<PAGE>
[Graphic Omitted]
- --------------------------------------------
NEWPORT ASIA PACIFIC FUND SEMIANNUAL REPORT
- --------------------------------------------
DECEMBER 31, 1999
<PAGE>
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
The six-month period ended December 31, 1999 was very good for investors in the
Pacific Basin, as the region experienced a strong economic recovery in concert
with a worldwide economic rebound. The economies in the region benefited from a
level of renewal and improved management. In Hong Kong and the People's Republic
of China (China), the private sector has shown unprecedented growth, driven by
an entrepreneurial boom in the high technology and telecommunications sectors.
These industries are benefiting from surging use of the Internet by both
businesses and consumers around the world. Japan also continued to recover, and,
like China, its high-technology and telecommunications sectors provided the
leadership. Singapore's banking industry continued to thrive, and Taiwan's
world-class semiconductor sector emerged from a major earthquake in very good
shape. In short, a wide range of factors in the region and worldwide converged
to produce what we believe is a solid foundation for future prosperity.
Although we are encouraged by these developments, it is important to note that
the region is still in the early stages of recovery from the devastating impact
of recession in 1997 and 1998. Much of the growth has been driven by exports --
particularly to the U.S.-- and internally generated growth is just beginning to
appear. Nevertheless, we are very pleased with the progress that we saw
throughout the region in 1999.
Newport Asia Pacific Fund continued to benefit from the positive economic trends
in the second half of 1999, turning in a very good performance during the
period. The following report will provide you with more specific information
about your Fund's performance and the strategies used during the period. We
thank you for choosing Newport Asia Pacific Fund and for giving us the
opportunity to serve your investment needs.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson
President
February 11, 2000
- ---------------------------
Not FDIC May Lose Value
Insured No Bank Guarantee
- ---------------------------
Because market and economic conditions change, there can be no assurance that
the trends described in this report will continue or come to pass
<PAGE>
- --------------------------------------------------------------------------------
HIGHLIGHTS
- --------------------------------------------------------------------------------
o STRONG RECOVERY IN PACIFIC BASIN ECONOMIES CONTINUED IN SECOND HALF OF 1999
Several important developments, including increased political stability,
improved regional economic conditions, more stable interest rates and
better corporate management helped produce an impressive recovery from the
deep recession of 1997-1998. This recovery translated into very good
returns for equity investors in these markets.
o JAPANESE HIGH-TECHNOLOGY, TELECOMMUNICATIONS HOLDINGS PERFORMED WELL
As one of the key factors in the overall Pacific Basin economy, Japan
continued to recover during the period. While its economy is still being
restrained by struggling old-line industries, certain areas, including
high-technology and telecommunications, are thriving. Stocks in these
sectors performed very well.
o FUND OUTPERFORMED INDEX DURING PERIOD
Good stock selection in a range of industries helped the Fund perform well
during the six-month period, outperforming the MSCI AC Asia Pacific Free
Index.
NEWPORT ASIA PACIFIC FUND VS.
MSCI AC ASIA PACIFIC FREE INDEX 7/1/99 - 12/31/99
Newport Asia Pacific Fund - class A 53.66%
MSCI AC Asia Pacific Free Index 11.11%
The Morgan Stanley Capital International (MSCI) All Country Asia Pacific Free
Index is an unmanaged index that invests in stocks in the Pacific Basin. Unlike
mutual funds, indexes are not investments and do not incur fees, charges or
expenses. It is not possible to invest directly in an index.
SIX-MONTH CUMULATIVE TOTAL RETURNS AS OF 12/31/99
Without With
sales sales
charge charge(1)
- --------------------------------------------------------------------------------
Class A 53.66% 44.82%
- --------------------------------------------------------------------------------
Class B 53.26% 48.26%
- --------------------------------------------------------------------------------
Class C 53.15% 52.15%
- --------------------------------------------------------------------------------
Class Z 54.12% N/A
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE AS OF 12/31/99
Class A $27.70
- --------------------------------------------------------------------------------
Class B $27.51
- --------------------------------------------------------------------------------
Class C $27.49
- --------------------------------------------------------------------------------
Class Z $27.71
- --------------------------------------------------------------------------------
DISTRIBUTIONS DECLARED PER SHARE FROM 7/1/99 TO 12/31/99
Class A $1.325
- --------------------------------------------------------------------------------
Class B $1.277
- --------------------------------------------------------------------------------
Class C $1.277
- --------------------------------------------------------------------------------
Class Z $1.341
- --------------------------------------------------------------------------------
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions.
(1) The "with sales charge" returns include the maximum 5.75% charge for Class
A shares and the maximum contingent deferred sales charges (CDSC) of 5% for
one year for Class B shares and 1% for one year for Class C shares.
Performance for different share classes will vary based on~differences in
sales charges and fees associated with each class.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS' REPORT
- --------------------------------------------------------------------------------
TOP COUNTRY BREAKDOWN AS OF 12/31/99
Japan 45.0%
Hong Kong 29.6%
Singapore 6.7%
Taiwan 3.8%
Australia 2.0%
Country breakdown is calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain the current country breakdown in the future.
TOP 10 HOLDINGS AS OF 12/31/99
China Telecom 4.0%
Softbank Corp. 3.5%
Kyocera Corp. 3.3%
Sony Corp. 3.3%
Cheung Kong
Holdings Ltd. 2.7%
Rohm Co., Ltd 2.5%
Sun Hung Kai
Properties Ltd. 2.5%
DBS Group Holdings Ltd.2.4%
Li & Fung Ltd. 2.3%
Hutchison Whampoa Ltd. 2.2%
Holdings are calculated as a percentage of net assets. Because the Fund is
actively managed, there can be no guarantee the Fund will continue to hold these
securities in the future.
BOUGHT
- --------------------------------------------------------------------------------
China Telecom, Inc. (4.0% of net assets) is the dominant provider of cellular
telecommunications services in the Guangdong and Zhejiang provinces in China.
The company has shown strong revenue growth, benefiting from a tremendous
increase in Internet use in China
FUND PERFORMED WELL ON STRENGTH OF RECOVERIES IN ASIA AND JAPAN
For the six-month period, Newport Asia Pacific Fund's Class A shares had a total
return of 53.66% without a sales charge. The Fund's performance came as a result
of a general economic recovery in countries throughout the Pacific Basin last
year. Government spending also played a significant role in Japan's recovery,
but the nature of economic change in the country has been more fundamental.
Newer firms in high growth~industries are fueling the growth, while old-line
firms are still lagging. Market forces are having a major impact on companies
mired in the old-fashioned, slow-to-change Japanese corporate culture, requiring
them to adapt or face stiff competition from newer, more nimble companies.
IMPROVED FINANCIAL REPORTING HELPED TO BOOST INVESTOR CONFIDENCE
The economic and financial crises of 1997 and 1998 helped improve the financial
accountability of corporations to their shareholders. Companies have realized
that they need to become more "transparent," letting investors know -- in
greater detail and with greater accuracy -- the true nature of their financial
and business status. As this has occurred, there has been a double benefit:
companies have gained a better picture of their operations, allowing them to
manage their organizations more efficiently; and investors -- particularly
foreign institutions -- have gained more confidence in these companies.
GROWTH IN TECHNOLOGY AND TELECOMMUNICATIONS LEAD THE WAY
Investors in Pacific Basin countries showed tremendous excitement about
developments in the high-technology and telecommunications industries. The
increased importance of the Internet for both business and consumers has been no
less a phenomenon in Asia than in the U.S., and many companies have been direct
beneficiaries. Moreover, entrepreneurs are building successful businesses in
high tech and telecom, expanding the base of economic growth to the small- and
mid-size company level and contributing to the phenomenal growth of private
enterprise that occurred last year.
The technology boom has allowed Asian countries to "leapfrog" stages of
technological development. For example, the wireless telecommunications industry
has seen enormous growth because there are not nearly as many fixed telephone
lines per capita as there are in the U.S. Instead of moving in stages from fixed
lines to a wireless network, many rapidly developing countries like China have
moved directly to wireless. This has allowed companies like Korea Telecom, China
Telecom and Japan's NTT Data Communications Systems Co. (1.6%, 4.0% and 1.4% of
net assets, respectively) to rapidly expand their wireless businesses.
OUTLOOK: ECONOMIC RECOVERY STILL IN EARLY STAGES
The year 2000 should bring continued economic growth to Pacific Basin countries,
as stronger domestic consumption and internally generated (non-export) growth
comprise a larger part of the economies in which the Fund is invested. There may
be some volatility in the global financial markets, which could spill over into
Asia and Japan -- especially if the volatility originates in the highly
influential U.S. stock market. But our analysis suggests that the fundamental
economic trends outlined in this report will not only continue, but will form
the building blocks for a longer term, more stable expansion in the region.
/s/ Chris Legallet /s/ David Smith
CHRIS LEGALLET and DAVID SMITH are co-managers of Newport Asia Pacific Fund. Mr.
Legallet is Chief Investment Officer and a senior vice president of Newport Fund
Management, Inc., and Mr. Smith is a senior vice president of Newport Fund
Management.
International investing offers significant long-term growth potential, but also
involves certain risks. Because many of the Asian countries are considered
emerging markets, they are subject to a greater degree of social, political,
currency and economic instability.
AVERAGE ANNUAL TOTAL RETURNS AS OF 12/31/1999
<TABLE>
<CAPTION>
Share Class A B C Z
Inception 8/19/98 8/19/98 8/19/98 8/19/99
- ---------------------------------------------------------------------------------------
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 121.46% 108.72% 120.10% 115.10% 119.95% 118.95% 122.13%
- ---------------------------------------------------------------------------------------
Life of Fund 120.34 111.00 118.84 116.64 118.73 118.73 120.82
- ---------------------------------------------------------------------------------------
</TABLE>
Past performance cannot predict future investment results. Returns and value of
an investment will vary, resulting in a gain or loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% charge for Class A shares and the maximum contingent deferred
sales charges (CDSC) of 5% for one year and 4% for Life of Fund for Class B
shares and 1% for one year for Class C shares. Performance for different share
classes will vary based on differences in sales charges and fees associated with
each class.
Class Z share performance information includes returns of the Fund's Class A
shares (as its expense structure more closely resembles that of the newer class)
for periods prior to its inception date. These Class A share returns are not
restated to reflect any expense differential (e.g., Rule 12b-1 fees) between
Class A shares and Class Z shares. Had the expense differential been reflected,
the returns for the periods prior to the inception of the newer class shares
would have been higher.
TOP FIVE SECTORS BREAKDOWN AS OF 12/31/99
Technology 29.9%
- --------------------------------------------------------------------------------
Consumer Cyclicals 25.2%
- --------------------------------------------------------------------------------
Financial 15.3%
- --------------------------------------------------------------------------------
Utility 5.7%
- --------------------------------------------------------------------------------
Services 4.4%
- --------------------------------------------------------------------------------
Sector breakdown is calculated as a~percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain the current sector breakdown in the future.
Industry sectors in the following financial statements are based upon the
standard industrial classifications (SIC) as published by the U.S. Office of
Management and Budget. The sector classifications used on this page are based
upon the advisor's defined criteria as used in the investment process.
BOUGHT
- --------------------------------------------------------------------------------
NTT Data Communications Systems Co. (DoCoMo) (1.4% of net assets) is the largest
cellular phone company in Japan, and the third-largest company in the world,
ranked by market capitalization. Since its~record-breaking $18 billion~initial
public offering in October 1998, the company's stock has soared. DoCoMo is part
of the fast-growing telecommunications sector that is helping pull Japan out of
recession.
<PAGE>
- --------------------
INVESTMENT PORTFOLIO
- --------------------
December 31, 1999 (Unaudited)
(In thousands)
COMMON STOCKS - 91.3% COUNTRY SHARES VALUE
- ------------------------------------------------------------------------------
CONSTRUCTION - 0.3%
SPECIAL TRADE CONTRACTORS
Zhejiang Expressway Co., Ltd. HK 328 $ 50
-------
- ------------------------------------------------------------------------------
FINANCE, INSURANCE & REAL ESTATE - 22.7%
DEPOSITORY INSTITUTIONS - 8.0%
Commonwealth Bank of Australia Au 9 149
DBS Group Holdings Ltd. Si 24 390
HSBC Holdings PLC (a) HK 24 337
Hang Seng Bank Ltd. HK 14 160
Overseas-Chinese Banking Corp., Ltd. Si 18 164
Suruga Bank, Ltd. (b) Ja 8 111
-------
1,311
-------
FINANCIAL SERVICES - 0.4%
Aeon Credit Service Ltd. Ja 1 66
-------
HOLDING COMPANIES - 4.7%
Citic Pacific Ltd. HK 44 166
Hutchison Whampoa Ltd. HK 25 363
Singapore Technologies Engineering Ltd. Si 156 242
-------
771
-------
NONDEPOSITORY CREDIT INSTITUTIONS - 2.9%
Acom Co., Ltd. Ja 2 206
Aiful Corp. Ja 1 110
Shohkoh Fund Ja (c) 79
Takefuji Corp. Ja 1 75
-------
470
-------
REAL ESTATE - 6.7%
Cheung Kong Holdings Ltd. HK 35 445
China Resources Enterprises Ltd. HK 80 128
SM Prime Holdings, Inc. Ph 620 117
Sun Hung Kai Properties Ltd. HK 39 406
-------
1,096
-------
- ------------------------------------------------------------------------------
MANUFACTURING - 24.2%
CHEMICALS & ALLIED PRODUCTS - 1.0%
Fujimi, Inc. Ja (c) 16
Takeda Chemical Industries Ltd. Ja 3 148
-------
164
-------
COMMUNICATIONS EQUIPMENT - 4.9%
Matsushita Communication Industrial Co. Ja 1 264
Sony Corp. Ja 2 534
-------
798
-------
ELECTRICAL INDUSTRIAL EQUIPMENT - 1.6%
Nidec Corp. Ja 1 202
Sodick Co., Ltd. (b) Ja 10 54
-------
256
-------
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.4%
Yamaichi Electronics Co., Ltd. Ja 2 66
Yokowo Co., Ltd. Ja (c) 2
-------
68
-------
ELECTRONIC COMPONENTS - 7.1%
Chartered Semiconductor Manufacturing Ltd.,
ADR (b) Si (c) 7
Kyocera Corp. Ja 2 544
Rohm Co., Ltd. Ja 1 411
United Microelectronics Corp., Ltd. Tw 57 203
-------
1,165
-------
FOOD & KINDRED PRODUCTS - 0.8%
Ito En Ltd. Ja 1 140
-------
HOUSEHOLD APPLIANCES - 0.2%
Guangdong Kelon Electric Holdings, Class H HK 42 32
-------
MACHINERY & COMPUTER EQUIPMENT - 4.0%
Canon Inc. Ja 4 159
Fujitsu Ltd. Ja 7 319
Union Tool Ja 1 177
-------
655
-------
MISCELLANEOUS MANUFACTURING - 1.3%
Secom Co., Ltd. Ja 2 220
-------
PRINTING & PUBLISHING - 2.9%
Singapore Press Holdings Ltd. Si 14 303
South China Morning Post Ltd. HK 194 167
-------
470
-------
- ------------------------------------------------------------------------------
RETAIL TRADE - 10.8%
APPAREL & ACCESSORY STORES - 2.4%
Esprit Holdings Ltd. HK 172 186
Giordano International Ltd. HK 204 210
-------
396
-------
FOOD STORES - 1.2%
President Chain Store Corp. Tw 44 193
-------
GENERAL MERCHANDISE STORES - 3.8%
Don Quijote Co., Ltd. Ja (c) 63
Ryohin Keikaku Co., Ltd. (b) Ja 1 241
Seven-Eleven Japan Co., Ltd. Ja 2 317
-------
621
-------
HOME FURNISHINGS & EQUIPMENT - 1.3%
Yamada Denki Co. Ja 2 217
-------
MISCELLANEOUS RETAIL - 1.1%
Foster's Brewing Group Ltd. Au 63 180
-------
RESTAURANTS - 1.0%
Cafe de Coral Holdings Ltd. HK 410 165
-------
- ------------------------------------------------------------------------------
SERVICES - 9.4%
AMUSEMENT & RECREATION - 0.5%
People Co., Ltd. Ja 1 86
-------
AUTO REPAIR, RENTAL & PARKING - 0.8%
Park24 Co., Ltd. Ja 2 134
-------
BUSINESS SERVICES - 0.8%
Dodwell B.M.S. Ltd. Ja 3 134
-------
COMPUTER RELATED SERVICES - 4.7%
Bellsystem 24, Inc. Ja (c) 219
Datacraft Asia Ltd. HK 3 25
Fujitsu Support & Services, Inc. Ja 1 294
Orix Corp. Ja 1 225
-------
763
-------
COMPUTER SOFTWARE - 2.3%
Fuji Soft ABC, Inc. Ja 2 172
Taiwan Semiconductor
Manufacturing Co. (b) Tw 39 208
-------
380
-------
ENGINEERING, ACCOUNTING, RESEARCH &
MANAGEMENT - 0.3%
Meitec Corp. Ja 2 54
-------
- ------------------------------------------------------------------------------
TRANSPORTATION, COMMUNICATIONS,
ELECTRIC, GAS & SANITARY SERVICES - 16.8%
COMMUNICATIONS - 1.7%
DDI Corp. Ja (c) 274
-------
ELECTRIC SERVICES - 1.5%
CLP Holdings Ltd. HK 18 83
Hong Kong Electric Holdings Ltd. HK 54 167
-------
250
-------
GAS SERVICES - 1.5%
Hong Kong & China Gas Co., Ltd. HK 183 251
-------
MOTOR, FREIGHT & WAREHOUSING - 0.4%
Aucnet, Inc. Ja 1 66
-------
SANITARY SERVICES - 0.5%
Sanix, Inc. (b) Ja 1 88
-------
TELECOMMUNICATION - 11.2%
Asia Satellite Telecommunications Holdings Ltd. HK 45 142
China Telecom Ltd. (a) (b) HK 101 650
Korea Telecom Corp., ADR Ko 4 269
NTT Data Communications Systems Co. Ja (c) 230
Nippon Telegraph & Telephone Corp. Ja (c) 103
PT Indonesian Satellite Corp. Tbk In 141 315
I-CABLE Communications Ltd. (b) HK 96 130
-------
1,839
-------
- ------------------------------------------------------------------------------
WHOLESALE TRADE - 7.1%
DURABLE GOODS
Johnson Electric Holdings Ltd. HK 34 218
Li & Fung Ltd. HK 152 381
Softbank Corp. Ja 1 574
-------
1,173
-------
TOTAL COMMON STOCKS
(cost of $8,439)(d) 14,996
-------
SHORT-TERM OBLIGATIONS - 7.9% PAR ALUE
- ------------------------------------------------------------------------------
Repurchase agreement with SBC Warburg Ltd.,
dated 12/31/99, due
01/03/00 at 2.500%, collateralized by U.S.
Treasury bonds and/or notes
with various maturities to 2021, market
value $1,325 (repurchase proceeds $1,298) $ 1,298 $ 1,298
-------
OTHER ASSETS & LIABILITIES, NET - 0.8% 129
- ------------------------------------------------------------------------------
NET ASSETS - 100.0% $16,423
-------
NOTES TO INVESTMENT PORTFOLIO:
- ------------------------------------------------------------------------------
(a) The value of this security represents fair value as
determined in good faith under the direction of the
Trustees.
(b) Non-income producing.
(c) Rounds to less than one.
(d) Cost for federal income tax purposes is the same.
SUMMARY OF
SECURITIES BY COUNTRY COUNTRY VALUE % OF TOTAL
- -----------------------------------------------------------------------------
Japan Ja $ 7,394 49.3
Hong Kong HK 4,862 32.4
Singapore Si 1,106 7.4
Taiwan Tw 604 4.0
Australia Au 329 2.2
Indonesia In 315 2.1
Korea Ko 269 1.8
Philippines Ph 117 0.8
------- -----
$14,996 100.0
------- -----
Certain securities are listed by country of underlying exposure but may trade
predominantly on other exchanges.
ACRONYM NAME
------- ----
ADR American Depositary Receipt
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
(In thousands except for per share amounts and footnotes)
ASSETS
Investments at value (cost $8,439) $14,996
Short-term obligations 1,298
--------
16,294
Cash including foreign currencies
(cost of $115) $115
Receivable for:
Fund shares sold 170
Dividends 2
Expense reimbursement due from Advisor/Administrator 6 293
---- --------
Total assets 16,587
LIABILITIES
Payable for:
Fund shares repurchased 159
Other 5
----
Total liabilities 164
--------
NET ASSETS $16,423
--------
CLASS A
Net asset value & redemption price per share ($8,848/319) $ 27.70(a)
--------
Maximum offering price per share
($27.70/0.9425) $ 29.39(b)
--------
CLASS B
Net asset value & offering price per share ($3,818/139) $ 27.51(a)
--------
CLASS C
Net asset value & offering price per share ($1,278/46) $ 27.49(a)
--------
CLASS Z
Net asset value, offering & redemption price per
share ($2,479/89) $ 27.71
--------
COMPOSITION OF NET ASSETS
Capital paid in $ 10,037
Overdistributed net investment income (359)
Accumulated net realized gain 188
Net unrealized appreciation 6,557
--------
$16,423
--------
(a) Redemption price per share is equal to net asset value less any applicable
contingent deferred sales charge.
(b) On sales of $50,000 or more the offering price is reduced.
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
For the Six Months Ended December 31, 1999
(Unaudited)
(In thousands)
INVESTMENT INCOME
Dividends $ 63
Interest 29
------
Total Investment Income 92
EXPENSES
Management fee $ 47
Administration fee 12
Service fee -- Class A, Class B,
Class C 10
Distribution fee -- Class B 6
Distribution fee -- Class C 2
Transfer agent fee 11
Bookkeeping fee 14
Trustees fee 3
Custodian fee 4
Audit fee 6
Registration fee 30
Reports to shareholders 1
Other 1
-----
147
Fees waived by the Advisor/Administrator (36) 111
----- ------
Net Investment Loss (19)
------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
PORTFOLIO POSITIONS
Net realized gain (loss) on:
Investments 379
Foreign currency transactions (6)
-----
Net Gain 373
------
Net Change in Unrealized Appreciation/Depreciation 4,419
------
Net Gain 4,792
------
INCREASE IN NET ASSETS FROM OPERATIONS $4,773
------
See notes to financial statements.
<PAGE>
- ----------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------
(In thousands)
(UNAUDITED)
SIX MONTHS ENDED PERIOD ENDED
DECEMBER 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS 1999(a) 1999(b)
- --------------------------------------------------------------------------------
OPERATIONS:
Net investment loss $ (19) $ (7)
Net realized gain 373 185
Net change in unrealized appreciation/depreciation 4,419 2,138
------- ------
Net Increase from Operations 4,773 2,316
DISTRIBUTIONS:
From net investment income -- Class A (177) (24)
From net realized gains -- Class A (205) --
From net investment income -- Class B (65) (1)
From net realized gains -- Class B (82) --
From net investment income -- Class C (16) (1)
From net realized gains -- Class C (20) --
From net investment income -- Class Z (54) --
From net realized gains -- Class Z (60) --
------- ------
4,094 2,290
------- ------
FUND SHARE TRANSACTIONS:
Receipts for shares sold -- Class A 1,703 2,479
Value of distributions reinvested -- Class A 379 24
Cost of shares repurchased -- Class A (290) --
------- ------
1,792 2,503
------- ------
Receipts for shares sold -- Class B 2,792 416
Value of distributions reinvested -- Class B 123 1
Cost of shares repurchased -- Class B (391) --
------- ------
2,524 417
------- ------
Receipts for shares sold -- Class C 831 112
Value of distributions reinvested -- Class C 34 1
Cost of shares repurchased -- Class C (12) --
------- ------
853 113
------- ------
Receipts for shares sold -- Class Z 1,736 --
Value of distributions reinvested -- Class Z 114 --
Cost of shares repurchased -- Class Z (13) --
------- ------
1,837 --
------- ------
Net Increase from Fund Share Transactions 7,006 3,033
------- ------
Total Increase 11,100 5,323
NET ASSETS
Beginning of period 5,323 --
------- ------
End of period (net of overdistributed net
investment income of $359 and $28,
respectively) $16,423 $5,323
------- ------
(a) Class Z shares were initially offered August 13, 1999.
(b) The Fund commenced investment operations on August 19, 1998.
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
- --------------------------------------------------------------------------------
(In thousands)
(UNAUDITED)
SIX MONTHS ENDED PERIOD ENDED
DECEMBER 31, JUNE 30,
INCREASE (DECREASE) IN NET ASSETS (CONTINUED) 1999(a) 1999(b)
- -------------------------------------------------------------------------------
NUMBER OF FUND SHARES
Sold -- Class A 73 240
Issued for distributions reinvested -- Class A 15 2
Repurchased -- Class A (11) --
------- ------
77 242
------- ------
Sold -- Class B 124 27
Issued for distributions reinvested -- Class B 5 (c)
Repurchased -- Class B (17) --
------- ------
112 27
------- ------
Sold -- Class C 35 11
Issued for distributions reinvested -- Class C 1 (c)
Repurchased -- Class C (1) --
------- ------
35 11
------- ------
Sold -- Class Z 85 --
Issued for distributions reinvested -- Class Z 5 --
Repurchased -- Class Z (1) --
------- ------
89 --
------- ------
(a) Class Z shares were initially offered on August 13, 1999.
(b) The Fund commenced investment operations on August 19, 1998.
(c) Rounds to less than one.
See notes to financial statements.
<PAGE>
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
December 31, 1999 (Unaudited)
NOTE 1. INTERIM FINANCIAL STATEMENTS
In the opinion of Newport Asia Pacific (the Fund), a series of Liberty Funds
Trust VI, the accompanying financial statements contain all normal and
recurring adjustments necessary for the fair presentation of the financial
position of the Fund at December 31, 1999, and the results of its operations,
the changes in it's net assets and the financial hightlights for the six
months then ended.
NOTE 2. ACCOUNTING POLICIES
ORGANIZATION
The Fund is a non-diversified portfolio of a Massachusetts business trust,
registered under the Investment Company Act of 1940, as amended, as an open-
ended management investment company. The Fund's investment objective is to
seek capital appreciation by investing primarily in equity securities of
companies located in or which derive a substantial portion of their revenue
from business activity with or in the Asian Pacific Region. The Fund may issue
an unlimited number of shares. The Fund offers four classes of shares: Class
A, Class B, Class C and Class Z. Class A shares are sold with a front-end
sales charge. A 1.00% contingent deferred sales charge is assessed on
redemptions made within eighteen months on an original purchase of $1 million
to $5 million. Class B shares are subject to an annual distribution fee and a
contingent deferred sales charge. Class B shares will convert to Class A
shares when they have been outstanding approximately eight years. Class C
shares are subject to a contingent deferred sales charge on redemptions made
within one year after purchase and an annual distribution fee. Effective
August 13, 1999, the Fund began offering Class Z shares which are offered
continuously at net asset value. There are certain restrictions on the
purchase of Class Z shares, as described in the Fund's prospectus.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the period. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies that are consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION AND TRANSACTIONS
Equity securities generally are valued at the last sale price or, in the case
of unlisted or listed securities for which there were no sales during the day,
at current quoted bid prices. In certain countries, the Fund may hold foreign
designated shares. If the foreign share prices are not readily available as a
result of limited share activity, the securities are valued at the last sale
price of the local shares in the principal market in which such securities are
normally traded. Korean equity securities that have reached the limit for
aggregate foreign ownership and for which premiums to the local exchange
prices may be paid by foreign investors are valued by applying a broker quoted
premium to the local share price. In addition, if the values of foreign
securities have been materially affected by events occurring after the closing
of a foreign market, the foreign securities may be valued at their fair value
under procedures approved by the Trustees.
Forward currency contracts are valued based on the weighted value of the
exchange traded contracts with similar durations.
Short-term obligations with a maturity of 60 days or less are valued at
amortized cost.
The value of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates.
In certain countries, the Fund may hold portfolio positions for which market
quotations are not readily available. Such securities are valued at fair value
under procedures approved by the Trustees.
Security transactions are accounted for on the date the securities are
purchased, sold or mature.
Cost is determined and gains and losses are based upon the specific
identification method for both financial statement and federal income tax
purposes.
DETERMINATION OF CLASS NET ASSET VALUES AND FINANCIAL HIGHLIGHTS
All income, expenses (other than the Class A, Class B and Class C service fees
and Class B and Class C distribution fees), realized and unrealized gains
(losses) are allocated to each class proportionately on a daily basis for
purposes of determining the net asset value of each class.
The per share data was calculated using average shares outstanding during the
period. In addition, Class A, Class B and Class C net investment income per
share data reflects the service fee per share applicable to Class A, Class B
and Class C shares and the distribution fee applicable to Class B and Class C
shares only.
Class A, Class B and Class C ratios are calculated by adjusting the expense
and net investment income ratios for the Fund for the entire period by the
service fee applicable to Class A, Class B and Class C shares and the
distribution fee applicable to Class B and Class C shares only.
FEDERAL INCOME TAXES
Consistent with the Fund's policy to qualify as a regulated investment company
and to distribute all of its taxable income, no federal income tax has been
accrued.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on the ex-date.
The amount and character of income and gains to be distributed are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. Reclassifications are made to the Fund's
capital accounts to reflect income and gains available for distribution (or
available capital loss carryforwards) under income tax regulations.
FOREIGN CURRENCY TRANSACTIONS
Net realized and unrealized gains (losses) on foreign currency transactions
includes the gains (losses) arising from the fluctuation in exchange rates
between trade and settlement dates on securities transactions, gains (losses)
arising from the disposition of foreign currency and currency gains (losses)
between the accrual and payment dates on dividends and interest income and
foreign withholding taxes.
The Fund does not distinguish that portion of gains (losses) on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included
with the net realized and unrealized gains (losses) from investments.
FORWARD CURRENCY CONTRACTS
The Fund may enter into forward currency contracts to purchase or sell foreign
currencies at predetermined exchange rates in connection with the settlement
of purchases and sales of securities. The Fund may also enter into forward
currency contracts to hedge certain other foreign currency denominated assets.
The contracts are used to minimize the exposure to foreign exchange rate
fluctuations during the period between trade and settlement date of the
contracts. All contracts are marked-to-market daily, resulting in unrealized
gains (losses) which become realized at the time the forward currency
contracts are closed or mature. Realized and unrealized gains (losses) arising
from such transactions are included in net realized and unrealized gains
(losses) on foreign currency transactions. Forward currency contracts do not
eliminate fluctuations in the prices of the Fund's portfolio securities. While
the maximum potential loss from such contracts is the aggregate face value in
U.S. dollars at the time the contract is opened, the actual exposure is
typically limited to the change in value of the contract (in U.S. dollars)
over the period it remains open. Risks may also arise if counterparties fail
to perform their obligations under the contracts.
OTHER
Corporate actions are recorded on the ex-date (except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware
of such), net of nonreclaimable tax withholdings. Where a high level of
uncertainty as to collection exists, income on securities is recorded net of
all tax withholdings with any rebates recorded when received.
The Fund's custodian takes possession through the federal book-entry system of
securities collateralizing repurchase agreements. Collateral is marked-to-
market daily to ensure that the market value of the underlying assets remains
sufficient to protect the Fund. The Fund may experience costs and delays in
liquidating the collateral if the issuer defaults or enters bankruptcy.
NOTE 3. FEES AND COMPENSATION PAID TO AFFILIATES
MANAGEMENT FEE
Newport Fund Management (the Advisor), is the investment investment Advisor of
the Fund and receives a monthly fee equal to 1.00% annually of the Fund's
average net assets.
ADMINISTRATION FEE
Colonial Management Associates, Inc. (the Administrator), an affiliate of the
Advisor, provides accounting and other services for a monthly fee equal to
0.25% annually of the Fund's average net assets.
BOOKKEEPING FEE
The Administrator provides bookkeeping and pricing services for a monthly fee
equal to $27,000 annually plus 0.035% of the Fund's average net assets over
$50 million.
TRANSFER AGENT FEE
Liberty Funds Services, Inc., (the Transfer Agent), an affiliate of the
Administrator, provides shareholder services for a monthly fee equal to 0.236%
annually of the Fund's average net assets and receives reimbursement for
certain out of pocket expenses.
UNDERWRITING DISCOUNTS, SERVICE AND DISTRIBUTION FEES
Liberty Funds Distributor, Inc. (the Distributor), a subsidiary of the
Administrator, is the Fund's principal underwriter. For the six months ended
December 31, 1999, the Fund has been advised that the Distributor retained net
underwriting discounts of $3,514 on sales of the Fund's Class A shares and
received contingent deferrred sales charges (CDSC) of none, $12,161 and $100
on Class A, Class B and Class C share redemptions, respectively.
The Fund has adopted a 12b-1 plan which requires it to pay the Distributor a
service fee equal to 0.25% annually on Class A, Class B and Class C net assets
as of the 20th of each month. The plan also requires the payment of a
distribution fee to the Distributor equal to 0.75% of the average net assets
attributable to Class B and Class C shares.
The CDSC and the fees received from the 12b-1 plan are used principally as
repayment to the Distributor for amounts paid by the Distributor to dealers
who sold such shares.
EXPENSE LIMITS
The Administrator has agreed, until further notice, to waive fees and bear
certain Fund expenses to the extent that total expenses (exclusive of service
fees, distribution fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) exceed 1.90% annually of the Fund's average
net assets.
OTHER
The Fund pays no compensation to its officers, all of whom are employees of
the Advisor or Administrator.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
NOTE 4. PORTFOLIO INFORMATION
INVESTMENT ACTIVITY
During the six months ended December 31, 1999, purchases and sales of
investments, other than short-term obligations, were $6,541,097 and
$1,149,857, respectively.
Unrealized appreciation (depreciation) at December 31, 1999, based on cost of
investments for both financial statement and federal income tax purposes was:
Gross unrealized appreciation $6,655,756
Gross unrealized depreciation (98,422)
----------
Net unrealized appreciation $6,557,334
==========
OTHER
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities.
These risks may involve foreign currency exchange rate fluctuations, adverse
political and economic developments and the possible prevention of currency
exchange or other foreign governmental laws or restrictions.
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
NOTE 5. LINE OF CREDIT
The Fund may borrow up to 33 1/3% of its net assets under a line of credit for
temporary or emergency purposes. Any borrowings bear interest at one of the
following options determined at the inception of the loan: (1) federal funds
rate plus 1/2 of 1%, (2) the lending bank's base rate or (3) IBOR offshore
loan rate plus 1/2 of 1%. There were no borrowings under the line of credit
during the six months ended December 31, 1999.
NOTE 6. OTHER RELATED PARTY TRANSACTIONS
At December 31, 1999, the Fund had one shareholder who owned greater than 5%
of the Fund's outstanding shares.
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of each class outstanding
throughout each period are as follows:
<TABLE>
<CAPTION>
(UNAUDITED)
SIX MONTHS ENDED DECEMBER 31, 1999
-------------------------------------------------------------------------
CLASS A CLASS B CLASS C CLASS Z (b)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 19.010 $ 18.900 $ 18.900 $ 19.820
---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (a)(c) (0.030) (0.116) (0.117) 0.015
Net realized and unrealized gain 10.045 10.003 9.984 9.176
---------- ---------- ---------- ----------
Total from Investment Operations 10.015 9.887 9.867 9.191
---------- ---------- ---------- ----------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.615) (0.567) (0.567) (0.631)
From net realized gains (0.710) (0.710) (0.710) (0.710)
---------- ---------- ---------- ----------
Total Distributions Declared to Shareholders (1.325) (1.277) (1.277) (1.341)
---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 27.700 $ 27.510 $ 27.490 $ 27.710
---------- ---------- ---------- ----------
Total return (d)(e)(f) 53.66% 53.26% 53.15% 47.52%
---------- ---------- ---------- ----------
RATIOS TO AVERAGE NET ASSETS
Expenses (g)(h) 2.15% 2.90% 2.90% 1.90%
Net investment income (loss) (g)(h) (0.26)% (1.01)% (1.01)% 0.17%
Fees and expenses waived or borne by the Advisor/
Administrator (g)(h) 0.74% 0.74% 0.74% 0.54%
Portfolio turnover (e) 11% 11% 11% 11%
Net assets at end of period (000) $ 8,848 $ 3,818 $ 1,278 $ 2,479
(a) Net of fees and expenses waived or borne
by the Advisor/Administrator
which amounted to: $ 0.095 $ 0.095 $ 0.095 $ 0.058
(b) Class Z shares were initially offered
on August 13, 1999. Per share amounts
reflect activity from that date.
(c) Per share data was calculated using average shares outstanding during the period.
(d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales
charge.
(e) Not annualized.
(f) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced.
(g) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(h) Annualized.
<PAGE>
<CAPTION>
PERIOD ENDED JUNE 30, 1999 (b)
-----------------------------------------------------
CLASS A CLASS B CLASS C
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.000 $ 10.000 $ 10.000
---------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment loss (a)(c) (0.019) (0.107) (0.107)
Net realized and unrealized gain 9.135 9.101 9.101
---------- -------- --------
Total from Investment Operations 9.116 8.994 8.994
---------- -------- --------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS
From net investment income (0.106) (0.094) (0.094)
---------- -------- --------
NET ASSET VALUE, END OF PERIOD $ 19.010 $ 18.900 $ 18.900
---------- -------- --------
Total return (d)(e)(f) 91.64% 90.36% 90.36%
---------- -------- --------
RATIOS TO AVERAGE NET ASSETS
Expenses (g)(h) 2.15% 2.90% 2.90%
Net investment loss (g)(h) (0.15)% (0.90)% (0.90)%
Fees and expenses waived or borne by the Advisor/
Administrator (g)(h) 3.10% 3.10% 3.10%
Portfolio turnover (f) 26% 26% 26%
Net assets at end of period (000) $ 4,606 $ 515 $ 202
(a) Net of fees and expenses waived or borne by the
Advisor/Administrator which amounted to: $ 0.365 $ 0.365 $ 0.365
(b) The Fund commenced investment operations on August 19, 1998.
(c) Per share data was calculated using average shares outstanding during the period.
(d) Total return at net asset value assuming all distributions reinvested and no initial sales charge or contingent deferred sales
charge.
(e) Had the Advisor/Administrator not waived or reimbursed a portion of expenses, total return would have been reduced.
(f) Not annualized.
(g) The benefits derived from custody credits and directed brokerage arrangements had no impact.
(h) Annualized.
</TABLE>
<PAGE>
TRUSTEES & TRANSFER AGENT
TOM BLEASDALE
Retired (formerly Chairman of the Board and Chief Executive Officer, Shore Bank
& Trust Company)
JOHN V. CARBERRY
Senior Vice President of Liberty Financial Companies, Inc. (formerly Managing
Director, Salomon Brothers)
LORA S. COLLINS
Attorney (formerly Attorney, Kramer, Levin, Naftalis & Frankel)
JAMES E. GRINNELL
Private Investor (formerly Senior Vice President-Operations, The Rockport
Company)
RICHARD W. LOWRY
Private Investor (formerly Chairman and Chief Executive Officer, U.S. Plywood
Corporation)
SALVATORE MACERA
Private Investor (formerly Executive Vice President of Itek Corp. and President
of Itek Optical & Electronic Industries, Inc.)
WILLIAM E. MAYER
Partner, Development Capital, LLC (formerly Dean, College of Business and
Management, University of Maryland; Dean, Simon Graduate School of Business,
University of Rochester; Chairman and Chief Executive Officer, CS First Boston
Merchant Bank; and President and Chief Executive Officer, The First Boston
Corporation)
JAMES L. MOODY, JR.
Retired (formerly Chairman of the Board, Chief Executive Officer and Director,
Hannaford Bros. Co.)
JOHN J. NEUHAUSER
Academic Vice President and Dean of Faculties, Boston College (formerly Dean,
Boston College School of Management)
THOMAS E. STITZEL
Business Consultant and Chartered Financial Analyst (formerly Professor of
Finance, College of Business, Boise State University)
ROBERT L. SULLIVAN
Retired Partner, KPMG LLP (formerly Management Consultant, Saatchi and Saatchi
Consulting Ltd. and Principal and International Practice Director, Management
Consulting, Peat Marwick Main & Co.)
ANNE-LEE VERVILLE
Consultant (formerly General Manager, Global Education Industry, and President,
Applications Solutions Division, IBM Corporation)
- --------------------------------------------------------------------------------
IMPORTANT INFORMATION ABOUT THIS REPORT
The Transfer Agent for Newport Asia Pacific Fund is:
Liberty Funds Services, Inc.
P.O. Box 1722
Boston, MA 02105-1722
1-800-345-6611
The Fund mails one shareholder report to each shareholder address. If you would
like more than one report, please call 1-800-426-3750 and additional reports
will be sent to you.
This report has been prepared for shareholders of Newport Asia Pacific Fund.
This report may also be used as sales literature when preceded or accompanied by
the current prospectus which provides details of sales charges, investment
objectives and operating policies of the Funds and with the most recent copy of
the Liberty Funds Distributor, Inc.
Performance Update.
SEMIANNUAL REPORT:
NEWPORT ASIA PACIFIC FUND
<PAGE>
Liberty offers the independent thinking and collective strength of six financial
specialists. Our distinguished product line helps financial advisors and their
clients build diversified investment portfolios for long-term financial goals.
- --------------------------------------------------------------------------------
L I B E R T Y
- ---------------
F U N D S
- --------------------------------------------------------------------------------
ALL-STAR Institutional money management approach for individual investors.
COLONIAL Fixed income and value style equity investing.
CRABBE
HUSON A contrarian approach to fixed income and equity investing.
NEWPORT A leader in international investing.(sm)
STEIN ROE Innovative approach for growth and income investing.
ADVISOR
[graphic omitted]
KEYPORT A leading provider of innovative annuity products.
Liberty's mutual funds are offered by prospectus through Liberty Funds
Distributor, Inc.
BEFORE YOU INVEST, CONSULT YOUR FINANCIAL ADVISOR.
Your financial advisor can help you develop a long-term plan for reaching your
financial goals.
- ---------------------------------------------------
NEWPORT ASIA PACIFIC FUND SEMIANNUAL REPORT
- ---------------------------------------------------
---------------
BULK RATE
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Omitted] L I B E R T Y PAID
----------------- HOLLISTON, MA
F U N D S PERMIT NO. 20
---------------
ALL-STAR o COLONIAL o CRABBE HUSON o NEWPORT o STEIN ROE ADVISOR
Liberty Funds Distributor, Inc. (C)2000
One Financial Center, Boston, MA 02111-2621, 1-800-426-3750
www.libertyfunds.com
737/03-221A-0100 (2/00) 00/148
