<PAGE>
AUSTIN
GLOBAL EQUITY FUND
SEMI-ANNUAL REPORT
DECEMBER 31, 1995
AUSTIN
Investment Management, Inc.
Registered Investment Advisors
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AUSTIN GLOBAL EQUITY FUND
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Two Portland Square Shareholder Inquiries
Portland, Maine 04101 Forum Financial Corp.
P.O. Box 446
Portland, Maine 04112
207-879-0001
SEMI-ANNUAL REPORT DECEMBER 31, 1995
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Dear Shareholder:
For the semi-annual period, July 1, 1995 to December
31, 1995, the Fund rose 16.54% (annualized). We are also pleased
to report that your Fund declared its first capital gains
distribution in the quarter ended December 31, 1995. It amounted
to $0.27 per share. The Fund's performance compared favorably
with the annualized rate of increase of 14.14% for Morningstar
Global Fund Index.
Domestic stocks constituted an important part of the Fund's
investments and to that degree contributed to the Fund's positive
performance during this period.
The Fund's global investment strategy involves the Fund in
foreign, as well as the U.S., stock markets. These foreign
markets underperformed the U.S. markets during the last six
months of 1995. Thus, the Fund's performance during this period
lagged behind the annualized returns of the S&P 500 Index and the
Dow-Jones Industrials of 28.9% and 27.44% respectively. Both
these indices gauge only American securities and therefore can
lead or lag a Global index at any particular time.
We appreciate your continued support, and look forward to a
prosperous 1996.
Austin Investment Management, Inc.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments, at value (cost $7,953,435) $ 9,447,983
Interest, dividends and other receivables 14,032
Organization costs, net 23,418
--------------
Total assets 9,485,433
--------------
LIABILITIES:
Accrued advisory fees 28,663
Accrued management fees 1,968
Accrued fees and other expenses 44,736
--------------
Total liabilities 75,367
--------------
NET ASSETS $ 9,410,066
--------------
COMPONENTS OF NET ASSETS:
Capital paid in $ 7,701,078
Undistributed net investment loss (10,993)
Net unrealized appreciation 1,494,548
Accumulated net realized gains 225,433
-------------
NET ASSETS $ 9,410,066
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SHARES OUTSTANDING 768,135
--------------
NET ASSET VALUE PER SHARE $ 12.25
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See Notes to Financial Statements Stone Bridge Funds, Inc.
</TABLE>
<PAGE>
AUSTIN GLOBAL EQUITY FUND
STATEMENT OF OPERATIONS
DECEMBER 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividend income $ 52,903
Interest income 16,993
-------------
Total income 69,896
-------------
EXPENSES:
Advisory 68,704
Administration 11,451
Distribution 87
Transfer agency 9,358
Custodian 2,817
Accounting 19,000
Auditing 7,000
Legal 5,873
Directors 1,265
Directors' and Officers' Insurance 10,221
Other 7,851
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Total expenses 143,627
Advisory fees waived (28,919)
-------------
Net expenses 114,708
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NET INVESTMENT LOSS (44,812)
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain 566,708
Net change in unrealized appreciation 159,145
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Net realized and unrealized gain on investments 725,853
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INCREASE IN NET ASSETS FROM OPERATIONS $ 681,041
-------------
</TABLE>
See Notes to Financial Statements Stone Bridge Funds, Inc.
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AUSTIN GLOBAL EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED JUNE 30, 1995
AND FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
Amount Shares
<S> <C> <C>
NET ASSETS-JUNE 30, 1994 $ 7,645,637
--------------
OPERATIONS:
Net investment gain 33,819
Net realized loss on investments (137,102)
Net change in unrealized appreciation 1,450,500
--------------
1,347,217
--------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares 1,247,864 122,991
Shares repurchased (1,767,124) (172,895)
-------------- ---------
(519,260) (49,904)
-------------- ---------
NET ASSETS-JUNE 30, 1995 $ 8,473,594
--------------
OPERATIONS:
Net investment loss (44,812)
Net realized gain on investments 566,708
Net change in unrealized appreciation 159,145
--------------
681,041
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DISTRIBUTIONS TO SHAREHOLDERS:
Net realized capital gains (199,483)
--------------
CAPITAL SHARE TRANSACTIONS:
Sale of shares 317,643 26,140
Reinvested dividends 198,975
16,550
Shares repurchased (61,704) (5,123)
-------------- ---------
454,914 37,567
-------------- ---------
NET ASSETS-DECEMBER 31, 1995 $ 9,410,066
--------------
</TABLE>
See Notes to Financial Statements Stone Bridge Funds, Inc.
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AUSTIN GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS
DECEMBER 31, 1995
<TABLE>
<CAPTION>
SHARES VALUE
------ ------
<S> <C> <C>
COMMON STOCKS (82.6%)
ARGENTINA (0.5%)
Telefonica de Argentina, S.A., Class B 17,000 $45,909
-------
DENMARK (.9%)
Tele Danmark A/S, ADR 3,000 82,875
-------
FINLAND (2.1%)
Nokia Corporation, "A" Shares, ADR 5,000 194,375
-------
GERMANY (5.5%)
RWE AG 10,000 291,488
Systeme, Anwendungen, Produkte
in der Datenverarbeitung 1,500 232,659
-------
524,147
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HONG KONG (6.6%)
China Light and Power, ADR 35,000 161,147
HSBC Holdings PLC, ADR 1,000 151,320
Hong Kong and China Gas Company, Ltd., ADR 50,000 80,505
Hutchison Whampoa 7,500 228,435
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621,407
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HUNGARY (1.7%)
MOL Magyar, ADR+ 20,000 160,000
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ITALY (4.8%)
Stet-Societa Finanziaria Telefonica, SPA 40,000 113,212
Telecom Italia, SPA 50,000 77,845
Telecom Italia Mobile, SPA* 150,000 264,270
-------
455,327
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Japan (7.0%)
Mitsubishi Bank Ltd. 7,000 170,625
Nisshinbo Industries Inc.* 20,000 193,888
Tokio Marine & Fire Insurance Company 4,500 297,000
-------
661,513
-------
</TABLE>
See Notes to Financial Statements Stone Bridge Funds, Inc.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
LUXEMBOURG (1.0%)
Millicom International Cellular, SA* 3,000 91,500
---------
MALAYSIA (2.0%)
Malaysian Oxygen Berhad 10,000 37,811
Nestle (Malaysia) Berhad 9,500 69,597
Telekom Malaysia Berhad 10,000 77,986
---------
185,394
---------
NETHERLANDS (7.1%)
Aegon NV, ADR 6,063 266,772
Royal Dutch Petroleum Company 1,500 211,688
Royal PTT Nederland NV, ADR 5,211 189,521
---------
667,981
---------
NEW ZEALAND (1.5%)
Telecom Corporation of New Zealand, ADR 2,000 138,750
---------
PORTUGAL (0.2%)
Portugal Telecom, SA, ADR* 1,200 22,800
---------
SINGAPORE (1.3%)
Development Bank of Singapore 5,000 62,214
Fraser and Neave, Ltd. 5,000 63,628
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125,842
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SWITZERLAND (2.6%)
Bank Fuer International Zahlungsausgleich 25 210,751
Roche Holdings AG 3,000 237,909
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448,660
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UNITED KINGDOM (8.3%)
Learmonth & Burch Management Systems Plc., ADR 1,000 8,875
RTZ Corporation Plc., ADR 4,000 230,000
Reuters Holdings Plc., ADR 2,500 137,812
Thorn EMI Plc., ADR 10,000 235,529
Vodafone Group Plc., ADR 5,000 176,250
---------
788,466
---------
</TABLE>
See Notes to Financial Statements Stone Bridge Funds, Inc.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 1995
<TABLE>
<S> <C> <C>
UNITED STATES (27.4%)
Baby Superstore, Inc.* 7,500 427,500
H & R Block, Inc. 5,000 202,500
California Microwave, Inc.* 10,000 166,250
Capital Cities / ABC, Inc. 2,000 246,750
Freeport-McMoran Oil & Gas Royalty Trust 35,000 170,625
Intercargo Corporation 10,000 100,000
LSI Logic Corporation 1,000 32,750
MBIA, Inc. 2,000 150,000
Merrill Lynch & Company, Inc. 3,000 153,000
Metromedia International Group* 15,000 210,000
Paging Network, Inc.* 10,000 243,750
Philip Morris Companies, Inc. 1,000 90,500
Roseville Telephone Company 6,164 158,723
Schlumberger, Ltd. 3,000 207,750
Sterling Vision, Inc.* 4,000 27,500
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2,587,598
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TOTAL COMMON STOCKS (COST $6,961,121) $ 7,802,544
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WARRANTS (9.8%)
UNITED STATES (9.8%)
Bank of New York* 25,000 928,125
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TOTAL WARRANTS (COST $275,000) $ 928,125
-----------
-----------
SHORT-TERM HOLDINGS (7.6%)
1784 U.S. Treasury Money Market Fund 369,728 369,728
Forum Daily Assets Treasury Fund 347,586 347,586
-----------
TOTAL SHORT-TERM HOLDINGS (COST $717,314) $ 717,314
------------
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TOTAL INVESTMENTS (100.0%) (COST $7,953,435) $ 9,447,983
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------------
</TABLE>
* Non-income producing securities
+ Security exempt from registration. This security may be resold in
transactions exempt from registration under Rule 144A of the Securities Act
of 1933 to qualified institutional buyers.
See Notes to Financial Statements Stone Bridge Funds, Inc.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
NOTE 1. SUMMARY OF ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Stone Bridge Funds, Inc. (the "Company") is registered as an open-end management
investment company. The Company consists of two active investment portfolios.
Included in this report is Austin Global Equity Fund (the "Fund"), a diversified
portfolio that commenced operations on December 8, 1993.
a) SECURITY VALUATION
The Company determines the net asset value per share of the
Fund as of 4:00 p.m., Eastern time, on each business day by
dividing the value of the Fund's net assets by the number of
shares outstanding at the time the determination is made.
Securities, other than short-term, held by the Fund for which
market quotations are readily available are valued using the
last reported sales price provided by independent pricing
services. If no sale is reported, the mean of the last bid
and ask price is used. If no mean price is available, the
last bid price is used. In the absence of readily available
market quotations, securities are valued at fair value
determined by the Company's Board of Directors. Securities
with maturity of sixty days or less are valued at amortized
cost.
b) FOREIGN CURRENCY TRANSLATION
The books and records of the Fund are maintained in United
States dollars. Foreign currency amounts are translated into
United States dollars on the following basis:
(i) market value of investment securities, other assets and
liabilities - at the current rates of exchange.
(ii) purchases and sales of investment securities, income and
expenses - at the rates of exchange prevailing on the respective
dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the year, the Fund does not isolate
that portion of the results of operations arising as a result of changes in
the foreign exchange rates from the fluctuations arising from changes in
the market prices of the securities held at year end. Similarly, the Fund
does not isolate the effect of changes in foreign exchange rates from the
fluctuations arising from changes in the market prices of portfolio
securities sold during the year. Accordingly, realized foreign currency
gains (losses) are included in the reported net realized loss on investment
transactions.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those
of U.S. companies as a result of, among other factors, the
level of governmental supervision and regulation of foreign
securities markets and the possibility of political and
economic instability.
c) PURCHASES AND REDEMPTIONS OF SHARES
Purchases and redemptions of the Fund's shares are effected
at the time of determination of the next net asset value
following the receipt of any purchase or redemption order.
The Company determines the net asset value per share of the
Fund as of 4:00 p.m., Eastern time, on each Fund business day
by dividing the value of the Fund's net assets by the number
of shares outstanding at the time the determination is made.
d) SECURITY TRANSACTIONS AND INVESTMENT INCOME
Realized gains and losses on investments sold are recorded on
the basis of specific identification. Interest income is
accrued as earned and dividend income is recorded on ex-date.
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AUSTIN GLOBAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
e) DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income and net capital
gains, if any, are declared and paid at least annually.
f) FEDERAL TAXES
No provision for Federal income taxes is required because the
Fund has qualified and intends to continue to qualify as a
regulated investment company under the Internal Revenue Code.
The Fund intends to distribute all of its taxable income to
its shareholders. As of June 30, 1995 the Fund has the
following capital loss carryforward available to offset
future capital gains:
Carryforward expiring in 2003 $21,986
g) ORGANIZATION COSTS
The costs incurred by the Fund in connection with its
organization have been capitalized and are being amortized on
a straight-line basis over a five year period beginning on
the commencement of the Fund's operations.
NOTE 2. INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES AND
OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser to the Fund is Austin Investment
Management, Inc. ("Adviser"). Pursuant to an Investment Advisory
Agreement, the Adviser receives an advisory fee from the Fund at
an annual rate of 1.5% of the average daily net assets of the
Fund. The Adviser has agreed to reimburse the Fund for certain
expenses that exceed the limits applicable to the Fund under the
laws of any state.
The administrator and distributor of the Fund is Forum Financial
Services, Inc. ("Forum"). Pursuant to an Administration and
Distribution Agreement, Forum receives a fee from the Fund at an
annual rate of 0.25% of the average annual daily net assets of
the Fund. Forum may delegate to other persons responsibility for
certain services under this Agreement. In addition, certain
legal expenses of $5,873 were charged to the Fund by Forum.
Forum Financial Corp. ("FFC") serves as the Company's transfer
agent and dividend disbursing agent, for which it receives
$12,000 plus certain shareholder account fees. FFC also serves
as the Company's fund accountant and receives $36,000 plus
certain adjustments based on the type and volume of portfolio
transactions. Forum and FFC are each controlled by their
president, John Y. Keffer, Chairman and President of the Company.
NOTE 3. DISTRIBUTION PLAN
The Company has adopted a Distribution Plan (the "Plan") pursuant
to Rule 12b-1 under the Investment Company Act of 1940 with
respect to the Fund. Under the Plan, the Fund may reimburse
Forum for the distribution expenses incurred by Forum on behalf
of the Fund. The Fund may not reimburse Forum for any
distribution expenses in any fiscal year of the Fund in excess of
0.25% of the average daily net assets of the Fund.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
NOTE 4. PURCHASES AND SALES OF SECURITIES
Purchases and sales (excluding short-term investments) of
securities during the period ended December 31, 1995 amounted to
$4,123,981 and $3,938,083, respectively. Unrealized appreciation
and depreciation as of December 31, 1995 were $1,814,287 and
$319,739, respectively. The cost of investments for Federal
income tax purposes at December 31, 1995 is the same as for
financial reporting purposes.
NOTE 5. CAPITAL SHARE TRANSACTIONS
The Company has 20 billion shares of $.001 par value stock
authorized of which 2 billion is allocated to the Fund.
NOTE 6. WAIVER OF FEES
During the period ended December 31, 1995, fees waived by the
Adviser were $28,919.
<PAGE>
AUSTIN GLOBAL EQUITY FUND
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED DATA FOR A SHARE OUTSTANDING Six Months Year Period
Ended Ended Ended
December 31, June 30, June 30,
1995 1995 1994 (c)
<S> <C> <C> <C>
Beginning Net Asset Value Per Share $11.60 $9.80 $10.00
Net Investment Gain/(Loss) (0.06) 0.04 (0.03)
Net Realized and Unrealized Gain (Loss)
on Investments 0.98 1.76 (0.17)
Distributions from Realized Capital Gains (0.27) ----- ------
------------------------------------------------------------
Ending Net Asset Value Per Share $12.25 $11.60 $ 9.80
Ratios to Average Net Assets:
Expenses (a) 2.50% (b) 2.50% 2.36% (b)
Net Investment Income (Loss) (0.98%) (b) .41% (0.83%) (b)
Total Return 8.02% 18.37% (3.57%) (b)
Portfolio Turnover Rate 42.46% 35.31% 2.49%
Net Assets at End of Period (000's omitted) $9,410 $8,474 $7,646
(a) During the period, various fees and expenses were waived and
reimbursed, respectively. Had such waiver and reimbursement
not occurred, the ratio of expenses to average net assets
would have been: 3.13% (b) 3.19% 4.18% (b)
(b) Annualized.
(c) For the period December 8, 1993 (commencement of
operations) through June 30, 1994.
</TABLE>
See Notes to Financial Statements Stone Bridge Funds, Inc.
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INVESTMENT ADVISER
Austin Investment Management, Inc.
375 Park Avenue, Suite 2207
New York, New York 10152-2207
ADMINISTRATOR
Forum Financial Services, Inc.
Two Portland Square
Portland, Maine 04101
DIRECTORS
John Y. Keffer
Joseph J. Nicholson
David B. Pinter
Max J. Schwartz
Seymour G. Siegel
OFFICERS
John Y. Keffer, CHAIRMAN AND PRESIDENT
Max Berueffy, VICE PRESIDENT
AND SECRETARY
Michael D. Martins, TREASURER AND
ASSISTANT SECRETARY
Lynn A. Young, ASSISTANT TREASURER
David I. Goldstein, ASSISTANT SECRETARY
