
Federal Home Loan Mortgage Corp.
Series 1995 PB, CMO, PAC 1, REMIC 6.50%, 9/20/25..... 1,393,000 1,400,383
Series 2034 PN, CMO, PAC (11), REMIC, 6.00%,
4/15/18............................................. 1,500,000 1,493,325
-----------
2,893,708
-----------
Federal National Mortgage Association
Pool #323057, 6.50%, 3/1/13.......................... 1,200,642 1,204,761
Series 1998-26 PA, CMO, PAC, REMIC, 6.00%, 11/18/17.. 2,750,000 2,740,547
-----------
3,945,308
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
MORTGAGE OBLIGATIONS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Government National Mortgage Association
Pool #780742, 7.00%, 9/15/24......................... $2,697,639 $ 2,739,790
TBA, 7.50%, 5/1/13................................... 1,548,000 1,599,270
-----------
4,339,060
-----------
TOTAL MORTGAGE OBLIGATIONS (Cost $11,196,459)................... 11,178,076
-----------
ASSET-BACKED SECURITIES - 7.9%
FINANCIAL SERVICES - 7.9%
Advanta Mortgage Loan Trust, Series 94-1 A1 6.30%,
7/25/25............................................. 78,663 78,259
Countrywide Funding Corp., Series D 6.875%, 9/15/05.. 525,000 538,781
Green Tree Financial Corp., Series 94-7 A4 8.35%,
3/15/20............................................. 250,000 258,877
Indymac Manufactured Housing Contract, Series 98-1 A2
6.39%, 9/25/28...................................... 340,000 342,853
Oakwood Mortgage Investors Inc., Series 95-A A2
6.50%, 9/15/20...................................... 439,853 440,897
The Money Store Home Equity Trust, Series 96-C A3
7.07%, 12/15/16..................................... 550,000 554,052
U.S. West Cap Funding, Inc. 6.75%, 10/1/05........... 155,000 158,294
World Financial Network Credit Card, Series 96-B A
6.95%, 4/15/06...................................... 405,000 420,684
-----------
TOTAL ASSET-BACKED SECURITIES (Cost $2,747,069)................. 2,792,697
-----------
CORPORATE BONDS - 23.2%
FINANCIAL SERVICES - 5.5%
Countrywide Capital I 8.00%, 12/15/26................ 445,000 456,681
Lehman Brothers Holdings 7.125%, 9/15/03............. 748,000 769,505
NB Capital Trust IV 8.25%, 4/15/27................... 626,000 690,947
-----------
1,917,133
-----------
INDUSTRIAL - 12.6%
Nabisco, Inc. 7.55%, 6/15/15......................... 834,000 866,317
News America Holdings, Inc. 7.60%, 10/11/15.......... 731,000 762,068
Philip Morris Cos., Inc. 7.25%, 9/15/01.............. 200,000 205,000
Phillips Petroleum Co. 7.125%, 3/15/28............... 443,000 430,818
Seagate Technology, Inc. Senior Notes 7.125%,
3/1/04.............................................. 833,000 838,206
Time Warner Entertainment Co. 8.375%, 3/15/23........ 775,000 884,469
Xerox Capital Trust I 8.00%, 2/1/27.................. 410,000 434,088
-----------
4,420,966
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUND MCKEE U.S. GOVERNMENT PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
CORPORATE BONDS - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
TELECOMMUNICATIONS - 2.4%
Frontier Corp. 7.25%, 5/15/04......................... $ 809,000 $ 843,383
-----------
UTILITIES - 0.7%
Pacific Gas & Electric 5.875%, 10/1/05................ 260,000 254,150
-----------
YANKEE BONDS - 2.0%
Barrick Gold Corp. 7.50%, 5/1/07...................... 675,000 712,968
-----------
TOTAL CORPORATE BONDS (Cost $7,810,898)............... 8,148,600
-----------
</TABLE>
<TABLE>
<S> <C> <C>
SHORT-TERM INVESTMENT - 4.4%
REPURCHASE AGREEMENT - 4.4%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,538,229,
collateralized by $1,341,004 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27,valued at $1,555,478 (Cost $1,538,000)...... 1,538,000 1,538,000
-----------
TOTAL INVESTMENTS - 119.3% (Cost $41,325,552) (a)............... 42,015,995
-----------
OTHER ASSETS AND LIABILITIES (NET) - (19.3%).................... (6,786,596)
-----------
NET ASSETS - 100%............................................... $35,229,399
===========
</TABLE>
+ See Note A to Financial Statements.
CMO Collateralized Mortgage Obligation
PAC Planned Amortization Class
REMIC Real Estate Mortgage Investment Conduit
(a) The cost for federal income tax purposes was $41,325,552. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $690,443. This consisted of aggregate gross unrealized
appreciation for all securities of $727,758 and aggregate gross
unrealized depreciation for all securities of $37,315.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.3%
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
AUTOMOTIVE - 1.0%
General Motors Corp. ..................................... 9,200 $ 619,850
-----------
BANKS - 4.9%
BankBoston Corp. ......................................... 7,650 825,722
Bankers Trust New York Corp. ............................. 11,200 1,446,200
Golden West Financial Corp................................ 6,900 726,656
-----------
2,998,578
-----------
BEVERAGES, FOOD & TOBACCO - 3.9%
Philip Morris Cos., Inc................................... 28,600 1,067,137
Pioneer Hi-Bred International, Inc. ...................... 35,200 1,328,800
-----------
2,395,937
-----------
CAPITAL EQUIPMENT - 4.9%
Cincinnati Milacron, Inc. ................................ 40,200 1,248,712
ITT Industries, Inc. ..................................... 47,200 1,719,850
-----------
2,968,562
-----------
CHEMICALS - 4.2%
Akzo Nobel N.V. ADR....................................... 17,500 1,802,500
Ethyl Corp................................................ 93,900 715,988
-----------
2,518,488
-----------
COMPUTERS - 1.9%
Computer Associates International, Inc. .................. 20,000 1,171,250
-----------
ELECTRONICS - 1.0%
*MEMC Electronic Materials, Inc. ......................... 44,400 624,375
-----------
ENERGY - 8.2%
Mitchell Energy & Development Corp., Class B.............. 38,770 978,942
Occidental Petroleum Corp. ............................... 27,700 815,419
*Stone Energy Corp. ...................................... 45,500 1,743,219
Ultramar Diamond Shamrock Corp. .......................... 20,900 675,331
YPF S.A. ADR.............................................. 21,600 753,300
-----------
4,966,211
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
FINANCIAL SERVICES - 7.6%
Green Tree Financial Corp. ............................... 70,300 $ 2,864,725
Lehman Brothers Holdings, Inc. ........................... 14,200 1,009,087
The PMI Group, Inc. ...................................... 9,200 747,500
-----------
4,621,312
-----------
HEALTH CARE - 2.0%
*Foundation Health Systems, Inc., Class A................. 41,850 1,211,034
-----------
INSURANCE - 1.9%
CIGNA Corp. .............................................. 5,500 1,138,156
-----------
MANUFACTURING - 1.2%
Tecumseh Products Co., Class A............................ 15,000 755,625
-----------
METALS - 3.3%
Aluminum Company of America............................... 25,700 1,991,750
-----------
MINING - 2.4%
Case Corp. ............................................... 22,900 1,455,581
-----------
MULTI-INDUSTRY - 1.4%
Loews Corp. .............................................. 8,300 830,519
-----------
PAPER & PACKAGING - 2.0%
Willamette Industries..................................... 30,900 1,199,306
-----------
PHARMACEUTICALS - 8.4%
American Home Products Corp. ............................. 9,200 856,750
Becton, Dickinson & Co. .................................. 16,500 1,148,813
*Biogen, Inc. ............................................ 34,200 1,509,075
Mylan Laboratories, Inc. ................................. 59,000 1,600,375
-----------
5,115,013
-----------
RETAIL - 7.7%
American Stores Co. ...................................... 68,700 1,648,800
*BJ'S Wholesale Club, Inc. ............................... 30,200 1,209,888
Dillard's Inc., Class A................................... 19,700 721,513
Gap, Inc. ................................................ 21,800 1,121,337
-----------
4,701,538
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
SERVICES - 6.2%
*Accustaff, Inc.......................................... 46,200 $ 1,657,425
Olsten Corp.............................................. 63,400 867,787
Reynolds & Reynolds Co., Class A......................... 54,000 1,242,000
-----------
3,767,212
-----------
TECHNOLOGY - 16.7%
AMP, Inc................................................. 33,900 1,332,694
*Advanced Micro Devices, Inc............................. 63,800 1,770,450
*Policy Management Systems............................... 14,200 1,144,875
*Seagate Technology, Inc................................. 55,200 1,473,150
*Sequent Computer Systems, Inc........................... 115,100 2,258,838
*Sterling Software, Inc.................................. 81,492 2,154,445
-----------
10,134,452
-----------
TELECOMMUNICATIONS - 3.3%
Bell Atlantic Corp....................................... 9,563 894,738
SBC Communications, Inc.................................. 7,120 295,035
Sprint Corp.............................................. 11,500 785,594
-----------
1,975,367
-----------
TEXTILES & APPAREL - 2.2%
*Tommy Hilfiger Corp..................................... 21,500 1,311,500
-----------
UTILITIES - 2.0%
GPU, Inc................................................. 13,100 519,088
Southern New England Telecommunications Corp............. 9,700 679,000
-----------
1,198,088
-----------
TOTAL COMMON STOCKS (Cost $48,544,023)........................... 59,669,704
-----------
TOTAL INVESTMENTS - 98.3% (Cost $48,544,023) (a)................. 59,669,704
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.7%........................ 1,005,170
-----------
NET ASSETS - 100%................................................ $60,674,874
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $48,544,023. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$11,125,681. This consisted of aggregate gross unrealized appreciation for
all securities of $12,729,749 and aggregate gross unrealized depreciation
for all securities of $1,604,068.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 97.4%
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
ARGENTINA - 2.5%
YPF S.A. ADR........................................... 100,000 $ 3,487,500
-----------
AUSTRALIA - 1.5%
Westpac Banking Corp................................... 312,000 2,095,270
-----------
CANADA - 4.4%
Alcan Aluminium Ltd.................................... 48,925 1,587,718
Canadian Imperial Bank of Commerce..................... 50,358 1,790,970
Seagram Co., Ltd....................................... 31,830 1,357,973
West Coast Energy, Inc................................. 25,242 595,830
West Coast Energy, Inc. ADR............................ 27,600 648,600
-----------
5,981,091
-----------
CHINA - 1.5%
*Huaneng Power International, Inc. ADR................. 93,000 2,046,000
-----------
DENMARK - 2.1%
Unidanmark A/S, Class A (Registered)................... 33,950 2,855,236
-----------
FINLAND - 4.9%
Nokia Oyj, Class K..................................... 101,000 6,723,180
-----------
FRANCE - 7.7%
Alcatel Alsthom........................................ 22,615 4,194,930
Coflexip............................................... 23,000 3,263,850
Total S.A., Class B.................................... 26,400 3,140,243
-----------
10,599,023
-----------
GERMANY - 3.9%
Bayer AG............................................... 47,650 2,126,046
Bayer AG ADR........................................... 19,900 884,937
Commerzbank AG......................................... 40,000 1,556,051
Commerzbank AG ADR..................................... 20,000 771,246
-----------
5,338,280
-----------
HONG KONG - 5.1%
Cathay Pacific Airways Ltd............................. 1,828,000 1,604,854
Guangshen Railway Co., Ltd. ADR........................ 180,000 1,766,250
Hong Kong Electric Holdings............................ 240,000 737,461
Hong Kong Electric Holdings ADR........................ 244,800 752,148
HSBC Holdings plc...................................... 77,000 2,197,018
-----------
7,057,731
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
IRELAND - 2.8%
*Elan Corp. plc ADR.................................... 62,000 $ 3,851,750
-----------
ISRAEL - 2.3%
Teva Pharmaceutical Industries Ltd. ADR................ 75,000 3,187,500
-----------
ITALY - 2.7%
Montedison S.p.A....................................... 2,645,580 3,341,171
Montedison S.p.A. ADR.................................. 32,634 414,044
-----------
3,755,215
-----------
JAPAN - 12.5%
Amada Co., Ltd......................................... 258,000 1,044,574
Credit Saison Co....................................... 61,400 1,333,570
Hitachi Ltd............................................ 270,000 1,939,080
Hitachi Ltd. ADR....................................... 8,100 585,225
INES Corp.............................................. 171,000 1,255,260
Ito-Yokado Co., Ltd.................................... 24,000 1,244,135
Kao Corp............................................... 61,000 897,873
Mitsui & Co., Ltd...................................... 59,000 366,127
Mitsui & Co., Ltd. ADR................................. 4,900 602,700
Mitsui Marine & Fire Insurance......................... 170,000 873,543
Mitsui Marine & Fire Insurance ADR..................... 10,630 546,262
Nintendo Co., Ltd...................................... 22,800 2,094,687
Nissan Motor Co., Ltd.................................. 344,000 1,111,609
Nissan Motor Co., Ltd. ADR............................. 34,200 228,713
Sanwa Bank Ltd......................................... 154,000 1,363,554
Sanwa Bank Ltd. ADR.................................... 4,000 354,196
Toyota Motor Corp...................................... 51,000 1,331,542
-----------
17,172,650
-----------
KOREA - 3.5%
LG Electronics......................................... 233,556 2,781,678
Pohang Iron & Steel Co., Ltd........................... 13,700 750,422
Pohang Iron & Steel Co., Ltd. ADR...................... 72,000 1,282,500
-----------
4,814,600
-----------
MEXICO - 4.4%
*Grupo Industrial Durango ADR.......................... 220,000 3,162,500
Telefonos de Mexico S.A. ADR, Class L.................. 49,800 2,819,925
-----------
5,982,425
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
NETHERLANDS - 7.8%
Akzo Nobel N.V......................................... 20,000 $ 4,071,726
KLM Royal Dutch Airlines N.V........................... 69,900 2,749,187
Philips Electronics N.V................................ 44,160 3,893,640
-----------
10,714,553
-----------
NORWAY - 0.9%
Den norske Bank ASA.................................... 243,400 1,279,541
-----------
PHILIPPINES - 2.9%
Ionics Circuit, Inc.................................... 3,375,000 1,558,989
Philippine Long Distance Telephone Co.................. 88,400 2,372,784
-----------
3,931,773
-----------
SINGAPORE - 3.0%
Asia Pulp & Paper Co., Ltd. ADR........................ 286,600 4,173,613
-----------
SPAIN - 2.1%
Repsol S.A............................................. 52,230 2,864,314
-----------
SWEDEN - 2.0%
Svenska Handelsbanken, Class A......................... 62,000 2,812,573
-----------
SWITZERLAND - 3.8%
Nestle S.A. (Registered)............................... 2,670 5,180,145
-----------
THAILAND - 1.6%
Advanced Info Service Public Co., Ltd. (Foreign)....... 310,000 2,168,394
-----------
UNITED KINGDOM - 11.5%
BAT Industries plc ADR................................. 201,000 3,906,938
British Steel plc...................................... 751,300 1,997,804
Carlton Communications plc............................. 110,787 992,180
Diageo plc, Class B.................................... 31,452 268,263
Diageo plc............................................. 199,817 2,379,331
*Professional Staff plc ADR............................ 80,000 1,440,000
Rio Tinto plc ADR...................................... 14,600 850,450
RTZ Corp. plc (Registered)............................. 118,280 1,698,220
*Waste Management International plc.................... 504,100 1,902,452
*Waste Management International plc ADR................ 43,900 353,944
-----------
15,789,582
-----------
TOTAL COMMON STOCKS - 97.4% (Cost $106,582,821).................. 133,861,939
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.9%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- ------------
<S> <C> <C>
REPURCHASE AGREEMENT - 1.9%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $2,583,385,
collateralized by $2,252,154 of various U.S.
Treasury Obigations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $2,612,354 (Cost $2,583,000)... $2,583,000 $ 2,583,000
------------
TOTAL INVESTMENTS - 99.3% (Cost $109,165,821) (a).............. 136,444,939
------------
OTHER ASSETS AND LIABILITIES (NET) - 0.7%...................... 1,030,739
------------
NET ASSETS - 100%.............................................. $137,475,678
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $109,165,821. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$27,279,118. This consisted of aggregate gross unrealized appreciation for
all securities of $36,405,079 and aggregate gross unrealized depreciation
for all securities of $9,125,961.
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR DIVERSIFICATION (UNAUDITED)
At April 30, 1998 sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
% OF
NET
INDUSTRY ASSETS VALUE
- -------- ------ ------------
<S> <C> <C>
Automotive................................................ 0.2% $ 228,712
Banks..................................................... 6.1 8,372,080
Beverages, Food & Tobacco................................. 4.8 6,554,531
Capital Equipment......................................... 9.3 12,785,742
Chemicals................................................. 7.6 10,423,880
Consumer Durables......................................... 12.0 16,554,461
Electronics............................................... 7.2 9,862,442
Energy.................................................... 9.4 12,871,348
Financial Services........................................ 7.3 10,037,146
Health Care............................................... 5.1 7,039,250
Insurance................................................. 0.6 873,543
Metals.................................................... 1.4 1,953,845
Multi-Industry............................................ 0.3 414,044
Natural Resources......................................... 7.1 9,741,896
Paper & Packaging......................................... 3.0 4,173,612
Repurchase Agreement...................................... 1.9 2,583,000
Services.................................................. 3.3 4,542,095
Technology................................................ 1.1 1,558,989
Telecommunications........................................ 4.4 5,980,499
Transportation............................................ 4.5 6,120,292
Utilities................................................. 2.7 3,773,532
----- ------------
Total Investments........................................ 99.3% $136,444,939
Other Assets and Liabilities (Net)........................ 0.7 1,030,739
----- ------------
Net Assets............................................... 100.0% $137,475,678
===== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.9%
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
BANKS - 10.6%
Coastal Bancorp, Inc..................................... 31,500 $ 1,134,000
Commerce Bancorp, Inc.................................... 39,060 2,241,067
MAF Bancorp, Inc......................................... 37,300 1,494,331
Peoples Heritage Financial Group, Inc.................... 38,100 1,838,325
S&T Bancorp, Inc......................................... 14,900 769,213
-----------
7,476,936
-----------
BEVERAGES, FOOD & TOBACCO - 3.9%
*Swisher International Group, Inc., Class A.............. 101,300 1,247,256
Tasty Baking Co.......................................... 71,600 1,476,750
-----------
2,724,006
-----------
CONSTRUCTION - 2.7%
*Toll Brothers, Inc...................................... 67,800 1,889,925
-----------
ELECTRONICS - 1.1%
Pioneer-Standard Electronics, Inc........................ 60,300 749,981
-----------
ENERGY - 4.3%
*Miller Exploration Co................................... 120,000 990,000
*Stone Energy Corp....................................... 54,000 2,068,875
-----------
3,058,875
-----------
HEALTH CARE - 2.7%
*Sierra Health Services, Inc............................. 48,600 1,868,063
-----------
HOME FURNISHINGS & APPLIANCES - 2.4%
La-Z-Boy, Inc............................................ 32,100 1,679,231
-----------
INDUSTRIAL - 5.1%
*Brown & Sharpe Manufacturing Co., Class A............... 167,000 2,285,812
*Dravo Corp.............................................. 129,200 1,324,300
-----------
3,610,112
-----------
INSURANCE - 11.3%
Arthur J. Gallagher & Co................................. 35,800 1,570,725
*Delphi Financial Group, Inc., Class A................... 42,228 2,406,996
LandAmerica Financial Group, Inc......................... 16,500 870,375
Selective Insurance Group, Inc........................... 47,900 1,317,250
The First American Financial Corp........................ 24,850 1,765,903
-----------
7,931,249
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
METALS - 7.6%
*Alltrista Corp.......................................... 45,300 $ 1,223,100
Century Aluminum Co...................................... 103,000 1,725,250
Intermet Corp............................................ 74,500 1,536,563
*Titanium Metals Corp.................................... 31,000 825,375
-----------
5,310,288
-----------
PAPER & PACKAGING - 2.0%
Pope & Talbot, Inc....................................... 89,100 1,386,619
-----------
PHARMACEUTICALS - 5.1%
Alpharma, Inc., Class A.................................. 57,900 1,317,225
Owens & Minor, Inc., Holding Company..................... 128,700 2,292,469
-----------
3,609,694
-----------
RETAIL - 9.8%
Claire's Stores, Inc..................................... 81,400 1,775,537
*Gymboree Corp........................................... 75,900 1,389,919
*Lands' End, Inc......................................... 47,500 1,751,563
*Mortons Restaurant Group, Inc........................... 79,400 1,955,225
-----------
6,872,244
-----------
SERVICES - 11.0%
*Aviall, Inc............................................. 116,400 1,629,600
Bowne & Co., Inc......................................... 42,300 1,747,519
*Integrated Systems Consulting Group, Inc................ 85,600 1,134,200
*Perceptron, Inc......................................... 70,400 1,056,000
*Personnel Group of America, Inc......................... 109,400 2,174,325
-----------
7,741,644
-----------
TECHNOLOGY - 14.9%
*Avid Technology, Inc.................................... 48,000 2,076,000
*Planar Systems, Inc..................................... 144,900 1,775,025
*Structural Dynamics Research Corp....................... 71,500 2,019,875
*Symantec Corp........................................... 59,500 1,725,500
*System Software Associates, Inc......................... 106,700 900,281
*Systems & Computer Technology Corp...................... 35,300 1,994,450
-----------
10,491,131
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
-------- -----------
<S> <C> <C>
UTILITIES - 4.4%
CILCORP, Inc........................................... 29,300 $ 1,400,906
Commonwealth Energy System............................. 43,900 1,679,175
-----------
3,080,081
-----------
TOTAL COMMON STOCKS (Cost $63,043,372).......................... 69,480,079
-----------
SHORT-TERM INVESTMENTS - 1.1%
<CAPTION>
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENTS - 1.1%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $810,121, collateralized
by $706,251 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at $819,205
(Cost $810,000)....................................... $810,000 810,000
-----------
TOTAL INVESTMENTS - 100.0% (Cost $63,853,372) (a)............... 70,290,079
-----------
OTHER ASSETS AND LIABILITIES (NET) - (0.0%)..................... (20,038)
-----------
NET ASSETS - 100%............................................... $70,270,041
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $63,853,372. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$6,436,707. This consisted of aggregate gross unrealized appreciation for
all securities of $9,234,163 and aggregate gross unrealized depreciation
for all securities of $2,797,456.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
MCKEE MCKEE MCKEE MCKEE
U.S. DOMESTIC INTERNATIONAL SMALL CAP
GOVERNMENT EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at Cost........ $41,325,552 $48,544,023 $109,165,821 $63,853,372
=========== =========== ============ ===========
Investments, at Value....... $42,015,995 $59,669,704 $136,444,939 $70,290,079
Cash........................ 55 -- 883 159
Receivable for Investments
Sold....................... 6,266,817 8,476,445 -- --
Dividends Receivable........ -- 58,488 418,212 36,517
Receivable for Fund Shares
Sold....................... -- 68,831 733,046 9,556
Foreign Withholding Tax
Reclaim Receivable......... -- -- 87,065 --
Interest Receivable......... 524,506 -- 385 121
Other Assets................ 464 834 953 656
----------- ----------- ------------ -----------
Total Assets............... 48,807,837 68,274,302 137,685,483 70,337,088
----------- ----------- ------------ -----------
LIABILITIES
Payable for Investments
Purchased.................. 4,948,326 -- -- --
Payable for Fund Shares
Redeemed................... 8,584,848 7,403,427 -- --
Payable for Investment
Advisory Fees--Note B...... 16,292 36,449 78,025 57,599
Payable for Administrative
Fees--Note C............... 8,954 9,268 15,922 6,677
Payable for Custodian Fees--
Note D..................... 6,029 10,556 102,335 2,108
Payable for Account Services
Fees--Note F............... 8,361 17,934 206 --
Payable for Directors'
Fees--Note G............... 645 703 725 663
Due to Custodian Bank--Note
D.......................... -- 115,618 -- --
Other Liabilities........... 4,983 5,473 12,592 --
----------- ----------- ------------ -----------
Total Liabilities.......... 13,578,438 7,599,428 209,805 67,047
----------- ----------- ------------ -----------
NET ASSETS.................. $35,229,399 $60,674,874 $137,475,678 $70,270,041
=========== =========== ============ ===========
NET ASSETS CONSIST OF:
Paid in Capital............. $33,350,904 $32,584,885 $106,877,253 $63,740,891
Undistributed Net Investment
Income (Loss).............. 331,981 36,349 535,292 (69,760)
Accumulated Net Realized
Gain....................... 856,071 16,927,959 2,790,734 162,203
Unrealized Appreciation..... 690,443 11,125,681 27,272,399 6,436,707
----------- ----------- ------------ -----------
NET ASSETS.................. $35,229,399 $60,674,874 $137,475,678 $70,270,041
=========== =========== ============ ===========
Institutional Class Shares
Shares Issued and
Outstanding ($0.001 par
value) (Authorized
25,000,000)................ 3,273,378 3,306,880 10,730,844 6,386,479
NET ASSET VALUE, Offering
and Redemption Price Per
Share...................... $ 10.76 $ 18.35 $ 12.81 $ 11.00
=========== =========== ============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
MCKEE MCKEE MCKEE MCKEE
U.S. DOMESTIC INTERNATIONAL SMALL CAP
GOVERNMENT EQUITY EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO*
----------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................. $ -- $ 533,482 $ 1,153,276 $ 263,662
Interest................... 1,576,834 39,723 116,597 84,446
Less: Foreign Taxes
Withheld.................. -- -- (93,469) --
----------- ----------- ----------- ----------
TOTAL INCOME.............. 1,576,834 573,205 1,176,404 348,108
----------- ----------- ----------- ----------
EXPENSES
Investment Advisory Fees--
Note B.................... 107,254 249,786 406,155 307,548
Administrative Fees--Note
C......................... 51,778 59,728 90,146 40,485
Custodian Fees--Note D..... 3,303 8,164 41,436 2,976
Account Services Fees--Note
F......................... 27,021 43,381 1,273 61
Directors' Fees--Note G.... 1,506 1,758 1,817 1,474
Registration and Filing
Fees...................... 5,586 5,744 6,881 16,291
Other Expenses............. 16,683 20,683 21,980 19,428
----------- ----------- ----------- ----------
Net Expenses Before
Expense Offset........... 213,131 389,244 569,688 388,263
Expense Offset--Note A..... (162) (1,303) (2,839) (868)
----------- ----------- ----------- ----------
Net Expenses After Expense
Offset................... 212,969 387,941 566,849 387,395
----------- ----------- ----------- ----------
NET INVESTMENT INCOME
(LOSS).................... 1,363,865 185,264 609,555 (39,287)
----------- ----------- ----------- ----------
NET REALIZED GAIN (LOSS)
ON:
Investments............... 1,073,792 16,961,453 2,821,806 162,203
Foreign Exchange
Transactions............. -- -- (27,827) --
----------- ----------- ----------- ----------
TOTAL NET REALIZED GAIN ON
INVESTMENTS AND FOREIGN
EXCHANGE TRANSACTIONS..... 1,073,792 16,961,453 2,793,979 162,203
----------- ----------- ----------- ----------
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION
ON:
Investments............... (1,124,527) (6,129,776) 14,056,845 6,436,707
Foreign Exchange
Translations............. -- -- 9,289 --
----------- ----------- ----------- ----------
TOTAL NET CHANGE IN
UNREALIZED
APPRECIATION/DEPRECIATION.. (1,124,527) (6,129,776) 14,066,134 6,436,707
----------- ----------- ----------- ----------
NET GAIN (LOSS) ON
INVESTMENTS AND FOREIGN
EXCHANGE TRANSACTIONS..... (50,735) 10,831,677 16,860,113 6,598,910
----------- ----------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS................ $ 1,313,130 $11,016,941 $17,469,668 $6,559,623
=========== =========== =========== ==========
</TABLE>
* The Portfolio commenced operations on November 4, 1997.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 1,363,865 $ 2,268,537
Net Realized Gain............................... 1,073,792 235,130
Net Change in Unrealized
Appreciation/Depreciation...................... (1,124,527) 1,536,088
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 1,313,130 4,039,755
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (1,408,951) (2,031,045)
Net Realized Gain............................... (328,406) --
------------ ------------
TOTAL DISTRIBUTIONS............................. (1,737,357) (2,031,045)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 5,412,575 46,890,798
In Lieu of Cash Distributions................... 1,734,420 2,025,173
Redeemed........................................ (29,020,537) (16,515,553)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... (21,873,542) 32,400,418
------------ ------------
TOTAL INCREASE (DECREASE)....................... (22,297,769) 34,409,128
NET ASSETS:
Beginning of Period............................. 57,527,168 23,118,040
------------ ------------
End of Period (including undistributed net
investment income of $331,981 and $377,067,
respectively................................... $ 35,229,399 $ 57,527,168
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 499,928 4,485,792
In Lieu of Cash Distributions................... 161,932 191,612
Shares Redeemed................................. (2,694,958) (1,556,148)
------------ ------------
(2,033,098) 3,121,256
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 185,264 $ 580,671
Net Realized Gain............................... 16,961,453 7,558,630
Net Change in Unrealized
Appreciation/Depreciation...................... (6,129,776) 14,272,224
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 11,016,941 22,411,525
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (214,413) (580,774)
Net Realized Gain............................... (7,577,519) (2,289,510)
------------ ------------
TOTAL DISTRIBUTIONS............................. (7,791,932) (2,870,284)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 10,336,844 42,565,470
In Lieu of Cash Distributions................... 7,791,932 2,870,017
Redeemed........................................ (68,067,413) (19,758,239)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... (49,938,637) 25,677,248
------------ ------------
TOTAL INCREASE (DECREASE)....................... (46,713,628) 45,218,489
NET ASSETS:
Beginning of Period............................. 107,388,502 62,170,013
------------ ------------
End of Period (including undistributed net
investment income of $36,349 and $65,498,
respectively).................................. $ 60,674,874 $107,388,502
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 632,656 2,738,317
In Lieu of Cash Distributions................... 500,413 207,257
Shares Redeemed................................. (4,196,006) (1,223,564)
------------ ------------
(3,062,937) 1,722,010
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 609,555 $ 998,276
Net Realized Gain............................... 2,793,979 9,912,396
Net Change in Unrealized
Appreciation/Depreciation...................... 14,066,134 8,498,768
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS..................................... 17,469,668 19,409,440
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (85,099) (961,510)
Net Realized Gain............................... (9,931,009) (1,154,956)
------------ ------------
TOTAL DISTRIBUTIONS............................. (10,016,108) (2,116,466)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 77,084,177 56,400,614
In Lieu of Cash Distributions................... 9,122,749 1,966,598
Redeemed........................................ (59,234,581) (63,834,286)
------------ ------------
NET INCREASE (DECREASE) FROM CAPITAL SHARE
TRANSACTIONS................................... 26,972,345 (5,467,074)
------------ ------------
TOTAL INCREASE.................................. 34,425,905 11,825,900
NET ASSETS:
Beginning of Period............................. 103,049,773 91,223,873
------------ ------------
End of Period (including undistributed net
investment income of $535,292 and $10,836,
respectively).................................. $137,475,678 $103,049,773
============ ============
(1) SHARES ISSUED AND REDEEMED:
Shares Issued................................... 6,532,930 4,401,990
In Lieu of Cash Distributions................... 850,210 170,717
Shares Redeemed................................. (4,949,887) (4,919,903)
------------ ------------
2,433,253 (347,196)
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 4,
1997* TO
APRIL 30,
1998
(UNAUDITED)
-----------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss............................................ ($39,287)
Net Realized Gain.............................................. 162,203
Net Change in Unrealized Appreciation/Depreciation............. 6,436,707
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 6,559,623
-----------
DISTRIBUTIONS:
Net Investment Income.......................................... (30,473)
-----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued......................................................... 63,714,383
In Lieu of Cash Distributions.................................. 29,824
Redeemed....................................................... (3,316)
-----------
NET INCREASE FROM CAPITAL SHARE TRANSACTIONS................... 63,740,891
-----------
TOTAL INCREASE................................................. 70,270,041
NET ASSETS:
Beginning of Period............................................ --
-----------
End of Period (including undistributed net investment loss of
$69,760)...................................................... $70,270,041
===========
(1) SHARES ISSUED AND REDEEMED:
Shares Issued.................................................. 6,383,689
In Lieu of Cash Distributions.................................. 3,094
Shares Redeemed................................................ (304)
-----------
6,386,479
===========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS MCKEE U.S. GOVERNMENT PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MARCH 2,
ENDED OCTOBER 31, 1995** TO
APRIL 30, 1998 ---------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995
-------------- ------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 10.84 $ 10.58 $ 10.76 $10.00
------- ------- ------- ------
Income From Investment
Operations:
Net Investment Income...... 0.33 0.54 0.46 0.28
Net Realized and Unrealized
Gain (Loss)............... (0.04) 0.25 (0.07)++ 0.71
------- ------- ------- ------
Total From Investment
Operations................ 0.29 0.79 0.39 0.99
------- ------- ------- ------
Distributions:
Net Investment Income...... (0.30) (0.53) (0.44) (0.23)
Net Realized Gain.......... (0.07) -- -- --
In Excess of Net Realized
Gain...................... -- -- (0.13) --
------- ------- ------- ------
Total Distributions........ (0.37) (0.53) (0.57) (0.23)
------- ------- ------- ------
Net Asset Value, End of
Period..................... $ 10.76 $ 10.84 $ 10.58 $10.76
======= ======= ======= ======
TOTAL RETURN................ 2.67%*** 7.73% 3.77%+ 9.96%+***
======= ======= ======= ======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)................ $35,229 $57,527 $23,118 $6,069
Ratio of Expenses to Average
Net Assets................. 0.89%* 0.94% 1.13% 0.89%*
Ratio of Net Investment
Income to Average Net
Assets..................... 5.72%* 5.67% 5.39% 5.39%*
Portfolio Turnover Rate..... 79% 124% 83% 104%
Ratio of Voluntarily Waived
Fees and Expenses Assumed
by the Adviser to Average
Net Assets................. N/A N/A 0.12% 1.93%*
Ratio of Expenses to Average
Net Assets Including
Expense Offsets............ 0.89%* 0.94% 1.13% 0.85%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period indicated.
++ The amount shown for the year ended October 31, 1996 for a share
outstanding throughout the period does not accord with the aggregate net
gains on investments for that period because of the sales and repurchases
of Portfolio shares in relation to fluctuating market value of the
investments of the Portfolio.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS MCKEE DOMESTIC EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MARCH 2,
ENDED OCTOBER 31, 1995** TO
APRIL 30, 1998 ----------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995
-------------- -------- ------- -----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period.................. $ 16.86 $ 13.38 $ 11.44 $10.00
------- -------- ------- ------
Income From Investment
Operations:
Net Investment Income...... 0.04 0.10 0.10 0.08
Net Realized and Unrealized
Gain...................... 2.78 3.92 2.08 1.43
------- -------- ------- ------
Total From Investment
Operations................ 2.82 4.02 2.18 1.51
------- -------- ------- ------
Distributions:
Net Investment Income...... (0.04) (0.10) (0.09) (0.07)
Net Realized Gain.......... (1.29) (0.44) (0.15) --
------- -------- ------- ------
Total Distributions........ (1.33) (0.54) (0.24) (0.07)
------- -------- ------- ------
Net Asset Value, End of
Period..................... $ 18.35 $ 16.86 $ 13.38 $11.44
======= ======== ======= ======
TOTAL RETURN................ 18.10%*** 30.96% 19.31%+ 15.13%+***
======= ======== ======= ======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)................ $60,675 $107,389 $62,170 $6,427
Ratio of Expenses to Average
Net Assets................. 1.01%* 0.94% 0.99% 1.08%*
Ratio of Net Investment
Income to Average Net
Assets..................... 0.48%* 0.64% 0.93% 1.12%*
Portfolio Turnover Rate..... 33% 47% 42% 27%
Average Commission Rate #... $0.0469 $ 0.0497 $0.0482 N/A
Ratio of Voluntarily Waived
Fees and Expenses Assumed
by the Adviser to Average
Net Assets................. N/A N/A 0.04% 1.65%*
Ratio of Expenses to Average
Net Assets Including
Expense Offsets............ 1.01%* 0.94% 0.99% 1.00%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
UAM FUNDS MCKEE INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED MAY 26,
ENDED OCTOBER 31, 1994** TO
APRIL 30, 1998 -------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994
-------------- -------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.42 $ 10.55 $ 10.03 $ 10.40 $ 10.00
-------- -------- ------- ------- -------
Income From Investment
Operations:
Net Investment Income.. 0.06 0.11 0.09 0.11 0.04
Net Realized and
Unrealized Gain
(Loss)................ 1.51 2.01 0.73 (0.39) 0.39
-------- -------- ------- ------- -------
Total From Investment
Operations............ 1.57 2.12 0.82 (0.28) 0.43
-------- -------- ------- ------- -------
Distributions:
Net Investment Income.. (0.01) (0.11) (0.09) (0.09) (0.03)
Net Realized Gain...... (1.17) (0.14) (0.21) -- --
-------- -------- ------- ------- -------
Total Distributions.... (1.18) (0.25) (0.30) (0.09) (0.03)
-------- -------- ------- ------- -------
Net Asset Value, End of
Period................. $ 12.81 $ 12.42 $ 10.55 $ 10.03 $ 10.40
======== ======== ======= ======= =======
TOTAL RETURN............ 14.45%*** 20.31% 8.29% (2.69)% 4.31%***
======== ======== ======= ======= =======
RATIO AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $137,476 $103,050 $91,224 $74,893 $37,257
Ratio of Expenses to
Average Net Assets..... 0.98%* 0.98% 1.01% 0.97% 1.12%*
Ratio of Net Investment
Income to Average Net
Assets................. 1.05%* 0.95% 0.92% 1.16% 0.97%*
Portfolio Turnover
Rate................... 4% 29% 9% 7% 11%
Average Commission Rate
#...................... $ 0.0121 $ 0.0428 $0.0560 N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.98%* 0.98% 1.01% 0.96% N/A
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
UAM FUNDS MCKEE SMALL CAP EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
NOVEMBER 4,
1997** TO
APRIL 30,
1998
(UNAUDITED)
-----------
<S> <C>
Net Asset Value, Beginning of Period............................ $ 10.00
-------
Income From Investment Operations:
Net Investment Loss............................................ (0.01)
Net Realized and Unrealized Gain............................... 1.02
-------
Total From Investment Operations............................... 1.01
-------
Distributions:
Net Investment Income.......................................... (0.01)
-------
Net Asset Value, End of Period.................................. $ 11.00
=======
TOTAL RETURN.................................................... 10.06%***
=======
RATIO AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........................... $70,270
Ratio of Expenses to Average Net Assets......................... 1.26%*
Ratio of Net Investment Income to Average Net Assets............ (0.13)%*
Portfolio Turnover Rate......................................... 1%
Average Commission Rate......................................... $0.0457
Ratio of Expenses to Average Net Assets Including Expense
Offsets........................................................ 1.26%*
</TABLE>
* Annualized
** Commencement of Operations
*** Not Annualized
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The McKee U.S.
Government Portfolio, McKee Domestic Equity Portfolio, McKee International Eq-
uity Portfolio and McKee Small Cap Equity Portfolio (the "Portfolios"), port-
folios of UAM Funds, Inc., are diversified and non-diversified, open-end man-
agement investment companies. At April 30, 1998, the UAM Funds were comprised
of forty-four active portfolios. The financial statements of the remaining
portfolios are presented separately. The objectives of the McKee Portfolios is
as follows:
MCKEE U.S. GOVERNMENT PORTFOLIO seeks to achieve a high level of current
income consistent with preservation of capital by investing primarily in
U.S. Treasury and Government agency securities.
MCKEE DOMESTIC EQUITY PORTFOLIO seeks to achieve a superior long-term
total return over a market cycle by investing primarily in equity securi-
ties of U.S. issuers.
MCKEE INTERNATIONAL EQUITY PORTFOLIO seeks to achieve a superior long-
term total return over a market cycle by investing primarily in the equity
securities of non-U.S. issuers.
MCKEE SMALL CAP EQUITY PORTFOLIO seeks to achieve a superior long-term
total return by investing primarily in the equity securities of small com-
panies.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may re-
quire management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results may differ
from those estimates.
1. SECURITY VALUATION: Equity securities listed on a United States secu-
rities exchange for which market quotations are readily available are val-
ued at the last quoted sales price as of the close of the exchange on the
day the valuation is made or, if no sale has occurred on such day, at the
bid price on such day. Securities listed on a foreign exchange are valued
at their closing price. Price information on listed securities is taken
from the exchange where the security is primarily traded. Over-the-counter
and unlisted equity securities are valued at the current bid prices. Fixed
income securities are stated on the
34
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
basis of valuations provided by brokers and/or a pricing service which
uses information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities, and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at the
time of purchase are valued at amortized cost, if it approximates market
value. The value of other assets and securities for which no quotations
are readily available is determined in good faith at fair value using
methods determined by the Board of Directors.
2. INCOME TAXES: It is each Portfolio's intention to qualify as a regu-
lated investment company under Subchapter M of the Internal Revenue Code
and to distribute all of their taxable income. Accordingly, no provision
for Federal income taxes is required in the financial statements.
The McKee International Equity Portfolio may be subject to taxes imposed
by countries in which it invests. Such taxes are generally based on either
income earned or gains realized or repatriated. The Portfolio accrues such
taxes when the related income is earned or gains are realized.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, each
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the McKee In-
ternational Equity Portfolio are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign cur-
rency are translated into U.S. dollars on the date of valuation. The McKee
International Equity Portfolio does not isolate that portion of realized
or
35
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
unrealized gains and losses resulting from changes in the foreign exchange
rate from fluctuations arising from changes in the market prices of the
securities. These gains and losses are included in net realized and
unrealized gain and loss on investments on the statement of operations.
Net realized and unrealized gains and losses on foreign currency transac-
tions represent net foreign exchange gains or losses from forward foreign
currency exchange contracts, disposition of foreign currencies, currency
gains or losses realized between trade and settlement dates on securities
transactions and the difference between the amount of the investment in-
come and foreign withholding taxes recorded on the McKee International Eq-
uity Portfolio's books and the U.S. dollar equivalent amounts actually re-
ceived or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The McKee International
Equity Portfolio may enter into forward foreign currency exchange con-
tracts to protect the value of securities held and related receivables and
payables against changes in future foreign exchange rates. A forward cur-
rency contract is an agreement between two parties to buy and sell cur-
rency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the current forward rate and the change in
market value is recorded by the McKee International Equity Portfolio as
unrealized gain or loss. The McKee International Equity Portfolio recog-
nizes realized gain or loss when the contract is closed, equal to the dif-
ference between the value of the contract at the time it was opened and
the value at the time it was closed. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of their contracts and are generally limited to the amount of
unrealized gain on the contracts, if any, at the date of default. Risks
may also arise from the unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distrib-
ute substantially all of its net investment income quarterly. Any realized
net capital gains will be distributed annually. All distributions are re-
corded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and foreign
currency transactions.
36
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are recorded
as soon as the McKee International Equity Portfolio is informed of the ex-
dividend date. Interest income is recognized on the accrual basis. Dis-
counts and premiums on securities purchased are amortized using the effec-
tive yield basis over their respective lives. Most expenses of the UAM
Funds can be directly attributed to a particular portfolio. Expenses which
cannot be directly attributed are apportioned among the portfolios of the
UAM Funds based on their relative net assets. Custodian fees for the Port-
folios have been increased to include expense offsets, if any, for custo-
dian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
C.S. McKee & Co., Inc. (the "Adviser"), a wholly-owned subsidiary of United
Asset Management Corporation ("UAM"), provides investment advisory services to
each Portfolio for a monthly fee calculated at an annual rate of 0.45%, 0.65%,
0.70% and 1.00% of average daily net assets for the month for the McKee U.S.
Government, McKee Domestic Equity, McKee International Equity and McKee Small
Cap Equity Portfolios, respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For
37
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
portfolios with more than one class of shares, the minimum annual fee in-
creases to $90,000. In addition, the Administrator receives a Portfolio-spe-
cific monthly fee at an annual rate of 0.04%, 0.04%, 0.06% and 0.04% of aver-
age daily net assets for the McKee U.S. Government, McKee Domestic Equity, Mc-
Kee International Equity and McKee Small Cap Equity Portfolios, respectively.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), a corporate affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services, includ-
ing but not limited to, administration, fund accounting, dividend disbursing
and transfer agent services. Pursuant to the Mutual Funds Service Agreement,
the Administrator pays CGFSC a monthly fee. For the six months ended April 30,
1998, UAM Fund Services, Inc. earned the following amounts from the Portfolios
as Administrator and paid the following portion to CGFSC for its services as
sub-Administrator:
<TABLE>
<CAPTION>
ADMINISTRATION PORTION PAID
MCKEE PORTFOLIOS FEES TO CGFSC
- ---------------- -------------- ------------
<S> <C> <C>
U.S. Government..................................... $51,778 $42,244
Domestic Equity..................................... 59,728 44,357
International Equity................................ 90,146 55,333
Small Cap Equity.................................... 40,485 28,183
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets held in accordance with the custodian agreement. As part of the custodian
agreement, the custodian bank has a lien on the securities of the Portfolios
to cover any advances made by the custodian to the Portfolios. At April 30,
1998, the payable to custodian bank represents the amount due for cash ad-
vances for shareholder redemptions on the Domestic Equity Portfolio.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services Agree-
ment (the "Services Agreement") with UAM Retirement Plan Services, Inc. (the
"Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services.
38
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government and
short-term securities were:
<TABLE>
<CAPTION>
MCKEE PORTFOLIOS PURCHASES SALES
- ---------------- ----------- -----------
<S> <C> <C>
U.S. Government......................................... $ 4,220,044 $12,231,079
Domestic Equity......................................... 24,522,234 81,260,712
International Equity.................................... 24,613,023 4,812,132
Small Cap Equity........................................ 63,556,271 675,102
</TABLE>
Purchases and sales of long-term U.S. Government securities were $32,045,195
and $37,616,211 respectively, for the McKee U.S. Government Portfolio. There
were no purchase or sales of long-term U.S. Government securities for the Mc-
Kee Domestic Equity, McKee International Equity and the McKee Small Cap Equity
Portfolios.
I. LINE OF CREDIT: The Portfolios, except the Small Cap Equity Portfolio,
along with certain other Portfolios of UAM Funds, collectively entered into an
agreement which enables them to participate in a $100 million unsecured line
of credit with several banks. Borrowings will be made solely to temporarily
finance the repurchase of Capital shares. Interest is charged to each partici-
pating Portfolio based on its borrowings at a rate per annum equal to the Fed-
eral Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per annum,
payable at the end of each calendar quarter, is accrued by each participating
Portfolio based on its average daily unused portion of the line of credit.
During the six months ended April 30, 1998, the Portfolios had no borrowings
under the agreement.
J. OTHER: At April 30, 1998, the percentage of total shares outstanding were
held by record shareholders owning 10% or greater of the aggregate total
shares outstanding for each portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
MCKEE PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ---------------- ------------ ---------
<S> <C> <C>
U.S. Government.......................................... 2 61%
Domestic Equity.......................................... 3 48%
International Equity..................................... 3 43%
Small Cap Equity......................................... 3 45%
</TABLE>
39
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998, the net assets of the McKee International Equity Portfo-
lio was substantially composed of foreign denominated securities and/or cur-
rency. Changes in currency exchange rates will affect the value of and invest-
ment income from such securities and currency.
Foreign security and currency transactions may involve certain considera-
tions and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.
40
<PAGE>
UAM FUNDS MCKEE PORTFOLIOS
- --------------------------------------------------------------------------------
OFFICERS AND DIRECTORS
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
C.S. McKee & Co., Inc.
One Gateway Center
Pittsburg, PA 15222
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
LEGAL COUNSEL
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
INDEPENDENT ACCOUNTANTS --------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
DISTRIBUTOR --------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
------------------------------
The NWQ Portfolios
------------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholder's Letter........................................................ 1
Portfolio of Investments
Balanced.................................................................. 8
Small Cap Value........................................................... 12
Special Equity............................................................ 15
Value Equity.............................................................. 18
Statement of Assets and Liabilities......................................... 21
Statement of Operations..................................................... 22
Statement of Changes in Net Assets
Balanced.................................................................. 23
Small Cap Value........................................................... 24
Special Equity............................................................ 25
Value Equity.............................................................. 26
Financial Highlights
Balanced.................................................................. 27
Small Cap Value........................................................... 28
Special Equity............................................................ 29
Value Equity.............................................................. 30
Notes to Financial Statements............................................... 31
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
May, 1998
Dear Shareholders:
During the six months ended April 30, 1998, U.S. financial markets continued
to set record highs, including passing 9000 on the Dow Jones Industrial Aver-
age for the first time. This performance is all the more impressive given the
continuing Asian crisis, which is impacting directly fully one third of the
world's economies. We are pleased to welcome shareholders of NWQ's two new eq-
uity funds: NWQ Special Equity and NWQ Small Cap Value, and to report their
initial performance.
NWQ BALANCED PORTFOLIO
During the six months ended April 30th the NWQ Balanced Portfolio Institu-
tional Class Shares gained 10.47% and the Service Class Shares gained 10.12%
versus the Lipper Balanced Funds Index return of 12.28% and the 14.85% return
for the composite balanced index composed of 60% S&P 500 Index, 30% Lehman
Brothers Government/Corporate Index (LBGC), and 10% Salomon Brothers 3-month
Treasury Bills (SBT-Bills). The individual benchmark returns were 22.50% S&P
500, 3.64% LBGC, and 2.59% SB T-Bills.
Six-month performance for the NWQ Balanced Portfolio includes two distinctly
different investment periods. At the beginning of the period investors were
bracing for an Asian led recession which transitioned in January 1998 to a
growing conviction that Asia's impact would be benign or even potentially a
positive through lower inflation and interest rates. With this change in sen-
timent, defensive stocks, which had been performing strongly, started to
underperform and many financial, industrial, and manufacturing stocks that
were pummeled during the height of the Asian fears, began to outperform. As
the Portfolio's common stock holdings continue to emphasize this latter group,
performance began to improve substantially starting in late January 1998. Bond
holdings, which were increased to 34.5% of assets, were steady performers
throughout the period, benefiting from both a flight to safety and continuing
signs of slowing inflation. We remain optimistic that interest rates will con-
tinue to move lower, which would be helpful for both the bond and the stock
markets.
As of April 30, 1998 the Portfolio held 59.9% equities, 34.5% fixed income,
and 5.6% cash equivalents based on market value of investments.
NWQ SMALL CAP VALUE PORTFOLIO
The NWQ Small Cap Value Portfolio gained 6.74% since inception on 11/4/97 ver-
sus 9.93% for the Russell 2000 Index, 12.14% for the Russell 2000 Value Index,
and 7.93% for the Lipper Equity Small Cap Fund Index.
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UAM FUNDS THE NWQ PORTFOLIOS
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Performance results for the first four months of 1998 have been excellent, ex-
ceeding the Russell 2000 Index and Lipper Small Cap Index significantly. The
Small Cap Value Portfolio has benefited from an above-average weighting in
both Financial Services and Materials and Processing, while stock selection
was excellent in Auto and Transportation, Consumer Discretionary and Technolo-
gy. During 1998, the significant undervaluation of the Small Cap Value Portfo-
lio was highlighted by two takeovers in the Portfolio: the pending acquisition
of Medusa by Southdown and of Tracor by The General Electric Company, plc. The
performance results since inception of the fund reflect an over-weighted posi-
tion in the energy group, which underperformed due to falling energy prices.
The NWQ Small Cap Equity Portfolio strategy will continue to identify funda-
mentally attractive sectors or industries and to select stocks within these
sectors with above-average statistical value and positive or improving funda-
mentals. Our philosophy is to provide superior risk-adjusted returns.
As of April 30, 1998 the Portfolio held 98.7% equities and 1.3% cash equiva-
lents based on market value of investments.
NWQ SPECIAL EQUITY PORTFOLIO
The NWQ Special Equity Institutional Class shares gained 15.30% since incep-
tion on 11/4/97 versus 19.09% for the S&P 500 Index, 16.09% for the S&P 400
Mid Cap Index, and 11.73% for the Lipper Equity Mid Cap Fund Index. The Spe-
cial Equity Service Class shares gained 16.26% since inception on 11/7/97 com-
pared to 20.74% for the S&P 500 Index, 18.0% for the S&P 400 Mid Cap Index,
and 10.85% for the Lipper Equity Mid Cap Fund Index.
Performance results for calendar year-to-date through April 30, 1998 have been
strong, outperforming both the S&P 400 Midcap and S&P 500 Indices as well as
the Lipper Equity Mid Cap Fund Index and led by holdings in media stocks such
as U.S. West Media Group, NTL Inc., and Liberty Media Group, as well as cellu-
lar telecommunications issues such as 360 Communications, Cellular Communica-
tions International, and CoreComm. Chase Manhattan Corp., Hayes Lemmerz, Ford,
and Integrated Health Services were also strong gainers in calendar 1998. Per-
formance results since inception of the Portfolio reflect relatively weak per-
formance in November and December, due in part to the Portfolio's heavier
weight in the energy sector, which suffered from declining oil prices, and a
number of the portfolio holdings relinquishing some of their exceptionally
strong gains from July through October 1997.
The NWQ Special Equity Portfolio strategy continues to be to seek undervalued
securities where there are catalysts present or developing, such as management
restructuring or industry consolidation, to improve profitability and recog-
nize value. We will not pursue a strategy to own the market's "golden stocks",
where
2
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UAM FUNDS THE NWQ PORTFOLIOS
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earnings multiples reflect high expectations and therefore a lower threshold
for disappointments. We are optimistic that this value-oriented portfolio is
positioned to perform well going forward. The Portfolio continues to be over-
weight in the media, finance, energy and wireless communication industries. We
expect mergers and acquisitions in the current market environment to continue
at their torrid pace. We also note that the pressure on corporate management
to maximize/enhance shareholder value is tremendous.
As of April 30, 1998 the Portfolio held 88% equities and 12% cash equivalents
based on market value of investments. The cash allocation is higher than usu-
al, reflecting substantial cash inflows near month-end.
NWQ VALUE EQUITY PORTFOLIO
During the six months ended April 30, 1998, the NWQ Value Equity Institutional
Class Shares gained 15.09% and the Service Class Shares gained 14.92% versus
the Lipper Equity Income Fund Index of 16.34% and the S&P 500 Index return of
22.50%.
Six-month performance for the NWQ Value Equity Portfolio reflects a transition
within the stock market from a fear of the Asian crisis to a growing convic-
tion that Asia's impact would be benign or even potentially a positive through
lower inflation and interest rates. With this transition, defensive stocks be-
gan to underperform and many financial, industrial, and manufacturing stocks
that were pummeled during the height of the Asian fears began to outperform.
As the Portfolio's common stock holdings continue to emphasize this latter
group, performance began to improve substantially starting in late January,
1998. While we have added positions in other sectors (cable, finance, and ca-
ble television), we continue to find significant value in industrial stocks.
Our conviction has been reinforced by recent merger offers for several compa-
nies we have held for long periods (W.R. Grace, Dresser Industries, and
Alumax). We remain positive on the outlook for common stocks in the period
ahead, however, they may pause for a while as they consolidate the strong
price gains they have already made for the year.
As of April 30, 1998 the Portfolio held 94.8% equities and 5.2% cash equiva-
lents based on market value of investments.
ECONOMIC OUTLOOK
Six months ago, as the currencies of Asia were beginning their free fall, we
stated "The U.S. economy continues to fire on all cylinders." This remains the
case today, despite the emergence of near depression-like conditions in many
of the "Asian Tiger" economies. In fact, the initial impact of Asia's collapse
has been beneficial to the domestic economy. As demand in the Far East de-
clined for almost
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UAM FUNDS THE NWQ PORTFOLIOS
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all items--oil, food, capital--domestic price pressures have disappeared, and
inflation rates have reached new lows. With unemployment also at record lows,
real wages increased 2.6% in the past year, the largest increase since 1976.
With a strong dollar making imports more competitive, prices for computers,
electronic goods, autos, apparel and most commodities have been under pres-
sure. As demand for capital has fallen in Asia, increased money flows have
been directed into U.S. markets. This, combined with the disappearance of the
federal budget deficit, has led to lower interest rates and a boom in home
mortgage refinancing. The decline in oil prices is another major positive for
the world's largest oil importer and consumer. The net impact has been a
large, de facto tax cut for U.S. consumers, who have witnessed a tremendous
increase in real purchasing power.
Will the Asian crisis that created so much apprehension a few months ago con-
tinue to be a blessing for the U.S? As one might expect, opinion is divided.
The Federal Reserve Board obviously believes that the economy will slow down
over the next few quarters. Mr. Greenspan is on record as saying that the U.S.
has only started to feel the impact of Asia's meltdown. In theory, the Fed
Chairman's logic makes sense. In an increasingly global economy, the collapse
of a large segment of the world economy should not improve growth prospects.
Still, the U.S. economy has defied all bearish predictions for a very long
time. Current economic statistics are the most favorable in a generation. GDP
growth remains well above the supposed 2-3% "speed limit" without provoking
any inflationary threats. There is little evidence of any imbalance in inven-
tories of the type associated with business cycle excesses of the past. Home
ownership and consumer confidence levels continue to reach new highs almost
every month. Consumer spending, adjusted for inflation, rose by 4.6% in the
last three quarters as the Asian flu took hold overseas. When one considers as
well the over $2 trillion increase in stock market values over the past two
years, it is difficult to get overly bearish about the domestic economic out-
look. And yet . . .
We continue to believe that it is too early to determine the true impact of
the Asian problems. China, which has held its currency firm to date, remains a
wild card in the world picture. The U.S. trade balance has yet to feel the
full brunt of sharply lower import prices from those areas most devastated by
currency turmoil. In part this reflects the difficulty some Asian nations cur-
rently face obtaining the financing necessary to export their products. Even-
tually, however, the favorable cost position of these nations should lead to
rising exports to the U.S. This may be beneficial for consumer prices, but it
is unlikely to help corporate profits. International Monetary Fund (IMF) bail-
outs of several Asian countries could still unravel, prompting reversals in
Asian securities markets that have rallied strongly off their recent lows.
4
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UAM FUNDS THE NWQ PORTFOLIOS
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The crippled Asian banking sector remains a major obstacle, and further damage
could still reverberate throughout western financial centers. The situation
remains fluid and highly uncertain.
On balance we believe investors would be wise to lean slightly toward Mr.
Greenspan's camp, if only to be on the safe side following such a long run of
good economic news. We do not foresee a drastic slowdown unfolding in the
U.S., but we also do not believe that all aspects of the Asian situation will
be beneficial to the U.S. economy. There will be some unpleasant side effects,
even though they may take a surprisingly long time to surface. The primary im-
pact may be in the corporate sector. Already a number of leading companies--
Intel, Motorola, Kimberly-Clark, Compaq Computer--have warned that business
conditions are becoming more difficult. We do not believe we have heard the
last of such warnings. The next two to three months may be critical. If IMF
programs can restore confidence in the long-term prospects for Asia, the
short-term problems should prove manageable, and U.S. GDP growth may suffer
only a minor slowdown. Should the situation unravel to the point that China
and Japan are swept into the vortex, the U.S. economic outlook will become
more uncertain.
Sincerely,
NWQ Investment Management Company
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. If the
adviser did not have temporary fee waivers and did not assume expenses on be-
half of the Portfolios, the total return for each portfolio would have been
lower. The investment return and principal value of an investment will fluctu-
ate so that an investor's shares, when redeemed, may be worth more or less
than their original cost.
5
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UAM FUNDS THE NWQ PORTFOLIOS
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DEFINITION OF COMPARATIVE INDICES
Dow Jones Industrial Average--a price-weighted average of thirty blue-chip
stocks that are generally the leaders in their industry and are listed on the
New York Stock Exchange. It has been a widely followed indicator of the stock
market since October 1, 1928.
Lehman Brothers Government/Corporate Index--an unmanaged index composed of a
combination of the Government and Corporate Bond Indices. The Government Index
includes public obligations of the U.S. Treasury, issues of Government agen-
cies, and corporate debt backed by the U.S. Government. The Corporate Bond In-
dex includes fixed-rate nonconvertible corporate debt. Also included are Yan-
kee Bonds and nonconvertible debt issued by or guaranteed by foreign or inter-
national governments and agencies. All issues are investment grade (BBB) or
higher, with maturities of at least one year and outstanding par value of at
least $100 million for U.S. Government issues and $25 million for others. Any
security downgraded during the month is held in the index until month-end and
then removed. All returns are market value weighted inclusive of accrued in-
come.
Lipper Balanced Fund Index--an unmanaged index of open-end equity funds whose
primary objective is to conserve principal by maintaining at all time a bal-
anced portfolio of both stocks and bonds. Typically, the stock/bond ratio
ranges around 60%/40%.
Lipper Equity Income Fund Index--an unmanaged index of equity funds which seek
relatively high current income and growth of income through investing 60% or
more of the portfolio in equities.
Lipper Equity Mid Cap Fund Index--an unmanaged index of funds which by pro-
spectus or portfolio practice invest primarily in companies with market capi-
talizations less than $5 billion at the time of purchase.
Lipper Equity Small Cap Fund Index--an unmanaged index of funds by prospectus
or portfolio practice invest primarily in companies with market capitaliza-
tions less than $1 billion at the time of purchase.
S&P 500 Index--an unmanaged index composed of 400 industrial corporation
stocks, 40 financial company stocks, 40 utilities company stocks and 20 trans-
portation stocks.
S&P Midcap 400 Index--an unmanaged index composed of 400 domestic stocks cho-
sen for market size (medium market capitalization of approximately $700 mil-
lion), liquidity and industry group representation. It is a market-weighted
index with each stock affecting the index in proportion to its market value.
6
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UAM FUNDS THE NWQ PORTFOLIOS
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Salomon Brothers 3-month U.S. Treasury Bill Index--a return equivalent yield
average based on the last three 3-month Treasury bill issues.
Russell 2000 Index--an unmanaged index composed of the 2000 smallest stocks in
the Russell 3000, a market value weighted index of the 3,000 largest U.S. pub-
licly traded companies.
Russell 2000 Value Index--contains those Russell 2000 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values than the Growth universe.
Comparisons of performance assume reinvestment of dividends and capital gains.
Please note that one can not invest in an unmanaged index.
7
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UAM FUNDS NWQ BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 59.4%
SHARES VALUE+
---------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 1.3%
*DONCASTERS plc ADR.................................... 7,500 $ 230,625
Raytheon Co., Class A.................................. 130 7,174
Sundstrand Corp. ...................................... 7,800 538,688
-----------
776,487
-----------
BASIC MATERIALS - 5.9%
Air Products & Chemical, Inc. ......................... 4,150 360,791
Alumax, Inc. .......................................... 10,400 513,500
Champion International Corp. .......................... 4,600 247,538
Du Pont (E.I.) de Nemours & Co. ....................... 9,200 669,875
Morton International, Inc. ............................ 16,100 515,200
Praxair, Inc. ......................................... 12,000 603,750
Reynolds Metals Co. ................................... 3,600 237,600
USX-U.S. Steel Group, Inc. ............................ 11,750 459,719
-----------
3,607,973
-----------
CAPITAL EQUIPMENT - 9.5%
Case Corp. ............................................ 8,100 514,856
Caterpillar, Inc. ..................................... 27,900 1,588,556
Cooper Industries, Inc. ............................... 6,400 428,000
Deere & Co. ........................................... 18,500 1,081,094
Foster Wheeler Corp. .................................. 9,200 254,725
Harnischfeger Industries, Inc. ........................ 5,000 141,250
Ingersoll-Rand Co. .................................... 20,550 946,584
Kennametal, Inc. ...................................... 5,000 266,563
York International Corp. .............................. 10,950 539,972
-----------
5,761,600
-----------
CONSUMER DISCRETIONARY - 7.1%
American Greetings Corp., Class A...................... 10,000 462,500
*Federated Department Stores, Inc. .................... 17,000 836,187
General Motors Corp. .................................. 2,050 138,119
Maytag Corp. .......................................... 12,000 618,000
Time Warner, Inc. ..................................... 12,500 981,250
*U.S. West Media Group................................. 34,500 1,302,375
-----------
4,338,431
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
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UAM FUNDS NWQ BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
---------- -----------
<S> <C> <C>
CONSUMER STAPLES - 2.7%
Philip Morris Companies, Inc. ........................ 16,000 $ 597,000
Unilever N.V.--New York Shares........................ 13,600 1,014,900
-----------
1,611,900
-----------
ELECTRONICS -
2.8%
Emerson Electric Co. ...................... 12,000 763,500
Grainger (W.W.), Inc. ..................... 8,500 925,969
-----------
1,689,469
-----------
ENERGY -
8.7%
Coastal Corp. ............................. 1,050 75,009
Dresser Industries, Inc. .................. 14,100 745,537
Halliburton Co. ........................... 12,500 687,500
*Noble Drilling Corp. ..................... 19,200 620,400
*Ocean Energy, Inc. ....................... 40,430 990,535
*R & B Falcon Corp. ....................... 11,800 378,338
Santa Fe International Corp. .............. 14,500 568,219
Tidewater, Inc. ........................... 9,400 372,475
Transocean Offshore, Inc. ................. 15,000 838,125
-----------
5,276,138
-----------
FINANCIAL SERVICES -
12.9%
Allstate Corp. ............................ 9,000 866,250
American International Group, Inc. ........ 3,625 476,914
Bank of New York Co., Inc. ................ 14,000 826,875
Bear Stearns Cos., Inc. ................... 8,820 503,291
Chase Manhattan Corp. ..................... 7,000 969,937
First Union Corp. ......................... 20,500 1,237,687
Hartford Financial Services Group, Inc. ... 4,000 443,000
*Highlands Insurance Group, Inc............ 145 3,933
Household International, Inc. ............. 4,000 525,750
National City Corp. ....................... 8,025 555,731
Norwest Corp. ............................. 35,000 1,389,062
-----------
7,798,430
-----------
HEALTH CARE -
1.4%
Aetna, Inc. ............................... 6,000 484,875
Columbia/HCA Healthcare Corp. ............. 11,800 388,663
-----------
873,538
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
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UAM FUNDS NWQ BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
---------- -----------
<S> <C> <C>
MULTI-INDUSTRY -
1.6%
Loews Corp. ............................... 9,800 $ 980,613
-----------
TECHNOLOGY - 3.9%
Texas Instruments, Inc. .............................. 14,900 954,531
Thomas & Betts Corp. ................................. 8,200 478,675
Xerox Corp. .......................................... 8,000 908,000
-----------
2,341,206
-----------
TRANSPORTATION - 1.6%
Delta Air Lines, Inc. ................................ 8,400 976,500
-----------
TOTAL COMMON STOCKS (Cost $24,699,169)........................... 36,032,285
-----------
PREFERRED STOCKS - 0.0%
HEALTH CARE - 0.0%
Fresenius Medical Care AG (Cost $79).................. 800 48
-----------
U.S. GOVERNMENT SECURITIES - 34.2%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
U.S. TREASURY BONDS - 20.9%
10.375%, 11/15/12..................................... $4,500,000 5,958,284
7.25%, 5/15/16........................................ 3,750,000 4,258,594
6.00%, 2/15/26........................................ 2,500,000 2,493,750
-----------
12,710,628
-----------
U.S. TREASURY NOTES - 13.3%
5.50%, 11/15/98....................................... 2,500,000 2,500,000
8.00%, 8/15/99........................................ 25,000 25,734
6.375%, 8/15/02....................................... 200,000 205,188
5.875%, 2/15/04....................................... 2,500,000 2,523,437
7.25%, 5/15/04........................................ 750,000 808,125
5.625%, 2/15/06....................................... 2,000,000 1,983,750
-----------
8,046,234
-----------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $20,073,648).............. 20,756,862
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
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UAM FUNDS NWQ BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENTS - 5.5%
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
U.S. TREASURY BILL - 2.5%
**5.14%, 6/4/98....................................... $1,500,000 $ 1,493,427
-----------
REPURCHASE AGREEMENT - 3.0%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,848,276,
collaterallized by $1,611,297 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $1,869,001....................... 1,848,000 1,848,000
-----------
TOTAL SHORT-TERM INVESTMENTS (Cost $3,340,647)................... 3,341,427
-----------
TOTAL INVESTMENTS - 99.1% (Cost $48,113,543)(a).................. 60,130,622
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.9%........................ 514,705
-----------
NET ASSETS - 100%................................................ $60,645,327
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
** Interest rate disclosed for U.S. Treasury Bill represents effective yield
at April 30, 1998.
ADR American Depositary Receipt
(a) The cost for Federal income tax purposes was $48,113,543. At April 30,
1998, net unrealized appreciation for all securities on tax cost was
$12,017,079. This consisted of aggregate gross unrealized appreciation of
$12,528,140, and gross unrealized depreciation for all securities of
$511,061.
The accompanying notes are an integral part of the financial statements.
11
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UAM FUNDS NWQ SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 99.4%
SHARES VALUE+
------ --------
<S> <C> <C>
AEROSPACE & DEFENSE - 2.8%
*DONCASTERS plc ADR.......................................... 800 $ 24,600
--------
BASICS MATERIALS - 15.9%
*Amax Gold, Inc. ............................................ 1,100 4,125
Centex Construction Products, Inc. .......................... 200 7,350
Century Aluminum Corp. ...................................... 350 5,863
Cleveland-Cliffs, Inc. ...................................... 250 14,000
IMCO Recycling, Inc. ........................................ 1,150 21,275
*International Specialty Products, Inc. ..................... 1,000 19,937
Medusa Corp. ................................................ 350 21,525
Philip Services Corp. ....................................... 2,800 21,175
Rayonier, Inc. .............................................. 525 26,316
--------
141,566
--------
CAPITAL EQUIPMENT - 13.6%
Atchison Casting Corp. ...................................... 1,400 26,512
Federal-Mogul Corp. ......................................... 250 16,172
Roper Industries, Inc. ...................................... 650 20,150
*Shaw Group, Inc. ........................................... 800 18,800
Titan International, Inc. ................................... 800 15,600
Tracor, Inc. ................................................ 600 23,550
--------
120,784
--------
CONSUMER DISCRETIONARY - 8.3%
*Bon-Ton Stores, Inc. ....................................... 900 14,737
Borg-Warner Automotive, Inc. ................................ 400 24,875
*Hayes Lemmerz International, Inc. .......................... 550 21,141
*Tropical Sportswear International Corp. .................... 800 13,400
--------
74,153
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
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UAM FUNDS NWQ SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ --------
<S> <C> <C>
ENERGY - 17.7%
*American Oilfield Divers, Inc. ............................. 850 $ 13,387
*Atwood Oceanics, Inc. ...................................... 150 8,203
*Forcenergy, Inc. ........................................... 600 13,837
*Gaylord Container Corp. Class A............................. 3,000 28,875
*Hvide Maine, Inc. Class A................................... 550 9,213
KCS Energy, Inc. ............................................ 1,150 17,825
*Key Energy Group, Inc. ..................................... 650 12,147
*Marine Drilling Companies, Inc. ............................ 550 13,337
*Meridian Resource Corp. .................................... 1,020 9,244
*National Energy Group, Inc. ................................ 2,000 4,938
*Stolt Comex Seaway, S.A. ................................... 800 26,000
--------
157,006
--------
FINANCIAL SERVICES - 20.7%
Commercial Bank of New York.................................. 500 12,625
Commercial Federal Corp. .................................... 975 35,344
*Farm Family Holdings, Inc. ................................. 720 28,665
*FPIC Insurance Group, Inc. ................................. 950 32,775
LandAmerica Financial Group, Inc. ........................... 250 13,187
Life RE Corp. ............................................... 400 28,800
NAC Re Corp. ................................................ 325 16,250
Washington Federal, Inc. .................................... 583 16,251
--------
183,897
--------
HEALTH CARE - 7.0%
Integrated Health Services, Inc. ............................ 750 28,922
*PharMerica, Inc. ........................................... 900 12,487
Weider Nutrition International, Inc. ........................ 1,500 21,281
--------
62,690
--------
MULTI-INDUSTRY - 1.6%
*Griffon Corp. .............................................. 1,050 14,044
--------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
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UAM FUNDS NWQ SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ -------
<S> <C> <C>
TECHNOLOGY- 11.8%
*Actel Corp. ................................................. 500 $ 7,438
*Anixter International, Inc. ................................. 550 10,966
*Antec corp. ................................................. 1,400 27,650
Belden, Inc................................................... 400 16,575
*Coherent, Inc. .............................................. 1,000 23,625
*GenRad, Inc. ................................................ 275 5,517
*International Rectifier Corp. ............................... 1,100 12,925
-------
104,696
-------
TOTAL COMMON STOCKS (Cost $828,778).................................. 883,436
--------
SHORT-TERM INVESTMENT - 1.3%
<CAPTION>
FACE
VALUE
-------
REPURCHASE AGREEMENT - 1.3%
Chase Securities, Inc. 5.37%, dated
4/30/98, due 5/1/98, to be repurchased
at $12,002, collateralized by $10,463 of
various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27,
valued at $12,136 (Cost $12,000)............................ $12,000 12,000
--------
TOTAL INVESTMENTS - 100.7% (Cost $840,778) (a)....................... 895,436
--------
OTHER ASSETS AND LIABILITIES (NET) - (0.7)%.......................... (6,268)
--------
NET ASSETS - 100%....................................................$889,168
========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security.
ADR American Depositary Receipt.
(a) The cost for Federal income tax purposes was $840,778. At April 30, 1998,
net unrealized Appreciation for all securities on tax cost was $54,658.
This consisted of aggregate gross unrealized appreciation of $82,968, and
gross unrealized depreciation for all securities of $28,310.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS NWQ SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.0%
SHARES VALUE+
------ ----------
<S> <C> <C>
BASIC MATERIALS - 2.2%
Praxair, Inc. ............................................. 2,100 $ 105,656
----------
BROADCASTING & PUBLISHING - 4.3%
E.W. Scripps Co. (The)..................................... 1,700 96,369
*Liberty Media Group, Class A.............................. 3,325 110,141
----------
206,510
----------
CAPITAL EQUIPMENT - 4.3%
Case Corp. ................................................ 1,800 114,413
*Hayes Lemmerz International, Inc. ........................ 2,350 90,328
----------
204,741
----------
CONSUMER DISCRETIONARY - 14.9%
Alberto-Culver Co., Class A................................ 3,500 93,625
*@Entertainment, Inc. ..................................... 3,500 58,625
*Circus Circus Enterprises, Inc. .......................... 4,500 81,281
*Cox Communications, Inc. Class A.......................... 2,000 89,250
Ford Motor Co. ............................................ 1,300 59,556
Hasbro, Inc. .............................................. 3,050 112,278
*Tele-Communications International, Inc., Class A.......... 4,300 81,700
*U.S. West Media Group..................................... 3,700 139,675
----------
715,990
----------
CONSUMER STAPLES - 3.0%
Philip Morris Cos., Inc. .................................. 3,800 141,787
----------
ENERGY - 18.9%
*BJ Services Co. .......................................... 2,400 90,000
Diamond Offshore Drilling, Inc. ........................... 2,200 111,375
*Forcenergy, Inc. ......................................... 4,200 96,863
Noble Affiliates, Inc. .................................... 1,200 51,750
*Ocean Energy, Inc. ....................................... 7,819 191,565
Santa Fe International Corp. .............................. 2,800 109,725
Tosco Corp. ............................................... 2,700 96,188
Transocean Offshore, Inc. ................................. 1,575 88,003
*Triton Energy Ltd. ....................................... 1,800 72,225
----------
907,694
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS NWQ SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ ----------
<S> <C> <C>
FINANCIAL SERVICES - 16.8%
BankAmerica Corp. ......................................... 1,450 $ 123,250
Chase Manhattan Corp. ..................................... 850 117,778
First Union Corp. ......................................... 2,000 120,750
Fleet Financial Group, Inc. ............................... 700 60,463
Hartford Financial Services Group, Inc. ................... 1,050 116,287
Provident Cos., Inc. ...................................... 2,400 93,750
Torchmark Corp. ........................................... 2,000 89,125
Waddell & Reed Financial, Inc., Class A.................... 3,400 84,150
----------
805,553
----------
HEALTH CARE - 4.3%
Aetna, Inc. ............................................... 1,400 113,137
Integrated Health Services, Inc. .......................... 2,400 92,550
----------
205,687
----------
MULTI-INDUSTRY - 3.9%
Loews Corp. ............................................... 1,850 185,116
----------
TECHNOLOGY - 9.4%
*Allen Telecom, Inc. ...................................... 5,000 80,313
*Berg Electronics Corp. ................................... 3,900 92,869
*MasTec, Inc. ............................................. 3,000 80,250
*Quantum Corp. ............................................ 4,600 107,812
Storage Technology Corp. .................................. 1,050 88,659
----------
449,903
----------
TELECOMMUNICATIONS - 13.0%
Cellular Communications International, Inc. ............... 3,500 153,562
*CoreComm, Inc. ........................................... 8,000 154,000
*NTL, Inc. ................................................ 3,500 134,750
Telephone and Data Systems, Inc. .......................... 2,100 99,750
*360 Communications Co. ................................... 2,600 79,463
----------
621,525
----------
TOTAL COMMON STOCKS (Cost $4,082,695)............................. 4,550,162
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS NWQ SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHORT-TERM INVESTMENT - 13.0%
FACE
VALUE VALUE+
-------- ----------
<S> <C> <C>
REPURCHASE AGREEMENT - 13.0%
Chase Securities, Inc. 5.37%, dated 4/30/98, due 5/1/98,
to be repurchased at $623,093, collateralized by
$543,203 of various U.S. Treasury Obligations, 5.50%-
14.00%, due 5/15/04-11/15/27, valued at $630,080 (Cost
$623,000).............................................. $623,000 $ 623,000
----------
TOTAL INVESTMENTS - 108.0% (Cost $4,705,695)(a).................. 5,173,162
----------
OTHER ASSETS AND LIABILITIES (NET) - (8.0%)...................... (381,301)
----------
NET ASSETS - 100%................................................ $4,791,861
==========
</TABLE>
+
See Note A to Financial Statements.
*
Non-Income Producing Security
ADR
American Depositary Receipt
(a)
The cost for Federal income tax purposes was $4,705,695. At April 30,
1998, net unrealized appreciation for all securities on tax cost was
$467,467. This consisted of aggregate gross unrealized appreciation for
all securities of $520,318, and gross unrealized depreciation for all
securities of $52,851.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS NWQ VALUE EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 94.8%
SHARES VALUE+
------ ----------
<S> <C> <C>
AEROSPACE & DEFENSE - 2.6%
*DONCASTERS plc ADR........................................ 2,500 $ 76,875
Raytheon Co., Class A...................................... 81 4,470
Sundstrand Corp. .......................................... 1,700 117,406
----------
198,751
----------
BASIC MATERIALS - 8.1%
Air Products & Chemical, Inc. ............................. 350 30,428
Alumax, Inc. .............................................. 1,775 87,641
Champion International Corp. .............................. 1,200 64,575
Du Pont (E.I.) de Nemours & Co. ........................... 1,200 87,375
Morton International, Inc. ................................ 3,700 118,400
Praxair, Inc. ............................................. 2,500 125,781
USX-U.S. Steel Group, Inc. ................................ 3,000 117,375
----------
631,575
----------
CAPITAL EQUIPMENT - 13.7%
Case Corp. ................................................ 1,900 120,769
Caterpillar, Inc. ......................................... 4,050 230,597
Cooper Industries, Inc. ................................... 1,950 130,406
Deere & Co. ............................................... 3,900 227,906
Harnischfeger Industries, Inc. ............................ 1,100 31,075
Ingersoll-Rand Co. ........................................ 3,825 176,189
Kennametal, Inc. .......................................... 1,600 85,300
York International Corp. .................................. 1,300 64,106
----------
1,066,348
----------
CONSUMER DISCRETIONARY - 11.4%
American Greetings Corp., Class A.......................... 2,500 115,625
*Federated Department Stores, Inc. ........................ 3,800 186,912
General Motors Corp. ...................................... 1,275 85,903
Time Warner, Inc. ......................................... 2,800 219,800
*U.S. West Media Group..................................... 7,500 283,125
----------
891,365
----------
CONSUMER STAPLES - 4.0%
Philip Morris Cos., Inc. .................................. 3,500 130,594
Unilever N.V.--New York Shares............................. 2,400 179,100
----------
309,694
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS NWQ VALUE EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
------ ----------
<S> <C> <C>
ELECTRONICS - 3.8%
Emerson Electric Co. ....................................... 2,900 $ 184,512
Grainger (W.W.), Inc. ...................................... 1,000 108,938
----------
293,450
----------
ENERGY - 16.8%
*BJ Services Co. ........................................... 3,000 112,500
Coastal Corp. .............................................. 1,775 126,802
Dresser Industries, Inc. ................................... 2,025 107,072
Halliburton Co. ............................................ 2,750 151,250
Noble Affiliates, Inc. ..................................... 1,600 69,000
*Noble Drilling Corp. ...................................... 4,700 151,869
*Ocean Energy, Inc. ........................................ 8,060 197,470
*R & B Falcon Corp. ........................................ 3,422 109,718
Santa Fe International Corp. ............................... 2,000 78,375
Tidewater, Inc. ............................................ 900 35,663
Transocean Offshore, Inc. .................................. 3,000 167,625
----------
1,307,344
----------
FINANCIAL SERVICES - 18.0%
Allstate Corp. ............................................. 1,900 182,875
American International Group, Inc. ......................... 800 105,250
Bank of New York Co., Inc. ................................. 2,700 159,469
Bear Stearns Cos., Inc. .................................... 1,470 83,882
Chase Manhattan Corp. ...................................... 700 96,994
First Union Corp. .......................................... 4,500 271,687
Household International, Inc. .............................. 600 78,863
National City Corp. ........................................ 1,275 88,294
Norwest Corp. .............................................. 5,100 202,406
Travelers Property & Casualty Corp., Class A................ 3,100 130,200
----------
1,399,920
----------
HEALTH CARE - 3.1%
Aetna, Inc. ................................................ 1,700 137,381
Columbia/HCA Healthcare Corp. .............................. 3,300 108,694
----------
246,075
----------
MULTI-INDUSTRY - 3.6%
Loews Corp. ................................................ 2,800 280,175
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS NWQ VALUE EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMON STOCKS - CONTINUED
SHARES VALUE+
-------- ----------
<S> <C> <C>
TECHNOLOGY - 6.4%
Texas Instruments, Inc. ................................ 2,600 $ 166,562
Thomas & Betts Corp. ................................... 2,200 128,425
Xerox Corp. ............................................ 1,800 204,300
----------
499,287
----------
TRANSPORTATION - 3.3%
Burlington Northern Sante Fe Corp. ..................... 525 51,975
Delta Air Lines, Inc. .................................. 1,800 209,250
----------
261,225
----------
TOTAL COMMON STOCKS (Cost $5,260,612)............................ 7,385,209
----------
PREFERRED STOCKS - 0.0%
HEALTH CARE - 0.0%
Fresenius Medical Care AG (Cost $20).................... 225 13
----------
SHORT-TERM INVESTMENT - 5.2%
<CAPTION>
FACE
AMOUNT
--------
<S> <C> <C>
REPURCHASE AGREEMENT - 5.2%
Chase Securities, Inc., 5.37% dated 4/30/98, due 5/1/98,
to be repurchased at $403,060, collateralized by
$351,381 of various U.S. Treasury Obligations, 5.50%-
14.00%, due 5/15/04-11/15/27, valued at $407,580 (Cost
$403,000).............................................. $403,000 403,000
----------
TOTAL INVESTMENTS - 100.0% (Cost $5,663,632)(a).................. 7,788,222
----------
OTHER ASSETS AND LIABILITIES (NET) - 0.0%........................ 3,326
----------
NET ASSETS - 100%................................................ $7,791,548
==========
</TABLE>
+
See Note A to Financial Statements.
*
Non-Income Producing Security
ADR
American Depositary Receipt
(a)
The cost for Federal income tax purposes was $5,663,632. At April 30,
1998, net unrealized appreciation for all securities on tax cost was
$2,124,590. This consisted of aggregate gross unrealized appreciation of
$2,210,935, and gross unrealized depreciation for all securities of
$86,345.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
NWQ NWQ NWQ
NWQ SMALL CAP SPECIAL VALUE
BALANCED VALUE EQUITY EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
ASSETS
Investments, at Cost............ $48,113,543 $840,778 $4,705,695 $5,663,632
=========== ======== ========== ==========
Investments, at Value (excluding
Repurchase Agreements)......... $58,282,622 $883,436 $4,550,162 $7,385,222
Repurchase Agreement, at Value.. 1,848,000 12,000 623,000 403,000
Cash............................ 474 277 751 514
Interest Receivable............. 517,468 2 93 60
Receivable for Investments
Sold........................... -- 21,972 -- --
Receivable for Portfolio Shares
Sold........................... 45,948 2,983 2,238 8,815
Dividends Receivable............ 24,774 83 2,708 4,901
Receivable due from Investment
Adviser--Note B................ -- 4,803 4,202 6,831
Other Assets.................... 412 -- -- 51
----------- -------- ---------- ----------
Total Assets................... 60,719,698 925,556 5,183,154 7,809,394
LIABILITIES
Payable for Investments
Purchased...................... -- 25,025 378,445 --
Payable for Shares Redeemed..... 7,339 -- -- 707
Payable for Investment Advisory
Fees--Note B................... 32,169 -- -- --
Payable for Administrative
Fees--Note C................... 11,081 2,010 3,828 8,155
Payable for Custodian Fees--Note
D.............................. 4,227 595 722 1,420
Distribution and Service Fees
Payable--Note E................ 16,757 -- 1,038 1,151
Payable for Directors' Fees--
Note G......................... 642 357 354 554
Other Liabilities............... 2,156 8,401 6,906 5,859
----------- -------- ---------- ----------
Total Liabilities.............. 74,371 36,388 391,293 17,846
----------- -------- ---------- ----------
NET ASSETS...................... $60,645,327 $889,168 $4,791,861 $7,791,548
=========== ======== ========== ==========
NET ASSETS CONSIST OF:
Paid in Capital................. $47,574,547 $835,533 $4,285,110 $5,344,054
Undistributed Net Investment
Income (Loss).................. 124,155 (766) (2,978) 582
Accumulated Net Realized Gain
(Loss)......................... 929,546 (257) 42,262 322,322
Unrealized Appreciation......... 12,017,079 54,658 467,467 2,124,590
----------- -------- ---------- ----------
NET ASSETS...................... $60,645,327 $889,168 $4,791,861 $7,791,548
=========== ======== ========== ==========
INSTITUTIONAL CLASS SHARES:
Net Assets...................... $15,199,191 $889,168 $1,669,082 $4,624,421
Shares Issued and Outstanding
($0.001 par value) (Authorized
25,000,000).................... 968,333 83,497 144,753 227,872
Net Asset Value, Offering and
Redemption Price Per Share..... $15.70 $10.65 $11.53 $20.29
====== ====== ====== ======
INSTITUTIONAL SERVICE CLASS
SHARES:
Net Assets...................... $45,446,136 $ -- $3,122,779 $3,167,127
Shares Issued and Outstanding
($0.001 par value) (Authorized
10,000,000).................... 2,901,213 -- 271,363 156,076
Net Asset Value, Offering and
Redemption Price Per Share..... $15.66 $-- $11.51 $20.29
====== ==== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
NWQ NWQ NWQ NWQ
BALANCED SMALL CAP VALUE SPECIAL EQUITY VALUE EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
---------- --------------- -------------- ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.................. $ 200,614 $ 985 $ 10,156 $ 41,539
Interest................... 694,784 1,516 5,533 11,586
---------- ------- -------- ----------
Total Income.............. 895,398 2,501 15,689 53,125
---------- ------- -------- ----------
EXPENSES
Investment Advisory Fees -
Note B................... $ 196,418 $ 2,122 $ 10,885 $ 26,076
Administrative Fees - Note
C........................ 66,399 12,924 23,387 48,776
Custodian Fees - Note D.... 3,517 699 722 1,178
Distribution and Service
Plan Fees -
Note E:
Institutional Service
Class................... 84,856 -- 3,943 5,517
Account Services Fees -
Note F.................. 31,149 -- -- 3,663
Directors' Fees - Note G... 1,495 958 960 1,258
Audit Fees................. 8,221 3,674 5,518 7,162
Printing Fees.............. 11,003 4,265 6,064 12,391
Registration and Filing
Fees..................... 8,625 11,582 11,684 8,439
Other Expenses............. 4,761 1,805 1,815 2,466
Account Services Fees
Waived -Note F........... (31,149) -- -- (3,663)
Investment Advisory Fees
Waived -
Note B................... (18,650) (2,122) (10,885) (26,076)
Expenses Assumed by
Adviser -Note B.......... -- (33,254) (35,426) (44,214)
---------- ------- -------- ----------
Net Expenses before
Expense Offset.......... 366,645 2,653 18,667 42,973
Expense Offset - Note A.... (866) (104) -- (172)
---------- ------- -------- ----------
Net Expenses After Expense
Offset................... 365,779 2,549 18,667 42,801
---------- ------- -------- ----------
NET INVESTMENT INCOME
(LOSS)................... 529,619 (48) (2,978) 10,324
---------- ------- -------- ----------
NET REALIZED GAIN (LOSS) ON
INVESTMENTS.............. 940,633 (257) 42,262 327,178
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION
ON INVESTMENTS........... 4,086,525 54,658 467,467 693,040
---------- ------- -------- ----------
TOTAL NET GAIN ON
INVESTMENTS.............. 5,027,158 54,401 509,729 1,020,218
---------- ------- -------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS............... $5,556,777 $54,353 $506,751 $1,030,542
========== ======= ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS NWQ BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 529,619 $ 933,380
Net Realized Gain................................ 940,633 1,712,730
Net Change in Unrealized
Appreciation/Depreciation....................... 4,086,525 6,839,163
----------- ------------
Net Increase in Net Assets Resulting From
Operations..................................... 5,556,777 9,485,273
----------- ------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.............................. (141,925) (245,374)
Institutional Service Class...................... (369,850) (641,089)
Net Realized Gain:
Institutional Class.............................. (427,967) (35,446)
Institutional Service Class...................... (1,286,672) (84,765)
----------- ------------
Total Distributions.............................. (2,226,414) (1,006,674)
----------- ------------
CAPITAL SHARE TRANSACTIONS - NOTE J:
Institutional Class:
Issued........................................... 3,694,873 6,073,340
In Lieu of Cash Distributions.................... 572,674 280,813
Redeemed......................................... (2,539,207) (4,173,967)
----------- ------------
Net Increase from Institutional Class Shares...... 1,728,340 2,180,186
----------- ------------
Institutional Service Class:
Issued........................................... 4,022,516 26,562,604
In Lieu of Cash Distributions.................... 1,656,521 725,851
Redeemed......................................... (4,210,834) (12,451,810)
----------- ------------
Net Increase from Institutional Service Class
Shares........................................... 1,468,203 14,836,645
----------- ------------
Net Increase from Capital Share Transactions..... 3,196,543 17,016,831
----------- ------------
Total Increase................................... 6,526,906 25,495,430
Net Assets:
Beginning of Period.............................. 54,118,421 28,622,991
----------- ------------
End of Period (including undistributed net
investment income of $124,155 and $106,311,
respectively)................................... $60,645,327 $ 54,118,421
=========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS NWQ SMALL CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 4, 1997*
TO
APRIL 30, 1998
(UNAUDITED)
-----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss......................................... $ (48)
Net Realized Loss........................................... (257)
Net Change in Unrealized Appreciation/Depreciation.......... 54,658
--------
Net Increase in Net Assets Resulting From Operations........ 54,353
--------
DISTRIBUTIONS:
Net Investment Income....................................... (718)
--------
CAPITAL SHARE TRANSACTIONS - NOTE J:
Issued...................................................... 910,517
In Lieu of Cash Distributions............................... 718
Redeemed.................................................... (75,702)
--------
Net Increase from Capital Share Transactions................ 835,533
--------
Total Increase............................................... 889,168
Net Assets:
Beginning of Period......................................... --
--------
End of Period (including undistributed net investment loss
of $(766))................................................. $889,168
========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS NWQ SPECIAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 4, 1997*
TO
APRIL 30, 1998
(UNAUDITED)
-----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss......................................... $ (2,978)
Net Realized Gain........................................... 42,262
Net Change in Unrealized Appreciation/Depreciation.......... 467,467
----------
Net Increase in Net Assets Resulting From Operations........ 506,751
----------
CAPITAL SHARE TRANSACTIONS - NOTE J:
Institutional Class:
Issued...................................................... 1,535,174
----------
Institutional Service Class**:
Issued...................................................... 2,749,936
----------
Net Increase from Capital Share Transactions................ 4,285,110
----------
Total Increase.............................................. 4,791,861
Net Assets:
Beginning of Period......................................... --
----------
End of Period (including undistributed net investment loss
of $(2,978))............................................... $4,791,861
==========
</TABLE>
* Commencement of Operations
** Initial offering of Institutional Service Class Shares began on November 7,
1997.
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS NWQ VALUE EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................. $ 10,324 $ 28,747
Net Realized Gain................................. 327,178 300,616
Net Change in Unrealized
Appreciation/Depreciation........................ 693,040 979,347
----------- -----------
Net Increase in Net Assets Resulting From
Operations....................................... 1,030,542 1,308,710
----------- -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class............................... (10,164) (30,242)
Institutional Service Class....................... -- (3,598)
Net Realized Gain:
Institutional Class............................... (194,510) (117,395)
Institutional Service Class....................... (102,403) --
----------- -----------
Total Distributions............................... (307,077) (151,235)
----------- -----------
CAPITAL SHARE TRANSACTIONS - NOTE J:
Institutional Class
Issued............................................ 783,776 2,132,517
In Lieu of Cash Distributions..................... 204,612 147,637
Redeemed.......................................... (1,882,622) (1,494,014)
----------- -----------
Net Increase from Institutional Class Shares....... (894,234) 786,140
----------- -----------
Institutional Service Class
Issued............................................ 346,516 2,589,371
In Lieu of Cash Distributions..................... 102,403 3,598
Redeemed.......................................... (68,609) (237,988)
----------- -----------
Net Increase from Institutional Service Class
Shares............................................ 380,310 2,354,981
----------- -----------
Net Increase from Capital Share Transactions...... (513,924) 3,141,121
----------- -----------
Total Increase.................................... 209,541 4,298,596
----------- -----------
Net Assets:
Beginning of Period............................... 7,582,007 3,283,411
----------- -----------
End of Period (including undistributed net
investment income of $582 and $422,
respectively).................................... $ 7,791,548 $ 7,582,007
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS NWQ BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES INSTITUTIONAL SERVICE CLASS SHARES
----------------------------------------------------- ------------------------------------
SIX MONTHS SIX MONTHS
ENDED AUGUST 2, ENDED YEAR JANUARY 22,
APRIL 30, YEARS ENDED OCTOBER 31, 1994** TO APRIL 30, ENDED 1996*** TO
1998 --------------------------- OCTOBER 31, 1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED) 1997 1996
----------- -------- -------- ------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 14.81 $ 12.39 $ 11.24 $ 9.84 $10.00 $ 14.80 $ 12.37 $ 11.57
------- -------- -------- ------- ------ ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income... 0.15 0.31 0.31 0.32 0.06 0.13 0.26 0.21
Net Realized and
Unrealized Gain (Loss)
on Investments......... 1.35 2.47 1.21 1.40 (0.19) 1.32 2.47 0.78
------- -------- -------- ------- ------ ------- ------- -------
Total from Investment
Operations............. 1.50 2.78 1.52 1.72 (0.13) 1.45 2.73 0.99
------- -------- -------- ------- ------ ------- ------- -------
DISTRIBUTIONS
Net Investment Income... (0.15) (0.31) (0.30) (0.32) (0.03) (0.13) (0.25) (0.19)
Net Realized Gain....... (0.46) (0.05) (0.07) -- -- (0.46) (0.05) --
------- -------- -------- ------- ------ ------- ------- -------
Total Distributions..... (0.61) (0.36) (0.37) (0.32) (0.03) (0.59) (0.30) (0.19)
------- -------- -------- ------- ------ ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 15.70 $ 14.81 $ 12.39 $ 11.24 $ 9.84 $ 15.66 $ 14.80 $ 12.37
======= ======== ======== ======= ====== ======= ======= =======
TOTAL RETURN+........... 10.47%++ 22.82% 13.68% 17.80% (1.30)%++ 10.12%++ 22.39% 8.60%++
======= ======== ======== ======= ====== ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $15,199 $ 12,697 $ 8,624 $ 5,334 $1,584 $45,446 $41,421 $19,999
Ratio of Expenses to
Average Net Assets..... 1.00%* 1.00% 1.01% 1.04% 1.00%* 1.40%* 1.40% 1.41%*
Ratio of Net Investment
Income to Average Net
Assets................. 2.18%* 2.29% 2.79% 3.30% 3.59%* 1.78%* 1.89% 2.39%*
Portfolio Turnover
Rate................... 12% 20% 31% 31% 1% 12% 20% 31%
Average Commssion
Rate#.................. $0.0578 $ 0.0619 $ 0.0717 N/A N/A $0.0578 $0.0619 $0.0717
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.18%* 0.22% 1.21% 2.63% 12.10%* 0.18%* 0.22% 0.99%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.00%* 1.00% 1.00% 1.00% N/A 1.40%* 1.40% 1.40%*
</TABLE>
* Annualized
** Commencement of Operations
*** Initial offering of Institutional Service Class Shares.
+ Total return would have been lower had the Adviser not waived and assumed
certain expenses during the periods.
++ Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS NWQ SMALL CAP VALUE PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
CLASS SHARES
------------------
NOVEMBER 4, 1997**
TO APRIL 30, 1998
(UNAUDITED)
------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD....................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income..................................... 0.01
Net Realized and Unrealized Gain on Investments........... 0.66
-------
Total from Investment Operations.......................... 0.67
-------
DISTRIBUTIONS
Net Investment Income..................................... (0.02)
-------
NET ASSET VALUE, END OF PERIOD............................. $ 10.65
=======
TOTAL RETURN+.............................................. 6.74%++
=======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)...................... $ 889
Ratio of Expenses to Average Net Assets.................... 1.20%*
Ratio of Net Investment Income to Average Net Assets....... (0.02)%*
Portfolio Turnover Rate.................................... 31%
Average Commission Rate#................................... $0.0609
Ratio of Voluntarily Waived Fees and Expenses Assumed by
the Adviser to Average Net Assets........................ 16.65%*
Ratio of Expenses to Average Net Assets Including Expense
Offsets.................................................. 1.25%*
</TABLE>
* Annualized
** Commencement of Operations
+ Total return would have been lower had the Adviser not waived and assumed
certain expenses during the periods.
++ Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS NWQ SPECIAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL SERVICE
CLASS SHARES CLASS SHARES
------------------ ---------------------
NOVEMBER 4, 1997** NOVEMBER 7, 1997***
TO TO
APRIL 30, 1998 APRIL 30, 1998
(UNAUDITED) (UNAUDITED)
------------------ ---------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.. $ 10.00 $ 9.90
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)......... -- (0.02)
Net Realized and Unrealized Gain on
Investments......................... 1.53 1.63
------- -------
Total from Investment Operations..... 1.53 1.61
------- -------
NET ASSET VALUE, END OF PERIOD........ $ 11.53 $ 11.51
======= =======
TOTAL RETURN+......................... 15.30%++ 16.26%++
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)......................... $ 1,669 $ 3,123
Ratio of Expenses to Average Net
Assets.............................. 1.15%* 1.55%*
Ratio of Net Investment Income to
Average Net Assets.................. 0.14%* (0.34)%*
Portfolio Turnover Rate............... 16% 16%
Average Commission Rate#.............. $0.0694 $0.0694
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets.................. 3.47%* 3.65%*
Ratio of Expenses to Average Net
Assets Including Expense Offsets.... 1.15%* 1.55%*
</TABLE>
* Annualized
** Commencement of Operations
*** Initial Offering of Institutional Service Class Shares
+ Total return would have been lower had the Adviser not waived and assumed
certain expenses during the periods.
++ Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS NWQ VALUE EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE
INSTITUTIONAL CLASS SHARES CLASS SHARES
---------------------------------------------------- ------------------------
SIX MONTHS SIX MONTHS
ENDED YEARS ENDED OCTOBER SEPTEMBER 21, ENDED JUNE 16,
APRIL 30, 31, 1994** TO APRIL 30, 1997*** TO
1998 ------------------------ OCTOBER 31, 1998 OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 (UNAUDITED) 1997
----------- ------- ------- ------ ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 18.38 $ 14.13 $ 11.65 $ 9.98 $10.00 $ 18.37 $ 17.39
------- ------- ------- ------ ------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income... 0.04 0.11 0.14 0.12 0.01 -- 0.01
Net Realized and
Unrealized Gain (Loss)
on Investments......... 2.63 4.76 2.49 1.65# (0.03) 2.64 1.00
------- ------- ------- ------ ------ ------- -------
TOTAL FROM INVESTMENT
OPERATIONS............. 2.67 4.87 2.63 1.77 (0.02) 2.64 1.01
------- ------- ------- ------ ------ ------- -------
DISTRIBUTIONS
Net Investment Income... (0.04) (0.12) (0.14) (0.10) -- -- (0.03)
Net Realized Gain....... (0.72) (0.50) (0.01) -- -- (0.72) --
------- ------- ------- ------ ------ ------- -------
Total Distributions..... (0.76) (0.62) (0.15) (0.10) -- (0.72) (0.03)
------- ------- ------- ------ ------ ------- -------
Net Asset Value, End of
Period................. $ 20.29 $ 18.38 $ 14.13 $11.65 $ 9.98 $ 20.29 $ 18.37
======= ======= ======= ====== ====== ======= =======
TOTAL RETURN+........... 15.09%++ 35.77% 22.69% 17.84% (0.20)%++ 14.92%++ 5.81%++
======= ======= ======= ====== ====== ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $ 4,624 $ 5,097 $ 3,283 $2,464 $ 253 $ 3,167 $ 2,485
Ratio of Expenses to
Average Net Assets..... 1.00%* 1.00% 1.03% 1.21% 1.00%* 1.40%* 1.40%*
Ratio of Net Investment
Income to Average Net
Assets................. 0.43%* 0.66% 1.11% 1.39% 1.36%* 0.01%* 0.09%*
Portfolio Turnover
Rate................... 10% 31% 25% 4% 0% 10% 31%
Average Commission
Rate#.................. $0.0613 $0.0627 $0.0705 N/A N/A $0.0613 $0.0627
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 1.98%* 2.83% 4.14% 9.67% 96.54%* 1.98%* 2.22%*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.00%* 1.00% 1.00% 1.00% N/A 1.40%* 1.40%*
</TABLE>
* Annualized
** Commencement of Operations
*** Initial offering of Institutional Service Class Shares
+ Total return would have been lower had the Adviser not waived and assumed
certain expenses during the periods.
++ Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The NWQ Balanced
Portfolio, the NWQ Small Cap Value Portfolio, the NWQ Special Equity Portfolio
and the NWQ Value Equity Portfolio (the "Portfolios"), portfolios of UAM Funds
Inc., are diversified, open-end management investment companies. At April 30,
1998, the UAM Funds were composed of forty-four active portfolios. The finan-
cial statements of the remaining portfolios are presented separately. The
Portfolios are authorized to offer two separate classes of shares--Institu-
tional Class Shares and Institutional Service Class Shares. Both classes have
identical voting rights (except Institutional Service Class Shareholders have
exclusive voting rights with respect to matters relating to distributions and
shareholder servicing of such shares), dividend, liquidation and other rights.
The objectives of the Portfolios are as follows:
NWQ BALANCED PORTFOLIO seeks to achieve consistent, above-average re-
turns with minimum risk to principal by investing primarily in a combina-
tion of investment grade fixed income securities and common stocks of com-
panies with above-average statistical value which are in fundamentally at-
tractive industries and which, in the Adviser's opinion, are undervalued
at the time of purchase.
NWQ SMALL CAP VALUE PORTFOLIO seeks to achieve long-term capital appre-
ciation by investing primarily in small capitalization common stocks and
other equity securities which, in the Adviser's opinion, are undervalued
at the time of purchase.
NWQ SPECIAL EQUITY PORTFOLIO seeks to achieve long-term capital appreci-
ation by investing primarily in the common stock and other equity securi-
ties of companies which, in the Adviser's opinion, are undervalued at the
time of purchase and offer the potential for above-average capital appre-
ciation.
NWQ VALUE EQUITY PORTFOLIO seeks to achieve consistent, superior total
return with minimum risk to principal by investing primarily in common
stocks with above-average statistical value which are in fundamentally at-
tractive industries and which, in the Adviser's opinion, are undervalued
at the time of purchase.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may re-
quire manage-
31
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
ment to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results may differ from those
estimates.
1. SECURITY VALUATION: Equity securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the valua-
tion is made or, if no sale occurred on such day, at the mean of the bid
and asked prices. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and un-
listed equity securities are valued at current bid prices. Fixed income
securities are stated on the basis of valuations provided by brokers
and/or a pricing service which uses information with respect to transac-
tions in fixed income securities, quotations from dealers, market transac-
tions in comparable securities and various relationships between securi-
ties in determining value. Short-term investments that have remaining ma-
turities of sixty days or less at time of purchase are valued at amortized
cost, if it approximates market value. The value of other assets and secu-
rities for which no quotations are readily available is determined in good
faith at fair value using methods determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, each
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
32
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distrib-
ute substantially all of its net investment income quarterly. Any realized
net capital gains will be distributed annually. All distributions are re-
corded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the effective yield
basis over their respective lives. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Income, expenses (other than class
specific expenses) and realized and unrealized gains and losses are allo-
cated to each class of shares based upon their relative net assets. Custo-
dian fees for the Portfolio have been increased to include expense off-
sets, if any, for custodian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
NWQ Investment Management Company (the "Adviser"), a wholly-owned subsidiary
of United Asset Management Corporation ("UAM"), provides investment advisory
services to each Portfolio for a monthly fee calculated at an annual rate of
average daily net assets for the month as follows:
<TABLE>
<CAPTION>
NWQ PORTFOLIOS
- --------------
<S> <C>
Balanced................................................................. 0.70%
Small Cap Value.......................................................... 1.00
Special Equity........................................................... 0.85
Value Equity............................................................. 0.70
</TABLE>
33
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses, if necessary, in order to keep the total annual oper-
ating expenses, after the effect of expense offset arrangements, from exceed-
ing the following:
<TABLE>
<CAPTION>
NWQ PORTFOLIOS INSTITUTIONAL CLASS RATE INSTITUTIONAL SERVICE CLASS RATE
- -------------- ------------------------ --------------------------------
<S> <C> <C>
Balanced............. 1.00% 1.40%
Small Cap Value...... 1.20 1.60
Special Equity....... 1.15 1.55
Value Equity......... 1.00 1.40
</TABLE>
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, computed daily and
payable monthly, of 0.19% of the first $200 million of the combined aggregate
net assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net as-
sets; plus 0.05% of the combined aggregate net assets in excess of $3 billion.
The fees are allocated among the portfolios of the UAM Funds on the basis of
their relative net assets and are subject to a graduated minimum fee schedule
per portfolio which rises from $2,000 per month, upon inception of a portfo-
lio, to $70,000 annually after two years. For portfolios with more than one
class of shares, the minimum annual fee increases to $90,000. In addition, the
Administrator receives a Portfolio-specific monthly fee at an annual rate of
0.06% of average daily net assets of NWQ Balanced Portfolio, and 0.04% of av-
erage daily net assets of NWQ Small Cap Value, NWQ Special Equity and NWQ
Value Equity Portfolios, respectively. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned the following amounts from the Portfolio as Administrator and paid the
following portion to CGFSC for their services as sub-Administrator:
<TABLE>
<CAPTION>
NWQ PORTFOLIOS ADMINISTRATION FEES PORTION PAID TO CGFSC
- -------------- ------------------- ---------------------
<S> <C> <C>
Balanced.............................. $66,399 $49,564
Small Cap Value....................... 12,924 12,839
Special Equity........................ 23,387 22,874
Value Equity.......................... 48,776 47,284
</TABLE>
34
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION AND SERVICE PLAN: UAM Fund Distributors, Inc. (the "Distrib-
utor"), a wholly-owned subsidiary of UAM, distributes the shares of the Port-
folios. The Distributor does not receive any fee or any other compensation
with respect to the Portfolios.
The NWQ Portfolios have adopted a Distribution and Service Plan (the
"Plans") on behalf of the Service Class Shares pursuant to Rule 12b-1 under
the Investment Company Act of 1940. Under the Plans, each Portfolio may not
incur distribution and service fees which exceed an annual rate of 0.75% of
their net assets, however, the Board has currently limited aggregate payments
under the Plans to 0.50% per annum of each Portfolios' net assets. Each Port-
folio's Service Class Shares are currently making payments for distribution
fees at 0.15% of average daily net assets.
In addition, the NWQ Portfolios' Service Class Shares pays service fees at
an annual rate of 0.25% of the average daily value of Service Class Shares
owned by clients of the Service Agents.
F. ACCOUNT SERVICES: The UAM Funds have entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
("the Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services.
The Service Provider has voluntarily agreed to waive a portion of its fees,
if necessary, in order to keep the total annual operating expenses, after the
effect of expense offset arrangements, from exceeding the following:
<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL SERVICE CLASS
NWQ PORTFOLIOS CLASS RATE RATE
- -------------- ------------- -------------
<S> <C> <C>
Balanced............................................ 1.00% 1.40%
Small Cap Value..................................... 1.20 1.60
Special Equity...................................... 1.15 1.55
Value Equity........................................ 1.00 1.40
</TABLE>
35
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds, and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government secu-
rities and short-term securities were:
<TABLE>
<CAPTION>
NWQ PORTFOLIOS PURCHASES SALES
- -------------- ---------- ----------
<S> <C> <C>
Balanced.................................................. $2,874,859 $5,286,176
Small Cap Value........................................... 966,286 137,250
Special Equity............................................ 4,438,782 398,349
Value Equity.............................................. 714,587 1,498,889
</TABLE>
Purchases and sales of long-term U.S. Government securities were approxi-
mately $4,502,891 and $999,609, respectively for NWQ Balanced Portfolio. There
were no purchases or sales of long-term U.S. Government securities for NWQ
Small Cap Value Portfolio, NWQ Special Equity Portfolio or NWQ Value Equity
Portfolio.
I. LINE OF CREDIT: The Portfolios, except the Small Cap Value and Special
Equity Portfolios, along with certain other Portfolios of UAM Funds, collec-
tively entered into an agreement which enables them to participate in a $100
million unsecured line of credit with several banks. Borrowings will be made
solely to temporarily finance the repurchase of Capital shares. Interest is
charged to each participating Portfolio based on its borrowings at a rate per
annum equal to the Federal Funds rate plus 0.50%. In addition, a commitment
fee of 0.08% per annum, payable at the end of each calendar quarter, is ac-
crued by each participating Portfolio based on its average daily unused por-
tion of the line of credit. During the six months ended April 30, 1998, the
Portfolios had no borrowings under the agreement.
36
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
J. OTHER: Transactions in capital shares for the Portfolios, by class, were
as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL INSTITUTIONAL SERVICE
CLASS SHARES CLASS SHARES**
-------------------------- -----------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED ENDED ENDED ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998 1997 1998 1997
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NWQ BALANCED PORTFOLIO:
Shares Issued........... 244,427 448,160 271,407 2,026,550
In Lieu of Cash Distri-
butions............... 39,301 20,838 114,462 53,941
Shares Redeemed......... (172,497) (308,186) (283,423) (898,610)
-------- -------- -------- ---------
Net Increase (Decrease)
from Capital Share
Transactions.......... 111,231 160,812 102,446 1,181,881
======== ======== ======== =========
<CAPTION>
NOVEMBER 4,
1997* TO
APRIL 30, 1998
--------------
<S> <C>
NWQ SMALL CAP VALUE
PORTFOLIO:
Shares Issued........... 90,564
In Lieu of Cash Distri-
butions............... 80
Shares Redeemed......... (7,147)
--------
Net Increase (Decrease)
from Capital Share
Transactions.......... 83,497
========
<CAPTION>
NOVEMBER 7,
NOVEMBER 4, 1997 TO
1997* TO APRIL APRIL 30,
30, 1998 1998
-------------- -----------
<S> <C> <C>
NWQ SPECIAL EQUITY
PORTFOLIO:
Shares Issued........... 144,753 271,363
-------- --------
Net Increase from
Capital Share
Transactions.......... 144,753 271,363
======== ========
<CAPTION>
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31,
1998 1997 1998 1997
-------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
NWQ VALUE EQUITY PORTFO-
LIO:
Shares Issued........... 41,176 127,379 18,714 147,786
In Lieu of Cash Distri-
butions............... 11,476 10,331 5,759 199
Shares Redeemed......... (102,077) (92,847) (3,661) (12,721)
-------- -------- -------- ---------
Net Increase (Decrease)
from Capital Share
Transactions.......... (49,425) 44,863 20,812 135,264
======== ======== ======== =========
</TABLE>
- -----------
* Commencement of operations.
** Initial offering of Institutional Service Class Shares for NWQ Balanced,
NWQ Special Equity and NWQ Value Equity began on January 22, 1996, Novem-
ber 7, 1997 and June 16, 1997, respectively.
37
<PAGE>
UAM FUNDS THE NWQ PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998, the percentage of total shares outstanding held by record
shareholders owning 10% or greater of the aggregate total shares outstanding
for each Portfolio were as follows:
<TABLE>
<CAPTION>
NWQ PORTFOLIOS NO. OF SHAREHOLDERS % OWNERSHIP
- -------------- ------------------- -----------
<S> <C> <C>
Balanced-Institutional Class................... 2 62%
Balanced-Institutional Service Class........... 4 65%
Small Cap Value Institutional Class............ 2 96%
Special Equity Institutional Class............. 4 94%
Special Equity Institutional Service Class..... 3 77%
Value Equity Institutional Class............... 1 26%
Value Equity Institutional Service Class....... 1 100%
</TABLE>
At April 30, 1998, 7% of the NWQ Value Equity Portfolio's Institutional
Class shares were beneficially held by a related party of the Portfolio.
38
<PAGE>
UAM Funds The NWQ Portfolios
- --------------------------------------------------------------------------------
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- --------------------------------------------------------------------------------
Investment Adviser
NWQ Investment Management Company
2049 Century Park East, 4th Floor
Los Angeles, CA 90067
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants ------------------------------------
Price Waterhouse LLP This report has been prepared for
160 Federal Street shareholders and may be distributed
Boston, MA 02110 to others only if preceded or
accompanied by a current prospectus.
Distributor ------------------------------------
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
Rice, Hall, James
Portfolios
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS THE RHJ PORTFOLIOS
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter
Small Cap................................................................. 1
Small/MidCap.............................................................. 4
Portfolio of Investments
Small Cap................................................................. 7
Small/MidCap.............................................................. 10
Statement of Assets and Liabilities......................................... 12
Statement of Operations..................................................... 13
Statement of Changes in Net Assets
Small Cap................................................................. 14
Small/MidCap.............................................................. 15
Financial Highlights
Small Cap................................................................. 16
Small/MidCap.............................................................. 17
Notes to Financial Statements............................................... 18
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
- --------------------------------------------------------------------------------
May 22, 1998
Dear Shareholders:
The performance of the Rice Hall James Small Cap Portfolio as of April 30,
1998 is presented below:
<TABLE>
<CAPTION>
FISCAL INCEPTION AVERAGE
QUARTER YEAR TO TO DATE ANNUAL
ENDED DATE 7/01/94 TO 7/01/94 TO
4/30/98 4/30/98 4/30/98 4/30/98
------- ------- ---------- ----------
<S> <C> <C> <C> <C>
RHJ Small Cap Portfolio................... +12.26% +7.05% +166.94% +29.17%
Russell 2000.............................. +12.44% +11.88% +112.71% +21.80%
Standard & Poor's 500..................... +13.85% +22.50% +172.16% +29.90%
Value Line Composite...................... +12.00% +12.21% +82.24% +16.98%
</TABLE>
The first half of fiscal 1998 was a poor one for small cap stocks in general
and the Rice Hall James Small Cap Portfolio in particular. The best place to
be during the six months ended April 30 was in large cap stocks as evidenced
by the S & P 500's 22.50% return. Mid cap stocks, as measured by the Russell
Midcap index, increased 16.86% and small caps, per the Russell 2000, were up
11.88%. The bigger the better.
The Portfolio exhibited "market-like" performance in the quarter ended April
30. The first fiscal quarter was the rough one for the Portfolio as it dropped
4.64%, while the Russell 2000 dropped 0.51% and, finally, micro cap stocks
portrayed by the Callan Micro cap index fell 1.75%. Further, investors with a
focus on growth companies in this quarter were penalized in the mid to small
cap area. The Russell 2000 growth index was down 3.63%.
The Rice Hall James Small Cap Portfolio is more growth oriented than the
Russell 2000 and about one quarter its size in average capitalization at $210
million versus $820 million. While the Portfolio's P/E ratio is lower than
that of the Russell 2000, the aggregate projected earnings growth rate at 24%
exceeds that of the Russell 2000 by nearly 4%. This positioning helps to
explain the underperformance during the first quarter.
The inception-to-date results in the Small Cap Portfolio are strong versus all
three of the above comparative indices. Our cumulative 166.94% return outpaced
by a large margin the rates of return for the Russell 2000 and Value Line.
During its 3 year 10 month history, the RHJ Portfolio has almost matched the
return of the S & P 500.
The market value of the Portfolio on 4/30/98 was $55.8 million. Basic industry
remains a heavily concentrated sector at 17%, while exposure to energy dropped
1
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
- -------------------------------------------------------------------------------
to 10%. Technology has increased to nearly 17% of the portfolio as the fourth
calendar quarter declined and year to date volatility in technology stocks
presented several investment opportunities. No other sector exceeded 11% of
the portfolio at quarter end and we do not anticipate any major changes this
quarter.
After the initial October reaction to the Asian problems, the market has
recovered dramatically. Ironically, this recovery in the market came largely
in the big capitalization issues, the very companies most exposed to the
negative fundamental effects of the Asian crisis. It has been a flight to
large recognizable names in a period of uncertainty, a flight to perceived
safety.
Further, the market has continued to reward the large cap investor in spite of
the fact that first quarter earnings reports for the Standard & Poor's 500
dropped like a stone to a 1.5% gain over the year ago period. To support full
year earnings growth of 6-7%, analysts have now had to raise second half
estimates to 8 to 10%. This weakness and subsequent "back-end loading" of
estimates is a yellow flag. The question is whether or not the large cap
market will accept a third year of single digit earnings growth, possibly mid
single digit growth this year, after consistent 15%+ growth in the early
1990's. It would seem that sooner or later valuation becomes an issue and
price/earnings ratios of 23 times 1998 earnings estimates, or 3 to 4 times
predicted earnings growth, are recognized as excessive.
While small capitalization earnings have also shown some weakness in the first
quarter, though not to the degree of the large caps, valuations are not as
extreme, nor is the fade in the growth rates. After first quarter earnings
increased approximately 15%, estimates for small cap earnings growth are in
the 20% area for 1998, while the past five year earnings growth has been about
a percent above that. Price earnings ratios are 21 times 1998 estimates, just
slightly higher than projected earnings growth rates. Valuation clearly favors
small cap stocks.
In our last letter we stated that we did not expect another double digit year
in the market in 1998, particularly in the large cap sector. We got that
double digit year in the first half and such momentum could continue. However,
valuation is still key and we would be surprised (though pleasantly) if the
market sustains its strong advance through 1998.
Whether the market rises or corrects, our area of focus remains the same. We
will not try to time the market, but instead maintain a fully invested
portfolio of growth companies with capitalizations between $40 million and
$500 million where we see positive fundamental change, regardless of the
industry or sector represented.
2
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
- -------------------------------------------------------------------------------
Maximum capital appreciation is the primary objective of this Portfolio,
current income generation is not a consideration and volatility and turnover
may be high. No derivative investments are used.
Sincerely,
Rice, Hall, James & Associates
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results.
Without the Adviser's temporary fee waivers (also expenses assumed by the
Adviser), total returns would have been lower. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Since the
portfolio is actively managed, its holdings are subject to change.
DEFINITION OF COMPARATIVE INDICES
---------------------------------
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 400
industrial, 40 financial, 40 utilities and 20 transportation stocks.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly-traded companies.
Value Line Composite is an unmanaged index composed of over 1,600 stocks in
the Value Line Investment Survey.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
3
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
- -------------------------------------------------------------------------------
May 22, 1998
Dear Shareholders:
The performance of the Rice, Hall, James Small/Mid Cap Portfolio as of April
30, 1998 is presented below. Two indices are provided for comparative
purposes, the Standard and Poor's 500 and a custom index created by averaging
the returns of the Russell 2000 and the Russell Mid Cap indices. This 50/50
Blended Russell index is the most appropriate benchmark for the RHJ Small/Mid
Cap Portfolio. Returns are shown for the most recent quarter, the fiscal year
to date and inception to date.
<TABLE>
<CAPTION>
FISCAL INCEPTION AVERAGE
QUARTER YEAR TO TO DATE ANNUAL
ENDED DATE 11/1/96 TO 11/1/96 TO
4/30/98 4/30/98 4/30/98 4/30/98
------- ------- ---------- ----------
<S> <C> <C> <C> <C>
RHJ Small/Mid Cap Portfolio............... +18.32% +19.61% +51.62% +32.08%
50/50 Blended Russell Index............... +12.83% +14.37% +47.59% +29.91%
Standard & Poor's 500..................... +13.85% +22.50% +61.82% +38.20%
</TABLE>
The quarter ended January 31, 1998 was clearly tough for small and mid cap
stocks with the Russell Blended index and the RHJ Portfolio over 6% behind the
S & P 500's 7.60% return. The second quarter improved as the 50/50 blended
index trailed the S & P 500 (large caps) by only one percent. The Rice Hall
James Small/Mid Cap Portfolio had a stellar quarter ending April 30, up
18.32%, 4.47% and 5.49% above the S & P 500 and the Russell Blended indices,
respectively.
The Portfolio ended the period with over $23 million in net asset value, with
significant sector concentrations in insurance, 17%; basic industries, 13%;
and services, 12%. Exposure to consumer related issues dropped considerably
over the past six months to 8% in consumer non-durables, 5% in consumer
durables and 4% in retail. Sector weightings do not drive our stock selection
process and we do not expect any dramatic changes in sector exposures this
quarter.
After the initial October reaction to the Asian problems, the market has
recovered dramatically. Ironically, this recovery in the market came largely
in the big capitalization issues, the very companies most exposed to the
negative fundamental effects of the Asian crisis. It has been a flight to
large recognizable names in a period of uncertainty, a flight to perceived
safety.
Further, the market has continued to reward the large cap investor in spite of
the fact that first quarter earnings reports for the Standard & Poor's 500
dropped like a stone to a 1.5% gain over the year ago period. To support full
year earnings growth of 6-7%, analysts have now had to raise second half
estimates to 8 to 10%. This
4
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
- -------------------------------------------------------------------------------
weakness and subsequent "back-end loading" of estimates is a yellow flag. The
question is whether or not the large cap market will accept a third year of
single digit earnings growth, possibly mid single digit growth this year,
after consistent 15%+ growth in the early 1990's. It would seem that sooner or
later valuation becomes an issue and price/earnings ratios of 23 times 1998
earnings estimates, or 3 to 4 times predicted earnings growth, are recognized
as excessive.
While small and mid capitalization company earnings have also shown some
weakness in the first quarter, though not to the degree of the large caps,
valuations are not as extreme, nor is the fade in the growth rates. First
quarter earnings increased 13%-15% and estimates for small and mid cap
earnings growth are in the 20% area for 1998, while the past five year
earnings growth has been slightly below that. Price earnings ratios are 21
times 1998 estimates, just slightly higher than projected earnings growth
rates. Valuation clearly favors small and mid cap stocks.
In our last letter we stated that we did not expect another double digit year
in the market in 1998, particularly in the large cap sector. We got that
double digit year in the first half and such momentum could continue. However,
valuation is still key and we would be surprised (though pleasantly) if the
market sustains its strong advance through 1998.
There are a great number of good quality attractive ideas in the small and mid
cap sectors where valuations have not reached the historically high levels of
the big caps and we will continue to construct what we think is the most
attractive portfolio of these names. Our area of focus will continue to be on
fundamentally strong growth companies with market capitalizations between $300
million and $2.5 billion. We will remain fully invested in the most
attractively priced small and mid capitalization growth stocks where positive
change is present, regardless of the industry or sector represented.
The RHJ Small/Mid Cap Portfolio is designed to replicate the Rice, Hall, James
core equity style in which the overwhelming majority of RHJ separate accounts
have been managed for many years. Capital appreciation is the portfolio
objective, dividend yield is not a consideration in equity selection and no
derivative investments are used.
Sincerely,
Rice, Hall, James & Associates
5
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
- -------------------------------------------------------------------------------
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results.
Without the Adviser's temporary fee waivers (also expenses assumed by the
Adviser), total returns would have been lower. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. Since the
portfolio is actively managed, its holdings are subject to change.
DEFINITION OF COMPARATIVE INDICES
---------------------------------
The Standard & Poor's 500 Stock Index is an unmanaged index composed of 400
industrial, 40 financial, 40 utilities and 20 transportation stocks.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly-traded companies.
The Russell Mid Cap Index is an unmanaged index composed of the 800 smallest
companies in the Russell 1000 Index, a U.S. equity index of the 1,000 largest
companies in the Russell 3000 Index, with an average capitalization of $1.96
billion.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
6
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 94.2%
<TABLE>
<CAPTION>
SHARES VALUE+
------- ----------
<S> <C> <C>
BANKS - 6.1%
*AmeriCredit Corp......................................... 15,000 $ 497,812
BancFirst Corp............................................ 25,000 1,106,250
*Surety Capital Corp...................................... 100,000 537,500
UnionBancorp, Inc......................................... 15,000 301,875
*Willis Lease Finance Corp................................ 40,000 935,000
----------
3,378,437
----------
BASIC INDUSTRIES - 15.8%
Brunswick Technologies, Inc............................... 50,000 700,000
Excel Industries, Inc..................................... 27,000 563,625
Harmon Industries, Inc.................................... 52,500 1,273,125
*Holophane Corp........................................... 25,000 675,000
*Mansur Industries, Inc................................... 35,000 665,000
*Northwest Pipe Co........................................ 30,000 660,000
Spartech Corp............................................. 36,000 762,750
*Tetra Tech, Inc.......................................... 27,250 654,000
*TETRA Technologies, Inc.................................. 55,000 1,316,562
*Thermo Sentron, Inc...................................... 30,000 348,750
Trion, Inc................................................ 50,000 287,500
*Universal Stainless & Alloy Products, Inc................ 50,000 550,000
*Whitehall Corp........................................... 20,000 357,500
----------
8,813,812
----------
CONSTRUCTION - 1.5%
*RDO Equipment Company, Class A........................... 50,000 825,000
----------
CONSUMER DURABLES - 4.4%
Cavalier Homes, Inc....................................... 150,000 1,800,000
*Keystone Automotive Industries, Inc...................... 20,000 516,250
*Rock of Ages, Corp....................................... 8,000 124,000
----------
2,440,250
----------
CONSUMER NON-DURABLES - 9.8%
*Craig Corp............................................... 30,000 399,375
*Eidos plc ADR............................................ 30,000 480,000
*Home Products International, Inc......................... 70,000 936,250
*O'Charleys, Inc.......................................... 45,000 888,750
*Omega Protein Corp....................................... 60,000 1,050,000
*Rio Hotel & Casino, Inc.................................. 26,000 588,250
*Silverleaf Resorts, Inc.................................. 30,000 712,500
*Zindart Ltd. ADR......................................... 30,000 438,750
----------
5,493,875
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ----------
<S> <C> <C>
ENERGY RELATED - 9.8%
*American Oilfield Divers, Inc............................ 80,000 $1,260,000
*Chieftain International, Inc............................. 57,500 1,286,562
*Domain Energy Corp....................................... 90,000 1,170,000
Midcoast Energy Resources, Inc............................ 38,500 863,844
*Unit Corp................................................ 90,000 877,500
----------
5,457,906
----------
HEALTH CARE - 10.7%
*ABAXIS, Inc.............................................. 110,000 281,875
*Andrx Corp............................................... 20,000 747,500
*IGEN International, Inc.................................. 30,000 1,095,000
*i-STAT Corp.............................................. 40,000 510,000
*LifeCell Corp............................................ 85,000 669,375
Meridian Diagnostics, Inc................................. 55,000 690,938
*Nitinol Medical Technologies............................. 100,000 825,000
*Prime Medical Services, Inc.............................. 110,000 1,168,750
----------
5,988,438
----------
INSURANCE - 4.6%
Argonaut Group, Inc....................................... 15,000 511,875
Chartwell Re Corp......................................... 13,000 400,563
MMI Companies, Inc........................................ 20,000 470,000
*Superior National Insurance Group, Inc................... 60,000 1,200,000
----------
2,582,438
----------
RETAIL - 7.2%
*1-800 CONTACTS, Inc...................................... 25,000 457,812
*Bon-Ton Stores, Inc...................................... 50,000 818,750
*Books-A-Million, Inc..................................... 75,000 435,938
*Marks Bros. Jewelers, Inc................................ 25,000 450,000
*Piercing Pagoda, Inc..................................... 20,000 665,000
*Sportsmans Guide, Inc.................................... 100,000 787,500
*Tropical Sportswear International Corp................... 25,000 418,750
----------
4,033,750
----------
SERVICES - 7.4%
Butler International, Inc................................. 30,000 798,750
*Extended Systems, Inc.................................... 140,000 980,000
*FirstService Corp........................................ 75,000 890,625
*F.Y.I., Inc.............................................. 25,000 662,500
*The Vincam Group, Inc.................................... 30,000 787,500
----------
4,119,375
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS--CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TECHNOLOGY - 15.8%
*Barringer Technologies, Inc........................ 40,000 $ 480,000
*FARO Technologies, Inc............................. 65,000 690,625
*H.T.E, Inc......................................... 55,000 1,540,000
*INTERSOLV, Inc..................................... 100,000 1,512,500
*Meridian Data, Inc................................. 30,000 174,375
*Peritus Software Services, Inc..................... 85,000 467,500
*Pomeroy Computer Resources, Inc.................... 40,000 1,000,000
*Power-One, Inc..................................... 80,000 1,000,000
*Radiant Systems, Inc............................... 25,000 550,000
*Three-Five Systems, Inc. .......................... 22,500 441,563
*Viagrafix Corp..................................... 85,000 950,937
-----------
8,807,500
-----------
TRANSPORTATION - 1.1%
*International Total Services, Inc.................. 30,000 607,500
-----------
TOTAL COMMON STOCKS (Cost $41,824,792)......................... 52,548,281
-----------
PREFERRED STOCKS - 0.7%
CONSUMER NON-DURABLE - 0.7%
*Craig Corp. (Cost $248,309)........................ 30,000 382,500
-----------
</TABLE>
SHORT-TERM INVESTMENT - 6.5%
<TABLE>
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 6.5%
Chase Securities Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $3,635,542,
collateralized by $3,169,408 of various
U.S.Treasury Obligations, 5.50%-14.00% due 5/15/04-
11/25/27, valued at $3,676,309 (Cost $3,635,000)... $3,635,000 3,635,000
-----------
TOTAL INVESTMENTS - 101.4% (Cost $45,708,101) (a).............. 56,565,781
-----------
OTHER ASSETS AND LIABILITIES (NET) - (1.4)%.................... (760,858)
-----------
NET ASSETS - 100%.............................................. $55,804,923
-----------
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $45,708,101. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$10,857,680. This consisted of aggregate gross unrealized appreciation for
all securities of $12,298,177 and aggregate gross unrealized depreciation
for all securities of $1,440,497.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 92.7%
<TABLE>
<CAPTION>
SHARES VALUE+
------ ---------
<S> <C> <C>
BANKS - 1.9%
National Commerce Bancorp................................... 10,000 $ 440,000
---------
BASIC INDUSTRIES - 12.1%
Dexter Corp................................................. 18,000 743,625
General Signal Corp......................................... 16,000 704,000
*Hexcel Corporation......................................... 23,800 664,912
*Royal Group Technologies, Ltd.............................. 11,000 341,688
*Steel Dynamics, Inc........................................ 17,000 388,875
---------
2,843,100
---------
CAPITAL CONSTRUCTION - 2.3%
*Jacobs Engineering Group, Inc.............................. 15,900 530,662
---------
CONSUMER DURABLES - 3.9%
International Game Technology............................... 32,400 901,125
---------
CONSUMER NON-DURABLES - 4.0%
Warnaco Group, Inc.......................................... 22,300 942,175
---------
ENERGY RELATED - 4.9%
*EVI, Inc................................................... 8,500 452,625
*Weatherford Enterra, Inc................................... 14,000 700,875
---------
1,153,500
---------
HEALTH CARE - 9.3%
*Alza Corp.................................................. 20,700 992,306
DENTSPLY International, Inc................................. 24,000 780,000
*Genesis Health Ventures, Inc............................... 15,700 415,069
---------
2,187,375
---------
INSURANCE - 16.1%
LandAmerica Financial Group, Inc............................ 12,000 633,000
Mid Ocean Ltd............................................... 11,800 889,425
Mutual Risk Management Ltd.................................. 25,200 853,650
Orion Capital Corp.......................................... 15,700 875,275
Terra Nova (Bermuda) Holdings Ltd........................... 17,000 520,625
---------
3,771,975
---------
MISCELLANEOUS - 1.6%
Standard Register Co........................................ 9,200 367,425
---------
RETAIL - 8.4%
Kellwood Co................................................. 24,000 766,500
*PETsMART, Inc.............................................. 30,600 357,637
*Zale Corp.................................................. 28,200 849,525
---------
1,973,662
---------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
SERVICES - 11.4%
*Concord EFS, Inc.................................... 24,600 $ 768,750
Lesco, Inc........................................... 16,000 358,000
*Rental Service Corp................................. 22,000 639,375
Select Appointments Holdings plc ADR................. 18,700 507,238
*SITEL Corp.......................................... 33,500 393,625
-----------
2,666,988
-----------
TECHNOLOGY - 9.6%
*Berg Electronics Corp............................... 32,000 762,000
*Gemstar International Group Ltd..................... 15,600 602,550
*Network Appliance, Inc.............................. 19,000 679,250
*Trimble Navigation Ltd.............................. 11,000 203,500
-----------
2,247,300
-----------
TELECOMMUNICATIONS - 2.0%
*Brightpoint, Inc.................................... 9,000 175,500
*Metromedia International Group, Inc................. 18,000 299,250
-----------
474,750
-----------
TRANSPORTATION - 5.2%
ASA Holdings, Inc.................................... 19,000 714,875
Interpool, Inc....................................... 31,900 504,419
-----------
1,219,294
-----------
TOTAL COMMON STOCKS (Cost $17,657,996).......................... 21,719,331
-----------
</TABLE>
SHORT-TERM INVESTMENTS - 7.4%
<TABLE>
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 7.4%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,741,260,
collateralized by $1,518,003 of various U.S.
Treasury Obligations, 5.50%-14.00% due 5/15/04-
11/15/27, valued at $1,760,785 (Cost $1,741,000).... $1,741,000 1,741,000
-----------
TOTAL INVESTMENTS - 100.1% (Cost $19,398,996)................... 23,460,331
-----------
OTHER ASSETS AND LIABILITIES (NET) - (0.1)%..................... (25,837)
-----------
NET ASSETS - 100%............................................... $23,434,494
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $19,398,996. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$4,061,335. This consisted of aggregate gross unrealized appreciation for
all securities of $4,071,768 and aggregate gross unrealized depreciation
for all securities of $10,433.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
APRIL 30, 1998
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SMALL CAP SMALL/MID CAP
PORTFOLIO PORTFOLIO
------------ -------------
<S> <C> <C>
ASSETS
Investments, at Cost............................. $ 45,708,101 $ 19,398,996
============ ============
Investments, at Value............................ 56,565,781 23,460,331
Cash............................................. 615 81
Receivable for Investments Sold.................. 31,249 --
Receivable for Portfolio Shares Sold............. 236,366 37,340
Dividends Receivable............................. 7,250 2,324
Interest Receivable.............................. 542 260
Other Assets..................................... 371 47
------------ ------------
Total Assets.................................... 56,842,174 23,500,383
------------ ------------
LIABILITIES
Payable for Investments Purchased................ 954,656 29,354
Payable for Portfolio Shares Redeemed............ 15,935 5,270
Payable for Investment Advisory Fees--Note B..... 31,845 12,481
Payable for Administrative Fees--Note C.......... 8,212 5,901
Payable for Custodian Fees--Note D............... 6,306 2,611
Payable for Account Services Fees--Note F........ 574 --
Payable for Directors' Fees--Note G.............. 637 580
Other Liabilities................................ 19,086 9,692
------------ ------------
Total Liabilities............................... 1,037,251 65,889
------------ ------------
NET ASSETS....................................... $55,804,923 $23,434,494
============ ============
NET ASSETS CONSIST OF:
Paid in Capital.................................. $43,078,802 $18,973,613
Undistributed Net Investment Loss................ (354,675) (17,448)
Accumulated Net Realized Gain.................... 2,223,116 416,994
Unrealized Appreciation.......................... 10,857,680 4,061,335
------------ ------------
NET ASSETS....................................... $55,804,923 $23,434,494
============ ============
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)......................... 3,191,409 1,570,767
Net Asset Value, Offering and Redemption Price
Per Share....................................... $17.49 $14.92
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
SMALL CAP SMALL/MID CAP
PORTFOLIO PORTFOLIO
---------- -------------
<S> <C> <C>
INVESTMENT INCOME
Interest............................................ $ 99,461 $ 33,349
Dividends........................................... 62,458 58,365
---------- ----------
Total Income....................................... 161,919 91,714
---------- ----------
EXPENSES
Investment Advisory Fees--Note B.................... 189,591 69,455
Administrative Fees--Note C......................... 49,786 35,366
Registration and Filing Fees........................ 13,034 5,290
Printing Fees....................................... 8,694 9,650
Custodian Fees--Note D.............................. 4,111 1,507
Audit Fees.......................................... 6,853 4,682
Directors' Fees--Note G............................. 1,490 1,249
Legal Fees.......................................... 1,504 302
Account Services Fees--Note F....................... 1,243 3,196
Other Expenses...................................... 16,254 2,156
Account Services Fees Waived--Note F................ -- (3,196)
Investment Advisory Fees Waived--Note B............. -- (21,122)
---------- ----------
Net Expenses Before Expense Offset................. 292,560 108,535
Expense Offset--Note A.............................. (440) --
---------- ----------
Net Expenses After Expense Offset................... 292,120 108,535
---------- ----------
NET INVESTMENT INCOME (LOSS)........................ (130,201) (16,821)
---------- ----------
NET REALIZED GAIN ON INVESTMENTS.................... 2,028,613 422,650
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
ON INVESTMENTS..................................... 1,906,085 3,189,272
---------- ----------
TOTAL NET GAIN...................................... 3,934,698 3,611,922
---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS......................................... $3,804,497 $3,595,101
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUND RHJSSMALL CAP PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss)..................... $ (130,201) $ (224,474)
Net Realized Gain................................ 2,028,613 6,189,598
Net Change in Unrealized Appreciation............ 1,906,085 5,992,504
----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 3,804,497 11,957,628
----------- -----------
DISTRIBUTIONS:
Net Realized Gain................................ (5,978,686) (3,197,327)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 23,080,332 34,602,981
In Lieu of Cash Distributions.................... 5,699,557 3,051,692
Redeemed......................................... (22,572,928) (28,131,214)
----------- -----------
Net Increase from Capital Share Transactions..... 6,206,961 9,523,459
----------- -----------
Total Increase................................... 4,032,772 18,283,760
NET ASSETS:
Beginning of Period.............................. 51,772,151 33,488,391
----------- -----------
End of Period (including undistributed net
investment income (loss) of $(354,675) and
$(224,474), respectively)....................... $55,804,923 $51,772,151
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued.................................... 1,378,201 1,973,490
In Lieu of Cash Distributions.................... 369,621 210,469
Redeemed......................................... (1,315,427) (1,553,527)
----------- -----------
432,395 630,432
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS OPERATIONS:
Net Investment Income (Loss)..................... $ (16,821) $ 12,547
Net Realized Gain................................ 422,650 158,564
Net Change in Unrealized Appreciation............ 3,189,272 872,063
----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 3,595,101 1,043,174
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................ (4,106) (9,068)
Net Realized Gain................................ (164,220) --
----------- -----------
Total Distributions.............................. (168,326) (9,068)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued-Regular................................... 9,122,969 13,404,528
In Lieu of Cash Distributions.................... 153,289 8,451
Redeemed......................................... (2,226,000) (1,489,624)
----------- -----------
Net Increase from Capital Share Transactions..... 7,050,258 11,923,355
----------- -----------
Total Increase................................... 10,477,033 12,957,461
NET ASSETS:
Beginning of Period.............................. 12,957,461 --
----------- -----------
End of Period (including undistributed net
investment income (loss) of $(17,448) and
$3,479, respectively)........................... $23,434,494 $12,957,461
=========== ===========
(1) Shares Issued and Redeemed:
Issued........................................... 701,853 1,157,280
In Lieu of Cash Distributions.................... 12,422 781
Redeemed......................................... (168,812) (132,757)
----------- -----------
545,463 1,025,304
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS RHJ SMALL CAP PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JULY 1,
APRIL 30, YEARS ENDED OCTOBER 31, 1994*** TO
1998 --------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994
----------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 18.76 $ 15.73 $ 15.87 $ 11.14 $10.00
------- ------- ------- ------- ------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss)................ (0.03) (0.08) (0.10) (0.07) 0.01
Net Realized and
Unrealized Gain....... 1.05 4.59 2.73 4.81 1.13
------- ------- ------- ------- ------
Total From Investment
Operations............ 1.02 4.51 2.63 4.74 1.14
------- ------- ------- ------- ------
DISTRIBUTIONS
Net Investment Income.. -- -- -- (0.01) --
In Excess of Net
Investment Income..... -- -- -- 0.00 # --
Net Realized Gain...... (2.29) (1.48) (2.77) -- --
------- ------- ------- ------- ------
Total Distributions.... (2.29) (1.48) (2.77) (0.01) --
------- ------- ------- ------- ------
NET ASSET VALUE, END OF
PERIOD................. $ 17.49 $ 18.76 $ 15.73 $ 15.87 $11.14
======= ======= ======= ======= ======
TOTAL RETURN............ 7.05 % 31.44 % 19.43 % 42.59 %+ 11.40 %**+
======= ======= ======= ======= ======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $55,805 $51,772 $33,488 $18,910 $8,287
Ratio of Expenses to
Average Net Assets..... 1.16 %* 1.21 % 1.37 % 1.40 % 1.40 %*
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... (0.52)%* (0.53)% (0.78)% (0.63)% 0.30 %*
Portfolio Turnover
Rate................... 58 % 158 % 181 % 180% 5 %
Average Commission Rate
##..................... $0.0482 $0.0498 $0.0509 N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. N/A N/A N/A 0.11 % 2.38 %*
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.16 %* 1.21 % 1.37 % 1.40 % N/A
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the periods indicated.
# Value is less than $0.01 per share.
## For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS RHJ SMALL/MID CAP PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, 1998 NOVEMBER 1, 1996***
(UNAUDITED) TO OCTOBER 31, 1997
---------------- -------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD...... $ 12.64 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)............. (0.01) 0.03
Net Realized and Unrealized Gain......... 2.45 2.64
------- -------
Total From Investment Operations......... 2.44 2.67
------- -------
DISTRIBUTIONS
Net Investment Income.................... (0.00)# (0.03)
Net Realized Gain........................ (0.16) --
------- -------
Total Distributions...................... (0.16) (0.03)
------- -------
NET ASSET VALUE, END OF PERIOD............ $ 14.92 $ 12.64
======= =======
TOTAL RETURN+............................. 19.61 %** 26.76 %
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)..... $23,434 $12,957
Ratio of Expenses to Average Net Assets... 1.25 %* 1.25 %
Ratio of Net Investment Income (Loss) to
Average Net Assets....................... (0.19)%* 0.24 %
Portfolio Turnover Rate................... 40 % 56 %
Average Commission Rate................... $0.0680 $0.0732
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets....................... 0.28 % 1.29 %
Ratio of Expenses to Average Net Assets
Including Expense Offsets................ 1.25 %* 1.25 %
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period.
# Value is less than 0.01 per share
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Rice,
Hall, James Small Cap Portfolio and Rice, Hall, James Small/Mid Cap Portfolio
(the "Portfolios"), portfolios of UAM Funds, Inc., are diversified, open-end
management investment companies. At April 30, 1998, the UAM Funds were
comprised of forty-four active portfolios. The financial statements of the
remaining portfolios are presented separately. The objectives of the
Portfolios are as follows:
RICE, HALL, JAMES SMALL CAP PORTFOLIO seeks to provide maximum capital
appreciation, consistent with reasonable risk to principal by investing
primarily in small market capitalization companies.
RICE, HALL, JAMES SMALL/MID CAP PORTFOLIO seeks to provide maximum
capital appreciation, consistent with reasonable risk to principal by
investing primarily in small/mid market capitalization companies.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may
require management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results may differ
from those estimates.
1. SECURITY VALUATION: Securities listed on a securities exchange for
which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the bid price on
such day. Price information on listed securities is taken from the
exchange where the security is primarily traded. Over-the-counter and
unlisted securities are valued at the current bid prices. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no
provision for Federal income taxes is required in the financial
statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the
18
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
- -------------------------------------------------------------------------------
repurchase transaction, including accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, each
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally
distribute substantially all of its net investment income quarterly. Any
realized net capital gains will be distributed annually. All distributions
are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments of net
operating losses.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and paid in
capital. Permanent book-tax differences, if any, are not included in
ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio.
Expenses which cannot be directly attributed are apportioned among the
portfolios of the UAM Funds based on their relative net assets. Custodian
fees for the Portfolios have been increased to include expense offsets for
custodian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Rice, Hall, James & Associates (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides
19
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
- -------------------------------------------------------------------------------
investment advisory services to the Rice, Hall, James Small Cap Portfolio and
the Rice, Hall, James Small/Mid Cap Portfolio for a monthly fee calculated at
an annual rate of 0.75% and 0.80% of average daily net assets, for the month,
respectively. The Adviser has voluntarily agreed to waive a portion of its
advisory fees and to assume expenses, if necessary, in order to keep the Rice,
Hall, James Small Cap Portfolio and the Rice, Hall, James Small/Mid Cap
Portfolio total annual operating expenses, after the effect of expense offset
arrangements, from exceeding 1.40% and 1.25% of average daily net assets,
respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, computed
daily and payable monthly, of 0.19% of the first $200 million of the combined
aggregate net assets; plus 0.11% of the next $800 million of the combined
aggregate net assets; plus 0.07% of the next $2 billion of the combined
aggregate net assets; plus 0.05% of the combined aggregate net assets in
excess of $3 billion. The fees are allocated among the portfolios of the UAM
Funds on the basis of their relative net assets and are subject to a graduated
minimum fee schedule per portfolio which rises from $2,000 per month, upon
inception of a portfolio, to $70,000 annually after two years. For portfolios
with more than one class of shares, the minimum annual fee increases to
$90,000. In addition, the Administrator receives a Portfolio-specific monthly
fee at an annual rate of 0.04% of average daily net assets of each Portfolio.
The Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), a corporate affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services,
including but not limited to, administration, fund accounting, dividend
disbursing and transfer agent services. Pursuant to the Mutual Funds Service
Agreement, the Administrator pays CGFSC a monthly fee. For the six months
ended April 30, 1998, UAM Fund Services, Inc. earned the following amounts
from the Portfolios as Administrator and paid the following portion to CGFSC
for its services as sub-Administrator:
<TABLE>
<CAPTION>
PORTION
ADMINISTRATION PAID TO
RICE, HALL, JAMES PORTFOLIOS FEES CGFSC
- ---------------------------- -------------- -------
<S> <C> <C>
Small Cap.............................................. $49,786 $39,675
Small/Mid Cap.......................................... 35,366 31,894
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's
assets held in accordance with the custodian agreement.
20
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
- -------------------------------------------------------------------------------
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in
order to keep the Rice, Hall, James Small Cap Portfolio and the Rice, Hall,
James Small/Mid Cap Portfolio total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 1.40% and 1.25% of
average daily net assets, respectively.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the Rice,
Hall, James Small Cap Portfolio and the Rice, Hall, James Small/Mid Cap
Portfolio made purchases of $28,000,078 and $11,952,759 and sales of
$30,220,032 and $6,524,278 of investment securities other than long-term U.S.
Government and short-term securities, respectively. There were no purchases or
sales of long-term U.S. Government securities.
I. LINE OF CREDIT: The Portfolios, along with certain other Portfolios of
UAM Funds, collectively entered into an agreement which enables them to
participate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of
capital shares. Interest is charged to each participating Portfolio based on
its borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%.
In addition, a commitment fee of 0.08% per annum, payable at the end of each
calendar quarter, is accrued by each participating Portfolio based on its
average daily unused portion of the line of credit. For the six months ended
April 30, 1998, the Portfolios had no borrowings under the agreement.
21
<PAGE>
UAM FUNDS RHJ PORTFOLIOS
- -------------------------------------------------------------------------------
J. OTHER: At April 30, 1998, the percentage of total shares outstanding were
held by record shareholders owning 10% or greater of the aggregate total
shares outstanding for each Portfolio was as follow:
<TABLE>
<CAPTION>
NO. OF %
RICE, HALL, JAMES PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ---------------------------- ------------ ---------
<S> <C> <C>
Small Cap............................................... 1 27%
Small/Mid Cap........................................... 2 44%
</TABLE>
22
<PAGE>
UAM Funds The Rice, Hall, James
Portfolios
================================================================================
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Rice, Hall, James & Associates
600 West Broadway, Suite 1000
San Diego, CA 92101
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
SAMI Preferred Stock Income Portfolio
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUND SAMISPREFERRED STOCK INCOME PORTFOLIO
APRIL 30, 1998
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments.................................................... 2
Statement of Assets and Liabilities......................................... 4
Statement of Operations..................................................... 5
Statement of Changes in Net Assets.......................................... 6
Financial Highlights........................................................ 7
Notes to Financial Statements............................................... 8
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUND SAMISPREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
May 28, 1998
Dear Shareholder:
The capitalization of United Asset Management SAMI Preferred Income Portfolio
(the "Portfolio") increased from $25.1 million to $29.0 million during the
second fiscal quarter ended April 30, 1998. An additional $4 million order has
been committed in the third fiscal quarter to date. Our fiscal 1998 goal of
$50 million remains intact and within reach.
Economic conditions remained relatively stable domestically in spite of occa-
sional worries from around the world. The 30 year Treasury Bond traded in a
narrow range of 30 basis points from 5.82% to 6.12%, ending the fiscal quarter
right in the middle at 5.98%. Preferred stocks continued to be strong as
spreads tightened slightly relative to the hedge in some sectors. We have seen
a sprinkling of new DRD issuance in fiscal 1998. Given that the size of the
DRD preferred stock market has been shrinking over the past few years, any new
issuance is most welcome.
The objective of the Portfolio is to provide tax advantaged income with mini-
mal capital fluctuation. In order to accomplish this we maintain a cross hedge
of Treasury futures and options on Treasury futures on the underlying invest-
ment vehicle, Preferred Stocks. These futures and options are used solely as a
hedge against interest rate fluctuations. Essentially, we invest in a long
term asset and hedge the duration down to approximately three months. The ef-
fect of this strategy is to provide our clients with consistent returns each
quarter. Some quarters, such as the second fiscal quarter when interest rates
rose, the hedge will offset losses on the preferred stocks.
Performance for the second fiscal quarter was 1.79% compared to 1.28% for the
three month Treasury Bill. This brings the six month to date performance to
3.85% versus 2.59% for the T-Bill. On a taxable equivalent basis, corporate
tax paying investors qualifying for the dividends received deduction would
have needed 2.15% for the quarter and 4.81% year to date. These returns com-
pare rather favorably versus the 3 month bill performance of 1.28% and 2.59%
respectively.
Looking ahead, the preferred stock market should continue to be a good place
to invest, given the strong technicals. We hope to see more new issuance to
help with our growth plans in the portfolio.
Sincerely,
LOGO
Mark A. Lieb
Scott T. Fleming Principal
Principal
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. The
investment return and principal value of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Since the portfolio is actively managed, its holdings are
subject to change.
Comparisons of performance assume reinvestment of dividends.
1
<PAGE>
UAM FUND SAMISPREFERRED STOCK INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
PREFERRED STOCKS - 102.2%
<TABLE>
<CAPTION>
SHARES VALUE+
------ -----------
<S> <C> <C>
FINANCIAL SERVICES - 21.5%
*Bear Stearns Co. Series F, 5.72%......................... 20,000 $ 1,002,500
European American Bank, 6.01%............................. 1,000 1,045,000
Fleet Financial Group, Inc., Series VI, 6.75%............. 20,000 1,125,000
Heller Financial Inc., Series C, 6.687%................... 10,000 1,085,000
Morgan Stanley Group, Inc., 7.75%......................... 12,000 651,000
Travelers Group Inc., Series H, 6.231%.................... 25,000 1,346,875
-----------
6,255,375
-----------
TELECOMMUNICATIONS - 4.1%
GTE Florida, Inc., Series A, $1.25........................ 52,196 1,202,335
-----------
UTILITIES - ELECTRICAL & GAS - 76.6%
Atlantic City Electric Co., 4.75%......................... 8,800 745,624
Baltimore Gas & Electric Co., Series 1993, 6.97%.......... 10,000 1,126,000
Carolina Power & Light, $4.20............................. 9,828 751,400
Central Illinois Light Co., 5.85%......................... 10,000 1,030,000
Dayton Power & Light, Series B, 3.75%..................... 5,900 405,124
Duke Power Co., Series X, 6.75%........................... 144 15,912
Florida Power & Light Co., Series U, 6.75%................ 11,000 1,229,800
Hawaiian Electric Co., Series R, 8.75%.................... 4,713 485,439
Indianapolis Power & Light Co., 5.65%..................... 5,000 509,075
Jersey Central Power & Light Co., 8.65%................... 2,500 255,000
Kentucky Utility Co., 6.53%............................... 12,330 1,368,630
Montana Power Co., $6.875................................. 10,000 1,106,200
NICOR, Inc., 4.48%........................................ 28,000 1,176,000
Ohio Power Co., 5.90%..................................... 10,000 1,053,750
Pacific Enterprises, Inc., $4.36.......................... 15,430 1,214,032
Pacific Gas & Electric Co., Series U, 7.04%............... 50,000 1,389,000
Peco Energy, Series A, $3.80.............................. 2,030 136,375
Potomac Electric Power Co., Series 1958, $2.46............ 22,019 955,074
Potomac Electric Power Co., Series 1991, $3.89............ 20,000 1,077,500
Public Service Electric & Gas, Series D, 5.05%............ 2,232 197,878
South Carolina Electric & Gas Co., 6.52%.................. 13,500 1,505,250
Southern California Edison Co., 4.24%..................... 76,300 1,464,273
Union Electric Co., $4.56................................. 15,800 1,326,884
Virginia Electric & Power Co., $7.05...................... 8,100 915,300
WPS Resources Corp., 6.88%................................ 7,500 832,500
-----------
22,272,020
-----------
TOTAL PREFERRED STOCKS - 102.2% (Cost $27,394,064) (a)........... 29,729,730
OTHER ASSETS AND LIABILITIES (NET) - (2.2)%...................... (635,597)
-----------
NET ASSETS - 100%................................................ $29,094,133
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
UAM FUND SAMISPREFERRED STOCK INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PREFERRED STOCKS - CONTINUED
+ See Note A to Financial Statements.
* Non-Income producing security
(a) The cost for federal income tax purposes was $27,394,064. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$2,335,666. This consisted of aggregate gross unrealized appreciation for
all securities of $2,375,183 and aggregate gross unrealized depreciation for
all securities of $39,517.
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
ASSETS
Investments, at Cost.......................................... $27,394,064
===========
Investments, at Value......................................... $29,729,730
Margin Deposit on Futures Contracts........................... 400,000
Receivable for Shares Sold.................................... 4,500
Receivable for Investments Sold............................... 564,462
Dividends Receivable.......................................... 182,472
Other Assets.................................................. 241
-----------
Total Assets................................................. 30,881,405
LIABILITIES
Payable for Daily Variation Margin on Futures Contracts....... 284,312
Payable for Investment Advisory Fees - Note B................. 10,766
Payable for Administrative Fees - Note C...................... 7,593
Payable for Custodian Fees - Note D........................... 3,526
Payable for Directors' Fees - Note F.......................... 628
Payable to Custodian Bank - Note D............................ 1,469,587
Other Liabilities............................................. 10,860
-----------
Total Liabilities............................................ 1,787,272
-----------
NET ASSETS.................................................... $29,094,133
===========
NET ASSETS CONSIST OF:
Paid in Capital............................................... $34,765,271
Undistributed Net Investment Income........................... 208,903
Accumulated Net Realized Loss................................. (8,449,239)
Unrealized Appreciation....................................... 2,569,198
-----------
NET ASSETS.................................................... $29,094,133
===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001 par value)
(Authorized 25,000,000)...................................... 3,025,439
Net Asset Value, Offering and Redemption Price Per Share...... $9.62
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
INVESTMENT INCOME
Dividends.......................................................... $ 928,712
Interest........................................................... 38,225
-----------
Total Income...................................................... 966,937
-----------
EXPENSES
Investment Advisory Fees-Note B.................................... 102,108
Administrative Fees-Note C......................................... 45,776
Custodian Fees-Note D.............................................. 2,072
Directors' Fees-Note F............................................. 1,362
Printing Fees...................................................... 9,135
Other Expenses..................................................... 16,497
Investment Advisory Fees Waived-Note B............................. (32,534)
-----------
Net Expenses...................................................... 144,416
-----------
NET INVESTMENT INCOME.............................................. 822,521
-----------
NET REALIZED GAIN (LOSS) ON:
Investments....................................................... 1,186,895
Futures........................................................... (1,686,528)
-----------
TOTAL NET REALIZED LOSS............................................ (499,633)
-----------
NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION ON:
Investments....................................................... (500,635)
Futures........................................................... 1,306,938
-----------
TOTAL NET CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION........... 806,303
-----------
NET GAIN........................................................... 306,670
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... $ 1,129,191
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
UAM FUND SAMISPREFERRED STOCK INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
---------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.......................... $ 822,521 $ 1,851,827
Net Realized Loss.............................. (499,633) (480,040)
Net Change in Unrealized
Appreciation/Depreciation..................... 806,303 986,811
------------ -----------
Net Increase in Net Assets Resulting from
Operations.................................... 1,129,191 2,358,598
------------ -----------
DISTRIBUTIONS:
Net Investment Income.......................... (721,567) (1,899,856)
------------ -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued......................................... 6,156,353 6,379,043
In Lieu of Cash Distributions.................. 500,954 1,322,317
Redeemed....................................... (10,522,485) (3,136,377)
------------ -----------
Net Increase (Decrease) from Capital Share
Transactions.................................. (3,865,178) 4,564,983
------------ -----------
Total Increase (Decrease)...................... (3,457,554) 5,023,725
NET ASSETS:
Beginning of Period............................ 32,551,687 27,527,962
------------ -----------
End of Period (including undistributed net
investment income of $208,903 and $107,949,
respectively)................................. $ 29,094,133 $32,551,687
============ ===========
(1) Shares Issued and Redeemed:
Shares Issued.................................. 645,290 683,108
In Lieu of Cash Distributions.................. 52,865 140,998
Shares Redeemed................................ (1,111,295) (332,524)
------------ -----------
(413,140) 491,582
============ ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTH ENDED YEARS ENDED OCTOBER 31,
APRIL 30,1998 ----------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
--------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 9.47 $ 9.34 $ 9.21 $ 9.29 $ 9.98 $ 10.09
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.26 0.55 0.58 0.67 0.60 0.60
Net Realized and
Unrealized Gain
(Loss)................ 0.11 0.15 0.14 (0.08) (0.71) (0.07)
------- ------- ------- ------- ------- -------
Total from Investment
Operations............ 0.37 0.70 0.72 0.59 (0.11) 0.53
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.22) (0.57) (0.59) (0.67) (0.58) (0.61)
In Excess of Net
Realized Gain......... -- -- -- -- -- (0.03)
------- ------- ------- ------- ------- -------
Total Distributions.... (0.22) (0.57) (0.59) (0.67) (0.58) (0.64)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. 9.62 $ 9.47 $ 9.34 $ 9.21 $ 9.29 $ 9.98
======= ======= ======= ======= ======= =======
TOTAL RETURN............ 3.85%+** 7.73%+ 8.17%+ 6.67% (1.15)% 5.47%+
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $29,094 $32,552 $27,528 $33,789 $91,221 $49,671
Ratio of Expenses to
Average Net Assets..... 0.99%* 0.99% 0.99% 0.98% 0.89% 0.82%
Ratio of Net Investment
Income to Average Net
Assets................. 5.64%* 5.83% 6.26% 7.03% 6.45% 6.10%
Portfolio Turnover
Rate................... 47% 59% 77% 44% 65% 144%
Average Commission Rate
#...................... $0.0445 $0.0339 $0.0302 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.22%* 0.18% 0.18% N/A N/A 0.14%
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.99%* 0.99% 0.99% 0.98% N/A N/A
</TABLE>
* Annualized
** Not annualized
+ Total return would have been lower had certain expenses not been waived and
expenses assumed by the Adviser during the periods indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM SAMISPREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The SAMI Pre-
ferred Stock Income Portfolio (the "Portfolio"), a portfolio of UAM Funds,
Inc., is a diversified, open-end management investment company. At April 30,
1998, the UAM Funds were comprised of forty-four active portfolios. The finan-
cial statements of the remaining portfolios are presented separately. The ob-
jective of the Portfolio is to provide a high level of dividend income consis-
tent with capital preservation.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Preferred securities listed on a securities ex-
change for which market quotations are readily available are valued at the
last quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day at the bid price on
such day. Price information on listed securities is taken from the ex-
change where the security is primarily traded. Under procedures approved
by the Board of Directors, fixed income securities and most fixed-dividend
preferred securities are valued according to the broadest and most repre-
sentative market which will ordinarily be the over-the-counter market or
if there is no actively quoted market price, the securities may be valued
based on a matrix system which considers such factors as security prices,
yields and maturities. Short-term investments that have remaining maturi-
ties of sixty days or less at time of purchase are valued at amortized
cost, if it approximates market value. The value of other assets and secu-
rities for which no quotations are readily available is determined in good
faith at fair value using methods determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is the Portfolio's intention to qualify as a
regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
At April 30, 1998, the Portfolio had available a capital loss carryover
for Federal income tax purposes of $9,066,746 of which $8,119,031 and
$947,715 will expire on October 31, 2003 and 2005, respectively.
8
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. FUTURES AND OPTIONS CONTRACTS: The Portfolio may use futures and op-
tions contracts to hedge against changes in the value of securities the
Portfolio owns or expects to purchase. The Portfolio may also write cov-
ered options on securities it owns or in which it may invest to increase
its current returns.
The potential risk to the Portfolio is that the change in value of
futures and options contracts may not correspond to the change in value of
the hedged instruments. In addition, losses may arise from changes in the
value of the underlying instruments, if there is an illiquid secondary
market for the contracts, or if the counterparty to the contract is unable
to perform.
Futures contracts are valued at the quoted daily settlement prices es-
tablished by the exchange on which they trade. Exchange traded options are
valued at the last sale price, or if no sales are reported, the last bid
price for purchased options and the last ask price for written options.
The Portfolio had the following futures contracts open at April 30,
1998:
<TABLE>
<CAPTION>
NET UNREALIZED
NUMBER OF AGGREGATE EXPIRATION APPRECIATION
CONTRACTS CONTRACTS FACE VALUE DATE (DEPRECIATION)
--------- --------- ----------- ---------- --------------
<S> <C> <C> <C> <C>
Sales:
U.S. Treasury Long
Bond.................. 174 $20,918,063 June 1998 $237,657
U.S. Treasury 10 Year
Note.................. 22 2,470,875 June 1998 (4,125)
--------
$233,532
========
</TABLE>
9
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
5. DISTRIBUTIONS TO SHAREHOLDERS: The Portfolio will normally distribute
substantially all of its net investment income quarterly. Any realized net
capital gains will be distributed annually. All distributions are recorded
on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income for the purpose of calculating net in-
vestment income per share in the financial highlights.
6. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Most expenses of
the UAM Funds can be directly attributed to a particular portfolio. Ex-
penses which cannot be directly attributed are apportioned among the port-
folios of the UAM Funds based on their relative net assets. Custodian fees
for the Portfolio have been increased to include expense offsets for cus-
todian balance credits, if any.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Spectrum Asset Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio for a monthly fee calculated at an annual rate of
0.70% of average daily net assets for the month. The Adviser has voluntarily
agreed to waive a portion of its advisory fees and to assume expenses, if nec-
essary, in order to keep the Portfolio's total annual operating expenses, af-
ter the effect of expense offset arrangements, from exceeding 0.99% of average
daily net assets.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
10
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee at an annual rate of 0.06% of aver-
age daily net assets of the Portfolio. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned $45,776 from the Portfolio as Administrator of which $37,023 was paid
to CGFSC for their services as sub-Administrator.
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolio's as-
sets held in accordance with the custodian agreement. As part of the custodian
agreement, the custodian bank has a lien on the securities of the Portfolio to
cover any advances made by the custodian to the Portfolio. At April 30, 1998,
the payable to the custodian bank represents the amount due for cash advanced
for the settlement of securities purchased.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolio. The
Distributor does not receive any fee or other compensation with respect to the
Portfolio.
F. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
G. PURCHASES AND SALES: For the six months ended April 30, 1998, the Portfo-
lio made purchases of $13,389,704 and sales of $16,517,365 of investment secu-
rities other than long-term U.S. Government and short-term securities. There
were no purchases or sales of long-term U.S. Government securities.
11
<PAGE>
UAM FUNDS SAMI PREFERRED STOCK INCOME PORTFOLIO
- -------------------------------------------------------------------------------
H. LINE OF CREDIT: The Portfolio, along with certain other Portfolios of UAM
Funds, collectively entered into an agreement which enables them to partici-
pate in a $100 million unsecured line of credit with several banks. Borrowings
will be made solely to temporarily finance the repurchase of Capital shares.
Interest is charged to each participating Portfolio based on its borrowings at
a rate per annum equal to the Federal Funds rate plus 0.50%. In addition, a
commitment fee of 1/8th of 1% per annum, payable at the end of each calendar
quarter, is accrued by each participating Portfolio based on its average daily
unused portion of the line of credit. During the six months ended April 30,
1998, the Portfolio had no borrowings under the agreement.
I. OTHER: At April 30, 1998, 79% of total shares outstanding were held by 4
record shareholders owning 10% or greater of the aggregate total shares out-
standing.
12
<PAGE>
SAMI Preferred Stock
UAMFunds Income Portfolio
================================================================================
Officers and Directors William H. Park
Vice President
Norton H.Reamer
Director, President and Chairman Michael E. DeFao
Secretary
John T. Bennett, Jr.
Director Karl O. Hartmann
Assistant Secretary
Nancy J. Dunn
Director Gary L. French
Treasurer
Philip D. English
Director Robert R. Flaherty
Assistant Treasurer
William A. Humenuk
Director Gordon M. Shone
Assistant Treasurer
Charles H. Salisbury, Jr.
Director and Executive Vice President
Peter M. Whitman, Jr.
Director
================================================================================
Investment Adviser
Spectrum Asset Management, Inc.
Four High Ridge Park
Stamford, CT 06905
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed
to others only if preceded or accompanied by a current prospectus.
- -------------------------------------------------------------------------------
<PAGE>
UAM FUNDS
Semi-Annual Report
THE SIRACH PORTFOLIOS
April 30, 1998
UAM
<PAGE>
UAM FUNDS
THE SIRACH PORTFOLIOS
APRIL 30, 1998
- -------------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments
Sirach Special Equity Portfolio........................................... 8
Sirach Growth Portfolio................................................... 13
Sirach Strategic Balanced Portfolio....................................... 18
Sirach Bond Portfolio..................................................... 25
Sirach Equity Portfolio................................................... 28
Statement of Assets and Liabilities......................................... 33
Statement of Operations..................................................... 35
Statement of Changes in Net Assets
Sirach Special Equity Portfolio........................................... 36
Sirach Growth Portfolio................................................... 37
Sirach Strategic Balanced Portfolio....................................... 38
Sirach Bond Portfolio..................................................... 39
Sirach Equity Portfolio................................................... 40
Financial Highlights
Sirach Special Equity Portfolio........................................... 41
Sirach Growth Portfolio................................................... 43
Sirach Strategic Balanced Portfolio....................................... 45
Sirach Bond Portfolio..................................................... 47
Sirach Equity Portfolio................................................... 48
Notes to Financial Statements............................................... 49
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
May, 1998
Dear Shareholders:
The first six months of fiscal 1998 was a period of strong growth for the
economy, with subdued inflation not unlike much of the past several years. GDP
for the fourth quarter of 1997 was 3.7% and for the first quarter of 1998 a
solid 4.2%. Inflation, as measured by the CPI, continues to be extremely well
behaved, with year over year changes during the period of under 2.0%. The Fed-
eral Reserve Board continues to express concern with the low unemployment rate
and upward pressure it sees on the Employment Cost Index. Many market partici-
pants feel the Fed would like to raise interest rates to slow the economy and
thus stay ahead of any inflation pressures that may develop. While the crisis
amongst Asian countries has contributed to both low inflation and low interest
rates recently, it has raised considerable concern as to the impact their de-
teriorating economic condition will have on the U.S. economy over the next six
to twelve months.
SIRACH SPECIAL EQUITY
During the first half of fiscal year 1998, large cap stocks continued to lead
the way as they generally have for 4 1/2 years. There have been brief three
month and six month periods where small cap stocks have outperformed, as in
the second half of 1997, but they have tended to be more catch-up phases than
actual major shifts in investor psychology favoring small caps.
For the first half, the S&P 500 Index returned 22.50%, the Russell 2500 Index
returned 13.27% and the Russell 2000 Index returned 11.88%. Value outperformed
growth with the Russell 2500 Value Index beating the Russell 2500 Growth Index
16.00% versus 10.04%.
The Special Equity Portfolio Institutional Class Shares outperformed most
small cap indexes returning 16.35% during the first half and ended with net
assets of $310 million. The Institutional Service Class Shares returned 16.10%
for the six month period.
The Portfolio's outperformance was driven primarily by good stock picking in
our two largest sectors, Technology and Consumer Cyclical, and our allocation
strategy in the volatility Energy sector. During the first quarter of the
year, we quickly took profits in the Energy sector and had little exposure
when the sector rolled over. We slowly added to the sector as it weakened and
benefited greatly when the sector rebounded in the second quarter. Our two
weakest sectors were Financial Services and Healthcare.
Sirach's investment process focuses on companies with strong and improving
earnings characteristics and has historically performed best when strong
profit
1
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UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
growth is scarce. Weakening world economies should exacerbate the already poor
pricing environment and affect S&P 500 companies profit growth to a greater
extent than earnings at niche smaller cap companies.
As the small cap/large cap earnings growth differential widens and with small
cap relative valuations at twenty year lows the small cap growth sector should
outperform.
SIRACH EQUITY PORTFOLIO
The Sirach Equity Portfolio ended the first six months of fiscal 1998 with net
assets of $39.2 million, up from $26.2 million at the 1997 fiscal year end.
The Portfolio returned 21.02% for the six month period, slightly behind the
S&P 500 Index return of 22.50% but nicely ahead of the Lipper Growth Funds re-
turn of 18.68%. The second quarter ending April was a strong period for the
Portfolio, with a return of 16.82% vs. the S&P 500 return of 13.85%, and the
Lipper Growth Funds return of 13.70%. Smaller capitalization indexes
underperformed during the fiscal first half. The S&P 400 Midcap and the S&P
600 Smallcap returned 19.17% and 13.14% respectively.
The performance of the Sirach Equity Portfolio relative to the S&P 500 Index
was impacted by the Portfolio's capitalization. The Portfolio has less
weighting than the index in the largest companies, and relatively more in the
mid-range capitalization companies. Thus, with the largest companies driving
performances during the first half, the Portfolio suffered on a relative
basis. Three sectors also had somewhat of a negative impact on performance;
Capital Goods, Consumer Staples, and Energy. Within the Capital Goods sector,
some of our holdings in the environmental services area underperformed due to
concerns over earnings growth. Our holdings in food retailers performed quite
well within the Consumer Staples sector, but a consolidation of our positions
in personal care companies and food producers, after strong performances last
year, caused this sector to trail the market return. Our decision to
underweight energy was a correct one, unfortunately our holdings are
concentrated in the oil service industry, which was especially hard hit.
Concerns arose because of the rapid decline in the price of oil and how that
might impact capital spending plans by the large international oil companies.
Though prices have retreated dramatically, capital spending budgets remain
intact and earnings estimates have not been reduced. Additionally, our
holdings have products with strong technology that makes their use quite cost
effective.
Finance remained the largest weighting in the Portfolio with less emphasis on
money center banks and more emphasis on financial services. The Consumer
Cyclical sector is the second largest portfolio weighting and was a bright
spot
2
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
during the period. Our holdings in warehouse stores, along with some other
specialty retailers performed quite well. Same store sales were strong and
costs well under control helped margins. This is a sector which we increased
weighting during the period, adding some specialty retail in addition to
exposure to media and advertising. Two other large sector holdings are Capital
Goods and Technology. Within Capital Goods, we expect a rebound from our
holdings in the environmental area and may use the opportunity to reduce
positions in holdings with less dynamic earnings prospects. We did in fact
reduce our exposure to this sector early in the period by reducing positions
in the machinery industry. Our Technology weighting is in line with the index
and our holdings cover a broad range of industries including computer
services, software, semiconductors, and communication equipment. During the
period, our weighting to semiconductors and hardware was reduced in favor of
computer services and communication equipment. This change was driven by
earnings visibility. Technology proved to be a strong contributor to
performance during the first six months. One other sector worth mentioning is
Healthcare, which we have equal weighting to the index. The sector was a
strong contributor to performance driven largely by our holdings in
pharmaceutical companies. The strong earnings outlook and deep drug pipelines
have resulted in very strong price performance by this group.
SIRACH GROWTH PORTFOLIO
The Sirach Growth Portfolio's net assets at the end of the first half of
fiscal 1998 were approximately $163 million. During the period, the
Portfolio's Institutional Class Shares returned 18.26%. The Institutional
Service Class Shares returned 18.18% for the same period. These returns were
essentially equal to the Lipper Growth Funds return of 18.68%, yet trailed the
S&P 500 Index return of 22.50%. The Portfolio's smaller average capitalization
and lower relative weighting in the largest companies in the index hindered
performance. The impact of capitalization can be seen somewhat by comparing
the returns of smaller capitalization indexes to the S&P 500 as shown above.
The S&P 400 Midcap Index returned 19.17% and the S&P 600 Smallcap Index
returned 13.14%.
Two sectors in particular influenced performance negatively during the first
half. Capital Goods, the fourth largest sector in the Portfolio, is nearly
double weighted the index. Early in the first half our holdings in the
environmental industry underperformed dramatically. Two factors had the
greatest influence: perceptions of industry accounting practices and inventory
problems at one of the companies we owned. Waste Management, a company we do
not own, raised some issues regarding past accounting practices they have
employed which led to the restatement of several years of financial data.
Though the companies we own in
3
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UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
the waste collection and disposal industry have not followed the same
accounting practices, their performance suffered because of investor's fears
that other irregularities may occur. Incidentally, now that Waste Management
has corrected their accounting problems, a company we own will merge Waste
Management into their operations and realize significant cost and revenue
synergies. The second factor involved one of our holdings which had to write
down inventories, thus impacting earnings negatively and raising concerns
about proper management controls. Energy was the second sector having a
detrimental impact on performance. Though we slightly underweighted the index,
our holdings in oil service companies were especially hard hit during the
period. A sharp decline in the price of oil and fears regarding capital
spending plans by the major oil companies caused the oil service stocks to
retreat dramatically from their highs. While we have reduced our exposure in
some of our holdings, earnings estimates have not been reduced and capital
spending plans have remained firm.
Finance continues as the largest portfolio weighting. Exposure to money center
banks was reduced in favor of regional banks and financial services companies.
Consumer Cyclical is the second largest weighting in the Portfolio and is two
times overweighted relative to the index. Retail companies make up the bulk of
our holdings in this sector. Strong sales trends coupled with firm control of
expenses has helped spur strong earnings. During the period this sector was
increased by adding additional exposure to specialty retail and by adding
companies in the advertising and publishing/broadcasting industries. The
Consumer Cyclical sector was a positive contributor with good stock selection
as well as high allocation relative to the index. The third largest sector in
the Portfolio is Technology. During the period we reduced our exposure to
semiconductors while increasing communication equipment, software, and
computer services which offer more consistent and more visible earnings. Our
Technology holdings performed well relative to the index and were positive
contributors to performance. The Portfolio currently has no holdings in the
Transportation or Basic Material sectors. This has been appropriate as neither
sector has been a strong contributor to performance of the index. More
recently, companies in the Basic Material sector have begun to rank well in
our disciplined screening process and are being monitored closely for
potential purchase.
SIRACH STRATEGIC BALANCED PORTFOLIO
The Sirach Strategic Balanced Portfolio had net assets of $81.3 million on
April 30, 1998. Asset allocation was 56.8% common stocks, 42.1% fixed income
and the remainder in cash equivalents.
4
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
The common stock characteristics for the Sirach Strategic Balanced Portfolio
are identical to the Sirach Growth Portfolio, while the bond and derivative
characteristics match the Sirach Bond Portfolio with 9.0% in Collateralized
Mortgage Obligations, 3.7% in REMICS and 4.6% in Mortgage Backed Securities.
SIRACH BOND PORTFOLIO
The total return for the period ended April 30, 1998 for the Sirach Bond Port-
folio was 4.32% for the Institutional Class Shares and 4.23% for the Institu-
tional Service Class Shares.
The total return for the Sirach Bond Portfolio in the second quarter was 0.98%
versus 0.79% for the Lehman Aggregate Index. On April 30, 1998, the Portfo-
lio's net assets were $55.2 million.
The thirty-year treasury bond remained in a relatively narrow trading range of
5.8% to 6% for the quarter. Total return for the market was roughly equal to
income generated. There were fewer opportunities than normal to add excess
return in the U.S. domestic market. The yield curve flattened, but by only two
basis points between ten and thirty year treasuries. Corporate, asset-backed
and mortgage sectors all returned between 0.9% and 1.2%. The best
opportunities came from industry and individual issue selection within the
corporate market.
Our current strategy:
DURATION
We continue to maintain a neutral duration. A reasonable case can be made for
either lower or higher rates from current levels over the intermediate term.
We expect that for the next few quarters any changes in interest rates will be
modest. Global deflationary pressures and the eventual further decline in
inflationary expectations are supportive for bonds longer term. However, the
strong domestic economy and the likelihood of a brief inflation scare has kept
both the Federal Reserve and bond market on the defensive. We are prepared to
move away from our current neutral stance if we see a change in the economic
fundamentals or a change in rates.
MATURITY STRUCTURE
The yield curve is relatively flat. Whether or not the curve inverts depends
on domestic economic growth, inflation expectations and resulting Fed action.
We expect only modest changes over the next quarter or two as the market
searches for the answers. We continue to move toward a neutral maturity struc-
ture with an underweighting in one to five year maturities as a hedge against
Fed action. We
5
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
will begin to move to a lower than index allocation to long maturities if the
spread between ten and thirty year bonds falls below approximately 0.2%.
SECTOR ALLOCATION
We did not make significant changes in sector weightings during the quarter.
Stronger than expected economic performance and continued investor demand
provided good support for corporate prices. Securities firms,
telecommunications and cable/media were top performing sectors within the
corporate market. Our overweighting in these areas was a positive factor in
first quarter performance. Our emphasis on mortgage securities with relatively
stable cash flow characteristics helped us avoid the negative impacts of very
high prepayments. We selectively added mortgage assets to take advantage of
market opportunities. If corporate spreads continue to narrow or the economic
outlook deteriorates, we will reduce the allocation to corporates.
The Portfolio's derivative exposure is entirely Collateralized Mortgage Obli-
gations (17.1%), REMICS (16.4%) and Mortgage Backed Securities (10.5%). Based
on quantitative statistics like convexity, the combination of these mortgage
related assets have less volatility than the mortgage component of the Lehman
Aggregate Index. Therefore the risk of volatility to the Portfolio has not
been increased above that of the underlying index.
Please contact us with any questions you may have.
Sincerely,
SIRACH CAPITAL MANAGEMENT, INC.
The investment results presented in the Adviser's letter represent past
performance and should not be construed as a guarantee of future results. If
the Adviser did not have temporary fee waivers and did not assume expenses on
behalf of the Sirach Bond and the Sirach Equity Portfolios, the total return
for each portfolio would have been lower. The investment return and principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.
6
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITION OF COMPARATIVE INDICES
S&P 500 INDEX--an unmanaged index composed of 400 industrial corporation
stocks, 40 financial company stocks, 40 utilities company stocks and 20
transportation stocks.
RUSSELL 2500 INDEX--an unmanaged index composed of the 2,500 smallest stocks
in the Russell 3000, a market value weighted index of the 3,000 largest U.S.
publicly traded companies.
RUSSELL 2000 INDEX--an unmanaged index composed of the 2,000 smallest stocks
in the Russell 3000, a market value weighted index of the 3,000 largest U.S.
publicly-traded companies.
RUSSELL 2500 VALUE INDEX--contains those Russell 2500 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit
lower price-to-book and price-earnings ratios, higher dividend yields and
lower forecasted growth values than the Growth universe.
RUSSELL 2500 GROWTH INDEX--contains those Russell 2500 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend yields
and higher forecasted growth values than the Value universe.
LIPPER GROWTH FUND INDEX--an unmanaged index composed of the 30 largest funds
by asset size in this investment objective.
S&P 400 MIDCAP INDEX--a capitalization-weighted index that measures the
performance of the mid-range sector of the U.S. stock market where the median
market capitalization is approximately $700 million.
S&P 600 SMALLCAP INDEX--a market-weighted index that measures the performance
of the small-cap sector of the U.S. stock market where the median market
capitalization is approximately $264 million.
LEHMAN BROTHERS AGGREGATE BOND INDEX--an unmanaged fixed income market value-
weighted index that combines the Lehman Brothers Government/Corporate Index
and the Lehman Brothers Mortgage-Backed Securities Index. It includes fixed
rate issues of investment grade (BBB) or higher, with maturities of at least
one year and outstanding par value of at least $100 million for U.S.
Government issues and $25 million for others.
Comparisons of performance assume reinvestment of dividends.
Please note that one can not invest in an unmanaged index.
7
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 92.0%
<TABLE>
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
BASIC MATERIALS - 1.1%
CHEMICALS-SPECIALTY - 1.1%
Crompton & Knowles Corp................................. 114,150 $ 3,417,365
------------
CAPITAL GOODS - 7.9%
AEROSPACE/DEFENSE - 1.5%
AAR Corp. .............................................. 102,675 2,688,802
*Kellstrom Industries, Inc. ............................ 73,900 1,916,781
------------
4,605,583
------------
BUILDING SUPPLIES - 1.0%
*Comfort Systems USA, Inc. ............................. 130,500 3,050,438
------------
CONSTRUCTION - 0.6%
TJ International, Inc. ................................. 62,900 1,942,037
------------
ELECTRICAL EQUIPMENT - 0.5%
*Security Dynamics Technologies, Inc. .................. 61,050 1,470,923
------------
ENVIRONMENTAL - 4.3%
*Allied Waste Industries, Inc........................... 159,200 4,387,950
*Newpark Resources, Inc................................. 169,750 4,084,609
*Stericycle, Inc. ...................................... 39,300 560,025
*Superior Services, Inc................................. 133,150 4,327,375
------------
13,359,959
------------
Total Capital Goods..................................... 24,428,940
------------
CONSUMER CYCLICAL - 15.3%
APPAREL/TEXTILES - 5.2%
*Fossil, Inc............................................ 117,450 2,697,679
*Nautica Enterprises, Inc. ............................. 38,850 965,180
*Pacific SunWear of California, Inc..................... 90,650 4,002,764
*Polo Ralph Lauren Corp................................. 147,200 4,140,000
Wolverine World Wide, Inc............................... 148,250 4,280,718
------------
16,086,341
------------
LODGING/HOTELS - 1.0%
*Prime Hospitality Corp................................. 150,600 3,115,538
------------
PRINTING/PUBLISHING - 1.5%
*NewsEDGE Corp.......................................... 80,250 1,369,266
*Valassis Communications, Inc........................... 85,150 3,342,137
------------
4,711,403
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
CONSUMER CYCLICAL - CONTINUED
RETAIL-GENERAL - 0.8%
*Dollar Tree Stores, Inc................................ 45,250 $ 2,451,984
------------
RETAIL-SPECIALTY - 6.8%
*Abercrombie & Fitch Co., Class A....................... 123,300 5,486,850
*General Nutrition Cos., Inc. .......................... 56,550 2,026,964
Ross Stores, Inc........................................ 135,150 6,254,911
*The Men's Wearhouse, Inc. ............................. 173,450 7,360,784
------------
21,129,509
------------
Total Consumer Cyclical................................. 47,494,775
------------
CONSUMER STAPLES - 7.6%
FOOD PRODUCERS - 1.4%
*American Italian Pasta Co., Class A.................... 41,450 1,284,950
Earthgrains Co.......................................... 64,750 3,027,063
------------
4,312,013
------------
FOOD RETAILERS - 1.1%
*Whole Foods Market, Inc................................ 55,800 3,447,394
------------
MEDIA - 0.8%
*Outdoor Systems, Inc................................... 62,200 1,974,850
*United Video Satellite Group, Inc., Class A............ 14,450 631,284
------------
2,606,134
------------
RESTAURANT - 4.3%
Apple South, Inc........................................ 82,150 1,291,295
CKE Restaurants, Inc.................................... 162,860 5,639,028
*Showbiz Pizza Time, Inc. .............................. 165,650 6,398,231
------------
13,328,554
------------
Total Consumer Staples.................................. 23,694,095
------------
ENERGY - 4.7%
EXPLORATION/DRILLING - 3.7%
*Marine Drilling Cos., Inc.............................. 121,750 2,956,242
*Varco International, Inc. ............................. 138,400 4,255,800
*Veritas DGC, Inc. ..................................... 79,950 4,332,291
------------
11,544,333
------------
OIL-SERVICES - 1.0%
*Global Industries Ltd. ............................... 129,550 2,935,117
------------
Total Energy............................................ 14,479,450
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
FINANCE - 9.5%
BANKS - 1.8%
City National Corp...................................... 91,300 $ 3,395,219
First American Corp. (Tennessee)........................ 43,300 2,131,172
------------
5,526,391
------------
FINANCIAL SERVICES - 6.5%
Fidelity National Financial, Inc........................ 81,500 3,005,313
*FIRSTPLUS Financial Group, Inc......................... 105,350 5,109,475
*Imperial Credit Industries, Inc........................ 229,000 5,767,937
Mutual Risk Management Ltd.............................. 56,450 1,912,244
*Ocwen Financial Corp................................... 167,400 4,331,475
------------
20,126,444
------------
REAL ESTATE/REITS - 1.2%
*Amresco, Inc........................................... 102,700 3,716,456
------------
Total Finance........................................... 29,369,291
------------
HEALTHCARE - 6.0%
BIOMEDICAL/SPECIALTY PHARMACEUTICALS - 0.8%
*IDEXX Laboratories, Inc................................ 37,700 834,113
*Theragenics Corp....................................... 57,450 1,644,506
------------
2,478,619
------------
MEDICAL SERVICES - 5.2%
*Coventry Health Care, Inc.............................. 122,350 2,072,303
*Curative Health Services, Inc.......................... 35,350 1,088,117
*Orthodontic Centers of America, Inc.................... 94,800 2,026,350
*Renal Care Group, Inc.................................. 37,800 1,445,850
*Sunrise Assisted Living, Inc........................... 76,100 3,417,366
*Total Renal Care Holdings, Inc......................... 183,250 6,070,156
------------
16,120,142
------------
Total Healthcare........................................ 18,598,761
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
MISCELLANEOUS - 10.3%
DIVERSIFIED - 0.2%
*Mettler-Toledo International, Inc...................... 28,150 $ 566,519
------------
PROFESSIONAL SERVICES - 10.1%
*Abacus Direct Corp..................................... 57,900 3,274,969
*ABR Information Services, Inc. ........................ 113,250 3,273,633
*Access Health, Inc. ................................... 56,800 1,917,000
*AccuStaff, Inc. ....................................... 273,250 9,802,844
*Rent-Way, Inc.......................................... 92,360 2,892,022
*Robert Half International, Inc. ....................... 95,900 5,190,587
*Romac International, Inc. ............................. 129,850 3,457,256
*Snyder Communications, Inc............................. 35,250 1,498,125
------------
31,306,436
------------
Total Miscellaneous..................................... 31,872,955
------------
TECHNOLOGY - 29.6%
COMMUNICATION EQUIPMENT - 1.8%
*Tekelec................................................ 110,700 5,566,134
------------
COMPUTER RELATED - 1.8%
*IDX Systems Corp. ..................................... 100,100 4,360,606
*Seagate Technology, Inc................................ 47,150 1,258,316
------------
5,618,922
------------
COMPUTER SERVICES - 1.3%
*Xylan Corp............................................. 147,100 4,187,753
------------
COMPUTER SOFTWARE - 18.6%
*Business Objects S.A. ADR.............................. 9,650 181,842
*Ciber, Inc............................................. 73,600 2,392,000
*Computer Horizons Corp................................. 147,250 5,581,695
*Compuware Corp......................................... 126,200 6,164,081
*CSG Systems International, Inc......................... 56,750 2,589,219
*Envoy Corp. ........................................... 65,750 2,753,281
*Gemstar International Group Ltd........................ 173,900 6,727,756
*Hyperion Software Corp................................. 162,200 7,055,700
*Keane, Inc. ........................................... 52,250 2,625,563
*Mercury Interactive Corp............................... 107,250 4,336,922
*QuadraMed Corp......................................... 88,500 2,522,250
*Saville Systems Ireland plc............................ 75,850 3,790,130
*Symantec Corp.......................................... 160,900 4,671,128
*Vantive Corp........................................... 74,050 2,367,286
*Veritas Software Corp.................................. 68,676 3,777,180
------------
57,536,033
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- -----------
<S> <C> <C>
TECHNOLOGY - CONTINUED
ELECTRONICS - 5.7%
*CBT Group plc ADR....................................... 56,600 $ 2,883,062
*Macromedia, Inc. ....................................... 101,350 1,517,083
*PMC-Sierra, Inc......................................... 106,050 4,815,333
*Vitesse Semiconductor Corp. ............................ 78,200 4,503,831
*World Access, Inc....................................... 104,650 4,035,566
-----------
17,754,875
-----------
SEMICONDUCTORS - 0.4%
*Integrated Device Technology, Inc....................... 93,950 1,130,336
-----------
Total Technology......................................... 91,794,053
-----------
TOTAL COMMON STOCKS (Cost $213,730,158)................... 285,149,685
-----------
</TABLE>
SHORT-TERM INVESTMENT - 9.1%
<TABLE>
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C>
REPURCHASE AGREEMENT - 9.1%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $28,254,214,
collateralized by $24,631,576 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $28,571,043
(Cost $28,250,000)............................... $28,250,000 28,250,000
------------
TOTAL INVESTMENTS - 101.1% (Cost $241,980,158)(a). 313,399,685
------------
OTHER ASSETS AND LIABILITIES (NET) - (1.1)%....... (3,415,499)
------------
NET ASSETS - 100%................................. $309,984,186
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $241,980,158. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$71,419,527. This consisted of aggregate gross unrealized appreciation for
all securities of $73,644,591 and aggregate gross unrealized depreciation
for all securities of $2,225,064.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 92.2%
<TABLE>
<CAPTION>
SHARES VALUE+
------ ------------
<S> <C> <C>
CAPITAL GOODS - 11.3%
CONSTRUCTION - 0.6%
McDermott International, Inc............................. 23,700 $ 980,588
------------
ELECTRICAL EQUIPMENT - 2.2%
General Electric Co...................................... 41,500 3,532,687
------------
ENVIRONMENTAL - 8.5%
Johnson Controls, Inc.................................... 25,100 1,490,312
*Republic Industries, Inc................................ 53,100 1,476,844
*Thermo Electron Corp.................................... 72,700 2,894,369
Tyco International Ltd................................... 64,700 3,526,150
*U.S.A. Waste Services, Inc.............................. 55,767 2,736,068
*U.S. Filter Corp........................................ 51,700 1,686,713
------------
13,810,456
------------
Total Capital Goods...................................... 18,323,731
------------
COMMUNICATION SERVICES - 4.8%
TELECOMMUNICATIONS-CELLULAR WIRELESS - 2.2%
*AirTouch Communications, Inc............................ 67,200 3,570,000
------------
TELECOMMUNICATIONS-LONG DISTANCE - 2.6%
AT&T Corp................................................ 25,800 1,549,612
*WorldCom, Inc........................................... 61,400 2,626,769
------------
4,176,381
------------
Total Communication Services............................. 7,746,381
------------
CONSUMER CYCLICAL - 15.7%
FURNITURE/APPLIANCES - 0.2%
Steelcase, Inc., Class A................................. 9,700 335,862
------------
PRINTING/PUBLISHING - 0.9%
Omnicom Group Inc........................................ 31,800 1,506,525
------------
RECREATION - 1.3%
Mattel, Inc.............................................. 52,300 2,003,744
------------
RETAIL-GENERAL - 4.5%
*Costco Cos., Inc........................................ 85,600 4,777,550
*Fred Meyer, Inc......................................... 56,600 2,539,925
------------
7,317,475
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------- ------------
<S> <C> <C>
CONSUMER CYCLICAL - CONTINUED
RETAIL-SPECIALTY - 8.8%
*Borders Group, Inc..................................... 61,300 $ 1,969,262
Home Depot, Inc......................................... 65,900 4,588,287
Nordstrom, Inc.......................................... 25,500 1,671,047
*Office Depot, Inc...................................... 78,000 2,583,750
*Staples, Inc........................................... 142,750 3,528,602
------------
14,340,948
------------
Total Consumer Cyclical................................. 25,504,554
------------
CONSUMER STAPLES - 9.4%
COSMETICS/TOILETRIES - 3.2%
Cardinal Health, Inc.................................... 15,450 1,487,063
Clorox Co............................................... 18,500 1,551,687
Procter & Gamble Co..................................... 25,200 2,071,125
------------
5,109,875
------------
FOOD PRODUCERS - 1.2%
Bestfoods............................................... 36,800 2,019,400
------------
FOOD RETAILERS - 3.8%
*Safeway, Inc........................................... 91,400 3,496,050
*Starbucks Corp......................................... 57,000 2,741,344
------------
6,237,394
------------
MEDIA - 1.2%
A.H. Belo Corp., Class A................................ 36,400 1,926,925
------------
Total Consumer Staples.................................. 15,293,594
------------
ENERGY - 3.4%
OIL-SERVICES - 3.4%
Halliburton Co.......................................... 57,700 3,173,500
Schlumberger Ltd........................................ 28,000 2,320,500
------------
Total Energy............................................. 5,494,000
------------
FINANCE - 18.9%
BANKS - 6.0%
BankAmerica Corp........................................ 27,800 2,363,000
Chase Manhattan Corp.................................... 4,400 609,675
First American Corp. (Tennessee)........................ 60,300 2,967,891
U.S. Bancorp............................................ 19,400 2,463,800
Washington Federal, Inc................................. 49,465 1,385,020
------------
9,789,386
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ ------------
<S> <C> <C>
FINANCE - CONTINUED
FINANCIAL SERVICES - 2.8%
Merrill Lynch & Co., Inc................................. 18,200 $ 1,597,050
SunAmerica, Inc.......................................... 58,600 2,926,338
------------
4,523,388
------------
INSURANCE COMPANIES - 10.1%
American International Group, Inc........................ 23,300 3,065,406
Conseco, Inc. ........................................... 45,000 2,233,125
Equitable Cos., Inc...................................... 54,600 3,351,075
MGIC Investment Corp..................................... 38,600 2,431,800
Travelers Group, Inc..................................... 46,749 2,860,454
UNUM Corp................................................ 44,700 2,402,625
------------
16,344,485
------------
Total Finance............................................ 30,657,259
------------
HEALTHCARE - 9.0%
DRUGS - 3.3%
Merck & Co., Inc. ....................................... 13,000 1,566,500
Pfizer, Inc.............................................. 18,800 2,139,675
Schering-Plough Corp. ................................... 20,300 1,626,538
------------
5,332,713
------------
MEDICAL PRODUCTS/SUPPLIES - 1.4%
Abbott Laboratories...................................... 31,851 2,329,104
------------
MEDICAL SERVICES - 4.3%
*HEALTHSOUTH Corp. ...................................... 87,600 2,644,425
*Quintiles Transnational Corp............................ 38,800 1,919,388
*Tenet Healthcare Corp................................... 65,800 2,463,387
------------
7,027,200
------------
Total Healthcare......................................... 14,689,017
------------
MISCELLANEOUS - 3.6%
DIVERSIFIED - 2.1%
AlliedSignal, Inc........................................ 25,200 1,104,075
Cognizant Corp........................................... 46,600 2,396,987
------------
3,501,062
------------
PROFESSIONAL SERVICES - 1.5%
*AccuStaff, Inc.......................................... 66,300 2,378,513
------------
Total Miscellaneous...................................... 5,879,575
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------ ------------
<S> <C> <C>
TECHNOLOGY - 12.7%
COMMUNICATION EQUIPMENT - 2.1%
Lucent Technologies, Inc................................. 30,300 $ 2,306,587
*Tellabs, Inc. .......................................... 16,700 1,183,091
------------
3,489,678
------------
COMPUTER RELATED - 2.1%
*Cisco Systems, Inc...................................... 29,100 2,132,485
Hewlett-Packard Co. ..................................... 16,900 1,272,781
------------
3,405,266
------------
COMPUTER SERVICES - 2.1%
Computer Associates International, Inc. ................. 57,000 3,338,062
------------
COMPUTER SOFTWARE - 6.4%
*BMC Software, Inc....................................... 11,800 1,103,669
*Fiserv, Inc. ........................................... 12,300 804,112
HBO & Co................................................. 39,000 2,331,469
*Microsoft Corp. ........................................ 17,400 1,568,719
*Visio Corp.............................................. 93,400 4,626,219
------------
10,434,188
------------
Total Technology......................................... 20,667,194
------------
UTILITIES - 3.4%
NATURAL GAS - 3.4%
Columbia Gas System, Inc. ............................... 33,000 2,681,250
Williams Cos., Inc. ..................................... 92,800 2,934,800
------------
Total Utilities.......................................... 5,616,050
------------
TOTAL COMMON STOCKS (Cost $114,145,547).................. 149,871,355
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 9.2%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
----------- ------------
<S> <C> <C>
REPURCHASE AGREEMENT - 9.2%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $15,022,240, collat-
eralized by $13,096,151 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 5/15/04-11/15/27,
valued at $15,190,693
(Cost $15,020,000)............................... $15,020,000 $ 15,020,000
------------
TOTAL INVESTMENTS - 101.4% (Cost $129,165,547)(a). 164,891,355
------------
OTHER ASSETS AND LIABILITIES (NET) - (1.4)%....... (2,329,498)
------------
NET ASSETS - 100%................................. $162,561,857
============
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $129,165,547. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$35,725,808. This consisted of aggregate gross unrealized appreciation for
all securities of $36,075,704 and aggregate gross unrealized depreciation
for all securities of $349,896.
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 56.8%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
CAPITAL GOODS - 7.1%
CONSTRUCTION - 0.4%
McDermott International, Inc.......................... 7,300 $ 302,038
-----------
ELECTRICAL EQUIPMENT - 1.2%
General Electric Co................................... 11,700 995,962
-----------
ENVIRONMENTAL - 5.5%
Johnson Controls, Inc................................. 7,500 445,312
*Republic Industries, Inc............................. 16,500 458,906
*Thermo Electron Corp................................. 21,000 836,063
Tyco International Ltd................................ 21,600 1,177,200
*U.S.A. Waste Services, Inc........................... 19,427 953,137
*U.S. Filter Corp..................................... 17,700 577,463
-----------
4,448,081
-----------
Total Capital Goods................................... 5,746,081
-----------
COMMUNICATION SERVICES - 3.1%
TELECOMMUNICATIONS-CELLULAR WIRELESS - 1.5%
*AirTouch Communications, Inc......................... 22,500 1,195,313
-----------
TELECOMMUNICATIONS-LONG DISTANCE - 1.6%
AT&T Corp............................................. 7,000 420,437
*WorldCom, Inc........................................ 21,400 915,519
-----------
1,335,956
-----------
Total Communication Services.......................... 2,531,269
-----------
CONSUMER CYCLICAL - 9.4%
FURNITURE/APPLIANCES - 0.1%
Steelcase, Inc., Class A.............................. 3,100 107,337
-----------
PRINTING/PUBLISHING - 0.5%
Omnicom Group, Inc.................................... 9,200 435,850
-----------
RECREATION - 0.7%
Mattel, Inc........................................... 14,400 551,700
-----------
RETAIL-GENERAL - 2.7%
*Costco Companies, Inc................................ 25,000 1,395,312
*Fred Meyer, Inc...................................... 17,500 785,313
-----------
2,180,625
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
CONSUMER CYCLICAL - CONTINUED
RETAIL-SPECIALTY - 5.4%
*Borders Group, Inc................................... 17,600 $ 565,400
Home Depot, Inc....................................... 19,600 1,364,650
Nordstrom, Inc........................................ 7,400 484,931
*Office Depot, Inc.................................... 23,500 778,438
*Staples, Inc......................................... 48,250 1,192,680
-----------
4,386,099
-----------
Total Consumer Cyclical............................... 7,661,611
-----------
CONSUMER STAPLES - 5.6%
COSMETICS/TOILETRIES - 1.6%
Cardinal Health, Inc.................................. 5,050 486,063
Clorox Co............................................. 4,000 335,500
Procter & Gamble Co................................... 6,000 493,125
-----------
1,314,688
-----------
FOOD PRODUCERS - 0.9%
Bestfoods............................................. 14,000 768,250
-----------
FOOD RETAILERS - 2.4%
*Safeway, Inc......................................... 30,000 1,147,500
*Starbucks Corp....................................... 16,500 793,547
-----------
1,941,047
-----------
MEDIA - 0.7%
A.H. Belo Corp., Class A.............................. 10,300 545,256
-----------
Total Consumer Staples................................ 4,569,241
-----------
ENERGY - 1.9%
OIL-SERVICES - 1.9%
Halliburton Co........................................ 16,000 880,000
Schlumberger Ltd...................................... 8,600 712,725
-----------
Total Energy.......................................... 1,592,725
-----------
FINANCE - 11.8%
BANKS - 3.9%
BankAmerica Corp...................................... 9,300 790,500
Chase Manhattan Corp.................................. 1,400 193,988
First American Corp. (Tennessee)...................... 18,300 900,703
U.S. Bancorp.......................................... 6,000 762,000
Washington Federal, Inc............................... 17,575 492,100
-----------
3,139,291
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
FINANCE - CONTINUED
FINANCIAL SERVICES - 1.8%
Merrill Lynch & Co., Inc. ............................ 5,800 $ 508,950
SunAmerica, Inc. ..................................... 19,150 956,303
-----------
1,465,253
-----------
INSURANCE COMPANIES - 6.1%
American International Group, Inc. ................... 6,700 881,469
Conseco, Inc.......................................... 13,800 684,825
Equitable Cos., Inc................................... 17,600 1,080,200
MGIC Investment Corp.................................. 12,200 768,600
Travelers Group, Inc. ................................ 12,499 764,782
UNUM Corp............................................. 15,200 817,000
-----------
4,996,876
-----------
Total Finance......................................... 9,601,420
-----------
HEALTHCARE - 5.6%
DRUGS - 2.0%
Merck & Co., Inc...................................... 4,450 536,225
Pfizer, Inc. ......................................... 5,700 648,731
Schering-Plough Corp.................................. 5,200 416,650
-----------
1,601,606
-----------
MEDICAL PRODUCTS/SUPPLIES - 0.9%
Abbott Laboratories................................... 10,449 764,083
-----------
MEDICAL SERVICES - 2.7%
*HEALTHSOUTH Corp..................................... 25,200 760,725
*Quintiles Transnational Corp. ....................... 12,200 603,519
*Tenet Healthcare Corp................................ 22,000 823,625
-----------
2,187,869
-----------
Total Healthcare...................................... 4,553,558
-----------
MISCELLANEOUS - 2.3%
DIVERSIFIED - 1.3%
AlliedSignal, Inc. ................................... 7,800 341,737
Cognizant Corp. ...................................... 13,800 709,838
-----------
1,051,575
-----------
PROFESSIONAL SERVICES - 1.0%
*AccuStaff, Inc....................................... 21,800 782,075
-----------
Total Miscellaneous................................... 1,833,650
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TECHNOLOGY - 8.0%
COMMUNICATION EQUIPMENT - 1.4%
Lucent Technologies, Inc. ............................ 9,400 $ 715,575
*Tellabs, Inc......................................... 5,500 389,813
-----------
1,105,388
-----------
COMPUTER RELATED - 1.2%
*Cisco Systems, Inc................................... 7,700 564,265
Hewlett-Packard Co.................................... 5,500 414,219
-----------
978,484
-----------
COMPUTER SERVICES - 1.6%
Computer Associates International, Inc................ 21,950 1,285,447
-----------
COMPUTER SOFTWARE - 3.8%
*BMC Software, Inc. .................................. 2,800 261,887
*Fiserv, Inc. ........................................ 1,100 71,706
HBO & Co. ............................................ 12,500 747,266
*Microsoft Corp....................................... 7,000 631,094
*Visio Corp. ......................................... 28,100 1,391,828
-----------
3,103,781
-----------
Total Technology...................................... 6,473,100
-----------
UTILITIES - 2.0%
NATURAL GAS - 2.0%
Columbia Gas System, Inc. ............................ 9,900 804,375
Williams Cos., Inc.................................... 26,900 850,712
-----------
Total Utilities....................................... 1,655,087
-----------
TOTAL COMMON STOCKS (Cost $34,379,374)................ 46,217,742
-----------
</TABLE>
<TABLE>
<S> <C> <C>
CORPORATE BONDS AND NOTES - 13.4%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
FINANCIAL SERVICES - 4.7%
++Bear Stearns Co., Inc., Series B, 5.938%,
10/27/04........................................... $1,100,000 1,098,226
#Jefferson-Pilot Capital Trust, 8.14%, 1/15/46...... 750,000 784,687
Lehman Brothers Holdings, Inc., 6.90%, 3/30/01...... 1,200,000 1,222,500
++Marine Midland Bank, 5.813%, 12/20/00............. 700,000 696,974
-----------
3,802,387
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE BONDS AND NOTES - CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
INDUSTRIAL - 6.7%
#American Trans Air, 7.46%, 1/15/08................. $1,000,000 $ 1,001,790
Continental Cablevision, Inc., 11.00%, 6/1/07....... 1,000,000 1,101,250
News America Holdings, Inc., 7.75%, 12/1/45......... 950,000 991,562
Occidental Petroleum Corp., 11.125%, 6/1/19......... 750,000 825,000
Time Warner Entertainment Co., 8.375%, 3/15/23...... 1,375,000 1,569,219
-----------
5,488,821
-----------
YANKEES - 2.0%
++Merita Bank Ltd., 6.03%, 12/1/05.................. 750,000 752,629
Province de Quebec, 11.00%, 6/15/15................. 750,000 839,062
-----------
1,591,691
-----------
TOTAL CORPORATE BONDS AND NOTES (Cost $10,609,498).. 10,882,899
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS - 9.0%
Federal National Mortgage Association, Series 1997-
41, Class D, REMIC, 7.25%, 1/18/19................. 1,000,000 1,014,787
Federal National Mortgage Association, Series 1996-
28, Class A, Structured Collateral, 7.00%,
9/25/23............................................ 1,125,000 1,142,573
GE Capital Mortgage Services, Inc., Series 1997-2,
Class 1A2 PAC 1 (11) 6.75%, 3/25/27................ 800,000 794,929
Morgan Stanley Capital Corp. I, Series C, Class 4,
9.00%, 5/1/16...................................... 630,454 631,954
Prudential Home Mortgage Securities Co., Series
1994-1, Class A6, REMIC, PAC 2 (22), 6.00%,
2/25/09............................................ 1,000,000 973,578
Residential Funding Mortgage, Series 1997-S12, Class
A6, REMIC, 7.25%, 8/25/27.......................... 1,000,000 1,010,853
Salomon Brothers Mortgage Securities VII, Series
1997-LB2, Class A1, 6.95%, 4/25/27................. 376,511 376,499
Trust Investment Enhanced Return Securities, Series
1997-7, 6.69%, 11/15/03............................ 1,400,000 1,406,454
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $7,236,960).................................. 7,351,627
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSET BACKED SECURITIES - 8.3%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
++Airplanes Pass Through Trust, Series 1, Class A4,
6.308%, 3/15/19.................................... $ 925,000 $ 930,781
Capita Equipment Receivables Trust, Series 1997-1,
Class B, 6.45%, 8/15/02............................ 850,000 859,716
Citibank Credit Card Master Trust I, Series 1997-6,
Class A PO, 8/15/06................................ 1,675,000 1,146,365
Metris Master Trust, Series 1996-1, Class A, 6.45%,
2/20/02............................................ 1,300,000 1,317,604
Metris Master Trust, Series 1997-1, Class A, 6.87%,
10/20/05........................................... 600,000 618,671
Northwest Airlines Corp., Series 1997-1, Class 1A,
7.068%, 7/2/17..................................... 1,000,000 1,023,470
Provident Bank Home Equity Loan Trust, Series 1997-
1, Class A1, 7.18%, 4/25/13........................ 596,163 606,024
The Money Store Home Equity Trust, Series 1995-B,
Class A3, 6.65%, 1/15/16........................... 257,077 260,532
-----------
TOTAL ASSET BACKED SECURITIES (Cost $6,650,081)..... 6,763,163
-----------
U.S. TREASURY SECURITIES - 6.8%
U.S. TREASURY BOND - 3.5%
7.125%, 2/15/23..................................... 2,500,000 2,846,025
-----------
U.S. TREASURY NOTES - 3.3%
6.25%, 10/31/01..................................... 800,000 815,048
7.875%, 11/15/04.................................... 800,000 892,456
7.00%, 7/15/06...................................... 850,000 917,473
-----------
2,624,977
-----------
TOTAL U.S. TREASURY SECURITIES (Cost $5,344,975).... 5,471,002
-----------
MORTGAGE-BACKED GNMA - 3.0%
Government National Mortgage Association, 7.00%,
5/15/24 Pool #376510 (Cost $2,226,627)............. 2,402,463 2,430,992
-----------
MORTGAGE-BACKED FNMA - 1.6%
Federal National Mortgage Association, 6.50%,
2/1/28, Pool #408248 (Cost $1,263,994)............. 1,278,781 1,265,593
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM IN-VESTMENT - 6.5%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - 6.5%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $5,315,793, collateralized
by $4,634,224 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27,
valued at $5,375,402
(Cost $5,315,000)............................................... $5,315,000 $ 5,315,000
-----------
TOTAL INVESTMENTS - 105.4% (Cost $73,026,509)(a)................. 85,698,018
-----------
OTHER ASSETS AND LIABILITIES (NET) - (5.4)%...................... (4,360,190)
-----------
NET ASSETS - 100%................................................ $81,337,828
===========
</TABLE>
+ See Note A to Financial Statements.
++ Variable/floating rate security-rate disclosed is as of April 30, 1998.
* Non-Income Producing Security
# 144A Security; certain conditions for public resale may exist.
PAC Planned Amortization Class
PO Principal Only
REMIC Real Estate Mortgage Investment Conduit
(a) The cost for federal income tax purposes was $73,026,509. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$12,671,509. This consisted of aggregate gross unrealized appreciation for
all securities of $12,860,743 and aggregate gross unrealized depreciation
for all securities of $189,234.
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS SIRACH BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
CORPORATE BONDS AND NOTES - 37.9%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
FINANCE - 12.2%
Conseco Financing Trust II, 8.70%, 11/15/26.......... $1,000,000 $ 1,106,044
Heller Financial, Inc., Series H, 6.52%, 12/6/99..... 1,500,000 1,506,810
#HSBC America Capital Trust, 7.808%, 12/15/26........ 900,000 883,125
Provident Cos., Inc., 7.405%, 3/15/38................ 1,000,000 998,750
Spieker Properties, Inc., 6.65%, 12/15/00............ 1,300,000 1,308,735
W.R. Berkley Capital Trust Corp., 8.197%, 12/15/45... 900,000 930,375
-----------
6,733,839
-----------
INDUSTRIAL - 14.4%
#American Trans Air, 7.46%, 1/15/08.................. 1,000,000 1,001,790
Continental Cablevision, Inc., 11.00%, 6/1/07........ 1,000,000 1,101,250
DeepTech International Inc., 12.00%, 12/15/00........ 1,000,000 1,108,750
News America Holdings, Inc., 7.75%, 12/1/45.......... 1,500,000 1,565,625
News Corp. Ltd., 11.00%, 6/30/05..................... 2,000,000 2,057,500
Time Warner Entertainment Co., 8.375%, 3/15/23....... 1,000,000 1,141,250
-----------
7,976,165
-----------
UTILITIES - 8.0%
DQU II Funding, 8.70%, 6/1/16........................ 1,500,000 1,698,750
Great Lakes Power, Inc., 8.90%, 12/1/99.............. 1,250,000 1,295,313
Gulf States Utilities Co., Series 99B, 7.46%,
11/1/99............................................. 1,400,000 1,421,000
-----------
4,415,063
-----------
YANKEES - 3.3%
#Hutchison Whampoa, 7.45%, 8/1/17.................... 750,000 687,187
Norsk Hydro A/S, 7.75%, 6/15/23...................... 1,000,000 1,112,500
-----------
1,799,687
-----------
TOTAL CORPORATE BONDS (Cost $20,850,326)............. 20,924,754
-----------
U.S. TREASURY SECURITIES - 18.9%
U.S. TREASURY BOND - 3.3%
7.125%, 2/15/23...................................... 1,625,000 1,849,916
-----------
U.S. TREASURY NOTES - 15.6%
6.25%, 10/31/01...................................... 3,100,000 3,158,311
7.875%, 11/15/04..................................... 1,600,000 1,784,912
7.00%, 7/15/06....................................... 3,400,000 3,669,892
-----------
8,613,115
-----------
TOTAL U.S. TREASURY SECURITIES (Cost $10,469,637).... 10,463,031
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
25
<PAGE>
UAM FUNDS SIRACH BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 17.1%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Bear Stearns Mortgage Securities, Inc., Series 1998-1,
Class 2A2, REMIC, 6.35%, 3/25/28..................... $1,000,000 $ 994,270
Mellon Residential Funding Corp., Series 1998-1, Class
A4, REMIC, 6.50%, 2/25/28............................ 1,000,000 980,220
Prudential Home Mortgage Securities Co., Series 1993-
15, Class A6, REMIC PAC (11), 6.75%, 5/25/08......... 1,000,000 995,105
Prudential Home Mortgage Securities Co., Series 1994-
1, Class A6, REMIC, PAC-2 (22), 6.00%, 2/25/09....... 1,350,000 1,314,330
Residential Funding Mortgage Securities, Inc., Series
1997-S9, Class A14, REMIC, 7.50%, 7/25/27............ 1,000,000 1,011,409
Residential Funding Mortgage Securities, Inc., Series
1997-S9, Class A19, REMIC, 7.10%, 7/25/27............ 1,200,000 1,221,654
Salomon Brothers Mortgage Securities VII, Series 1997-
LB6, Class A6, REMIC, 6.82%, 12/25/27................ 1,500,000 1,517,685
Trust Investment Enhanced Return Securities, Series
1997-7, 6.69%, 11/15/03.............................. 1,400,000 1,406,454
-----------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS
(Cost $9,387,564).................................... 9,441,127
-----------
ASSET BACKED SECURITIES - 14.9%
++Airplanes Pass Through Trust, Series 1, Class A4,
6.308%, 3/15/19...................................... 1,225,000 1,232,656
Americredit Automobile Receivables Trust, Series 1997-
B, Class A2, 6.36%, 9/12/00.......................... 831,860 834,397
CIT Group Home Equity Loan Trust, Series 1997-1, Class
A2, 6.17%, 10/15/08.................................. 1,000,000 1,001,600
Continental Mortgage Home Equity Loan Trust, Series
1996-4, Class A4, 6.37%, 10/15/11.................... 1,000,000 1,003,345
Discover Card Master Trust I, Series 1993-2, Class A,
5.40%, 1/16/01....................................... 1,500,000 1,497,379
Metris Master Trust, Series 1996-1, Class A, 6.45%,
2/20/02.............................................. 1,100,000 1,114,895
Metris Master Trust, Series 1997-1, Class A, 6.87%,
10/20/05............................................. 1,500,000 1,539,375
-----------
TOTAL ASSET BACKED SECURITIES (Cost $8,193,417)....... 8,223,647
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
26
<PAGE>
UAM FUNDS SIRACH BOND PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
MORTGAGE PASS-THROUGHS - 8.7%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
Federal Home Loan Mortgage Corporation Gold, Pool
#C90205, 6.00%, 12/1/17.............................. $1,289,281 $ 1,256,237
Federal Home Loan Mortgage Corporation Gold, Pool
#G10431, 6.50%, 1/1/11............................... 1,129,934 1,135,583
Federal National Mortgage Association Pool #408248,
6.50%, 2/1/28........................................ 1,377,148 1,362,946
Saxon Mortgage Securities Corp., Series 1994-9B, Class
2A, REMIC, 7.00%, 7/25/09............................ 1,026,496 1,024,129
-----------
TOTAL MORTGAGE PASS-THROUGHS (Cost $4,771,000)................... 4,778,895
-----------
SHORT-TERM INVESTMENT - 1.2%
REPURCHASE AGREEMENT - 1.2%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $682,102, collateralized
by $594,645 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27, valued at
$689,750 (Cost $682,000)............................. 682,000 682,000
-----------
TOTAL INVESTMENTS - 98.7% (Cost $54,353,944)(a)....... 54,513,454
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.3%............. 715,757
-----------
NET ASSETS - 100%..................................... $55,229,211
===========
</TABLE>
+ See Note A to Financial Statements.
++ Variable/Floating Rate Security--rate disclosed is as of April 30, 1998.
# 144A Security; certain conditions for public sale may exist.
CMO Collateralized Mortgage Obligation
PAC Planned Amortization Class
REMIC Real Estate Mortgage Investment Conduit
(a) The cost for federal income tax purposes was $54,353,944. At April 30,
1998, net unrealized appreciation for all securities based on tax cost
was $159,510. This consisted of aggregate gross unrealized appreciation
for all securities of $255,988 and aggregate gross unrealized
depreciation for all securities of $96,478.
The accompanying notes are an integral part of the financial statements.
27
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 98.7%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
CAPITAL GOODS - 12.3%
CONSTRUCTION - 0.6%
McDermott International, Inc.......................... 6,100 $ 252,388
-----------
ELECTRICAL EQUIPMENT - 2.5%
General Electric Co................................... 11,400 970,425
-----------
ENVIRONMENTAL - 9.2%
Johnson Controls, Inc. ............................... 7,300 433,437
*Republic Industries, Inc............................. 13,750 382,422
*Thermo Electron Corp................................. 18,500 736,531
Tyco International Ltd................................ 16,000 872,000
*U.S.A. Waste Services, Inc........................... 14,652 718,864
*U.S. Filter Corp. ................................... 13,950 455,119
-----------
3,598,373
-----------
Total Capital Goods................................... 4,821,186
-----------
COMMUNICATION SERVICES - 5.2%
TELECOMMUNICATIONS-CELLULAR WIRELESS - 2.0%
*AirTouch Communications, Inc......................... 14,900 791,563
-----------
TELECOMMUNICATIONS-LONG DISTANCE - 3.2%
AT&T Corp. ........................................... 6,100 366,381
*WorldCom, Inc........................................ 20,100 859,903
-----------
1,226,284
-----------
Total Communication Services.......................... 2,017,847
-----------
CONSUMER CYCLICAL - 15.4%
FURNITURE/APPLIANCES - 0.5%
Steelcase, Inc., Class A.............................. 5,400 186,975
-----------
PRINTING/PUBLISHING - 1.0%
Omnicom Group, Inc.................................... 8,200 388,475
-----------
RECREATION - 1.2%
Mattel, Inc........................................... 12,650 484,653
-----------
RETAIL-GENERAL - 4.4%
*Costco Cos., Inc..................................... 18,900 1,054,856
*Fred Meyer, Inc. .................................... 15,200 682,100
-----------
1,736,956
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
28
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
CONSUMER CYCLICAL - CONTINUED
RETAIL-SPECIALTY - 8.3%
*Borders Group, Inc. ................................. 15,500 $ 497,938
Home Depot, Inc. ..................................... 11,500 800,688
Nordstrom, Inc........................................ 6,350 416,123
*Office Depot, Inc. .................................. 20,250 670,781
*Staples, Inc......................................... 35,025 865,774
-----------
3,251,304
-----------
Total Consumer Cyclical............................... 6,048,363
-----------
CONSUMER STAPLES - 10.4%
COSMETICS/TOILETRIES - 4.2%
Cardinal Health, Inc.................................. 5,675 546,219
Clorox Co............................................. 7,400 620,675
Procter & Gamble Co. ................................. 6,100 501,344
-----------
1,668,238
-----------
FOOD PRODUCERS - 1.5%
Bestfoods............................................. 10,500 576,187
-----------
FOOD RETAILERS - 3.5%
*Safeway, Inc......................................... 18,400 703,800
*Starbucks Corp....................................... 13,600 654,075
-----------
1,357,875
-----------
MEDIA - 1.2%
A.H. Belo Corp., Class A.............................. 8,800 465,850
-----------
Total Consumer Staples................................ 4,068,150
-----------
ENERGY - 3.4%
OIL-SERVICES - 3.4%
Halliburton Co. ...................................... 12,450 684,750
Schlumberger Ltd...................................... 7,950 658,856
-----------
Total Energy.......................................... 1,343,606
-----------
FINANCE - 17.9%
BANKS - 5.7%
BankAmerica Corp. .................................... 7,050 599,250
Chase Manhattan Corp. ................................ 2,700 374,119
First American Corp. (Tennessee)...................... 8,550 420,820
U.S. Bancorp.......................................... 4,950 628,650
Washington Federal, Inc............................... 7,887 220,836
-----------
2,243,675
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
29
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
FINANCE - CONTINUED
FINANCIAL SERVICES - 2.9%
Merrill Lynch & Co., Inc. ............................ 5,150 $ 451,912
SunAmerica, Inc....................................... 14,100 704,119
-----------
1,156,031
-----------
INSURANCE COMPANIES - 9.3%
American International Group, Inc..................... 5,625 740,039
Conseco, Inc.......................................... 11,600 575,650
Equitable Cos., Inc................................... 11,600 711,950
MGIC Investment Corp.................................. 9,050 570,150
Travelers Group, Inc. ................................ 12,549 767,842
UNUM Corp............................................. 4,900 263,375
-----------
3,629,006
-----------
Total Finance......................................... 7,028,712
-----------
HEALTHCARE - 11.0%
DRUGS - 4.6%
Merck & Co., Inc...................................... 3,750 451,875
Pfizer, Inc. ......................................... 6,050 688,565
Schering-Plough Corp.................................. 7,950 636,994
-----------
1,777,434
-----------
MEDICAL PRODUCTS/SUPPLIES - 1.6%
Abbott Laboratories................................... 8,700 636,188
-----------
MEDICAL SERVICES - 4.8%
*HEALTHSOUTH Corp..................................... 21,200 639,975
*Quintiles Transnational Corp. ....................... 10,400 514,475
*Tenet Healthcare Corp................................ 19,350 724,416
-----------
1,878,866
-----------
Total Healthcare...................................... 4,292,488
-----------
MISCELLANEOUS - 5.0%
DIVERSIFIED - 3.0%
AlliedSignal, Inc..................................... 12,500 547,656
Cognizant Corp........................................ 12,050 619,822
-----------
1,167,478
-----------
PROFESSIONAL SERVICES - 2.0%
*AccuStaff, Inc....................................... 21,700 778,488
-----------
Total Miscellaneous................................... 1,945,966
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
30
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TECHNOLOGY - 14.3%
COMMUNICATION EQUIPMENT - 2.4%
Lucent Technologies, Inc. ............................ 8,400 $ 639,450
*Tellabs, Inc......................................... 4,500 318,797
-----------
958,247
-----------
COMPUTER RELATED - 2.4%
*Cisco Systems, Inc................................... 7,875 577,090
Hewlett-Packard Co.................................... 4,650 350,203
-----------
927,293
-----------
COMPUTER SERVICES - 2.6%
Computer Associates International, Inc................ 12,275 718,855
Equifax, Inc. ........................................ 8,150 315,303
-----------
1,034,158
-----------
COMPUTER SOFTWARE - 6.3%
*BMC Software, Inc. .................................. 2,800 261,888
*Fiserv, Inc.......................................... 3,100 202,081
HBO & Co. ............................................ 13,150 786,123
*Microsoft Corp....................................... 7,300 658,141
*Visio Corp........................................... 11,500 569,609
-----------
2,477,842
-----------
SEMICONDUCTORS - 0.6%
Intel Corp. .......................................... 2,800 226,362
-----------
Total Technology...................................... 5,623,902
-----------
UTILITIES - 3.8%
NATURAL GAS - 3.8%
Columbia Gas System, Inc. ............................ 8,650 702,813
Williams Cos., Inc.................................... 24,850 785,881
-----------
Total Utilities....................................... 1,488,694
-----------
TOTAL COMMON STOCKS (Cost $29,183,375)................ 38,678,914
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
31
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT - 3.3%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - 3.3%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,301,194, collateralized
by $1,134,360 of various U.S. Treasury Obligations,
5.50%-14.00%, due 5/15/04-11/15/27,
valued at $1,315,785
(Cost $1,301,000)................................................. $1,301,000 $ 1,301,000
-----------
TOTAL INVESTMENTS - 102.0% (Cost $30,484,375)(a)................... 39,979,914
-----------
OTHER ASSETS AND LIABILITIES (NET) - (2.0)%........................ (765,474)
-----------
NET ASSETS - 100%.................................................. $39,214,440
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
(a) The cost for federal income tax purposes was $30,484,375. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$9,495,539. This consisted of aggregate gross unrealized appreciation for
all securities of $9,585,470 and aggregate gross unrealized depreciation
for all securities of $89,931.
The accompanying notes are an integral part of the financial statements.
32
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
SIRACH
SPECIAL SIRACH
EQUITY GROWTH
PORTFOLIO PORTFOLIO
------------ ------------
<S> <C> <C>
ASSETS
Investments and Repurchase Agreements at Cost...... $241,980,158 $129,165,547
============ ============
Investments, at Value.............................. $313,399,685 $164,891,355
Cash............................................... 138,178 858
Receivable for Investments Sold.................... 6,900,959 92,632
Dividends Receivable............................... 40,787 63,986
Receivable for Portfolio Shares Sold............... 994,334 72,875
Interest Receivable................................ 4,214 2,241
Other Assets....................................... 15,497 1,224
------------ ------------
Total Assets...................................... 321,493,654 165,125,171
------------ ------------
LIABILITIES
Payable for Investments Purchased.................. 9,092,010 1,956,636
Payable for Portfolio Shares Redeemed.............. 2,130,941 471,882
Payable for Investment Advisory Fees--Note B....... 174,455 86,982
Payable for Administrative Fees--Note C............ 39,765 16,987
Payable for Custodian Fees--Note D................. 45,181 15,147
Payable for Distribution Fees--Note E.............. 534 6,579
Payable for Account Service Fees--Note F........... 3,375 6,662
Payable for Directors' Fees--Note G................ 1,141 733
Other Liabilities.................................. 22,066 1,706
------------ ------------
Total Liabilities................................. 11,509,468 2,563,314
------------ ------------
NET ASSETS......................................... $309,984,186 $162,561,857
============ ============
NET ASSETS CONSIST OF:
Paid in Capital.................................... $200,137,845 $114,130,766
Undistributed Net Investment Income (Loss)......... (958,683) 126,862
Accumulated Net Realized Gain...................... 39,385,497 12,578,421
Unrealized Appreciation/Depreciation............... 71,419,527 35,725,808
------------ ------------
NET ASSETS......................................... $309,984,186 $162,561,857
============ ============
INSTITUTIONAL CLASS SHARES
NET ASSETS......................................... $307,453,008 $132,254,050
Shares Issued and Outstanding ($0.001 par
value)+.......................................... 22,263,733 9,051,341
Net Asset Value, Offering, and Redemption Price Per
Share............................................ $13.81 $14.61
====== ======
INSTITUTIONAL SERVICE CLASS SHARES
NET ASSETS......................................... $ 2,531,178 $ 30,307,807
Shares Issued and Outstanding ($0.001 par value)
(Authorized 10,000,000).......................... 184,283 2,076,571
Net Asset Value, Offering, and Redemption Price Per
Share............................................ $13.74 $14.60
====== ======
</TABLE>
+ Authorized Institutional Class Shares
The accompanying notes are an integral part of the financial statements.
33
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
<TABLE>
<CAPTION>
SIRACH
STRATEGIC SIRACH SIRACH
BALANCED BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments and Repurchase Agreements at
Cost...................................... $73,026,509 $54,353,944 $30,484,375
=========== =========== ===========
Investments, at Value...................... $85,698,018 $54,513,454 $39,979,914
Cash....................................... 826 -- 281
Receivable for Investments Sold............ 28,748 510,001 25,554
Dividends Receivable....................... 18,808 -- 15,061
Receivable for Portfolio Shares Sold....... 8,651 49,522 40,908
Interest Receivable........................ 406,133 795,973 194
Other Assets............................... 498 24,945 7,187
----------- ----------- -----------
Total Assets.............................. 86,161,682 55,893,895 40,069,099
----------- ----------- -----------
LIABILITIES
Payable for Investments Purchased.......... 504,905 571,263 406,854
Payable for Portfolio Shares Redeemed...... 4,228,065 78,156 417,973
Payable for Investment Advisory Fees--Note
B......................................... 45,207 2,153 14,129
Payable for Administrative Fees--Note C.... 13,482 6,607 7,307
Payable for Custodian Fees--Note D......... 22,808 4,911 7,906
Payable for Distribution Fees--Note E...... 77 175 --
Payable for Account Service Fees--Note F... 2,841 -- --
Payable for Directors' Fees--Note G........ 679 1,419 490
Other Liabilities.......................... 5,790 -- --
----------- ----------- -----------
Total Liabilities......................... 4,823,854 664,684 854,659
----------- ----------- -----------
NET ASSETS................................. $81,337,828 $55,229,211 $39,214,440
=========== =========== ===========
NET ASSETS CONSIST OF:
Paid in Capital............................ $64,339,676 $54,325,424 $29,331,553
Undistributed Net Investment Income
(Loss).................................... 264,915 341,381 (23,358)
Accumulated Net Realized Gain.............. 4,061,728 402,896 410,706
Unrealized Appreciation/Depreciation....... 12,671,509 159,510 9,495,539
----------- ----------- -----------
NET ASSETS................................. $81,337,828 $55,229,211 $39,214,440
=========== =========== ===========
INSTITUTIONAL CLASS SHARES
NET ASSETS................................. $80,920,611 $54,285,305 $39,214,440
Shares Issued and Outstanding ($0.001 par
value)+.................................. 6,833,441 5,316,444 2,381,726
Net Asset Value, Offering, and Redemption
Price Per Share........................... $11.84 $10.21 $16.46
====== ====== ======
INSTITUTIONAL SERVICE CLASS SHARES
NET ASSETS................................. $ 417,217 $ 943,906 --
Shares Issued and Outstanding ($0.001 par
value) (Authorized 10,000,000)........... 35,267 92,481 --
Net Asset Value, Offering, and Redemption
Price Per Share.......................... $11.83 $10.21 --
====== ====== ======
</TABLE>
+ Authorized 25,000,000
The accompanying notes are an integral part of the financial statements.
34
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
FOR THE SIX MONTHS ENDED APRIL 30,
1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
SIRACH SIRACH
SPECIAL SIRACH STRATEGIC SIRACH SIRACH
EQUITY GROWTH BALANCED BOND EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends................. $ 180,545 $ 428,323 $ 138,080 $ -- $ 109,250
Interest.................. 260,649 593,283 1,351,387 1,458,031 31,030
----------- ----------- ---------- ---------- ----------
TOTAL INCOME............. 441,194 1,021,606 1,489,467 1,458,031 140,280
----------- ----------- ---------- ---------- ----------
EXPENSES
Investment Advisory Fees -
Note B.................. 1,072,765 524,391 278,130 79,728 109,894
Administrative Fees - Note
C........................ 210,941 108,597 79,502 35,279 43,208
Custodian Fees - Note D... 27,870 12,447 8,674 5,603 4,923
Distribution Fees - Note
E........................ 2,686 34,807 467 817 --
Account Services Fee -
Note F.................. 14,815 36,522 15,119 2,170 1,522
Directors' Fees - Note G.. 3,202 2,073 1,667 2,173 1,402
Audit Fees................ 13,860 8,291 9,618 8,337 6,174
Legal Fees................ 8,945 3,726 2,000 3,775 717
Printing Fees............. 7,147 6,566 8,088 3,935 3,581
Registration and Filing
Fees..................... 18,066 12,955 9,654 35,534 10,172
Shareholder Servicing
Fees..................... -- -- -- 10,796 11,115
Other Expenses............ 19,763 9,857 5,691 1,993 1,634
Account Services Fees
Waived - Note F.......... -- -- -- (2,170) (1,522)
Investment Advisory Fees
Waived - Note B......... -- -- -- (72,619) (40,423)
----------- ----------- ---------- ---------- ----------
Net Expenses Before
Expense Offset.......... 1,400,060 760,232 418,610 115,351 152,397
----------- ----------- ---------- ---------- ----------
Expense Offset - Note A... (183) (3,065) (1,215) (692) (323)
----------- ----------- ---------- ---------- ----------
Net Expenses After
Expense Offset.......... 1,399,877 757,167 417,395 114,659 152,074
----------- ----------- ---------- ---------- ----------
NET INVESTMENT INCOME
(LOSS)................... (958,683) 264,439 1,072,072 1,343,372 (11,794)
----------- ----------- ---------- ---------- ----------
NET REALIZED GAIN ON
INVESTMENTS.............. 40,033,184 12,665,845 4,095,268 402,896 459,920
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION
ON INVESTMENTS........... 7,041,847 14,063,432 4,586,028 159,510 6,188,953
----------- ----------- ---------- ---------- ----------
NET GAIN ON INVESTMENTS... 47,075,031 26,729,277 8,681,296 562,406 6,648,873
----------- ----------- ---------- ---------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS............... $46,116,348 $26,993,716 $9,753,368 $1,905,778 $6,637,079
=========== =========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
35
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss)................... $ (958,683) $ (2,126,807)
Net Realized Gain.............................. 40,033,184 59,936,569
Net Change in Unrealized
Appreciation/Depreciation..................... 7,041,847 (22,635,983)
------------- -------------
Net Increase in Net Assets Resulting from
Operations.................................... 46,116,348 35,173,779
------------- -------------
DISTRIBUTIONS:
Net Realized Gain:
Institutional Class............................ (59,156,378) (94,454,824)
Institutional Service Class.................... (398,575) (230,305)
------------- -------------
Total Distributions............................ (59,554,953) (94,685,129)
------------- -------------
CAPITAL SHARE TRANSACTIONS - NOTE K:
Institutional Class:
Issued......................................... 181,699,385 518,941,786
In Lieu of Cash Distributions.................. 58,860,916 92,086,326
Redeemed....................................... (288,154,597) (624,309,111)
------------- -------------
Net Decrease from Institutional Class Shares... (47,594,296) (13,280,999)
------------- -------------
Institutional Service Class:
Issued......................................... 472,268 2,413,514
In Lieu of Cash Distributions.................. 398,575 230,305
Redeemed....................................... (260,692) (1,777,851)
------------- -------------
Net Increase from Institutional Service Class
Shares........................................ 610,151 865,968
------------- -------------
Net Decrease from Capital Share Transactions... (46,984,145) (12,415,031)
------------- -------------
Total Decrease................................. (60,422,750) (71,926,381)
NET ASSETS:
Beginning of Period............................ 370,406,936 442,333,317
------------- -------------
End of Period (including undistributed net
investment income (loss) of ($958,683) and $0,
respectively)................................. $ 309,984,186 $ 370,406,936
============= =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
36
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 264,439 $ 1,207,031
Net Realized Gain................................ 12,665,845 32,422,800
Net Change in Unrealized
Appreciation/Depreciation....................... 14,063,432 6,913,248
------------ ------------
Net Increase in Net Assets Resulting from
Operations...................................... 26,993,716 40,543,079
------------ ------------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class.............................. (260,347) (1,170,706)
Institutional Service Class...................... (32,918) (131,548)
Net Realized Gain:
Institutional Class.............................. (27,119,786) (18,774,806)
Institutional Service Class...................... (5,143,497) (2,206,978)
------------ ------------
Total Distributions.............................. (32,556,548) (22,284,038)
------------ ------------
CAPITAL SHARE TRANSACTIONS - NOTE K:
Institutional Class:
Issued........................................... 12,848,007 27,280,256
In Lieu of Cash Distributions.................... 24,763,428 19,113,553
Redeemed......................................... (32,676,499) (57,746,105)
------------ ------------
Net Increase (Decrease) from Institutional Class
Shares.......................................... 4,934,936 (11,352,296)
------------ ------------
Institutional Service Class:
Issued........................................... 5,303,035 13,498,163
In Lieu of Cash Distributions.................... 5,176,415 2,338,526
Redeemed......................................... (5,348,035) (8,103,907)
------------ ------------
Net Increase from Institutional Service Class
Shares.......................................... 5,131,415 7,732,782
------------ ------------
Net Increase (Decrease) from Capital Share
Transactions.................................... 10,066,351 (3,619,514)
------------ ------------
Total Increase................................... 4,503,519 14,639,527
NET ASSETS:
Beginning of Period.............................. 158,058,338 143,418,811
------------ ------------
End of Period (including undistributed net
investment income of $126,862 and $155,688,
respectively)................................... $162,561,857 $158,058,338
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
37
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.............................. $ 1,072,072 $ 2,584,283
Net Realized Gain.................................. 4,095,268 12,346,754
Net Change in Unrealized
Appreciation/Depreciation......................... 4,586,028 1,157,105
----------- -----------
Net Increase in Net Assets Resulting from
Operations........................................ 9,753,368 16,088,142
----------- -----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class................................ (1,121,010) (2,609,834)
Institutional Service Class........................ (4,508) (7,305)
Net Realized Gain:
Institutional Class................................ (12,114,555) (9,238,271)
Institutional Service Class........................ (42,005) --
----------- -----------
Total Distributions................................ (13,282,078) (11,855,410)
----------- -----------
CAPITAL SHARE TRANSACTIONS - NOTE K:
Institutional Class:
Issued............................................. 5,257,541 16,651,416
In Lieu of Cash Distributions...................... 12,511,759 11,748,811
Redeemed........................................... (19,527,724) (29,827,011)
----------- -----------
Net Decrease from Institutional Class Shares....... (1,758,424) (1,426,784)
----------- -----------
Institutional Service Class*:
Issued............................................. 153,853 686,936
In Lieu of Cash Distributions...................... 46,514 7,305
Redeemed........................................... (157,592) (348,012)
----------- -----------
Net Increase from Institutional Service Class
Shares............................................ 42,775 346,229
----------- -----------
Net Decrease from Capital Share Transactions....... (1,715,649) (1,080,555)
----------- -----------
Total Increase (Decrease).......................... (5,244,359) 3,152,177
NET ASSETS:
Beginning of Period................................ 86,582,187 83,430,010
----------- -----------
End of Period (including undistributed net
investment income of $264,915 and $318,361,
respectively)..................................... $81,337,828 $86,582,187
=========== ===========
</TABLE>
*Initial offering of Institutional Service Class Shares began on March 7, 1997.
The accompanying notes are an integral part of the financial statements.
38
<PAGE>
UAM FUNDS SIRACH BOND PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NOVEMBER 3,
1997+ TO
APRIL 30,
1998
(UNAUDITED)
-----------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income.......................................... $ 1,343,372
Net Realized Gain.............................................. 402,896
Net Change in Unrealized Appreciation/Depreciation............. 159,510
-----------
Net Increase in Net Assets Resulting from Operations........... 1,905,778
-----------
DISTRIBUTIONS:
Net Investment Income:
Institutional Class............................................ (987,056)
Institutional Service Class.................................... (14,935)
-----------
Total Distributions............................................ (1,001,991)
-----------
CAPITAL SHARE TRANSACTIONS - NOTE K:
Institutional Class*:
Issued......................................................... 58,550,944
In Lieu of Cash Distributions.................................. 984,540
Redeemed....................................................... (6,143,525)
-----------
Net Increase from Institutional Class Shares................... 53,391,959
-----------
Institutional Service Class**:
Issued......................................................... 918,530
In Lieu of Cash Distributions.................................. 14,935
-----------
Net Increase from Institutional Service Class Shares........... 933,465
-----------
Net Increase from Capital Share Transactions................... 54,325,424
-----------
Total Increase................................................. 55,229,211
NET ASSETS:
Beginning of Period............................................. --
-----------
End of Period (including undistributed net investment income of
$341,381)..................................................... $55,229,211
===========
</TABLE>
+ Commencement of Operations
* Initial offering of Institutional Class Shares began on November 3, 1997.
** Initial offering of Institutional Service Class Shares began on November 7,
1997.
The accompanying notes are an integral part of the financial statements.
39
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED
1998 OCTOBER 31,
(UNAUDITED) 1997
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss)....................... $ (11,794) $ 46,023
Net Realized Gain.................................. 459,920 802,110
Net Change in Unrealized
Appreciation/Depreciation......................... 6,188,953 3,216,213
----------- -----------
Net Increase in Net Assets Resulting from
Operations........................................ 6,637,079 4,064,346
----------- -----------
DISTRIBUTIONS:
Net Investment Income.............................. (22,510) (24,915)
Net Realized Gain.................................. (850,895) (37,985)
----------- -----------
Total Distributions................................ (873,405) (62,900)
----------- -----------
CAPITAL SHARE TRANSACTIONS - NOTE K:
Issued............................................. 10,226,751 20,525,559
In Lieu of Cash Distributions...................... 873,405 62,900
Redeemed........................................... (3,818,746) (4,830,582)
----------- -----------
Net Increase from Capital Share Transactions....... 7,281,410 15,757,877
----------- -----------
Total Increase..................................... 13,045,084 19,759,323
NET ASSETS:
Beginning of Period................................. 26,169,356 6,410,033
----------- -----------
End of Period (including undistributed net
investment income (loss) of ($23,358) and $10,946,
respectively)...................................... $39,214,440 $26,169,356
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
40
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
--------------------------------------------------------------
SIX MONTHS
ENDED
APRIL 30, YEARS ENDED OCTOBER 31,
1998 ------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 14.95 $ 17.98 $ 18.80 $ 16.10 $ 19.10 $ 15.03
-------- -------- -------- -------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss)................ (0.04) (0.09) (0.06) 0.11 0.04 (0.01)
Net Realized and
Unrealized Gain
(Loss)................ 1.76 0.98 3.51 3.65 (0.90) 4.68
-------- -------- -------- -------- -------- --------
Total From Investment
Operations............ 1.72 0.89 3.45 3.76 (0.86) 4.67
-------- -------- -------- -------- -------- --------
DISTRIBUTIONS
Net Investment Income.. -- -- (0.03) (0.11) (0.02) (0.01)
Net Realized Gain...... (2.86) (3.92) (4.24) (0.95) (2.12) (0.59)
-------- -------- -------- -------- -------- --------
Total Distributions.... (2.86) (3.92) (4.27) (1.06) (2.14) (0.60)
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD................. $ 13.81 $ 14.95 $ 17.98 $ 18.80 $ 16.10 $ 19.10
======== ======== ======== ======== ======== ========
TOTAL RETURN............ 16.35%** 8.11% 23.62% 25.31% (4.68)% 31.81 %
======== ======== ======== ======== ======== ========
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $307,453 $368,430 $441,326 $498,026 $513,468 $528,078
Ratio of Expenses to
Average Net Assets..... 0.91%* 0.89% 0.87% 0.85% 0.88% 0.89 %
Ratio of Net Investment
Income (Loss) to
Average Net Assets..... (0.62)%* (0.53)% (0.29)% 0.64% 0.27% (0.03)%
Portfolio Turnover
Rate................... 55% 114% 129% 137% 107% 102 %
Average Commission
Rate#.................. $ 0.0559 $ 0.0571 $ 0.0590 N/A N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.91%* 0.89% 0.87% 0.85% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
41
<PAGE>
UAM FUNDS SIRACH SPECIAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE CLASS
-------------------------------------
SIX MONTHS
ENDED YEAR MARCH 22,
APRIL 30, ENDED 1996+ TO
1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.. $ 14.91 $ 17.97 $ 16.54
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)......... (0.05) (0.11) (0.01)
Net Realized and Unrealized Gain..... 1.74 0.97 1.44
------- ------- -------
Total From Investment Operations..... 1.69 0.86 1.43
------- ------- -------
DISTRIBUTIONS
Net Investment Income................ -- -- --
Net Realized Gain.................... (2.86) (3.92) --
------- ------- -------
Total Distributions.................. (2.86) (3.92) --
------- ------- -------
NET ASSET VALUE, END OF PERIOD........ $ 13.74 $ 14.91 $ 17.97
======= ======= =======
TOTAL RETURN.......................... 16.10 %** 7.91 % 8.65 %**
======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands)......................... $ 2,531 $ 1,977 $ 1,007
Ratio of Expenses to Average Net
Assets.............................. 1.16 %* 1.14 % 1.12 %*
Ratio of Net Investment Income (Loss)
to Average Net Assets............... (0.87)%* (0.78)% (0.64)%*
Portfolio Turnover Rate............... 55 % 114 % 129 %
Average Commission Rate#.............. $0.0559 $0.0571 $0.0590
Ratio of Expenses to Average Net
Assets Including Expense Offsets.... 1.16 %* 1.14 % 1.12 %*
</TABLE>
* Annualized
** Not Annualized
+ Initial offering of Institutional Service Class Shares
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
42
<PAGE>
UAM FUND SIRACH GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
-------------------------------------------------------
SIX MONTHS
ENDED DECEMBER 1,
APRIL 30, YEARS ENDED OCTOBER 31, 1993+ TO
1998 ---------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994
----------- -------- -------- -------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 15.44 $ 14.01 $ 11.35 $ 9.66 $ 10.00
-------- -------- -------- -------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.03 0.12 0.12 0.15 0.10
Net Realized and
Unrealized Gain
(Loss)................ 2.30 3.55 2.65 1.70 (0.36)
-------- -------- -------- -------- -------
Total From Investment
Operations............ 2.33 3.67 2.77 1.85 (0.26)
-------- -------- -------- -------- -------
DISTRIBUTIONS
Net Investment Income.. (0.03) (0.13) (0.11) (0.16) (0.08)
Net Realized Gain...... (3.13) (2.11) -- -- --
-------- -------- -------- -------- -------
Total Distributions.... (3.16) (2.24) (0.11) (0.16) (0.08)
-------- -------- -------- -------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 14.61 $ 15.44 $ 14.01 $ 11.35 $ 9.66
======== ======== ======== ======== =======
TOTAL RETURN............ 18.26%** 30.86% 24.52% 19.33% (2.58)%**
======== ======== ======== ======== =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (Thousands)..... $132,254 $132,530 $128,982 $114,787 $80,944
Ratio of Expenses to
Average Net Assets..... 0.90%* 0.90% 0.87% 0.86% 0.92%*
Ratio of Net Investment
Income to Average Net
Assets................. 0.37%* 0.84% 0.97% 1.48% 1.13%*
Portfolio Turnover
Rate................... 56% 138% 151% 119% 141%
Average Commission
Rate#.................. $ 0.0592 $ 0.0600 $ 0.0600 N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.90%* 0.90% 0.86% 0.84% N/A
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
43
<PAGE>
UAM FUNDS SIRACH GROWTH PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL SERVICE CLASS
------------------------------------
SIX MONTHS
ENDED YEAR MARCH 22,
APRIL 30, ENDED 1996++ TO
1998 OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.... $ 15.43 $ 14.00 $ 12.80
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.................. 0.01 0.07 0.07
Net Realized and Unrealized Gain....... 2.31 3.56 1.19
------- ------- -------
Total From Investment Operations....... 2.32 3.63 1.26
------- ------- -------
DISTRIBUTIONS
Net Investment Income.................. (0.02) (0.09) (0.06)
Net Realized Gain...................... (3.13) (2.11) --
------- ------- -------
Total Distributions.................... (3.15) (2.20) (0.06)
------- ------- -------
NET ASSET VALUE, END OF PERIOD.......... $ 14.60 $ 15.43 $ 14.00
======= ======= =======
TOTAL RETURN............................ 18.18%** 30.53% 9.87%**
======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)... $30,308 $25,528 $14,437
Ratio of Expenses to Average Net
Assets................................. 1.15%* 1.15% 1.12%*
Ratio of Net Investment Income to
Average Net Assets..................... 0.12%* 0.57% 0.72%*
Portfolio Turnover Rate................. 56% 138% 151%
Average Commission Rate#................ $0.0592 $0.0600 $0.0600
Ratio of Expenses to Average Net Assets
Including Expense Offsets.............. 1.15%* 1.15% 1.11%*
</TABLE>
* Annualized
** Not Annualized
++ Initial offering of Institutional Service Class Shares
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
44
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
---------------------------------------------------
SIX MONTHS
ENDED DECEMBER 1,
APRIL 30, YEARS ENDED OCTOBER 31, 1993+ TO
1998 ------------------------- OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994
----------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 12.44 $ 11.99 $ 10.75 $ 9.35 $ 10.00
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.15 0.37 0.36 0.36 0.27
Net Realized and
Unrealized Gain
(Loss)................ 1.16 1.81 1.24 1.39 (0.69)
------- ------- ------- ------- -------
Total From Investment
Operations............ 1.31 2.18 1.60 1.75 (0.42)
------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.16) (0.37) (0.36) (0.35) (0.23)
Net Realized Gain...... (1.75) (1.36) -- -- --
------- ------- ------- ------- -------
Total Distributions.... (1.91) (1.73) (0.36) (0.35) (0.23)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 11.84 $ 12.44 $ 11.99 $ 10.75 $ 9.35
======= ======= ======= ======= =======
TOTAL RETURN............ 10.62%** 20.78% 15.13% 19.10% (4.19)%**
======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $80,921 $86,204 $83,430 $95,834 $99,564
Ratio of Expenses to
Average Net Assets..... 0.98%* 0.97% 0.93% 0.87% 0.90 %*
Ratio of Net Investment
Income to Average Net
Assets................. 2.50%* 3.06% 3.04% 3.49% 3.05 %*
Portfolio Turnover
Rate................... 40% 128% 172% 158% 158 %
Average Commission
Rate#.................. $0.0597 $0.0598 $0.0600 N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.97%* 0.97% 0.92% 0.86% N/A
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
++ Initial offering of Institutional Service Class Shares
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
45
<PAGE>
UAM FUNDS SIRACH STRATEGIC BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
SERVICE CLASS
------------------------
SIX MONTHS
ENDED MARCH 7,
APRIL 30, 1997++ TO
1998 OCTOBER 31,
(UNAUDITED) 1997
----------- -----------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $ 12.44 $ 11.26
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income.............................. 0.15 0.19
Net Realized and Unrealized Gain................... 1.15 1.21
------- -------
Total From Investment Operations................... 1.30 1.40
------- -------
DISTRIBUTIONS
Net Investment Income.............................. (0.16) (0.22)
Net Realized Gain.................................. (1.75) --
------- -------
Total Distributions................................ (1.91) (0.22)
------- -------
NET ASSET VALUE, END OF PERIOD...................... $ 11.83 $ 12.44
======= =======
TOTAL RETURN........................................ 11.95%** 12.57%**
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)............... $ 417 $ 378
Ratio of Expenses to Average Net Assets............. 1.23%* 1.22%*
Ratio of Net Investment Income to Average Net
Assets............................................ 2.24%* 2.71%*
Portfolio Turnover Rate............................. 40% 128%
Average Commission Rate#............................ $0.0597 $0.0598
Ratio of Expenses to Average Net Assets Including
Expense Offsets................................... 1.22%* 1.22%*
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
++ Initial offering of Institutional Service Class Shares
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
46
<PAGE>
UAM FUNDS SIRACH BOND PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
INSTITUTIONAL
INSTITUTIONAL CLASS SERVICE CLASS
------------------- -------------
NOVEMBER 3, NOVEMBER 7,
1997+ TO 1997++ TO
APRIL 30, APRIL 30,
1998 1998
(UNAUDITED) (UNAUDITED)
------------------- -------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 10.00 $10.00
------- ------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................... 0.28 0.25
Net Realized and Unrealized Gain ........... 0.15 0.17
------- ------
Total From Investment Operations............ 0.43 0.42
------- ------
DISTRIBUTIONS
Net Investment Income....................... (0.22) (0.21)
------- ------
Total Distributions......................... (0.22) (0.21)
------- ------
NET ASSET VALUE, END OF PERIOD............... $ 10.21 $10.21
======= ======
TOTAL RETURN+++.............................. 4.32 %** 4.23 %**
======= ======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........ $54,285 $ 944
Ratio of Expenses to Average Net Assets...... 0.50 %* 0.75 %*
Ratio of Net Investment Income to Average Net
Assets...................................... 5.90 %* 5.64 %*
Portfolio Turnover Rate...................... 137 % 137 %
Ratio of Voluntarily Waived Fees and Expenses
Assumed by the Adviser to Average Net
Assets...................................... 0.33 % 0.33 %
Ratio of Expenses to Average Net Assets
Including Expense Offsets................... 0.50 %* 0.75 %*
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
++ Initial Offering of Institutional Service Class Shares
+++ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser.
The accompanying notes are an integral part of the financial statements.
47
<PAGE>
UAM FUNDS SIRACH EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30, YEAR ENDED JULY 1, 1996+
1998 OCTOBER 31, TO OCTOBER 31,
(UNAUDITED) 1997 1996
----------- ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.. $ 13.98 $ 10.97 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss)......... (0.01) 0.03 0.01
Net Realized and Unrealized Gain..... 2.88 3.06 0.97
------- ------- -------
Total From Investment Operations..... 2.87 3.09 0.98
------- ------- -------
DISTRIBUTIONS
Net Investment Income................ (0.01) (0.02) (0.01)
Net Realized Gain.................... (0.38) (0.06) --
------- ------- -------
Total Distributions.................. (0.39) (0.08) (0.01)
------- ------- -------
NET ASSET VALUE, END OF PERIOD........ $ 16.46 $ 13.98 $ 10.97
======= ======= =======
TOTAL RETURN++........................ 21.02 %** 28.34% 9.80%**
======= ======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(Thousands).......................... $39,214 $26,169 $ 6,410
Ratio of Expenses to Average Net
Assets............................... 0.90 %* 0.90% 1.03%*
Ratio of Net Investment Income (Loss)
to Average Net Assets................ (0.07)%* 0.30% 0.39%*
Portfolio Turnover Rate............... 24 % 89% 34%
Average Commission Rate............... $0.0599 $0.0599 $0.0600
Ratio of Voluntarily Waived Fees and
Expenses Assumed by the Adviser to
Average Net Assets................... 0.25 %* 0.53% 4.15%
Ratio of Expenses to Average Net
Assets Including Expense Offsets..... 0.90 %* 0.90% 0.90%*
</TABLE>
* Annualized
** Not Annualized
+ Commencement of Operations
++ Total Return would have been lower had certain fees not been waived and ex-
penses assumed by the Advisor during the periods indicated.
The accompanying notes are an integral part of the financial statements.
48
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UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are
registered under the Investment Company Act of 1940, as amended. The Sirach
Special Equity Portfolio, Sirach Growth Portfolio, Sirach Strategic Balanced
Portfolio, Sirach Bond Portfolio, and Sirach Equity Portfolio (the
"Portfolios"), portfolios of UAM Funds, Inc., are diversified, open-end
management investment companies. At April 30, 1998, the UAM Funds were
comprised of forty-four active portfolios. The financial statements of the
remaining portfolios are presented separately. The Portfolios are authorized
to offer two separate classes of shares--Institutional Class Shares and
Institutional Service Class Shares. As of April 30, 1998, the Sirach Special
Equity Portfolio, Sirach Growth Portfolio, Sirach Strategic Balanced
Portfolio, and the Sirach Bond Portfolio have issued Institutional Service
Class Shares. Both classes of shares have identical voting rights (except
Institutional Service Class shareholders have exclusive voting rights with
respect to matters relating to distribution and shareholder servicing of such
shares), dividend, liquidation and other rights. The objective of the
Portfolios are as follows:
SIRACH SPECIAL EQUITY PORTFOLIO seeks to provide maximum long-term
growth of capital consistent with reasonable risk to principal, by invest-
ing in small to medium capitalized companies with particularly attractive
financial characteristics.
SIRACH GROWTH PORTFOLIO seeks to provide long-term capital growth
consistent with reasonable risk to principal by investing in a diversified
portfolio of common stocks.
SIRACH STRATEGIC BALANCED PORTFOLIO seeks to provide long-term growth of
capital consistent with reasonable risk to principal by investing in a
diversified portfolio of common stocks and fixed income securities.
SIRACH BOND PORTFOLIO seeks to provide above-average total return with
reasonable risk to principal by investing primarily in investment grade
fixed income securities.
SIRACH EQUITY PORTFOLIO seeks to provide long-term capital growth
consistent with reasonable risk to principal by investing, under normal
circumstances, up to 90% of its total assets in common stocks of companies
that offer long-term growth potential.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by each of the Portfolios in the prepara-
tion of its financial statements. Generally accepted accounting principles may
require
49
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Equity securities listed on a securities exchange
for which market quotations are readily available are valued at the last
quoted sales price as of the close of the exchange on the day the
valuation is made or, if no sale occurred on such day, at the mean of the
bid and asked prices. Price information on listed securities is taken from
the exchange where the security is primarily traded. Over-the-counter and
unlisted equity securities are valued at the mean between bid and ask
prices. Fixed income securities are stated on the basis of valuations
provided by brokers and/or a pricing service which uses information with
respect to transactions in fixed income securities, quotations from
dealers, market transactions in comparable securities and various
relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at amortized cost, if it approximates market value.
The value of other assets and securities for which no quotations are
readily available is determined in good faith at fair value using methods
determined by the Board of Directors.
2. FEDERAL INCOME TAXES: It is each Portfolios' intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving
repurchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash
balances into a joint trading account which invests in one or more
repurchase agreement. This joint repurchase agreement is covered by the
same collateral requirements as discussed above.
50
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally
distribute substantially all of its net investment income quarterly. Any
realized net capital gains will be distributed annually. All distributions
are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations,
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and net
operating losses.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending
undistributed net investment income for the purpose of calculating net
investment income per share in the financial highlights.
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized over their respective
lives. Most expenses of the UAM Funds can be directly attributed to a
particular portfolio. Expenses which cannot be directly attributed are
apportioned among the portfolios of the UAM Funds based on their relative
net assets. Income, expenses (other than class specific expenses) and
realized and unrealized gains or losses are allocated to each class of
shares based upon their relative net assets. Custodian fees for the
Portfolios have been increased to include expense offsets for custodian
balance credits, if any.
51
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Sirach Capital Management, Inc. (the "Adviser"), a wholly-owned subsidiary of
United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolio for a monthly fee calculated at an annual rate of
average daily net assets for the month as follows:
<TABLE>
<CAPTION>
SIRACH PORTFOLIOS RATE
- ----------------- -----
<S> <C>
Special Equity............................................................ 0.70%
Growth.................................................................... 0.65%
Strategic Balanced........................................................ 0.65%
Bond...................................................................... 0.35%
Equity.................................................................... 0.65%
</TABLE>
The Adviser has voluntarily agreed to waive a portion of its advisory fees
and to assume expenses, if necessary, in order to keep the Sirach Bond, and
the Sirach Equity Portfolio's total annual operating expenses, after the
effect of expense offset arrangements, from exceeding 0.50%, and 0.90% of
average daily net assets, respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund
accounting, dividend disbursing and transfer agent services to the UAM Funds
under a Fund Administration Agreement (the "Agreement"). Pursuant to the
Agreement, the Administrator is entitled to receive annual fees, payable
monthly, of 0.19% of the first $200 million of the combined aggregate net
assets; plus 0.11% of the next $800 million of the combined aggregate net
assets; plus 0.07% of the next $2 billion of the combined aggregate net
assets; plus 0.05% of the combined aggregate net assets in excess of $3
billion. The fees are allocated among the portfolios of the UAM Funds on the
basis of their relative net assets and are subject to a graduated minimum fee
schedule per portfolio which rises from $2,000 per month, upon inception of a
portfolio, to $70,000 annually after two years. For portfolios with more than
one class of shares, the minimum annual fee increases to $90,000. In addition,
the Administrator receives a Portfolio-specific annual fee, payable monthly of
0.04%, 0.04%, 0.06%, 0.04%, and 0.04% of average daily net assets for the
Sirach Special Equity Portfolio, Sirach Growth Portfolio, Sirach Strategic
Balanced Portfolio, Sirach Bond Portfolio, and Sirach Equity Portfolio. The
Administrator has entered into a Mutual Funds Service Agreement with Chase
Global Funds Services Company ("CGFSC"), a corporate affiliate of The Chase
Manhattan Bank, under which CGFSC agrees to provide certain services,
including but not limited to, administration, fund accounting, dividend
disbursing and transfer agent services. Pursuant to the Mutual Funds
52
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
Service Agreement, the Administrator pays CGFSC a monthly fee. For the six
months ended April 30, 1998, UAM Fund Services, Inc. earned the following
amounts from the Portfolios as Administrator and paid the following portion to
CGFSC as sub-Administrator:
<TABLE>
<CAPTION>
PORTION
ADMINISTRATION PAID TO
SIRACH PORTFOLIOS FEES CGFSC
----------------- -------------- --------
<S> <C> <C>
Special Equity....................................... $210,941 $149,640
Growth............................................... 108,597 76,340
Strategic Balanced................................... 79,502 53,828
Bond................................................. 35,279 26,168
Equity............................................... 43,208 36,446
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios'
assets held in accordance with the custodian agreement.
E. DISTRIBUTION AND SERVICE PLANS: UAM Fund Distributors, Inc. ("The
Distibutor"), a wholly-owned subsidiary of UAM, distributes the shares of the
Portfolios. The Sirach Special Equity Portfolio, the Sirach Growth Portfolio,
Sirach Strategic Balanced Portfolio, and the Sirach Bond Portfolio have
adopted Distribution and Service Plans (the "Plans") on behalf of the Service
Class Shares pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Distributor does not receive any fee or other compensation with respect to
the Portfolios.
F. ACCOUNT SERVICES: The UAM Funds entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for
participants in a self-directed, defined contribution plan, and for whom the
Service Provider provides participant recordkeeping. Pursuant to the Services
Agreement, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which they provide
services. The Service Provider has voluntarily agreed to waive its fees in
order to keep the Sirach Bond, and the Sirach Equity Portfolio's total annual
operating expenses, after the effect of expense offset offset arrangements,
from exceeding 0.50%, and 0.90% of average daily net assets, respectively.
53
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated
person, receives $2,000 per meeting attended, which is allocated
proportionally among the active portfolios of UAM Funds, plus a quarterly
retainer of $150 for each active portfolio of the UAM Funds and reimbursement
of expenses incurred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, the
Portfolio made purchases and sales of investment securities other than long-
term U.S. Government and short-term securities of:
<TABLE>
<CAPTION>
SIRACH PORTFOLIOS PURCHASES SALES
----------------- ------------ ------------
<S> <C> <C>
Special Equity...................................... $166,196,590 $282,892,680
Growth.............................................. 79,246,320 99,489,098
Strategic Balanced.................................. 28,168,062 41,044,795
Bond................................................ 65,318,485 26,166,894
Equity.............................................. 14,226,025 8,088,206
</TABLE>
Purchases and sales of long-term U.S. Government securities were $3,804,265
and $1,305,505 respectively, for Sirach Strategic Balanced Portfolio and
$45,762,005 and $31,595,858, respectively, for Sirach Bond Portfolio. There
were no purchases or sales of long-term U.S. Government securities for Sirach
Special Equity Portfolio, Sirach Growth Portfolio and Sirach Equity Portfolio.
I. LINE OF CREDIT: The Portfolios, except the Sirach Bond Portfolio, along
with certain other Portfolios of UAM Funds, collectively entered into an
agreement which enables them to participate in a $100 million unsecured line
of credit with several banks. Borrowings will be made solely to temporarily
finance the repurchase of Capital shares. Interest is charged to each
participating Portfolio based on its borrowings at a rate per annum equal to
the Federal Funds rate plus 0.50%. In addition, a commitment fee of 0.08% per
annum, payable at the end of each calendar quarter, is accrued by each
participating Portfolio based on its average daily unused portion of the line
of credit. During the six months ended April 30, 1998, the Portfolios had no
borrowings under the agreement.
54
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- --------------------------------------------------------------------------------
J. OTHER: At April 30, 1998 the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
SIRACH PORTFOLIOS SHAREHOLDERS OWNERSHIP
----------------- ------------ ---------
<S> <C> <C>
Special Equity-Institutional Class..................... 1 10%
Special Equity-Institutional Service Class............. 2 99
Growth-Institutional Class............................. 4 43
Growth-Institutional Service Class..................... 4 74
Strategic Balanced-Institutional Class................. 2 21
Strategic Balanced-Institutional Service Class......... 1 100
Bond-Institutional Class............................... 2 53
Bond-Institutional Service Class....................... 1 100
Equity................................................. 5 71
</TABLE>
55
<PAGE>
UAM FUNDS SIRACH PORTFOLIOS
- --------------------------------------------------------------------------------
K. CAPITAL SHARE TRANSACTIONS: Transactions in capital shares for the Portfo-
lios, by class, were as follows:
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES INSTITUTIONAL SERVICE CLASS SHARES
----------------------------- ----------------------------------------
SIX MONTHS ENDED SIX MONTHS ENDED
APRIL 30, YEAR ENDED APRIL 30, YEAR ENDED
1998 OCTOBER 31, 1998 OCTOBER 31,
(UNAUDITED) 1997 (UNAUDITED) 1997
----------------- ----------- -------------------- -----------------
<S> <C> <C> <C> <C>
SIRACH SPECIAL EQUITY
PORTFOLIO:
Shares Issued........... 13,834,445 38,540,490 35,721 180,282
In Lieu of Cash
Distributions.......... 5,350,992 7,051,021 36,400 17,661
Shares Redeemed......... (21,557,633) (45,506,302) (20,456) (121,360)
----------- ----------- ---------------- -----------------
Net Increase (Decrease)
from Capital Share
Transactions........... (2,372,196) 85,209 51,665 76,583
=========== =========== ================ =================
SIRACH GROWTH PORTFOLIO:
Shares Issued........... 917,719 2,011,431 395,176 1,003,962
In Lieu of Cash
Distributions.......... 1,960,683 1,589,675 409,851 194,309
Shares Redeemed......... (2,409,566) (4,223,292) (382,543) (575,122)
----------- ----------- ---------------- -----------------
Net Increase (Decrease)
from Capital Share
Transactions........... 468,836 (622,186) 422,484 623,149
=========== =========== ================ =================
SIRACH STRATEGIC
BALANCED PORTFOLIO:
Shares Issued........... 455,609 1,431,717 13,455 60,218
In Lieu of Cash
Distributions.......... 1,155,122 1,093,136 4,290 634
Shares Redeemed......... (1,705,948) (2,556,375) (12,845) (30,485)
----------- ----------- ---------------- -----------------
Net Increase (Decrease)
from Capital Share
Transactions........... (95,217) (31,522) 4,900 30,367
=========== =========== ================ =================
SIRACH EQUITY PORTFOLIO:
Shares Issued........... 698,788 1,654,446 -- --
In Lieu of Cash
Distributions.......... 62,790 5,312 -- --
Shares Redeemed......... (251,107) (372,849) -- --
----------- ----------- ---------------- -----------------
Net Increase from
Capital Share
Transactions........... 510,471 1,286,909 -- --
=========== =========== ================ =================
<CAPTION>
NOVEMBER 3, 1997* NOVEMBER 7, 1997**
TO APRIL 30, 1998 TO APRIL 30, 1998
(UNAUDITED) (UNAUDITED)
----------------- --------------------
<S> <C> <C> <C> <C>
SIRACH BOND PORTFOLIO:
Shares Issued........... 5,817,754 -- 91,008 --
In Lieu of Cash
Distributions.......... 96,963 -- 1,473 --
Shares Redeemed......... (598,273) -- -- --
----------- ----------- ---------------- -----------------
Net Increase from
Capital Share
Transactions........... 5,316,444 -- 92,481 --
=========== =========== ================ =================
</TABLE>
* Commencement of Operations
** Initial Offering of Institutional Service Class Shares
56
<PAGE>
UAM FUNDS THE SIRACH PORTFOLIOS
- --------------------------------------------------------------------
OFFICERS AND DIRECTORS
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- --------------------------------------------------------------------
INVESTMENT ADVISOR
Sirach Capital Management, Inc.
3323 One Union Square
Seattle, WA 98101
ADMINISTRATOR
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
LEGAL COUNSEL
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
DISTRIBUTOR
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- ----------------------------------------------
This report has been prepared for
shareholders and may be distributed to others
only if preceded or accompanied by a current
prospectus.
- ----------------------------------------------
<PAGE>
UAM Funds
Semi-Annual Report
---------------------------
Sterling Partners'
Portfolios
---------------------------
April 30, 1998
UAM
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholder's Letter........................................................ 1
Portfolio of Investments
Balanced.................................................................. 6
Equity.................................................................... 10
Small Cap Value........................................................... 13
Statement of Assets and Liabilities......................................... 16
Statement of Operations..................................................... 17
Statement of Changes in Net Assets
Balanced.................................................................. 18
Equity.................................................................... 19
Small Cap Value........................................................... 20
Financial Highlights
Balanced.................................................................. 21
Equity.................................................................... 22
Small Cap Value........................................................... 23
Notes to the Financial Statements........................................... 24
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
To Our Fellow Shareholders:
OVERVIEW OF ECONOMIC AND MARKET CONDITIONS
It would seem to the casual observer that the last six months have offered an
entire year's worth of returns and news. Remarkably, the Dow Jones Industrial
Average rose 22.9% while the S&P 500 gained 22.4%. Similarly, bonds were
strong throughout the period as the 30-Year Treasury yield fell to a two de-
cade low at 5.66% in mid-January. Bond yields did eventually pull back ulti-
mately posting only a slight gain for the period and ending April at the 5.95%
level. Certainly adding fuel to the domestic fire was the continued strength
of the US dollar. Economic and political deterioration in Japan helped push
our currency to a six year high against the yen. Inflationary pressures were
held in check as many commodities continued to experience price deflation. The
price of oil hit a multi-year low briefly touching $12 per barrel. Perhaps
most startling was the stock market's willingness to push ahead even as the
environment for corporate earnings appeared to deteriorate. Several bellwether
companies have already indicated that earnings for 1998 will fall short of ex-
pectations. IBES reports that earnings estimate cuts for this year have out-
numbered upward revisions by a commanding 2-to-1 margin. Reflecting this erod-
ing outlook, first quarter S&P 500 earnings slowed to under 4% which is the
weakest showing since the recession of 1990-91. Despite all this "bad news,"
the overwhelming influence of funds flowing into equity mutual funds continues
to be most positive. With more than $20 billion new dollars being directed to
equity portfolios each month, new stock issuance cannot come close to meeting
this incredible demand. With the benefit of hindsight, the mathematics of this
lopsided supply/demand equation certainly has provided a foundation for the
market's rapid ascent.
FIXED INCOME COMMENTARY
A number of nationally renowned economists have promoted the idea that we are
experiencing a new paradigm of economic prosperity. While common sense cau-
tions against such radical statements, there is near-term evidence suggesting
some consideration of their views. Just last year, Federal Reserve Chairman
Greenspan expressed his belief that economic activity in excess of 2.5% Gross
Domestic Product could not be sustained without inflation. Despite this proc-
lamation, the economy experienced its sixth consecutive quarter of growth in
excess of Mr. Greenspan's level as the Gross Domestic Product expanded at a
rate of 4.2% in the first quarter of this year. During this same period, in-
flation has actually slowed and current prices at the producer's level (PPI)
are actually declining on a year-over-year basis.
1
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
Low inflation and a strong employment market continue to encourage very high
levels of consumer confidence. Low long-term interest rates have stimulated
the already strong housing and commercial construction segments of the econo-
my. Despite expectations of a slowing in consumption due to an early tax re-
fund season, demand at the retail level actually rose during the month of
April.
Recent comments from the Federal Reserve have expressed concern about a domes-
tic economy that is growing too fast. Clearly, the current unexpected favora-
ble inflation environment is allowing the Fed more time to see if the pace of
economic activity will slow. The consensus view is still looking for a slow-
down in the second half of the year when it is expected domestic companies
will feel the impact of a very weak Asian economy.
Despite the volatility of the financial markets, our disciplines still tell us
we need to stay invested. While the domestic economy is growing much faster
than the Fed would like, the international environment is very tenuous. Our
fixed income portfolios continue to be invested slightly longer than their
comparable maturity benchmarks. While we have taken advantage of the recent
volatility to be a little more active in our institutional accounts, we con-
tinue to emphasize high quality, short and intermediate-term securities. While
we are cognizant of the possibility of a Fed tightening of credit if the econ-
omy does not slow during the course of this year, the combination of a budget
surplus, very favorable inflation data and an unstable overseas economy tells
us not to be short this bond market.
EQUITY COMMENTARY
GROWTH VERSUS PROFITABILITY
One of the great advantages a focus on cash flow affords an investor is a
purer understanding of the economic benefits of expansion. Sole reliance on
reported earnings often captures only the upside of corporate growth. However,
whether organic or external, growth comes with an associated cost that can
offset the perceived value created by accelerating earnings. These costs can
take the form of tangible cash outflows--heightened capital expenditures,
working capital burdens, or higher funding costs. Additionally, risk factors
such as management breadth, cultural cohesion, and systems integration (par-
ticularly acute as we approach the new millennium) combine to further raise
the cost of expansion. Stock market history is littered with examples of com-
panies whose fortunes seemed to have turned overnight as they went from rapid
growth to disaster. Certainly, a classic example is W.T. Grant Company, which
was a retail giant in the early 1970s. Although earnings growth was impres-
sive, cash flow was nonexistent due to receivables and inventory demands.
These working capital demands eventually
2
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
forced the closing of one of the great retail growth stories. More recently,
we have witnessed the rather sudden demise of several acquisition minded phy-
sician practice management companies, most noticeably, MedPartners (MDM),
whose revenue growth over the last three years has been explosive. Unfortu-
nately, upon examination of the company's statement of cash flow, the demands
of acquisition driven growth have prevented the creation of any free cash
flow. Certainly, the collapse of MDM's stock can be at least partially attrib-
uted to the failure of the company's business model to produce any true eco-
nomic wealth (free cash flow) for its shareholders.
We believe the distribution sector of our economy offers an increasing number
of companies whose management teams have adopted a philosophy of profitability
over growth. Focused on industries as diverse as electronic equipment to prop-
erty and casualty insurance, "middleman" companies have historically been
plagued by perpetual pricing wars and the burden of market share gains. These
attributes rarely allowed the sustained generation of free cash flow. However,
over the last few years, we believe distribution firms such as Anixter (AXE),
Owens & Minor (OMI), McKesson (MCK), and Hilb Rogal (HRH) are demonstrating
that an appropriate business model can be created based on:
*Pricing Discipline
*Maximized Working Capital Efficiency
*Reduced Capital Expenditures Via Facility Consolidation
*Deeper Client Penetration Through Value Added Services
Importantly, the objective of these strategies is not to achieve spectacular
revenue or earnings growth. Rather, moderate top-line gains are accompanied by
double-digit expansion in free cash flow. This excess cash flow is then being
used to reduce debt, repurchase shares, or reinvest in the business. As share-
holders, we are indebted to the management of these companies for their under-
standing of the difference between growth and wealth creation. Perhaps it is
not a coincidence that each of these companies claims a high level of inside
ownership.
THE IMPORTANCE OF PEOPLE
In this age of rapid technology advancements, corporate focus is often cen-
tered on issues of hardware, software, and infrastructure expansion. Within
the money management industry, this mindset can often gain even greater momen-
tum as quantitative measures are the widely used tools of the trade. At Ster-
ling, we have worked hard to insure our "tools" are indeed state-of-the-art
and provide us with a competitive advantage. That said, we do not view these
structural resources as our greatest assets. Rather, we believe a sustained
competitive advantage is gained only
3
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
when people are truly viewed as a firm's greatest asset. The importance of our
people is embedded directly in Sterling's Mission Statement:
"On behalf of our clients, Sterling Capital Management commits to
providing superior investment performance and exceptional service;
fostering a work environment built on integrity, communication, re-
spect and teamwork; growing profitability in order to attract and re-
tain the best people; embracing change as a means of improving the
quality of our services."
Consistent with this Mission Statement, we are pleased to announce JAMES F.
EASTERLIN has joined Sterling's team as a Senior Vice President and Equity
Portfolio Manager. James has an outstanding record as a top-performing equity
analyst for the Baltimore-based Legg Mason Value Trust--a five-star rated eq-
uity mutual fund according to Morningstar. James has over 20 years experience
in business analysis and valuation. He also brings management and operational
experience from time spent in the manufacturing sector. James' diverse back-
ground gives him broad industry exposure which he will utilize in the areas of
initial focus which include utilities, manufacturing, and retail.
PERFORMANCE
The Sterling Partners' Balanced Portfolio posted a six month return ending
April 30th of 13.32%. This gain is slightly less than the return of 14.70%
registered by the Balanced Index during the same time period.
The Sterling Partners' Equity Portfolio generated a six month return ending
April 30th of 19.94%. This return lags slightly the S&P 500 Index of 22.50%,
but is similar to those achieved by other active equity managers.
The Sterling Partners' Small Cap Value Portfolio posted a six month return
ending April 30th of 15.77%. This gain handsomely exceeded the Russell 2000
Index return of 11.88% and places the Portfolio among the top performing
within its investment category.
Thank you for your continued confidence in Sterling Capital Management.
STERLING CAPITAL MANAGEMENT
May 18, 1998
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. Without
the Adviser's temporary fee waivers and/or expenses assumed by the Adviser,
total returns for the Sterling Partners' Equity and the Sterling Partners'
Small Cap Value Portfolios would have been lower. The investment return and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost.
4
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITIONS OF THE COMPARATIVE INDICES
--------------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
The Balanced Index, a hypothetical combination of unmanaged indices, reflects
the portfolio's neutral mix of 60% stocks and 40% bonds. The index combines
returns from the S&P 500 Index and the Lehman Brothers Government/Corporate
Index.
The Russell 2000 Index is an unmanaged index composed of the 2,000 smallest
stocks in the Russell 3000, a market value weighted index of the 3,000 largest
U.S. publicly traded companies.
The Lehman Brothers Government/Corporate Index is an unmanaged index composed
of a combination of the Government and Corporate Bond Indices. The Government
Index includes public obligations of the U.S. Treasury, issues of Government
Agencies, and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate non-convertible corporate debt. Also included are
Yankee Bonds and non-convertible debt issued by or guaranteed by foreign or
international governments and agencies. All issues are investment grade (BBB)
or higher, with maturities of at least one year and outstanding par value of
at least $100 million for U.S. Government issues and $25 million for others.
Any security downgraded during the month is held in the index until month-end
and then removed. All returns are market value weighted inclusive of accrued
income.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
5
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 60.7%
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 1.7%
Lockheed Martin Corp. .................................. 13,200 $ 1,470,150
-----------
BANKS - 3.2%
Bankers Trust New York Corp. ........................... 12,392 1,600,117
J.P. Morgan & Co. ...................................... 9,445 1,239,656
-----------
2,839,773
-----------
BASIC RESOURCES - 1.5%
Rayonier, Inc. ......................................... 26,050 1,305,756
-----------
BEVERAGES, FOOD & TOBACCO - 4.7%
Diageo plc ADR.......................................... 32,054 1,540,595
Nabisco Holdings Corp. ................................. 27,150 1,298,109
Philip Morris Cos., Inc. ............................... 34,700 1,294,744
-----------
4,133,448
-----------
CONSTRUCTION - 1.9%
USG Corp. .............................................. 32,700 1,679,962
-----------
CONSUMER NON-DURABLES - 3.2%
First Brands Corp. ..................................... 45,550 1,221,309
Hasbro, Inc. ........................................... 43,425 1,598,583
-----------
2,819,892
-----------
ENERGY - 3.8%
Chevron Corp. .......................................... 12,090 999,692
Exxon Corp. ............................................ 6,868 500,935
Mobil Corp. ............................................ 14,140 1,117,060
USX-Marathon Group...................................... 21,450 768,178
-----------
3,385,865
-----------
ENTERTAINMENT & LEISURE TIME - 1.5%
The Walt Disney Co. .................................... 10,750 1,336,359
-----------
FINANCIAL SERVICES - 7.4%
AFLAC, Inc. ............................................ 23,300 1,514,500
Capital One Financial Corp. ............................ 14,250 1,368,891
H&R Block, Inc. ........................................ 35,750 1,608,750
Nationwide Financial Services, Inc., Class A............ 22,300 967,263
Waddell & Reed Financial, Inc., Class A................. 44,600 1,103,850
-----------
6,563,254
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
HEALTH CARE - 7.6%
Bausch & Lomb, Inc. .................................... 14,775 $ 730,439
Columbia/HCA Healthcare Corp. .......................... 45,300 1,492,069
*Humana, Inc. .......................................... 37,000 999,000
McKesson Corp. ......................................... 16,500 1,166,344
Merck & Co., Inc. ...................................... 8,450 1,018,225
*PacifiCare Health Systems, Inc., Class A............... 8,800 618,200
*PacifiCare Health Systems, Inc., Class B............... 8,800 630,300
-----------
6,654,577
-----------
HOME FURNISHINGS & APPLIANCES - 2.1%
Black & Decker Corp. ................................... 35,650 1,840,431
-----------
INDUSTRIAL - 0.9%
*Airgas, Inc. .......................................... 49,150 761,825
-----------
INSURANCE - 1.4%
Ohio Casualty Corp. .................................... 25,150 1,216,631
-----------
MANUFACTURING - 4.5%
Belden, Inc. ........................................... 18,000 745,875
Snap-on, Inc. .......................................... 35,375 1,496,804
United Dominion Industries.............................. 49,145 1,680,145
-----------
3,922,824
-----------
OFFICE EQUIPMENT - 1.4%
Danka Business Systems plc ADR.......................... 63,825 1,276,500
-----------
RETAIL - 3.7%
Cracker Barrel Old Country Store, Inc. ................. 17,750 652,312
Family Dollar Stores, Inc. ............................. 26,675 906,950
*Federated Department Stores, Inc. ..................... 10,800 531,225
McDonald's Corp. ....................................... 19,300 1,194,188
-----------
3,284,675
-----------
SERVICES - 1.8%
Manpower, Inc. ......................................... 36,200 1,595,063
-----------
TECHNOLOGY - 2.1%
First Data Corp. ....................................... 37,000 1,253,375
Hewlett-Packard Co. .................................... 8,200 617,563
-----------
1,870,938
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TEXTILES & APPAREL - 1.7%
Unifi, Inc. ......................................... 38,725 $ 1,483,652
-----------
TRANSPORTATION - 1.4%
Canadian National Railway............................ 18,950 1,232,934
-----------
UTILITIES - 3.2%
Duke Energy Corp. ................................... 30,850 1,785,444
Unicom Corp. ........................................ 29,525 1,025,994
-----------
2,811,438
-----------
TOTAL COMMON STOCKS (Cost $39,186,466).......................... 53,485,947
-----------
CORPORATE BONDS AND NOTES - 19.3%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
BANKS - 5.6%
BankAmerica Corp. 6.65%, 5/1/01...................... $ 910,000 924,269
NationsBank Corp. 5.70%, 2/12/01..................... 640,000 634,989
Wachovia Corp. 6.625%, 11/15/06...................... 3,270,000 3,339,880
-----------
4,899,138
-----------
FINANCIAL SERVICES - 6.3%
Associates Corp. of North America 6.00%, 6/15/01..... 1,750,000 1,746,850
Morgan Stanley, Dean Witter, Discover and Co.
6.375%, 8/1/02...................................... 2,000,000 2,016,360
Sears Roebuck Acceptance Corp. 6.54%, 5/6/99......... 1,800,000 1,811,250
-----------
5,574,460
-----------
INDUSTRIAL - 2.7%
Dell Computer Corp. 6.55%, 4/15/08................... 500,000 499,630
Ford Motor Corp. 7.25%, 10/1/08...................... 1,300,000 1,383,213
Nike, Inc. 6.375%, 12/1/03........................... 500,000 505,395
-----------
2,388,238
-----------
TELECOMMUNICATIONS - 1.4%
Pacific Bell 7.00%, 7/15/04 1,200,000 1,249,296
-----------
TRANSPORTATION - 1.9%
Southern Railway Corp. 10.00%, 7/15/00............... 1,535,000 1,659,795
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<TABLE>
<S> <C> <C>
CORPORATE BONDS AND NOTES - CONTINUED
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
UTILITIES - 1.4%
Georgia Power 6.625%, 4/1/03.......................... $1,250,000 $ 1,256,725
-----------
TOTAL CORPORATE BONDS AND NOTES (Cost $16,755,007)............... 17,027,652
-----------
U.S. GOVERNMENT AND AGENCY SECURITIES - 14.6%
FEDERAL HOME LOAN MORTGAGE CORP. - 1.7%
7.00%, 9/1/23 Estimated Average Life 6/03............. 1,458,939 1,480,367
-----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.2%
6.50%, 8/15/27........................................ 1,923,604 1,912,774
-----------
MORTGAGE PASS-THROUGHS - 0.1%
Federal Home Loan Mortgage Corporation
Pool #G50213 6.50%, 11/1/99, Estimated Average Life
5/99................................................. 45,237 45,492
Pool #M90315 5.50%, 12/1/98, Estimated Average Life
12/98................................................ 89,191 87,630
-----------
133,122
-----------
U.S. TREASURY NOTES - 10.6%
6.125%, 8/15/07....................................... 4,455,000 4,575,419
6.125%, 11/15/27...................................... 4,670,000 4,777,970
-----------
9,353,389
-----------
TOTAL U.S. GOVERNMENT AND AGENCY SECURITIES (Cost $12,873,815)... 12,879,652
-----------
SHORT-TERM INVESTMENT - 5.3%
REPURCHASE AGREEMENT - 5.3%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $4,680,698,
collateralized by $4,080,558 of various U.S. Treasury
Obligations, 5.50%-14.00% due 05/15/04-11/15/27,
valued at $4,733,185 (Cost $ 4,680,000).............. 4,680,000 4,680,000
-----------
TOTAL INVESTMENTS - 99.9% (Cost $73,495,288) (a)................. 88,073,251
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.1%........................ 86,433
-----------
NET ASSETS - 100%................................................ $88,159,684
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $73,495,288. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$14,577,963. This consisted of aggregate gross unrealized appreciation for
all securities of $14,726,357 and aggregate gross unrealized depreciation
for all securities of $148,394.
9
<PAGE>
UAM FUNDS STERLING PARTNERS' EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.8%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
AEROSPACE & DEFENSE - 2.7%
Lockheed Martin Corp. ................................. 14,925 $ 1,662,272
-----------
BANKS - 5.1%
Bankers Trust New York Corp. .......................... 13,960 1,802,585
J.P. Morgan & Co. ..................................... 10,650 1,397,813
-----------
3,200,398
-----------
BASIC RESOURCES - 2.4%
Rayonier, Inc. ........................................ 30,150 1,511,269
-----------
BEVERAGES, FOOD & TOBACCO - 7.5%
Diageo plc ADR......................................... 35,532 1,707,757
Nabisco Holdings Corp. ................................ 31,386 1,500,643
Philip Morris Cos, Inc. ............................... 39,098 1,458,844
-----------
4,667,244
-----------
CONSTRUCTION - 3.1%
USG Corp. ............................................. 36,925 1,897,022
-----------
CONSUMER NON-DURABLES - 5.0%
First Brands Corp. .................................... 50,552 1,355,425
Hasbro, Inc. .......................................... 47,910 1,763,687
-----------
3,119,112
-----------
ENERGY - 6.0%
Chevron Corp. ......................................... 13,693 1,132,240
Exxon Corp. ........................................... 7,050 514,209
Mobil Corp. ........................................... 15,200 1,200,800
USX-Marathon Group..................................... 24,300 870,244
-----------
3,717,493
-----------
ENTERTAINMENT & LEISURE TIME - 2.4%
The Walt Disney Co. ................................... 12,176 1,513,629
-----------
FINANCIAL SERVICES - 11.7%
AFLAC, Inc. ........................................... 25,300 1,644,500
Capital One Financial Corp. ........................... 16,175 1,553,811
H&R Block, Inc. ....................................... 40,450 1,820,250
Nationwide Financial Services, Inc., Class A........... 24,650 1,069,194
Waddell & Reed Financial, Inc., Class A................ 49,575 1,226,981
-----------
7,314,736
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS STERLING PARTNERS' EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
HEALTH CARE - 11.9%
Bausch & Lomb, Inc. ................................... 16,750 $ 828,078
Columbia/HCA Healthcare Corp. ......................... 50,900 1,676,519
*Humana, Inc. ......................................... 41,700 1,125,900
McKesson Corp. ........................................ 17,600 1,244,100
Merck & Co., Inc. ..................................... 9,600 1,156,800
*PacifiCare Health Systems, Inc., Class A.............. 9,950 698,987
*PacifiCare Health Systems, Inc., Class B.............. 9,950 712,669
-----------
7,443,053
-----------
HOME FURNISHINGS & APPLIANCES - 3.3%
Black & Decker Corp. .................................. 39,475 2,037,897
-----------
INDUSTRIAL - 1.4%
*Airgas, Inc. ......................................... 55,800 864,900
-----------
INSURANCE - 2.1%
Ohio Casualty Corp. ................................... 27,025 1,307,334
-----------
MANUFACTURING - 7.0%
Belden, Inc. .......................................... 20,445 847,190
Snap-on, Inc. ......................................... 38,975 1,649,130
United Dominion Industries............................. 54,475 1,862,364
-----------
4,358,684
-----------
OFFICE EQUIPMENT - 2.3%
Danka Business Systems plc ADR......................... 71,700 1,434,000
-----------
RETAIL - 5.8%
Cracker Barrel Old Country Store, Inc. ................ 19,050 700,087
Family Dollar Stores, Inc. ............................ 30,650 1,042,100
*Federated Department Stores, Inc. .................... 11,050 543,522
McDonald's Corp. ...................................... 21,900 1,355,063
-----------
3,640,772
-----------
SERVICES - 2.8%
Manpower, Inc. ........................................ 40,100 1,766,906
-----------
TECHNOLOGY - 3.5%
Hewlett-Packard Co. ................................... 8,862 667,419
First Data Corp. ...................................... 43,800 1,483,725
-----------
2,151,144
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS STERLING PARTNERS' EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
TEXTILES & APPAREL - 2.6%
Unifi, Inc. .......................................... 42,843 $ 1,641,422
-----------
TRANSPORTATION - 2.1%
Canadian National Railway............................. 20,437 1,329,682
-----------
UTILITIES - 5.1%
Duke Energy Corp. .................................... 34,200 1,979,325
Unicom Corp. ......................................... 34,525 1,199,744
-----------
3,179,069
-----------
TOTAL COMMON STOCKS (Cost $43,640,691)........................... 59,758,038
-----------
SHORT-TERM INVESTMENT - 4.2%
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C>
REPURCHASE AGREEMENT - 4.2%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98 to be repurchased at $2,597,387,
collateralized by $2,264,361 of various U.S. Treasury
Obligations, 5.50%-14.00%, due 05/15/04-11/15/27,
valued at $2,626,513 (Cost $2,597,000)............... $2,597,000 2,597,000
-----------
TOTAL INVESTMENTS - 100.0% (Cost $46,237,691) (a)................ 62,355,038
-----------
OTHER ASSETS AND LIABILITIES (NET) - 0.0%........................ 14,527
-----------
NET ASSETS - 100%................................................ $62,369,565
===========
</TABLE>
+
See Note A to Financial Statements.
*
Non-Income Producing Security
ADR
American Depositary Receipt
(a)
The cost for federal income tax purposes was $46,237,691. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$16,117,347. This consisted of aggregate gross unrealized appreciation for
all securities of $16,239,842 and aggregate gross unrealized depreciation
for all securities of $122,495.
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS STERLING PARTNERS'
SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 95.8%
<TABLE>
<CAPTION>
SHARES VALUE+
---------- -----------
<S> <C> <C>
BANKS - 8.2%
Empire Federal Bancorp, Inc. .......................... 58,175 $ 988,975
Ocean Financial Corp. ................................. 24,800 979,600
*Provident Financial Holdings, Inc. ................... 44,875 1,054,562
-----------
3,023,137
-----------
BEVERAGES, FOOD & TOBACCO - 2.6%
Earthgrains Co. ....................................... 20,175 943,181
-----------
BUILDING MATERIALS - 9.5%
*Cameron Ashley Building Products...................... 72,475 1,440,441
Texas Industries, Inc. ................................ 21,000 1,353,187
Zurn Industries, Inc. ................................. 16,575 714,797
-----------
3,508,425
-----------
CONSTRUCTION - 3.7%
*Perini Corp. ......................................... 137,575 1,367,152
-----------
CONSUMER DURABLES - 1.2%
*Samsonite Corp. ...................................... 15,400 442,750
-----------
ELECTRONICS - 6.0%
Fluke Corp. ........................................... 37,975 1,205,706
*Marshall Industries................................... 31,350 1,016,916
-----------
2,222,622
-----------
ENTERTAINMENT & LEISURE TIME - 3.1%
Gaylord Entertainment Co. ............................. 34,000 1,156,000
-----------
FINANCIAL SERVICES - 7.2%
Capital Southwest Corp. ............................... 9,275 976,194
Conning Corp. ......................................... 29,980 614,590
Financial Security Assurance Holdings Ltd. ............ 17,350 1,038,831
-----------
2,629,615
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS STERLING PARTNERS'
SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
--------- -----------
<S> <C> <C>
HEALTH CARE - 16.7%
*Acuson Corp. .......................................... 46,200 $ 866,250
Diagnostic Products Corp. .............................. 26,850 760,191
*Haemonetics Corp. ..................................... 48,000 852,000
*Magellan Health Services, Inc. ........................ 37,450 1,039,237
Owens & Minor, Inc., Holding Company.................... 86,800 1,546,125
*Sun Healthcare Group, Inc. ............................ 63,425 1,062,369
-----------
6,126,172
-----------
INDUSTRIAL - 6.7%
Gleason Corp. .......................................... 50,200 1,662,875
*Philip Services Corp. ................................. 107,375 812,023
-----------
2,474,898
-----------
INSURANCE - 5.5%
Hilb, Rogal & Hamilton Co. ............................. 51,400 918,775
Stewart Information Services Corp. ..................... 31,350 1,101,169
-----------
2,019,944
-----------
METALS - 3.3%
*Steel of West Virginia, Inc. .......................... 104,250 1,198,875
-----------
MULTI-INDUSTRY - 6.0%
Clarcor, Inc. ......................................... 58,795 1,319,213
*Griffon Corp. ........................................ 66,560 890,240
-----------
2,209,453
-----------
OFFICE EQUIPMENT - 3.4%
Danka Business Systems plc ADR ......................... 62,300 1,246,000
-----------
RETAIL - 3.1%
CPI Corp. .............................................. 43,770 1,135,284
-----------
SERVICES - 4.3%
*Bell & Howell Co. ..................................... 57,400 1,585,675
-----------
TELECOMMUNICATIONS - 5.3%
*Anixter International, Inc. ........................... 77,350 1,542,166
Salient 3 Communications, Inc., Class A................. 37,925 393,472
-----------
1,935,638
-----------
TOTAL COMMON STOCKS (Cost $30,987,956)............................ 35,224,821
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS STERLING PARTNERS'
SMALL CAP VALUE PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
SHORT TERM INVESTMENT - 4.6%
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE+
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENT - 4.6%
Chase Securities, Inc., 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,694,253,
collateralized by $1,477,023 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $1,713,251 (Cost $1,694,000)... $1,694,000 $ 1,694,000
-----------
TOTAL INVESTMENTS - 100.4% (Cost $32,681,956)(a)............... 36,918,821
-----------
OTHER ASSETS AND LIABILITIES (NET) - (0.4%).................... (136,602)
-----------
NET ASSETS - 100%.............................................. $36,782,219
===========
</TABLE>
+ See Note A to Financial Statements.
* Non-Income Producing Security
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $32,681,956. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$4,236,865. This consisted of aggregate gross unrealized appreciation for
all securities of $4,735,946 and aggregate gross unrealized depreciation
for all securities of $499,081.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
STERLING
STERLING STERLING PARTNERS'
PARTNERS' PARTNERS' SMALL CAP
BALANCED EQUITY VALUE
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Investments, at Cost.................... $73,495,288 $46,237,691 $32,681,956
=========== =========== ===========
Investments, at Value................... $88,073,251 $62,355,038 $36,918,821
Cash.................................... 755 946 836
Receivable for Investments Sold......... 1,115,349 -- 902,133
Receivable for Portfolio Shares Sold.... 11,432 36,459 98,366
Dividends Receivable.................... 53,940 60,761 10,850
Interest Receivable..................... 567,070 387 252
Other Assets............................ 643 386 91
----------- ----------- -----------
Total Assets........................... 89,822,440 62,453,977 37,931,349
----------- ----------- -----------
LIABILITIES
Payable for Investments Purchased....... 1,483,772 -- 1,103,473
Payable for Portfolio Shares Redeemed... 101,144 28,588 --
Payable for Investment Advisory Fees--
Note B................................. 52,815 34,719 23,106
Payable for Administrative Fees--Note
C...................................... 11,022 9,322 6,340
Payable for Custodian Fees--Note D...... 8,088 4,417 6,993
Payable for Account Services Fees--Note
F...................................... 3,302 -- --
Payable for Directors' Fees--Note G..... 631 632 574
Other Liabilities....................... 1,982 6,734 8,644
----------- ----------- -----------
Total Liabilities...................... 1,662,756 84,412 1,149,130
----------- ----------- -----------
NET ASSETS.............................. $88,159,684 $62,369,565 $36,782,219
=========== =========== ===========
NET ASSETS CONSIST OF:
Paid in Capital......................... $69,362,560 $43,006,613 $30,139,796
Undistributed Net Investment Income
(Loss)................................. 207,389 42,134 (15,600)
Accumulated Net Realized Gain........... 4,011,772 3,203,471 2,421,158
Unrealized Appreciation................. 14,577,963 16,117,347 4,236,865
----------- ----------- -----------
NET ASSETS.............................. $88,159,684 $62,369,565 $36,782,219
=========== =========== ===========
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001
par value)
(Authorized 25,000,000)................ 6,395,873 3,215,760 2,394,091
Net Asset Value, Offering and Redemption
Price Per Share........................ $13.78 $19.39 $15.36
====== ====== ======
</TABLE>
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
FOR THE SIX MONTHS ENDED APRIL 30, 1998
(UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
STERLING
STERLING STERLING PARTNERS'
PARTNERS' PARTNERS' SMALL CAP
BALANCED EQUITY VALUE
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends................................ $ 559,856 $ 610,853 $ 124,041
Interest................................. 959,503 51,902 45,317
----------- ----------- ----------
TOTAL INCOME............................ 1,519,359 662,755 169,358
----------- ----------- ----------
EXPENSES
Investment Advisory Fees-Note B.......... $ 301,928 $ 205,524 $ 141,771
Administrative Fees-Note C............... 65,645 55,549 35,045
Custodian Fees-Note D.................... 4,943 3,137 5,252
Account Services Fees-Note F............. 16,553 11,345 1,289
Directors' Fees-Note G................... 1,601 1,469 1,289
Audit Fees............................... 7,703 6,679 3,350
Legal Fees............................... 1,926 1,149 383
Printing Fees............................ 8,282 6,098 6,766
Registration and Filing Fees............. 6,674 6,712 10,587
Other Expenses........................... 16,677 5,275 5,079
Account Services Fees Waived-Note F...... -- (11,345) (1,289)
Investment Advisory Fees Waived-Note B... -- (19,617) (31,428)
----------- ----------- ----------
Net Expenses Before Expense Offset...... 431,932 271,975 178,094
Expense Offset-Note A.................... -- (423) (636)
----------- ----------- ----------
Net Expenses After Expense Offset....... 431,932 271,552 177,458
----------- ----------- ----------
NET INVESTMENT INCOME (LOSS)............. 1,087,427 391,203 (8,100)
----------- ----------- ----------
NET REALIZED GAIN ON INVESTMENTS......... 4,051,757 3,240,798 2,426,251
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON
INVESTMENTS............................. 5,014,159 6,460,818 2,279,995
----------- ----------- ----------
NET GAIN ON INVESTMENTS.................. 9,065,916 9,701,616 4,706,246
----------- ----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS.............................. $10,153,343 $10,092,819 $4,698,146
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 1,087,427 $ 1,783,977
Net Realized Gain............................... 4,051,757 8,948,061
Net Change in Unrealized
Appreciation/Depreciation...................... 5,014,159 3,917,853
------------ ------------
Net Increase in Net Assets Resulting from
Operations..................................... 10,153,343 14,649,891
------------ ------------
DISTRIBUTIONS:
Net Investment Income........................... (1,102,770) (1,727,012)
Net Realized Gain............................... (8,946,008) (4,423,527)
------------ ------------
Total Distributions............................. (10,048,778) (6,150,539)
------------ ------------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 11,172,740 27,923,261
In Lieu of Cash Distributions................... 9,829,393 5,943,855
Redeemed........................................ (11,230,225) (22,774,378)
------------ ------------
Net Increase from Capital Share Transactions.... 9,771,908 11,092,738
------------ ------------
Total Increase.................................. 9,876,473 19,592,090
Net Assets:
Beginning of Period............................. 78,283,211 58,691,121
------------ ------------
End of Period (including undistributed net
investment income of $207,389 and $222,732,
respectively).................................. $ 88,159,684 $ 78,283,211
============ ============
(1) Shares Issued and Redeemed:
Shares Issued................................... 831,668 2,175,854
In Lieu of Cash Distributions................... 778,353 483,960
Shares Redeemed................................. (843,080) (1,707,662)
------------ ------------
766,941 952,152
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS STERLING PARTNERS' EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 391,203 $ 385,182
Net Realized Gain................................ 3,240,798 6,787,489
Net Change in Unrealized
Appreciation/Depreciation....................... 6,460,818 4,581,781
----------- -----------
Net Increase in Net Assets Resulting from
Operations...................................... 10,092,819 11,754,452
----------- -----------
DISTRIBUTIONS:
Net Investment Income............................ (359,571) (399,390)
Net Realized Gain................................ (6,790,276) (3,300,956)
----------- -----------
Total Distributions.............................. (7,149,847) (3,700,346)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 6,025,862 14,372,614
In Lieu of Cash Distributions.................... 6,822,119 3,658,369
Redeemed......................................... (3,307,322) (9,142,001)
----------- -----------
Net Increase from Capital Share Transactions..... 9,540,659 8,888,982
----------- -----------
Total Increase................................... 12,483,631 16,943,088
Net Assets:
Beginning of Period.............................. 49,885,934 32,942,846
----------- -----------
End of Period (including undistributed net
investment income of $42,134 and $10,502,
respectively)................................... $62,369,565 $49,885,934
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued.................................... 328,350 851,392
In Lieu of Cash Distributions.................... 402,891 239,374
Shares Redeemed.................................. (182,664) (518,745)
----------- -----------
548,577 572,021
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS STERLING PARTNERS'
SMALL CAP VALUE PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS JANUARY 2, 1997*
ENDED TO
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss)................. $ (8,100) $ 5,032
Net Realized Gain............................ 2,426,251 820,414
Net Change in Unrealized
Appreciation/Depreciation................... 2,279,995 1,956,870
----------- -----------
Net Increase in Net Assets Resulting from
Operations.................................. 4,698,146 2,782,316
----------- -----------
DISTRIBUTIONS:
Net Investment Income........................ (7,500) (5,455)
Net Realized Gain............................ (825,084) --
----------- -----------
Total Distributions.......................... (832,584) (5,455)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued....................................... 14,155,984 17,330,126
In Lieu of Cash Distributions................ 691,507 5,453
Redeemed..................................... (1,819,044) (224,230)
----------- -----------
Net Increase from Capital Share
Transactions................................ 13,028,447 17,111,349
----------- -----------
Total Increase............................... 16,894,009 19,888,210
Net Assets:
Beginning of Period.......................... 19,888,210 --
----------- -----------
End of Period (including undistributed net
investment income (loss) of $(15,600) and
$0, respectively)........................... $36,782,219 $19,888,210
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued................................ 1,021,255 1,464,695
In Lieu of Cash Distributions................ 53,152 540
Shares Redeemed.............................. (129,832) (15,719)
----------- -----------
944,575 1,449,516
=========== ===========
</TABLE>
* Commencement of Operations
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS STERLING PARTNERS' BALANCED PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 --------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 13.91 $ 12.55 $ 11.86 $ 11.13 $ 11.51 $ 10.71
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS.............
Net Investment Income.. 0.18 0.32 0.34 0.46 0.32 0.34
Net Realized and
Unrealized Gain
(Loss)................ 1.49 2.32 1.38 1.04 (0.25) 0.94
------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 1.67 2.64 1.72 1.50 0.07 1.28
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.19) (0.31) (0.36) (0.45) (0.32) (0.32)
Net Realized Gain...... (1.61) (0.97) (0.67) (0.32) (0.13) (0.16)
------- ------- ------- ------- ------- -------
Total Distributions.... (1.80) (1.28) (1.03) (0.77) (0.45) (0.48)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 13.78 $ 13.91 $ 12.55 $ 11.86 $ 11.13 $ 11.51
======= ======= ======= ======= ======= =======
TOTAL RETURN............ 13.32%** 22.58% 15.52% 14.23% 0.66% 12.23%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $88,160 $78,283 $58,691 $64,933 $64,673 $47,016
Ratio of Expenses to
Average Net Assets..... 1.07%* 1.07% 1.03% 0.96% 1.01% 0.99%
Ratio of Net Investment
Income to Average Net
Assets................. 2.70%* 2.47% 2.77% 3.96% 3.05% 3.08%
Portfolio Turnover
Rate................... 33% 133%+ 84% 130% 70% 49%
Average Commission
Rate#.................. $0.0684 $0.0658 $0.0684 N/A N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.07%* 1.07% 1.02% 0.96% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
+ The turnover rate is higher than normally anticipated due to increased
shareholder activity within the portfolio.
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS STERLING PARTNERS' EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 18.70 $ 15.72 $ 13.69 $ 12.54 $ 12.39 $ 11.01
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.13 0.15 0.15 0.21 0.16 0.15
Net Realized and
Unrealized Gain....... 3.20 4.55 3.01 1.73 0.27 1.53
------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 3.33 4.70 3.16 1.94 0.43 1.68
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.12) (0.16) (0.16) (0.20) (0.15) (0.16)
Net Realized Gain...... (2.52) (1.56) (0.97) (0.59) (0.13) (0.14)
------- ------- ------- ------- ------- -------
Total Distributions.... (2.64) (1.72) (1.13) (0.79) (0.28) (0.30)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 19.39 $ 18.70 $ 15.72 $ 13.69 $ 12.54 $ 12.39
======= ======= ======= ======= ======= =======
TOTAL RETURN+........... 19.94%** 32.46% 24.76% 16.61% 3.50% 15.46%
======= ======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $62,370 $49,886 $32,943 $31,969 $23,352 $15,982
Ratio of Expenses to
Average Net Assets..... 0.99%* 0.99% 0.99% 1.00% 0.99% 0.93%
Ratio of Net Investment
Income to Average Net
Assets................. 1.43%* 0.86% 1.01% 1.64% 1.34% 1.30%
Portfolio Turnover
Rate................... 22% 57% 78% 135% 73% 55%
Average Commission Rate
#...................... $0.0655 $0.0661 $0.0687 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. 0.11%* 0.16% 0.21% 0.23% 0.32% 0.54%
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.99%* 0.99% 0.99% 0.99% N/A N/A
</TABLE>
* Annualized
** Not Annualized
+ Total return would have been lower had certain fees not been waived and ex-
penses assumed by the Adviser during the periods.
# For fiscal years beginning on or after September 1, 1995, a portfolio is re-
quired to disclose the average commission rate per share it paid for portfo-
lio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS STERLING PARTNERS'
SMALL CAP VALUE PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JANUARY 2, 1997***
APRIL 30, 1998 TO
(UNAUDITED) OCTOBER 31, 1997
-------------- ------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 13.72 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income....................... -- 0.01
Net Realized and Unrealized Gain............ 2.09 3.72
------- -------
Total From Investment Operations............ 2.09 3.73
------- -------
DISTRIBUTIONS
Net Investment Income....................... (0.01) (0.01)
Net Realized Gain........................... (0.44) --
------- -------
Total Distributions......................... (0.45) (0.01)
------- -------
NET ASSET VALUE, END OF PERIOD............... $ 15.36 $ 13.72
======= =======
TOTAL RETURN+................................ 15.77%** 37.34%**
======= =======
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (Thousands)........ $36,782 $19,888
Ratio of Expenses to Average Net Assets...... 1.25%* 1.25%*
Ratio of Net Investment Income to Average Net
Assets...................................... (0.06)%* 0.06%*
Portfolio Turnover Rate...................... 38% 50%
Average Commission Rate...................... $0.0609 $0.0619
Ratio of Voluntarily Waived Fees and Expenses
Assumed by the Adviser to Average Net
Assets...................................... 0.23%* 0.85%*
Ratio of Expenses to Average Net Assets
Including Expense Offsets .................. 1.25%* 1.25%*
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
assumed by the Adviser during the period.
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The Sterling
Partners' Balanced Portfolio, Sterling Partners' Equity Portfolio and the
Sterling Partners' Small Cap Value Portfolio (the "Portfolios"), are portfo-
lios of UAM Funds, Inc., which are diversified, open-end management investment
companies. At April 30, 1998, the UAM Funds were comprised of forty-four ac-
tive portfolios. The financial statements of the remaining portfolios are pre-
sented separately. The objectives of the Portfolios are as follows:
The STERLING PARTNERS' BALANCED PORTFOLIO seeks to provide maximum long-
term total return consistent with reasonable risk to principal, by invest-
ing in a balanced portfolio of common stocks and fixed income securities.
The STERLING PARTNERS' EQUITY PORTFOLIO seeks to provide maximum long-
term total return consistent with reasonable risk to principal, by invest-
ing primarily in common stocks.
The STERLING PARTNERS' SMALL CAP VALUE PORTFOLIO seeks to provide maxi-
mum long-term total return consistent with reasonable risk to principal,
by investing primarily in equity securities of smaller companies, in terms
of market capitalization.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolio in the preparation of its
financial statements. Generally accepted accounting principles may require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results may differ from
those estimates.
1. SECURITY VALUATION: Equity securities listed on a securities exchange
and unlisted securities for which market quotations are readily available
are valued at the last quoted sales price as of the close of the exchange
on the day the valuation is made. Price information on listed securities
is taken from the exchange where the security is primarily traded. In ad-
dition, listed and unlisted securities not traded on the valuation date
for which market quotations are readily available are valued at the aver-
age between the bid and asked price. Fixed income securities are stated on
the basis of valuations provided by brokers and/or a pricing service which
uses information with respect to transactions in fixed income securities,
quotations from dealers, market transactions in comparable securities and
various relationships between securities in determining value. Short-term
investments that have remaining maturities of sixty days or less at time
of purchase are valued at
24
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
amortized cost, if it approximates market value. The value of other assets
and securities for which no quotations are readily available is determined
in good faith at fair value using methods determined by the Board of Di-
rectors.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolio's custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, the
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. DISTRIBUTIONS TO SHAREHOLDERS: Each Portfolio will normally distrib-
ute substantially all of its net investment income to shareholders quar-
terly. Any realized net capital gains will be distributed annually. All
distributions are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments in the
timing of the recognition of gains or losses on investments and in-kind
transactions.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
25
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
5. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date. Interest income is recognized on the accrual basis. Discounts and
premiums on securities purchased are amortized using the effective yield
basis over their respective lives. Most expenses of the UAM Funds can be
directly attributed to a particular portfolio. Expenses which cannot be
directly attributed are apportioned among the portfolios of the UAM Funds
based on their relative net assets. Custodian fees for the Portfolio have
been increased to include expense offsets, if any, for custodian balance
credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Sterling Capital Management Company (the "Adviser"), a wholly-owned subsidiary
of United Asset Management Corporation ("UAM"), provides investment advisory
services to the Portfolios for a monthly fee calculated at an annual rate of
0.75% of average daily net assets for the month for the Sterling Partners'
Balanced and Sterling Partners' Equity Portfolios and an annual rate of 1.00%
of average daily net assets for the month for the Sterling Partners' Small Cap
Value Portfolio. The Adviser has voluntarily agreed to waive a portion of its
advisory fees and to assume expenses, if necessary, in order to keep the total
annual operating expenses, after the effect of expense offset arrangements,
from exceeding 1.11%, 0.99% and 1.25% of average daily net assets for the
Sterling Partners' Balanced Portfolio, the Sterling Partners' Equity Portfolio
and the Sterling Partners' Small Cap Value Portfolio, respectively.
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, payable monthly,
of 0.19% of the first $200 million of the combined aggregate net assets; plus
0.11% of the next $800 million of the combined aggregate net assets; plus
0.07% of the next $2 billion of the combined aggregate net assets; plus 0.05%
of the combined aggregate net assets in excess of $3 billion. The fees are al-
located among the portfolios of the UAM Funds on the basis of their relative
net assets and are subject to a graduated minimum fee schedule per portfolio
which rises from $2,000 per month, upon inception of a portfolio, to $70,000
annually after two years. For portfolios with more than one class of shares,
the minimum annual fee increases to $90,000. In addition, the Administrator
receives a Portfolio-specific monthly fee of
26
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
0.06%, 0.06% and 0.04% of average daily net assets for Sterling Partners' Bal-
anced Portfolio, Sterling Partners' Equity Portfolio and Sterling Partners'
Small Cap Value Portfolio, respectively. The Administrator has entered into a
Mutual Funds Service Agreement with Chase Global Funds Services Company
("CGFSC"), a corporate affiliate of The Chase Manhattan Bank, under which
CGFSC agrees to provide certain services, including but not limited to, admin-
istration, fund accounting, dividend disbursing and transfer agent services.
Pursuant to the Mutual Funds Service Agreement, the Administrator pays CGFSC a
monthly fee. For the six months ended April 30, 1998, UAM Fund Services, Inc.
earned the following amounts from the Portfolios as Administrator and paid the
following portion to CGFSC for its services as sub-Administrator:
<TABLE>
<CAPTION>
PORTION
ADMINISTRATION PAID TO
STERLING PARTNERS' PORTFOLIOS FEES CGFSC
- ----------------------------- -------------- -------
<S> <C> <C>
Balanced............................................... $65,645 $41,491
Equity................................................. 55,549 39,107
Small Cap Value........................................ 35,045 29,375
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets held in accordance with the custodian agreement.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.
F. ACCOUNT SERVICES: The UAM Funds have entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment, the Service Provider is entitled to receive, after the end of each
month, a fee at the annual rate of 0.15% of the average aggregate daily net
asset value of shares of the UAM Funds in the accounts for which it provides
services. The Service Provider has voluntarily agreed to waive a portion of
its fees, if necessary, in order to keep the Portfolios' total annual operat-
ing expenses, after the effect of expense offset arrangements, from exceeding
1.11%, 0.99% and 1.25% of average daily net assets for the Sterling Partners'
Balanced Portfolio, the Sterling Partners' Equity Portfolio and the Sterling
Partners' Small Cap Value Portfolio, respectively.
27
<PAGE>
UAM FUNDS STERLING PARTNERS' PORTFOLIOS
- -------------------------------------------------------------------------------
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government and
Agency securities and short-term securities were:
<TABLE>
<CAPTION>
STERLING PARTNERS' PORTFOLIOS PURCHASES SALES
- ----------------------------- ----------- -----------
<S> <C> <C>
Balanced.............................................. $13,421,380 $15,978,016
Equity................................................ 14,115,666 11,566,944
Small Cap Value....................................... 21,689,547 10,403,586
</TABLE>
Purchases and sales of long-term U.S. Government and Agency securities were
$12,436,608 and $12,238,069, respectively, for the Sterling Partners' Balanced
Portfolio. There were no purchases or sales of long-term U.S. Government and
Agency securities for the Sterling Partners' Equity Portfolio and Sterling
Partners' Small Cap Value Portfolio.
I. LINE OF CREDIT: The Portfolios, along with certain other portfolios of
UAM Funds, collectively entered into an agreement which enables them to par-
ticipate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of Capi-
tal shares. Interest is charged to each participating Portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.08% per annum, payable at the end of each cal-
endar quarter, is accrued by each participating Portfolio based on its average
daily unused portion of the line of credit. During the six months ended April
30, 1998, the Portfolios had no borrowings under the agreement.
J. OTHER: At April 30, 1998, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
STERLING PARTNERS' PORTFOLIOS SHAREHOLDERS OWNERSHIP
- ----------------------------- ------------ ---------
<S> <C> <C>
Balanced................................................ 1 16%
Small Cap Value......................................... 1 15
</TABLE>
28
<PAGE>
UAM Funds Sterling Partners'
Portfolios
- --------------------------------------------------------------------------------
Officers and Directors
Norton H. Reamer William H. Park
Director, President and Chairman Vice President
John T. Bennett, Jr. Michael E. DeFao
Director Secretary
Nancy J. Dunn Karl O. Hartmann
Director Assistant Secretary
Philip D. English Gary L. French
Director Treasurer
William A. Humenuk Robert R. Flaherty
Director Assistant Treasurer
Charles H. Salisbury, Jr. Gordon M. Shone
Director and Executive Vice President Assistant Treasurer
Peter M. Whitman, Jr.
Director
- --------------------------------------------------------------------------------
Investment Adviser
Sterling Capital Management Company
One First Union Center
301 S. College Street
Suite 3200
Charlotte, NC 28202
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
-----------------------------------
Independent Accountants This report has been prepared for
Price Waterhouse LLP shareholders and may be distributed
160 Federal Street to others only if preceded or
Boston, MA 02110 accompanied by a current prospectus.
------------------------------------
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
<PAGE>
UAM Funds
Semi-Annual Report
The TS&W Portfolios
April 30, 1998
[LOGO OF UAM FUNDS APPEARS HERE]
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Shareholders' Letter........................................................ 1
Portfolio of Investments
Equity.................................................................... 7
Fixed Income.............................................................. 10
International Equity...................................................... 12
Statement of Assets and Liabilities......................................... 17
Statement of Operations..................................................... 18
Statement of Changes in Net Assets
Equity.................................................................... 19
Fixed Income.............................................................. 20
International Equity...................................................... 21
Financial Highlights
Equity.................................................................... 22
Fixed Income.............................................................. 23
International Equity...................................................... 24
Notes to Financial Statements............................................... 25
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
May 18, 1998
Dear Shareholders:
We are pleased to provide you with our semi-annual report for the period ended
April 30, 1998 on the UAM Funds' Portfolios managed by Thompson, Siegel &
Walmsley, Inc. (TS&W).
The TS&W Equity, Fixed Income and International Equity Portfolios have grown
since our last report of January 31, 1998. The Equity Portfolio's net assets
on April 30, 1998 were $104,994,944, the Fixed Income Portfolio's net assets
were $72,833,034 and the International Equity Portfolio was valued at
$131,208,087.
Participants in these Portfolios include the TS&W retirement plans, existing
TS&W clients, and others seeking investment management direction from TS&W. We
encourage many of our clients to pursue a balanced investment approach, util-
izing a combination of these Portfolios to achieve their specific investment
objectives.
The Portfolios are managed by the TS&W team of investment professionals util-
izing the same investment philosophy and decision making process which has
been in place at our firm for over two decades. We pursue a conservative ap-
proach that emphasizes relative values in the selection of securities. We
stress quality securities and a diversified approach in structuring portfo-
lios.
Our decision making process focuses on top-down economic analysis; fundamental
analysis of economic sectors, industries, and companies; and an analysis of
absolute and relative values in the market. Our long-term goal is to achieve
above-average results at below-average levels of risk over a complete economic
or market cycle.
TS&W EQUITY PORTFOLIO
The TS&W Equity Portfolio had total net assets of $104,994,944 on April 30,
1998, with $90,121,133 (85.8% of net assets) invested in common stocks, and
the remainder in cash reserves. For the six-month period ending April 30,
1998, the fund returned 16.23% versus the S&P 500 Index return of 22.50%.
We continue to take steps to cushion the Equity Portfolio against a reversal
in the stock market's enormous rally. In addition to a stock of "dry powder"
in the form of cash reserves, our portfolio displays value characteristics su-
perior to those of the overall market. For example, although current fashion
places little emphasis on dividends, the TS&W Equity Portfolio continues to
enjoy a significant yield premium to the overall stock market. Second quarter
additions like NationsBank, Citicorp, Stratus Computer, Toys "R' Us, Raychem,
and Nalco Chemical were avail-
1
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
able at valuation levels significantly below those of their industry peers or
the broader market. Although this conservative approach has restrained our re-
sults relative to the benchmark S&P 500, we believe that a less aggressive
posture is appropriate at this time.
Our analysis of earnings and interest rates leads us to conclude that the
stock market has overrun its fundamental support. Corporate profits will
likely prove to be the most important determinant of the stock market's course
over the balance of the year. A growing list of leading corporations announced
that earnings will fall short of Wall Street expectations in early 1998, and
we expect other market leaders to fall victim to earnings problems as the year
progresses. Our efforts are directed at locating securities in which the po-
tential for improving earnings is not widely recognized or where concerns
about short-term earnings trends mask significant long-term value.
A pair of fresh economic statistics describes the nearly perfect state of US
economic health. Gross Domestic Product (GDP), a broad measure of US economic
output, grew at an annual rate of 4.2% (adjusted for inflation) in the first
quarter of 1998. This marked the twenty-eighth consecutive quarter of expan-
sion for the US economy. Remarkably, the real output of the US economy has
grown by nearly 60% over the past fifteen years, interrupted only by the rela-
tively mild nine-month recession of late 1990 and early 1991. Inflation, once
accepted to be the evil twin of robust economic growth, has remained subdued.
A comprehensive measure of prices paid by US purchasers of goods and services
expanded by only 1.4% over the year ended March 31, the lowest rate in 34
years. This combination of a strong and durable economic expansion and rela-
tively stable prices is "as good as it gets" for investors in US stocks.
Corporate profit growth has been a key contributor to the long market rally
since the 1990-1991 recession. However, earnings estimates for S&P 500 compa-
nies have been trending downward over the past six months as analysts assess
the impact of the Asian economic crisis and incorporate profit warnings from
corporate managers. In particular, labor costs are rising more rapidly than
the general level of prices. In an environment of unusually low inflation and
slowing sales growth, corporate profit margins will be squeezed unless compa-
nies can continue to wring productivity gains from workers.
Declining interest rates also play a starring role in the bull market of the
1990s. But the path of interest rates over the past six months does not suffi-
ciently explain the stock market's buoyancy. The rate on a ten-year Treasury
note declined by about .2% over the past half year, a modest change relative
to the stock market advance.
2
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
Psychology and emotion, less tangible but equally powerful forces, are now
driving the stock market higher. Investors large and small are increasingly
convinced that the prevailing mixture of growth without inflation will persist
and that any retreat in the stock market is an opportunity to buy. Failure to
maximize one's stock market exposure is judged to carry onerous opportunity
cost. According to Ned Davis Research, the percentage of household financial
assets invested in stocks is near an all time high. New cash continued to
stream into equity mutual funds at a daily rate of almost $790 million during
the latest three months. This inflow, more than any other single factor, is
responsible for the stock market's recent ascent.
The positive sentiment toward stocks is illustrated by the dramatic increase
in the price-to-earnings multiple of the S&P 500. Between December 31, 1997
and March 31, 1998, the price to earnings multiple of the index based on esti-
mated 1998 earnings increased from 19.5 to 22.9. The revaluation is most pro-
nounced among the 25 largest stocks, which account for one-third of the
index's value. These largest companies saw their price to earnings multiple
rise from 24.2 at the end of 1997 to 29.7 at the end of March 1998. These
lofty prices suggest that investors have chosen to overlook the mediocre earn-
ings growth posted in the first quarter. As they have moved higher, we have
reduced the Equity Portfolio's exposure to this exclusive group of stocks.
TS&W FIXED INCOME PORTFOLIO
The TS&W Fixed Income Portfolio had total net assets of $72,833,034 on April
30, 1998, and a total return for the six months ended April 30, 1998 of 3.49%.
The Portfolio return for the most recent quarter ending April 30, 1998, was
0.52% versus the Lehman Government/Corporate Index, our benchmark index, re-
turn of 0.61%.
Domestic economic growth for the first four months of 1998 was surprisingly
strong. Most analysts expected the U.S. economy to slow during early 1998.
These expectations were based on 1) an eroding U.S. trade balance with Asia 2)
slower domestic consumption, and 3) capital investment tapering off. Although
U.S. exports have been reduced by the Asian crisis, domestic consumption has
not slowed, and business investment has accelerated. The most noteworthy eco-
nomic trend of early 1998 has been the continued disinflation, with the core
rate dropping to the lowest level in more than thirty years.
Interest rates were essentially unchanged for the first four months of 1998
despite the string of positive readings on inflation. This is best represented
by the yield on the ten year Treasury that ended April at 5.7% versus 5.8% at
the close of 1997. Similarly, the yield on the thirty-year Treasury bond, a
gauge of the market's sensitivity to potential trends in inflation, stood at
6.0% at the end of April versus
3
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
a year end level of 5.9%. While rates are essentially unchanged from the end
of 1997, several 25 to 30 basis point swings occurred during the first four
months of 1998. In January, for example, the yield on long term Treasury is-
sues dropped below 5.7%.
The TS&W Fixed Income Portfolio began and ended the second fiscal quarter with
an effective maturity of 7.9 years, and a duration of 4.9 years - slightly
shorter than the benchmark index duration of 5.4 years. The Portfolio was com-
posed of 49.8% Treasury issues, 31.7% corporate bonds, 2.0% overnight funds,
and 15.2% Agency securities. During the recent quarter the Portfolio experi-
enced a net inflow of funds. These new funds were invested in a combination of
corporate and Treasury securities.
Our outlook is for interest rates to stay in a narrow trading range for the
immediate future. This expectation is based on our view that the economy will
continue expanding without inflationary pressures rising significantly. The
Federal Government's budget surplus will cap the supply of new Treasuries, re-
lieving a source of pressure on interest rates. On the other hand, bond in-
vestors will view the current employment picture with uneasiness. While wage
pressures have yet to be a significant factor in today's business environment,
corporations have to pay more for certain kinds of skilled labor. This ulti-
mately could translate into either increased prices for goods or compressed
profit margins. If increased prices materialize, the Federal Reserve would
raise short-term rates to remove inflationary expectations from business plan-
ning.
TS&W INTERNATIONAL EQUITY PORTFOLIO
The TS&W International Equity Portfolio had total net assets of $131,208,087
on April 30, 1998, and a total return for the six months ended April 30, 1998
of 17.90%. The Portfolio returned 16.5% for the most recent quarter ending
April 30, 1998. The Morgan Stanley Capital International EAFE Index ("EAFE"),
our benchmark index, rose 10.63% during the quarter.
The quarter was characterized by two major trends: the Japanese equity market
shrinking by almost 7%, and the rest of EAFE achieving over 16% gains. The
Japanese economy remains sluggish and teetering on the bring of recession. A
trumpeted government stimulus package failed to inspire confidence that the
economy will be righted soon. The stock market is reacting to declining con-
sumer expenditures, unemployment levels at 45 year highs, and weak sales of
Japanese products to Asian countries struggling with their own newly weakened
currencies.
European markets, in contrast, were rocketing to one of their finest quarterly
performances on record. Lower interest rates, ample liquidity, corporate ac-
tions both rumored and actual, as well as earnings recoveries, boosted inter-
est in equities. The investment themes of corporate restructuring, shareholder
value enhancement, and equity culture development are underpinning the rally.
4
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
In Europe the winning sectors were financials, telecommunications, and elec-
tronics. In contrast, pharmaceuticals were the poorest performing sector.
Countries containing a relatively high proportion of drug stocks, e.g., the UK
and Switzerland, lagged.
Outside Japan, the rest of Asia performed relatively well, rising 8% for the
quarter. However, nearly all gains occurred in the early part of the quarter
as a "relief rally" after the dreadful falls at the end of 1997. While cur-
rency fluctuations have moderated, the long, slow rebuilding task is just be-
ginning. Latin America also performed well for the quarter but with less vola-
tility. This reflects improving fundamentals and rising confidence. Outside
investors are beginning to favorably differentiate Latin investments from
those of Asia.
The Portfolio continues a significant underweighting in Japan. Holdings are
concentrated in sectors where a weaker yen should be beneficial or where com-
panies embody a new mindset of emphasizing profits. The Portfolio will con-
tinue to overweight Europe as we expect further benefits from an accommodating
monetary policy and the impetus of economic restructuring and de-regulation.
The world economic recovery has further to run, even if U.S. growth slows. The
rest of the world is, in widely varying degrees, busily restructuring its in-
dustrial base. Europeans are progressing towards implementation of a common
currency to reduce transaction costs and to unify business practices. Other
ideas to enhance economic performance are being examined and tried. There is
considerable scope for reform. In addition corporate earnings expectations are
not as stretched as they are in the U.S.
Thus, any stock market slowdown in the U.S. should adversely impact the rest
of the world only temporarily. Further, the stronger dollar provides a major
competitive boost to the rest of the world, much of which is being helped al-
ready by loose monetary policy. Continental Europe will benefit especially
from structural changes.
Respectfully submitted,
/s/ John T. Siegel
John T. Siegel, CFA
Managing Director
The investment results presented in the Adviser's letter represent past per-
formance and should not be construed as a guarantee of future results. The in-
vestment return and principal value of an investment will fluctuate so that an
investor's shares, when redeemed, may be worth more or less than their origi-
nal cost. For a complete discussion of the risks associated with international
investing, please refer to the TS&W Portfolios' Prospectus.
5
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
DEFINITION OF THE COMPARATIVE INDICES
-------------------------------------
The S&P 500 Index is an unmanaged index composed of 400 industrial, 40 finan-
cial, 40 utilities and 20 transportation stocks.
The Lehman Brothers Government/Corporate Index is an unmanaged index composed
of a combination of the Government and Corporate Bond Indices. The Government
Index includes public obligations of the U.S. Treasury, issues of Government
agencies, and corporate debt backed by the U.S. Government. The Corporate Bond
Index includes fixed-rate nonconvertible corporate debt. Also included are
Yankee Bonds and nonconvertible debt issued by or guaranteed by foreign or in-
ternational governments and agencies. All issues are investment grade (BBB) or
higher, with maturities of at least one year and outstanding par value of at
least $100 million for U.S. Government issues and $25 million for others. Any
security downgraded during the month is held in the index until month-end and
then removed. All returns are market value weighted inclusive of accrued in-
come.
The Morgan Stanley Capital International EAFE Index is an unmanaged index com-
posed of arithmetic, market value weighted averages of the performance of over
900 securities listed on the stock exchanges of countries in Europe, Australia
and the Far East.
Comparisons of performance assume reinvestment of dividends.
Please note that one cannot invest in an unmanaged index.
6
<PAGE>
UAM FUNDS TS&W EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
COMMON STOCKS - 85.8%
SHARES VALUE+
------- ------------
AEROSPACE & DEFENSE - 2.2%
Raytheon Co. ........................................... 41,110 $ 2,330,423
------------
BANKS - 8.3%
Citicorp................................................ 15,000 2,257,500
Crestar Financial Corp. ................................ 21,590 1,291,352
J.P. Morgan & Co. ...................................... 15,000 1,968,750
National City Corp. .................................... 11,000 761,750
NationsBank Corp. ...................................... 32,500 2,461,875
------------
8,741,227
------------
BEVERAGES, FOOD & TOBACCO - 2.2%
Archer-Daniels-Midland Co. ............................. 70,875 1,523,813
Procter & Gamble Co. ................................... 10,000 821,875
------------
2,345,688
------------
CAPITAL EQUIPMENT - 4.8%
Albany International Corp., Class A..................... 39,325 1,120,762
Grainger (W.W.), Inc. .................................. 17,000 1,851,938
Raychem Corp. .......................................... 51,300 2,061,619
------------
5,034,319
------------
CHEMICALS - 1.2%
Nalco Chemical Co. ..................................... 32,440 1,289,490
------------
COMPUTERS - 1.3%
*Stratus Computer, Inc. ................................ 30,185 1,314,934
------------
CONSTRUCTION - 0.9%
Ingersoll-Rand Co. ..................................... 20,300 935,068
------------
CONSUMER CYCLICAL - 2.5%
Masco Corp. ............................................ 44,920 2,605,360
------------
CONSUMER STAPLES - 4.8%
International Flavors & Fragrances, Inc. ............... 62,500 3,058,594
Unilever N.V.--New York Shares.......................... 26,000 1,940,250
------------
4,998,844
------------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
UAM FUNDS TS&W EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
SHARES VALUE+
------- ------------
ELECTRONICS - 7.2%
AMP, Inc. .............................................. 42,000 $ 1,651,125
Electronic Data Systems Corp. .......................... 69,000 2,967,000
Hewlett-Packard Co. .................................... 27,000 2,033,438
Motorola, Inc. ......................................... 17,000 945,625
------------
7,597,188
------------
ENERGY - 12.6%
Dresser Industries, Inc. ............................... 45,050 2,382,018
Elf Aquitaine ADR....................................... 37,479 2,433,793
Enron Corp. ............................................ 60,225 2,962,317
Schlumberger Ltd. ...................................... 13,340 1,105,553
Texaco, Inc. ........................................... 30,000 1,845,000
Unocal Corp. ........................................... 60,000 2,456,250
------------
13,184,931
------------
FOOD - 1.4%
Bestfoods............................................... 26,740 1,467,357
------------
HEALTH CARE - 2.5%
Johnson & Johnson....................................... 37,300 2,662,287
------------
INSURANCE - 0.9%
Chubb Corp. ............................................ 12,500 986,719
------------
LODGING & RESTAURANTS - 2.0%
McDonald's Corp. ....................................... 34,430 2,130,356
------------
MANUFACTURING - 2.3%
Pall Corp. ............................................. 125,000 2,453,125
------------
PHARMACEUTICALS - 6.6%
American Home Products Corp. ........................... 26,300 2,449,187
Merck & Co., Inc. ...................................... 17,500 2,108,750
Pharmacia & Upjohn, Inc. ............................... 55,000 2,313,438
------------
6,871,375
------------
REAL ESTATE INVESTMENT TRUSTS - 3.2%
Liberty Property Trust.................................. 47,500 1,214,218
Merry Land & Investment Co., Inc. ...................... 52,400 1,103,675
United Dominion Realty Trust............................ 75,000 1,017,188
------------
3,335,081
------------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
UAM FUNDS TS&W EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
SHARES VALUE+
----------- ------------
RETAIL - 2.3%
*Toys "R' Us, Inc. ................................ 49,200 $ 1,356,075
Wal-Mart Stores, Inc. ............................. 20,000 1,011,250
------------
2,367,325
------------
SERVICES - 3.0%
Burlington Northern, Inc. ......................... 10,000 990,000
Waste Management, Inc. ............................ 66,320 2,221,720
------------
3,211,720
------------
TECHNOLOGY - 3.8%
Corning, Inc. ..................................... 53,300 2,132,000
B.F. Goodrich Co. ................................. 33,600 1,808,100
------------
3,940,100
------------
UTILITIES - 9.8%
Dominion Resources, Inc. .......................... 47,650 1,885,153
GTE Corp. ......................................... 45,000 2,629,688
MCI Communications Corp. .......................... 37,700 1,894,425
Pacificorp......................................... 98,600 2,292,450
Southern Co. ...................................... 61,000 1,616,500
------------
10,318,216
------------
TOTAL COMMON STOCKS (Cost $67,963,051)......................... 90,121,133
------------
SHORT-TERM INVESTMENTS - 15.2%
FACE
AMOUNT
-----------
REPURCHASE AGREEMENT - 15.2%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $15,949,379,
collateralized by $13,904,416 of various U.S.
Treasury Obligations, 5.50%-14.00%, due 5/15/04-
11/15/27, valued at $16,128,227 (Cost
$15,947,000)...................................... $15,947,000 15,947,000
------------
TOTAL INVESTMENTS - 101.0% (Cost $83,910,051) (a).............. 106,068,133
------------
OTHER ASSETS AND LIABILITIES (NET) - (1.0%).................... (1,073,189)
------------
NET ASSETS - 100%.............................................. $104,994,944
============
+ See Note A to Financial Statements.
* Non-Income Producing Security.
ADR American Depositary Receipt
(a) The cost for federal income tax purposes was $83,910,051. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$22,158,082. This consisted of aggregate gross unrealized appreciation for
all securities of $22,822,476 and aggregate gross unrealized depreciation
for all securities of $664,394.
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
UAM FUNDS TS&W FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
U.S. GOVERNMENT SECURITIES - 49.8%
FACE
AMOUNT VALUE+
---------- ----------
U.S. TREASURY BONDS - 21.4%
6.125%, 8/31/98........................................ $1,500,000 $1,503,780
6.25%, 8/15/23......................................... 3,900,000 4,010,135
7.125%, 2/15/23........................................ 5,050,000 5,748,970
8.125%, 8/15/19........................................ 3,490,000 4,354,787
----------
15,617,672
----------
U.S. TREASURY NOTES - 28.4%
6.25%, 8/31/00......................................... 3,235,000 3,280,063
6.375%, 1/15/99-1/15/00................................ 6,325,000 6,390,566
6.50%, 8/15/05......................................... 3,000,000 3,132,090
6.875%, 5/15/06........................................ 5,000,000 5,354,550
7.25%, 8/15/04......................................... 2,350,000 2,538,681
----------
20,695,950
----------
TOTAL U.S. GOVERNMENT SECURITIES (Cost $34,425,101)............... 36,313,622
----------
AGENCY SECURITIES - 15.2%
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.0%
6.00%, 2/1/02.......................................... 2,902,887 2,897,140
----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 6.2%
6.50%, 2/1/03.......................................... 2,374,275 2,387,631
7.00%, 3/1/11.......................................... 2,133,744 2,172,418
----------
4,560,049
----------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 5.0%
7.50%, 1/15/07......................................... 959 985
7.50%, 12/15/22........................................ 1,605,752 1,649,910
9.00%, 8/15/24......................................... 1,840,613 1,977,509
12.50%, 11/15/13....................................... 5,549 6,461
----------
3,634,865
----------
TOTAL AGENCY SECURITIES (Cost $10,888,167)........................ 11,092,054
----------
CORPORATE OBLIGATIONS - 31.7%
BEVERAGES, FOOD & TOBACCO - 4.2%
Phillip Morris Cos., Inc. 7.25%, 9/15/01............... 3,000,000 3,075,000
----------
ENERGY - 4.2%
Enron Corp. 6.625%, 11/15/05........................... 3,000,000 3,030,000
----------
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
UAM FUNDS TS&W FIXED INCOME PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
CORPORATE OBLIGATIONS - CONTINUED
FACE
AMOUNT VALUE+
---------- -----------
FINANCIAL SERVICES - 17.3%
CIT Group Holdings 6.375%, 8/1/02................... $3,000,000 $ 3,015,000
Countrywide Funding Corp. 8.25%, 7/15/02............ 2,000,000 2,130,000
Ford Motor Credit Co. 7.00%, 9/25/01................ 3,000,000 3,082,500
General Electric Capital Corp. 6.50%, 11/1/06....... 1,750,000 1,789,375
Lehman Brothers, Inc. 7.125%, 7/15/02............... 2,500,000 2,568,750
-----------
12,585,625
-----------
INDUSTRIAL - 3.6%
WMX Technologies, Inc. 6.25%, 10/15/00.............. 2,625,000 2,625,000
-----------
TRANSPORTATION - 2.4%
General Motors Co., 6.25%, 5/1/05................... 1,750,000 1,747,813
-----------
TOTAL CORPORATE OBLIGATIONS (Cost $22,809,111)................. 23,063,438
-----------
SHORT-TERM INVESTMENT - 2.0%
REPURCHASE AGREEMENT - 2.0%
Chase Securities, Inc. 5.37%, dated 4/30/98, due
5/1/98, to be repurchased at $1,430,213, collater-
alized by $1,246,837 of various U.S. Treasury Ob-
ligations, 5.50%-14.00%, due 5/15/04-11/15/27,
valued at $1,446,251 (Cost $1,430,000)............. 1,430,000 1,430,000
-----------
TOTAL INVESTMENTS - 98.7% (Cost $69,552,379) (a)................ 71,899,114
-----------
OTHER ASSETS AND LIABILITIES (NET) - 1.3%....................... 933,920
-----------
NET ASSETS - 100%............................................... $72,833,034
===========
+ See Note A to Financial Statements.
(a) The cost for federal income tax purposes was $69,552,379. At April 30,
1998, net unrealized appreciation for all securities based on tax cost was
$2,346,735. This consisted of aggregate gross unrealized appreciation for
all securities of $2,358,600 and aggregate gross unrealized depreciation
for all securities of $11,865.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - 92.6%
SHARES VALUE+
------- -----------
ARGENTINA - 1.5%
YPF S.A. ADR............................................. 58,000 $ 2,022,750
-----------
AUSTRALIA - 2.5%
Brambles Industries Ltd.................................. 106,000 2,184,634
WMC Ltd.................................................. 320,994 1,142,715
-----------
3,327,349
-----------
BRAZIL - 1.6%
Telebras S.A. ADR........................................ 17,000 2,070,813
-----------
DENMARK - 2.0%
Novo Nordisk A/S, Class B................................ 16,000 2,597,631
-----------
FINLAND - 1.8%
Instrumentarium Group, Class A........................... 37,000 2,299,658
-----------
FRANCE - 9.2%
Alcatel Alsthom.......................................... 13,000 2,411,412
AXA-UAP.................................................. 15,500 1,820,496
Castorama Dubois......................................... 5,000 826,818
Cie Financiere de Paribas, Class A....................... 24,000 2,555,315
Elf Aquitaine S.A........................................ 12,463 1,635,885
Elf Aquitaine S.A. ADR................................... 9,227 599,178
Valeo S.A................................................ 22,115 2,200,095
-----------
12,049,199
-----------
GERMANY - 8.3%
adidas AG................................................ 12,000 1,987,730
Deutsche Lufthansa AG.................................... 100,000 2,339,654
Karstadt AG.............................................. 4,000 1,807,027
Mannesmann AG............................................ 3,681 2,902,919
Veba AG.................................................. 28,000 1,847,406
-----------
10,884,736
-----------
HONG KONG - 3.2%
HSBC Holdings plc........................................ 94,518 2,696,853
Hutchison Whampoa Ltd.................................... 250,000 1,546,059
-----------
4,242,912
-----------
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
SHARES VALUE+
------- ----------
INDIA - 1.2%
*Indian Opportunities Fund Ltd............................. 156,183 $1,542,307
----------
ISRAEL - 1.0%
*Scitex Corp., Ltd......................................... 100,000 1,331,250
----------
JAPAN - 8.1%
Denso Corp., Ltd.......................................... 74,000 1,274,028
East Japan Railway Co..................................... 200 998,941
Hitachi Ltd............................................... 193,000 1,386,083
Nomura Securities Co., Ltd. .............................. 140,000 1,711,064
Ricoh Co., Ltd............................................ 142,000 1,473,301
Riso Kagaku............................................... 27,200 1,422,370
Takefuji Corp............................................. 32,000 1,683,063
Yamatake-Honeywell Co., Ltd............................... 59,000 652,331
----------
10,601,181
----------
KOREA - 0.9%
Samsung Electronics Co.................................... 22,482 1,246,193
----------
MEXICO - 3.1%
*Banacci, Class B.......................................... 600,000 1,862,849
Panamerica Beverages, Inc., Class A....................... 56,000 2,233,000
----------
4,095,849
----------
NETHERLANDS - 6.7%
*ASM Lithography Holding N.V............................... 25,000 2,271,151
ING Groep N.V............................................. 36,076 2,346,334
Koninklijke Emballage Industrie Van Leer.................. 80,000 2,040,816
Philips Electronics N.V................................... 24,000 2,116,109
----------
8,774,410
----------
NORWAY - 1.7%
*Petroleum Geo-Services ASA................................ 35,000 2,271,752
----------
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
COMMON STOCKS - CONTINUED
SHARES VALUE+
------- -----------
SINGAPORE - 2.8%
Clipsal Industries Ltd................................... 329,000 $ 473,760
Datacraft Asia Ltd....................................... 948,000 3,185,280
-----------
3,659,040
-----------
SPAIN - 3.3%
ENDESA................................................... 91,200 2,216,209
Repsol S.A. ADR.......................................... 39,000 2,132,813
-----------
4,349,022
-----------
SWEDEN - 11.3%
*Assa Abloy AB, Class B................................... 29,700 1,036,395
Ericsson (LM) ADR........................................ 42,700 2,191,044
Europolitans Holdings AB................................. 34,000 2,109,236
Getinge Industrier AB, Class B........................... 80,000 1,778,375
Scandic Hotels AB........................................ 91,000 3,469,512
Sparbanken Sverige AB, Class A........................... 75,000 2,345,749
Tornet Fastighets AB..................................... 125,000 1,898,247
-----------
14,828,558
-----------
SWITZERLAND - 5.2%
Credit Suisse Group (Registered)......................... 12,000 2,640,176
Roche Holding AG, Genusschein............................ 215 2,179,529
Sika Finanz AG (Bearer).................................. 5,000 2,000,133
-----------
6,819,838
-----------
UNITED KINGDOM - 17.2%
British Steel Co. plc ADR................................ 22,000 598,125
First Leisure Corp. plc.................................. 250,000 1,463,358
*Flextech plc............................................. 183,000 1,514,951
Geest plc................................................ 375,000 3,178,099
Misys plc................................................ 30,000 1,442,452
Norwich Union plc........................................ 325,000 2,428,233
Psion plc................................................ 265,000 1,223,200
RTZ Corp. plc (Registered)............................... 104,227 1,496,452
Railtrack Group plc...................................... 109,000 1,991,546
Rolls-Royce plc.......................................... 418,556 1,952,991
TI Group plc............................................. 179,165 1,609,051
TransTec plc............................................. 840,000 1,036,057
Unilever plc............................................. 244,000 2,599,391
-----------
22,533,906
-----------
TOTAL COMMON STOCKS (Cost $85,873,231)........................... 121,548,354
-----------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- -------------------------------------------------------------------------------
CONVERTIBLE BONDS - 4.3%
FACE
AMOUNT VALUE+
-------------- ------------
JAPAN - 3.0%
Credit Saison Co. Ltd., Series 1, 0.50%,
03/31/03..................................... JPY140,000,000 $ 1,451,491
Sony Corp., Series 4, 1.40%,
03/31/05..................................... 225,000,000 2,439,174
------------
3,890,665
------------
SWITZERLAND - 1.3%
Novartis AG 2.00%, 10/6/02.................... CHF 1,100,000 1,706,375
------------
TOTAL CONVERTIBLE BONDS (Cost $4,890,924)..................... 5,597,040
------------
RIGHTS - 0.0%
NO. OF
RIGHTS
--------------
SWEDEN - 0.0%
*Mandamus AB (Cost $0) ....................... 90,000 --
------------
SHORT-TERM INVESTMENTS-1.4%
FACE
AMOUNT
--------------
REPURCHASE AGREEMENT - 1.4%
Chase Securities, Inc. 5.37%, dated 4/30/98,
due 5/1/98, to be repurchased at $1,794,268,
collateralized by $1,564,214 of various
U.S. Treasury Obligations, 5.50%-14.00%,
due 5/15/04-11/15/27, valued at $1,814,388
(Cost $1,794,000).............................. $ 1,794,000 1,794,000
------------
TOTAL INVESTMENTS - 98.3% (Cost $92,558,155) (a).............. 128,939,394
------------
OTHER ASSETS AND LIABILITIES - 1.7%........................... 2,268,693
------------
NET ASSETS - 100%............................................. $131,208,087
============
+See Note A to Financial Statements.
*Non-Income Producing Security
ADR American Depositary Receipt
CHF Swiss Franc
JPY Japanese Yen
(a) The cost for federal income tax purposes was $92,558,155. At April 30, 1998,
net unrealized appreciation for all securities based on tax cost was
$36,381,239. This consisted of aggregate gross unrealized appreciation for
all securities of $40,393,049 and aggregate gross unrealized depreciation
for all securities of $4,011,810.
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
At April 30, 1998 sector diversification of the Portfolio was as follows:
% OF
NET MARKET
ASSETS VALUE
SECTOR DIVERSIFICATION ------ ------------
Aerospace & Defense...................................... 1.5% $ 1,952,991
Banks.................................................... 7.3 9,545,627
Beverages, Food & Tobacco................................ 4.1 5,411,099
Broadcasting & Publishing................................ 1.1 1,514,951
Capital Equipment........................................ 2.1 2,747,329
Communications........................................... 1.8 2,411,412
Construction............................................. 1.5 2,000,133
Consumer Cyclical........................................ 1.5 1,987,730
Consumer Non-Durables.................................... 2.0 2,599,391
Electronics.............................................. 7.3 9,551,812
Energy................................................... 6.6 8,662,378
Entertainment & Leisure.................................. 1.1 1,463,358
Financial Services....................................... 5.8 7,655,818
Health Care.............................................. 4.8 6,257,562
Home Furnishings & Appliances............................ 2.5 3,339,308
Industrial............................................... 4.7 6,090,760
Insurance................................................ 5.0 6,595,062
Lodging & Restaurants.................................... 2.6 3,469,512
Machine.................................................. 3.0 3,938,976
Manufacturing............................................ 0.8 1,036,395
Metals................................................... 2.5 3,237,292
Multi-Industry........................................... 5.2 6,738,233
Office Equipment......................................... 1.1 1,422,370
Pharmaceuticals.......................................... 2.0 2,597,631
Real Estate.............................................. 1.4 1,898,248
Repurchase Agreement..................................... 1.4 1,794,000
Retail................................................... 1.4 1,807,027
Services................................................. 3.4 4,453,904
Telecommunications....................................... 5.6 7,365,328
Transportation........................................... 4.1 5,330,141
Utilities................................................ 3.1 4,063,616
----- ------------
TOTAL INVESTMENTS....................................... 98.3% $128,939,394
OTHER ASSETS AND LIABILITIES (NET)....................... 1.7 2,268,693
----- ------------
NET ASSETS.............................................. 100.0% $131,208,087
===== ============
The accompanying notes are an integral part of the financial statements.
16
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
TS&W TS&W
TS&W FIXED INTERNATIONAL
EQUITY INCOME EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
------------ ----------- -------------
ASSETS
Investments, at Cost.................. $ 83,910,051 $69,552,379 $ 92,558,155
============ =========== ============
Investments, at Value (Including
Repurchase Agreements of $15,947,000,
$1,430,000 and $1,794,000,
respectively......................... $106,068,133 $71,899,114 $128,939,394
Foreign Currency, at Value (Cost
$172,165)............................ -- -- 147,393
Cash.................................. 118 221 3,218
Receivable for Investments Sold....... -- -- 938,869
Dividends Receivable.................. 135,890 -- 432,176
Receivable for Portfolio Shares Sold.. 1,153 -- 970,503
Foreign Withholding Tax Reclaim
Receivable........................... -- -- 56,135
Interest Receivable................... 2,379 995,834 4,058
Other Assets.......................... 749 505 871
------------ ----------- ------------
Total Assets......................... 106,208,422 72,895,674 131,492,617
LIABILITIES
Payable for Investments Purchased..... 1,095,088 -- 7,441
Payable for Portfolio Shares
Redeemed............................. 20,000 -- --
Payable for Investment Advisory Fees--
Note B............................... 64,792 26,490 106,597
Payable for Administrative Fees--Note
C.................................... 12,418 8,151 15,434
Payable for Custodian Fees--Note D.... 7,153 6,008 142,702
Payable for Account Services Fees--
Note F............................... 420 92 858
Payable for Directors' Fees--Note G... 641 647 735
Payable for Dividends Declared........ -- 10,392 --
Other Liabilities..................... 12,966 10,860 10,763
------------ ----------- ------------
Total Liabilities.................... 1,213,478 62,640 284,530
------------ ----------- ------------
NET ASSETS............................ $104,994,944 $72,833,034 $131,208,087
============ =========== ============
NET ASSETS CONSIST OF:
Paid in Capital....................... $ 75,438,235 $70,355,262 $ 96,264,759
Undistributed Net Investment Income
(Loss)............................... 236,800 (18,624) 231,653
Accumulated Net Realized Gain (Loss).. 7,161,827 149,661 (1,626,744)
Unrealized Appreciation/Depreciation.. 22,158,082 2,346,735 36,338,419
------------ ----------- ------------
NET ASSETS............................ $104,994,944 $72,833,034 $131,208,087
============ =========== ============
INSTITUTIONAL CLASS SHARES
Shares Issued and Outstanding ($0.001
par value) (Authorized 25,000,000)... 6,593,457 6,867,730 7,565,314
Net Asset Value, Offering and
Redemption Price Per Share........... $15.92 $10.61 $17.34
============ =========== ============
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
FOR THE SIX MONTHS ENDED
APRIL 30, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
TS&W TS&W
TS&W FIXED INTERNATIONAL
EQUITY INCOME EQUITY
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ---------- -------------
INVESTMENT INCOME
Dividends............................... $ 1,055,088 $ -- $ 932,112
Interest................................ 292,985 2,156,780 221,196
Less: Foreign Taxes Withheld............ -- -- (111,461)
----------- ---------- -----------
TOTAL INCOME........................... 1,348,073 2,156,780 1,041,847
----------- ---------- -----------
EXPENSES
Investment Advisory Fees--Note B........ 375,168 154,271 583,802
Administrative Fees--Note C............. 77,340 53,761 91,068
Custodian Fees--Note D.................. 5,899 3,591 45,647
Account Services Fees--Note F........... 4,165 2,139 1,412
Directors' Fees--Note G................. 1,695 1,558 1,862
Other Expenses.......................... 27,005 24,019 28,479
----------- ---------- -----------
Net Expenses Before Expense Offset..... 491,272 239,339 752,270
Expense Offset--Note A.................. (1,518) -- (674)
----------- ---------- -----------
Net Expenses After Expense Offset...... 489,754 239,339 751,596
----------- ---------- -----------
NET INVESTMENT INCOME................... 858,319 1,917,441 290,251
----------- ---------- -----------
NET REALIZED GAIN (LOSS) ON:
Investments............................ 7,335,050 260,443 (1,298,925)
Foreign Exchange Transactions.......... -- -- (323,227)
----------- ---------- -----------
Total Net Realized Gain (Loss) on
Investments and Foreign Exchange
Transactions.......................... 7,335,050 260,443 (1,622,152)
----------- ---------- -----------
NET CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments............................ 7,061,763 178,434 21,209,871
Foreign Exchange Translations.......... -- -- (42,820)
----------- ---------- -----------
TOTAL NET CHANGE IN UNREALIZED
APPRECATION/DEPRECIATION............... 7,061,763 178,434 21,167,051
----------- ---------- -----------
NET GAIN ON INVESTMENTS AND FOREIGN
EXCHANGE TRANSACTIONS.................. 14,396,813 438,877 19,544,899
----------- ---------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $15,255,132 $2,356,318 $19,835,150
=========== ========== ===========
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
UAM FUNDS TS&W EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income............................ $ 858,319 $ 1,565,390
Net Realized Gain................................ 7,335,050 16,195,514
Net Change in Unrealized
Appreciation/Depreciation....................... 7,061,763 2,896,650
------------ -----------
Net Increase in Net Assets Resulting from
Operations...................................... 15,255,132 20,657,554
============ ===========
DISTRIBUTIONS:
Net Investment Income............................. (784,661) (1,548,754)
Net Realized Gain................................. (16,324,477) (6,706,841)
------------ -----------
Total Distributions.............................. (17,109,138) (8,255,595)
============ ===========
CAPITAL SHARE TRANSACTIONS: (1)
Issued........................................... 5,877,882 9,013,129
In Lieu of Cash Distributions.................... 16,012,769 7,810,103
Redeemed......................................... (10,623,435) (15,197,710)
------------ -----------
Net Increase from Capital Share Transactions..... 11,267,216 1,625,522
============ ===========
Total Increase................................... 9,413,210 14,027,481
Net Assets:
Beginning of Period.............................. 95,581,734 81,554,253
------------ -----------
End of Period (including undistributed net
investment income of $236,800 and $163,142,
respectively)................................... $104,994,944 $95,581,734
============ ===========
(1) Shares Issued and Redeemed:
Shares Issued.................................... 385,621 578,626
In Lieu of Cash Distributions.................... 1,111,680 559,828
Shares Redeemed.................................. (690,059) (983,929)
------------ -----------
807,242 154,525
============ ===========
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
UAM FUNDS TS&W FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- -----------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 1,917,441 $ 3,680,206
Net Realized Gain............................... 260,443 48,016
Net Change in Unrealized
Appreciation/Depreciation...................... 178,434 1,493,638
----------- -----------
Net Increase in Net Assets Resulting from
Operations..................................... 2,356,318 5,221,860
----------- -----------
DISTRIBUTIONS:
Net Investment Income........................... (1,917,441) (3,668,126)
In Excess of Net Investment Income.............. -- (12,080)
----------- -----------
Total Distributions............................. (1,917,441) (3,680,206)
----------- -----------
CAPITAL SHARE TRANSACTIONS: (1)
Issued.......................................... 7,989,517 9,167,888
In Lieu of Cash Distributions................... 1,860,735 3,572,636
Redeemed........................................ (5,442,747) (7,987,804)
----------- -----------
Net Increase from Capital Share Transactions.... 4,407,505 4,752,720
----------- -----------
Total Increase.................................. 4,846,382 6,294,374
Net Assets:
Beginning of Period............................. 67,986,652 61,692,278
----------- -----------
End of Period (including net investment loss of
$(18,624) and $(18,624), respectively.......... $72,833,034 $67,986,652
=========== ===========
(1) Shares Issued and Redeemed:
Shares Issued................................... 751,565 892,974
In Lieu of Cash Distributions................... 175,387 347,371
Shares Redeemed................................. (512,140) (775,004)
----------- -----------
414,812 465,341
=========== ===========
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED YEAR ENDED
APRIL 30, 1998 OCTOBER 31,
(UNAUDITED) 1997
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income........................... $ 290,251 $ 551,849
Net Realized Gain (Loss)........................ (1,622,152) 2,555,268
Net Change in Unrealized
Appreciation/Depreciation...................... 21,167,051 5,073,444
------------ ------------
Net Increase in Net Assets Resulting from
Operations..................................... 19,835,150 8,180,561
============ ============
DISTRIBUTIONS:
Net Investment Income............................ (588,510) (808,398)
Net Realized Gain................................ (2,523,237) (639,370)
------------ ------------
Total Distributions............................. (3,111,747) (1,447,768)
============ ============
CAPITAL SHARE TRANSACTIONS: (1)
Issued--Regular................................. 12,904,915 51,429,847
In Lieu of Cash Distributions................... 3,031,556 1,434,895
Redeemed........................................ (16,952,160) (47,436,454)
------------ ------------
Net Increase (Decrease) from Capital Share
Transactions................................... (1,015,689) 5,428,288
------------ ------------
Total Increase.................................. 15,707,714 12,161,081
Net Assets:
Beginning of Period............................. 115,500,373 103,339,292
------------ ------------
End of Period (including undistributed net
investment income of $231,653 and $529,912,
respectively).................................. $131,208,087 $115,500,373
============ ============
(1) Shares Issued and Redeemed:
Shares Issued................................... 802,176 3,212,502
In Lieu of Cash Distributions................... 210,818 100,342
Shares Redeemed................................. (1,073,986) (2,951,613)
------------ ------------
(60,992) 361,231
============ ============
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
UAM FUNDS TS&W EQUITY PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 16.52 $ 14.48 $ 12.47 $ 11.23 $ 11.02 $ 9.65
-------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.14 0.27 0.26 0.23 0.19 0.14
Net Realized and
Unrealized Gain....... 2.22 3.25 2.34 1.34 0.33 1.36
-------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 2.36 3.52 2.60 1.57 0.52 1.50
-------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.13) (0.27) (0.26) (0.22) (0.18) (0.13)
Net Realized Gain...... (2.83) (1.21) (0.33) (0.11) (0.13) --
-------- ------- ------- ------- ------- -------
Total Distributions.... (2.96) (1.48) (0.59) (0.33) (0.31) (0.13)
-------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 15.92 $ 16.52 $ 14.48 $ 12.47 $ 11.23 $ 11.02
======== ======= ======= ======= ======= =======
TOTAL RETURN............ 16.23%** 26.31% 21.45% 14.32% 4.82% 15.62%
======== ======= ======= ======= ======= =======
RATIO AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $104,995 $95,582 $81,554 $60,352 $38,379 $30,953
Ratio of Expenses to
Average Net Assets..... 0.98%* 0.99% 1.01% 1.01% 1.10% 1.22%
Ratio of Net Investment
Income to Average Net
Assets................. 1.72%* 1.72% 1.93% 2.04% 1.74% 1.51%
Portfolio Turnover
Rate................... 21% 42% 40% 17% 23% 23%
Average Commission
Rate#.................. $ 0.0578 $0.0593 $0.0692 N/A N/A N/A
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.98%* 0.99% 1.01% 0.99% N/A N/A
</TABLE>
* Annualized
** Not Annualized
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
UAM FUNDS TS&W FIXED INCOME PORTFOLIO
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1998 -------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 10.54 $ 10.30 $ 10.42 $ 9.60 $ 10.75 $ 10.09
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.29 0.59 0.56 0.56 0.47 0.44
Net Realized and
Unrealized Gain
(Loss)................ 0.07 0.24 (0.12) 0.82 (1.05) 0.68
------- ------- ------- ------- ------- -------
Total From Investment
Operations............ 0.36 0.83 0.44 1.38 (0.58) 1.12
------- ------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income.. (0.29) (0.59) (0.56) (0.56) (0.47) (0.46)
Net Realized Gain...... -- -- -- -- (0.10) --
------- ------- ------- ------- ------- -------
Total Distributions.... (0.29) (0.59) (0.56) (0.56) (0.57) (0.46)
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 10.61 $ 10.54 $ 10.30 $ 10.42 $ 9.60 $ 10.75
------- ------- ------- ------- ------- -------
TOTAL RETURN............ 3.49%** 8.40% 4.40% 14.73% (5.46)% 11.31%
------- ------- ------- ------- ------- -------
RATIO AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $72,833 $67,987 $61,692 $46,677 $32,118 $28,987
Ratio of Expenses to
Average Net Assets..... 0.70%* 0.72% 0.77% 0.76% 1.02% 1.15%
Ratio of Net Investment
Income to Average Net
Assets................. 5.59%* 5.79% 5.50% 5.56% 4.73% 4.39%
Portfolio Turnover
Rate................... 19% 36% 59% 25% 27% 83%
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 0.70%* 0.72% 0.77% 0.75% N/A N/A
</TABLE>
* Annualized
** Not Annualized
The accompanying notes are an integral part of the financial statements.
23
<PAGE>
UAM FUNDS TS&W INTERNATIONAL EQUITY PORTFOLIO
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS DECEMBER 18,***
ENDED YEARS ENDED OCTOBER 31, 1992 TO
APRIL 30, 1998 ------------------------------------ OCTOBER 31,
(UNAUDITED) 1997 1996 1995 1994 1993
-------------- -------- -------- ------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 15.14 $ 14.22 $ 13.22 $ 13.85 $ 12.54 $ 10.00
-------- -------- -------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income.. 0.04 0.07 0.10 0.13 0.07 0.05
Net Realized and
Unrealized Gain
(Loss)................ 2.58 1.05 1.04 (0.31) 1.29 2.49
-------- -------- -------- ------- ------- -------
Total From Investment
Operations............ 2.62 1.12 1.14 (0.18) 1.36 2.54
-------- -------- -------- ------- ------- -------
DISTRIBUTIONS:
Net Investment Income.. (0.08) (0.11) (0.14) (0.09) (0.05) --
Net Realized Gain...... (0.34) (0.09) -- (0.36) -- --
-------- -------- -------- ------- ------- -------
Total Distributions.... (0.42) (0.20) (0.14) (0.45) (0.05) --
-------- -------- -------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 17.34 $ 15.14 $ 14.22 $ 13.22 $ 13.85 $ 12.54
======== ======== ======== ======= ======= =======
TOTAL RETURN............ 17.90%** 7.94% 8.71% 1.11% 10.87% 25.40%+**
======== ======== ======== ======= ======= =======
RATIO AND SUPPLEMENTAL
DATA
Net Assets, End of
Period (Thousands)..... $131,208 $115,500 $103,339 $77,553 $49,362 $28,030
Ratio of Expenses to
Average Net Assets..... 1.29%* 1.30% 1.35% 1.32% 1.38% 1.37%
Ratio of Net Investment
Income to Average Net
Assets................. 0.50%* 0.47% 0.84% 1.29% 0.70% 1.02%
Portfolio Turnover
Rate................... 18% 45% 25% 23% 30% 11%
Average Commission
Rate#.................. $ 0.0219 $ 0.0008 $ 0.0015 N/A N/A N/A
Ratio of Voluntarily
Waived Fees and
Expenses Assumed by the
Adviser to Average Net
Assets................. N/A N/A N/A N/A N/A 0.31%
Ratio of Expenses to
Average Net Assets
Including Expense
Offsets................ 1.29%* 1.30% 1.34% 1.30% N/A N/A
</TABLE>
* Annualized
** Not Annualized
*** Commencement of Operations
+ Total return would have been lower had certain fees not been waived and
expenses assumed by the Adviser during the period indicated.
# For fiscal years beginning on or after September 1, 1995, a portfolio is
required to disclose the average commission rate per share it paid for
portfolio trades on which commissions were charged.
The accompanying notes are an integral part of the financial statements.
24
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
UAM Funds, Inc. and UAM Funds Trust (collectively the "UAM Funds") are reg-
istered under the Investment Company Act of 1940, as amended. The TS&W Equity
Portfolio, TS&W Fixed Income Portfolio and TS&W International Equity Portfolio
(the "Portfolio"), portfolios of UAM Funds, Inc., are diversified, open-end
management investment companies. At April 30, 1998, the UAM Funds were com-
prised of forty-four active portfolios. The financial statements of the re-
maining portfolios are presented separately. The objectives of the Portfolios
are as follows:
TS&W EQUITY PORTFOLIO seeks to provide maximum long-term total return con-
sistent with reasonable risk to principal, by investing in a diversified port-
folio of common stocks of relatively large companies.
TS&W FIXED INCOME PORTFOLIO seeks to provide maximum long-term total return
consistent with reasonable risk to principal, by investing primarily in in-
vestment grade fixed income securities of varying maturities.
TS&W INTERNATIONAL EQUITY PORTFOLIO seeks to provide maximum long-term total
return consistent with reasonable risk to principal, by investing in a diver-
sified portfolio of common stocks of primarily non-United States issuers on a
world-wide basis.
A. SIGNIFICANT ACCOUNTING POLICIES: The following significant accounting
policies are in conformity with generally accepted accounting principles. Such
policies are consistently followed by the Portfolios in the preparation of
their financial statements. Generally accepted accounting principles may re-
quire management to make estimates and assumptions that affect the reported
amounts and disclosures in the financial statements. Actual results may differ
from those estimates.
1. SECURITY VALUATION: Equity securities listed on a United States secu-
rities exchange for which market quotations are readily available are val-
ued at the last quoted sales price as of the close of the exchange on the
day the valuation is made or, if no sale occurred on such day, at the bid
price on such day. Securities listed on a foreign exchange are valued at
their closing price. Price information on listed securities is taken from
the exchange where the security is primarily traded. Over-the-counter and
unlisted equity securities are valued at the current bid price. Fixed in-
come securities are stated on the basis of valuations provided by brokers
and/or a pricing service which uses information with respect to transac-
tions in fixed income securities, quotations from
25
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
dealers, market transactions in comparable securities and various rela-
tionships between securities in determining value. Short-term investments
that have remaining maturities of sixty days or less at time of purchase
are valued at amortized cost, if it approximates market value. The value
of other assets and securities for which no quotations are readily avail-
able is determined in good faith at fair value using methods determined by
the Board of Directors.
2. FEDERAL INCOME TAXES: It is each Portfolio's intention to qualify as
a regulated investment company under Subchapter M of the Internal Revenue
Code and to distribute all of its taxable income. Accordingly, no provi-
sion for Federal income taxes is required in the financial statements.
The TS&W International Equity Portfolio may be subject to taxes imposed
by countries in which it invests. Such taxes are generally based on either
income or gains earned or repatriated. The TS&W International Equity Port-
folio accrues such taxes when the related income or gains are earned.
At October 31, 1997, the TS&W Fixed Income Portfolio had available a
capital loss carryover for Federal income tax purposes of $95,946 which
will expire on October 31, 2003.
3. REPURCHASE AGREEMENTS: In connection with transactions involving re-
purchase agreements, the Portfolios' custodian bank takes possession of
the underlying securities, the value of which exceeds the principal amount
of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the value of the
collateral is monitored on a daily basis to determine the adequacy of the
collateral. In the event of default on the obligation to repurchase, each
Portfolio has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
Pursuant to an Exemptive Order issued by the Securities and Exchange
Commission, the UAM Funds may transfer their daily uninvested cash bal-
ances into a joint trading account which invests in one or more repurchase
agreement. This joint repurchase agreement is covered by the same collat-
eral requirements as discussed above.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the TS&W In-
ternational Equity Portfolio are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in a foreign cur-
rency are translated into U.S. dollars on the date of valuation. The TS&W
International Equity Portfolio does not isolate that portion of realized
or
26
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
unrealized gains and losses resulting from changes in the foreign exchange
rate from fluctuations arising from changes in the market prices of the
securities. These gains and losses are included in net realized and
unrealized gain and loss on investments on the statement of operations.
Net realized and unrealized gains and losses on foreign currency transac-
tions represent net foreign exchange gains or losses from forward foreign
currency exchange contracts, disposition of foreign currencies, currency
gains or losses realized between trade and settlement dates on securities
transactions and the difference between the amount of the investment in-
come and foreign withholding taxes recorded on the TS&W International Eq-
uity Portfolio's books and the U.S. dollar equivalent amounts actually re-
ceived or paid.
5. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS: The TS&W International
Equity Portfolio may enter into forward foreign currency exchange con-
tracts to protect the value of securities held and related receivables and
payables against changes in future foreign exchange rates. A forward cur-
rency contract is an agreement between two parties to buy and sell cur-
rency at a set price on a future date. The market value of the contract
will fluctuate with changes in currency exchange rates. The contract is
marked-to-market daily using the current forward rate and the change in
market value is recorded by the TS&W International Equity Portfolio as
unrealized gain or loss. The TS&W International Equity Portfolio recog-
nizes realized gain or loss when the contract is closed, equal to the dif-
ference between the value of the contract at the time it was opened and
the value at the time it was closed. Risks may arise upon entering into
these contracts from the potential inability of counterparties to meet the
terms of their contracts and are generally limited to the amount of
unrealized gain on the contracts, if any, at the date of default. Risks
may also arise from the unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
6. DISTRIBUTIONS TO SHAREHOLDERS: The TS&W Equity Portfolio will nor-
mally distribute substantially all of its net investment income quarterly.
The TS&W Fixed Income Portfolio will normally distribute substantially all
of its net investment income monthly. The TS&W International Equity Port-
folio will normally distribute substantially all of its net investment in-
come annually. Any realized net capital gains will be distributed annual-
ly. All distributions are recorded on ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These dif-
ferences are primarily due to differing book and tax treatments for for-
eign currency
27
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
transactions, and for the timing of the recognition of gains or losses on
investments.
Permanent book and tax basis differences relating to shareholder distri-
butions may result in reclassifications to undistributed net investment
income (loss), accumulated net realized gain (loss) and paid in capital.
Permanent book-tax differences, if any, are not included in ending un-
distributed net investment income (loss) for the purpose of calculating
net investment income (loss) per share in the financial highlights.
7. OTHER: Security transactions are accounted for on trade date, the
date the trade was executed. Costs used in determining realized gains and
losses on the sale of investment securities are based on the specific
identification method. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are recorded
as soon as the TS&W International Equity Portfolio is informed of the ex-
dividend date. Interest income is recognized on the accrual basis. Dis-
counts and premiums on securities purchased are amortized using the effec-
tive yield basis over their respective lives. Most expenses of the UAM
Funds can be directly attributed to a particular portfolio. Expenses which
cannot be directly attributed are apportioned among the portfolios of the
UAM Funds based on their relative net assets. Custodian fees for the Port-
folios have been increased to include expense offsets, if any, for custo-
dian balance credits.
B. ADVISORY SERVICES: Under the terms of an investment advisory agreement,
Thompson, Siegal & Walmsley, Inc. (the "Adviser"), a wholly-owned subsidiary
of United Asset Management Corporation ("UAM"), provides investment advisory
services to each Portfolio for a monthly fee calculated at an annual rate of
average daily net assets for the month, as follows:
<TABLE>
<CAPTION>
TS&W PORTFOLIOS RATE
--------------- -----
<S> <C>
Equity................................................................. 0.75%
Fixed Income........................................................... 0.45%
International Equity................................................... 1.00%
</TABLE>
C. ADMINISTRATION SERVICES: UAM Fund Services, Inc. (the "Administrator"), a
wholly-owned subsidiary of UAM, provides and oversees administrative, fund ac-
counting, dividend disbursing and transfer agent services to the UAM Funds un-
der a Fund Administration Agreement (the "Agreement"). Pursuant to the Agree-
ment, the Administrator is entitled to receive annual fees, computed daily and
payable monthly, of 0.19% of the first $200 million of the combined aggregate
net assets; plus 0.11% of the next $800 million of the combined aggregate net
assets;
28
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
plus 0.07% of the next $2 billion of the combined aggregate net assets; plus
0.05% of the combined aggregate net assets in excess of $3 billion. The fees
are allocated among the portfolios of the UAM Funds on the basis of their rel-
ative net assets and are subject to a graduated minimum fee schedule per port-
folio which rises from $2,000 per month, upon inception of a portfolio, to
$70,000 annually after two years. For portfolios with more than one class of
shares, the minimum annual fee increases to $90,000. In addition, the Adminis-
trator receives a Portfolio-specific monthly fee at an annual rate of 0.06%,
0.04% and 0.06% of average daily net assets for the TS&W Equity, TS&W Fixed
Income and TS&W International Equity Portfolios, respectively. The Administra-
tor has entered into a Mutual Funds Service Agreement with Chase Global Funds
Services Company ("CGFSC"), a corporate affiliate of The Chase Manhattan Bank,
under which CGFSC agrees to provide certain services, including but not lim-
ited to, administration, fund accounting, dividend disbursing and transfer
agent services. Pursuant to the Mutual Funds Service Agreement, the Adminis-
trator pays CGFSC a monthly fee. For the six months ended April 30, 1998, UAM
Fund Services, Inc. earned the following amounts from the Portfolios as Admin-
istrator and paid the following portion to CGFSC for its services as sub-Ad-
ministrator:
<TABLE>
<CAPTION>
ADMINISTRATION PORTION PAID
TS&W PORTFOLIOS FEES TO CGFSC
- --------------- -------------- ------------
<S> <C> <C>
Equity.............................................. $77,340 $47,326
Fixed Income........................................ 53,761 40,048
International Equity................................ 91,068 56,040
</TABLE>
D. CUSTODIAN: The Chase Manhattan Bank is custodian for the Portfolios' as-
sets held in accordance with the custodian agreement. As part of the custodian
agreement, the custodian bank has a lien on the securities of the portfolios
to cover any advances made by the custodian to the portfolios.
E. DISTRIBUTION SERVICES: UAM Fund Distributors, Inc. (the "Distributor"), a
wholly-owned subsidiary of UAM, distributes the shares of the Portfolios. The
Distributor does not receive any fee or other compensation with respect to the
Portfolios.
F. ACCOUNT SERVICES: The UAM Funds have entered into an Account Services
Agreement (the "Services Agreement") with UAM Retirement Plan Services, Inc.
(the "Service Provider"), a wholly-owned subsidiary of UAM. Under the Services
Agreement, the Service Provider agrees to perform certain services for partic-
ipants in a self-directed, defined contribution plan, and for whom the Service
Provider provides participant recordkeeping. Pursuant to the Services Agree-
ment,
29
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
the Service Provider is entitled to receive, after the end of each month, a
fee at the annual rate of 0.15% of the average aggregate daily net asset value
of shares of the UAM Funds in the accounts for which they provide services.
G. DIRECTORS' FEES: Each Director, who is not an officer or affiliated per-
son, receives $2,000 per meeting attended, which is allocated proportionally
among the active portfolios of UAM Funds, plus a quarterly retainer of $150
for each active portfolio of the UAM Funds and reimbursement of expenses in-
curred in attending Board meetings.
H. PURCHASES AND SALES: For the six months ended April 30, 1998, purchases
and sales of investment securities other than long-term U.S. Government and
agency securities and short-term securities were:
<TABLE>
<CAPTION>
TS&W PORTFOLIOS PURCHASES SALES
- --------------- ----------- -----------
<S> <C> <C>
Equity.................................................. $19,049,143 $25,889,460
Fixed Income............................................ 9,134,162 1,315,405
International Equity.................................... 20,048,900 21,080,424
</TABLE>
Purchases and sales of long-term U.S. Government securities were $9,465,430
and $11,539,348 respectively, for the TS&W Fixed Income Portfolio. There were
no purchases or sales of long-term U.S. Government securities for the TS&W Eq-
uity Portfolio and the TS&W International Equity Portfolio.
I. LINE OF CREDIT: The Portfolios, along with certain other portfolios of
UAM Funds, collectively entered into an agreement which enables them to par-
ticipate in a $100 million unsecured line of credit with several banks.
Borrowings will be made solely to temporarily finance the repurchase of Capi-
tal shares. Interest is charged to each participating Portfolio based on its
borrowings at a rate per annum equal to the Federal Funds rate plus 0.50%. In
addition, a commitment fee of 0.08% per annum, payable at the end of each cal-
endar quarter, is accrued by each participating Portfolio based on its average
daily unused portion of the line of credit. For the six months ended April 30,
1998, the Portfolios had no borrowings under the agreement.
J. OTHER: At April 30, 1998, the percentage of total shares outstanding held
by record shareholders owning 10% or greater of the aggregate total shares
outstanding for each Portfolio was as follows:
<TABLE>
<CAPTION>
NO. OF %
TS&W PORTFOLIOS SHAREHOLDERS OWNERSHIP
- --------------- ------------ ---------
<S> <C> <C>
Equity................................................... 2 22%
Fixed Income............................................. 1 11%
</TABLE>
30
<PAGE>
UAM FUNDS THE TS&W PORTFOLIOS
- -------------------------------------------------------------------------------
At April 30, 1998, the net assets of TS&W International Equity Portfolio
were substantially comprised of foreign denominated securities and/or curren-
cy. Changes in currency exchange rates will affect the value of and investment
income from such securities and currency.
Foreign security and currency transactions may involve certain considera-
tions and risks not typically associated with those of U.S. dollar denominated
transactions as a result of, among other factors, the possibly lower level of
governmental supervision and regulation of foreign securities markets and the
possibility of political or economic instability.
31
<PAGE>
UAM Funds
- --------------------------------------------------------------------------------
Officers and Directors
Norton H.Reamer
Director, President and Chairman
John T. Bennett, Jr.
Director
Nancy J. Dunn
Director
Philip D. English
Director
William A. Humenuk
Director
Charles H. Salisbury, Jr.
Director and Executive Vice President
Peter M. Whitman, Jr.
Director
The TS&W Portfolios
- --------------------------------------------------------------------------------
William H. Park
Vice President
Michael E. DeFao
Secretary
Karl O. Hartmann
Assistant Secretary
Gary L. French
Treasurer
Robert R. Flaherty
Assistant Treasurer
Gordon M. Shone
Assistant Treasurer
- --------------------------------------------------------------------------------
Investment Adviser
Thompson, Siegel & Walmsley, Inc.
5000 Monument Avenue
Richmond, VA 23230-0883
Administrator
UAM Fund Services, Inc.
211 Congress Street
Boston, MA 02110
Custodian
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, NY 11245
Legal Counsel
Drinker, Biddle & Reath LLP
Philadelphia National Bank Building
1345 Chestnut Street
Philadelphia, PA 19107-3496
Independent Accountants
Price Waterhouse LLP
160 Federal Street
Boston, MA 02110
Distributor
UAM Fund Distributors, Inc.
211 Congress Street
Boston, MA 02110
- --------------------------------------------------------------------------------
This report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
- --------------------------------------------------------------------------------
