<PAGE> 1
Willamette Family of Funds
Annual Report -- March 31, 2000
TABLE OF CONTENTS
Message to Shareholders
PAGE 1
Value Fund Performance Review
PAGE 3
Small Cap Growth Fund Performance Review
PAGE 6
Technology Fund Performance Review
PAGE 9
Statements of Assets and Liabilities
PAGE 11
Statements of Operations
PAGE 12
Statements of Changes in Net Assets
PAGE 13
Schedules of Portfolio Investments
PAGE 15
Notes to Financial Statements
PAGE 22
Financial Highlights
PAGE 27
Report of Independent Auditors
PAGE 30
<PAGE> 2
A Message to Shareholders of
WILLAMETTE FAMILY OF FUNDS
April 1, 2000
Dear Shareholders:
The past twelve months were an eventful period for the Willamette Family of
Funds. We introduced two new members of the Fund Family -- starting with the
Willamette Small Cap Growth Fund on April 5, 1999, and followed by the
Willamette Technology Fund on March 2, 2000. Like the Willamette Value Fund, our
newest Funds are specialty funds, created to help investors tap the expertise
and investment potential of a specific asset manager, market sector and/or
investment style.
Willamette Small Cap Growth Fund seeks to provide long-term capital appreciation
by investing in the stocks of small corporations whose growth opportunities are
underestimated by most investors. The Fund is sub-advised by John Lui of The
Bank of New York, an individual with an outstanding record of applying this
investment approach to mutual funds and institutional accounts. Willamette Small
Cap Growth Fund is the only small-cap fund that Mr. Lui and The Bank of New York
have agreed to sub-advise for another organization.
For the Willamette Technology Fund, we sought out one of the most experienced
investment management teams in the technology sector, First American Asset
Management (FAAM), a division of Minneapolis-based U.S. Bank. The investment
management team has as much as 15 years of experience both working in and
managing portfolios for the technology industry. Their broad perspective -- they
view technology as not only an industrial sector, but an investment style or
category all its own -- has generated strong results for investors since 1994.
The Willamette Technology Fund is the first portfolio they have agreed to
sub-advise.
We are very pleased with these new additions, as the Willamette Small Cap Growth
Fund has delivered stellar returns and the Technology Fund was well-received by
investors during its initial month of operations.
The past twelve months were challenging for the Willamette Value Fund, as the
value sector experienced an especially rough year. Early in the period, the
valuations of large-company stocks were notably higher than their small-company
counterparts. As the year progressed, two issues became obvious.
First, the Federal Reserve was (and still is) concerned about the possibility
that the U.S. economy may be growing too quickly and that inflationary pressures
may derail our economic expansion, now in its ninth year. As a result, the
Federal Reserve raised its key short-term interest rate five times between June
1999 and March 2000, making the equity markets relatively less attractive when
compared to fixed-income securities.
Second, businesses and investors realized that the transition to Y2K was not
likely to be as disruptive as previously thought, and that companies worldwide
were investing (and would continue to invest) in large amounts of new
technology. The market turned away from the more established, blue-chip
companies that had led performance since 1995 and focused on the potential of
companies in technology- and telecommunications-related businesses. The rally in
small stocks and technology picked up speed in the second half of the fiscal
year and lasted until the last few weeks of the period. As the period came to a
close, the markets broadened a bit but were quite volatile.
Like the equity markets, the fixed-income markets served up mixed results for
the year. While the Federal Reserve maneuvered short-term Treasury yields into
higher territory, the U.S. Treasury Department effectively
1
<PAGE> 3
moved yields on long-term Treasuries to lower levels. Last fall, the Department
announced that it would deploy some of the record federal budget surplus to
retire government debt, especially bonds with maturities of ten years or longer.
In February 2000, the Treasury Department followed through with its plan,
purchasing approximately $2 billion of long-term Treasury bonds. As the supply
of these safe, long-term securities diminished, investors bid up their prices,
forcing their yields down. Declining yields on long-term Treasuries, which may
be considered an alternative to investing in blue-chip stocks, may be one reason
that investors began to look at income-producing stocks beginning in March 2000.
Looking back at the markets and results for the fiscal year period, we are
reminded once again that diversification should be part of every investor's
long-term strategy. Whether the transitions are gradual or abrupt, the markets
will always change, favoring one group of securities, then another. To help you
achieve diversification, we will continue to look for investment managers who
have superior track records in a specific investment style or niche market, and
to bring their skills to you in the form of new Willamette Funds. As always, we
thank you for your continued trust and confidence in the Willamette Family of
Funds.
Sincerely,
/s/ Tim Phillips
Tim Phillips
Willamette Asset Managers
- ---------------
The views expressed in this report reflect those of the Investment Adviser
through the end of the report period only, as stated on the cover. The manager's
views are subject to change at any time based upon market and other conditions.
2
<PAGE> 4
An Interview with James Smith of Willamette Asset Managers,
Member of the Portfolio Management Team for the
WILLAMETTE VALUE FUND
HOW DID THE FUND PERFORM DURING THE TWELVE MONTHS ENDED MARCH 31, 2000?
The Willamette Value Fund provided a total return of -0.98%(1) (at NAV),
compared to a 3.36% total return for its benchmark, the Dow Jones Composite
Index(2).
THE FUND INVESTS IN THE "DOGS OF THE DOW" AND THE "SMALL DOGS OF THE NYSE." WHAT
HAPPENED TO THESE TWO GROUPS OF STOCKS DURING THE PERIOD?
To answer that, we need to look at the bigger picture -- the entire U.S. stock
market. After lagging for the majority of the past few years, small-company
stocks and, to an even greater extent, technology stocks dominated broad market
performance from the fourth quarter of calendar 1999 right through mid-March
2000. There was a slowdown in technology stocks during the final three weeks of
March 2000, but it was not enough to strip them of their victor's crown. So,
while the technology-laden Russell 2000(3) raced ahead 37.29% over the twelve
months ended March 31, 2000, the Dow Jones Composite advanced just 100 points,
or 3.36%, during the same period. The NYSE Composite Index(4) rose 7.31%.
Investors' preference for technology was so strong that most everything else in
the market was overlooked, including most of the solid, large-company value
stocks included in the potential universe for the Fund.
WHAT OTHER FACTORS IMPACTED THESE STOCKS?
Since last June, the Federal Reserve has raised its key short-term interest rate
five times. This hurt income-producing stocks like the ones the Fund targets
because investors look at such stocks as an alternative to fixed-income
investments. The higher the yields available on fixed-income securities, the
less likely investors are to favor income-oriented stocks.
DID YOU OWN ANY TECHNOLOGY STOCKS?
There are very few technology- or telecommunications-related stocks that meet
the Fund's key criteria of a high dividend yield. SBC Communications and
Phillips Electronics are among the very few that pay any dividends at all.
HOW DID YOU INVEST THE FUND'S ASSETS?
We followed the Fund's disciplined approach, which stipulates that 50% of assets
will be invested in the "Dogs of the Dow," which are the ten or so stocks in the
Dow Jones Industrial Average (DJIA) that have the highest ratio of dividends to
stock price. The balance of the Fund's assets are allocated to 25 high-yielding
stocks listed on the New York Stock Exchange. Stocks in this second group are
chosen from the 400 largest NYSE companies (as measured by their market
capitalization) that are not part of the DJIA. The 50 with the highest dividend
yields are excluded, and the Fund invests in the next 25 high-yielding stocks.
We rebalance the investment mix annually, after re-examining the dividend yields
for all of the stocks in our available universe. Any stock that has been in the
portfolio for at least a year and no longer fits the criteria is sold and
replaced with one that does fit.
WHICH INVESTMENTS CONTRIBUTED THE MOST TO THE FUND'S RESULTS?(5)
For the majority of the period, energy companies provided some of the best
returns, while our investments in cyclical companies and financial services
businesses tended to subtract from performance. For instance, our investments in
Exxon Mobil (3.11% of total investments as of 3/31/00) and Shell Transport
(1.79%) gained 12.9% and 24.8%, respectively, fueled by rising oil prices during
the latter part of the fiscal year. In contrast, Procter & Gamble (2.29%) and
Caterpillar (2.83%) declined during the period. While below-estimate earnings
3
<PAGE> 5
for 1999 played a part in the decline for Procter & Gamble, it's fair to say
that lack of interest from investors was a big factor for both stocks.
WHAT IS YOUR OUTLOOK FOR THE FUND?
I believe we saw a sign of things to come during the final weeks of the fiscal
year. After hitting a peak on March 10, the NASDAQ Composite Index(6), which
comprises mainly technology firms, lost ground rapidly. Rather than take their
money out of the markets, investors began to diversify their holdings into areas
of the market representative of strong companies with good earnings growth and
more reasonable valuations. As a result, the Fund gained 8.06%(1) (at NAV) for
the one-month period ending March 31, 2000. We believe that investors will
continue to look for value-oriented alternatives. That bodes well for the kind
of undervalued but solid companies in which the Willamette Value Fund invests.
- ---------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL RETURNS INCLUDE CHANGE IN
SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
(1) NAV represents return at net asset value. For the twelve-month and one-month
periods ending 3/31/00, the Fund returned -5.47% and 3.21%, respectively, at
maximum 4.50% sales charge.
(2) The Dow Jones Composite Index is representative of 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.
(3) The Russell 2000 Index is representative of the performance of domestically
traded common stocks of small to mid-size companies.
(4) The NYSE Composite is a capitalization-weighted index, which includes all
companies listed on the New York Stock Exchange.
(5) The Funds' composition is subject to change at any time.
(6) The NASDAQ Composite Index is a broad-based capitalization-weighted index of
all NASDAQ National Market and Small Cap Stocks.
Investors can not invest directly in an index.
4
<PAGE> 6
WILLAMETTE VALUE FUND
FUND OBJECTIVE:
The diversified Willamette
Value Fund seeks to provide
above-average annual total
return through a
combination of capital
appreciation and dividend
income from stocks.
INVESTMENT STRATEGY:
Focus on purchasing
equities believed to be
fundamentally sound, that
have a record of paying
historically high dividends
and are priced low relative
to their earnings and/or
prices of comparable
securities.
ASSET MANAGER:
Willamette Asset Managers,
Inc., a registered
investment adviser and an
affiliate of Willamette
Securities, Inc. and
Phillips and Company
Securities, Inc., acts as
investment adviser to the
Fund.
GROWTH OF $10,000 AS OF MARCH 31, 2000(1)
[COMPARISON GROWTH OF $10,000 INVESTMENT GRAPH]
<TABLE>
<CAPTION>
WILLAMETTE VALUE FUND (POP)* DOW JONES COMPOSITE INDEX
---------------------------- -------------------------
<S> <C> <C>
5/26/98 Inception $ 9,550 $10,000
6/30/98 9,312 10,166
9/30/98 8,739 8,869
12/31/98 9,542 10,141
3/31/99 9,657 10,531
6/30/99 10,791 11,526
9/30/99 10,114 10,643
12/31/99 9,998 11,355
3/31/00 9,562 10,884
</TABLE>
AVERAGE ANNUAL TOTAL RETURNS AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
SINCE INCEPTION
1 YEAR (5/26/98)
<S> <C> <C>
-------------------------------------------------------------
NAV -0.98% 0.06%
-------------------------------------------------------------
POP* -5.47% -2.40%
</TABLE>
* Public Offering Price (POP), reflects maximum sales charge of 4.50%.
TOP 10 HOLDINGS(2)
<TABLE>
<C> <S> <C>
1. AT&T Corp. 7.86%
2. General Motors Corp. 7.80%
3. J.P. Morgan 5.61%
4. Eastman Kodak Co. 5.58%
5. Minn. Mining & Mfg. Co. 5.58%
6. Merck & Co., Inc. 4.38%
7. E.I. Du Ponte de Nemours 3.50%
8. Exxon Mobil Corp. 3.11%
9. Tyco International 2.85%
10. Caterpillar, Inc. 2.83%
</TABLE>
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND NET
ASSET VALUE (NAV) WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
(1) The performance of the Willamette Value Fund is measured against the Dow
Jones Composite Index, which is unmanaged and is generally representative of
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 does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investors cannot invest directly in an index.
(2) The Fund's holdings are subject to change at any time.
5
<PAGE> 7
An Interview with John Lui of The Bank of New York,
Portfolio Manager of the
WILLAMETTE SMALL CAP GROWTH FUND
HOW DID THE FUND PERFORM DURING THE FISCAL YEAR ENDED MARCH 31, 2000?
The Willamette Small Cap Growth Fund, which began operations on April 5, 1999,
had an excellent first fiscal year. Since inception, the Fund chalked up a total
return of 101.67%(1) (at NAV). In comparison, its benchmark, the Russell 2000
Index(2), a broad measure of small-company U.S. stocks, gained 35.83% between
April 5, 1999 and March 31, 2000.
WHAT FACTORS INFLUENCED THE INVESTMENT ENVIRONMENT FOR SMALL-CAP STOCKS?
We have been calling for the equity market to broaden out for quite some time,
and it finally occurred during the past twelve months. For the twelve-month
period ended March 31, 2000, the Russell 2000 Index outperformed the larger-cap
Standard & Poor's 500 Index(3), returning 37.29% and 17.94%, respectively.
We saw a very narrow market from 1995 to 1998 that favored the big, blue-chip
stocks in the S&P 500 and the mega-stocks of the Dow Jones Industrial
Average(4). During this period, the compound annual return of the S&P 500, at
30.53% (average annual total return from 1/1/95 to 12/31/98), was nearly double
that of the Russell 2000, at 15.57%. In 1999, investors began to focus on
relative valuations and fundamentals, leading to a broadening of the markets.
While the Russell 2000's performance strengthened, it was also quite volatile.
WHAT ACCOUNTS FOR THE FUND'S SUPERIOR PERFORMANCE?
Once again, our bottom-up stock selection strategy produced above-market returns
with below-market volatility. While the Russell 2000 Index ended the third
calendar quarter, September 30, 1999, in a negative position, the Fund posted
positive returns in each of the past four quarters.
We attribute these results to our focus on small companies whose earnings are
growing faster than the average company and whose growth opportunities are
underestimated by the market.
WHAT WERE THE FUND'S BEST-PERFORMING SECTORS DURING THE YEAR?(5)
Technology companies led performance. Technology in general is transforming the
global economy and the way we do business. The transition from analog to
digital, and from voice transmission to data transmission, is driving rapid
change. It also provides tremendous opportunities to invest in smaller companies
that build, manufacture or support basic infrastructure or conduct business in
this new digital, wireless, data-oriented world. Our areas of focus include:
investments in communication/semiconductor companies, such as Applied
Microcircuits (1.72% of total investments as of 3/31/00) and Micromuse
(2.41%);and providers of network management software, such as Visual Networks
(0.99%).
We are also focusing on companies that have successfully adopted these new
technologies in their business models and are applying them in their respective
industries. Among these are Apollo Group (1.24%), which has taken the lead in
providing education via the Internet, and Williams-Sonoma (0.75%), a retailer
that is using the Internet and e-tailing to grow its business.(5)
WHAT DO YOU FORESEE FOR 2000?
Looking ahead, we see enormous opportunity in the market. The transition to a
wireless world is in its infancy and investors are only just beginning to
recognize the power of this trend. However, as businesses adapt to new best
practices by deploying the technology provided by our small-cap firms, the
transition will not always be so smooth.
As opportunities in the market unfold, so will risk. That is why we have
gradually increased the number of holdings in the portfolio to approximately
115, including several energy stocks. The Fund's exposure to
6
<PAGE> 8
energy stocks is higher than that of the index, but we believe that recent
quarterly earnings indicate a cyclical recovery for the next two years. We have
focused on the energy subsectors where we have the greatest confidence in profit
recovery, such as U.S.-based natural gas companies. By increasing the number of
securities and sectors held in the portfolio, we believe we are well-positioned
to minimize the volatility that will accompany the upcoming technology-based
transformations.
- ---------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL RETURNS INCLUDE CHANGE IN
SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
Smaller capitalization funds typically carry additional risks, since smaller
companies have historically experienced a greater degree of market volatility
and a higher risk of failure than large company stocks.
(1) NAV represents return at net asset value. For the since inception period
ended 3/31/00, the Fund returned 92.62% at maximum 4.50% sales charge.
(2) The Russell 2000 Index is representative of the performance of domestically
traded common stocks of small to mid-size companies.
(3) The Standard and Poor's 500 Index is generally representative of the
performance of the U.S. stock market as a whole.
(4) The Dow Jones Industrial Average is generally representative of the
performance price-weighted average of 30 widely-held domestic stocks.
(5) The Fund's holdings are subject to change at any time.
7
<PAGE> 9
WILLAMETTE SMALL CAP GROWTH FUND
FUND OBJECTIVE:
The Willamette Small Cap
Growth Fund seeks to
provide long-term capital
appreciation by investing
in a diversified portfolio
of small, fast-growing
companies.
INVESTMENT STRATEGY:
The Fund focuses on
companies that exhibit
strong potential for growth
in sales and earnings per
share, and are well-managed
and show signs of expanding
operations, new products
and distribution channels.
ASSET MANAGER:
Willamette Asset Managers,
Inc., a registered
investment adviser and an
affiliate of Willamette
Securities, Inc. and
Phillips and Company
Securities, Inc., acts as
investment adviser to the
Fund.
SUB-ADVISER
The Bank of New York, which
has helped investors meet
their investment objectives
since 1832, provides
day-to-day management of
the Fund.
GROWTH OF $10,000 AS OF MARCH 31, 2000(1)
[COMPARISON GROWTH OF $10,000 INVESTMENT GRAPH]
<TABLE>
<CAPTION>
WILLAMETTE SMALL CAP GROWTH
FUND (POP)* RUSSELL 2000 INDEX
--------------------------- ------------------
<S> <C> <C>
4/5/99 $ 9,550 $10,000
6/30/99 10,554 11,377
9/30/99 11,232 10,622
12/31/99 17,089 12,547
3/31/00 19,262 13,401
</TABLE>
CUMULATIVE TOTAL RETURNS AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
SINCE INCEPTION
(4/5/99)
<S> <C>
----------------------------------------------------------
NAV 101.67%
----------------------------------------------------------
POP* 92.62%
</TABLE>
* Public Offering Price (POP), reflects maximum sales charge of 4.50%.
TOP 10 HOLDINGS(2)
<TABLE>
<C> <S> <C>
1. Network Appliance Inc. 2.42%
2. Micromuse, Inc. 2.41%
3. The Scotts Co. 2.18%
4. Medimmune, Inc. 2.15%
5. Radio One, Inc. 2.03%
6. C-Cor Net Corp. 2.01%
7. DII Group, Inc. 1.86%
8. Gemstar Int. Group Ltd. 1.81%
9. Veritas Software Corp. 1.77%
10. Research in Motion 1.76%
</TABLE>
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND NET
ASSET VALUE (NAV) WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
(1) The performance of the Willamette Small Cap Growth Fund is measured against
the Russell 2000 Index, which is unmanaged and is generally representative
of the performance of domestically traded common stocks of small to mid-size
companies. The index does not reflect the deduction of fees associated with
a mutual fund, such as investment management and fund accounting fees. The
Fund's performance reflects the deduction of fees for these value-added
services. Investors cannot invest directly in an index.
(2) The Fund's holdings are subject to change at any time.
8
<PAGE> 10
An Interview with Roland Whitcomb of First American Asset Management,
Member of the Portfolio Management Team for the
WILLAMETTE TECHNOLOGY FUND
HOW DID THE WILLAMETTE TECHNOLOGY FUND PERFORM DURING ITS FIRST MONTH OF
OPERATIONS?
We launched the Fund on March 2, 2000, into a very strong market for technology
stocks. During the initial week, investors contributed $36 million dollars,
which we invested in a very diversified portfolio of more than 100 stocks.
However, even broad diversification wasn't sufficient defense when technology
stocks pulled back just two weeks after we began operations. For the one-month
period ending March 31, 2000, the Fund had a total return of -10.50%(1) (at
NAV). In comparison, its benchmark, the S&P Technology Index(2) gained 8.16% for
the same period.
HOW DID YOU INVEST THE FUND'S ASSETS IN THIS INITIAL PERIOD?
We chose to invest the money in the same manner as our model portfolio -- a
separate portfolio that we have actively managed for years. We invested the
money slowly, across all of the technology subsectors -- telecommunications,
semiconductors and equipment, computer hardware, electronic equipment, etc. In
retrospect, going in slowly cost the Fund some performance. Technology stocks as
a group posted very large gains between the Fund's first day and March 10, when
the NASDAQ Composite Index(3) hit a new record high, so we were forced to pay
more and more for stocks with each passing day.
WHAT HAPPENED IN THE SECOND HALF OF THE MONTH?
Technology stocks had experienced a very strong run-up for a couple of months,
so it was only a matter of time before the market took some of the "air" out of
the more inflated prices. When it began in earnest, we repositioned some assets
from smaller-company stocks, which tend to be the most volatile, into large-
company equities, such as Cisco Systems (3.6% of total investments as of
3/31/00), Microsoft (3.6%) and Intel Corp. (2.9%). However, there really was no
safe haven, and even this move was a case of "the lesser evil."(4)
WHAT DO YOU FORESEE FOR THE FUND AND TECHNOLOGY STOCKS?
The second quarter of 2000 (the first quarter of the Fund's new fiscal year) is
going to be a challenge. The technology sector will continue to be very volatile
for the next several months. Then, we believe things will settle down, and the
second half of calendar year 2000 should be much more positive for the sector
and the Fund. The fundamentals of many technology companies are improving, the
economy remains strong, and the outlook for spending on technology products and
services is very good. Businesses are buying to build infrastructure, and there
is strong consumer demand for the new wireless phone technology. Later in the
year, we look for another wave of computer buying by consumers as well.
In the meantime, we will continue to look for companies of all sizes with the
best fundamental characteristics, and keep the Fund diversified among the many
rapidly evolving areas of technology.
- ---------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. TOTAL RETURNS INCLUDE CHANGE IN
SHARE PRICE AND REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS.
(1) NAV represents return at net asset value. For the one-month period ended
3/31/00, the Fund returned -15.65% at maximum 5.75% sales charge.
(2) The S&P Technology Index is generally representative of the technology
sector.
(3) The NASDAQ Composite Index is a broad-based capitalization-weighted index of
all NASDAQ National Market and Small Cap Stocks.
(4) The Fund's holdings are subject to change at any time.
9
<PAGE> 11
WILLAMETTE TECHNOLOGY FUND
FUND OBJECTIVE:
By investing in a wide
variety of
technology-related stocks,
the Willamette Technology
Fund seeks to provide
long-term growth of
capital.
INVESTMENT STRATEGY
The Fund focuses on the
stocks of companies that
have a unique technology, a
clear competitive
advantage, a strong
financial position and a
relatively attractive share
price.
ASSET MANAGER:
Willamette Asset Managers,
Inc., a registered
investment adviser and an
affiliate of Willamette
Securities, Inc. and
Phillips and Company
Securities, Inc., acts as
investment adviser to the
Fund.
SUB-ADVISER:
First American Asset
Management, a division of
U.S. Bank and one of the
nation's largest investment
managers, provides day-to-
day management of the Fund.
GROWTH OF $10,000 AS OF MARCH 31, 2000(1)
[COMPARISON GROWTH OF $10,000 INVESTMENT GRAPH]
<TABLE>
<CAPTION>
WILLAMETTE TECHNOLOGY FUND (POP)* S&P 500 TECHNOLOGY INDEX
--------------------------------- ------------------------
<S> <C> <C>
3/2/00 $9,425 $10,000
3/31/00 8,435 10,816
</TABLE>
CUMULATIVE TOTAL RETURN AS OF MARCH 31, 2000
<TABLE>
<CAPTION>
SINCE INCEPTION
(3/2/00)
<S> <C>
----------------------------------------------------------
NAV -10.50%
----------------------------------------------------------
POP* -15.65%
</TABLE>
* Public Offering Price (POP), reflects maximum sales charge of 5.75%.
TOP 10 HOLDINGS(2)
<TABLE>
<C> <S> <C>
1. Microsoft 3.64%
2. Cisco Systems 3.61%
3. Brocade Communications 2.94%
4. Intel Corp. 2.92%
5. Oracle Corporation 2.91%
6. Ebay, Inc. 2.67%
7. Dell Computer 2.47%
8. America Online 2.31%
9. Nokia Corp. (ADR) 1.91%
10. Applied Materials 1.90%
</TABLE>
- --------------------------------------------------------------------------------
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURN AND NET
ASSET VALUE (NAV) WILL FLUCTUATE, SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST.
(1) The performance of the Willamette Technology Fund is measured against the
S&P Technology Index, which is unmanaged and is generally representative of
the technology sector. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management and fund
accounting fees. The Fund's performance reflects the deduction of fees for
these value-added services. Investors cannot invest directly in an index.
(2) The Fund's holdings are subject to change at any time.
10
<PAGE> 12
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 2000
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE
VALUE SMALL CAP WILLAMETTE
FUND GROWTH FUND TECHNOLOGY FUND
----------- ----------- ---------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (cost $14,868,673;
$24,618,849; and $36,547,407,
respectively)............................ $14,311,355 $38,924,541 $32,962,640
Interest and dividends receivable.......... 44,278 22,149 35,446
Receivable for capital shares sold......... 105,495 23,205 259,234
Receivable for investments sold............ 1,430,152 -- 88,428
Receivable from advisor.................... 9,246 -- --
Unamortized organizational costs........... 20,563 -- --
Prepaid expenses and other assets.......... 4,544 10,157 --
----------- ----------- -----------
Total assets.......................... 15,925,633 38,980,052 33,345,748
----------- ----------- -----------
LIABILITIES:
Payable for investments purchased.......... -- 242,706 435,261
Payable for capital shares redeemed........ 9,096 7,315 123,680
Accrued expenses and other payables:
Investment advisory fees................. 12,802 42,708 28,166
Administration fees...................... 428 1,101 937
Distribution and shareholder service
fees.................................. 6,401 17,795 14,083
Other.................................... 24,864 34,646 24,800
----------- ----------- -----------
Total liabilities..................... 53,591 346,271 626,927
----------- ----------- -----------
Net assets............................ $15,872,042 $38,633,781 $32,718,821
=========== =========== ===========
NET ASSETS:
Capital.................................... $16,408,946 $22,195,861 $36,535,869
Undistributed net realized gains/(losses)
from investment transactions............. 20,414 2,132,228 (232,281)
Unrealized appreciation/(depreciation) from
investments.............................. (557,318) 14,305,692 (3,584,767)
----------- ----------- -----------
Net assets............................ $15,872,042 $38,633,781 $32,718,821
=========== =========== ===========
Outstanding units of beneficial interest
(shares)................................. 1,643,976 1,937,570 3,654,726
=========== =========== ===========
Net asset value -- redemption price per
share.................................... $ 9.65 $ 19.94 $ 8.95
=========== =========== ===========
Maximum Sales Charge....................... 4.50% 4.50% 5.75%
=========== =========== ===========
Maximum Offering Price per share
(100%/(100%-maximum sales charge) of net
asset value adjusted to the nearest
cent).................................... $ 10.10 $ 20.88 $ 9.50
=========== =========== ===========
</TABLE>
See notes to financial statements.
11
<PAGE> 13
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2000
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE WILLAMETTE
VALUE SMALL CAP TECHNOLOGY
FUND GROWTH FUND (a) FUND (b)
----------- --------------- -----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income................................. $ 10,803 $ 101,081 $ 32,991
Dividend income (Net of foreign withholding tax
of $3,350; $0; and $342, respectively)....... 473,413 19,291 2,455
----------- ----------- -----------
Total Income............................... 484,216 120,372 35,446
----------- ----------- -----------
EXPENSES:
Investment advisory fees........................ 174,029 259,469 33,800
Administration fees............................. 34,806 43,240 5,633
Distribution and shareholder service fees....... 87,014 108,101 14,083
Fund accounting fees............................ 37,821 39,964 3,253
Audit fees...................................... 14,340 12,057 5,892
Legal fees...................................... 25,222 36,084 2,907
Organization fees............................... 6,971 -- --
Registration and filing fees.................... 15,525 18,469 6,319
Printing........................................ 29,563 29,602 3,283
Transfer agent fees............................. 87,790 74,354 7,360
Trustees fees................................... 2,290 1,918 151
Other........................................... 10,012 9,555 878
----------- ----------- -----------
Total expenses before
waivers/reimbursements.................. 525,383 632,813 83,559
Fees waived by the investment advisor........... -- (23,161) (5,633)
Expenses reimbursed by the investment advisor... (47,091) -- --
----------- ----------- -----------
Net expenses............................... 478,292 609,652 77,926
----------- ----------- -----------
Net investment income/(loss)...................... 5,924 (489,280) (42,480)
----------- ----------- -----------
REALIZED/UNREALIZED GAINS/(LOSSES) ON INVESTMENTS:
Net realized gains/(losses) on investment
transactions.................................... 637,228 2,925,801 (189,801)
Net change in unrealized
appreciation/(depreciation) from investments.... (1,100,067) 14,305,692 (3,584,767)
----------- ----------- -----------
Net realized/unrealized gains/(losses) from
investments..................................... (462,839) 17,231,493 (3,774,568)
----------- ----------- -----------
Change in net assets resulting from operations.... $ (456,915) $16,742,213 $(3,817,048)
=========== =========== ===========
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to March 31,
2000.
(b) For the period from March 2, 2000 (commencement of operations) to March 31,
2000.
See notes to financial statements.
12
<PAGE> 14
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
WILLAMETTE VALUE FUND
-----------------------------------
YEAR ENDED PERIOD ENDED
MARCH 31, 2000 MARCH 31, 1999(a)
-------------- -----------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income..................................... $ 5,924 $ 1,418
Net realized gains from investment transactions........... 637,228 6,344
Net change in unrealized appreciation/(depreciation) from
investments............................................ (1,100,067) 542,749
----------- -----------
Change in net assets resulting from operations.............. (456,915) 550,511
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income................................ (6,510) (832)
In excess of net investment income........................ (7,876) --
From net realized gain on investment...................... (615,282) --
----------- -----------
Change in net assets from shareholder distributions......... (629,668) (832)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................... 8,322,096 16,315,038
Dividends reinvested...................................... 609,630 --
Cost of shares redeemed................................... (6,938,055) (1,899,763)
----------- -----------
Change in net assets from capital share transactions........ 1,993,671 14,415,275
----------- -----------
Change in net assets...................................... 907,088 14,964,954
NET ASSETS:
Beginning of period....................................... 14,964,954 --
----------- -----------
End of period............................................. $15,872,042 $14,964,954
=========== ===========
SHARE TRANSACTIONS:
Issued.................................................... 772,077 1,672,330
Reinvested................................................ 61,837 --
Redeemed.................................................. (670,489) (191,779)
----------- -----------
Change in shares............................................ 163,425 1,480,551
=========== ===========
</TABLE>
- ---------------
(a) For the period from May 26, 1998 (commencement of operations) to March 31,
1999.
See notes to financial statements.
13
<PAGE> 15
WILLAMETTE FAMILY OF FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
WILLAMETTE WILLAMETTE
SMALL CAP TECHNOLOGY
GROWTH FUND FUND
------------------ ------------------
PERIOD ENDED PERIOD ENDED
MARCH 31, 2000 (a) MARCH 31, 2000 (b)
------------------ ------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss..................................... $ (489,280) $ (42,480)
Net realized gains/(losses) from investment
transactions......................................... 2,925,801 (189,801)
Net change in unrealized appreciation/(depreciation)
from investments..................................... 14,305,692 (3,584,767)
----------- -----------
Change in net assets resulting from operations............ 16,742,213 (3,817,048)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net realized gain on investment.................... (323,769) --
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from shares issued............................. 26,268,710 38,158,931
Dividends reinvested.................................... 316,464 --
Cost of shares redeemed................................. (4,369,837) (1,623,062)
----------- -----------
Change in net assets from capital share transactions...... 22,215,337 36,535,869
----------- -----------
Change in net assets.................................... 38,633,781 32,718,821
NET ASSETS:
Beginning of period..................................... -- --
----------- -----------
End of period........................................... $38,633,781 $32,718,821
=========== ===========
SHARE TRANSACTIONS:
Issued.................................................. 2,220,979 3,820,329
Reinvested.............................................. 19,215 --
Redeemed................................................ (302,624) (165,603)
----------- -----------
Change in shares.......................................... 1,937,570 3,654,726
=========== ===========
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to March 31,
2000.
(b) For the period from March 2, 2000 (commencement of operations) to March 31,
2000.
See notes to financial statements.
14
<PAGE> 16
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (89.0%):
Aerospace & Military Technology (0.4%):
2,879 Lockheed Martin Corp. .......... $ 58,840
-----------
Automotive (9.0%):
2,191 DaimlerChrysler AG.............. 143,374
3,695 Ford Motor Co. ................. 169,739
13,482 General Motors Corp. ........... 1,116,478
-----------
1,429,591
-----------
Automotive Parts (2.5%):
5,225 Dana Corp. ..................... 147,280
10,614 Genuine Parts Co. .............. 253,409
-----------
400,689
-----------
Banking & Financial Services (9.4%):
4,493 ABN Amro Holding N.V............ 101,654
1,260 Bank of America Corp. .......... 66,071
2,399 Bank One Corp. ................. 82,466
6,091 J.P. Morgan & Co. .............. 802,488
5,265 KeyCorp......................... 100,035
5,834 National City Corp. ............ 120,326
1,298 National Westminster Bank PLC... 159,005
2,389 Washington Mutual, Inc. ........ 63,309
-----------
1,495,354
-----------
Beverages (1.5%):
802 Anheuser-Busch Companies,
Inc. ......................... 49,925
6,416 Diageo PLC...................... 193,282
-----------
243,207
-----------
Building Materials (0.6%):
2,472 Hanson PLC -- ADR............... 87,447
-----------
Chemicals (4.1%):
1,301 Dow Chemical Co. ............... 148,314
9,475 Du Pont (E.I.) de Nemours &
Co. .......................... 500,991
-----------
649,305
-----------
Conglomerates (2.7%):
468 PPG Industries, Inc. ........... 24,482
8,178 Tyco International Ltd. ........ 407,878
-----------
432,360
-----------
Consumer Products (2.1%):
5,833 Procter & Gamble Co. ........... 328,106
-----------
Diversified Electronics (0.5%):
426 Philips Electronics, NY
Shares........................ 72,979
-----------
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Diversified Operation (5.0%):
9,014 Minnesota Mining & Manufacturing
Co. .......................... $ 798,302
-----------
Drugs & Pharmaceuticals (4.9%):
1,431 American Home Products.......... 76,737
10,094 Merck & Co., Inc. .............. 627,090
1,221 Pharmacia & Upjohn, Inc. ....... 72,344
-----------
776,171
-----------
Electric Utilities (0.4%):
3,761 Edison International............ 62,292
-----------
Energy (1.2%):
2,700 Florida Power & Light, Inc. .... 124,369
3,162 PG&E Corp. ..................... 66,402
-----------
190,771
-----------
Food Products & Services (2.9%):
3,105 ConAgra, Inc. .................. 56,278
1,208 General Mills, Inc. ............ 43,715
4,311 H.J. Heinz Co. ................. 150,345
2,940 Kellogg Co. .................... 75,338
7,321 Winn-Dixie Stores, Inc. ........ 142,302
-----------
467,978
-----------
Insurance (2.8%):
7,603 The St. Paul Companies, Inc. ... 259,452
3,368 XL Capital Ltd. -- Class A...... 186,503
-----------
445,955
-----------
Machinery & Equipment (2.6%):
10,287 Caterpillar, Inc. .............. 405,694
-----------
Metals (0.3%):
2,243 Anglogold Ltd. -- ADR........... 53,832
-----------
Oil -- Integrated Companies (8.9%):
1,128 Atlantic Richfield Co. ......... 95,880
1,291 BP Amoco Co. PLC -- ADR......... 68,504
7,858 Conoco, Inc. -- Class B......... 201,361
5,729 Exxon Mobil Corp. .............. 445,787
3,306 Phillips Petroleum Co. ......... 152,903
519 Royal Dutch Petroleum Co., NY
Shares........................ 29,875
5,231 Shell Transport & Trading Co. --
ADR........................... 256,646
2,650 Texaco, Inc. ................... 142,106
734 USX-Marathon Group.............. 19,130
-----------
1,412,192
-----------
</TABLE>
Continued
15
<PAGE> 17
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Paper Products (1.4%):
4,764 International Paper Co. ........ $ 203,661
442 Weyerhaeuser Co. ............... 25,194
-----------
228,855
-----------
Photo Equipment & Supplies (5.0%):
14,703 Eastman Kodak Co. .............. 798,557
-----------
Semiconductors (2.0%):
2,410 Intel Corp. .................... 317,969
-----------
Telecommunications (14.7%):
20,001 AT&T Corp. ..................... 1,125,055
552 Bell Atlantic Corp. ............ 33,741
8,448 Global Crossing Ltd. (b)........ 345,840
459 GTE Corp. ...................... 32,589
15,450 Hellenic
Telecommunication -- ADR...... 224,025
4,061 SBC Communications, Inc. ....... 170,562
4,824 Tele Danmark A/S -- ADR......... 224,015
2,262 U.S. West, Inc. ................ 164,278
-----------
2,320,105
-----------
Tire & Rubber (1.5%):
10,175 The Goodyear Tire & Rubber
Co. .......................... 237,205
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Tobacco (1.9%):
14,344 Philip Morris Companies,
Inc. ......................... $ 303,017
-----------
Transportation (0.7%):
2,332 CSX Corp. ...................... 54,802
3,781 Norfolk Southern Corp. ......... 54,352
-----------
109,154
-----------
Total COMMON STOCKS (Cost $14,683,245)...... 14,125,927
-----------
SHORT-TERM INVESTMENTS (1.2%):
Cash Sweep Account (1.2%):
$185,428 UBOC Sweep Account.............. 185,428
-----------
Total Short-Term Investments (Cost
$185,428)................................... 185,428
-----------
Total Investments (Cost $14,868,673)
(a) -- 90.2%................................ 14,311,355
Other assets in excess of
liabilities -- 9.8%......................... 1,560,687
-----------
Total Net Assets -- 100.0%.................. $15,872,042
===========
</TABLE>
- ---------------
ADR -- American Depository Receipt
PLC -- Public Limited Company
(a) Represents cost for financial reporting and federal income tax purposes and
differs from market value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 1,684,065
Unrealized depreciation......................... (2,241,383)
-----------
Net unrealized depreciation..................... $ (557,318)
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
16
<PAGE> 18
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS (90.4%):
Banking & Financial Services (2.7%):
2,700 Bank United Corp. -- Class
A........................... $ 85,219
6,100 Greater Bay Bancorp........... 245,524
2,605 Legg Mason, Inc. ............. 112,666
8,300 UCBH Holdings, Inc. .......... 178,450
4,825 Waddell & Reed Financial,
Inc. -- Class A............. 204,158
4,100 Wilmington Trust Corp. ....... 199,363
-----------
1,025,380
-----------
Biotechnology (0.4%):
600 Affymetrix, Inc. (b).......... 89,063
800 Incyte Pharmaceuticals, Inc.
(b)......................... 69,600
-----------
158,663
-----------
Broadcasting -- Radio & Cable TV (3.2%):
5,800 Emmis Communications Corp. --
Class A (b)................. 269,700
1,425 Hispanic Broadcasting Corp.
(b)......................... 161,381
11,860 Radio One, Inc. (b)........... 790,173
-----------
1,221,254
-----------
Commercial Services (0.6%):
7,360 Iron Mountain, Inc. (b)....... 250,700
-----------
Computer Software, Peripherals & Internet (31.8%):
3,900 Ancor Communication, Inc.
(b)......................... 160,388
7,073 AnswerThink Consulting Group
(b)......................... 172,846
4,000 AppNet, Inc. (b).............. 188,000
4,000 Bluestone Software, Inc.
(b)......................... 135,000
3,000 BroadVision, Inc. (b)......... 134,625
4,400 Commerce One, Inc. (b)........ 656,700
6,200 Concentric Network Corp.
(b)......................... 341,000
2,100 Crossroads Systems, Inc.
(b)......................... 216,825
4,190 Digex, Inc. (b)............... 464,828
5,820 DoubleClick, Inc. (b)......... 544,898
3,550 Entrust Technologies, Inc.
(b)......................... 302,027
1,115 Gadzoox Networks, Inc. (b).... 53,450
7,900 Informatica Corp. (b)......... 606,819
6,750 Mercury Interactive Corp.
(b)......................... 534,938
6,750 Micromuse, Inc. (b)........... 936,983
8,585 Netcentives, Inc. (b)......... 257,550
2,200 NetIQ Corp. (b)............... 146,988
11,400 Network Appliance, Inc. (b)... 943,349
6,920 Packeteer, Inc. (b)........... 242,200
3,460 Phone.Com, Inc. (b)........... 564,413
4,025 PLX Technology, Inc. (b)...... 149,868
2,600 RealNetworks, Inc. (b)........ 148,038
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Computer Software, Peripherals & Internet, continued:
6,440 Research in Motion Ltd. (b)... $ 685,860
4,200 SanDisk Corp. (b)............. 514,500
1,150 SeaChange International, Inc.
(b)......................... 70,869
1,770 Tanning Technology Corp.
(b)......................... 76,221
7,088 TranSwitch Corp. (b).......... 681,334
10,462 USinternetworking, Inc. (b)... 405,422
3,800 Verio, Inc. (b)............... 171,238
5,250 VERITAS Software Corp. (b).... 687,749
1,550 Viant Corp. (b)............... 51,925
6,800 Visual Networks, Inc. (b)..... 385,900
5,440 Vitria Technology, Inc. (b)... 548,420
3,700 Xircom, Inc. (b).............. 136,900
-----------
12,318,071
-----------
Consumer Products (2.2%):
20,250 The Scotts Co. (b)............ 850,500
-----------
Diversified Electronics (10.0%):
4,460 Applied Micro Circuits Corp.
(b)......................... 669,279
6,415 DII Group, Inc. (b)........... 725,295
8,200 Gemstar International Group
Ltd. (b).................... 705,200
1,900 II-VI, Inc. (b)............... 72,200
8,400 Jabil Circuit, Inc. (b)....... 363,300
2,800 Lattice Semiconductor Corp.
(b)......................... 189,525
1,960 PMC-Sierra, Inc. (b).......... 399,228
2,400 QLogic Corp. (b).............. 325,200
7,600 Sawtek, Inc. (b).............. 399,475
-----------
3,848,702
-----------
Drugs & Pharmaceuticals (10.2%):
3,700 Alkermes, Inc. (b)............ 342,250
4,700 Alpharma, Inc. -- Class A..... 172,725
2,950 Andrx Corp. (b)............... 340,725
10,000 Aurora Biosciences Corp.
(b)......................... 408,750
5,925 Celgene Corp. (b)............. 589,908
6,700 Cephalon, Inc. (b)............ 251,250
900 Human Genome Sciences, Inc.
(b)......................... 74,756
6,930 Jones Pharma, Inc. ........... 210,499
4,800 MedImmune, Inc. (b)........... 835,800
600 Millennium Pharmaceuticals,
Inc. (b).................... 77,925
3,600 Sepracor, Inc. (b)............ 262,125
7,053 Shire Pharmaceuticals Group --
PLC (b)..................... 361,466
-----------
3,928,179
-----------
</TABLE>
Continued
17
<PAGE> 19
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Education, Entertainment & Training (3.0%):
17,100 Apollo Group, Inc. (b)........ $ 482,006
12,630 DeVry, Inc. (b)............... 385,215
18,705 ITT Educational Services, Inc.
(b)......................... 299,280
-----------
1,166,501
-----------
Food Products & Services (0.3%):
4,300 Dean Foods Co. ............... 115,025
-----------
Industrial Goods & Services (1.6%):
6,390 Waters Corp. (b).............. 608,648
-----------
Insurance (0.2%):
3,225 Annuity & Life Re (Holdings)
Ltd. ....................... 83,850
-----------
Medical & Health Care Products/Services (0.4%):
1,625 Express Scripts, Inc. -- Class
A (b)....................... 68,250
3,775 MedQuist, Inc. (b)............ 102,633
-----------
170,883
-----------
Oil & Gas Exploration, Equipments & Services (6.9%):
2,800 BJ Services Co. (b)........... 206,850
7,500 Cal Dive International, Inc.
(b)......................... 380,625
3,700 Core Laboratories N.V. (b).... 107,531
36,000 Grey Wolf, Inc. (b)........... 141,750
2,300 Maverick Tube Corp. (b)....... 74,606
9,200 National-Oilwell, Inc. (b).... 284,050
5,700 Newfield Exploration Co.
(b)......................... 200,925
7,100 Patterson Energy, Inc. (b).... 225,425
14,500 Precision Drilling Corp.
(b)......................... 483,938
1,800 Stolt Comex Seaway S.A. -- ADR
(b)......................... 25,200
2,250 Stolt Comex Seaway S.A. --
Class A, ADR (b)............ 23,344
6,600 Stone Energy Corp. (b)........ 325,050
11,000 Superior Energy Services, Inc.
(b)......................... 107,250
4,075 Tuboscope, Inc. (b)........... 69,275
-----------
2,655,819
-----------
Publishing (0.5%):
2,050 Houghton Mifflin Co. ......... 86,997
1,800 Scholastic Corp. (b).......... 97,087
-----------
184,084
-----------
Recruitment Services (0.4%):
5,150 Korn/Ferry International
(b)......................... 153,213
-----------
Retail Stores (4.2%):
5,150 American Eagle Outfitters,
Inc. (b).................... 195,378
7,713 BJ's Wholesale Club, Inc.
(b)......................... 297,991
5,000 Children's Place Retail
Stores, Inc. (b)............ 71,250
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- --------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Retail Stores, continued:
5,433 Duane Reade, Inc. (b)........... $ 126,364
6,570 Linens 'n Things, Inc. (b)...... 225,023
7,400 Men's Wearhouse, Inc. (b)....... 219,225
2,430 Tiffany & Co. .................. 203,209
9,400 Williams-Sonoma, Inc. (b)....... 291,400
-----------
1,629,840
-----------
Semiconductors (0.4%):
800 Hi/Fn, Inc. (b)................. 52,050
1,800 Microchip Technology, Inc.
(b)........................... 118,350
-----------
170,400
-----------
Telecommunications (11.1%):
17,100 American Mobile Satellite Corp.
(b)........................... 410,400
16,000 C-COR.net Corp. (b)............. 783,999
14,030 Clearnet Communications, Inc. --
Class A (b)................... 577,861
3,050 Efficient Networks, Inc. (b).... 475,038
610 Finisar Corp. (b)............... 89,375
5,030 Metromedia Fiber Network,
Inc. -- Class A (b)........... 486,338
3,050 Next Level Communication, Inc.
(b)........................... 331,688
3,300 Powertel, Inc. (b).............. 228,319
4,973 VoiceStream Wireless Corp.
(b)........................... 640,841
5,373 Western Wireless Corp. (b)...... 246,242
-----------
4,270,101
-----------
Transportation (0.3%):
1,900 Swift Transportation Co., Inc.
(b)........................... 38,950
4,500 Werner Enterprises, Inc. ....... 76,500
-----------
115,450
-----------
Total COMMON STOCKS (Cost $20,619,571)...... 34,925,263
-----------
SHORT-TERM INVESTMENTS (10.4%):
Cash Sweep Account (10.4%):
$3,999,278 UBOC Sweep Account.............. 3,999,278
-----------
Total Short-Term Investments (Cost
$3,999,278)................................. 3,999,278
-----------
Total Investments (Cost $24,618,849) (a) --
100.8%...................................... 38,924,541
Liabilities in excess of other
assets -- (0.8)%............................ (290,760)
-----------
Total Net Assets -- 100.0%.................. $38,633,781
===========
</TABLE>
Continued
18
<PAGE> 20
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE SMALL CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
- ---------------
ADR -- American Depository Receipt
PLC -- Public Limited Company
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes by the amount of losses recognized for
financial reporting in excess of federal income tax reporting of $104,579.
Cost for federal income tax purposes differs from value by net unrealized
appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $15,785,577
Unrealized depreciation......................... (1,584,464)
-----------
Net unrealized appreciation..................... $14,201,113
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
19
<PAGE> 21
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE TECHNOLOGY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS (94.7%):
Broadcasting -- Radio & Cable TV (1.7%):
2,200 Crown Castle International Corp.
(b)........................... $ 83,325
5,600 TV Guide, Inc. -- Class A (b)... 269,150
6,000 Wink Communications, Inc. (b)... 200,250
-----------
552,725
-----------
Computer Networking (10.1%):
2,500 3Com Corp. (b).................. 139,063
5,400 Brocade Communications Systems,
Inc. (b)...................... 968,287
15,400 Cisco Systems, Inc. (b)......... 1,190,612
2,400 Digital Island, Inc. (b)........ 146,250
1,000 Foundry Networks, Inc. (b)...... 143,750
1,400 IntraNet Solutions, Inc. (b).... 64,400
12,500 PairGain Technologies, Inc.
(b)........................... 233,594
4,400 Sun Microsystems, Inc. (b)...... 412,294
-----------
3,298,250
-----------
Computer Software, Peripherals & Internet (48.5%):
1,500 724 Solutions, Inc. (b)......... 186,750
1,800 Active Software, Inc. (b)....... 114,497
1,100 Akamai Technologies, Inc. (b)... 176,825
11,300 America Online, Inc. (b)........ 759,924
2,100 Apropos Technology, Inc. (b).... 77,700
3,300 BEA Systems, Inc. (b)........... 242,138
8,200 Chordiant Software, Inc. (b).... 133,250
2,000 Clarent Corp. (b)............... 180,375
900 Commerce One, Inc. (b).......... 134,325
3,600 CommTouch Software Ltd. (b)..... 169,425
3,600 Covad Communications Group, Inc.
(b)........................... 261,000
15,100 Dell Computer Corp. (b)......... 814,455
5,600 Deltathree.com, Inc. -- Class A
(b)........................... 117,250
2,600 Digex, Inc. (b)................. 288,438
2,300 Digimarc Corp. (b).............. 101,200
5,200 Digitas, Inc. (b)............... 127,400
6,600 DSET Corp. (b).................. 121,688
9,400 DSL.net, Inc. (b)............... 207,975
5,000 eBay, Inc. (b).................. 879,999
3,700 eGain Communications Corp.
(b)........................... 144,300
7,000 El Sitio, Inc. (b).............. 150,063
500 Eprise Corp. (b)................ 7,875
3,000 Etinuum, Inc. (b)............... 28,500
4,500 FairMarket, Inc. (b)............ 102,375
5,000 Forrester Research, Inc. (b).... 271,250
5,000 GRIC Communications, Inc. (b)... 168,750
2,500 iBasis, Inc. (b)................ 102,656
1,500 Insilicon Corp. (b)............. 23,719
6,300 Integrated Information Systems,
Inc. (b)...................... 137,320
</TABLE>
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Computer Software, Peripherals & Internet, continued:
4,900 InterNAP Network Services (b)... $ 225,400
3,100 iPrint.Com, Inc. (b)............ 59,675
2,900 ITXC Corp. (b).................. 136,481
5,400 J.D. Edwards & Co. (b).......... 175,838
6,700 Legato Systems, Inc. (b)........ 298,988
2,100 Liberate Technologies (b)....... 131,775
1,300 Loudeye Technologies, Inc.
(b)........................... 45,338
4,300 MarchFirst, Inc. (b)............ 153,456
2,700 MetaSolv Software, Inc. (b)..... 159,469
11,300 Microsoft Corp. (b)............. 1,200,624
2,500 Natural Microsystems, Corp.
(b)........................... 214,375
2,100 Netegrity, Inc. (b)............. 143,850
5,900 NetObjects, Inc. (b)............ 134,225
3,500 Network Solutions, Inc. (b)..... 538,015
5,600 ONYX Software Corp. (b)......... 178,500
12,300 Oracle Corp. (b)................ 960,168
400 Palm, Inc. (b).................. 17,950
5,400 Peregrine Systems, Inc. (b)..... 362,138
4,900 PFSweb, Inc. (b)................ 78,400
3,200 Portal Software, Inc. (b)....... 182,200
2,100 Primus Knowledge Solutions, Inc.
(b)........................... 180,600
1,300 PurchasePro.com, Inc. (b)....... 94,250
300 Quest Software, Inc. (b)........ 33,825
600 RADVision Ltd. (b).............. 31,425
4,400 Sagent Technology, Inc. (b)..... 126,775
6,700 Saleslogix Corp. (b)............ 181,319
300 Selectica, Inc. (b)............. 26,475
6,300 SERENA Software, Inc. (b)....... 200,813
2,900 Siebel Systems, Inc. (b)........ 346,369
200 Silicon Laboratories, Inc.
(b)........................... 17,700
14,800 Sybase, Inc. (b)................ 300,625
3,900 TenFold Corp. (b)............... 235,950
14,100 Tricord Systems, Inc. (b)....... 134,831
4,650 USinternetworking, Inc. (b)..... 180,188
200 ValueClick, Inc. (b)............ 4,188
2,700 Vignette Corp. (b).............. 432,675
4,400 Visual Networks, Inc. (b)....... 249,700
5,800 WatchGuard Technologies, Inc.
(b)........................... 522,000
300 Websense, Inc. (b).............. 14,419
9,300 Witness Systems, Inc. (b)....... 282,488
3,400 Yahoo!, Inc. (b)................ 582,674
9,900 Zamba Corp. (b)................. 103,641
-----------
15,911,217
-----------
Diversified Electronics (5.3%):
2,700 Audiovox Corp. -- Class A (b)... 117,788
4,700 JDS Uniphase Corp. (b).......... 568,700
4,500 KLA-Tencor Corp. (b)............ 379,125
1,800 QLogic Corp. (b)................ 243,900
</TABLE>
Continued
20
<PAGE> 22
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE TECHNOLOGY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS
MARCH 31, 2000
<TABLE>
<CAPTION>
SECURITY MARKET
SHARES DESCRIPTION VALUE
- -------- -------------------------------- -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Diversified Electronics, continued:
4,000 Teradyne, Inc. (b).............. $ 329,000
5,400 Viasystems Group, Inc. (b)...... 83,700
-----------
1,722,213
-----------
Financial Services (0.4%):
1,600 Internet Capital Group, Inc.
(b)........................... 144,500
-----------
Medical & Health Care Products/Services (0.1%):
1,500 SciQuest.com, Inc. (b).......... 38,625
-----------
Retail (0.6%):
8,300 Drugstore.com, Inc. (b)......... 109,456
8,300 HomeGrocer.com, Inc. (b)........ 86,113
-----------
195,569
-----------
Semiconductors (16.8%):
2,000 Actel Corp. (b)................. 71,375
6,645 Applied Materials, Inc. (b)..... 626,290
2,700 ASM Lithography Holding NV
(b)........................... 301,725
2,500 Broadcom Corp. (b).............. 607,187
4,500 Chartered Semiconductor
Manufacturing Ltd. -- ADR
(b)........................... 424,125
800 E-Tek Dynamics, Inc. (b)........ 188,200
10,400 FSI International, Inc. (b)..... 213,200
7,300 Intel Corp...................... 963,143
7,500 Lam Research Corp. (b).......... 337,969
5,000 Maxim Integrated Products, Inc.
(b)........................... 355,313
100 PSi Technologies Holdings,
Inc. -- ADR (b)............... 1,663
2,700 RF Micro Devices, Inc. (b)...... 362,813
6,200 ST Assembly Test Service Ltd. --
ADR (b)....................... 300,700
6,900 Taiwan Semiconductor
Manufacturing Co. Ltd. -- ADR
(b)........................... 393,300
4,200 Xilinx, Inc. (b)................ 347,813
-----------
5,494,816
-----------
</TABLE>
<TABLE>
<CAPTION>
SHARES
OR
PRINCIPAL SECURITY MARKET
AMOUNT DESCRIPTION VALUE
- ---------- ------------------------------ -----------
<C> <S> <C>
COMMON STOCKS, CONTINUED:
Telecommunications (11.2%):
3,100 Allegiance Telecom, Inc.
(b)......................... $ 249,938
500 BreezeCOM Ltd. (b)............ 18,688
2,500 Copper Mountain Networks, Inc.
(b)......................... 204,844
7,800 Cypress Communications, Inc.
(b)......................... 191,100
1,800 Efficient Networks, Inc.
(b)......................... 280,350
8,300 MCI WorldCom, Inc. (b)........ 376,094
2,000 Metalink Ltd. (b)............. 76,750
4,300 Motorola, Inc................. 612,212
2,300 Network Plus Corp. (b)........ 93,150
2,900 Nokia Corp. -- ADR............ 630,024
7,300 Primus Telecommunications
Group, Inc. (b)............. 377,318
800 Tele 1 Europe Holding AB --
ADR (b)..................... 15,300
5,700 Telocity, Inc. (b)............ 70,538
1,700 Turnstone Systems, Inc. (b)... 195,500
6,200 Z-Tel Technologies, Inc.
(b)......................... 260,400
-----------
3,652,206
-----------
Total COMMON STOCKS (Cost $34,594,888)..... 31,010,121
-----------
SHORT-TERM INVESTMENTS (6.0%):
Cash Sweep Account (6.0%):
$1,952,519 UBOC Sweep Account............ 1,952,519
-----------
Total Short-Term Investments (Cost
$1,952,519)................................ 1,952,519
-----------
Total Investments (Cost $36,547,407) (a) --
100.7%..................................... 32,962,640
Liabilities in excess of other
assets -- (0.7)%........................... (243,819)
-----------
Total Net Assets -- 100.0%................. $32,718,821
===========
</TABLE>
- ---------------
ADR -- American Depository Receipt
(a) Represents cost for financial reporting purposes and differs cost basis for
federal income tax purposes by the amount of losses recognized for financial
reporting in excess of federal income tax reporting of $247,875. Cost for
federal income tax purposes differs from value by net unrealized
depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation......................... $ 1,486,996
Unrealized depreciation......................... (5,319,638)
-----------
Net unrealized depreciation..................... $(3,832,642)
===========
</TABLE>
(b) Represents non-income producing securities.
See notes to financial statements.
21
<PAGE> 23
WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
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 Funds currently have four investment portfolios registered
with the Securities and Exchange Commission. The accompanying financial
statements and financial highlights are those of the Willamette Value Fund
("Value Fund"), the Willamette Small Cap Growth Fund ("Small Cap Growth
Fund"), and the Willamette Technology Fund ("Technology Fund")
(collectively, the "Funds"). The Small Cap Growth Fund commenced operations
on April 5, 1999. The Technology Fund commenced operations on March 2,
2000. The Funds offer three managed investment portfolios, as a series of
the Group, and are authorized to issue an unlimited number of shares. The
Willamette Global Health Sciences Fund ("Global Health Fund") currently is
not being offered. 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. The Small Cap Growth Fund seeks to provide long-term capital
appreciation. The Technology Fund objective is to provide long-term growth
of capital. The Global Health Fund's objective is to seek long-term growth
of capital.
2. SIGNIFICANT ACCOUNTING PRINCIPLES:
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their 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 most recent bid price. Securities for which recent market quotations
are not readily available are valued at their fair value in the best
judgement of the Adviser under the guidelines established by 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
Continued
22
<PAGE> 24
WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
sales of securities are determined by comparing the identified cost of the
security lot sold with the net sales proceeds.
EXPENSES:
Expenses directly attributable to a Fund are charged to that Fund. Other
expenses are allocated proportionately among the Funds or Group, as
applicable, 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 and the
Technology 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 and the Technology Fund were borne by Willamette
Asset Managers, Inc.
DIVIDENDS TO SHAREHOLDERS:
The Value Fund intends to declare its net investment income, if any,
quarterly as a dividend. The Small Cap Growth Fund and the Technology Fund
intend to declare their net investment income, if any, annually as
dividends. Net realized capital gains for each fund, if any, are declared
and distributed at least annually, normally in December of each year.
Dividends and distributions are recorded on the ex-dividend date.
Distributions from net investment income and from net realized gains are
determined in accordance with federal income tax regulations and may differ
from generally accepted accounting principles. These "book/tax" differences
are either considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amount are reclassified within
the composition of net assets based on their federal tax basis treatment.
Temporary differences do not require reclassification.
As of March 31, 2000, the following reclassifications have been made to
increase/(decrease) such accounts with offsetting adjustments made to
Capital:
<TABLE>
<CAPTION>
UNDISTRIBUTED NET UNDISTRIBUTED NET
INVESTMENT REALIZED GAIN/(LOSS)
INCOME/(LOSS) ON INVESTMENTS
----------------- --------------------
<S> <C> <C>
Value Fund.................................. $ 7,876 $ (7,876)
Small Cap Growth Fund....................... 489,280 (469,804)
Technology Fund............................. 42,480 (42,480)
</TABLE>
Continued
23
<PAGE> 25
WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
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 each Fund's average daily net assets, at the annual
rate of 1.00% for the Value Fund and 1.20% for the Small Cap Growth Fund
and Technology Fund.
On February 17, 2000, the Board of Trustees approved a proposal to permit
Willamette Asset Managers, Inc., the investment adviser of the Value Fund,
to appoint The Bank of New York as sub-adviser to provide daily management
of the Fund's portfolio. The proposal is subject to shareholder approval,
and a meeting of the Value Fund's shareholders of record on March 10, 2000
is planned for May 9, 2000.
Bank of New York provides portfolio management services, as sub-adviser, to
the Small Cap Growth Fund, pursuant to a sub-investment advisory agreement
with the Group and the Adviser. 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.
U.S. Bank National Association, acting through its First American Asset
Management division, provides portfolio management services, as
sub-adviser, to the Technology Fund, pursuant to a sub-investment agreement
with the Group and the Adviser. The Adviser compensates the Sub-Adviser at
a rate of 0.50%, 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 for services
provided under the 12b-1 plan.
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 annually 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 2.90% for the period from February 1, 1999 to March 31, 1999, and 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
Continued
24
<PAGE> 26
WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
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. Under the Agreement, the Adviser made
reimbursements of $27,590 for the period ended March 31, 1999 and they have
until March 31, 2001 to receive repayment from the Fund. The Adviser made
reimbursements of $47,091 for the year ended March 31, 2000 and they have
until March 31, 2002 to receive repayment from the Fund. 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.
However, except for purposes of these repayment provisions, as of March 31,
2000, the Value Fund's expenses will no longer be limited by the Adviser to
a maximum of 2.75%.
The Distributor is entitled to receive commissions on sales of shares of
the Funds. For the period ended March 31, 2000, BISYS received $3,334,789
from commissions earned on sales of shares of the Funds, of which
$2,927,930 was re-allowed to non-affiliates.
Certain trustees and officers of the Group are affiliated with BISYS. Such
individuals are not paid any fees directly by the Funds or the Group for
serving as trustees and officers for the Group.
4. PURCHASES AND SALES OF SECURITIES:
Purchases and sales of securities (excluding short-term securities) for the
year ended March 31, 2000 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Value Fund......................................... $13,347,771 $13,334,789
Small Cap Growth Fund(a)........................... 29,009,901 11,316,131
Technology Fund(b)................................. 38,240,426 3,455,631
</TABLE>
- ---------------
(a) For the period from April 5, 1999 (commencement of operations) to March
31, 2000.
(b) For the period from March 2, 2000 (commencement of operations) to March
31, 2000.
5. FEDERAL INCOME TAXES:
The Funds intend to qualify or continue 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.
Continued
25
<PAGE> 27
WILLAMETTE FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 2000
FEDERAL INCOME TAXES INFORMATION (UNAUDITED):
During the year ended March 31, 2000, the Value Fund declared long-term
capital gain distributions as follows:
<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
Value Fund.................................................. $616,814
</TABLE>
For corporate shareholders the following percentage of the total ordinary
income distributions paid during the fiscal year ended March 31, 2000
qualify for the corporate dividend received deduction for the following
Funds:
<TABLE>
<CAPTION>
PERCENTAGE
----------
<S> <C>
Value Fund.................................................. 43.28%
</TABLE>
26
<PAGE> 28
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE VALUE FUND
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
MARCH 31, MARCH 31,
2000 1999(a)
---------- ------------
<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/(loss) on investments.... (0.10) 0.11
------- -------
Total from investment activities....................... (0.09) 0.11
------- -------
DISTRIBUTIONS
Net investment income..................................... --** --**
In excess of net investment income........................ (0.01) --
Net realized gains........................................ (0.36) --
------- -------
Total Distributions.................................... (0.37) --
------- -------
NET ASSET VALUE, END OF PERIOD.............................. $ 9.65 $ 10.11
======= =======
Total return (excludes sales charge)........................ (0.98)% 1.11%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, end of period (000)........................... $15,872 $14,965
Ratio of net expenses to average net assets............... 2.75% 2.90%(c)
Ratio of net investment income to average net assets...... 0.03% 0.02%(c)
Ratio of gross expenses to average net assets*............ 3.02% 3.20%(c)
Portfolio turnover........................................ 79.63% 0.39%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reimbursed. If such
voluntary fee reimbursements had not occurred, the ratio would have been as
indicated.
** 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.
27
<PAGE> 29
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>
PERIOD ENDED
MARCH 31,
2000(a)
------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment loss....................................... (0.25)
Net realized and unrealized gain on investments........... 10.38
-------
Total from investment activities....................... 10.13
-------
DISTRIBUTION
Net realized gains........................................ (0.19)
-------
NET ASSET VALUE, END OF PERIOD.............................. $ 19.94
=======
Total return (excludes sales charge)........................ 101.67%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, end of period (000)........................... $38,634
Ratio of net expenses to average net assets............... 2.82%(c)
Ratio of net investment loss to average net assets........ (2.26)%(c)
Ratio of gross expenses to average net assets*............ 2.93%(c)
Portfolio turnover........................................ 55.15%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) For the period from April 5, 1999 (commencement of operations) to March 31,
2000.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
28
<PAGE> 30
WILLAMETTE FAMILY OF FUNDS
WILLAMETTE TECHNOLOGY FUND
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31,
2000(a)
------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $ 10.00
-------
INVESTMENT ACTIVITIES
Net investment loss....................................... (0.01)
Net realized and unrealized loss on investments........... (1.04)
-------
Total from investment activities....................... (1.05)
-------
NET ASSET VALUE, END OF PERIOD.............................. $ 8.95
=======
Total return (excludes sales charge)........................ (10.50)%(b)
RATIOS/SUPPLEMENTARY DATA:
Net Assets, end of period (000)........................... $32,719
Ratio of net expenses to average net assets............... 2.77%(c)
Ratio of net investment loss to average net assets........ (1.51)%(c)
Ratio of gross expenses to average net assets*............ 2.97%(c)
Portfolio turnover........................................ 11.14%
</TABLE>
- ---------------
* During the period, certain fees were voluntarily reduced. If such voluntary
fee reductions had not occurred, the ratio would have been as indicated.
(a) For the period from March 2, 2000 (commencement of operations) to March 31,
2000.
(b) Not annualized.
(c) Annualized.
See notes to financial statements.
29
<PAGE> 31
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholders
Willamette Family of Funds of The Coventry Group
We have audited the accompanying statements of assets and liabilities,
including the schedules of portfolio investments, of Willamette Value Fund,
Willamette Small Cap Growth Fund, and Willamette Technology Fund (the Funds) as
of March 31, 2000, the related statements of operations for the period then
ended, and the statements of changes in net assets and financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Willamette Value Fund, Willamette Small Cap Growth Fund, and Willamette
Technology Fund at March 31, 2000, the results of their operations for the
period then ended, and the changes in their net assets and their financial
highlights for each of the indicated periods, in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Columbus, Ohio
May 8, 2000
30
<PAGE> 32
INVESTMENT ADVISER
Willamette Asset Managers, Inc.
One Pacific Square
220 N.W. 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
5/00
WILLAMETTE
FAMILY
OF FUNDS
[WILLAMETTE LOGO]
WILLAMETTE
Asset Managers
Investment Adviser
ANNUAL REPORT
MARCH 31, 2000
This material must be preceded or
accompanied by a current prospectus.
