<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND SEMI-ANNUAL REPORT
AND BJB INTERNATIONAL EQUITY FUND APRIL 30, 1996
- --------------------------------------------------------------------------------
Dear Fellow Shareholder:
I am pleased to report on the recent activity and performance of the BJB
Investment Funds. The past six months have been a difficult time for the world's
bond markets and positive returns have been hard to come by. On a relative
basis, however, the Global Income Fund has done well. The world's equity
markets, on the other hand, generally have performed quite well, especially
since the beginning of 1996. The International Equity Fund lagged the indices a
bit on the 6-month comparison, but did quite well since the beginning of 1996,
as well as for the twelve month period ending April 30, 1996.
BJB GLOBAL INCOME FUND
For the six months ending April 30, 1996 the BJB Global Income Fund
returned 2.37%, compared with 0.20% for the equally blended Salomon Brothers
World Government Bond Index and Lehman Brothers Intermediate
Government/Corporate Bond Index. The period from November 1995 to April 1996 saw
a series of cuts in short term interest rates around the world, but a reversal
in the key U.S. bond markets in the latter part of the period.
In the U.S. the Federal Reserve cut the Fed Fund target from 5.5% to 5.25%
in January in response to the benign inflation outlook and as 'insurance'
against a faltering economy. The bond market continued to anticipate further
easing in rates, with the U.S. Treasury bond yield curve out to seven years at
times trading below the Fed Funds rate. This situation was reversed in February,
however, after a stronger-than-expected unemployment report led to profit-taking
in the bond market and a reassessment of interest rate expectations. The 30-year
bond saw yields rise by over 100 basis points toward the 7% level.
Elsewhere within the 'dollar-bloc' markets, the Canadians continued their
rate-cutting cycle, pushing short rates below those in the U.S. This prompted
some weakness in the Canadian dollar, which declined towards 1.37 versus the
U.S. dollar. The Australian authorities kept rates unchanged at 7.5%, with a
view to curbing any wage inflation. The change in government after the March
federal elections was viewed positively by the market and, with an improving
current account balance and falling inflation, the bond and currency
outperformed other dollar-bloc markets.
European markets saw a continuation of the rate-cutting process. In
response to weak growth and high unemployment, the German authorities cut the
Discount Rate to 3%, supporting all European bond markets. Nevertheless,
European bond markets declined in absolute terms, dragged down by the fall in
the U.S. bond market in February and March. The high-yielding markets of Spain,
Italy and Sweden continued to be the best performers as investors viewed
favorable the efforts of respective governments to reduce budget deficits and
bring down inflation in order to meet the Maastricht requirements for a single
European currency.
The Japanese market was sluggish until February and March, but thereafter
outperformed other markets by virtue of the fact that it simply stabilized while
the others were declining. However, the massive fiscal and monetary stimulus in
the Japanese economy lead us to believe that there is very little value in the
bond market.
The U.S. dollar rallied sharply during the period to April 1996,
appreciating to the 1.50 level against the deutschemark and around 107 versus
the Japanese yen. The Japanese authorities continue to 'talk down' the yen,
expressing concern about the sustainability of the recovery in the economy. The
lowering of German rates over the period has also encouraged a weaker
deutschemark.
Looking ahead, we believe that growth is picking up throughout the G7
economies and the emerging markets. However, Europe is clearly further behind
the rest of the world in the economic cycle and is still restricted by the need
for countries to reduce budget deficits in order to have the opportunity to
participate in the single European currency. In this environment we believe that
European bond markets will continue to do relatively well and we expect to
remain overweight accordingly. With the first signs of a pick-up in activity
<PAGE>
now evident in Germany we see limited scope for further rate cuts in the
hard-core countries of Germany, Holland, France and Belgium. We believe that the
high-yielding markets of Spain, Italy and Sweden, where we still see the
potential for significant rate cuts, should continue to outperform. We still see
little value in the Japanese bond market and therefore plan to continue to run a
zero weighting to the market. We expect yields in the U.S. bond market to
continue to rise, in response to stronger growth numbers and the possibility
that the Federal Reserve will turn its bias to one of tightening. However, as
yields rise relative to Europe we expect to take advantage of opportunities to
switch European bonds into the dollar-bloc markets.
BJB INTERNATIONAL EQUITY FUND
The BJB International Equity Fund ('Equity Fund') has continued to benefit
from a favorable backdrop for international equities. Over the past twelve
months, the Equity Fund has consistently emphasized European Investments versus
stocks in Japan, which has helped our performance over the full time period but
not over the past six months. Performance of the Equity Fund versus market
capitalization and competitor benchmarks over the six and twelve months periods
ending April 30, 1996, was as follows:
<TABLE>
<CAPTION>
6 MONTHS ENDED 12 MONTHS ENDED
4/30/96 4/30/96
-------------- ---------------
<S> <C> <C>
BJB International Equity Fund........... +9.67% +16.46%
MSCI EAFE Index (net dividends)......... +13.23% +11.51%
Lipper International Equity Fund
Index................................. +12.09% +17.33%
</TABLE>
The Equity Fund has added roughly 5% excess return versus the market
capitalization weighted EAFE index strategy over the past year. The Equity Fund
trailed the Lipper Index slightly over the period but one should note that the
Lipper Index also contains pure emerging market funds, which performed very well
over the two periods in question, so the comparison is not on a truly level
playing field.
We continue to perceive high value in international equities relative to
common stocks in the United States. Since the end of November 1995, most
international equity markets have outperformed the S&P 500 index in local
currency terms and we expect this outperformance to increase over the next 12 to
18 months.
The Equity Fund continues to emphasize stocks in Europe. We perceive high
relative value in Europe from a multitude of perspectives, including better
fundamental value, favorable flow of funds factors and a shift to policies
focused on enhancement of shareholder value. Within Europe, our two significant
underweight positions are in the UK and Switzerland. The British market suffers
from a high correlation to movements on Wall Street and uncertainty surrounding
policy changes to be expected next year from a Labour Party government.
Switzerland is traditionally viewed as a 'defensive' market, and we expect it to
lag others in a period of expanding economic activity.
The Equity Fund continues to have roughly 20% of assets invested in
Japanese stocks. We do not view valuation relative to Europe as particularly
compelling. Nor are we as confident that Japanese companies have a sufficiently
high focus on shareholders' interests. However, long term Japanese financial
assets have been the beneficiaries of extremely high local liquidity, and we
expect this factor will continue to boost equity prices. Globally, Japan is the
country best positioned in the business cycle. Their economy is very early in
the cycle, and we anticipate high rates of growth in corporate cash flow over
the next few years.
Currently, investments in emerging markets (including Hong Kong) account
for 17.7% of total Equity Fund assets, up from 8% at the end of October 1995. We
would be at somewhat higher exposure, for we find attractive valuation and
sentiment patterns in many developing countries' stock markets, were it not for
an unfavorable US interest rate environment, which will tend to work against
cross border investment and, at the margin, negatively impact local interest
rates in Asia and Latin America.
The Equity Fund currently has two strong biases in terms of sectoral
allocation. Within Europe, we have emphasized companies with a high degree of
sensitivity to the economic cycle at the expense of more defensive issues. In
late 1995, we found cyclical
2
<PAGE>
companies were very out of favor and pricing in a recession, which our
economists viewed as unlikely. This mis-pricing created the opportunity to shift
away from financial and consumer goods issues which had performed very well in
1995. In Japan, the Equity Fund continues to underweight financial issues, with
an exposure well below that of the broad market. Although we see signs that
authorities and corporate leaders are making progress in dealing with the
aftermath of the asset deflation of the 1990's, we wish to avoid investments
when disclosure of asset quality is limited and when we know there will be heavy
issuance of new shares to boost bank capital levels.
The Equity Fund has participated in a number of initial public offerings
recently, and on the whole this has been a profitable experience. We expect many
more of these opportunities ahead, particularly in Europe where governments
continue to sell corporate shareholdings to help reduce budget deficits. Shares
in privatization deals are often priced very generously for buyers, and we will
remain alert so that shareholders of the Equity Fund may benefit from this type
of opportunity.
We remain quite enthusiastic about the outlook for international equity
investment on a medium term (3 to 5 year) view. We remain committed to providing
shareholders with exposure to international corporate investments in a
thoughtful, well diversified manner.
We wish to thank the Fund's shareholders for their support and assure you
that the Management will devote every effort to achieving sustained
outperformance of the target indices.
Sincerely,
/s/ David E. Bodner
----------------------
David E. Bodner
President
June 14, 1996
3
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
FOREIGN GOVERNMENT BONDS -- 55.3%
ITALY -- 9.7%
Government of Italy:
ITL 230,000,000 10.500% due 04/01/2000................. $ 154,166
1,360,000,000 10.500% due 11/01/2000................. 916,643
USD 500,000 Republic of Italy (Global),
6.875% due 09/27/2023.................. 440,000
-----------
1,510,809
-----------
GERMANY -- 8.5%
DEM 975,000 Deutschland BundesRepublic,
6.250% due 01/04/2024.................. 571,207
Treuhandanstalt:
385,000 6.750% due 05/13/2004.................. 260,832
680,000 7.500% due 09/09/2004.................. 479,655
-----------
1,311,694
-----------
AUSTRALIA -- 8.2%
Government of Australia:
AUD 570,000 7.000% due 04/15/2000................... 428,062
530,000 8.750% due 01/15/2001................... 421,754
500,000 10.00% due 02/15/2006................... 424,197
-----------
1,274,013
-----------
FRANCE -- 7.8%
Government of France (B-TAN):
FRF 1,530,000 8.000% due 05/12/1998................... 316,215
ECU 276,000 5.000% due 03/16/1999................... 337,449
FRF 2,600,000 7.750% due 04/12/2000................... 548,176
-----------
1,201,840
-----------
See Notes to Financial Statements.
4
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
FOREIGN GOVERNMENT BONDS -- CONTINUED
UNITED KINGDOM -- 5.1%
United Kingdom Gilts:
GBP 326,000 8.000% due 12/07/2000.................. $ 501,830
174,000 9.750% due 08/27/2002.................. 287,639
-----------
789,469
-----------
NEW ZEALAND -- 5.0%
NZD 1,228,000 New Zealand Government,
6.500% due 02/15/2000.................. 778,393
-----------
DENMARK -- 5.0%
DKK 4,570,000 Kingdom of Denmark,
7.000% due 12/15/2004.................. 773,408
-----------
SPAIN -- 4.4%
ESP 82,000,000 Government of Spain,
10.100% due 02/28/2001................. 684,311
-----------
NETHERLANDS -- 1.6%
NLG 415,000 Government of Netherlands,
6.250% due 07/15/1998.................. 254,256
-----------
TOTAL FOREIGN GOVERNMENT BONDS
(COST $8,627,774)....................... 8,578,193
-----------
FOREIGN CORPORATE BONDS -- 8.4%
UNITED KINGDOM -- 6.2%
USD 250,000 Prudential Plc,
7.125% due 08/16/2005.................. 246,875
USD 700,000 SmithKline Beecham--Euro Medium Term
Note, 7.375% due 11/10/1997............. 709,625
-----------
956,500
-----------
AUSTRALIA -- 2.2%
USD 360,000 Telecom Australia,
6.500% due 11/28/2005.................. 341,550
-----------
TOTAL FOREIGN CORPORATE BONDS (COST
$1,341,915)............................. 1,298,050
-----------
See Notes to Financial Statements.
5
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
MARKET
FACE VALUE
CURRENCY VALUE (NOTE 1)
- --------- ------------- -----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 18.2%
Federal National Mortgage Association:
USD 1,000,000 5.300% due 12/10/1998................... $ 973,750
1,000,000 6.250% due 08/12/2003................... 943,750
912,718 Government National Mortgage
Association,
7.500% due 09/15/2025................... 902,022
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(COST $2,760,282)....................... 2,819,522
-----------
U.S. TREASURY OBLIGATIONS -- 8.6%
U.S. Treasury Notes:
USD 500,000 6.750% due 04/30/2000.................. 506,455
350,000 5.625% due 11/30/2000.................. 339,206
500,000 6.500% due 08/15/2005.................. 491,670
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(COST $1,373,671)....................... 1,337,331
-----------
SHORT-TERM INVESTMENT -- 2.4%
USD 380,000 U.S. Treasury Bill,
4.845% due 05/30/1996.................. 375,397
-----------
TOTAL SHORT-TERM INVESTMENT
(AT AMORTIZED COST)..................... 375,397
-----------
TOTAL INVESTMENTS -- 92.9% (COST $14,479,039)*.................. 14,408,493
OTHER ASSETS AND LIABILITIES (NET) -- 7.1%...................... 1,096,376
-----------
NET ASSETS -- 100.0%............................................ $15,504,869
-----------
-----------
- ------------------
* Aggregate cost for federal income tax purposes.
GLOSSARY OF CURRENCIES
AUD -- Australian Dollar FRF -- French Franc
DEM -- German Deutsche Mark GBP -- Great Britain Pound Sterling
DKK -- Danish Krone ITL -- Italian Lira
ECU -- European Currency Unit NLG -- Netherlands Guilder
ESP -- Spanish Peseta NZD -- New Zealand Dollar
JPY -- Japanese Yen USD -- United States Dollar
See Notes to Financial Statements.
6
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
APRIL 30, 1996 (UNAUDITED)
FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY
CONTRACTS TO RECEIVE
-------------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- -------- -------------------- -------- ----------- --------------
05/03/96 DEM 623,980 407,608 414,343 $ (6,735)
05/30/96 JPY 45,067,800 432,150 422,042 10,108
--------------
Net Unrealized Appreciation of Forward Foreign
Exchange Contracts.......................................... $ 3,373
--------------
--------------
FORWARD FOREIGN EXCHANGE CONTRACTS TO SELL
CONTRACTS TO DELIVER
-------------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- -------- -------------------- -------- ----------- --------------
05/03/96 AUD 528,000 414,694 414,343 $ (351)
05/09/96 DKK 4,400,000 745,708 770,578 24,870
05/13/96 DEM 624,291 408,049 418,000 9,951
05/22/96 FRF 4,369,085 846,328 856,017 9,689
05/24/96 DEM 1,214,460 794,303 800,000 5,697
05/28/96 NLG 455,220 266,242 268,566 2,324
05/29/96 ECU 250,647 307,936 310,000 2,064
05/30/96 DEM 643,826 421,233 422,042 809
05/30/96 JPY 22,000,000 210,955 210,536 (419)
--------------
Net Unrealized Appreciation of Forward Foreign
Exchange Contracts.......................................... $ 54,634
--------------
--------------
See Notes to Financial Statements.
7
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS -- 99.7%
ARGENTINA-1.0%
Quilmes Industrial SA*.................. 10,000 $ 118,750
-----------
AUSTRALIA-4.6%
Ampolex Ltd*............................ 45,500 155,480
Australia & New Zealand Bank Group...... 23,660 113,004
Lend Lease.............................. 45 686
Sydney Harbor Casino Ltd*............... 60,000 90,967
The News Corporation Ltd................ 19,106 111,965
Western Mining Corp Holding Ltd......... 7,500 54,674
-----------
526,776
-----------
AUSTRIA-1.1%
Flughafen Wien AG*...................... 1,200 84,111
Mayr-Melnhof*........................... 1,000 45,862
-----------
129,973
-----------
BELGIUM-0.7%
Electrabel.............................. 350 78,494
-----------
BRAZIL-1.7%
Banco Bradesco SA....................... 4,300,000 48,546
Cia Cervejaria Brahma................... 127,641 61,373
Telecomunicacoes Brasileiras............ 1,500 81,188
-----------
191,107
-----------
CANADA-1.5%
Barrick Gold Corp....................... 3,000 91,875
Seagrams Co Ltd......................... 2,200 74,525
-----------
166,400
-----------
COLOMBIA-0.4%
Banco Ganadero SA-Sponsored ADR......... 2,500 49,063
-----------
FINLAND-4.0%
Finnair Oy*............................. 10,150 82,617
Nokia (ORD)............................. 3,000 107,157
Raision Tehtaat Oy...................... 2,300 76,024
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
FINLAND -- CONTINUED
Repola.................................. 6,000 $ 116,268
Valmet Class A*......................... 6,000 81,809
-----------
463,875
-----------
FRANCE-8.6%
Carrefour Supermarche................... 60 46,885
Compagnie De Saint Goban*............... 635 76,065
Compagnie Financiere de Paribas......... 82 5,275
Comptoirs Modernes*..................... 250 96,759
Credit Local de France*................. 900 71,077
Dassault Aviation SA*................... 800 80,039
Imetal.................................. 700 109,589
Lafarge Coppee.......................... 990 63,414
Michelin, Class B (Registered).......... 2,000 99,119
SGS-Thomson Microelectronics*........... 1,600 76,292
Sidel................................... 260 61,887
Synthelabo*............................. 1,100 85,807
Technip SA.............................. 425 38,236
Total SA-Class B........................ 1,100 74,653
-----------
985,097
-----------
GERMANY-7.3%
Adidas (ORD)*........................... 1,300 98,916
Allianz AG Holdings*.................... 3 5,153
Altana Ind-Aktien....................... 100 61,655
BASF AG*................................ 200 54,601
Daimler-Benz AG......................... 130 71,194
Fresenius AG*........................... 650 100,614
Hoechst AG.............................. 250 84,188
Rhoen-Klinikum*......................... 600 72,497
SAP AG.................................. 500 66,390
Siemens AG.............................. 100 54,751
Veba AG................................. 2,000 99,406
Volkswagen AG........................... 200 69,035
-----------
838,400
-----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
HONG KONG-3.6%
Cheung Kong............................. 8,000 $ 57,139
China-Hk Photo Product Hld Ltd.......... 90,000 44,503
Consolidated Electric Power............. 25,000 41,368
CP Pokphand Co Ltd...................... 114,000 48,264
HKR International Ltd................... 49,600 56,426
HSBC Holdings Plc....................... 3,200 47,780
New World Development................... 12,000 53,830
Wing Lung Bank.......................... 10,680 60,748
-----------
410,058
-----------
HUNGARY-0.7%
Egis Rights*............................ 780 33,821
Mol Magyar Olaj-Es Gazipari*............ 1,950 21,072
Pick Szeged Rights*..................... 526 25,302
-----------
80,195
-----------
INDONESIA-0.5%
Pt Darya Varia Laboratoria-Foreign*..... 26,000 57,939
Pt Darya Varia Laboratoria-Rights*...... 3,120 67
-----------
58,006
-----------
IRELAND-1.5%
Bank of Ireland......................... 14,504 104,712
Smurfit (Jefferson)..................... 24,000 64,797
-----------
169,509
-----------
ITALY-3.5%
Benetton................................ 6,000 72,119
Fiat SPA................................ 25,000 85,083
Instituto Mobiliare Italiano............ 10,000 79,306
Stet D Risp Port Non Convertible........ 35,000 91,657
Telecom Italia Mobile*.................. 35,000 76,795
-----------
404,960
-----------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
<S> <C> <C>
COMMON STOCKS -- CONTINUED
JAPAN-22.1%
Autobacs Seven.......................... 1,000 $ 96,429
Canon Inc............................... 6,000 119,152
Canon Sales Co. Inc..................... 4,000 111,896
Daihatsu Motor Co ltd................... 16,000 105,862
Fanuc Company........................... 4,000 173,764
Fuji Photo Film......................... 3,000 93,374
Hitachi Ltd............................. 10,000 107,886
Honda Motor Co Ltd...................... 6,000 136,910
Ichiyoshi Securities*................... 12,000 88,218
Japan Associated Finance................ 1,000 124,117
Jusco Co................................ 5,000 154,669
Kurita Water Industries................. 4,400 110,483
Mitsubishi Corp......................... 8,000 113,806
Mitsubishi Heavy........................ 11,000 98,091
Nintendo Corp........................... 1,500 115,715
Nippon Telegraph & Telephone Corp....... 14 108,402
Nomura Securities Co Ltd................ 4,000 87,073
Rohm Corp............................... 2,000 126,981
Sankyo Co Ltd........................... 5,000 121,253
Sumitomo Marine & Fire.................. 12,000 114,111
Taisei Corp............................. 14,000 108,268
Toshiba Corporation..................... 14,000 108,803
-----------
2,525,263
-----------
MALAYSIA-0.6%
Lion Land Berhad........................ 50,000 63,370
-----------
MEXICO-1.2%
Grupo Posadas 'L'-Rights*............... 36,000 0
Grupo Posadas SA-Class L................ 180,000 82,369
Telefonos De Mexico..................... 1,500 51,000
-----------
133,369
-----------
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
NETHERLANDS-5.5%
Baan Company NV*........................ 750 $ 45,346
Heineken NV............................. 600 125,568
International Nederlanden Group......... 1,500 115,816
KLM Royal Dutch*........................ 2,560 85,906
Philips Gloeilampen Gem Bezit........... 2,000 70,616
Ranstad Holdings NV*.................... 1,700 108,935
Telegraaf (Holdingsmij)-CVA............. 450 80,362
-----------
632,549
-----------
NEW ZEALAND-1.6%
Carter Holt Harvey Ltd.................. 24,000 56,863
Lion Nathan............................. 27,000 67,308
Telecom New Zealand..................... 14,000 59,418
-----------
183,589
-----------
NORWAY-3.2%
Christiania Bank Og Kreditk............. 40,000 87,022
Netcom Asa*............................. 7,000 101,164
Norsk Hydro............................. 1,800 82,154
Uni-Storebrand As-Class A*.............. 20,000 95,237
-----------
365,577
-----------
PERU-1.0%
Banco Wiese-Sponsored ADR............... 3,100 20,925
Cementos Lima SA-Trabajo................ 19,314 22,755
Cia De Minas Buenaventura............... 2,698 22,787
Cia De Minas Buenventura-Rights*........ 675 0
Telefonica De Peru...................... 22,000 49,240
-----------
115,707
-----------
PHILIPPINES-0.9%
San Miguel Corporation, Class B (ORD)... 15,000 47,054
Southeast Asia Cement Holdings.......... 360,000 53,022
-----------
100,076
-----------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
POLAND-1.0%
Bank Rozwoju Eksportu SA................ 1,300 $ 31,057
Electrim SA*............................ 5,000 31,979
Gorazdze*............................... 800 25,734
Mostostal-Export SA*.................... 10,000 29,345
-----------
118,115
-----------
PORTUGAL-0.6%
Banco Commercial Portuguese
(Registered)............................ 6,000 68,816
Banco Commercial Portuguese*............ 6,000 2,682
-----------
71,498
-----------
SOUTH AFRICA-1.0%
Barlow Limited.......................... 3,200 36,852
Nedcor Ltd.............................. 2,800 39,375
South African Breweries Ltd*............ 1,300 37,992
-----------
114,219
-----------
SOUTH KOREA-1.9%
Korea Electric Power Corp............... 2,500 69,375
Korea Fund.............................. 6,284 150,821
-----------
220,196
-----------
SPAIN-3.4%
Argentaria SA*.......................... 1,300 52,654
Banco Popular Espanola (Registered)..... 500 82,894
Empresa Nacional de Electricidad........ 1,500 94,259
Repsol SA............................... 2,000 73,378
Telefonica de Espana (ORD).............. 5,000 89,068
-----------
392,253
-----------
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
SWEDEN-4.3%
Asea-Class A............................ 700 $ 71,580
Astra AB-Class A........................ 2,000 88,849
Ericsson AB-Class B..................... 3,960 80,229
Sandvik AB-Class B Fria*................ 4,500 99,126
SKF AB-Class B.......................... 3,000 69,841
Sparbanken Sverige...................... 6,200 69,886
Tornet Fastighets AB.................... 6,200 7,582
-----------
487,093
-----------
SWITZERLAND-2.2%
Nestle SA (Registered).................. 90 100,072
Roche Holdings AG....................... 50 67,633
Swissair (Registered)*.................. 82 81,010
-----------
248,715
-----------
THAILAND-1.2%
Krung Thai Bank Ltd-Foreign............. 15,000 73,679
National Finance & Securities........... 10,000 59,023
-----------
132,702
-----------
TURKEY-0.6%
Eregli Demir Ve Celik Fabrik............ 240,000 26,142
Hurriyet Gazeteci*...................... 600,000 29,490
Petkim Petrokimya Holding As............ 34,000 17,163
-----------
72,795
-----------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- --------- -----------
COMMON STOCKS -- CONTINUED
<S> <C> <C>
UNITED KINGDOM-6.7%
3I Group Plc (ORD)...................... 10,000 $ 69,339
British Aerospace Plc (ORD)............. 7,047 92,268
British Airways Plc (ORD)............... 10,000 78,063
British Petroleum Co Plc (ORD).......... 10,284 92,732
DFS Furniture Co. Plc (ORD)*............ 4,800 36,676
Granada Group Plc (ORD)................. 7,084 87,744
Harvey Nichols (ORD)*................... 10,000 48,582
Lloyds TSB Group Plc (ORD).............. 1 5
Lonrho Plc (ORD)........................ 37,000 107,686
Siebe Plc (ORD)......................... 7,123 92,031
Tesco Plc (ORD)......................... 15,145 63,897
-----------
769,023
-----------
TOTAL COMMON STOCKS (COST
$10,374,702)............................ 11,416,772
-----------
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
<TABLE>
<CAPTION>
MARKET
SHARE VALUE
DESCRIPTION AMOUNT (NOTE 1)
- ---------------------------------------- ---------- -----------
<S> <C> <C> <C>
WARRANTS -- 0.0%
BRAZIL-0.0%
Brahma Warrants, expires 4/30/2003...... 7,352 $ 373
-----------
TOTAL WARRANTS (COST $373).............. 373
-----------
CORPORATE CONVERTIBLE BOND--0.1% PAR
----------
SWITZERLAND-0.1%
Winterthur -- (Virgin
Island)..................2.50% 12/31/98 CHF 15,360 15,088
-----------
TOTAL CORPORATE CONVERTIBLE BOND (COST
$13,199)................................ 15,088
-----------
TOTAL INVESTMENTS -- 99.8% (COST
$10,388,274)**.......................... 11,432,233
OTHER ASSETS AND LIABILITIES
(NET) -- 0.2%........................... 24,791
-----------
TOTAL NET ASSETS -- 100.0%.............. $11,457,024
-----------
-----------
</TABLE>
- ------------------
PORTFOLIO FOOTNOTES:
ADR American Depositary Receipt
ORD Ordinary Shares
* Non-income producing security.
** Aggregate cost for federal income tax purposes.
GLOSSARY OF CURRENCIES
DEM -- German Deutsche Mark
JPY -- Japanese Yen
CHF -- Swiss Franc
See Notes to Financial Statements.
16
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
APRIL 30, 1996 (UNAUDITED)
(PERCENTAGE OF NET ASSETS)
At April 30, 1996, sector diversification of the Portfolio was as follows:
<TABLE>
<CAPTION>
MARKET
% OF NET VALUE
ASSETS (NOTE 1)
-------- -----------
<S> <C> <C>
INDUSTRY SECTOR:
Banking............................... 9.7% $ 1,114,127
Transportation........................ 8.9 1,016,852
Finance............................... 7.6 872,502
Health................................ 7.3 837,572
Food and Beverage..................... 7.2 829,079
Retail Trade.......................... 7.1 815,793
Communication......................... 7.0 803,661
Electronics........................... 6.6 751,072
Utilities............................. 4.9 559,454
Metals and Mining..................... 4.5 510,185
Construction.......................... 4.3 488,325
Equipment............................. 4.2 479,199
Industrial............................ 3.3 373,500
Paper and Forest Products............. 2.7 308,736
Publishing............................ 2.5 291,703
Insurance............................. 2.0 229,589
Chemicals............................. 2.3 228,546
Consumer Services..................... 1.5 175,325
Motor Vehicles and Equipment.......... 1.4 165,464
Real Estate........................... 1.0 118,551
Communications........................ 0.8 91,657
Entertainment......................... 0.8 90,967
Lodging............................... 0.7 82,369
Natural Resources..................... 0.7 74,653
Agriculture........................... 0.4 48,264
Miscellaneous......................... 0.3 38,236
Conglomerates......................... 0.1 36,852
-------- -----------
TOTAL INVESTMENTS....................... 99.8 11,432,233
OTHER ASSETS AND LIABILITIES (NET)...... 0.2 24,791
-------- -----------
NET ASSETS.............................. 100% $11,457,024
-------- -----------
-------- -----------
</TABLE>
See Notes to Financial Statements.
17
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS
APRIL 30, 1996 (UNAUDITED)
FORWARD FOREIGN EXCHANGE CONTRACTS TO BUY
<TABLE>
<CAPTION>
CONTRACTS TO
RECEIVE
--------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- -------- --------------- --------------- --------------- ---------------
<C> <C> <C> <C> <S>
05/06/96 DEM 736,850 481,423 500,000 $ (18,577)
05/06/96 JPY 115,989,223 1,108,359 1,107,613 746
---------------
Net Unrealized Appreciation of Forward Foreign
Exchange Contracts........................................ $ (17,831)
---------------
---------------
</TABLE>
FORWARD FOREIGN EXCHANGE CONTRACTS TO SELL
<TABLE>
<CAPTION>
CONTRACTS TO
DELIVER
--------------- NET UNREALIZED
EXPIRATION LOCAL VALUE IN IN EXCHANGE APPRECIATION
DATE CURRENCY USD FOR USD (DEPRECIATION)
- -------- --------------- --------------- --------------- ---------------
<C> <C> <C> <C> <S>
05/06/96 JPY 41,780,000 399,238 397,262 $ (1,976)
05/06/96 CHF 602,154 485,128 500,000 14,872
05/07/96 JPY 74,209,223 709,224 702,672 (6,552)
05/13/96 JPY 73,899,000 706,870 684,567 (22,303)
07/15/96 DEM 746,900 490,119 500,000 9,881
---------------
Net Unrealized Depreciation of Forward Foreign
Exchange Contracts........................................ $ (6,078)
---------------
---------------
</TABLE>
See Notes to Financial Statements.
18
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30,1996 (UNAUDITED)
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
ASSETS:
Investments in securities, at value
(Cost $14,479,039 and $10,388,274,
respectively)...................... $14,408,493 $ 11,432,233
Cash and foreign currency, at value
(Cost $928,229 and $331,046,
respectively)...................... 928,459 329,112
Receivables:
Interest and dividends............. 346,173 42,388
Tax reclaim........................ -- 13,173
Net unrealized appreciation of
forward foreign exchange
contracts......................... 58,007 --
Other Assets:
Unamortized organization costs
(Note 6).......................... 26,359 12,521
Prepaid expense.................... 2,983 1,296
------------- --------------------
Total Assets....................... 15,770,474 11,830,723
------------- --------------------
LIABILITIES:
Payables:
Investments purchased.............. 154,985 264,890
Net unrealized depreciation of
forward foreign exchange
contracts......................... -- 23,909
Investment advisory fee payable
(Note 2).......................... 26,422 13,511
Custody and administration fee
payable........................... 55,633 54,076
Distribution and shareholder
servicing fees payable (Note 3)... 10,660 6,950
Accrued expenses and other
payables.......................... 17,905 10,363
------------- --------------------
Total Liabilities.................. 265,605 373,699
------------- --------------------
NET ASSETS.............................. $15,504,869 $ 11,457,024
------------- --------------------
------------- --------------------
NET ASSETS CONSIST OF:
Undistributed net investment income
(loss)............................ $ 66,832 $ (88,043)
Accumulated net realized loss on
investments sold, forward foreign
exchange contracts and foreign
currency transactions............. (982,206) (4,513,036)
Net unrealized appreciation
(depreciation) on investments,
forward foreign exchange
contracts, foreign currency
transactions and net other
assets............................ (15,948) 1,020,685
Par value.......................... 1,328 1,031
Paid in capital in excess of par
value............................. 16,434,863 15,036,387
------------- --------------------
NET ASSETS.............................. $15,504,869 $ 11,457,024
------------- --------------------
------------- --------------------
SHARES OUTSTANDING...................... 1,328,060 1,030,764
------------- --------------------
------------- --------------------
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE................................. $ 11.67 $ 11.12
------------- --------------------
------------- --------------------
</TABLE>
See Notes to Financial Statements.
19
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INVESTMENT INCOME (LOSS):
Interest.............................. $ 593,828 $ 3,214
Dividends+............................ -- 79,409
------------- -----------
593,828 82,623
EXPENSES:
Investment advisory fee (Note 2)...... 54,366 51,644
Custody and administration fees....... 54,074 46,136
Distribution and shareholder servicing
fees (Note 3)...................... 20,910 12,909
Shareholder reports................... 18,829 11,597
Auditing fees......................... 12,332 5,271
Transfer agent fees................... 12,262 10,176
Amortization of organization costs
(Note 6)........................... 11,317 3,928
Insurance premium expense............. 8,847 2,768
Trustees' fees and expenses (Note
2)................................. 4,985 4,173
Registration and filing fees.......... 4,073 5,415
Legal fees............................ 3,192 5,230
Fees waived by investment advisor
(Note 2)........................... -- (25,822)
------------- -----------
Total Expenses..................... 205,187 133,425
Less: Fees paid indirectly (Note
2)................................ (16,753) (11,187)
------------- -----------
Net Expenses....................... 188,434 122,238
------------- -----------
NET INVESTMENT INCOME (LOSS)............ 405,394 (39,615)
------------- -----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS (NOTES 1 AND 4):
Realized gain (loss) on:
Security transactions++............ 418,091 123,268
Forward foreign exchange
contracts......................... (29,975) (6,935)
Foreign currency transactions...... 136,101 105,812
------------- -----------
Net realized gain on
investments..................... 524,217 222,145
------------- -----------
Net change in unrealized appreciation
(depreciation) of:
Securities......................... (608,922) 850,339
Forward foreign exchange
contracts......................... 95,568 (47,330)
Currencies and net other assets.... (10,817) (622)
------------- -----------
Net change in unrealized
appreciation (depreciation) of
investments..................... (524,171) 802,387
------------- -----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS............................. 46 1,024,532
------------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................... $ 405,440 $ 984,917
------------- -----------
------------- -----------
</TABLE>
- ------------------
+ Net of foreign withholding tax of $9,357 for the Equity Fund.
++ Net of foreign capital gains withholding tax of $24,038 for the Equity Fund.
See Notes to Financial Statements.
20
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED APRIL 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)............ $ 405,394 $ (39,615)
Net realized gain on investments........ 524,217 222,145
Net change in unrealized appreciation
(depreciation) of investments......... (524,171) 802,387
------------- --------------------
Net increase in net assets resulting
from operations....................... 405,440 984,917
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................... (1,011,369) --
FUND SHARE TRANSACTIONS:
Net increase (decrease) from Fund share
transactions (Note 5)................. (1,215,839) 828,793
------------- --------------------
Net increase (decrease) in net assets... (1,821,768) 1,813,710
NET ASSETS:
Beginning of period..................... 17,326,637 9,643,314
------------- --------------------
End of period (including undistributed
net investment income (loss) of
$66,832 and $(88,043),
respectively)......................... $15,504,869 $ 11,457,024
------------- --------------------
------------- --------------------
</TABLE>
See Notes to Financial Statements.
21
<PAGE>
BJB INVESTMENT FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
BJB BJB
GLOBAL INCOME INTERNATIONAL EQUITY
FUND FUND
------------- --------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS:
Net investment income (loss)............ $ 1,041,135 $ (58,518)
Net realized gain (loss) on
investments........................... 930,422 (2,069,254)
Net change in unrealized appreciation
(depreciation) of investments......... 439,503 479,443
------------- --------------------
Net increase (decrease) in net assets
resulting from operations............. 2,411,060 (1,648,329)
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class A shares..................... (950,161) --
Class B shares..................... (903) --
FUND SHARE TRANSACTIONS:
Net increase (decrease) from Fund
share transactions (Note 5):
Class A shares..................... (12,750,548) (3,540,598)
Class B shares..................... (26,996) (13,361)
------------- --------------------
Net decrease in net assets............ (11,317,548) (5,202,288)
NET ASSETS:
Beginning of period..................... 28,644,185 14,845,602
------------- --------------------
End of period (including undistributed
net investment income (loss) of
$672,807 and $(48,428),
respectively)......................... $17,326,637 $ 9,643,314
------------- --------------------
------------- --------------------
</TABLE>
See Notes to Financial Statements.
22
<PAGE>
BJB INVESTMENT FUNDS
BJB GLOBAL INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR YEAR YEAR PERIOD
APRIL 30, 1996 ENDED ENDED ENDED ENDED
(UNAUDITED)# 10/31/95# 10/31/94# 10/31/93 10/31/92*
---------------- --------- --------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period.... $ 12.11 $ 11.16 $ 12.28 $ 12.36 $ 12.00
-------- --------- --------- -------- ---------
Income (Loss) from investment
operations:
Net investment income................. 0.29 0.59 0.39 0.37 0.16**
Net realized and unrealized gain
(loss) on securities............... (0.00) 0.92 (0.81) 0.58 0.42
-------- --------- --------- -------- ---------
Total income (loss) from investment
operations....................... 0.29 1.51 (0.42) 0.95 0.58
Less distributions:
Dividends from net investment income.... (0.73) (0.56) (0.27) (0.37) (0.16)
Distributions from net realized gains... -- -- -- (0.66) --
Distributions from Capital (Note 1)..... -- -- (0.43) -- (0.06)
-------- --------- --------- -------- ---------
Total distributions................ (0.73) (0.56) (0.70) (1.03) (0.22)
-------- --------- --------- -------- ---------
Net Asset Value, end of period.......... $ 11.67 $ 12.11 $ 11.16 $ 12.28 $ 12.36
-------- --------- --------- -------- ---------
-------- --------- --------- -------- ---------
Total Return***......................... 2.37% 13.90% (3.54)% 8.15% 4.86%
-------- --------- --------- -------- ---------
-------- --------- --------- -------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's).... $ 15,505 $17,327 $28,619 $ 57,682 $28,647
Ratio of net investment income to
average net assets.................... 4.85%+ 5.19% 3.29% 2.24% 3.95%+
Ratio of total expenses to average net
assets................................ 2.46%+,## 2.15%## 1.66% 1.78% 1.00%+**
Portfolio turnover rate................. 99% 319% 320% 291% 43%
</TABLE>
- ------------------------------
* The BJB Global Income Fund commenced operations on July 1, 1992.
** Net investment income and annualized operating expenses before waiver of
fees by the investment adviser, sub-investment adviser or administrator
were $0.13 and 1.75%.
*** Total return represents aggregate total return for the periods indicated
and does not reflect any applicable sales charge. (Note 1)
+ Annualized.
# Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the
period since the use of the undistributed method does not accord with
results of operations.
## Includes indirectly paid expenses. Excluding indirectly paid expenses the
ratio of total expenses to average net assets would have been 2.26% and
2.05% for the six months ended April 30, 1996 and for the year ended
October 31, 1995, respectively.
See Notes to Financial Statements.
23
<PAGE>
BJB INVESTMENT FUNDS
BJB INTERNATIONAL EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR YEAR PERIOD
APRIL 30, 1996 ENDED ENDED ENDED
(UNAUDITED) 10/31/95# 10/31/94 10/31/93*
---------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period.... $ 10.13 $ 11.30 $ 13.10 $ 12.00
-------- --------- --------- ---------
Income from investment operations:
Net investment loss++................. (0.03) (0.06) (0.21) (0.02)
Net realized and unrealized gain
(loss) on securities............... 1.02 (1.11) (1.56) 1.12
-------- --------- --------- ---------
Total income (loss) from investment
operations....................... 0.99 (1.17) (1.77) 1.10
-------- --------- --------- ---------
Less distributions:
In excess of net investment income...... -- -- (0.03) --
-------- --------- --------- ---------
Net Asset Value, end of period.......... $ 11.12 $ 10.13 $ 11.30 $ 13.10
-------- --------- --------- ---------
-------- --------- --------- ---------
Total Return**.......................... 9.67% (10.53)% (13.53)% 9.17%
-------- --------- --------- ---------
-------- --------- --------- ---------
Ratios/Supplemental Data:
Net assets, end of period (in 000's).... $ 11,457 $ 9,643 $14,831 $11,292
Ratio of net investment loss to average
net assets............................ (0.77)%+ (0.63)% (1.26)% (3.83)%+
Ratio of total expenses to average net
assets................................ 2.58 %(a)(c)+ 2.84%(b)(c) 2.16% 2.09%+
Portfolio turnover rate................. 37% 116% 169% 20%
Average brokerage commission rate....... $ 0.0048
</TABLE>
- ------------------------------
* The BJB International Equity Fund commenced operations on October 4, 1993.
** Total return represents aggregate total return for the periods indicated
and does not reflect any applicable sales charge. (Note 1)
+ Annualized.
++ Net investment loss before waiver of fees by the investment adviser was
($0.06) and ($0.11) for the six months ended April 30, 1996 and for the
year ended October 31, 1995, respectively.
# Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for the period
since the use of the undistributed method does not accord with results of
operations.
(a) Figure is net of the voluntary expense waiver by the Adviser. Excluding
this waiver, the ratio of total expenses to average net assets would have
been 3.08%.
(b) Figures are net of the expense reimbursement by the Adviser in connection
with the voluntary and involuntary expense limitation. Before the expense
reimbursement the ratio of total expenses to average net assets would have
been 3.36%.
(c) Includes indirectly paid expenses. Excluding indirectly paid expenses the
ratio of total expenses to average net assets would have been 2.37% and
2.67% for the six months ended April 30, 1996 and for the year ended
October 31, 1995, respectively.
See Notes to Financial Statements.
24
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
BJB Investment Funds (the 'Trust') is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended (the
'1940 Act'), as an open-end management investment company that currently offers
two investment funds: BJB Global Income Fund (the 'Income Fund') and BJB
International Equity Fund (the 'Equity Fund') (individually, a 'Fund' and
collectively, the 'Funds'). The Trust was organized as a Massachusetts business
trust under the laws of the Commonwealth of Massachusetts on April 30, 1992. The
Income Fund commenced operations on July 1, 1992 and the Equity Fund commenced
operations on October 4, 1993.
The Funds currently offer only Class A shares, and, since September 28,
1995, no longer assess a front-end sales charge. No class B shares, which were
subject to a contingent deferred sales charge, were outstanding after September
19, 1995. Both classes of shares had identical rights and privileges except with
respect to the effect of the respective sales charges on each class, if any, the
distribution and/or service fees borne by each class, expenses allocable
exclusively to each class, voting rights on matters affecting a single class and
the exchange privilege of each class.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
presentation of financial statements in conformity with generally accepted
accounting principals 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 revenue and expenses during the reporting period. Actual
results could differ from these estimates.
Portfolio valuation: Generally, each Fund's investments are valued at
market value or, in the absence of a market value, at fair value as determined
by or under the direction of the Trust's Board of Trustees. A security which is
traded primarily on a United States or foreign stock exchange is valued at the
last sale price on that exchange or, if there were no sales during the day, at
the mean of the current quoted bid and asked prices. Portfolio securities which
are traded primarily on foreign securities exchanges are generally valued at the
preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time that a value was so
established is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under the
direction of the Trust's Board of Trustees or its delegates. Debt securities
(other than government securities and short-term obligations) are valued by
independent pricing services approved by the Trust's Board of Trustees.
Investments in government securities (other than short-term securities) are
valued at the mean of the quoted bid and asked prices in the over-the-counter
market. Short-term investments that mature in 60 days or less are valued at
amortized cost.
Repurchase agreements: The Funds may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, a Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during a Fund's holding period. The value of the collateral at all
times is equal to at least 100% of the total amount of the repurchase
obligations, including interest. In the event of counterparty default, the Fund
has the right to use the collateral to offset losses incurred. There is
potential loss to a Fund in the event the Fund is delayed or prevented from
exercising its rights to dispose of the collateral securities, including the
risk of a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its rights. The Funds' investment adviser,
acting under the supervision of the Board of Trustees, reviews the value of the
collateral and the creditworthiness of those banks and dealers with which the
Funds enter into repurchase agreements to evaluate potential risks.
Foreign currency: The books and records of the Funds are maintained in
United States (U.S.) dollars. Foreign currencies, investments and other assets
and liabilities are translated into U.S. dollars at the exchange rates
prevailing at the end of the period, and purchases and sales of investment
securities, income and expenses are translated on the respective dates of such
transactions. Unrealized gains or losses on investments which result from
changes in foreign currencies have been included in the net unrealized
appreciation (depreciation) of investments. Net realized currency gains and
losses include foreign currency gains and losses between
25
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
trade date and settlement date on investment securities transactions, foreign
currency transactions and the difference between the amounts of interest and
dividends recorded on the books of the Funds and the amount actually received.
The portion of foreign currency gains and losses related to fluctuations in
exchange rates between the purchase trade date and sale trade date is included
in realized gains and losses on security transactions.
Forward foreign currency contracts: Forward foreign currency contracts are
valued at the forward rate and are marked-to-market daily. The change in market
value is recorded by the Funds as an unrealized gain or loss. When the contract
is closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at the
time it was closed.
The use of forward foreign currency contracts does not eliminate
fluctuations in the underlying prices of the Fund's portfolio securities, but it
does establish a rate of exchange that can be achieved in the future. Although
forward foreign currency contracts limit the risk of loss due to a decline in
the value of the currency holdings, they also limit any potential gain that
might result should the value of the currency increase. In addition, the Fund
could be exposed to risks if the counterparties to the contracts are unable to
meet the terms of their contracts.
Option contracts: Purchase of put and call options are recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, the Fund will realize a loss equal to the premium paid. When the
Fund enters into a closing sale transaction, the Fund will realize a gain or
loss depending on whether the sales proceeds from the closing sale transaction
are greater or less than the premium paid. When a Fund exercises a put option,
it will realize a gain or loss from the sale of the underlying security and the
proceeds from such sale will be decreased by the premium originally paid. When a
Fund exercises a call option, the cost of the security which the Fund purchases
upon exercise will be increased by the premium originally paid.
When a Fund writes a call option or a put option, an amount equal to the
premium received by a Fund is recorded as a liability, the value of which is
marked-to-market daily. When a written option expires, a Fund realizes a gain
equal to the amount of the premium received. When a Fund enters into a closing
purchase transaction the Fund realizes a gain (or loss if the cost of the
closing purchase transaction exceeds the premium received when the option was
sold) without regard to any unrealized gain or loss on the underlying security,
and the liability related to such option is eliminated. When a call option is
exercised, a Fund realizes a gain or loss from the sale of the underlying
security and the proceeds from such sale are increased by the premium originally
received. When a put option is exercised, the amount of the premium originally
received will reduce the cost of the security which a Fund purchased upon
exercise.
Unlike options on specific securities, all settlements of options on stock
indices are in cash and gains or losses depend on general movements in the
stocks included in the index rather than price movements on a particular stock.
There is no physical delivery of securities.
The risk associated with purchasing options is limited to the premium
originally paid. The risk in writing a call option is a Fund may forego the
opportunity of profit if the market price of the underlying security increases
and the option is exercised. The risk in writing a put option is that a Fund may
incur a loss if the market price of the underlying security decreases and the
option is exercised. There is also the risk a Fund may not be able to enter into
a closing transaction because of an illiquid secondary market. In addition, the
Fund could be exposed to risks if the counterparties to the transactions are
unable to meet the terms of the contracts.
Securities transactions and investment income: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
Dividends and distribution to shareholders: Distributions to shareholders
are recorded on the ex-dividend date. Each Fund intends to distribute annually
to its shareholders substantially all of its investment company taxable income.
The Income Fund declares and pays monthly dividends from its net investment
income. The Equity Fund intends to declare and pay annually dividends from its
net investment income. Both Funds will determine annually whether to distribute
any net realized long-term capital gains in excess of net
26
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
realized short-term capital losses; however, each Fund currently expects to
distribute any excess annually to its shareholders. Additional distributions of
net investment income and capital gains may be made at the discretion of the
Board of Trustees to avoid the application of the excise tax imposed under
Section 4982 of the Internal Revenue Code of 1986 for certain undistributed
amounts. Income distributions and capital gain distributions on a Fund and class
level are determined in accordance with income tax regulations which may differ
from generally accepted accounting principles. These differences are primarily
due to differing treatments of income and gains on various investment securities
held by a Fund, timing differences and differing characterization of
distributions made by a Fund as a whole.
Federal income taxes: The Trust intends that each Fund separately qualify
as a regulated investment company for U.S. Federal income tax purposes.
Accordingly, the Funds do not anticipate that any income taxes will be paid. It
is expected that certain capital gains earned by the Funds and certain dividends
and interest received by the Funds will be subject to foreign withholding taxes.
2. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS
Julius Baer Investment Management Inc. ('Julius Baer Investment
Management') serves as the Income Fund's investment adviser pursuant to an
investment advisory agreement. The Income Fund pays Julius Baer Investment
Management a quarterly fee for its investment advisory services calculated at an
annual rate of 0.65% of the Income Fund's average daily net assets. Bank Julius
Baer & Co., Ltd.--New York Branch ('Bank Julius Baer') serves as the Income
Fund's servicing agent pursuant to a servicing agent agreement with Julius Baer
Investment Management. Out of its advisory fee, Julius Baer Investment
Management pays Bank Julius Baer a quarterly fee calculated at an annual rate of
0.15% of the Income Fund's average daily net assets.
Bank Julius Baer serves as the Equity Fund's investment adviser pursuant to
an investment advisory agreement. The Equity Fund pays Bank Julius Baer a
quarterly fee for its investment advisory services calculated at an annual rate
of 1.00% of the Equity Fund's average daily net assets. Beginning March 13,
1995, the adviser agreed to waive 0.50% of its 1.00% fee.
The Advisers have agreed that if, in any fiscal year, the expenses borne by
a Fund exceed applicable expense limitations imposed by the securities
regulations of any state in which shares of a Fund are registered or qualified
for sale to the public, each of them would reduce the fees paid to them by such
Fund to the extent required by such regulations in the proportion that the fee
it retains bears to total management fees. The most restrictive annual expense
limit applicable limits each Fund's allowable operating expenses (excluding
interest, taxes, a portion of a Fund's 12b-1 distribution fees, a portion of a
Fund's custodian expenses attributable to investments in foreign securities,
brokerage commissions and extraordinary expenses) to 2.5% of the first $30
million of the average net assets of the Fund, 2% of the next $70 million of the
average net assets of the Fund and 1.5% of the remaining average net assets of
the Fund.
No director, officer or employee of Julius Baer Investment Management, Bank
Julius Baer or any affiliates of those entities received any compensation from
the Trust for serving as an officer or Trustee of the Funds. The Funds pay each
of the Trustees who is not a director, officer or employee of Julius Baer
Investment Management, Bank Julius Baer or any affiliate thereof an annual fee
of $5,000 plus $250 for each Board of Trustees meeting attended. In addition,
the Funds reimburse these Trustees for travel and out-of-pocket expenses
incurred in connection with the Board of Trustees meetings.
The Funds have entered into an expense offset arrangement as part of the
custody agreement with Investors Bank & Trust. Under this arrangement, custody
fees are reduced when the Funds maintain cash on deposit at the custodian. For
the six months ended April 30, 1996, the Income Fund incurred total custody fees
of $54,073 which, after receiving a credit of $16,753 pursuant to the expense
offset arrangement resulted in a net expense of $37,320. For the six months
ended April 30, 1996, the Equity Fund incurred total custody fees in the amount
of $46,136 which, after receiving a credit of $11,187 pursuant to the expense
offset arrangement resulted in a net expense of $34,949. The assets deposited
with Investors Bank & Trust under the expense offset arrangement could have been
invested in an income-producing asset.
For the six months ended April 30, 1996, the Funds incurred total brokerage
commissions of $33,398 of which $1,050 was paid in total to Bank Julius Baer,
Frankfurt and Bank Julius Baer, Zurich (affiliates of the Adviser).
27
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
3. DISTRIBUTION AND SHAREHOLDER SERVICING PLAN
The Trust has adopted a Shareholder Services and Distribution Plan (the
'Plans') pursuant to Rule 12b-1 of the 1940 Act with respect to each class of
shares of the Funds. Under the Plans, the Funds compensate certain financial
institutions, including Funds Distributor Inc., for certain distribution,
shareholder servicing, administrative and accounting services for their clients
and customers who are beneficial owners of each of the Funds' shares. With
respect to Class A shares of each Fund, a Fund may expend an aggregate amount on
an annual basis not to exceed 0.25% of the value of the average daily net assets
of that class. For the six months ended April 30, 1996 the Income Fund and
Equity Fund incurred $20,910 and $12,909, respectively, in service and
distribution fees for Class A shares.
Under their terms, the Plans shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a majority of the
Trustees and a majority of those Trustees who are not 'interested persons' of
the Trust and who have no direct or indirect financial interest in the operation
of the Plans or in any agreement related to the Plans.
4. PURCHASES AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of securities, excluding U.S.
government securities and short-term investments, during the six months ended
April 30, 1996, were as follows:
<TABLE>
<CAPTION>
COST OF PROCEEDS
PURCHASES FROM SALES
----------- -----------
<S> <C> <C>
Income Fund............................. $13,076,938 $13,132,714
Equity Fund............................. 5,491,398 3,657,130
</TABLE>
Cost of purchases and proceeds from sales of long-term U.S. government
securities, excluding short-term investments, during the six months ended April
30, 1996, were $2,076,086 and $4,432,461, respectively for the Income Fund.
At April 30, 1996, aggregate gross unrealized appreciation for all
securities in which there was an excess of value over tax cost, and aggregate
gross unrealized depreciation for all securities in which there was an excess of
tax cost over value was:
<TABLE>
<CAPTION>
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
------------ ------------
<S> <C> <C>
Income Fund............................. $ 242,548 $313,094
Equity Fund............................. 1,401,964 358,005
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust may issue an unlimited number of shares of beneficial interest of
each Fund, with a par value of $.001 per share. Changes in shares of beneficial
interest on the Income Fund and the Equity Fund were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED 4/30/96 YEAR ENDED 10/31/95
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Income Fund Class A
shares:
Sold................ 54,796 $ 652,239 58,447 $ 652,663
Issued as
reinvestment of
dividends......... 51,744 616,345 49,173 566,530
Redeemed............ (209,061) (2,484,423) (1,241,882) (13,969,741)
---------- ------------ ---------- ------------
Net decrease........ (102,521) $ (1,215,839) (1,134,262) $(12,750,548)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
28
<PAGE>
BJB INVESTMENT FUNDS
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
YEAR ENDED 10/31/95
--------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C> <C> <C>
Income Fund Class B
shares:
Sold................ -- --
Issued as
reinvestment of
dividends......... 78 $ 901
Redeemed............ (2,319) (27,897)
---------- ------------
Net decrease........ (2,241) $ (26,996)
---------- ------------
---------- ------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED 4/30/96 YEAR ENDED 10/31/95
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Equity Fund Class A
shares:
Sold................ 195,489 $ 2,067,360 267,288 $ 2,763,238
Issued as
reinvestment of
dividends......... -- -- -- --
Redeemed............ (117,115) (1,238,567) (627,941) (6,303,836)
---------- ------------ ---------- ------------
Net increase
(decrease)........ 78,374 $ 828,793 (360,653) $ (3,540,598)
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED 10/31/95
--------------------------
SHARES AMOUNT
---------- ------------
<S> <C> <C> <C> <C>
Equity Fund Class B
shares:
Sold................ -- --
Issued as
reinvestment of
dividends......... -- --
Redeemed............ (1,304) $ (13,361)
---------- ------------
Net increase........ (1,304) $ (13,361)
---------- ------------
---------- ------------
</TABLE>
6. ORGANIZATIONAL COSTS
All costs in connection with the organization of the Funds, including the
fees and expenses of registering and qualifying their shares for distribution
under federal and state securities regulations, are being amortized on the
straight-line method over a period of sixty months from July 1, 1992, the date
that the Income Fund commenced operations, and from October 4, 1993, the date
the Equity Fund commenced operations. In the event that any of the initial
shares of the Funds are redeemed during such amortization period, the Funds will
be reimbursed for any unamortized costs in the same proportion as the number of
initial shares outstanding bears to the total numbers of shares outstanding at
the time of redemption.
7. FOREIGN SECURITIES
Investing in securities of foreign companies and foreign governments
involves special risks and considerations not typically associated with
investing in U.S. companies and the United States government. These risks
include revaluation of currencies and future adverse political and economic
developments. Moreover, securities of many foreign companies and foreign
governments and their markets may be less liquid and their prices more volatile
than those of securities of comparable U.S. companies and the United States
government.
29
<PAGE>
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SEMI-ANNUAL REPORT
[LOGO]
BJB
Global
Income
Fund
BJB
International
Equity
Fund
April 30, 1996
