<PAGE> 1
WEALTH-BULDING OPPORTUNITY
ONE FUND(SM)
[ONE FUND(SM) LOGO]
ANNUAL REPORT
ONE Fund, Inc.
JUNE 30, 1998
OHIO NATIONAL
FINANCIAL SERVICES
<PAGE> 2
PRESIDENT'S
MESSAGE
DEAR SHAREHOLDER:
First, I want to thank you for being a shareholder of ONE Fund. All of us here
appreciate your support. In the six years since its founding, ONE Fund has
remained committed to serving its shareholders through adherence to fundamental
investment principles - careful selection and constant professional management.
We are pleased therefore to provide you with an update of your fund family's
performance and investment activity for the year ended June 30, 1998. By the end
of its fiscal year, ONE Fund's net assets totaled more than $91.5 million.
LOOKING BACK
For some time now we have enjoyed an economic climate of reasonable growth, low
unemployment, modest interest rates, subdued inflation and stable corporate
earnings. Over the past year and a half, however, while the overall direction
has continued to be favorable, the journey has not been an especially smooth one
for many investors. In the past 18 months, diversified U.S. stock mutual funds
have had three calendar quarters of gains and three calendar quarters of losses.
Blue chip stocks have continued to be strong performers, despite higher
valuations than smaller stocks and pressures on earnings due to sinking
currencies and economic turbulence throughout Asia. Also advancing, although not
nearly at the same pace as the large caps, have been the stocks of midsize and
small companies. Abroad, European equities have enjoyed a solid advance on the
strength of a long-term trend of improving corporate performance and optimism
over an improved investment climate accompanying the forthcoming introduction of
the "euro" common currency. Continued economic turmoil in Asia has driven down
emerging markets' equities substantially. As for bonds, the fundamentals
underpinning the U.S. bond market are as strong as at any time in recent memory.
LOOKING AHEAD
Markets in the United States and Europe thus far have shown remarkable
resilience amid fears that Asia has not yet reached the bottom of its economic
cycle. The "flight to quality" - cash inflow diverted from battered foreign
markets - is in part helping fuel the demand for stocks.
Inflation is low and is expected to stay in check, at least in the near-term,
as their regional economic tempest causes Asian companies to send their goods to
the U.S. at deeply reduced prices and prevents their competitors in the U.S.
from raising their own prices. Low interest rates could help prolong the U.S.
economic expansion by sustaining the booming housing industry and making loans
for capital investment more affordable. Still, a strong dollar, rising labor
costs and Asia's downturn are combining to temper corporate profitability and in
turn slow earnings growth among larger companies. The time may be approaching
when many midsize and small companies with limited exposure to Asia and less
economic sensitivity generate higher relative earnings growth.
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 on the investment opportunities available to you through ONE Fund.
As your needs change over time, he or she stands ready to serve you.
Thank you again for the confidence you have placed in ONE Fund as you pursue
your wealth-building endeavors. Be assured that we will make every effort to
continue to merit that confidence.
Best regards,
/s/ John J. Palmer
John J. Palmer
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS AND SHAREHOLDERS ONE FUND, INC.:
We have audited the accompanying statements of assets and liabilities and the
schedules of investments of ONE Fund, Inc. (comprising, respectively, the Money
Market, Tax-Free Income, Income, Income & Growth, Growth, Small Cap,
International, Global Contrarian, and Core Growth Portfolios) as of June 30,
1998, and the related statements of operations, statements of changes in net
assets and the financial highlights for each of the periods indicated herein.
These financial statements and financial highlights are the responsibility of
the funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of June 30, 1998, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the portfolios comprising ONE Fund, Inc. as of June 30, 1998, and the results
of their operations, the changes in their net assets and their financial
highlights for each of the periods indicated herein, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Cincinnati, Ohio
July 24, 1998
- --------------------------------------------------------------------------------
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
Thomas A. Barefield, Vice President
Michael A. Boedeker, Vice President
Joseph P. Brom, Vice President
Stephen T. Williams, Vice President
Dennis R. Taney, Treasurer
Theresa M. Brunsman, Assistant Secretary
William J. Hilbert, Jr., Compliance Director and Assistant Treasurer
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund. This report is not
authorized for distribution to prospective investors in the fund unless preceded
or accompanied by an effective prospectus of ONE Fund, Inc. For a prospectus
containing more complete information, including charges and expenses, please
contact Ohio National Equities, Inc. (Member NASD/SIPC) One Financial Way,
Cincinnati, Ohio 45242, telephone 513.794.6100. 8/98
<PAGE> 4
ONE FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30,1998
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -----------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND
RELATED (6.1%)
$726,000 American Honda
5.520% 07-20-98 $ 723,885
274,000 Ford Motor Credit Corp.
5.490% 08-05-98 272,538
-----------
996,423
-----------
CHEMICALS (3.5%)
577,000 Great Lakes Chemicals
5.520% 07-21-98 575,231
-----------
CONSUMER PRODUCTS (15.5%)
473,000 American Home Products
5.490% 07-30-98 470,908
428,000 Eastman Kodak
5.500% 07-07-98 427,608
412,000 Fortune Brands (b)
6.150% 07-01-98 412,000
687,000 Kellogg Co.
5.500% 07-24-98 684,586
548,000 PHH Corp.
5.850% 07-08-98 547,377
-----------
2,542,479
-----------
ELECTRICAL EQUIPMENT (3.2%)
528,000 Avnet Inc.
5.580% 07-23-98 526,200
-----------
FINANCE (23.5%)
548,000 American Express
5.510% 07-02-98 547,916
596,000 Block Financial Corp.
5.520% 08-07-98 592,619
511,000 Caterpillar Financial
5.490% 08-08-98 508,195
268,000 G.E. Capital
5.490% 08-05-98 266,569
627,000 Household Finance Corp.
5.520% 08-10-98 623,154
800,000 Houston Industries (b)
5.730% 07-15-98 798,217
508,000 USAA Capital Corp.
5.470% 08-12-98 504,758
-----------
3,841,428
-----------
HOUSING, FURNITURE &
RELATED (6.8%)
399,000 Sherman Williams
5.510% 07-06-98 398,695
712,000 Stanley Works
5.480% 07-16-98 710,374
-----------
1,109,069
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ---------------------------------------------------------------
<S> <C> <C>
INDUSTRIAL (7.6%)
$750,000 BAT Capital
5.620% 07-14-98 $ 748,478
500,000 Flour Corp.
5.580% 08-11-98 496,822
-----------
1,245,300
-----------
INSURANCE (6.2%)
510,000 Allstate Corp.
5.530% 08-04-98 507,336
507,000 Reliastar Mortgage
5.600% 07-13-98 506,054
-----------
1,013,390
-----------
MACHINERY AND
EQUIPMENT (4.7%)
769,000 John Deere Capital
5.510% 08-18-98 763,350
-----------
MEDIA AND
PUBLISHING (3.2%)
525,000 Tribune Co. (b)
5.500% 07-08-98 524,358
-----------
OIL, ENERGY, AND
NATURAL GAS (6.6%)
416,000 Atlantic Richfield (b)
5.530% 08-17-98 412,997
670,000 Texaco Inc.
5.500% 08-25-98 664,370
-----------
1,077,367
-----------
RETAIL (10.4%)
516,000 J.C. Penny (b)
5.500% 08-03-98 513,399
604,000 Sears Roebuck
5.480% 07-22-98 602,069
583,000 Winn-Dixie
5.500% 07-28-98 580,595
-----------
1,696,063
-----------
UTILITIES (3.7%)
610,000 Carolina Power & Light
5.520% 07-06-98 609,532
-----------
TOTAL HOLDINGS
(COST $16,520,190(a) $16,520,190
===========
</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 $2,660,971 or 16.2% of net
assets.
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
ONE FUND, INC.
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES JUNE 30 1998
<S> <C>
Assets:
Investments in securities at amortized cost
and market value (note 1) ............... $16,520,190
Cash in bank .............................. 294
Receivable for fund shares sold ........... 57,908
Other ..................................... 2,789
-----------
Total assets ............................ 16,581,181
-----------
Liabilities:
Payable for fund shares redeemed .......... 174,238
Payable for investment management
services (note 3) ....................... 2,000
Accrued 12b-1 fees (note 6) ............... 5,825
Other accrued expenses .................... 14,443
Dividends payable ......................... 23,708
-----------
Total liabilities ....................... 220,214
-----------
Net assets at market value ................... $16,360,967
===========
Net assets consist of:
Par value, $.001 per share ................ $ 16,361
Paid-in capital in excess of par value .... 16,344,526
Accumulated undistributed net realized
loss on investments ........... 80
-----------
Net assets at market value ................... $16,360,967
===========
Shares outstanding ........................... 16,360,967
Net asset value per share .................... $ 1.00
===========
Maximum offering price per share ............. $ 1.00
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For Year Ended June 30, 1998
<S> <C>
Investment income:
Interest ................................... $ 856,986
-----------
Expenses:
Management fees (note 3) ................... 45,452
12b-1 fees (note 6) ........................ 22,727
Custodian fees (note 3) .................... 6,300
Directors' fees (note 3) ................... 2,385
Professional fees .......................... 9,814
Transfer agent and accounting fees.......... 49,700
Filing fees ................................ 11,925
Printing, proxy and postage fees ........... 6,476
Organizational expense (note 1) ............ 455
Other ...................................... 160
-----------
Total expenses ........................... 155,394
Less expenses voluntarily reduced
or reimbursed (note 3) ................. (22,726)
-----------
Net expenses ............................. 132,668
-----------
Net investment income .................... 724,318
-----------
Net increase in net
assets from operations ............... $ 724,318
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
From operations:
Net investment income ..................................................... $ 724,318 $ 800,904
------------ ------------
Net increase in assets from operations ................................ 724,318 800,904
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ................................. (724,318) (800,904)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ................................................. 21,996,755 17,151,447
Received from dividends reinvested ........................................ 455,744 545,914
Paid for shares redeemed .................................................. (20,456,024) (19,142,752)
------------ ------------
Increase (decrease) in net assets derived from capital share transactions 1,996,475 (1,445,391)
------------ ------------
Increase (decrease) in net assets ..................................... 1,996,475 (1,445,391)
------------ ------------
Net Assets:
Beginning of period ....................................................... 14,364,492 15,809,883
------------ ------------
End of period ............................................................. $ 16,360,967 $ 14,364,492
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Years Ended June 30,
1998 1997 1996 1995 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income ............................... 0.05 0.05 0.05 0.05 0.03.
Less distributions:
Dividends from net investment income ................ (0.05) (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 ........................................... 4.87% 4.77% 5.18% 5.06% 3.06%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses ............................................ 0.88% 0.80% 0.57% 0.51% 0.44%
Net investment income ............................... 4.81% 4.71% 5.14% 4.99% 2.97%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses ............................................ 1.03% 1.04% 0.87% 0.81% 0.74%
Net investment income ............................... 4.66% 4.47% 4.84% 4.69% 2.67%
Net assets at end of period (millions) ................. $ 16.4 $ 14.4 $ 15.8 $ 14.1 $ 12.3
</TABLE>
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets 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.
<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 JUNE 30, 1998
Average Annual Total Returns:
Without With max.
sales charge sales charge
One-year 5.77% 2.60%
Three-Year 6.71% 5.64%
Since inception (11/1/94) 8.32% 7.42%
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
Over the past year, tax-exempt funds have not performed as well as government or
corporate bonds of equal maturity. The performance of the ONE Fund Tax-Free
Income Portfolio lagged that of its benchmark, the Lehman Tax-Free Intermediate
Bond Index, with a return of 5.77 percent for the portfolio versus 7.42 percent
for the index. The main reason for the underperformance was credit deterioration
in an industrial revenue bond that has since been sold.
Our expectation is for reasonable stability in the overall level of interest
rates for the near term. The portfolio as currently structured should outperform
the index under such circumstances.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Tax-Free Income Portfolio (with max.
sales charge) (Commenced operations
November 1, 1994)
Data Value
---- -----
<S> <C>
12/12/94 $ 9,860.10
12/31/95 $11,480.30
12/31/96 $11,930.00
12/31/97 $12,950.30
06/30/98 $13,003.40
</TABLE>
<TABLE>
<CAPTION>
Lehman Bros. Municipal Bond Index-
Intermediate
Data Value
---- -----
<S> <C>
12/31/94 $10,264.00
12/31/95 $11,834.40
12/31/96 $12,313.80
12/31/97 $13,397.90
06/31/98 $13,397.90
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. Washington St Pub Pwr Sub Sys Nuclear
5.70% 7/1/2012 4.45
2. Chicago Illinois Midway Airport 5.5% 1/1/2029 4.32
3. North Carolina Med Care Commn Healthcare
5.25% 5/1/2026 4.19
4. New York St Medical Care Facs 6.75% 8/15/2014 4.04
5. Metropolitan Atlanta Rapid Trans Authority
6.80% 7/1/2014 4.01
6. Pennsylvania Intergvt Coop Auth Spl Tax
6.75% 6/15/2021 4.00
7. Nevada State G.O. 6.60% 12/1/2013 3.92
8. Matagorda Cnty Texas Nav Dist No 1 6.70%
3/1/2027 3.80
9. Clark Cnty Nevada School Dist 7.00% 6/1/2009 3.80
10. Richland Cnty South Carolina Poll Ctl 5.90%
11/1/2020 3.80
TOP 5 CATEGORIES AS OF JUNE 30, 1998
% of Portfolio
Power Revenue 18.2
Insured Bonds 15.9
Hospital Revenue 14.8
Pollution Control/Industrial Revenue 11.1
General Obligation Bonds 11.0
<PAGE> 8
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30,1998
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- -----------------------------------------------------------------
<S> <C> <C>
AIRPORT REVENUE (7.8%)
$300,000 Chicago Illinois Midway Airport
5.500% 01-01-29 $ 309,540
250,000 Chicago Illinois O'Hare Airport
5.000% 01-01-13 248,345
------------
557,885
------------
CONVENTION COMPLEX &
HOSPITALITY FACILITIES (3.0%)
200,000 Metropolitan Pier
6.250% 07-01-17 217,700
------------
GENERAL OBLIGATION BONDS (11.0%)
100,000 Clairborne County Mississippi
7.300% 05-01-25 105,620
150,000 Commonwealth of Puerto Rico
5.500% 07-01-17 154,596
250,000 State of Nevada
6.600% 12-01-13 281,303
250,000 State of Washington
5.000% 05-01-17 248,325
------------
789,844
------------
HOSPITAL REVENUE (14.8%)
250,000 Hawaii Department of Budget
6.000% 07-01-20 269,388
250,000 Massachusetts State Hospital
6.200% 10-01-16 271,060
300,000 North Carolina Medical Care Comm.
5.250% 10-01-26 300,714
200,000 Wisconsin Health and Education
6.125% 11-15-15 217,992
------------
1,059,154
------------
HOUSING REVENUE (2.2%)
150,000 Alaska Housing
5.875% 12-01-24 156,890
------------
INSURED BONDS (15.9%)
250,000 Atlanta RTA
6.800% 07-01-14
(Insured MBIA) 287,795
250,000 Matagorde Texas
6.700% 07-01-14
(Insured AMBAC) 272,726
250,000 New York State Med Care
6.750% 08-15-14
(Insured AMBAC) 289,605
250,000 Pennsylvania Intergovernment
Corp.
6.750% 06-15-21
(Insured FGIC) 287,060
------------
1,137,186
------------
POLLUTION CONTROL &
INDUSTRIAL REVENUE (11.1%)
250,000 Lawrenceburg, Indiana
5.900% 11-01-19 259,138
250,000 Richland County, S. Carolina
6.550% 11-01-20 272,122
250,000 West Feliciana, Louisiana
8.000% 12-01-24 266,243
------------
797,503
------------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- -----------------------------------------------------------------
<S> <C> <S>
POWER REVENUE (18.2%)
$250,000 Jacksonville Florida
Municipal Electric
5.500% 10-01-14 $ 257,728
250,000 North Carolina Eastern Power
6.000% 01-01-22 0267,927
250,000 Salt River Arizona Project
5.000% 01-01-13 0250,853
200,000 Southern California
Public Power
6.000% 07-01-18 208,428
300,000 Washington Power
5.700% 07-01-12 318,873
--------------
1,303,809
--------------
SCHOOL REVENUE (3.8%)
250,000 Clark County,
Nevada School District
7.000% 06-01-09 272,602
--------------
WATER REVENUE (3.6%)
250,000 Metropolitan Water
District of
S. California
5.500% 07-01-13 259,230
--------------
TOTAL MUNICIPAL BONDS
(91.4%)(COST 551,770,314) $ 6,551,803
--------------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -----------------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE & RELATED (4.6%)
$199,000 Ford Motor Credit Corp.
5.630% 07-02-98 $ 198,969
129,000 General Motors
Acceptance Corp.
5.590% 07-06-98 128,900
--------------
327,869
--------------
FINANCIAL SERVICES (1.5%)
108,000 GE Capital Corp.
5.650% 07-01-98 107,898
--------------
RETAIL (1.6%)
116,000 Sears Roebuck Acceptance Corp.
5.450% 07-01-98 116,000
-------------
TOTAL SHORT-TERM NOTES
(7.7%) (COST $551,767) $ 551,767
-------------
TOTAL HOLDINGS
(COST $6,322,081)(a) $ 7,103,570
=============
</TABLE>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 9
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $6,322,081) ....... $ 7,103,570
Cash in bank ............................. 904
Receivable for fund shares sold .......... 121
Dividends and accrued interest receivable 107,820
Deferred organizational expenses (note 1) 748
Other .................................... 1,606
-----------
Total assets ........................... 7,214,769
-----------
Liabilities:
Payable for fund shares redeemed ......... 6,000
Payable for investment management
services (note 3) ...................... 2,648
Accrued 12b-1 fees (note 6) .............. 4,312
Other accrued expenses ................... 6,840
Dividends payable ........................ 25,187
-----------
Total liabilities ...................... 44,987
-----------
Net assets at market value .................. $ 7,169,782
===========
Net assets consist of:
Par value, $.001 per share ............... $ 638
Paid-in capital in excess of par value ... 6,498,887
Accumulated undistributed net realized
loss on investments .................... (111,345)
Net unrealized appreciation on investments 781,489
Undistributed net investment income ...... 113
-----------
Net assets at market value .................. $ 7,169,782
===========
Shares outstanding .......................... 637,969
Net asset value per share ................... $ 11.24
===========
Maximum offering price per share
($11.24/97%) .............................. $ 11.59
===========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For Year Ended June 30, 1998
<S> <C>
Investment income:
Interest ...................................... $ 407,962
---------
Expenses:
Management fees (note 3) ...................... 42,613
12b-1 fees (note 6) ........................... 17,756
Custodian fees (note 3) ....................... 5,550
Directors' fees (note 3) ...................... 1,125
Professional fees ............................. 4,629
Transfer agent and accounting fees ............ 32,500
Filing fees ................................... 6,268
Printing, proxy and postage fees .............. 2,200
Organizational expense (note 1) ............... 465
Other ......................................... 290
---------
Total expenses .............................. 113,396
Less expenses voluntarily reduced
or reimbursed (note 3) .................... (10,653)
---------
Net expenses ................................ 102,743
---------
Net investment income ....................... 305,219
---------
Realized and unrealized gain/loss on investments:
Net realized loss from investments ............ (100,005)
Net increase in unrealized
appreciation on investments ................. 186,945
---------
Net gain on investments ....................... 86,940
---------
Net increase in net
assets from operations ...................... $ 392,159
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 10
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
--------------- ---------------
<S> <C> <C>
From operations:
Net investment income .......................................... $ 305,219 $ 320,171
Realized loss on investments ................................... (100,005) (4,042)
Unrealized gain on investments ................................. 186,945 185,075
--------------- ---------------
Net increase in assets from operations ..................... 392,159 501,204
--------------- ---------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ...................... (305,219) (320,058)
--------------- ---------------
From capital share transactions (note 4):
Received from shares sold ...................................... 457,036 436,076
Received from dividends reinvested ............................. 32,007 153,756
Paid for shares redeemed ....................................... (232,821) (227,986)
--------------- ---------------
Increase in net assets derived from capital share transactions 256,222 361,846
--------------- ---------------
Increase in net assets ....................................... 343,162 542,992
--------------- ---------------
Net Assets:
Beginning of period ............................................ 6,826,620 6,283,628
--------------- ---------------
End of period .................................................. $ 7,169,782 $ 6,826,620
=============== ===============
Includes undistributed net investment income of ................ $ 113 $ 113
=============== ===============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
11-1-94
Year End June 30, to
1998 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 ............................... 0.49 0.53 0.56 0.35
Net realized and unrealized gain on investments ..... 0.15 0.30 0.13 0.66
------------ ------------ ------------ ------------
Total income from investment operations ........... 0.64 0.83 0.69 1.01
------------ ------------ ------------ ------------
Less distributions:
Dividends from net investment income ................ (0.49) (0.53) (0.56) (0.35)
------------ ------------ ------------ ------------
Net asset value, end of period ......................... $ 11.24 $ 11.09 $ 10.79 $ 10.66
============ ============ ============ ============
Total return ........................................... 5.77% 7.82% 6.59% 10.26%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses ............................................ 1.45% 1.24% 0.94% 0.91%
Net investment income ............................... 4.30% 4.81% 5.20% 5.04%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses ............................................ 1.60% 1.45% 1.24% 1.21%
Net investment income ............................... 4.15% 4.60% 4.90% 4.74%
Portfolio turnover rate ................................ 4% 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 management fees equal to 0.15% of average
net assets 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.
<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.
PERFORMANCE AS OF JUNE 30, 1998
Average Annual Total Returns:
Without With max.
sales charge sales charge
One-year 8.56% 5.31%
Three-year 7.12% 6.04%
Five-year 5.70% 5.06%
Since inception (8/18/92) 6.49% 5.93%
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
The ONE Fund Income Portfolio returned 8.56 percent over the past year, slightly
better than the Lehman Government/Corporate Intermediate Bond Index. The
portfolio has a slightly longer maturity structure than the index and has
benefited from a general decline in interest rates during the period.
We expect reasonable stability in interest rates over the next several
months. If that expectation should prove correct, our portfolio maturity
structure should allow the portfolio to perform slightly better than the index.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Income Portfolio (with max. sales charge)
(Commenced operations August 18, 1922)
Data Value
---- -----
<S> <C>
12/31/92 $ 9,757.20
12/31/93 $11,050.70
12/31/94 $10,449.30
12/31/95 $12,201.70
12/31/96 $12,771.30
12/31/97 $13,809.60
06/30/98 $14,281.90
</TABLE>
<TABLE>
<CAPTION>
Lehman Bros. Govt./Corporate Bond
Index-intermediate
Date Value
---- -----
<S> <C>
12/31/92 $10,100.00
12/31/93 $10,980.60
12/31/94 $10,766.60
12/31/95 $12,413.90
12/31/96 $12,916.80
12/31/97 $13,933.10
06/30/98
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. U.S. Treasury Note 6.375% 8/15/02 14.88
2. Texas Utilities Electric Co. 7.48% 1/1/17 4.68
3. Mississippi Chemical Corp 7.25% 11/15/07 4.56
4. Watson Pharmaceuticals Inc 7.125% 5/15/08 4.35
5. Mirage Resorts Inc 6.75% 2/1/08 4.29
6. ITT Destinations Inc 6.75% 11/15/05 4.16
7. El Paso Electric Co 8.90% 2/1/06 4.04
8. Tenneco Inc 8.075% 8/1/03 3.86
9. ITT Rayonier Inc 7.50% 10/15/02 3.81
10. IBM Corp 7.25% 11/1/02 3.79
TOP 5 INDUSTRIES AS OF JUNE 30, 1998
% of Portfolio
Utilities 19.9
Government 14.9
Hotel/Lodging 11.3
Oil, Energy & Natural Gas 8.4
Transportation and Equipment 6.6
<PAGE> 12
ONE FUND, INC.
INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- ------------------------------------------------------------
<S> <C> <C>
GOVERNMENT (14.9%)
$1,000,000 U.S. Treasury Note
6.375% 08-15-02 $1,030,626
----------
CHEMICALS (4.6%)
300,000 Mississippi Chemical Corp.
7.250% 11-15-07 315,986
----------
COMMUNICATIONS (1.6%)
100,000 Comcast Cable Communications
8.375% 05-01-07 112,494
----------
COMPUTER AND RELATED (3.8%)
250,000 International Business Machines
7.250% 11-01-02 262,481
----------
CONSUMER GOODS (3.6%)
250,000 RJR Nabisco, Inc.
7.625% 09-15-03 248,713
----------
DRUGS (4.3%)
300,000 Watson Pharmaceuticals, Inc.
7.125% 05-15-08 301,327
----------
FORESTRY AND PAPER PRODUCTS (3.8%)
250,000 ITT Rayonier, Inc.
7.500% 10-15-02 263,762
----------
HOTEL/LODGING (11.3%)
200,000 Hilton Hotels Corp.
7.200% 12-15-09 197,502
300,000 ITT Destinations, Inc.
6.750% 11-15-05 287,920
300,000 Mirage Resorts Inc.
6.750% 02-01-08 296,922
----------
782,344
----------
MEDICAL AND RELATED (3.8%)
250,000 Bergen Brunswig Corp.
7.375% 01-15-03 262,133
----------
OIL, ENERGY AND NATURAL GAS (8.4%)
200,000 PDV America, Inc.
7.875% 08-01-03 209,075
100,000 Seagull Energy
7.875% 08-01-03 101,990
250,000 Tenneco Inc.
8.075% 10-01-02 267,537
----------
578,602
----------
REAL ESTATE (3.0%)
200,000 Avalon Properties Inc.
7.375% 09-15-02 208,044
----------
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- ------------------------------------------------------------
TEXTILES AND RELATED (3.6%)
$250,000 Fruit of the Loom Corp.
7.875% 10-15-99 $252,031
----------
TRANSPORTATION & EQUIPMENT (6.6%)
250,000 Illinois Central Gulf Railroad
6.750% 05-15-03 256,534
200,000 ABC Rail Product Corp.
8.750% 12-01-04 199,000
----------
455,534
----------
UTILITIES (14.3%)
250,000 El Paso Electric Co.
8.900% 02-01-06 280,000
200,000 Niagra Mohawk Power Corp.
7.750% 10-01-08 206,250
178,501 Puget Power
6.450% 04-11-05 179,867
300,000 Texas Utilities Electric
7.480% 01-01-17 323,881
----------
989,998
----------
TOTAL LONG-TERM BONDS & NOTES
(87.6%) (Cost $5,853,606) $6,064,075
----------
MARKET
SHARES PREFERRED STOCK VALUE
- ------------------------------------------------------------
UTILITIES (5.6%)
8,000 GTE Delaware, 8.750 $209,500
7,000 Connecticut Light, Power & Capital
9.300% Series A 179,375
----------
388,875
----------
TOTAL PREFERRED STOCK
(5.6%) (COST $3751,000) $388,875
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ------------------------------------------------------------
AUTOMOTIVE AND RELATED (3.3%)
$231,000 Ford Motor Acceptance Corp.
5.630% 07-02-98 $230,964
----------
Retail (2.5%)
170,000 Sears Roebuck Acceptance Corp.
5.900% 07-01-98 170,000
----------
TOTAL SHORT-TERM NOTES
(5.8%) (COST $400,964) $400,964
----------
TOTAL HOLDINGS
(COST $6,629,570)(a) $6,853,914
==========
</TABLE>
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
<PAGE> 13
ONE FUND, INC.
INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30,1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $6,629,570) ........................................ $ 6,853,914
Cash in bank .............................................................. 759
Receivable for fund shares sold ........................................... 12,021
Dividends and accrued interest receivable ................................. 113,953
Other ..................................................................... 1,583
-----------
Total assets ............................................................ 6,982,230
-----------
Liabilities:
Payable for investment management
services (note 3) ....................................................... 1,972
Accrued 12b-1 fees (note 6) ............................................... 4,045
Other accrued expenses .................................................... 16,952
Dividends payable ......................................................... 34,876
-----------
Total liabilities ....................................................... 57,845
-----------
Net assets at market value .................................................. $ 6,924,385
===========
Net assets consist of:
Par value, $.001 per share ................................................ $ 692
Paid-in capital in excess of par value .................................... 6,754,823
Accumulated undistributed net realized
loss on investments ..................................................... (55,474)
Net unrealized appreciation on investments ................................ 224,344
-----------
Net assets at market value .................................................. $ 6,924,385
===========
Shares outstanding .......................................................... 692,940
Net asset value per share ................................................... $ 9.99
===========
Maximum offering price per share ($9.99/97%) ................................ $ 10.30
===========
STATEMENT OF OPERATIONS
For Year Ended June 30, 1998
Investment income:
Interest .................................................................. $ 495,090
-----------
Expenses:
Management fees (note 3) .................................................. 33,928
12b-1 fees (note 6) ....................................................... 16,964
Custodian fees (note 3) ................................................... 5,500
Directors' fees (note 3) .................................................. 1,095
Professional fees ......................................................... 4,505
Transfer agent and accounting fees ........................................ 33,700
Filing fees ............................................................... 6,062
Printing, proxy and postage fees .......................................... 2,080
Organizational expense (note 1) ........................................... 455
Other ..................................................................... 299
-----------
Total expenses .......................................................... 104,588
Less expenses voluntarily reduced
or reimbursed (note 3) ................................................ (10,178)
-----------
Net expenses ............................................................ 94,410
-----------
Net investment income ................................................... 400,680
-----------
Realized and unrealized gain on investments:
Net realized gain from investments ........................................ 48,077
Net increase in unrealized
appreciation on investments ............................................. 117,144
-----------
Net gain on investments ............................................... 165,221
-----------
Net increase in net
assets from operati ................................................. $ 565,901
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 14
ONE FUND, INC.
INCOME PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
From operations:
Net investment income .................................................... $ 400,680 $ 420,873
Realized gain on investments ............................................. 48,077 7,352
Unrealized gain on investments ........................................... 117,144 98,941
------------- -------------
Net increase in assets from operations ................................ 565,901 527,166
------------- -------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ................................ (400,680) (420,873)
------------- -------------
From capital share transactions (note 4):
Received from shares sold ................................................ 759,219 201,790
Received from dividends reinvested ....................................... 79,395 224,885
Paid for shares redeemed ................................................. (702,729) (892,262)
------------- -------------
Increase (decrease) in net assets derived from capital share transactions 135,885 (465,587)
------------- -------------
Increase (decrease) in net assets .................................... 301,106 (359,294)
------------- -------------
Net Assets:
Beginning of period ...................................................... 6,623,279 6,982,573
------------- -------------
End of period ............................................................ $ 6,924,385 $ 6,623,279
============= =============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Year Ended June 30,
1998 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 ................................. 0.59 0.61 0.63 0.65 0.62
Net realized and unrealized gain (loss) on investments 0.24 0.16 (0.19) 0.39 (0.98)
--------- --------- --------- --------- ---------
Total income (loss) from investment operations ....... 0.83 0.77 0.44 1.04 (0.36)
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income .................. (0.59) (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 .................................. (0.59) (0.61) (0.63) (0.65) (0.68)
--------- --------- --------- --------- ---------
Net asset value, end of period ......................... $ 9.99 $ 9.75 $ 9.59 $ 9.78 $ 9.39
========= ========= ========= ========= =========
Total return ........................................... 8.56% 8.26% 4.61% 11.58% (3.79%)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses .............................................. 1.39% 1.21% 0.97% 0.85% 1.02%
Net investment income ................................. 5.91% 6.29% 6.50% 6.80% 6.10%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses .............................................. 1.54% 1.51% 1.22% 1.10% 1.27%
Net investment income ................................. 5.76% 5.99% 6.25% 6.55% 5.85%
Portfolio turnover rate ................................ 40% 10% 9% 4% 6%
Net assets at end of period (millions) ................. $ 6.9 $ 6.6 $ 7.0 $ 7.1 $ 4.6
</TABLE>
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets 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.
<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 JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year 14.77% 9.04%
Three-year 17.13% 15.15%
Five-year 14.11% 12.95%
Since inception (8/18/92) 14.18% 13.18%
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
We continued to see an increasing yet volatile stock market led
by blue chips and a select number of growth stocks during the twelve months
ending June 30, 1998. The valuation spread between the largest companies and
most others are near all-time highs. The breadth of the stock market continues
to narrow. Interest rates moved lower with the largest part of the move
occurring during the second half of 1997. The interest rate spread between
Treasury securities and corporate bonds have widened during the second quarter
of 1998 due to investor's concerns about Asia and other uncertainties.
The Income and Growth Portfolio return was 14.8% for the period. The
strongest performing sectors included Utilities, Consumer Staples, Healthcare
and Financials. The weaker performing sectors included Capital Goods, Real
Estate and certain issues in the Technology sector.
As spreads continue to increase between Treasury securities and corporate
bonds, we are looking to add to our holdings of high-quality corporate bonds. We
expect the stock market volatility to continue through the remainder of the year
as investors contend with Asian concerns, potential slowdowns in other parts of
the world, Year 2000 issues and reduced corporate profits. On the other hand,
several countries continue to experience steady economic growth, and many
companies (small, medium and large) should continue to report very good earnings
growth. Investments in these areas and companies should provide positive results
for investors over time.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Income and Growth Portolio (with max. sales charge)
(Commenced operations August 18, 1992)
Data Value
---- -----
<S> <C>
12/31/92 $ 9,487.70
12/31/93 $11,146.40
12/31/94 $11,066.70
12/31/95 $13,796.00
12/31/96 $15,976.10
12/31/97 $19,635.90
06/30/98 $20,682.50
<CAPTION>
S&P 500 Index
Data Value
---- -----
<S> <C>
12/31/92 $10,627.00
12/31/93 $11,688.40
12/31/94 $11,841.80
12/31/95 $16,273.90
12/31/96 $20,030.30
12/31/97 $26,690.10
06/30/98 $31,416.90
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. Camco International Inc 3.88
2. Texas Instruments Inc 2.91
3. Allied Signal 2.76
4. Microsoft Corp 2.70
5. CBS Corporation 2.37
6. Williams Cos Inc 2.21
7. Regal Beloit Corp 2.13
8. PDV America, Inc NT 7.875% 8/1/03 1.95
9. Hewlett-Packard Co 1.86
10. Intel Corp 1.85
TOP 5 INDUSTRIES AS OF JUNE 30, 1998
% of Portfolio
Oil, Energy & Natural Gas 17.2
Computer & Related 13.0
Real Estate 7.2
Industrial Services 6.1
Electrical Equipment 5.9
<PAGE> 16
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ----------------------------------------------------------
AEROSPACE (2.8%)
<S> <C> <C>
10,000 Allied Signal, Inc. $443,750
-----------
AUTOMOTIVE AND RELATED (3.3%)
3,300 Chrysler Corp. 186,038
3,500 Cooper Tire & Rubber Co. 72,188
4,000 Magna International, Inc. CL A 274,500
-----------
532,726
-----------
BANKING (3.0%)
5,970 First State Bancorporation 144,026
807 First Union Corp. 47,034
3,500 Flagstar Bancorp, Inc. 85,312
1,000 Star Banc Corp. 63,875
3,750 Susquehanna Bancshares Inc. 140,156
-----------
480,403
-----------
BUSINESS SERVICES (2.4%)
5,000 First Data Corp. 166,563
4,000 Manpower Inc. 114,750
6,000 Reynolds and Reynolds CL A 109,125
-----------
390,438
-----------
CHEMICALS (4.4%)
1,250 Hanson Trust PLC 37,891
13,000 Hawkins Chemical Inc. 156,000
5,000 Minerals Technologies, Inc. 254,375
6,000 OM Group, Inc. 247,500
-----------
695,766
-----------
COMPUTER AND RELATED (11.4%)
2,000 *3Com Corp. 61,375
3,000 Computer Associates International 166,688
5,000 Hewlett Packard Co. 299,375
4,000 Intel Corp. 296,500
10,000 MacNeal-Schwendler Corp. 98,125
4,000 *Microsoft Corp. 433,500
8,000 Texas Instruments, Inc. 466,500
-----------
1,822,063
-----------
ELECTRICAL EQUIPMENT (5.0%)
12,000 CBS Corporation 381,000
5,000 Hubbell Inc. CL B 208,125
3,000 Varian Associates, Inc. 117,000
1,000 Xerox Corp. 101,625
-----------
807,750
-----------
ENTERTAINMENT AND LEISURE (1.7%)
10,000 Cedar Fair 276,250
-----------
FINANCE (1.3%)
18,500 Bando McGlocklin Capital Corp. 212,750
-----------
FOOD AND RELATED (2.2%)
3,000 H.J. Heinz Co. 168,375
6,000 Panamerican Beverages Inc. Cl A 188,625
-----------
357,000
-----------
FORESTRY AND PAPER PRODUCTS (0.7%)
3,630 Sonoco Products Co. 109,808
-----------
HOUSING, FURNITURE & RETLATED (1.8%)
7,100 Haverty Furniture Co. 157,088
6,200 Shelby Williams Industries Inc. 93,000
-----------
250,088
-----------
MARKET
SHARES COMMON STOCK VALUE
- ----------------------------------------------------------
INDUSTRIAL SERVICES (6.1%)
9,000 Clarcor Inc. $189,000
7,000 Health & Retirement Property Trust 131,688
5,000 Pall Corporation 102,500
12,000 Regal Beloit Corp. 342,000
5,000 York International, Corp. 217,813
-----------
983,001
-----------
INSURANCE SERVICES (0.9%)
4,000 Blanch EW Holdings Inc. 147,000
-----------
MEDICAL AND RELATED (2.0%)
500 Allegiance Corporation 25,625
2,500 Baxter International, Inc. 134,531
2,150 *National Healthcare LP 70,950
1,500 United Healthcare Corp.. 95,250
-----------
326,356
-----------
METALS AND MINING (0.6%)
6,000 Worthington Industries, Inc. 90,375
-----------
OIL, ENERGY AND GAS (8.8%)
8,000 Camco International, Inc. 623,000
1,400 Kerr-McGee Corp. 81,025
5,000 Pacific Gulf Properties, Inc. 106,562
6,000 WD-40 Co. 162,750
4,000 Westcoast Energy, Inc. 89,250
10,500 Williams Cos., Inc. 354,375
-----------
1,416,962
-----------
REAL ESTATE (6.8%)
5,000 Bershire Realty Company, Inc. 58,437
3,000 Camden Property Trust 89,250
8,000 Commercial Net Lease Realty 129,500
10,000 Corporate Office Properties Trust 88,750
4,000 First Industrial Realty Trust 127,250
7,000 Great Lakes REIT Inc. 122,062
6,000 Healthcare Realty Trust, Inc. 163,500
6,000 Liberty Property Trust 153,375
4,500 National Health Investors, Inc. 149,063
-----------
1,081,187
-----------
TEXTILES AND RELATED (1.0%)
4,500 Oxford Industries, Inc. 157,219
-----------
TRANSPORTATION (2.6%)
2,000 Burlington Northern Santa Fe 196,375
3,000 CNF Transportation, Inc. 127,500
4,500 *Wisconsin Central Trans. Corp. 98,435
-----------
422,310
-----------
UTILITIES (0.3%)
2,000 UGI Corp. 49,750
-----------
TOTAL COMMON STOCK
(68.9%) (COST $6,5,09,816) $11,052,952
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- ----------------------------------------------------------
AUTOMOTIVE AND RELATED (0.3%)
2,000 Walbro Capital Trust Conv. 8.00% $44,250
-----------
(continued)
</TABLE>
<PAGE> 17
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
- ----------------------------------------------------------
<S> <C> <C>
BANKING (0.7%)
4,000 National Australia Bank Ltd. Conv. $114,750
-----------
BUSINESS SERVICES (0.6%)
4,000 Flagstar Capital 8.50% 99,750
-----------
OIL, ENERGY AND GAS (1.3%)
3,000 Consumers Energy II 8.20% Conv. 75,750
3,000 Howell Corp. $3.50 Series A Conv. 129,000
-----------
204,750
-----------
REAL ESTATE (0.4%)
2,400 Camden Property $2.25 Series A Conv. 63,600
-----------
TOTAL PREFERRED STOCK
(3.3%) (COST $538,113) $527,100
-----------
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- ----------------------------------------------------------
COMMUNICATIONS (0.7%)
$100,000 Comcast Cable Communications
8.375% 05-01-07 $112,494
-----------
COMPUTER AND RELATED (1.6%)
250,000 IBM Corp.
7.250% 11-01-02 262,481
-----------
FINANCE (2.6%)
100,000 Citifed Bancorp, Inc. 100,502
8.250% 09-01-03
50,000 ESI Tractebel Acq. Corp.
7.990% 12-30-11 50,875
250,000 Geon Corp.
7.500% 12-15-15 261,588
-----------
412,965
-----------
FOOD AND RELATED (0.5%)
75,000 Marsh Supermarkets, Inc.
8.875% 08-01-07 77,063
-----------
FORESTRY AND PAPER PRODUCTS (1.6%)
250,000 ITT Rayonier, Inc.
7.500% 10-15-02 263,762
-----------
HOUSING, FURNITURE AND RELATED (0.6%)
100,000 Owens Corning
7.500% 05-01-05 102,080
-----------
RESTAURANTS (0.6%)
100,000 Tricon Global Restaurants
7.450% 05-15-05 101,045
-----------
UTILITIES (0.7%)
100,000 Niagara Mohawk Power Corp.
7.750% 10-01-08 103,125
-----------
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- ----------------------------------------------------------
OIL, ENERGY AND NATURAL GAS (5.8%)
300,000 PDV America, Inc.
7.875% 08-01-03 313,612
100,000 R&B Falcon Corp.
6.750% 04-15-05 100,726
250,000 Tenneco, Inc.
8.075% 10-01-02 267,536
250,000 Union Texas Petroleum
8.250% 11-15-99 256,986
-----------
938,860
-----------
TOTAL LONG-TERM BONDS & NOTES
(14.7%) (Cost $2,270,057) $2,373,875
-----------
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- ----------------------------------------------------------
ELECTRICAL EQUIPMENT (0.9%)
$150,000 Richey Electronics
7.000% 03-01-06 $137,625
-----------
OIL, ENERGY AND NATURAL GAS (1.3%)
100,000 Offshore Logistics
6.000% 12-15-06 206,500
-----------
TOTAL CONVERTIBLE DEBENTURES
(2.2%) (COST $345,369) $344,125
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- ----------------------------------------------------------
AUTOMOTIVE AND RELATED (2.9%)
$197,000 Ford Motor Credit Corp.
5.620% 07-06-98 $196,846
270,000 General Motors Acceptance Corp.
5.580% 07-15-98 269,414
-----------
466,260
-----------
FINANCE (4.5%)
257,000 GE Capital Corp.
5.300% 07-01-98 257,000
462,000 Household Financial Corp.
5.500% 07-02-98 461,929
-----------
718,929
-----------
INSURANCE (1.8%)
301,000 Prudential Funding
5.750% 07-06-98 300,760
-----------
RETAIL (1.9%)
302,000 Sears Roebuck
5.560% 07-10-98 301,580
-----------
TOTAL SHORT-TERM NOTES
(11.1%) (COST $1,787,529) $1,787,529
-----------
TOTAL HOLDINGS
(COST $11,450,884)(a) $16,085,581
===========
</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.
<PAGE> 18
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $11,450,884) ...................................... $ 16,085,581
Cash in bank ............................................................ 691
Receivable for fund shares sold ......................................... 262
Dividends and accrued interest receivable ............................... 74,651
Other ................................................................... 1,755
------------
Total assets ........................................................... 16,162,940
------------
Liabilities:
Payable for fund shares redeemed ........................................ 38,316
Payable for investment management
services (note 3) ...................................................... 4,579
Accrued 12b-1 fees (note 6) ............................................. 9,579
Other accrued expenses .................................................. 17,151
Dividends payable ....................................................... 38,817
------------
Total liabilities ...................................................... 108,442
------------
Net assets at market value ............................................... $ 16,054,498
============
Net assets consist of:
Par value, $.001 per share .............................................. $ 1,012
Paid-in capital in excess of par value .................................. 11,311,721
Accumulated undistributed net realized
gain on investments .................................................... 107,068
Net unrealized appreciation on investments .............................. 4,634,697
------------
Net assets at market value ............................................... $ 16,054,498
============
Shares outstanding ....................................................... 1,012,631
Net asset value per share ................................................ $ 15.85
============
Maximum offering price per share ($15.85/95%) ............................ $ 16.69
============
STATEMENT OF OPERATIONS
For Year Ended June 30, 1998
Investment income:
Interest ................................................................ $ 260,799
Dividends ............................................................... 302,487
------------
Total investment income ................................................ 563,286
------------
Expenses:
Management fees (note 3) ................................................ 73,633
12b-1 fees (note 6) ..................................................... 36,816
Custodian fees (note 3) ................................................. 6,200
Directors' fees (note 3) ................................................ 2,175
Professional fees ....................................................... 8,947
Transfer agent and accounting fees ...................................... 53,700
Filing fees ............................................................. 10,875
Printing, proxy and postage fees ........................................ 4,133
Organizational expense (note 1) ......................................... 446
Other ................................................................... 526
------------
Total expenses ......................................................... 197,451
Less expenses voluntarily reduced
or reimbursed (note 3) ................................................ (22,090)
------------
Net expenses ........................................................... 175,361
------------
Net investment income .................................................. 387,925
------------
Realized and unrealized gain on investments:
Net realized gain from investments ...................................... 664,230
Net increase in unrealized
appreciation on investments ............................................ 887,079
------------
Net gain on investments ............................................... 1,551,309
------------
Net increase in net
assets from operations ............................................... $ 1,939,234
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 19
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
From operations:
Net investment income ............................................................. $ 387,925 $ 321,700
Realized gain on investments ...................................................... 664,230 129,214
Unrealized gain on investments .................................................... 887,079 1,933,894
------------ ------------
Net increase in assets from operations .......................................... 1,939,234 2,384,808
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ......................................... (391,040) (320,587)
Capital gains distributions ....................................................... (676,652) (243,651)
------------ ------------
Total dividends and distributions ............................................... (1,067,692) (564,238)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ......................................................... 3,431,737 2,484,392
Received from dividends reinvested ................................................ 615,775 427,145
Paid for shares redeemed .......................................................... (1,979,004) (2,386,862)
------------ ------------
Increase in net assets derived from capital share transactions ................... 2,068,508 524,675
------------ ------------
Increase in net assets ......................................................... 2,940,050 2,345,245
------------ ------------
Net Assets:
Beginning of period ............................................................... 13,114,448 10,769,203
------------ ------------
End of period ..................................................................... $ 16,054,498 $ 13,114,448
============ ============
Includes undistributed net investment income of ................................... $ 0 $ 3,115
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Years Ended June 30,
1998 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 ................................... 0.42 0.38 0.38 0.41 0.33
Net realized and unrealized gain (loss) on investments .. 1.73 2.39 1.27 1.54 (0.11)
------ ------ ------ ------ ------
Total income from investment operations ................ 2.15 2.77 1.65 1.95 0.22
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income .................... (0.42) (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 .................................... (1.19) (0.66) (0.44) (1.03) (0.53)
------ ------ ------ ------ ------
Net asset value, end of period ........................... $15.85 $14.89 $12.78 $11.57 $10.65
====== ====== ====== ====== ======
Total return ............................................. 14.77% 22.34% 14.50% 19.41% 1.96%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses ................................................ 1.20% 1.12% 0.89% 0.81% 0.94%
Net investment income ................................... 2.65% 2.77% 3.10% 3.69% 3.08%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses ................................................ 1.35% 1.31% 1.14% 1.06% 1.19%
Net investment income ................................... 2.50% 2.58% 2.85% 3.44% 2.83%
Average commission rate (b) .............................. $ 0.07 $ 0.07 NR NR NR
Portfolio turnover rate .................................. 39% 14% 7% 25% 14%
Net assets at end of period (millions) ................... $ 16.1 $ 13.1 $ 10.8 $ 7.7 $ 7.5
</TABLE>
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets 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.
(b) 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, 1997
The accompanying notes are an integral part of these financial statements.
<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 JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year 14.13% 8.43%
Three-year 18.28% 16.27%
Five-year 15.45% 14.28%
Since inception (8/18/92) 16.31% 15.30%
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
We continued to see an increasing yet volatile stock market led
by blue chips and a select number of growth stocks during the twelve months
ending June 30, 1998. The valuation spread between the largest companies and
most others are near all-time highs. The breadth of the stock market continues
to narrow. Interest rates moved lower with the largest part of the move
occurring during the second half of 1997. The interest rate spread between
Treasury securities and corporate bonds have widened during the second quarter
of 1998 due to investor's concerns about Asia and other uncertainties.
The Growth Portfolio return was 14.1% for the period. The strongest
performing sectors were Consumer Staples, Financials, Healthcare and selected
Technology issues. The weaker sectors included Energy, Consumer Cyclicals and
selected technology issues. The portfolio's invested position averaged 93%
during the period.
We expect the stock market volatility to continue through the remainder of
the year as investors contend with Asian concerns, potential slowdowns in other
parts of the world, Year 2000 issues and reduced corporate profits. On the other
hand, several countries continue to experience steady economic growth, and many
companies (small, medium and large) should continue to report very good earnings
growth. Investments in these areas and companies should provide positive results
for investors over time.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Growth Portfolio (with max. sales charge)
(Commenced operations August 18, 1992)
Data Value
---- -----
<S> <C>
12/31/92 $10,178.30
12/31/93 $11,917.10
12/31/94 $11,987.60
12/31/95 $15,367.30
12/31/96 $18,098.30
12/31/97 $21,126.80
06/30/98 $23,051.50
</TABLE>
<TABLE>
<CAPTION>
S&P 500 Index
Data Value
---- -----
<S> <C>
12/31/92 $10,627.00
12/31/93 $11,688.40
12/31/94 $11,841.80
12/31/95 $16,273.90
12/31/96 $20,030.30
12/31/97 $26,690.10
06/30/98 $31,416.90
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. Cisco Systems Inc. 4.37
2. Microsoft Corp 3.05
3. Allied Signal Corp 2.81
4. Camco International 2.74
5. Texas Instruments 2.67
6. Magna International Cl A 2.41
7. Hardinge Inc 2.19
8. Kendle International Inc 2.13
9. Health South Corp 1.88
10. Computer Associates 1.76
TOP 5 INDUSTRIES AS OF JUNE 30, 1998
% of Portfolio
Computer & Related 17.6
Medical & Related 11.1
Oil, Energy & Natural Gas 8.3
Electrical Equipment 7.0
Automotive and Related 6.0
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 21
ONE FUND, INC.
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -----------------------------------------------------
<S> <C> <C>
AEROSPACE (4.3%)
9,000 Allied Signal, Inc. $399,375
336 Boeing Co. 14,973
4,000 Rockwell International Corp. 192,250
---------
606,598
---------
AUTOMOTIVE AND RELATED (6.0%)
5,500 Arvin Industries, Inc. 199,719
3,000 Chrysler Corp. 169,125
2,000 Cooper Tire & Rubber 41,250
5,000 Magna International, Inc. CL A 343,125
7,000 Walbro Corp. 98,875
---------
852,094
---------
BANKING (4.4%)
6,614 Charter One Financial, Inc. 222,809
2,985 First State Bancorp 72,013
807 First Union Corp. 47,034
3,500 Flagstar Bancorp, Inc. 85,313
1,000 Star Banc Corp. 63,875
3,750 Susquehanna Bancshares 140,156
---------
631,200
---------
BUSINESS SERVICES (5.5%)
8,500 *Alternative Resources Corp. 105,188
5,000 First Data Corp. 166,563
7,500 *Lo Jack Corp. 93,281
3,500 Manpower Inc. 100,406
5,500 *Mapics Inc. 108,281
6,000 Reynolds and Reynolds CL A 109,125
4,500 Wackenhut Corp. CL B 96,750
---------
779,594
---------
CHEMICALS (3.4%)
12,000 Hawkins Chemicals Inc. 144,000
3,500 Minerals Technologies, Inc. 178,063
4,000 OM Group Inc. 165,000
---------
487,063
---------
COMMUNICATIONS (0.5%)
3,187 *Mastec Inc. 76,090
---------
COMPUTER AND RELATED (17.6%)
2,000 *3Com Corp. 61,375
6,750 *Cisco Systems, Inc. 621,422
4,500 Computer Associates Intl. 250,031
4,000 Hewlett Packard Co. 239,500
3,000 Intel Corp. 222,375
1,000 *LSI Logic 23,063
10,000 MacNeal-Schwendler Corp. 98,125
4,000 *Microsoft Corp. 433,500
1,000 *Structural Dynamics Research Corp. 23,125
6,500 Texas Instruments, Inc. 379,031
3,500 *Zebra Tech. Corp. CL A 149,625
---------
2,501,172
---------
CONSUMER GOODS (0.9%)
4,000 *Sola International 130,750
---------
DRUGS (0.5%)
5,000 *Applied Analytical Industries 71,875
---------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -----------------------------------------------------
ELECTRICAL EQUIPMENT (7.0%)
<S> <C> <C>
5,000 *Advanced Lighting Tech. Inc. $116,250
6,666 *Analog Devices, Inc. 163,734
7,500 *Anixter International, Inc. 142,969
4,800 BMC Industries, Inc. 42,000
7,000 CBS Corporation 222,250
7,000 *Richey Electronics, Inc. 54,687
4,000 Varian Associates, Inc. 156,000
1,000 Xerox Corp. 101,625
---------
999,515
---------
ENTERTAINMENT AND LEISURE (2.2%)
8,000 Cedar Fair 221,000
5,000 *Livent, Inc. 43,750
5,000 *Royal Olympic Cruise Lines 50,000
---------
314,750
---------
FOOD AND RELATED (2.1%)
10,000 Food Lion Inc. CL A 106,250
6,000 Panamerican Beverages Inc. CL A 188,625
---------
294,875
---------
FORESTRY AND PAPER PRODUCTS (0.7%)
3,300 Sonoco Products Co. 99,825
---------
HOTEL/ LODGING (1.7%)
6,500 *Guest Supply, Inc. 108,875
2,000 La Quinta Inns 42,250
4,000 *Mirage Resorts, Inc. 85,250
---------
236,375
---------
HOUSING, FURNITURE & RELATED (1.2%)
5,000 *Meadowcraft Inc. 55,000
7,500 Shelby Williams Industries, Inc. 112,500
---------
167,500
---------
INDUSTRIAL SERVICES (3.3%)
3,500 *Hawk Corp. 61,687
10,000 *Medar Inc. 21,250
8,000 Regal Beloit Corp. 228,000
3,500 York International Corp. 152,469
---------
463,406
---------
INSURANCE (2.2%)
4,000 Blanch (EW) Holdings, Inc. 147,000
3,800 St. Paul Cos. 159,838
---------
306,838
---------
MEDICAL AND RELATED (11.1%)
700 Allegiance Corp. 35,875
3,500 Baxter International 188,344
5,500 *Cephalon Inc. 43,312
3,900 *Foundation Health Corp. 102,863
10,000 *Health South Corp. 266,875
2,000 *Humana Inc. 62,375
10,000 *Kendle Intl. Inc. 302,500
5,000 Mylan Laboratories 150,312
3,350 *National Healthcare LP 110,550
8,250 *Quorum Health Group, Inc. 218,625
1,500 United Healthcare Corp. 95,250
---------
1,576,881
---------
(continued)
</TABLE>
<PAGE> 22
ONE FUND, INC.
GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
MACHINERY (2.2%)
<S> <C> <C>
12,750 Hardinge Inc. $ 310,781
METAL FABRICATING (2.8%)
10,000 Amcast Industrial Corp. 186,250
3,250 *Wolverine Tube, Inc. 123,500
6,000 Worthington Industries Inc. 90,375
-----------
400,125
-----------
NON-HAZARDOUS WASTE
DISPOSAL (0.5%)
5,000 *Stericycle Inc. 72,500
-----------
OIL, ENERGY AND
NATURAL GAS (7.5%)
4,500 *Belco Oil & Gas Corp. 38,812
5,000 Camco International, Inc. 389,375
7,000 *Louis Dreyfus Natural Gas Corp. 132,563
2,500 *Offshore Logistics Inc. 44,375
8,000 *Santa Fe Energy Resources, Inc. 86,000
6,700 *Tesoro Petroleum Corp. 106,363
5,400 *The Meridian Resource Corp. 38,137
5,000 Williams Cos., Inc. 168,750
6,100 Wiser Oil Co. 67,481
-----------
1,071,856
-----------
RESTAURANTS (1.9%)
10,000 *Buffets Inc. 156,875
5,000 *Consolidated Products 105,625
-----------
262,500
-----------
RETAIL (0.4%)
10,000 *Ridgeview Inc. 60,000
-----------
RETIREMENT/AGED CARE (0.6%)
7,500 *Capital Senior Living Corp. 90,000
-----------
TEXTILES AND RELATED (0.9%)
3,000 Warnaco Group, CL A $ 127,313
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION (4.6%)
4,000 *Atlas Air Inc. $ 135,250
955 Burlington Northern Santa Fe 93,767
3,000 Consolidated Freightways, Inc. 127,500
6,566 *Halter Marine Group Inc. 98,900
3,000 Trinity Industries 124,500
3,500 *Wisconsin Central Trans. Corp. 76,563
-----------
656,480
-----------
TOTAL COMMON STOCK
(95.7%) (COST $9,013,912) $13,647,956
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- ------------------------------------------------------------
OIL, ENERGY AND NATURAL
GAS (0.8%)
2,500 Howell Corp. $3.50 Series A Conv. $ 107,500
-----------
Total Preferred Stock
(0.8%) (Cost $128,075) $107,500
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
AUTOMOTIVE AND RELATED (1.5%)
$224,000 Ford Motor Credit Corp.
5.630% 07-0 2-98 $ 223,965
-----------
FINANCIAL SERVICES (0.8%)
109,000 Prudential Funding
5.750% 07-06-98 108,913
-----------
RETAIL (1.0%)
140,000 Sears Acceptance Corp.
5.900% 07-01-98 140,000
-----------
TOTAL SHORT-TERM NOTES
(3.3%) (COST $472,878) $ 472,878
-----------
TOTAL HOLDINGS
(COST $9,614,865)(a) $14,228,334
===========
</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.
<PAGE> 23
ONE FUND, INC.
GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $9,614,865) .................................... $14,228,334
Cash in bank ......................................................... 2,912
Receivable for fund shares sold ...................................... 3,369
Dividends and accrued interest receivable ............................ 11,853
Other ................................................................ 1,966
-----------
Total assets ........................................................ 14,248,434
-----------
Liabilities:
Payable for fund shares redeemed ..................................... 3,640
Payable for investment management
services (note 3) ................................................... 4,059
Accrued 12b-1 fees (note 6) .......................................... 8,864
Other accrued expenses ............................................... 22,077
-----------
Total liabilities ................................................... 38,640
-----------
Net assets at market value ............................................ $ 14,209,794
============
Net assets consist of:
Par value, $.001 per share ........................................... $ 761
Paid-in capital in excess of par value ............................... 8,706,171
Accumulated undistributed net realized
gain on investments ................................................. 889,393
Net unrealized appreciation on investments ........................... 4,613,469
-----------
Net assets at market value ............................................ $ 14,209,794
============
Shares outstanding .................................................... 760,818
Net asset value per share ............................................. $ 18.68
============
Maximum offering price per share ($18.68/95%) ......................... $ 19.66
============
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1998
<S> <C>
Investment income:
Interest ............................................................. $ 42,943
Dividends ............................................................ 135,656
-----------
Total investment income ............................................. 178,599
-----------
Expenses:
Management fees (note 3) ............................................. 71,522
12b-1 fees (note 6) .................................................. 35,761
Custodian fees (note 3) .............................................. 6,100
Directors' fees (note 3) ............................................. 2,205
Professional fees .................................................... 9,073
Transfer agent and accounting fees ................................... 56,300
Filing fees .......................................................... 11,025
Printing, proxy and postage fees ..................................... 4,189
Organizational expense (note 1) ...................................... 440
Other ................................................................ 521
-----------
Total expenses ...................................................... 197,136
Less expenses voluntarily reduced
or reimbursed (note 3) ............................................. (21,457)
-----------
Net expenses ........................................................ 175,679
-----------
Net investment income ............................................... 2,920
-----------
Realized and unrealized gain on investments:
Net realized gain from investments ................................... 1,329,264
Net increase in unrealized
appreciation on investments ......................................... 518,363
-----------
Net gain on investments ............................................ 1,847,627
-----------
Net increase in net
assets from operations ............................................ $ 1,850,547
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 24
ONE FUND, INC.
GROWTH PORTFOLIO
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
<S> <C> <C>
From operations:
Net investment income ......................................... $ 2,920 $ 52,241
Realized gain on investments .................................. 1,329,264 542,097
Unrealized gain on investments ................................ 518,363 1,573,212
------------ ------------
Net increase in assets from operations ...................... 1,850,547 2,167,550
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income ..................... (1,820) (53,115)
Distributions in excess of net investment income .............. (10,132) 0
Capital gains distributions ................................... (889,104) (495,835)
------------ ------------
Total dividends and capital gains distributions ............. (901,056) (548,950)
------------ ------------
From capital share transactions (note 4):
Received from shares sold ..................................... 1,982,622 2,494,756
Received from dividends reinvested ............................ 608,764 400,497
Paid for shares redeemed ...................................... (2,605,972) (2,996,818)
------------ ------------
Decrease in net assets derived from capital share transactions (14,586) (101,565)
------------ ------------
Increase in net assets ..................................... 934,905 1,517,035
------------ ------------
Net Assets:
Beginning of period ........................................... 13,274,889 11,757,854
------------ ------------
End of period ................................................. $ 14,209,794 $ 13,274,889
============ ============
Includes overdistributed net investment income of ............. $ 0 ($ 1,100)
============ ============
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
Years Ended June 30,
1998 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 ................................. 0.00 0.07 0.14 0.16 0.12
Net realized and unrealized gain on investments ....... 2.41 2.73 2.72 2.17 0.22
--------- --------- --------- --------- ---------
Total income from investment operations .............. 2.41 2.80 2.86 2.33 0.34
--------- --------- --------- --------- ---------
Less distributions:
Dividends from net investment income .................. 0.00 (0.07) (0.14) (0.16) (0.12)
Distributions in excess of net investment income ...... (0.06) 0.00 0.00 0.00 0.00
Distributions from net realized capital gains ......... (1.19) (0.68) (0.28) (0.81) (0.18)
--------- --------- --------- --------- ---------
Total distributions .................................. (1.25) (0.75) (0.42) (0.97) (0.30)
--------- --------- --------- --------- ---------
Net asset value, end of period ......................... $ 18.68 $ 17.52 $ 15.47 $ 13.03 $ 11.67
========= ========= ========= ========= =========
Total return ........................................... 14.13% 18.68% 22.22% 20.54% 2.85%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses .............................................. 1.24% 1.13% 0.90% 0.83% 1.04%
Net investment income ................................. 0.02% 0.43% 0.99% 1.35% 1.04%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses .............................................. 1.39% 1.32% 1.15% 1.08% 1.30%
Net investment income (loss) .......................... (0.13%) 0.24% 0.74% 1.10% 0.79%
Average commission rate (b) ............................ $ 0.07 $ 0.07 NR NR NR
Portfolio turnover rate ................................ 40% 27% 22% 24% 8%
Net assets at end of period (millions) ................. $ 14.2 $ 13.3 $ 11.8 $ 7.0 $ 5.3
</TABLE>
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets 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.
(b) 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.
<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 lest 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 JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year 10.56% 5.03%
Three-year 16.34% 14.37%
Since inception (11/1/94) 15.88% 14.24%
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
As expected, markets have continued to exhibit volatility over
the past several months. In response to the economic turmoil in the Pacific Rim,
investors have sought out highly liquid blue chip issues and Treasury securities
in a flight to quality. This has had a pronounced impact on the relative
performance of the small capitalization issues, especially in the months of
December, May and June.
During the first six months of calendar 1998, the ONE Fund Small Cap
Portfolio trailed the Russell 2000 Index return. Strong performance from the
Consumer Staples and Health Care sectors was more than offset by a handful of
earnings disappointments and lagging performance from investments in the energy
sector.
We believe an overweighting in the energy sector is appropriate. Commodity
prices have declined sharply this year, due to supply/demand imbalance resulting
from a reduction in Asian demand, a mild winter and resumption of Iraqi exports.
However, we would note production decline rates from existing fields are
accelerating and low oil prices are exerting budgetary pressures on oil
exporters. This has led to announced production cuts from major OPEC and
non-OPEC producers. Additionally, several oil producing regions are experiencing
political turmoil and weather patterns could return to normal. We feel that at
current valuation levels, energy stocks could be one of the best sector
opportunities of this decade.
Although disappointed with near-term results, we are encouraged with the
opportunities which are now presenting themselves. Cash reserves have been
worked down over the past six months. We feel the companies in the Small Cap
Portfolio have favorable risk-reward characteristics and are positioned well for
the future.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Small Cap Portfolio (with max. sales charge)
(Commerced operations November 1, 1994)
Date Value
---- -----
<S> <C>
12/31/94 $ 9,539.90
12/31/95 $11,600.80
12/31/96 $13,571.60
12/31/97 $15,872.10
06/30/98 $16,300.60
Russell 2000 Index
Date Value
---- -----
12/31/94 $ 9,853.00
12/31/95 $12,656.00
12/31/96 $14,743.70
12/31/97 $18,026.70
06/30/98 $18,976.70
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. Kendle International Inc 2.60
2. Hardinge Inc 2.51
3. Zebra Technologies Corp CL A 2.20
4. Atlas Air Inc 2.15
5. Quorum Health Group Inc 2.13
6. Susquehanna Bancshares Inc. PA 1.92
7. Advanced Lighting Technologies Inc 1.92
8. Blanch E W Holdings Inc 1.89
9. Healthcare Realty Trust 1.87
10. WD-40 Company 1.86
TOP 5 INDUSTRIES AS OF JUNE 30, 1998
% of Portfolio
Oil, Energy & Natural Gas 13.5
Real Estate 8.0
Industrial Services 6.7
Medical and Related 6.4
Computer & Related 6.2
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 26
ONE FUND, INC.
Small Cap Portfolio
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------
<S> <C> <C>
AUTOMOTIVE AND RELATED (2.1%)
11,000 Defiance Inc. $93,500
2,000 Walbro Corp. 28,250
----------
121,750
----------
BANKING (4.4%)
2,985 First International Bancorp, Inc. 72,013
3,000 Flagstar Bancorp, Inc. 73,125
3,000 Susquehanna Bancshares 112,125
----------
257,263
----------
BUSINESS SERVICES (6.0%)
5,500 *Alternative Resources Corp. 68,062
2,500 *Mapics Inc. 49,219
2,000 Pittston Brink's Group 73,750
2,000 Reynolds & Reynolds CL A 36,375
11,000 *Source Information Management 68,063
2,500 Wackenhut Corp. CL B 53,750
----------
349,219
----------
CHEMICALS (2.2%)
4,000 Hawkins Chemical Inc. 48,000
2,000 OM Group Inc. 82,500
----------
130,500
----------
COMMUNICATIONS (0.7%)
1,687 *Mastec Inc. 40,277
----------
COMPUTER AND RELATED (6.2%)
5,000 MacNeal-Schwendler Corp. 49,062
7,500 *Map Info Corp. 80,625
4,500 *Rand A Technology Corp. 82,623
1,000 *Structural Dynamics Research Corp. 23,125
3,000 *Zebra Tech Corp. CL A 128,250
----------
363,685
----------
CONSUMER PRODUCTS (2.8%)
2,500 *Sola International, Inc. 81,719
6,500 *Lo Jack Corp. 80,844
----------
162,563
----------
DRUGS (0.5%)
2,000 *Applied Analytical Industries, Inc. 28,750
----------
DURABLE GOODS (1.5%)
3,630 Myers Industries, Inc. 87,120
----------
ELECTRICAL EQUIPMENT (4.8%)
5,000 *Anixter International, Inc. 95,312
4,800 BMC Industries, Inc. 42,000
2,000 Federal Signal Corp. 48,625
15,000 Rohn Industries, Inc. 70,313
3,000 *Richey Electronics, Inc. 23,438
----------
279,688
----------
ENTERTAINMENT AND LEISURE (2.6%)
3,000 Cedar Fair 82,875
8,000 *Livent Inc. 70,000
----------
152,875
----------
Finance (1.6%)
8,000 Bando McGlocklin Capital Corp. 92,000
----------
Forestry and Paper Products (1.2%)
4,500 *Fibermark Inc. 72,000
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------
<S> <C> <C>
HOTEL/MOTEL (1.6%)
5,500 *Guest Supply $92,125
----------
HOUSING, FURNITURE & RELATED (3.3%)
3,000 Haverty Furniture 66,375
5,000 *Medowcraft Inc. 55,000
4,800 Shelby Williams Industries, Inc. 72,000
----------
193,375
----------
INDUSTRIAL SERVICES (6.7%)
4,800 *Advanced Lighting Tech., Inc. 111,600
4,000 Clarcor Inc. 84,000
4,500 IMCO Recycling Inc. 83,250
10,000 *Medar Inc. 21,250
15,000 *Recycling Industries, Inc. 88,125
----------
388,225
----------
INSURANCE SERVICES (1.9%)
3,000 Blanch (EW) Holdings, Inc. 110,250
----------
MACHINERY (2.5%)
6,000 Hardinge Inc. 146,250
----------
MEDICAL AND RELATED (6.4%)
3,000 *Cephalon Inc. 23,625
5,000 *Kendle International Inc. 151,250
4,688 *Quorum Health Group, Inc. 124,219
5,000 *Stericycle Inc. 72,500
----------
371,594
----------
METAL AND MINING (2.7%)
2,500 Amcast Industrial Corp. 46,563
1,500 *Hawk Corp. CL A 26,437
2,250 *Wolverine Tube, Inc. 85,500
----------
158,500
----------
OIL, ENERGY AND NATURAL GAS (12.8%)
4,200 *Belco Oil & Gas Corp. 36,225
1,300 Camco International, Inc. 101,238
5,000 *Louis Dreyfus Natural Gas Corp. 94,687
10,000 *Matrix Services 72,500
10,000 *Meridian Resource Corp. 70,625
12,500 *Newstar Resources, Inc. CL A 13,673
2,500 *Offshore Logistics, Inc. 44,375
8,000 *Santa Fe Energy Resources, Inc. 86,000
5,500 *Tesoro Petroleum Corp. 87,312
4,000 WD-40 Co. 108,500
3,000 Wiser Oil Co. 33,188
----------
748,323
----------
REAL ESTATE (8.0%)
6,000 Commercial Net Lease Realty 97,125
3,000 First Industrial Realty Trust 95,438
3,000 Great Lakes REIT, Inc. 52,312
4,000 Healthcare Realty Trust, Inc. 109,000
3,000 Liberty Property Trust 76,688
1,000 National Health Investors, Inc. 33,125
----------
463,688
----------
RESTAURANTS (1.6%)
6,000 *Buffets Inc. 94,125
----------
(continued)
</TABLE>
<PAGE> 27
ONE FUND, INC.
SMALL CAP PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------
RETAIL (1.3%)
<S> <C> <C>
3,500 *Consolidated Products inc. $73,937
----------
RETIREMENT/AGED CARE (1.0%)
5,000 *Capital Senior Living Corp. 60,000
----------
TEXTILES & RELATED (1.0%)
10,000 *Ridgeview Inc. 60,000
----------
TRANSPORTATION & EQUIPMENT (5.5%)
3,700 *Atlas Air Inc. 125,106
3,500 *Avondale Industries, Inc. 96,578
4,500 *Halter Marine Group 67,781
3,000 *Royal Olympic Cruise Lines 30,000
----------
319,465
----------
MISCELLANEOUS (1.6%)
4,000 *Specialty Equipment 90,500
----------
TOTAL COMMON STOCK
(94.5%) (COST $4,846,646) $5,508,047
----------
MARKET
SHARES PREFERRED STOCK VALUE
- --------------------------------------------------------
OIL, ENERGY AND NATURAL GAS (0.7%)
<S> <C> <C>
1,000 Howell Corp. $3.50 Series A Conv. $43,000
----------
TOTAL PREFERRED STOCK
(0.7%) (COST $51,100) $43,000
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- --------------------------------------------------------
ELECTRICAL EQUIPMENT (0.8%)
<S> <C> <C>
$50,000 Richey Electronics
7.000% 03-01-06 $45,875
TOTAL CONVERTIBLE DEBENTURES
(0.8%) (COST $46,032) $45,875
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- --------------------------------------------------------
AUTOMOTIVE (1.7%)
$100,000 Ford Motor Credit Corp.
5.630% 07-02-98 $99,984
----------
RETAIL (2.3%)
134,000 Sears Roebuck Acceptance Corp.
5.900% 07-01-98 134,000
----------
TOTAL SHORT-TERM NOTES
(4.0%) (COST $233,984) $233,984
----------
TOTAL HOLDINGS
(COST $5,177,762)(a) $5,830,906
==========
</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.
<PAGE> 28
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $5,177,762) ................ $ 5,830,906
Cash in bank ..................................... 560
Receivable for fund shares sold .................. 155
Dividends and accrued interest receivable ........ 8,050
Deferred organizational expenses (note 1) ........ 694
Other ............................................ 1,492
-----------
Total assets .................................... 5,841,857
-----------
Liabilities:
Payable for fund shares redeemed ................. 2,662
Payable for investment management
services (note 3) ............................... 2,396
Accrued 12b-1 fees (note 6) ...................... 3,347
Other accrued expenses ........................... 7,198
-----------
Total liabilities ............................... 15,603
-----------
Net assets at market value ........................ $ 5,826,254
===========
Net assets consist of:
Par value, $.001 per share ....................... $ 437
Paid-in capital in excess of par value ........... 4,763,808
Accumulated undistributed net realized
gain on investments ............................. 408,819
Net unrealized appreciation on investments ....... 653,144
Undistributed net investment income .............. 46
-----------
Net assets at market value ........................ $ 5,826,254
===========
Shares outstanding ................................ 437,426
Net asset value per share ......................... $ 13.32
===========
Maximum offering price per share ($13.32/95%) ..... $ 14.02
==========
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For Year Ended June 30, 1998
<S> <C>
Investment income:
Interest ......................................... $ 33,264
Dividends ........................................ 92,227
-----------
Total investment income ......................... 125,491
-----------
Expenses:
Management fees (note 3) ......................... 38,468
12b-1 fees (note 6) .............................. 14,791
Custodian fees (note 3) .......................... 5,400
Directors' fees (note 3) ......................... 870
Professional fees ................................ 3,578
Transfer agent and accounting fees ............... 35,000
Filing fees ...................................... 6,140
Printing, proxy and postage fees ................. 1,953
Organizational expense (note 1) .................. 522
Other ............................................ 251
-----------
Total expenses .................................. 106,973
Less expenses voluntarily reduced
or reimbursed (note 3) ......................... (8,886)
-----------
Net expenses .................................... 98,087
-----------
Net investment income ........................... 27,404
-----------
Realized and unrealized gain (loss) on investments:
Net realized gain from investments ............... 726,343
Net decrease in unrealized
appreciation on investments ..................... (202,189)
-----------
Net gain on investments ........................ 524,154
-----------
Net increase in net
assets from operations ........................ $ 551,558
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 29
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
<S> <C> <C>
From operations:
Net investment income ........................................... $ 27,404 $ 41,520
Realized gain on investments .................................... 726,343 298,952
Unrealized gain (loss) on investments ........................... (202,189) 353,303
----------- -----------
Net increase in assets from operations ........................ 551,558 693,775
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income ....................... (26,854) (41,809)
Capital gains distributions ..................................... (547,755) (428,367)
----------- -----------
Total dividends and distributions ............................. (574,609) (470,176)
----------- -----------
From capital share transactions (note 4):
Received from shares sold ....................................... 1,281,269 965,667
Received from dividends reinvested .............................. 274,091 204,093
Paid for shares redeemed ........................................ (909,621) (652,126)
----------- -----------
Increase in net assets derived from capital share transactions . 645,739 517,634
----------- -----------
Increase in net assets ....................................... 622,688 741,233
----------- -----------
Net Assets:
Beginning of period ............................................. 5,203,566 4,462,333
----------- -----------
End of period ................................................... $ 5,826,254 $ 5,203,566
=========== ===========
Includes undistributed (overdistributed) net investment income of $ 46 ($ 504)
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
11-1-94
Years Ended June 30, to
1998 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 ....... 1.30 1.67 2.26 0.67
------ ------ ------ ------
Total income from investment operations .............. 1.36 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 ......................... $13.32 $13.30 $12.82 $10.63
====== ====== ====== ======
Total return ........................................... 10.56% 14.82% 24.10% 8.91%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses .............................................. 1.67% 1.35% 0.94% 1.00%(a)
Net investment income ................................. 0.47% 0.89% 2.21% 3.19%(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses .............................................. 1.82% 1.62% 1.27% 1.31%(a)
Net investment income ................................. 0.32% 0.62% 1.88% 2.88%(a)
Average commission rate (d) ............................ $ 0.07 $ 0.08 NR NR
Portfolio turnover rate ................................ 77% 34% 34% 8%
Net assets at end of period (millions) ................. $ 5.8 $ 5.2 $ 4.5 $ 2.9
</TABLE>
(a) Annualized
(b) Calculated on an aggregate basis (not annualized).
(c) The advisor has elected to waive management fees equal to 0.15% of average
net assets 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. NRNot required prior to June 30, 1997 The
accompanying notes are an integral part of these financial statements.
NR Not required prior to June 30, 1997
The accompanying notes are an integral part of these financial statements.
<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, U.S. Government obligations or in U.S. common stock.
PERFORMANCE AS OF JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year -2.63% -9.76%
Three-year 9.01% 7.10%
Five-year 14.63% 13.46%
Since inception (5/1/93) 13.48% 12.31%
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
European markets were volatile due to growing worries over Asian markets,
corporate earnings and the direction of interest rates. Once the EMU founding
members were confirmed and bilateral exchange rates were set, European blue
chips rose as meager earnings announcements continued. Overall, German, French,
Swedish and Finnish blue chips achieved significant gains while other issues
were far weaker. Yet, smaller capitalization stocks, which account for most of
the ONE Fund International Portfolio's holdings, continued to underperform large
capitalization stocks.
In Japan, stocks fell due to the gloomy economic outlook and doubts
concerning the effectiveness of the government's economic package. The yen
weakened significantly until the concerted action between the U.S. and Japanese
governments in June. Japanese authorities also announced plans for the ailing
financial sector and tax cut proposals. Smaller and domestically oriented
companies fared worse than larger stocks, which negatively affected the
portfolio's holdings in Japan.
Other Asian markets plunged due to growing instability in the Pacific Rim
(riots in Indonesia, strikes in South Korea, etc.). New Zealand and Australian
stocks were likewise negatively impacted by those events.
Canadian stocks declined, due in part to weakness in the metals sector. In
Latin America, markets fell sharply as investors fled most emerging markets.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
International Portoflio (with max. sales charge)
Commenced operations May 1, 1993)
Date Value
---- -----
<S> <C>
12/31/93 $12,920.40
12/31/94 $14,160.00
12/31/95 $15,839.70
12/31/96 $18,050.10
12/31/97 $18,270.70
06/30/98 $19,219.00
</TABLE>
<TABLE>
<CAPTION>
Morgan Stanley Captal Inti. EAFE Index
Date Value
---- -----
<S> <C>
12/31/93 $10,826.00
12/31/94 $11,698.50
12/31/95 $13.049.20
12/31/96 $13,879.90
12/31/97 $14.040.80
06/30/98 $16,298.60
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. Buderus AG 3.42
2. Fuji Photo Film Co. LTD 2.86
3. Societe Immobiliere Marseillaise 2.72
4. Taittinger C.I. 2.70
5. Shimano Inc. 2.61
6. Kuehne & Nagel International AG Bearer 2.60
7. Bank for International Settlements (U.S. Tranche) 2.47
8. Secom Co, LTD 2.37
9. Deceuninck Plastics Industries SA 2.32
10. Sika Finanz AG Bearer 2.31
TOP 5 COUNTRIES/REGIONS AS OF JUNE 30, 1998
% of Portfolio
Japan 21.5
France 14.5
Switzerland 11.6
Germany 5.7
Latin America 3.5
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.
<PAGE> 31
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------------
JAPAN (21.5%)
<S> <C> <C>
40,000 Aida Engineering Limited (19) $ 155,222
12,100 Chofu Seisakusho (9) 164,342
65,000 Dai-Tokyo Fire Marine Ins. Co. Ltd. (18) 225,612
65,000 Dowa Fire & Marine Ins. Co. Ltd. (18) 193,848
12,000 Fuji Photo Film Co., Ltd. (9) 416,514
2,000 Hitachi Ltd. ADR (11) 129,000
65,000 *Iino Kaiun Kaisha (5) 123,316
5,000 Ito-Yokado Co. Ltd. (28) 234,630
45,000 Nisshinbo Industries Inc. (8) 179,476
6,000 Secom Co., Ltd. (29) 345,370
15,000 Shimano Inc. (9) 379,433
18,000 Shiseido Company (9) 203,859
25,000 Shoei Co. (27) 149,833
2,200 Toho Co. (20) 230,823
-----------
3,131,278
-----------
FRANCE (14.5%)
1,000 Vivendi (33) 213,005
1,000 Conflandey (30) 55,767
1,000 Elf Aquitaine (12) 140,243
2,000 Emin Leydier (24) 146,843
1,000 Gaumont SA (20) 77,546
1,000 Groupe Didot-Bottin (35) 147,503
1,500 Legrand ADP (10) 257,387
1,000 NSC Groupe (19) 149,978
350 Promodes C.I. (28) 128,776
200 Societe Immobillere Marseillaise (35) 395,981
700 Taittinger (13) 393,836
-----------
2,106,865
-----------
SWITZERLAND (11.6%)
55 Bank of Intl. Settlements (3) 360,151
700 Edipresse SA Bearer (20) 192,103
500 Kuehne & Nagel Intl. AG (32) 378,414
50 Lindt & Sprungli AG (13) 128,661
850 Sika Finanz AG Bearer (7) 336,196
750 Societe Generale d'Affichage (20) 293,682
-----------
1,689,207
-----------
GERMANY (5.7%)
3,000 Bayer AG (7) 154,480
1,000 Buderus AG (5) 497,788
12,000 Gerresheimer Glas AG (4) 179,867
-----------
832,135
-----------
LATIN AMERICA (3.5%)
35,000 Antofagasta Holdings plc (21) 147,356
5,000 Banco Latinoamericano 'Bladex' (3) 153,750
43,750 Cresud S.A. (1) 70,885
151,543 Ledesma SA (1) 140,956
-----------
512,947
-----------
BELGIUM (3.2%)
1,000 Deceuninck Plastics Ind. SA (4) 337,910
1,000 Engrais Rosier SA (4) 131,410
-----------
469,320
-----------
NEW ZEALAND (3.2%)
130,549 Carter Holt Harvey Limited (14) 113,532
34,370 Independent Press Comm. (20) 166,352
130,000 Shortland Properties, Ltd. (27) 43,741
300,260 Tasman Agriculture Limited (1) 139,887
-----------
463,512
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ---------------------------------------------------------------
<S> <C> <C>
HONG KONG (3.1%)
924,587 CDL Hotels Intl. Ltd. (16) $ 274,500
300,000 Shaw Brothers (Hong Kong) Ltd.(20) 182,006
-----------
456,506
-----------
CANADA (2.7%)
7,000 Canadian Pacific Ltd. (34) 198,625
10,000 Franco-Nevada Mining Corp. (21) 198,522
-----------
397,147
-----------
UNITED KINGDOM (1.9%)
50,000 *McBride plc (10) 71,907
55,000 Royal Doulton plc (9) 200,838
-----------
272,745
-----------
SINGAPORE (1.7%)
95,406 Clipsal Industries Ltd. (10) 58,175
74,400 DelGro Corp. (35) 71,746
121,627 Times Publishing Ltd. (25) 124,518
-----------
254,439
-----------
SWEDEN (1.7%)
7,000 IRO AB. (31) 91,909
10,000 PLM AB (23) 157,559
-----------
249,468
-----------
NETHERLANDS (1.6%)
4,500 Apothekers Cooperatie OPG (17) 151,233
7,000 European City Estates NV (27) 87,575
-----------
238,808
-----------
NORWAY (0.9%)
7,500 Schibsted AS (25) 126,207
-----------
ITALY (0.8%)
150,000 *Montedison non-conv. Savings SpA(34) 115,822
-----------
FINLAND (0.6%)
1,000 Vaisala Oy A (5) 80,795
-----------
MEXICO (0.6%)
25,000 Industrias Penoles SA de CV (21) 79,449
-----------
MISCELLANEOUS (2.0%)
15,000 North European Oil Royalty Tr. (12) 226,875
5,000 Minorco ADR (34) 59,688
-----------
286,563
-----------
TOTAL COMMON STOCK
(80.8%) (COST $11,780,664) $11,763,213
-----------
MARKET
SHARES PREFERRED STOCK VALUE
- ---------------------------------------------------------------
INDONESIA (2.1%)
7,000 Freeport McMoRan Pfd. 'C' (22) $ 132,563
10,500 Freeport McMoRan Pfd. 'D' (22) 177,188
-----------
309,751
-----------
TOTAL PREFERRED STOCK
(2.1%) (COST $461,433) $ 309,751
-----------
(continued)
</TABLE>
<PAGE> 32
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- ------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (1.9%)
$250,000 Cheil Jedang Co 3.000%
due 12-31-06 (9) $ 271,250
-----------
TOTAL U.S. DOLLAR (1.9%) $ 271,250
-----------
NON U.S. DOLLAR (3.8%)
149,850 FF Gaumont SA 3.750%
due 01-01-03 (20) 34,064
780,000 FF Immobiliere Hoteliere
due 01-01-01 (33) 108,895
150,000 GB Berisford plc 5.000%
due 01-31-15 (9) 245,733
50,000 GBP BAA plc 5.750%
due 03-29-06 (32) 105,463
170,000 NZ Shortland Properties Inc. 7.500%
due 12-31-98 (27) 59,840
-----------
TOTAL NON-U.S. DOLLAR (3.8%) $ 553,995
-----------
TOTAL CONVERTIBLE DEBENTURES
(5.7%) (COST $689,826) $ 825,245
-----------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
</TABLE>
<TABLE>
<CAPTION>
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) $ 224,844
-----------
NON-U.S. DOLLAR (2.3%)
300,000 AUD Queensland Treasury 8.00%
due 09-14-07 (15) 239,666
100,000 NZ Trans Power Finance Ltd. 8.00%
due 02-15-02 (15) 91,636
-----------
331,302
-----------
TOTAL NON-CONVERTIBLE BONDS
(3.8%) (COST $583,995) $ 556,146
-----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- --------------------------------------------------------------------
AUTOMOTIVE AND RELATED (4.5%)
$650,000 Toyota Motor Credit Corp.
6.160% 07-01-98 $ 650,000
-----------
FINANCE (2.7%)
393,000 American Express
5.950% 07-01-98 393,000
-----------
TOTAL SHORT-TERM NOTES
(7.2%) (COST $1,043,000) $ 1,043,000
-----------
TOTAL HOLDINGS
(COST $14,558,918) (a) $14,497,355
===========
</TABLE>
Foreign Currencies
NZ - New Zealand Dollar
FF - French Franc
GBP - British Pound
JPY - Japanese Yen
AUD - Australian Dollar
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
(35) Holding Companies
The accompanying notes are an integral part of these financial statements.
<PAGE> 33
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
June 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $14,558,918) ............... $ 14,497,355
Cash in bank ..................................... 28,192
Unrealized gain on forward currency
contracts (note 5) .............................. 185,635
Receivable for fund shares sold .................. 3,793
Receivable for securities sold ................... 1,421
Dividends and accrued interest receivable ........ 41,136
Other ............................................ 27,730
------------
Total assets .................................... 14,785,262
------------
Liabilities:
Accounts payable ................................. 91,192
Unrealized loss on forward currency
contracts (note 5) .............................. 8,964
Payable for fund shares redeemed ................. 54,001
Payable for investment management
services (note 3) ............................... 25,212
Accrued 12b-1 fees (note 6) ...................... 9,463
Dividends payable ................................ 17,490
Other accrued expenses ........................... 16,135
------------
Total liabilities ............................... 222,457
------------
Net assets at market value ........................ $ 14,562,805
============
Net assets consist of:
Par value, $.001 per share ....................... $ 1,127
Paid-in capital in excess of par value ........... 13,982,547
Accumulated undistributed net realized
gain on investments ............................. 464,846
Net unrealized appreciation (depreciation) on:
Investments (note 1) ............................ (61,563)
Foreign currency related transactions ........... (1,111)
Forward currency contracts (note 5) ............. 176,671
Undistributed net investment income .............. 288
------------
Net assets at market value ........................ $ 14,562,805
============
Shares outstanding ................................ 1,126,842
Net asset value per share ......................... $ 12.92
============
Maximum offering price per share ($12.92/95%) ..... $ 13.60
============
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For Year Ended June 30, 1998
<S> <C>
Investment income:
Interest (net of $1,236 foreign taxes withheld) .. $ 170,403
Dividends (net of $30,697 foreign taxes withheld) 326,493
------------
Total investment income ......................... 496,896
Expenses:
Management fees (note 3) ......................... 152,991
12b-1 fees (note 6) .............................. 42,497
Custodian fees (note 3) .......................... 78,000
Directors' fees (note 3) ......................... 3,195
Professional fees ................................ 13,143
Transfer agent and accounting fees ............... 55,000
Filing fees ...................................... 16,375
Printing, proxy and postage fees ................. 6,870
Organizational expense ........................... 2,119
Other ............................................ 774
------------
Total expenses .................................. 370,964
Less Expenses Voluntarily reduced or
reimbursed (note 3) ............................ (16,448)
------------
Net expenses .................................... 354,516
------------
Net investment income ........................... 142,380
------------
Realized and unrealized gain on investments
and foreign currency:
Net realized gain from:
Investments ..................................... 973,178
Forward currency related transactions ........... 697,339
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments .................................... (2,464,591)
Foreign currency related transactions .......... 34,335
------------
Net loss on investments ........................ (759,739)
------------
Net decrease in net
assets from operations ........................ ($ 617,359)
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 34
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
------------- -------------
From operations:
<S> <C> <C>
Net investment income ......................................................................... $ 142,380 $ 167,390
Realized gain on investments and foreign currency related transactions ........................ 1,670,517 1,936,008
Unrealized gain (loss) on investments and foreign currency related transactions ............... (2,430,256) 393,505
------------ -----------
Net increase (decrease) in assets from operations ........................................... (617,359) 2,496,903
------------ -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income ..................................................... (139,103) (178,422)
Capital gains and foreign currency related transactions distributions ......................... (2,283,120) (1,072,777)
------------ -----------
Total dividends and distributions ........................................................... (2,422,223) (1,251,199)
------------ -----------
From capital share transactions (note 4):
Received from shares sold ..................................................................... 3,159,453 4,465,324
Received from dividends reinvested ............................................................ 1,971,077 1,281,180
Paid for shares redeemed ...................................................................... (6,838,385) (2,765,311)
------------ -----------
Increase (decrease) in net assets derived from capital share transactions .................... (1,707,855) 2,981,193
------------ -----------
Increase (decrease) in net assets .......................................................... (4,747,437) 4,226,897
------------ -----------
Net Assets:
Beginning of period ........................................................................... 19,310,242 15,083,345
------------ -----------
End of period ................................................................................. $ 14,562,805 $19,310,242
============ ===========
Includes undistributed (overdistributed) net investment income of ............................. $ 288 ($ 2,989)
============ ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Years Ended June 30,
1998 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 ........................... 0.12 0.14 0.10 0.14 0.05
Net realized and unrealized gain (loss) on
investments and foreign currency transactions .. (0.63) 1.92 2.24 0.63 4.01
-------- -------- -------- -------- --------
Total income (loss) from investment operations . (0.51) 2.06 2.34 0.77 4.06
-------- -------- -------- -------- --------
Less distributions:
Dividends from net investment income ............ (0.12) (0.15) (0.39) (0.14) (0.05)
Distributions from net realized capital gains and
foreign currency transactions .................. (1.90) (0.93) (0.37) (1.06) (0.59)
-------- -------- -------- -------- --------
Total distributions ............................ (2.02) (1.08) (0.76) (1.20) (0.64)
-------- -------- -------- -------- --------
Net asset value, end of period ................... $ 12.92 $ 15.45 $ 14.47 $ 12.89 $ 13.32
======== ======== ======== ======== ========
Total return ..................................... (4.84%) 14.76% 18.65% 6.44% 40.65%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (a):
Expenses ........................................ 2.10% 1.87% 1.72% 1.50% 1.50%
Net investment income ........................... 0.85% 0.99% 0.70% 1.11% 0.46%
Ratios assuming no fees reimbursed by advisor:
Expenses ........................................ 2.20% 1.98% 1.72% 1.50% 1.50%
Net investment income ........................... 0.75% 0.88% 0.70% 1.11% 0.46%
Average commission rate (b) ...................... $ 0.01 $ 0.02 NR NR NR
Portfolio turnover rate .......................... 12% 9% 20% 39% 27%
Net assets at end of period (millions) ........... $ 14.6 $ 19.3 $ 15.1 $ 12.0 $ 10.4
</TABLE>
(a) The advisor has elected to reimburse certain operating expenses of the
International Portfolio.
(b) 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.
<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 JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year -1.05% -6.00%
Three-year 9.01% 7.16%
Since inception (11/1/94) 8.19% 6.67%
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 ONE Fund Global Contrarian Portfolio owns mostly small and obscure stocks
which we believe are neglected. It also has exposure to commodity and/or "hard
asset" related stocks in the U.S. as well as foreign markets. Finally, it holds
emerging market debt instruments, both corporate and sovereign. Most commodities
and commodity-related stocks fell in the second quarter, including gold-related
securities. While the U.S. and foreign markets registered advances in the second
quarter, small capitalization stocks lagged large capitalization stocks in most
markets. Also, emerging markets were down sharply over that period.
The portfolio has been reducing its exposure to commodities-related
securities over the last nine months as weaker global economic growth is
anticipated in the medium-term following the Asian crisis. Simultaneously, the
portfolio recently started buying selected stocks and bonds that appear
depressed in a few Asian countries.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
Global Contrarian Portfolio (with max sales charge)
(Commenced operations November 1, 1994)
<S> <C>
Date Value
---- -----
12/31/94 $ 9,150.40
12/31/95 $10,521.30
12/31/96 $11,580.90
12/31/97 $12,760.80
</TABLE>
<TABLE>
<CAPTION>
Morgan Stanley Captl. Intl. World Index
<S> <C>
12/31/94 $ 9,654.00
12/31/95 $11,134.30
12/31/96 $12,634.30
12/31/97 $14,527.90
</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 HOLDINGS AS OF JUNE 30, 1998
% of Portfolio
1. San Juan Basin Royalty Trust 3.73%
2. Freeport McMoran Copper & Gold Inc.,
Preferred Ser `D' 3.33%
3. Kuehne & Nagel International AG Bearer 2.99%
4. East Texas Financial Services Inc 2.88%
5. Edipresse SA Bearer 2.71%
6. Franklin Electric Company, Inc 2.69%
7. CDL Hotels International Limited 2.37%
8. Federal Republic of Brazil EI FRN 4/15/2006 2.37%
9. Emin Leydier 2.18%
10. Lawter International, Inc 2.15%
TOP 5 COUNTRIES AS OF JUNE 30, 1998
% of Portfolio
United States 31.5
Japan 10.1
Switzerland 7.6
France 4.5
Hong Kong 3.6
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.
<PAGE> 36
ONE FUND, INC.
Global Contrarian Portfolio
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES U.S. COMMON STOCK VALUE
<S> <C> <C>
CHEMICALS (2.2%)
10,000 Lawter International Inc. $ 108,750
-----------
CAPITAL GOODS (4.0%)
2,000 Bandag Inc. Class 'A' 69,000
2,000 Franklin Electric Co. Inc. 136,000
-----------
205,000
-----------
CONSUMER PRODUCTS (3.6%)
2,000 Allen Organ Co. Class 'B' 80,500
1,300 Dole Foods Company, Inc. 49,688
2,000 Wang Laboratories, Inc. 50,875
-----------
181,063
-----------
ELECTRICAL EQUIPMENT (1.4%)
5,000 Zero Corporation 70,938
-----------
FINANCE (4.2%)
10,500 East Texas Financial Services 145,688
4,000 First Federal Financial Corp. 68,000
-----------
213,688
-----------
FORESTRY & PAPER PRODUCTS (3.9%)
500 Georgia Pacific Corp. Timber Group 11,531
2,500 Greif Brothers Corp. Class 'A' 93,438
2,000 Rayonier Inc. 92,000
-----------
196,969
-----------
METALS AND MINING (1.1%)
1,000 Reynolds Metals Company 55,938
-----------
OIL AND ENERGY (4.8%)
1,300 Rochester & Pittsburgh Coal Co. 53,300
25,000 San Juan Basin Royalty Trust 189,063
-----------
242,363
-----------
REAL ESTATE (0.8%)
2,000 Alico, Inc. 41,000
-----------
SERVICES (5.5%)
2,000 Chemed Corp. 68,125
6,000 Kaiser Ventures Inc. 76,500
3,000 Manpower Inc. 57,375
3,000 UniFirst Corporation 75,000
-----------
277,000
-----------
TOTAL U.S. COMMON STOCK
(31.5%) (COST $1,262,702) $ 1,592,709
-----------
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ----------------------------------------------------------------------
JAPAN (10.1%)
2,500 Benesse Corp. (29) $ 87,133
10,000 Dai Tokyo Fire & Marine Ins. Co., Ltd. 34,710
15,000 Dowa Fire & Marine Ins. Co., Ltd. (18) 44,734
2,500 Fuji Photo Film Co. Ltd. (9) 86,774
4,000 Koekisha Co., Ltd. (29) 62,376
10,000 Nittetsu Mining Co., Ltd. (22) 35,931
1,000 Secom Co., Ltd. (29) 57,562
400 Toho Co. (20) 41,968
10,000 Yomeishu Seizo Co. Ltd. (13) 58,927
-----------
510,115
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ----------------------------------------------------------------------
<S> <C> <C>
SWITZERLAND (7.6%)
15 Bank for Intl. Settlements (3) $ 98,223
500 Edipresse SA 'Bearer' (25) 137,216
200 Kuehne & Nagel International AG (3) 151,366
-----------
386,805
-----------
FRANCE (4.5%)
1,500 Emin Leydier (14) 110,132
500 Groupe NSC (19) 74,989
600 Rougier SA (14) 40,489
-----------
225,610
-----------
HONG KONG (3.6%)
403,845 CDL Hotels Intl. Ltd. (16) 119,897
100,000 Shaw Brothers (Hong Kong) Ltd.(20) 60,669
-----------
180,566
-----------
GERMANY (3.4%)
200 Buderus AG (5) 99,557
100 Axel Springer Verlag AG (20) 73,562
-----------
173,119
-----------
LATIN AMERICA (2.8%)
10,000 Antofagasta Holding plc (21) 42,102
500,000 Grupo Fernandez Editores (25) 70,807
30,308 Ledesma SA (1) 28,191
-----------
141,100
-----------
SINGAPORE (2.5%)
100,000 Clipsal Ind. Ltd. (10) 89,500
50,000 DelGro Corp. Ltd. (35) 35,873
-----------
125,373
-----------
NETHERLANDS (2.0%)
2,000 Bosch & Keuning (20) 68,686
2,600 German City Estates NV (27) 32,528
-----------
101,214
-----------
NEW ZEALAND (1.5%)
50,000 Shortland Properties, Ltd. (27) 16,824
50,000 Wrightson Ltd. (1) 9,576
10,000 Independent Press Communications (1) 48,400
-----------
74,800
-----------
SOUTH AFRICA (1.3%)
3,000 Anglogold Ltd. ADR (22) 59,250
2,500 Western Areas Gold Mining Ltd. (21) 7,884
-----------
67,134
-----------
MEXICO (1.0%)
17,500 Industrias Penoles S.A. de C.V. (22) 55,614
-----------
CANADA (1.0%)
3,000 Noranda, Inc. (21) 51,895
-----------
INDONESIA (1.0%)
600,000 PT Rigs Tender (12) 50,676
-----------
BELGIUM (1.0%)
376 Engrais Rosier SA (34) 49,410
-----------
SWEDEN (0.9%)
5,000 Bylock & Nordsjofrakt AB 'B' (32) 16,631
5,000 Gorthon Lines (32) 27,823
-----------
44,454
-----------
</TABLE>
(continued)
<PAGE> 37
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
TOTAL FOREIGN COMMON STOCK
(44.2%) (COST $2,681,600) $2,237,885
----------
TOTAL COMMON STOCK
(75.7%) (COST $3,944,302 ) $3,830,594
----------
MARKET
SHARES FOREIGN PREFERRED STOCK VALUE
- -----------------------------------------------------------------------
INDONESIA (4.8%)
10,000 Freeport McMoRan Pfd. 'D' (22) $168,750
4,000 Freeport McMoRan Pfd. 'C' (22) 75,750
----------
244,500
----------
Total Foreign Preferred Stock
(4.8%) (Cost $331,775) $244,500
----------
FACE MARKET
AMOUNT NON-CONVERTIBLE BONDS VALUE
- -----------------------------------------------------------------------
U.S. DOLLAR (4.8%)
145,500 Federal Republic Of Brazil EI FRN
6.875% due 04-15-06 (15) 119,856
65,201 Republic of Argentina FRB
6.750% due 03-31-05 (15) 84,016
50,000 PT Pabrik Kertas Tjiwi Kimia
13.250% due 08-01-01 (14) 39,750
----------
TOTAL NON-CONVERTIBLE BONDS
(4.8%) (COST $224,002) $ 243,622
----------
(a) Also represents cost for Federal income tax purposes.
Foreign Currencies
NZ - New Zealand Dollar
FF - French Franc
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- -----------------------------------------------------------------------
<S> <C> <C>
U.S. DOLLAR (4.3%)
$55,000 Inversiones y Representaciones
4.500% 08-02-03 (27) $ 59,400
100,000 International Container Terminal Svcs Inc.
1.750% 03-13-04 (32) 85,750
100,000 Tipeo Asphalt Co.
2.750% 09-16-06 (6) 73,000
----------
218,150
----------
NON U.S. DOLLAR (1.4%)
100,000 NZ Shortland Properties Inc.
7.500% due 12-31-98 (27) 35,200
260,000 FF Immobilier Hoteliere
5.000% due 01-01-01 (16) 36,298
----------
71,498
----------
TOTAL CONVERTIBLE DEBENTURES
(5.7%) (Cost $317,121) $ 289,648
----------
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -----------------------------------------------------------------------
AUTOMOTIVE AND RELALED (4.0%)
$200,000 Toyota Motor Credit Corp.
6.160% due 07-01-98 $ 200,000
----------
FINANCE (4.0%)
200,000 American Express
5.950% due 07-01-98 200,000
----------
MISCELLANEOUS (3.3%)
173,000 Pearson inc.
5.720% due 07-01-98 172,750
----------
TOTAL SHORT-TERM NOTES
(11.3%) (COST $572,750) $ 572,750
----------
TOTAL HOLDINGS
(COST $5,389,951)(a) $5,181,114
==========
</TABLE>
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
(35) Holding Companies
The accompanying notes are an integral part of these financial statements.
<PAGE> 38
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
JUNE 30, 1998
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $5,389,951) ....................... $5,181,114
Cash in bank ............................................ 8,016
Unrealized gain on forward currency
contracts (note 5) ..................................... 28,706
Dividends and accrued interest receivable ............... 19,262
Deferred organizational expenses (note 1) ............... 692
Other ................................................... 7,223
----------
Total assets ........................................... 5,245,013
----------
Liabilities:
Payable for securities purchased ........................ 90,977
Payable for shares redeemed ............................. 1,059
Payable for investment management
services (note 3) ...................................... 26,469
Accrued 12b-1 fees (note 6) ............................. 3,424
Dividends payable ....................................... 49,520
Other accrued expenses .................................. 11,482
----------
Total liabilities ...................................... 182,931
----------
Net assets at market value ............................... $5,062,082
==========
Net assets consist of:
Par value, $.001 per share .............................. $ 470
Paid-in capital in excess of par value .................. 4,720,024
Accumulated undistributed net realized
gain on investments .................................... 519,005
Net unrealized appreciation (depreciation) on:
Investments (note 1) ................................... (208,837)
Foreign currency related transactions .................. (394)
Forward currency contracts (note 5) .................... 28,706
Undistributed net investment income ..................... 3,108
----------
Net assets at market value ............................... $5,062,082
==========
Shares outstanding ....................................... 470,485
Net asset value per share ................................ $ 10.76
==========
Maximum offering price per share ($10.76/95%) ............ $ 11.33
==========
</TABLE>
<TABLE>
<CAPTION>
FOR YEAR ENDED JUNE 30, 1998
<S> <C>
Investment income:
Interest ................................................ $ 79,056
Dividends (net of $6,802 foreign taxes withheld)......... 125,570
----------
Total investment income ................................ 204,626
----------
Expenses:
Management fees (note 3) ................................ 54,075
12b-1 fees (note 6) ..................................... 15,021
Custodian fees (note 3) ................................. 40,079
Directors' fees (note 3) ................................ 1,050
Professional fees ....................................... 4,319
Transfer agent and accounting fees ...................... 27,800
Filing fees ............................................. 6,707
Printing, proxy and postage fees ........................ 1,995
Organizational expense (note 1) ......................... 522
Other ................................................... 254
----------
Total expenses ......................................... 151,822
----------
Less expenses voluntarily reduced
or reimbursed (note 3) ................................ (23,873)
----------
Net expenses ........................................... 127,949
----------
Net investment income .................................. 76,677
----------
Realized and unrealized gain (loss) on
investments and foreign currency:
Net realized gain from:
Investments ............................................ 646,699
Forward currency related transactions .................. 78,490
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments ........................................... (836,078)
Foreign currency related transactions ................. 15,375
----------
Net loss on investments ............................... (95,514)
----------
Net decrease in net
assets from operations ............................... ($ 18,837)
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 39
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
From operations:
Net investment income ......................................................... $ 76,677 $ 104,098
Realized gain on investments and foreign currency related transactions ........ 725,189 388,766
Unrealized gain (loss) on investments and foreign currency related transactions (820,703) 135,383
----------- -----------
Net increase (decrease) in assets from operations ........................... (18,837) 628,247
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income ..................................... (70,667) (109,924)
Capital gains and foreign currency related transactions distributions ......... (405,742) (345,450)
----------- -----------
Total dividends and distributions ........................................... (476,409) (455,374)
----------- -----------
From capital share transactions (note 4):
Received from shares sold ..................................................... 509,252 966,852
Received from dividends reinvested ............................................ 211,749 277,521
Paid for shares redeemed ...................................................... (1,459,507) (784,457)
----------- -----------
Increase in net assets derived from capital share transactions ............... (738,506) 459,916
----------- -----------
Increase (decrease) in net assets .......................................... (1,233,752) 632,789
----------- -----------
Net Assets:
Beginning of period ........................................................... 6,295,834 5,663,045
----------- -----------
End of period ................................................................. $ 5,062,082 $ 6,295,834
=========== ===========
Includes undistributed (overdistributed) net investment income of ............. $ 3,108 ($ 2,902)
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
11-1-94
Years Ended June 30, to
1998 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 (loss) from investment operations:
Net investment income ................................... 0.14 0.20 0.16 0.17
Net realized and unrealized gain (loss) on investments
and foreign currency transactions ..................... (0.26) 0.99 1.61 0.13
------ ------ ------ ------
Total income (loss) from investment operations ......... (0.12) 1.19 1.77 0.30
------ ------ ------ ------
Less distributions:
Dividends from net investment income .................... (0.13) (0.21) (0.16) (0.17)
Distributions from net realized capital gains and foreign
currency transactions ................................. (0.78) (0.67) (0.14) (0.12)
------ ------ ------ ------
Total distributions .................................... (0.91) (0.88) (0.30) (0.29)
------ ------ ------ ------
Net asset value, end of period ........................... $10.76 $11.79 $11.48 $10.01
======= ======= ====== =======
Total return ............................................. (1.05%) 11.11% 17.84% 2.99%(b)
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (c):
Expenses ................................................ 2.13% 2.02% 2.14% 2.05%(a)
Net investment income ................................... 1.28% 1.78% 1.49% 2.85%(a)
Ratios assuming no fees reimbursed by advisor:
Expenses ................................................ 2.53% 2.21% 2.14% 2.05%(a)
Net investment income ................................... 0.88% 1.59% 1.49% 2.85%(a)
Average commission rate (d) .............................. $ 0.01 $ 0.01 NR NR
Portfolio turnover rate .................................. 25% 6% 26% 8%
Net assets at end of period (millions) ................... $ 5.1 $ 6.3 $ 5.7 $ 3.9
</TABLE>
(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
The accompanying notes are an integral part of these financial statements.
<PAGE> 40
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 JUNE 30, 1998
AVERAGE ANNUAL TOTAL RETURNS:
Without With max.
sales charge sales charge
One-year 7.51% 2.13%
Since inception (11/1/96) 3.57% 0.40%
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
Cumulatively, for the first half of 1998, the ONE Fund Core Growth Portfolio
outperformed the Russell Midcap Growth Index by the 373 basis points and the
Russell 2000 Growth Index by 1,015 basis points.
It appears that the market continues to favor large cap stocks even though,
on average, earnings estimates for small cap companies are accelerating while
earnings estimates for large cap companies are decelerating. One analyst
recently observed that, "If the second quarter 1998 profit growth for the small
and mid cap segments of the market comes in close to the expectation, it will be
the fifth consecutive quarter in which profit growth for those segments has
surpassed that of the large caps." The consensus estimated average growth rate
for large cap companies for the next 12 months is 6 percent compared with 10.9
percent for the preceding 12 months. In contrast, the consensus average
estimated growth rate for the Russell 2000 Growth Index companies is 39 percent
over the next 12 months compared with 24 percent over the past 12 months. In
addition to the superior growth forecasts, we believe small cap stocks are
attractively valued at present. By our reckoning, they now stand at levels seen
every decade or two.
<TABLE>
<CAPTION>
CHANGE IN VALUE OF $10,000 INVESTMENT
12/31/96 12/31/97
-------- --------
<S> <C> <C>
Core Growth Portfolio
(with max sales charge) $ 9,389.80 $ 8,789.70
Russell 3000 Index 10,614.00 13,977.70
</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 JUNE 30, 1998
% of Portfolio
1. HBO & Co 2.91
2. Saville Sys - ADR 2.83
3. JD Edwards & Co 2.82
4. Clear Channel Communications 2.67
5. America On Line 2.59
6. Citrix Systems 2.57
7. Dell Computers 2.27
8. Cambridge Technology Partners 2.26
9. Parexel International 2.19
10. Jacor Communications 2.11
Top 5 Industries as of June 30, 1998
% of Portfolio
Computer & Related 22.6
Business Services 21.3
Medical & Related 10.1
Communications 7.6
Media and Publishing 4.8
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
<PAGE> 41
ONE FUND, INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -----------------------------------------------------------
AUTOMOTIVE AND RELATED (2.6%)
<S> <C> <C>
1,300 *Central Parking $ 59,150
2,100 Harley Davidson, Inc. 81,375
------------
140,525
------------
BUSINESS SERVICES (21.3%)
1,300 *Abacus Direct Corp. 67,519
2,900 *Apollo Group CL A 95,881
2,400 *Computer Horizons 88,950
1,500 *DA Consulting Group Inc. 21,562
3,200 *Daou Systems Inc. 73,200
1,000 *Documentum Inc. 48,000
1,400 *DST Systems, Inc. 78,400
3,000 *Ecsoft Group 97,125
1,500 *Gartner Group 52,500
2,400 *I2 Technologies 84,300
3,150 *Intl. Telcomm Data Systems 91,350
2,700 *Radiant Systems 39,150
3,400 *RWD Technologies, Inc. 80,325
1,300 *Sterling Commerce, Inc. 63,050
3,000 *Saville Systems 150,375
------------
1,131,687
------------
COMPUTER AND RELATED (22.6%)
3,800 *Bea Systems Inc. 87,162
1,200 *BMC Software Inc. 62,325
2,600 *Cadence Design Systems, Inc. 81,250
2,200 *Cambridge Technology Partners 120,175
2,000 *Citrix Systems 136,750
1,200 *Compuware Corp. 61,350
1,300 *Dell Computer Corp. 120,656
1,600 *Filenet Corp. 46,200
3,500 *JD Edwards & Co. 150,281
700 *Manugistics 17,325
300 *Microsoft Corp. 32,513
3,100 *Quadramed Corp. 84,669
1,100 *Software AG Systems 32,175
5,000 *Summit Design, Inc. 73,438
2,000 *Vision Software 95,500
------------
1,201,769
------------
COMMUNICATIONS (7.6%)
1,800 *Advanced Fibre Communications 72,112
900 *Citadel Communications Corp. 14,400
800 Lucent Technology 66,550
1,500 *Star Telecommunications Inc. 33,563
1,700 *Tekelec 76,075
800 *Tellabs Inc. 57,300
600 *Univision Communications 22,350
1,300 *Worldcom Inc. 62,969
------------
405,319
------------
DRUGS (2.2%)
3,200 *Parexel International Corp. 116,400
------------
ELECTRICAL EQUIPMENT (3.7%)
1,200 *Applied Micro Circuits Corp. 31,050
3,000 *Celestica Inc.. 56,250
1,500 *Lernout & Hausp Speech Products 89,531
750 *Level One Communications 17,625
------------
194,456
------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ----------------------------------------------------------
ENTERTAINMENT AND LEISURE (2.8%)
<S> <C> <C>
2,000 *Cinar Films Inc. CL B $ 39,000
2,100 *Family Golf Center 53,156
900 *Premier Parks 59,963
------------
152,119
------------
FINANCIAL SERVICES (1.9%)
1,300 Associates First Capital 99,938
------------
FOOD & RELATED (1.6%)
1,400 *Suiza Foods Corp. 83,562
------------
INDUSTRIAL SERVICES (0.5%)
1,100 *Hanover Compressor 29,768
------------
INTERNET SERVICE PROVIDER (2.6%)
1,300 *America On Line Inc. 137,800
------------
MEDIA & PUBLISHING (4.8%)
1,300 *Clear Channel Communications 141,863
1,900 *Jacor Communications 112,100
------------
253,963
------------
MEDICAL AND RELATED (10.1%)
4,400 HBO & CO 155,100
2,750 *Health Management Assoc., Inc. 91,953
700 *Healthcare Financial 42,919
2,000 *Healthsouth Corp. 53,375
2,000 *Medquist Inc. 57,750
1,700 Omnicare Inc. 64,813
1,800 *Safeskin Corp. 74,025
------------
539,935
------------
NETWORK PRODUCTS AND SECURITY (4.2%)
1,700 *Axent Technologies Inc. 52,063
1,000 *Check Point Software 32,750
500 *Cisco Systems 46,031
1,200 *Network Assoc. Inc. 57,450
1,200 *Xylan Corp. 35,775
------------
224,069
------------
OIL, ENERGY AND NATURAL GAS (2.1%)
1,000 *Friede Goldman International, Inc. 28,875
2,000 *Global Industries Ltd. 33,750
2,400 *Varco International, Inc. 47,550
------------
110,175
------------
RETAIL (4.1%)
500 *CDW Computer Centers, Inc. 25,000
700 *General Nutrition 21,788
1,200 *Hibbett Sporting Goods, Inc. 48,000
2,100 *NBTY Inc. 38,587
1,000 *United Rentals Inc. 42,000
700 *Whole Food Market, Inc. 42,350
------------
217,725
------------
TEXTILES (1.6%)
2,400 *Jones Apparel Group, Inc. 87,750
------------
(continued)
</TABLE>
<PAGE> 42
ONE FUND, INC.
CORE GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1998
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION (1.9%)
1,300 *Coach USA Inc. $ 59,312
1,600 *Motivepower Industries, Inc. 39,200
----------
98,512
----------
TOTAL COMMON STOCK
(98.2%) (COST $4,173,129) $5,225,472
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- ------------------------------------------------------------------
<S> <C> <C>
FINANCIAL (3.4%)
$182,000 Star Bank 5.200% due 07-01-98
repurchase price $182,026
collateralized by GNMA certificates,
pool # 8375
due 02-20-24 (cost $182,000) $ 182,000
----------
TOTAL REPURCHASE AGREEMENTS
(3.4%) (COST $182,000) $ 182,000
----------
TOTAL HOLDINGS
(COST $4,355,129)(a) $5,407,472
==========
</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.
<PAGE> 43
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1998
<TABLE>
<S> <C>
Assets:
Investments in securities at market
value (note 1) (Cost $4,355,129) ...................... $ 5,407,472
Cash in bank ............................................ 795
Receivable for fund shares sold ......................... 164
Dividends and accrued interest receivable ............... 134
Receivable for securities sold .......................... 34,029
Other ................................................... 4,121
-----------
Total assets .......................................... 5,446,715
-----------
Liabilities:
Payable for securities purchased ........................ 112,778
Payable for fund share redeemed ......................... 1,004
Payable for investment management
services (note 3) ..................................... 6,758
Accrued 12b-1 fees (note 6) ............................. 3,201
Other accrued expenses .................................. 1,322
-----------
Total liabilities ..................................... 125,063
-----------
Net assets at market value ................................. $ 5,321,652
===========
Net assets consist of:
Par value, $ 001 per share .............................. $ 502
Paid-in capital in excess of par value .................. 4,788,949
Accumulated net realized
loss on investments ................................... (520,142)
Net unrealized appreciation on investments .............. 1,052,343
-----------
Net assets at market value ................................. $ 5,321,652
===========
Shares outstanding ......................................... 502,101
Net asset value per share .................................. $10 60
===========
Maximum offering price per share ($10 60/95%) .............. $11.16
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1998
<TABLE>
<S> <C>
Investment income:
Interest ................................................ $ 19,232
Dividends ............................................... 3,621
-----------
Total investment income ............................... 22,853
-----------
Expenses:
Management fees (note 3) ................................ 51,878
12b-1 fees (note 6) ..................................... 13,652
Custodian fees (note 3) ................................. 5,400
Directors' fees (note 3) ................................ 900
Professional fees ....................................... 3,798
Transfer agent and accounting fees ...................... 33,600
Filing fees ............................................. 4,500
Printing, proxy and postage fees ........................ 1,710
Other ................................................... 235
-----------
Total expenses ........................................ 115,673
-----------
Less expenses voluntarily reduced
or reimbursed (note 3) .............................. (2,864)
-----------
Net expenses .......................................... 112,809
-----------
Net investment loss ................................... (89,956)
-----------
Realized and unrealized gain (loss) on investments:
Net realized loss from investments ...................... (365,825)
Net increase in unrealized
appreciation on investments ........................... 836,872
-----------
Net gain on investments ............................. 471,047
-----------
Net increase in net
assets from operations ....................... $ 381,091
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 44
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
11-1-96
Year Ended to
June 30, 1998 6-30-97
------------- -------------
<S> <C> <C>
From operations:
Net investment loss ....................................................... ($ 89,956) ($ 38,829)
Realized loss on investments .............................................. (365,825) (154,317)
Unrealized gain on investments ............................................ 836,872 215,471
----------- -----------
Net increase in assets from operations ................................ 381,091 22,325
----------- -----------
From capital share transactions (note 4):
Received from shares sold ................................................. 728,721 5,793,191
Paid for shares redeemed .................................................. (1,271,044) (332,632)
----------- -----------
Increase (decrease) in net assets derived from capital share transactions (542,323) 5,460,559
----------- -----------
Increase (decrease) in net assets ................................ (161,232) 5,482,884
----------- -----------
Net Assets:
Beginning of period ....................................................... 5,482,884 0
----------- -----------
End of period ............................................................. $ 5,321,652 $ 5,482,884
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
11-1-96
Year Ended to
6-30-98 6-30-97
----------- -----------
<S> <C> <C>
Per share data:
Net asset value, beginning of period .................... $ 9.86 $ 10.00
Income (loss) from investment operations:
Net investment loss .................................. (0.16) (0.08)
Net realized and unrealized gain (loss) on investments 0.90 (0.06)
------- -------
Total income (loss) from investment operations ..... 0.74 (0.14)
------- -------
Net asset value, end of period .......................... $ 10.60 $ 9.86
======= =======
Total return ............................................ 7.51% (1.40%)(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses ............................................. 2.06% 1.35%(a)
Net investment loss .................................. (1.65%) (0.87%)(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses ............................................. 2.12% 1.40%(a)
Net investment loss .................................. (1.70%) (0.92%)(a)
Average commission rate (d) ............................. $ 0.05 $ 0.05
Portfolio turnover rate ................................. 116% 80%
Net assets at end of period (millions) .................. $ 5.3 $ 5.5
</TABLE>
(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.
The accompanying notes are an integral part of these financial statements.
<PAGE> 45
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
(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.
CORE GROWTH PORTFOLIO - long-term capital appreciation.
There are no assurances these objectives will be met.
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 but the Money Market portfolio, 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 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 contracts). 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.
<PAGE> 46
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998
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.
<PAGE> 47
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998
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 $128,785, resulting in a reclassification
adjustment to decrease Paid-in capital in excess of par value by $128,785. 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 $111,345, $55,474, and $520,142
respectively at June 30, 1998. If not offset by subsequent capital gains, $6,302
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,
$4,042 and $154,317 will expire June 30, 2005 in the Tax-Free Income and Core
Growth Portfolios, respectively and $80, $100,005, and $365,825 will expire June
30, 2006 in the Money Market, 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 June 30, 1998 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...... 781,489 240,524 4,878,793 5,398,860 1,174,422 2,248,393 587,129 1,168,516
Depreciation...... 0 (16,180) (244,096) (785,391) (521,278) (2,309,956) (795,966) (116,173)
Net unrealized:
Appreciation/ 781,489 224,344 4,634,697 4,613,469 653,144 0 0 1,052,343
Depreciation..... 0 0 0 0 0 (61,563) (208,837) 0
</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 June 30, 1998 the additional shares owned
were as follows: 7,183,666 shares of
<PAGE> 48
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998
the Money Market Portfolio, 553,940 shares of the Tax-Free Income Portfolio,
508,244 shares of the Income Portfolio, 345,432 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 June 30, 1998 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 ... 284,055 2,531,619 5,397,134 5,406,516 4,409,799 1,756,439 1,370,010 5,919,661
Sales ....... 354,000 2,166,346 5,073,537 6,771,833 4,207,182 3,968,372 1,565,583 10,412,717
U.S. Govt.
Obligations:
Purchases ... -- -- -- -- -- -- -- --
Sales ....... -- 800,000 -- -- -- -- -- --
</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.
Prior to May 1, 1996, O.N. Investment Management Company served as the Fund's
investment advisor. 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 & SMALL
MARKET INCOME INCOME GROWTH 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 0.65% 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.
ONI is presently waiving management fees equal to 0.15% of average net assets
for certain portfolios. Management fees waived by ONI for the year ended June
30, 1998 were $22,726, $10,653, $10,178, $22,090, $21,457 and $8,886 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 year ended June 30, 1998, the reimbursement was $16,448, $23,873, and $2,864
for the International, Global Contrarian, and Core Growth Portfolios
respectively.
<PAGE> 49
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998
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 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 years ended June 30, 1998 and 1997 were as
follows:
<TABLE>
<CAPTION>
MONEY MARKET TAX-FREE INCOME INCOME
----------------------------- ---------------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
06-30-98 6-30-97 06-30-98 6-30-97 06-30-98 6-30-97
----------------------------- ---------------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital shares
issued on sales........... 21,996,755 17,151,447 40,258 39,876 76,483 20,785
Capital shares issued
on reinvested dividends... 455,744 545,914 2,820 14,155 7,995 23,352
Capital shares redeemed..... 20,456,024 19,142,752 20,443 20,980 70,795 93,120
INCOME & GROWTH GROWTH SMALL CAP
----------------------------- ---------------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
06-30-98 6-30-97 06-30-98 6-30-97 06-30-98 6-30-97
----------------------------- ---------------------------------- ----------------------------
Capital shares
issued on sales........... 216,315 184,505 106,470 160,092 90,612 77,889
Capital shares issued
on reinvested dividends... 39,848 32,135 35,559 25,550 21,133 16,545
Capital shares redeemed..... 123,916 178,596 138,800 187,890 65,628 51,087
INTERNATIONAL GLOBAL CONTRARIAN CORE GROWTH
----------------------------- ---------------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 11-1-96 TO
06-30-98 6-30-97 06-30-98 6-30-97 06-30-98 6-30-97
----------------------------- ---------------------------------- ----------------------------
Capital shares
issued on sales........... 202,687 324,624 43,691 88,240 74,120 592,472
Capital shares issued
on reinvested dividends... 178,279 73,771 19,016 22,545 0 0
Capital shares redeemed..... 504,238 190,431 126,384 69,585 127,889 36,602
</TABLE>
Sales charges imposed on capital shares sold by Ohio National Equities, Inc.
(ONEQ), the Fund's principal underwriter, a wholly-owned subsidiary of ONLIC,
for the year ended June 30, 1998 were approximately $10,627, $5,279, $70,443,
$45,986, $27,552, $57,623, $10,159, and $18,666 for the Tax-Free Income, Income,
Income & Growth, Growth, Small Cap, International, Global Contrarian and Core
Growth Portfolios, respectively.
<PAGE> 50
ONE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1998
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 June 30, 1998, 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 06/30/98 AMOUNT TYPE AT 06/30/98 GAIN LOSS
------------- ------ ---- ----------- ------ ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/21/98 360,000 Australian Dollar $222,336 215,014 U.S. Dollar $215,014 -- $(7,322)
09/10/98 911,500 Swiss Franc 603,962 634,312 U.S. Dollar 634,312 $30,350 --
12/23/98 296,000 Swiss Franc 198,179 204,420 U.S. Dollar 204,420 6,241 --
09/17/98 553,000 Deutsche Mark 307,256 308,740 U.S. Dollar 308,740 1,484 --
12/17/98 20,000 Deutsche Mark 11,167 11,136 U.S. Dollar 11,136 -- (31)
09/22/98 1,219,500 French Franc 202,172 202,222 U.S. Dollar 202,222 50 --
09/22/98 99,671 U.S. Dollar 99,671 591,500 French Franc 98,060 -- (1,611)
12/14/98 5,646,000 French Franc 940,216 956,090 U.S. Dollar 956,090 15,874 --
09/29/98 125,820,000 Japanese Yen 915,821 1,020,026 U.S. Dollar 1,020,026 104,205 --
12/24/98 164,643,000 Japanese Yen 1,213,331 1,224,384 U.S. Dollar 1,224,384 11,053 --
10/06/98 778,000 New Zealand $ 405,142 421,520 U.S. Dollar 421,520 16,378 --
-------------- -------------- ----------- ----------
$5,119,253 $5,295,924 $185,635 $(8,964)
============== ============== =========== ==========
</TABLE>
GLOBAL CONTRARIAN PORTFOLIO
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY TO BE DELIVERED U.S. $ VALUE CURRENCY TO BE RECEIVED U.S. $ VALUE UNREALIZED
DATES THROUGH AMOUNT TYPE AT 06/30/98 AMOUNT TYPE AT 06/30/98 GAIN LOSS
------------- ------ ---- ----------- ------ ---- ----------- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
12/23/98 196,000 Swiss Franc $131,227 135,359 U.S. Dollar $135,359 $ 4,132 --
12/14/98 432,000 French Franc 71,940 73,155 U.S. Dollar 73,155 1,215 --
09/29/98 11,495,000 Japanese Yen 83,670 90,755 U.S. Dollar 90,755 7,085 --
12/24/98 18,764,000 Japanese Yen 138,281 139,540 U.S. Dollar 139,540 1,259 --
11/13/00 11,720,000 Japanese Yen 94,795 109,810 U.S. Dollar 109,810 15,015 --
-------------- ---------------------------------------
$519,913 $548,619 $28,706 --
============== =======================================
</TABLE>
(6) DISTRIBUTION PLAN
The Fund has a distribution agreement (12b-1 Plan) with ONEQ 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.
