<PAGE> 1
ONE FUND
SEMI-ANNUAL REPORT
------------------------
DECEMBER 31, 1999
ONE Fund, Inc.
[Ohio National Logo]
<PAGE> 2
President's
Message
[John J. Palmer Photo]
Dear Investor:
Thank you for being a shareholder in the ONE Fund. All of us here appreciate
your support. We are pleased to provide you with an update of ONE Fund's
performance and investment activity for the six months ending December 31, 1999.
We are committed to serving ONE Fund shareholders through adherence to
fundamental investment principles: careful selection and consistent professional
management.
New Funds/New Fund Management
What a difference a year can make. We have seen a change in the market, change
among our portfolio managers and a change in our performance. The results,
indeed, have been excellent.
- - In January, Federated Global Investment Management Corp., began managing our
International and Global Contrarian portfolios. Federated is part of
Pittsburgh-based Federated Investors, an investment manager founded in 1955,
which now has more than $110 billion in managed assets. We immediately began
to see steady gains in overall performance. As of December 31, the
International portfolio experienced a 62.59 percent annualized return.
(Following a vote of shareholders, the Global Contrarian portfolio was merged
into the International fund on November 1.)
- - On December 15, the S&P 500 Index portfolio became available in ONE Fund. It
is managed by B. Douglas Hundley who has demonstrated his proficiency with the
highly regarded S&P 500 Index portfolio of Ohio National Fund. We believe it
will prove to be an excellent long-term addition to the ONE Fund.
Portfolios also ranked very well within their style and category. Highlights
include:
- - The Income & Growth portfolio ranked in the top 25 percent (by Lipper) for the
second half of 1999, and the Growth portfolio ranked in the top 28 percent.
- - The Small Cap portfolio ranked in the top 23 percent for its Lipper Fund
classification for the fourth quarter, returning 10.99 percent for the
quarter.
- - The Core Growth portfolio performance was very noteworthy, returning 105.53
percent for the year ending December 31 and 54.69 percent for the last three
months of 1999.
To be sure, 1999 was about change and growth at ONE Fund - two themes that were
missing during a lackluster 1998. In the past six months, we've seen a change in
the market, change in our portfolio managers and change in overall performance -
important changes for your long-term investment in ONE Fund. We are working hard
to provide even better products and services for you in the future.
The Importance of Diversification
For all investors, we continue to emphasize the value of diversification. As a
company, we certainly do not recommend investing solely in the "style of the
moment" or trying to base investment decisions on market timing. We remain
dedicated to staying in step with - and, in some cases, even ahead of - other
financial services providers when it comes to improving our investment
selections. Today, with the array of investment styles now available within the
ONE Fund, diversification becomes an important tool for you as you plan your
wealth-building investment strategies.
1
<PAGE> 3
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 continue to make every effort to merit your confidence.
Best regards,
/S/JOHN J. PALMER
John J. Palmer, FSA, MAAA
- --------------------------------------------------------------------------------
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
Michael A. Boedeker, 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. 2/00
2
<PAGE> 4
ONE FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE & RELATED (10.0%)
$516,000 Ford Motor Credit 5.840% 01-11-00.... $ 515,330
304,000 Ford Motor Credit 6.010% 01-03-00.... 304,000
345,000 General Motors 4.500% 01-12-00....... 344,612
516,000 General Motors 6.230% 01-12-00....... 515,196
-----------
1,679,138
-----------
CHEMICALS (6.2%)
545,000 Dupont El Nemou 6.000% 02-24-00...... 540,277
517,000 Great Lakes Chemical 5.930%
01-10-00............................ 516,404
-----------
1,056,681
-----------
COMMUNICATIONS (3.0%)
506,000 Motorola Inc. 5.150% 01-27-00........ 504,263
-----------
COMPUTER & RELATED (2.9%)
491,000 IBM Credit Corp. 5.910% 01-19-00..... 489,710
-----------
CONSUMER PRODUCTS (5.5%)
494,000 Fortune Brands 5.900% 01-26-00....... 492,138
444,000 General Mills 5.870% 01-05-00........ 443,855
-----------
935,993
-----------
FINANCIAL SERVICES (27.4%)
558,000 American General Finance Corp. 5.780%
01-18-00............................ 556,656
483,000 Allmerica Financial 6.150%
02-15-00............................ 479,452
245,000 American Express Credit 1.000%
01-03-00............................ 245,000
322,000 American General Finance Corp. 5.880%
01-04-00............................ 321,947
562,000 Block Financial 6.100% 01-31-00...... 559,334
540,000 G.E. Capital 5.750% 01-21-00......... 538,448
320,000 G.E. Capital 4.500% 01-28-00......... 319,000
320,000 Household Finance Corp. 5.820%
02-07-00............................ 502,142
568,000 Merrill Lynch 5.870% 02-22-00........ 563,369
558,000 USAA Capital Corp. 5.900% 01-27-00... 555,787
-----------
4,641,135
-----------
FOOD & RELATED (8.8%)
689,000 Coca Cola Co. 6.020% 02-03-00........ 685,428
813,000 Winn Dixie 6.500% 01-20-00........... 810,504
-----------
1,495,932
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
INDUSTRIAL SERVICES (9.4%)
$655,000 Cooper Industries 6.020% 02-14-00.... $ 650,400
429,000 Flour Corp. 5.990% 02-01-00.......... 426,930
519,000 Monsanto 6.300% 01-28-00............. 516,729
-----------
1,594,059
-----------
INSURANCE SERVICES (7.9%)
500,000 Allstate 6.150% 02-11-00............. 496,669
400,000 Prudential Funding 5.500% 02-28-00... 396,578
447,000 Prudential Funding 5.650% 02-25-00... 443,282
-----------
1,336,529
-----------
MACHINERY (3.2%)
538,000 John Deere Capital 5.780% 01-07-00... 537,655
-----------
MANUFACTURING (2.8%)
475,000 Textron 5.900% 01-13-00.............. 474,221
-----------
MEDIA & PUBLISHING (2.5%)
432,000 Scripps (E.W.) Co. 5.970% 01-24-00... 430,429
-----------
OIL, ENERGY & NATURAL GAS (6.0%)
521,000 Consolidated Natural Gas 6.000%
01-25-00............................ 519,090
507,000 Questar Corp. 6.050% 01-18-00........ 505,722
-----------
1,024,812
-----------
RETAIL (5.0%)
567,000 Sears Roebuck Acceptance Corp. 6.060%
01-18-00............................ 565,568
282,000 Sears Roebuck Acceptance Corp. 5.250%
01-05-00............................ 281,918
-----------
847,486
-----------
TOTAL SHORT-TERM NOTES (100.6%) (COST
$17,048,043)........................ $17,048,043
-----------
TOTAL HOLDINGS (100.6%) (COST
$17,048,043)(a)..................... $17,048,043
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (-0.6%)................. (100,388)
-----------
TOTAL NET ASSETS (100.0%)............ $16,947,655
===========
</TABLE>
- ---------------
(a) Represents cost for financial reporting and federal income tax purposes. See
Note 1.
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 5
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at amortized
cost (note 1)........................... $17,048,043
Cash in bank.............................. 2,311
Receivable for fund shares sold........... 10,628
Other..................................... 4,522
-----------
Total assets............................ 17,065,504
-----------
Liabilities:
Payable for fund shares redeemed.......... 165
Payable for investment management services
(note 3)................................ 2,408
Accrued 12b-1 fees (note 6)............... 6,304
Other accrued expenses.................... 28,452
Dividends payable......................... 80,520
-----------
Total liabilities....................... 117,849
-----------
Net assets.................................. $16,947,655
===========
Net assets consist of:
Par value, $.001 per share................ $ 16,948
Paid-in capital in excess of par value.... 16,930,707
-----------
Net assets.................................. $16,947,655
===========
Shares outstanding.......................... 16,948,012
Net asset value per share................... $ 1.00
===========
Maximum offering price per share............ $ 1.00
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................. $ 489,982
-----------
Expenses:
Management fees (note 3).................. 26,786
12b-1 fees (note 6)....................... 13,393
Custodian fees (note 3)................... 2,693
Directors' fees (note 3).................. 1,869
Professional fees......................... 6,488
Transfer agent and accounting fees........ 30,338
Filing fees............................... 8,766
Printing, proxy and postage fees.......... 3,156
Other..................................... 646
-----------
Total expenses.......................... 94,135
Less expenses voluntarily reduced or
reimbursed (note 3)................... (13,393)
-----------
Net expenses............................ 80,742
-----------
Net investment income................... 409,240
-----------
Net increase in net assets from
operations............................ $ 409,240
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 6
ONE FUND, INC.
MONEY MARKET PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 409,240 $ 730,870
------------ ------------
Net increase in assets from operations................ 409,240 730,870
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (409,240) (730,870)
------------ ------------
From capital share transactions (note 4):
Received from shares sold................................. 8,671,186 21,575,304
Received from dividends reinvested........................ 224,254 485,752
Paid for shares redeemed.................................. (8,713,426) (21,656,382)
------------ ------------
Increase in net assets derived from capital share
transactions......................................... 182,014 404,674
------------ ------------
Increase in net assets............................. 182,014 404,674
Net Assets:
Beginning of period....................................... 16,765,641 16,360,967
------------ ------------
End of period............................................. $ 16,947,655 $ 16,765,641
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED JUNE 30
DECEMBER 31, --------------------------------------------------
1999 1999 1998 1997 1996 1995
------------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period...................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income................................... 0.02 0.04 0.05 0.05 0.05 0.05
Less distributions:
Dividends from net investment income.................... (0.02) (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 $ 1.00
====== ====== ====== ====== ====== ======
Total return.............................................. 2.32%(b) 4.44% 4.87% 4.77% 5.18% 5.06%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses................................................ 0.92%(a) 0.88% 0.88% 0.80% 0.57% 0.51%
Net investment income................................... 4.69%(a) 4.36% 4.81% 4.71% 5.14% 4.99%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses................................................ 1.08%(a) 1.03% 1.03% 1.04% 0.87% 0.81%
Net assets at end of period (millions).................... $ 16.9 $ 16.8 $ 16.4 $ 14.4 $ 15.8 $ 14.1
</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 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> 7
ONE FUND, INC.
INCOME PORTFOLIO
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 DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year (0.80)% (3.77)%
Three-year 4.63% 3.57%
Five-year 6.94% 6.30%
Since inception
(8/18/92) 5.46% 5.03%
</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 trailed the Lehman Brothers Government/Corporate
Intermediate Index -(.80) to +.39 for the year 1999. This was a very difficult
year for the fixed income investors with the vast majority of fixed income funds
providing investors with negative returns. Our underperformance relative to the
index was primarily a second half occurrence since we were approximately even
over the first six months. Market price deterioration in a few of our "Baa"
rated corporates relative to the U.S. Treasury market was the primary reason for
this.
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>
'92 9700 10000
9757.2 10100
'93 10826.6 10721.2
11050.7 10980.6
'94 10408.7 10690.7
10449.3 10766.6
'95 11620.6 11799.1
12201.7 12413.9
'96 12150.4 12387.8
12771.3 12916.8
'97 13158.3 13282.3
13809.6 13933.1
'98 14281.9 14411
14738.9 15101.3
'99 14659.3 15013.7
14619.8 15159.4
</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 DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. US Treasury Note 6.375% 08/15/02 13.9
2. Delta Airlines 7.70% 12/15/2005 4.6
3. Texas Utilities Electric Co.
7.48% 01/01/17 4.5
4. Watson Pharmaceuticals, Inc.
7.125% 5/15/08 4.3
5. Mississippi Chemical Corp. 7.25%
11/15/07 4.1
6. Lyondell Chemicals 9.625%
05/01/07 4.0
7. ITT Destinations Inc. 6.75%
11/15/05 4.0
8. Mirage Resorts Inc. 6.75%
02/01/08 4.0
9. El Paso Electric Co. 8.9%
02/01/06 4.0
10. IBM Corp. 7.25% 11/01/02 3.9
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Utilities 19.0
2. US Treasury 13.9
3. Transportation and Equipment 10.9
4. Hotel/Lodging 10.7
5. Chemicals 8.0
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 8
ONE FUND, INC.
INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
GOVERNMENT (14.0%)
$900,000 U.S. Treasury Note 6.375% 08/15/02.... $ 901,969
----------
CHEMICALS (8.0%)
250,000 Lyondell Chemicals Inc. (144A) 9.625%
05/01/07............................. 256,875
300,000 Mississippi Chemical Corp. 7.250%
11/15/07............................. 262,835
----------
519,710
----------
COMMUNICATIONS (1.6%)
100,000 Comcast Cable Communications 8.375%
05/01/07............................. 103,509
----------
COMPUTER & RELATED (3.9%)
250,000 IBM Corp. 7.250% 11/01/02............. 253,479
----------
DRUGS (4.3%)
300,000 Watson Pharmaceuticals Inc. 7.125%
05/15/08............................. 279,506
----------
FORESTRY & PAPER PRODUCTS (3.9%)
250,000 ITT Rayonier Inc. 7.500% 10/15/02..... 252,559
----------
HOTEL/LODGING (10.7%)
200,000 Hilton Hotels Corp. 7.200% 12/15/09... 175,377
300,000 ITT Destinations Inc. 6.750%
11/15/05............................. 257,576
300,000 Mirage Resorts Inc. 6.750% 02/01/08... 260,386
----------
693,339
----------
MEDICAL & RELATED (3.7%)
250,000 Bergen Brunswig Corp. 7.375%
01/15/03............................. 240,605
----------
OIL, ENERGY & NATURAL GAS (4.4%)
200,000 PDV America, Inc. 7.875% 08/01/03..... 188,456
100,000 Seagull Energy 7.875% 08/01/03........ 98,210
----------
286,666
----------
REAL ESTATE (3.1%)
200,000 Avalon Properties Inc. 7.375%
09/15/02............................. 197,865
----------
TRANSPORTATION & EQUIPMENT (11.0%)
200,000 ABC Rail Product Corp. 8.750%
12/01/04............................. 165,000
300,000 Delta Airlines 7.700% 12/15/05........ 295,388
250,000 Illinois Central Gulf Railroad 6.750%
05/15/03............................. 247,316
----------
707,704
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
UTILITIES (13.3%)
$250,000 El Paso Electric Co. 8.900%
02/01/06............................. $ 257,715
200,000 Niagara Mohawk Power Corp. 7.750%
10/01/08............................. 200,214
116,711 Puget Power 6.450% 04/11/05........... 114,414
300,000 Texas Utilities Electric 7.480%
01/01/17............................. 288,481
----------
860,824
----------
TOTAL LONG-TERM BONDS & NOTES (81.9%)
(COST $5,497,067).................... $5,297,735
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
UTILITIES (5.7%)
8,000 GTE Delaware 8.75% Ser. B.......... $ 198,000
7,000 CL & P Capital 9.3% Ser. A......... 170,188
-----------
TOTAL PREFERRED STOCK (5.7%) (COST
$375,000)......................... $ 368,188
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (12.2%)
$325,000 American Express Credit 1.00%
01/04/00............................. $ 324,973
466,000 Firstar 1.000%
01/03/00 repurchase price $466,038
collateralized by GNMA
certificates pool # 8375 due
02/20/24 (Cost $466,000)............. 466,000
----------
TOTAL SHORT-TERM NOTES (12.2%)
(COST $790,973)...................... $ 790,973
----------
TOTAL HOLDINGS (99.8%)
(COST $6,663,040) (a)................ $6,456,896
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(0.2%)............................... 13,036
----------
TOTAL NET ASSETS (100.0%)............. $6,469,932
==========
</TABLE>
- ---------------
(a) Represents cost for financial reporting and federal income tax purposes. See
Note 1.
(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 4.0% of net assets. These
securities were deemed liquid pursuant to procedures approved by the
Board of Directors.
The accompanying notes are an integral part of these financial statements.
7
<PAGE> 9
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,663,040)............... $6,456,896
Cash in bank............................... 446
Dividends & accrued interest receivable.... 107,092
Other...................................... 3,976
----------
Total assets............................. 6,568,410
----------
Liabilities:
Payable for shares redeemed................ 35,845
Payable for investment management services
(note 3)................................. 2,092
Accrued 12b-1 fees (note 6)................ 4,461
Other accrued expenses..................... 23,039
Dividends payable.......................... 33,041
----------
Total liabilities........................ 98,478
----------
Net assets at market value................... $6,469,932
==========
Net assets consist of:
Par value, $.001 per share................. $ 689
Paid-in capital in excess of par value..... 6,698,704
Accumulated undistributed net realized loss
on investments........................... (23,317)
Net unrealized depreciation on
investments.............................. (206,144)
----------
Net assets at market value................... $6,469,932
==========
Shares outstanding........................... 689,414
Net asset value per share.................... $ 9.38
==========
Maximum offering price per share
($9.38/97%)................................ $ 9.67
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 234,612
---------
Expenses:
Management fees (note 3).................... 15,971
12b-1 fees (note 6)......................... 7,985
Custodian fees (note 3)..................... 2,513
Directors' fees (note 3).................... 740
Professional fees........................... 2,594
Transfer agent & accounting fees............ 17,245
Filing fees................................. 3,554
Printing, proxy and postage fees............ 1,298
Other....................................... 122
---------
Total expenses............................ 52,022
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (4,791)
---------
Net expenses.............................. 47,231
---------
Net investment income..................... 187,381
---------
Realized and unrealized gain (loss) on
investments:
Net realized gain from investments............ 12,371
Net increase in unrealized depreciation on
investments............................... (206,537)
---------
Net loss on investments................. (194,166)
---------
Net decrease in net assets from
operations........................... $ (6,785)
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE> 10
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 187,381 $ 377,694
Realized gain on investments.............................. 12,371 19,787
Unrealized loss on investments............................ (206,537) (223,951)
---------- ----------
Net increase (decrease) in assets from operations..... (6,785) 173,530
---------- ----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (187,381) (377,694)
---------- ----------
From capital share transactions (note 4):
Received from shares sold................................. 6,229,390 327,145
Received from dividends reinvested........................ 24,221 66,015
Paid for shares redeemed.................................. (5,953,947) (748,947)
---------- ----------
Increase (decrease) in net assets derived from capital
share transactions................................... 299,664 (355,787)
---------- ----------
Increase (decrease) in net assets.................. 105,498 (559,951)
Net Assets:
Beginning of period....................................... 6,364,434 6,924,385
---------- ----------
End of period............................................. $6,469,932 $6,364,434
========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
SIX MONTHS ENDED ---------------------------------------
DECEMBER 31, 1999 1999 1998 1997 1996
----------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $ 9.69 $ 9.99 $ 9.75 $ 9.59 $ 9.78
Income (loss) from investment operations:
Net investment income..................................... 0.28 0.57 0.59 0.61 0.63
Net realized & unrealized gain (loss) on investments...... (0.31) (0.30) 0.24 0.16 (0.19)
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... (0.03) 0.27 0.83 0.77 0.44
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.28) (0.57) (0.59) (0.61) (0.63)
Distributions from net realized capital gains............. 0.00 0.00 0.00 0.00 0.00
------ ------ ------ ------ ------
Total distributions..................................... (0.28) (0.57) (0.59) (0.61) (0.63)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 9.38 $ 9.69 $ 9.99 $ 9.75 $ 9.59
====== ====== ====== ====== ======
Total return................................................ (0.27)%(b) 2.65% 8.56% 8.26% 4.61%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.49%(a) 1.40% 1.39% 1.21% 0.97%
Net investment income..................................... 5.90%(a) 5.70% 5.91% 6.29% 6.50%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.64%(a) 1.55% 1.54% 1.51% 1.22%
Portfolio turnover rate..................................... 5% 4% 40% 10% 9%
Net assets at end of period (millions)...................... $ 6.5 $ 6.4 $ 6.9 $ 6.6 $ 7.0
</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 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.
9
<PAGE> 11
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
OBJECTIVE
To provide moderate income with the potential for increasing income over time.
Growth of capital is also a primary objective. At least 90% of the assets of
this portfolio will be invested in income-producing securities. Normally, at
least 50% of the assets will be invested in dividend-paying stock.
PERFORMANCE AS OF DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 11.19% 5.63%
Three-year 12.31% 10.41%
Five-year 15.22% 14.07%
Since inception
(8/18/92) 12.50% 11.72%
</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
1999 turned out to be another year of high returns for stock indices across the
board. Volatility has continued at extreme levels and we see this as a regular
market factor for the foreseeable future. The Income & Growth Portfolio has gone
through a transformation process to make the fund more growth-oriented than it
was in the past. Due to unacceptable portfolio performance, new management was
engaged to direct the fund beginning at mid-year. The fund has progressed into a
more growth-oriented portfolio and has taken sizable positions in large and
liquid securities. As a result, the previous holdings in smaller capitalized
names have been replaced. Fortunately, this has had a positive impact on the
fund's performance. Due to the narrow market we are experiencing, the fund
didn't perform as well as the widely publicized growth names. However, the
portfolio's performance in the second half of the year improved relative to the
S&P 500 when compared to the first half of the year. We are confident that the
changes we have made will continue to improve the fund's relative performance.
Performance of the fund has been improved by taking increased positions in
technology and faster-growing companies. We feel that the best areas for
continued performance lie in these growth areas and continue to hold large
weightings in them. We will continue to search for superior companies that have
outstanding fundamentals. Cash positions will continue to be a small weighting
within the fund.
In summary, we thank you for your continued support and patience. The Income &
Growth Portfolio is positioning itself to benefit from the vagaries of the
market and we look to report more positive news in the future.
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>
'92 9500 10000
9487.7 10627
'93 10686.9 11139.2
11146.4 11688.4
'94 10766.3 11288.6
11066.7 11841.8
'95 12856.2 14227.9
13796 16273.9
'96 14725.8 17933.8
15976.1 20030.3
'97 18016.2 24136.5
19635.9 26690.1
'98 20682.5 31416.9
20359.8 34316.7
'99 21660.8 38565.1
22637.7 41538.5
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Intel Corp 4.08
2. Texas Instruments 4.00
3. General Electric Co. 3.96
4. Honeywell 3.34
5. Johnson & Johnson 3.08
6. Bell Atlantic 3.05
7. Tyco International 2.89
8. American Int'l. 2.79
9. Citigroup 2.75
10. Home Depot Inc. 2.55
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Computer & Related 11.8
2. Communications 10.9
3. Oil, Energy and Natural Gas 10.8
4. Electronics/Semiconductors 10.0
5. Retail 6.3
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 12
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AEROSPACE (3.3%)
7,000 Honeywell............................ $ 403,812
-----------
BANKING (1.5%)
8,700 Firstar Corp. ....................... 183,787
-----------
BROADCAST RADIO & TV (1.8%)
3,400 *CBS Corp. .......................... 217,387
-----------
BUSINESS SERVICES (0.9%)
3,000 Manpower Inc. ....................... 112,875
-----------
COMMUNICATIONS (10.0%)
2,500 *ADC Telecommunications Inc. ........ 181,406
6,000 Bell Atlantic Corp. ................. 369,375
3,450 *MCI Worldcom Inc. .................. 183,066
1,500 Nokia Corp ADR....................... 285,000
4,000 SBC Communications................... 195,000
-----------
1,213,847
-----------
COMPUTER & RELATED (9.7%)
1,800 *Citrix Systems Inc. ................ 221,400
2,000 *EMC Corp. Mass. .................... 218,500
2,000 Hewlett Packard Co. ................. 227,875
2,500 International Business Machines...... 270,000
2,000 *Microsoft Corp. .................... 233,500
-----------
1,171,275
-----------
CONSUMER PRODUCTS (3.1%)
4,000 Johnson & Johnson.................... 372,500
-----------
ELECTRICAL EQUIPMENT (8.1%)
6,000 Circuit City Stores.................. 270,375
3,100 General Electric Co. ................ 479,725
3,000 CTS Corp. ........................... 226,125
-----------
976,225
-----------
ELECTRONICS/SEMICONDUCTORS (8.1%)
6,000 Intel Corp. ......................... 493,875
5,000 Texas Instruments Inc. .............. 484,375
-----------
978,250
-----------
FINANCIAL SERVICES (4.0%)
5,300 Associates First Capital CL A........ 145,419
6,000 Citigroup............................ 333,375
-----------
478,794
-----------
FOOD & RELATED (1.5%)
8,000 Conagra Inc. ........................ 180,500
-----------
INSURANCE SERVICES (2.8%)
3,125 American Intl. Group................. 337,891
-----------
MEDICAL & RELATED (1.8%)
3,500 Baxter International Inc. ........... 219,844
-----------
OIL, ENERGY & NATURAL GAS (7.2%)
3,000 Apache Corp. ........................ 110,813
3,000 Halliburton.......................... 120,750
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
OIL, ENERGY & NATURAL GAS (CONTINUED)
2,500 Kerr-McGee Corp. .................... $ 155,000
3,350 Schlumberger Ltd. ................... 188,437
649 Transocean Sedco Forex Inc. ......... 21,894
9,000 Williams Cos. Inc. .................. 275,062
-----------
871,956
-----------
RETAIL (5.4%)
5,000 CVS Corp. ........................... 199,688
4,500 Home Depot Inc. ..................... 308,531
3,000 Tandy Corp. ......................... 147,562
-----------
655,781
-----------
SECURITY SYSTEMS/SERVICES (2.9%)
9,000 Tyco International................... 349,875
-----------
TELECOMMUNICATIONS EQUIPMENT (1.4%)
3,000 Scientific Atlanta Inc. ............. 166,875
-----------
UTILITIES (1.7%)
6,000 Coastal Corp. ....................... 212,625
-----------
TOTAL COMMON STOCK (75.2%) (COST
$6,285,558)......................... $ 9,104,099
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES REAL ESTATE INVESTMENT TRUSTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
5,000 Reckson Assoc. Realty Corp-B......... $ 115,000
-----------
TOTAL REAL ESTATE INV. TRUST (0.9%)
(COST $106,438)..................... $ 115,000
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
BANKING (FOREIGN) (0.9%)
4,000 National Australia Bank Ltd.
Conv. .............................. $ 110,500
-----------
BUSINESS SERVICES (0.6%)
4,000 Flagstar Capital 8.50%............... 75,000
-----------
OIL, ENERGY & NATURAL GAS (0.5%)
3,000 Consumers Energy II 8.2% Conv. ...... 61,875
-----------
RETAIL (1.0%)
2,500 Kmart Financing 7.75% 06/15/16
Conv. .............................. 109,375
-----------
TOTAL PREFERRED STOCK (3.0%) (COST
$424,671)........................... $ 356,750
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
CHEMICALS (1.8%)
$250,000 Geon Corporation 7.500% 12/15/15..... $ 218,718
-----------
COMMUNICATIONS (0.8%)
100,000 Comcast Cable Communications 8.375%
05/01/07 (144A)..................... 103,508
-----------
</TABLE>
(continued)
11
<PAGE> 13
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
COMPUTER & RELATED (2.1%)
$250,000 IBM Corp. 7.250% 11/01/02............ $ 253,479
-----------
FINANCIAL SERVICES (0.4%)
50,000 ESI Tractebel Acq. Corp. 7.990%
12/30/11 (144A)..................... 44,735
-----------
FOOD & RELATED (0.6%)
75,000 Marsh Supermarkets Inc. Ser. B 8.875%
08/01/07............................ 69,375
-----------
FORESTRY & PAPER PRODUCTS (2.1%)
250,000 ITT Rayonier Inc. NT 7.500%
10/15/02............................ 252,559
-----------
HOUSING, FURNITURE & RELATED (0.8%)
100,000 Owens Corning 7.500% 05/01/05........ 95,065
-----------
OIL, ENERGY & NATURAL GAS (3.1%)
300,000 PDV America Inc. 7.875% 08/01/03..... 282,683
100,000 R&B Falcon Corp. Series B 6.750%
04/15/05............................ 90,250
-----------
372,933
-----------
RESTAURANTS (0.8%)
100,000 Tricon Global Restaurants 7.450%
05/15/05............................ 96,253
-----------
UTILITIES (0.8%)
100,000 Niagara Mohawk Power Corp. Ser. G
7.750% 10/01/08..................... 100,107
-----------
TOTAL LONG-TERM BONDS & NOTES (13.3%)
(COST $1,674,502)................... $ 1,606,732
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
- -------------------------------------------------------------
<C> <S> <C>
MEDICAL & RELATED (1.7%)
$100,000 Centocor Inc. 4.750% 02/15/05........ $ 200,438
-----------
TOTAL CONVERTIBLE DEBENTURES (1.7%)
(COST $149,947)..................... $ 200,438
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (4.7%)
$600,000 American Express Credit 1.000%
01/03/00............................ $ 599,950
-----------
118,000 Firstar 1.000% 01/03/00 repurchase
price $118,010 collateralized by
GNMA certificates pool # 8375 due
1/3/00 (Cost $118,000).............. 118,000
-----------
TOTAL SHORT-TERM NOTES (5.9%) (COST
$717,950)........................... $ 717,950
-----------
TOTAL HOLDINGS (100.0%) (COST
$9,359,065) (a)..................... $12,100,696
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (0.0%).................. 6,446
-----------
TOTAL NET ASSETS (100.0%)............ $12,107,415
===========
</TABLE>
- ---------------
* Non-income producing securities.
(a) Represents cost for financial reporting and 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 $148,244 or 1.2% of net assets. These
securities were deemed liquid pursuant to procedures approved by the
Board of Directors.
The accompanying notes are an integral part of these financial statements.
12
<PAGE> 14
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $9,359,065).............. $12,100,969
Cash in bank.............................. 478
Receivable for fund shares sold........... 11,493
Dividends & accrued interest receivable... 52,968
Other..................................... 2,392
-----------
Total assets............................ 12,168,300
-----------
Liabilities:
Payable for fund shares redeemed.......... 1,012
Payable for investment management services
(note 3)................................ 3,724
Accrued 12b-1 fees (note 6)............... 7,480
Other accrued expenses.................... 48,669
-----------
Total liabilities....................... 60,885
-----------
Net assets at market value.................. $12,107,415
===========
Net assets consist of:
Par value, $.001 per share................ $ 848
Paid-in capital in excess of par value.... 8,710,376
Accumulated undistributed net realized
gain on investments..................... 648,217
Net unrealized appreciation on
investments............................. 2,741,904
Undistributed net investment income....... 6,070
-----------
Net assets at market value.................. $12,107,415
===========
Shares outstanding.......................... 848,003
Net asset value per share................... $ 14.28
===========
Maximum offering price per share
($14.28/95%).............................. $ 15.03
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 100,859
Dividends.................................. 55,823
-----------
Total investment income.................. 156,682
-----------
Expenses:
Management fees (note 3)................... 31,982
12b-1 fees (note 6)........................ 15,991
Custodian fees (note 3).................... 2,615
Directors' fees (note 3)................... 1,448
Professional fees.......................... 5,021
Transfer agent & accounting fees........... 30,062
Filing fees................................ 6,788
Printing, proxy and postage fees........... 2,441
Other...................................... 208
-----------
Total expenses........................... 96,556
Less expenses voluntarily reduced or
reimbursed (note 3).................... (9,594)
-----------
Net expenses............................. 86,962
-----------
Net investment income.................... 69,720
-----------
Realized & unrealized gain (loss) on
investments:
Net realized gain from investments......... 1,715,718
Net decrease in unrealized appreciation on
investments.............................. (1,230,758)
-----------
Net gain on investments................ 484,960
-----------
Net increase in net assets from
operations.......................... $ 554,680
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE> 15
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 69,720 $ 322,778
Realized gain on investments.............................. 1,715,718 903,416
Unrealized loss on investments............................ (1,230,758) (662,035)
----------- -----------
Net increase in assets from operations................ 554,680 564,159
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (63,650) (323,003)
Capital gains distributions............................... (1,455,499) (622,486)
----------- -----------
Total dividends and distributions..................... (1,519,149) (945,489)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 360,579 1,753,433
Received from dividends reinvested........................ 802,266 564,557
Paid for shares redeemed.................................. (1,386,656) (4,695,463)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 223,811 (2,377,473)
----------- -----------
Decrease in net assets............................. (1,188,280) (2,758,803)
Net Assets:
Beginning of period....................................... 13,295,695 16,054,498
----------- -----------
End of period............................................. $12,107,415 $13,295,695
=========== ===========
Includes undistributed net investment income of........... $ 6,070 $ 225
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED JUNE 30,
SIX MONTHS ENDED ---------------------------------------
DECEMBER 31, 1999 1999 1998 1997 1996
----------------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ 15.51 15.85 14.89 12.78 11.57
Income from investment operations:
Net investment income..................................... 0.08 0.35 0.42 0.38 0.38
Net realized & unrealized gain on investments............. 0.60 0.33 1.73 2.39 1.27
------ ------ ------ ------ ------
Total income from investment operations................. 0.68 0.68 2.15 2.77 1.65
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.08) (0.35) (0.42) (0.38) (0.37)
Distributions from net realized capital gains............. (1.83) (0.67) (0.77) (0.28) (0.07)
------ ------ ------ ------ ------
Total distributions..................................... (1.91) (1.02) (1.19) (0.66) (0.44)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $14.28 $15.51 $15.85 $14.89 $12.78
====== ====== ====== ====== ======
Total return................................................ 4.51%(b) 4.73% 14.77% 22.34% 14.50%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.36%(a) 1.30% 1.20% 1.12% 0.89%
Net investment income..................................... 1.09%(a) 2.33% 2.65% 2.77% 3.10%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.50%(a) 1.45% 1.35% 1.31% 1.14%
Portfolio turnover rate..................................... 46% 49% 39% 14% 7%
Net assets at end of period (millions)...................... $ 12.1 $ 13.3 $ 16.1 $ 13.1 $ 10.8
</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 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.
14
<PAGE> 16
ONE FUND, INC.
GROWTH PORTFOLIO
OBJECTIVE
To provide long-term capital growth. Current income is incidental. Normally at
least 90% of the assets of this portfolio will be invested in common stocks.
Selection of stocks is not limited with regard to whether stocks are
exchange-listed or dividend-paying or whether they are issued by companies of
any particular size.
PERFORMANCE AS OF DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 20.96% 14.92%
Three-year 13.15% 11.24%
Five-year 16.73% 15.56%
Since inception
(8/18/92) 14.77% 14.05%
</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
1999 turned out to be another year of high returns for stock indices across the
board. Volatility has continued at extreme levels and we see this as a regular
market factor for the foreseeable future. The Growth Portfolio has gone through
a transformation process to make the fund even more growth-oriented than it was
in the past. Due to unacceptable portfolio performance, new management was
engaged to direct the fund beginning at mid-year. The fund has progressed into a
more growth-oriented portfolio and has taken sizable positions in large and
liquid securities. As a result, the previous holdings in smaller capitalized
names have been replaced. Fortunately, this has had a positive impact on the
fund's performance. Under old management, the fund trailed the S&P 500 Index by
638 basis points halfway through the year. Under current management, the fund
outperformed the S&P 500 Index by 652 basis points during the second half of
1999. For 1999, the portfolio ended up essentially matching the S&P 500,
trailing it by only six basis points. We are confident that the changes we have
made will continue to improve the fund's relative performance.
Performance of the fund has been improved by taking increased positions in
technology and faster-growing companies. We feel that the best areas for
continued performance lie in these growth areas and continue to hold large
weightings in them. We will continue to search for superior companies that have
outstanding fundamentals. Cash positions will continue to be a small weighting
within the fund.
In summary, we thank you for your continued support and patience. The Growth
Portfolio is positioning itself to benefit from the vagaries of the market and
we look to report more positive news in the future.
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>
'92 9500 10000
10178.3 10627
'93 11227.7 11139.2
11917.1 11688.4
'94 11547.6 11288.6
11987.6 11841.8
'95 13927.2 14227.9
15367.3 16273.9
'96 17017.7 17933.8
18098.3 20030.3
'97 20197.7 24136.5
21126.8 26690.1
'98 23051.5 31416.9
21677.6 34316.7
'99 22978.3 38565.1
26222.8 41538.5
</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 DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Cisco Systems Inc 7.02
2. Microsoft Corp 4.59
3. Texas Intruments Inc 4.23
4. EMC Corp./Mass 4.11
5. Intel Corp 3.60
6. Citrix Systems Inc 3.23
7. MCI Worldcom Inc. 3.17
8. Infinity 3.16
9. Home Depot, Inc 3.15
10. CBS Corporation 3.07
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Computer and Related 20.8
2. Electronics/Semiconductors 14.5
3. Communication 12.0
4. Oil, Energy & Natural Gas 6.3
5. Broadcast Radio & TV 6.3
</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.
15
<PAGE> 17
ONE FUND, INC.
GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AEROSPACE (3.0%)
6,000 Honeywell ......................... $ 346,125
-----------
BANKING (1.2%)
6,420 Firstar Corp. ..................... 135,623
-----------
BROADCAST RADIO & TV (6.2%)
5,500 *CBS Corp. ........................ 351,656
11,000 *Infinity Broadcasting Corp. ...... 361,875
-----------
713,531
-----------
BUSINESS SERVICES (1.2%)
3,500 Manpower Inc. ..................... 131,688
-----------
COMMUNICATIONS (12.0%)
4,500 *ADC Telecommunications Inc. ...... 326,531
4,000 Bell Atlantic Corp. ............... 246,250
6,825 *MCI Worldcom Inc. ................ 362,152
1,500 Nokia Oyj Spon-ADR................. 285,000
3,000 SBC Communications Inc. ........... 146,250
-----------
1,366,183
-----------
COMPUTER & RELATED (20.8%)
3,000 *Citrix Systems Inc. .............. 369,000
7,500 *Cisco Systems Inc. ............... 803,438
4,300 *EMC Corp. Mass.................... 469,775
1,500 Hewlett Packard Co. ............... 170,906
2,000 International Business Machines.... 216,000
4,400 *Sun Microsystems Inc. ............ 340,725
-----------
2,369,844
-----------
COMPUTER SOFTWARE (4.6%)
4,500 *Microsoft Corp. .................. 525,375
-----------
CONGLOMERATE (2.8%)
2,100 General Electric Co. .............. 324,975
-----------
ELECTRONICS/SEMICONDUCTORS (14.5%)
4,000 *Altera Corp. ..................... 198,250
3,000 CTS Corp. ......................... 226,125
5,000 Intel Corp. ....................... 411,563
3,500 *Solectron Corp. .................. 332,937
5,000 Texas Instruments Inc. ............ 484,375
-----------
1,653,250
-----------
FINANCIAL SERVICES (3.9%)
3,200 Associates First Capital CL A...... 142,675
5,500 Citigroup Inc. .................... 305,594
-----------
448,269
-----------
HEALTH CARE (2.0%)
2,500 Johnson & Johnson.................. 232,812
-----------
INSURANCE SERVICES (2.4%)
2,500 American Intl. Group............... $ 270,312
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
MEDICAL & RELATED (3.4%)
3,500 Baxter International............... 219,844
1,000 *MedImmune Inc. ................... 165,875
-----------
385,719
-----------
OIL, ENERGY & NATURAL GAS (6.3%)
3,000 Apache Corp. ...................... 110,813
2,000 Halliburton Company................ 80,500
2,500 Kerr-McGee Corp. .................. 155,000
2,950 Schlumberger Ltd. ................. 165,938
572 Transocean Sedco Forex Inc. ....... 19,279
6,000 Williams Cos. Inc. ................ 183,375
-----------
714,905
-----------
RETAIL (5.6%)
5,000 Circuit City Group................. 225,312
5,250 Home Depot Inc. ................... 359,953
1,000 Tandy Corp. ....................... 49,188
-----------
634,453
-----------
SECURITY SYSTEMS & SERVICES (2.9%)
8,500 Tyco International Ltd. ........... 330,437
-----------
TELECOMMUNICATIONS EQUIPMENT (1.8%)
3,500 *Mcleod USA Inc. .................. 206,062
-----------
TOTAL COMMON STOCK (94.6%) (COST
$6,294,661)....................... $10,789,563
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (5.7%)
$500,000 American Express Credit 1.00%
1/3/00.............................. $ 499,972
-----------
148,000 Firstar 1.000% 01/03/00
repurchase price $148,012
collateralized by GNMA
certificates pool # 8375 due
1/3/00 (Cost $148,000).............. 148,000
-----------
TOTAL SHORT-TERM NOTES (5.7%) (COST
$647,972)........................... $ 647,972
-----------
TOTAL HOLDINGS (100.3%) (COST
$6,942,633)(a)...................... $11,437,535
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (-0.3%)................. (30,268)
-----------
TOTAL NET ASSETS (100.0%)............ $11,407,267
===========
</TABLE>
- ---------------
* Non-income producing securities.
(a) Represents cost for financial reporting and federal income tax purposes. See
note 1.
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 18
ONE FUND, INC.
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,942,633)............... $1,437,535
Cash in bank............................... 869
Receivable for fund shares sold............ 1,616
Dividends & accrued interest receivable.... 5,474
Other...................................... 2,454
----------
Total assets............................. 11,447,948
----------
Liabilities:
Payable for fund shares redeemed........... 24
Payable for investment management services
(note 3)................................. 3,395
Accrued 12b-1 fees (note 6)................ 6,623
Other accrued expenses..................... 30,639
----------
Total liabilities........................ 40,681
----------
Net assets at market value................... $1,407,267
==========
Net assets consist of:
Par value, $.001 per share................. $ 641
Paid-in capital in excess of par value..... 6,622,384
Accumulated undistributed net realized gain
on investments........................... 289,340
Net unrealized appreciation on
investments.............................. 4,494,902
----------
Net assets at market value................... $1,407,267
==========
Shares outstanding........................... 640,779
Net asset value per share.................... $ 17.80
==========
Maximum offering price per share
($17.80/95%)............................... $ 18.74
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................. $ 14,974
Dividends................................. 27,358
------------
Total investment income................. 42,332
------------
Expenses:
Management fees (note 3).................. 27,171
12b-1 fees (note 6)....................... 13,586
Custodian fees (note 3)................... 2,563
Directors' fees (note 3).................. 1,207
Professional fees......................... 4,184
Transfer agent & accounting fees.......... 27,751
Filing fees............................... 5,656
Printing, proxy and postage fees.......... 2,037
Other..................................... 178
------------
Total expenses.......................... 84,333
Less expenses voluntarily reduced or
reimbursed (note 3)................... (8,151)
------------
Net expenses............................ 76,182
------------
Net investment loss..................... (33,850)
------------
Realized & unrealized gain on investments:
Net realized gain from investments........ 1,262,819
Net increase in unrealized appreciation on
investments............................. 263,722
------------
Net gain on investments............... 1,562,541
------------
Net increase in net assets from
operations......................... $ 1,492,691
============
</TABLE>
The accompanying notes are an integral part of these financial statements.
17
<PAGE> 19
ONE FUND, INC.
GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (33,850) $ (14,187)
Realized gain on investments.............................. 1,262,819 158,409
Unrealized gain (loss) on investments..................... 263,722 (382,289)
----------- -----------
Net increase (decrease) in assets from operations..... 1,492,691 (238,067)
----------- -----------
Dividends and distributions to shareholders:
Capital gains distributions............................... (1,066,045) (955,237)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 350,529 1,390,243
Received from dividends reinvested........................ 627,265 607,828
Paid for shares redeemed.................................. (910,926) (4,100,808)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions..................................... 66,868 (2,102,737)
----------- -----------
Increase (decrease) in net assets.................. 493,514 (3,296,041)
Net Assets:
Beginning of period....................................... 10,913,753 14,209,794
----------- -----------
End of period............................................. $11,407,267 $10,913,753
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
DECEMBER 31, ---------------------------------------
1999 1999 1998 1997 1996
------------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $17.14 $18.68 $17.52 $15.47 $13.03
Income (loss) from investment operations:
Net investment income (loss).............................. (0.05) (0.02) 0.00 0.07 0.14
Net realized & unrealized gain (loss) on investments...... 2.47 (0.12) 2.41 2.73 2.72
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... 2.42 (0.14) 2.41 2.80 2.86
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... 0.00 0.00 0.00 (0.07) (0.14)
Distributions in excess of net investment income.......... 0.00 0.00 (0.06) 0.00 0.00
Distributions from net realized capital gains............. (1.76) (1.40) (1.19) (0.68) (0.28)
------ ------ ------ ------ ------
Total distributions..................................... (1.76) (1.40) (1.25) (0.75) (0.42)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $17.80 $17.14 $18.68 $17.52 $15.47
====== ====== ====== ====== ======
Total return................................................ 14.12%(b) (0.32)% 14.13% 18.68% 22.22%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.41%(a) 1.36% 1.24% 1.13% 0.90%
Net investment income (loss).............................. (0.63)%(a) (0.13)% 0.02% 0.43% 0.99%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.56%(a) 1.51% 1.39% 1.32% 1.15%
Portfolio turnover rate..................................... 50% 53% 40% 27% 22%
Net assets at end of period (millions)...................... $ 11.4 $ 10.9 $ 14.2 $ 13.3 $ 11.8
</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 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> 20
ONE FUND, INC.
SMALL CAP PORTFOLIO
OBJECTIVE
To provide maximum capital growth by investing primarily in common stocks of
small and medium sized companies. Under normal conditions, at least 65% of this
portfolio's assets will be invested in common stocks of companies with market
capitalization of less than $1 billion.
PERFORMANCE AS OF DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 0.86% (4.18)%
Three-year 0.72% (0.99)%
Five-year 7.78% 6.67%
Since inception
(11/1/94) 7.60% 6.53%
</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
1999 turned out to be another year of high returns for stock indices across the
board. Volatility has continued at extreme levels and we see this as a regular
market factor for the foreseeable future. The Russell 2000 Index actually
outperformed the S&P 500 in 1999 after a late rally in the year. The large
discrepancy between small and larger capitalized security valuations finally
were enough to attract investor money to the universe. Unfortunately, the Small
Cap Portfolio didn't participate in this process. Due to unacceptable portfolio
performance, new management was engaged to direct the fund beginning in early
December. The fund has progressed into a more growth-oriented portfolio and has
increased the number of positions. The fund will continue to increase the number
of positions to decrease the average weighted position overall. The fund didn't
perform as well as the its benchmark in 1999; however, the portfolio is being
repositioned to improve its performance. We are confident that the changes we
have made will improve the fund's relative performance.
Performance of the fund will be improved by taking increased positions in
technology and faster-growing companies. We feel that the best areas for strong
performance lie in these growth areas and we will build large weightings in
them. We will continue to search for superior companies that have outstanding
fundamentals. Cash positions will be a smaller weighting within the fund than at
times in the past.
In summary, we thank you for your continued support and patience. The Small Cap
Portfolio is positioning itself to benefit from the vagaries of the market and
we look to report positive news in the future.
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>
'94 9500 10000
9539.9 9853
'95 10340.3 11273.8
11600.8 12656
'96 12840.9 13967.1
13571.6 14743.7
'97 14741.4 16247.6
15872.1 18026.7
'98 16300.6 18976.7
13754.5 17623.6
'99 13768.2 19259.1
13872.9 21369.9
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Map Info Corp. 7.79
2. Mastec Inc. 5.89
3. Plexus Corp. 4.97
4. Maximus Inc. 4.80
5. CTS Corporation 4.69
6. Regis Corp. 4.27
7. Source Information 4.26
8. Louis Dreyfus 3.84
9. Stericycle Inc. 3.72
10. Guest Supply Inc. 3.60
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<S> <C>
1. Computer and Related 15.7
2. Business Services 14.1
3. Medical and Related 9.6
4. Telecommunications 9.3
5. Oil, Energy and Natural Gas 8.8
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 21
ONE FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
BANKING (4.0%)
5,000 Flagstar Bancorp Inc. ............... $ 86,250
7,500 Sovereign Bancorp Inc. .............. 55,898
-----------
142,148
-----------
BUSINESS SERVICES (14.1%)
5,000 *Maximus Inc. ....................... 169,688
4,000 *Plexus Corp. ....................... 176,000
9,000 *Source Information Management....... 150,750
-----------
496,438
-----------
COMPUTER & RELATED (15.7%)
1,000 *Cybex Computer Products Corp. ...... 40,500
5,000 *High Speed Access Corp. ............ 90,000
7,500 *Map Info Corp. ..................... 275,625
2,500 *Mapics Inc. ........................ 31,563
5,000 *Optio Software Inc. ................ 117,500
-----------
555,188
-----------
DISTRIBUTION & WHOLESALE (1.7%)
1,500 *Scan Source Inc. ................... 60,844
-----------
DRUGS (6.6%)
2,500 *Biovaile Corp. ..................... 234,375
-----------
ELECTRICAL EQUIPMENT (6.8%)
2,200 CTS Corp. ........................... 165,825
1,000 *TranSwitch Corp. ................... 72,563
-----------
238,388
-----------
FINANCIAL SERVICES (1.1%)
1,500 *Profit Recovery Group Intl. ........ 39,844
-----------
HOTEL/LODGING (3.6%)
8,500 *Guest Supply Inc. .................. 127,500
-----------
INSTRUMENT-SCIENTIFIC (1.1%)
1,000 *Mettler-Toledo Intl. ............... 38,187
-----------
MEDICAL & RELATED (9.6%)
20,000 *LCA-Vision Inc. .................... 93,750
1 *Quorum Health Group Inc. ........... 5
7,000 *Stericycle Inc. .................... 131,688
3,000 *Wesley Jessen Visioncare............ 113,625
-----------
339,068
-----------
OIL, ENERGY & NATURAL GAS (8.8%)
7,500 *Louis Dreyfus Natural Gas Corp. .... 135,937
9,000 *Santa Fe Snyder Corp. .............. 72,000
9,000 *Tesoro Petroleum Corp. ............. 104,062
-----------
311,999
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
RADIO & TV (2.2%)
1,500 *Cumulus Media Inc. ................. $ 76,125
-----------
RETAIL (7.4%)
5,000 Claires Stores Inc. ................. 111,875
8,000 Regis Corp. ......................... 151,000
-----------
262,875
-----------
REAL ESTATE & LEASING (2.0%)
3,000 Reckson Assoc. Realty................ 69,000
-----------
TELECOMMUNICATIONS (9.3%)
1,000 *Gilat Satellite Networks Ltd. ...... 118,750
4,687 *Mastec Inc. ........................ 208,571
-----------
327,321
-----------
TOTAL COMMON STOCK (94.0%) (COST
$2,359,818).......................... $ 3,319,300
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.4%)
$119,000 American Express Credit 1.000%
01-04-00............................. $ 118,990
----------
TOTAL REPURCHASE AGREEMENTS (3.4%)
(COST $118,990)...................... $ 118,990
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL (2.8%)
$100,000 Firstar Bank 1.0% due 01/03/00
repurchase price $100,008
collateralized by GNMA certificates
pool # 837 due 02-20-24 (cost
$100,000)............................ $ 100,000
----------
TOTAL REPURCHASE AGREEMENTS (2.8%)
(COST $100,000)...................... $ 100,000
----------
TOTAL HOLDINGS (100.2%)
(COST $2,578,808)(a)................. $3,538,290
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(-0.2%).............................. (6,818)
----------
TOTAL NET ASSETS (100.0%)............. $3,531,472
==========
</TABLE>
- ---------------
* Non income producing security.
(a) Represents cost for financial reporting and federal income tax purposes. See
Note 1.
The accompanying notes are an integral part of these financial statements.
20
<PAGE> 22
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $2,578,808)............... $3,538,290
Cash in bank............................... 751
Receivable for fund shares sold............ 4,907
Dividends & accrued interest receivable.... 366
Other...................................... 4,062
----------
Total assets............................. 3,548,376
----------
Liabilities:
Payable for fund shares redeemed........... 2,991
Payable for investment management services
(note 3)................................. 137
Accrued 12b-1 fees (note 6)................ 1,508
Other accrued expenses..................... 11,871
Dividends payable.......................... 397
----------
Total liabilities........................ 16,904
----------
Net assets at market value................... $3,531,472
==========
Net assets consist of:
Par value, $.001 per share................. $ 331
Paid-in capital in excess of par value..... 3,666,920
Accumulated net realized loss on
investments.............................. (1,095,261)
Net unrealized appreciation on
investments.............................. 959,482
----------
Net assets at market value................... $3,531,472
==========
Shares outstanding........................... 333,171
Net asset value per share.................... $ 10.60
==========
Maximum offering price per share
($10.60/95%)............................... $ 11.16
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 10,699
Dividends................................... 11,025
---------
Total investment income................... 21,724
---------
Expenses:
Management fees (note 3).................... 11,010
12b-1 fees (note 6)......................... 4,235
Custodian fees (note 3)..................... 2,472
Directors' fees (note 3).................... 396
Professional fees........................... 1,372
Transfer agent & accounting fees............ 16,403
Filing fees................................. 1,855
Printing, proxy and postage fees............ 666
Organizational expense (note 1)............. 172
Other....................................... 142
---------
Total expenses............................ 38,723
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (9,080)
---------
Net expenses.............................. 29,643
---------
Net investment loss....................... (7,919)
---------
Realized & unrealized gain (loss) on
investments:
Net realized loss from investments.......... (427,200)
Net increase in unrealized appreciation on
investments............................... 445,982
---------
Net gain on investments................... 18,782
---------
Net increase in net assets from
operations.............................. $ 10,863
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
21
<PAGE> 23
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment income (loss).............................. $ (7,919) $ 9,841
Realized loss on investments.............................. (427,200) (804,516)
Unrealized gain (loss) on investments..................... 445,982 (139,644)
----------- ----------
Net increase (decrease) in assets from operations..... 10,863 (934,319)
----------- ----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. 0 (9,841)
Distributions in excess of net investment income.......... 0 (9,359)
Capital gains distributions............................... 0 (272,363)
----------- ----------
Total dividends and distributions..................... 0 (291,563)
----------- ----------
From capital share transactions (note 4):
Received from shares sold................................. 66,257 464,602
Received from dividends reinvested........................ 0 133,949
Paid for shares redeemed.................................. (298,318) (1,446,253)
----------- ----------
Decrease in net assets derived from capital share
transactions......................................... (232,061) (847,702)
----------- ----------
Decrease in net assets............................. (221,198) (2,073,584)
Net Assets:
Beginning of period....................................... 3,752,670 5,826,254
----------- ----------
End of period............................................. $ 3,531,472 $3,752,670
=========== ==========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEARS ENDED JUNE 30,
ENDED --------------------------------------
DECEMBER 31, 1999 1999 1998 1997 1996
----------------- ------ ------ ------ --------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $10.52 $13.32 $13.30 $12.82 $10.63
Income (loss) from investment operations:
Net investment income (loss).............................. (0.02) 0.02 0.06 0.11 0.26
Net realized & unrealized gain (loss) on investments...... 0.10 (2.09) 1.30 1.67 2.26
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... 0.08 (2.07) 1.36 1.78 2.52
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... 0.00 (0.02) (0.06) (0.11) (0.25)
Distributions in excess of net investment income.......... 0.00 (0.03) 0.00 0.00 0.00
Distributions from net realized capital gains............. 0.00 (0.68) (1.28) (1.19) (0.08)
------ ------ ------ ------ ------
Total distributions..................................... 0.00 (0.73) (1.34) (1.30) (0.33)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $10.60 $10.52 $13.32 $13.30 $12.82
====== ====== ====== ====== ======
Total return................................................ 0.76%(b) (15.54)% 10.56% 14.82% 24.10%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 1.71%(a) 1.74% 1.67% 1.35% 0.94%
Net investment income..................................... (0.46)%(a) 0.23% 0.47% 0.89% 2.21%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.24%(a) 2.07% 1.82% 1.62% 1.27%
Net investment income (loss).............................. (0.10)% 0.32% 0.62% 1.88%
Portfolio turnover rate..................................... 53% 48% 77% 34% 34%
Net assets at end of period (millions)...................... $ 3.5 $ 3.8 $ 5.8 $ 5.2 $ 4.5
</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.
22
<PAGE> 24
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
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, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 62.59% 54.46%
Three-year 17.00% 15.01%
Five-year 15.34% 14.16%
Since inception
(5/1/93) 17.24% 16.34%
</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
Markets in Asia and Europe rallied in the second half led by technology, media
and telecommunication stocks. Specifically in Asia, the technology rally finally
rolled into such bourses as Hong Kong, Korea and Singapore as investors took
advantage of the significant valuation discrepancy relative to the United
States. The semi-annual performance ending December 31, 1999 for the One Fund
International Portfolio stood at 70.70%. This can be compared with 21.34% for
the Morgan Stanley International Europe, Australia, and Far East Index. 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. The fund's strong relative outperformance can be
attributable to being overweighted technology, media and telecommunication names
throughout the international equity markets. Moreover, the fund continued to
benefit from remaining overweighted Japan, as the economy continued to improve.
Finally, some of our top holdings included Softbank, a leading Japanese-based
software and media company; JDS Uniphase, a leading provider of components for
telecommunication equipment; and ASM Lithography, a leading maker of
semi-conductor production equipment.
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>
9500 10000
'93 9930.4 10052
12920.4 10826
'94 13939.8 11791.7
14160 11698.5
'95 14829.8 12021.4
15839.7 13049.2
'96 17599.5 13658.6
18050.1 13879.9
'97 20199.8 15456.7
18270.7 14040.8
'98 19219 16298.6
17374 16741.9
'99 16548.7 17406.6
28248.6 21256.9
</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 DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Energis PLC 5.13
2. Furukawa Electric Co 2.51
3. Sony Corp. 2.36
4. Intershop Communications AG 2.16
5. Descartes Systems Group, Inc. 1.96
6. Sharp Corp. 1.87
7. ARM Holdings plc, ADR 1.66
8. Tf1 Television Francaise 1.58
9. Murata Manufacturing Co. Ltd. 1.56
10. Nikon Corp 1.56
</TABLE>
TOP 5 COUNTRIES/REGIONS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Japan 27.3
2. United Kingdom 12.5
3. Germany 10.0
4. Canada 9.2
5. Netherlands 6.8
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE> 25
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
JAPAN (27.3%)
1,000 Bandai Co. Ltd. (13)................. $ 31,782
2,000 Canon Inc. (2)....................... 79,405
1,900 Capcom Co. Ltd. (9).................. 101,261
500 Csk Corp. (28)....................... 81,166
2,000 Daiwa Securities Co. Ltd. (14)....... 31,273
2,000 Daiwabo Info. System Co. Ltd. (9).... 44,886
2,500 Fuji Machine Mfg. Co. (20)........... 201,447
2,000 Fujitec Co. (20)..................... 20,047
2,000 Fujitsu Ltd. (9)..................... 91,140
24,900 Furukawa Electric Co. (11)........... 377,420
1,000 Hosiden Corp. (11)................... 64,150
1,000 Internet Initiative ADR (9).......... 97,188
1 Japan Telecom Co. Ltd. (29).......... 40,094
300 Kyocera Corp. (11)................... 77,743
500 Matsushita Communication (11)........ 132,016
400 Megachips Corp. (11)................. 25,582
1,000 Murata Manufacturing Co. Ltd. (11)... 234,696
9,000 NEC Corp. (11)....................... 214,307
9,000 Nikko Securities Co. Ltd. (14)....... 113,798
8,000 Nikon Corp. (11)..................... 234,696
200 Nintendo Corp. Ltd. (13)............. 33,209
2,000 Nippon Broadcasting System (22)...... 174,066
120 Nippon Television Network (22)....... 140,818
2 NTT Mobile Communication Network Inc.
(29)................................ 76,863
240 Obic Co. Ltd. (9).................... 169,920
1,100 Paris Miki Inc. (35)................. 78,956
900 Sega Enterprises (13)................ 28,604
11,000 Sharp Corp. (2)...................... 281,293
200 Softbank Corp. (28).................. 191,277
1,200 Sony Corp. (3)....................... 355,564
1,000 Suruga Bank Ltd. (4)................. 13,935
1,000 Taiyo Yuden Co. (11)................. 59,261
5,000 Toho Bank Ltd. (4)................... 23,030
3,000 Tokyo Securities Co. Ltd. (14)....... 11,735
4,000 Toshiba Corp. (11)................... 30,510
27,000 Wako Securities Co. Ltd. (14)........ 71,553
3,000 Yokowo Co. Ltd. (11)................. 74,809
-----------
4,109,500
-----------
UNITED KINGDOM (12.5%)
1,300 *ARM Holdings PLC ADR (11)........... 248,950
5,300 British Sky Broadcasting Grp PLC
(22)................................ 85,502
1,700 Eidos PLC (13)....................... 149,917
16,100 *Energis PLC (29).................... 772,945
6,900 Enterprise Oil (12).................. 46,502
650 Filtronic PLC (11)................... 22,192
19,700 *Imagination Technologies Grp PLC
(28)................................ 129,419
9,100 Inversys PLC (30).................... 49,328
100 Jazztel PLC ADR (29)................. 6,513
9,500 Prudential Corp. PLC (19)............ 186,769
590 Psion PLC (9)........................ 24,707
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM, CONTINUED
8,100 Reckitt Benckiser PLC (10)........... $ 76,543
7,750 *Shire Pharmaceuticals Grp PLC
(23)................................ 77,562
32 SmithKline Beecham PLC (10).......... 406
-----------
1,877,255
-----------
GERMANY (10.0%)
260 Adva AG Optical Networking (29)...... 49,247
1,460 Aixtron (11)......................... 205,639
3,285 Baader Wertpapierhandelsbank AG
(4)................................. 105,246
1,210 *Consors Discount Broker AG (14)..... 101,183
350 DIS Deutsche Industries Service
(14)................................ 28,915
1,400 *Epcos AG (11)....................... 104,377
400 *GFK AG (28)......................... 16,523
1,160 *Intershop Communications AG (28).... 331,911
514 Mannesmann AG (29)................... 124,492
600 Medion AG (34)....................... 53,619
1,300 Siemens AG (30)...................... 166,338
1,150 *Singulus Technologies AG (11)....... 72,414
2,450 *Telegate AG (29).................... 142,672
-----------
1,502,576
-----------
CANADA (9.2%)
2,600 *Canfor Corp. (16)................... 30,408
4,500 *CGI Group Inc. CL A (28)............ 192,301
3,000 *Cyberplex Inc. (28)................. 37,889
13,497 *Descartes Systems Group Inc. (28)... 296,560
4,700 *Intl. Forest Products Ltd. CL A
(16)................................ 12,848
1,200 *JDS Uniphase Corp. (29)............. 193,575
10,200 *Mosaic Group Inc. (28).............. 79,059
1,930 Nortel Networks Corp. (11)........... 194,803
2,000 Onex Corp. (28)...................... 72,318
1,300 *Research in Motion Ltd. (11)........ 60,007
5,407 *Telesystem Intl. Wireless Inc.
(29)................................ 198,693
2,000 *Ulster Petroleums Ltd. (12)......... 17,785
-----------
1,386,246
-----------
NETHERLANDS (6.8%)
1,950 *ASM Lithography Holding ADR (11).... 221,813
1,850 *BE Semiconductor Industries (11).... 26,560
1,164 *Equant ADR (28)..................... 130,368
800 Koninklijke (Royal) Philips
Electronics (2)..................... 108,810
900 *KPNQUEST (28)....................... 57,375
200 *OpenTV Corp. ADR (35)............... 16,050
1,320 *STMicroelectronics (11)............. 203,209
700 *United Pan-Europe Communications
(29)................................ 89,567
86 *United Pan-Europe Communications ADR
(29)................................ 10,965
2,900 VNU-Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit
(22)................................ 152,457
-----------
1,017,174
-----------
FRANCE (5.6%)
475 Alcatel (11)......................... 109,112
350 Canal Plus (22)...................... 50,954
700 Ciments Francais Ord A (5)........... 47,569
800 Lagardere S.C.A. (35)................ 43,524
</TABLE>
(continued)
24
<PAGE> 26
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
FRANCE, CONTINUED
50 M6 Metropole Television (22)......... $ 24,785
455 Tf1 Television Francaise (22)........ 238,375
2,650 Thomson-CSF (1)...................... 87,545
2,642 *Wavecom SA (11)..................... 232,909
-----------
834,773
-----------
HONG KONG (3.8%)
206,000 CCT Telecommunications (29).......... 152,377
16,000 *China Telecommunications (29)....... 100,032
428,000 *E-New Media Co. Ltd. (30)........... 209,224
23,000 *Pacific Century CyberWorks Ltd.
(26)................................ 53,554
9,000 Television Broadcasts Ltd. (22)...... 61,362
-----------
576,549
-----------
SOUTH KOREA (3.3%)
2,500 Daelim Industrial Co. (5)............ 28,732
4,700 *Haansoft Inc. (35).................. 217,719
1,170 *Hyundai Electronics Ind. Co. (11)... 6,801
200 *Korea Thrunet Co. Ltd. CL A (29).... 13,575
350 Samsung Electronics Co. (11)......... 81,990
1,900 SK Corp. (12)........................ 57,561
2,800 *Turbo Tek Co. Ltd. (20)............. 87,908
-----------
494,286
-----------
SWEDEN (2.6%)
1,800 Allgon AB CL B (11).................. 35,747
1,800 Ericsson LM-B (29)................... 115,701
800 HIQ International AB (28)............ 51,234
1,100 *Modern Times Group CL B (22)........ 54,548
6,830 *Readsoft AB (11).................... 124,402
-----------
381,632
-----------
SINGAPORE & MALAYSIAN (2.1%)
38,000 DBS Land Ltd. (26)................... 74,836
58,000 GES International Ltd. (11).......... 62,684
18,000 Natsteel Electronics Ltd. (11)....... 95,107
46,000 OMNI Industries (16)................. 83,410
-----------
316,037
-----------
TAIWAN (1.8%)
2,400 *Advanced Semiconductor Engineering
Inc. GDR (11)....................... 46,560
550 *Macronix Intl. Co. Ltd. SP ADR
(11)................................ 10,519
1,900 Mosel Vitelic Inc GDR (11)........... 25,840
4,214 Taiwan Semiconductor ADR (11)........ 189,630
-----------
272,549
-----------
AUSTRALIA (1.4%)
55,550 *Davnet Ltd. (29).................... 83,821
11,100 E.R.G. Ltd. (11)..................... 62,319
8,500 Telstra Corp. (29)................... 29,973
56,200 Westel Group Ltd. (29)............... 30,261
-----------
206,374
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
ITALY (1.3%)
9,050 Bulgari SPA (13)..................... $ 81,331
4,200 Pininfarina SPA (3).................. 101,979
5,000 Pirelli SPA (30)..................... 13,727
-----------
197,037
-----------
ISRAEL (1.3%)
5,700 *Orckit Communications Inc. (29)..... 195,581
-----------
SWITZERLAND (1.3%)
30 *Agefi Groupe SA (28)................ 11,504
200 *Charles Voegele Holding AG (27)..... 35,959
148 Publicitas Holding SA (22)........... 146,539
-----------
194,002
-----------
SPAIN (0.6%)
700 Amadeus Global Travel (32)........... 11,108
1,260 Sogecable (22)....................... 80,483
-----------
91,591
-----------
DENMARK (0.6%)
650 Novo-Nordisk CL B (22)............... 86,177
-----------
FINLAND (0.5%)
400 Nokia Oyj (11)....................... 72,540
613 *Sanitec Oyj (5)..................... 8,029
-----------
80,569
-----------
THAILAND (0.4%)
13,900 *Hana Microelectronics Co. Ltd.
(11)................................ 66,720
-----------
IRELAND (0.2%)
786 Icon PLC ADR (28).................... 13,363
400 *Ryanair Holdings PLC ADR (32)....... 22,050
-----------
35,413
-----------
GREECE (0.2%)
94 Commercial Bank of Greece (4)........ 7,256
910 *Tiletipos S.A. (29)................. 22,527
-----------
29,783
-----------
BRAZIL (0.1%)
3,700 Usinas Siderurgicas de M Preference
(25)................................ 20,100
-----------
TOTAL FOREIGN COMMON STOCK (92.9%)
(COST $8,208,473)................... $13,971,924
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES US COMMON STOCK VALUE
- -----------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS (1.9%)
350 *Infonet Services Corp. CL B......... $ 9,188
1,300 *Global Crossing Ltd. ............... 65,000
5,950 Global Telesystems Group Inc. ....... 206,763
-----------
280,951
-----------
TOTAL US COMMON STOCK (1.9%) (COST
$237,942)........................... $ 280,951
-----------
TOTAL COMMON STOCK (94.8%) (COST
$8,446,415)......................... $14,252,875
-----------
</TABLE>
(continued)
25
<PAGE> 27
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.7%)
$561,000 State Street Bank 2.500% due 01/03/00
repurchase price $561,012
collateralized by U.S. Treasury Bond
due 05/15/04 (Cost $561,000)........ $ 561,000
-----------
TOTAL REPURCHASE AGREEMENTS (3.7%)
(COST $561,000)..................... $ 561,000
-----------
TOTAL HOLDINGS (98.5%) (COST
$9,007,415)(a)...................... $14,813,875
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (1.5%).................. 232,281
-----------
TOTAL NET ASSETS (100.0%)............ $15,046,156
===========
</TABLE>
- ---------------
* Non-income producing securities.
(a) Represents cost for financial reporting and federal income tax purposes.
See Note 1.
ADR (American depository receipt) represents ownership of foreign securities.
INDUSTRY CLASSIFICATIONS
<TABLE>
<S> <C>
(1) Aerospace (18) Hotels
(2) Appliances & Household Durables (19) Insurance
(3) Automotive (20) Machinery
(4) Banking (21) Manufacturing
(5) Building/Construction (22) Media & Publishing
(6) Cement (23) Medical & Health Care
(7) Chemicals (24) Metal & Mining
(8) Communications (25) Plastics
(9) Computer Products (26) Real Estate
(10) Consumer Products (27) Retailing
(11) Electrical & Electronics (28) Services
(12) Energy and Oil (29) Telecommunications
(13) Entertainment & Leisure (30) Diversified
(14) Finance (31) Textile
(15) Food & Beverage (32) Transportation
(16) Forest & Paper Products (33) Utilities
(17) Governmental (34) Wholesale
(35) Miscellaneous
</TABLE>
The accompanying notes are an integral part of these financial statements.
26
<PAGE> 28
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $9,077,415).............. $14,813,875
Unrealized gain on forward currency
contracts (note 5)...................... 7,524
Receivable for securities sold............ 1,018,518
Dividends & accrued interest receivable... 22,604
Due from adviser.......................... 37,215
Other..................................... 2,016
-----------
Total assets............................ 15,901,752
-----------
Liabilities:
Bank overdraft............................ 24,134
Unrealized loss on forward currency
contracts (note 5)...................... 31,032
Payable for securities purchased.......... 747,465
Accrued 12b-1 fees (note 6)............... 7,893
Other accrued expenses.................... 45,072
-----------
Total liabilities....................... 855,596
-----------
Net assets at market value.................. $15,046,156
===========
Net assets consist of:
Par value, $.001 per share................ $ 815
Paid-in capital in excess of par value.... 10,053,262
Accumulated undistributed net realized
loss on investments (note 1)............ (28,663)
Net unrealized appreciation (depreciation)
on:
Investments (note 1).................... 5,736,460
Foreign currency related transactions... (6,640)
Forward currency contracts (note 5)..... (23,508)
Undistributed net investment loss......... (685,570)
-----------
Net assets at market value.................. $15,046,156
===========
Shares outstanding.......................... 814,734
Net asset value per share................... $ 18.47
===========
Maximum offering price per share
($18.47/95%).............................. $ 19.44
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 8,229
Dividends (net of $781 foreign taxes
withheld)................................ 8,756
----------
Total investment income.................. 16,985
Expenses:
Management fees (note 3)................... 37,407
12b-1 fees (note 6)........................ 11,002
Custodian fees (note 3).................... 42,720
Directors' fees (note 3)................... 893
Professional fees.......................... 2,084
Transfer agent & accounting fees........... 25,456
Filing fees................................ 2,993
Printing, proxy and postage fees........... 9,677
Other...................................... 107
----------
Total expenses........................... 132,339
Less expenses voluntarily reduced or
reimbursed (note 3).................... (39,135)
----------
Net expenses............................. 93,204
----------
Net investment loss...................... (76,219)
----------
Realized & unrealized gain (loss) on
investments & foreign currency:
Net realized gain (loss) from:
Investments.............................. 1,205,486
Forward currency related transactions.... (51,455)
Net increase in unrealized appreciation on:
Investments............................ 5,430,314
Foreign currency related
transactions........................ 12,662
----------
Net gain on investments................ 6,597,007
----------
Net increase in net assets from
operations.......................... $6,520,788
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
27
<PAGE> 29
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (76,219) $ (31,684)
Realized gain (loss) on investments and foreign currency
related transactions.................................... 1,154,031 (1,969,286)
Unrealized gain on investments and foreign currency
related transactions.................................... 5,442,976 149,338
----------- -----------
Net increase (decrease) in assets from operations..... 6,520,788 (1,851,632)
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. 0 (97)
Capital gains and foreign currency related transactions
distributions........................................... 0 (285,520)
----------- -----------
Total dividends and distributions..................... 0 (285,617)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 3,078,380 507,008
Received from dividends reinvested........................ 0 271,907
Paid for shares redeemed.................................. (1,441,573) (6,315,910)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 1,636,807 (5,536,995)
----------- -----------
Increase (decrease) in net assets.................. 8,157,595 (7,674,244)
Net Assets:
Beginning of period....................................... 6,888,561 14,562,805
----------- -----------
End of period............................................. $15,046,156 $ 6,888,561
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
SIX MONTHS ENDED -------------------------------------
DECEMBER 31, 1999 1999 1998 1997 1996
----------------- ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $10.82 $ 12.92 $15.45 $14.47 $12.89
Income (loss) from investment operations:
Net investment income (loss).............................. (0.12) (0.04) 0.12 0.14 0.10
Net realized and unrealized gain (loss) on investments and
foreign currency transactions........................... 7.77 (1.74) (0.63) 1.92 2.24
------ ------- ------ ------ ------
Total income (loss) from investment operations.......... 7.65 (1.78) (0.51) 2.06 2.34
------ ------- ------ ------ ------
Less distributions:
Dividends from net investment income...................... 0.00 0.00 (0.12) (0.15) (0.39)
Distributions from net realized capital gains and foreign
currency transactions................................... 0.00 (0.32) (1.90) (0.93) (0.37)
------ ------- ------ ------ ------
Total distributions..................................... 0.00 (0.32) (2.02) (1.08) (0.76)
------ ------- ------ ------ ------
Net asset value, end of period.............................. $18.47 $ 10.82 $12.92 $15.45 $14.47
====== ======= ====== ====== ======
Total return................................................ 70.70%(b) (13.90)% (4.84)% 14.76% 18.65%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (c):
Expenses.................................................. 2.10%(a) 2.13% 2.10% 1.87% 1.72%
Net investment income (loss).............................. (1.72)%(a) (0.32)% 0.85% 0.99% 0.70%
Ratios assuming no fees reimbursed by advisor:
Expenses.................................................. 2.98%(a) 2.56% 2.20% 1.98% 1.72%
Portfolio turnover rate..................................... 123% 217% 12% 9% 20%
Net assets at end of period (millions)...................... $ 15.0 $ 6.9 $ 14.6 $ 19.3 $ 15.1
</TABLE>
- ---------------
(a) Annualized.
(b) Calculated on an aggregate basis (not annualized).
(c) 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.
28
<PAGE> 30
ONE FUND, INC.
CORE GROWTH PORTFOLIO
OBJECTIVE
To provide long-term capital growth. Current income is incidental. Normally at
least 90% of the assets of this portfolio will be invested in common stocks.
Selection of stocks is not limited with regard to whether stocks are
exchange-listed or dividend-paying or whether they are issued by companies of
any particular size.
PERFORMANCE AS OF DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 105.53% 95.25%
Five-year 27.14% 24.99%
Since inception
(11/1/96) 25.10% 23.76%
</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 70.34% for the second half, 1999 and
105.53% for the full year ending December 31, 1999. This compares with the
Russell Mid Cap Growth Index returns of 32.51% and 51.31% respectively for the
same periods.
The key factors that led to the favorable results in the second half were
evident throughout the year. First, growth stocks significantly outperformed
value stocks across all capitalizations. This is evidenced by the full year,
1999 return of the Russell Mid Cap Growth Index of 51.31% vs. -0.10% for the
Russell Mid Cap Value Index. Second, we were overweighted in the technology
sector when technology had, by far, the best returns in the market. And third,
the individual stocks in each major sector of the Fund outperformed the stocks
held in the benchmark. This was especially true in the technology sector where
the Fund's technology holdings significantly outperformed those technology
stocks represented in the Russell Mid Cap Growth Index. In addition, the Fund's
holdings in the Consumer, Health Care, Industrial and Services sectors well
exceeded those of the benchmark.
Throughout all of 1999, consumers continued to spend, the manufacturing sector
continued to grow, corporate profits remained strong, jobs were plentiful and
inflation remained low. During the year, foreign economies began to recover. By
the end of the year, the strength and length of the bull market has surpassed
most expectations. And now, computer-related Y2K worries appear to be over. Few
economists are predicting the economy will slow significantly in 2000. During
the second half of 1999, the Fed raised interest rates three times to absorb the
additional liquidity it injected into the market in 1998. While many predicted
that the third increase would be disruptive, the stock market barely missed a
beat. The question for the new year is whether the Fed will raise interest rates
beyond reversing what it had done in 1998, with the intention of slowing the
economy. Some economists are already predicting that the Fed will raise rates
one or more times in early 2000. In response, worried investors sent the market
down sharply in early January believing that Alan Greenspan would indeed take
the millennium punchbowl away.
Although equity mutual funds overall experienced net inflows for 1999, small-cap
funds actually experienced net outflows for the year. And according to L. Keith
Mullins of Salomon Smith Barney, he predicts a "significant rotation by
institutional capital" into small- and mid-cap stocks. If Institutional
investors begin to rotate more assets out of large-caps and retail investors
continue their shift begun at the end of last year, we believe small- and
mid-cap stocks could enjoy a second year of strong performance.
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>
'95 9500.00 10000.00
'96 9389.80 10614.00
'97 9359.80 12499.00
8789.70 13977.70
'98 10061.60 16075.70
9387.50 17313.60
'99 19249.00 23308.00
</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 DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Infospace.com Inc 4.08
2. VERSIGN INC 3.08
3. MEDIMMUNE INC 2.92
4. JDS UNIPHASE CORP. 2.84
5. Emulex Corporation 2.81
6. MicroStrategy Inc 2.77
7. TriQuint 2.61
8. GETTY IMAGES INC 2.58
9. LAMAR ADVERTISING CO 2.40
10. Ariba Inc 2.34
</TABLE>
TOP 5 INDUSTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Internet Software 11.8
2. Computer and Related 11.0
3. Electronic/Semiconductors 11.0
4. Retail 9.4
5. Medical and Related 9.3
</TABLE>
29
<PAGE> 31
ONE FUND, INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
ADVERTISING (7.2%)
3,600 *Getty Images, Inc. ................... $ 175,950
2,700 *Lamar Advertising Co. ................ 163,519
1,500 Omnicorp Group Inc. ................... 150,000
----------
489,469
----------
AUDIO VIDEO (1.1%)
1,100 *Gemstar International Group .......... 78,375
----------
COMMUNICATIONS (1.5%)
700 *Powerwave Technologies Inc. .......... 40,863
600 *Univision Communications ............. 61,313
----------
102,176
----------
COMPUTER & RELATED (11.0%)
900 *Ariba Inc. ........................... 159,638
1,100 *Bea Systems Inc. ..................... 76,931
1,700 *Emulex Corp. ......................... 191,250
1,100 *Verisign Inc. ........................ 209,825
800 *Veritas Software Corp. ............... 114,500
----------
752,144
----------
COMPUTER SOFTWARE (7.9%)
500 *Active Software Inc. ................. 46,000
300 *Broadbase Software Inc. .............. 33,750
600 *BroadVision Inc. ..................... 102,038
900 *Informatica Corp. .................... 95,738
100 *Intertrust Tech Corp. ................ 11,762
900 *MicroStrategy Inc. ................... 189,000
300 *VA Linux Systems Inc. ................ 61,987
----------
540,275
----------
CONSULTING SERVICES (1.9%)
3,000 *USWeb Corp. .......................... 133,312
----------
ELECTRONICS/SEMICONDUCTORS (11.0%)
2,600 *Atmel ................................ 76,862
2,300 *Cypress Semiconductor ................ 74,463
1,600 *Fairchild Semiconductor .............. 47,600
1,600 *Flextronics Intl. Ltd. ............... 73,600
1,300 *Integrated Device Technology Inc. .... 37,700
800 *LSI Logic Corp. ...................... 54,000
800 *Microchip Technology ................. 54,750
400 *QLogic Corp. ......................... 63,950
1,800 Tandy Corp. ........................... 88,538
1,600 *TriQuint Semiconductor Inc. .......... 178,000
----------
749,463
----------
ENTERTAINMENT & LEISURE (1.0%)
2,300 *Premier Parkes Inc. .................. 66,413
----------
FINANCIAL SERVICES (1.9%)
2,300 *Ameritrade Holdings .................. 49,881
3,100 *E*Trade Group Inc. ................... 80,988
----------
130,869
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
FIBER OPTICS (6.9%)
700 *C-Cor.net Corp. ...................... $ 53,638
1,000 *Cienna Corp. ......................... 57,500
1,200 *JDS Uniphase Corp. ................... 193,575
1,700 *MRV Communications Inc. .............. 106,888
200 *Sycamore Networks Inc. ............... 61,600
----------
473,201
----------
INSTRUMENTS-SCIENTIFIC (4.0%)
3,900 *Mettler-Toledo Intl. Inc. ............ 148,931
600 PE Corp.-PE Biosystems Grp. ........... 72,188
1,200 Perkin-Elmer Inc. ..................... 50,025
----------
271,144
----------
INTERNET & RELATED (6.1%)
1,300 *Infospace.com Inc. ................... 278,200
2,500 *Rare Medium Group .................... 85,313
1,100 *Verio Inc. ........................... 50,806
----------
414,319
----------
INTERNET SOFTWARE (11.8%)
200 *Akamai Technologies Inc. ............. 65,525
900 *Art Technology Group Inc. ............ 117,000
600 *Commerce One Inc. .................... 117,900
1,500 *Exodus Communications Inc. ........... 133,219
500 *F5 Networks Inc. ..................... 57,000
2,000 *Lycos Inc. ........................... 159,125
600 *Viant Corp. .......................... 59,400
600 *Vignette Corp. ....................... 97,800
----------
806,969
----------
MEDICAL & RELATED (9.3%)
2,500 *Allscripts Inc. ...................... 110,000
1,100 *Celgene Corp. ........................ 77,000
900 *Cytyc Corp. .......................... 54,956
1,700 *Medicis Pharmaceutical CL A .......... 72,356
1,200 *Medimmune Inc. ....................... 199,050
1,700 *Teva Pharmaceuticals ................. 121,869
----------
635,231
----------
NETWORK PRODUCTS & SERVICES (4.8%)
600 *Check Point Software ................. 119,250
201 *Juniper Networks Inc. ................ 68,000
300 *Redback Networks Inc. ................ 142,000
----------
329,250
----------
OIL, ENERGY & NATURAL GAS (1.5%)
2,100 Diamond Offshore Drilling Inc. ........ 64,181
2,100 EOG Resources Inc. .................... 36,881
----------
101,062
----------
TELECOMMUNICATIONS (1.4%)
1,400 *CommScope Inc. ....................... 56,437
400 *Ditech Communications Corp. .......... 37,400
200 *MCK Communications ................... 4,500
----------
98,337
----------
</TABLE>
(continued)
30
<PAGE> 32
ONE FUND, INC.
CORE GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- ------------------------------------------------------------
<C> <S> <C>
RETAIL (9.4%)
3,000 *American Eagle Outfitters Inc. ....... $ 135,000
1,800 Circuit City Stores ................... 81,112
1,700 *Insight Enterprises Inc. ............. 69,062
1,700 Tiffany & Co. ......................... 151,725
1,400 *United Rentals Inc. .................. 23,975
700 *Whole Food Market Inc. ............... 32,463
3,000 *Zale Corp. ........................... 145,123
----------
638,460
----------
TOTAL COMMON STOCK (99.7%)
(COST $4,456,174) .................... $6,810,469
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- ------------------------------------------------------------
<C> <S> <C>
FINANCIAL (0.1%)
$3,000 Firstar Bank 1.0% due 01/03/00
repurchase price $3,000 collateralized
by GNMA certificates pool # 837 due
02-20-24 (cost $3,000) ............... $ 3,000
----------
TOTAL REPURCHASE AGREEMENTS (0.1%)
(COST $3,000)......................... $ 3,000
----------
TOTAL HOLDINGS (99.8%) (COST
$4,459,174) (a) ...................... $6,813,469
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(0.2%) ............................... 16,908
----------
TOTAL NET ASSETS (100.0%) ............. $6,830,377
==========
</TABLE>
- ---------------
* Non income producing security.
(a) Represents cost for financial reporting purposes and differs from cost basis
for federal income tax purposes. See note 1.
The accompanying notes are an integral part of these financial statements.
31
<PAGE> 33
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $4,459,174)............... $ 6,813,469
Cash in bank............................... 957
Receivable for securities sold............. 69,167
Dividends & accrued interest receivable.... 595
Other...................................... 7,329
-----------
Total assets............................. 6,891,517
-----------
Liabilities:
Payable for securities purchased........... 41,804
Payable for investment management services
(note 3)................................. 5,468
Accrued 12b-1 fees (note 6)................ 3,682
Other accrued expenses..................... 10,186
-----------
Total liabilities........................ 61,140
-----------
Net assets at market value................... $ 6,830,377
===========
Net assets consist of:
Par value, $.001 per share................. $ 397
Paid-in capital in excess of par value..... 3,713,470
Accumulated net realized gain on
investments.............................. 762,215
Net unrealized appreciation on
investments.............................. 2,354,295
-----------
Net assets at market value................... $ 6,830,377
===========
Shares outstanding........................... 396,616
Net asset value per share.................... $ 17.22
===========
Maximum offering price per share
($17.22/95%)............................... $ 18.13
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 3,416
Dividends.................................. 3,386
----------
Total investment income.................. 6,802
----------
Expenses:
Management fees (note 3)................... 25,646
12b-1 fees (note 6)........................ 6,749
Custodian fees (note 3).................... 2,490
Directors' fees (note 3)................... 482
Professional fees.......................... 1,673
Transfer agent & accounting fees........... 16,891
Filing fees................................ 2,263
Printing, proxy and postage fees........... 815
Other...................................... 135
----------
Total expenses........................... 57,144
----------
Net investment loss...................... (50,342)
----------
Realized & unrealized gain on investments:
Net realized gain from investments......... 1,951,794
Net increase in unrealized appreciation on
investments.............................. 1,183,778
----------
Net gain on investments.................. 3,135,572
----------
Net increase in net assets from
operations............................. $3,085,230
==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
32
<PAGE> 34
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1999 JUNE 30, 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (50,342) $ (78,400)
Realized gain on investments.............................. 1,951,794 484,943
Unrealized gain on investments............................ 1,185,778 118,174
----------- -----------
Net increase in assets from operations................ 3,085,230 524,717
----------- -----------
Dividend and distribution to shareholders:
Capital gains distributions............................... (1,154,380) 0
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 289,252 692,176
Received from dividends reinvested........................ 379,135 0
Paid for shares redeemed.................................. (324,140) (1,983,265)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 344,247 (1,291,089)
----------- -----------
Increase (decrease) in net assets.................. 2,275,097 (766,372)
Net Assets:
Beginning of period....................................... 4,555,280 5,321,652
----------- -----------
End of period............................................. $ 6,830,377 $ 4,555,280
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, 11-1-96
DECEMBER 31, ----------------- TO
1999 1999 1998 6-30-97
------------- ------ ------ --------
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $12.13 $10.60 $ 9.86 $10.00
Income (loss) from investment operations:
Net investment loss....................................... (0.13) (0.18) (0.16) (0.08)
Net realized & unrealized gain (loss) on investments...... 8.30 1.71 0.90 (0.06)
------ ------ ------ ------
Total income (loss) from investment operations.......... 8.17 1.53 0.74 (0.14)
------ ------ ------ ------
Less distributions:
Distributions from net realized capital gains............. (3.08) 0.00 0.00 0.00
------ ------ ------ ------
Net asset value, end of period.............................. $17.22 $12.13 $10.60 $ 9.86
====== ====== ====== ======
Total return................................................ 67.57%(b) 14.43% 7.51% (1.40)%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 2.17%(a) 1.98% 2.06% 1.35%(a)
Net investment loss....................................... (1.91)%(a) (1.81)% (1.65)% (0.87)%(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.18%(a) 2.42% 2.12% 1.40%(a)
Portfolio turnover rate..................................... 164% 148% 116% 80%
Net assets at end of period (millions)...................... $ 6.8 $ 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.
33
<PAGE> 35
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO
OBJECTIVE
The S&P 500 Index Portfolio seeks total return approximating that of the S&P 500
Index, including reinvestment of dividends, at a risk level consistent with that
of the S&P 500 Index.
PERFORMANCE AS OF DECEMBER 31, 1999
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
Since inception 5.90% 0.57%
</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 has added an S&P 500 Index fund, modeled after the Ohio National
S&P 500 Index Fund. The One Fund S&P 500 opened mid-December 1999, but the Ohio
National S&P fund completed its third year of existence with its third straight
year of outstanding performance. During a volatile, but yet good year for the
S&P 500 Index, the Ohio National Index Fund returned after fund expenses 25.63%,
or over 4.5% more than the actual S&P 500 Index. The actual Index returned, with
dividends reinvested, 21.04% for 1999.
Although another outstanding year for the S&P 500 Index, the Nasdaq 100 index
and the Dow Jones Industrial Average both outperformed the S&P 500 for 1999. The
Nasdaq had another outstanding year, led by technology stocks, returning 102%
for 1999. The DJIA had its best year out of the past 5 years, with a return of
27%. The 3 year average returns for the three indexes are:
<TABLE>
<CAPTION>
12/31/96 THROUGH 12/31/99 AVERAGE ANNUAL RETURNS
- ------------------------------------------------
<S> <C>
S&P 500 Index 27.6%
Dow Jones Industrial Average 23.4%
Nasdaq 100 65.4%
</TABLE>
Although less volatile, and therefore less risky than the 30 stocks that make up
the Dow Jones Industrial Average, the S&P 500 Index has returned more than the
Dow in each of the past three years. The Nasdaq has had a remarkable run up in
value over that same time period, which resulted in technology and internet
stocks currently near record high valuations.
We are looking forward to yet another year of earnings growth for the year 2000.
With Y2K scares out of the way, earnings growth remaining strong at around 20%
for US companies, Fed Funds interest rate hikes nearing an end, inflation
remaining mild and overseas economies recovering, I expect to report the first
year of double digit stock index returns to you for our new S&P fund in
approximately 12 months.
TOP 10 STOCKS AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. S&P 500 Depositary 6.21
2. Cisco Systems Inc 5.43
3. Microsoft Corp 4.20
4. Mediaone Group Inc 3.25
5. Qualcomm Inc 2.98
6. Intel Corp 2.96
7. American Express Co 2.81
8. SBC Communications 2.78
9. Intl Business Mach 2.51
10. Dell Computer Corp 2.48
</TABLE>
TOP 5 COUNTRIES AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
% of Portfolio
<C> <S> <C>
1. Government 9.4
2. Computer and Related 9.3
3. Financial Services 7.4
4. Computer Software 6.3
5. Communications 5.2
</TABLE>
34
<PAGE> 36
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
AEROSPACE (0.6%)
700 Boeing Co. ........................... $ 29,094
----------
AUTOMOTIVE & RELATED (0.7%)
700 Ford Motor Corp. ..................... 37,406
----------
BANKING (2.8%)
1,300 Bank One Corp. ....................... 41,681
900 Chase Manhattan....................... 69,919
1,000 Fleet Boston Financial Corp. ......... 34,812
----------
146,412
----------
COMMUNICATIONS (5.2%)
800 Qualcomm Inc. ........................ 141,000
2,700 SBC Communications Inc. .............. 131,625
----------
272,625
----------
COMPUTER & RELATED (9.3%)
2,400 Cisco Systems Inc. ................... 257,100
2,300 Dell Computer Corp. .................. 117,300
1,100 Intl. Business Machines............... 118,800
----------
493,200
----------
COMPUTER SOFTWARE (6.3%)
1,000 Computer Associates Intl. Inc. ....... 69,938
1,700 Microsoft Corp. ...................... 198,475
600 Oracle Corp. ......................... 67,237
----------
335,650
----------
CONSUMER PRODUCTS (2.6%)
900 Johnson & Johnson..................... 83,813
500 Procter & Gamble Co. ................. 54,781
----------
138,594
----------
ECOLOGICAL SERVICES & EQUIPMENT (0.7%)
1,000 Monsanto Co. ......................... 35,625
----------
ELECTRICAL EQUIPMENT (3.7%)
1,800 Edison Intl. ......................... 47,138
600 General Electric Co. ................. 92,850
1,800 Thomas & Betts Corp. ................. 57,375
----------
197,363
----------
ELECTRONICS/SEMICONDUCTORS (3.4%)
300 Applied Materials Inc. ............... 38,006
1,700 Intel Corp. .......................... 139,931
----------
177,937
----------
ENTERTAINMENT & LEISURE (1.1%)
2,000 The Walt Disney Co. .................. 58,500
----------
FINANCIAL SERVICES (3.9%)
800 American Express Co. ................. 133,000
1,200 Associates First Capital Corp. ....... 32,925
500 Lehman Bros. Holdings Inc. ........... 42,344
----------
208,269
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
- -------------------------------------------------------------
<C> <S> <C>
FOOD & RELATED (2.0%)
1,000 Coca-Cola Co. ........................ $ 58,250
800 Kroger Co. ........................... 15,100
1,500 Sara Lee Corp. ....................... 33,094
----------
106,444
----------
INSURANCE SERVICES (1.0%)
500 American Intl. Group.................. 54,063
----------
INTERNET SOFTWARE (0.7%)
500 America Online Inc. .................. 37,719
----------
MANUFACTURING (0.9%)
1,200 Tyco Intl. Ltd. ...................... 46,650
----------
MEDICAL & RELATED (4.4%)
600 Amgen Inc. ........................... 36,037
1,500 Boston Scientific Corp. .............. 32,813
900 Merck & Co. Inc. ..................... 60,356
1,500 Schering-Plough Corp. ................ 63,281
500 Warner-Lambert Co. ................... 40,969
----------
233,456
----------
OFFICE EQUIPMENT (0.1%)
300 Xerox Co. ............................ 6,806
----------
OIL, ENERGY & NATURAL GAS (3.1%)
800 Exxon Mobil Corp. .................... 64,450
1,200 Royal Dutch Petroleum................. 72,525
1,000 USX-Marathon Group.................... 24,688
----------
161,663
----------
RADIO & TV (2.9%)
2,000 MediaOne Group Inc. .................. 153,625
----------
RESTAURANTS (0.4%)
500 McDonalds Corp. ...................... 20,156
----------
RETAIL (3.6%)
1,300 Dayton Hudson Corp. .................. 95,468
300 GAP Inc. ............................. 13,800
1,200 Home Depot Inc. ...................... 82,275
----------
191,543
----------
TOTAL COMMON STOCK (59.4%) (COST
$2,929,241).......................... $3,142,800
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES DEPOSITORY SHARES VALUE
- -----------------------------------------------------------
<S> <C> <C>
2,000 S&P 500 Depository Receipt........... $293,750
--------
TOTAL DEPOSITORY SHARES (5.5%) (COST
$283,828)........................... $293,750
--------
</TABLE>
(continued)
35
<PAGE> 37
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS DECEMBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (7.4%)
$ 191,000 American Express Credit 1.000%
01-04-00........................ $ 190,984
206,000 Household Finance 6.450%
01-06-00........................ 205,815
----------
396,799
----------
GOVERNMENT (9.4%)
500,000 U.S. Treasury Bill 5.260%
01-27-00........................ 498,101
----------
INSURANCE SERVICES (3.8%)
200,000 Prudential Funding 6.500%
01-11-00........................ 199,639
----------
TOTAL SHORT-TERM NOTES (20.6%)
(COST $1,094,539)............... $1,094,539
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
- -------------------------------------------------------------
<C> <S> <C>
FINANCIAL (3.8%)
$ 200,000 Firstar Bank 1.0% due 01/03/00
repurchase price $200,016
collateralized GNMA certificates
pool #837 due 02-02-24 (cost
$200,000)........................ $ 200,000
----------
TOTAL REPURCHASE AGREEMENTS (3.8%)
(COST $200,000).................. $ 200,000
----------
TOTAL HOLDINGS (89.3%) (COST
$4,507,608)(a)................... $4,731,089
----------
CASH & RECEIVABLES, NET OF
LIABILITIES (10.7%).............. 567,444
----------
TOTAL NET ASSETS (100.0%)......... $5,298,533
==========
</TABLE>
- ---------------
(a) Represents cost for financial reporting and federal income tax purposes. See
Note 1.
The accompanying notes are an integral part of these financial statements.
36
<PAGE> 38
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO(a)
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $4,507,608)............... $ 4,731,089
Cash in Bank............................... 416
Variation margins on future contracts (note
1)....................................... 570,875
Dividends & accrued interest receivable.... 21
-----------
Total assets............................. 5,302,401
-----------
Liabilities:
Payable for investment management services
(note 1)................................. 960
Accrued 12b-1 fees (note 6)................ 600
Other accrued expenses..................... 2,308
-----------
Total liabilities........................ 3,868
-----------
Net assets at market value................... $ 5,298,533
===========
Net assets consist of:
Par value, $.001 per share................. $ 500
Paid-in capital in excess of par value..... 5,003,151
Net unrealized appreciation on:
Investments (note 1)..................... 223,481
Futures contracts (note 1)............... 70,875
Undistributed net investment income........ 526
-----------
Net assets at market value................... $ 5,298,533
===========
Shares outstanding........................... 500,354
Net asset value per share.................... $ 10.59
===========
Maximum offering price per share
($10.59/95%)............................... $ 11.15
===========
</TABLE>
STATEMENT OF OPERATIONS
For the period 12/15/99 to 12/31/99 (Unaudited)
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 4,372
Dividends................................... 22
---------
Total investment income................... 4,394
---------
Expenses:
Management fees (note 3).................... 960
12b-1 fees (note 6)......................... 600
Custodian fees (note 3)..................... 241
Directors' fees (note 3).................... 77
Professional fees........................... 312
Transfer agent & accounting fees............ 1,384
Filing fees................................. 119
Printing, proxy and postage fees............ 158
Other....................................... 17
---------
Total expenses............................ 3,868
---------
Net investment income..................... 526
---------
Unrealized gain on investments:
Net increase in unrealized appreciation on:
Investments............................. 223,481
Futures contracts....................... 70,875
---------
Net gain on investments................. 294,356
---------
Net increase in net assets from
operations........................... $ 294,882
=========
</TABLE>
- ---------------
(a) Commenced operations December 15, 1999.
The accompanying notes are an integral part of these financial statements.
37
<PAGE> 39
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO(c)
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 15, 1999
TO
DECEMBER 31, 1999
-----------------
<S> <C>
From operations:
Net investment income..................................... $ 526
Unrealized gain on investments and futures contracts...... 294,356
----------
Net increase in assets from operations................ 294,882
----------
From capital share transactions (note 4):
Received from shares sold................................. 5,003,651
----------
Increase in net assets............................. 5,298,533
Net Assets:
Beginning of period....................................... 0
----------
End of period............................................. $5,298,533
==========
Includes undistributed net investment income of........... $ 526
==========
</TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
<TABLE>
<CAPTION>
DECEMBER 15, 1999
TO
DECEMBER 31, 1999
-----------------
<S> <C>
Per share data:
Net asset value, beginning of period........................ $ 10.00
Income from investment operations:
Net investment income..................................... 0.00
Net unrealized gain on investment and futures contracts... 0.59
----------
Total income from investment operations................. 0.59
----------
Net asset value, end of period.............................. $ 10.59
==========
Total return................................................ 5.90%(b)
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor:
Expenses.................................................. 1.79%(a)
Net investment income..................................... 0.24%(a)
Portfolio turnover rate..................................... 0%
Net assets at end of period (millions)...................... $ 5.3
</TABLE>
- ---------------
(a) Annualized.
(b) Calculated on an aggregate basis (not annualized).
(c) Commenced operations December 15, 1999.
The accompanying notes are an integral part of these financial statements.
38
<PAGE> 40
ONE FUND, INC. December 31, 1999 (Unaudited)
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 eight
separate investment portfolios that seek the following investment objectives:
- Money Market Portfolio -- current income consistent with preservation of
capital and liquidity.
- 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.
- Core Growth Portfolio -- long-term capital appreciation.
- S&P 500 Index Portfolio -- Total return that approximates that of the
Standard & Poor's 500 Index ("S&P 500") by investing in common stocks and
in stock index futures contracts hedged by U.S. Government obligations,
investment grade corporate bonds and cash equivalents.
There are no assurances these objectives will be met.
Effective November 3, 1999 the Global Contrarian Portfolio merged into the
International Portfolio.
Effective December 3, 1999 the Tax-Free Income Portfolio merged into the
Income Portfolio.
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 and
Income portfolios, all of the undistributed net income is accrued as daily
dividends to shareholders of record immediately before each computation of
the net asset value of these portfolios. Dividends (representing net
investment income) will normally be paid monthly to the shareholders of these
three portfolios. Distributions arising from net investment income from the
remaining portfolios are declared and paid to shareholders quarterly and are
recorded on the ex-dividend date. Accumulated net realized capital gains are
distributed to shareholders at least once a year.
For all but the Money Market Portfolio, securities which are traded on U.S.
and foreign stock exchanges or in the over-the-counter markets are valued at
the last sale price or, if there has been no sale that day, at the last bid
reported as of 4:00 p.m. Eastern time on each day the New York Stock Exchange
is open for unrestricted trading. Over-the-counter securities are valued at
the last bid price as of the close of trading on the Exchange. Short-term
investments (investments with remaining maturities of 60 days or less) are
valued at amortized cost and fixed income securities are valued by using
market quotations, or independent pricing services which use prices provided
by market makers or estimates of market value obtained from yield data
relating to instruments or securities with similar characteristics.
Restricted securities and securities for which market quotations are not
readily available, if any, are valued at fair value using methods approved by
the Board of Directors. The differences between cost and market values of
such investments are reflected as unrealized appreciation or depreciation.
All investments and cash quoted in foreign currencies are valued daily in
U.S. dollars on the basis of the foreign currency exchange rates prevailing
at the time of such valuation.
Foreign currency exchange rates are generally determined prior to 4:00 p.m.
Eastern time. Occasionally, events affecting the value of foreign investments
and such exchange rates occur between the time at which they are determined
and the time of
(continued)
39
<PAGE> 41
ONE FUND, INC. December 31, 1999 (Unaudited)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
valuation, which in the case of the International Portfolio, would not be
reflected in the computation of the portfolios' net asset values. If events
materially affecting the value of such securities or currency exchange rates
occurred during such time period, the securities are valued at their fair
value as determined in good faith by or under the direction of the Fund's
Board of Directors.
In connection with purchases and sales of securities denominated in foreign
currencies, the Fund may enter into forward foreign currency exchange
contracts (forward contracts). A forward contract is a commitment to purchase
or sell a foreign currency at a future date, at a negotiated rate.
Additionally, the Fund may enter into such contracts to hedge certain other
foreign currency denominated investments. These contracts are recorded at
market value, and the related realized and unrealized foreign exchange gains
and losses are included in the statement of operations. In the event that
counterparties fail to settle these currency contracts or the related foreign
security trades, the Fund could be exposed to foreign currency fluctuations.
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.
The S&P 500 Index Portfolio currently holds investments in S&P 500 Index
Futures Contracts. The contracts in the S&P 500 Index Portfolio are fully
hedged with commercial paper and/or U.S. Treasuries. The futures contracts in
the S&P 500 Index Portfolio at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
EXPIRATION UNDERLYING FACE UNDERLYING CASH DEPOSITED AS
PURCHASED DATE AMOUNT AT VALUE GAIN/LOSS MARGIN REQUIREMENTS
--------- ---------- --------------- ---------- -------------------
<S> <C> <C> <C> <C>
5 March 00 1,784,375 $70,875 500,000
</TABLE>
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 Portfolio 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 Portfolio 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.
(continued)
40
<PAGE> 42
ONE FUND, INC. December 31, 1999 (Unaudited)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Although the net assets and the market value of the International Portfolio
is presented at the foreign exchange rates at the end of the period, the
Portfolio does 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 Portfolio does 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.
Net investment income (loss) and net realized gains (losses) may differ for
financial statement and tax purposes primarily due to net operating losses
and wash sales. 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 reclassifications were made in the Growth, Small Cap,
International and Core Growth Portfolios: accumulated net investment loss has
been decreased by $33,850, $7,919, $127,674 and $50,342 respectively,
resulting in a reclassification adjustment to decrease Paid-in capital in
excess of par value by $33,850, $7,919, $127,674 and $50,342 respectively.
The amount of losses recognized for financial reporting purposes in excess of
federal income tax purposes in the Core Growth Portfolio was $16,675. Cost
for federal income tax purposes differs from value by net unrealized
appreciation (depreciation) of securities as follows:
<TABLE>
<CAPTION>
PORTFOLIO
-------------------------------------------------------------------------------
INCOME & SMALL INTER- CORE S&P 500
INCOME GROWTH GROWTH CAP NATIONAL GROWTH INDEX
-------- --------- --------- --------- --------- --------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Gross unrealized:
Appreciation....................... 36,211 3,167,950 4,654,579 1,029,135 5,800,910 2,456,563 267,359
Depreciation....................... (242,356) (426,047) (159,677) (69,653) (64,450) (85,593) (43,878)
Net unrealized:
Appreciation....................... 0 2,741,904 4,494,902 959,482 5,736,460 2,370,970 223,481
Depreciation....................... (206,145) 0 0 0 0 0 0
</TABLE>
For federal income tax purposes, the Small Cap and International Portfolios
had net capital losses of $804,516 and $1,442,884 respectively at June 30,
1999. In addition, the Income and Core Growth Portfolios also had capital
loss carryovers at June 30, 1999. If not offset by subsequent capital gains,
$35,681 will expire June 30, 2004 in the Income Portfolio, $35,199 will
expire in June 30, 2006 in the Core Growth Portfolio and $804,516 and
$1,442,884 will expire June 30, 2007 in the Small Cap and International
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.
(continued)
41
<PAGE> 43
ONE FUND, INC. December 31, 1999 (Unaudited)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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 Portfolio was
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. The S&P 500 Index
Portfolio was organized on September 17, 1999 with the commencement of
operations on December 15, 1999. Organizational expenses of approximately
$2,610 was incurred by the Small Cap Portfolio. Such expenses will be charged
against operations on a straight line basis over a period of 60 months from
the commencement of operations. 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, Core Growth, and S&P 500
Index Portfolios. ONLIC and its affiliates have also purchased additional
shares of each portfolio and as of December 31, 1999 the additional shares
owned were as follows: 9,112,820 shares of the Money Market Portfolio,
508,244 shares of the Income Portfolio, 345,432 shares of the Income & Growth
Portfolio, 237,631 shares of the Growth Portfolio, 211,503 shares of the
Small Cap Portfolio, 196,371 shares of the International Portfolio, 250,000
shares of the Core Growth Portfolio, and 500,000 shares of the S&P 500 Index
Portfolio.
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) from July 1, 1999 to December 31, 1999 were as follows:
<TABLE>
<CAPTION>
INCOME & CORE S&P 500
INCOME GROWTH GROWTH SMALL CAP INTERNATIONAL GROWTH INDEX
--------- --------- --------- ---------- ------------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Stocks & Bonds:
Purchases....................... 299,304 5,487,089 5,145,919 1,698,527 12,107,354 8,423,328 8,423,328
Sales........................... 533,455 7,275,395 6,394,632 1,635,055 9,991,447 9,373,823 9,373,823
U.S. Govt. Obligations:
Purchases....................... -- -- -- -- -- -- --
Sales........................... -- -- -- -- -- -- --
</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.
(continued)
42
<PAGE> 44
ONE FUND, INC. December 31, 1999 (Unaudited)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For assets held in the Money Market, Income, Income & Growth, Growth, Small
Cap, and S&P 500 Index Portfolios, the fees are as follows:
<TABLE>
<CAPTION>
PORTFOLIO
-----------------------------------------------------
MONEY INCOME & SMALL S&P 500
MARKET INCOME GROWTH GROWTH CAP INDEX
------ ------ -------- ------ ----- -------
<S> <C> <C> <C> <C> <C> <C>
First $100 million........................................ 0.30% 0.50% 0.50% 0.50% 0.65% 0.40%
Next $150 million........................................ 0.25% 0.40% 0.40% 0.40% 0.55% 0.40%
Over $250 million........................................ 0.20% 0.30% 0.30% 0.30% 0.45% 0.40%
</TABLE>
For the International Portfolio, 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 0.40% of the fist $200 million and 0.35% of average net assets in
excess of $200 million of International 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 six months
ended December 31, 1999 were $13,939, $4,791, $9,594, $8,151 and $9,080 for
the Money Market, Income, Income & Growth, Growth and Small Cap Portfolios,
respectively. Under the agreement between the Fund and ONI, ONI has agreed to
reimburse the portfolios for expenses, other than advisory fees, 12b-1 fees,
taxes and interest, in excess of 1% of their average daily net assets. For
the six months ended December 31, 1999, the reimbursement was $6,540 and
$39,135 for the Small Cap and International 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 Portfolio is Star Bank, N.A., 425 Walnut Street, Cincinnati,
Ohio. The custodian for the International Portfolio 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 six months ended December 31, 1999 and the
year ended June 30, 1999 were as follows:
<TABLE>
<CAPTION>
MONEY MARKET INCOME INCOME & GROWTH
----------------------- --------------------- ---------------------
6 MONTHS 6 MONTHS 6 MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
12-31-99 6-30-99 12-31-99 6-30-99 12-31-99 6-30-99
---------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales....................... 8,671,496 21,575,304 657,789 32,840 23,522 118,333
Capital shares issued on reinvested dividends........ 224,254 485,752 2,536 6,655 56,741 38,380
Capital shares redeemed.............................. 8,713,426 21,656,382 627,955 75,391 89,258 312,346
</TABLE>
(continued)
43
<PAGE> 45
ONE FUND, INC. December 31, 1999 (Unaudited)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
GROWTH SMALL CAP INTERNATIONAL
----------------------- --------------------- ---------------------
6 MONTHS 6 MONTHS 6 MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
12-31-99 6-30-99 12-31-99 6-30-99 12-31-99 6-30-99
---------- ---------- -------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales....................... 20,692 84,824 6,537 41,741 295,196 47,020
Capital shares issued on reinvested dividends........ 35,660 37,590 0 12,745 0 23,927
Capital shares redeemed.............................. 52,496 246,309 30,226 135,052 117,064 561,187
</TABLE>
<TABLE>
<CAPTION>
CORE GROWTH S&P 500 INDEX
----------------------- ---------------------
6 MONTHS 6 MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
12-31-99 6-30-99 12-31-99 6-30-99
---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Capital shares issued on sales....................... 22,082 78,273 500,353 NA
Capital shares issued on reinvested dividends........ 22,554 0 0 NA
Capital shares redeemed.............................. 23,598 204,796 0 NA
</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 six months ended December 31, 1999 were approximately $217,
$4,360, $4,308, $2,384, $4,206 and $2,477 for the Income, Income & Growth,
Growth, Small Cap, International and Core Growth, 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 seven
portfolios have been allocated 100 million shares each. The remaining shares
have not been allocated.
(5) COMMITMENTS
The International Portfolio enters into foreign currency exchange contracts
as a way of managing foreign exchange rate risk. The Fund may enter into
these contracts for the purchase or sale of a specific foreign currency at a
fixed price on a future date as a hedge against either specific transactions
or portfolio positions. The objective of the Fund's foreign currency hedging
transactions is to reduce the risk that the U.S. dollar value of the Fund's
securities denominated in foreign currency will decline in value due to
changes in foreign currency exchange rates.
As of December 31, 1999, the International Portfolio 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 12/31/99 AMOUNT TYPE 12/31/99 GAIN LOSS
---------- ------------ ------------- ---------- ----------- ------------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/05/01 388,000 New Zealand $ 203,137 186,046 U.S. Dollar 186,046 -- $ (17,091)
10/05/01 206,455 U.S. Dollar 206,455 388,000 New Zealand $ 203,137 -- (3,317)
11/13/99 11,720,000 Japanese Yen 120,434 109,810 U.S. Dollar 109,810 -- (10,624)
11/13/99 112,909 U.S. Dollar 112,909 11,720,000 Japanese Yen 120,434 $ 7,524 --
---------- ---------- -------- ---------
$ 642,935 $ 619,427 $ 7,524 $ (31,032)
========== ========== ======== =========
</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.
44
<PAGE> 46
THIS PAGE INTENTIONALLY LEFT BLANK
45
<PAGE> 47
ONE FUND, INC.
Post Office Box 371
Cincinnati, Ohio 45201
Form 5843 Rev. 1/00
