<PAGE> 1
TABLE OF CONTENTS
Portfolio Manager's Report to Shareholders
PAGE 2
Report of Independent Accountants
PAGE 7
Schedule of Portfolio Investments
PAGE 8
Statement of Assets and Liabilities
PAGE 9
Statement of Operations
PAGE 10
Statement of Changes in Net Assets
PAGE 11
Notes to Financial Statements
PAGE 12
Financial Highlights
PAGE 17
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-1-
<PAGE> 2
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value of a $10,000 Investment
ALPINE REALTY INCOME & GROWTH
FUND MORGAN STANLEY REIT INDEX
----------------------------- -------------------------
<S> <C> <C>
'12/30/98' 10000 10000
'10/31/99' $10314 $ 9517
</TABLE>
Past performance is not predictive of future results. Investment return and
principal value of the Alpine Realty Income & Growth Fund will fluctuate, so
that the shares, when redeemed, may be worth more or less than their original
cost. The returns set forth reflect the waiver of certain advisory fees and
reimbursements. Without the waiver or reimbursement of fees, total return would
have been lower.
The Morgan Stanley REIT Index is a total-return index comprising of the most
actively traded real estate investment trusts and is designed to be a measure of
real estate equity performance. An investor can not invest directly in an index.
<TABLE>
<CAPTION>
COMPARATIVE TOTAL RETURNS AS OF 10/31/99
SINCE
INCEPTION+
- -------------------------------------------------------------------------
<S> <C>
Alpine Class Y 3.14%
Alpine Class A (4.75%)* -2.00%
Alpine Class B (5.00%)** -2.05%
- -------------------------------------------------------------------------
Morgan Stanley REIT Index -4.83%
</TABLE>
* Represents maximum sales load. ** Represents maximum redemption fee.
+ Represents Class A and Class Y shares, which commenced December 30, 1998.
Class B commenced February 18, 1999.
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-2-
<PAGE> 3
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the initial Annual Report for the ten month old Alpine
Realty Income & Growth Fund. As of October 31, 1999, the Fund's Class Y shares
net asset value was $9.90 providing a period-to-date total return of 3.14% which
compares favorably with our Fund's benchmark Morgan Stanley REIT Index total
return of -4.83%. Through much of the year the Fund has maintained its position
in the top decile of real estate mutual funds, according to Lipper Analytical
Services. While the Fund's relative performance has been positive, the sector's
stock returns have been disappointing, like many industries perceived to be at a
mature phase of their business cycle. We believe, however, that real estate
stocks are nearing the end of this period of negative returns. The silver lining
to this decline in REIT share prices has been the opportunity to enhance the
quality and growth potential of the Fund's portfolio. We have been able to
increase the portfolio's current income level and its potential for future
dividend growth while buying shares at significant discounts to underlying real
estate values.
Q. WHAT HAS ENABLED THE ALPINE REALTY INCOME & GROWTH FUND TO OUTPERFORM ITS
BENCHMARK INDEX?
A. We believe Alpine's fundamental focus on value investing has been and will
continue to be the most appropriate approach to generating outperformance at
this point in the real estate cycle. Our focus on undervalued companies with
strong balance sheets and solid dividend coverage has reduced the portfolio's
downside volatility. We avoided REITs which had previously been valued at
premiums to their underlying property value due to high projected growth
rates that required continued acretive acquisition activity. Such companies
have underperformed over the past year as the market has become less certain
of capital appreciation potential and more restrictive with its capital
allocations. At this stage of the real estate cycle, as the recovery phase
has transitioned to expansion and is now approaching a mature equilibrium
phase, we expect income returns to be as important as capital appreciation
for most property investors, including REITs. This is why Alpine introduced
this Realty Income & Growth Fund last year. True to its mission, this
portfolio has emphasized those REITs, which can generate reasonable growth
from their existing properties as opposed to those companies which have
primarily relied upon acquisitions for growth.
Q. WHY HAVE REITS UNDERPERFORMED THE OVERALL STOCK MARKET FOR THE PAST TWO
YEARS?
A. Beginning in late 1997, the stock market appropriately became concerned that
property prices had risen too high, too quickly. Share prices at the end of
1997 were in many instances at 15-30% premiums to the underlying real estate
value because many investors had accepted Wall Street's explanation that "New
Paradigm" REITs were now growth companies and should be priced as such.
During this period, several notable transactions highlighted the rich pricing
of real estate. Starwood Lodging outbid Hilton Hotels for ITT Sheraton and
Donald Trump and Conseco paid a record $900 million for New York's GM
building, over $560 per square foot. Meanwhile, the acceleration of rents and
the pace of declines in vacancies began to moderate. These events in
hindsight marked the top of a market type transition from the recovery phase
of the real estate cycle to today's equilibrium phase. While such transitions
can lead to a
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-3-
<PAGE> 4
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
- --------------------------------------------------------------------------------
correction from excess, we believe a combination of fears from the financial
crunch of last year following the collapse of the Russian Ruble in August
1998 combined with modest overbuilding (by historical standards) of new
buildings in specific sectors and cities raised concern that the growth
potential of the sector was over. This has been compounded in recent months
by broad mutual fund and institutional selling of REITs since share prices
continued to underperform growth oriented "new technology" companies. This
has spiraled further this Fall as tax loss selling by both institutional and
individual investors has produced the lowest share prices in three to five
years for most REITs. We believe today's ensuing oversold situation, where
valuation or performance prospects are often disregarded, is a unique
opportunity, because this real estate cycle is still healthy. For example,
room rates for Starwood's hotels have risen by roughly 10% since the ITT
purchase and rents in G.M. building have jumped from $70/sq. ft. to over
$90/sq. ft. over the fiscal year. Property performance should not be confused
with real estate stock performance.
Q. WHAT WILL LEAD TO A TURNAROUND IN THE MARKET'S PERCEPTION OF REAL ESTATE
STOCKS?
A. We believe the market will regain confidence in the sector and its growth
prospects for both technical stock market considerations as well as
underlying real estate performance prospects. First, we expect these stocks
to bounce back from tax loss selling which could negatively impact prices
through the end of 1999. Gradually, more investors should then take note that
a number of companies have instituted significant share buybacks ranging in
size from a several percent to up to 15% of their equity base. There is also
an increasing level of insider buying by management and there have been
several management buyouts over the course of this year. In fact, your fund
has already benefited from several of these takeover bids, namely for
Berkshire Realty and Sunstone Hotel Investors, which are now complete, as
well as Walden Residential Properties, which is in process. We expect that
management led buyout and merger and acquisition activity could accelerate in
2000 and we believe that a number of the Fund's current holdings are trading
at prices which could be attractive to a private market bid. We also believe
that market recognition of equilibrium in most real estate markets and the
future reports of declining new construction will renew investor confidence
in the industry. With most regional economies exhibiting signs of continued
growth, albeit at a somewhat slower pace, occupancies and rent levels should
continue to remain healthy and the divergence between public market valuation
of real estate companies and private market valuation of the underlying
assets should narrow.
Q. HOW IS THE PORTFOLIO POSITIONED FOR THE YEAR 2000?
A. We have and will continue to take advantage of the current pricing pressure
on REITs to upgrade the income producing characteristics of the fund's
holdings. Currently, the weighted-average dividend yield of the Morgan
Stanley REIT Index is approaching 9% as of October 31, 1999. Present market
conditions have enabled us to purchase shares in companies which own some of
the most desirable institutional quality real estate, providing significant
dividend safety and growth at attractive current yields.
- --------------------------------------------------------------------------------
-4-
<PAGE> 5
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
- --------------------------------------------------------------------------------
Moving forward, we anticipate a continued focus on companies owning real
estate in markets with the strongest population and employment growth
prospects and with the greatest barriers to supply additions. Since our last
report, we have increased our investment in companies with holdings in the
California and eastern seaboard markets and reduced our exposure to several
of the southern and southeastern markets, which are vulnerable to imbalances
in new supply. We have additionally decreased our weightings in the lodging
sector since the end of the fiscal year, primarily as a result of the
management led buyout of our previously largest holding, Sunstone Hotel
Investors. Lastly, the office, industrial, and self-storage sectors currently
provide very attractive valuations in our opinion and we expect to increase
our weighting in these sectors.
In summary, I wish to emphasize Alpine's view that there is a mismatch
between the values in the property market and the real estate stock market.
Small capitalization stocks and so-called value stocks have lagged the S&P
500 this year. We believe a shift to value investing will supercede growth,
perhaps sooner than many think. It is important to note that although REITs
have trailed the S&P 500 for the past three years, they have still
outperformed for 16 of the past 25 years. In the interim, this portfolio
should be able to grow its dividend at mid-to-high digit growth rates.
In closing, allow me to introduce Robert W. Gadsden who in September,
took over for Marc Halle as co-portfolio Manager of this fund. Bob's
background in REITs, as well as in direct property investment and mortgage
lending are well suited to Alpine's big picture approach to analyzing real
estate from the ground up. We look forward to updating you on this Fund's
progress in the next millennium. Thank you for your support.
/s/ Samuel A. Lieber /s/ Robert W. Gadsen
Samuel A. Lieber Robert W. Gadsden
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-5-
<PAGE> 6
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
- --------------------------------------------------------------------------------
GEOGRAPHICAL DISTRIBUTION
[GEOGRAPHICAL DISTRIBUTION PIE GRAPH]
<TABLE>
<CAPTION>
MOUNTAIN PACIFIC NEW CENTRAL MID
SOUTH EAST STATES SOUTHWEST ENGLAND PLAINS SOUTH MIDWEST ATLANTIC
- ---------- -------- --------- ------- ------- ----- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
15.7% 5.7% 24.2% 5.3% 4.6% 11% 10% 17.7%
<CAPTION>
PACIFIC
NORTHWEST
---------
<S><C>
5.8%
</TABLE>
SECTOR DISTRIBUTION
[SECTOR DISTRIBUTION PIE GRAPH]
<TABLE>
<CAPTION>
DIVERSIFIED APARTMENTS OTHER HEALTH CARE RETAIL OFFICE/INDUSTRIAL 26% LODGING
- ----------- ---------- ----- ----------- ------ ---------------------- -------
<S> <C> <C> <C> <C> <C> <C>
8% 6% 5% 5% 28% 26% 22%
</TABLE>
TOP 10 HOLDINGS* AS OF 10/31/99
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1. Sunstone Hotel Investors, Inc. 5.71% 6. Highwoods Properties, Inc. 3.67%
2. Mack Cali Realty Corp. 4.64% 7. Developers Diversified Realty Corp. 3.67%
3. Felcor Lodging Trust, Inc. 4.46% 8. The Macerich Co. 3.60%
4. Simon Property Group, Inc. 4.45% 9. Alexander's Inc. 3.58%
5. Burnham Pacific Property, Inc. 4.14% 10. Host Marriott Corp. 3.52%
</TABLE>
* Portfolio composition subject to change.
- --------------------------------------------------------------------------------
-6-
<PAGE> 7
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Trustees
Alpine Equity Trust
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of portfolio investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Alpine Realty
Income & Growth Fund of the Alpine Equity Trust (hereafter referred to as the
"Fund") at October 31, 1999, and the results of its operations, the changes in
its net assets and the financial highlights for the period then ended, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which includes confirmation of securities at October 31, 1999 by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Columbus, Ohio
December 20, 1999
-7-
<PAGE> 8
ALPINE REALTY INCOME & GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
OCTOBER 31, 1999
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS -- (2.1%)
Lodging -- (2.1%)
3,500 Starwood Hotels & Resorts
Worldwide, Inc. ............ $ 80,281
-----------
Total Common Stocks
(Cost $85,335).............. 80,281
-----------
REAL ESTATE INVESTMENT TRUSTS -- (91.6%)
Apartments -- (5.8%)
5,500 BRE Properties, Class A....... 124,781
4,100 Gables Residential Trust...... 99,169
-----------
223,950
-----------
Diversified -- (7.8%)
1,900 Alexander's, Inc. (b)......... 139,056
5,000 Crescent Real Estate Equities,
Inc......................... 83,438
2,500 Vornado Realty Trust.......... 79,219
-----------
301,713
-----------
Health Care -- (4.8%)
2,400 Healthcare Properties......... 63,000
2,500 Healthcare Realty Trust,
Inc......................... 48,125
4,500 Nationwide Health Properties,
Inc......................... 74,531
-----------
185,656
-----------
Hotels -- (18.5%)
10,200 Felcor Lodging Trust, Inc..... 173,400
15,200 Host Marriott Corp............ 136,800
8,700 Innkeepers USA Trust.......... 75,038
6,400 MeriStar Hospitality Corp..... 102,800
23,200 Sunstone Hotel Investors,
Inc......................... 221,850
-----------
709,888
-----------
Net Lease -- (2.8%)
4,900 Franchise Finance Corp. of
America..................... 106,575
-----------
Office-Industrial Buildings -- (23.8%)
7,800 Cornerstone Properties,
Inc......................... 113,588
4,000 Duke Realty Investments,
Inc......................... 78,500
3,000 Equity Office Properties...... 66,375
5,900 Highwoods Properties, Inc..... 142,706
5,500 Kilroy Realty Corp............ 105,531
7,000 Mack Cali Realty Corp......... 180,251
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS, CONTINUED:
8,300 Mission West Properties....... $ 63,806
5,700 Prologis Trust................ 110,081
1,500 Spieker Properties, Inc....... 52,406
-----------
913,244
-----------
Neighborhood Centers -- (15.1%)
16,100 Burnham Pacific Property,
Inc......................... 160,999
10,000 Developers Diversified Realty
Corp........................ 142,500
3,400 Federal Realty Investment
Trust....................... 61,838
12,000 Kranzco Realty Trust.......... 102,000
3,300 New Plan Excel Realty Trust... 57,131
4,000 Ramco-Gershenson Properties... 54,500
-----------
578,968
-----------
Shopping Malls -- (11.5%)
3,000 Chelsea GCA Realty, Inc....... 93,000
2,500 Glimcher Realty Trust......... 37,031
7,500 Simon Property Group, Inc..... 172,969
7,000 The Macerich Co............... 140,000
-----------
443,000
-----------
Storage -- (1.5%)
2,000 Storage USA, Inc.............. 58,250
-----------
Total Real Estate Investment
Trusts (Cost $3,779,826).... 3,521,244
-----------
REPURCHASE AGREEMENTS -- (7.4%)
$ 285,751 State Street Bank, 3.50%, date
10/31/99, due 11/1/99,
collateralized by U.S.
Treasury Bond, 8.13%, due
8/15/19 with a market value
of $296,250................. 285,751
-----------
Total Repurchase Agreements
(Cost $285,751)............. 285,751
-----------
Total Investments
(Cost $4,150,912) (a).......
101.1% 3,887,276
Liabilities in excess of
other assets........ (1.1)% (43,757)
---- ----------
TOTAL NET ASSETS....... 100.0% $ 3,843,519
---- ----------
---- ----------
</TABLE>
- ---------------
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting purposes in excess of federal income tax purposes of
$17,175. Cost for federal income tax purposes differs from value by net
unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................... $ 32,090
Unrealized depreciation................... (312,901)
-----------
Net unrealized depreciation............... $ (280,811)
===========
</TABLE>
(b) Non-income producing securities.
See notes to financial statements.
-8-
<PAGE> 9
ALPINE REALTY INCOME & GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1999
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost $3,865,161)................... $3,601,525
Repurchase agreements, at cost............................ 285,751
----------
3,887,276
Interest and dividends receivable......................... 19,422
Receivable for investment securities sold................. 318,274
Receivable for expense reimbursement...................... 14,607
Prepaid expenses and other assets......................... 24,975
----------
Total Assets............................................ 4,264,554
----------
LIABILITIES:
Payable for investment securities purchased............... 399,156
Accrued expenses and other liabilities:
Investment advisory fees................................ 846
Administration fees..................................... 120
Distribution fees....................................... 1
Other................................................... 20,912
----------
Total Liabilities....................................... 421,035
----------
NET ASSETS.................................................. $3,843,519
==========
NET ASSETS REPRESENTED BY
Shares of beneficial interest, at par value............... $ 39
Additional paid-in-capital................................ 4,053,444
Undistributed net investment income....................... 66,377
Accumulated net realized losses on short sales and
investments............................................. (12,705)
Unrealized depreciation from investments.................. (263,636)
----------
TOTAL NET ASSETS........................................ $3,843,519
==========
NET ASSETS VALUE
Class A shares
Net assets of $1,029 / 104 shares outstanding........... $ 9.91
==========
Offering price (based on sales charge of 4.75%)......... $ 10.40
==========
Class B shares*
Net assets of $1,028 / 104 shares outstanding........... $ 9.92
==========
Class Y Shares
Net assets of $3,841,462 / 387,826 shares outstanding... $ 9.90
==========
</TABLE>
- ---------------
* Redemption price per share varies based on length of time shares are held
(Note 5)
See notes to financial statements.
-9-
<PAGE> 10
ALPINE REALTY INCOME & GROWTH FUND
STATEMENT OF OPERATIONS
PERIOD ENDED OCTOBER 31,1999 (a)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $ 6,492
Dividends................................................. 242,879
--------
Total income.......................................................... 249,371
--------
EXPENSES:
Investment advisory fees.................................. $ 26,862
Administration fees....................................... 6,179
Distribution fees -- Class B.............................. 60
Shareholder Servicing Fees -- Class A..................... 3
Shareholder Servicing Fees -- Class B..................... 20
Custodian fees............................................ 2,652
Fund accounting fees...................................... 500
Legal fees................................................ 3,594
Audit fees................................................ 8,543
Trustees' fees............................................ 951
Transfer agent fees....................................... 1,029
Registration and filing fees.............................. 41,632
Printing costs............................................ 19,555
Other..................................................... 2,415
--------
Gross expenses.............................................. 113,995
Expenses voluntarily waived................................. (19,943)
Expenses voluntarily reimbursed............................. (52,787)
--------
Total expenses........................................................ 41,265
--------
Net Investment Income................................................. 208,106
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized losses from short sales and investments................ (12,705)
Net change in unrealized depreciation from investments.............. (263,636)
--------
Net realized/unrealized losses from investments....................... (276,341)
--------
Change in net assets resulting from operations........................ $(68,235)
========
</TABLE>
- ---------------
(a) The Fund commenced offering Class A and Class Y Shares on December 30, 1998
and Class B Shares on February 18, 1999.
See notes to financial statements.
-10-
<PAGE> 11
ALPINE REALTY INCOME & GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PERIOD
ENDED
OCTOBER 31,
1999(a)
------------
<S> <C>
OPERATIONS:
Net investment income..................................... $ 208,106
Net realized losses from short sales and investments...... (12,705)
Net change in unrealized depreciation from investments.... (263,636)
----------
Change in net assets resulting from operations......... (68,235)
----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Class A................................................ (39)
Class B................................................ (386)
Class Y................................................ (141,304)
----------
Total change in net assets from distributions to
shareholders.......................................... (141,729)
----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold................................. 4,170,202
Cost of shares redeemed................................... (208,088)
Dividends reinvested...................................... 91,369
----------
Net increase in net assets resulting from shares of
beneficial interest transactions....................... 4,053,483
----------
Total change in net assets............................. 3,843,519
----------
NET ASSETS:
Beginning of period....................................... --
----------
End of period............................................. $3,843,519
==========
</TABLE>
- ---------------
(a) The Fund commenced offering Class A and Class Y Shares on December 30, 1998
and Class B Shares on February 18, 1999.
See notes to financial statements.
-11-
<PAGE> 12
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1999
1. ORGANIZATION:
The Alpine Realty Income & Growth Fund, (the "Fund"), is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as a
diversified, open-end management investment company. The Fund is a separate
series of the Alpine Equity Trust (the "Trust"), a Massachusetts business
trust organized in 1988.
The fund offers Class A, Class B, and Class Y shares. Class A shares are
sold with a maximum front-end sales charge of 4.75%. Class B shares is sold
without a font-end sales charge, but pay higher ongoing distribution fees
than Class A shares. Class B shares are sold subject to a contingent
deferred sales charge that is payable upon redemption and decreases
depending on how long the shares have been held. Class Y shares are sold at
net asset value and are not subject to contingent deferred sales charges or
distribution fees. Class Y shares are sold only to certain institutional or
individual investors who do not receive services of financial
intermediaries that offer shares of the Fund.
Alpine Realty Income & Growth Fund commenced operations on December 30,
1998.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles
("GAAP"), which require management to make estimates and assumptions that
affect amounts reported herein. Actual results could differ from these
estimates.
A. VALUATION OF SECURITIES:
The Fund values securities traded on a national securities exchange or
included on the National Association of Securities Dealers Automated
Quotation National Market System (" NASDAQ") at the last reported sales
price on the exchange where primarily traded. The Fund values securities
traded on an exchange or NASDAQ for which there has been no sale and other
securities traded in the over-the-counter market at the mean between the
last reported bid and asked price. Securities, for which market quotations
are not available, including restricted securities, are valued at fair
value as determined in good faith according to procedures approved by the
Board of Trustees. Short-term investments with remaining maturities of 60
days or less are carried at amortized cost, which approximates market
value.
B. REPURCHASE AGREEMENTS:
The Fund may invest in repurchase agreements. Securities pledged as
collateral for repurchase agreements are held by the custodian on the
Fund's behalf. The Fund monitors the adequacy of the collateral daily and
will require the seller to provide additional collateral in the event the
market value of the securities pledged falls below the carrying value of
the repurchase agreement, including accrued interest. The Fund will only
enter into repurchase agreements with banks and other financial
institutions, which are deemed by the investment advisor to be creditworthy
pursuant to guidelines established by the Board of Trustees. Repurchase
agreements are considered to be loans by the Fund under the 1940 act.
Continued
-12-
<PAGE> 13
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1999
C. SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Securities transactions are accounted for no later than one business day
after the trade date. Realized gains and losses are computed on the
identified cost basis. Interest income is recorded on the accrual basis and
includes accretion of discounts and amortization of premiums. Dividend
income is recorded on the ex-dividend date or in the case of some foreign
securities, on the date thereafter when the Fund is made aware of the
dividend. Foreign income may be subject to foreign withholding taxes, which
are accrued as applicable. Capital gains realized on some foreign
securities are subject to foreign taxes, which are accrued as applicable.
D. SHORT SALE TRANSACTIONS:
Short sales are transactions in which the Fund sells a security it does not
own, in anticipation of a decline in the market value of that security. To
complete such a transaction, the Fund must borrow the security to deliver
to the buyer upon the short sale; the Fund then is obligated to replace the
security borrowed by purchasing it in the open market at some later date.
The Fund will incur a loss if the market price of the security increases
between the date of the short sale and the date on which the Fund replaces
the borrowed security. The Fund will realize a gain if the security
declines in value between those dates. All short sales must be fully
collateralized. The Fund maintains the collateral in a segregated account
with its custodian, consisting of cash, equities and/or U.S. Government
securities sufficient to collateralize its obligation on the short
positions. At October 31, 1999, there were no open short positions.
E. FEDERAL TAXES:
It is the Fund's policy to continue to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute timely, all of its net investment company income and net
realized capital gains to shareholders. Therefore, no federal income tax
provision is required. (Under the applicable foreign tax law, a withholding
tax may be imposed on interest, dividends and capital gains earned on
foreign investments at various rates. Where available, the Fund will file
for claims on foreign taxes withheld.)
F. DIVIDENDS AND DISTRIBUTIONS:
The Fund intends to distribute substantially all of its net investment
income and net realized capital gains, if any, annually in the form of
dividends. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income
tax regulations, which may differ from GAAP. These "book/ tax" differences
are either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are reclassified within
the composition of net assets based on their federal tax-basis treatment;
temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment
income and net realized capital gains for financial reporting purposes but
not for tax purposes are reported as dividends in excess of net
Continued
-13-
<PAGE> 14
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1999
investment income or distributions in excess of net realized gains. To the
extent they exceed net investment income and net realized gains for tax
purposes, they are reported as returns of capital.
G. CLASS ALLOCATIONS:
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the
relative net assets of each class. Class specific expenses are allocated to
the class to which they relate. Currently, class specific expenses are
limited to expenses incurred under the Distribution Plans.
3. CAPITAL SHARE TRANSACTIONS:
The Fund has an unlimited number of shares of beneficial interest, with
$0.0001 par value, authorized. Transactions in shares and dollars of the
Fund were as follows:
<TABLE>
<CAPTION>
PERIOD ENDED
OCTOBER 31, 1999 (a)
---------------------
SHARES AMOUNT
------- ----------
<S> <C> <C>
CLASS A
Shares sold............................................... 100 $ 1,000
Shares issued in reinvestment of dividends................ 4 40
------- ----------
Net change................................................ 104 1,040
------- ----------
CLASS B
Shares sold............................................... 1,605 16,031
Shares redeemed........................................... (1,538) (16,301)
Shares issued in reinvestment of dividends................ 37 386
------- ----------
Net change................................................ 104 116
------- ----------
CLASS Y
Shares sold............................................... 397,771 4,153,171
Shares redeemed........................................... (18,728) (191,787)
Shares issued in reinvestment of dividends................ 8,783 90,943
------- ----------
Net change................................................ 387,826 4,052,327
------- ----------
Total net change.......................................... 388,034 $4,053,483
======= ==========
</TABLE>
- ---------------
(a) The Fund commenced offering Class A and Class Y Shares on December 30,
1998 and Class B Shares on February 18, 1999.
4. SECURITIES TRANSACTIONS:
Cost of purchases and proceeds from sales of investment securities,
excluding securities sold short and short-term investments, were $8,358,819
and $4,480,832, respectively, for the period ended October 31, 1999.
Continued
-14-
<PAGE> 15
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1999
5. DISTRIBUTION PLANS
BISYS Fund Services L.P. ("BISYS L.P."), a wholly-owned subsidiary of The
BISYS Group Inc. serves as principal underwriter to the Fund.
The Fund has adopted Distribution Plans for each class of shares, except
Class Y Shares, as allowed by Rule 12b-1 of the 1940 Act. Distributions
plans permit the Fund to reimburse its principle underwriter for costs
related to selling shares of the Fund and for various other services. These
costs, which consist primarily of commissions and service fees to
broker-dealers who sell shares of the Fund, are paid by the Fund. Pursuant
to the Distribution plans, each class, except Class Y Shares, currently
pays a service fee equal to 0.25% of the average daily net assets of the
class. Class B shares also presently pay distribution fees equal to 0.75%
of the average daily net assets of the class. Distribution Plan fees are
calculated daily and paid monthly.
Each of the Distribution Plans may be terminated at any time by vote of the
Independent Trustees or by vote of a majority of the outstanding voting
shares of the respective class.
Class B shares are subject to a Contingent Deferred Sales Charge ("CDSC")
on redemption of shares made within six years of purchase. The applicable
CDSC is equal to a percentage of the lesser of the net asset value per
share ("NAV") at the date of the original purchase or at the date of
redemption, according to the following chart:
<TABLE>
<CAPTION>
YEAR OF REDEMPTION CDSC
------------------ ----
<S> <C>
First....................................................... 5%
Second...................................................... 4%
Third....................................................... 3%
Fourth...................................................... 3%
Fifth....................................................... 2%
Six......................................................... 1%
</TABLE>
6. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Investment advisory services are provided to the Fund by Alpine Management
& Research LLC ("Alpine"). Pursuant to the investment advisor's agreement
with the Fund, Alpine is entitled to an annual fee based on the Fund
average daily net assets, in accordance with the following schedule:
<TABLE>
<S> <C>
First $750 million.......................................... 1.00%
Next $250 million........................................... 0.90%
Over $1 billion............................................. 0.80%
</TABLE>
Continued
-15-
<PAGE> 16
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
OCTOBER 31, 1999
Fees may be voluntarily reduced or reimbursed to assist the Fund in
maintaining competitive expense ratios. Information regarding these
transactions for the Fund is as follows for the period ended October 31,
1999:
<TABLE>
<CAPTION>
INVESTMENT ADVISOR
-----------------------------
ANNUAL FEE VOLUNTARY
BEFORE VOLUNTARY FEE
FEE REDUCTIONS REDUCTIONS REIMBURSEMENTS
---------------- ---------- --------------
<S> <C> <C> <C>
Realty Income and Growth Fund..... $26,862 $19,943 $52,787
</TABLE>
BISYS L.P. is the Fund's Distributor. BISYS Fund Services Ohio, Inc. is the
Fund's Administrator and BISYS Fund Services, Inc. ("BISYS") is the Fund's
Fund Accountant, Transfer Agent and Dividend Disbursing Agent. In addition,
Investors Fiduciary Trust Company ("IFTC") is the Fund's Custodian. In
return for these services, BISYS L.P. and BISYS will earn an annual fee
amounting to 0.23% of the Fund's average daily net assets. As of July 1,
1999, this changed to the greater of an annual fee amounting to 0.23% of
the fund's average daily net assets or $250,000 annually for the Trust.
IFTC will earn an annual fee amounting to 0.095% of the Fund's average
daily net assets.
Officers of the Fund and affiliated Trustees receive no compensation
directly from the Fund.
7. CONCENTRATION OF CREDIT RISK:
The Fund invest a substantial portion of its assets in the equity
securities of issuers engaged in the real estate industry, including real
estate investment trusts (REITs). As a result, the Fund may be more
affected by economic developments in the real estate industry than would a
general equity fund.
8. FINANCING AGREEMENT
Effective August 27, 1999, the Trust entered into a secured committed
revolving line of credit (the "Committed Line") with State Street Bank and
Trust Company (the "Bank"). Under this agreement, the Bank provides a
$5,000,000 Committed Line to be used by the Funds of the Trust. Borrowings
of the Funds under this agreement will incur interest at 0.50% per annum
above the Bank's overnight federal funds rate. A commitment fee of 0.08%
per annum will be incurred on the unused portion of the Committed Line,
which will be allocated by average net assets to all Funds of the Trust. As
of October 31, 1999 the Trust had an unused Committed Line balance of
$3,668,842.
Continued
-16-
<PAGE> 17
ALPINE REALTY INCOME & GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
PERIOD ENDED OCTOBER 31, 1999
--------------------------------------------------
CLASS A(a)(b) CLASS B(a)(c) CLASS Y(a)(b)
-------------- -------------- --------------
<S> <C> <C> <C>
NET ASSETS VALUE BEGINNING OF YEAR................ $10.00 $ 9.99 $10.00
------ ------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss).................... 0.63 0.53 0.64
Net realized and unrealized gain (loss) from
short sales and investments.................. (0.33) (0.23) (0.32)
------ ------ ------
Total from investment operations................ 0.30 0.30 0.32
------ ------ ------
LESS DISTRIBUTIONS:
From net investment income...................... (0.39) (0.37) (0.42)
------ ------ ------
Total distributions............................. (0.39) (0.37) (0.42)
------ ------ ------
NET ASSET VALUE END OF YEAR....................... $ 9.91 $ 9.92 $ 9.90
====== ====== ======
TOTAL RETURN (EXCLUDES SALES CHARGES)............. 2.90%(d) 2.92%(d) 3.14%(d)
ANNUALIZED RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000)............... $ 1 $ 1 $3,842
Ratio of expenses to average net assets......... 1.73%(e) 2.48%(e) 1.50%(e)
Ratio of net investment income (loss) to average
net assets................................... 7.14%(e) 6.94%(e) 7.76%(e)
Ratio of expenses to average net assets(f)...... 4.43%(e) 5.18%(e) 4.18%(e)
Portfolio Turnover (g).......................... 159% 159% 159%
</TABLE>
- ---------------
(a) Net investment income is based on average shares outstanding during the
period.
(b) For the period from December 30, 1998 (commencement of class operations) to
October 31, 1999.
(c) For the period from February 18, 1999 (commencement of class operations) to
October 31, 1999.
(d) Not Annualized.
(e) Annualized.
(f) During the period, certain fees were waived or reimbursed. If such fees
waived or reimbursed had not incurred, the ratios would have been as
indicated.
(g) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
-17-
<PAGE> 18
[This Page Intentionally Left Blank]
<PAGE> 19
TRUSTEES
Samuel A. Lieber
Laurence B. Ashkin
Foster Bam
H. Guy Leibler
[ALPINE LOGO]
INVESTMENT ADVISOR
Alpine Management and Research, LLC Realty
122 East 42nd Street, 37th floor Income & Growth
New York, NY 10168 Fund
CUSTODIAN
IFTC
801 Pennsylvania
Kansas City, MO 64105
TRANSFER AGENT
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, OH 43215
LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services L.P.
3435 Stelzer Road
Columbus, OH 43219 [GRAPHIC]
_______________________________
Alpine International Real Estate Equity Fund ANNUAL REPORT
122 East 42nd Street, 37th floor October 31, 1999
New York, NY 10168
(212) 687-5588
(12/99)
<PAGE> 20
TRUSTEES
Samuel A. Lieber
Laurence B. Ashkin
Foster Bam
H. Guy Leibler
[ALPINE LOGO]
INVESTMENT ADVISOR
Alpine Management and Research, LLC Realty
122 East 42nd Street, 37th floor Income & Growth
New York, NY 10168 Fund
CUSTODIAN
IFTC
801 Pennsylvania
Kansas City, MO 64105
TRANSFER AGENT
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
ACCOUNTANTS
PricewaterhouseCoopers LLP
100 East Broad Street
Columbus, OH 43215
LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, NY 10022
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services L.P.
3435 Stelzer Road
Columbus, OH 43219 [GRAPHIC]
_______________________________
Alpine International Real Estate Equity Fund ANNUAL REPORT
122 East 42nd Street, 37th floor October 31, 1999
New York, NY 10168
(212) 687-5588
(12/99)
