<PAGE> 1
TABLE OF CONTENTS
Portfolio Manager's Report to Shareholders
PAGE 2
Schedule of Portfolio Investments
PAGE 8
Statement of Assets and Liabilities
PAGE 9
Statement of Operations
PAGE 10
Statements of Changes in Net Assets
PAGE 11
Notes to Financial Statements
PAGE 12
Financial Highlights
PAGE 17
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<PAGE> 2
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALPINE REALTY INCOME & GROWTH
FUND MORGAN STANLEY REIT INDEX
----------------------------- -------------------------
<S> <C> <C>
12/30/98 10000 10000
1/31/99 10250 9889
4/30/99 11066 10609
7/31/99 10984 10298
10/31/99 10314 9549
1/31/00 10652 9760
4/30/00 11905 10626
</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 4/30/00
SINCE
6 MONTH(A) 1 YEAR INCEPTION+
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Alpine Class Y 15.43% 7.58% 13.96%
Alpine Class A (4.75%)* 9.93% 2.24% 9.64%
Alpine Class B (5.00%)** 9.88% 2.08% 10.40%
-------------------------------------------------------------------------------------
Morgan Stanley REIT Index 11.28% .17% 4.65%
</TABLE>
* REPRESENTS MAXIMUM SALES LOAD.
** REPRESENTS MAXIMUM REDEMPTION FEE.
+ Class A and Class Y shares, commenced December 30, 1998. Performance for
Class B shares for the period prior to its inception on February 18, 1999,
represents performance for Class Y shares. Class B shares are subject to
distribution and service fees, which had they been included in the prior
period, performance would have been lower.
(a) Not annualized.
--------------------------------------------------------------------------------
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<PAGE> 3
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the Alpine Realty Income & Growth Fund's Semi-Annual
report for the six months ended April 30, 2000. The net asset value of the
Fund's Class Y shares on that date was $10.86, up from $9.90 at the beginning of
the period. In addition, the Fund made two quarterly dividend distributions to
shareholders of $0.3135 on December 27, 1999 and $0.1858 on March 27, 2000,
which in combination with the increase in net asset value produced a total
return to shareholders of 15.43% during the period.
COMPARATIVE PERFORMANCE
The Alpine Realty Income & Growth Fund has consistently outperformed its
peer group and benchmark over a number of measurement periods since its
inception on December 30, 1998, including the latest six month period ending
April 30, 2000.
We are pleased to report that the Fund's Y shares were ranked #1 in terms
of total return to shareholders among the 132 funds tracked by Lipper Analytical
Services, Inc., within Lipper's Real Estate funds category(1) for the period
from December 31,1998 through April 30, 2000. During that period the Fund
achieved a total return of 12.59% on an annualized basis, which compares very
favorably to the 2.25% average of the funds tracked by Lipper(2) and the 3.41%
return of the Morgan Stanley REIT Index (the "RMS Index")(3), the Fund's primary
benchmark.
During the six month period ended April 30, 2000, the Fund's Class Y
shares' total return of 15.43% compares favorably to both the 11.28% return of
the RMS Index and the 9.69% average return of the 147 funds tracked by Lipper
over the period.
We are particularly pleased that the Fund has achieved its strong relative
performance while producing a very healthy income return to its shareholders.
For investors who acquired the Fund's Y shares at $10.00 per share at inception
on December 30, 1998, the Fund delivered a 7.4% income return in 1999. During
the first quarter of 2000, the Fund made a distribution to shareholders of
$0.1858, which equates to an annualized yield of 7.52% based on the Fund's NAV
at the beginning of the year.
We believe the Fund's outperformance over the above-mentioned periods has
been due to Alpine's fundamental focus on value investing. Additionally, in the
fourth quarter of 1999 we took advantage of the pricing pressure on REITs(4) to
upgrade the income producing characteristics of the Fund's holdings and purchase
shares in companies which own some of the most desirable institutional quality
real estate at very attractive valuation levels. That pricing pressure had
resulted from both tax loss selling and "overselling" by investors who had
rotated away from the underperforming real estate sector to higher growth
oriented investments. Moving forward, we will continue to target individual
companies with strong balance sheets, solid dividend coverage, and healthy
---------------
(1) For the 1 year ending 04/30/00, the Fund ranked #2 in terms of total returns
to shareholders out of 139 funds. Lipper ranking is based on total return
and does not reflect a sales change.
(2) For the 1 year ending 04/30/00 the average of the funds tracked by Lipper
was -2.22%. Lipper Real Estate Fund Average is an average of funds that
invest 65% of their portfolio in equity securities of domestic and foreign
companies engaged in the real estate industry. Lipper is an independent
mutual fund performance monitor whose results are based on total return & do
not reflect a sales charge.
(3) The Morgan Stanley REIT Index (the "RMS 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. The index was
developed with a base value of 200 as of December 31, 1994.
(4) REIT Disclosure: Investments in the Funds are subject to the risks related
to direct investment in real estate, such as real estate risk, regulatory
risks, concentration risk, and diversification risk. By itself the fund does
not constitute a complete investment plan and should be considered a
long-term investment for investors who can afford to whether changes in the
value of their investments.
--------------------------------------------------------------------------------
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<PAGE> 4
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
real estate fundamentals. We will also continue to overweight those sectors
within the real estate universe that we believe the market has undervalued. In
following our value approach, we hope to continue to produce superior total
return performance for our shareholders.
<TABLE>
<S> <C>
GEOGRAPHICAL SECTOR DISTRIBUTION*
DISTRIBUTION*
[SECTOR DISTRIBUTION
[GEOGRAPHICAL PIE GRAPH]
DISTRIBUTION PIE
GRAPH]
</TABLE>
REAL ESTATE STOCK PERFORMANCE
In our "Alpine View 2000" sent previously to shareholders, we set forth the
proposition that a favorable shift in investor sentiment towards real estate
securities was near at hand. We noted that the weak performance of real estate
stocks during 1999 and early 2000 had resulted not from the performance
attributes of the underlying real estate assets but primarily from investor
disinterest in stocks dubbed as part of the "old economy" and the concurrent
fascination with the growth prospects of information technology companies.
However, we expected the pendulum to shift back towards inexpensive sectors such
as real estate as investors reassessed the risk-adjusted returns of growth vs.
value plays and, in fact, this appears to be exactly what happened beginning on
March 13, 2000. This date marked the beginning of a slide in the technology
laden NASDAQ(5) Index which dropped 23.5% from its peak of 5048.62 on March 10
through April 30 and a rise in the RMS Index over the same period of 12.2%.
The positive performance of REITs since March 10 broke a pattern of negative
return performance that had been in effect since peak valuations in October
1997. Indeed, after two consecutive down years in 1998 and 1999, patient
investors in real estate securities have seen the disparity between private and
public market valuations of real estate begin to narrow in the year 2000. REITs'
high current dividend yields, average projected earnings growth of 8%, and share
valuation discounts to underlying real estate value, have finally captured
investors' interest.
---------------
(5) The NASDAQ Composite index is a broad-based capitalization- weighted index
of all NASDAQ National Market and Small Cap Stocks. An investor cannot
invest directly in an index.
--------------------------------------------------------------------------------
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<PAGE> 5
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
Total return performance of the RMS Index from December 31, 1999 through
April 30, 2000 was 9.55% which compares to -5.08% for the NASDAQ and -0.78% for
the S&P 500(6). Hotel and regional mall companies were the two leading sectors,
outperforming the broader REIT index with 17.7% and 14.6% returns respectively.
Both sectors were among the weakest performers in 1999 with investors selling
hotel companies based primarily on concerns of oversupply in many markets and
disposing of shares in regional mall REITs due to fears of the impact of
E-retailing on store based shopping. Last Fall, we believed both sectors
provided attractive valuations and expected that as signs of a slowdown in hotel
construction and weakness in E-retailers surfaced share prices in both sectors
would rise from their oversold valuation levels.
Also performing well during the first four months of 2000 were office and
industrial companies with 10.2% returns. Companies with assets located in major
metropolitan central business districts such as New York City, Washington D.C.,
Boston, and San Francisco or in the strong suburban markets of northern
California, northern Virginia, and Boston exhibited the strongest internal cash
flow growth and were rewarded by the market. The weakest performing sector in
2000 continued to be the health care REITs whose exposure to troubled operators
of nursing homes and assisted living facilities weighed mightily on the
stability of their prospective earnings.
FUND PORTFOLIO PERFORMANCE*
The Fund's outperformance during both the six month and year to date periods
ending April 30, 2000 was due primarily to our focus on undervalued companies,
our purposeful overweighing in the lodging and retail sectors, and our
geographic focus on the West Coast and Eastern seaboard markets from northern
Virginia to Boston. At the same time, the Fund maintained a relatively
conservative approach to portfolio construction, as compared to recent trends in
this group, as evidenced by the Fund's composition at the end of the period
which (i) was diversified through 41 different investments, (ii) had its largest
holding limited to less than 5.3% of total investment, and (iii) had the top 10
holdings account for less than 39.5% of the Fund.
Specifically, the Fund benefited during the period from having approximately
29% of its assets in retail REITs and diversified REITs with retail assets and
over 13% of its assets invested in lodging companies. This compares with the 20%
and 6% respective weightings of these sectors in the RMS Index. Notable
performers over the six month period ended April 30, 2000 were lodging
investments in Starwood Hotels & Resorts Worldwide, MeriStar Hospitality Corp.,
Host Marriott Corp., and newly added RFS Hotel Investors, all returning in
excess of 24%. Retail investments in the regional mall REITs, Macerich Company,
Simon Property Group, Inc., and newly
TOP 10 HOLDINGS* AS OF 4/30/00
<TABLE>
<C> <S> <C> <C> <C> <C>
1. Chelsea GCA Realty, Inc. 5.28% 6. Simon Property Group 3.56%
2. Duke Realty Investments 4.68% 7. CBL & Associates Prop. 3.54%
3. Equity Res Prop Trust 4.42% 8. Macerich Company 3.50%
4. Mack Cali Realty Corp. 3.89% 9. Starwood Hotels & Resorts 3.38%
5. Kilroy Realty Corp. 3.65% 10. Vornado 3.35%
Percentages based on net assets.
</TABLE>
* Portfolio composition subject to change.
---------------
(6) The Standard & Poor's 500 Index is a capitalization-weighted index of 500
stocks. The index is designed to measure performance of the board domestic
economy through changes in the aggregate market value of 500 stocks
representing all major industries. An investor can not invest directly in an
index.
--------------------------------------------------------------------------------
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<PAGE> 6
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
added CBL Associates Properties, all returned in excess of 15%.
During the period, the Fund maintained an approximate market weighting in
office and industrial REITs which, as mentioned above, was the third best
performing sector in the REIT universe. Best performers for the Fund in this
sector were Duke-Weeks Realty Corp., Kilroy Realty Corp., Equity Office
Properties, and Cornerstone Properties, all returning in excess of 15%, with
Cornerstone returning 29.5% based on its announced merger into Equity Office
Properties. The performance of Kilroy and attractiveness of Cornerstone as an
acquisition by Equity Office were driven by each company's exposure to the
strong office markets of California.
PORTFOLIO CHANGES*
Notable changes to the Fund's portfolio during the period included (i) an
increased weighting in the multi-family sector, (ii) new top ten investments in
Equity Residential Properties and CBL Associates, and (iii) increased investment
in existing holdings Chelsea GCA and Duke-Weeks Realty Corp., which ended the
period as the Fund's two largest investments at 5.3% and 4.7% of investments,
respectively. We increased the Fund's exposure to apartment companies from
approximately 6% at the beginning of the period to over 13% at the end of the
period, picking up shares in Equity Residential and Apartment Investment and
Management Company, the two largest REIT apartment managers and owners, as well
as in Town and Country Trust and Roberts Realty, two REITs focused on in-fill
markets in the Baltimore/Washington D.C. and Atlanta metro markets,
respectively. We were able to buy these shares at attractive discounts to the
underlying net asset values of the companies' equity and believe they have above
average earnings growth potentials in the current interest rate environment. In
addition to new holdings among the Fund's ten largest investments, including
Equity Residential and CBL Associates, Reckson Associates, an owner of suburban
and CBD office properties in the robust New York City metro markets, became a
top ten holding through the purchase of both its Class A and B shares. The
Fund's manager also took advantage of pricing pressure on the shares of Chelsea
GCA and Duke-Weeks during the period and were able to achieve 18.5% and 19.2%
incremental returns on our new investments, respectively. Finally, we divested
of three previous top ten holdings, Highwoods Properties, Inc., Burnham Pacific
Properties, Inc., and FelCor Lodging Trust Inc., during the period and our
shares in the previous #1 holding, Sunstone Hotel Investors, Inc., were tendered
upon completion of the company's privatization in November 1999.
OUTLOOK
Alpine believes that during the remainder of 2000, several issues with
implications for the performance of real estate securities will dominate
investor sentiment: (i) a continued reassessment of the risk-adjusted returns of
growth vs. value plays; (ii) concerns of additional interest rate increases led
by the Federal Reserve; and (iii) new technology initiatives and new business
ventures made possible by the REIT Modernization Act.
We believe that the investor community will continue their renewed focus on
the attractive current yield and valuation levels of REITs. Despite the strong
rise in the Morgan Stanley REIT Index since mid-March, share prices of many
entities remain at sizable discounts to their underlying assets, particularly in
the lodging and regional mall sectors, while average REIT dividend yields of
approximately 7.6% are over 600 basis points higher than yields afforded by
equities in the S&P 500 and nearly 400 basis points higher than S&P Utility
yields. Concurrently, real estate fundamentals remain very healthy across many
markets with national office and industrial vacancy rates reaching new lows,
retail sales in real estate based shopping venues being powered by strong
consumer confidence, and multi-family apartment owners in the supply constrained
east and west coast markets achieving strong rent and occupancy levels.
Perhaps the largest overhang on the equity markets is the prospective
interplay between potential interest rate increases led by the Federal Reserve
and
--------------------------------------------------------------------------------
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<PAGE> 7
Portfolio Manager's Report to Shareholders Alpine Realty Income & Growth Fund
--------------------------------------------------------------------------------
the impact of such rate increases on the economy.
Though we believe an aggregate of 50 basis points in increases is possible
before the end of the summer, we do not believe the Federal Reserve will allow
rising rates to push the economy toward a recession. Significantly, if the
Federal Reserve is successful in bringing economic growth down to more
normalized levels, real estate fundamentals should remain healthy with a
continuation of the business cycle stabilizing demand. By sector, any
significant rate increases could potentially have the greatest impact on the
more economically sensitive lodging and retail sectors. In all cases, though,
real estate companies with limited exposure to variable rate debt and near term
debt maturities will obviously fare better than those with greater balance sheet
exposure. Accordingly, we will continue our focus on companies with both healthy
real estate fundamentals and balance sheet strength and will remain vigilant of
greater than anticipated interest rate impacts to the lodging and retail
sectors.
Another dominant theme for 2000 has been the intersection of new technology
and bricks and mortar real estate and we expect it to remain so throughout the
year. In fact, the National Association of Real Estate Investors' upcoming
conference in June is entitled "Focus Real Estate; Angle Technology" and is
dominated by panels discussing the impact of technology on the various real
estate sectors. To date much press has been afforded to wiring buildings for
high speed Internet access, to web-based property operating systems, to Internet
enabled purchasing collectives, and to potential Internet provided services to
tenants. Our belief is that such technological upgrades will continue apace with
the larger and better capitalized REITs leading the charge although the
aggregate impact on revenues for most REITs will be in the form of ancillary
income and thus not be significant relative to their core operations. Improving
operating margins through expense efficiencies and maintaining building
competitiveness will be the major outcomes from capital spent on new technology.
Potentially more significant, in our opinion, will be new business initiatives
undertaken by REITs starting in the year 2001 as allowed by the REIT
Modernization Act. This legislation will allow REITs to use up to 20% of their
balance sheet to establish taxable REIT subsidiaries which can engage in revenue
generating activities previously disallowed under the tax laws. Such activities
can encompass services provided to tenants or others as well as more active
merchant building activities. We believe that the larger capitalized REITs with
greater free cash flow and balance sheet strength will be the primary
beneficiaries of this new legislation.
We will continue our value approach throughout 2000, targeting companies
with strong balance sheets, solid dividend coverage, and healthy real estate
fundamentals, and hope to continue to produce exceptional performance for our
shareholders. We look forward to updating you on this Fund's progress as the
rest of 2000 unfolds.
/S/ SAMUEL A. LIEBER /S/ Robert W. Gadsen
Samuel A. Lieber Robert W. Gadsden
Co-Portfolio Manager Co-Portfolio Manager
---------------
* Portfolio holdings and composition are subject to change.
Past performance is no guarantee for future results. Investment return and net
asset value will fluctuate so that an investor's shares, when redeemed may be
worth more or less than the original cost.
BISYS Fund Services distributes the Alpine Realty Income & Growth Fund.
For more complete information on the Alpine Realty Income & Growth Fund,
including fees, expenses and sales charges please call 1-877-945-3863 for a free
prospectus. Please read the prospectus carefully before investing or sending
money.
The views expressed in this report reflect those of the investment adviser only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on the market and other
condition.
--------------------------------------------------------------------------------
-7-
<PAGE> 8
ALPINE REALTY INCOME & GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
---------- ------------------------------- ----------
<C> <S> <C>
COMMON STOCKS -- (3.3%)
Lodging -- (3.3%)
5,500 Starwood Hotels & Resorts
Worldwide, Inc............... $ 156,406
----------
Total Common Stocks
(Cost $124,205)................ 156,406
----------
REAL ESTATE INVESTMENT TRUSTS -- (95.0%)
Apartments -- (12.9%)
3,000 Apartment Investment and
Management Co................ 119,250
3,500 BRE Properties, Class A........ 97,781
4,500 Equity Residential Properties
Trust........................ 204,750
12,200 Roberts Realty Investors,
Inc.......................... 82,350
6,000 Town and Country Trust......... 103,500
----------
607,631
----------
Diversified -- (6.4%)
2,200 Alexander's, Inc. (b) (c)...... 144,100
4,500 Vornado Realty Trust........... 155,250
----------
299,350
----------
Health Care -- (3.8%)
7,000 Healthcare Realty Trust,
Inc.......................... 126,000
3,900 Nationwide Health Properties,
Inc.......................... 51,675
----------
177,675
----------
Hotels -- (9.7%)
5,000 Hospitality Properties Trust... 111,250
6,200 Host Marriott Corp. (c)........ 66,263
10,100 Innkeepers USA Trust........... 90,900
3,400 MeriStar Hospitality Corp...... 67,150
10,000 RFS Hotel Investors, Inc....... 121,250
----------
456,813
----------
Mortgage / Finance -- (3.2%)
8,500 iStar Financial, Inc........... 149,281
----------
Retail Centers -- (9.7%)
10,000 Developers Diversified Realty
Corp......................... 151,875
4,200 Kranzco Realty Trust........... 37,275
6,000 Philips International Realty
Corp......................... 98,625
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
---------- ------------------------------- ----------
<C> <S> <C>
REAL ESTATE INVESTMENT TRUSTS, CONTINUED:
Retail Centers, continued:
4,000 Ramco-Gershenson Properties
Trust........................ $ 57,000
5,000 Regency Realty Corp............ 110,625
----------
455,400
----------
Net Lease -- (2.0%)
5,000 National Golf Properties,
Inc.......................... 95,625
----------
Office-Industrial Buildings -- (29.1%)
2,100 AMB Property Corp.............. 46,331
3,000 Cabot Industrial Trust......... 57,750
10,000 Duke-Weeks Realty Corp. (c).... 216,874
3,000 Equity Office Properties....... 81,563
7,000 Kilroy Realty Corp............. 168,875
3,000 Liberty Property Trust......... 74,250
7,000 Mack-Cali Realty Corp.......... 180,250
3,300 Mission West Properties........ 27,638
7,000 Pacific Gulf Properties,
Inc.......................... 150,500
7,200 ProLogis Trust................. 141,750
3,000 PS Business Parks, Inc......... 66,750
6,100 Reckson Associates Realty
Corp......................... 122,381
2,000 Reckson Associates Realty
Corp., Class B............... 43,000
----------
1,377,912
----------
Shopping Malls -- (17.0%)
7,000 CBL & Associates Properties,
Inc.......................... 164,063
7,500 Chelsea GCA Realty, Inc. (c)... 244,687
11,500 Crown American Realty Trust.... 63,969
7,000 Macerich Co. (c)............... 162,313
6,500 Simon Property Group, Inc.
(c).......................... 164,937
----------
799,969
----------
Storage -- (1.2%)
2,500 Public Storage, Inc............ 55,938
----------
Total Real Estate Investment
Trusts
(Cost $4,206,809).............. 4,475,594
----------
Total Investments
(Cost $4,331,014) (a).. 98.3% 4,632,000
Other assets in excess of
liabilities............ 1.7% 79,394
----- ----------
TOTAL NET ASSETS......... 100.0% $4,711,394
===== ==========
</TABLE>
---------------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation..................... $361,807
Unrealized depreciation..................... (60,821)
--------
Net unrealized appreciation................. $300,986
========
</TABLE>
(b) Non-income producing securities.
(c) All or a portion of this security is held as collateral for the line of
credit.
See notes to financial statements.
-8-
<PAGE> 9
ALPINE REALTY INCOME & GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $4,331,014)................... $4,632,000
Interest and dividends receivable......................... 9,820
Receivable for investment securities sold................. 337,780
Receivable from investment advisor........................ 3,056
Prepaid expenses and other assets......................... 15,044
----------
Total Assets........................................... 4,997,700
----------
LIABILITIES:
Payable to custodian for line of credit................... 175,077
Payable for investment securities purchased............... 82,234
Accrued expenses and other liabilities:
Administration fees.................................... 176
Other.................................................. 28,819
----------
Total Liabilities...................................... 286,306
----------
NET ASSETS.................................................. $4,711,394
==========
NET ASSETS REPRESENTED BY
Shares of beneficial interest, at par value............... $ 43
Additional paid-in-capital................................ 4,491,013
Undistributed net investment income....................... 18,547
Accumulated net realized losses on investment
transactions........................................... (99,195)
Unrealized appreciation on investment transactions........ 300,986
----------
TOTAL NET ASSETS....................................... $4,711,394
==========
NET ASSET VALUE
Class A shares
Net assets of $2,243 / 206 shares outstanding.......... $ 10.89
==========
Offering price (based on sales charge of 4.75%)........ $ 11.43
==========
Class B shares*
Net assets of $1,181 / 109 shares outstanding.......... $ 10.83
==========
Class Y shares
Net assets of $4,707,970 / 433,596 shares
outstanding........................................... $ 10.86
==========
</TABLE>
---------------
* Redemption price per share varies based on length of time shares are held.
See notes to financial statements.
-9-
<PAGE> 10
ALPINE REALTY INCOME & GROWTH FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................... $ 747
Dividends.......................................................... 200,465
--------
Total income.................................................... 201,212
--------
EXPENSES:
Investment advisory fees.................................. $20,852
Administration fees....................................... 9,346
Distribution fees -- Class B.............................. 4
Shareholder servicing fees -- Class A..................... 2
Shareholder servicing fees -- Class B..................... 2
Fund accounting fees...................................... 3,598
Audit fees................................................ 6,438
Custodian fees............................................ 2,294
Interest expense from line of credit...................... 3,268
Legal fees................................................ 5,182
Registration and filing fees.............................. 11,129
Printing.................................................. 13,032
Transfer agent fees....................................... 1,388
Trustees' fees............................................ 620
Other..................................................... 465
-------
Total expenses before voluntary fee reductions.............. 77,620
--------
Expenses waived/reimbursed by investment advisor.......... (43,945)
--------
Net expenses......................................... 33,675
--------
Net investment income....................................... 167,537
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized losses from investment transactions................... (82,105)
Net change in unrealized depreciation from investment
transactions.................................................... 564,622
--------
Net realized/unrealized gains/losses from investments................ 482,517
--------
Change in net assets resulting from operations....................... $650,054
========
</TABLE>
See notes to financial statements.
-10-
<PAGE> 11
ALPINE REALTY INCOME & GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2000 OCTOBER 31, 1999(A)
---------------- -------------------
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income..................................... $ 167,537 $ 208,106
Net realized losses from short sales and investment
transactions........................................... (82,105) (12,705)
Net change in unrealized depreciation on investment
transactions........................................... 564,622 (263,636)
---------- ----------
Change in net assets from operations...................... 650,054 (68,235)
---------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net investment income................................ (68) (39)
From net realized gain on investments..................... (1) --
DISTRIBUTIONS TO CLASS B SHAREHOLDERS:
From net investment income................................ (47) (386)
From net realized gain on investments..................... (1) --
DISTRIBUTIONS TO CLASS Y SHAREHOLDERS:
From net investment income................................ (215,252) (141,304)
From net realized gain on investments..................... (4,383) --
---------- ----------
Change in net assets from shareholder distributions....... (219,752) (141,729)
---------- ----------
SHARES OF BENEFICIAL INTEREST TRANSACTIONS:
Proceeds from shares sold................................. 539,905 4,170,202
Dividends reinvested...................................... 138,143 91,369
Cost of shares redeemed................................... (240,475) (208,088)
---------- ----------
Change in net assets from shares of beneficial interest
transactions......................................... 437,573 4,053,483
---------- ----------
Total change in net assets............................. 867,875 3,843,519
---------- ----------
NET ASSETS:
Beginning of period....................................... 3,843,519 --
---------- ----------
End of period............................................. $4,711,394 $3,843,519
========== ==========
</TABLE>
---------------
(a) The fund commenced offering Class A shares 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
APRIL 30, 2000
(UNAUDITED)
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 are
sold without a front-end sales charge, but pay higher ongoing distribution
fees than Class A share. Class B shares are also sold subject to a
contingent deferred sales charge that is payable upon redemption and
decreases depending on the length of time 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.
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. The custodian holds
securities pledged as collateral for repurchase agreements 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
APRIL 30, 2000
(UNAUDITED)
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 where
applicable. 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. As of April 30, 2000, there were no outstanding positions of
securities sold short.
E. FINANCING AGREEMENT:
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 April 30, 2000 the
Trust had an unused Committed Line balance of $759,250.
F. 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.)
Continued
-13-
<PAGE> 14
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 2000
(UNAUDITED)
G. 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 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.
H. 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>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2000 OCTOBER 31, 1999(A)
-------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- ------- ----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold.............................. 95 $ 926 100 $ 1,000
Shares issued in reinvestment of
dividends............................. 7 69 4 40
------- --------- ------- ----------
Net change............................... 102 995 104 1,040
------- --------- ------- ----------
CLASS B
Shares sold.............................. -- -- 1,605 16,031
Shares issued in reinvestment of
dividends............................. 5 48 37 386
Shares redeemed.......................... -- -- (1,538) (16,301)
------- --------- ------- ----------
Net change............................... 5 48 104 116
------- --------- ------- ----------
</TABLE>
Continued
-14-
<PAGE> 15
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 2000
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL 30, 2000 OCTOBER 31, 1999(A)
-------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
------- --------- ------- ----------
<S> <C> <C> <C> <C>
CLASS Y
Shares sold.............................. 56,102 538,979 397,771 4,153,171
Shares issued in reinvestment of
dividends............................. 14,264 138,026 8,783 90,943
Shares redeemed.......................... (24,597) (240,475) (18,728) (191,787)
------- --------- ------- ----------
Net change............................... 45,769 436,530 387,826 4,052,327
------- --------- ------- ----------
Total net change................. 45,876 $ 437,573 388,034 $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 $4,472,450
and $3,924,613, respectively, for the period ended April 30, 2000.
5. DISTRIBUTION PLANS:
BISYS Fund Services LP ("BISYS LP"), 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
During the period ended April 30, 2000, BISYS LP earned no commission on
sales of shares of the fund.
Continued
-15-
<PAGE> 16
ALPINE REALTY INCOME & GROWTH FUND
NOTES TO FINANCIAL STATEMENTS, CONTINUED
APRIL 30, 2000
(UNAUDITED)
6. INVESTMENT ADVISORY AGREEMENT AND OTHER AFFILIATED TRANSACTIONS:
Alpine Management & Research LLC ("Alpine") provide investment advisory
services to the Fund. 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>
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 April 30,
2000:
<TABLE>
<CAPTION>
INVESTMENT ADVISOR
----------------------------------
ANNUAL FEE
BEFORE VOLUNTARY VOLUNTARY ADDITIONAL
FEE REDUCTIONS FEE REDUCTIONS REIMBURSEMENTS
---------------- -------------- --------------
<S> <C> <C> <C>
Realty Income & Growth Fund.................. $20,852 $20,852 $23,093
</TABLE>
BISYS LP 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 return
for these services, BISYS LP and BISYS will earn an annual fee amounting to
0.23% of the Fund's average daily net assets or a minimum of $250,000
annually for the Trust.
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.
-16-
<PAGE> 17
ALPINE REALTY INCOME & GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL, 30 2000 OCTOBER 31, 1999(a)(b)
---------------- ----------------------
(UNAUDITED)
<S> <C> <C>
CLASS A SHARES
NET ASSET VALUE BEGINNING OF PERIOD.................... $ 9.91 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income................................ 0.41 0.63
Net realized and unrealized gain (loss) from
investments and short sales....................... 1.06 (0.33)
------ ------
Total from investment operations..................... 1.47 0.30
------ ------
LESS DISTRIBUTIONS:
From net investment income........................... (0.49) (0.39)
From net realized gains.............................. --(g) --
------ ------
Total distributions.................................. (0.49) (0.39)
------ ------
NET ASSET VALUE END OF PERIOD.......................... $10.89 $ 9.91
====== ======
TOTAL RETURN (EXCLUDES SALES CHARGES).................. 15.36%(e) 2.90%(e)
ANNUALIZED RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................... $ 2 $ 1
Ratio of expenses to average net assets.............. 1.94%(d) 1.73%(d)
Ratio of net investment income to average net
assets............................................ 7.92%(d) 7.14%(d)
Ratio of expenses to average net assets (c).......... 3.96%(d) 4.43%(d)
Ratio of interest expense to average net assets...... 0.14%(d) --
Portfolio turnover (f)............................... 92% 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) During the period, certain fees were voluntarily waived or reimbursed. If
such voluntary fee waiver or reimbursement had not occurred, the ratios
would have been as indicated.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(g) Distribution was less than $0.005 per share.
See notes to financial statements.
-17-
<PAGE> 18
ALPINE REALTY INCOME & GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL, 30 2000 OCTOBER 31, 1999(a)(b)
---------------- ----------------------
(UNAUDITED)
<S> <C> <C>
CLASS B SHARES
NET ASSET VALUE BEGINNING OF PERIOD.................... $ 9.92 $ 9.99
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income................................ 0.38 0.53
Net realized and unrealized gain (loss) from
investments and short sales....................... 0.98 (0.23)
------ ------
Total from investment operations..................... 1.36 0.30
------ ------
LESS DISTRIBUTIONS:
From net investment income........................... (0.45) (0.37)
From net realized gains --(g) --
------ ------
Total distributions.................................. (0.45) (0.37)
------ ------
NET ASSET VALUE END OF PERIOD.......................... $10.83 $ 9.92
====== ======
TOTAL RETURN (EXCLUDES REDEMPTION CHARGES)............. 14.88%(e) 2.92%(e)
ANNUALIZED RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................... $ 1 $ 1
Ratio of expenses to average net assets.............. 2.73%(d) 2.48%(d)
Ratio of net investment income to average net
assets............................................ 6.84%(d) 6.94%(d)
Ratio of expenses to average net assets (c).......... 4.71%(d) 5.18%(d)
Ratio of interest expense to average net assets...... 0.16%(d) --
Portfolio turnover (f)............................... 92% 159%
</TABLE>
---------------
(a) Net investment income is based on average shares outstanding during the
period.
(b) For the period from February 18, 1999 (commencement of class operations) to
October 31, 1999.
(c) During the period, certain fees were voluntarily waived or reimbursed. If
such voluntary fee waiver or reimbursement had not occurred, the ratios
would have been as indicated.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(g) Distribution was less than $0.005 per share.
See notes to financial statements.
-18-
<PAGE> 19
ALPINE REALTY INCOME & GROWTH FUND
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
APRIL, 30 2000 OCTOBER 31, 1999(a)(b)
---------------- ----------------------
(UNAUDITED)
<S> <C> <C>
CLASS Y SHARES
NET ASSET VALUE BEGINNING OF PERIOD.................... $ 9.90 $10.00
------ ------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income................................ 0.43 0.64
Net realized and unrealized gain (loss) from
investments and short sales....................... 1.03 (0.32)
------ ------
Total from investment operations..................... 1.46 0.32
------ ------
LESS DISTRIBUTIONS:
From net investment income........................... (0.50) (0.42)
From net realized gains.............................. --(g) --
------ ------
Total distributions.................................. (0.50) (0.42)
------ ------
NET ASSET VALUE END OF PERIOD.......................... $10.86 $ 9.90
====== ======
TOTAL RETURN........................................... 15.43%(e) 3.14%(e)
ANNUALIZED RATIOS/SUPPLEMENTARY DATA:
Net Assets at end of period (000).................... $4,708 $3,842
Ratio of expenses to average net assets.............. 1.64%(d) 1.50%(d)
Ratio of net investment income to average net
assets............................................ 8.04%(d) 7.76%(d)
Ratio of expenses to average net assets (c).......... 3.72%(d) 4.18%(d)
Ratio of interest expense to average net assets...... 0.14%(d) --
Portfolio turnover (f) 92% 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) During the period, certain fees were voluntarily waived or reimbursed. If
such voluntary fee waiver or reimbursement had not occurred, the ratios
would have been as indicated.
(d) Annualized.
(e) Not annualized.
(f) Portfolio turnover is calculated on the basis of the Fund, as a whole,
without distinguishing between the classes of shares issued.
(g) Distribution was less than $0.005 per share.
See notes to financial statements.
-19-
<PAGE> 20
[This Page Intentionally Left Blank]
<PAGE> 21
TRUSTEES
Samuel A. Lieber
Laurence B. Ashkin
H. Guy Leibler
INVESTMENT ADVISER
Alpine Management and Research, LLC
122 East 42nd Street, 37th floor
New York, NY 10168
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
[ALPINE LOGO] ALPINE
REALTY
INCOME & GROWTH
FUND
ALPINE REALTY INCOME & GROWTH FUND
122 East 42nd Street, 37th floor
New York, NY 10168
(212)687-5588
-----------------------------------
SEMI-ANNUAL REPORT
APRIL 30, 2000
This material must be preceded or
accompanied by a current prospectus.
(6/00)
