THE CROWLEY PORTFOLIO GROUP, INC.
SEMI-ANNUAL REPORT
(Unaudited)
MAY 31, 1999
<TABLE>
<CAPTION>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
<S> <C> <C> <C>
Auto & Truck
$ 500,000 Ford Holdings
7.350%, 11/07/11 4.28% $ 517,500
50,000 General Motors
9.625%, 12/01/00 .43 52,508
300,000 General Motors
7.700%, 04/15/16 2.64 318,000
----- --------
7.35 888,008
----- --------
Banking
60,000 BankAmerica
7.750%, 07/15/02 .51 62,240
30,000 BankAmerica
7.875%, 12/01/02 .26 31,359
80,000 Bankers Trust New York
9.500%, 06/14/00 .69 82,600
20,000 Bankers Trust New York
9.400%, 03/01/01 .17 20,878
95,000 Banque Paribas New York
6.875%, 03/01/09 .78 93,589
40,000 First Union Corp.
9.450%, 06/15/99 .33 40,050
100,000 First Union Corp.
9.890%, 03/13/01 .88 106,479
---- -------
3.62 437,195
---- -------
Broadcasting & Cable T.V.
50,000 Cox Communications, Inc.
8.875%, 03/01/01 .43 52,070
Chemical (Basic)
400,000 DuPont E.I.
8.250%, 1/15/22 3.47 420,000
Chemical (Diversified)
80,000 ICI Wilmington
9.500%, 011/15/00 .69 83,658
Diversified Company
218,000 American Standard, Inc.
9.250%, 12/01/16 1.84 222,087
107,000 Mark IV Industries
7.500%, 09/01/07 .84 101,650
---- -------
2.68 323,737
---- -------
Diversified Financial Services
180,000 Advanta Corp.
7.000%, 05/01/01 1.40 169,200
---- -------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1999 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
<S> <C> <C> <C>
Drug
$ 100,000 ICN Pharmaceutical,
9.250%, 08/15/05 .85% $ 103,000
Electric Utility
510,000 Appalachian Power Company
8.500%, 12/01/22 4.47 540,753
250,000 Duquesne Lighting Company
7.625%, 04/15/23 2.17 262,772
217,000 Houston Lighting & Power
7.750%, 03/15/23 1.83 221,340
35,000 Mississippi Power & Light Co.
General Ref Mortgage
8.500%, 01/05/23 .31 37,078
400,000 Wisconsin Power & Light Company
1st Mortgage, 9.300%, 12/01/25 3.48 420,624
245,000 Wisconsin Electric Power
1st Mortgage, 7.750%, 01/15/23 2.04 246,031
----- ---------
14.30 1,728,598
----- ---------
Electrical Equipment Industry
100,000 General Electric Capital Corp.
Variable Rate, 05/01/18 .83 100,687
----- ---------
Entertainment
300,000 Paramont Communications
7.500%, 07/15/23 2.51 303,000
----- ---------
Food Processing
100,000 Quaker Oats Co.
9.000%, 12/17/01 .88 106,140
----- ---------
Grocery Store
350,000 Great Atlantic & Pacific Tea
7.750%, 04/15/07 2.90 350,000
----- ---------
Insurance (Diversified)
185,000 Aetna Services, Inc.
7.625%, 08/15/26 1.57 188,700
200,000 Trenwick Group
8.820%, 02/01/37 1.65 200,000
----- ---------
3.22 388,700
----- ---------
Insurance & Financial
250,000 Lucadia National
7.750%, 08/15/13 2.07 250,000
200,000 Source One Mortgage
9.000%, 06/01/12 1.94 235,000
----- --------
4.01 485,000
----- --------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1999 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
<S> <C> <C> <C>
Machinery (Construction & Mining)
$ 200,000 Caterpillar Inc.
6.810%, 08/24/99 1.66% $ 200,580
----- ------------
Office Equipment & Supplies
87,000 Ikon Office Solutions
6.750%, 12/01/25 .58 69,600
----- ------------
Paper and Forest Products
50,000 International Paper Company
9.700%, 03/15/00 .42 51,320
100,000 Pope & Talbot, Inc.
8.375%, 06/01/13 .79 95,500
----- ------------
1.21 146,820
----- ------------
Real Estate & Lodging
250,000 HMH Properties
7.875%, 08/01/08 1.99 240,000
Retail Building Supply Industry
300,000 Loews Corp.
7.625%, 06/01/23 2.53 306,000
Retail Store Industry
50,000 Dayton Hudson Corp.
10.000%, 12/01/00 .44 52,720
100,000 K Mart Corp.
Pass Thru Sec K-1 8.990%, 07/05/10 .89 108,000
200,000 K Mart Corp.
8.850%, 12/15/11 1.80 218,000
30,000 Wal Mart Stores
9.100%, 07/15/00 .26 31,073
----- ------------
3.39 409,793
----- ------------
Savings & Loan Industry
200,000 Great Western Financial
8.206%, 02/01/27 1.70 206,000
----- -----------
Securities Brokerage Industry
35,000 Bear Stearns Companies
9.375%, 06/01/01 .31 36,958
200,000 Bear Stearns Companies
7.000%, 04/02/18 1.67 201,440
200,000 Lehman Bros Holding Inc.
8.500%, 05/01/07 1.78 216,436
30,000 Morgan Stanley Group
8.100%, 06/24/02 .26 31,439
----- ------------
4.02 486,273
----- ------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1999 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
<S> <C> <C> <C>
Telecommunications Service Industry
$ 150,000 GTE North, Inc.
7.625%, 05/15/26 1.24% $ 150,000
100,000 ITT Corp.
6.250%, 11/15/00 .81 98,469
250,000 Mediaone Group
6.750%, 10/01/05 2.06 248,750
----- ------------
4.11 497,219
----- ------------
Tobacco
130,000 Philip Morris
8.250%, 10/15/03 .88 106,203
----- ------------
Trucking Equipment
100,000 Interpool, Inc.
7.200%, 08/01/07 .75 90,500
----- ------------
Total Corporate
Bonds & Notes (Cost $8,732,463) 71.96 8,697,981
----- ------------
</TABLE>
<TABLE>
<CAPTION>
Market
Percent of Value
Par Value Net Assets (Note 1-A)
PREFERRED STOCKS
<S> <C> <C> <C>
4,000 AT&T Capital, 8.125% .84 101,500
4,000 AT&T Capital, 8.25% .85 102,500
3,800 Canadian Occidental, 9.75% .84 101,175
8,000 Citigroup Capital I, 8.00% 1.71 206,504
4,000 Conseco, 8.70% .85 102,252
4,000 Georgia Power, Series 7.75% .84 102,000
8,000 Hartford Capital, Series A, 7.70% 1.68 203,000
10,000 Hercules Trust 9.42% 2.15 260,000
6,000 Lincoln National Capital, Series 8.75% 1.29 156,378
4,000 Nova Chemical, Ltd., 9.50% .87 104,752
10,000 Pacific Telesis, 7.56% 2.08 252,500
10,000 Pacificorp Capital, 8.25% 2.13 256,880
6,000 Transcanada Pipe Line Ltd., 8.25% 1.28 154,500
----- ---------
Total Preferred Stocks (Cost $2,044,868) 17.41 2,103,941
----- ---------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1999 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
U.S. GOVERNMENT AGENCY
<S> <C> <C> <C>
$1,000,000 Federal Home Loan Bank
Zero Coupon, 07/28/17 1.99% $ 240,310
80,000 Federal Home Loan Mortgage Corp.
8.325%, 07/15/09 .66 80,304
200,000 Federal National Mortgage Association
8.400%, 10/25/04 1.68 202,560
----- ------------
Total U.S. Government Agency (Cost $529,600) 4.33 523,174
----- ------------
Total Investments (Cost $11,306,931) (a) 93.70% 11,325,096
Other Assets Less Liabilities 6.30% 761,783
------- ------------
Net Assets 100.00% $ 12,086,879
======= ============
</TABLE>
(a) Aggregate cost for federal income tax purposes is $11,306,931.
At May 31, 1999, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Unrealized appreciation $ 165,703
Unrealized depreciation (147,538)
------------
Net unrealized appreciation $ 18,165
============
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 1999 (Unaudited)
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
GENERAL EQUITY FUNDS
<S> <C> <C> <C>
Aggressive Growth
5,303 Strong Opportunity 3.33% $ 225,215
6,789 Twentieth Century Ultra 3.59 242,562
------ -----------
6.92 467,777
------ -----------
Balanced
8,265 Columbia Balanced 2.89 195,547
2,439 Dodge & Cox Balanced 2.54 171,690
------ -----------
5.43 367,237
------ -----------
Corporate - High Yield
19,255 Federated High Yield Trust 2.52 170,411
17,643 Fidelity Capital & Income 2.62 177,314
14,736 Strong High Yield 2.42 163,569
20,178 T. Rowe Price High Yield 2.49 167,878
------ -----------
10.05 679,172
------ -----------
Growth
5,804 Fidelity Stock Selection 2.60 175,411
4,956 Harbor Capital Appreciation 2.99 202,218
6,496 Longleaf Partners 2.80 188,969
1,967 Nicholas 2.45 165,353
4,596 Oakmark 2.62 177,352
5,990 Vanguard U.S. Growth 3.31 223,487
6,380 Warburg Capital Appreciation 2.18 147,752
------ -----------
18.95 1,280,542
------ -----------
Growth/Income
7,610 American Century Growth & Income 3.39 229,356
4,105 Babson Value 3.08 208,227
2,195 Dodge & Cox Stock 3.38 228,167
14,461 Mutual Beacon 3.22 217,498
8,277 Neuberger & Berman Guardian 3.04 205,193
12,519 Pelican 3.16 213,818
8,153 Steinroe Growth & Income 3.25 219,471
------ -----------
22.52 1,521,730
------ -----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1999 (Unaudited)
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
INTERNATIONAL EQUITY FUNDS
<S> <C> <C> <C>
Foreign Equity
3,002 Managers International Equity 2.19% $ 147,916
15,125 Twentieth Century International Equity 2.18 147,162
------ -----------
4.37 295,078
------ -----------
Global Equity
6,943 Founders Worldwide Growth 2.35 159,062
4,026 Janus Worldwide Fund 2.99 201,843
------ -----------
5.34 360,905
------ -----------
Total Investments (Cost $4,677,322) (a) 73.58% 4,972,441
Other Assets Less Liabilities 26.42% 1,785,218
------ -----------
Net Assets 100.00% $ 6,757,659
====== ===========
</TABLE>
(a) Aggregate cost for federal income tax purposes is $4,677,322.
At May 31, 1999 unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Unrealized appreciation $ 410,148
Unrealized depreciation (115,029)
-----------
Net unrealized appreciation $ 295,119
===========
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
Income Diversified
Portfolio Portfolio
<S> <C> <C>
ASSETS
Investments at market value
(Identified cost $11,306,931 and $4,677,322
respectively) (Note 1) $ 11,325,096 $ 4,972,441
Cash 554,488 1,787,872
Interest receivable 212,538 -
-------------- ------------
Total assets 12,092,122 6,760,313
-------------- ------------
LIABILITIES
Accrued expenses 5,243 2,654
-------------- ------------
Total liabilities 5,243 2,654
-------------- ------------
NET ASSETS
(500 million shares of $.01 par value common stock
authorized; 1,143,456 and 495,162 shares issued
and outstanding, respectively) $ 12,086,879 $ 6,757,659
============== ============
NET ASSET VALUE
Offering and redemption price per share
(Net assets/shares outstanding) $10.57 $13.65
======= =======
At May 31, 1999, net assets consisted of:
Paid-in capital $ 12,036,682 $ 6,294,152
Undistributed net investment income 265,460 -
Distributions in excess of net investment income - (7,588)
Accumulated undistributed net realized gains (losses) (233,428) 175,976
Net unrealized appreciation of investments 18,165 295,119
-------------- ------------
$ 12,086,879 $ 6,757,659
============== ============
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended May 31, 1999
(Unaudited)
Income Diversified
Portfolio Portfolio
<S> <C> <C>
INVESTMENT INCOME
Interest income ............................................. $ 363,145 $ 2,343
Dividend income ............................................. 67,634 75,001
--------- ---------
Total income ............................................. 430,779 77,344
--------- ---------
EXPENSES
Investment advisory fees (Note 2) ........................... 35,935 32,678
Transfer agent fees ......................................... 23,961 13,071
Other expenses .............................................. 21,835 14,130
--------- ---------
Total expenses ........................................... 81,731 59,879
--------- ---------
Investment income - net ............................... 349,048 17,465
--------- ---------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from security transactions ......... 7,200 (96,629)
Capital gain distribution from regulated investment companies -- 272,131
Change in unrealized appreciation of investments ............ (236,205) 353,750
--------- ---------
Net gain (loss) on investments ........................... (229,005) 529,252
--------- ---------
Net increase in net assets resulting from operations .. $ 120,043 $ 546,717
========= =========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
May 31, 1999 November 30,
(Unaudited) 1998
<S> <C> <C>
OPERATIONS
Investment income - net ............................... $ 349,048 $ 611,531
Net realized gain on investments ...................... 7,200 14,114
Change in unrealized appreciation ..................... (236,205) 123,347
------------ ------------
Net increase in net assets resulting from operations 120,043 748,992
DISTRIBUTIONS TO SHAREHOLDERS
From investment income - net
($.59 and $.68 per share) .......................... (638,573) (569,758)
CAPITAL SHARE TRANSACTIONS (a) ............................ 625,525 2,427,296
------------ ------------
Total increase .................................. 106,995 2,606,530
NET ASSETS
Beginning of period ................................... 11,979,884 9,373,354
------------ ------------
End of period
(including undistributed net investment income
of $265,460 and $554,985, respectively) ............ $ 12,086,879 $ 11,979,884
============ ============
</TABLE>
(a) Summary of capital share activity follows:
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1999 Year Ended
(Unaudited) November 30, 1998
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold .................................. 42,682 $ 449,178 287,143 $ 3,031,209
Shares issued in reinvestment of distributions 60,643 638,573 54,837 569,758
------- ----------- -------- -----------
103,325 1,087,751 341,980 3,600,967
Shares redeemed .............................. (43,765) (462,226) (109,884) (1,173,671)
------- ----------- -------- -----------
Net increase ............................. 59,560 $ 625,525 232,096 $ 2,427,296
======= =========== ======== ===========
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
May 31, 1999 November 30,
(Unaudited) 1998
<S> <C> <C>
OPERATIONS
Investment income - net ............................... $ 17,465 $ 50,711
Net realized loss on investments ...................... (96,629) (9,695)
Capital gain distribution from regulated
investment companies ............................... 272,131 223,741
Change in unrealized appreciation ..................... 353,750 (335,574)
----------- -----------
Net increase (decrease) in net assets
resulting from operations ....................... 546,717 (70,817)
DISTRIBUTIONS TO SHAREHOLDERS
From investment income - net
($.13 and $.08 per share, respectively) ............ (61,880) (13,884)
From net realized gains on investments
($.45 and $.32 per share, respectively) ............ (214,198) (55,535)
CAPITAL SHARE TRANSACTIONS (a) ............................ 242,236 4,145,151
----------- -----------
Total increase .................................. 512,875 4,004,915
NET ASSETS
Beginning of period ................................... 6,244,784 2,239,869
----------- -----------
End of period
(Including undistributed (distribution in excess of)
net investment income of $(7,588) and $36,827
respectively) ...................................... $ 6,757,659 $ 6,244,784
=========== ===========
</TABLE>
(a) Summary of capital share activity follows:
<TABLE>
<CAPTION>
Six Months Ended
May 31, 1999 Year Ended
(Unaudited) November 30, 1998
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 6,606 $ 87,459 311,457 $ 4,270,555
Shares issued in reinvestment of distributions 21,237 276,077 5,514 69,419
------ ----------- ------- ------------
27,843 363,536 316,971 4,339,974
Shares redeemed (9,015) (121,300) (14,618) (194,823)
------ ----------- ------- ------------
Net increase 18,828 $ 242,236 302,353 $ 4,145,151
====== =========== ======= ============
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
Six Months Ended
May 31, 1999 Year Ended November 30,
(Unaudited) 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $11.05 $11.00 $10.90 $11.08 $10.69 $11.57
------ ------ ------ ------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .31 .59 .69 .59 .65 .61
Net gains (losses) on securities
(both realized and unrealized) (.20) .14 .06 (.15) .37 (.76)
------ ------ ------ ------ ------ ------
Total from investment operations .11 .73 .75 .44 1.02 (.15)
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends (from net investment income) (.59) (.68) (.65) (.62) (.63) (.66)
Distributions (from realized capital gains) - - - - - (.07)
------ ------ ------ ------ ------ ------
Total distributions (.59) (.68) (.65) (.62) (.63) (.73)
====== ====== ====== ====== ====== ======
NET ASSET VALUE
End of period $10.57 $11.05 $11.00 $10.90 $11.08 $10.69
TOTAL RETURN 1.02% 7.03% 7.34% 4.16% 10.12% (1.43)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $12,087 $11,980 $9,373 $9,529 $8,940 $6,654
Ratio of expenses to average net assets 1.35%* 1.35% 1.39% 1.39% 1.43% 1.37%
Ratio of net investment income to
average net assets 5.77%* 5.70% 6.22% 5.62% 6.43% 6.28%
Portfolio turnover rate 31.01% 44.77% 22.81% 66.18% 31.60% 14.45%
</TABLE>
* Annualized
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
<TABLE>
<CAPTION>
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
Period
April 1, 1995 (a)
Six Months Ended To
May 31, 1999 Years Ended November 30, November 30,
(Unaudited) 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $13.11 $12.87 $12.15 $10.71 $10.00
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income .04 .16 .17 .05 -
Net gains on securities
(both realized and unrealized) 1.08 .48 1.17 1.43 .71
------ ------ ------ ------ ------
Total from investment operations 1.12 .64 1.34 1.48 .71
------ ------ ------ ------ ------
LESS DISTRIBUTIONS
Dividends
(from net investment income) (.13) (.08) (.18) (.04) -
Distributions
(from realized capital gains) (.45) (.32) (.44) - -
------ ------ ------ ------ ------
Total distributions (.58) (.40) (.62) (.04) -
NET ASSET VALUE
End of period $13.65 $13.11 $12.87 $12.15 $10.71
====== ====== ====== ====== ======
TOTAL RETURN 8.76% 5.10% 11.64% 13.87% 7.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $6,758 $6,245 $2,240 $1,500 $962
Ratio of expenses to average net assets 1.83%(b) 1.88% 1.87% 2.22% 2.06%(b)
Ratio of net investment income (loss)
to average net assets .53%(b) 1.11% 1.08% .46% (.09)%(b)
Portfolio turnover rate 10.61% 4.51% - 20.69% -
</TABLE>
(a) Effective date of the Portfolio's initial registration under the Securities
Act of 1933, as amended.
(b) Annualized.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 1999 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Crowley Portfolio Group, Inc. (the "Fund") is an open-end diversified
investment company currently offering two series of shares: The Crowley
Income Portfolio, and The Crowley Diversified Management Portfolio (each a
"Portfolio").
The objective of The Crowley Income Portfolio is to maximize current
income, consistent with prudent risk, i.e., reasonable risk to principal.
The objective of The Crowley Diversified Management Portfolio is high total
return consistent with reasonable risk. The Portfolios will use a variety
of investment strategies in an effort to balance portfolio risks and to
hedge market risks. There can be no assurance that the objectives of the
Portfolios will be achieved.
SECURITY VALUATION
Portfolio securities, which are fixed income securities, are valued by
using market quotations, prices provided by market-makers or estimates
of market values obtained from yield data relating to instruments or
securities with similar characteristics, in accordance with procedures
established in good faith by the Board of Directors. Securities listed
on an exchange or quoted on a national market system are valued at the
last sales price. Investments in regulated investment companies are
valued at the net asset value per share as quoted by the National
Association of Securities Dealers, Inc. Money market securities with
remaining maturities of less than 60 days are valued on the amortized
cost basis as reflecting fair value. All other securities are valued
at their fair value as determined in good faith by the Board of
Directors.
FEDERAL INCOME TAXES
The Portfolios intend to comply with the requirements of the Internal
Revenue Code necessary to qualify as regulated investment companies
and as such will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is
distributed to shareholders. At November 30, 1998, the Income
Portfolio had a capital loss carryforward for Federal income tax
purposes of approximately $240,600, of which $22,000 expires in the
year 2002, $28,400 in 2003, $143,200 in 2004 and $47,000 in 2005.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS
As is common in the industry, security transactions are accounted for
on the trade date (the date the securities are purchased or sold).
Interest income is recorded on the accrual basis. Bond premiums and
discounts are amortized in accordance with Federal income tax
regulations. Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with generally
accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
- --------------------------------------------------------------------------------
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
May 31, 1999 (Unaudited)
(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Crowley & Crowley Corp. (the "Advisor") provides the Fund with management
and administrative services pursuant to a Management Agreement.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of .60% of the average
daily net assets of The Crowley Income Portfolio and 1% of the average
daily net assets of The Crowley Diversified Management Portfolio. The
Advisor pays all expenses incurred by it in rendering management services
to the Fund including the costs of accounting, bookkeeping and data
processing services provided in its role as administrator. The Portfolios
bear their costs of operations, which include, but are not limited to:
advisory fees; taxes; brokerage fees; accounting fees; legal fees;
custodian and auditing fees; and printing and other expenses which are not
expressly assumed by the Advisor under the Management Agreement.
The Crowley Financial Group, Inc. ("TCFG") serves as the Portfolio
shareholders' servicing agent. As shareholder servicing agent, TCFG will
act as the Transfer, Dividend Disbursing and Redemption Agent to the
Portfolios. As compensation for its services, TCFG receives a fee computed
daily and payable monthly, at the annualized rate of .40% of the average
daily net assets of each Portfolio. During the six months ended May 31,
1999, TCFG earned fees of $23,961 and $13,071 from the Income Portfolio and
Diversified Management Portfolio, respectively.
Crowley Securities serves as distributor of the Fund's shares.
Certain officers and directors of the Fund are also officers of Crowley &
Crowley Corp., Crowley Securities and The Crowley Financial Group, Inc.
(3) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments,
aggregated $2,170,110 and $1,876,464, respectively, in the Income Portfolio
and $347,346 and $1,747,884, respectively, in the Crowley Diversified
Management Portfolio.
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THE CROWLEY PORTFOLIO GROUP, INC.
The Crowley Income Portfolio
The Crowley Diversified Management Portfolio
Semi-Annual Report Dated
May 31, 1999
Dear Shareholder:
We are pleased to present you with the Semi-Annual Report for The Crowley
Portfolio Group, Inc. The report contains information regarding both The Crowley
Income Portfolio and The Crowley Diversified Management Portfolio. The
Portfolios have combined assets exceeding the 18.8 million dollar level. The
report contains financial data through May 31, 1999. There are currently 333
active accounts.
The Crowley Income Portfolio was priced at $10.57 per share as of May 31, 1999
and paid a $0.59 per dividend distribution on December 31, 1998. The composition
of the Portfolio remains heavily invested in corporate bonds and notes with
71.96% of the Portfolio's assets so invested. Preferred stocks comprised 17.41%
of the Portfolio and government agency bonds comprised 4.33%. Cash and cash
equivalents represented 6.30% of the Portfolio. Over the last six months
interest rates have risen sharply which normally has an adverse effect upon the
price of bonds. Given the rising rates, The Crowley Income Portfolio performed
well during this time period and was still able to provide a positive total
return to shareholders. Management does not believe that interest rates will
continue to rise, at least not at the current accelerated pace of the last six
months. Management has started to increase investments in some longer term
maturities and that of some lower quality bonds. Management believes the second
half of 1999 will provide a more stable environment for bond investing.
The Crowley Diversified Management Portfolio was priced at $13.65 per share as
of May 31, 1999. The Diversified Portfolio continued to grow and continued to
have good investment results. The Diversified Portfolio is generally considered
more aggressive than The Crowley Income Portfolio and currently is comprised of
approximately 6.92% aggressive growth funds, 5.43% balanced funds, 10.05% high
yield bond funds, 18.95% growth funds, 22.52% growth and income funds, 4.37%
foreign equity funds, 5.34% global equity funds and the remaining 26.42% in cash
and cash equivalents. The cash and cash equivalents position resulted from a
recent restructuring of the Portfolio. Management intends to invest the cash and
cash equivalents over the next two weeks. New investments will primarily be in
growth funds. Management currently intends to achieve an approximate 90%-10%
stock to bond mixture in the Portfolio. The international portion of the
Portfolio is currently at 9.71%
Sincerely,
Robert A. Crowley, CFA
President
July 15, 1999
