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UNIVERSAL CAPITAL GROWTH FUND
-----------------------------
ANNUAL REPORT
SEPTEMBER 30, 1999
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<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
100 S. WACKER DRIVE
SUITE 2100
CHICAGO, IL 60606
(800) 969-9676
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November 17, 1999
Dear Shareholder,
We at Graver, Bokhof, Goodwin & Sullivan would like to thank shareholders of the
Universal Capital Growth Fund (the "Fund") for their support. We are pleased to
report the Fund's total return, based upon net asset value, exceeded that of the
S&P 500R Stock Index (the "S&P 500") for the fiscal year. We are particularly
proud of these results given the highly volatile and selective nature of the
stock market during this time period when most stocks' and fund managers'
returns were below that of the S&P 500.
The Fund recorded a total return of 29.5%, gross of sales charges, for the
fiscal year ended September 30, 1999. The Fund's investment results and those
of the S&P 500 are summarized in the following table:
TOTAL RETURNS<F1>
September 30, 1999
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Inception
Quarter 6 Months 1 Year 3 Years 5 Years 1/22/91
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Universal Capital
Growth Fund -9.3% -0.5% 29.5% 23.7% 22.9% 17.0%
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S&P 500
Stock Index -6.2% 0.4% 27.8% 25.1% 25.0% 19.7%
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<F1> Returns, except for the quarter and 6 months, represent average annual
returns as of September 30, 1999. All returns include the reinvestment of
dividends but exclude sales charges. Past performance is not indicative of
future performance. Investment and principal value will fluctuate, so that
your shares, when redeemed, may be worth more or less than original cost.
The S&P 500 Stock Index is an unmanaged but commonly used measure of common
stock total return performance. Please refer to the performance chart on
the following page. Graver, Bokhof, Goodwin & Sullivan assumed management
of the Fund on August 15, 1997.
The fiscal year ended September 30, 1999 can once again be characterized as one
of extreme price volatility for both the market and the Fund. The recovery of
stock prices from the lows of October 1998 was quick and surprising to most.
Thanks to the swift action by the Federal Reserve Board to cut rates and
increase money supply during last fall's global financial crises, economic
activity and corporate earnings were reinvigorated. Combined with a low level
of inflation and interest rates, the stage was set for all time high stock
prices. By early summer most stock indices had reached new highs. On the heels
of an accelerating economy even the cyclical stock component of the Dow Jones
Industrial Average was rebounding sharply. This broader advance was short
lived, however, as soaring stock prices caused Fed Chairman Alan Greenspan to
voice caution about an overheated economy and the potential for rising
inflation. The direction of interest rates would soon be headed higher as the
Fed sought to reverse the liquidity injected into the monetary system last fall.
Three consecutive rate increases have since occurred, returning rates to the
level that existed before last fall's crises. In reaction to the change in
direction for rates, stock prices spent much of the third calendar quarter
moving lower. The breadth of participation of rising stocks, already extremely
narrow by historical standards, got even worse. By September 30, about the only
stocks still rising were in the technology and information processing areas.
Away from technology, 84% of all S&P 500 stocks were down at least 10% from
their 12 month high and 60% were down over 20%. Even in the technology area a
handful of large capitalization and numerous recent initial public offerings of
"dot.com's" dominated the price move. The increasingly narrow market breadth
has made it more difficult to achieve above average returns while also
attempting to manage risk through a diversified portfolio of stocks.
Within the Fund's diversified portfolio we attempt to apply a prudent degree of
concentration to enhance performance. Not surprisingly, technology was a major
contributor to this fiscal year's success. Some of our larger gains occurred in
stocks such as: Netb@nk, Cisco Systems, Tellabs, Lexmark International,
Microsoft and IBM. With the exception of Netb@nk, which is an Internet banker,
the major gains were in the
<PAGE>
technology sector. At fiscal year-end the technology group comprised about 37%
of the portfolio's assets. Other contributors to the Fund's performance
included: Amgen and Eli Lilly in healthcare, as well as Merrill Lynch, Morgan
Stanley Dean Witter and Wells Fargo in the financial services sector. The
healthcare and financial services sectors currently account for 20% and 13% of
the portfolio's assets, respectively. Stocks in which we took losses include:
Household International, Health Management Associates, Maytag, McKesson Corp.,
Saks and Sterling Commerce.
As we move into the new millennium, stock prices have once again begun to rise
sharply. Volatility and narrow market breadth are still key components of day
to day stock price fluctuations. Our outlook calls for a slowing of economic
activity as we move into the New Year. Recent interest rate hikes and concerns
about Y2K glitches will likely help moderate consumer spending. A temporary
easing of economic growth would not necessarily be bad for the stock and bond
markets, as it would eventually lead to an environment of more stable and
sustainable economic growth.
As in the past, we will continue to focus our attention on identifying good
quality growth companies with reasonable valuations while emphasizing those
sectors and industries with the most appreciation potential.
All of us at Graver, Bokhof, Goodwin & Sullivan thank you for your confidence
and trust and wish you a healthy and prosperous 2000.
Sincerely,
/s/Andrew J. Goodwin, III
Andrew J. Goodwin, III
President
- - The views expressed in this report reflect those of the investment adviser as
of November 17, 1999 and those views are subject to change at any time based
upon market and other conditions. The Fund holdings may change due to
ongoing management and references to specific investments should not be
construed as a recommendation of the Fund or its Adviser.
GROWTH OF $10,000 INVESTMENT
Universal Capital S&P 500
Growth Fund Stock Index
----------------- -----------------
1/22/91 9,452 10,000
9/30/91 10,548 11,984
9/30/92 11,001 13,308
9/30/93 12,337 15,038
9/30/94 13,257 15,592
9/30/95 18,278 20,230
8/30/96 19,631 24,344
9/30/97 26,745 34,190
9/30/98 28,649 37,283
9/30/99 37,123 47,650
This chart assumes an initial gross investment of $10,000 made on 1/22/91
(commencement). Returns shown include the reinvestment of all dividends. Past
performance is not predictive of future performance. Investment return and
principal value will fluctuate, so that your shares, when redeemed, may be worth
more or less than the original cost. The Fund's performance graph includes
deduction of the 5.5% front-end load. The S&P 500 Stock Index is an unmanaged
but commonly used measure of common stock total return performance.
- -------------------------------
TOTAL RETURN<F1>
with 5.5% sales load effect
- -------------------------------
1 year 22.4%
- -------------------------------
5 year 21.5%
- -------------------------------
Since inception 16.3%
- -------------------------------
<F1> Represent average annual returns.
Dreher & Associates, Inc. as Distributor
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1999
SHARES VALUE
------ ------
COMMON STOCKS 92.65%
- --------------------------------------------------
AEROSPACE AND DEFENSE 2.69%
United Technologies Corporation 8,000 $474,500
BANKS 5.98%
MBNA Corporation 15,000 342,187
Net.b@nk, Inc.<F1> 9,000 199,125
Wells Fargo & Company 13,000 515,125
----------
1,056,437
COMPUTERS 4.12%
International Business Machines Corporation 6,000 728,250
COMPUTER NETWORKS 4.65%
Cisco Systems, Inc.<F1> 12,000 822,750
COMPUTER SOFTWARE 6.93%
BMC Software, Inc.<F1> 7,000 500,938
Microsoft Corporation<F1> 8,000 724,500
----------
1,225,438
CONSUMER PRODUCTS 2.12%
Procter & Gamble Company (The) 4,000 375,000
DIVERSIFIED MISCELLANEOUS 2.92%
Tyco International Ltd. 5,000 516,250
ELECTRICAL EQUIPMENT 2.68%
General Electric Company 4,000 474,250
ELECTRONIC PRODUCTS & COMPONENTS 11.99%
American Power Conversion Corporation<F1> 30,000 570,000
Intel Corporation 10,000 743,125
Lexmark International Group, Inc.,
Class A<F1> 10,000 805,000
----------
2,118,125
ENERGY 3.48%
Halliburton Company 15,000 615,000
<F1> Non-income producing
See Notes to the Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1999
SHARES VALUE
------ ------
COMMON STOCKS (CONTINUED) 92.65%
- --------------------------------------------------
FINANCE & FINANCIAL SERVICES 7.26%
American International Group, Inc. 5,000 $434,688
Merrill Lynch & Co., Inc. 6,000 403,125
Morgan Stanley Dean Witter & Co. 5,000 445,937
----------
1,283,750
HEALTHCARE 12.06%
Amgen Inc.<F1> 9,000 733,500
Boston Scientific Corporation<F1> 15,000 370,312
Johnson & Johnson 5,000 459,375
Medtronic, Inc. 16,000 568,000
----------
2,131,187
PHARMACEUTICALS 9.45%
Abbott Laboratories 9,000 330,750
Eli Lilly and Company 6,000 384,000
Merck & Co., Inc. 7,200 466,650
Schering-Plough Corporation 11,200 488,600
----------
1,670,000
RETAIL 5.08%
Lowe's Companies, Inc. 8,000 390,000
Walgreen Co. 20,000 507,500
----------
897,500
SERVICES 2.16%
Outback Steakhouse, Inc.<F1> 15,000 382,031
TELECOMMUNICATIONS 9.08%
ADC Telecommunications, Inc.<F1> 8,000 335,500
MCI WorldCom, Inc.<F1> 8,951 643,353
Tellabs, Inc.<F1> 11,000 626,313
----------
1,605,166
----------
TOTAL COMMON STOCKS
(Cost $9,576,313) 16,375,634
----------
<F1> Non-income producing
See Notes to the Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1999
SHARES VALUE
------ ------
RIGHTS 0.00%
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U.S. Surgical, 9/23/00<F1> 7 $550
----------
Total Rights
(Cost $0) 550
----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS 10.99%
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MONEY MARKET 10.99%
UMB Bank, n.a. Money Market Fiduciary $1,942,628 1,942,628
----------
TOTAL MONEY MARKET 1,942,628
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $1,942,628) 1,942,628
----------
Number of
Contracts
---------
PUT OPTIONS PURCHASED 1.15%
- --------------------------------------------------
S&P 500 Index 1350, expiring December 1999 25 202,500
----------
TOTAL PUT OPTIONS PURCHASED
(COST $150,150) 202,500
----------
TOTAL INVESTMENTS 104.79%
(COST $11,669,091) 18,521,312
LIABILITIES LESS OTHER ASSETS (4.79)% (846,569)
----------
NET ASSETS 100.00% $17,674,743
==========
<F1> Non-income producing
See Notes to the Financial Statements
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
ASSETS:
Investments at value (cost $11,669,091) $18,521,312
Dividends and interest receivable 8,927
Prepaid expenses and other assets 4,713
Capital shares receivable 246
-------------
Total Assets 18,535,198
-------------
LIABILITIES:
Payable for investment securities purchased 792,319
Accrued distribution fees 23,708
Payable to Adviser 12,072
Other accrued expenses 32,356
-------------
Total Liabilities 860,455
-------------
NET ASSETS $17,674,743
=============
NET ASSETS CONSIST OF:
Paid-in-capital 9,758,743
Accumulated net realized gain
on investments 1,063,779
Net unrealized appreciation
on investments 6,852,221
-------------
TOTAL NET ASSETS $17,674,743
=============
NET ASSET VALUE PER SHARE
($17,674,743 DIVIDED BY
795,729 SHARES OUTSTANDING) $22.21
======
MAXIMUM OFFERING PRICE
PER SHARE
(NET ASSET VALUE, PLUS 5.82% OF NET
ASSET VALUE OR 5.50% OF OFFERING PRICE) $23.50
======
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
INVESTMENT INCOME:
Dividend income $84,030
Interest income 44,391
-------------
128,421
-------------
EXPENSES:
Investment advisory fees 172,359
Distribution fees 86,180
Transfer agent fees and expenses 26,408
Legal fees 17,217
Audit fees 14,902
Fund accounting fees 13,740
Federal and state registration fees 12,054
Reports to shareholders 11,072
Custody fees 10,975
Trustees' fees and expenses 7,945
Other 3,353
-------------
Total expenses before waiver 376,205
Waiver of investment advisory fees (31,486)
-------------
Net expenses 344,719
-------------
Net investment loss (216,298)
-------------
REALIZED AND UNREALIZED GAINS:
Net realized gain on investments 1,063,779
Change in net unrealized appreciation
on investments 3,214,680
-------------
Net gain on investments 4,278,459
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 4,062,161
=============
See Notes to the Financial Statements
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
SEPTEMBER 30, 1999 SEPTEMBER 30, 1998
------------------ ------------------
OPERATIONS:
Net investment loss $(216,298) $(148,469)
Net realized gain
on investments 1,063,779 1,402,832
Change in net unrealized
appreciation on
investments 3,214,680 (332,626)
---------- ----------
Net increase in net
assets resulting
from operations 4,062,161 921,737
---------- ----------
DISTRIBUTIONS:
Net realized gains (1,399,939) (355,252)
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from 38,445 and 58,241
shares issued, respectively 871,272 1,125,668
Net asset value of 71,994 and
19,566 shares issued to
holders in reinvestment of
dividends, respectively 1,375,088 345,153
Cost of 52,497 and 58,235 shares
redeemed, respectively (1,144,818) (1,120,802)
---------- ----------
Net increase from capital
transactions 1,101,542 350,019
---------- ----------
TOTAL INCREASE IN NET ASSETS 3,763,764 916,504
NET ASSETS:
Beginning of year 13,910,979 12,994,475
---------- ----------
End of year $17,674,743 $13,910,979
========== ==========
See Notes to the Financial Statements
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
FINANCIAL HIGHLIGHTS
Year Ended September 30,
1999 1998 1997<F1> 1996 1995
-------- -------- -------- -------- --------
NET ASSET VALUE,
BEGINNING OF YEAR $18.86 $18.09 $14.99 $16.28 $12.47
INCOME FROM INVESTMENT
OPERATIONS:
Net investment loss (0.27) (0.21) (0.08) (0.10) (0.10)
Net realized and unrealized
gain on investments 5.54 1.46 4.97 1.14 4.54
------ ------ ------ ------ ------
TOTAL FROM INVESTMENT
OPERATIONS 5.27 1.25 4.89 1.04 4.44
------ ------ ------ ------ ------
LESS DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net realized gains (1.92) (0.48) (1.79) (2.33) (0.63)
------ ------ ------ ------ ------
NET ASSET VALUE, END OF YEAR $22.21 $18.86 $18.09 $14.99 $16.28
====== ====== ====== ====== ======
TOTAL RETURN<F2> 29.54% 7.12% 36.24% 7.40% 37.87%
SUPPLEMENTAL DATA AND RATIOS:
Ratio of net expenses
to average net assets<F3> 2.00% 2.00% 2.00% 2.00% 2.00%
Ratio of net investment loss
to average net assets<F3> (1.26)% (1.03)% (0.48)% (0.67)% (0.77)%
Portfolio turnover rate 71.1% 58.1% 49.2% 262.1% 157.6%
Net assets,
end of year (in 000's) $17,675 $13,911 $12,994 $11,124 $8,149
<F1> On August 15, 1997, the adviser changed to Graver, Bokhof, Goodwin &
Sullivan from Integrated Financial Services, Inc.
<F2> The total return calculation does not reflect any sales load imposed on the
purchase of shares.
<F3> After waiver of investment adviser fees and earnings credits of the
custodian of 0.18%, 0.37%, 0.50%, 0.35% and 0.66% of average net assets for
1999, 1998, 1997, 1996 and 1995.
See Notes to the Financial Statements
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION. Universal Capital Investment Trust (the "Trust") is a
Massachusetts business trust organized on October 18, 1990. The Trust is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end investment company. Universal Capital Growth Fund (the
"Fund"), the only series of the Trust currently offered, commenced selling
shares to the public on January 22, 1991 (commencement of operations).
INVESTMENT VALUATION. Investments are stated at value. Investments traded on a
securities exchange or in the over-the-counter market are valued at the last
current sale price as of the time of valuation or, lacking any current reported
sale on that day, at the mean between the most recent bid and asked quotations.
Investments for which quotations are not readily available and securities for
which the valuation methods described above do not produce a value reflective of
the fair value of the securities are valued at a fair value as determined in
good faith by the board of trustees or a committee thereof.
OPTION CONTRACTS. The Fund purchases put option contracts to hedge portfolio
investments. Option contracts are valued at the last current sale price as of
the time of valuation or, lacking any current reported sale on that day, at the
mean between the most recent bid and asked quotations. When option contracts
expire or are closed, realized gains or losses are recognized without regard to
any unrealized gains or losses on the underlying securities.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
recorded on the trade date (the day the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Realized gains and losses from investment
transactions are reported on an identified cost basis.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
FEDERAL INCOME TAXES AND DIVIDENDS TO SHAREHOLDERS. It is the Fund's policy to
comply with the special provisions of the Internal Revenue Code available to
regulated investment companies and, in the manner provided therein, to
distribute all of its taxable income, as well as any net realized gain on sales
of investments. Such provisions were complied with and therefore no provision
for federal income taxes is required.
The character of distributions made during the year from net investment income
or net realized gains may differ from the characterization for federal income
tax purposes due to differences in the recognition of income, expense or gain
items for financial statement and tax purposes. Where appropriate,
reclassifications between net asset accounts are made for such differences that
are permanent in nature. Accordingly, at September 30, 1999, the Fund reduced
paid-in-capital by $216,298 for the current period's net investment loss.
REPURCHASE AGREEMENTS. The Fund may invest in repurchase agreements. All
repurchase agreements are fully collateralized by U.S. Treasury securities. All
collateral is held through the Fund's custodian bank and is monitored daily by
the Fund to ensure that its market value exceeds the carrying value of the
repurchase agreements.
2. TRANSACTIONS WITH AFFILIATES
Pursuant to an investment advisory agreement with Graver, Bokhof, Goodwin &
Sullivan (the "Adviser"), the Fund pays an investment advisory fee at the annual
rate of 1.0% of the first $250 million of the Fund's average daily net assets
and .75% of the Fund's average daily net assets in excess of $250 million.
During the year ended September 30, 1999, the Fund incurred investment advisory
fees of $172,359 under this agreement.
The agreement provides for the waiver of expenses from the Adviser through
December 31, 2000 should the Fund's normal operating expenses exceed 2.00% of
average daily net assets. During the year ended September 30, 1999, the Adviser
waived $31,486 of its investment advisory fee.
While serving as distributor, Dreher & Associates, Inc. (the "Distributor")
assumed all expenses of personnel, office space, office facilities and equipment
incidental to such service. The Trust has adopted a Distribution Plan pursuant
to Rule 12b-1 under the 1940 Act whereby the Fund pays the Distributor a monthly
service fee of .25% and a monthly sales compensation fee of .25%, based on the
Fund's average daily net assets. In return, the Distributor bears all expenses
incurred in the distribution and promotion of the Fund's shares. During the year
ended September 30, 1999, the Fund incurred distribution fees of $86,180. The
Distributor received commissions of $6,008 from sale of the Fund's shares during
the year ended September 30, 1999, all of which were paid to brokers affiliated
with the Fund.
Portfolio transactions for the Fund have been executed through the Distributor,
consistent with the Fund's policy of obtaining best price and execution. During
the year ended September 30, 1999, the Fund paid brokerage commissions to the
Distributor on purchases and sales of securities in the amount of $20,385. It
is the Adviser's opinion that commission rates charged to the Fund by the
Distributor are consistent with those charged to comparable unaffiliated
customers in similar transactions.
<PAGE>
UNIVERSAL CAPITAL GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
3. INVESTMENTS
Purchases and sales of investments, other than short-term obligations, were
$11,509,181 and $11,899,671 respectively, for the year ended September 30, 1999.
The cost basis of investments for federal income tax purposes at September 30,
1999 was $11,721,441. At September 30, 1999, on a tax basis, gross unrealized
appreciation was $6,955,377, gross unrealized depreciation was $155,506 and net
unrealized appreciation was $6,799,871.
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS
OF 1999 DIVIDENDS
INCOME AND CAPITAL GAIN DIVIDENDS PAID TO YOU, WHETHER RECEIVED IN CASH OR
REINVESTED IN SHARES, MUST BE INCLUDED IN YOUR FEDERAL INCOME TAX RETURN AND
MUST BE REPORTED BY THE FUND TO THE INTERNAL REVENUE SERVICE IN ACCORDANCE WITH
U.S. TREASURY DEPARTMENT REGULATIONS.
NONE OF THE DIVIDENDS PAID BY THE FUND QUALIFY FOR THE 70% DIVIDENDS RECEIVED
DEDUCTION AVAILABLE TO CERTAIN CORPORATE SHAREHOLDERS.
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Graver, Bokhof, Goodwin & Sullivan
South Wacker Drive, Suite 2100
Chicago, Illinois 60606
(800) 969-9676
DISTRIBUTOR
Dreher & Associates, Inc.
One Oakbrook Terrace, Suite 708
Chicago, Illinois 60181
(630) 932-3000
CUSTODIAN
UMB Bank, n.a.
P.O. Box 419226
Kansas City, Missouri 64141
TRANSFER AGENT
Sunstone Financial Group, Inc.
207 East Buffalo Street, Suite 400
Milwaukee, WI 53202
(800) 537-3446
COUNSEL
Vedder, Price, Kaufman & Kammholz
Chicago, Illinois
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, Illinois
This report is submitted for the general information of shareholders of the
Universal Capital Growth Fund. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective prospectus
for the Fund. The prospectus gives details about charges, investment objectives,
risks and operation policies of the Fund. Read the prospectus carefully.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholders
Universal Capital Growth Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Universal Capital Growth Fund as of September
30, 1999, the related statement of operations for the year then ended and
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the fiscal years since 1995. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
September 30, 1999, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Universal Capital Growth Fund at September 30, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the fiscal years since 1995, in conformity with generally accepted accounting
principles.
Chicago, Illinois
October 22, 1999
