<PAGE> 1
WILLAMETTE ASSET MANAGERS
-----------------------------------------------------------------
WILLAMETTE FAMILY OF FUNDS
220 NW 2(nd) Avenue, Suite 950
Portland, Oregon 97209
October 1, 1999
Dear Valued Shareholders:
Since the successful launch of the first mutual fund, the Willamette Value Fund
(WILVX), over 16 months ago, the Willamette Family of Funds has received wide
acceptance among investors. In keeping with our goal to provide long-term
investment services, we believe it is important to keep our shareholders
informed of events surrounding the Willamette Family of Funds.
The first half of fiscal 1999, was an important period for the Willamette Family
of Funds. We saw the introduction of the second mutual fund, the Willamette
Small Cap Growth Fund (WILGX). The Small Cap Growth Fund seeks to provide
long-term capital appreciation by investing in the stock of small corporations
with a market cap of up to $1.5 billion. While there is greater risk investing
in smaller companies, there is also greater potential for growth if the
portfolio is carefully selected and well diversified. To insure that the stock
selection in this Fund is performed diligently by capable professionals, The
Bank of New York's small cap investment team was chosen to manage this Fund.
Founded in 1784 by Alexander Hamilton, The Bank of New York is one of the
largest commercial banks in United States and provides administrative or
advisory services for approximately $48.4 billion in assets.
For the first half of the fiscal year the stock markets in general experienced a
tremendous amount of volatility. However, we were very pleased with the
performance of the Funds as they surpassed their respective benchmark indexes.
Since April 5, 1999 (inception date), the Small Cap Growth Fund increased an
impressive 17.60%(1) (without load), versus the Russell 2000 Index(2) which only
increased 8.25%. While the value sector did not fare as well during the six
month period in question, the Value Fund still managed to end the period up
4.73%(3) (without load), versus a 1.07% increase in the Dow Jones Composite
Index(4). As of September 30, 1999, the Value Fund had a total return of
4.34%(5) (without load) since May 26, 1998 (inception date) and a total one-year
return of 15.73%(6) (without load).
We are pleased with the acceptance the Funds have experienced since May 1998,
and appreciative to the individuals who have become investors in the Funds. As
of September 30, 1999, they had total net assets in excess of $36.8 million. The
Willamette Value Fund had $18.7 million under management, while the Willamette
Small Cap Growth Fund totaled just over $18.1 million. This is important because
as total assets under management continue to increase, the average expense
ratios of these Funds should decline accordingly.
-1-
<PAGE> 2
Finally, because the two Funds invest in different sectors of the market,
fund shareholders are provided the opportunity to diversify their portfolios
through a Fund Family they know and trust. To build on this relationship and
meet the different needs of fund shareholders, we will be adding additional
Funds. Look for more information on these and the existing Funds in the near
future.
We thank you for your continued support of the Willamette Family of Funds.
Sincerely,
/s/ James T. Smith
James T. Smith
Willamette Asset Managers
For more complete information on the Willamette Family of Funds, including fees,
expenses and sales charges please call 1-877-945-3863 for a free prospectus.
Please read the prospectus carefully before investing or sending money.
The views expressed in this report reflect those of the investment adviser only
through the end of the period of the report as stated on the cover. The
manager's views are subject to change at any time based on the market and other
conditions.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate so that an investor's shares, when redeemed may be
worth more or less than the original cost.
The Willamette Family of Funds is distributed by BISYS Fund Services.
Small Capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure.
(1 )The total return for the Willamette Small Cap Growth Fund, subject to a
4.50% load, was 12.32%.
(2 )The Willamette Small Cap Growth Fund's performance is compared to the
Russell 2000 Index, which represents the performance of domestically traded
common stocks of small to mid-size companies. The index is unmanaged and
does not reflect the deduction of fees associated with a mutual fund, such
as investment adviser fees. The performance for the Small Cap Growth Fund
reflects the deduction of fees for these value-added services.
(3 )The total return for the Willamette Value Fund, subject to a 4.50% load, was
-0.01%.
(4 )The Willamette Value Fund's performance is compared to the Dow Jones
Composite Index, which represents the performance price-weighted average of
65 stocks that make up the Dow Jones Industrial Average, the Dow Jones
Transportation Average and the Dow Jones Utility Average. The index is
unmanaged and does not reflect the deduction of fees associated with a
mutual fund, such as investment adviser fees. The performance for the Value
Fund reflects the deduction of fees for these value-added services.
(5 )The total return for the Willamette Value Fund since May 26, 1998 (inception
date), subject to a 4.50% load, was 0.84%.
(6 )The total return for the Willamette Value Fund, subject to a 4.50% load, was
10.53%.
-2-
<PAGE> 3
TABLE OF CONTENTS
Statement of Assets and Liabilities
PAGE 4
Statement of Operations
PAGE 5
Statement of Changes in Net Assets
PAGE 6
Schedule of Portfolio Investments
PAGE 7
Notes to Financial Statements
PAGE 11
Financial Highlights
PAGE 15
-3-
<PAGE> 4
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE
VALUE SMALL CAP
FUND GROWTH FUND
----------- -----------
<S> <C> <C>
ASSETS:
Investments, at value (Cost $17,954,399 and $15,717,714,
respectively)............................................. $18,606,752 $17,991,251
Interest and dividends receivable........................... 54,063 9,724
Receivable for capital shares sold.......................... 48,109 10,445
Receivable for investments sold............................. -- 518,592
Receivable from advisor..................................... 19,110 --
Unamortized organizational costs............................ 24,033 --
Prepaid expenses and other assets........................... 12,823 25,552
----------- -----------
Total assets........................................... 18,764,890 18,555,564
----------- -----------
LIABILITIES:
Dividends payable........................................... 1,697 --
Payable for investments purchased........................... -- 371,820
Payable for capital shares redeemed......................... 8,926 3,042
Accrued expenses and other payables:
Investment advisory fees.................................. 15,502 14,885
Administration fees....................................... 400 394
Distribution and shareholder service fees................. 7,550 7,442
----------- -----------
Total liabilities...................................... 34,075 397,583
----------- -----------
Net assets............................................. $18,730,815 $18,157,981
=========== ===========
NET ASSETS:
Capital..................................................... 17,630,523 15,788,619
Undistributed net investment loss........................... (1,326) (157,914)
Accumulated undistributed net realized gains................ 449,265 253,739
Net unrealized appreciation from investments................ 652,353 2,273,537
----------- -----------
Net assets............................................. $18,730,815 $18,157,981
=========== ===========
Outstanding units of beneficial interest (shares)........... 1,769,934 1,543,774
=========== ===========
Net asset value -- redemption price per share............... $ 10.58 $ 11.76
=========== ===========
Maximum Sales Charge........................................ 4.50% 4.50%
=========== ===========
Maximum Offering Price per share (100%/(100%-Maximum Sales
Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 11.08 $ 12.31
=========== ===========
</TABLE>
See notes to financial statements.
-4-
<PAGE> 5
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE
VALUE SMALL CAP
FUND GROWTH FUND(a)
---------- --------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income............................................. $ 8,982 $ 32,501
Dividend income (Net of foreign withholding tax of $3,350
and $0, respectively)..................................... 245,056 7,712
-------- ----------
Total income........................................... 254,038 40,213
-------- ----------
EXPENSES:
Investment advisory fees.................................... 87,948 65,613
Administration fees......................................... 17,590 13,123
Distribution and shareholder service fees................... 43,974 32,807
Fund accounting fees........................................ 18,712 16,943
Organization fees........................................... 3,501 --
Transfer agent fees......................................... 43,182 40,252
Trustees fees............................................... 810 684
Other....................................................... 33,352 28,705
-------- ----------
Total expenses......................................... 249,069 198,127
Expenses reimbursed by investment adviser................... (7,505) --
-------- ----------
Net expenses........................................... 241,564 198,127
-------- ----------
Net investment income (loss)................................ 12,474 (157,914)
-------- ----------
REALIZED/UNREALIZED GAINS ON INVESTMENTS:
Net realized gains from investment transactions............. 442,921 253,739
Net change in unrealized appreciation from investments...... 109,604 2,273,537
-------- ----------
Net realized/unrealized gains from investments.............. 552,525 2,527,276
-------- ----------
Change in net assets resulting from operations.............. $564,999 $2,369,362
======== ==========
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to September
30, 1999.
See notes to financial statements.
-5-
<PAGE> 6
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE
VALUE FUND SMALL CAP GROWTH FUND
--------------------------------------- ---------------------
SIX MONTHS ENDED PERIOD ENDED PERIOD ENDED
SEPTEMBER 30, 1999 MARCH 31, 1999(a) SEPTEMBER 30, 1999(b)
------------------ ----------------- ---------------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income (loss)....... $ 12,474 $ 1,418 $ (157,914)
Net realized gains from investment
transactions.................... 442,921 6,344 253,739
Net change in unrealized
appreciation from investments... 109,604 542,749 2,273,537
----------- ----------- -----------
Change in net assets resulting from
operations......................... 564,999 550,511 2,369,362
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income......... (14,386) (832) --
----------- ----------- -----------
Change in net assets from shareholder
distributions...................... (14,386) (832) --
----------- ----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued........ 5,742,751 16,315,038 16,953,641
Dividends reinvested............... 13,445 -- --
Cost of shares redeemed............ (2,540,948) (1,899,763) (1,165,022)
----------- ----------- -----------
Change in net assets from capital
share transactions................. 3,215,248 14,415,275 15,788,619
----------- ----------- -----------
Change in net assets............ 3,765,861 14,964,954 18,157,981
NET ASSETS:
Beginning of period................ 14,964,954 -- --
----------- ----------- -----------
End of period...................... $18,730,815 $14,964,954 $18,157,981
=========== =========== ===========
SHARE TRANSACTIONS:
Issued............................. 518,305 1,672,330 1,653,335
Reinvested......................... 1,199 -- --
Redeemed........................... (230,121) (191,779) (109,561)
----------- ----------- -----------
Change in shares..................... 289,383 1,480,551 1,543,774
=========== =========== ===========
</TABLE>
- ---------------
(a) For the period from May 26, 1998 (commencement of operations) to March 31,
1999.
(b) For the period from April 5, 1999 (commencement of operations) to September
30, 1999.
See notes to financial statements.
-6-
<PAGE> 7
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (96.7%):
Airlines (0.6%):
2,023 British Airways PLC -- ADR...... $ 115,564
-----------
Automotive (6.0%):
1,191 DaimlerChrysler AG.............. 82,700
3,466 Ford Motor Co................... 173,950
13,751 General Motors Corp............. 865,454
-----------
1,122,104
-----------
Automotive Parts (2.1%):
1,407 Dana Corp....................... 52,235
12,978 Genuine Parts Co................ 344,728
-----------
396,963
-----------
Banking & Financial Services (11.2%):
4,493 ABN Amro Holding N.V............ 101,654
3,675 Bank One Corp................... 127,936
8,583 J.P. Morgan & Co................ 980,607
3,222 National City Corp.............. 85,987
1,298 National Westminster Bank PLC... 180,422
7,988 PNC Financial Corp.............. 420,867
2,557 Summit Bancorp.................. 82,943
3,226 Union Planters Corp............. 131,460
-----------
2,111,876
-----------
Beverages (0.7%):
2,998 Diageo PLC...................... 124,230
-----------
Building Materials (0.3%):
1,511 Hanson PLC -- ADR............... 58,457
-----------
Chemicals (2.9%):
1,040 Dow Chemical Co................. 118,170
4,983 Du Pont (E.I.) de Nemours &
Co............................ 303,340
2,052 Union Carbide Corp.............. 116,579
-----------
538,089
-----------
Conglomerates (2.4%):
468 PPG Industries, Inc............. 28,080
4,089 Tyco International Ltd.......... 422,189
-----------
450,269
-----------
Cosmetics & Toiletries (0.8%):
4,234 International Flavors &
Fragrance..................... 146,073
-----------
Diversified Operation (6.8%):
12,143 Minnesota Mining & Manufacturing
Co............................ 1,166,487
5,756 Tenneco, Inc.................... 97,852
-----------
1,264,339
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Electric Utilities (1.0%):
1,808 Duke Energy Corp................ $ 99,666
3,761 Edison International............ 91,439
-----------
191,105
-----------
Energy (1.1%):
1,953 Florida Power & Light, Inc...... 98,382
4,221 PG&E Corp....................... 109,219
-----------
207,601
-----------
Food Products & Services (2.8%):
2,740 General Mills, Inc.............. 222,283
2,690 H.J. Heinz Co................... 115,670
2,940 Kellogg Co...................... 110,066
2,709 Winn-Dixie Stores, Inc.......... 80,423
-----------
528,442
-----------
Insurance (1.2%):
5,051 The St. Paul Companies, Inc..... 138,903
1,831 XL Capital Ltd. -- Class A...... 82,395
-----------
221,298
-----------
Machinery & Equipment (1.4%):
4,737 Caterpillar, Inc................ 259,647
-----------
Metals (3.5%):
10,427 Alcoa, Inc...................... 647,126
-----------
Office Supplies & Equipment (0.8%):
6,394 Equity Office Properties
Trust......................... 148,661
-----------
Oil -- Integrated Companies (22.1%):
2,159 Atlantic Richfield Co........... 191,341
2,526 BP Amoco Co. PLC -- ADR......... 279,912
11,685 Chevron Corp.................... 1,037,043
7,859 Conoco, Inc. -- Class B......... 215,135
12,024 Exxon Corp...................... 913,072
1,682 Mobil Corp...................... 169,462
3,306 Phillips Petroleum Co........... 161,168
4,306 Royal Dutch Petroleum Co., NY
Shares........................ 254,323
10,302 Shell Transport & Trading Co. --
ADR........................... 468,741
6,536 Texaco, Inc..................... 412,585
1,965 USX-Marathon Group.............. 57,476
-----------
4,160,258
-----------
Paper Products (3.6%):
8,407 International Paper Co.......... 404,062
4,733 Weyerhaeuser Co................. 272,739
-----------
676,801
-----------
Photo Equipment & Supplies (5.4%):
13,461 Eastman Kodak Co................ 1,015,464
-----------
</TABLE>
-7-
<PAGE> 8
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Pipelines (1.0%):
2,853 Consolidated Natural Gas Co..... $ 177,956
-----------
Publishing (0.7%):
5,613 Reed International PLC -- ADR... 138,571
-----------
Retail Stores (1.6%):
2,997 J.C. Penney Co., Inc............ 103,022
6,056 Sears, Roebuck and Co........... 190,007
-----------
293,029
-----------
Telecommunications (10.1%):
2,893 Alltel Corp..................... 203,595
8,432 AT&T Corp....................... 366,792
4,343 Bell Atlantic Corp.............. 292,338
10,713 Global Crossing Ltd. (b)........ 283,902
3,720 GTE Corp........................ 285,975
9,236 Hellenic
Telecommunication -- ADR...... 103,328
7,427 Tele Danmark A/S -- ADR......... 220,025
2,262 U.S. West, Inc.................. 129,075
-----------
1,885,030
-----------
Tire & Rubber (1.9%):
7,426 The Goodyear Tire & Rubber
Co............................ 357,376
-----------
Tobacco (4.3%):
23,344 Philip Morris Companies, Inc.... 798,073
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Transportation (0.4%):
1,365 CSX Corp........................ $ 57,842
902 Norfolk Southern Corp........... 22,099
-----------
79,941
-----------
Total COMMON STOCKS (Cost $17,461,990)...... 18,114,343
-----------
SHORT-TERM INVESTMENTS (2.6%):
Cash Sweep Account (2.6%):
$492,409 UBOC Sweep Account Willamette
Asset Management.............. 492,409
-----------
Total Short-Term Investments (Cost
$492,409)................................... 492,409
-----------
Total Investments (Cost $17,954,399) (a)
(99.3%):.................................... $18,606,752
Other assets in excess of liabilities
(0.7%):..................................... 124,063
-----------
Total Net Assets (100.0%):.................. $18,730,815
===========
</TABLE>
- ---------------
ADR -- American Depository Receipt
PLC -- Public Limited Company
(a) Represents cost for federal income tax and financial reporting purposes and
differs from market value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 1,712,144
Unrealized depreciation......................... (1,059,791)
-----------
Net unrealized appreciation..................... $ 652,353
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-8-
<PAGE> 9
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (85.5%):
Banking & Financial Services (2.2%):
2,300 Bank United Corp. -- Class
A........................... $ 74,463
2,605 Legg Mason, Inc............... 99,804
3,425 Peoples Heritage Financial
Group, Inc.................. 56,941
2,650 PIMCO Advisors Holdings LP.... 83,475
4,125 Waddell & Reed Financial,
Inc. -- Class A............. 91,523
-----------
406,206
-----------
Beverages (1.1%):
5,280 Robert Mondavi Corp. -- Class
A (b)....................... 198,330
-----------
Broadcasting -- Radio & Cable TV (5.7%):
4,540 Adelphia Communications
Corp. -- Class A (b)........ 267,009
3,900 ANTEC Corp. (b)............... 207,188
1,300 Emmis Communications Corp. --
Class A (b)................. 85,881
1,425 Hispanic Broadcasting Corp.
(b)......................... 108,478
5,420 Jones Intercable, Inc. --
Class A (b)................. 293,018
1,760 Radio One, Inc. (b)........... 73,040
-----------
1,034,614
-----------
Commercial Services (4.2%):
4,905 Central Parking Corp.......... 143,471
6,060 Iron Mountain, Inc. (b)....... 205,283
9,150 Profit Recovery Group
International, Inc. (b)..... 408,319
-----------
757,073
-----------
Computer Software, Peripherals & Internet (23.3%):
2,840 Commerce One, Inc. (b)........ 277,521
6,115 Computer Network Technology
Corp. (b)................... 56,946
5,600 Concentric Network Corp.
(b)......................... 113,750
3,190 Digex, Inc. (b)............... 75,563
3,110 DoubleClick, Inc. (b)......... 370,478
3,150 Entrust Technologies, Inc.
(b)......................... 70,678
1,115 Gadzoox Networks, Inc. (b).... 60,071
3,650 Informatica Corp. (b)......... 185,238
3,075 Mercury Interactive Corp.
(b)......................... 198,530
3,875 Micromuse, Inc. (b)........... 248,969
6,050 Network Appliance, Inc. (b)... 433,330
6,120 Packeteer, Inc. (b)........... 208,463
2,030 Phone.Com, Inc. (b)........... 307,545
4,025 PLX Technology, Inc. (b)...... 97,103
6,115 RAVISENT Technologies,
Inc. (b).................... 87,903
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Computer Software, Peripherals & Internet, continued
1,300 RealNetworks, Inc. (b)........ $ 135,931
3,440 Research in Motion Ltd. (b)... 106,425
2,435 Rhythms NetConnections,
Inc. (b).................... 84,008
8,390 THINK New Ideas, Inc. (b)..... 56,108
2,992 TranSwitch Corp. (b).......... 170,544
4,250 USinternetworking, Inc. (b)... 132,813
3,200 Verio, Inc. (b)............... 99,200
5,100 VERITAS Software Corp. (b).... 387,280
6,100 Visual Networks, Inc. (b)..... 258,869
220 Vitria Technology, Inc. (b)... 8,085
-----------
4,231,351
-----------
Consumer Products (1.4%):
7,550 The Scotts Co. (b)............ 261,419
-----------
Diversified Electronics (8.8%):
4,030 Applied Micro Circuits Corp.
(b)......................... 229,710
5,715 DII Group, Inc. (b)........... 201,097
4,100 Gemstar International Group
Ltd. (b).................... 320,312
800 Hi/Fn, Inc. (b)............... 88,200
3,600 Jabil Circuit, Inc. (b)....... 178,200
2,600 Lattice Semiconductor Corp.
(b)......................... 77,188
1,200 Microchip Technology, Inc.
(b)......................... 61,650
1,480 PMC-Sierra, Inc. (b).......... 136,900
1,000 QLogic Corp. (b).............. 69,875
6,900 Sawtek, Inc. (b).............. 241,500
-----------
1,604,632
-----------
Drugs & Pharmaceuticals (9.7%):
4,800 Alkermes, Inc. (b)............ 138,300
4,000 Alpharma, Inc. -- Class A..... 141,250
2,950 Andrx Corp. (b)............... 172,667
10,200 Aurora Biosciences Corp.
(b)......................... 138,975
5,625 Celgene Corp. (b)............. 152,227
5,120 Jones Pharma, Inc............. 168,800
5,400 MedImmune, Inc. (b)........... 538,144
6,165 Roberts Pharmaceutical Corp.
(b)......................... 186,491
1,600 Sepracor, Inc. (b)............ 120,800
-----------
1,757,654
-----------
Education, Entertainment & Training (3.5%):
4,500 Apollo Group, Inc. (b)........ 95,063
3,045 Career Education Corp. (b).... 88,305
2,900 CINAR Corp. -- Class B (b).... 87,725
5,430 DeVry, Inc. (b)............... 108,600
6,275 Education Management Corp.
(b)......................... 77,653
3,305 ITT Educational Services,
Inc. (b).................... 64,448
3,005 Mp3.Com, Inc. (b)............. 112,874
-----------
634,668
-----------
</TABLE>
-9-
<PAGE> 10
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Food Products & Services (1.4%):
4,300 Dean Foods Co................. $ 187,319
3,420 U.S. Foodservice (b).......... 61,560
-----------
248,879
-----------
Industrial Goods & Services (1.8%):
5,490 Waters Corp. (b).............. 332,488
-----------
Insurance (0.6%):
3,225 Annuity & Life Re (Holdings)
Ltd......................... 80,222
1,260 Reinsurance Group of America,
Inc......................... 32,366
-----------
112,588
-----------
Medical & Health Care Products/Services
(2.3%):
3,665 CareInsite, Inc. (b).......... 185,540
1,325 Express Scripts, Inc. -- Class
A (b)....................... 103,681
3,775 MedQuist, Inc. (b)............ 126,227
-----------
415,448
-----------
Oil & Gas Exploration, Equipment & Services (5.4%):
2,400 BJ Services Co. (b)........... 76,350
3,700 Core Laboratories N.V. (b).... 69,606
8,525 Global Industries Ltd. (b).... 69,266
2,300 Maverick Tube Corp. (b)....... 38,238
8,000 National-Oilwell, Inc. (b).... 131,500
5,100 Newfield Exploration Co.
(b)......................... 167,980
6,050 R&B Falcon Corp. (b).......... 79,406
4,050 Stolt Comex Seaway S.A........ 44,832
3,500 Stone Energy Corp. (b)........ 178,062
11,000 Superior Energy Services,
Inc. (b).................... 69,438
4,075 Tuboscope, Inc. (b)........... 50,683
-----------
975,361
-----------
Publishing (0.9%):
2,050 Houghton Mifflin Co........... 83,281
1,500 Scholastic Corp. (b).......... 75,000
-----------
158,281
-----------
Recruitment Services (0.6%):
4,350 Korn/Ferry International
(b)......................... 100,322
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail Stores (4.9%):
4,550 American Eagle Outfitters,
Inc. (b).................... $ 220,391
6,315 BJ's Wholesale Club, Inc.
(b)......................... 186,687
5,435 Duane Reade, Inc. (b)......... 163,729
6,070 Linens 'n Things, Inc. (b).... 204,863
2,030 Tiffany & Co.................. 121,673
-----------
897,343
-----------
Telecommunications (7.1%):
11,930 Clearnet Communications, Inc.-
Class A (b)................. 215,486
1,735 Copper Mountain Networks, Inc.
(b)......................... 152,029
2,650 Efficient Networks, Inc.
(b)......................... 96,394
4,230 Metromedia Fiber Network,
Inc.-Class A (b)............ 103,635
1,585 NorthPoint Communications
Holdings, Inc. (b).......... 29,323
7,875 VoiceStream Wireless Corp.
(b)......................... 486,035
4,575 Western Wireless Corp. (b).... 205,160
-----------
1,288,062
-----------
Transportation (0.6%):
1,900 Swift Transportation Co., Inc.
(b)......................... 37,406
4,200 Werner Enterprises, Inc....... 74,025
-----------
111,431
-----------
Total COMMON STOCKS (Cost $13,252,613)..... 15,526,150
-----------
SHORT-TERM INVESTMENTS (13.6%):
Cash Sweep Account (13.6%):
$2,465,101 UBOC Sweep Account Willamette
Asset Management............ 2,465,101
-----------
Total Short-Term Investments (Cost
$2,465,101)................................ 2,465,101
-----------
Total Investments (Cost $15,717,714) (a)
(99.1%):................................... $17,991,251
Other assets in excess of liabilities
(0.9%):.................................... 166,730
-----------
Total Net Assets (100.0%):................. $18,157,981
===========
</TABLE>
- ---------------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from market value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $3,194,084
Unrealized depreciation......................... (920,547)
----------
Net unrealized appreciation..................... $2,273,537
==========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
-10-
<PAGE> 11
THE WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
1. ORGANIZATION:
The Coventry Group (the "Group") was organized as a Massachusetts business
trust on January 8, 1992 and is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company. The accompanying financial statements and financial highlights are
those of the Willamette Value Fund ("Value Fund") and the Willamette Small
Cap Growth Fund ("Small Cap Growth Fund" or collectively, the "Funds"). The
Small Cap Growth Fund commenced operations on April 5, 1999. The Funds
offer two managed investment portfolios, as a series of the Group, and is
authorized to issue an unlimited number of shares. The Funds offer one
class of shares of beneficial interest ("shares").
The investment objective of the Value Fund is to provide above average
total return through a combination of capital appreciation and dividend
income by investing in primarily equity securities. The Small Cap Growth
Fund seeks to provide long-term capital appreciation.
2. SIGNIFICANT ACCOUNTING PRINCIPLES:
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are
in conformity with generally accepted accounting principles. The
preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of income
and expenses for the period. Actual results could differ from those
estimates.
SECURITIES VALUATION:
Securities are valued as of 4:00 p.m. on any day in which the New York
Stock exchange is open for trading. Equity securities are valued at the
last reported sales price on the securities exchange or in the principal
over-the-counter market in which such securities are primarily traded.
Listed securities for which last sales prices are not available are valued
at the last bid price. If the last bid price is not available, the
securities are valued at their fair value in the best judgement of the
Adviser under the supervision of the Group's Board of Trustees. Debt
securities with remaining maturities of 60 days or less will be valued at
their amortized cost. Other debt securities are generally valued by pricing
agents.
SECURITIES TRANSACTIONS AND RELATED INCOME:
Security transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the
accrual basis and includes, where applicable, the pro rata amortization of
premium or discount. Dividend income is recorded on the ex-dividend date.
Gains or losses realized on sales of securities are determined by comparing
the identified cost of the security lot sold with the net sales proceeds.
Continued
-11-
<PAGE> 12
THE WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
EXPENSES:
Expenses directly attributable to a Fund are charged to that Fund. Other
expenses are allocated proportionately among the Funds in relation to the
net assets of each Portfolio.
ORGANIZATION COSTS:
All expenses in connection with the Value Fund's organization and
registration under the 1940 Act and the Securities Act of 1933 were paid by
that Fund. Such expenses are being amortized on a straight-line basis over
sixty months beginning with the date of the initial public offering. The
Fund paid $32,958 in organizational costs. Under the provisions of SOP
98-5, costs associated with organizing the Small Cap Growth Fund, which
commenced operations subsequent to June 30, 1998, must be expensed as
incurred and may not be amortized over future periods. Accordingly, costs
incurred in connection with the organization of the Small Cap Growth Fund
were expensed as incurred and are included in the accompanying Statement of
Operations.
DIVIDENDS TO SHAREHOLDERS:
The Value Fund intends to declare its net investment income quarterly as a
dividend to Shareholders at the close of business on the day of
declaration, and generally will, if any, pay such dividends quarterly. The
Small Cap Growth Fund intends to declare its net investment income annually
as dividends. Net realized capital gains, if any, are declared and
distributed at least annually, normally in December of each year.
A Shareholder will automatically receive all income dividends and capital
gains distributions in additional full and fractional shares of a Fund at
net asset value as of the ex-dividend date, unless the Shareholder elects
to receive dividends or distributions in cash.
FEDERAL INCOME TAXES:
The Funds intend to qualify annually and elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). To qualify, the Funds must meet certain income, distribution and
diversification requirements. In any year in which the Funds qualifies as a
regulated investment company and distributes substantially all of its
income, the Funds generally will not pay any U.S. federal income or excise
tax.
3. RELATED PARTY TRANSACTIONS:
Investment advisory services are provided by the Willamette Asset Managers,
Inc. (the "Adviser"). The Adviser is an affiliate of Phillips & Company
Securities, Inc. ("Phillips") and Willamette Securities, Inc., each a
registered broker-dealer. Under the terms of the investment advisory
agreement, the Adviser is entitled to receive a fee, computed daily and
paid monthly based upon the Fund's average daily net assets, at the annual
rate of 1.00% and 1.20% for the Value Fund and Small Cap Growth Fund,
respectively.
Continued
-12-
<PAGE> 13
THE WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
Bank of New York, 48 Wall Street, New York, New York 10286, provides
portfolio management services, as sub-Adviser ("Sub-Adviser") to the Small
Cap Growth Fund, pursuant to a sub-investment advisory agreement with the
Group and the Adviser, dated as of April 1, 1999. The Adviser compensates
the Sub-Adviser at a rate of 0.45%; accrued daily and paid monthly, based
on average net assets of the Fund.
BISYS Fund Services L.P. (the "Distributor"), an indirect, wholly-owned
subsidiary of The BISYS Group, Inc. ("BISYS") serves as the distributor to
the Funds. Pursuant to the Funds' Distribution and Shareholder Service Plan
(the "12b-1 Plan"), the Distributor may receive fees computed at the annual
rate of 0.50% of the average daily net assets of each Fund.
BISYS Fund Services Ohio, Inc. ("BISYS Ohio") serves the Funds as
Administrator, Transfer Agent and Fund Accountant. Under the terms of the
administration agreement, BISYS Ohio receives a fee computed daily and paid
monthly, at an annual rate of 0.20% of the Fund's average daily net assets.
Under the terms of the Transfer Agent Agreement, BISYS Ohio receives a fee
based upon a specified amount per shareholder with specified minimum per
portfolio amounts and surcharges, plus certain out-of-pocket expenses.
Under the terms of the Fund Accounting Agreement, accounting fees are
computed daily and paid monthly at an annual rate of 0.03% of the average
daily net assets of each Fund or a minimum of $35,000 per fund plus certain
out-of-pocket expenses.
The Value Fund has adopted an Expense Limitation Agreement (the
"Agreement") dated February 1, 1999 whereby the Adviser reduces its fee and
reimburses the Fund so that the operating expenses of the Fund are limited
to an annual rate (as a percentage of the Fund's average daily net assets)
of 2.75% for the period from April 1, 1999 to March 31, 2000. In connection
with the Agreement, the Fund has agreed to pay the Adviser the amount of
fees and reimbursements that, if not for the above limitation, would have
been payable or reimbursable to the Adviser for a period of up to two years
after the limitation periods, provided that the Fund's operating expenses,
without regard to such repayment or reimbursement, are at an annual rate
(as a percentage of the Fund's average daily net assets) of 2.75% or less.
Additionally, the Fund will not make repayments or reimbursements in an
amount that would cause the Fund's total operating expenses to exceed the
2.75% annual expense limitation.
The Distributor is entitled to receive commissions on sales of shares of
the Funds. For the period ended September 30, 1999, BISYS received $988,900
from commissions earned on sales of shares of the Funds, of which $109,483
was re-allowed to affiliates.
Certain trustees and officers of the Funds are affiliated with BISYS. Such
officers are not paid any fees directly by the Funds or the Group for
serving as officers for the Group.
Continued
-13-
<PAGE> 14
THE WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(UNAUDITED)
4. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
six months ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
---------- ----------
<S> <C> <C>
Willamette Value Fund................................ $6,624,662 $3,641,616
Willamette Small Cap Growth Fund (a)................. 17,384,416 4,385,541
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to September
30, 1999.
Continued
-14-
<PAGE> 15
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS FOR PERIOD
ENDED ENDED
SEPTEMBER 30, MARCH 31,
1999 1999(a)
------------- ----------
(UNAUDITED)
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.11 $ 10.00
------- -------
INVESTMENT ACTIVITIES
Net investment income..................................... 0.01 --*
Net realized and unrealized gain on investments........... 0.47 0.11
------- -------
Total from investment activities....................... 0.48 0.11
------- -------
DISTRIBUTIONS
Net investment income..................................... (0.01) --*
------- -------
Total Distributions.................................... (0.01) --
------- -------
NET ASSET VALUE, END OF PERIOD.............................. $ 10.58 $ 10.11
======= =======
Total return (excludes sales charge)........................ 4.73%(b) 1.11%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $18,731 $14,965
Ratio of net expenses to average net assets............... 2.75%(c) 2.90%(c)
Ratio of net investment income to average net assets...... 0.14%(c) 0.02%(c)
Expense waiver/reimbursement.............................. 0.08% 0.30%
Portfolio turnover........................................ 21.65% 0.39%
</TABLE>
- ---------
* Amount is less than $0.005
(a) For the period from May 26, 1998 (commencement of operations) to March 31,
1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-15-
<PAGE> 16
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
FOR PERIOD
ENDED
SEPTEMBER 30,
1999(a)
-------------
(UNAUDITED)
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment loss....................................... (0.10)
Net realized and unrealized gain on investments........... 1.86
-------
Total from investment activities....................... 1.76
-------
NET ASSET VALUE, END OF PERIOD.............................. $ 11.76
=======
Total return (excludes sales charge)........................ 17.60%(b)
RATIOS/SUPPLEMENTARY DATA:
Net assets at end of period (000)......................... $18,158
Ratio of expenses to average net assets................... 3.02%(c)
Ratio of net investment loss to average net assets........ (2.41)%
Portfolio turnover........................................ 34.65%
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to September
30, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
-16-
<PAGE> 17
[This Page Intentionally Left Blank]
<PAGE> 18
INVESTMENT ADVISER
Willamette Asset Managers, Inc.
One Pacific Square
220 NW 2nd Avenue, Suite 950
Portland, Oregon 97209
ADMINISTRATOR AND DISTRIBUTOR
BISYS Fund Services
3435 Stelzer Road
Columbus, Ohio 43219
LEGAL COUNSEL
Dechert Price & Rhoads
1775 Eye Street, N.W.
Washington, D.C. 20006
INDEPENDENT AUDITORS
Ernst & Young LLP
10 West Broad Street
Suite 2300
Columbus, Ohio 43215
CUSTODIAN
Union Bank of California
475 Sansome Street, 15th Floor
San Francisco, California 94111
11/99
WILLAMETTE
FAMILY
OF FUNDS
[LOGO]
WILLAMETTE VALUE FUND
Investment Adviser
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1999
