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THE BAUPOST FUND
SEMI-ANNUAL REPORT
(UNAUDITED)
April 30, 1997
This report and the financial statements contained herein are submitted for the
general information of the shareholders of The Baupost Fund. The report is not
authorized for distribution to prospective investors in The Baupost Fund unless
preceded or accompanied by the current prospectus.
THE BAUPOST FUND
SEMI-ANNUAL REPORT
(UNAUDITED)
APRIL 30, 1997
<TABLE>
<CAPTION>
CONTENTS:
<S> <C>
Management's Discussion of Performance......................................................................... 1
Audited Financial Statements:
Statement of Assets and Liabilities as of April 30, 1997 ..................................................... 4
Statement of Operations for the six months ended April 30, 1997............................................... 5
Statement of Changes in Net Assets for the six months ended April 30, 1997
and year ended October 31, 1996........................................................................... 6
Schedule of Investments as of April 30, 1997................................................................. 7
Schedule of Forward Foreign Currency Contracts as of April 30, 1997.......................................... 17
Schedule of Securities Sold Short as of April 30, 1997....................................................... 18
Notes to Financial Statements.................................................................................. 19
Financial Highlights........................................................................................... 25
</TABLE>
THE BAUPOST GROUP, INC.
44 BRATTLE STREET
P.O. BOX 389125
CAMBRIDGE, MASSACHUSETTS 02238-9125
(617) 497-6680
FAX: (617) 876-0930
June 20, 1997
Dear Baupost Fund Shareholder,
We are pleased to report profitable results for the six months ended April
30, 1997. Specifically, during that period the Fund gained 8.69% in value.
While this represents an attractive absolute return for a six month period,
you should know that our performance has lagged behind the continued strong
gains posted by the U.S. equity market. There are several reasons for this
relative underperformance: One is our low U.S. stock market exposure (only 31%
of net assets at April 30.) Another is our lack of exposure to the expensive
large capitalization consumer growth and technology stocks (the new "nifty
fifty") which have been among the best performers in the market. A third is our
considerable net cash and cash equivalent position (close to 30% of net assets
at April 30.) Finally, we have underperformed this roaring bull market for the
same reasons we always do: we remain risk averse value investors and will never
own what we perceive to be expensive stocks in the hope that they could somehow
rise even higher.
Gains in the U.S. stock market, it seems to us, are being fueled by two
important factors. First, the U.S. economic situation has been and remains very
favorable, with low inflation, relatively low interest rates and steady GDP
growth. The world is at peace, the U.S. has emerged as the sole superpower, and
capitalism has never been more popular.
Second, investors have come to expect (and depend on?) handsome returns
from investing in equities, and money has been relentlessly flowing into U.S.
stocks. We believe that this has in the short run become a self-fulfilling
prophecy, as funds flows lift share prices to produce the profitable returns
that investors have sought. Over time, however, this is very likely to become a
self-defeating prophecy, as today's inflows lift share prices to levels from
which the long term returns will likely be below the historical average, and
even further below today's investors' bloated expectations.
During the past six months, the Fund has enjoyed gains in a number of areas
of the portfolio, including several situations that benefited from unexpected
takeover activity. This has continued into May with the announcement that Basic
Petroleum has agreed to be acquired for $40 per share.
We continue to find attractive investments outside the U.S., and have
initiated a number of new positions over the past few months. The French market
declined ahead of the recent elections there, and this resulted in an
opportunity to add to a few of our established positions. We continue to believe
that foreign equity markets are both much cheaper than the U.S. and that they
are priced considerably less efficiently than here, creating a compelling
long-term opportunity for the Fund, notwithstanding the risks of investing in
foreign markets.
We thank you again for your confidence and support and look forward to
continued future investment success.
Very truly yours,
/s/ Seth A. Klarman
--------------------------
Seth A. Klarman
President
================================================================================
Average Annual Total Returns (1) 1 Life of Fund
For Periods Ended 04/30/97 Year (since 12/14/90)
---- ----------------
The Baupost Fund 24.75% 16.32%
================================================================================
Total return is an historical measure of past performance and is not intended to
indicate future performance. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
(1) Assumes reinvestment of all dividends.
GROWTH OF AN ASSUMED $50,000 INVESTMENT
IN THE BAUPOST FUND FROM 12/14/90 THROUGH 4/30/97
FUND S&P
12/14/90 $50,000.00 $50,000.00
04/30/91 $58,158.98 $58,161.73
04/30/92 $63,692.31 $66,325.82
04/30/93 $75,761.04 $72,448.88
04/30/94 $85,933.03 $76,302.11
04/30/95 $92,875.27 $89,627.93
04/30/96 $105,059.48 $116,707.47
04/30/97 $131,063.27 $146,040.47
THE BAUPOST FUND
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
APRIL 30, 1997
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities - at value $ 125,852,839
(Notes A and C) (cost $118,810,856)
Cash 11,642,047
Receivable for investments sold 807,554
Receivable for investments sold short 1,120,998
Unrealized appreciation on forward foreign
currency contracts sold 521,200
Accrued investment income 385,809
Other assets 22,843
-------------------
Total Assets 140,353,290
LIABILITIES:
Payable for investments purchased 11,067,193
Payable to The Baupost Group, Inc. (Note B) 405,637
Payable for securities sold short 784,213
(Notes A and C) (proceeds $1,120,998)
Other payables and accrued expenses 180,016
-------------------
Total Liabilities 12,437,059
-------------------
NET ASSETS $ 127,916,231
===================
COMPOSITION OF NET ASSETS:
Paid in capital $ 109,355,428
Distributions in excess of net investment
income (Note A) (2,403,943)
Accumulated undistributed net realized
gain on investments and foreign
currency transactions 13,233,949
Net unrealized appreciation on investments
and assets & liabilities in foreign currencies 7,730,797
-------------------
NET ASSETS $ 127,916,231
===================
NET ASSET VALUE:
Offering and redemption price per share
($127,916,231 / 8,681,774.086) $ 14.73
===================
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
STATEMENT OF OPERATIONS
(UNAUDITED)
SIX MONTHS ENDED APRIL 30, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME:
INCOME:
<S> <C>
Interest $ 1,433,755
Dividends (net of foreign withholdings of $27,172) 343,689
Other loss (48,735)
-------------------
Total Investment Income 1,728,709
EXPENSES:
Investment management fee (Note B) 618,281
Administrative fee (Note B) 154,571
Investment expenses 267,063
Legal fees 61,814
Custodian fees 39,102
Audit fees 19,600
Directors' fees 12,750
Registration and filing fees 11,616
Miscellaneous 2,893
-------------------
Total Expenses 1,187,690
NET INVESTMENT INCOME 541,019
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain (loss) on:
Investments 10,746,949
Short sales 157,710
Foreign currency transactions 2,265,468
-------------------
13,170,127
Change in unrealized appreciation/(depreciation) on:
Investments (4,112,236)
Short sales (568,092)
Foreign currency transactions 689,292
-------------------
(3,991,036)
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS 9,179,091
-------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 9,720,110
===================
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
--------------------- -----------------------
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income $ 541,019 $ 2,251,486
Net realized gain on investments and foreign
currency transactions 13,170,127 10,367,365
Change in unrealized appreciation of investments
and foreign currency transactions (3,991,036) 7,415,969
--------------------- ------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS 9,720,110 20,034,820
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (2,845,958) (1,825,419)
In excess of net investment income
From net realized gain on investments (10,826,206) (4,283,665)
CAPITAL SHARE TRANSACTIONS (NOTE E) 23,080,243 5,422,927
--------------------- ------------------------
INCREASE IN NET ASSETS 19,128,189 19,348,663
NET ASSETS AT BEGINNING OF PERIOD 108,788,042 89,439,379
--------------------- ------------------------
NET ASSETS AT END OF PERIOD
(including distributions in excess of
net investment income of $2,403,943
and $99,004, respectively)
$ 127,916,231 $ 108,788,042
===================== ========================
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
<TABLE>
<CAPTION>
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
<S> <C> <C> <C>
COMMON STOCKS - 63.36%
UNITED STATES - 30.88%
TELEPHONE COMMUNICATIONS - 5.46%
110,500 C-Tec Corporation $ 3,014,578 *
136,800 NCR Corporation 3,967,200 *
------------------
6,981,778
WHOLESALE - FOOD - 5.27%
259,400 TLC Beatrice International Holdings 6,744,400
AUTO & HOME SUPPLY - 4.05%
49,850 Dart Group Corporation - Class A 5,184,400
COMPUTER PROGRAMMING SERVICES - 3.62%
266,700 Wang Laboratories, Inc. 4,633,912 *
LESSORS OF REAL PROPERTY - 2.29%
835,959 MBO Properties, Inc. 2,925,856 *
FINANCIAL INSTITUTIONS - 2.04%
69,700 Allmerica Financial Corporation 2,509,200
110 Fidelity Bankshares, Inc. 2,090
132 First Federal Savings Bank of Siouxland 4,620
100 Harbor Federal Savings Bank 3,675
1,949 Mid-Central Financial Corporation 35,082
808 Mid-Coast Bancorp Inc. 14,948
1,800 Shelby County Bancorp 43,200
------------------
2,612,815
CEREAL BREAKFAST FOOD - 1.59%
198,900 Ralcorp Holdings, Inc. 2,038,725 *
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
PHOTOGRAPHIC PORTRAIT STUDIOS - 1.44%
114,280 CPI Corporation $ 1,842,765
FIRE, MARINE & CASUALTY INSURANCE - 1.04%
55,500 Farm Family Holdings, Inc. 1,325,062 *
ALUMINUM - 1.01%
29,950 Maxxam, Inc. 1,287,850 *
PHARMACEUTICALS - 0.97%
116,200 Therapeutic Discovery Corp. Class A 1,234,625 *
MISCELLANEOUS - 2.10%
40,900 Cadiz Land Company, Inc. 207,056 *
20,800 Chemfirst Inc. 481,000
154,240 Louise's Inc. 0 +*
49,900 Office Depot 698,600 *
938,000 Regency Equities Corporation 14,070 *
1,105 The Homestake Oil & Gas Company 110,500 +
1,579 The Homestake Royalty Corporation 221,060 +
46,200 Trak Auto Corporation 490,875 *
20,100 Trigon Healthcare Inc. 381,900 *
1,400 USAA Real Estate Equities Inc. Class A REIT 88,200 +
------------------
2,693,261
TOTAL COMMON STOCKS - UNITED STATES $ 39,505,449
==================
(Total Cost $36,651,424)
FRANCE - 15.21%
DIVERSIFIED HOLDING COMPANIES - 8.55%
2,786 Compagnie Generale D'Industrie et de Partcipations $ 845,285
2,161 Financiere et Industrielle Gaz et Eaux 956,244
10,075 Pathe SA 2,355,240
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
4,669 Societe Eurafrance SA $ 2,019,590
154,000 Thomson CSF 4,754,309
------------------
10,930,668
TEXTILES - 3.57%
77,135 Chargeurs International SA 4,564,201
FIRE, MARINE & CASUALTY INSURANCE - 2.92%
114,624 Assurances Generales de France 3,733,316
NONRESIDENTIAL CONSTRUCTION - 0.17%
3,600 GTM Entrepose 217,031
------------------
TOTAL COMMON STOCKS - FRANCE $ 19,445,216
==================
(Total Cost $16,309,118)
RUSSIA - 4.88%
OIL & GAS FIELD EXPLORATION SERVICES - 4.88%
32,300 Lukoil Oil Co. - Sponsored ADR $ 1,808,800
30,000 Surgutneftegaz Sponsored ADR 1,102,500
6,000,000 Unified Energy System of Russia 1,536,000
500,000 Vareganneftegaz 1,800,000 *
------------------
TOTAL COMMON STOCKS - RUSSIA $ 6,247,300
==================
(Total Cost $4,552,737)
HONG KONG - 4.32%
ELECTRONIC & OTHER ELECTRICAL EQUIP. - 3.41%
77,000 Semi-Tech Corporation - Class A $ 127,856
700 Semi-Tech Corporation - Class B 1,227
42,400 Semi-Tech Global Ltd. - ADR 284,080
2,841,238 Semi-Tech Global Ltd. 3,943,107
------------------
4,356,270
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
MANUFACTURING - TOYS & DOLLS - 0.91%
5,676,700 Playmates Toys Holdings Ltd. $ 1,165,240
------------------
TOTAL COMMON STOCKS - HONG KONG $ 5,521,510
==================
(Total Cost $7,616,760)
ITALY - 2.38%
DIVERSIFIED HOLDING COMPANIES - 2.38%
620,300 IFIL Finanziaria di Partecipazioni Ordinary Shares $ 1,781,095
700,000 IFIL Finanziaria di Partecipazioni Savings Shares 1,260,819
------------------
TOTAL COMMON STOCKS - ITALY $ 3,041,914
==================
(Total Cost $2,957,957)
BAHAMAS - 2.14%
CRUDE PETROLEUM - 2.14%
5,300 Basic Holdings Ltd. $ 559,724 +*
69,400 Basic Petroleum International Ltd. 2,177,425 +*
------------------
TOTAL COMMON STOCKS - BAHAMAS $ 2,737,149
==================
(Total Cost $1,919,525)
SWITZERLAND - 1.76%
FREIGHT TRANSPORATION - 1.76%
1,010 Danzas Holding AG - Registered Shares $ 959,946
6,690 Danzas Holding AG - Participation Certificates 1,294,399
------------------
TOTAL COMMON STOCKS - SWITZERLAND $ 2,254,345
==================
(Total Cost $2,505,797)
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
SOUTH KOREA - 1.12%
Commercial Banks - 0.87%
40,000 Hana Bank $ 536,383
17,000 Hana Bank - GDR Reg S 220,150
12,850 Housing & Commercial Bank Korea 248,500
6,300 Kookmin Bank 113,723
------------------
1,118,756
Security Broker/Dealers - 0.25%
9,570 Dongwon Securities - Preferred 42,383
12,470 Dongwon Securities - Common 121,638
19,140 Shinyoung Securities Co. - Preferred 107,299
3,100 Shinyoung Securities Co. - Common 42,751
------------------
314,071
------------------
TOTAL COMMON STOCKS - SOUTH KOREA $ 1,432,827
==================
(Total Cost $1,423,376)
UNITED KINGDOM - 0.47%
LUMBER & OTHER CONSTRUCTION MATERIALS - 0.47%
115,000 Adam & Harvey Group PLC $ 597,522
------------------
TOTAL COMMON STOCKS - UNITED KINGDOM $ 597,522
==================
(Total Cost $452,380)
HUNGARY - 0.20%
HOTELS AND MOTELS - 0.20%
14,400 Pannonia Hotels $ 261,173 +*
------------------
TOTAL COMMON STOCKS - HUNGARY $ 261,173
==================
(Total Cost $211,454)
TOTAL COMMON STOCKS $ 81,044,405
==================
(Total Cost $74,600,528)
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
COLLATERALIZED MORTGAGE OBLIGATIONS - 3.28%
263,755 Guardian S&L 1990-4A FRN due 06/25/20 $ 152,978
396,431 RTC Series 1991-M2 Class A1 principal only due 09/25/20 295,341
2,164,322 RTC Series 1991-M2 Class A3 principal only due 09/25/20 1,569,133
436 RTC Series 1991-M2 Class X1 interest only due 09/25/20 238,824
367 RTC Series 1991-M2 Class X2 interest only due 09/25/20 29,296
710 RTC Series 1991-M2 Class X3 interest only due 09/25/20 76,494
21,572,512 Structured Asset Sec. 1996-CFL Class X1 due 02/25/28 1,098,850
25,759,637 Structured Asset Sec. 1996-CFL Class X2 due 02/25/28 732,540
------------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS $ 4,193,456
==================
(Total Cost $4,227,168)
OPTIONS - 2.96%
1,028 British Sky Broadcasting Group 7.707 Puts expiring 10/13/97 $ 335,502 +
1,496 British Sky Broadcasting Group 6.500 Puts expiring 12/19/97 233,189 +
66,894 FRF/DEM 3.420 Puts/Calls expiring 07/25/97 16,819 +
66,894 FRF/DEM 3.420 Puts/Calls expiring 07/25/97 19,564 +
66,969 FRF/DEM 3.420 Puts/Calls expiring 07/29/97 17,999 +
50 Gold May 560 Calls expiring 05/07/97 0 +
50 Gold May 565 Calls expiring 05/07/97 0 +
50 Gold June 565 Calls expiring 05/12/97 0 +
569 Gold April 550 Calls expiring 04/05/01 85,275 +
569 Gold April 550 Calls expiring 04/09/01 85,275 +
27,606 Housing & Commercial Bank Swap expiring 02/11/98 97,921 +
35,140 Housing & Commercial Bank Swap expiring 05/20/99 149,887 +
9,340 Housing & Commercial Bank Swap expiring 05/20/99 33,550 +
398 Japanese Yen 135.980 Puts expiring 03/25/99 50,455 +
27,088 Kookmin Bank Swap expiring 02/11/98 46,232 +
34,430 Kookmin Bank Swap expiring 05/20/99 66,306 +
95 Nasdaq 100 Index 534.936 Puts expiring 08/04/97 1,909 +
53 Nasdaq 100 Index 551.816 Puts expiring 06/04/97 0 +
52 Nasdaq 100 Index 593.440 Puts expiring 03/25/98 38,790 +
52 Nasdaq 100 Index 629.330 Puts expiring 09/26/97 23,734 +
41 Nasdaq 100 Index 632.600 Puts expiring 05/11/98 55,148 +
86 Nasdaq 100 Index 635.205 Puts expiring 10/06/97 32,089 +
51 Nasdaq 100 Index 635.350 Puts expiring 09/29/97 26,384 +
42 Nasdaq 100 Index 642.290 Puts expiring 10/20/97 20,525 +
64 Nasdaq 100 Index 647.110 Puts expiring 05/20/98 113,348 +
50 Nasdaq 100 Index 653.820 Puts expiring 10/15/97 37,011 +
38 Nasdaq 100 Index 656.000 Puts expiring 11/26/97 23,180 +
5,100 Pathe/BSY Spread Calls expiring 08/29/97 191,964 +
4,900 Pathe/BSY Spread Calls expiring 09/21/97 115,787 +
450 Philip Morris 16.670 Puts expiring 05/19/97 0 +
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
360 Philip Morris 16.670 Puts expiring 05/19/97 $ 0 +
295 Philip Morris 16.670 Puts expiring 05/23/97 0 +
295 Philip Morris 16.670 Puts expiring 05/23/97 0 +
114 Philip Morris 50 Calls expiring 04/18/02 88,148 +
114 Philip Morris 50 Calls expiring 04/18/02 84,934 +
113 Philip Morris 50 Calls expiring 04/24/00 65,369 +
113 Philip Morris 50 Calls expiring 04/25/00 65,369 +
226 Philip Morris 50 Calls expiring 04/28/00 130,964 +
113 Philip Morris 50 Calls expiring 04/28/00 65,482 +
12,014 Pohang Iron & Steel Swap expiring 01/17/00 146,152 +
19,895 RJR Stub 6.103 Calls expiring 03/20/00 15,582 +
54,690 RJR Stub 6.267 Calls expiring 03/21/00 41,849 +
11,650 RJR Stub 6.540 Calls expiring 03/27/00 8,473 +
11,650 RJR Stub 6.400 Calls expiring 03/27/00 8,722 +
16,776 RJR Stub 6.170 Calls expiring 03/31/00 13,065 +
58,250 RJR Stub 6.110 Calls expiring 04/03/00 45,948 +
56,450 RJR Stub 5.800 Calls expiring 04/25/00 50,410 +
16,881 Samsung Pref. Eq. Linked Note expiring 02/05/00 550,186 +
977 SK Telecom Swap expiring 06/05/98 4,636 +
1,182 SK Telecom Swap expiring 12/23/98 (25,410)+
1,211 SK Telecom Swap expiring 12/28/98 80,062 +
1,130 SK Telecom Swap expiring 03/04/99 28,482 +
2,053 SK Telecom Swap expiring 01/23/00 38,234 +
7 South Korean Won 918.300 Puts expiring 06/10/97 6,559 +
17 South Korean Won 929.280 Puts expiring 07/07/97 15,769 +
35 South Korean Won 918.000 Puts expiring 01/22/98 105,423 +
94 S&P 500 Index 614.700 Puts expiring 09/19/97 12,734 +
159 S&P 500 Index 716.868 Puts expiring 05/02/97 0 +
276 US 10 Yr. Treasury Note Future 104.000 Puts expiring 08/22/97 138,000 +
142 US 10 Yr. Treasury Note Future 104.000 Puts expiring 08/22/97 84,313 +
------------------
TOTAL OPTIONS $ 3,787,298
==================
(Total Cost $6,508,111)
PARTNERSHIPS - 2.25%
Emerging Europe Fund for Sustainable Development L.P. $ 64,286 +
NCH Investors Fund L.P. 625,000 +
New Century Capital Partners II L.P. 865,580 +
Sigma/Ukraine L.P. 703,783 +
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
Sigma/Ukraine Class C L.P. $ 304,663 +
Ukrainian Growth Fund II L.P. 312,000 +
------------------
TOTAL PARTNERSHIPS $ 2,875,312
==================
(Total Cost $2,911,523)
PURCHASED BANK DEBT & TRADE CLAIMS - 1.54%
2,453,801 Maxwell Comm. Bank Debt - Baker Nye $ 269,361 +*
5,000,000 Maxwell Comm. Berlitz Obligations 543,750 +*
167,868 Maxwell Comm. Revolving Bank Debt - First Chicago 18,743 +*
943,496 Maxwell Comm. Revolving Bank Debt - Halcyon 105,691 +*
396,015 Maxwell Comm. Revolving Bank Debt - Halcyon II 44,216 +*
875,543 Maxwell Comm. Revolving Bank Debt - Lazard Freres 97,689 +*
264,059 Maxwell Comm. Revolving Bank Debt - Merrill Lynch 29,482 +*
823,981 Maxwell Comm. Revolving Bank Debt - San Paolo 92,266 +*
1,015,000 Maxwell Comm. Revolving Bank Debt - TCC Associates 113,610 +*
579,133 Maxwell Comm. Term Bank Debt - First Chicago 62,981 +*
1,678,704 Maxwell Comm. Term Bank Debt - Halcyon 182,559 +*
702,221 Maxwell Comm. Term Bank Debt - Halcyon II 76,367 +*
426,846 Maxwell Comm. Term Bank Debt - Lazard Freres 46,419 +*
468,269 Maxwell Comm. Term Bank Debt - Merrill Lynch 50,924 +*
325,093 Maxwell Comm. Term Bank Debt - San Paolo 35,354 +*
1,806,952 Maxwell Comm. Term Bank Debt - TCC Associates 196,506 +*
1,750,000 Wheeling-Pittsburgh Nonrestricted Trade Claims 0 *
------------------
TOTAL PURCHASED BANK DEBT & TRADE CLAIMS $ 1,965,918
==================
(Total Cost $0)
COMPANIES IN LIQUIDATION - 1.06%
5,682,800 Antonelli Liquidating Trust $ 22,731 +
3,150 EHLCO Liquidating Trust 283 +
250,000 Lionel Corp. Subordinated Notes 2,500 *
12.375% due 08/01/96
364,000 Lionel Corp. Subordinated Convertible Debentures 3,640 *
8.000% due 07/15/07
15,000,000 Maxwell Comm. Corp. PLC 6.000% due 06/15/93 910,352 *
5,500,000 Maxwell Comm. Corp. PLC 5.000% due 06/16/95 392,057 *
100,550 Timber Realization Liquidating Trust 25,137 +*
------------------
TOTAL COMPANIES IN LIQUIDATION $ 1,356,700
==================
(Total Cost $3,316)
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
WARRANTS - 0.57%
78,100 AXA-UAP CTF De Valeur Garant Exp. 07/01/99 $ 340,235
60,000 Five Arrows Chile Inv. Trust Warrants Exp. 05/31/99 22,800
1,109,400 Jardine Strategic Holdings Warrants Exp. 05/02/98 360,555
11,500 Scania AB-B Warrants Exp. 06/04/99 11,816
------------------
TOTAL WARRANTS $ 735,406
==================
(Total Cost $665,374)
CLOSED-END MUTUAL FUNDS - 0.09%
1,200 Komercni Bank Investicni Fond $ 21,667
6,700 Zivnobanka Investicni Fond 94,787 *
------------------
TOTAL CLOSED-END MUTUAL FUNDS $ 116,454
==================
(Total Cost $147,674)
BONDS & NOTES IN REORGANIZATION - 0.03%
90,130 MBL Class 4 Unsecured Claim $ 31,546 +*
548,227 RTC Series 1991 M2 Class B interest only due 09/25/20 10,965
------------------
TOTAL BONDS AND NOTES IN REORGANIZATION $ 42,511
==================
(Total Cost $13,706)
CORPORATE BONDS - 0.01%
11,000 Chartwell Contingent Interest Note 8.000% due 06/30/06 $ 4,702 +
------------------
TOTAL CORPORATE BONDS $ 4,702
==================
(Total Cost $5,785)
THE BAUPOST FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 1997
NUMBER OF SHARES, MARKET
UNITS OR FACE VALUE VALUE
- ------------------------ ------------------
TEMPORARY INVESTMENTS - 23.24%
U S GOVERNMENT OBLIGATIONS - 23.24%
10,000,000 U S Treasury Bill due 05/01/97 $ 10,000,000
10,000,000 U S Treasury Bill due 07/24/97 9,881,467 ~
10,000,000 U S Treasury Bill due 08/14/97 9,849,210
------------------
29,730,677
TOTAL TEMPORARY INVESTMENTS $ 29,730,677
==================
(Total Cost $29,727,671)
TOTAL INVESTMENTS - 98.39% $ 125,852,839
==================
(Total Cost of Investments $118,810,856)
* Non-income producing security.
+ Restricted Securities - securities not registered under the Securities Act of 1933.
See Note D in the Notes to Financial Statements.
~ A portion of the security is serving as collateral or is segregated for securities sold short.
Foreign Currency Abbreviations
CHF Swiss Franc
DEM Deutschemark
The percentage shown for each investment category
is the total value of that category expressed
as a percentage of total net assets of the
Fund.
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
APRIL 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Market Unrealized
Value Gain/(Loss)
--------------------- -----------------
CONTRACTS TO SELL
<S> <C> <C> <C>
FRF 114,019,621 French Franc due 05/30/97 $ 19,581,714 $ 468,443
(Receivable amount $20,050,157)
ITL 5,655,200,000 Italian Lira due 05/30/97 3,301,704 44,964
(Receivable amount $3,346,668)
CHF 2,581,350 Swiss Franc due 05/27/97 1,759,300 7,793
(Receivable amount $1,767,093)
------------------------ ---------------------
TOTAL CONTRACTS TO SELL $ 24,642,718 $ 521,200
======================== =====================
(Receivable amount $25,163,918)
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
SCHEDULE OF SECURITIES SOLD SHORT
APRIL 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
Number of shares, Market
units or face value ($) Value
- ------------------------ -------------------
COMMON STOCK - 0.61%
<S> <C>
72,950 Kaiser Aluminum Corporation $ 784,213
--------------------
TOTAL COMMON STOCK SOLD SHORT $ 784,213
--------------------
(Total Proceeds from Common Stock Sold Short $1,120,998)
TOTAL SECURITIES SOLD SHORT - 0.61%
(Total Proceeds from Securities Sold Short $1,120,998) $ 784,213
====================
The percentage shown for each investment category is the total value of that
category expressed as a percentage of total net assets of the Fund.
</TABLE>
See notes to financial statements.
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
NOTE A--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Baupost Fund (the Fund) was established as a Massachusetts business trust
under an Agreement and Declaration of Trust dated June 29, 1990, and is
registered under the Investment Company Act of 1940, as amended, as a no-load,
nondiversified, open-end management investment company. The Fund is the
successor organization to Baupost Limited Partnership 1985 E-1 (the
Partnership).
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that may affect the
reported amounts of assets and liabilities. Actual results could differ from
those estimates.
SECURITY VALUATION: Portfolio securities, options and futures contracts for
which market quotations are available and which are traded on an exchange or on
NASDAQ are valued at the last quoted sales price or, if there is no such
reported sale that day, at the closing bid price. Securities, options and
forward contracts traded in the over-the-counter market (other than those traded
on NASDAQ) and other unlisted securities are valued at the most recent bid price
as obtained from one or more dealers that make markets in the securities.
Portfolio securities which are traded both in the over-the-counter market and on
one or more stock exchanges are valued according to the broadest and most
representative market. To the extent the Fund engages in "naked" short sales
(i.e., it does not own the underlying security or a security convertible into
the underlying security without the payment of any further consideration) the
Fund will value such short position as described above, except that the
valuation, where necessary, will be based on the asked price instead of the bid
price.
Assets for which no quotations are readily available are valued at fair value as
determined in good faith in accordance with procedures adopted by the Trustees
of the Fund. Determination of fair value is based upon such factors as are
deemed relevant under the circumstances, including the financial condition and
operating results of the issuer, recent third-party transactions (actual or
proposed) relating to such securities and, in extreme cases, the liquidation
value of the issuer.
Certain investments held by the Fund are restricted as to public sale in
accordance with the Securities Act of 1933. Whenever possible, such assets are
valued based on bid prices obtained from reputable brokers or market makers as
of the valuation date. For assets not priced by brokers or market makers, fair
value is determined by The Baupost Group, Inc.
(Baupost) in accordance with procedures adopted by the Trustees of the Fund.
SHORT SALES: The Fund is engaged in short-selling which obligates the Fund to
replace the security borrowed by purchasing the security at current market
value. The Fund would incur a loss if the 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 would realize a gain if the price of the security
declines between those dates. Until the Fund replaces the borrowed security, the
Fund maintains daily, in a segregated account with its custodian, cash or
securities sufficient to cover its short position. At April 30 1997, the Fund
had approximately $385,000 of U.S. Treasury bills in a segregated account
relating to its short positions.
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
NOTE A--ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES -- CONTINUED
Securities sold short at April 30, 1997 and their related market values and
proceeds are set forth in the Schedule of Securities Sold Short.
FORWARD FOREIGN CURRENCY CONTRACTS: The Fund may enter into forward foreign
currency contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date. The U.S. dollar value of the currencies the Fund
has committed to buy or sell is shown in the Schedule of Forward Foreign
Currency Contracts. Losses may arise from changes in the value of a foreign
currency relative to the U.S. dollar or from the potential inability of the
counterparties to meet the terms of their contracts. The Fund uses forward
foreign currency contracts to hedge the risks associated with holding securities
denominated in foreign currencies. These contracts are adjusted by the daily
exchange rate of the underlying currency, and any gains or losses are recorded
as unrealized until the contract settlement date.
FOREIGN CURRENCY TRANSLATION: The value of foreign securities is translated into
U.S. dollars at the rate of exchange on the day of valuation. Purchases and
sales of foreign securities, as well as income and expenses relating to such
securities, are translated into U.S. dollars at the exchange rate on the dates
of the transactions. The portion of both realized and unrealized gains and
losses on investments that result from fluctuations in foreign exchange rates is
not separately disclosed.
SWAPS: The Fund may enter into swap agreements. A swap is an agreement to
exchange cash payments between the Fund and another party. The cash payments may
fluctuate based on underlying indices or individual securities depending on the
terms of the swap agreements. Risks may arise upon entering these agreements
from the potential inability of the other party to meet the terms of the
agreements or from unanticipated changes in the underlying index or value of the
security. The Fund generally uses swaps to take positions on anticipated changes
in individual foreign securities.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Gains and losses on securities sold are determined
using the specific identification method. Dividend income is recorded on the
ex-dividend date or, for certain foreign dividends, as soon as the Fund becomes
aware of the dividends. Interest income, including original issue discount,
where applicable, is recorded on an accrual basis, except for bonds in default
for which there is some concern as to whether interest will be received in cash,
in which case interest is recorded when received.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements with
institutions that Baupost has determined are creditworthy. Each repurchase
agreement is recorded at cost. The Fund requires that the securities purchased
in a repurchase transaction be transferred to the custodian in a manner
sufficient to enable the Fund to obtain those securities in the event of a
default under the repurchase agreement.
PURCHASED CALL AND PUT OPTIONS: The Fund may enter into purchased call and put
options for both hedging and non-hedging activities. The Fund's exposure to
market risk relating to the securities is affected by a number of factors
including the size and composition of the options held, the time period during
which the options may be exercised, the volatility of the underlying security or
index, and the
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
relationship between the current market price of the underlying security or
index and the strike or exercise price of the option. Baupost closely monitors
the Fund's exposure to risk. In addition, all positions involving future
settlement are collateralized by cash balances or security deposits at the
broker through which the transaction was performed.
FEDERAL INCOME TAXES AND DISTRIBUTIONS: The Fund is a regulated investment
company, as defined under Subchapter M of the Internal Revenue Code (the Code).
By complying with Code provisions, the Fund is relieved from federal income tax
provided that substantially all of its taxable income is distributed to
shareholders. Therefore, no provision has been made for federal income taxes.
The Fund's income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to different treatment for
certain of the Fund's foreign securities. Differences in the recognition or
classification of income between the financial statements and tax earnings and
profits, which result in temporary overdistributions for financial statement
purposes are classified as distributions in excess of net investment income or
accumulated net realized gains.
CONCENTRATION OF CREDIT RISK: Concentrations of credit risk exist if a number of
companies in which the Fund has invested are engaged in similar activities and
have similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or other
conditions. To mitigate its exposure to concentrations of credit risk, the Fund
invests in a variety of industries located in diverse geographic areas. While
the portfolio is not concentrated in any one industry, securities of distressed
companies, many of which are restricted as to resale and which were purchased at
a significant discount, are an important component of the Fund's investments in
bonds.
NOTE B--INVESTMENT MANAGEMENT CONTRACT AND OTHER TRANSACTIONS WITH AFFILIATES
The Fund retains Baupost as its investment adviser, transfer agent and
administrator. Certain individuals who are officers and trustees of the Fund are
also officers, directors and shareholders of Baupost.
The Fund pays Baupost a quarterly management fee at an annual rate of 1% of
average net assets of the Fund and an administrative fee at an annual rate of
0.25% of average net assets of the Fund, to serve as transfer agent, dividend
disbursing agent and administrator. Baupost has agreed with the Fund to reduce
its management fee by up to 0.75% of the Fund's average net assets until further
notice to the extent that the Fund's total annual expenses (including the
management fee, administrative fee and certain other expenses, but excluding
brokerage commissions, transfer taxes, interest and expenses relating to
preserving the value of the Fund's investments) would otherwise exceed 1.5% of
the Fund's average net assets. For the purpose of determining the applicable
management and administrative fees, average net assets is determined by taking
an average of the determination of such net asset values during each quarter at
the close of business on the last business day of each month during such quarter
before any month-end share purchases or redemptions.
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
Management and administrative fees for the period November 1, 1996 through April
30, 1997 amounted to $618,281 and $154,571, respectively.
NOTE C--INVESTMENT TRANSACTIONS
Purchases and proceeds from the sale of investment securities (excluding
short-term investments) for the period ended April 30, 1997 aggregated
$63,355,197 and $67,772,303, respectively.
For federal income tax purposes, the identified cost of investments at April 30,
1997 was $119,306,678. Net unrealized appreciation, on a federal income tax
basis, for all securities and securities sold short was as follows:
Six Months Ended
April 30, 1997
--------------
Gross unrealized appreciation $ 16,150,399
Gross unrealized depreciation 8,770,926
-------------
Net unrealized appreciation $ 7,379,473
=============
NOTE D--RESTRICTED SECURITIES
At April 30, 1997 the Fund held the following securities which are restricted as
to public sale in accordance with the Securities Act of 1933:
<TABLE>
<CAPTION>
Earliest
Value at Acquisition
Purchased Bank Debt & Trade Claims: Cost April 30, 1997 Date
- ---------------------------------- ---- -------------- ----
<S> <C> <C> <C>
Maxwell Communications Corporate Debt 0 $1,965,919 11/22/93
Corporate Bonds:
- ----------------
Chartwell Inc. 8.00% due 06/30/06 5,785 4,702 12/21/95
Options:
- --------
British Sky Broadcasting Puts Expiring
10/13/97 - 12/19/97 579,788 568,691 10/11/96
FRF/DEM Calls Expiring 07/25/97 - 07/29/97 96,514 54,382 04/25/97
Gold Calls Expiring 05/07/97 - 04/09/01 291,268 170,550 11/05/96
Housing & Commerial Bank Swaps Expiring 50,872 281,358 02/03/97
02/11/98-5/20/99
Japanese Yen Puts Expiring 03/25/99 63,273 50,455 03/26/97
Kookmin Bank Swap Expiring 02/11/98-05/20/99 50,375 112,538 02/03/97
Nasdaq 100 Puts Expiring 06/04/97 - 05/20/98 1,364,008 372,118 06/03/96
</TABLE>
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
NOTE D--RESTRICTED SECURITIES -- CONTINUED
<TABLE>
<CAPTION>
Earliest
Value at Acquisition
Cost April 30, 1997 Date
---- -------------- ----
Options (cont'd):
- -----------------
<S> <C> <C> <C>
Pathe/BSY Spread Calls Expiring 08/29/97 -
09/21/97 $787,800 $307,751 08/27/96
Philip Morris Puts Expiring 05/19/97 - 04/28/00 822,056 500,266 05/19/95
Pohang Iron & Steel Swap Expiring 01/17/00 57,753 146,152
RJR Stub Calls Expiring 03/20/00 - 04/25/00 707,219 184,049 03/20/97
S & P 500 Index Puts Expiring 05/02/97 - 09/19/97 214,537 12,734 09/18/96
Samsung Preferred Equity Linked Note 01/05/00 530,000 550,186 01/31/97
SK Telecom Swap Expiring 06/05/98-03/04/99 452,943 126,004 12/03/96
South Korean Won Puts Expiring 06/10/97-01/22/98 117,586 127,751 12/10/96
Partnerships:
- -------------
Emerging Europe Fund for Sustainable Development, L.P. 64,286 64,286 02/25/97
NCH Investors Fund, L.P. 659,681 625,000 12/18/95
New Century Capital Partners II, L.P. 867,110 865,580 11/30/95
Sigma Ukraine, LP 703,783 05/14/96
703,783
Sigma Ukraine Class C, L.P. (Non-Voting) 304,663 304,663 11/27/96
Ukrainian Growth Fund II, LP 312,000 312,000 03/31/97
Common Stock:
- -------------
Basic Holdings, Ltd. 346,885 559,724 07/06/95
Basic Petroleum International, Ltd. 1,572,640 2,177,425 05/31/96
Louise's, Inc. 0 0 07/15/96
Pannonia Hotels 211,454 261,173 01/28/97
The Homestake Oil & Gas Company 113,815 110,500 02/10/94
The Homestake Royalty Corporation 241,587 221,060 02/10/94
USAA Real Estate Equities Inc. Class A Common 89,600 88,200 04/22/97
Companies in Liquidation:
- -------------------------
Antonelli Liquidating Trust (98,646) 22,731 12/02/93
Ehlco Liquidating Trust 431 284 01/30/89
Timber Realization Liquidating Trust 0 25,138 08/03/87
</TABLE>
THE BAUPOST FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Bonds & Notes in Reorganization:
- --------------------------------
MBL Class 4 usecured claim 0 31,546 06/18/96
----------- ---------
TOTAL RESTRICTED SECURITIES $11,581,066 $11,908,697
(9.31% Net Assets) =========== ===========
</TABLE>
The Fund does not have the right to demand that such securities be registered.
The Fund does not anticipate any significant costs associated with the
disposition of these securities.
NOTE E--CAPITAL SHARE TRANSACTIONS
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
-------------- ----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------- ------
<S> <C> <C> <C> <C>
Shares sold 1,531,748.430 $22,428,419.38 1,109,681.050 $15,369,110.78
Shares issued in
reinvestment of
dividends 923,568.339 13,216,262.88 454,829.173 5,799,072.03
Shares redeemed (846,404.411) (912,564,439.70) (1,132,554.464) (15,745,255.86)
------------ --------------- -------------- --------------
NET INCREASE 1,608,912.358 $23,080,242.56 431,955.759 $5,422,926.95
============= ============== =========== =============
</TABLE>
THE BAUPOST FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED OCTOBER, 31
SELECTED PER SHARE DATA (A) APRIL 30
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of $15.38 $13.47 $14.33 $14.77 $12.56 $11.97
------ ------ ------ ------ ------ ------
period Income from investment
operations
Net investment income 0.13 0.41 0.25 0.22 0.28 0.24
Net realized and unrealized gain 1.15 2.43 0.71 1.23 2.76 0.88
---- ---- ---- ---- ---- ----
Total from investment operations 1.28 2.84 0.96 1.45 3.04 1.12
---- ---- ---- ---- ---- ----
Less distributions
From net investment income 0.40 0.28 0.25 0.46 0.22 0.53
In excess of net investment income - - 0.08 - - -
From net realized gain 1.53 0.65 1.49 1.43 0.61 -
---- ---- ---- ---- ---- -----
Total distributions 1.93 0.93 1.82 1.89 0.83 0.53
---- ---- ---- ---- ---- ----
Net Asset Value, end of period $14.73 $15.38 $13.47 $14.33 $14.77 $12.56
====== ====== ====== ====== ====== ======
TOTAL RETURN 8.69% 22.51% 7.91% 11.06% 25.45% 9.51%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $127,916 $108,788 $89,439 $81,787 $75,378 $46,942
(in thousands)
Ratio of expenses to average net 1.92% 1.50% 1.54% 1.53% 1.52% 1.50%
assets
Total expenses to average net assets 1.92% 1.50% 1.54% 1.55% 1.63% 1.72%
Ratio of net investment income to .88% 2.27% 1.60% 1.32% 2.29% 2.07%
average net assets
Ratio of net excluding investment .88% 2.27% 1.60% 1.30% 2.17% 1.85%
income waiver of management fee to
average net assets
Portfolio turnover rate 91% 120% 106% 161% 183% 137%
Average commission rate (b) $0.0296 $0.0271
</TABLE>
(a)All per share amounts reflect the effect of the ten-for-one share split as of
the close of business October 31, 1993.
(b)For fiscal years beginning after Sept. 1, 1995 a fund is required to
disclose its average commission rate per share for security trades on which
commissions are charged.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Baupost
Fund's financial statements at 04/30/97 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-END> APR-30-1997
<INVESTMENTS-AT-COST> 118,810,856
<INVESTMENTS-AT-VALUE> 125,852,839
<RECEIVABLES> 1,928,552
<ASSETS-OTHER> 12,571,899
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 140,353,290
<PAYABLE-FOR-SECURITIES> 11,851,406
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 585,653
<TOTAL-LIABILITIES> 12,437,059
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 109,355,428
<SHARES-COMMON-STOCK> 8,681,774
<SHARES-COMMON-PRIOR> 7,072,862
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 2,403,943
<ACCUMULATED-NET-GAINS> 13,233,946
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 7,730,797
<NET-ASSETS> 127,916,231
<DIVIDEND-INCOME> 343,689
<INTEREST-INCOME> 1,433,755
<OTHER-INCOME> (48,735)
<EXPENSES-NET> 1,187,690
<NET-INVESTMENT-INCOME> 541,019
<REALIZED-GAINS-CURRENT> 13,170,127
<APPREC-INCREASE-CURRENT> (3,991,036)
<NET-CHANGE-FROM-OPS> 9,720,110
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,845,958
<DISTRIBUTIONS-OF-GAINS> 10,826,206
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,531,748
<NUMBER-OF-SHARES-REDEEMED> 846,404
<SHARES-REINVESTED> 923,568
<NET-CHANGE-IN-ASSETS> 19,128,189
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 10,890,028
<OVERDISTRIB-NII-PRIOR> 99,004
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 618,281
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,187,690
<AVERAGE-NET-ASSETS> 122,765,788
<PER-SHARE-NAV-BEGIN> 15.38
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 1.15
<PER-SHARE-DIVIDEND> .40
<PER-SHARE-DISTRIBUTIONS> 1.53
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.73
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
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