<PAGE> 1
WEALTH-BUILDING OPPORTUNITY
ONE Fund[SM]
[LOGO]
SEMI-ANNUAL REPORT
ONE Fund, Inc.
December 31, 1997
<PAGE> 2
PRESIDENT'S MESSAGE
[John J. Palmer photo]
DEAR INVESTORS:
We are pleased to provide you with an update of ONE Fund's
performance and investment activity for the six months ended December 31, 1997.
It was a generally unsettled period for investors, given the heightened market
volatility experienced both domestically and abroad. Nonetheless, ONE Fund
stayed the course, focusing on long-term performance, and net assets stood at
$86.5 million as of calendar year-end.
IN REVIEW
Many stock market indices were nearing their 1997 peak as ONE Fund
began its fiscal year on July 1. Domestically, the Dow Jones Industrial Average
hit its 1997 high of 8,259 in early August before retreating to end the year at
7,908. Except for a shore period of time in third quarter 1997, large stocks
continued to outpace midsize and small stocks, as they have throughout much of
the 1990's. Internationally, Thailand's decision on July 2 to allow the value of
its currency to float, instead of being pegged to a basket of currencies, set
off a reaction that sent Asian currencies and stock markets reeling in the
following months. At the same time, weakness in Asian economies acted to dampen
inflation and strengthen the dollar, which in turn helped bonds bounce back in
the latter half of 1997.
LOOKING AHEAD
Entering 1998, Asia's turmoil continues to cloud the future. Economic and
currency volatility has hit Asian stocks hard and cast uncertainty over growth
prospects in the U.S. and elsewhere. In addition, the unprecedented three
consecutive years of greater than 20 percent returns experienced from 1995 to
1997 has put the domestic stock market in uncharted territory. But while the
short-term course of events is unknowable, our long-term commitment to our
fundamental investment principles -- careful selection and constant professional
management -- remains unchanged.
IN CLOSING
Information on your investments is contained in the following pages.
We are proud that ONE Fund is able to provide its investors with the sound
results documented herein. Please contact your registered representative for
additional information about ONE Fund and its role as a component of your
financial plan. As your needs change over time, he or she stands ready to serve
you. Thank you for the confidence you have placed in ONE Fund as you pursue
your wealth-building endeavors. We appreciate your investment with us. Be
assured that we will make every effort to continue to merit that confidence.
Best regards,
/s/ John J. Palmer
John J. Palmer
1
<PAGE> 3
DIRECTORS AND OFFICERS OF ONE FUND, INC.
John J. Palmer, President and Director
Ronald L. Benedict, Secretary and Director
George E. Castrucci, Director
Ross Love, Director
George M. Vredeveld, Director
Joseph P. Brom, Vice President
Michael A. Boedeker, Vice President
David G. McClure, Vice President
Stephen T. Williams, Vice President
Dennis R. Taney, Treasurer
Theresa M. Brunsman, Assistant Secretary
This report may be used as sales literature only when accompanied or preceded by
an effective prospectus of ONE Fund, Inc. which relates sales expense and other
pertinent information.
2
<PAGE> 4
<TABLE>
<CAPTION>
ONE FUND INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -----------------------------------------------------------------------
<S> <C>
AUTOMOTIVE AND RELATED (3.6%)
$502,000 Ford Motor Credit Corp.
5.580% 01-15-98 $ 500,988
---------
COMPUTER AND RELATED (7.8%)
574,000 IBM Credit Corp.
5.560% 02-02-98 571,252
527,000 Lucent Technologies
5.660% 02-23-98 522,692
---------
1,093,944
---------
COMMUNICATIONS (3.5%)
500,000 Ameritech (b)
5.550% 01-23-98 498,381
---------
CONSUMER GOODS (3.5%)
502,000 PHH Corp.
5.730% 02-20-98 498,085
---------
ELECTRICAL EQUIPMENT (6.5%)
499,000 Avnet Inc.
5.760% 02-18-98 418,827
422,000 G.E. Capital
5.670% 01-28-98 496,957
---------
915,784
---------
ENTERTAINMENT AND LEISURE (2.6%)
361,000 Walt Disney
5.700% 01-26-98 359,628
---------
FINANCE (18.0%)
500,000 BHP Finance Corp.
5.680% 02-04-98 497,397
522,000 CIT Group Holding
5.540% 01-02-98 522,000
500,000 Heller Financial
5.620% 01-21-98 498,517
470,000 Household Finance Corp.
5.800% 01-09-98 469,470
549,000 Transamerica Financial
5.750% 01-22-98 547,246
---------
2,534,630
---------
FOOD AND RELATED (3.6%)
500,000 Winn-Dixie
5.500% 01-06-98 499,694
---------
HOUSING, FURNITURE & RELATED (3.1%)
442,000 Sherwin Williams (b)
5.750% 01-20-98 440,729
---------
INDUSTRIAL (7.0%)
$491,000 Amcor LTD (b)
5.700% 01-13-98 490,145
493,000 BAT Capital Corp.
5.730% 02-09-98 490,018
------------
980,163
------------
INSURANCE (13.3%)
425,000 Great Western Life
5.700% 02-03-98 422,847
444,000 International Lease Finance
5.550% 01-13-98 443,247
509,000 Metlife Funding
5.730% 02-05-98 506,245
500,000 Reliastar Mortgage
5.980% 01-14-98 499,003
------------
1,871,342
------------
MACHINERY AND EQUIPMENT (3.5%)
500,000 John Deere Capital Corp.
5.570% 01-12-98 499,226
------------
OIL, ENERGY, AND NATURAL GAS (3.6%)
503,000 Questar
5.850% 01-27-98 500,957
------------
RETAIL (3.6%)
516,000 Southland Corp.
5.730% 03-03-98 511,072
------------
TRANSPORTATION (5.2%)
735,000 J.B. Hunt Transportation Services Inc.
5.570% 01-12-98 734,650
------------
UTILITIES (13.4%)
430,000 Bay State Corp.
5.800% 01-29-98 428,130
538,000 Central Louisiana Electric
5.850% 02-03-98 535,202
432,000 Cincinnati Bell (b)
5.800% 02-17-98 428,798
495,000 Midamerican Energy
5.720% 01-30-98 492,798
------------
1,884,928
------------
TOTAL HOLDINGS
(COST $14,324,201) (A) $14,324,201
===========
</TABLE>
(a) Also represents cost for Federal income tax purposes.
(b) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,858,053 or 13.2% of net
assets.
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
ONE FUND, INC.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
Assets:
Investments in securities at amortized cost
<S> <C>
and market value (note 1) ...................... $14,324,201
Cash in bank .................................... 25,581
Receivable for fund shares sold.................. 26,363
Other ........................................... 6,376
-----------
Total assets ................................... 14,382,521
-----------
Liabilities:
Payable for fund shares redeemed ................ 265,501
Payable for investment management
services (note 3) .............................. 1,931
Accrued 12b-1 fees (note 6) ..................... 5,270
Other accrued expenses .......................... 17,280
Dividends payable ............................... 26,379
-----------
Total liabilities .............................. 316,361
-----------
Net assets at market value $14,066,160
===========
Net assets consist of:
Par value, $.001 per share ...................... $14,066
Paid-in capital in excess of par value .......... 14,052,094
-----------
Net assets at market value $14,066,160
===========
Shares outstanding................................ 14,066,160
Net asset value per share......................... $1.00
===========
Maximum offering price per share.................. $1.00
===========
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED
DECEMBER 31, 1997
(UNAUDITED)
Investment income:
<S> <C>
Interest............................................. $418,830
-----------
Expenses:
Management fees (note 3)............................. 22,128
12b-1 fees (note 6).................................. 11,064
Custodian fees (note 3).............................. 3,530
Directors' fees (note 3) ............................ 1,216
Professional fees.................................... 5,230
Transfer agent and accounting fees .................. 31,241
Filing fees ......................................... 5,679
Organizational expense (note 1)...................... 455
Other................................................ 1,896
-----------
Total expenses...................................... 82,439
Less expenses voluntarily reduced
or reimbursed (note 3)............................. (11,064)
-----------
Net expenses........................................ 71,375
-----------
Net investment income .............................. 347,455
-----------
Net increase in net
assets from operations............................. $347,455
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 6
<TABLE>
<CAPTION>
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
<S> <C> <C>
From operations:
Net investment income .............................................. $ 347,455 $ 800,904
----------- -----------
Net increase in assets from operations............................ 347,455 800,904
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income........................... (347,455) (800,904)
----------- -----------
From capital share transactions (note 4):
Received from shares sold .......................................... 8,636,418 17,151,447
Received from dividends reinvested ................................. 212,265 545,914
Paid for shares redeemed ........................................... (9,147,015) (19,142,752)
----------- -----------
Decrease in net assets derived from capital share transactions..... (298,332) (1,445,391)
----------- -----------
Decrease in net assets .......................................... (298,332) (1,445,391)
Net Assets:
Beginning of period ................................................ 14,364,492 15,809,883
----------- -----------
End of period ...................................................... $14,066,160 $14,364,492
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED JUNE 30
12-31-97 1997 1996 1995 1994
--------- ------- ----- ----- ------
Per share data:
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......................... $1.00 $1.00 $1.00 $1.00 $1.00
Income from investment operations:
Net investment income....................................... 0.02 0.05 0.05 0.05 0.03
Less distributions:
Dividends from net investment income........................ (0.02) (0.05) (0.05) (0.05) (0.03)
------ ------ ------ ------ ------
Net asset value, end of period............................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
Total return................................................. 2.41%(b) 4.77% 5.18% 5.06% 3.06%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................... 0.99%(a) 0.80% 0.57% 0.51% 0.44%
Net investment income....................................... 4.82%(a) 4.71% 5.14% 4.99% 2.97%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................... 1.14%(a) 1.04% 0.87% 0.81% 0.74%
Net investment income....................................... 4.67%(a) 4.47% 4.84% 4.69% 2.67%
Net assets at end of period (millions)....................... $14.1 $14.4 $15.8 $14.1 $12.3
</TABLE>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the Money
Market portfolio, but it may cease that waiver, in whole or in part,
without prior notice. In addition, the advisor has reimbursed certain
operating expenses.
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 7
TAX-FREE INCOME PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide high current income exempt from federal income taxes. Preservation
of capital is a secondary objective. Normally, at least 85% of the assets of
this portfolio will be invested in investment grade municipal securities.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 8.50% 5.25%
Three-year 9.54% 8.44%
Since inception (11/1/94) 9.54% 8.49%
</TABLE>
The maximum sales charge is 3%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. The advisor is currently
waiving fees of .15% for this portfolio. Had the fees not been waived,
returns would have been lower.
COMMENTS
Prior to the inclusion of any sales charges, the Tax-Free Income Portfolio
returned 5.34% for the six-month period ended December 31, 1997, and 8.50% for
the year. In contrast, the Lehman Brothers Intermediate-Term Municipal Bond
Index returned 4.98% for the six-month period and 7.85% for the year. The
portfolio has a longer maturity structure than the index and benefits when
overall interest rates decline, as was the case in 1997. If you are in the
39.6% marginal federal income tax rate bracket, you would have to earn 14.07%
from a taxable investment to match your portfolio's tax-free return for 1997.
In 1998, we are anticipating more stability in interest rates over the course
of the year. Therefore, we are maintaining our current portfolio structure.
Remember that past performance is not necessarily predictive of future results.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'94 '95 '96 '97
<S> <C> <C> <C> <C>
TAX-FREE INCOME PORTFOLIO
(COMMENCED OPERATIONS NOVEMBER 1, 1994) $9,860 $11,480 $11,930 $12,950
LEHMAN BROS. MUNICIPAL BOND INDEX $10,264 $11,834 $12,314 $13,398
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings will
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
It is not open to direct investment.
TOP 10 BONDS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C>
1. Wash State Public Power Supply
System 5.70% 7/01/12 4.46
2. Chicago Midway Airport 5.5% 1/1/29 4.29
3. North Carolina Med Care 5.25% 5/01/26 4.17
4. Atlanta Rapid Trans Auth 6.80% 7/01/14 4.02
5. Pennsylvania Intergovernment 6.75% 6/15/21 4.00
6. Nevada General Obligation 6.6% 12/01/13 3.97
7. New York St. Med Care Facs 6.75% 8/15/24 3.94
8. Mobile Alabama Dev Board 6.95% 1/01/20 3.84
9. Clark Cnty Nevada School District 7.00% 6/01/09 3.82
10. Matagorda Cnty 6.7% 3/01/27 3.80
</TABLE>
TOP 5 CATEGORIES AS OF DECEMBER 31,
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Power Revenue 22.02
Insured Bonds 19.45
Pollution Control/Industrial Revenue 11.11
General Obligation 11.01
Hospital Revenue 10.94
</TABLE>
7
<PAGE> 8
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDIT)
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- --------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (1.1%)
$ 80,000 Star Bank 5.50% due 01-02-98
repurchase price $80,024
collateralized by GNMA certificates
pool # 8359
due 01-20-24 (Cost $80,000) $ 80,000
----------
TOTAL REPURCHASE AGREEMENTS
(1.1%) (Cost $80,000) $ 80,000
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- --------------------------------------------------------------------
AUTOMOTIVE AND RELATED (2.8%)
$200,000 General Motors Acceptance Corp
6.190% 01-05-98 $ 199,862
----------
TOTAL SHORT-TERM NOTES
(2.8%) (COST $199,862) $ 199,862
----------
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- --------------------------------------------------------------------
AIRPORT REVENUE (7.7%)
$300,000 Chicago Illinois Midway Airport
5.500% 01-01-29 $ 308,736
250,000 Chicago Illinois O'Hare Airport
5.000% 01-01-13 246,757
----------
555,493
----------
CONVENTION COMPLEX &
HOSPITALITY FACILITIES (3.0%)
200,000 Metropolitan Pier
6.250% 07-01-17 215,986
----------
GENERAL OBLIGATION BONDS (11.0%)
100,000 Clairborne County Mississippi
7.300% 05-01-25 106,034
150,000 Commonwealth of Puerto Rico
5.500% 07-01-17 153,485
250,000 State of Nevada
6.600% 12-01-13 285,553
250,000 State of Washington
5.000% 05-01-17 246,932
----------
792,004
----------
HOSPITAL REVENUE (14.6%)
250,000 Hawaii Department of Budget
6.000% 07-01-20 264,987
250,000 Massachusetts State Hospital
6.200% 10-01-16 270,565
300,000 North Carolina Medical Care Comm.
5.250% 05-01-26 300,198
200,000 Wisconsin Health and Education
6.125% 11-15-15 216,374
----------
1,052,124
----------
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- --------------------------------------------------------------------
HOUSING REVENUE (2.2%)
$150,000 Alaska Housing
5.875% 12-01-24 $ 155,524
----------
INSURED BONDS (15.8%)
250,000 Atlanta RTA
6.800% 07-01-14 (Insured MBIA) 289,218
250,000 Matagorde Texas
6.700% 03-01-27 (Insured AMBAC) 273,518
250,000 New York State Med Care
6.750% 08-15-14 (Insured AMBAC) 283,475
250,000 Pennsylvania Intergovernment Corp.
6.750% 06-15-21 (Insured FGIC) 288,192
----------
1,134,403
----------
POLLUTION CONTROL &
INDUSTRIAL REVENUE (11.1%)
250,000 Lawrenceburg, Indiana
5.900% 11-01-19 257,943
250,000 Richland County, S. Carolina
6.550% 11-01-20 272,287
250,000 West Feliciana, Louisiana
8.000% 12-01-24 269,465
----------
799,695
----------
POWER REVENUE (22.0%)
250,000 Jacksonville Florida Municipal Electric
5.500% 10-01-14 255,658
250,000 Mobile Alabama
6.950% 01-01-20 276,307
250,000 North Carolina Eastern Power
6.000% 01-01-22 268,990
250,000 Salt River Arizona Project
5.000% 01-01-13 252,463
200,000 Southern California Public Power
6.000% 07-01-18 209,888
300,000 Washington Power
5.700% 07-01-12 320,994
----------
1,584,300
----------
SCHOOL REVENUE (3.8%)
250,000 Clark County, Nevada School District
7.000% 06-01-09 275,188
----------
WATER REVENUE (3.6%)
250,000 Metropolitan Water District of
S. California
5.500% 07-01-13 260,167
----------
TOTAL MUNICIPAL BONDS (94.8%)
(COST $6,016,039) $6,824,884
----------
TOTAL HOLDINGS
(COST $6,295,901) (A) $7,104,746
==========
</TABLE>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $6,295,901) ..................... $ 7,104,746
Cash in bank .......................................... 193
Receivable for fund shares sold ....................... 13,044
Dividends and accrued interest receivable ............. 118,746
Deferred organizational expenses (note 1) ............. 1,081
Other ................................................. 2,801
-----------
Total assets ......................................... 7,240,611
-----------
Liabilities:
Payable for investment management
services (note 3) .................................... 2,910
Accrued 12b-1 fees (note 6) ........................... 4,330
Other accrued expenses ................................ 11,063
Dividends payable ..................................... 26,087
-----------
Total liabilities .................................... 44,390
-----------
Net assets at market value ............................. $ 7,196,221
===========
Net assets consist of:
Par value, $.001 per share ............................ $ 629
Paid-in capital in excess of par value ................ 6,398,087
Accumulated undistributed net realized
loss on investments .................................. (11,340)
Net unrealized appreciation on investments ............ 808,845
-----------
Net assets at market value ............................. $ 7,196,221
===========
Shares outstanding ..................................... 629,085
Net asset value per share .............................. $ 11.44
===========
Maximum offering price per share ($11.44/97%) .......... $ 11.79
===========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
Investment income:
Interest .............................................. $ 202,997
-----------
Expenses:
Management fees (note 3) .............................. 21,259
12b-1 fees (note 6) ................................... 8,852
Custodian fees (note 3) ............................... 4,843
Directors' fees (note 3) .............................. 567
Professional fees ..................................... 2,439
Transfer agent and accounting fees .................... 16,655
Filing fees ........................................... 4,197
Organizational expense (note 1) ....................... 132
Other ................................................. 1,008
-----------
Total expenses ....................................... 59,952
Less expenses voluntarily reduced
or reimbursed (note 3) .............................. (5,325)
-----------
Net expenses ......................................... 54,627
-----------
Net investment income ................................ 148,370
-----------
Unrealized gain on investments:
Net increase in unrealized
appreciation on investments .......................... 214,301
-----------
Net increase in net
assets from operations .............................. $ 362,671
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
9
<PAGE> 10
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITIED)
6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
-------------- -------------
<S> <C> <C>
From operations:
Net investment income ......................................... $ 148,370 $ 320,171
Realized loss on investments .................................. 0 (4,042)
Unrealized gain on investments ................................ 214,301 185,075
----------- -----------
Net increase in assets from operations ...................... 362,671 501,204
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income ..................... (148,257) (320,058)
----------- -----------
From capital share transactions (note 4):
Received from shares sold ..................................... 194,731 436,076
Received from dividends reinvested ............................ 11,974 153,756
Paid for shares redeemed ...................................... (51,518) (227,986)
----------- -----------
Increase in net assets derived from capital share transactions 155,187 361,846
----------- -----------
Increase in net assets ..................................... 369,601 542,992
----------- -----------
Net Assets:
Beginning of period ........................................... 6,826,620 6,283,628
----------- -----------
End of period (a) ............................................. $ 7,196,221 $ 6,826,620
----------- -----------
(a) Includes undistributed net investment income of ........... 0 $ 113
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months 11-1-94
Ended Years Ended June 30, to
12-31-97 1997 1996 6-30-95
------ ------ ------ ------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period ................... $11.09 $10.79 $10.66 $10.00
Income from investment operations:
Net investment income ................................. 0.24 0.53 0.56 0.35
Net realized and unrealized gain on investments ....... 0.35 0.30 0.13 0.66
------ ------ ------ ------
Total income from investment operations .............. 0.59 0.83 0.69 1.01
------ ------ ------ ------
Less distributions:
Dividends from net investment income .................. (0.24) (0.53) (0.56) (0.35)
------ ------ ------ ------
Net asset value, end of period ......................... $11.44 $11.09 $10.79 $10.66
====== ====== ====== ======
Total return ........................................... 5.34%(b) 7.82% 6.59% 10.26%
Ratios and supplemental data:
Ratios net of fees waived or reimbursed by advisor (c):
Expenses .............................................. 1.55%(a) 1.24% 0.94% 0.91%
Net investment income ................................. 4.22%(a) 4.81% 5.20% 5.04%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses .............................................. 1.71%(a) 1.45% 1.24% 1.21%
Net investment income ................................. 4.07%(a) 4.60% 4.90% 4.74%
Portfolio turnover rate ................................ 0% 6% 8% 0%
Net assets at end of period (millions) ................. $ 7.2 $ 6.8 $ 6.3 $ 5.7
</TABLE>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the
Tax-Free Income portfolio, but it may cease that waiver, in whole or in
part, without prior notice. In addition, the advisor has reimbursed certain
operating expenses.
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 11
INCOME PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide high current income. Preservation of capital is a secondary
objective. Normally, at least 85% of the assets of this portfolio will be
invested in investment-grade fixed-income securities and the equivalent. The
remainder may be invested in below investment-grade corporate bonds.
<TABLE>
<CAPTION>
PERFORMANCE AS OF DECEMBER 31, 1997
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 8.17% 4.93%
Three-year 9.72% 8.62%
Five-year 6.80% 6.15%
Since inception (8/18/92) 6.44% 5.83%
</TABLE>
The maximum sales charge is 3%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. The advisor is currently
waiving fees of .15% for this portfolio. Had the fees not been waived, returns
would have been lower.
COMMENTS
Prior to the inclusion of any sales charges, the Income Portfolio returned 4.97%
for the six-month period ended December 31, 1997, and 8.17% for the year. In
contrast, the Lehman Brothers Intermediate-Term Government/Corporate Bond Index
returned 4.90% for the six-month period and 7.87% for the year. The portfolio
has a slightly longer maturity structure than the index and benefited from an
overall decline in interest rates during 1997.
We anticipate greater stability in interest rates during 1998. Thus, at this
time, we have not altered our portfolio composition since year end. Remember
that past performance is not necessarily predictive of future results.
CHANGE IN VALUE OF $100,000 INVESTMENT
<TABLE>
<CAPTION>
'94 '95 '96 '97
<S> <C> <C> <C> <C>
INCOME PORTFOLIO
(COMMENCED OPERATIONS AUGUST 18, 1992) $10,449 $12,202 $12,771 $13,810
LEHMAN BROS. GOVERNMENT/CORP BOND INDEX - INTERMEDIATE $10,767 $12,414 $12,917 $13,933
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
It is not open to direct investment.
TOP 10 BONDS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C>
1. US Treasury 6.375% 8/15/02 15.00
2. Texas Utilities 7.48% 01/01/17 4.58
3. Mississippi Chem Corp 7.25% 11/15/07 4.40
4. ITT Destinations 6.75% 11/15/05 4.22
5. El Paso Electric 8.90% 2/01/06 4.04
6. Tenneco 8.075% 10/01/02 3.91
7. ITT Rayonier 7.5% 10/15/02 3.84
8. IBM 7.25% 11/01/02 3.82
9. Bergen Brunswick 7.375% 1/15/03 3.82
10. Fruit of the Loom 7.875% 10/15/99 3.74
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1997
% of Portfolio
<S> <C>
Utilities 20.88
US Treasury Notes 15.00
Hotel/Lodging 10.32
Oil, Energy, and Natural Gas 8.48
Chemicals 4.40
</TABLE>
11
<PAGE> 12
<TABLE>
<CAPTION>
ONE FUND, INC.
INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (3.9%)
$151,000 Ford Motor Acceptance Corp.
5.950% 01-07-98 $150,850
116,000 General Motors Acceptance Corp.
5.750% 01-06-98 115,907
----------
266,757
----------
ELECTRICAL EQUIPMENT (2.9%)
200,000 G.E. Capital
6.100% 01-05-98 199,865
----------
INSURANCE SERVICES (1.5%)
100,000 Cigna Corp.
6.170% 01-02-98 99,983
----------
TOTAL SHORT-TERM NOTES
(8.3%) (COST $566,605) $566,605
----------
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (15.0%)
$1,000,000 U.S. Treasury Note
6.375% 08-15-02 $1,026,251
----------
CHEMICALS (4.4%)
300,000 MIssissippi Chemical Corp.
7.250% 11-15-07 301,221
----------
COMMUNICATIONS (1.6%)
100,000 Comcast Cable Communications
8.375% 05-01-07 111,554
----------
COMPUTER AND RELATED (3.8%)
250,000 International Business Machines
7.250% 11-01-02 261,688
----------
CONSUMER GOODS (3.7%)
250,000 RJR Nabisco, Inc.
7.625% 09-15-03 255,414
----------
FORESTRY AND PAPER PRODUCTS (3.9%)
250,000 ITT Rayonier, Inc.
7.500% 10-15-02 262,424
----------
HOTEL/LODGING (10.3%)
200,000 Hilton Hotels Corp.
7.200% 12-15-09 201,336
300,000 ITT Destinations, Inc.
6.750% 11-15-05 289,041
200,000 Marriott International
7.875% 04-15-05 215,958
----------
706,335
----------
MEDICAL AND RELATED (3.8%)
250,000 Bergen Brunswig Corp.
7.375% 01-15-03 261,052
----------
OIL, ENERGY AND NATURAL GAS (8.5%)
$200,000 PDV America, Inc.
7.875% 08-01-03 $207,240
100,000 Seagull Energy
7.875% 08-01-03 105,220
250,000 Tenneco Inc.
8.075% 10-01-02 267,701
----------
580,161
----------
REAL ESTATE (3.0%)
200,000 Avalon Properties Inc.
7.375% 09-15-02 205,480
----------
RETAIL (1.5%)
100,000 Genesco, Inc.
10.375% 02-01-03 104,250
----------
TEXTILES AND RELATED (3.8%)
250,000 Fruit of the Loom Corp.
7.875% 10-15-99 256,162
----------
TRANSPORTATION & EQUIPMENT (3.7%)
250,000 Illinois Central Gulf Railroad
6.750% 05-15-03 254,366
----------
UTILITIES (15.2%)
250,000 El Paso Electric Co.
8.900% 02-01-06 276,562
250,000 Mississippi Power and Light
8.800% 04-01-05 251,093
198,545 Puget Power
6.450% 04-11-05 199,496
300,000 Texas Utilities Electric
7.480% 01-01-17 313,382
----------
1,040,533
----------
MISCELLANEOUS (2.9%)
200,000 ABC Rail Product Corp.
8.750% 12-01-04 200,000
----------
TOTAL LONG-TERM BONDS & NOTES
(85.1%) (COST $5,627,376) $5,826,891
----------
MARKET
SHARES PREFERRED STOCK VALUE
- ---------------------------------------------------------------------
<S> <C> <C>
UTILITIES (5.6%)
8,000 GTE Delaware, 8.750% Series B $212,000
7,000 Connecticut Light, Power & Capital
9.300% Series A 175,875
----------
387,875
----------
TOTAL PREFERRED STOCK (5.6%)
(COST $375,000) $387,875
----------
TOTAL HOLDINGS
(COST $6,568,981) (a) $6,781,371
==========
<FN>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
</TABLE>
12
<PAGE> 13
<TABLE>
<CAPTION>
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
- ---------------------------------------------------------------
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $6,568,981) ................ $6,781,371
Cash in bank ..................................... 827
Receivable for fund shares sold................... 157
Dividends and accrued interest receivable ........ 115,002
Other ............................................ 1,826
-----------
Total assets .................................... 6,899,183
-----------
Liabilities:
Payable for investment management
services (note 3) ............................... 2,126
Accrued 12b-1 fees (note 6) ...................... 4,071
Other accrued expenses ........................... 16,531
Dividends payable ................................ 27,733
-----------
Total liabilities ............................... 50,461
-----------
Net assets at market value $6,848,722
===========
Net assets consist of:
Par value, $.001 per share ....................... $689
Paid-in capital in excess of par value ........... 6,712,482
Accumulated undistributed net realized
loss on investments ............................. (77,207)
Net unrealized appreciation on investments ....... 212,390
Undistributed net investment income............... 368
-----------
Net assets at market value $6,848,722
===========
Shares outstanding................................. 688,694
Net asset value per share.......................... $9.94
===========
Maximum offering price per share ($9.94/97%)....... $10.25
===========
<CAPTION>
STATEMENT OF OPERATIONS
- ---------------------------------------------------------------
For the six months ended December 31, 1997 (Unaudited)
<S> <C>
Investment income:
Interest.......................................... $250,439
============
Expenses:
Management fees (note 3).......................... 17,027
12b-1 fees (note 6)............................... 8,513
Custodian fees (note 3)........................... 2,958
Directors' fees (note 3).......................... 552
Professional fees................................. 2,374
Transfer agent and accounting fees ............... 18,166
Filing fees ...................................... 4,107
Organizational expense (note 1)................... 455
Other............................................. 825
-----------
Total expenses................................... 54,977
Less expenses voluntarily reduced
or reimbursed (note 3).......................... (5,109)
-----------
Net expenses..................................... 49,868
-----------
Net investment income ........................... 200,571
-----------
Realized and unrealized gain on investments:
Net realized gain from investments ............... 26,338
Net increase in unrealized
appreciation on investments ..................... 105,190
-----------
Net gain on investments......................... 131,528
-----------
Net increase in net
assets from operations.......................... $332,099
===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) 6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
-------------- -------------
<S> <C> <C>
From operations:
Net investment income ................................................................. $200,571 $420,873
Realized gain on investments........................................................... 26,388 7,352
Unrealized gain on investments ........................................................ 105,190 98,941
-------------- -------------
Net increase in assets from operations............................................... 332,149 527,166
-------------- -------------
Dividends and distributions to shareholders:
Dividends paid from net investment income.............................................. (200,204) (420,873)
-------------- -------------
From capital share transactions (note 4):
Received from shares sold ............................................................. 365,997 201,790
Received from dividends reinvested .................................................... 39,494 224,885
Paid for shares redeemed .............................................................. (311,943) (892,262)
-------------- -------------
Increase (decrease) in net assets derived from capital share transactions............. 93,548 (465,587)
-------------- -------------
Decrease in net assets ............................................................. (225,443) (359,294)
-------------- -------------
Net Assets:
Beginning of period ................................................................... 6,623,279 6,982,573
-------------- -------------
End of period (a) ..................................................................... $6,848,722 $6,623,279
============== =============
(a) Includes undistributed net investment income of................................. $368 0
============== =============
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months
Ended Year Ended June 30,
12-31-97 1997 1996 1995 1994
--------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period............................ $9.75 $9.59 $9.78 $9.39 $10.43
Income (loss) from investment operations:
Net investment income.......................................... 0.29 0.61 0.63 0.65 0.62
Net realized and unrealized gain (loss) on investments ........ 0.19 0.16 (0.19) 0.39 (0.98)
------- ------- ------ ------- ------
Total income (loss) from investment operations................ 0.48 0.77 0.44 1.04 (0.36)
------- ------- ------ ------- ------
Less distributions:
Dividends from net investment income........................... (0.29) (0.61) (0.63) (0.65) (0.62)
Distributions from net realized capital gains ................. 0.00 0.00 0.00 0.00 (0.06)
------- ------- ------ ------- ------
Total distributions........................................... (0.29) (0.61) (0.63) (0.65) (0.68)
------- ------- ------ ------- ------
Net asset value, end of period.................................. $9.94 $9.75 $9.59 $9.78 $9.39
======= ======= ====== ======== =======
Total return.................................................... 4.97% (b) 8.26% 4.61% 11.58% (3.79%)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses....................................................... 1.48% (a) 1.21% 0.97% 0.85% 1.02%
Net investment income.......................................... 5.96% (a) 6.29% 6.50% 6.80% 6.10%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses....................................................... 1.64% (a) 1.51% 1.22% 1.10% 1.27%
Net investment income.......................................... 5.80% (a) 5.99% 6.25% 6.55% 5.85%
Portfolio turnover rate......................................... 11% 10% 9% 4% 6%
Net assets at end of period (millions).......................... $6.8 $6.6 $7.0 $7.1 $4.6
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the Income portfolio, but it may cease that waiver, in whole
or in part, without prior notice.
In addition, the advisor has reimbursed certain operating expenses.
The accompanying notes are an integral part of these financial statements.
</TABLE>
14
<PAGE> 15
INCOME & GROWTH PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide moderate income with the potential for increasing income over time.
Growth of capital is also a primary objective. At least 90% of the assets of
this portfolio will be invested in income-producing securities. Normally, at
least 50% of the assets will be invested in dividend-paying stock.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 22.87% 16.73%
Three-year 21.43% 19.41%
Five-year 15.74% 14.57%
Since inception (8/18/92) 14.47% 13.38%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. The advisor is currently
waiving fees of .15% for this portfolio. Had the fees not been waived, returns
would have been lower.
COMMENTS
1997 was, for the most part, the third straight year of very good returns in
the domestic equity markets (when compared to the long-term average annual rate
of return for domestic stocks of 10%). Large-capitalization stocks again led
the way, pushed by enormous flows of cash into stock mutual funds, increased
interest in index methods of investing and continued positive profit growth.
Most small-, mid- and blended-capitalization stock indices and mutual funds
lagged the large-cap funds and S&P 500 Index. The year was very volatile with
some sectors of the market at times experiencing bear market-like conditions.
We expect those areas and others to rebound from their corrections.
The Income & Growth Portfolio's performance for the calendar year
trailed that of the S&P 500 Index for two primary reasons. First, the
portfolio's investments consist of common stocks and their equivalent and
fixed-income instruments. The portfolio's cash position averaged 6% to 7% of
its net assets. this portfolio structure will not out perform the S&P 500 Index
in a strong large-cap-led stock market. Second, the common stock portion
of the portfolio (approximately 72%) consists of small-,medium- and
large-capitalization stocks, small- and mid-sized equities have generally not
kept pace with the larger companies, even though their growth potential
relative to their valuations would suggest otherwise.
Looking forward, we expect continued volatility in the equity markets.
Continued strong cash flows into mutual funds could push markets higher.
Concerns about slowing profit growth and economic uncertainty in emerging growth
areas and its impact on the rest of the world could cause sharp sell-offs. We
expect equity returns to gravitate toward their long-term averages. Fixed-
income instruments should continue to provide steady results.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'92 '93 '94 '95 '96 '97
<S> <C> <C> <C> <C> <C> <C>
INCOME & GROWTH PORTFOLIO
(COMMENCED OPERATIONS AUGUST 18, 1992) $9,488 $11,146 $11,067 $13,796 $15,976 $19,636
S&P INDEX $10,627 $11,688 $11,842 $16,274 $20,030 $26,670
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
It is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Camco International 3.80
2. Allied Signal 2.90
3. Texas Instruments 2.68
4. Regal Beloit 2.64
5. CBS Corp 2.63
6. Hewlett Packard 2.33
7. Williams Cos. 2.22
8. Intel Corp 2.09
9. Cedar Fair 1.93
10. Microsoft Corp 1.93
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Oil, Energy, and Natural Gas 19.21
Computer and Related 13.40
Automotive and Related 7.36
Electrical Equipment 7.25
Financial Services 7.07
</TABLE>
15
<PAGE> 16
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------------
<S> <C> <C>
BANKING (1.0%)
$100,000 First State Bancorporation
7.500% 04-30-17 $ 129,875
----------
COMMUNICATIONS (0.8%)
100,000 Comcast Cable Communications
8.375% 05-01-07 111,554
----------
COMPUTER AND RELATED (1.9%)
250,000 IBM Corp.
7.250% 11-01-02 261,689
----------
ELECTRICAL EQUIPMENT (1.1%)
150,000 Richey Electronics
7.000% 03-01-06 147,750
----------
FINANCE (0.7%)
100,000 Citifed Bancorp, Inc.
8.250% 09-01-03 102,009
----------
FOOD AND REALTED (0.6%)
75,000 Marsh Supermarkets, Inc.
8.875% 08-01-07 75,937
----------
FORESTRY AND PAPER PRODUCTS (2.0%)
250,000 ITT Rayonier, Inc.
7.500% 10-15-02 262,424
----------
OIL, ENERGY AND NATURAL GAS (7.1%)
100,000 Offshore Logistics
6.000% 12-15-06 115,500
300,000 PDV America, Inc.
7.875% 08-01-03 310,861
250,000 Tenneco, Inc.
8.075% 10-01-02 267,701
250,000 Union Texas Petroleum
8.250% 11-15-99 259,000
----------
953,062
----------
UTILITIES (1.5%)
200,000 Mississippi Power and Light
8.800% 04-01-05 200,874
----------
TOTAL LONG-TERM BONDS & NOTES
(16.7%) (COST $2,105,972) $2,245,174
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------------
AUTOMOTIVE AND RELATED (4.0%)
$161,000 Ford Motor Credit Corp.
6.120% 01-05-98 $ 160,890
375,000 General Motors Acceptance Corp.
5.800% 01-08-98 374,577
----------
535,467
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------------
FINANCE (4.5%)
$189,000 American Express Credit
6.000% 01-07-98 $ 188,811
195,000 Associates Corp.
5.540% 01-02-98 194,970
222,000 Household Financial Corp.
6.100% 01-06-98 221,812
----------
605,593
----------
RETAIL (1.4%)
190,000 Sears Roebuck
5.900% 01-09-98 189,751
----------
TOTAL SHORT-TERM NOTES (9.9%)
(COST $1,330,811) $1,330,811
----------
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------------
AEROSPACE (2.9%)
10,000 Allied Signal, Inc. $ 389,375
----------
AUTOMOTIVE AND RELATED (3.4%)
3,300 Chrysler Corp. 116,119
3,500 Cooper Tire & Rubber Co. 85,312
4,000 Magna International, Inc. CL A 251,250
----------
452,681
----------
BANKING (2.0%)
3,500 Flagstar Bancorp, Inc. 69,289
1,000 Star Banc Corp. 57,375
3,750 Susquehanna Bancshares Inc. 143,438
----------
270,102
----------
BUSINESS SERVICES (3.0%)
5,000 First Data Corp. 146,250
4,000 Manpower Inc. 141,000
6,000 Reynolds and Reynolds CL A 110,625
----------
397,875
----------
CHEMICALS (4.5%)
6,000 Chemi-Trol Chemical Co. 132,000
1,250 Hanson Trust PLC 28,828
5,000 Minerals Technologies, Inc. 227,188
6,000 OM Group, Inc. 219,750
----------
607,766
----------
COMPUTER AND RELATED (11.5%)
2,000 * 3Com Corp. 69,875
3,000 Computer Associates International 158,625
5,000 Hewlett Packard Co. 312,500
4,000 Intel Corp. 281,000
10,000 MacNeal-Schwendler Corp. 96,250
2,000 * Microsoft Corp. 258,500
8,000 Texas Instruments, Inc. 360,000
----------
1,536,750
----------
ELECTRICAL EQUIPMENT (6.2%)
12,000 CBS Corporation 353,250
5,000 Hubbell Inc CL B 246,562
3,000 Varian Associates, Inc. 151,688
1,000 Xerox Corp. 73,813
----------
825,313
----------
(continued)
</TABLE>
16
<PAGE> 17
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------------
<S> <C> <C>
ENTERTAINMENT AND LEISURE (1.9%)
10,000 Cedar Fair $ 258,750
----------
FINANCE (1.6%)
18,500 Bando McGlocklin Capital Corp. 208,125
----------
FOOD AND RELATED (2.6%)
3,000 H.J. Heinz Co. 152,437
6,000 Panamerican Beverages Inc Cl A 195,750
----------
348,187
----------
FORESTRY AND PAPER PRODUCTS (1.0%)
4,000 Sonoco Products Co. 138,750
----------
HOUSING, FURNITURE & RELATED (1.5%)
7,100 Haverty Furniture Co. 95,850
6,200 Shelby Williams Industries Inc. 102,300
----------
198,150
----------
INDUSTRIAL SERVICES (5.4%)
6,000 Clarcor Inc. 177,750
12,000 Regal Beloit Corp. 354,750
5,000 York International, Corp. 197,812
----------
730,312
----------
INSURANCE SERVICES (1.0%)
4,000 Blanch EW Holdings Inc. 137,750
----------
MEDICAL AND RELATED (2.5%)
500 Allegiance Corporation 17,719
2,500 Baxter International, Inc. 126,094
2,150 National Healthcare LP 120,400
1,500 United Healthcare Corp. 74,531
----------
338,744
----------
METALS AND MINING (0.7%)
6,000 Worthington Industries, Inc. 99,000
----------
OIL, ENERGY AND GAS (10.3%)
8,000 Camco International, Inc. 509,500
1,400 Kerr-McGee Corp. 88,637
4,800 National Propane Partners LP 101,700
5,000 Pacific Gulf Properties, Inc. 118,750
6,000 WD-40 Co. 174,000
4,000 Westcoast Energy, Inc. 92,000
10,500 Williams Cos., Inc. 297,938
----------
1,382,525
----------
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------------
REAL ESTATE (8.3%)
5,000 Bershire Realty Company, Inc. $ 60,000
3,000 Camden Property Trust 93,000
8,000 Commercial Net Lease Realty 143,000
4,000 First Industrial Realty Trust 144,500
7,000 Great Lakes REIT Inc. 136,062
6,000 Healthcare Realty Trust, Inc. 173,625
6,000 Liberty Property Trust 171,375
4,500 National Health Investors, Inc. 188,438
-----------
1,110,000
-----------
TEXTILES AND RELATED (1.1%)
4,500 Oxford Industries, Inc. 146,250
-----------
TRANSPORTATION (2.9%)
2,000 Burlington Northern Santa Fe 185,875
2,500 CNF Transportation, Inc. 95,937
4,500 * Wisconsin Central Trans. Corp. 105,188
-----------
387,000
-----------
UTILITIES (0.4%)
2,000 UGI Corp. 58,625
-----------
TOTAL COMMON STOCK (74.7%)
(COST $6,076,640) $10,022,030
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- -------------------------------------------------------------------
AUTOMOTIVE AND RELATED (0.3%)
2,000 Walbro Capital Trust 8.000% $ 47,500
-----------
BANKING (0.9%)
4,000 National Australia Bank Ltd. 113,750
-----------
FINANCE (0.2%)
1,500 * Money Store Inc 6.500% 33,094
-----------
OIL, ENERGY AND GAS (1.8%)
3,000 Consumers Energy Fin II 8.200% 75,562
3,000 Howell Corp. $3.50 Series A 165,750
-----------
241,312
-----------
REAL ESTATE (0.5%)
2,500 Oasis Residential, Inc.
$2.25 Series A 64,063
-----------
TOTAL PREFERRED STOCK (3.7%)
(COST $480,363) $ 499,719
-----------
TOTAL HOLDINGS
(COST $9,993,786) (a) $14,097,734
===========
</TABLE>
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
17
<PAGE> 18
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $9,993,786) ........................... $ 14,097,734
Cash in bank ................................................ 892
Receivable for fund shares sold ............................. 61,305
Dividends and accrued interest receivable ................... 74,807
Other ....................................................... 3,748
------------
Total assets ............................................... 14,238,486
------------
Liabilities:
Payable for investment management
services (note 3) .......................................... 4,397
Accrued 12b-1 fees (note 6) ................................. 8,586
Other accrued expenses ...................................... 8,773
Dividends payable ........................................... 800,018
------------
Total liabilities .......................................... 821,774
------------
Net assets at market value ................................... $ 13,416,712
============
Net assets consist of:
Par value, $.001 per share .................................. $ 881
Paid-in capital in excess of par value ...................... 9,254,842
Accumulated undistributed net realized
gain on investments ........................................ 56,984
Net unrealized appreciation on investments .................. 4,103,948
Undistributed net investment income ......................... 57
------------
Net assets at market value ................................... $ 13,416,712
============
Shares outstanding ........................................... 881,233
Net asset value per share .................................... $ 15.22
============
Maximum offering price per share ($15.22/95%) ................ $ 16.02
============
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
Investment income:
Interest .................................................... $ 121,489
Dividends ................................................... 168,507
------------
Total investment income .................................... 289,996
------------
Expenses:
Management fees (note 3) .................................... 35,619
12b-1 fees (note 6) ......................................... 17,809
Custodian fees (note 3) ..................................... 3,243
Directors' fees (note 3) .................................... 1,198
Professional fees ........................................... 4,714
Transfer agent and accounting fees .......................... 23,476
Filing fees ................................................. 3,988
Organizational expense (note 1) ............................. 446
Other ....................................................... 1,774
------------
Total expenses ............................................. 92,267
Less expenses voluntarily reduced
or reimbursed (note 3) .................................... (10,686)
------------
Net expenses ............................................... 81,581
------------
Net investment income ...................................... 208,415
------------
Realized and unrealized gain on investments:
Net realized gain from investments .......................... 614,147
Net increase in unrealized
appreciation on investments ................................ 356,330
------------
Net gain on investments ................................... 970,477
------------
Net increase in net
assets from operations .................................... $ 1,178,892
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 19
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
-------------- -------------
<S> <C> <C>
From operations:
Net investment income ........................................... $ 208,415 $ 321,700
Realized gain on investments .................................... 614,147 129,214
Unrealized gain on investments .................................. 356,330 1,933,894
------------ ------------
Net increase in assets from operations ...................... 1,178,892 2,384,808
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ....................... (211,473) (320,587)
Capital gains distributions ..................................... (676,652) (243,651)
------------ ------------
Total dividends and distributions ........................... (888,125) (564,238)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ....................................... 1,122,759 2,484,392
Received from dividends reinvested .............................. 50,024 427,145
Paid for shares redeemed ........................................ (1,161,286) (2,386,862)
------------ ------------
Increase in net assets derived from capital share transactions 11,497 524,675
------------ ------------
Increase in net assets ..................................... 302,264 2,345,245
------------ ------------
Net Assets:
Beginning of period ............................................. 13,114,448 10,769,203
------------ ------------
End of period (a) ............................................... $ 13,416,712 $ 13,114,448
============ ============
(a) Includes undistributed net investment income of............... $ 57 $ 3,116
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months
Ended Years Ended June 30,
12-31-97 1997 1996 1995 1994
---------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period ........................ $14.89 $12.78 $11.57 $10.65 $10.96
Income from investment operations:
Net investment income ................................ 0.24 0.38 0.38 0.41 0.33
Net realized and unrealized gain (loss) on investments 1.10 2.39 1.27 1.54 (0.11)
------ ------ ------ ------ ------
Total income from investment operations ........... 1.34 2.77 1.65 1.95 0.22
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income ................. (0.24) (0.38) (0.37) (0.41) (0.33)
Distributions from net realized capital gains ........ (0.77) (0.28) (0.07) (0.62) (0.20)
------ ------ ------ ------ ------
Total distributions ............................... (1.01) (0.66) (0.44) (1.03) (0.53)
------ ------ ------ ------ ------
Net asset value, end of period .............................. $15.22 $14.89 $12.78 $11.57 $10.65
====== ====== ====== ====== ======
Total return ................................................ 8.97%(b) 22.34% 14.50% 19.41% 1.96%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses ............................................. 1.18%(a) 1.12% 0.89% 0.81% 0.94%
Net investment income ................................ 3.00%(a) 2.77% 3.10% 3.69% 3.08%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses ............................................. 1.33%(a) 1.31% 1.14% 1.06% 1.19%
Net investment income ................................ 2.85%(a) 2.58% 2.85% 3.44% 2.83%
Average commission rate (d) ................................. $ 0.07 $ 0.07 NR NR NR
Portfolio turnover rate ..................................... 9% 14% 7% 25% 14%
Net assets at end of period (millions) ...................... $ 13.4 $ 13.1 $ 10.8 $ 7.7 $ 7.5
</TABLE>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the Income
& Growth portfolio, but it may cease that waiver, in whole or in part,
without prior notice. In addition, the advisor has reimbursed certain
operating expenses.
(d) Represents the total dollar amount of commission paid on equity security
transactions divided by the total number of shares purchased and sold for
which commissions were charged.
NR Not required prior to June 30, 1997.
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 20
GROWTH PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide long-term capital growth. Current income is incidental. Normally
at least 90% of the assets of this portfolio will be invested in common stocks.
Selection of stocks is not limited with regard to whether stocks are exchange-
listed or dividend-paying or whether they are issued by companies of any
particular size.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 16.72% 10.89%
Three-year 21.45% 19.42%
Five-year 15.96% 14.79%
Since inception (8/18/92) 16.04% 14.94%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment
return and principal value will fluctuate so that shares, when redeemed, may
be worth more or less than their original cost. The advisor is currently
waiving fees of .15% for this portfolio. Had the fees not been waived, returns
would have been lower.
COMMENTS
1997 was, for the most part, the third straight year of very good returns in
the domestic equity markets (when compared to the long-term average annual rate
of return for domestic stocks of 10%). Large-capitalization stocks again led
the way, pushed by enormous flows of cash into stock mutual funds, increased
interest in index methods of investing and continued positive profit growth.
Most, small- mid- and blended-capitalization stock indices and mutual funds
lagged the large-cap funds and S&P 500 Index. The year was very volatile with
some sectors of the market at times experiencing bear market-like conditions.
We expect those areas and others to rebound from their corrections.
The Growth Portfolio's performance for the calendar year trailed that of the
S&P 500 Index for two primary reasons. First, even though many of the
portfolio's largest holdings are large-cap stocks, approximately two-thirds of
the portfolio's total holdings consist of companies whose market
capitalizations range from $300 million to $5 billion. This area of the market
has not kept pace with the larger stocks, despite better valuations in relation
to potential earnings growth. Second, the portfolio didn't rebound from the
October drop experienced by nearly all equity markets. The technology and
energy sectors of the portfolio experienced the largest drops. We expect
these areas to rebound from their corrections as their secular outlooks remain
positive.
Looking forward, we expect continued volatility in the equity markets.
Continued strong cash flows into mutual funds could push markets higher.
Concerns about slowing profit growth and economic uncertainty in emerging
growth areas and its impact on he rest of the world could cause sharp
sell-offs. We expect equity returns to gravitate toward their long-term
averages.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
'92 '93 '94 '95 '96 '97
<S> <C> <C> <C> <C> <C> <C>
GROWTH PORTFOLIO
(COMMENCED OPERATIONS AUGUST 18, 1992) $10,180 $11,920 $11,990 $15,370 $18,100 $21,127
S&P INDEX $10,627 $11,688 $11,842 $16,274 $20,030 $26,690
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
It is not open to direct investment.
<TABLE>
<CAPTION>
TOP 10 STOCKS AS OF DECEMBER 31, 1997
% of Portfolio
<S> <C>
1. Cisco Systems 4.25%
2. Camco International 2.99
3. Texas Instruments 2.81
4. Allied Signal 2.74
5. Hardinge 2.48
6. Magna International 2.46
7. Hewlett Packard 2.44
8. Cedar Fair 2.02
9. Microsoft Corp 2.02
10. Williams Cos. 2.00
</TABLE>
<TABLE>
<CAPTION>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1997
% of Portfolio
<S> <C>
Computer and Related 18.23
Oil, Energy, and Natural Gas 10.76
Electrical Equipment 8.34
Medical and Related 7.58
Business Services 7.01
</TABLE>
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
21
<PAGE> 21
<TABLE>
<CAPTION>
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ---------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (3.6%)
$212,000 Ford Motor Credit Corp.
5.950% 01-07-98 $211,790
254,000 General Motors Acceptance Corp.
6.190% 01-05-98 253,825
----------
465,615
----------
FINANCIAL SERVICES (2.9%)
258,000 American Express Credit Corp.
5.750% 01-06-98 257,794
108,000 Household Finance Corp.
6.100% 01-02-98 107,982
----------
365,776
----------
TOTAL SHORT-TERM NOTES
(6.5%) (COST $831,391) $831,391
----------
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------------
<S> <C> <C>
AEROSPACE (4.5%)
9,000 Allied Signal, Inc. $350,438
336 Boeing Co. 16,443
4,000 Rockwell International Corp. 209,000
----------
575,881
----------
AUTOMOTIVE AND RELATED (5.8%)
5,500 Arvin Industries, Inc. 183,219
3,000 Chrysler Corp. 105,562
2,000 Cooper Tire & Rubber 48,750
5,000 Magna International, Inc. CL A 314,063
7,000 Walbro Corp. 94,062
----------
745,656
----------
BANKING (3.8%)
3,307 Charter One Financial, Inc. 208,754
3,500 Flagstar Bancorp, Inc. 69,289
1,000 Star Banc Corp. 57,375
3,750 Susquehanna Bancshares 143,438
----------
478,856
----------
BUSINESS SERVICES (7.5%)
8,500 *Alternative Resources Corp. 196,031
6,000 *American Business Info. CL B 61,500
5,000 First Data Corp. 146,250
7,500 *Lo Jack Corp. 110,625
5,000 Manpower Inc. 176,250
5,500 *Mapics Inc. 59,812
6,000 Reynolds and Reynolds CL A 110,625
4,500 Wackenhut Corp. CL B 95,063
----------
956,156
----------
CHEMICALS (3.7%)
5,000 Chemi-Trol Chemical Co. 110,000
3,500 Minerals Technologies, Inc. 159,031
5,500 OM Group Inc. 201,438
----------
470,469
----------
CONSUMER GOODS (1.6%)
8,000 *Acorn Products Inc. 80,000
4,000 *Sola International 130,000
----------
210,000
----------
COMMUNICATIONS (0.6%)
3,187 *Mastec Inc. 72,903
----------
COMPUTER AND RELATED (18.7%)
6,000 American Business Info CL A $63,000
2,000 *3Com Corp. 69,875
9,750 *Cisco Systems, Inc. 543,563
4,500 Computer Associates Intl. 237,938
9,000 *Continental Circuits Corp. 125,437
5,000 Hewlett Packard Co. 312,500
3,000 Intel Corp. 210,750
1,000 *LSI Logic 19,750
10,000 MacNeal-Schwendler Corp. 96,250
2,000 *Microsoft Corp. 258,500
1,000 *Structural Dynamics Research Corp. 22,500
8,000 Texas Instruments, Inc. 360,000
2,500 *Zebra Tech. Corp. CL A 74,375
----------
2,394,438
----------
DRUGS (0.6%)
5,000 *Applied Analytical Industries 82,500
----------
ELECTRICAL EQUIPMENT (8.3%)
5,000 *Advanced Lighting Tech. Inc. 95,000
6,666 *Analog Devices, Inc. 184,565
7,500 *Anixter International, Inc. 123,750
5,000 BMC Industries, Inc. 80,625
8,000 CBS Corporation 235,500
7,000 *Richey Electronics, Inc. 71,750
4,000 Varian Associates, Inc. 202,250
1,000 Xerox Corp. 73,812
----------
1,067,252
----------
ENTERTAINMENT AND LEISURE (2.0%)
10,000 Cedar Fair 258,750
----------
FOOD AND RELATED (2.2%)
10,000 Food Lion Inc. CL A 84,375
6,000 Panamerican Beverages Inc CL A 195,750
----------
280,125
----------
FORESTRY AND PAPER PRODUCTS (1.1%)
4,000 Sonoco Products Co. 138,750
----------
HOTEL/ LODGING (1.7%)
6,500 *Guest Supply, Inc. 85,312
2,000 La Quinta Inns 38,625
4,000 *Mirage Resorts, Inc. 91,000
----------
214,937
----------
HOUSING, FURNITURE & RELATED (1.4%)
5,000 Meadowcraft Inc. 58,750
7,500 Shelby Williams Industries, Inc. 123,750
----------
182,500
----------
INDUSTRIAL SERVICES (3.4%)
10,000 *Medar Inc. 53,750
8,000 Regal Beloit Corp. 236,500
3,500 York International Corp. 138,469
----------
428,719
----------
INSURANCE (2.3%)
4,000 Blanch (EW) Holdings, Inc. 137,750
1,900 St. Paul Cos. 155,919
----------
293,669
----------
(continued)
</TABLE>
22
<PAGE> 22
<TABLE>
<CAPTION>
ONE FUND, INC.
GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- -----------------------------------------------------------
<S> <C> <C>
MACHINERY (2.5%)
8,500 Hardinge Inc. $316,625
-----------
MEDICAL AND RELATED (7.6%)
700 Allegiance Corp. 24,806
3,500 Baxter International 176,531
5,500 *Cephalon Inc. 62,563
5,600 Columbia HCA Healthcare 165,900
3,900 *Foundation Health Corp. 87,263
2,000 *Humana Inc. 41,500
2,150 National Healthcare LP 120,400
8,250 *Quorum Health Group, Inc. 215,531
1,500 United Healthcare Corp. 74,531
-----------
969,025
-----------
METAL FABRICATING (3.4%)
10,000 Amcast Industrial Corp. 229,375
3,250 *Wolverine Tube, Inc. 100,750
6,000 Worthington Industries Inc. 99,000
-----------
429,125
-----------
OIL, ENERGY AND NATURAL GAS (9.7%)
4,500 *Belco Oil & Gas Corp. 84,656
6,000 Camco International, Inc. 382,125
7,000 *Louis Dreyfus Natural Gas Corp. 130,813
2,500 *Offshore Logistics Inc. 53,437
8,000 Santa Fe Energy Resources, Inc. 90,000
6,700 *Tesoro Petroleum Corp. 103,850
5,400 *The Meridian Resource Corp. 51,637
9,000 Williams Cos., Inc. 255,375
6,100 Wiser Oil Co. 86,163
-----------
1,238,056
-----------
RESTAURANTS (0.7%)
10,000 *Buffets Inc. 93,750
-----------
RETAIL (0.5%)
10,000 *Ridgeview Inc. 62,500
-----------
TEXTILES AND RELATED (0.7%)
3,000 Warnaco Group, CL A 94,125
-----------
TRANSPORTATION (4.2%)
4,000 *Atlas Air Inc. $96,000
955 Burlington Northern Santa Fe 88,755
2,500 Consolidated Freightways, Inc. 95,938
1,566 *Halter Marine Group Inc. 45,218
3,000 Trinity Industries 133,875
3,500 *Wisconsin Central Trans. Corp. 81,812
-----------
541,598
-----------
TOTAL COMMON STOCK (98.5%)
(COST $8,414,945) $12,596,365
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- -----------------------------------------------------------
<S> <C> <C>
FINANCE (0.3%)
1,500 Money Store 6.500% $33,094
-----------
OIL, ENERGY AND NATURAL GAS (1.1%)
2,500 Howell Corp. $3.50 Series A 138,125
-----------
REAL ESTATE (0.2%)
1,250 Oasis Residential Inc., 9.000%
Series A 32,031
-----------
TOTAL PREFERRED STOCK (1.6%)
(COST $199,074) $203,250
-----------
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- -----------------------------------------------------------
<S> <C> <C>
BANKING (0.5%)
$50,000 First State Bancorporation
7.500% 04-30-17 $64,937
-----------
TOTAL CONVERTIBLE DEBENTURES
(0.5%) (COST $50,000) $64,937
-----------
TOTAL HOLDINGS
(COST $9,495,410)(a) $13,695,943
===========
<FN>
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
</TABLE>
23
<PAGE> 23
<TABLE>
<CAPTION>
ONE FUND, INC.
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $9,495,410) ................. $13,695,943
Cash in bank ...................................... 721
Receivable for fund shares sold.................... 3,438
Dividends and accrued interest receivable ......... 17,809
Other ............................................. 3,649
-----------
Total assets ..................................... 13,721,560
-----------
Liabilities:
Payable for fund shares redeemed .................. 5,200
Payable for investment management
services (note 3) ................................ 4,325
Accrued 12b-1 fees (note 6) ....................... 8,706
Other accrued expenses ............................ 13,708
Dividends payable ................................. 900,985
-----------
Total liabilities ................................ 932,924
-----------
Net assets at market value $12,788,636
===========
Net assets consist of:
Par value, $.001 per share ........................ $747
Paid-in capital in excess of par value ............ 8,532,939
Accumulated undistributed net realized
gain on investments .............................. 53,761
Net unrealized appreciation on investments ........ 4,200,533
Underdistributed net investment income ............ 656
-----------
Net assets at market value $12,788,636
===========
Shares outstanding.................................. 746,832
Net asset value per share........................... $17.12
===========
Maximum offering price per share ($17.12/95%)....... $18.02
===========
<CAPTION>
STATEMENT OF OPERATIONS
For the six months ended December 31, 1997 (Unaudited)
<S> <C>
Investment income:
Interest........................................... $25,236
Dividends.......................................... 72,566
------------
Total investment income........................... 97,802
------------
Expenses:
Management fees (note 3)........................... 35,950
12b-1 fees (note 6)................................ 17,975
Custodian fees (note 3)............................ 3,243
Directors' fees (note 3) .......................... 1,114
Professional fees.................................. 4,791
Transfer agent and accounting fees ................ 25,712
Filing fees ....................................... 4,029
Organizational expense (note 1).................... 440
Other.............................................. 1,625
------------
Total expenses.................................... 94,879
Less expenses voluntarily reduced
or reimbursed (note 3)........................... (10,785)
------------
Net expenses...................................... 84,094
------------
Net investment income ............................ 13,708
------------
Realized and unrealized gain on investments:
Net realized gain from investments ................ 493,556
Net increase in unrealized
appreciation on investments ...................... 105,427
------------
Net gain on investments.......................... 598,983
------------
Net increase in net
assets from operations........................... $612,691
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 24
<TABLE>
<CAPTION>
ONE FUND, INC.
GROWTH PORTFOLIO
Statement of Changes in Net Assets (Unaudited)
6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
------------- -------------
<S> <C> <C>
From operations:
Net investment income ........................................................................... $13,708 $52,241
Realized gain on investments .................................................................... 493,556 542,097
Unrealized gain on investments .................................................................. 105,427 1,573,212
------------- -------------
Net increase in assets from operations......................................................... 612,691 2,167,550
------------- -------------
Dividends and distributions to shareholders:
Dividends paid from net investment income........................................................ (11,952) (53,115)
Capital gains distributions ..................................................................... (889,028) (495,835)
------------- -------------
Total dividends and capital gains distributions ............................................... (900,980) (548,950)
------------- -------------
From capital share transactions (note 4):
Received from shares sold ....................................................................... 984,401 2,494,756
Received from dividends reinvested .............................................................. 0 400,497
Paid for shares redeemed ........................................................................ (1,182,365) (2,996,818)
------------- -------------
Decrease in net assets derived from capital share transactions.................................. (197,964) (101,565)
------------- -------------
Increase (decrease) in net assets............................................................. (486,253) 1,517,035
------------- -------------
Net Assets:
Beginning of period ............................................................................. 13,274,889 11,757,854
------------- -------------
End of period (a) ............................................................................... $12,788,636 $13,274,889
============= =============
(a) Includes underdistributed (overdistributed) net investment income of......................... $656 ($1,100)
============= =============
<CAPTION>
Financial Highlights (Unaudited)
Six Months
Ended Years Ended June 30,
12-31-97 1997 1996 1995 1994
---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period......................... $17.52 $15.47 $13.03 $11.67 $11.63
Income from investment operations:
Net investment income....................................... 0.02 0.07 0.14 0.16 0.12
Net realized and unrealized gain on investments ............ 0.79 2.73 2.72 2.17 0.22
---------- ------- ------- ------- -------
Total income from investment operations.................... 0.81 2.80 2.86 2.33 0.34
---------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income........................ (0.02) (0.07) (0.14) (0.16) (0.12)
Distributions from net realized capital gains............... (1.19) (0.68) (0.28) (0.81) (0.18)
---------- ------- ------- ------- -------
Total distributions........................................ (1.21) (0.75) (0.42) (0.97) (0.30)
---------- ------- ------- ------- -------
Net asset value, end of period............................... $17.12 $17.52 $15.47 $13.03 $11.67
========== ------- ------- ------- -------
Total return................................................. 4.60% (b) 18.68% 22.22% 20.54% 2.85%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................... 1.20% (a) 1.13% 0.90% 0.83% 1.04%
Net investment income....................................... 0.20% (a) 0.43% 0.99% 1.35% 1.04%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................... 1.36% (a) 1.32% 1.15% 1.08% 1.30%
Net investment income....................................... 0.04% (a) 0.24% 0.74% 1.10% 0.79%
Average commission rate (d) ................................. $0.06 $0.07 NR NR NR
Portfolio turnover rate...................................... 9% 27% 22% 24% 8%
Net assets at end of period (millions)....................... $12.8 $13.3 $11.8 $7.0 $5.3
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the Growth portfolio, but it may cease that waiver,
in whole or in part, without prior notice.
In addition, the advisor has reimbursed certain operating expenses.
(d) Represents the total dollar amount of commissions paid on equity security transactions divided by the total number of
shares purchased and sold for which commissions were charged.
NR Not required prior to June 30, 1997
The accompanying notes are an integral part of these financial statements.
</TABLE>
25
<PAGE> 25
SMALL CAP PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide maximum capital growth by investing primarily in common stocks of
small and medium sized companies. Under normal conditions, at least 65% of this
portfolio's assets will be invested in common stocks of companies with market
capitalization of less than $1 billion.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 16.92% 11.07%
Three-year 18.34% 16.36%
Since inception (11/1/94) 17.59% 15.67%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
1997 was, for the most part, the third straight year of very good returns in the
domestic equity markets (when compared to the long-term average annual rate of
return for domestic stocks of 10%). Large-capitalization stocks again led the
way, pushed by enormous flows of cash into stock mutual funds, increased
interest in index methods of investing and continued positive profit growth.
Most small-, mid- and blended-capitalization stock indices and mutual funds
lagged the large-cap funds and S&P 500 Index. The year was very volatile with
some sectors of the market at times experiencing bear market-like conditions. We
expect those areas and others to rebound from their corrections.
The Small Cap Portfolio's performance for the calendar year trailed the
Russell 2000 Index return because the portfolio maintained a 10% to 12% cash
position for most of this year. This structure provided relatively positive
results during the first and fourth quarters of 1997 when many small-cap issues
suffered near bear market types of conditions. The portfolio lagged the
small-cap rally in the second and third quarters of 1997.
Looking forward, we expect continued volatility in the equity markets.
Continued strong cash flows into mutual funds could push markets higher.
Concerns about slowing profit growth and economic uncertainty in emerging growth
areas and its impact on the rest of the world could cause sharp sell-offs. We
expect equity returns to gravitate toward their long-term averages.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'94 '95 '96 '97
<S> <C> <C> <C> <C>
SMALL CAP PORTFOLIO
(COMMENCED OPERATIONS NOVEMBER 1, 1994) $9,540 $11,601 $13,572 $15,872
RUSSELL 2000 INDEX $9,853 $12,656 $14,744 $18,027
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C>
1. Camco International 2.88
2. Hardinge 2.70
3. Alternative Resources 2.29
4. Quorum Health Group 2.22
5. Clarcor Inc 2.14
6. WD-40 2.10
7. Healthcare Realty 2.09
8. Susquehanna Bankshares 2.08
9. First Industrial Realty Trust 1.96
10. Commercial Net Lease Realty 1.94
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31,1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Oil, Energy, and Natural Gas 14.02
Real Estate and Leasing 10.94
Computer and Related 8.79
Financial 7.32
Electrical Equipment 6.58
</TABLE>
<PAGE> 26
<TABLE>
<CAPTION>
ONE FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (1.6%)
7,500 Defiance Inc. $60,000
2,000 Walbro Corp. 26,875
----------
86,875
----------
BANKING (4.6%)
6,500 First International Bancorp, Inc. 78,812
3,000 Flagstar Bancorp, Inc. 59,391
3,000 Susquehanna Bancshares 114,750
----------
252,953
----------
BUSINESS SERVICES (8.3%)
5,500 *Alternative Resources Corp. 126,844
4,000 *American Business Info. CL B 41,000
6,500 *Lo Jack Corp. 95,875
2,500 *Mapics Inc 27,187
2,000 Pittston Brink's Group 80,500
2,000 Reynolds & Reynolds CL A 36,875
2,500 Wackenhut Corp. CL B 52,813
----------
461,094
----------
CHEMICALS (3.4%)
4,000 Chemi-Trol Chemical Co. 88,000
2,750 OM Group Inc. 100,719
----------
188,719
----------
COMMUNICATIONS (0.7%)
1,687 *Mastec Inc. 38,590
----------
COMPUTER AND RELATED (8.8%)
4,000 *American Business Info CL A 42,000
6,000 *Continental Circuits Corp. 83,625
3,000 *Ikos Systems, Inc. 18,375
5,000 MacNeal-Schwendler Corp. 48,125
7,500 *Map Info Corp 89,062
4,500 *Rand A Technology Corp. 69,182
1,000 *Structural Dynamics Research Corp. 22,500
2,000 *Whittman-Hart Inc. 68,500
1,500 *Zebra Tech Corp. CL A 44,625
----------
485,994
----------
CONSUMER PRODUCTS (2.6%)
6,000 *Acorn Products, Inc. 60,000
2,500 *Sola International, Inc. 81,250
----------
141,250
----------
DRUGS (0.6%)
2,000 *Applied Analytical Industries, Inc. 33,000
----------
DURABLE GOODS (1.1%)
3,300 Myers Industries, Inc. 61,937
----------
ELECTRICAL EQUIPMENT (5.7%)
5,000 *Anixter International, Inc. 82,500
5,000 BMC Industries, Inc. 80,625
2,000 Federal Signal Corp. 43,250
15,000 Rohn Industries, Inc. 77,345
3,000 *Richey Electronics, Inc. 30,750
----------
314,470
----------
ENTERTAINMENT AND LEISURE (1.4%)
3,000 Cedar Fair 77,625
----------
FINANCE (1.6%)
8,000 Bando McGlocklin Capital Corp. 90,000
----------
FORESTRY AND PAPER PRODUCTS (1.7%)
4,500 *Fibermark Inc. $96,750
----------
HOTEL/MOTEL (1.3%)
5,500 *Guest Supply 72,187
----------
HOUSING, FURNITURE & RELATED (4.5%)
5,600 Haverty Furniture 75,600
5,000 Medowcraft Inc. 58,750
4,800 Shelby Williams Industries, Inc. 79,200
4,000 *Zaring National Corp. 36,000
----------
249,550
----------
INDUSTRIAL SERVICES (6.7%)
4,000 *Advanced Lighting Tech., Inc. 76,000
4,000 Clarcor Inc. 118,500
4,500 IMCO Recycling Inc. 72,281
10,000 *Medar Inc. 53,750
8,000 *Recycling Industries, Inc. 48,000
----------
368,531
----------
INSURANCE SERVICES (1.9%)
3,000 Blanch (EW) Holdings, Inc. 103,312
----------
MACHINERY (2.7%)
4,000 Hardinge Inc. 149,000
----------
MEDICAL AND RELATED (2.8%)
3,000 *Cephalon Inc. 34,125
4,688 *Quorum Health Group, Inc. 122,461
----------
156,586
----------
METAL AND MINING (2.3%)
2,500 Amcast Industrial Corp. 57,344
2,250 *Wolverine Tube, Inc. 69,750
----------
127,094
----------
OIL, ENERGY AND NATURAL GAS (14.0%)
4,200 *Belco Oil & Gas Corp. 79,013
2,500 Camco International, Inc. 159,219
5,000 *Louis Dreyfus Natural Gas Corp. 93,438
5,400 *Meridian Resource Corp. 51,637
12,500 *Newstar Resources, Inc. CL A 43,750
2,500 *Offshore Logistics, Inc. 53,437
8,000 *Santa Fe Energy Resources, Inc. 90,000
3,000 *Tesoro Petroleum Corp. 46,500
4,000 WD-40 Co. 116,000
3,000 Wiser Oil Co. 42,375
----------
775,369
----------
REAL ESTATE (9.4%)
6,000 Commercial Net Lease Realty 107,250
3,000 First Industrial Realty Trust 108,375
3,000 Great Lakes REIT, Inc. 58,312
4,000 Healthcare Realty Trust, Inc. 115,750
3,000 Liberty Property Trust 85,688
1,000 National Health Investors, Inc. 41,875
----------
517,250
----------
RESTAURANTS (1.0%)
6,000 *Buffets Inc. 56,250
----------
TEXTILES & RELATED (1.1%)
10,000 *Ridgeview Inc. 62,500
----------
</TABLE>
(continued)
28
<PAGE> 27
<TABLE>
<CAPTION>
ONE FUND, INC.
SMALL CAP PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION & EQUIPMENT (3.0%)
2,500 *Atlas Air Inc. $60,000
3,500 *Avondale Industries, Inc. 103,906
-----------
163,906
-----------
TOTAL COMMON STOCK
(92.8%) (COST $4,306,254) $5,130,792
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- ------------------------------------------------------------
<S> <C> <C>
OIL, ENERGY AND NATURAL GAS (1.0%)
1,000 Howell Corp. $3.50 Series A $55,250
-----------
REAL ESTATE AND LEASING (0.6%)
1,250 Oasis Residential Inc.
9.000% Series A 32,031
-----------
TOTAL PREFERRED STOCK
(1.6%) (COST $82,350) $87,281
-----------
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- ------------------------------------------------------------
<S> <C> <C>
BANKING (1.2%)
$50,000 First State Bancorporation
7.500% 04-30-17 $64,938
-----------
ELECTRICAL EQUIPMENT (0.9%)
50,000 Richey Electronics
7.000% 03-01-06 49,250
-----------
TOTAL CONVERTIBLE DEBENTURES
(2.1%) (COST $95,853) $114,188
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE (6.0%)
$166,000 Ford Motor Credit Corp.
5.800% 01-07-98 $165,840
165,000 General Motors Acceptance Corp.
6.000% 01-08-98 164,807
-----------
330,647
-----------
FINANCIAL SERVICES (5.7%)
140,000 G.E. Capital Corp.
6.080% 01-02-98 139,976
175,000 Household Finance Corp.
6.100% 01-06-98 174,852
-----------
314,828
-----------
INSURANCE SERVICES (2.2%)
124,000 Cigna Corporation
6.170% 01-05-98 123,915
-----------
TOTAL SHORT-TERM NOTES
(13.9%) (COST $769,390) $769,390
-----------
TOTAL HOLDINGS
(COST $5,253,847)(a) $6,101,651
===========
<FN>
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities
The accompanying notes are an integral part of these financial statements.
</TABLE>
29
<PAGE> 28
<TABLE>
<CAPTION>
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $5,253,847)................ $6,101,651
Cash in bank .................................... 307
Receivable for fund shares sold.................. 3,006
Dividends and accrued interest receivable ....... 9,799
Deferred organizational expenses (note 1) ....... 945
Other ........................................... 1,986
-----------
Total assets ................................... 6,117,694
-----------
Liabilities:
Payable for fund shares redeemed ................ 1,000
Payable for investment management
services (note 3) .............................. 2,724
Accrued 12b-1 fees (note 6) ..................... 3,379
Other accrued expenses .......................... 7,738
Dividends payable ............................... 574,501
-----------
Total liabilities .............................. 589,342
-----------
Net assets at market value $5,528,352
===========
Net assets consist of:
Par value, $.001 per share ...................... $426
Paid-in capital in excess of par value .......... 4,631,389
Accumulated undistributed net realized
gain on investments ............................ 48,733
Net unrealized appreciation on investments ...... 847,804
-----------
Net assets at market value $5,528,352
===========
Shares outstanding................................ 426,239
Net asset value per share......................... $12.97
===========
Maximum offering price per share ($12.97/95%)..... $13.65
===========
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest.......................................... $21,115
Dividends......................................... 54,782
-----------
Total investment income.......................... 75,897
-----------
Expenses:
Management fees (note 3).......................... 19,062
12b-1 fees (note 6)............................... 7,331
Custodian fees (note 3)........................... 2,789
Directors' fees (note 3).......................... 436
Professional fees................................. 1,875
Transfer agent and accounting fees ............... 16,285
FIling fees ...................................... 4,130
Organizational expense (note 1)................... 267
Other............................................. 761
-----------
Total expenses................................... 52,936
Less expenses voluntarily reduced
or reimbursed (note 3).......................... (4,399)
-----------
Net expenses..................................... 48,537
-----------
Net investment income ........................... 27,360
-----------
Realized and unrealized gain (loss) on investments:
Net realized gain from investments ............... 366,149
Net decrease in unrealized
appreciation on investments ..................... (7,529)
-----------
Net gain on investments......................... 358,620
-----------
Net increase in net
assets from operations.......................... $385,980
===========
</TABLE>
30
The accompanying notes are an integral part of these financial statements.
<PAGE> 29
<TABLE>
<CAPTION>
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
6 MONTHS ENDED YEAR ENDED
DEC. 31, 1997 JUNE 30, 1997
------------ -------------
<S> <C> <C>
From operations:
Net investment income ................................................................... $27,560 $41,520
Realized gain on investments ............................................................ 366,149 298,952
Unrealized gain (loss) on investments ................................................... (7,529) 353,303
------------ -------------
Net increase in assets from operations................................................. 386,180 693,775
------------ -------------
Dividends and distributions to shareholders:
Dividends paid from net investment income................................................ (26,854) (41,809)
Capital gains distributions ............................................................. (547,647) (428,367)
------------ -------------
Total dividends and distributions ..................................................... (574,501) (470,176)
------------ -------------
From capital share transactions (note 4):
Received from shares sold ............................................................... 809,978 965,667
Received from dividends reinvested ...................................................... 0 204,093
Paid for shares redeemed ................................................................ (296,671) (652,126)
------------ -------------
Increase in net assets derived from capital share transactions.......................... 513,307 517,634
------------ -------------
Increase in net assets ............................................................... 324,786 741,233
------------ -------------
Net Assets:
Beginning of period ..................................................................... 5,203,566 4,462,333
------------ -------------
End of period (a) ....................................................................... $5,528,352 $5,203,566
============ =============
(a) Includes overdistributed net investment income of.................................... 0 ($504)
============ =============
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
SIX MONTHS 11-1-94
ENDED YEARS ENDED JUNE 30, TO
12-31-97 1997 1996 6-30-95
---------- ------- ------ -------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period....................... $13.30 $12.82 $10.63 $10.00
Income from investment operations:
Net investment income..................................... 0.06 0.11 0.26 0.22
Net realized and unrealized gain on investments .......... 0.95 1.67 2.26 0.67
--------- -------- ------ -------
Total income from investment operations.................. 1.01 1.78 2.52 0.89
--------- -------- ------ -------
Less distributions:
Dividends from net investment income...................... (0.06) (0.11) (0.25) (0.22)
Distributions from net realized capital gains............. (1.28) (1.19) (0.08) (0.04)
--------- -------- ------ -------
Total distributions...................................... (1.34) (1.30) (0.33) (0.26)
--------- -------- ------ -------
Net asset value, end of period............................. $12.97 $13.30 $12.82 $10.63
========= ======== ====== =======
Total return............................................... 7.65% (b) 14.82% 24.10% 8.91%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.72% (a) 1.35% 0.94% 1.00%
Net investment income..................................... 0.96% (a) 0.89% 2.21% 3.19%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.86% (a) 1.62% 1.27% 1.31%
Net investment income..................................... 0.82% (a) 0.62% 1.88% 2.88%
Average commission rate (d)................................ $0.11 $0.08 NR NR
Portfolio turnover rate.................................... 23% 34% 34% 8%
Net assets at end of period (millions)..................... $5.5 $5.2 $4.5 $2.9
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to waive 0.15% of the management fee for the Small Cap portfolio, but it may cease that waiver,
in whole or in part, without prior notice.
In addition, the advisor has reimbursed certain operating expenses.
(d) Represents the total dollar amount of commissions paid on equity security transactions divided by the total number of
shares purchased and sold for which commissions were charged.
NR Not required prior to June 30, 1997
The accompanying notes are an integral part of these financial statements.
</TABLE>
31
<PAGE> 30
INTERNATIONAL PORTFOLIO
ONE Fund, Inc.
OBJECTIVE
To provide long-term capital growth by investing primarily in common stock (and
securities convertible into common stocks) of foreign companies. When deemed
appropriate for temporary defensive purposes, it may invest in short-term debt
instruments, US Government obligations or in US common stock.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 1.24% -3.17%
Three-year 8.87% 7.39%
Since inception (5/1/93) 13.77% 13.07%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
COMMENTS
The International Portfolio underperformed the MSCI EAFE Index over the six
months ending December 31, 1997. This can be attributed to several factors: the
portfolio's holdings in Europe (roughly 37% of net assets at year-end) largely
consists of small capitalization stocks that significantly lagged the stronger
performance of large capitalization stocks during the period. In Japan (about
20% of net assets at year-end), equities declined sharply while small
capitalization stocks slid even further. The currency crisis that affected other
Asian countries (approximately 5% of net assets) caused sharp declines in local
stock markets, which negatively impacted the portfolio. Gold-related securities
(approximately 5% of net assets) also performed poorly as the price of gold
bullion dropped over the period. Finally, the strength of the US dollar
diminished returns despite partial hedges in place throughout the period.
We maintained a cautious and defensive approach with a fairly large net cash
position, which mitigated the impact of severe turmoil experienced in
international markets.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'93 '95 '97
<S> <C> <C> <C>
INTERNATIONAL PORTFOLIO
(COMMENCED OPERATIONS MAY 1, 1993) $12,920 $15,840 $18,271
MORGAN STANLEY CAPITAL, INTL. EAFE INDEX $10,826 $13,050 $14,041
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<C> <C>
1. Fuji 2.79
2. Buderus 2.72
3. Secom 2.32
4. Bank for International Settlements 2.08
5. CDL Hotels 1.70
6. Shimano 1.67
7. Affichage 1.66
8. Sika Finanz 1.63
9. Noranda 1.56
10. ITO Yokado 1.54
</TABLE>
TOP 5 COUNTRIES/REGIONS AS OF DECEMBER 31,1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Japan 20.29
France 10.56
Switzerland 9.42
United Kingdom 6.67
Germany 5.11
</TABLE>
The risk associated with investing on a worldwide basis include differences in
regulation of financial data and reporting and currency exchanges as well as
economic and political systems which may be different from those in the United
States. The prices of small company stocks are generally more volatile than the
prices of large company stocks.
33
<PAGE> 31
<TABLE>
<CAPTION>
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------
<S> <C> <C>
JAPAN (21.4%)
40,000 Aida Engineering Limited (19) $132,193
12,100 Chofu Seisakusho (9) 158,655
65,000 Dai-Tokyo Fire Marine Ins. Co. Ltd. (18) 223,287
65,000 Dowa Fire & Marine Ins. Co. Ltd. (18) 193,881
12,000 Fuji Photo Film Co., Ltd. (9) 460,070
2,000 Hitachi Ltd. ADR (11) 138,375
65,000 *Iino Kaiun Kaisha (5) 96,193
5,000 Ito-Yokado Co. Ltd. (28) 254,955
35,000 Nisshinbo Industries Inc. (8) 147,606
6,000 Secom Co., Ltd. (29) 383,698
15,000 Shimano Inc. (9) 276,042
18,000 Shiseido Company (9) 245,677
25,000 Shoei Co. (27) 181,919
2,200 Toho Co. (20) 234,482
10,000 Tokyo Marine & Fire Ins. Co. Ltd. (18) 113,484
-----------
3,240,517
-----------
FRANCE (10.7%)
1,000 Compagnie Generale des Eaux (33) 139,616
1,000 Compagnie Generale des Eaux
Nouvelle (Warrants) (33) 680
1,000 Elf Aquitaine (12) 116,347
2,000 Emin Leydier (24) 118,009
200 Eurafrance (34) 81,443
1,000 Gaumont SA (20) 72,717
1,000 Groupe Didot-Bottin (35) 103,715
2,000 Legrand ADP (10) 252,306
1,000 NSC Groupe 131,139
750 Promodes C.I. (28) 225,006
135 Societe Immobillere Marseillaise (35) 175,019
700 Taittinger (13) 209,308
-----------
1,625,305
-----------
SWITZERLAND (10.2%)
55 Bank of Intl. Settlements (3) 343,280
700 Edipresse SA Bearer (20) 203,010
500 Kuehne & Nagel Intl. AG (32) 322,503
75 Lindt & Sprungli AG (13) 130,814
850 Sika Finanz AG Bearer (7) 269,767
750 Societe Generale d'Affichage (20) 274,453
-----------
1,543,827
-----------
GERMANY (4.9%)
3,500 Bayer AG (7) 129,903
1,000 Buderus AG (5) 448,720
12,000 Gerresheimer Glas AG (4) 168,145
-----------
746,768
-----------
CANADA (4.3%)
7,000 Canadian Pacific Ltd. (34) 190,750
10,000 Franco-Nevada Mining Corp. (21) 196,634
15,000 Noranda, Inc. (21) 258,213
-----------
645,597
-----------
LATIN AMERICA (4.2%)
35,000 Antofagasta Holdings plc (21) 190,771
5,000 Banco Latinoamericano 'Bladex' (3) 206,875
43,750 Cresud S.A. 87,517
681,944 Ledesma SA (1) 157,635
-----------
642,798
-----------
NEW ZEALAND (3.9%)
130,549 Carter Holt Harvey Limited (14) $201,585
34,370 Independent Press Comm. (20) 159,614
130,000 Shortland Properties, Ltd. (27) 66,409
300,260 Tasman Agriculture Limited (1) 158,614
-----------
586,222
-----------
HONG KONG (3.3%)
924,587 CDL Hotels Intl. Ltd. (16) 280,456
300,000 Shaw Brothers (Hong Kong) Ltd.(20) 222,658
-----------
503,114
-----------
UNITED KINGDOM (2.8%)
25,000 Berisford plc (34) 77,423
50,000 *McBride plc (10) 147,001
55,000 Royal Doulton plc (9) 193,951
-----------
418,375
-----------
BELGIUM (2.4%)
1,000 Deceuninck Plastics Ind. SA (4) 196,522
1,000 Engrais Rosier SA (4) 163,903
-----------
360,425
-----------
SINGAPORE (1.7%)
35,000 Clipsal Industries Ltd. (10) 44,800
70,000 DelGro Corp. 85,706
75,000 Times Publishing Ltd. (25) 130,609
-----------
261,115
-----------
NETHERLANDS (1.5%)
4,500 Apothekers Cooperatie OPG (17) 134,345
7,000 European City Estates NV (27) 94,991
-----------
229,336
-----------
AUSTRIA (1.4%)
2,500 VAE AG (26) 219,689
-----------
ITALY (0.9%)
200,000 *Montedison non-conv. Savings SpA(34) 131,257
-----------
NORWAY (0.8%)
7,500 Schibsted AS (25) 128,679
-----------
MEXICO (0.7%)
25,000 Industrias Penoles SA de CV (21) 111,325
-----------
SWEDEN (0.7%)
7,000 IRO AB. (31) 102,343
-----------
FINLAND (0.5%)
1,000 Vaisala Oy A (5) 84,439
-----------
TURKEY (0.5%)
372,770 Medya Holding (25) 77,249
-----------
MISCELLANEOUS (3.2%)
15,000 North European Oil Royalty Tr. (12) 241,875
5,000 Minorco ADR (34) 83,750
100,000 Lonrho plc (34) 153,608
-----------
479,233
-----------
TOTAL COMMON STOCK
(80.0%) (COST $12,643,147) $12,137,613
-----------
(continued)
</TABLE>
34
<PAGE> 32
<TABLE>
<CAPTION>
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (Unaudited)
MARKET
SHARES PREFERRED STOCK VALUE
- ----------------------------------------------------------------
<S> <C> <C>
INDONESIA (2.3%)
6,500 Freeport McMoRan Pfd. 'C' (22) $147,875
10,500 Freeport McMoRan Pfd. 'D' (22) 203,438
-----------
351,313
-----------
TOTAL PREFERRED STOCK
(2.3%) (COST $450,965) $351,313
-----------
MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- ----------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (1.7%)
$250,000 Cheil Jedang Co 3.000%
due 12-31-06 (9) $264,063
-----------
TOTAL U.S. DOLLAR (1.7%) $264,063
-----------
NON U.S. DOLLAR (3.7%)
149,850 FF Gaumont SA 3.750%
due 01-01-03 (20) $29,224
780,000 FF Immobiliere Hoteliere
due 01-01-01 (33) 89,753
150,000 GBP Berisford plc 5.000%
due 01-31-15 (9) 212,450
50,000 GBP BAA plc 5.750%
due 03-29-06 (32) 88,056
7,000,000 JPY Nippon Yusen 2.000%
due 09-29-00 (32) 55,017
170,000 NZ Shortland Properties Inc. 7.500%
due 12-31-98 (27) 87,830
-----------
TOTAL NON-U.S. DOLLAR (3.7%) $562,330
-----------
TOTAL CONVERTIBLE DEBENTURES
(5.4%) (COST $820,356) $826,393
-----------
FACE MARKET
AMOUNT NON-CONVERTIBLE BONDS VALUE
- ----------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (1.5%)
$250,000 United Mexican States 'C'
6.375% 12-31-19 (15) $231,875
-----------
NON-U.S. DOLLAR (1.9%)
300,000 AUD Queensland Treasury 8.00%
due 09-14-07 (15) 219,240
100,000 NZ Trans Power Finance Ltd. 8.00%
due 02-15-02 (15) 58,039
-----------
277,279
-----------
TOTAL NON-CONVERTIBLE BONDS
(3.4%) (COST $513,497) $509,154
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ----------------------------------------------------------------
<S> <C> <C>
CONSUMER PRODUCTS (5.5%)
$833,000 Maytag Corp.
7.000% 01-02-98 $832,838
-----------
FINANCE (11.6%)
498,000 American Express
5.750% 01-06-98 497,602
440,000 Goldman Sachs Group, LLP
6.050% 01-05-98 439,704
818,000 Merrill Lynch
6.000% 01-02-98 817,865
-----------
1,755,171
-----------
TOTAL SHORT-TERM NOTES
(17.1%) (COST $2,588,008) $2,588,009
-----------
TOTAL HOLDINGS
(COST $17,015,973) (A) $16,412,482
===========
FOREIGN CURRENCIES
NZ - New Zealand Dollar
FF - French Franc
GBP - British Pound
JPY - Japanese Yen
AUD - Austrailian Dollar
<FN>
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
Industry Classifications
(1) Agriculture (18) Insurance
(2) Automotive (19) Machinery
(3) Banking (20) Media
(4) Building Products (21) Metal (non-ferrous)
(5) Capital Goods (22) Mining
(6) Cement (23) Packaging
(7) Chemicals (24) Paper
(8) Computer Products (25) Publishing
(9) Consumer Products (26) Rail Equipment
(10) Electrical Products (27) Real Estate
(11) Electronics (28) Retailing
(12) Energy and Oil (29) Services
(13) Food & Beverage (30) Steel
(14) Forest Products (31) Textile
(15) Governmental (32) Transportation
(16) Hotels (33) Utilities
(17) Health Care (34) Miscellaneous
</TABLE>
The accompanying notes are an integral part of these financial statements.
35
<PAGE> 33
<TABLE>
<CAPTION>
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
- ------------------------------------------------------------------
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $17,015,973) .................. $16,412,482
Cash in bank ........................................ 17,163
Unrealized gain on forward currency
contracts (note 5) ................................. 318,909
Receivable for fund shares sold...................... 12,958
Receivable for securities sold ...................... 30,654
Dividends and accrued interest receivable ........... 44,747
Deferred organizational expenses (note 1) ........... 949
Other ............................................... 5,374
------------
Total assets ....................................... 16,843,236
------------
Liabilities:
Unrealized gain on forward currency
contracts (note 5) ................................. 48,091
Payable for investment management
services (note 3) .................................. 12,537
Accrued 12b-1 fees (note 6) ......................... 10,985
Other accrued expenses .............................. 17,581
Dividends payable.................................... 1,585,781
------------
Total liabilities .................................. 1,674,975
------------
Net assets at market value $15,168,261
============
Net assets consist of:
Par value, $.001 per share .......................... $1,221
Paid-in capital in excess of par value .............. 15,290,070
Accumulated undistributed net realized
gain on investments ................................ 216,215
Net unrealized appreciation (depreciation) on:
Investments (note 1) ............................... (603,491)
Foreign currency related transactions .............. (1,526)
Forward currency contracts (note 5)................. 270,818
Overdistributed net investment income ............... (5,046)
------------
Net assets at market value $15,168,261
============
Shares outstanding.................................... 1,221,492
Net asset value per share............................. $12.42
============
Maximum offering price per share ($12.42/95%)......... $13.07
============
<CAPTION>
STATEMENT OF OPERATIONS
- ------------------------------------------------------------------
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest (net of $360 foreign taxes withheld)........ $89,236
Dividends (net of $10,085 foreign taxes withheld).... 122,494
------------
Total investment income............................. 211,730
Expenses:
Management fees (note 3)............................. 82,960
12b-1 fees (note 6).................................. 23,044
Custodian fees (note 3).............................. 41,178
Directors' fees (note 3)............................. 1,605
Professional fees.................................... 6,904
Organizational expense .............................. 1,170
Transfer agent and accounting fees .................. 23,019
Filing fees ......................................... 4,716
Other................................................ 2,624
------------
Total expenses...................................... 187,220
------------
Net investment income .............................. 24,510
------------
Realized and unrealized gain (loss) on
investments and foreign currency:
Net realized gain from:
Investments......................................... 724,547
Forward currency related transactions............... 310,459
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments........................................ (3,006,519)
Foreign currency related transactions.............. 128,067
------------
Net loss on investments............................ (1,843,446)
------------
Net decrease in net
assets from operations............................. ($1,818,936)
============
The accompanying notes are an integral part of these financial statements.
</TABLE>
36
<PAGE> 34
<TABLE>
<CAPTION>
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (Unaudited) 6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
-------------- -------------
<S> <C> <C>
From operations:
Net investment income ..................................................................... $24,510 $167,390
Realized gain on investments and foreign currency related transactions..................... 1,035,006 1,936,008
Unrealized gain (loss) on investments and foreign currency related transactions............ (2,878,452) 393,505
-------------- -------------
Net increase (decrease) in assets from operations................................ (1,818,936) 2,496,903
-------------- -------------
Dividends and distributions to shareholders:
Dividends paid from net investment income.................................................. (26,567) (178,422)
Capital gains and foreign currency related transactions distributions ..................... (1,896,240) (1,072,777)
-------------- -------------
Total dividends and distributions ............................................... (1,922,807) (1,251,199)
-------------- -------------
From capital share transactions (note 4):
Received from shares sold ................................................................. 2,333,684 4,465,324
Received from dividends reinvested ........................................................ 317,884 1,281,180
Paid for shares redeemed .................................................................. (3,051,806) (2,765,311)
-------------- -------------
Increase (decrease) in net assets derived from capital share transactions............. (400,238) 2,981,193
-------------- -------------
Increase (decrease) in net assets .......................................... (4,141,981) 4,226,897
-------------- -------------
Net Assets:
Beginning of period ....................................................................... 19,310,242 15,083,345
-------------- -------------
End of period (a) ......................................................................... $15,168,261 $19,310,242
============== =============
(a) Includes overdistributed net investment income of..................................... ($5,046) ($2,989)
============== =============
<CAPTION>
FINANCIAL HIGHLIGHTS (Unaudited)
Six Months
Ended Years Ended June 30,
12-31-97 1997 1996 1995 1994
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $15.45 $14.47 $12.89 $13.32 $9.90
Income from investment operations:
Net investment income.................................. 0.02 0.14 0.10 0.14 0.05
Net realized and unrealized gain (loss) on
investments and foreign currency transactions..... (1.48) 1.92 2.24 0.63 4.01
-------- ------- ------- ------- -------
Total income (loss) from investment operations.... (1.46) 2.06 2.34 0.77 4.06
-------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income................... (0.02) (0.15) (0.39) (0.14) (0.05)
Distributions from net realized capital gains and
foreign currency transactions..................... (1.55) (0.93) (0.37) (1.06) (0.59)
-------- ------- ------- ------- -------
Total distributions............................... (1.57) (1.08) (0.76) (1.20) (0.64)
-------- ------- ------- ------- -------
Net asset value, end of period.............................. $12.42 $15.45 $14.47 $12.89 $13.32
======== ======= ======= ======= =======
Total return................................................ (9.53%) (b) 14.76% 18.65% 6.44% 40.65%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (c):
Expenses............................................... 2.08% (a) 1.87% 1.72% 1.50% 1.50%
Net investment income.................................. 0.27% (a) 0.99% 0.70% 1.11% 0.46%
Ratios assuming no fees reimbursed by advisor:
Expenses .............................................. 2.08% (a) 1.98% 1.72% 1.50% 1.50%
Net investment income ................................. 0.27% (a) 0.88% 0.70% 1.11% 0.46%
Average commission rate (d) ................................ $0.01 $0.02 NR NR NR
Portfolio turnover rate..................................... 8% 9% 20% 39% 27%
Net assets at end of period (millions)...................... $15.2 $19.3 $15.1 $12.0 $10.4
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to reimburse certain operating expenses of the International Portfolio.
(d) Represents the total dollar amount of commissions paid on equity security transactions divided by the total number of
shares purchased and sold for which commissions were charged.
NR Not required prior to June 30, 1997
The accompanying notes are an integral part of these financial statements.
</TABLE>
37
<PAGE> 35
GLOBAL CONTRARIAN PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide long-term capital growth by investing in foreign and domestic
securities that, in the judgment of the portfolio manager, are undervalued or
presently out of favor with other investors but have positive prospects for
eventual recovery. Under normal market conditions, at least 65% of the
portfolio's assets will be invested in conformity with its investment
objectives.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 10.20% 4.69%
Three-year 11.73% 9.83%
Since inception (11/1/94) 9.76% 7.99%
</TABLE>
The above returns reflect the maximum sales charge of 5% for this portfolio. All
returns represent past performance and neither predict nor guarantee future
investment results. Your investment return and principal value will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
COMMENTS
The Global Contrarian Portfolio underperformed the MSCI World Index over the
six-month period ending December 31, 1997. This was partly due to the
portfolio's significant exposure (approximately 20%) to commodities-related
securities (e.g., oil, gold, forest products, base metals, sugar), which were
pressured over the period by the developing Asian financial crisis. The poor
performance of emerging market debt (roughly 6% of the portfolio through Brady
bonds and corporate debt) also negatively impacted the portfolio.
The portfolio has been reducing its exposure to commodities-related securities
over the last six-months as weaker global economic growth is anticipated in the
medium-term following the Asian crisis. Simultaneously, the portfolio has
started buying selected stocks and bonds that appear depressed in a few Asian
countries.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'94 '95 '96 '97
<S> <C> <C> <C>
GLOBAL CONTRARIAN PORTFOLIO
(COMMENCED OPERATIONS NOVEMBER 1, 1994) $9,150 $10,521 $11,581 $12,761
MORGAN STANLEY CAPT. INTL. WORLD INDEX $9,654 $11,134 $12,634 $14,528
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C>
1. Edipresse 3.45
2. Secom 3.04
3. San Juan Basin Royalty Trust 2.93
4. East Texas Financial Services 2.64
5. Cowles Media 2.41
6. Zero Corp 2.35
7. Unifirst 2.23
8. Kuehne Nagel 2.05
9. Franklin Electric 2.04
10. CDL Hotels 1.94
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31,1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
United States 47.00
Japan 8.00
Switzerland 7.14
France 4.83
Mexico 3.20
</TABLE>
The risk associated with investing on a worldwide basis include differences in
regulation of financial data and reporting and currency exchanges as well as
economic and political systems which may be different from those in the United
States. The prices of small company stocks are generally more volatile than the
prices of large company stocks.
39
<PAGE> 36
<TABLE>
<CAPTION>
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (unaudited)
MARKET
SHARES U.S. COMMON STOCK VALUE
- --------------------------------------------------------------------
<S> <C> <C>
CHEMICALS (0.9%)
5,000 Lawter International Inc. $54,375
-----------
CAPITAL GOODS (3.8%)
2,000 Bandag Inc. Class 'A' 95,750
2,000 Franklin Electric Co. Inc. 128,500
-----------
224,250
-----------
CONSUMER PRODUCTS (5.2%)
2,000 Allen Organ Co. Class 'B' 83,000
1,300 Dole Foods Company, Inc. 59,475
5,000 Furniture Brands Intl., Inc. 102,500
3,000 Wang Laboratories, Inc. 66,375
-----------
311,350
-----------
FINANCE (7.1%)
5,000 Classic Bancshares Inc. 83,750
7,000 East Texas Financial Services 166,250
5,000 First Federal Financial Corp. 80,625
5,000 Southern Banc Company, Inc. 87,500
-----------
418,125
-----------
FORESTRY & PAPER PRODUCTS (3.6%)
500 Georgia Pacific Corporation 30,375
500 Georgia Pacific Corp. Timber Group 11,344
2,500 Greif Brothers Corp. Class 'A' 83,750
2,000 Rayonier Inc. 85,125
-----------
210,594
-----------
MEDIA (0.2%)
8,000 Integrity Music, Inc. 'A' 10,000
-----------
METALS AND MINING (1.0%)
1,000 Reynolds Metals Company 60,000
-----------
OIL AND ENERGY (5.9%)
6,500 North European Oil Royalty Trust 104,812
1,300 Rochester & Pittsburgh Coal Co. 57,850
20,000 San Juan Basin Royalty Trust 185,000
-----------
347,662
-----------
REAL ESTATE (0.8%)
2,000 Alico, Inc. 46,500
-----------
SERVICES (1.8%)
3,000 Manpower Inc. 105,750
-----------
MISCELLANEOUS (7.5%)
2,000 Chemed Corp. 82,875
6,000 Kaiser Ventures Inc. 72,000
5,000 UniFirst Corporation 140,312
5,000 Zero Corporation 148,125
-----------
443,312
-----------
TOTAL U.S. COMMON STOCK
(37.8%) (COST $1,622,348) $2,231,918
-----------
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- --------------------------------------------------------------------
<S> <C> <C>
JAPAN (8.9%)
6,000 Dai Tokyo Fire & Marine Ins. Co., Ltd. (18) $20,611
10,000 Dowa Fire & Marine Ins. Co., Ltd. (18) 29,828
2,500 Fuji Photo Film Co. Ltd. (9) 95,848
4,000 Koekisha Co., Ltd. 65,023
7,000 Nittetsu Mining Co., Ltd. (22) 28,448
3,000 Secom Co., Ltd. (29) 191,849
400 Toho Co. (20) 42,633
10,000 Yomeishu Seizo Co. Ltd. 51,758
-----------
525,998
-----------
SWITZERLAND (7.5%)
15 Bank for Intl. Settlements (3) 93,622
750 Edipresse SA 'Bearer' (25) 217,510
200 Kuehne & Nagel International AG (3) 129,001
-----------
440,133
-----------
FRANCE (4.2%)
1,500 Emin Leydier (14) 88,507
500 Groupe NSC (19) 65,570
500 Legrand ADP (10) 63,076
600 Rougier SA (14) 29,918
-----------
247,071
-----------
LATIN AMERICA (3.4%)
10,000 Antofagasta Holding plc (21) 54,506
500,000 Grupo Fernandez Editores (25) 117,837
30,308 Ledesma SA (1) 31,526
-----------
203,869
-----------
HONG KONG (3.3%)
403,845 CDL Hotels Intl. Ltd. (16) 122,499
100,000 Shaw Brothers (Hong Kong) Ltd.(20) 74,219
-----------
196,718
-----------
NEW ZEALAND (2.9%)
50,000 Carter Holt Harvey Ltd. (14) 77,207
50,000 Shortland Properties, Ltd. (27) 25,542
50,000 Wrightson Ltd. (1) 23,220
10,000 Independent Press Communications (1) 46,440
-----------
172,409
-----------
GERMANY (2.7%)
200 Buderus AG (5) 89,744
100 Axel Springer Verlag AG (20) 67,280
-----------
157,024
-----------
MEXICO (1.3%)
17,500 Industrias Penoles S.A. de C.V. 77,927
-----------
MALAYSIA (1.3%)
30,000 Genting Berhad 75,173
-----------
SOUTH AFRICA (1.2%)
15,000 Vaal Reefs Exploration Ltd. ADR (21) 57,656
2,500 Western Areas Gold Mining Ltd. (21) 13,768
-----------
71,424
-----------
INDONESIA (1.1%)
430,000 PT Rigs Tender 66,454
-----------
BELGIUM (1.0%)
376 Engrais Rosier SA (34) 61,628
-----------
CANADA (0.9%)
3,000 Noranda, Inc. (21) 51,643
-----------
(continued)
</TABLE>
40
<PAGE> 37
<TABLE>
<CAPTION>
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO (Continued)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (Unaudited)
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ------------------------------------------------------------------
<S> <C> <C>
SWEDEN (0.8%)
5,000 Bylock & Nordsjofrakt AB 'B' (32) $20,670
5,000 Gorthon Lines (32) 27,539
-----------
48,209
-----------
NETHERLANDS (0.6%)
2,600 German City Estates NV (27) 35,283
-----------
SINGAPORE (0.3%)
13,000 DelGro Corp. Ltd. (35) 15,917
6,500 Singapore Bus Service Ltd. (32) 2,357
-----------
18,274
-----------
MISCELLANEOUS (1.6%)
62,000 Lonrho plc (34) 95,237
-----------
TOTAL FOREIGN COMMON STOCK
(43.0%) (COST $2,898,652) $2,544,474
-----------
TOTAL COMMON STOCK
(80.8%) (COST $4,521,000) $4,776,392
-----------
<CAPTION>
MARKET
SHARES U.S. PREFERRED STOCK VALUE
- ------------------------------------------------------------------
<S> <C> <C>
MEDIA (2.6%)
2,000 Cowles Media Co. Pfd. $152,000
-----------
TOTAL U.S. PREFERRED STOCK
(2.6%) (COST $46,250) $152,000
-----------
MARKET
SHARES FOREIGN PREFERRED STOCK VALUE
- ------------------------------------------------------------------
<S> <C> <C>
INDONESIA (2.3%)
2,500 Freeport McMoRan Pfd. 'D' (22) $48,438
4,000 Freeport McMoRan Pfd. 'C' (22) 91,000
-----------
139,438
-----------
TOTAL FOREIGN PREFERRED STOCK
(2.3%) (COST $177,847) $139,438
-----------
TOTAL PREFERRED STOCK
(4.9%) (COST $224,097) $291,438
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ------------------------------------------------------------------
<S> <C> <C>
APPLIANCES (5.1%)
$300,000 Maytag Corp.
7.000% due 01-02-98 $299,942
-----------
FINANCE (3.3%)
196,000 Merrill Lynch
6.000% due 01-02-98 195,967
-----------
TOTAL SHORT-TERM NOTES
(8.4%) (COST $495,909) $495,909
-----------
FACE MARKET
AMOUNT NON-CONVERTIBLE BONDS VALUE
- ------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (6.0%)
$50,000 Cemex SA 10.000%
due 11-05-99 (6) $51,000
147,000 Federal Republic Of Brazil EI FRN
6.875% due 04-15-06 (15) 127,155
144,000 Republic of Argentina FRB
6.750% due 03-31-05 (15) 128,916
50,000 PT Pabrik Kertas Tjiwi Kimia
13.250% due 08-01-01 (14) 50,008
-----------
TOTAL NON-CONVERTIBLE BONDS
(6.0%) (COST $304,146) $357,079
-----------
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- ------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (3.5%)
$55,000 Inversiones y Representaciones
4.500% 08-02-03 (27) $58,506
100,000 International Container Terminal Svcs Inc.
1.750% 03-13-04 (32) 74,250
100,000 Tipeo Asphalt Co.
2.750% 09-16-06 (6) 74,000
-----------
206,756
-----------
NON U.S. DOLLAR (1.4%)
100,000 NZ Shortland Properties Inc.
7.500% due 12-31-98 (27) 51,665
260,000 FF Immobilier Hoteliere
5.000% due 01-01-01 (16) 29,918
-----------
81,583
-----------
TOTAL CONVERTIBLE DEBENTURES
(4.9%) (COST $314,950) $288,339
-----------
TOTAL HOLDINGS
(COST $5,860,102)(a) $6,209,157
===========
<FN>
(a) Also represents cost for Federal income tax purposes.
Foreign Currencies
NZ - New Zealand Dollar
FF - French Franc
INDUSTRY CLASSIFICATIONS
(1) Agriculture (12) Energy and Oil (23) Packaging
(2) Automotive (13) Food & Beverage (24) Paper
(3) Banking (14) Forest Products (25) Publishing
(4) Building Products (15) Governmental (26) Rail Equipment
(5) Capital Goods (16) Hotels (27) Real Estate
(6) Cement (17) Health Care (28) Retailing
(7) Chemicals (18) Insurance (29) Services
(8) Computer Products (19) Machinery (30) Steel
(9) Consumer Products (20) Media (31) Textile
(10) Electrical Products (21) Metal (non-ferrous) (32) Transportation
(11) Electronics (22) Mining (33) Utilities
The accompanying notes are an integral part of these financial statements.
</TABLE>
41
<PAGE> 38
<TABLE>
<CAPTION>
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $5,860,102) ........ $6,209,157
Cash in bank ............................. 65,920
Unrealized gain on forward currency
contracts (note 5) ...................... 47,278
Receivable for fund shares sold........... 12,905
Dividends and accrued interest receivable 22,078
Deferred organizational expenses (note 1) 951
Other .................................... 2,191
----------
Total assets ............................ 6,360,480
----------
Liabilities:
Unrealized loss on forward currency
contracts (note 5) ...................... 9,024
Payable for securities purchased ......... 76,356
Payable for investment management
services (note 3) ....................... 1,592
Accrued 12b-1 fees (note 6) .............. 3,904
Other accrued expenses ................... 22,603
Dividends payable......................... 335,817
----------
Total liabilities ....................... 449,296
----------
Net assets at market value $5,911,184
==========
Net assets consist of:
Par value, $.001 per share ............... $535
Paid-in capital in excess of par value ... 5,466,487
Accumulated undistributed net realized
gain on investments ..................... 57,096
Net unrealized appreciation (depreciation) on:
Investments (note 1) .................... 349,055
Foreign currency related transactions ... (504)
Forward currency contracts (note 5)...... 38,254
Undistributed net investment income ...... 261
----------
Net assets at market value $5,911,184
==========
Shares outstanding......................... 535,280
Net asset value per share.................. $11.04
==========
Maximum offering price per share ($11.04/95) $11.62
==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest............................................ $38,635
Dividends (net of $2,628 foreign taxes withheld).... 55,131
----------
Total investment income............................ 93,766
Expenses:
Management fees (note 3)............................ 28,593
12b-1 fees (note 6)................................. 7,942
Custodian fees (note 3)............................. 22,526
Directors' fees (note 3) ........................... 530
Professional fees................................... 2,275
Transfer agent and accounting fees.................. 12,973
Filing fees ........................................ 4,445
Organizational expense (note 1) .................... 263
Other............................................... 776
----------
Total expenses..................................... 80,323
----------
Less expenses voluntarily reduced
or reimbursed (note 3)............................ (12,017)
----------
Net expenses....................................... 68,306
----------
Net investment income.............................. 25,460
----------
Realized and unrealized gain (loss) on
investments and foreign currency:
Net realized gain from:
Investments........................................ 184,790
Forward currency related transactions.............. 29,325
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments....................................... (278,186)
Foreign currency related transactions............. 24,812
----------
Net loss on investments........................... (39,259)
----------
Net decrease in net
assets from operations............................ ($13,799)
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
42
<PAGE> 39
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
6 Months Ended Year Ended
Dec. 31, 1997 June 30, 1997
------------ ------------
<S> <C> <C>
From operations:
Net investment income ......................................................... $25,460 $104,098
Realized gain on investments and foreign currency related transactions ........ 214,115 388,766
Unrealized gain (loss) on investments and foreign currency related transactions (253,374) 135,383
------------ ------------
Net increase (decrease) in assets from operations ........................... (13,799) 628,247
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ..................................... (22,297) (109,924)
Capital gains and foreign currency related transactions distributions ......... (356,577) (345,450)
------------ ------------
Total dividends and distributions ........................................... (378,874) (455,374)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ..................................................... 384,968 966,852
Received from dividends reinvested ............................................ 20,291 277,521
Paid for shares redeemed ...................................................... (397,236) (784,457)
------------ ------------
Increase in net assets derived from capital share transactions ............... 8,023 459,916
------------ ------------
Increase (decrease) in net assets .......................................... (384,650) 632,789
------------ ------------
Net Assets:
Beginning of period ........................................................... 6,295,834 5,663,045
------------ ------------
End of period (a) ............................................................. $5,911,184 $6,295,834
============ ============
(a) Includes undistributed (overdistributed) net investment income of ............ $261 ($2,902)
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months 11-1-94
Ended Years Ended June 30, to
Dec. 31, 1997 1997 1996 6-30-95
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period ............... $11.79 $11.48 $10.01 $10.00
Income from investment operations:
Net investment income ........................... 0.04 0.20 0.16 0.17
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. (0.08) 0.99 1.61 0.13
------------ ------------ ------------ ------------
Total income from investment operations ........ (0.04) 1.19 1.77 0.30
------------ ------------ ------------ ------------
Less distributions:
Dividends from net investment income ............ (0.04) (0.21) (0.16) (0.17)
Distributions from net realized capital gains and
foreign currency transactions .................. (0.67) (0.67) (0.14) (0.12)
------------ ------------ ------------ ------------
Total distributions ............................ (0.71) (0.88) (0.30) (0.29)
------------ ------------ ------------ ------------
Net asset value, end of period ..................... $11.04 $11.79 $11.48 $10.01
============ ============ ============ ============
Total return ....................................... (0.38%)(b) 11.11% 17.84% 2.99%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (c):
Expenses ........................................ 2.18%(a) 2.02% 2.14% 2.05%
Net investment income ........................... 0.81%(a) 1.78% 1.49% 2.85%
Ratios assuming no fees reimbursed by advisor:
Expenses ........................................ 2.57%(a) 2.21% 2.14% 2.05%
Net investment income ........................... 0.43%(a) 1.59% 1.49% 2.85%
Average commission rate (d) ........................ $0.01 $0.01 NR NR
Portfolio turnover rate ............................ 12% 6% 26% 8%
Net assets at end of period (millions) ............. $5.9 $6.3 $5.7 $3.9
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has elected to reimburse certain operating expenses of the Global Contrarian portfolio.
(d) Represents the total dollar amount of commissions paid on equity security transactions
divided by the total number of shares purchased and sold for which commissions were charged.
NR Not required prior to June 30, 1997
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
43
<PAGE> 40
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (11.3%)
$605,000 Star Bank 5.500% due 01-02-98
repurchase price $605,185
collateralized by GNMA certificates,
pool # 8359
due 01-20-24 (cost $605,000) $605,000
---------
TOTAL REPURCHASE AGREEMENTS
(11.3%) (COST $605,000) $605,000
---------
MARKET
SHARES COMMON STOCK VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C>
AUTOMOTIVE AND RELATED (2.6%)
1,000 * Coldwater Creek $33,750
1,800 Harley Davidson, Inc. 98,550
5,850 * Miller Industries, Inc. 4,837
---------
137,137
---------
BUSINESS SERVICES (12.5%)
400 * Abacus Direct Corp. 16,400
2,800 * Appolo Group CL A 132,300
2,500 * Accustaff Inc. 57,500
2,900 * Cambridge Technology Partners 120,713
961 * Cendant Corporation 33,043
1,000 * Documentum Inc. 42,125
2,300 * DST Systems, Inc. 98,181
2,800 * Gartner Group 104,300
3,450 * US Office Products Corp. 67,706
---------
672,268
---------
COMMUNICATIONS (4.6%)
4,200 * Advanced Fibre Communications 122,325
1,800 * Tellabs Inc. 95,175
1,000 * Tekelec 30,500
---------
248,000
---------
COMPUTER AND RELATED (24.2%)
2,200 * Aspen Technology, Inc. 75,350
3,200 * Bea Systems Inc. 55,400
1,200 * Cadence Design Systems, Inc. 29,400
900 * CDW Computer Centers, Inc. 46,913
2,000 * Daou Systems Inc. 62,500
1,100 * Dell Computer Corp. 92,400
600 * Electronics for Imaging, Inc. 9,975
1,700 * Galileo Tech Ltd. 49,087
2,800 HBO & CO 134,400
1,300 * Intl. Telcomm Data Systems 41,600
2,900 JD Edwards & Co. 85,550
1,900 * Manugistics 84,788
800 * McAfee Associates, Inc. 42,300
1,400 * Parametric Technology Corp. 66,325
3,700 * RWD Technologies, Inc. 66,600
1,200 * Remedy Corp. 25,200
2,000 * Sterling Commerce, Inc. 76,875
5,000 * Summit Design, Inc. 51,875
2,400 * Security Dynamics Technologies, Inc. 85,800
3,000 * Vision Software 115,125
---------
1,297,463
---------
CONSUMER GOODS (1.6%)
2,850 * Blyth Industries, Inc. 85,322
---------
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------------
DRUGS (4.0%)
2,070 * Dura Pharmaceuticals, Inc. $94,961
3,200 * Parexel International Corp. 118,400
----------
213,361
----------
ELECTRICAL EQUIPMENT (4.7%)
2,600 Helix Technology Corp. 50,700
800 * Lernout & Hausp Speech Products 37,200
500 * Level One Communications 14,125
800 * Micrel Inc. 23,000
2,550 * Microchip Technology, Inc. 76,500
1,000 * Powerwave Technologies, Inc. 16,812
1,200 * Speed Fam International, Inc. 31,800
----------
250,137
----------
ENTERTAINMENT AND LEISURE (1.4%)
2,200 * American Skiing Corp. 32,725
1,100 * Cinar Films Inc. CL B 42,762
----------
75,487
----------
FINANCIAL SERVICES (3.9%)
1,600 Associates First Capital 113,800
4,600 Money Store 96,600
----------
210,400
----------
FOOD & RELATED (1.3%)
1,200 * Suiza Foods Corp. 71,475
----------
HOTEL/LODGING (1.9%)
900 * Capstar Hotel Co. 68,625
800 * Signature Resorts, Inc. 32,813
----------
101,438
----------
HOUSING, FURNITURE & RELATED (0.9%)
2,500 * Comfort Systems USA, Inc. 49,375
----------
INDUSTRIAL SERVICES (2.9%)
800 * Cognex Corp. 95,375
500 * Eastern Environmental Services 11,000
1,100 * Hanover Compressor 22,481
700 Santa Fe International 28,481
----------
157,337
----------
* MACHINERY (1.1%)
1,000 * Asyst Corp. 21,750
800 * Lam Research Corp. 23,400
400 * US Filter Corp. 11,975
----------
57,125
----------
MEDIA & PUBLISHING (5.5%)
1,800 * Clear Channel Communications 142,988
600 * Consolidated Graphics 27,975
1,900 * Jacor Communications 100,937
100 * Mail-Well Inc. 4,050
700 * United Video Satellite 20,125
----------
296,075
----------
MEDICAL AND RELATED (4.3%)
3,600 * FPA Medical Management 67,050
1,850 * Health Management Assoc., Inc. 46,713
1,700 Omnicare Inc. 52,700
800 * Pediatrix Medical Group 34,200
500 * Safeskin Corp. 28,375
----------
229,038
----------
</TABLE>
(continued)
46
<PAGE> 41
CORE GROWTH PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide long-term capital growth. Current income is incidental. Normally at
least 90% of the assets of this portfolio will be invested in common stocks.
Selection of stocks is not limited with regard to whether stocks are
exchange-listed or dividend-paying or whether they are issued by companies of
any particular size.
PERFORMANCE AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
<S> <C> <C>
One-year -6.37% -11.05%
Since inception (11/1/96) -6.37% -10.43%
</TABLE>
The above returns reflect the maximum sales charge of 5% for this portfolio. All
returns represent past performance and neither predict nor guarantee future
investment results. Your investment return and principal value will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
COMMENTS
The top 30 companies in the Russell 3000 Growth Index represent 47% of the
index's market capitalization. While they are growing at above-average rates, we
believe that there are many smaller companies with higher earnings growth. Over
the next three to five years, Core Growth Portfolio companies are expected to
grow earnings at 38% versus 14% for the Russell 3000 Growth Index companies.
The NMSGI Index, consisting of the 500 fastest growing small stocks, aims to
eliminate the large cap bias of the NASDAQ in which Intel and Microsoft account
for 20% of the market. The index advanced just 7.3% for 1997 despite the fact
that 75% of its companies met or beat estimates. Additionally, earnings growth
in the index registered a 58% gain for the year versus a 10% gain for the S&P
500, illustrating the point that small companies grow faster than large ones.
Except for a few months in mid-1997, investors were unwilling to pay for
high-quality, high-earnings growth companies. Currently, uncertainty centered on
Asia has kept investors at bay. Steadfast investors in this style will be
rewarded. In virtually all past periods, remaining invested in this style has
paid off when the style returns to favor.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
'95 '96 '97
<S> <C> <C> <C>
CORE GROWTH PORTFOLIO
(COMMENCED OPERATIONS NOVEMBER 1, 1995) $9,500 $9,390 $8,791
RUSSELL 3000 INDEX $10,000 $10,610 $13,978
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C> <C>
1. Clear Channel Comm 2.66
2. HBO 2.50
3. Appolo Group 2.47
4. Advanced Fibre Comm. 2.28
5. Cambridge Technology 2.25
6. Parexel Int'l 2.21
7. Visio Software 2.15
8. Assoc 1st Capital 2.12
9. Gartner Group 1.94
10. Jacor Comm 1.88
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31,1997
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
Computer and Related 24.18
Business Services 11.91
Oil, Energy, and Natural Gas 9.66
Electrical Equipment 4.66
Medical and Related 4.27
</TABLE>
The prices of small companies are generally more volatile than the prices of
large companies.
<PAGE> 42
<TABLE>
<CAPTION>
ONE FUND, INC.
CORE GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
MARKET
SHARES COMMON STOCK VALUE
- ----------------------------------------------------------------
<S> <C> <C> <C>
OIL, ENERGY AND NATURAL GAS (9.7%)
900 Camco International, Inc. $57,319
200 * Dril-Quip Inc. 7,025
1,600 Ensco International, Inc. 53,600
700 * EVI Inc. 36,225
1,700 * Friede Goldman International, Inc. 50,788
800 * Global Industries Ltd. 13,600
600 Helmerch & Payne 40,725
1,400 * IRI International Corp. 19,600
1,400 * Newpark Resources, Inc. 24,500
1,600 * Pool Energy Services Co. 35,600
1,000 * Seacor Smit Inc. 60,250
1,300 * UTI Energy Corp. 33,637
4,000 * Varco International, Inc. 85,750
---------
518,619
---------
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------------
RETAIL (1.0%)
1,400 * Hibbett Sporting Goods, Inc. $30,800
500 * Whole Food Market, Inc. 25,563
----------
56,363
----------
TEXTILES (1.6%)
2,000 * Jones Apparel Group, Inc. 86,000
----------
TRANSPORTATION (2.2%)
500 * Coach USA Inc. 16,750
2,100 * Hvide Marine Inc. 54,075
2,100 Motivepower Industries, Inc. 48,825
----------
119,650
----------
TOTAL COMMON STOCK
(91.9%) (COST $4,640,160) $4,932,070
----------
TOTAL HOLDINGS
(COST $5,245,160)(a) $5,537,070
==========
</TABLE>
* NON INCOME PRODUCING SECURITY.
(a) ALSO REPRESENTS COST FOR FEDERAL INCOME TAX PURPOSES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
47
<PAGE> 43
<TABLE>
<CAPTION>
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $5,245,160) .......... $5,537,070
Cash in bank ............................... 264
Receivable for fund shares sold............. 1,918
Dividends and accrued interest receivable .. 148
Receivable for securities sold ............. 96,829
Other ...................................... 5,312
----------
Total assets .............................. 5,641,541
----------
Liabilities:
Payable for securities purchased ........... 261,636
Payable for investment management
services (note 3) ......................... 4,532
Accrued 12b-1 fees (note 6) ................ 3,412
Other accrued expenses ..................... 5,403
----------
Total liabilities ......................... 274,983
----------
Net assets at market value $5,366,558
==========
Net assets consist of:
Par value, $.001 per share ................. $579
Paid-in capital in excess of par value ..... 5,603,510
Accumulated net realized
loss on investments ....................... (529,441)
Net unrealized appreciation on investments . 291,910
----------
Net assets at market value $5,366,558
==========
Shares outstanding........................... 579,458
Net asset value per share.................... $9.26
==========
Maximum offering price per share ($9.26/95%). $9.75
==========
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<S> <C>
Investment income:
Interest............................................. $12,999
Dividends............................................ 2,063
----------
Total investment income............................. 15,062
----------
Expenses:
Management fees (note 3)............................. 26,895
12b-1 fees (note 6).................................. 7,078
Custodian fees (note 3).............................. 2,890
Directors' fees (note 3)............................. 528
Professional fees.................................... 2,260
Transfer agent and accounting fees .................. 15,999
Filing fees ......................................... 5,650
Other................................................ 805
----------
Total expenses...................................... 62,105
----------
Less expenses voluntarily reduced
or reimbursed (note 3)............................. (1,291)
----------
Net expenses........................................ 60,814
----------
Net investment loss ................................ (45,752)
----------
Realized and unrealized gain (loss) on investments:
Net realized loss from investments .................. (375,124)
Net increase in unrealized
appreciation on investments ........................ 76,439
----------
Net loss on investments............................ (298,685)
----------
Net decrease in net
assets from operations............................. ($344,437)
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
48
<PAGE> 44
<TABLE>
<CAPTION>
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
11-1-96
6 Months Ended to
Dec. 31, 1997 6-30-97
-------------- --------------
<S> <C> <C>
From operations:
Net investment loss ........................................... ($45,752) ($38,829)
Realized loss on investments .................................. (375,124) (154,317)
Unrealized gain on investments ................................ 76,439 215,471
-------------- --------------
Net increase (decrease) in assets from operations ........... (344,437) 22,325
-------------- --------------
From capital share transactions (note 4):
Received from shares sold ..................................... 543,944 5,793,191
Paid for shares redeemed ...................................... (315,833) (332,632)
-------------- --------------
Increase in net assets derived from capital share transactions 228,111 5,460,559
-------------- --------------
Increase (decrease) in net assets ......................... (116,326) 5,482,884
-------------- --------------
Net Assets:
Beginning of period ........................................... 5,482,884 0
-------------- --------------
End of period (a) ............................................. $5,366,558 $5,482,884
============== ==============
(a) Includes net investment loss of ............................ ($45,752) ($38,829)
============== ==============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS (UNAUDITED)
Six Months 11-1-96
Ended to
12-31-97 6-30-97
-------------- --------------
<S> <C> <C>
Per share data:
Net asset value, beginning of period ............................ $9.86 $10.00
Income from investment operations:
Net investment loss ............................................ (0.08) (0.08)
Net realized and unrealized gain on
investments ................................................... (0.52) (0.06)
-------------- --------------
Total (loss) from investment operations ....................... (0.60) (0.14)
-------------- --------------
Net asset value, end of period .................................. $9.26 $9.86
============== ==============
Total return (b) ................................................ (6.09%) (1.40%)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses (a) ................................................... 2.19% 1.35%
Net investment loss (a) ........................................ (1.64%) (0.87%)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses (a) ................................................... (2.23%) 1.40%
Net investment loss (a) ........................................ (1.69%) (0.92%)
Average commission rate (d) ..................................... $0.06 $0.05
Portfolio turnover rate ......................................... 52% 80%
Net assets at end of period (millions) .......................... $5.4 $5.5
<FN>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized)
(c) The advisor has reimbursed certain operating expenses of the Core Growth Portfolio.
(d) Represents the total dollar amount of commissions paid on equity security transactions divided by the
total number of shares purchased and sold for which commissions were charged.
</FN>
</TABLE>
The accompanying notes are an integral part of these financial statements.
49
<PAGE> 45
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 (Unaudited)
(1) BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES ONE Fund, Inc.
(Fund) is registered under the Investment Company Act of 1940 as amended
(the "1940 Act"), as a diversified open-end management investment company.
The Fund is a series investment company which consists of nine separate
investment portfolios that seek the following investment objectives:
MONEY MARKET PORTFOLIO - current income consistent with preservation of
capital and liquidity.
TAX-FREE INCOME PORTFOLIO - high current income exempt from federal income
taxes.
INCOME PORTFOLIO - high current income. Preservation of capital is a
secondary objective.
INCOME & GROWTH PORTFOLIO - moderate income with the potential for
increasing income over time. Growth of capital is also a primary objective.
GROWTH PORTFOLIO - long-term capital growth.
SMALL CAP PORTFOLIO - maximum capital growth by investing primarily in
common stocks of small- and medium-sized companies.
INTERNATIONAL PORTFOLIO - long-term capital growth by investing primarily
in common stocks of foreign companies.
GLOBAL CONTRARIAN PORTFOLIO - long-term growth of capital by investing in
foreign and domestic securities believed to be under valued or presently
out of favor.
The following portfolio commenced operations on November 1, 1996:
CORE GROWTH PORTFOLIO - long-term capital appreciation.
The following is a summary of significant accounting policies:
Investments in the Money Market Portfolio are valued at amortized cost in
accordance with Rule 2a-7, which approximates market value. Premiums and
discounts are amortized on a straight line basis. For the Money Market,
Income, and Tax-Free Income portfolios, all of the undistributed net income
is accrued as daily dividends to shareholders of record immediately before
each computation of the net asset value of these portfolios. Dividends
(representing net investment income) will normally be paid monthly to the
shareholders of these three portfolios. Distributions arising from net
investment income from the remaining portfolios are declared and paid to
shareholders quarterly and are recorded on the ex-dividend date.
Accumulated net realized capital gains are distributed to shareholders at
least once a year.
For all other portfolios, securities which are traded on U.S. and foreign
stock exchanges or in the over-the-counter markets are valued at the last
sale price or, if there has been no sale that day, at the last bid reported
as of 4:00 p.m. Eastern time on each day the New York Stock Exchange is
open for unrestricted trading. Over-the-counter securities are valued at
the last bid price as of the close of trading on the Exchange. Short-term
investments (investments with remaining maturities of 60 days or less) are
valued at amortized cost and fixed income securities are valued by using
market quotations, or independent pricing services which use prices
provided by market makers or estimates of market value obtained from yield
data relating to instruments or securities with similar characteristics.
All investments and cash quoted in foreign currencies are valued daily in
U.S. dollars on the basis of the foreign currency exchange rates prevailing
at the time of such valuation.
Foreign currency exchange rates are generally determined prior to 4:00 p.m.
Eastern time. Occasionally, events affecting the value of foreign
investments and such exchange rates occur between the time at which they
are determined and the time of valuation, which in the case of the
International and Global Contrarian Portfolios, would not be reflected in
the computation of the portfolios' net asset values. If events materially
affecting the value of such securities or currency exchange rates occurred
during such time period, the securities are valued at their fair value as
determined in good faith by or under the direction of the Fund's Board of
Directors.
In connection with purchases and sales of securities denominated in foreign
currencies, the Fund may enter into forward foreign currency exchange
contracts (forward contract). A forward contract is a commitment to
purchase or sell a foreign currency at a future date, at a negotiated rate.
Additionally, the Fund may enter into such contracts to hedge certain other
foreign currency denominated investments. These contracts are recorded at
market value, and the related realized and unrealized foreign exchange
gains and losses are included in the statement of operations. In the event
that counterparties fail to settle these currency contracts or the related
foreign security trades, the Fund could be exposed to foreign currency
fluctuations.
51
<PAGE> 46
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
Each portfolio other than the Money Market Portfolio may, (a) write call
options traded on a registered national securities exchange if such
portfolio owns the underlying securities subject to such options, and
purchase call options for the purpose of closing out positions it has
written, (b) purchase put options on securities owned, and sell such
options in order to close its positions in put options, (c) purchase and
sell financial futures and options thereon, and (d) purchase and sell
financial index options; provided, however, that no option or futures
contract shall be purchased or sold if, as a result, more than one-third of
the total assets of the portfolio would be hedged by options or futures
contracts, and no more than 5% of any portfolio's total assets, at market
value, may be used for premiums on open options and initial margin deposits
on futures contracts. Options are recorded at market value, and the related
realized and unrealized gains and losses are included in the statement of
operations. The portfolios making use of options bear the market risk of an
unfavorable change in the price of any security underlying the options.
The Fund may invest in two kinds of financial futures contracts: stock
index futures contracts and interest rate futures contracts. Stock index
futures contracts are contracts developed by and traded on national
commodity exchanges whereby the buyer will, on a specified future date, pay
or receive a final cash payment equal to the difference between the actual
value of the stock index on the last day of the contract and the value of
the stock index established by the contract multiplied by the specific
dollar amount set by the exchange. Futures contracts may be based on
broad-based stock indexes such as the Standard & Poor's 500 Index or on
narrow-based stock indexes. A particular index will be selected according
to Ohio National Investments, Inc.'s ("ONI's"), the investment advisor to
the Fund, investment strategy for the particular portfolio. The Fund may
enter into such contracts to reduce the risk of fluctuation of portfolio
securities values or to take advantage of expected market fluctuations.
Securities transactions are recorded on a trade date basis. Dividend income
is recognized on the ex-dividend date (except in the case of the
International and Global Contrarian Portfolios in which dividends are
recorded as soon after the ex-dividend date as the Fund becomes aware of
such dividends), and interest income is accrued daily as earned. Net
realized gain or loss on investments and foreign exchange transactions are
determined using the first-in, first-out method.
The books and records of all the portfolios are maintained in U.S. dollars.
Foreign currency amounts in the International and Global Contrarian
Portfolios are translated into U.S. dollars on the following basis:
(1) market value of investments, other assets and liabilities--at exchange
rates prevailing at the end of the period.
(2) purchases and sales of investments, income and expenses--at the rates
of exchange prevailing on the respective dates of such transaction.
Although the net assets and the market value of the portfolios are
presented at the foreign exchange rates at the end of the period, the
portfolios do not generally isolate the effect of fluctuations in foreign
exchange rates from the effect of changes in the market price of the
investments. However, the portfolios do isolate the effect of fluctuations
in foreign exchange rates when determining the gain or loss upon sale or
maturity of foreign-currency denominated debt obligations pursuant to
Federal income tax regulations.
Foreign investment and currency transactions may involve certain
considerations and risks not typically associated with investing in U.S.
companies and the U.S. Government. These risks, including re-evaluation of
currency and future adverse political and economic developments, could
cause investments and their markets to be less liquid and prices more
volatile than those of comparable U.S. companies and the U.S. Government.
Each portfolio may acquire repurchase agreements from member banks of the
Federal Reserve System which ONI deems creditworthy under guidelines
approved by the Board of Directors, subject to the seller's agreement to
repurchase such securities at a mutually agreed upon date and price. The
repurchase price generally equals the price paid by the portfolio plus
interest negotiated on the basis of current short-term rates, which may be
more or less than the rate on the underlying portfolio securities. The
seller, under a repurchase agreement, is required to maintain as collateral
for the repurchase transaction securities in which the portfolio has a
perfected security interest with a value not less than 100% of the
repurchase price (including accrued interest). Securities subject to
repurchase agreements are held by the Fund's custodian or another qualified
custodian or in the Federal Reserve/Treasury book-entry system. Repurchase
agreements are considered to be loans by the portfolio under the 1940 Act.
52
<PAGE> 47
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to wash sales and net
operating losses. The character of distributions made during the period
from net investment income or net realized gains, if any, may differ from
their ultimate characterization for federal income tax purposes. On the
statement of assets and liabilities, as a result of permanent book-to-tax
differences, the following reclassification was made in the Core Growth
Portfolio: accumulated net investment loss has been decreased by $45,752,
resulting in a reclassification adjustment to decrease Paid-in capital in
excess of par value by $45,752. This reclassification has no effect on net
assets or net asset value per share.
For Federal income tax purposes, the Tax-Free Income, Income and Core
Growth Portfolios had net capital losses of $11,340, $103,545 and $154,317
respectively at June 30, 1997. If not offset by subsequent capital gains,
$54,379 will expire June 30, 2003 in the Income Portfolio, $7,298 and
$49,166 will expire June 30, 2004 in the Tax-Free Income and Income
Portfolios, respectively, and $4,042 and $154,317 will expire June 30, 2005
in the Tax-Free Income and Core Growth Portfolios, respectively. The Board
of Directors does not intend to authorize a distribution of any net
realized gain for the portfolios until the capital loss carryovers have
been offset or expire.
It is the policy of the Fund to distribute to its shareholders
substantially all of its taxable income, thus gaining relief from Federal
income taxes under provisions of current tax regulations applicable to
investment companies of this type. Accordingly, no provision for Federal
income taxes has been made.
Most expenses of the Fund can be directly attributed to a portfolio.
Expenses which cannot be directly attributed are allocated between the
portfolios in the Fund based on average net assets.
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 increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
The gross unrealized appreciation and depreciation on investments in each
portfolio as of December 31, 1997 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO
---------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME & SMALL INTERNA- GLOBAL CORE
INCOME INCOME GROWTH GROWTH CAP TIONAL CONTRARIAN GROWTH
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross unrealized:
Appreciation...... 808,845 222,937 4,236,966 4,787,883 1,176,944 2,138,661 1,044,484 702,197
Depreciation...... 0 (10,547) (133,018) (587,350) (329,140) (2,742,152) (695,429) (410,288)
Net unrealized:
Appreciation/
Depreciation..... 808,845 212,390 4,103,948 4,200,533 847,804 (603,491) 349,055 291,909
</TABLE>
The Money Market, Income, Income & Growth, and Growth Portfolios were
organized on May 12, 1992 with the commencement of operations on August 18,
1992. The International Portfolio was organized on March 18, 1993 with
commencement of operations on April 30, 1993. The Small Cap, Tax-Free
Income and Global Contrarian Portfolios were organized on September 15,
1994 with the commencement of operations on November 1, 1994. The Core
Growth Portfolio was organized on August 22, 1996 with the commencement of
operations on November 1, 1996. Organizational expenses of approximately
$68,000 were incurred with the start up of the original four portfolios,
$11,590 with the start up of the International Portfolio and $7,813 with
the Small Cap, Tax-Free, and Global Contrarian Portfolios. Such expenses
will be charged against operations on a straight line basis over a period
of 60 months from the commencement of operations of the respective
portfolios. The Fund's sponsoring entity, Ohio National Life Insurance
Company (ONLIC), has agreed that it shall continue to hold the initial
shares purchased by it for at least as long as unamortized deferred
organizational expenses continue to be carried as an asset of the Fund. The
initial shares purchased were 25,000 shares of the Money Market Portfolio,
2,500 shares each of the Income, Income & Growth, and Growth Portfolios and
100 shares each of the International, Small Cap, Tax-Free Income, Global
Contrarian and Core Growth Portfolios. ONLIC and its affiliates have also
purchased additional shares of each portfolio and as of December 31, 1997
the additional shares owned were as follows: 7,547,353 shares of the Money
Market Portfolio, 553,940 shares of the Tax-Free Income Portfolio, 508,244
shares of the Income Portfolio, 345,432
53
<PAGE> 48
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
shares of the Income & Growth Portfolio, 237,631 shares of the Growth
Portfolio, 211,503 shares of the Small Cap Portfolio, 267,042 shares of the
Global Contrarian Portfolio, and 250,000 shares of the Core Growth
Portfolio.
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) from July 1, 1997 to December 31, 1997 were as follows:
<TABLE>
<CAPTION>
PORTFOLIO
----------------------------------------------------------------------------------------------------------------
TAX-FREE INCOME & SMALL GLOBAL CORE
INCOME INCOME GROWTH GROWTH CAP INTERNATIONAL CONTRARIAN GROWTH
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Stocks & Bonds:
Purchases..... -- 698,739 1,187,901 1,169,476 1,331,693 1,243,081 897,374 3,071,462
Sales......... -- -- -- -- -- -- -- --
U.S. Govt.
Obligations:
Purchases..... -- 657,825 1,845,137 1,582,368 1,178,119 2,311,438 683,867 2,622,892
Sales ........ -- 400,000 -- -- -- -- -- --
</TABLE>
(3) INVESTMENT ADVISORY AGREEMENT, SUB-ADVISORY AGREEMENTS AND TRANSACTIONS
WITH AFFILIATED PERSONS
The Fund has an investment advisory agreement with Ohio National
Investments, Inc. ("ONI"), a wholly owned subsidiary of ONLIC, under the
terms of which ONI provides portfolio management and investment advice to
the Fund and administers its other affairs, subject to the supervision of
the Fund's Board of Directors. As compensation for its services, the Fund
pays ONI a fee based on the average daily net asset value of each
portfolio's assets.
For assets held in the Money Market, Tax-Free Income, Income, Income &
Growth, Growth, and Small Cap Portfolios, the fees are as follows:
<TABLE>
<CAPTION>
PORTFOLIO
---------------------------------------------------------------------------------------------------------------
MONEY TAX-FREE INCOME & GROWTH SMALL
MARKET INCOME INCOME GROWTH CAP
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
First $100 mil..... 0.30% 0.60% 0.50% 0.50% 0.50% 0.65%
Next $150 mil...... 0.25% 0.50% 0.40% 0.40% 0.40% 0.55%
Over $250 mil...... 0.20% 0.40% 0.30% 0.30% 0.30% 0.45%
</TABLE>
For the International and Global Contrarian Portfolios, ONI is paid a fee
at an annual rate of 0.90% of each Portfolios' average daily net asset
values. ONI then pays Societe Generale Asset Management Corporation (SGAM)
fees at an annual rate of 0.75% of the average daily net asset values for
directing the investment and reinvestment of each portfolios' assets
pursuant to a sub-advisory agreement between ONI and SGAM dated May 1,
1996. For the Core Growth Portfolio, ONI is paid a fee at an annual rate of
0.95% of the portfolio's average daily net asset value. ONI then pays
Pilgrim Baxter & Associates (PBA) a fee at an annual rate of 0.75% of the
average daily net asset value of the first $50 million of Portfolio assets,
0.70% of the next $100 million and 0.50% of portfolio assets in excess of
$150 million for directing the investment and reinvestment of the
portfolio's assets pursuant to a sub-advisory agreement between ONI and PBA
dated November 1, 1996.
The advisor is presently waiving 0.15% of its management fees for certain
portfolios. Management fees waived by ONI for the six months ended December
31, 1997 were $11,064 ($0.001 per share), $5,325 ($0.009 per share), $5,109
($0.007 per share), $10,686 ($0.012 per share), $10,785 ($0.014 per share)
and $4,399 ($0.011 per share) for the Money Market, Tax-Free Income,
Income, Income & Growth, Growth and Small Cap Portfolios, respectively.
Under the agreement between the Fund and ONI, ONI has agreed to reimburse
the portfolios for expenses, other than advisory fees, 12b-1 fees, taxes
and interest, in excess of 1% of their average daily net assets. For the
six months ended December 31, 1997, the reimbursement was $12,017 for the
Global Contrarian Portfolio.
54
<PAGE> 49
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
Each director who is not an officer of the Fund or an employee of ONI or
its corporate affiliates is paid a quarterly retainer fee of $850 plus $200
for each meeting attended.
The Fund's transfer agent and dividend paying agent is American Data
Services, Inc., The Hauppauge Corporate Center, 150 Motor Parkway, Suite
109, Hauppauge, New York. The Fund's custodian for those portfolios other
than the International and Global Contrarian Portfolios is Star Bank, N.A.,
425 Walnut Street, Cincinnati, Ohio. The custodian for the International
and Global Contrarian Portfolios is Investors Fiduciary Trust Company, 801
Pennsylvania, Kansas City, Missouri. For International and Global
Contrarian Portfolio assets held outside the United States, Star Bank and
Investors Fiduciary Trust Company enter into subcustodial agreements,
subject to approval by the Board of Directors.
Certain directors and officers of the Fund are also directors and officers
of ONI and ONLIC.
(4) CAPITAL SHARE TRANSACTIONS Capital share transactions for the six months
ended December 31 and the year ended June 30, 1997 were as follows:
<TABLE>
<CAPTION>
MONEY MARKET TAX-FREE INCOME INCOME
-------------- -------------- ----------------- ---------------- -------------- -------------
6 MONTHS YEAR ENDED 6 MONTHS YEAR ENDED 6 MONTHS YEAR ENDED
ENDED 6-30-97 ENDED 6-30-97 ENDED 6-30-97
12-31-97 12-31-97 12-31-97
-------------- -------------- ----------------- ---------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Capital shares
issued on sales........... 8,636,418 17,151,447 17,281 39,876 37,003 20,785
Capital shares issued
on reinvested dividends... 212,265 545,914 1,059 14,155 3,991 23,352
Capital shares redeemed..... 9,147,015 19,142,752 4,589 20,980 31,557 93,120
INCOME & GROWTH GROWTH SMALL CAP
-------------- -------------- ----------------- ---------------- -------------- -------------
6 MONTHS YEAR ENDED 6 MONTHS YEAR ENDED 6 MONTHS YEAR ENDED
ENDED 6-30-97 ENDED 6-30-97 ENDED 6-30-97
12-31-97 12-31-97 12-31-97
-------------- -------------- ----------------- ---------------- -------------- -------------
Capital shares
issued on sales........... 70,333 184,505 51,800 160,092 55,893 77,889
Capital shares issued
on reinvested dividends... 3,023 32,135 0 25,550 0 16,545
Capital shares redeemed..... 72,507 178,596 62,557 187,890 20,963 51,087
INTERNATIONAL GLOBAL CONTRARIAN CORE GROWTH
-------------- -------------- ----------------- ---------------- -------------- -------------
6 MONTHS YEAR ENDED 6 MONTHS YEAR ENDED 6 MONTHS 11-1-96 TO
ENDED 6-30-97 ENDED 6-30-97 ENDED 6-30-97
12-31-97 12-31-97 12-31-97
-------------- -------------- ----------------- ---------------- -------------- -------------
Capital shares
issued on sales........... 163,284 324,624 32,688 88,240 55,228 592,472
Capital shares issued
on reinvested dividends... 21,277 73,771 1,635 22,545 0 0
Capital shares redeemed..... 213,183 190,431 33,205 69,585 31,640 36,602
</TABLE>
Sales charges imposed on capital shares sold by The O.N. Equity Sales
Company (ONESCO), the Fund's principal underwriter, a wholly-owned
subsidiary of ONLIC, for the six months ended December 31, 1997 were
approximately $4,796, $2,785, $31,693, $23,135, $14,542, $42,480, $6,375,
and $11,760 for the Tax-Free Income, Income, Income & Growth, Growth, Small
Cap, International, Global Contrarian and Core Growth Portfolios,
respectively.
55
<PAGE> 50
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
The Fund is authorized to issue 10 billion of its capital shares. The Money
Market Portfolio has been allocated 200 million shares and the other eight
portfolios have been allocated 100 million shares each. The remaining
shares have not been allocated.
(5) COMMITMENTS
The International and Global Contrarian Portfolios enter into foreign
currency exchange contracts as a way of managing foreign exchange rate
risk. The Fund may enter into these contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date as a hedge
against either specific transactions or portfolio positions. The objective
of the Fund's foreign currency hedging transactions is to reduce the risk
that the U.S. dollar value of the Fund's securities denominated in foreign
currency will decline in value due to changes in foreign currency exchange
rates. As of December 31, 1997, the International and Global Contrarian
Portfolios had entered into forward currency contracts, as set forth below
summarized by currency:
INTERNATIONAL PORTFOLIO
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY TO BE DELIVERED U.S. $ VALUE CURRENCY TO BE RECEIVED U.S. $ VALUE UNREALIZED
DATES THROUGH AMOUNT TYPE AT 12/31/97 AMOUNT TYPE AT 12/31/97 GAIN LOSS
- ------------- ------ ---- ----------- ------ ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
06/11/98 325,000 Australian Dollar 211,022 225,692 U.S. Dollar 225,692 $ 14,670
01/08/98 911,500 Swiss Franc 623,589 635,103 U.S. Dollar 635,103 11,514
06/10/98 364,000 Swiss Franc 253,358 252,980 U.S. Dollar 252,980 $ (378)
01/15/98 615,000 Deutsche Mark 342,151 362,693 U.S. Dollar 362,693 20,542
01/15/98 35,028 U.S. Dollar 35,028 62,000 Deutsche M. 34,493 (535)
06/17/98 57,000 Deutsche Mark 31,984 32,923 U.S. Dollar 32,923 939
01/22/98 1,012,500 French Franc 168,452 176,343 U.S. Dollar 176,343 7,891
01/22/98 110,446 U.S. Dollar 110,446 652,000 French Franc 108,475 (1,971)
06/03/98 6,676,000 French Franc 1,118,801 1,081,345 U.S. Dollar 1,081,345 (37,456)
01/29/98 93,296,000 Japanese Yen 717,689 832,951 U.S. Dollar 832,951 115,262
01/29/98 81,715 U.S. Dollar 81,715 9,615,000 Japanese Yen 73,964 (7,751)
06/24/98 174,861,000 Japanese Yen 1,374,964 1,488,000 U.S. Dollar 1,488,000 113,036
04/03/98 741,000 New Zealand $ 433,040 468,095 U.S. Dollar 468,095 35,055
----------- ----------- --------- ---------
5,502,239 5,773,057 $318,909 $(48,091)
=========== =========== ========= =========
GLOBAL CONTRARIAN PORTFOLIO
SETTLEMENT CURRENCY TO BE DELIVERED U.S. $ VALUE CURRENCY TO BE RECEIVED U.S. $ VALUE UNREALIZED
DATES THROUGH AMOUNT TYPE AT 12/31/97 AMOUNT TYPE AT 12/31/97 GAIN LOSS
- ------------- ------ ---- ----------- ------ ---- ----------- ---- ----
06/10/98 221,000 Swiss Franc 153,826 160,716 U.S. Dollar 160,716 $ 6,890
06/10/98 18,008 U.S. Dollar 18,008 25,000 Swiss Franc 17,401 $ (607)
06/03/98 432,000 French Franc 72,397 69,279 U.S. Dollar 69,279 (3,118)
06/24/98 46,890,000 Japanese Yen 368,704 403,077 U.S. Dollar 403,077 34,373
06/24/98 97,455 U.S. Dollar 97,455 11,720,000 Japanese Yen 92,156 (5,299)
11/13/00 11,720,000 Japanese Yen 103,795 109,810 U.S. Dollar 109,810 6,015
----------- ----------- --------- ---------
814,185 852,439 $47,278 $(9,024)
=========== =========== ========= =========
</TABLE>
(6) DISTRIBUTION PLAN
The Fund has a distribution agreement (12b-1 Plan) with ONESCO under the
terms of which the Fund pays a fee for shareholder service and sales of
Fund shares based on the average daily net assets of the portfolio. For
those assets not in the Money Market Portfolio, the fee is at an annual
rate of 0.25% of average net assets and can increase to 0.30% for sales
representatives who service $5 million or more of Fund shares. The fee for
the Money Market Portfolio is 0.15% of average net assets and can increase
to a maximum of 0.17% for the aforementioned servicing level.
56
<PAGE> 51
--------------------
ONE FUND, INC. THIRD CLASS BULK
U.S. POSTAGE PAID
P.O. BOX 371 CINCINNATI OH
Cincinnati, Ohio 45201
Permit No. 117
--------------------
Form 5843 Rev. 1/98
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
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<INTEREST-EXPENSE> 0
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<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .02
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> TAX-FREE INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
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<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 11.09
<PER-SHARE-NII> .24
<PER-SHARE-GAIN-APPREC> .35
<PER-SHARE-DIVIDEND> (.24)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 11.44
<EXPENSE-RATIO> 1.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> INCOME
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
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<PER-SHARE-NAV-BEGIN> 9.75
<PER-SHARE-NII> .29
<PER-SHARE-GAIN-APPREC> .19
<PER-SHARE-DIVIDEND> (.29)
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> INCOME & GROWTH
<S> <C>
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<FISCAL-YEAR-END> JUN-30-1997
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<PERIOD-END> DEC-31-1997
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> GROWTH
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> SMALL CAP
<S> <C>
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
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<NAME> INTERNATIONAL
<S> <C>
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<PER-SHARE-NII> .02
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 8
<NAME> GLOBAL CONTRARIAN
<S> <C>
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<PERIOD-START> JUL-01-1997
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<PER-SHARE-NAV-BEGIN> 11.79
<PER-SHARE-NII> .04
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 9
<NAME> CORE GROWTH
<S> <C>
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<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-01-1997
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