<PAGE> 1
President's
Message
John J. Palmer Photo
Dear Investor:
First, I want to thank you for being a shareholder of ONE Fund. All of us here
appreciate your support.
In the seven years since its founding, ONE Fund has remained committed to
serving its shareholders through adherence to fundamental investment
principles -- careful selection and consistent professional management. We are
pleased, therefore, to provide you with an update of ONE Fund's performance and
investment activity for the year ending June 30, 1999.
New portfolios
Starting January 1999, we were pleased to introduce Federated Global Investment
Management Corp., as subadvisor of the International and Global Contrarian
portfolios of the ONE Fund. They replaced Societe Generale as the subadviser for
the funds. Federated Global Investment Management is part of Pittsburgh-based
Federated Investors, an investment manager founded in 1955 which now has more
than $110 billion in managed assets.
Also this year:
- - The Board of Directors approved a plan of merger in which the Global
Contrarian Portfolio will be merged into the International Portfolio and the
Tax-Free Income Portfolio will be merged into the Income portfolio. These
plans must be approved by shareholders.
We already see steady gains in overall performance from these strategies. And,
to help our clients continue to pursue investment diversification, plans are
well underway to provide additional investment options for shareholders later
this year.
The importance of diversification
For all investors, it's important to continue to emphasize the value of
diversification. As a company, we certainly do not recommend investing solely in
the "style of the moment" or basing investment decisions strictly on market
timing. We remain dedicated to staying in step with -- and in some cases, even
ahead of -- other mutual fund and financial service providers when it comes to
improving our investment selections. We've always kept a strong focus on
providing our clients with diversified and innovative portfolio choices, and we
will continue this progress in the coming year.
The market in general
While the past year was one of unusual volatility for the stock market, we
continue to enjoy an economic climate growing at a solid clip, low unemployment,
modest interest rates, subdued inflation and stable corporate earnings.
The second quarter of 1999 has proven to be just as interesting as the first.
April began with a strong price increase in the value of downtrodden cyclical
stocks as superior earnings were announced for these companies. Value investing
was back in style and money began to flow into the mid- and small-cap sectors of
the market.
May proved to be relatively flat as investors began to worry about inflation
and the prospect of the Fed tightening the monetary supply. Small caps advanced
slightly, mid-caps were flat and large-caps were slightly down. NASDAQ stocks
did not have a good month and some internet IPOs actually held below the
stratosphere as investors' concern for real earnings began to show.
During June, all of the major indices were up with the NASDAQ leading the way
at +11.4 percent, followed by DJIA up 6.2 percent, and the S&P 500 up 3.7
percent. The month also continued a broadening of the market as small- and
mid-cap stocks performed well versus the larger stocks.
Looking into the future what can we expect based on the first six months of
1999? It seems clear that the volatility experienced in 1998 continued into this
year. Fears of higher interest rates, renewed inflation and a
1
<PAGE> 2
potential downturn in the market are keeping investors focused on every piece of
news regarding their investments which in turn leads to quick reactions every
time either good or bad investment news is reported.
It is equally clear that while investors are still enamored of the domestic
stock market, there seems to be a renewed interest in companies outside the
large-cap growth sector. Whether this signals a shift in market leadership is
too soon to tell, but it does bode well for the overall health of the domestic
stock market.
In Closing
Information on your investments is contained in the following pages. Please
contact your registered representative for additional information on the
investment opportunities available in 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
- --------------------------------------------------------------------------------
Directors & 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
Joseph P. Brom, Vice President
Michael A. Boedeker, Vice President
Stephen T. Williams, Vice President
Dennis R. Taney, Treasurer
Marcus L. Collins, 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. 8/99
2
<PAGE> 3
ONE FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE & RELATED (10.5%)
$647,000 American Honda Finance 5.030%
07/30/99............................ $ 644,378
622,000 Ford Motor Credit 4.980% 07/21/99.... 620,279
505,000 General Motors Acceptance Corp.
4.970% 08/24/99..................... 501,235
-----------
1,765,892
-----------
CHEMICALS (5.7%)
543,000 Dupont E.I. De Nemours Co. 4.880%
08/16/99............................ 539,614
415,000 Great Lakes Chemicals 4.830%
07/19/99............................ 413,998
-----------
953,612
-----------
COMPUTER & RELATED (3.7%)
624,000 IBM Credit Corp. 4.940% 08/11/99..... 620,489
-----------
CONSUMER PRODUCTS (15.6%)
648,000 American Home Products 4.780%
07/08/99............................ 647,398
549,000 Eastman Kodak 4.880% 08/09/99........ 546,098
420,000 Fortune Brands 4.780% 07/06/99....... 419,721
512,000 Procter & Gamble 4.920% 07/13/99..... 511,160
500,000 Stanley Works 4.900% 07/28/99........ 498,163
-----------
2,622,540
-----------
ELECTRICAL EQUIPMENT (6.5%)
532,000 Avnet Inc. 5.800% 07/01/99........... 532,000
553,000 Eaton Corp. 4.830% 07/16/99.......... 551,887
-----------
1,083,887
-----------
FINANCE (23.7%)
584,000 Allmerica Financial Corp. 5.000%
08/17/99............................ 580,188
444,000 American General Finance Co. 5.170%
08/27/99............................ 440,366
489,000 Associates Corp. 4.900% 07/15/99..... 488,068
727,000 CIT Capital 4.890% 07/22/99.......... 724,926
600,000 G.E. Capital 4.810% 08/02/99......... 597,435
544,000 Household Finance 4.910% 08/05/99.... 541,403
605,000 USAA Capital Corp. 4.780% 07/20/99... 603,474
-----------
3,975,860
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FOOD & RELATED (3.1%)
$522,000 Coca Cola Co. 4.800% 07/02/99........ $ 521,931
-----------
INDUSTRIAL (6.4%)
570,000 Fluor Corp. 4.790% 07/16/99.......... 569,393
503,000 Monsanto Co. 4.920% 07/26/99......... 501,281
-----------
1,070,674
-----------
INSURANCE SERVICES (2.3%)
388,000 Prudential Funding 5.040% 08/13/99... 385,664
-----------
MACHINERY & EQUIPMENT (3.6%)
604,000 John Deere Capital Corp. 4.800%
07/12/99............................ 603,114
-----------
OIL, ENERGY & NATURAL GAS (7.1%)
533,000 Consolidated Natural Gas 5.180%
08/30/99............................ 528,399
669,000 Questar Corp. 5.030% 08/03/99........ 665,915
-----------
1,194,314
-----------
UTILITIES (11.7%)
545,000 Cleco Corp. 4.820% 07/07/99.......... 544,562
597,000 Dayton Power & Light 5.140%
07/27/99............................ 594,784
815,000 PP&L Capital Funding 5.250%
07/14/99............................ 813,455
-----------
1,952,801
-----------
TOTAL HOLDINGS (99.9%)
(COST $16,750,778) (A).............. $16,750,778
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (0.1%).................. 14,863
-----------
TOTAL NET ASSETS (100.0%)............ $16,765,641
===========
</TABLE>
- ---------------
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at amortized
cost (note 1)........................... $16,750,778
Cash in bank.............................. 213
Receivable for fund shares sold........... 93,993
Other..................................... 2,897
-----------
Total assets............................ 16,847,881
-----------
Liabilities:
Payable for fund shares redeemed.......... 30,497
Payable for investment management services
(note 3)................................ 2,058
Accrued 12b-1 fees (note 6)............... 5,723
Other accrued expenses.................... 23,648
Dividends payable......................... 20,314
-----------
Total liabilities....................... 82,240
-----------
Net assets.................................. $16,765,641
===========
Net assets consist of:
Par value, $.001 per share................ $ 16,766
Paid-in capital in excess of par value.... 16,748,875
-----------
Net assets.................................. $16,765,641
===========
Shares outstanding.......................... 16,765,641
Net asset value per share................... $ 1.00
===========
Maximum offering price per share............ $ 1.00
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................. $ 878,465
-----------
Expenses:
Management fees (note 3).................. 50,298
12b-1 fees (note 6)....................... 25,149
Custodian fees (note 3)................... 5,299
Directors' fees (note 3).................. 2,862
Professional fees......................... 9,984
Transfer agent and accounting fees........ 59,539
Filing fees............................... 13,501
Printing, proxy and postage fees.......... 4,848
Other..................................... 1,264
-----------
Total expenses.......................... 172,744
Less expenses voluntarily reduced or
reimbursed (note 3)................... (25,149)
-----------
Net expenses............................ 147,595
-----------
Net investment income................... 730,870
-----------
Net increase in net assets from
operations............................ $ 730,870
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 730,870 $ 724,318
------------ ------------
Net increase in assets from operations................ 730,870 724,318
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (730,870) (724,318)
------------ ------------
From capital share transactions (note 4):
Received from shares sold................................. 21,575,304 21,996,755
Received from dividends reinvested........................ 485,752 455,744
Paid for shares redeemed.................................. (21,656,382) (20,456,024)
------------ ------------
Increase in net assets derived from capital share
transactions......................................... 404,674 1,996,475
------------ ------------
Increase in net assets............................. 404,674 1,996,475
------------ ------------
Net Assets:
Beginning of period....................................... 16,360,967 14,364,492
------------ ------------
End of period............................................. $ 16,765,641 $ 16,360,967
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<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..................................... 0.04 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income...................... (0.04) (0.05) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return................................................ 4.44% 4.87% 4.77% 5.18% 5.06%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 0.88% 0.88% 0.80% 0.57% 0.51%
Net investment income..................................... 4.36% 4.81% 4.71% 5.14% 4.99%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.03% 1.03% 1.04% 0.87% 0.81%
Net investment income..................................... 4.21% 4.66% 4.47% 4.84% 4.69%
Net assets at end of period (millions)...................... $ 16.8 $ 16.4 $ 14.4 $ 15.8 $ 14.1
</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.
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 0.97% (2.06)%
Three-year 4.81% 3.75%
Since inception
(11/1/94) 6.70% 6.00%
</TABLE>
The maximum sales charge is 3%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
ONE FUND TAX-FREE INCOME PORTFOLIO
The Tax-Free Fund has lagged its benchmark, the Lehman Tax Free Intermediate
Bond Index for the six months and twelve months ended June 30, 1999. For six
months we lagged -1.66% to -1.01% and for 12 months .97% to 2.83%. Our
comparisons have suffered previously from the fact that our portfolio has a
somewhat longer maturity profile than the index and increases in interest rate
levels over the past year have impacted our market value more negatively. We do
feel with the economy expected to slow somewhat in the second half of 1999,
interest rates may be more stable and our performance should improve versus the
index.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
TAX-FREE INCOME PORTFOLIO (WITH MAX.
SALES CHARGE)|(COMMENCED OPERATIONS LEHMAN BROS. MUNICIPAL BOND INDEX
NOVEMBER 1, 1994) -INTERMEDIATE
------------------------------------ ---------------------------------
<S> <C> <C>
9,700.00 10,000.00
'94 9,860.00 10,264.00
10,690.00 11,248.00
'95 11,480.00 11,834.00
11,400.00 11,810.00
'96 11,930.00 12,314.00
12,290.00 12,662.00
'97 12,950.00 13,398.00
13,003.00 13,758.00
'98 13,352.00 14,267.00
13,130.00 14,139.00
</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.
Neither the portfolio nor the index is open to direct investment.
TOP 10 HOLDINGS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Washington St Pub Pwr Sup Sys
Nuclear 4.54
2. Chicago Illinois Midway Airport 4.37
3. North Carolina Med Care Commn
Healthcare 4.15
4. New York St Med Care Facs Fin Agy
Rev 4.11
5. Metropolitan Atlanta Rapid Tran
Auth 4.10
6. Pennsylvania Intergvt Coop Auth
Spl Tax 4.07
7. Nevada State Gen Oblig 4.01
8. Richland Cnty South Carolina Poll
Ctl 3.91
9. Matagorda Cnty Texas Nav Dist No
1 3.91
10. Clark Cnty Nevada School District 3.89
</TABLE>
TOP 5 CATEGORIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Power Revenue 18.41
2. Hospital Revenue 18.29
3. Insured 16.06
4. Pollution Control & Industrial
Revenue 11.27
5. General Obligation 11.18
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 7
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- -------------------------------------------------------------
<C> <S> <C>
AIRPORT REVENUE (7.8%)
$300,000 Chicago Illinois Midway Airport 5.500%
01/01/29............................. $ 298,914
250,000 Chicago Illinois O'Hare Intl Airport
5.000% 01/01/13...................... 240,153
----------
539,067
----------
CONVENTION COMPLEX & HOSPITALITY FACILITIES (3.0%)
200,000 Metropolitan Pier & Exp ILL Hosp Facs
6.250% 07/01/17...................... 209,454
----------
GENERAL OBLIGATION BONDS (11.2%)
100,000 Clairborne County Mississippi 7.300%
05/01/25............................. 104,368
150,000 Commonwealth of Puerto Rico 5.500%
07/01/17............................. 152,180
250,000 Nevada State 6.600% 12/01/13.......... 273,860
250,000 State of Washington 5.000% 05/01/17... 239,590
----------
769,998
----------
HOSPITAL REVENUE (18.2%)
250,000 Hawaii Department of Budget 6.000%
07/01/20............................. 258,872
250,000 Maricopa Cnty Arizona Indl Dev 5.250%
11/15/37............................. 241,390
250,000 Massachusetts St Health & Edl Facs
6.200% 10/01/16...................... 264,647
300,000 North Carolina Medical Care Comm
Healthcare Facs 5.250% 05/01/26...... 283,302
200,000 Wisconsin St Health & Edl Facs 6.125%
11/15/15............................. 211,652
----------
1,259,863
----------
HOUSING REVENUE (2.3%)
150,000 Alaska St Housing Fin Corp 5.875%
12/01/24............................. 155,687
----------
INSURED BONDS (16.1%)
250,000 Matagorde Cnty Texas Nav Dist #1
6.700% 03/01/27 (AMBAC).............. 266,965
250,000 Metropolitan Atlanta Rapid Trans
6.800% 07/01/14 (MBIA)............... 280,163
250,000 New York State Med Care Facs 6.750%
08/15/14 (AMBAC)..................... 281,090
250,000 Pennsylvania Intergvt Coop 6.750%
06/15/21 (FGIC)...................... 278,347
----------
1,106,565
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT MUNICIPAL BONDS VALUE
- -------------------------------------------------------------
<C> <S> <C>
POLLUTION CONTROL & INDUSTRIAL REVENUE (11.3%)
$250,000 Lawrenceburg, Indiana 5.900%
11/01/19............................. $ 251,063
250,000 Richland County, S Carolina 6.550%
11/01/20............................. 266,987
250,000 West Feliciana, Louisiana 8.000%
12/01/24............................. 258,315
----------
776,365
----------
POWER REVENUE (18.4%)
250,000 Jacksonville Florida Electric 5.500%
10/01/14............................. 252,760
250,000 N Carolina Eastern Power System 6.000%
01/01/22............................. 253,248
250,000 Salt River Arizona Project Power
5.000% 01/01/13...................... 246,502
200,000 Southern California Public Power
6.000% 07/01/18...................... 205,274
300,000 Washington St Pub Pwr Sys Nuclear
5.700% 07/01/12...................... 310,173
----------
1,267,957
----------
SCHOOL REVENUE (3.9%)
250,000 Clark Cnty Nevada School District
7.000% 06/01/09...................... 265,972
----------
TRANSPORTATION REVENUE (3.2%)
250,000 Central Pudget Sound RTA Washington
4.750% 02/01/28...................... 221,650
----------
WATER REVENUE (3.7%)
250,000 Metropolitan Water District of S.
California 5.500% 07/01/13........... 253,760
----------
TOTAL MUNICIPAL BONDS (99.1%) (COST
$6,267,256).......................... $6,826,338
----------
TOTAL HOLDINGS (99.1%)
(COST $6,267,256) (A)................ $6,826,338
----------
CASH & RECEIVABLES,
NET OF LIABILITIES (0.9%)............ 61,845
----------
TOTAL NET ASSETS (100.0%)............. $6,888,183
==========
</TABLE>
- ---------------
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 8
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,267,256)............... $6,826,338
Dividends & accrued interest receivable.... 111,035
Deferred organizational expenses (note
1)....................................... 176
Other...................................... 1,654
----------
Total assets............................. 6,939,203
----------
Liabilities:
Payable for investment management services
(note 3)................................. 2,820
Accrued 12b-1 fees (note 6)................ 4,253
Other accrued expenses..................... 19,510
Dividends payable.......................... 24,437
----------
Total liabilities........................ 51,020
----------
Net assets at market value................... $6,888,183
==========
Net assets consist of:
Par value, $.001 per share................. $ 632
Paid-in capital in excess of par value..... 6,439,701
Accumulated undistributed net realized loss
on investments........................... (111,345)
Net unrealized appreciation on
investments.............................. 559,082
Undistributed net investment income........ 113
----------
Net assets at market value................... $6,888,183
==========
Shares outstanding........................... 632,397
Net asset value per share.................... $ 10.89
==========
Maximum offering price per share
($10.89/97%)............................... $ 11.23
==========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 408,845
----------
Expenses:
Management fees (note 3)................... 43,382
12b-1 fees (note 6)........................ 18,120
Custodian fees (note 3).................... 4,906
Directors' fees (note 3)................... 1,275
Professional fees.......................... 4,437
Transfer agent & accounting fees........... 33,918
Filing fees................................ 8,153
Printing, proxy and postage fees........... 2,211
Organizational expense (note 1)............ 573
Other...................................... 185
----------
Total expenses........................... 117,160
Less expenses voluntarily reduced or
reimbursed (note 3).................... (10,766)
----------
Net expenses............................. 106,394
----------
Net investment income.................... 302,451
----------
Unrealized loss on investments:
Net decrease in unrealized appreciation on
investments.............................. (222,407)
----------
Net loss on investments................ (222,407)
----------
Net increase in net assets from
operations.......................... $ 80,044
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 9
ONE FUND, INC.
TAX-FREE INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 302,451 $ 305,219
Realized loss on investments.............................. 0 (100,005)
Unrealized gain (loss) on investments..................... (222,407) 186,945
---------- ----------
Net increase in assets from operations................ 80,044 392,159
---------- ----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (302,451) (305,219)
---------- ----------
From capital share transactions (note 4):
Received from shares sold................................. 303,312 457,036
Received from dividends reinvested........................ 36,968 32,007
Paid for shares redeemed.................................. (399,472) (232,821)
---------- ----------
Increase (decrease) in net assets derived from capital
share transactions................................... (59,192) 256,222
---------- ----------
Increase (decrease) in net assets.................. (281,599) 343,162
---------- ----------
Net Assets:
Beginning of period....................................... 7,169,782 6,826,620
---------- ----------
End of period............................................. $6,888,183 $7,169,782
========== ==========
Includes undistributed net investment income of........... $ 113 $ 113
========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30, 11-1-94
--------------------------------------- TO
1999 1998 1997 1996 6-30-95
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $11.24 $11.09 $10.79 $10.66 $10.00
Income from investment operations:
Net investment income..................................... 0.47 0.49 0.53 0.56 0.35
Net realized & unrealized gain (loss) on investments...... (0.35) 0.15 0.30 0.13 0.66
------ ------ ------ ------ ------
Total income from investment operations................. 0.12 0.64 0.83 0.69 1.01
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.47) (0.49) (0.53) (0.56) (0.35)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $10.89 $11.24 $11.09 $10.79 $10.66
====== ====== ====== ====== ======
Total return................................................ 0.97% 5.77% 7.82% 6.59% 10.26%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.47% 1.45% 1.24% 0.94% 0.91%(a)
Net investment income..................................... 4.18% 4.30% 4.81% 5.20% 5.04%(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.62% 1.60% 1.45% 1.24% 1.21%(a)
Net investment income..................................... 4.03% 4.15% 4.60% 4.90% 4.74%(a)
Portfolio turnover rate..................................... 0% 4% 6% 8% 0%
Net assets at end of period (millions)...................... $ 6.9 $ 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.
9
<PAGE> 10
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 2.65% (0.43)%
Three-year 6.46% 5.38%
Five-year 7.08% 6.43%
Since inception
(8/18/92) 5.92% 5.45%
</TABLE>
The maximum sales charge is 3%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The Income Portfolio was about even with the Lehman Government/Corporate
Intermediate Bond Index for the first six months of 1999 losing -.54% versus
- -.58% for the Index. For the year ended 6-30-99, the fund trailed the Index
2.65% to 4.19%. Corporate bond performance especially in the Baa category was
poor relative to U.S. Treasury Securities in the last half of 1998. So far this
year corporates in that category have done better than U.S. Treasury Securities.
The economy is expected to slow somewhat in the second half of 1999 and interest
rates will likely be more stable than the first half of this year when long U.S.
Treasury Bond yields increased by about 1%.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
INCOME PORTFOLIO (WITH MAX. SALES
CHARGE)|(COMMENCED OPERATIONS LEHMAN BROS. GOVT./CORPORATE BOND
AUGUST 18, 1992) INDEX - INTERMEDIATE
--------------------------------- ---------------------------------
<S> <C> <C>
9,700.00 10,000.00
'92 9,757.00 10,100.00
10,827.00 10,721.00
'93 11,051.00 10,981.00
10,409.00 10,691.00
'94 10,449.00 10,767.00
11,621.00 11,799.00
'95 12,202.00 12,414.00
12,150.00 12,388.00
'96 12,771.00 12,917.00
13,158.00 13,282.00
'97 13,810.00 13,933.00
14,282.00 14,411.00
'98 14,739.00 15,101.00
14,659.00 15,014.00
</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.
Neither the portfolio nor the index is open to direct investment.
TOP 10 BONDS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. U.S. Treasury Note 14.51
2. Texas Utilities Electric Co. 4.82
3. Watson Pharmaceuticals, Inc 4.54
4. Mirage Resorts Inc. 4.42
5. ITT Destinations Inc. 4.30
6. Mississippi Chemical Corp. 4.27
7. El Paso Electric Co. 4.24
8. Lyondell Chemicals, Inc. Series
144A 4.08
9. IBM Corp. 4.07
10. Tenneco Inc. 4.07
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Utilities 20.40
2. U.S. Treasury Notes 14.42
3. Hotel/Lodging 11.72
4. Oil, Energy, and Natural Gas 8.70
5. Chemicals 8.30
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 11
ONE FUND, INC.
INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
GOVERNMENT (14.4%)
$900,000 U.S. Treasury Note 6.375% 08/15/02.... $ 917,438
----------
CHEMICALS (8.3%)
250,000 Lyondell Chemicals Inc. (144A) 9.625%
05/01/07............................. 258,125
300,000 Mississippi Chemical Corp. 7.250%
11/15/07............................. 270,015
----------
528,140
----------
COMMUNICATIONS (1.7%)
100,000 Comcast Cable Communications 8.375%
05/01/07............................. 106,918
----------
COMPUTER & RELATED (4.1%)
250,000 IBM Corp. 7.250% 11/01/02............. 257,723
----------
DRUGS (4.5%)
300,000 Watson Pharmaceuticals Inc. 7.125%
05/15/08............................. 287,618
----------
FORESTRY & PAPER PRODUCTS (4.0%)
250,000 ITT Rayonier Inc. 7.500% 10/15/02..... 256,812
----------
HOTEL/LODGING (11.7%)
200,000 Hilton Hotels Corp. 7.200% 12/15/09... 191,733
300,000 ITT Destinations Inc. 6.750%
11/15/05............................. 272,209
300,000 Mirage Resorts Inc. 6.750% 02/01/08... 279,878
----------
743,820
----------
MEDICAL & RELATED (4.0%)
250,000 Bergen Brunswig Corp. 7.375%
01/15/03............................. 251,369
----------
OIL, ENERGY & NATURAL GAS (8.7%)
200,000 PDV America, Inc. 7.875% 08/01/03..... 195,745
100,000 Seagull Energy 7.875% 08/01/03........ 100,410
250,000 Tenneco Inc. 8.075% 10/01/02.......... 257,629
----------
553,784
----------
REAL ESTATE (3.1%)
200,000 Avalon Properties Inc. 7.375%
09/15/02............................. 200,575
----------
TEXTILES & RELATED (3.9%)
250,000 Fruit of the Loom Corp. 7.875%
10/15/99............................. $ 250,086
----------
TRANSPORTATION & EQUIPMENT (6.9%)
200,000 ABC Rail Product Corp. 8.750%
12/01/04............................. 188,000
250,000 Illinois Central Gulf Railroad 6.750%
05/15/03............................. 251,453
----------
439,453
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
UTILITIES (14.4%)
$250,000 El Paso Electric Co. 8.900%
02/01/06............................. $ 268,301
200,000 Niagara Mohawk Power Corp. 7.750%
10/01/08............................. 206,154
137,426 Puget Power 6.450% 04/11/05........... 136,685
300,000 Texas Utilities Electric 7.480%
01/01/17............................. 304,992
----------
916,132
----------
TOTAL LONG-TERM BONDS & NOTES (89.7%)
(COST $5,716,850).................... $5,709,868
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
UTILITIES (6.0%)
8,000 GTE Delaware 8.750% Series B....... $ 203,000
7,000 Connecticut Light, Power & Capital
9.300% Series A................... 179,375
-----------
382,375
-----------
TOTAL PREFERRED STOCK (6.0%)
(COST $375,000)................... $ 382,375
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.6%)
$230,000 Household Finance 5.450% 07/01/99..... $ 230,000
----------
TOTAL SHORT-TERM NOTES (3.6%)
(COST $230,000)...................... $ 230,000
----------
TOTAL HOLDINGS (99.3%)
(COST $6,321,850) (A)................ $6,322,243
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(0.7%)............................... 42,191
----------
TOTAL NET ASSETS (100.0%)............. $6,364,434
==========
</TABLE>
- ---------------
(a) Also represents cost for Federal income tax purposes.
(144A) 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 buyers. At the period end, the value
of these securities amounted to $258,125 or 4.1% of net assets.
The accompanying notes are an integral part of these financial statements.
11
<PAGE> 12
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,321,850)............... $6,322,243
Cash in bank............................... 756
Dividends & accrued interest receivable.... 113,375
Other...................................... 1,627
----------
Total assets............................. 6,438,001
----------
Liabilities:
Payable for shares redeemed................ 21,601
Payable for investment management services
(note 3)................................. 2,019
Accrued 12b-1 fees (note 6)................ 3,418
Other accrued expenses..................... 18,860
Dividends payable.......................... 27,669
----------
Total liabilities........................ 73,567
----------
Net assets at market value................... $6,364,434
==========
Net assets consist of:
Par value, $.001 per share................. $ 657
Paid-in capital in excess of par value..... 6,399,072
Accumulated undistributed net realized loss
on investments........................... (35,688)
Net unrealized appreciation on
investments.............................. 393
----------
Net assets at market value................... $6,364,434
==========
Shares outstanding........................... 657,044
Net asset value per share.................... $ 9.69
==========
Maximum offering price per share
($9.69/97%)................................ $ 9.99
==========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 470,680
---------
Expenses:
Management fees (note 3).................... 33,132
12b-1 fees (note 6)......................... 16,542
Custodian fees (note 3)..................... 5,023
Directors' fees (note 3).................... 1,275
Professional fees........................... 4,437
Transfer agent & accounting fees............ 34,276
Filing fees................................. 5,999
Printing, proxy and postage fees............ 2,081
Other....................................... 194
---------
Total expenses............................ 102,959
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (9,973)
---------
Net expenses.............................. 92,986
---------
Net investment income..................... 377,694
---------
Realized and unrealized gain (loss) on
investments:
Net realized gain from investments............ 19,787
Net decrease in unrealized appreciation on
investments............................... (223,951)
---------
Net loss on investments................. (204,164)
---------
Net increase in net assets from
operations........................... $ 173,530
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
12
<PAGE> 13
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 377,694 $ 400,680
Realized gain on investments.............................. 19,787 48,077
Unrealized gain (loss) on investments..................... (223,951) 117,144
---------- ----------
Net increase in assets from operations................ 173,530 565,901
---------- ----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (377,694) (400,680)
---------- ----------
From capital share transactions (note 4):
Received from shares sold................................. 327,145 759,219
Received from dividends reinvested........................ 66,015 79,395
Paid for shares redeemed.................................. (748,947) (702,729)
---------- ----------
Increase (decrease) in net assets derived from capital
share transactions................................... (355,787) 135,885
---------- ----------
Increase (decrease) in net assets.................. (559,951) 301,106
---------- ----------
Net Assets:
Beginning of period....................................... 6,924,385 6,623,279
---------- ----------
End of period............................................. $6,364,434 $6,924,385
========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $ 9.99 $ 9.75 $ 9.59 $ 9.78 $ 9.39
Income (loss) from investment operations:
Net investment income..................................... 0.57 0.59 0.61 0.63 0.65
Net realized & unrealized gain (loss) on investments...... (0.30) 0.24 0.16 (0.19) 0.39
------ ------ ------ ------ ------
Total income from investment operations................. 0.27 0.83 0.77 0.44 1.04
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.57) (0.59) (0.61) (0.63) (0.65)
Distributions from net realized capital gains............. 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions..................................... (0.57) (0.59) (0.61) (0.63) (0.65)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 9.69 $ 9.99 $ 9.75 $ 9.59 $ 9.78
====== ====== ====== ====== ======
Total return................................................ 2.65% 8.56% 8.26% 4.61% 11.58%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.40% 1.39% 1.21% 0.97% 0.85%
Net investment income..................................... 5.70% 5.91% 6.29% 6.50% 6.80%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.55% 1.54% 1.51% 1.22% 1.10%
Net investment income..................................... 5.55% 5.76% 5.99% 6.25% 6.55%
Portfolio turnover rate..................................... 4% 40% 10% 9% 4%
Net assets at end of period (millions)...................... $ 6.4 $ 6.9 $ 6.6 $ 7.0 $ 7.1
</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.
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 14
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 4.73% (0.50)%
Three-year 13.72% 11.79%
Five-year 14.98% 13.81%
Since inception
(8/18/92) 12.75% 11.91%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The volatility that we expected in the stock and bond markets over the last
twelve months had a profound effect on the fund's performance. During this
period when the S&P 500 Index was up approximately 23%, your fund was up 4.7%.
The portfolio exhibited greater volatility than the overall market due to its
larger weighting in smaller companies. While these companies performed well
fundamentally, the narrowing of the market's breadth over the past year didn't
reward them. Smaller companies didn't offer any support during last year's
market correction, even though their valuations would have suggested otherwise.
Despite having strong performance by the technology and other sectors, the
portfolio suffered relative to the market.
As a result of these occurrences, management of the fund has taken steps to
rectify the situation. The fund is now under new management. We are confident
that the management of the fund will better reflect the fund's objective and its
performance will more closely align with its peer group. Under this new
direction, the fund has a better focus on growth names and larger companies with
excellent prospectus.
The fund will focus on sectors believed to offer the best potential for capital
appreciation. Those sectors currently include: communication services, consumer
staples, financials and technology. As always, the portfolio will only select
companies which have superior earnings potential with strong management terms
combined with a positive outlook.
Due to the recent strength of the stock market, valuation has become an even
greater concern with many securities. Your fund has participated greatly with
the recent market highs, tempered slightly by higher interest rates. We look for
sustained strong performance but we must contend with many issues that we will
continue to monitor over the next year. We are concerned with sustained earnings
growth, year-2000 issues and inflation fears. Regardless of these concerns, your
fund will stay fully invested, as we are not market-timers.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
INCOME & GROWTH PORTFOLIO (WITH STANDARD & POORS 500 INDEX
MAX. SALES CHARGE)|(COMMENCED --------------------------
OPERATIONS AUGUST 18, 1992)
-------------------------------
<S> <C> <C>
9,500 10,000
'92 9,488 10,627
10,687 11,139
'93 11,146 11,688
10,766 11,289
'94 11,067 11,842
12,856 14,228
'95 13,796 16,274
14,726 17,934
'96 15,976 20,030
18,016 24,137
'97 19,636 26,690
20,683 31,417
'98 20,360 34,317
'99 21,661 38,565
</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, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Texas Instruments 5.40
2. Schlumberger Ltd 4.20
3. Microsoft Corp 4.03
4. Allied Signal Inc 3.75
5. Hewlett-Packard Co 3.74
6. Intel Corp 3.54
7. CL&P CAPITAL L.P. 2.83
8. General Electric Co. 2.61
9. Williams Cos Inc 2.53
10. United Healthcare 2.33
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Computer and Related 14.50
2. Oil, Energy, and Natural Gas 14.04
3. Electronics/Semiconductors 9.03
4. Electrical Equipment 7.16
5. Medical & Related 6.78
</TABLE>
The accompanying notes are an integral part of these financial statements.
14
<PAGE> 15
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AEROSPACE (3.8%)
8,000 Allied Signal Inc. .................. $ 504,000
-----------
AUTOMOTIVE & RELATED (1.7%)
2,557 *DaimlerChrysler AG (Foreign)........ 227,253
-----------
BANKING (3.5%)
3,000 Bank One Corp. ...................... 178,687
2,600 Bank of America Corp. ............... 190,612
3,500 Charter One Financial Inc. .......... 97,344
-----------
466,643
-----------
BUSINESS SERVICES (1.9%)
3,000 Manpower Inc. ....................... 67,875
8,000 Reynolds & Reynolds CL A............. 186,500
-----------
254,375
-----------
BROADCAST RADIO & TV (1.3%)
6,000 Infinity Broadcasting Corp. CL A..... 178,500
-----------
CHEMICALS (2.1%)
5,000 Minerals Technologies Inc. .......... 279,063
-----------
COMMUNICATIONS (4.1%)
2,000 *ADC Telecom. Inc. .................. 91,125
1,800 *Associated Group Inc. CL B.......... 117,338
1,900 Bell Atlantic Corp. ................. 124,212
2,500 *MCI Worldcom Inc. .................. 215,625
-----------
548,300
-----------
COMPUTER & RELATED (11.7%)
3,000 Computer Associates Intl. Inc. ...... 165,000
3,000 *EMC Corp. Mass...................... 165,000
5,000 Hewlett Packard Co. ................. 502,500
6,000 *Microsoft Corp. .................... 541,125
1,400 *NCR Corp. .......................... 68,338
2,988 *Unisys Corp. ....................... 116,345
-----------
1,558,308
-----------
CONSUMER PRODUCTS (0.9%)
2,500 Newell Rubbermaid Inc. .............. 116,250
-----------
DRUGS (2.2%)
1,300 Eli Lilly & Co. ..................... 93,113
5,000 Mylan Laboratories Inc. ............. 132,500
2,000 *Watson Pharmaceuticals Inc. ........ 70,125
-----------
295,738
-----------
ELECTRICAL EQUIPMENT (7.2%)
4,000 American Power Conversion............ 80,500
3,100 General Electric Co. ................ 350,300
3,000 Tyco International Ltd............... 284,250
4,000 Xerox Corp. ......................... 236,250
-----------
951,300
-----------
ELECTRONICS/SEMICONDUCTORS (9.0%)
8,000 Intel Corp. ......................... 476,000
5,000 Texas Instruments Inc. .............. 725,000
-----------
1,201,000
-----------
FOOD & RELATED (0.9%)
10,000 Food Lion Inc. CL B.................. 115,625
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCE (3.9%)
3,800 Associates First Capital CL A........ $ 168,388
1,500 Equitable Companies Inc. ............ 100,500
8,700 Firstar Corp. ....................... 243,600
-----------
512,488
-----------
HOUSING, FURNITURE & RELATED (0.6%)
7,500 Clayton Homes Inc. .................. 85,781
-----------
INSURANCE SERVICES (1.8%)
2,000 American Intl. Group................. 234,125
-----------
MEDICAL & RELATED (5.5%)
2,500 Baxter International Inc. ........... 151,563
2,300 Cardinal Health Inc. ................ 147,488
5,000 *HCR Manor Care...................... 120,937
5,000 United Healthcare Corp. ............. 313,125
-----------
733,113
-----------
OIL, ENERGY & NATURAL GAS (6.8%)
8,850 Schlumberger Ltd..................... 563,634
8,000 Williams Cos. Inc. .................. 340,500
-----------
904,134
-----------
RETAIL (1.2%)
2,500 Home Depot Inc. ..................... 161,094
-----------
TRANSPORTATION (0.9%)
3,000 CNF Transportation Inc. ............. 115,125
-----------
TOTAL COMMON STOCK (71.0%) (COST
$5,498,004)......................... $ 9,442,215
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES REAL ESTATE INVESTMENT TRUSTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
10,200 Commercial Net Lease Realty Inc. .... $ 131,325
6,000 JDN Realty Corp. .................... 134,250
4,500 National Health Investors Inc. ...... 102,656
-----------
TOTAL REAL ESTATE INV. TRUST (2.8%)
(COST $377,865)..................... $ 368,231
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
BANKING (FOREIGN) (0.9%)
4,000 National Australia Bank Ltd.
Conv. .............................. $ 121,500
-----------
BUSINESS SERVICES (0.7%)
4,000 Flagstar Capital 8.50%............... 98,750
-----------
COMPUTER & RELATED (0.9%)
1,710 Unisys Series A $3.75 Conv. ......... 111,364
-----------
OIL, ENERGY & NATURAL GAS (0.6%)
3,000 Consumers Energy II 8.2% Conv. ...... 75,375
-----------
RETAIL (1.1%)
2,500 Kmart Financing 7.75% 06/15/16
Conv. .............................. $ 146,250
-----------
TOTAL PREFERRED STOCK (4.2%) (COST
$513,685)........................... $ 553,239
-----------
</TABLE>
(continued)
15
<PAGE> 16
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
CHEMICALS (1.7%)
$250,000 Geon Corp. 7.500% 12/15/15........... $ 219,329
-----------
COMMUNICATIONS (0.8%)
100,000 Comcast Cable Communications 8.375%
05/01/07 (144A)..................... 106,917
-----------
COMPUTER & RELATED (1.9%)
250,000 IBM Corp. 7.250% 11/01/02............ 257,723
-----------
FINANCIAL SERVICES (0.4%)
50,000 ESI Tractebel Acq. Corp. 7.990%
12/30/11 (144A)..................... 47,699
-----------
FOOD & RELATED (0.6%)
75,000 Marsh Supermarkets Inc. Ser. B 8.875%
08/01/07............................ 74,625
-----------
FORESTRY & PAPER PRODUCTS (1.9%)
250,000 ITT Rayonier Inc. NT 7.500%
10/15/02............................ 256,812
-----------
HOUSING, FURNITURE & RELATED (0.8%)
100,000 Owens Corning 7.500% 05/01/05........ 99,086
-----------
OIL, ENERGY & NATURAL GAS (6.7%)
300,000 PDV America Inc. 7.875% 08/01/03..... 293,618
100,000 R&B Falcon Corp. Series B 6.750%
04/15/05............................ 84,500
250,000 Tenneco Inc. 8.075% 10/01/02......... 257,629
250,000 Union Texas Petroleum Hlgs. 8.250%
11/15/99............................ 251,918
-----------
887,665
-----------
RESTAURANTS (0.8%)
$100,000 Tricon Global Restaurants 7.450%
05/15/05............................ $ 99,645
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
UTILITIES (0.8%)
$100,000 Niagara Mohawk Power Corp. Ser. G
7.750% 10/01/08..................... $ 103,077
-----------
TOTAL LONG-TERM BONDS & NOTES (16.2%)
(COST $2,172,334)................... $ 2,152,578
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- -------------------------------------------------------------
<C> <S> <C>
MEDICAL & RELATED (1.2%)
$100,000 Centocor Inc. 4.750% 02/15/05........ $ 168,187
-----------
TOTAL CONVERTIBLE DEBENTURES (1.2%)
(COST $149,899)..................... $ 168,187
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.2%)
$424,000 Household Finance 5.450% 07/01/99.... $ 424,000
-----------
RETAIL (2.3%)
307,000 Sears Roebuck Acceptance Corp. 5.000%
07/01/99............................ 307,000
-----------
TOTAL SHORT-TERM NOTES (5.5%) (COST
$731,000)........................... $ 731,000
-----------
TOTAL HOLDINGS (100.9%) (COST
$9,442,787) (A)..................... $13,415,450
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (-0.9%)................. (119,755)
-----------
TOTAL NET ASSETS (100.0%)............ $13,295,695
===========
</TABLE>
- ---------------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
(144A) 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 buyers. At the period end, the value
of these securities amounted to $154,616 or 1.2% of net assets.
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 17
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $9,442,788).............. $13,415,450
Cash in bank.............................. 177
Receivable for securities sold............ 217,318
Receivable for fund shares sold........... 4,143
Dividends & accrued interest receivable... 49,463
Other..................................... 1,870
-----------
Total assets............................ 13,688,421
-----------
Liabilities:
Payable for securities purchased.......... 253,058
Payable for fund shares redeemed.......... 75,609
Payable for investment management services
(note 3)................................ 4,144
Accrued 12b-1 fees (note 6)............... 7,864
Other accrued expenses.................... 29,066
Dividends payable......................... 22,985
-----------
Total liabilities....................... 392,726
-----------
Net assets at market value.................. $13,295,695
===========
Net assets consist of:
Par value, $.001 per share................ $ 857
Paid-in capital in excess of par value.... 8,933,953
Accumulated undistributed net realized
gain on investments..................... 387,998
Net unrealized appreciation on
investments............................. 3,972,662
Undistributed net investment income....... 225
-----------
Net assets at market value.................. $13,295,695
===========
Shares outstanding.......................... 856,998
Net asset value per share................... $ 15.51
===========
Maximum offering price per share
($15.51/95%).............................. $ 16.33
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest..................................... $247,711
Dividends.................................... 254,654
--------
Total investment income.................... 502,365
--------
Expenses:
Management fees (note 3)..................... 69,239
12b-1 fees (note 6).......................... 34,610
Custodian fees (note 3)...................... 5,219
Directors' fees (note 3)..................... 2,868
Professional fees............................ 9,984
Transfer agent & accounting fees............. 59,692
Filing fees.................................. 13,499
Printing, proxy and postage fees............. 4,843
Other........................................ 417
--------
Total expenses............................. 200,371
Less expenses voluntarily reduced or
reimbursed (note 3)...................... (20,784)
--------
Net expenses............................... 179,587
--------
Net investment income...................... 322,778
--------
Realized & unrealized gain (loss) on
investments:
Net realized gain from investments........... 903,416
Net decrease in unrealized appreciation on
investments................................ (662,035)
--------
Net gain on investments.................. 241,381
--------
Net increase in net assets from
operations............................ $564,159
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE> 18
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 322,778 $ 387,925
Realized gain on investments.............................. 903,416 664,230
Unrealized gain (loss) on investments..................... (662,035) 887,079
----------- -----------
Net increase in assets from operations................ 564,159 1,939,234
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (323,003) (391,040)
Capital gains distributions............................... (622,486) (676,652)
----------- -----------
Total dividends and distributions..................... (945,489) (1,067,692)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 1,753,433 3,431,737
Received from dividends reinvested........................ 564,557 615,775
Paid for shares redeemed.................................. (4,695,463) (1,979,004)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... (2,377,473) 2,068,508
----------- -----------
Increase (decrease) in net assets.................. (2,758,803) 2,940,050
----------- -----------
Net Assets:
Beginning of period....................................... 16,054,498 13,114,448
----------- -----------
End of period............................................. $13,295,695 $16,054,498
=========== ===========
Includes undistributed net investment income of........... $ 225 $ 0
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ 15.85 14.89 12.78 11.57 10.65
Income from investment operations:
Net investment income..................................... 0.35 0.42 0.38 0.38 0.41
Net realized & unrealized gain on investments............. 0.33 1.73 2.39 1.27 1.54
------ ------ ------ ------ ------
Total income from investment operations................. 0.68 2.15 2.77 1.65 1.95
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.35) (0.42) (0.38) (0.37) (0.41)
Distributions from net realized capital gains............. (0.67) (0.77) (0.28) (0.07) (0.62)
------ ------ ------ ------ ------
Total distributions..................................... (1.02) (1.19) (0.66) (0.44) (1.03)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $15.51 $15.85 $14.89 $12.78 $11.57
====== ====== ====== ====== ======
Total return................................................ 4.73% 14.77% 22.34% 14.50% 19.41%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.30% 1.20% 1.12% 0.89% 0.81%
Net investment income..................................... 2.33% 2.65% 2.77% 3.10% 3.69%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.45% 1.35% 1.31% 1.14% 1.06%
Net investment income..................................... 2.18% 2.50% 2.58% 2.85% 3.44%
Portfolio turnover rate..................................... 49% 39% 14% 7% 25%
Net assets at end of period (millions)...................... $ 13.3 $ 16.1 $ 13.1 $ 10.8 $ 7.7
</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.
The accompanying notes are an integral part of these financial statements.
18
<PAGE> 19
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year (0.32)% (5.30)%
Three-year 10.53% 8.65%
Five-year 14.74% 13.57%
Since inception
(8/18/92) 13.73% 12.96%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The volatility that we expected in the stock market over the last twelve months
had a profound effect on the fund's performance. During this period when the S&P
500 Index was up approximately 23%, your fund was virtually flat. The portfolio
exhibited greater volatility than the overall market due to a larger weighting
in smaller companies. While these companies performed well fundamentally, the
narrowing of the market's breadth over the past year didn't reward them. Smaller
companies didn't offer any support during last year's market correction, even
though their valuations would have suggested otherwise. Despite having strong
performance by the technology and other sectors, the portfolio suffered relative
to the market.
As a result of these occurrences, management of the fund has taken steps to
rectify the situation. The fund is now under new management. We are confident
that the management of the fund will better reflect the fund's objective and its
performance will more closely align with its peer group. Under this new
direction, the fund has a better focus on growth names and larger companies with
excellent prospects.
The fund will focus on sectors believed to offer the best potential for capital
appreciation. Those sectors currently include: communication services, consumer
staples, financials and technology. As always, the portfolio will only select
companies which have superior earnings potential with strong management teams
combined with a positive outlook.
Due to the recent strength of the stock market, valuation has become an even
greater concern with many securities. Your fund has participated greatly with
the recent market highs and has outperformed its benchmark. We look for
sustained strong performance, but we must contend with many issues that we will
continue to monitor over the next year. We are concerned with sustained earnings
growth, year-2000 issues and inflation fears. Regardless of these concerns, your
fund will stay fully invested, as we are not market-timers.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
GROWTH PORTFOLIO (WITH MAX. SALES STANDARD & POOR'S 500 INDEX
CHARGE)|(COMMENCED OPERATIONS ---------------------------
AUGUST 18, 1992)
---------------------------------
<S> <C> <C>
9,500.00 10,000.00
'92 10,178.00 10,627.00
11,228.00 11,139.00
'93 11,917.00 11,688.00
11,548.00 11,289.00
'94 11,988.00 11,842.00
13,927.00 14,228.00
'95 15,367.00 16,274.00
17,018.00 17,934.00
'96 18,098.00 20,030.00
20,198.00 24,137.00
'97 21,127.00 26,690.00
23,052.00 31,417.00
'98 21,678.00 34,317.00
22,978.00 38,565.00
</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.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Cisco Systems Inc 6.51
2. Texas Instruments Inc 5.99
3. Microsoft Corp 4.55
4. Allied Signal Inc 4.05
5. Hewlett Packard Co 3.69
6. Intel Corp 3.28
7. Infinity 3.00
8. Computer Sciences 2.54
9. Analog Devices Inc 2.30
10. Computer Associates 2.27
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Computer and Related 16.12
2. Electronics/Semiconductors 9.25
3. Medical and Related 9.12
4. Computer/Applications Software 8.55
5. Electronic Equipment 7.75
</TABLE>
The prices of small company stocks are generally more volatile than the prices
of large company stocks.
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 20
ONE FUND, INC.
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AEROSPACE (4.0%)
7,000 Allied Signal Inc. ................ $ 441,000
-----------
AUTOMOTIVE & RELATED (1.9%)
2,370 DaimlerChrysler Corp. (Foreign).... 210,634
-----------
BANKING (5.1%)
1,500 Bank One Corp. .................... 89,344
2,000 Bank of America Corp. ............. 146,625
5,000 Charter One Financial Inc. ........ 139,062
6,420 Firstar Corp. ..................... 179,760
-----------
554,791
-----------
BROADCAST RADIO & TV (3.0%)
11,000 *Infinity Broadcasting Corp. ...... 327,250
-----------
BUSINESS SERVICES (2.9%)
3,500 Manpower Inc. ..................... 79,187
10,000 Reynolds and Reynolds CL A......... 233,125
-----------
312,312
-----------
CHEMICALS (1.8%)
3,500 Minerals Technologies, Inc. ....... 195,344
-----------
COMMUNICATIONS (3.8%)
2,000 *ADC Telecom. Inc. ................ 91,125
1,000 *Associated Group Inc. CL B........ 65,187
1,000 Bell Atlantic Corp. ............... 65,375
2,250 *MCI Worldcom Inc. ................ 194,063
-----------
415,750
-----------
COMPUTER & RELATED (16.1%)
11,000 *Cisco Systems Inc. ............... 709,500
4,000 *Computer Sciences Corp. .......... 276,750
3,000 *EMC Corp. Mass.................... 165,000
4,000 Hewlett Packard Co. ............... 402,000
5,000 *High Speed Access................. 128,125
1,600 *NCR Corp. ........................ 78,100
-----------
1,759,475
-----------
COMPUTER/APPLICATIONS SOFTWARE (8.6%)
4,500 Computer Associates Intl. ......... 247,500
5,500 *Microsoft Corp. .................. 496,031
10,000 *Mapinfo Corp. .................... 190,000
-----------
933,531
-----------
DRUGS (3.0%)
8,000 *Applied Analytical Industries..... 90,000
1,200 Lilly (Eli) & Co. ................. 85,950
3,000 Mylan Laboratories Inc. ........... 79,500
2,000 *Watson Pharmaceuticals Inc. ...... 70,125
-----------
325,575
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
ELECTRICAL EQUIPMENT (7.8%)
4,000 *American Power Conversion......... $ 80,500
5,000 *Analog Devices Inc. .............. 250,938
2,100 General Electric Co. .............. 237,300
1,500 *Solectron Corp. .................. 100,031
3,000 Xerox Corp. ....................... 177,187
-----------
845,956
-----------
ELECTRONICS/SEMICONDUCTORS (9.2%)
6,000 Intel Corp. ....................... 357,000
4,500 Texas Instruments Inc. ............ 652,500
-----------
1,009,500
-----------
FINANCIAL SERVICES (1.3%)
3,200 Associates First Capital - CL A.... 141,800
-----------
FOOD & RELATED (0.8%)
3,500 Food Lion Inc. CL A................ 41,563
3,500 Food Lion Inc. CL B................ 40,469
-----------
82,032
-----------
HOUSING, FURNITURE & RELATED (0.8%)
8,000 Clayton Homes Inc. ................ 91,500
-----------
INSURANCE SERVICES (2.2%)
1,500 American Intl Group................ 175,594
1,000 Equitable Companies Inc. .......... 67,000
-----------
242,594
-----------
MEDICAL & RELATED (9.1%)
3,500 Baxter International............... 212,187
12,500 *Capital Senior Living Corp. ...... 125,000
3,000 Cardinal Health Inc. .............. 192,375
2,000 *Centocor Inc. .................... 93,250
3,000 *HCR Manor Care.................... 72,562
7,000 *Kendle Intl. Inc. ................ 112,000
3,000 United Healthcare Corp. ........... 187,875
-----------
995,249
-----------
OIL, ENERGY & NATURAL GAS (5.6%)
7,000 *Louis Dreyfus Natural Gas
Corp. ............................ 150,938
2,950 Schlumberger Ltd. ................. 187,878
6,700 *Tesoro Petroleum Corp. ........... 106,781
4,000 Williams Cos. Inc. ................ 170,250
-----------
615,847
-----------
RETAIL (3.4%)
13,500 *Consolidated Products............. 243,000
2,000 Home Depot Inc. ................... 128,875
-----------
371,875
-----------
SECURITY SYSTEMS & SERVICES (2.5%)
2,250 Symbol Technologies Inc. .......... 82,969
2,000 Tyco International Ltd. ........... 189,500
-----------
272,469
-----------
</TABLE>
(continued)
20
<PAGE> 21
ONE FUND, INC.
GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
TEXTILES & RELATED (1.0%)
4,000 Warnaco Group CL A................. $ 107,000
-----------
TRANSPORTATION (2.4%)
4,500 *Atlas Air Inc. ................... 145,125
3,000 CNF Transportation Inc. ........... 115,125
-----------
260,250
-----------
TOTAL COMMON STOCK (96.3%) (COST
$6,280,554)....................... $10,511,734
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.4%)
$373,000 Household Finance 5.450% 07/01/99.... $ 373,000
-----------
TOTAL SHORT-TERM NOTES (3.4%) (COST
$373,000)........................... $ 373,000
-----------
TOTAL HOLDINGS (99.7%) (COST
$6,653,554) (A)..................... $10,884,734
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (0.3%).................. 29,019
-----------
TOTAL NET ASSETS (100.0%)............ $10,913,753
===========
</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.
21
<PAGE> 22
ONE FUND, INC
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,653,554).............. $10,884,734
Cash in bank.............................. 799
Receivable for securities sold............ 241,259
Receivable for fund shares sold........... 1,007
Dividends & accrued interest receivable... 4,797
Other..................................... 2,055
-----------
Total assets............................ 11,134,651
-----------
Liabilities:
Payable for securities purchased.......... 149,685
Payable for fund shares redeemed.......... 37,447
Payable for investment management services
(note 3)................................ 3,317
Accrued 12b-1 fees (note 6)............... 6,375
Other accrued expenses.................... 24,074
-----------
Total liabilities....................... 220,898
-----------
Net assets at market value.................. $10,913,753
===========
Net assets consist of:
Par value, $001 per share................. $ 637
Paid-in capital in excess of par value.... 6,589,371
Accumulated undistributed net realized
gain on investments..................... 92,565
Net unrealized appreciation on
investments............................. 4,231,180
-----------
Net assets at market value.................. $10,913,753
===========
Shares outstanding.......................... 636,923
Net asset value per share................... $ 17.14
===========
Maximum offering price per share
($17.14/95%).............................. $ 18.04
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 45,116
Dividends................................... 95,370
---------
Total investment income................... 140,486
---------
Expenses:
Management fees (note 3).................... 56,667
12b-1 fees (note 6)......................... 28,303
Custodian fees (note 3)..................... 5,141
Directors' fees (note 3).................... 2,390
Professional fees........................... 8,320
Transfer agent & accounting fees............ 55,250
Filing fees................................. 11,250
Printing, proxy and postage fees............ 4,041
Other....................................... 353
---------
Total expenses............................ 171,715
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (17,042)
---------
Net expenses.............................. 154,673
---------
Net investment loss....................... (14,187)
---------
Realized & unrealized gain (loss) on
investments:
Net realized gain from investments.......... 158,409
Net decrease in unrealized appreciation on
investments............................... (382,289)
---------
Net loss on investments................. (223,880)
---------
Net decrease in net assets from
operations........................... $(238,067)
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
22
<PAGE> 23
ONE FUND, INC
GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income (loss).............................. $ (14,187) $ 2,920
Realized gain on investments.............................. 158,409 1,329,264
Unrealized gain (loss) on investments..................... (382,289) 518,363
----------- -----------
Net increase (decrease) in assets from operations..... (238,067) 1,850,547
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. 0 (1,820)
Distributions in excess of net investment income.......... 0 (10,132)
Capital gains distributions............................... (955,237) (889,104)
----------- -----------
Total dividends and capital gains distributions....... (955,237) (901,056)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 1,390,243 1,982,622
Received from dividends reinvested........................ 607,828 608,764
Paid for shares redeemed.................................. (4,100,808) (2,605,972)
----------- -----------
Decrease in net assets derived from capital share
transactions........................................... (2,102,737) (14,586)
----------- -----------
Increase (decrease) in net assets.................. (3,296,041) 934,905
----------- -----------
Net Assets:
Beginning of period....................................... 14,209,794 13,274,889
----------- -----------
End of period............................................. $10,913,753 $14,209,794
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
--------------------------------------------------
1999 1998 1997 1996 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $18.68 $17.52 $15.47 $13.03 $11.67
Income (loss) from investment operations:
Net investment income (loss).............................. (0.02) 0.00 0.07 0.14 0.16
Net realized & unrealized gain (loss) on investments...... (0.12) 2.41 2.73 2.72 2.17
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... (0.14) 2.41 2.80 2.86 2.33
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... 0.00 0.00 (0.07) (0.14) (0.16)
Distributions in excess of net investment income.......... 0.00 (0.06) 0.00 0.00 0.00
Distributions from net realized capital gains............. (1.40) (1.19) (0.68) (0.28) (0.81)
------ ------ ------ ------ ------
Total distributions..................................... (1.40) (1.25) (0.75) (0.42) (0.97)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $17.14 $18.68 $17.52 $15.47 $13.03
====== ====== ====== ====== ======
Total return................................................ (0.32)% 14.13% 18.68% 22.22% 20.54%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.36% 1.24% 1.13% 0.90% 0.83%
Net investment income (loss).............................. (0.13)% 0.02% 0.43% 0.99% 1.35%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.51% 1.39% 1.32% 1.15% 1.08%
Net investment income (loss).............................. (0.28)% (0.13)% 0.24% 0.74% 1.10%
Portfolio turnover rate..................................... 53% 40% 27% 22% 24%
Net assets at end of period (millions)...................... $ 10.9 $ 14.2 $ 13.3 $ 11.8 $ 7.0
</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.
The accompanying notes are an integral part of these financial statements.
23
<PAGE> 24
SMALL CAP PORTFOLIO
ONE FUND, INC.
OBJECTIVE
To provide maximum capital growth by investing primarily in common stocks of
small and medium sized companies. Under normal conditions, at least 65% of this
portfolio's assets will be invested in common stocks of companies with market
capitalization of less than $1 billion.
PERFORMANCE AS OF JUNE 30, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year (15.54)% (19.76)%
Three-year 2.35% 0.61%
Since inception
(11/1/94) 8.28% 7.08%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The Small Cap portfolio return for the twelve months ending June 30, 1999 was
- -15.54%. Investors witnessed two bear market type return periods during the
fiscal year, July, 1998 to early October, 1998, (actually began May, 1998), and
again starting late January, 1999 through early March, 1999. The Small Cap
portfolio experienced large corrections during this period. The common stocks of
many small capitalization companies lost more than 30% of their market values
during these periods. Many of these companies reported good earnings growth and
were very attractively valued. The market basically ignored the small cap sector
until the second quarter of 1999. Small cap stocks return for the quarter was
approximately 16%. The Small Cap Portfolio return for the quarter was 16.1%.
We expect the overall stock market to continue to perform in a volatile manner.
Concerns over inflation, rising interest rates and lingering Y2K issues outstrip
the continuing positive earnings reported by several companies, and create
corrective periods in the markets. If there is one uptick in inflation and
profitability continues for the strong pace of the last few years, we expect the
small cap sector to at least keep close to the mid and large capitalization
sectors of the market. We will attempt to invest in strongly positioned
companies with the potential to grow earnings in a consistent manner.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO (WITH MAX. SALES RUSSELL 2000 INDEX
CHARGE) (COMMENCED OPERATIONS ------------------
NOVEMBER 1, 1994)
------------------------------------
<S> <C> <C>
9,500.00 10,000.00
'94 9,540.00 9,853.00
10,340.00 11,274.00
'95 11,601.00 12,656.00
12,841.00 13,967.00
'96 13,572.00 14,744.00
14,741.00 16,248.00
'97 15,872.00 18,027.00
16,301.00 18,977.00
'98 13,755.00 17,624.00
13,768.00 19,259.00
</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, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Consolidated Product 4.70
2. Louis Dreyfus 4.28
3. Atlas Air Inc. 3.84
4. Tesoro Petroleum 3.79
5. Map Info Corp. 3.77
6. High Speed Access 3.39
7. Bando McGlocklin 3.21
8. Capital Senior 3.04
9. Guest Supply Inc. 2.88
10. Amcast Industrial 2.80
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Oil, Energy, and Natural Gas 12.63
2. Medical 10.51
3. Computer and Related 9.15
4. Business Services 8.97
5. Transportation and Equipment 5.96
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 25
ONE FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
BUSINESS SERVICES (9.0%)
11,000 *Lo Jack Corp. ...................... $ 92,125
2,500 *Mapics Inc. ........................ 26,406
2,000 *Maximus Inc. ....................... 57,500
4,000 Reynolds & Reynolds CL A............. 93,250
5,000 *Source Information Management....... 67,500
-----------
336,781
-----------
CHEMICALS (1.8%)
2,000 OM Group Inc. ....................... 69,000
-----------
COMMUNICATIONS (2.8%)
3,687 *Mastec Inc. ........................ 104,158
-----------
COMPUTER & RELATED (9.2%)
7,000 *Electronic Processing Inc. ......... 72,625
5,000 *High Speed Access Corp. ............ 128,125
7,500 *Map Info Corp. ..................... 142,500
-----------
343,250
-----------
DRUGS (1.8%)
6,000 *Applied Analytical Inds. Inc. ...... 67,500
-----------
EDUCATION (2.0%)
2,800 *Sylvan Learning Systems............. 76,125
-----------
ELECTRICAL EQUIPMENT (4.3%)
1,100 CTS Corp. ........................... 77,000
4,000 Federal Signal Corp. ................ 84,750
-----------
161,750
-----------
ENTERTAINMENT & LEISURE (2.0%)
3,000 Cedar Fair........................... 74,812
-----------
FINANCIAL SERVICES (3.2%)
10,000 Bando McGlocklin Capital Corp. ...... 121,250
-----------
FORESTRY & PAPER PRODUCTS (1.6%)
4,500 *Fibermark Inc. ..................... 59,344
-----------
HOTEL/MOTEL (2.9%)
8,500 *Guest Supply........................ 108,906
-----------
INDUSTRIAL SERVICES (4.1%)
4,000 Clarcor Inc. ........................ 76,750
4,500 IMCO Recycling Inc. ................. 77,062
-----------
153,812
-----------
INSURANCE SERVICES (2.2%)
6,000 State Auto Financial Corp. .......... 81,000
-----------
MEDICAL & RELATED (10.5%)
11,500 *Capital Senior Living Corp. ........ 115,000
5,000 *Kendle International Inc. .......... 80,000
1 *Quorum Health Group Inc. ........... 7
7,000 *Stericycle Inc. .................... 94,937
3,000 *Sunrise Assisted Living............. 104,625
-----------
394,569
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
METAL & MINING (2.8%)
6,500 Amcast Industrial Corp. ............. $ 106,031
-----------
OIL, ENERGY & NATURAL GAS (12.6%)
7,500 *Louis Dreyfus Natural Gas Corp. .... 161,719
9,000 *Santa Fe Snyder Corp. .............. 68,625
9,000 *Tesoro Petroleum Corp. ............. 143,438
4,000 WD-40 Co. ........................... 100,000
-----------
473,782
-----------
RESTAURANTS (2.8%)
9,000 *Buffets Inc. ....................... 103,500
-----------
RETAIL (4.7%)
9,875 *Consolidated Products Inc. ......... 177,750
-----------
TRANSPORTATION & EQUIPMENT (6.0%)
4,500 *Atlas Air Inc. ..................... 145,125
4,800 *Hearland Express.................... 78,600
-----------
223,725
-----------
TOTAL COMMON STOCK (86.3%) (COST
$2,723,545).......................... $ 3,237,045
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE (14.4%)
$180,000 American Express Credit Corp. 5.200%
01/99................................ $ 180,000
180,000 CIGNA Corp. 5.250% 07/06/99........... 179,869
180,000 G.E. Capital 4.950% 07/02/99.......... 179,975
----------
TOTAL SHORT-TERM NOTES (14.4%)
(COST $539,844)...................... $ 539,844
----------
TOTAL HOLDINGS (100.7%)
(COST $3,263,389) (A)................ $3,776,889
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(-0.7%).............................. (24,219)
----------
TOTAL NET ASSETS (100.0%)............. $3,752,670
==========
</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.
25
<PAGE> 26
ONE FUND, INC
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $3,263,389)............... $3,776,889
Cash in bank............................... 15,532
Dividends & accrued interest receivable.... 349
Deferred organizational expenses (note
1)....................................... 172
Other...................................... 1,525
----------
Total assets............................. 3,794,467
----------
Liabilities:
Payable for fund shares redeemed........... 29,999
Payable for investment management services
(note 3)................................. 1,102
Accrued 12b-1 fees (note 6)................ 1,829
Other accrued expenses..................... 8,470
Dividends payable.......................... 397
----------
Total liabilities........................ 41,797
----------
Net assets at market value................... $3,752,670
==========
Net assets consist of:
Par value, $001 per share.................. $ 357
Paid-in capital in excess of par value..... 3,906,828
Accumulated net realized loss on
investments.............................. (668,061)
Net unrealized appreciation on
investments.............................. 513,500
Undistributed net investment income........ 46
----------
Net assets at market value................... $3,752,670
==========
Shares outstanding........................... 356,860
Net asset value per share.................... $ 10.52
==========
Maximum offering price per share
($10.52/95%)............................... $ 11.07
==========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 34,337
Dividends................................... 49,358
---------
Total investment income................... 83,695
---------
Expenses:
Management fees (note 3).................... 27,654
12b-1 fees (note 6)......................... 10,586
Custodian fees (note 3)..................... 5,000
Directors' fees (note 3).................... 956
Professional fees........................... 3,329
Transfer agent & accounting fees............ 33,191
Filing fees................................. 5,107
Printing, proxy and postage fees............ 1,618
Organizational expense (note 1)............. 522
Other....................................... 151
---------
Total expenses............................ 88,114
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (14,260)
---------
Net expenses.............................. 73,854
---------
Net investment income..................... 9,841
---------
Realized & unrealized loss on investments:
Net realized loss from investments.......... (804,516)
Net decrease in unrealized appreciation on
investments............................... (139,644)
---------
Net loss on investments................... (944,160)
---------
Net decrease in net assets from
operations.............................. $(934,319)
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 27
ONE FUND, INC
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 9,841 $27,404.00
Realized gain (loss) on investments....................... (804,516) 726,343
Unrealized loss on investments............................ (139,644) (202,189)
----------- ----------
Net increase (decrease) in assets from operations..... (934,319) 551,558
----------- ----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (9,841) (26,854)
Distributions in excess of net investment income.......... (9,359) 0
Capital gains distributions............................... (272,363) (547,755)
----------- ----------
Total dividends and distributions..................... (291,563) (574,609)
----------- ----------
From capital share transactions (note 4):
Received from shares sold................................. 464,602 1,281,269
Received from dividends reinvested........................ 133,949 274,091
Paid for shares redeemed.................................. (1,446,253) (909,621)
----------- ----------
Increase (decrease) in net assets derived from capital
share transactions................................... (847,702) 645,739
----------- ----------
Increase (decrease) in net assets.................. (2,073,584) 622,688
----------- ----------
Net Assets:
Beginning of period....................................... 5,826,254 5,203,566
----------- ----------
End of period............................................. $ 3,752,670 $5,826,254
=========== ==========
Includes undistributed net investment income of........... $ 46 $ 46
=========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30, 11-1-94
------------------------------------ TO
1999 1998 1997 1996 6-30-95
------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $13.32 $13.30 $12.82 $10.63 $10.00
Income (loss) from investment operations:
Net investment income..................................... 0.02 0.06 0.11 0.26 0.22
Net realized & unrealized gain (loss) on investments...... (2.09) 1.30 1.67 2.26 0.67
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... (2.07) 1.36 1.78 2.52 0.89
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.02) (0.06) (0.11) (0.25) (0.22)
Distributions in excess of net investment income.......... (0.03) 0.00 0.00 0.00 0.00
Distributions from net realized capital gains............. (0.68) (1.28) (1.19) (0.08) (0.04)
------ ------ ------ ------ ------
Total distributions..................................... (0.73) (1.34) (1.30) (0.33) (0.26)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $10.52 $13.32 $13.30 $12.82 $10.63
====== ====== ====== ====== ======
Total return................................................ (15.54)% 10.56% 14.82% 24.10% 8.91%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.74% 1.67% 1.35% 0.94% 1.00%(a)
Net investment income..................................... 0.23% 0.47% 0.89% 2.21% 3.19%(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.07% 1.82% 1.62% 1.27% 1.31%(a)
Net investment income (loss).............................. (0.10)% 0.32% 0.62% 1.88% 2.88%(a)
Portfolio turnover rate..................................... 48% 77% 34% 34% 8%
Net assets at end of period (millions)...................... $ 3.8 $ 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.
The accompanying notes are an integral part of these financial statements.
27
<PAGE> 28
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 DECEMBER 31, 1998
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year (13.90)% (18.20)%
Three-year (1.28)% (2.95)%
Five-year 3.97% 2.91%
Since inception
(5/1/93) 8.91% 8.01%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
COMMENTS
We finally began to see investors focus again on emerging markets and Japan
after a notable period of underperformance. This turnaround was attributable to
investor optimism that the "Asian Crisis" is finally over. This rally however
came at the expense of the markets in Western Europe. Concerns over economic
slowdown, a weak Euro currency, and fund outflows were factors. The year-to-date
performance ending June 30, 1999 for the One Fund International Portfolio stood
at -4.75%. This compared with 3.97% for the Morgan Stanley International Europe,
Australia, and Far East Index. The fund's underperformance was due to the timing
in the first half of 1999 in restructuring the fund. In the second-half of 1999
the fund better matched our investment strategy. Our investment discipline is
driven by security selection where we are looking for well positioned companies
with strong bottom line growth that are trading at reasonable valuations.
Moreover, the fund was well positioned when the Japanese equity market began to
rally. Secondly, positions in the telecom and media sectors in Western Europe
continued to pay dividends. Finally, some of our top holdings include, Softbank,
a leading Japanese based software and media company and Nortel Networks, a
leading provider of global high-capacity data networks for telephone and the
internet.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
INTERNATIONAL PORTFOLIO (WITH MAX.
SALES CHARGE)|(COMMENCED OPERATIONS MORGAN STANLEY CAPTL. INTL. EAFE
MAY 1, 1993) INDEX
----------------------------------- --------------------------------
<S> <C> <C>
9,500.00 10,000.00
9,930.00 10,052.00
'93 12,920.00 10,826.00
13,940.00 11,792.00
'94 14,160.00 11,699.00
14,830.00 12,021.00
'95 15,840.00 13,049.00
17,600.00 13,659.00
'96 18,050.00 13,880.00
20,200.00 15,457.00
'97 18,271.00 14,041.00
19,219.00 16,299.00
'98 17,374.00 16,742.00
16,549.00 17,407.00
</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, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Vivendi Ex Gen Des Faux 1.69
2. Sony Corp 1.55
3. British Telecom PLC 1.28
4. Mobilcom AG 1.25
5. Nortel Networks Corp 1.20
6. Global Telesystems Group, Inc 1.19
7. Softbank Corp 1.16
8. M-6 Metropole Television 1.13
9. Bouygues 1.11
10. Mannesmann AG 1.07
</TABLE>
TOP 5 COUNTRIES/REGIONS AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Japan 25.52
2. United Kingdom 13.72
3. France 11.88
4. Germany 7.12
5. Canada 6.26
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE> 29
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -----------------------------------------------------------
<C> <S> <C>
JAPAN (25.5%)
500 Advantest Corp. (12)................. $ 54,920
1,200 Aiwa Co. Ltd. (11)................... 39,641
1,500 Asatsu Inc. (29)..................... 39,641
3,200 Capcom Co. Ltd. (9).................. 67,787
3,000 Ebara Corp. (21)..................... 35,653
1,100 Enix Corp. (9)....................... 47,966
1,000 Fujitec Co. Ltd. (4)................. 9,473
2,000 Fujitsu Ltd.(9)...................... 40,220
8,900 Furukawa Electric Co. (11)........... 40,794
4,000 Hitachi Ltd. (11).................... 37,494
5,000 Inax Corp. (4)....................... 30,516
1,600 Kao Corp. (10)....................... 44,927
200 Keyence Corp. (12)................... 34,984
1,000 Kyorin Pharmaceutical Co. (24)....... 24,859
1,400 Matsushita-Kotobuki Electronics
(12)................................ 39,542
1,100 Mycal Card Inc. (15)................. 49,965
1,600 Namco Ltd. (14)...................... 42,945
4,000 Nec Corp. (12)....................... 49,717
6,000 Nikko Securities Co. Ltd. (15)....... 38,700
3,000 Nikon Corp. (12)..................... 49,056
3,000 Nippon Conlux Co. Ltd. (11).......... 16,129
1,000 Nippon Broadcasting System (23)...... 49,552
3,000 Olympus Optical Co. Ltd. (12)........ 44,324
800 Paris Miki Inc. (23)................. 43,606
1,300 Paltek Corp. (34).................... 51,105
200 Rohm Co Ltd. (12).................... 31,300
14,000 Sanyo Electric Co. Ltd. (11)......... 56,886
3,500 Sharp Corp. (12)..................... 41,335
800 Shimamura Co. Ltd. (28).............. 67,721
1,600 Shimachu (28)........................ 35,413
3,300 Shinkawa Ltd. (12)................... 71,404
400 Softbank Corp. (34).................. 80,968
1,000 Sony Corp. (12)...................... 107,776
1,700 Square Co. Ltd. (12)................. 61,213
4,000 Sumitomo Forestry Co. Ltd. (4)....... 31,119
1,000 Takeda Chemical Industries (24)...... 46,331
2,000 Taiyo Yuden Co. Ltd. (12)............ 32,803
500 Union Tool (12)...................... 37,164
15,000 *Wako Securities Co. Ltd. (15)....... 33,200
----------
1,758,149
----------
UNITED KINGDOM (13.7%)
3,500 *Allied Domecq plc (16).............. 33,822
1,050 *Arm Holdings plc ADR (12)........... 36,619
2,927 *Baltimore Tech. Zergo Hldgs (29).... 33,222
1,100 Barclays (3)......................... 32,062
2,800 British Telecom plc (8).............. 46,788
9,207 *Cable & Wireless Communications
(8)................................. 88,825
1,487 *Colt Telecom Group plc (8).......... 31,223
950 *Eidos plc (9)....................... 31,225
27,200 Electronics Boutique plc (12)........ 39,555
2,713 *Energis plc (8)..................... 64,451
4,000 *Future Network plc (23)............. 26,641
2,762 *Icon plc ADR (29)................... 54,204
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -----------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM, CONTINUED
1,950 Logica plc (29)...................... $ 20,442
1,912 *National Westminister Bank (3)...... 40,509
4,500 Prudential Corp. plc (20)............ 66,611
5,400 *Reuters Group plc (23).............. 71,122
150 *Sage Group plc (9).................. 5,332
7,000 Securicor plc (29)................... 61,464
2,200 *Sema Group plc (29)................. 21,207
3,400 *Shire Pharmaceuticals Group (24).... 28,272
2,800 Smithkline Beecham plc (24).......... 36,349
10,857 *Telewest Communications plc (8)..... 48,435
2,800 *W.H. Smith Group plc (22)........... 26,903
----------
945,283
----------
FRANCE (11.9%)
275 Alcatel (11)......................... 38,681
292 Bouygues (4)......................... 77,119
3,125 *Bull Sa (9)......................... 26,856
350 *Club Mediterrance (14).............. 37,112
511 Dexia France (3)..................... 68,348
150 Essolor Intl. (24)................... 46,849
48,100 *Eurotunnel Sa Esa Units (32)........ 70,877
487 *Infogrames Entertainment (14)....... 31,364
140 Labinal (11)......................... 37,047
375 M-6 Metropole Television (23)........ 78,791
500 Pernod Ricard (16)................... 33,490
2,000 *Remy Cointreau (16)................. 38,766
270 Societe Du Louvre (14)............... 19,740
175 Television Francaise (23)............ 40,754
1,600 Thomson CSF (1)...................... 55,562
1,450 Vivendi Ex Gen Des Fuax (29)......... 117,365
----------
818,721
----------
GERMANY (7.1%)
750 Bayer AG (7)......................... 31,184
420 *Consors Discount Broker (15)........ 32,026
180 *Intershop Communications AG (29).... 43,217
540 *Kinowelt Medien AG (23)............. 40,342
497 Mannesmann AG (8).................... 74,259
100 *Medion AG (34)...................... 28,646
950 Mobilcom AG (8)...................... 87,125
768 Ser Systeme AG (12).................. 44,713
900 Siemens AG (22)...................... 69,370
1,150 *Telegate AG (8)..................... 39,343
----------
490,225
----------
CANADA (6.3%)
900 *Celestcia Inc. (12)................. 38,981
1,000 Four Seasons Hotels Inc. (19)........ 43,739
9,700 *Intl Forest Producers CL A (17)..... 36,950
200 *JDS Uniphase........................ 33,227
1,800 Molson Cos. Ltd. CL A (16)........... 32,692
5,500 Nexfor Inc. (17)..................... 34,045
970 Nortel Networks Corp. (11)........... 83,137
900 Teleglobe Inc. (8)................... 26,662
</TABLE>
(continued)
29
<PAGE> 30
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -----------------------------------------------------------
<C> <S> <C>
CANADA, CONTINUED
3,338 *Telesystem Intl. Wireless Inc.
(8)................................. $ 60,738
856 *TLC The Laser Center (24)........... 40,759
----------
430,930
----------
NETHERLANDS (3.1%)
500 *ASM Lithography ADR (12)............ 29,688
1,107 Benckiser NV B Shares (10)........... 59,032
628 *Equant NV Reg Shares (29)........... 59,110
2,750 TNT Post Group NV (32)............... 65,601
63 United Pan-Europe Com-Sp ADR (8)..... 3,481
----------
216,912
----------
SINGAPORE & MALAYSIAN (2.2%)
22,000 Clipsal Inc. Ltd. (12)............... 34,100
9,000 Fraser & Neave Ltd. (16)............. 39,907
29,600 Kim Eng Holding (15)................. 27,641
3,000 Singapore Press Holding (23)......... 51,095
----------
152,743
----------
AUSTRALIA (2.2%)
5,018 Aust & NZ Banking Group Ltd. (3)..... 36,834
31,446 *Cable & Wireless Opus (8)........... 71,476
6,704 Publishing Broadcasting (23)......... 44,164
----------
152,474
----------
SWITZERLAND (2.1%)
45 *Distefora Holding AG (34)........... 4,627
127 Publicigroupe SA (23)................ 69,374
75 The Swath Group AG-Reg (28).......... 10,700
107 Zurich Allied AG (20)................ 60,787
----------
145,488
----------
GREECE (2.1%)
1,100 *Bank of Piraeus (3)................. 31,748
660 Commercial Bank Of Greece (3)........ 47,150
1 EFG Eurobank (3)..................... 24
1,400 Lambrakis Media Group (23)........... 35,455
1,700 Teletypos SA (8)..................... 30,194
----------
144,571
----------
HONG KONG (1.9%)
10,000 *Pacific Century Ins. (20)........... 8,094
8,000 Midland Realty Holdings Ltd. (27).... 1,155
19,300 Smartone Telecommunications (8)...... 68,656
38,000 Wheelock & Co. (27).................. 52,161
----------
130,066
----------
ITALY (1.8%)
7,564 Class Editori Spa (23)............... 60,406
1,650 Luxottica Group Spa Spon ADR (24).... 25,678
1,650 Pininfarina Spa (2).................. 36,895
----------
122,979
----------
SWEDEN (1.7%)
2,897 *Modern Times Group B Shares (23).... 62,954
18,828 Societe Europeene Comm B (8)......... 52,114
----------
115,068
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -----------------------------------------------------------
<C> <S> <C>
BRAZIL (1.7%)
1,800 Telesp Cellular Part ADR (8)......... $ 48,150
2,100 Tele Norte Leste Participacoes (8)... 38,981
8,800 Usinas Sider Minas Gerais (25)....... 29,864
----------
116,995
----------
THAILAND (1.7%)
6,100 Bec World Public Co. Ltd. (23)....... 37,671
9,700 *Hana Microelectronics (12).......... 28,900
19,400 *Thai Airways Intl Ltd. (32)......... 36,519
4,000 *Total Access Communications (8)..... 12,800
----------
115,890
----------
INDONESIA (1.2%)
17,500 PT Indosat (8)....................... 33,723
21,000 PT Semen Gresik (4).................. 45,985
----------
79,708
----------
FINLAND (0.9%)
6,700 Merita plc (3)....................... 38,041
800 Nokian Renkaat OYJ (2)............... 24,731
----------
62,772
----------
LUXEMBOURG (0.7%)
354 Societe Europeene Satel ADR (23)..... 51,343
----------
MEXICO (0.6%)
1,000 *Groupo Televisa SA Spons GDR (23)... 44,813
----------
DENMARK (0.4%)
300 Falck A/S (29)....................... 24,525
----------
NORWAY (0.1%)
728 Schibsted (23)....................... 8,187
----------
IRELAND (0.0%)
50 *Ryanair Holdings plc SP ADR (32).... 2,650
----------
TOTAL FOREIGN COMMON STOCK (88.9%)
(COST $5,848,616)................... $6,130,492
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES US COMMON STOCK VALUE
- ----------------------------------------------------------
<C> <S> <C>
COMMUNICATIONS (1.6%)
1,020 *Global Telesystems Group Inc. ...... $ 82,620
383 *NTL Inc. Holdings Co. .............. 33,010
----------
TOTAL US COMMON STOCK (1.6%) (COST
$90,314)............................ 115,630
----------
TOTAL COMMON STOCK (90.5%) (COST
$5,938,930)......................... $6,246,122
----------
</TABLE>
(continued)
30
<PAGE> 31
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN PREFERRED STOCK VALUE
- ----------------------------------------------------------
<C> <S> <C>
AUSTRALIA (1.0%)
48,032 Village Roadshow Ltd. (14)........... $ 71,726
----------
GERMANY (0.6%)
56 Wella AG (10)........................ 39,817
----------
TOTAL FOREIGN PREFERRED STOCK (1.6%)
(COST $112,589)..................... $ 111,543
----------
TOTAL HOLDINGS (92.1%) (COST
$6,051,519)(A)...................... $6,357,665
----------
CASH & RECEIVABLES, NET OF
LIABILITIES (7.9%).................. 530,896
----------
TOTAL NET ASSETS (100.0%)............ $6,888,561
==========
</TABLE>
- ---------------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
INDUSTRY CLASSIFICATIONS
<TABLE>
<S> <C>
(1) Aerospace (18) Governmental
(2) Automotive (19) Hotels
(3) Banking (20) Insurance
(4) Building/Construction (21) Machinery
(5) Capital Goods (22) Manufacturing
(6) Cement (23) Media & Publishing
(7) Chemicals (24) Medical & Health Care
(8) Communications (25) Metal & Mining
(9) Computer Products (26) Packaging
(10) Consumer Products (27) Real Estate
(11) Electrical Products (28) Retailing
(12) Electronics (29) Services
(13) Energy and Oil (30) Steel
(14) Entertainment & Leisure (31) Textile
(15) Finance (32) Transportation
(16) Food & Beverage (33) Utilities
(17) Forest & Paper Products (34) Wholesale
(35) Miscellaneous
</TABLE>
The accompanying notes are an integral part of these financial statements.
31
<PAGE> 32
ONE FUND, INC
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30,1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,051,519)............... $ 6,357,665
Cash in bank............................... 162,860
Unrealized gain on forward currency
contracts (note 5)....................... 241,472
Receivable for securities sold............. 620,082
Receivable for fund shares sold............ 48
Dividends & accrued interest receivable.... 36,854
Other...................................... 4,623
-----------
Total assets............................. 7,423,604
-----------
Liabilities:
Unrealized loss on forward currency
contracts (note 5)....................... 269,007
Payable for securities purchased........... 175,670
Payable for fund shares redeemed........... 56,896
Accrued 12b-1 fees (note 6)................ 5,049
Other accrued expenses..................... 28,421
-----------
Total liabilities........................ 535,043
-----------
Net assets at market value................... $ 6,888,561
===========
Net assets consist of:
Par value, $.001 per share................. $ 637
Paid-in capital in excess of par value..... 8,416,633
Accumulated undistributed net realized loss
on investments (note 1).................. (1,234,149)
Net unrealized appreciation (depreciation)
on:
Investments (note 1)..................... 306,146
Foreign currency related transactions.... (15,275)
Forward currency contracts (note 5)...... (27,535)
Undistributed net investment loss.......... (557,896)
-----------
Net assets at market value................... $ 6,888,561
===========
Shares outstanding........................... 636,602
Net asset value per share.................... $ 10.82
===========
Maximum offering price per share
($10.82/95%)............................... $ 11.39
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest (net of $384 foreign taxes
withheld)................................ $ 57,406
Dividends (net of $11,046 foreign taxes
withheld)................................ 124,859
-----------
Total investment income.................. 182,265
Expenses:
Management fees (note 3)................... 88,376
12b-1 fees (note 6)........................ 25,116
Custodian fees (note 3).................... 67,000
Directors' fees (note 3)................... 2,560
Professional fees.......................... 8,881
Transfer agent & accounting fees........... 49,000
Filing fees................................ 12,001
Printing, proxy and postage fees........... 4,319
Other...................................... 373
-----------
Total expenses........................... 257,626
Less expenses voluntarily reduced or
reimbursed (note 3).................... (43,677)
-----------
Net expenses............................. 213,949
-----------
Net investment loss...................... (31,684)
-----------
Realized & unrealized gain (loss) on
investments & foreign currency:
Net realized loss from:
Investments.............................. (1,442,884)
Forward currency related transactions.... (526,402)
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments............................ 367,709
Foreign currency related
transactions........................ (218,371)
-----------
Net loss on investments................ (1,819,948)
-----------
Net decrease in net assets from
operations.......................... $(1,851,632)
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 33
ONE FUND, INC
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income (loss).............................. $ (31,684) $ 142,380
Realized gain (loss) on investments and foreign currency
related transactions.................................... (1,969,286) 1,670,517
Unrealized gain (loss) on investments and foreign currency
related transactions.................................... 149,338 (2,430,256)
----------- -----------
Net decrease in assets from operations................ (1,851,632) (617,359)
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (97) (139,103)
Capital gains and foreign currency related transactions
distributions........................................... (285,520) (2,283,120)
----------- -----------
Total dividends and distributions..................... (285,617) (2,422,223)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 507,008 3,159,453
Received from dividends reinvested........................ 271,907 1,971,077
Paid for shares redeemed.................................. (6,315,910) (6,838,385)
----------- -----------
Decrease in net assets derived from capital share
transactions......................................... (5,536,995) (1,707,855)
----------- -----------
Decrease in net assets............................. (7,674,244) (4,747,437)
----------- -----------
Net Assets:
Beginning of period....................................... 14,562,805 19,310,242
----------- -----------
End of period............................................. $ 6,888,561 $14,562,805
=========== ===========
Includes undistributed net investment income of........... $ 0 $ 288
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------------------------------
1999 1998 1997 1996 1995
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $ 12.92 $15.45 $14.47 $12.89 $13.32
Income (loss) from investment operations:
Net investment income (loss).............................. (0.04) 0.12 0.14 0.10 0.14
Net realized and unrealized gain (loss) on investments and
foreign currency transactions........................... (1.74) (0.63) 1.92 2.24 0.63
------- ------ ------ ------ ------
Total income (loss) from investment operations.......... (1.78) (0.51) 2.06 2.34 0.77
------- ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... 0.00 (0.12) (0.15) (0.39) (0.14)
Distributions from net realized capital gains and foreign
currency transactions................................... (0.32) (1.90) (0.93) (0.37) (1.06)
------- ------ ------ ------ ------
Total distributions..................................... (0.32) (2.02) (1.08) (0.76) (1.20)
------- ------ ------ ------ ------
Net asset value, end of period.............................. $ 10.82 $12.92 $15.45 $14.47 $12.89
======= ====== ====== ====== ======
Total return................................................ (13.90)% (4.84)% 14.76% 18.65% 6.44%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (a):
Expenses.................................................. 2.13% 2.10% 1.87% 1.72% 1.50%
Net investment income (loss).............................. (0.32)% 0.85% 0.99% 0.70% 1.11%
Ratios assuming no fees reimbursed by advisor:
Expenses.................................................. 2.56% 2.20% 1.98% 1.72% 1.50%
Net investment income (loss).............................. (0.75)% 0.75% 0.88% 0.70% 1.11%
Portfolio turnover rate..................................... 217% 12% 9% 20% 39%
Net assets at end of period (millions)...................... $ 6.9 $ 14.6 $ 19.3 $ 15.1 $ 12.0
</TABLE>
- ---------------
(a) The advisor has elected to reimburse certain operating expenses of the
International Portfolio, but it may cease that waiver, in whole or in part,
without prior written notice.
The accompanying notes are an integral part of these financial statements.
33
<PAGE> 34
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year (11.88)% (16.29)%
Three-year (1.05)% (2.73)%
Since inception
(11/1/94) 3.53% 2.39%
</TABLE>
The above returns reflect the maximum sales charge of 5% for this portfolio. All
returns represent past performance and neither predict nor guarantee future
investment results. Your investment return and principal value will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
COMMENTS
We finally began to see investors focus again on emerging markets and Japan
after a notable period of underperformance. This turnaround was attributable to
investor optimism that the "Asian Crisis" is finally over. This rally however
came at the expense of the markets in Western Europe. Concerns over economic
slowdown, a weak Euro currency, and fund outflows were factors. The year-to-
date performance ending June 30, 1999 for the Global Contrarian Portfolio stood
at -4.72%. This compared with 3.97% for the Morgan Stanley International Europe,
Australia, and Far East Index. The fund's underperformance was due to the timing
in the first half of 1999 in restructuring the fund. In the second-half of 1999
the fund better matched our investment strategy. Our investment discipline is
driven by security selection where we are looking for well positioned companies
with strong bottom line growth that are trading at reasonable valuations.
Moreover, the fund was well positioned when the Japanese equity market began to
rally. Secondly, positions in the telecom and media sectors in Western Europe
continued to pay dividends. Finally, some of our top holdings include, Softbank,
a leading Japanese based software and media company and Nortel Networks, a
leading provider of global high-capacity data networks for telephone and the
internet.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
GLOBAL CONTRARIAN PORTFOLIO (WITH
MAX. SALES CHARGE)|(COMMENCED MORGAN STANLEY CAPTL. INTL. WORLD
OPERATIONS NOVEMBER 1, 1994) INDEX
--------------------------------- ---------------------------------
<S> <C> <C>
9,500.00 10,000.00
'94 9,150.00 9,654.00
9,781.00 10,066.00
'95 10,521.00 11,134.00
11,531.00 11,923.00
'96 11,581.00 12,634.00
12,811.00 14,578.00
'97 12,761.00 14,528.00
12,674.00 16,648.00
'98 11,721.00 17,631.00
11,168.00 19,132.00
</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, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Sony Corp 2.05
2. Mannesmann AG 1.74
3. Bouygues 1.72
4. Nippon Broadcasting System 1.57
5. Prudential Corp PLC 1.45
6. Smartone Telecommunications 1.43
7. Advantest Corp 1.39
8. Cable and Wireless Comms PLC 1.33
9. Class Editori SPA 1.31
10. Mobilcom AG 1.28
</TABLE>
TOP 5 COUNTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Japan 28.11
2. United Kingdom 13.83
3. France 12.56
4. Germany 7.72
5. Canada 6.38
</TABLE>
The risk associated with investing on a worldwide basis include differences in
regulation of financial data and reporting and currency exchanges as well as
economic and political systems which may be different from those in the United
States. The prices of small company stocks are generally more volatile than the
prices of large company stocks.
The accompanying notes are an integral part of these financial statements.
34
<PAGE> 35
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
JAPAN (28.1%)
400 Advantest Corp. (12).................. $ 43,936
500 Aiwa Co. Ltd. (11).................... 16,517
600 Asatsu Inc. (29)...................... 15,857
1,300 Capcom Co. Ltd. (9)................... 27,539
1,000 Ebara Corp. (21)...................... 11,884
500 Enix Corp. (9)........................ 21,803
1,100 Fujitec Co. Ltd. (4).................. 10,420
1,000 Fujitsu Ltd. (9)...................... 20,110
4,000 Furukawa Electric Co. (11)............ 18,334
2,000 Hitachi Ltd. (11)..................... 18,747
2,000 Inax Corp. (4)........................ 12,206
700 Kao Corp. (10)........................ 19,656
100 Keyence Corp. (12).................... 17,492
1,000 Kyorin Pharmaceutical Co. (24)........ 24,859
600 Matsushita-Kotobuki Electronics
(12)................................. 16,947
500 Mycal Card Inc. (15).................. 22,711
700 Namco Ltd. (14)....................... 18,788
2,000 Nec Corp. (12)........................ 24,859
3,000 Nikko Securities Co. Ltd. (15)........ 19,350
1,000 Nikon Corp. (12)...................... 16,352
2,000 Nippon Conlux Co. Ltd. (11)........... 10,753
1,000 Nippon Broadcasting System (23)....... 49,552
1,000 Olympus Optical Co. Ltd. (12)......... 14,775
300 Paris Miki Inc. (23).................. 16,352
1,000 Paltek Corp. (34)..................... 39,311
100 Rohm Co Ltd. (12)..................... 15,650
5,000 Sanyo Electric Co. Ltd. (11).......... 20,316
1,500 Sharp Corp. (12)...................... 17,715
300 Shimamura Co. Ltd. (28)............... 25,395
700 Shimachu (28)......................... 15,493
1,500 Shinkawa Ltd. (12).................... 32,457
100 Softbank Corp. (34)................... 20,242
600 Sony Corp. (12)....................... 64,665
800 Square Co. Ltd. (12).................. 28,806
2,000 Sumitomo Forestry Co. Ltd. (4)........ 15,559
500 Takeda Chemical Industries (24)....... 23,166
1,000 Taiyo Yuden Co. Ltd. (12)............. 16,402
300 Union Tool (12)....................... 22,298
7,000 *Wako Securities Co. Ltd. (15)........ 15,493
----------
862,767
----------
UNITED KINGDOM (13.8%)
1,500 *Allied Domecq plc (16)............... 14,495
550 *Arm Holdings plc ADR (29)............ 19,181
1,583 *Baltimore Tech. Zergo Hldgs (9)...... 17,967
500 Barclays (3).......................... 14,574
1,100 British Telecom plc (8)............... 18,381
4,349 *Cable & Wireless Communications
(8).................................. 41,957
610 *Colt Telecom Group plc (8)........... 12,809
450 *Eidos plc (9)........................ 14,791
10,800 Electronics Boutique plc (12)......... 15,706
1,217 *Energis plc (8)...................... 28,911
1,900 *Future Network plc (23).............. 12,655
986 *Icon plc ADR (29).................... 19,350
775 Logica plc (29)....................... 8,124
686 *National Westminister Bank (3)....... 14,534
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM, CONTINUED
3,100 Prudential Corp. plc (20)............. $ 45,887
2,200 *Reuters Group plc (23)............... 28,976
50 *Sage Group plc (9)................... 1,777
3,000 Securicor plc (29).................... 26,342
1,040 *Sema Group plc (29).................. 10,025
1,400 *Shire Pharmaceuticals Group (24)..... 11,642
1,200 Smithkline Beecham plc (24)........... 15,578
3,882 *Telewest Communications plc (8)...... 17,318
1,400 *W.H. Smith Group plc (22)............ 13,451
----------
424,431
----------
FRANCE (12.6%)
125 Alcatel (11).......................... 17,582
205 Bouygues (4).......................... 54,141
1,375 *Bull Sa (9).......................... 11,817
150 *Club Mediterrance (14)............... 15,905
235 Dexia France (3)...................... 31,432
60 Essolor Intl. (24).................... 18,740
19,600 *Eurotunnel Sa Esa Units (32)......... 28,881
216 *Infogrames Entertainment (14)........ 13,911
60 Labinal (11).......................... 15,877
150 M-6 Metropole Television (23)......... 31,516
200 Pernod Ricard (16).................... 13,396
950 *Remy Cointreau (16).................. 18,414
108 Societe Du Louvre (14)................ 7,896
90 Television Francaise (23)............. 20,959
1,050 Thomson CSF (1)....................... 36,462
600 Vivendi Ex Gen Des Fuax (29).......... 48,565
----------
385,494
----------
GERMANY (7.7%)
350 Bayer AG (7).......................... 14,553
190 *Consors Discount Broker (15)......... 14,488
60 *Intershop Communications AG (9)...... 14,406
256 *Kinowelt Medien AG (23).............. 19,125
367 Mannesmann AG (8)..................... 54,835
50 *Medion AG (34)....................... 14,323
440 Mobilcom AG (8)....................... 40,352
288 Ser Systeme AG (12)................... 16,767
400 Siemens AG (22)....................... 30,831
500 *Telegate AG (8)...................... 17,105
----------
236,785
----------
CANADA (6.4%)
400 *Celestcia Inc. (12).................. 17,325
400 Four Seasons Hotels Inc. (19)......... 17,495
4,000 *Intl Forest Producers CL A (17)...... 15,237
92 *JDS Uniphase (8)..................... 15,218
800 Molson Cos. Ltd. CL A (16)............ 14,530
2,400 Nexfor Inc. (17)...................... 14,856
395 Nortel Networks Corp. (11)............ 33,855
400 Teleglobe Inc. (8).................... 11,850
2,069 *Telesystem Intl. Wireless Inc. (8)... 37,648
371 *TLC The Laser Center (24)............ 17,665
----------
195,679
----------
</TABLE>
(continued)
35
<PAGE> 36
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
NETHERLANDS (3.4%)
250 *ASM Lithography ADR (12)............. $ 14,844
439 Benckiser NV B Shares (10)............ 23,410
356 *Equant NV Reg Shares (29)............ 33,509
1,250 TNT Post Group NV (32)................ 29,819
23 United Pan-Europe Com-Sp ADR (8)...... 1,271
----------
102,853
----------
HONG KONG (2.3%)
4,000 *Pacific Century Ins. (20)............ 3,238
4,000 Midland Realty Holdings Ltd. (27)..... 577
12,700 Smartone Telecommunications (8)....... 45,178
16,000 Wheelock & Co. (27)................... 21,962
----------
70,955
----------
AUSTRALIA (2.2%)
2,400 Aust & NZ Banking Group Ltd. (3)...... 17,617
14,555 *Cable & Wireless Opus (8)............ 33,083
2,689 Publishing Broadcasting (23).......... 17,714
----------
68,414
----------
ITALY (2.2%)
5,161 Class Editori Spa (23)................ 41,216
700 Luxottica Group Spa Spon ADR (24)..... 10,894
650 Pininfarina Spa (2)................... 14,534
----------
66,644
----------
GREECE (2.2%)
500 *Bank of Piraeus (3).................. 14,431
315 Commercial Bank Of Greece (3)......... 22,504
1 EFG Eurobank (3)...................... 11
600 Lambrakis Media Group (23)............ 15,195
800 Teletypos SA (8)...................... 14,209
----------
66,350
----------
SWEDEN (2.0%)
1,735 *Modern Times Group B Shares (23)..... 37,703
8,963 Societe Europeene Comm B (8).......... 24,809
----------
62,512
----------
SINGAPORE & MALAYSIAN (2.0%)
10,000 Clipsal Inc. Ltd. (12)................ 15,500
4,000 Fraser & Neave Ltd. (16).............. 17,737
12,500 Kim Eng Holding (15).................. 11,673
1,000 Singapore Press Holding (23).......... 17,032
----------
61,942
----------
SWITZERLAND (1.9%)
61 Publicigroupe SA (23)................. 33,322
40 The Swath Group AG-Reg (28)........... 5,707
35 Zurich Allied AG (20)................. 19,884
----------
58,913
----------
BRAZIL (1.7%)
750 Telesp Cellular Part ADR (8).......... 20,063
1,100 Tele Norte Leste Participacoes (8).... 20,419
3,700 Usinas Sider Minas Gerais (25)........ 12,557
----------
53,039
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
THAILAND (1.4%)
2,600 Bec World Public Co. Ltd. (23)........ $ 16,056
4,200 *Hana Microelectronics (12)........... 12,514
7,800 *Thai Airways Intl Ltd. (32).......... 14,683
----------
43,253
----------
INDONESIA (1.1%)
7,500 PT Indosat (8)........................ 14,453
9,000 PT Semen Gresik (4)................... 19,708
----------
34,161
----------
LUXEMBOURG (1.1%)
223 Societe Europeene Satel ADR (23)...... 32,343
----------
FINLAND (0.9%)
2,700 Merita plc (3)........................ 15,330
400 Nokian Renkaat OYJ (2)................ 12,365
----------
27,695
----------
MEXICO (0.6%)
400 *Groupo Televisa SA Spons GDR (23).... 17,925
----------
DENMARK (0.3%)
100 Falck A/S (29)........................ 8,175
----------
IRELAND (0.0%)
50 *Ryanair Holdings plc SP ADR (32)..... 2,650
----------
NORWAY (0.0%)
163 Schibsted (23)........................ 1,833
----------
TOTAL FOREIGN COMMON STOCK (93.9%)
(COST $2,731,860).................... $2,884,813
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES U.S. COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
COMMUNICATIONS (1.6%)
440 *Global Telesystems Group Inc......... $ 35,640
161 *NTL Inc. Holdings Co................. 13,876
----------
TOTAL U.S. COMMON STOCK (1.6%) (COST
$39,366)............................. $ 49,516
----------
TOTAL COMMON STOCK (95.5%) (COST
$2,771,226).......................... $2,934,329
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN PREFERRED STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AUSTRALIA (1.1%)
22,079 Village Roadshow Ltd. (14)............ $ 32,970
GERMANY (0.7%)
30 Wella AG (10)......................... 21,330
----------
TOTAL FOREIGN PREFERRED STOCK (1.8%)
(COST $53,970)....................... $ 54,300
----------
</TABLE>
<TABLE>
TOTAL HOLDINGS (97.3%)
(Cost $2,828,086)(a). $2,988,629
<C> <S> <C>
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(2.7%)............................... 80,472
----------
TOTAL NET ASSETS (100.0%)............. $3,069,101
==========
</TABLE>
(continued)
36
<PAGE> 37
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
- ---------------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
INDUSTRY CLASSIFICATIONS
(1) Aerospace
(2) Automotive
(3) Banking
(4) Building/Construction
(5) Capital Goods
(6) Cement
(7) Chemicals
(8) Communications
(9) Computer Products
(10) Consumer Products
(11) Electrical Products
(12) Electronics
(13) Energy and Oil
(14) Entertainment & Leisure
(15) Finance
(16) Food & Beverage
(17) Forest & Paper Products
(18) Governmental
(19) Hotels
(20) Insurance
(21) Machinery
(22) Manufacturing
(23) Media & Publishing
(24) Medical & Health Care
(25) Metal & Mining
(26) Packaging
(27) Real Estate
(28) Retailing
(29) Services
(30) Steel
(31) Textile
(32) Transportation
(33) Utilities
(34) Wholesale
(35) Miscellaneous
The accompanying notes are an integral part of these financial statements.
37
<PAGE> 38
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $2,825,016)............... $ 2,988,629
Unrealized gain on forward currency
contracts (note 5)....................... 7,427
Receivable for securities sold............. 218,319
Dividends & accrued interest receivable.... 12,476
Other...................................... 25,075
-----------
Total assets............................. 3,251,926
-----------
Liabilities:
Accounts payable........................... 72,439
Payable for securities purchased........... 64,172
Payable for fund shares redeemed........... 18,480
Unrealized loss on forward currency
contracts (note 5)....................... 11,286
Accrued 12b-1 fees (note 6)................ 2,003
Other accrued expenses..................... 14,445
-----------
Total liabilities........................ 182,825
-----------
Net assets at market value................... $ 3,069,101
===========
Net assets consist of:
Par value, $.001 per share................. $ 390
Paid-in capital in excess of par value..... 3,967,440
Accumulated undistributed net realized loss
on investments (note 1).................. (1,008,433)
Net unrealized appreciation (depreciation)
on:
Investments (note 1)..................... 163,613
Foreign currency related transactions.... (644)
Forward currency contracts (note 5)...... (3,859)
Undistributed net investment loss.......... (49,406)
-----------
Net assets at market value................... $ 3,069,101
===========
Shares outstanding........................... 389,704
Net asset value per share.................... $ 7.88
===========
Maximum offering price per share
($7.88/95%)................................ $ 8.29
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 35,901
Dividends
(net of $4,264 foreign taxes withheld).... 83,137
---------
Total investment income................... 119,038
---------
Expenses:
Management fees (note 3).................... 34,827
12b-1 fees (note 6)......................... 9,674
Custodian fees (note 3)..................... 48,400
Directors' fees (note 3).................... 800
Professional fees........................... 2,926
Transfer agent & accounting fees............ 26,001
Filing fees................................. 5,750
Printing, proxy and postage fees............ 1,351
Organizational expense (note 1)............. 522
Other....................................... 120
---------
Total expenses............................ 130,371
---------
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (47,996)
---------
Net expenses.............................. 82,375
---------
Net investment income..................... $ 36,663
---------
Realized & unrealized gain (loss) on
investments & foreign currency:
Net realized loss from:
Investments............................... $(857,799)
Forward currency related transactions..... (62,568)
Net increase (decrease) in unrealized
appreciation (depreciation) on:
Investments............................. 372,451
Foreign currency related transactions... (32,815)
---------
Net loss on investments................. (580,731)
---------
Net decrease in net assets from
operations........................... $(544,068)
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
38
<PAGE> 39
ONE FUND, INC.
GLOBAL CONTRARIAN PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 36,663 $ 76,677
Realized gain (loss) on investments and foreign currency
related transactions.................................... (920,367) 725,189
Unrealized gain (loss) on investments and foreign currency
related transactions.................................... 339,636 (820,703)
----------- -----------
Net decrease in assets from operations................ (544,068) (18,837)
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (26,610) (70,667)
Capital gains and foreign currency related transactions
distributions........................................... (685,933) (405,742)
----------- -----------
Total dividends and distributions..................... (712,543) (476,409)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 158,234 509,252
Received from dividends reinvested........................ 242,528 211,749
Paid for shares redeemed.................................. (1,137,132) (1,459,507)
----------- -----------
Decrease in net assets derived from capital share
transactions......................................... (736,370) (738,506)
----------- -----------
Decrease in net assets............................. (1,992,981) (1,233,752)
----------- -----------
Net Assets:
Beginning of period....................................... 5,062,082 6,295,834
----------- -----------
End of period............................................. $ 3,069,101 $ 5,062,082
=========== ===========
Includes undistributed net investment income of........... $ 0 $ 3,108
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30, 11-1-94
---------------------------------------- TO
1999 1998 1997 1996 6-30-95
------- ------ ------ ------ -------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $ 10.76 $11.79 $11.48 $10.01 $10.00
Income (loss) from investment operations:
Net investment income..................................... 0.09 0.14 0.20 0.16 0.17
Net realized & unrealized gain (loss) on investment and
foreign currency transactions........................... (1.29) (0.26) 0.99 1.61 0.13
------- ------ ------ ------ ------
Total income (loss) from investment operations.......... (1.20) (0.12) 1.19 1.77 0.30
------- ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.06) (0.13) (0.21) (0.16) (0.17)
Distributions from net realized capital gains and foreign
currency transactions................................... (1.62) (0.78) (0.67) (0.14) (0.12)
------- ------ ------ ------ ------
Total distributions..................................... (1.68) (0.91) (0.88) (0.30) (0.29)
------- ------ ------ ------ ------
Net asset value, end of period.............................. $ 7.88 $10.76 $11.79 $11.48 $10.01
======= ====== ====== ====== ======
Total return................................................ (11.88)% (1.05)% 11.11% 17.84% 2.99%(b)
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (c):
Expenses.................................................. 2.15% 2.13% 2.02% 2.14% 2.05%(a)
Net investment income..................................... 0.96% 1.28% 1.78% 1.49% 2.85%(a)
Ratios assuming no fees reimbursed by advisor:
Expenses.................................................. 3.40% 2.53% 2.21% 2.14% 2.05%(a)
Net investment income (loss).............................. (0.30)% 0.88% 1.59% 1.49% 2.85%(a)
Portfolio turnover rate..................................... 254% 25% 6% 26% 8%
Net assets at end of period (millions)...................... $ 3.1 $ 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, but it may cease that waiver, in whole or in
part, without prior notice.
The accompanying notes are an integral part of these financial statements.
39
<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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 14.43% 8.72%
Since inception
(11/1/96) 7.52% 5.63%
</TABLE>
The above returns reflect the maximum sales charge of 5% for this portfolio. All
returns represent past performance and neither predict nor guarantee future
investment results. Your investment return and principal value will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
COMMENTS
The One Fund Core Growth Portfolio returned 10.98% for the 2nd quarter, 1999 and
14.43% for the year ending June 30, 1999. This compares with the Russell Mid Cap
Growth Index returns of 10.42% and 20.31% respectively for the same periods.
Although this calendar year has been strong for the Fund, the July through
December period last year was difficult. The market returns of 1998 were very
narrow, led by the largest stocks in each major index and the small
capitalization stocks held by your Fund lagged in this environment.
The Fund's most heavily weighted sector, at nearly 40%, is technology. This
sector has contributed well over half of the Fund's positive performance and
there has been broad strength among the holdings. Semiconductors,
telecommunication equipment, Internet services and contract manufacturing
companies all participated in this rally due to robust expectations for first
and second quarter earnings. The portfolio's representation in software is small
due to concerns over Year 2000 demand imbalances. The consumer cyclical sector,
which comprises mostly retailers, is the next largest contributor to Fund. No
one stock drove the overall performance, but again, strength was broad among
holdings.
The U.S. economic outlook continues to be positive by most measures. The GDP
report for the first quarter of 1999 surprised everyone when it came in at a
healthy 4.5%. At 4.3%, unemployment remains near a 30-year low. Despite the
continued tight labor market, wage inflation does not appear to be a significant
threat, according to the employment cost index. Productivity remains high. After
a scare in May, the CPI number release in June was zero. At its June 30th Open
Market Committee meeting, the Federal Reserve raised interest rates one-quarter
point and adopted "a directive that included no predilection about near-term
policy action".
Although large capitalization stocks have surpassed their smaller brethren for
the first three quarters of your fiscal year ending June 30th, the second
quarter provided an environment where small stocks beat mid-size stocks which
beat large caps. Growth stocks, other than having a tough May, have led the
market higher this year across all capitalizations.
The business outlook for technology firms can change quickly. We believe that
investment managers need to be able to react quickly to, as well as anticipate,
the changing landscape of this sector. At no time is this more likely to be true
than in 1999, when Year 2000 issues will cause more opportunities and more
disappointments than in a typical year. The Fund will continue to be actively
managed and repositioned as the evidence unfolds.
We continue to like the long-term prospects of the all-cap growth companies we
own. Superior technologies, services, balance sheets, business models and
ability to execute are all characteristics commonly found in top quality growth
companies that we believe contribute to sustained, above-average growth rates.
Many investors have been anxiously waiting for the rebound in small/mid
capitalization stocks. We are encouraged with their recent outperformance and
there is much evidence to suggest their relative performance will continue to be
strong.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO (WITH MAX. RUSSELL 3000 INDEX
SALES CHARGE)|(COMMENCED OPERATIONS ------------------
NOVEMBER 1, 1995)
-----------------------------------
<S> <C> <C>
9,500.00 10,000.00
'96 9,390.00 10,614.00
9,360.00 12,499.00
'97 8,790.00 13,978.00
10,062.00 16,076.00
'98 9,388.00 17,314.00
11,514.00 19,280.00
</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, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Xilinx Inc 3.44
2. Outdoor Systems Inc 2.66
3. Cisco Systems Inc. 2.63
4. Premier Parks Inc. 2.60
5. Medquist Inc. 2.34
6. Medimmune Inc 2.32
7. Corning Inc 2.25
8. Veritas Software 2.24
9. MCI Worldcom Inc. 2.22
10. Lamar Advertising Co 2.19
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Medical and Related 12.67
2. Retail 11.36
3. Semiconductors 10.23
4. Computer & Related 9.83
5. Electronic Equipment 7.83
</TABLE>
40
<PAGE> 41
ONE FUND INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------
<C> <S> <C>
ADVERTISING (5.0%)
2,500 *Lamar Advertising Co. ............. $ 102,344
3,400 *Outdoor Systems Inc. .............. 124,100
-------------
226,444
-------------
AUTOMOTIVE & RELATED (1.0%)
800 Harley Davidson, Inc. .............. 43,500
-------------
BROADCAST RADIO & TV (4.2%)
900 *Citadel Communications............. 32,569
800 Mediaone Group Inc. ................ 59,500
1,500 *Univision.......................... 99,000
-------------
191,069
-------------
COMMUNICATIONS (10.7%)
1,900 *Amdocs Ltd. ....................... 43,225
2,200 *American Tower Corp. .............. 52,800
700 *Aware Inc. Mass.................... 32,288
1,400 *Ciena Corp. ....................... 42,263
600 E-Tek Dynamics Inc. ................ 28,537
1,064 *Global Crossing.................... 45,287
1,300 *L-3 Communications................. 62,806
1,200 *MCI Worldcom Inc. ................. 103,500
1,100 *Metromedia Fiber Network-A......... 39,531
1,100 *Powerwave Technologies Inc. ....... 35,475
-------------
485,712
-------------
COMPUTER & RELATED (9.8%)
1,800 *EMC Corp. ......................... 99,000
1,300 *I2 Technologies.................... 55,900
1,100 *Macromedia Inc. ................... 38,775
900 *New Era of Networks Inc. .......... 39,544
600 *Sun Microsystems Inc. ............. 41,325
800 *Verisign Inc. ..................... 69,000
1,100 *Veritas Software................... 104,431
-------------
447,975
-------------
ELECTRICAL EQUIPMENT (7.8%)
2,300 *Celestica Inc. .................... 99,619
1,300 *Jabil Circuit Inc. ................ 58,662
1,200 *Sandmina Corp. .................... 91,050
1,200 *Terayne Inc. ...................... 86,100
400 *Waters Corp. ...................... 21,250
-------------
356,681
-------------
ELECTRONICS/SEMICONDUCTORS (10.2%)
800 *Conexant Systems Inc. ............. 46,450
1,400 *LSI Logic Corp. ................... 64,575
800 *PMC - Sierra Inc. ................. 47,150
600 *SDL Inc. .......................... 30,637
1,200 *Transwitch Corp. .................. 56,850
500 *Uniphase Corp. .................... 83,000
2,400 *Xilinx Inc. ....................... 137,400
-------------
466,062
-------------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT & LEISURE (5.5%)
1,400 Carnival Corp. ..................... $ 67,900
2,500 *Cinar Films Inc. .................. 61,250
3,300 *Premier Parks...................... 121,275
-------------
250,425
-------------
FINANCIAL SERVICES (1.8%)
400 Goldman Sachs Group Inc. ........... 28,900
500 Schwab (Charles) Group.............. 54,937
-------------
83,837
-------------
INTERNET PRODUCTS & SERVICES (3.5%)
1,100 *Infospace.com Inc. ................ 51,700
1,500 *PSINET Inc. ....................... 65,625
600 *Verio Inc. ........................ 41,700
-------------
159,025
-------------
MACHINERY (1.5%)
900 *Applied Material................... 66,488
-------------
MANUFACTURING (3.2%)
1,500 Corning Inc. ....................... 105,188
700 Danaher Corp. ...................... 40,687
-------------
145,875
-------------
MEDIA & PUBLISHING (2.0%)
1,351 *Clear Channel Communications....... 93,183
-------------
MEDICAL & RELATED (12.7%)
700 *Express Scripts Inc. CL A.......... 42,131
1,400 Guidant Corp. ...................... 72,013
1,600 *Medimmune Inc. .................... 108,400
2,500 *Medquist Inc. ..................... 109,375
1,300 *Minimed Inc. ...................... 100,019
1,200 *Quintilies Transnational........... 50,400
1,200 *Visx Inc. ......................... 95,025
-------------
577,363
-------------
NETWORK PRODUCTS & SERVICES (6.9%)
800 *Check Point Software............... 42,900
1,900 *Cisco Systems...................... 122,550
200 *Emulex Corp. ...................... 22,237
2,500 *Newbridge Networks Corp. .......... 71,875
700 *Network Solutions Inc. CL A........ 55,387
-------------
314,949
-------------
OIL, ENERGY & NATURAL GAS (1.7%)
2,300 *BJ Services Co. ................... 67,706
300 *Hanover Compress................... 9,637
-------------
77,343
-------------
RETAIL (11.4%)
1,200 *Duane Reade Inc. .................. 36,750
1,300 Home Depot Inc. .................... 83,769
1,300 *Kohls Corp. ....................... 100,344
1,500 *Linens 'N Things Inc. ............. 65,625
2,550 *Staples Inc. ...................... 78,891
1,600 Tandy Corp. ........................ 78,200
2,500 *United Rentals Inc. ............... 73,750
-------------
517,329
-------------
</TABLE>
(continued)
41
<PAGE> 42
ONE FUND INC.
CORE GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 1999
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- --------------------------------------------------------------
<C> <S> <C>
TRANSPORTATION (0.8%)
2,100 *Motivepower Industries Inc. ....... $ 37,275
-------------
TOTAL COMMON STOCK (99.7%)
(COST $3,370,018).................. $ 4,540,535
-------------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL (2.0%)
$92,000 Firstar Bank 3.3% due 07/01/1999
repurchase price $92,008
collateralized by GNMA certificates
pool #837 due 02-20-24 (cost
$92,000)........................... $ 92,000
-------------
TOTAL REPURCHASE AGREEMENTS (2.0%)
(COST $92,000)..................... $ 92,000
-------------
TOTAL HOLDINGS (101.7%)
(COST $3,462,018) (A).............. $ 4,632,535
-------------
CASH & RECEIVABLES, NET OF
LIABILITIES (-1.7%)................ (77,255)
-------------
TOTAL NET ASSETS (100.0%)........... $ 4,555,280
=============
</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.
42
<PAGE> 43
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $3,462,018)............... 4,632,535
Cash in bank............................... 592
Receivable for securities sold............. 22,649
Dividends & accrued interest receivable.... 99
Other...................................... 1,623
-----------
Total assets............................. 4,657,498
-----------
Liabilities:
Payable for securities purchased........... 90,918
Payable for fund share redeemed............ 3,716
Accrued 12b-1 fees (note 6)................ 2,692
Other accrued expenses..................... 4,892
-----------
Total liabilities........................ 102,218
-----------
Net assets at market value................... $ 4,555,280
===========
Net assets consist of:
Par value, $.001 per share................. $ 376
Paid-in capital in excess of par value..... 3,419,586
Accumulated net realized loss on
investments.............................. (35,199)
Net unrealized appreciation on
investments.............................. 1,170,517
-----------
Net assets at market value................... $ 4,555,280
===========
Shares outstanding........................... 375,578
Net asset value per share.................... $ 12.13
===========
Maximum offering price per share
($12.13/95%)............................... $ 12.77
===========
</TABLE>
STATEMENT OF OPERATIONS
For Year Ended June 30, 1999
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 5,108
Dividends................................... 2,317
--------
Total investment income................... 7,425
--------
Expenses:
Management fees (note 3).................... 40,766
12b-1 fees (note 6)......................... 10,728
Custodian fees (note 3)..................... 4,950
Directors' fees (note 3).................... 956
Professional fees........................... 3,328
Transfer agent & accounting fees............ 33,557
Filing fees................................. 8,839
Printing, proxy and postage fees............ 1,615
Other....................................... 141
--------
Total expenses............................ 104,880
--------
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (19,055)
--------
Net expenses.............................. 85,825
--------
Net investment loss....................... (78,400)
--------
Realized & unrealized gain on investments:
Net realized gain from investments.......... 484,943
Net increase in unrealized appreciation on
investments............................... 118,174
--------
Net gain on investments................... 603,117
--------
Net increase in net assets from
operations.............................. $524,717
========
</TABLE>
The accompanying notes are an integral part of these financial statements.
43
<PAGE> 44
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (78,400) $ (89,956)
Realized gain (loss) on investments....................... 484,943 (365,825)
Unrealized gain on investments............................ 118,174 836,872
----------- -----------
Net increase in assets from operations................ 524,717 381,091
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 692,176 728,721
Paid for shares redeemed.................................. (1,983,265) (1,271,044)
----------- -----------
Decrease in net assets derived from capital share
transactions......................................... (1,291,089) (542,323)
----------- -----------
Decrease in net assets............................. (766,372) (161,232)
----------- -----------
Net Assets:
Beginning of period....................................... 5,321,652 5,482,884
----------- -----------
End of period............................................. $ 4,555,280 $ 5,321,652
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30, 11-1-96
------------------- TO
1999 1998 6-30-97
------ ------ --------
<S> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $10.60 $ 9.86 $10.00
Income (loss) from investment operations:
Net investment loss....................................... (0.18) (0.16) (0.08)
Net realized & unrealized gain (loss) on investments...... 1.71 0.90 (0.06)
------ ------ ------
Total income (loss) from investment operations.......... 1.53 0.74 (0.14)
------ ------ ------
Net asset value, end of period.............................. $12.13 $10.60 $ 9.86
====== ====== ======
Total return................................................ 14.43% 7.51% (1.40)%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.98% 2.06% 1.35%(a)
Net investment loss....................................... (1.81)% (1.65)* (0.87)*(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.42% 2.12% 1.40%(a)
Net investment loss....................................... (2.25)% (1.70)% (0.92)%(a)
Portfolio turnover rate..................................... 148% 116% 80%
Net assets at end of period (millions)...................... $ 4.6 $ 5.3 $ 5.5
</TABLE>
- ---------------
(a) Annualized
(b) Calculated on an aggregate basis (not annualized).
(c) The advisor has elected to reimburse certain operating expenses of the Core
Growth Portfolio, but it may cease that waiver, in whole or in part, without
prior written notice.
The accompanying notes are an integral part of these financial statements.
44
<PAGE> 45
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS
(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 at 4:00 p.m. Eastern time. 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
45
<PAGE> 46
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
to settle these currency contracts or the related foreign security trades,
the Fund could be exposed to foreign currency fluctuations.
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.
46
<PAGE> 47
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 $207,185 resulting in a
reclassification adjustment to decrease Paid-in capital in excess of par
value by $207,185. On the statement of assets and liabilities, as a result of
temporary book-to-tax differences, accumulated undistributed net realized
loss on investments was decreased by $29,490 and $16,294 resulting in a
reclassification adjustment to Paid-in capital in excess of par of $29,409
and $16,294 for the International and Global Contrarian Portfolios,
respectively. These reclassifications had no effect on net assets or net
asset values per share.
For federal income tax purposes, the Small Cap, International and Global
Contrarian Portfolios had net capital losses of $804,516, $1,442,884, and
$857,799 respectively at June 30, 1999. In addition, the Tax-Free Income,
Income and Core Growth Portfolios also had capital loss carryovers at June
30, 1999. If not offset by subsequent capital gains, $7,298 and $35,681 will
expire June 30, 2004 in the Tax-Free Income and Income Portfolios,
respectively, $4,042 will expire June 30, 2005 in the Tax-Free Portfolio,
$100,005 and $35,199 will expire June 30, 2006 in the Tax-Free Income and
Core Growth Portfolios, respectively, $804,516, $1,442,884 and $857,799 will
expire June 30, 2007 in the Small Cap, International, and Global Contrarian
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.
Expenses directly attributable to a portfolio are charged to that portfolio.
Expenses not directly attributable to a portfolio are allocated on the basis
of relative 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, 1999 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>
Gross unrealized:
Appreciation.............. 584,400 109,054 4,171,173 4,488,284 666,546 574,880 270,993 1,222,426
Depreciation.............. (25,318) (108,661) (198,511) (257,104) (153,045) (268,734) (107,380) (51,908)
Net unrealized:
Appreciation.............. 559,082 393 3,972,662 4,231,180 513,500 306,146 163,613 1,170,517
Depreciation.............. 0 0 0 0 0 0 0 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
47
<PAGE> 48
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Growth Portfolios. ONLIC and its affiliates have also purchased additional
shares of each portfolio and as of June 30, 1999 the additional shares owned
were as follows: 8,875,316 shares of 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, 265,163 shares of
the Growth Portfolio, 217,056 shares of the Small Cap Portfolio, 273,068
shares of the Global Contrarian Portfolio, and 258,377 shares of the Core
Growth Portfolio.
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) from July 1, 1998 to June 30, 1999 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................ 489,412 250,000 6,292,070 5,752,819 1,848,218 21,225,783 9,120,563 6,229,699
Sales.................... -- 304,242 8,150,841 8,772,679 3,265,044 29,690,582 11,703,676 7,517,755
U.S. Govt. Obligations:
Purchases................ -- -- -- -- -- -- -- --
Sales.................... -- 104,173 -- -- -- -- -- --
</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.
After January 1,1999, the advisor began waiving any fees in excess of 0.85%
in the International Portfolio. ONI pays Federated Investment Counseling
("FIC") fees at an annual rate of (i) 0.40% of the first $200 million and
0.35% of average net assets in excess of $200 million of International
Portfolio and (ii) 0.75% of the first $100 million and 0.65% of the average
daily net assets in excess of $100 million of the Global Contrarian Portfolio
pursuant to a sub-advisory agreement between ONI and FIC dated January 1,
1999. 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 0.65% of the average
daily net asset value of the first $50 million of Portfolio assets, 0.60% 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, 1999 were $25,149, $10,766, $9,973, $20,784, $17,042 and $6,482 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,
48
<PAGE> 49
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
taxes and interest, in excess of 1% of their average daily net assets. For
the year ended June 30, 1999, the reimbursement was $7,778, $19,055, $43,677,
and $47,996 for the Small Cap, Core Growth, International, and Global
Contrarian Portfolios respectively.
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, 1999 and 1998 were as
follows:
<TABLE>
<CAPTION>
MONEY MARKET TAX-FREE INCOME INCOME
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6-30-99 6-30-98 6-30-99 6-30-98 6-30-99 6-30-98
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales....................... 21,575,304 21,996,755 26,786 40,258 32,840 76,483
Capital shares issued on reinvested dividends........ 485,752 455,744 3,288 2,820 6,655 7,995
Capital shares redeemed.............................. 21,656,382 20,456,024 35,646 20,443 75,391 70,795
</TABLE>
<TABLE>
<CAPTION>
INCOME & GROWTH GROWTH SMALL CAP
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6-30-99 6-30-98 6-30-99 6-30-98 6-30-99 6-30-98
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales....................... 118,333 216,315 84,824 106,470 41,741 90,612
Capital shares issued on reinvested dividends........ 38,380 39,848 37,590 35,559 12,745 21,133
Capital shares redeemed.............................. 312,346 123,916 246,309 138,800 135,052 65,628
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL GLOBAL CONTRARIAN CORE GROWTH
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6-30-99 6-30-98 6-30-99 6-30-98 6-30-99 6-30-98
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales....................... 47,020 202,687 17,121 43,691 78,273 74,120
Capital shares issued on reinvested dividends........ 23,927 178,279 29,126 19,016 0 0
Capital shares redeemed.............................. 561,187 504,238 127,028 126,384 204,796 127,889
</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, 1999 were approximately $6,016, $5,203, $36,716,
$33,354, $9,750, $13,487, $3,864 and $11,103 for the Tax-Free Income, Income,
Income & Growth, Growth, Small Cap, International, Global Contrarian and Core
Growth Portfolios, respectively.
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
49
<PAGE> 50
ONE FUND, INC. June 30, 1999
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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, 1999, 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. $ CURRENCY TO BE RECEIVED U.S. $ UNREALIZED
DATES ---------------------------- VALUE AT --------------------------- VALUE AT --------------------
THROUGH AMOUNT TYPE 06/30/99 AMOUNT TYPE 06/30/99 GAIN LOSS
---------- ------------ ------------- ---------- ----------- ------------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
07/15/99 360,000 Australian $ 237,618 225,475 U.S. Dollar 225,475 -- $ (12,143)
07/15/99 228,780 U.S. Dollar 228,780 360,000 Australian $ 237,618 $ 8,838 --
07/22/99 296,000 Swiss Franc 190,654 222,556 U.S. Dollar 222,556 31,902 --
07/22/99 218,289 U.S. Dollar 218,289 296,000 Swiss Franc 190,654 -- (27,635)
07/01/99 5,646,000 French Franc 886,934 1,023,198 U.S. Dollar 1,023,197 136,263
07/01/99 1,005,530 U.S. Dollar 1,005,530 5,646,000 French Franc 886,934 -- (118,596)
07/29/99 124,916,000 Japanese Yen 1,035,144 1,099,613 U.S. Dollar 1,099,613 64,469 --
07/29/99 1,125,369 U.S. Dollar 1,125,369 124,916,000 Japanese Yen 1,035,144 -- (90,225)
10/05/01 388,000 New Zealand $ 205,077 186,046 U.S. Dollar 186,046 -- (19,031)
10/05/01 206,455 U.S. Dollar 206,455 388,000 New Zealand $ 205,078 -- (1,377)
---------- ---------- -------- ---------
$5,339,850 $5,312,315 $241,472 $(269,007)
========== ========== ======== =========
</TABLE>
GLOBAL CONTRARIAN PORTFOLIO
<TABLE>
<CAPTION>
SETTLEMENT CURRENCY TO BE DELIVERED U.S. $ CURRENCY TO BE RECEIVED U.S. $ UNREALIZED
DATES ---------------------------- VALUE AT --------------------------- VALUE AT --------------------
THROUGH AMOUNT TYPE 06/30/99 AMOUNT TYPE 06/30/99 GAIN LOSS
---------- ------------ ------------- ---------- ----------- ------------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
07/29/99 3,684,000 Japanese Yen 30,528 32,430 U.S. Dollar 32,430 $ 1,902 --
07/29/99 33,189 U.S. Dollar 33,189 3,684,000 Japanese Yen 30,528 -- $ (2,661)
11/13/99 11,720,000 Japanese Yen 104,285 109,810 U.S. Dollar 109,810 5,525 --
11/13/99 112,909 U.S. Dollar 112,909 11,720,000 Japanese Yen 104,284 -- (8,625)
---------- ---------- -------- ---------
$ 280,911 $ 277,052 $ 7,427 $ (11,286)
========== ========== ======== =========
</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.
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INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
ONE Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of ONE
Fund, Inc. (comprised of Money Market, Tax-Free Income, Income, Income & Growth,
Growth, Small Cap, International, Global Contrarian and Core Growth Portfolios,
collectively the Portfolios) including the schedules of investments, as of June
30, 1999, 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 the financial highlights are the responsibility
of the Portfolios' 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 audits to obtain
reasonable assurance about whether the financial statements and financial
highlights 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 verification of securities owned as of June
30, 1999, by confirmation with the custodian and brokers and other appropriate
audit procedures. 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 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 aforementioned portfolios comprising the ONE Fund, Inc. at June 30, 1999,
and the results of their operations, the changes in their net assets and the
financial highlights for each of the periods indicated herein, in conformity
with generally accepted accounting principles.
KPMG LLP
Columbus, Ohio
July 30, 1999
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