<PAGE>
[LOGO OF GOVETT FUNDS]
SEMI-ANNUAL REPORT
June 30, 2000
<PAGE>
CONTENTS
------------------------------------------------------
SCHEDULE OF INVESTMENTS 1
FINANCIAL STATEMENTS 9
<PAGE>
Govett Emerging Markets Equity Fund
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Common Stocks - 80.8%
Brazil - 5.9%
6,500 Embratel Participacoes ADR ....................... $ 153,563
4,820 Pao de Acucar GDR................................. 154,842
188 Tele Norte Leste Participacoes
ADR............................................. 4,442
1,410 Telebras.......................................... 136,946
2,092 Telemig Celular Participacoes
ADR............................................. 149,578
6,900 Unibanco GDR ..................................... 198,375
-------------
797,746
-------------
China - 1.4%
900,000 PetroChina Company Ltd. 'H'*...................... 187,031
-------------
Czech Republic - 1.2%
9,598 SPT Telekom*...................................... 161,144
-------------
Hong Kong - 3.6%
14,000 China Mobile*..................................... 123,469
12,600 HSBC Holdings..................................... 143,852
11,000 Hutchison Whampoa ................................ 138,285
100,200 New World Infrastructure.......................... 88,689
-------------
494,295
-------------
Hungary - 2.8%
1,392 Gedeon Richter GDR ............................... 74,646
8,684 Magyar Tavkozlesi Rt. ADR......................... 299,055
-------------
373,701
-------------
India - 6.5%
3,100 Himachal Futuristic
Communications, Ltd. ............................. 98,582
8,993 Hindalco Industries .............................. 159,044
3,850 Hindustan Lever .................................. 244,568
3,300 ITC............................................... 58,731
35,000 Mahanagar Telephone Nigam......................... 168,180
1,600 Satyam Computer Services*......................... 106,869
580 SSI Ltd. ......................................... 36,948
-------------
872,922
-------------
Israel - 4.1%
900 Check Point Software
Technologies Ltd.* ............................. 190,575
2,000 Comverse Technology, Inc.* ....................... 186,000
1,900 Orbotech Ltd.* ................................... 176,462
-------------
553,037
-------------
Malaysia - 1.8%
90,000 Resorts World.....................................
246,316
-------------
Mexico - 12.9%
34,000 Banacci 'O'* ..................................... 145,100
5,270 Cemex ADR......................................... 123,186
47,541 Femsa* ........................................... 202,888
58,500 Grupo Modelo ..................................... 135,825
3,760 Grupo Televisa GDR* .............................. 259,205
17,700 Organizacion Soriana* ............................ 70,502
199,594 Telefonos de Mexico .............................. 569,892
100,750 Walmart de Mexico* ............................... 232,386
-------------
1,738,984
-------------
Russia - 1.2%
1,779 Lukoil Holding ADR ............................... 90,942
6,073 Surgutneftegaz ADR ............................... 78,949
-------------
169,891
-------------
South Africa - 1.9%
2,800 Anglo American Corp. ............................. 133,160
1 Edgars Consolidated Stores........................ 5
16,100 Sappi ............................................ 121,196
-------------
254,361
-------------
South Korea - 16.2%
9,110 Korea Electric Power ............................. 282,690
4,000 Korea Telecom ADR ................................ 193,500
2,060 Korea Telecom Freetel* ........................... 137,269
11,066 L.G Chemical ..................................... 221,315
2,760 Pohang Iron & Steel .............................. 234,161
2,224 Samsung Electronics .............................. 735,998
8,600 Samsung Securities Co., Ltd. ..................... 188,964
590 SK Telecom Co., Ltd. ............................. 193,135
-------------
2,187,032
-------------
Taiwan - 12.9%
19,200 Acer Peripherals, Inc. ........................... 54,366
39,737 Asustek Computer ................................. 328,501
109,000 Far East Textile Ltd. ............................ 135,518
117,000 Formosa Plastics Corp. ........................... 220,863
143,000 Siliconware Precision Industries
Co.* ........................................... 321,139
14,000 Systex Corp.*..................................... 49,211
183,540 United Microelectronics* ......................... 510,746
25,600 Universal Scientific Industrial Co.,
Ltd. ........................................... 62,490
32,000 Wyse Technology Taiwan Ltd. ...................... 57,282
-------------
1,740,116
-------------
Thailand - 1.2%
13,500 Advanced Info Service* ........................... 168,168
-------------
Turkey - 7.2%
10,091,406 Aksigorta A.S .................................... 199,244
1,602,801 Netas Northern
Telekomunikasyon A.S ........................... 178,248
See accompanying notes to the financial statements.
1
<PAGE>
Govett Emerging Markets Equity Fund (continued)
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Common Stocks - (continued)
Turkey - (continued)
2,500,000 Tupras-Turkiye Petrol Rafineriler
A.S. ......................................... $ 130,954
13,463,331 Turkiye Garanti Bankasi A.S.* .................. 162,746
26,798,439 Yapi ve Kredi Bankasi* ......................... 298,027
-------------
969,219
-------------
Total - Common Stocks (Cost $8,618,061) 10,913,963
------------
Preferred Stocks - 11.1%
Brazil - 11.1%
1,969,000 Banco Itau ..................................... 173,045
14,929 Petrobras ...................................... 451,140
11,733,738 Tele Norte Leste Participacoes ................. 274,883
14,065,700 Telecentro Sul Participacoes ................... 203,557
6,097,454 Telesp Celular ................................. 109,879
10,320 Vale de Rio Doce ............................... 291,260
-------------
Total - Preferred Stocks (Cost $837,259) ..................... 1,503,764
-------------
Warrants and Rights - 2.3%
Brazil - 0.0%
101 Tele Norte Leste Participacoes ............... --
-------------
South Africa - 1.2%
19,798 Dimension Data Holdings Ltd. ................... 163,936
-------------
Turkey - 1.1%
479,786 Vestel Elektronik Sanayii ve
Ticaret A.S.* ................................ 144,993
-------------
Total - Warrants and Rights (Cost $215,707) 308,929
-------------
TOTAL INVESTMENTS - 94.2%
(COST $9,671,027) 12,726,656
Other Assets and Liabilities (net) - 5.8% 786,870
-------------
TOTAL NET ASSETS - 100.0% $ 13,513,526
=============
Sector Allocation
Regional Telecommunications 11.6%
National Telecommunications 11.6
Semiconductor Equipment & Products 11.6
Computers & Peripherals 9.2
Banking 8.9
Metals & Mining 6.1
Oil & Gas 6.0
Chemicals 3.3
Beverages 2.9
Household Products 2.9
Other 20.1
------
94.2
Other Assets and Liabilities (net) 5.8
------
Total Net Assets 100.0%
======
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
See accompanying notes to the financial statements.
2
<PAGE>
Govett Smaller Companies Fund
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
COMMON STOCKS - 97.7%
DENMARK - 2.2%
Commercial Services &
Supplies - 2.2%
18,000 International Service System* ...................... $ 1,369,022
------------
FINLAND - 1.2%
Communications Equipment - 1.2%
25,000 Perlos ............................................ 789,268
------------
FRANCE - 1.9%
Computers & Peripherals - 1.9%
7,108 Cap Gemini ........................................ 1,230,158
------------
GERMANY - 0.4%
Electronic Equipment &
Instruments - 0.4%
15,250 Vivanco Gruppe ..................................... 245,817
------------
ISRAEL - 2.1%
Diversified Telecommunication
Services - 0.7%
55,000 Forsoft* .......................................... 426,250
------------
IT Consulting & Services - 1.4%
10,000 Comverse Technology, Inc.* ........................ 930,000
------------
1,356,250
------------
ITALY - 3.2%
Media - 3.2%
140,000 Class Editore ..................................... 2,048,377
------------
JAPAN - 10.4%
Commercial Services & Supplies - 5.3%
31,900 H.I.S.C.O ......................................... 1,574,789
44,800 Meitec ............................................ 1,772,670
------------
3,347,459
------------
Electrical Equipment - 1.7%
18,700 Fuji Soft ABC ..................................... 1,108,135
------------
Pharmaceuticals - 3.4%
52,000 Kyorin Pharmaceutical ............................. 2,155,542
------------
6,611,136
------------
SPAIN - 1.7%
Hotels Restaurants & Leisure - 0.9%
50,000 NH Hoteles* ....................................... 574,663
------------
IT Consulting & Services - 0.8%
22,300 Indra Sistemas .................................... 509,622
------------
1,084,285
------------
THAILAND - 2.3%
Diversified Telecommunications
Equipment - 2.3%
367,000 Total Access Communication* ........................ 1,475,340
------------
UNITED KINGDOM - 5.3%
Computers & Peripherals - 2.6%
161,033 RM ................................................. 1,636,955
------------
Health Care Equipment & Supplies - 2.7%
105,991 Nestor Healthcare Group ............................ 777,612
90,000 SSL International .................................. 973,422
------------
1,751,034
------------
3,387,989
------------
UNITED STATES - 67.0%
Aerospace & Defense - 1.1%
40,000 Teledyne Technologies, Inc.* ....................... 670,000
------------
Automobiles - 1.2%
45,000 Arvin Industries, Inc. ............................. 781,875
------------
Banks - 1.2%
50,000 Banknorth Group, Inc.* ............................. 765,625
------------
Commercial Services & Supplies - 4.8%
50,000 Genome Therapeutics Corp.* .......................... 1,521,875
35,000 True North Communications ........................... 1,540,000
------------
3,061,875
------------
Communications Equipment - 1.0%
20,000 Williams Communications Group, Inc.* ............... 663,750
------------
Computers & Peripherals - 4.2%
20,000 Atmel Corp.* ....................................... 737,500
30,000 Baltimore Technologies ADR* ........................ 472,500
13,500 Scientific-Atlanta ................................. 1,005,750
22,500 USinternetworking* ................................. 459,844
------------
2,675,594
------------
Diversified Financials - 11.4%
55,000 Blackrock, Inc.* ................................... 1,595,000
20,000 CIT Group .......................................... 325,000
25,000 Legg Mason, Inc. ................................... 1,250,000
30,000 Paine Webber Group ................................. 1,365,000
20,000 Southwest Securities Group, Inc. ................... 745,000
60,000 Waddell & Reed Financial ........................... 1,968,750
------------
7,248,750
------------
Diversified Telecommunication Services - 1.3%
25,000 Andrew Corp.* ...................................... 839,063
------------
See accompanying notes to the financial statements.
3
<PAGE>
Govett Smaller Companies Fund (continued)
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
COMMON STOCKS - (continued)
Electronic Equipment &
Instruments - 6.0%
21,000 C & D Technologies, Inc. ................... $ 1,186,500
20,000 Harris Corp. ............................... 655,000
15,000 Jabil Circuit* ............................. 744,375
15,000 MKS Instruments* ........................... 586,875
15,000 Powerwave Technologies, Inc.* .............. 660,000
-----------
3,832,750
-----------
Energy Equipment & Services - 1.6%
40,000 Grant Prideco, Inc.* ....................... 1,000,000
-----------
Health Care Equipment & Supplies - 10.5%
25,000 Biomet, Inc. ............................... 960,937
65,000 CIMA Labs, Inc.* ........................... 1,316,250
85,000 Edwards Lifesciences Corp.* ................ 1,572,500
100,000 Health Management Associates,
Inc. (Class A)* .......................... 1,306,250
70,000 LifePoint Hospitals, Inc.* ................. 1,557,500
-----------
6,713,437
-----------
Media - 2.1%
28,000 Adelphia Communications* ................... 1,312,500
-----------
Metals & Mining - 2.2%
29,200 Belden, Inc. ................................ 748,250
25,000 Harsco Corp. ................................ 637,500
-----------
1,385,750
-----------
Multiline Retail - 1.9%
50,000 Tuesday Morning Corp.* ...................... 525,000
40,000 Wendy's International, Inc. ................. 712,500
-----------
1,237,500
-----------
Oil & Gas - 5.2%
129,400 Parker Drilling Co.* ........................ 800,663
27,900 Patina Oil & Gas Corp. ...................... 578,925
15,000 Smith International, Inc.* .................. 1,092,187
60,000 Stolt Comex Seaway* ......................... 847,500
-----------
3,319,275
-----------
Semiconductor Equipment &
Products - 1.0%
6,000 Altera Corp.* ................................ 611,625
-----------
Services - 1.2%
22,000 PairGain Technologies, Inc.* ................. 780,749
-----------
Software - 2.1%
32,000 MarchFirst, Inc.* ............................ 584,000
85,500 NetObjects, Inc.* ............................ 780,188
-----------
1,364,188
-----------
Technology - 1.3%
43,000 Vical, Inc.* ................................. 827,750
-----------
Textiles & Apparel - 1.0%
40,000 Wellman, Inc. ................................ 647,500
-----------
Wireless Telecommunication
Services - 4.7%
55,000 Spectrasite Holdings, Inc.* .................. 1,560,625
6,500 VoiceStream Wireless* ........................ 755,930
20,500 WinStar Communications* ..................... 694,437
-----------
3,010,992
-----------
42,750,548
-----------
Total - Common Stocks (Cost 51,410,995) 62,348,190
-----------
TOTAL INVESTMENTS - 97.7%
(Cost 51,410,995) 62,348,190
Other Assets and Liabilities (net) - 2.3% 1,470,519
-----------
TOTAL NET ASSETS - 100.0% $63,818,709
===========
* Non-income producing security
ADR American Depositary Receipt
See accompanying notes to the financial statements.
4
<PAGE>
Govett International Smaller Companies
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Common Stocks - 86.2%
Denmark - 3.9%
580 International Service System*..........................$ 44,113
-----------
Finland - 3.7%
1,350 Perlos Corp............................................ 42,621
-----------
France - 2.3%
150 Cap Gemini............................................. 25,960
-----------
Germany - 2.1%
9 Porsche................................................ 24,336
-----------
Italy - 4.3%
2,700 Class Editore.......................................... 39,504
1,900 Simint................................................. 10,040
-----------
49,544
-----------
Japan - 27.5%
1,000 Arrk Corp.............................................. 50,403
300 Doutor Coffee.......................................... 23,176
400 Fuji Soft ABC.......................................... 23,703
600 H.I.S.C.O.............................................. 29,620
1,000 Kyorin Pharmaceutical.................................. 41,453
1,000 Meitec................................................. 39,568
5,000 Nichido Fire & Marine Insurance Co.,
Ltd.................................................. 27,321
300 Noritsu Koki Co. Ltd................................... 10,175
300 People................................................. 24,024
3,000 Tokyo Biso Kogyo Corp.................................. 16,562
2,000 Tsubaki Nakashima...................................... 29,394
-----------
315,399
-----------
Spain - 6.8%
2,300 Indra Sistemas......................................... 52,562
2,150 NH Hoteles*............................................ 24,710
-----------
77,272
-----------
Thailand - 2.6%
7,500 Total Access Communication*............................ 30,150
-----------
United Kingdom - 33.0%
7,000 Biocompatibles International*.......................... 32,190
7,333 Cannons Group.......................................... 15,308
1,400 Filtronic.............................................. 17,154
10,100 First Choice Holidays.................................. 22,154
4,500 First Technology....................................... 36,418
10,300 Grantchester Holdings.................................. 26,487
1,500 Guardian IT............................................ 31,029
5,000 J.D. Wetherspoon....................................... 28,363
23,650 Miller Fisher Group.................................... 10,822
2,780 Nestor Healthcare Group................................ 20,396
6,500 Redrow Group........................................... 17,502
2,500 RM..................................................... 25,413
8,500 Saatchi & Saatchi...................................... 54,690
1,325 SSL International...................................... 14,331
3,000 Ultraframe............................................. 26,185
-----------
378,442
-----------
Total - Common Stocks (Cost $746,228) 987,837
-----------
TOTAL INVESTMENTS - 86.2%
(Cost $746,228) 987,837
Other Assets and Liabilities (net) - 13.8% 157,544
-----------
TOTAL NET ASSETS - 100.0% $1,145,381
===========
* Non-income producing security
Sector Allocation
Commercial Service & Supplies 13.7%
Computers & Peripherals 8.9
Media 8.4
Hotels, Restaurants, & Leisure 8.1
Health & Personal Care 6.0
Automobiles 5.4
Containers & Packaging 5.4
IT Consulting & Services 4.7
Building Products 3.9
Communications Equipment 3.8
Other 17.9
-----
86.2
Other Assets and Liabilities (net) 13.8
-----
Total Net Assets 100.0%
=====
See accompanying notes to the financial statements.
5
<PAGE>
Govett International Equity Fund
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Common Stocks - 96.3%
Brazil - 1.6%
2,730 Pas de Acucaz ADR......................................$ 87,701
3,239 Telesp ADR............................................. 59,922
3,460 Vale Rio Doce ADR...................................... 97,745
-----------
245,368
-----------
Finland - 2.6%
7,885 Nokia Oyj.............................................. 401,981
-----------
France - 18.3%
2,286 Accor.................................................. 93,604
6,531 Aventis................................................ 476,226
2,897 Axa.................................................... 455,920
2,790 Banque Nationale de Paris.............................. 268,238
438 Cap Gemini............................................. 77,077
621 Equant*................................................ 25,209
1,578 Groupe Danone.......................................... 209,208
705 L'Air Liquide.......................................... 91,854
1,464 Lafarge................................................ 113,664
2,901 ST Microelectronics N.V................................ 182,620
3,511 Total Fina............................................. 537,815
867 Valeo.................................................. 46,309
3,135 Vivendi................................................ 276,440
-----------
2,854,184
-----------
Germany - 8.2%
3,905 Deutsche Bank.......................................... 321,804
6,634 Deutsche Telekom AG.................................... 382,181
2,493 MG Technologies AG*.................................... 34,240
198 SAP.................................................... 36,977
2,338 Siemens................................................ 349,661
1,612 Veba AG................................................ 77,645
1,728 Volkswagon............................................. 66,421
-----------
1,268,929
-----------
Hong Kong - 0.6%
7,808 Hutchison Whampoa...................................... 98,157
-----------
Hungary - 0.9%
4,000 Magyar Tavkozlesi Rt. ADR.............................. 137,750
-----------
India - 0.5%
8,000 Mahanager Telephone Nigam GDR.......................... 81,500
-----------
Israel - 0.6%
1,020 Comverse Technology, Inc.*............................. 94,860
-----------
Italy - 1.2%
10,480 Instituto Bancario San Paolo di
Torino................................................. 185,822
-----------
Japan - 23.8%
1,200 Acom Co................................................ 100,843
8,000 Bank of Tokyo-Mitsubushi............................... 96,547
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Japan - (continued)
20,000 Fuji Heavy Industries..................................$ 145,085
10,000 Fujitsu................................................ 345,753
14,000 Hitachi................................................ 201,799
4,000 Ito-Yokado............................................. 240,426
11,000 Matsushita Electric Industries......................... 284,987
28,000 Mazda Motor............................................ 75,708
1,400 Murata Manufacturing Co................................ 200,744
57,000 Nippon Steel........................................... 119,751
27 Nippon Telegraph & Telephone........................... 358,660
1,500 Promise................................................ 118,423
12,000 Sakura Bank............................................ 82,868
4,000 Shin-Etsu Chemical..................................... 202,742
300 Softbank Corp.......................................... 40,699
4,400 Sony................................................... 410,382
14,000 Sumitomo Bank.......................................... 171,464
18,000 Sumitomo Chemical Co................................... 108,192
25,000 Sumitomo Marine & Fire
Insurance.............................................. 145,320
4,000 Takeda Chemical Industries............................. 262,283
-----------
3,712,676
-----------
Mexico - 1.9%
1,900 Telefonos de Mexico ADR................................ 108,537
84,100 Walmart de Mexico (Series C)*.......................... 193,982
-----------
302,519
-----------
Netherlands - 7.4%
4,464 Fortis................................................. 129,819
4,251 ING Groep.............................................. 287,065
4,016 Koninklijke Ahold...................................... 118,093
4,628 Koninklijke KPN........................................ 206,804
1,917 Royal Dutch Petroleum.................................. 119,031
5,778 VNU.................................................... 298,148
-----------
1,158,960
-----------
South Africa - 0.7%
314 Edgars Consolidated Stores............................. 3,013
13,300 Sappi Ltd.............................................. 100,118
-----------
103,131
-----------
South Korea - 1.7%
1,364 Samsung Electronics GDR................................ 263,252
-----------
Spain - 1.2%
8,294 Telefonica S.A.*....................................... 177,993
-----------
Sweden - 4.4%
4,364 Atlas Copco............................................ 84,037
4,744 ForeningsSparbanken AB................................. 69,322
16,435 Nordic Baltic Holding AB............................... 123,803
2,130 Sandvik AB............................................. 44,636
See accompanying notes to the financial statements.
6
<PAGE>
Govett International Equity Fund (continued)
Schedule of Investments
June 30, 2000 (Unaudited)
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
Common Stocks - (continued)
Sweden - (continued)
18,516 Telefonaktiebolaget LM Ericsson
AB (Series B)..........................................$ 365,999
-----------
687,797
-----------
Switzerland - 3.9%
14 Givaudan AG*........................................... 4,256
65 Nestle................................................. 129,952
73 Novartis............................................... 115,505
9 Roche Holding.......................................... 87,515
1,824 UBS.................................................... 266,938
-----------
604,166
-----------
Taiwan - 2.1%
20,616 Asustek Computer GDR*.................................. 173,690
13,400 Siliconware Precision Industries
Co. GDR*............................................... 152,090
-----------
325,780
-----------
Turkey - 0.9%
13,003,980 Yapi ve Kredi Bankasi*................................. 144,618
-----------
United Kingdom - 13.8%
8,350 Abbey National......................................... 99,785
4,122 Allied Zurich.......................................... 48,729
449 Anglo American......................................... 21,531
1,285 AstraZeneca............................................ 59,967
3,017 Barclays............................................... 74,983
9,914 Barratt Developments................................... 39,292
5,472 Billiton............................................... 22,266
20,812 BP Amoco............................................... 199,598
8,674 British Telecom........................................ 112,055
1,470 Cable & Wireless....................................... 24,883
3,320 Conduit GDR*........................................... 50,523
5,152 Diageo................................................. 46,215
2,381 EMI Group.............................................. 21,610
5,493 Glaxo Wellcome......................................... 160,119
4,138 Granada Group.......................................... 41,313
3,056 Halifax................................................ 29,309
5,604 HSBC Holdings.......................................... 64,045
2,419 Imperial Chemical Industries........................... 19,193
13,780 Invensys............................................... 51,695
8,353 Lloyds TSB Group....................................... 78,846
1,457 Logica................................................. 34,471
3,311 Marconi................................................ 43,073
1,744 Ocean Group............................................ 28,756
1,402 Pearson................................................ 44,537
4,988 Prudential............................................. 73,039
2,503 Railtrack Group........................................ 38,866
3,310 Reuters Group.......................................... 56,429
1,502 RMC Group.............................................. 19,540
3,060 Scottish Power......................................... 25,922
Value
Shares Description (See Note 1)
--------------------------------------------------------------------------------
United Kingdom - (continued)
2,482 SEMA Group.............................................$ 35,292
3,006 Serco Group............................................ 23,418
4,063 Severn Trent........................................... 44,283
6,137 Smithkline Beecham..................................... 80,302
1,800 Smiths Industries...................................... 23,416
3,866 Unilever............................................... 23,392
71,521 Vodafone Group......................................... 288,867
-----------
2,149,560
-----------
Total - Common Stocks (Cost $13,626,375)............................. 14,999,003
-----------
Preferred Stocks - 1.4%
Brazil - 0.6%
6,786,000 Telecentro Sul Participacoes........................... 98,206
-----------
Germany - 0.8%
2,050 Henkel KGaA............................................ 117,317
-----------
Total - Preferred Stocks (Cost $239,002)............................. 215,523
-----------
Warrants and Rights - 0.0%
France - 0.0%
360 Lafarge, expiring 3/20/01
(Cost $26,247)....................................... 1,202
-----------
TOTAL INVESTMENTS - 97.7%
(Cost $13,891,624) 15,215,728
Other Assets and Liabilities (net) - 2.3% 359,269
-----------
TOTAL NET ASSETS - 100.0% $15,574,997
===========
* Non-income producing security
ADR American Depositary Receipt
GDR Global Depositary Receipt
Sector Allocation
Banks 13.2%
Regional Telecommunications 7.1
National Telecommunications 6.5
Multiline Retail 5.8
Oil & Gas 5.5
Communications Equipment 4.9
Electronic Equipment & Instruments 4.8
Diversified Financials 4.7
Insurance 4.6
Electrical Equipment 4.4
Other 36.2
-----
97.7
Other Assets and Liabilities (net) 2.3
-----
Total Net Assets 100.0%
=====
See accompanying notes to the financial statements.
7
<PAGE>
Govett Global Income Fund
Schedule of Investments
June 30, 2000 (Unaudited)
Principal Value
Amount Description (See Note 1)
--------------------------------------------------------------------------------
Corporate Bonds - 11.3%
Germany - 11.3%
EUR 400,000 Treuhandanstalt
7.125%, 01/29/03
(Cost $378,804)...............................$ 400,137
-----------
Government Bonds &
Notes - 80.4%
Austria - 2.8%
EUR 100,000 Republic of Austria
6.25%, 05/31/06................................ 98,861
-----------
Denmark - 3.3%
DKK 900,000 Kingdom of Denmark
6.00%, 11/15/09................................ 117,460
-----------
France - 4.0%
EUR 150,000 French Treasury Bill
4.50%, 07/12/03.................................. 140,829
-----------
Germany - 9.2%
EUR 175,000 Deutschland Republic
5.625%, 01/04/28............................... 169,068
EUR 50,000 Deutschland Republic
6.00%, 06/20/16................................ 51,338
EUR 100,000 Deutschland Republic
6.25%, 01/04/24................................ 103,392
-----------
323,798
-----------
Ireland - 4.2%
EUR 170,000 Irish Government
3.50%, 10/18/05................................ 149,142
-----------
Italy - 9.1%
EUR 30,000,000 Government of Italy
3.75%, 06/08/05................................ 319,346
-----------
Netherlands - 4.4%
EUR 150,000 Netherlands Government
7.00%, 06/15/05................................ 154,086
-----------
New Zealand - 4.2%
NZD 300,000 New Zealand Government
8.00%, 11/15/06................................ 148,889
-----------
Sweden - 3.5%
SEK 1,000,000 Government of Sweden
13.00%, 06/15/01............................... 121,868
-----------
United Kingdom - 5.9%
GBP 60,000 U.K. Treasury
6.50%, 12/07/03................................ 92,532
GBP 70,000 U.K. Treasury
7.50%, 12/07/06................................ 116,583
-----------
209,115
-----------
United States - 29.8%
USD 200,000 U.S. Treasury Note
6.125%, 11/15/27............................... 199,375
USD 850,000 U.S. Treasury Note
6.50%, 08/31/01................................ 850,000
-----------
1,049,375
-----------
Total - Government Bonds and Notes
(Cost $3,022,660) 2,832,769
-----------
TOTAL INVESTMENTS - 91.7%
(Cost $3,401,464) 3,232,906
Other Assets and Liabilities (net)- 8.3% 292,518
-----------
TOTAL NET ASSETS - 100.0% $3,525,424
===========
DKK -- Danish Krone
EUR -- Euro
GBP -- British Pound
NZD -- New Zealand Dollar
SEK -- Swedish Krona
USD -- United States Dollar
See accompanying notes to the financial statements.
8
<PAGE>
Statements of Assets and Liabilities
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Emerging International
Markets Smaller Smaller International Global
Equity Companies Companies Equity Income
Fund Fund Fund Fund Fund
------------- ------------- ------------- ------------- -------------
ASSETS:
<S> <C> <C> <C> <C> <C>
Investments, at value (Note 1) -
(see accompanying Schedule of Investments)....... $ 12,726,656 $ 62,348,190 $ 987,837 $ 15,215,728 $ 3,232,906
Cash .............................................. 334,943 -- 64,609 59,850 172,744
Foreign currency, at value (Note 1) ............... 78,965 1,712,951 67,952 346,414 --
Receivable from:
Securities sold ................................ 364,456 734,943 -- 200,732 66,710
Securities lending ............................. -- 1,014,175 -- -- --
Fund shares sold ............................... -- 2,939 -- -- --
Dividends and interest ......................... 19,726 48,888 1,624 38,605 54,249
Reimbursement from investment manager (Note 2).. 105,939 -- 72,229 -- 56,571
Other assets ...................................... 9,248 9,248 9,248 26,454 9,248
------------- ------------- ------------- ------------- -------------
Total assets ................................... 13,639,933 65,871,334 1,203,499 15,887,783 3,592,428
------------- ------------- ------------- ------------- -------------
LIABILITIES:
Overdraft payable ................................. -- 840,580 -- -- --
Payable for:
Securities purchased ........................... -- 772,240 -- 152,402 --
Fund shares repurchased ........................ 22,285 66,820 -- 55,579 3,507
Distributions declared ......................... -- -- -- -- 13,367
Investment manager (Note 2) .................... -- 213,721 -- 39,376 --
Professional fees ................................. 42,336 41,911 41,937 42,301 42,150
Accrued expenses and other liabilities ............ 61,786 117,353 16,181 23,128 7,980
------------- ------------- ------------- ------------- -------------
Total liabilities .............................. 126,407 2,052,625 58,118 312,786 67,004
------------- ------------- ------------- ------------- -------------
Net assets......................................... $ 13,513,526 $ 63,818,709 $ 1,145,381 $ 15,574,997 $ 3,525,424
============= ============= ============= ============= =============
NET ASSETS CONSIST OF:
Paid-in-capital.................................... 22,193,540 64,670,467 905,532 11,507,777 8,481,128
Undistributed net investment loss.................. (90,179) (629,343) (6,069) (136,294) (49,535)
Accumulated net realized gain/(loss) on investments
and foreign currency transactions................ (11,646,038) (11,148,662) 3,462 2,874,043 (4,734,969)
Net unrealized appreciation (depreciation) on
investments, forward currency contracts and net
other assets (net of accrued foreign country tax
unrealized appreciation)......................... 3,056,203 10,926,247 242,456 1,329,471 (171,200)
------------- ------------- ------------- ------------- -------------
Net assets ........................................ $ 13,513,526 $ 63,818,709 $ 1,145,381 $ 15,574,997 $ 3,525,424
============= ============= ============= ============= =============
Class A Retail Shares:
Net assets......................................... $ 13,513,526 $ 63,818,709 $ 48,376 $ 9,569,639 $ 3,525,424
============= ============= ============= ============= =============
Shares outstanding ................................ 1,130,030 2,268,496 3,697 831,417 501,273
============= ============= ============= ============= =============
Net Asset Value, offering and redemption
price per share ................................. $ 11.96 $ 28.13 $ 13.09 $ 11.51 $ 7.03
============= ============= ============= ============= =============
Institutional Class Shares:
Net assets......................................... $ 1,097,005 $ 6,005,358
============= =============
Shares outstanding ................................ 83,532 518,083
============= ============= ============= ============= =============
Net Asset Value, offering and redemption
price per share.................................. $ 13.13 $ 11.59
============= ============= ============= ============= =============
Cost of investments................................ $ 9,671,027 $ 51,410,995 $ 746,228 $ 13,891,624 $ 3,401,464
Cost of foreign currency........................... $ 79,607 $ 1,733,300 $ 67,131 $ 345,767 $ --
</TABLE>
See accompanying notes to the financial statements.
9
<PAGE>
Statements of Operations
For the six months ended June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Emerging International
Markets Smaller Smaller International Global
Equity Companies Companies Equity Income
Fund Fund Fund Fund Fund
------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest* ......................................... $ -- $ 60,376 $ 3,003 $ 301 $ 96,213
Dividends* ........................................ 87,775 121,207 1,026 127,575 3,452
------------- ------------- ------------- ------------- -----------
Total investment income ........................ 87,775 181,583 4,029 127,876 99,665
------------- ------------- ------------- ------------- -----------
Expenses:
Management fee (Note 2) .......................... 78,227 341,300 5,812 92,981 13,650
Custody and administration fees ................... 79,240 178,836 8,162 70,653 14,242
12b-1 fee Class A (Note 3) ........................ 27,430 119,545 87 19,835 6,377
Professional fees ................................. 30,120 29,695 29,720 30,084 29,934
Transfer agency fee ............................... 58,910 240,265 281 21,021 7,055
Registration and filing fees ...................... 10,827 20,952 7,486 8,704 7,842
Directors' fees and expenses ...................... 16,798 16,672 16,798 16,805 16,805
Insurance ......................................... 3,413 3,413 3,413 3,412 3,413
Custody Overdraft ................................. 1,588 7,055 -- 50,815 --
Other ............................................. 4,371 14,187 2,397 3,429 3,321
------------- ------------- ------------- ------------- -----------
Total expenses ................................. 310,924 971,920 74,156 317,739 102,639
------------- ------------- ------------- ------------- -----------
Less: Expenses reimbursable and fees waived by the
Manager (Note 2)................................ (165,690) (162,988) (65,351) (61,239) (59,071)
------------- ------------- ------------- ------------- -----------
Net operating expenses ............................ 145,234 808,932 8,805 256,500 43,568
------------- ------------- ------------- ------------- -----------
Net investment income (loss) ...................... (57,459) (627,349) (4,776) (128,624) 56,097
------------- ------------- ------------- ------------- -----------
Realized and unrealized gain (loss):
Net realized gain (loss) on:
Investment transactions ........................ 1,346,551 15,763,531 7,851 2,897,412 (49,037)
Foreign currency transactions and forward
foreign currency contracts ................... (53,199) 1,825 (4,387) (23,245) (19,785)
------------- ------------- ------------- ------------- -----------
Net realized gain (loss) ..................... 1,293,352 15,765,356 3,464 2,874,167 (68,822)
------------- ------------- ------------- ------------- -----------
Net unrealized appreciation (depreciation) on:
Investments..................................... (3,119,271) (16,240,606) (73,806) (4,011,185) 40,605
Foreign currency transactions................... (10,220) (10,833) 1,384 5,367 (4,346)
------------- ------------- ------------- ------------- -----------
Net unrealized appreciation (depreciation)
during the period........................... (3,129,491) (16,251,439) (72,422) (4,005,818) 36,259
------------- ------------- ------------- ------------- -----------
Net realized and unrealized gain (loss)............ (1,836,139) (486,083) (68,958) (1,131,651) (32,653)
------------- ------------- ------------- ------------- -----------
Net increase (decrease) in net assets resulting
from operations................................. $ (1,893,598) $ (1,113,432) $ (73,734) $ (1,260,275) $ 23,534
============= ============= ============= ============= ===========
*Net of foreign taxes withheld of.................. $ 11,430 $ 6,559 $ 421 $ 16,656 $ 34
============= ============= ============= ============= ===========
</TABLE>
See accompanying notes to the financial statements.
10
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Emerging Markets Equity Fund Smaller Companies Fund
----------------------------- -----------------------------
Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2000 December 31, June 30, 2000 December 31,
(Unaudited) 1999 (Unaudited) 1999
---------------- ----------- ---------------- ------------
<S> <C> <C> <C> <C>
Increase (decrease) in net assets from:
Operations:
Net investment income (loss) .................................. $ (57,459) $ 12,236 $ (627,349) $ (1,184,054)
Net realized gain (loss) on investment and foreign
currency transactions ...................................... 1,293,352 1,208,760 15,765,356 17,199,079
Net change in unrealized appreciation (depreciation)
on investments, forward currency contracts,
foreign currency, and other assets ......................... (3,129,491) 7,032,881 (16,251,439) 16,956,268
------------ ----------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations .................................. (1,893,598) 8,253,877 (1,113,432) 32,971,293
------------ ----------- ------------ ------------
Distributions to shareholders:
From net investment income:
Class A Retail Shares .................................... -- -- -- --
From net realized capital gains:
Class A Retail Shares .................................... -- -- -- --
Institutional Class Shares ............................... -- -- -- --
Return of capital ............................................. -- -- -- --
------------ ----------- ------------ ------------
Total distributions to shareholders ........................... -- -- -- --
------------ ----------- ------------ ------------
Fund share transactions (Note 5):
Class A Retail Shares:
Proceeds from shares sold ..................................... 876,480 1,150,426 1,408,409 3,160,642
Net asset value of shares issued on reinvestment of
distributions .............................................. -- -- -- --
Cost of shares repurchased .................................... (3,528,155) (6,079,257) (9,151,346) (24,408,685)
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting from
Class A Retail Shares ...................................... (2,651,675) (4,928,831) (7,742,937) (21,248,043)
------------ ----------- ------------ ------------
Institutional Class Shares:
Proceeds from shares sold ..................................... -- -- -- --
Net asset value of shares issued on reinvestment of
distributions .............................................. -- -- -- --
Cost of shares repurchased .................................... -- -- -- --
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting from
Institutional Class Shares ................................. -- -- -- --
------------ ----------- ------------ ------------
Net increase (decrease) in net assets resulting from
fund share transactions .................................... (2,651,675) (4,928,831) (7,742,937) (21,248,043)
------------ ----------- ------------ ------------
Total change in net assets .................................... (4,545,273) 3,325,046 (8,856,369) 11,723,250
Net Assets:
Beginning of period ........................................ 18,058,799 14,733,753 72,675,078 60,951,827
------------ ----------- ------------ ------------
End of Period* ............................................. $ 13,513,526 $18,058,799 $ 63,818,709 $ 72,675,078
============ =========== ============ ============
*Including undistributed net investment loss of................ $ (90,179) $ (32,720) $ (629,343) $ (1,994)
</TABLE>
See accompanying notes to the financial statements.
11
<PAGE>
<TABLE>
<CAPTION>
International Smaller
Companies Fund International Equity Fund Global Income Fund
------------------------------------ ------------------------------------ ------------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended
June 30, 2000 December 31, June 30, 2000 December 31, June 30, 2000 December 31,
(Unaudited) 1999 (Unaudited) 1999 (Unaudited) 1999
---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C>
$ (4,776) $ (5,308) $ (128,624) $ (71,221) $ 56,097 $ 188,529
3,464 127,130 2,874,167 2,237,473 (68,822) 96,854
(72,422) 314,878 (4,005,818) 2,593,678 36,259 (733,328)
------------ ------------- ------------ ------------- ------------- --------------
(73,734) 436,700 (1,260,275) 4,759,930 23,534 (447,945)
------------ ------------- ------------ ------------- ------------- --------------
-- -- -- -- (77,446) (143,931)
(2,893) (2,996) (264,585) (1,385,617) -- --
(65,269) (51,959) (163,825) (898,400) -- --
-- -- -- -- -- (65,494)
------------ ------------- ------------ ------------- ------------- --------------
(68,162) (54,955) (428,410) (2,284,017) (77,446) (209,425)
------------ ------------- ------------ ------------- ------------- --------------
20,298 92,586 39,073 814,529 15,867 65,959
2,810 2,928 251,685 1,306,935 38,932 132,954
(34,778) (45,523) (2,368,073) (3,133,358) (426,146) (2,659,154)
------------ ------------- ------------ ------------- ------------- --------------
(11,670) 49,991 (2,077,315) (1,011,894) (371,347) (2,460,241)
------------ ------------- ------------ ------------- ------------- --------------
-- -- 1,350 2,175 -- --
65,269 51,959 163,635 897,524 -- --
-- -- (1,961,373) (126,930) -- --
------------ ------------- ------------ ------------- ------------- --------------
65,269 51,959 (1,796,388) 772,769 -- --
------------ ------------- ------------ ------------- ------------- --------------
53,599 101,950 (3,873,703) (239,125) (371,347) (2,460,241)
------------ ------------- ------------ ------------- ------------- --------------
(88,297) 483,695 (5,562,388) 2,236,788 (425,259) (3,117,611)
1,233,678 749,983 21,137,385 18,900,597 3,950,683 7,068,294
------------ ------------- ------------ ------------- ------------- --------------
$ 1,145,381 $ 1,233,678 $ 15,574,997 $ 21,137,385 $ 3,525,424 $ 3,950,683
============ ============= ============ ============= ============= ==============
$ (6,069) $ (1,293) $ (136,294) $ (7,670) $ (49,535) $ (93,680)
</TABLE>
12
<PAGE>
Financial Highlights
For a Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
Emerging Markets Equity Fund
----------------------------------------------------------------------------------------
Class A Retail Shares
----------------------------------------------------------------------------------------
Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2000 December 31, December 31, December 31, December 31, December 31,
(Unaudited) 1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $ 13.54 $ 7.96 $ 12.24 $ 13.66 $ 12.24 $ 13.29
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income (loss)+ ........... (0.06) - 0.02 (0.11) (0.13) (0.06)
Net realized and unrealized gain (loss)
on investments ........................ (1.52) 5.58 (4.15) (1.31) 1.61 (0.98)
--------- --------- --------- --------- --------- ---------
Total from investment operations ..... (1.58) 5.58 (4.13) (1.42) 1.48 (1.04)
--------- --------- --------- --------- --------- ---------
Less distributions to shareholders:
From net investment income .............. - - (0.15) - - -
In excess of net investment income ...... - - - - (0.06) -
From net realized gain .................. - - - - - (0.01)
--------- --------- --------- --------- --------- ---------
Total distributions .................. - - (0.15) - (0.06) (0.01)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period .......... $ 11.96 $ 13.54 $ 7.96 $ 12.24 $ 13.66 $ 12.24
========= ======== ========= ========= ========= =========
Total Return............................. (11.66)%** 70.10% (34.18)% (10.40)% 12.08 % (7.84)%
Ratios/Supplemental Data:
Net Assets, end of period (000's)........ $ 13,514 $ 18,059 $ 14,734 $ 32,899 $ 56,814 $ 75,887
Net operating expenses to average daily
net assets (Note A)................... 1.85%* 1.85% 2.50% 2.50% 2.38% 2.50%
Net investment income (loss) to average
daily net assets...................... (0.73)%* 0.08% 0.03% (0.54)% (0.62)% (0.49)%
Portfolio turnover rate.................. 37% 63% 121% 120% 122% 115%
----------------------------
Note A: For the years presented, AIB Govett, Inc., investment manager (or its predecessors or affiliates thereof), waived a portion
of its management fee and reimbursed a portion of the other operating expenses of the Funds. Without the waiver and
reimbursement of expenses, the expense ratios as a percentage of average net assets for the periods indicated would have
been:
Expenses......................... 3.97%* 4.31% 4.09% 2.91% 2.62% 2.78%
</TABLE>
* Annualized
** Not Annualized
+ Per share net investment income (loss) does not reflect the current period's
reclassification of permanent differences between book and tax basis net
investment income (loss). See Note 1.
See accompanying notes to the financial statements.
13
<PAGE>
<TABLE>
<CAPTION>
Smaller Companies Fund
-------------------------------------------------------------------------------------------------------------
Class A Retail Shares
-------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2000 December 31, December 31, December 31, December 31, December 31,
(Unaudited) 1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$ 28.69 $ 16.85 $ 19.09 $ 21.83 $ 29.96 $ 19.06
--------- -------- -------- -------- -------- --------
(0.28) (0.47) (0.35) (0.43) (0.44) (0.30)
(0.28) 12.31 (1.89) (2.31) (2.84) 13.32
--------- -------- -------- -------- -------- --------
(0.56) 11.84 (2.24) (2.74) (3.28) 13.02
--------- -------- -------- -------- -------- --------
- - - - - -
- - - - (4.85) (2.12)
--------- -------- -------- -------- -------- --------
- - - - (4.85) (2.12)
--------- -------- -------- -------- -------- --------
$ 28.13 $ 28.69 $ 16.85 $ 19.09 $ 21.83 $ 29.96
========= ======== ======== ======== ======== ========
(1.85)%** 70.27% (11.73)% (12.55)% (10.62)% 69.13%
$ 63,819 $ 72,675 $ 60,952 $127,925 $259,735 $517,990
2.35%* 2.35% 1.95% 1.95% 1.81% 1.95%
(1.83)%* (1.97)% (1.51)% (1.64)% (1.40)% (1.64)%
70% 76% 104% 77% 406% 280%
2.83%* 3.16% 2.91% 2.59% 2.08% 2.12%
</TABLE>
14
<PAGE>
Financial Highlights (continued)
For a Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
International Smaller Companies Fund
-----------------------------------------------------------------------------------
Class A Retail Shares Institutional Class Shares
-----------------------------------------------------------------------------------
Six Months Six Months
Ended Period Ended Ended Year Ended
June 30, 2000 December 31, June 30, 2000 December 31,
(Unaudited) 1999(a) (Unaudited) 1999(a)
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $14.83 $10.90 $14.85 $ 10.00
------- ------- ------- -------
Income from investment operations:
Net investment income (loss)+.................. (0.24) (0.09) (0.06) (0.07)
Net realized income and unrealized gain
(loss) on operations......................... (0.67) 4.71 (0.83) 5.61
------- ------- ------- -------
Total from investment operations............. (0.91) 4.62 (0.89) 5.54
------- ------- ------- -------
Less distributions to shareholders:
From net investment income..................... - - - -
In excess of net investment income............. - - - -
From net realized gain......................... (0.83) (0.69) (0.83) (0.69)
------- ------- ------- -------
Total distributions.......................... (0.83) (0.69) (0.83) (0.69)
------- ------- ------- -------
Net asset value, end of period.................. $13.09 $14.83 $13.13 $14.85
======= ======= ======= =======
Total return................................... (6.09)%** 42.49%** (5.98)%** 55.51%
Ratios/Supplemental Data:
Net Assets, end of period (000's).............. $ 48 $ 67 $1,097 $1,167
Net operating expenses to average daily
net assets (Note A).......................... 1.85%* 1.85%* 1.50%* 1.50%
Net investment income (loss) to average
daily net assets............................. (1.17)%* (1.22)%* (0.81)%* (0.55)%
Portfolio turnover rate........................ 6 % 87 % 6 % 87 %
-------------------------------------------------
Note A: For the years presented, AIB Govett, Inc., investment manager (or its predecessors or affiliates thereof), waived a portion
of its management fee and reimbursed a portion of the other operating expenses of the Funds. Without the waiver and
reimbursement of expenses, the expense ratios as a percentage of average net assets for the periods indicated would have
been:
Expenses....................................... 13.07 %* 15.47 %* 12.74 %* 16.91 %
</TABLE>
(a) Commencement of Operations was May 25, 1999.
(b) Commencement of Operations was December 31, 1998.
(c) Commencement of Operations was July 24, 1998.
* Annualized
** Not Annualized
+ Per share net investment income (loss) does not reflect the current period's
reclassification of permanent differences between book and tax basis net
investment income (loss). See Note 1.
15
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
------------------------------------------------------------------------------------------------------------------------------------
Class A Retail Shares Institutional Class Shares
---------------------------------------------------------------------------------- -----------------------------------------------
Six Months Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended Ended Year Ended Year Ended
June 30, 2000 December 31, December 31, December 31, December 31, December 31, June 30, 2000 December 31, December 31,
(Unaudited) 1999 1998 1997 1996 1995 (Unaudited) 1998 1998
------------- ------------ ----------- ------------ ------------ ------------ -------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$12.72 $11.17 $10.90 $11.19 $11.27 $10.16 $12.78 $11.19 $12.85
------ ------ ------ ------ ------ ------ ------ ------ ------
0.08 (0.06) (0.08) (0.24) (0.11) (0.08) (0.45) (0.02) (0.02)
(0.97) 3.11 2.15 0.18 1.45 1.20 (0.42) 3.11 (0.13)
------ ------ ------ ------ ------ ------ ------ ------ ------
(0.89) 3.05 2.07 (0.06) 1.34 1.12 (0.87) 3.09 (0.15)
------ ------ ------ ------ ------ ------ ------ ------ ------
- - - - (0.11) - - - -
- - - - (0.09) - - - -
(0.32) (1.50) (1.80) (0.23) (1.22) (0.01) (0.32) (1.50) (1.51)
------ ------ ------ ------ ------ ------ ------ ------ ------
(0.32) (1.50) (1.80) (0.23) (1.42) (0.01) (0.32) (1.50) (1.51)
------ ------ ------ ------ ------ ------ ------ ------ ------
$11.51 $12.72 $11.17 $10.90 $11.19 $11.27 $11.59 $12.78 $11.19
====== ====== ====== ====== ====== ====== ====== ====== ======
(6.95)%** 27.95 % 19.12% (0.71)% 12.13 % 11.01% (6.77)%** 28.25 % (1.15)%**
$9,570 $12,718 $12,223 $13,952 $25,822 $28,546 $6,005 $8,419 $6,678
2.35 %* 2.35 %* 2.45% 2.50 % 2.39 % 2.50% 2.00 % 2.00 %* 1.75 %*
(1.51)%* (0.52)% (0.62)% (1.01)% (1.06)% (0.64)% (1.18)%* (0.17)% (0.47)%
28 % 41 % 109 % 51 % 84 % 101 % 28 % 41 % 109 %
3.02 %* 3.34 % 3.30 % 3.12 % 3.09 % 2.75 % 2.65 % 2.98 % 2.90 %
</TABLE>
16
<PAGE>
Financial Highlights (continued)
For a Share Outstanding Throughout Each Period:
<TABLE>
<CAPTION>
Global Income Fund
----------------------------------------------------------------------------------------
Class A Retail Shares
----------------------------------------------------------------------------------------
Six Months
Ended Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2000 December 31, December 31, December 31, December 31, December 31,
(Unaudited) 1999 1998 1997 1996 1995
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $ 7.13 $ 8.07 $ 7.82 $ 8.32 $ 8.97 $ 8.48
------ ------ ------ ------- ------- -------
Income from Investment operations:
Net investment income +................... 0.10 0.16 0.32 0.26 0.57 0.63
Net realized and unrealized gain (loss)
on investments......................... (0.05) (0.80) 0.27 (0.30) (0.54) 0.53
------ ------ ------ ------- ------- -------
Total from investment operations....... 0.05 (0.64) 0.59 (0.04) 0.03 1.16
------ ------ ------ ------- ------- -------
Less distributions to shareholders:
From net investment income................ (0.15) (0.21) (0.06) (0.12) (0.66) (0.63)
In excess of net investment income........ - - - - (0.02) (0.04)
Return of capital......................... - (0.09) (0.28) (0.34) - -
------ ------ ------ ------- ------- -------
Total distributions.................... (0.15) (0.30) (0.34) (0.46) (0.68) (0.67)
------ ------ ------ ------- ------- -------
Net asset value, end of period............ $ 7.03 $ 7.13 $ 8.07 $ 7.82 $ 8.32 $ 8.97
====== ====== ====== ======= ======= =======
Total Return.............................. 0.74%** (8.06)% 7.65% (0.35)% 0.34% 14.11%
Ratios/Supplemental Data:
Net Assets, end of period (000's)......... $3,525 $3,951 $7,068 $10,277 $20,354 $41,181
Net operating expenses to average daily
net assets (Note A).................... 2.35%* 2.35% 1.75% 1.75% 1.64% 1.75%
Net investment income (loss) to average
daily net assets....................... 3.07%* 3.56% 4.37% 4.23% 7.17% 7.45%
Portfolio turnover rate................... 65% 33% 23% 76% 236% 249%
</TABLE>
-----------------------------------
Note A: For the years presented, AIB Govett, Inc., investment manager (or its
predecessors or affiliates thereof), waived a portion of its
management fee and reimbursed a portion of the other operating
expenses of the Funds. Without the waiver and reimbursement of
expenses, the expense ratios as a percentage of average net assets for
the periods indicated would have been:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Expenses............................... 5.59%* 4.51% 3.54% 2.82% 2.38 1.93%
</TABLE>
* Annualized
** Not Annualized
+ Per share net investment income does not reflect the current period's
reclassification of permanent differences between book and tax basis net
investment income. See Note 1.
See accompanying notes to the financial statements.
17
<PAGE>
Notes to Financial Statements
Note 1-Significant Accounting Policies
The Govett Funds, Inc. (the "Company") consists of seven series (individually a
"Fund" and collectively the "Funds") which are registered with the Securities
and Exchange Commission ("SEC") under the Investment Company Act of 1940, as
amended (the "1940 Act"). Five series are currently being offered to the public,
as diversified open-end investment companies, except Govett Global Income Fund,
which is a non-diversified investment company.
Each fund has authorized the issuance of Retail Shares (Class A and Class B) and
Institutional Class shares. Presently, none of the Funds offer Class B shares
and only the International Equity Fund and International Smaller Companies Fund
have Institutional Class shares outstanding. Each class of shares has equal
rights as to assets and voting privileges. Class A and Class B have exclusive
voting rights for their respective distribution plan. Each class of shares
differs in its respective service, distribution and transfer agent expenses.
Each Fund, except Govett Global Income Fund, seeks long-term capital
appreciation by investing in certain geographical regions or companies. Govett
Global Income Fund seeks primarily a high level of current income, consistent
with preservation of capital.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
effect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies consistently followed by the Funds in the
preparation of their financial statements.
Portfolio Valuation--Portfolio securities listed or traded on domestic or
foreign securities exchanges are valued at the last quoted sales price.
Securities listed or traded on the over-the-counter market are valued at the
mean between the latest available current bid and asked prices. Bonds and
short-term debt securities with remaining maturities in excess of 60 days are
valued at the mean of representative quoted bid and asked prices for such
securities or, if such prices are not available, they are based on prices for
securities of comparable maturity, quality and type. Prices are obtained from
pricing services as authorized by the Company's Board of Directors. Short-term
debt securities which mature in 60 days or less are valued at amortized cost.
Foreign securities quoted in foreign currency are translated into U.S. dollars
at the foreign currency rates applicable on that day or at such other rates as
AIB Govett, Inc. ("AIB Govett") or the "Manager") and AIB Govett Asset
Management Limited ("AIB Govett" or the "Manager") and AIB Govett Asset
Management Limited ("AIB Govett London" or the "Subadviser") may determine to be
appropriate in computing net asset value. Securities for which there are no
representative quotations or valuations are valued at fair value as determined
in good faith by the Board of Directors.
Repurchase Agreements--Under the terms of a typical repurchase agreement, the
Fund takes possession of an underlying debt obligation subject to an obligation
of the seller to repurchase, and the Fund to resell, the obligation at an
agreed-upon price and time. The Value of the collateral is at least equal at
all times to the total amount of the repurchase obligations, including interest.
The Manager and Subadviser, acting under the supervision of the Board of
Directors, review the value of the collateral and the creditworthiness of those
banks and dealers with which the Fund enters into repurchase agreements to
evaluate potential risks.
Foreign Currency Translation--Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S. dollars
at the foreign currency exchange rates applicable on that day. Purchases and
sales of securities, income receipts and expense payments are translated in U.S.
dollars at the prevailing exchange rate on the respective dates of the
transactions. Net realized gains and losses on foreign currency translations
represent net gains and losses from sales and maturities of forward currency
contracts, disposition of foreign currencies, currency gains and losses realized
between the trade and settlement dates on securities transactions and the
difference between the amount of net investment income accrued and the U.S.
dollar amount actually received. The effects of changes in foreign currency
exchange rates on investments in securities are not segregated in the Statement
of Operations from the effects of changes in market prices of those securities,
but are not included with the net realized and unrealized gain or loss on
investment transactions.
Forward Foreign Currency Exchange Contracts--The Funds may enter into forward
foreign currency exchange contracts in connection with planned purchases or
sales or securities or to hedge the value of some or all of a Fund's portfolio
securities. Forward foreign currency contracts are marked-to-market daily using
the forward foreign currency exchange rates applicable on that day or at such
other rates as the Subadviser may determine to be appropriate.
Taxes--No provision has been made for income tax because each Fund's policy is
to qualify as a regulated investment company under the Internal Revenue Code and
to distribute all of its taxable income.
Distributions to Shareholders--All of the Funds except Govett Global Income Fund
intend to declare and pay distributions from net investment income and net
realized gains, if any, annually. The Global Income Fund seeks to declare
dividends daily and to pay dividends monthly from net investment income, if any,
and to declare and pay distributions from net realized gains, if any, annually.
18
<PAGE>
Notes to Financial Statements (continued)
Security Transactions and Related Investment Income--Security transactions are
recorded on the ex-dividend date. Interest income is recorded on an accrual
basis. The cost of securities sold is determined on the identified cost basis.
Original issue discount and premium on debt securities is amortized using
the yield to maturity method. Market discount on debt securities is amortized
on a straight-line basis.
Expenses--Fund expenses not directly attributable to the operations of specific
class of shares are allocated pro rata to each class on the basis of the
relative net assets of the respective classes. Expenses which are not readily
attributable to a specific Fund are allocated in such manner as deemed
equitable by the Company's Board of Directors, taking into consideration, among
other things, the nature and type of expense.
Note 2-Management Fee and Affiliated Service Providers
The Manager and Subadviser, pursuant to the terms of their respective investment
management contracts, provide all investment management services to the Funds.
As compensation for these services, the Manager earns a monthly fee computed at
an annual rate of 1.00% (0.75% for the Global Income Fund) of the value of the
average daily net assets of each Fund. The Manager agreed to waive a portion of
its management fee and to reimburse a portion of the other operating expenses to
the extent that the Funds' annual ordinary operating expenses exceed 2.35% for
Class A shares and 2.00% for Institutional Class shares for Smaller Companies
Fund, International Equity Fund and Global Income Fund and 1.85% for Class A
shares and 1.50% for Institutional Class Shares for the Emerging Markets Equity
Fund and International Smaller Companies Fund.
Note 3-Distribution Agreement/12b-l Plan
The Funds have adopted a Distribution and Service Plan for their Class A shares
pursuant to Rule 12b-l on the 1940 Act. The Funds pay a distribution fee,
computed daily and paid quarterly, equal to an annual rate not to exceed 0.35%
of the value of each Fund's average daily net assets, attributable to Class A
shares, for providing ongoing distribution services and facilities to the Fund's
Class A shares.
Note-4 Purchases and Sales Securities
Costs of purchases and proceeds from sales of securities, excluding short-term
obligations, for the period ended June 30, 2000, were as follows
Purchases Sales
----------- -----------
Emerging Markets Equity.................... $ 5,700,793 $ 8,913,102
=========== ===========
Smaller Companies.......................... $45,885,585 $55,412,235
=========== ===========
International Smaller Companies............ $ 64,140 $ 154,022
=========== ===========
International Equity....................... $ 5,160,095 $10,050,174
=========== ===========
Global Income:
U.S. Government securities.............. $ 1,024,095 $ 1,592,868
Other Investments....................... 1,275,922 1,374,036
----------- -----------
$ 2,300,017 $ 2,966,904
=========== ===========
Note 5-Fund Share Transactions
The Company's Articles of Incorporation permit the Company's Board of Directors
to establish an unlimited number of series (or Funds), each of which may issue
one or more separate classes of shares. The Company can issue up to a total of
three billion shares and has authorized 250 million shares for each Fund.
Transactions in fund shares for the periods indicated below are as follows:
Smaller Companies
Fund Global Income Fund
----------------------- -----------------------
Period Ended Year Ended Period Ended Year Ended
6/30/00 12/31/99 6/30/00 12/31/99
------------ ---------- ------------ ----------
Shares Sold............... 49,202 156,616 2,287 6,907
Shares Issued on
reinvestment
of distributions....... -- -- 5,572 19,253
Shares repurchased........ (313,414) (1,241,105) (60,851) (348,297)
------- --------- ------ -------
Net decrease.............. (264,212) (1,084,489) (52,992) (322,137)
======= ========= ====== =======
International Smaller Companies Fund
---------------------------------------------------
Institutional
Class A Retail Sales Class Shares
------------------------- -------------------------
Period Ended Period Ended Period Ended Period Ended
6/30/00 12/31/99 06/30/00 12/31/99
------------ ------------ ------------ ------------
Shares Sold............. 1,297 7,642 -- --
Shares issued on
reinvestment
of distributions........ 216 200 4,989 3,545
Shares repurchased...... (2,340) (3,318) -- --
----- ----- ----- -----
Net increase (decrease). (827) 4,524 4,989 3,545
===== ===== ===== =====
Emerging Markets Equity Fund
----------------------------
Period Ended Year Ended
06/30/00 12/31/99
-------------- -------------
Shares sold............................ 70,082 109,581
Shares repurchased..................... (274,123) (627,098)
------- -------
Net decrease........................... (204,041) (517,517)
======= =======
19
<PAGE>
Notes to Financial Statements (continued)
<TABLE>
<CAPTION>
International Equity Fund
---------------------------------------------------------
Class A Retail Shares Institutional Class Shares
------------------------ ----------------------------
Period Ended Year Ended Period Ended Period Ended
06/30/00 12/31/99 06/30/00 12/31/99
------------ ---------- ----------- ------------
<S> <C> <C> <C> <C>
Shares sold.............. 3,195 68,159 111 182
Shares issued on
reinvestment
of distributions....... 21,863 105,584 14,118 72,178
Shares repurchased....... (193,682) (268,017) (154,917) (10,425)
-------- -------- -------- -------
Net increase
(decrease)............. (168,624) (94,274) (140,688) 61,935
======== ======== ======== =======
</TABLE>
At June 30, 2000, 3 shareholders held a total of 61% of the outstanding Class A
retail shares of the International Smaller Companies Fund (with each shareholder
holding more than 10% of outstanding shares) and 1 shareholder held 100% of the
Institutional Class shares of the same fund.
At June 30, 2000, 1 shareholder held a total of 10% of the outstanding Class A
retail shares of the International Equity Fund and 1 shareholder held 67% of the
Institutional Class shares of the same fund.
At June 30, 2000, 1 shareholder held a total of 11% of the outstanding Class
A retail shares of the Global Income Fund.
Note 6--Federal Income Tax Cost
At June 30, 2000, the cost and gross unrealized appreciation and depreciation in
value of investments owned by the Funds, as computed on a federal income tax
basis, were as follows:
<TABLE>
<CAPTION>
Emerging Smaller
Markets Equity Companies
Fund Fund
-------------- ---------
<S> <C> <C>
Aggregate cost............................... $9,671,027 $51,410,995
========== ===========
Gross unrealized appreciation................ 3,585,007 15,994,047
Gross unrealized depreciation................ (529,378) (5,056,852)
---------- -----------
Net unrealized appreciation.................. $3,055,629 $10,937,195
========== ===========
<CAPTION>
International Smaller International
Companies Equity
Fund Fund
--------------------- -------------
<S> <C> <C>
Aggregate cost....................... $746,228 $13,891,624
===================== =============
Gross unrealized appreciation........ 300,952 2,981,545
Gross unrealized depreciation........ (59,343) (1,657,441)
--------------------- -------------
Net unrealized appreciation.......... $241,609 $ 1,324,104
===================== =============
<CAPTION>
Global
Income
Fund
----------
<S> <C>
Aggregate Cost................................................. $3,401,464
==========
Gross unrealized appreciation.................................. 27,810
Gross unrealized depreciation.................................. (196,368)
----------
Net unrealized depreciation.................................... $ (168,558)
==========
</TABLE>
Note 7--Financial Instruments
The Funds regularly trade financial instruments with off-balance sheet risk in
the normal course of their investing activities to assist in managing exposure
to market risk, such as interest rates and foreign currency exchange rates.
These financial instruments include forward foreign currency exchange contracts
(see Schedule of Investments).
The notional or contractual amounts of these instruments represent the
investment the Funds have in particular classes of financial instruments and do
not necessarily represent the amounts potentially subject to risk. The
measurement of the risk associated with these instruments is meaningful only
when all related and offsetting transactions are considered.
Note 8--Portfolio Investment Risks
Each Fund primarily purchases securities of foreign issuers other than Smaller
Companies Fund, which may purchase such securities. Investing in securities of
foreign issuers involves special risks not typically associated with investing
in securities of U.S. issuers. These risks and considerations may involve
adverse political and economic developments and the possible imposition of
currency exchange blockages or other foreign governmental laws or restrictions.
In addition, the securities of some foreign companies and securities markets are
less liquid and at times more volatile than securities of comparable U.S.
companies and U.S. securities and most foreign securities are subject to the
risk of currency rate fluctuations.
Note 9--Plan of Reorganization
On August 4, 2000, shareholders approved a tax-free Plan of Reorganization
(effective August 11, 2000) between ARK Funds and the Company providing for the
transfer of all of the assets and liabilities of Global Income Fund, Emerging
Markets Equity Fund and International Equity Fund (collectively, the "Acquired
Funds") to ARK Income Portfolio, ARK Emerging Markets Equity Portfolio and ARK
International Equity Selection Portfolio (collectively, the "Acquiring Funds"),
respectively. The transfer of assets and liabilities will be in exchange for
shares of the Acquiring Funds corresponding to the same net assets and shares
held by the respective Acquired Funds. The corresponding shares, net assets and
unrealized appreciation of the Acquired Funds are as follows:
20
<PAGE>
Notes to Financial Statements (continued)
Unrealized
Fund Shares Net Assets Appreciation
---- ------ ---------- ------------
Global Income Fund........... 492,602 $3,394,864 $ 4,228
Emerging Markets Equity
Fund....................... 1,088,953 12,154,505 1,848,245
International Equity Fund.... 1,622,389 14,480,211 630,574
On August 18, 2000, shareholders approved a tax-free Plan of Reorganization
between the ARK Funds and the Company providing for the transfer of all of the
assets and liabilities of Smaller Companies Fund to Small Cap Equity Portfolio,
in exchange for shares of the Small Cap Equity Portfolio corresponding to the
same net assets as shares held in the Smaller Companies Fund.
The International Smaller Companies Fund will be liquidated pending shareholder
approval.
--------------------------------------------------------------------------------
Voting Results of Special Meetings of Shareholders (Unaudited)
The proposals described below were submitted to a vote of shareholders of Govett
Funds at a special meeting of shareholders held on August 4, 2000 (the
"Meeting"):
Proposal No. 1--Proposal to reorganize the Govett International Equity Fund
with and into the ARK International Equity Selection Portfolio, to reorganize
the Govett Global Income Fund with and into the ARK Income Portfolio and also to
reorganize the Govett Emerging Markets Equity Fund with and into the ARK
Emerging Markets Equity Portfolio.
At the Meeting the shareholders approved Proposal No. 1 as follows:
Fund For Against Abstain
---- --- ------- -------
International Equity Fund........... 858,635 5,715 23,153
Global Income Fund.................. 329,900 394 10,936
Emerging Markets Fund............... 586,201 15,433 21,277
Proposal No. 2--If shareholders of ARK International Equity Selection Portfolio
do not approve certain changes, the proposal is to reorganize the Govett
International Equity Fund with and into the ARK International Equity Portfolio.
At the Meeting the shareholders approved Proposal No. 2 as follows:
For Against Abstain
--- ------- -------
854,246 10,770 22,487
The proposal described below was submitted to a vote of shareholders of Govett
Funds at a special meeting of shareholders held on August 18, 2000 (the
"Meetings"):
Proposal No. 1--Proposal to reorganize the Govett Small Companies Fund with and
into the ARK Small-Cap Equity Portfolio.
At the Meetings the shareholders approved Proposal No. 1 as follows:
For Against Abstain
--- ------- -------
1,154,933 34,644 44,925
21
