<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
HUDSON CAPITAL
APPRECIATION FUND 110 Wall Street
(A Series of The Fahnestock Funds) New York, New York 10005
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dear Shareholder:
We are pleased to present the Semi-Annual Report of Hudson Capital Appreciation
Fund for the period ending June 30, 1997.
PERFORMANCE COMPARISON
The Hudson Capital Appreciation Fund produced a total return of 22.9% for the
first six months of 1997. This compared to a 21.1% increase for the Standard &
Poor's Composite Index of 500 stocks and an 11.7% increase for the Nasdaq
Composite Index. For the last 18 months, since January 1, 1996, the Fund has
increased 72.8%, compared to a 49.9% increase for the S&P 500 and 37.1% for the
Nasdaq Composite Index. At June 30, 1997, the Fund's net asset value per share
was $15.97 and a total assets exceeded $21 million. (As this letter is written,
August 22, 1997, NAV per share is $17.58 and total assets exceed $28 million.)
On April 15, 1997, the Fund introduced two new classes of shares, designated
Class B and Class N. The original shares are now designated Class A. The three
classes participate equally, share for share, in the Fund's investment results
but have different distribution and expense factors, all of which are described
in detail in the current prospectuses. Over time, these expense factors may
result in the classes having different net asset values.
INVESTMENT STRATEGY
We believe that 1997 will be an excellent year for corporate earnings with a
backdrop of moderate inflation (under 3%), a strong US dollar, and the lowest
federal deficit in recent memory. While the stock market turned in an astounding
performance in the first half after some turbulence during April, most of the
market's performance for 1997 may be behind it. Our strategy for managing the
Fund's assets is to remain fully invested, trying to identify companies whose
stock prices represent 'good value at a fair price'.
FACTORS AFFECTING PORTFOLIO PERFORMANCE
Portfolio performance will be affected by the general direction of stock prices
and the level of confidence in the stock market as represented by investment
flows. More important will be stock selection and the identification of
companies whose forward revenue growth and earnings performance is not
adequately reflected in their current stock price. As portfolio holdings become
fairly valued, they will be sold and replaced with other more promising
selections.
STOCK SELECTION
As we look ahead, our stock selection will continue to focus on the
identification of undervalued companies whose stock prices do not reflect
fundamental trends such as growth in sales, earnings and strong industry
momentum due to technology change and innovations. We do not attempt to
anticipate market direction and so will remain relatively fully invested at all
times. We appreciate your confidence as we serve your long term investment
needs.
Very truly yours,
James D. Gerson
James D. Gerson
Senior Vice President and Portfolio Manager
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS -- 99.6%
AGRICULTURE -- 6.1%
10,000 AGCO Corporation $ 359,375
15,000 Con Agra, Inc. 961,875
-----------
1,321,250
-----------
BUILDING & CONSTRUCTION -- 11.2%
20,000 Centex Construction 390,000
20,000 Continental Homes Holdings Corp. 352,500
22,500 (a)Genlyte Group, Inc. 295,312
10,000 Lone Star Industries 453,125
20,000 MCI Building Systems 647,500
30,000 Southern Energy Homes, Inc. 273,750
-----------
2,412,187
-----------
CHEMICALS -- 2.9%
40,000 Agrium, Inc. 460,000
10,000 VWR Scientific Products 157,500
-----------
617,500
-----------
COMMUNICATIONS -- 1.3%
15,000 (a)IFR Systems, Inc. 281,250
-----------
COMPUTER PRODUCTS -- 8.6%
20,000 Cabletron Systems 566,250
20,000 Ciprico, Inc. 305,000
15,000 (a)EMC Corporation 585,000
31,000 (a)Phoenix Technologies Ltd. 403,000
-----------
1,859,250
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
SHARES VALUE
- --------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
CONSUMER PRODUCTS -- 7.4%
6,000 Blount International, Inc. -- Class A $ 255,375
27,000 (a)Helen of Troy Ltd. 691,875
20,000 (a)Mackie Designs, Inc. 175,000
15,000 Regis Corp. Minnesota 354,375
40,000 (a)Sirena Apparel Group, Inc. 120,000
-----------
1,596,625
-----------
ELECTRONICS -- 6.8%
10,000 ADE Corp. 297,500
17,600 (a)Aeroflex, Inc. 90,200
25,000 Checkpoint Systems 401,563
10,000 (a)NU Horizons Electronics 81,875
10,000 (a)Speedfam International 358,750
10,000 (a)Ultratech Stepper, Inc. 228,750
-----------
1,458,638
-----------
ENVIRONMENTAL -- 0.7%
33,000 (a)Gundle/SLT Environmental, Inc. 165,000
-----------
FINANCIAL -- 5.8%
16,000 State Street Boston Corp. 740,000
8,000 Travelers Group, Inc. 504,500
-----------
1,244,500
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------- -----------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
INDUSTRIAL PRODUCTS -- 19.7%
19,000 AFC Cable System $ 513,000
1,100 A.M. Castle Co. 24,268
15,000 Baldor Electric 443,437
8,000 (a)Esterline Technologies Corp. 281,500
20,000 Greenfield Industries 540,000
10,000 Hadco Corp. 655,000
20,212 (a)New Brunswick Scientific 141,484
5,000 Park Ohio Industries 76,250
22,000 Republic Group, Inc. 442,750
34,650 (a)Supreme Industries, Inc. -- Class A 298,856
15,000 Titan Wheel International, Inc. 264,375
30,000 Valmont Industries 570,000
-----------
4,250,920
-----------
OIL, ENERGY & GAS EXPLORATION -- 10.8%
45,000 (a)Abacan Resources Corp. 143,438
12,000 Global Industries 280,313
13,000 (a)Hvide Marine, Inc. 287,625
15,500 (a)Louis Dreyfus Natural Gas Corp. 251,875
35,000 Southern Mineral 175,000
28,699 (a)Southern Union Company 656,490
12,000 Tidewater, Inc. 528,000
-----------
2,322,741
-----------
PHARMACEUTICALS & HEALTH -- 5.5%
7,000 Amgen, Inc. 406,875
10,000 McKesson Corp. 775,000
-----------
1,181,875
-----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- --------- -----------
COMMON STOCKS (CONTINUED)
<C> <S> <C>
RESTAURANTS -- 2.2%
26,000 (a)Garden Fresh Restaurants Corp. $ 308,750
10,000 (a)O'Charleys, Inc. 170,000
-----------
478,750
-----------
RETAIL -- 4.0%
15,000 (a)Travis Boats & Motors, Inc. 196,875
20,000 Wal-Mart Stores, Inc. 676,250
-----------
873,125
-----------
TRANSPORTATION -- 6.6%
15,000 Air Express International Corp. 596,250
20,000 (a)Celadon Group, Inc. 230,000
30,000 Simon Transportation Service 596,250
-----------
1,422,500
-----------
TOTAL COMMON STOCKS (identified cost $16,367,584) 21,486,111
-----------
<CAPTION>
FACE
AMOUNT
- ---------
<C> <S> <C>
SHORT-TERM INVESTMENTS -- 0.3%
$67,000 Money Market Fiduciary Fund, on demand (cost $67,000) 67,000
-----------
TOTAL INVESTMENTS (identified cost $16,434,584)(b) $21,553,111
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES -- 0.1% 18,860
-----------
NET ASSETS -- 100% $21,571,971
-----------
-----------
</TABLE>
- ------------
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to $16,434,584. The
net unrealized appreciation of investments on a federal tax basis amounts to
$5,118,527 which is comprised of $5,635,496 appreciation and $516,969
depreciation at June 30, 1997.
Note: The categories of investments are shown as a percentage of net assets
($21,571,971) at June 30, 1997.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
STATEMENT OF ASSETS AND LIABILITIES
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total investments in securities, at value (Cost $16,434,584) (Note 1)............................. $21,553,111
Cash.............................................................................................. 117,680
Dividends receivable.............................................................................. 13,482
Receivable for Fund shares sold................................................................... 220,535
Receivable from Advisor........................................................................... 58,000
-----------
Total assets................................................................................. 21,962,808
-----------
LIABILITIES:
Payable for Fund shares redeemed.................................................................. 45,826
Accrued expenses.................................................................................. 58,000
Other payables.................................................................................... 287,011
-----------
Total liabilities............................................................................ 390,837
-----------
Net assets for 1,350,870 shares of beneficial interest outstanding................................ $21,571,971
-----------
-----------
NET ASSETS CONSIST OF:
Paid in capital................................................................................... $14,502,182
Net unrealized appreciation of investments........................................................ 5,118,527
Accumulated net realized gain on investments...................................................... 2,083,827
Distribution in excess of net investment income................................................... (132,565)
-----------
Net assets................................................................................... $21,571,971
-----------
-----------
Class A Shares:
Net Asset Value Per Share ($21,086,931/1,320,487 shares outstanding).............................. $ 15.97
-----------
Offering Price Per Share (100/95.50 of 15.97)*.................................................... 16.72
-----------
Redemption Proceeds Per Share..................................................................... 15.97
-----------
Class B Shares:
Net Asset Value Per Share ($309,221/19,371 shares oustanding)..................................... $ 15.96
-----------
Offering Price Per Share.......................................................................... 15.96
-----------
Redemption Proceeds Per Share (95/100 of 15.96)*.................................................. 15.16
-----------
Class N Shares:
Net Asset Value Per Share ($175,819/11,012 shares oustanding)..................................... $ 15.97
-----------
Offering Price Per Share.......................................................................... 15.97
-----------
Redemption Proceeds Per Share..................................................................... 15.97
-----------
</TABLE>
- ------------
* See 'How to Buy Shares' in the Prospectus
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT INCOME
<TABLE>
<S> <C>
Interest............................................................................................ $ 51,641
Dividends........................................................................................... 10,833
----------
Total income................................................................................... 62,474
----------
Expenses: (Notes 2 and 3)
Investment management fee........................................................................... 93,929
Distribution expenses Class A....................................................................... 46,780
Distribution and shareholder service expenses Class B............................................... 215
Distribution expenses Class N....................................................................... 39
Legal, compliance and filing fees................................................................... 97,048
Custodian fee....................................................................................... 3,723
Shareholder servicing and related shareholder expenses.............................................. 45,570
Audit and accounting................................................................................ 22,397
Trustees' fees and expenses......................................................................... 9,000
Other............................................................................................... 28,228
----------
Total expenses................................................................................. 346,929
----------
Investment management fee waived.................................................................... (93,929)
Reimbursement of other operating expenses........................................................... (57,961)
----------
Net expenses........................................................................................ 195,039
----------
Net investment loss................................................................................. (132,565)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments.................................................................... 2,067,664
Net change in unrealized appreciation of investments................................................ 1,925,915
----------
Net gain on investments............................................................................. 3,993,579
----------
Net increase in net assets from operations............................................................... $3,861,014
----------
----------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Investment loss net................................................................ $ (132,565) $ (150,917)
Net realized gain on investments................................................... 2,067,664 2,958,488
Unrealized appreciation (depreciation) of investments.............................. 1,925,915 1,794,231
------------- -----------------
Net increase in net assets resulting from operations.......................... 3,861,014 4,601,802
Distributions to shareholders from net realized gains -- Class A................... (184) (2,791,224)
Share transactions -- net (Note 4)................................................. 2,040,421 1,762,917
------------- -----------------
Net increase (decrease) in net assets......................................... 5,901,251 3,573,495
Net Assets:
Beginning of year............................................................. 15,670,720 12,097,225
------------- -----------------
End of year................................................................... $ 21,571,971 $15,670,720
------------- -----------------
------------- -----------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1. SUMMARY OF ACCOUNTING POLICIES.
Hudson Capital Appreciation Fund (the 'Fund') is a series of The Fahnestock
Funds, a Massachusetts business trust (the 'Trust'). The Trust is an open-end
diversified management investment company registered under the Investment
Company Act of 1940. Effective April 15, 1997, the Fund redesignated its
existing Shares as Class A Shares and added Class B and Class N Shares. Its
financial statements are prepared in accordance with generally accepted
accounting principles for investment companies as follows:
A) VALUATION OF SECURITIES
Securities traded on a national securities exchange are valued at
the price of the last sale on such exchange on the date as of which
assets are valued. If no sale has occurred on such date, or if the
security is traded only in the over-the-counter market, it will
normally be valued at its current bid price. Debt securities having
a remaining maturity of 60 days or less are valued at amortized
cost, which approximates market value. Portfolio securities for
which current quotations are not readily available are valued at
fair value as determined in good faith by the Board of Trustees.
B) FEDERAL INCOME TAXES
It is the Trust's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies
and to distribute all of its taxable income to its shareholders.
Therefore, no provision for Federal income tax is required.
C) GENERAL
Securities transactions are recorded on a trade date basis. Interest
income, including amortization of premium and discount, is accrued
as earned and dividend income is recorded on the ex-dividend date.
Realized gains and losses from securities transactions are recorded
on the identified cost basis.
D) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the
ex-dividend date. Income distributions and capital gain
distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting
principles.
E) OTHER
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those
estimates.
2. INVESTMENT MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
Under the Investment Management Agreement, the Fund pays an investment
management fee to Hudson Capital Advisors, Inc. (the 'Advisor') equal to 1% of
the Fund's average daily net assets up to $25 million and 0.75% of annual
average net assets in excess of $25 million.
Under the Fund's Administration Agreement with Fahnestock & Co. Inc. (the
'Administrator'), the Administrator has agreed to provide administrative
services to the Fund at no charge.
The Advisor has agreed that, if in any fiscal year the sum of the Fund's
expenses (excluding payments under the Distribution Plans) exceeds 2 1/2% of the
first $30 million of its average daily net assets, 2% of the next $70 million of
its average daily net assets and 1 1/2% of its average daily net assets in
excess of $100 million, the Advisor will reduce the advisory fee or reimburse
the Fund for any such excess amounts. During the period ended June 30, 1997, the
Fund incurred investment management fees of $93,929. However, the Advisor has
waived $93,929 of expenses in order to comply with the agreement as stated
above.
In acting as Distributor during the year, Fahnestock & Co. Inc. earned $47,034
of commissions on sales of the Fund's shares.
Fees are paid to Trustees who are unaffiliated with the Advisor on the basis of
$3,000 per annum plus $750 per meeting attended.
3. DISTRIBUTION PLANS.
Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Trust has
adopted Distribution Plans (the 'Plans') under which it may reimburse Fahnestock
& Co. Inc. (the 'Distributor') for expenses relating to the distribution of Fund
shares at an annual rate not to exceed 0.50 of 1% of the Fund's average daily
net assets with respect to Class A Shares, 1.00 of 1% (0.75 of 1% attributable
to distribution and 0.25 of 1% to shareholder servicing expenses) with respect
to Class B Shares and 0.25 of 1% for Class N Shares. Distribution expenses
incurred in a year in excess of the amount available for reimbursement may be
carried forward and sought to be reimbursed in future years. Interest at the
prevailing broker loan rate may be charged to the Fund on any expenses carried
forward and those
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
expenses and interest will be reflected as current expenses on the Fund's
statement of operations for the year in which they become accounting
liabilities.
4. TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST.
At June 30, 1997, the Fund had authorized an unlimited number of shares of
beneficial interest ($.001 par value). Transactions were as follows:
CLASS A SHARES
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31, 1996
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
-------- ----------- -------- -----------
<S> <C> <C> <C> <C>
Sold........................................... 219,822 $ 3,074,117 223,039 $ 2,946,523
Issued on reinvestment of dividends and
distributions................................ 14 184 213,111 2,755,522
Redeemed....................................... (105,262) (1,498,091) (292,500) (3,939,128)
-------- ----------- -------- -----------
Net increase (decrease)................... 114,574 $ 1,576,210 143,650 $ 1,762,917
-------- ----------- -------- -----------
-------- ----------- -------- -----------
</TABLE>
CLASS B SHARES
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1997
-----------------------
SHARES AMOUNT
-------- -----------
<S> <C> <C>
Sold........................................... 19,371 $ 297,734
Issued on reinvestment of dividends and
distributions................................ -- --
Redeemed....................................... -- --
-------- -----------
Net increase (decrease)................... 19,371 $ 297,734
-------- -----------
-------- -----------
</TABLE>
CLASS N SHARES
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30, 1997
-----------------------
SHARES AMOUNT
-------- -----------
<S> <C> <C>
Sold........................................... 11,012 $ 166,477
Issued on reinvestment of dividends and
distributions................................ -- --
Redeemed....................................... -- --
-------- -----------
Net increase (decrease)................... 11,012 $ 166,477
-------- -----------
-------- -----------
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
5. INVESTMENT TRANSACTIONS.
Purchases and sales of investment securities, other than short-term investments,
totaled $8,136,870 and $6,258,616, respectively. Fahnestock & Co. Inc. earned
commissions of $16,825 for executing securities transactions of the Fund during
the period ended June 30, 1997.
6. FINANCIAL HIGHLIGHTS.
CLASS A (for a share outstanding throughout each period)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1997 --------------------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992 1991'D'D'
----------------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period........................... $ 12.99 $ 11.39 $ 10.95 $ 13.72 $ 11.93 $ 11.36 $ 10.00
Income from investment operations:
Net investment income/(loss)....... (0.10) (0.10) (0.03) (0.06) (0.13) (0.05) 0.01
Net realized and unrealized gains
(losses) on investments.......... 3.08 4.72 2.09 (1.48) 2.25 1.02 1.74
-------- ------- ------- ------- ------- ------- -------
Total income from investment
operations................... 2.98 4.62 2.06 (1.54) 2.12 0.97 1.75
-------- ------- ------- ------- ------- ------- -------
Less dividends paid to
shareholders:
Dividends paid from net realized
gains on investments............. 0.00** (3.02) (1.62) (1.23) (0.33) (0.40) (0.39)
-------- ------- ------- ------- ------- ------- -------
Net asset value, end of period..... $ 15.97 12.99 $ 11.39 $ 10.95 $ 13.72 $ 11.93 $ 11.36
-------- ------- ------- ------- ------- ------- -------
-------- ------- ------- ------- ------- ------- -------
Total return........................... 22.94% 40.68% 18.94% (11.22)% 17.77% 8.54% 17.50%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)......................... $21,087 $15,671 $12,097 $15,874 $19,227 $16,993 $11,987
Ratio of expenses to average net
assets........................... 2.08%*'D' 2.50%'D' 2.50%'D' 2.49%'D' 2.49%'D' 2.50%'D' 2.48%*'D'
Ratio of net investment income
(loss) to average net assets..... (1.41)%*'D' (1.13)%'D' (0.16)%'D' (0.46)%'D' (1.00)%'D' (0.48)%'D' 0.11%*'D'
Average commission rate
paid'D'D'D'...................... 0.0600 0.0597 -- -- -- -- --
Portfolio turnover rate............ 33.67% 85.37% 197.71% 194.55% 154.18% 256.84% 250.85%
</TABLE>
- ------------
* Annualized
** Are less than one cent per share.
'D' The ratios of expenses and investment income/(loss) (net) to average net
assets are net of expenses voluntarily reimbursed by the Advisor,
Administrator and Distributor in the amount of 1.61%, 1.00%, .92%, .27%,
.25%, 1.10% and .56%, respectively.
'D'D' Reflects operations for the period from March 5, 1991 (commencement of
operations) to December 31, 1991.
'D'D'D' For the fiscal year beginning on or after September 1, 1995, the
portfolio is required to disclose its average commission rate per share
for purchases or sales of equity securities.
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS B (for a share outstanding throughout the period)
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30,
1997'D'D'D'
(UNAUDITED)
----------------
<S> <C>
Net asset value, beginning of
period.......................... $ 13.54
Income from investment operations:
Net investment income/(loss)...... (0.04)
Net realized and unrealized gains
(losses) on investments......... 2.46
--------
Total income from investment
operations.................. 2.42
Less dividends paid to
shareholders:
Dividends paid from net realized
gains on investments............ --
--------
Net asset value, end of period.... $ 15.96
--------
--------
Total return.......................... 17.87%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)........................ $ 309
Ratio of expenses to average net
assets.......................... 2.56%*'D'
Ratio of net investment loss to
average net assets.............. (1.68%)*'D'
Average commission rate
paid'D'D'....................... 0.0600
Portfolio turnover rate........... 33.67%
</TABLE>
- ------------
* Annualized
'D' The ratios of expenses and investment loss (net) to average net assets
are net of expenses voluntarily reimbursed by the Advisor, Administrator
and Distributor in the amount of 1.61%.
'D'D' For the fiscal year beginning on or after September 1, 1995, the
portfolio is required to disclose its average commission rate per share
for purchases or sales of equity securities.
'D'D'D' Reflects operations for the period from April 15, 1997 (commencement of
offering) to June 30, 1997.
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
HUDSON CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS N (for a share outstanding throughout the period)
<TABLE>
<CAPTION>
PERIOD ENDED
JUNE 30,
1997'D'D'D'
(UNAUDITED)
----------------
<S> <C>
Net asset value, beginning of
period.......................... $ 13.54
Income from investment operations:
Net investment income/(loss)...... (0.03)
Net realized and unrealized gains
(losses) on investments......... 2.46
--------
Total income from investment
operations.................. 2.43
Less dividends paid to
shareholders:
Dividends paid from net realized
gains on investments............ --
--------
Net asset value, end of period.... $ 15.97
--------
Total return.......................... 17.95%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)........................ $ 176
Ratio of expenses to average net
assets.......................... 1.81%*'D'
Ratio of net investment loss to
average net assets.............. (0.99%)*'D'
Average commission rate
paid'D'D'....................... 0.0600
Portfolio turnover rate........... 33.67%
</TABLE>
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* Annualized
'D' The ratios of expenses and investment income/(loss) (net) to average net
assets are net of expenses voluntarily reimbursed by the Advisor,
Administrator and Distributor in the amount of 1.61%.
'D'D' For the fiscal year beginning on or after September 1, 1995, the
portfolio is required to disclose its average commission rate per share
for purchases or sales of equity securities.
'D'D'D' Reflects operations for the period from April 15, 1997 (commencement of
offering) to June 30, 1997.
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HUDSON CAPITAL
APPRECIATION FUND
(A Series of The Fahnestock Funds)
110 Wall Street
New York, New York 10005
Telephone (800) 221-5588
INVESTMENT ADVISOR
Hudson Capital Advisors, Inc.
805 Third Avenue
New York, New York 10022
PRINCIPAL DISTRIBUTOR
Fahnestock & Co. Inc.
110 Wall Street
New York, New York 10005
CUSTODIAN AND TRANSFER AGENT
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
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This report is submitted for the
general information of the
shareholders of the Fund. It is not
authorized for distribution to
prospective investors in the Fund
unless preceded or accompanied by an
effective prospectus, which includes
information regarding the Fund's
objectives and policies, experience
of its management, marketability of
shares, and other information.
[LOGO]
CLASS A SHARES
CLASS B SHARES
CLASS N SHARES
SEMI-ANNUAL REPORT
JUNE 30, 1997
(UNAUDITED)
[LOGO]
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STATEMENT OF DIFFERENCES
The dagger symbol shall be expressed as....................................`D'
