<PAGE> 1
WEALTH BUILDING OPPORTUNITY
ONE Fund(SM)
Annual Report
JUNE 30, 2000
<PAGE> 2
President's
Message
[John J. Palmer Photo]
Dear Investor:
In the first six months of 2000, investors have seen strong economic growth
coupled with sharp corrections in the market. Higher energy costs, three
interest rate hikes and the roller coaster performance of the stock market have
consumers' short-term confidence wavering and wondering "what could be next?"
Despite investors recent tribulations, most ONE Fund portfolios have performed
well over the last six months. While they have been affected by the market
turmoil, both in the United States and abroad, our managers' performance has
generally been in line or better than their benchmarks or peers.
Here are a few highlights of ONE Fund activity.
- In the last 12 months, our portfolio managers have repositioned the Small Cap,
Income & Growth and Growth Portfolios to give more emphasis on faster-growing
companies, many in the technology sector. These maneuvers and the attractive
growth rates in the technology sector have improved the performance for these
funds.
- In a year and a half, Federated Global Investment Management has helped us to
realize healthy gains on the International Portfolio. The one-year performance
ending June 30, 2000, for the ONE Fund International Portfolio was 67.47
percent, which outperformed the return of the Morgan Stanley Capital
International Europe, Australia & Far East Index of 17.16 percent.
- The ONE Fund Core Growth, Growth and Income & Growth Portfolios ranked in the
top 10 percent of their Lipper Fund categories for one-year and year-to-date.
- The International Portfolio ranked in the top 10 percent of its Lipper
category for one-year and top 1/3 for year-to date.
- The ONE Fund Core Growth Portfolio returned 102.02 percent for the 12 months
ended June 30, 2000. This compares with the Russell Mid Cap Growth Index
return of 48.6 percent over the same period.
In the following pages, we're pleased to present you with a complete update of
ONE Fund's performance and investment activity for the year ending June 30,
2000.
Back to the Basics
All of the recent market activity brings us back to the fundamentals of
investing. Rather than guessing where the market will take us, we've found three
steps that have held up against the test of time:
1. Stay diversified.
2. Have a long-term investment philosophy.
3. Maintain a regular investment plan.
Staying diversified is a concept that many people have put by the wayside in
recent years. Recent drops in stocks like Proctor & Gamble and Amazon.com hammer
home the point that placing your retirement money in just one or two investments
may be a hazardous approach.
The ONE Fund can help you stay diversified. By investing in different portfolios
within the ONE Fund you can achieve a balanced portfolio with little time,
effort and expense on your part.
1
<PAGE> 3
In recent years, with the rise of dotcom millionaires, day traders and vast
increases in daily trading volume many investors have just paid lip service to
the concept of long-term investing. The year 2000 is leading investors to
rethink the value of this tried and true concept.
Investment decisions should not be made on the basis of one-day or one-week
returns. Instead, a long-term allocation strategy based upon your risk tolerance
and long-term goals should allow you to weather market volatility. ONE Fund's
wide array of portfolios allow you to invest in multiple portfolios across a
range of investment styles.
As always, we suggest the maintenance of a regular investment plan. Stopping
investment flow when the market is down only ensures that your money will not be
in play when the market rises. Investing in ONE Fund portfolios through an
automatic monthly withdrawal from your checking account maintains your
investment plan regardless of market volatility.
What the market will do in the future is an unfolding story of our portfolio
managers, the Wall Street gurus and even Alan Greenspan. So, our portfolio
managers continue to focus on the long-term performance of companies and look
for outstanding opportunities on a company-by-company basis. Through thorough
research, discipline and focus we are vigilantly monitoring our existing
holdings and new opportunities to ensure that we continue to meet your
expectations.
As always, your registered representative is available to provide you additional
information on ONE Fund investment opportunities.
Thank you again for the confidence you have placed in the ONE Fund as you pursue
your wealth-building efforts. Be assured that we will make every effort to
continue to merit that confidence.
Best regards,
/s/ JOHN J. PALMER
John J. Palmer
P.S. Be sure to check out our redesigned web site -- www.ohionational.com. You
are sure to find a host of other financial services.
--------------------------------------------------------------------------------
Directors & Officers of ONE Fund, Inc.
John J. Palmer, President and Director
Ronald L. Benedict, Secretary and Director
James E. Bushman, Director
Ross Love, Director
George M. Vredeveld, Director
Thomas A. Barefield, Vice President
Michael A. Boedeker, Vice President
Christopher A. Carlson, Vice President
Dennis R. Taney, Treasurer
Marcus L. Collins, Assistant Secretary
Yvonne L. Gross, Compliance Director and Assistant Treasurer
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the fund. This report is not
authorized for distribution to prospective investors in the fund unless preceded
or accompanied by an effective prospectus of ONE Fund, Inc. For a prospectus
containing more complete information, including charges and expenses, please
contact Ohio National Equities, Inc. (Member NASD/SIPC), One Financial Way,
Cincinnati, Ohio 45242, telephone 513.794.6100. 8/00
2
<PAGE> 4
ONE FUND, INC.
MONEY MARKET PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE & RELATED (14.7%)
$419,000 American Honda Finance 6.570%
08/30/00............................ $ 414,412
574,000 Ford Motor Credit 6.530% 07/26/00.... 571,397
486,000 General Motors Acceptance Corp.
6.470% 07/03/00..................... 485,825
730,000 TRW Inc. 6.800% 08/04/00............. 725,312
-----------
2,196,946
-----------
CHEMICALS (10.7%)
502,000 Dupont El Nemou 6.520% 07/07/00...... 501,455
484,000 Great Lakes Chemical 6.550%
08/07/00............................ 480,742
619,000 Sherwin-Williams 6.520% 07/27/00..... 616,085
-----------
1,598,282
-----------
COMMUNICATIONS (7.2%)
604,000 AT&T Corp 6.560% 07/10/00............ 603,009
479,000 Knight-Ridder 6.520% 07/21/00........ 477,265
-----------
1,080,274
-----------
COMPUTER & RELATED (3.3%)
487,000 IBM Credit Corp. 6.510% 07/05/00..... 486,648
-----------
CONSUMER PRODUCTS (2.5%)
368,000 Procter & Gamble 6.500% 07/18/00..... 366,870
-----------
ENTERTAINMENT (3.1%)
461,000 Walt Disney 6.370% 07/20/00.......... 459,450
-----------
ELECTRICAL (3.0%)
450,000 Edison International 6.650%
08/16/00............................ 446,176
-----------
FINANCIAL SERVICES (29.3%)
597,000 Allmerica Financial 6.620%
08/15/00............................ 592,060
385,000 American Express Credit 6.540%
07/31/00............................ 382,902
384,000 American General Finance Corp. 6.580%
07/13/00............................ 383,158
430,000 Associates Corp. 6.540% 07/28/00..... 427,891
318,000 Associates Corp. 6.560% 07/28/00..... 316,435
466,000 CIT Group 6.560% 07/25/00............ 463,962
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES, CONTINUED
$402,000 G.E. Capital 6.510% 07/06/00......... $ 401,636
497,000 Household Finance Corp. 6.520%
07/19/00............................ 495,380
500,000 Merrill Lynch 6.600% 08/10/00........ 496,333
412,000 USAA Capital Corp. 6.230% 07/12/00... 411,216
-----------
4,370,973
-----------
FOOD & RELATED (3.3%)
489,000 Heinz Co. 6.520% 08/01/00............ 486,254
-----------
INSURANCE SERVICES (3.5%)
523,000 Prudential Funding 6.570% 07/24/00... 520,805
-----------
MACHINERY (2.8%)
427,000 John Deere Capital 6.530% 07/17/00... 425,761
-----------
MANUFACTURING (2.6%)
399,000 Textron 6.540% 08/14/00.............. 395,811
-----------
MEDIA & PUBLISHING (3.2%)
483,000 Tribune Co. 6.530% 08/08/2000........ 479,671
-----------
OIL, ENERGY & NATURAL GAS (7.0%)
564,000 Consolidated Natural Gas 6.650%
08/09/00............................ 559,937
489,000 Dixie Pipeline 6.620% 07/14/00....... 487,831
-----------
1,047,768
-----------
RETAIL (4.1%)
614,000 Walmart Stores 6.510% 07/11/00....... 612,889
-----------
TOTAL SHORT-TERM NOTES (100.3%)
(COST $14,974,578).................. $14,974,578
-----------
TOTAL HOLDINGS (100.3%)
(COST $14,974,578)(a)............... $14,974,578
-----------
LIABILITIES, NET OF CASH &
RECEIVABLES (-0.3%)................. (40,057)
-----------
TOTAL NET ASSETS (100.0%)............ $14,934,521
===========
</TABLE>
---------------
(a) Also represents cost for Federal income tax purposes.
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
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at amortized
cost (note 1)........................... $14,974,578
Cash in bank.............................. 792
Receivable for fund shares sold........... 23,047
Other..................................... 2,843
-----------
Total assets............................ 15,001,260
-----------
Liabilities:
Payable for fund shares redeemed.......... 5,638
Payable for investment management services
(note 3)................................ 1,783
Accrued 12b-1 fees (note 6)............... 4,823
Other accrued expenses.................... 28,243
Dividends payable......................... 26,252
-----------
Total liabilities....................... 66,739
-----------
Net assets.................................. $14,934,521
===========
Net assets consist of:
Par value, $.001 per share................ $ 14,935
Paid-in capital in excess of par value.... 14,919,586
-----------
Net assets.................................. $14,934,521
===========
Shares outstanding.......................... 14,934,852
Net asset value per share................... $ 1.00
===========
Maximum offering price per share............ $ 1.00
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest..................................... $948,012
--------
Expenses:
Management fees (note 3)..................... 48,748
12b-1 fees (note 6).......................... 24,374
Custodian fees (note 3)...................... 5,054
Directors' fees (note 3)..................... 3,507
Professional fees............................ 12,173
Transfer agent and accounting fees........... 58,429
Filing fees.................................. 17,817
Printing, proxy and postage fees............. 6,154
Other........................................ 1,514
--------
Total expenses............................. 177,770
Less expenses voluntarily reduced or
reimbursed (note 3)...................... (24,374)
--------
Net expenses............................... 153,396
--------
Net investment income...................... 794,616
--------
Net increase in net assets from
operations............................... $794,616
========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------------
2000 1999
------------ -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 794,616 $ 730,870
------------ ------------
Net increase in assets from operations................ 794,616 730,870
------------ ------------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (794,902) (730,870)
------------ ------------
From capital share transactions (note 4):
Received from shares sold................................. 15,978,751 21,575,304
Received from dividends reinvested........................ 522,996 485,752
Paid for shares redeemed.................................. (18,332,581) (21,656,382)
------------ ------------
Increase (decrease) in net assets derived from capital
share transactions................................... (1,830,834) 404,674
------------ ------------
Increase (decrease) in net assets.................. (1,831,120) 404,674
Net Assets:
Beginning of period....................................... 16,765,641 16,360,967
------------ ------------
End of period............................................. $ 14,934,521 $ 16,765,641
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------------------------------------
2000 1999 1998 1997 1996
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning of period........................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations:
Net investment income..................................... 0.05 0.04 0.05 0.05 0.05
Less distributions:
Dividends from net investment income...................... (0.05) (0.04) (0.05) (0.05) (0.05)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return................................................ 4.98% 4.44% 4.87% 4.77% 5.18%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 0.94% 0.88% 0.88% 0.80% 0.57%
Net investment income..................................... 4.83% 4.36% 4.81% 4.71% 5.14%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.08% 1.03% 1.03% 1.04% 0.87%
Net assets at end of period (millions)...................... $ 14.9 $ 16.8 $ 16.4 $ 14.4 $ 15.8
</TABLE>
---------------
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets for the Money Market portfolio, but it may cease that waiver, in
whole or in part, without prior notice.
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 1.75% (1.29)%
Three-year 4.27% 3.22%
Five-year 5.12% 4.49%
Since inception
(8/18/92) 5.38% 4.97%
</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 Index
1.75% to 4.16% for the twelve months ended June 30, 2000. The first 6 months
results were quite weak but in the second half, fixed income markets are
beginning to show improvement. Our return of 2.03% in the second half of the
year compares favorably with the average bond fund return results from Lipper of
2.00%. Bonds rated in the "Baa" category which comprises most of our portfolio
have begun to outperform various other bond categories after more than a year of
underperformance.
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
'00 14915.1 15646
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading.
Neither the portfolio nor the index is open to direct investment.
TOP 10 BONDS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. U.S. Treasury Note 6.375%
08/15/02 15.4
2. Delta Airlines 7.70% 12/15/05 5.0
3. Texas Utilities Electric Co.
7.48% 01/01/17 5.0
4. ITT Destinations Inc. 6.75%
11/15/05 4.7
5. Watson Pharmaceuticals, Inc.
7.125% 05/15/08 4.6
6. Mirage Resorts Inc. 6.75%
02/01/08 4.6
7. El Paso Electric Co. 8.90%
02/01/06 4.4
8. IBM Corp. 7.25% 11/01/02 4.3
9. ITT Rayonier Inc. 7.50%
10/15/02 4.3
10. IBP Inc. 7.95% 02/01/10 4.3
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Utilities 17.3
2. Government 15.5
3. Hotel/Lodging 12.2
4. Transportation & Equipment 11.8
5. Chemicals 8.4
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE> 8
ONE FUND, INC.
INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
GOVERNMENT (15.5%)
$900,000 U.S. Treasury Note 6.375% 08/15/02.... $ 898,875
----------
CHEMICALS (8.4%)
250,000 Lyondell Chemicals Inc. (144A) 9.625%
05/01/07............................. 246,875
300,000 Mississippi Chemical Corp. 7.250%
11/15/07............................. 241,498
----------
488,373
----------
COMMUNICATIONS (1.8%)
100,000 Comcast Cable Communications 8.375%
05/01/07............................. 102,063
----------
COMPUTER & RELATED (4.3%)
250,000 IBM Corp. 7.250% 11/01/02............. 250,326
----------
DRUGS (4.6%)
300,000 Watson Pharmaceuticals Inc. 7.125%
05/15/08............................. 268,286
----------
FOOD & RELATED (4.3%)
250,000 IBP Inc. 7.950% 02/01/10.............. 249,827
----------
FORESTRY & PAPER PRODUCTS (4.3%)
250,000 ITT Rayonier Inc. 7.500% 10/15/02..... 250,092
----------
HOTEL/LODGING (12.2%)
200,000 Hilton Hotels Corp. 7.200% 12/15/09... 175,461
300,000 ITT Destinations Inc. 6.750%
11/15/05............................. 271,653
300,000 Mirage Resorts Inc. 6.750% 02/01/08... 265,193
----------
712,307
----------
MEDICAL & RELATED (3.7%)
250,000 Bergen Brunswig Corp. 7.375%
01/15/03............................. 216,356
----------
OIL, ENERGY & NATURAL GAS (4.9%)
200,000 PDV America, Inc. 7.875% 08/01/03..... 189,292
100,000 Seagull Energy 7.875% 08/01/03........ 98,120
----------
287,412
----------
REAL ESTATE (3.4%)
200,000 Avalon Properties Inc. 7.375%
09/15/02............................. 197,467
----------
TRANSPORTATION & EQUIPMENT (11.8%)
200,000 ABC Rail Product Corp. 8.750%
12/01/04............................. 149,000
300,000 Delta Airlines 7.700% 12/15/05........ 289,347
250,000 Illinois Central Gulf Railroad 6.750%
05/15/03............................. 247,939
----------
686,286
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
UTILITIES (14.4%)
$250,000 El Paso Electric Co. 8.900%
02/01/06............................. $ 258,131
200,000 Niagara Mohawk Power Corp. 7.750%
10/01/08............................. 195,264
98,975 Puget Power 6.450% 04/11/05........... 96,745
300,000 Texas Utilities Electric 7.480%
01/01/17............................. 289,041
----------
839,181
----------
TOTAL LONG-TERM BONDS & NOTES (93.6%)
(COST $5,727,519).................... $5,446,851
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
UTILITIES (2.9%)
7,000 CL & P Capital 9.3% Ser. A........... $ 171,938
-----------
TOTAL PREFERRED STOCK (2.9%)
(COST $175,000)..................... $ 171,938
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (2.5%)
$148,000 American Express Credit 6.880%
07/03/00............................. $ 147,943
----------
TOTAL SHORT-TERM NOTES (2.5%)
(COST $147,943)...................... $ 147,943
----------
TOTAL HOLDINGS (99.0%)
(COST $6,050,463)(a)................. $5,766,732
----------
CASH & RECEIVABLES, NET OF LIABILITIES
(1.0%)............................... 55,743
----------
TOTAL NET ASSETS (100.0%)............. $5,822,475
==========
</TABLE>
---------------
(a) Also represents cost for Federal income tax purposes.
(144A) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These Securities may be resold in transactions exempt from
registration, normally to qualified buyers. At the period end, the market
value of these securities amounted to $246,875 or 4.2% 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.
7
<PAGE> 9
ONE FUND, INC.
INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,050,463)............... $5,766,732
Cash in bank............................... 167
Receivable for fund shares sold............ 9,696
Dividends & accrued interest receivable.... 115,114
Other...................................... 3,233
----------
Total assets............................. 5,894,942
----------
Liabilities:
Payable for shares redeemed................ 18,570
Payable for investment management services
(note 3)................................. 1,682
Accrued 12b-1 fees (note 6)................ 2,968
Other accrued expenses..................... 23,708
Dividends payable.......................... 25,539
----------
Total liabilities........................ 72,467
----------
Net assets at market value................... $5,822,475
==========
Net assets consist of:
Par value, $.001 per share................. $ 628
Paid-in capital in excess of par value..... 6,128,895
Accumulated undistributed net realized loss
on investments........................... (23,317)
Net unrealized depreciation on
investments.............................. (283,731)
----------
Net assets at market value................... $5,822,475
==========
Shares outstanding........................... 627,613
Net asset value per share.................... $ 9.28
==========
Maximum offering price per share
($9.28/97%)................................ $ 9.57
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 470,587
---------
Expenses:
Management fees (note 3).................... 31,275
12b-1 fees (note 6)......................... 15,620
Custodian fees (note 3)..................... 5,000
Directors' fees (note 3).................... 1,482
Professional fees........................... 5,317
Transfer agent & accounting fees............ 34,449
Filing fees................................. 7,514
Printing, proxy and postage fees............ 2,823
Other....................................... 308
---------
Total expenses............................ 103,788
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (9,408)
---------
Net expenses.............................. 94,380
---------
Net investment income..................... 376,207
---------
Realized and unrealized gain (loss) on
investments:
Net realized gain from investments............ 12,371
Net increase in unrealized depreciation on
investments............................... (284,124)
---------
Net loss on investments................. (271,753)
---------
Net increase in net assets from
operations........................... $ 104,454
=========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------------
2000 1999
------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 376,207 $ 377,694
Realized gain on investments.............................. 12,371 19,787
Unrealized loss on investments............................ (284,124) (223,951)
----------- -----------
Net increase in assets from operations................ 104,454 173,530
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (376,207) (377,694)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 15,345 327,145
Received from merger (note 7)............................. 6,231,363 0
Received from dividends reinvested........................ 65,063 66,015
Paid for shares redeemed.................................. (6,581,977) (748,947)
----------- -----------
Decrease in net assets derived from capital share
transactions......................................... (270,206) (355,787)
----------- -----------
Decrease in net assets............................. (541,959) (559,951)
Net Assets:
Beginning of period....................................... 6,364,434 6,924,385
----------- -----------
End of period............................................. $ 5,822,475 $ 6,364,434
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------------------------------------
2000 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 from investment operations:
Net investment income..................................... 0.57 0.57 0.59 0.61 0.63
Net realized & unrealized gain (loss) on investments...... (0.41) (0.30) 0.24 0.16 (0.19)
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... 0.16 0.27 0.83 0.77 0.44
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.57) (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..................................... (0.57) (0.57) (0.59) (0.61) (0.63)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $ 9.28 $ 9.69 $ 9.99 $ 9.75 $ 9.59
====== ====== ====== ====== ======
Total return................................................ 1.75% 2.65% 8.56% 8.26% 4.61%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.51% 1.40% 1.39% 1.21% 0.97%
Net investment income..................................... 6.01% 5.70% 5.91% 6.29% 6.50%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.66% 1.55% 1.54% 1.51% 1.22%
Portfolio turnover rate..................................... 10% 4% 40% 10% 9%
Net assets at end of period (millions)...................... $ 5.8 $ 6.4 $ 6.9 $ 6.6 $ 7.0
</TABLE>
---------------
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets for the Income portfolio, but it may cease that waiver, in whole
or in part, without prior notice.
The accompanying notes are an integral part of these financial statements.
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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 12.58% 6.76%
Three-year 10.60% 8.66%
Five-year 14.02% 12.43%
Since inception
(8/18/92) 12.72% 11.97%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The Income & Growth Portfolio has gone through a major transformation over the
last twelve months and this has drastically improved results for shareowners.
New management was brought in to improve performance at this time last year and
the new strategy is paying off. Through the first six months in 2000, the fund
is up 7.72% vs. -0.42% for the S&P 500. Over the last twelve months, the fund is
up 12.58% vs. 7.25% for the S&P 500. As stated in last year's comments, the fund
has been re-positioned to reflect the higher valuations that the market has
placed on faster-growing companies. Much larger weightings have been given to
the technology sector and this has improved the fund's performance. In addition,
the fund is more focused on capital growth while observing its income
requirement. Fixed Income positions have been consolidated where possible and
replaced with securities which are deemed to have higher total return potential.
Telecommunications Equipment and Electronics/Semiconductors have taken a larger
role in the fund's investments and will continue to do so in the future. Current
management believes strongly in the outlook for these industries as well as the
Computer & Related Industry. These areas will continue to be over-weighted to
benefit from the spending that businesses are doing to increase their
information infrastructure needs.
We have under-weighted the Basic Materials and Financial Sectors. Despite the
income stream that financials provide, they have been pruned down because of the
current interest rate environment. We will continue to monitor them and others
as well to capture any potential. Much of the opportunity that is available will
be dependent on the monetary policy of the Federal Reserve and we will be
positioned accordingly.
We will continue to be fully invested while keeping a minimal amount of cash
available for opportunities that present themselves. We thank you for your
continued support and look to report further success in the future.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
INCOME & GROWTH PORTFOLIO (WITH
MAX. SALES CHARGE)|(COMMENCED RUSSELL 3000 LB GOV/CORP. INTER.
OPERATIONS AUGUST 18, 1992) COMBINED
------------------------------- --------------------------------
<S> <C> <C>
'92 9500 10000
9487.7 10622.9
'93 10686.9 11191.4
11146.4 11710.6
'94 10766.3 11261.3
11066.7 11658.1
'95 12856.2 13566.9
13796 15175
'96 14725.8 16212.8
15976.1 17655.3
'97 18016.2 20000.1
19635.9 21950.3
'98 20682.5 24482.4
20359.8 26153.9
'99 21660.8 28188.1
22637.7 32392.1
'00 24385.3 32919.4
</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. It
is not open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Texas Instruments 4.4
2. General Electric Co. 3.9
3. Scientific Atlanta 3.6
4. Tyco International 3.4
5. ADC Telecomm. Inc. 3.3
6. Johnson & Johnson 3.2
7. Intel Corp 3.2
8. American Int'l 2.9
9. Citigroup 2.9
10. Dallas Semiconductor 2.6
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
1. Electronics/Semiconductors 12.8
2. Computer & Related 11.5
3. Oil, Energy, & Natural Gas 9.8
4. Retail 8.2
5. Telecommunications Equipment 7.5
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE> 12
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
ADVERTISING (1.4%)
3,000 Young & Rubicam Inc.................. $ 171,562
-----------
AEROSPACE (1.9%)
7,000 Honeywell............................ 235,812
-----------
AUTOMOTIVE & RELATED (1.4%)
2,000 *General Motors CL H................. 175,500
-----------
BANKING (1.5%)
8,700 Firstar Corp. ....................... 183,244
-----------
COMMUNICATIONS (5.7%)
5,000 *ADC Telecommunications Inc. ........ 419,375
6,000 Nokia Corp ADR....................... 299,625
-----------
719,000
-----------
COMPUTER & RELATED (9.5%)
2,600 *Citrix Systems Inc. ................ 49,237
6,000 Computer Associates Intl Inc. ....... 307,125
4,000 *EMC Corp. Mass. .................... 307,750
2,000 Hewlett Packard Co. ................. 249,750
2,500 International Business Machines...... 273,906
-----------
1,187,768
-----------
CONGLOMERATE (3.9%)
9,300 General Electric Co. ................ 492,900
-----------
ELECTRONICS/SEMICONDUCTORS (12.8%)
762 *Agilent Technologies................ 56,197
6,000 CTS Corp. ........................... 270,000
8,000 Dallas Semiconductor................. 326,000
3,000 Intel Corp. ......................... 401,062
8,000 Texas Instruments Inc. .............. 549,500
-----------
1,602,759
-----------
FINANCIAL SERVICES (2.9%)
6,000 Citigroup............................ 361,500
-----------
HEALTH CARE PRODUCTS (3.2%)
4,000 Johnson & Johnson.................... 407,500
-----------
INSURANCE SERVICES (2.9%)
3,125 American Intl. Group................. 367,188
-----------
MEDICAL & RELATED (1.9%)
3,500 Baxter International Inc. ........... 246,094
-----------
MULTIMEDIA (2.0%)
3,689 *Viacom Inc. CL B.................... 251,544
-----------
OIL, ENERGY & NATURAL GAS (6.8%)
3,000 Apache Corp. ........................ 176,437
3,000 Halliburton.......................... 141,563
3,350 Schlumberger Ltd. ................... 249,994
7,000 Williams Cos. Inc. .................. 291,812
-----------
859,806
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
RETAIL (7.5%)
6,000 Circuit City Stores.................. $ 199,125
7,000 CVS Corp. ........................... 280,000
4,500 Home Depot Inc. ..................... 224,719
5,000 Radioshack Corp. .................... 236,875
-----------
940,719
-----------
SECURITY SYSTEMS/SERVICES (3.4%)
9,000 Tyco International................... 426,375
-----------
TELECOMMUNICATIONS EQUIPMENT (7.5%)
9,000 Motorola Inc. ....................... 261,563
6,000 Scientific Atlanta Inc. ............. 447,000
4,000 Telefonos De Mexico ADR.............. 228,500
-----------
937,063
-----------
UTILITIES (1.9%)
4,000 Coastal Corp. ....................... 243,500
-----------
TOTAL COMMON STOCK (78.1%) (COST
$6,607,535)......................... $ 9,809,834
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES REAL ESTATE INVESTMENT TRUSTS VALUE
-------------------------------------------------------------
<C> <S> <C>
5,000 Reckson Assoc. Realty Corp-B......... $ 127,188
-----------
TOTAL REAL ESTATE INV. TRUST (1.0%)
(COST $106,438)..................... $ 127,188
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES PREFERRED STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
BANKING (FOREIGN) (0.9%)
4,000 National Australia Bank Ltd. Conv.... $ 113,250
-----------
RETAIL (0.7%)
2,500 Kmart Financing 7.75% 06/15/16
Conv. .............................. 91,094
-----------
TOTAL PREFERRED STOCK (1.6%) (COST
$249,858)........................... $ 204,344
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
COMMUNICATIONS (0.8%)
$100,000 Comcast Cable Communications 8.375%
05/01/07............................ $ 102,063
-----------
COMPUTER & RELATED (2.0%)
250,000 IBM Corp. 7.250% 11/01/02............ 250,326
-----------
CONSUMER PRODUCTS (1.6%)
200,000 Playtex Family Products 9.000%
12/15/03............................ 194,500
-----------
FINANCIAL SERVICES (0.3%)
50,000 ESI Tractebel Acq. Corp. 7.990%
12/30/11 (144A)..................... 44,361
-----------
FORESTRY & PAPER PRODUCTS (2.0%)
250,000 ITT Rayonier Inc. NT 7.500%
10/15/02............................ 250,092
-----------
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.
11
<PAGE> 13
ONE FUND, INC.
INCOME & GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT LONG-TERM BONDS & NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
HOUSING, FURNITURE & RELATED (0.5%)
$100,000 Owens Corning 7.500% 05/01/05........ $ 69,438
-----------
OIL, ENERGY & NATURAL GAS (3.0%)
300,000 PDV America Inc. 7.875% 08/01/03..... 283,938
100,000 R&B Falcon Corp. Series B 6.750%
04/15/05............................ 90,500
-----------
374,438
-----------
RESTAURANTS (0.8%)
100,000 Tricon Global Restaurants 7.450%
05/15/05............................ 93,838
-----------
UTILITIES (0.8%)
100,000 Niagara Mohawk Power Corp. Ser. G
7.750% 10/01/08..................... 97,633
-----------
TOTAL LONG-TERM BONDS & NOTES (11.8%)
(COST $1,543,603)................... $ 1,476,689
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT CONVERTIBLE DEBENTURES VALUE
-------------------------------------------------------------
<C> <S> <C>
MEDICAL & RELATED (1.6%)
$150,000 Centocor Inc. 4.750% 02/15/05........ $ 203,063
-----------
TOTAL CONVERTIBLE DEBENTURES (1.6%)
(COST $149,996)..................... $ 203,063
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (2.4%)
$183,000 American Express Credit 6.780%
07/06/00............................ $ 182,828
122,000 Ford Motor Credit 6.780% 07/03/00.... 121,954
-----------
304,782
-----------
OIL, ENERGY & NATURAL GAS (3.9%)
488,000 Chevron USA 6.750% 07/03/00.......... 487,634
-----------
TOTAL SHORT-TERM NOTES (6.3%) (COST
$792,416)........................... $ 792,416
-----------
TOTAL HOLDINGS (100.4%) (COST
$9,449,846)(a)...................... $12,613,534
-----------
LIABILITIES, NET OF CASH &
RECEIVABLES (-0.4%)................. (48,629)
-----------
TOTAL NET ASSETS (100.0%)............ $12,564,905
===========
</TABLE>
------------------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
(144A) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These Securities may be resold in transactions exempt from
registration, normally to qualified buyers. At the period end, the market
value of these securities amounted to $44,361 or 0.4% 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
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $9,449,846).............. $12,613,534
Cash in bank.............................. 1,482
Receivable for fund shares sold........... 1,330
Dividends & accrued interest receivable... 31,229
Other..................................... 1,815
-----------
Total assets............................ 12,649,390
-----------
Liabilities:
Payable for fund shares redeemed.......... 23,675
Payable for investment management services
(note 3)................................ 3,664
Accrued 12b-1 fees (note 6)............... 7,503
Other accrued expenses.................... 49,643
-----------
Total liabilities....................... 84,485
-----------
Net assets at market value.................. $12,564,905
===========
Net assets consist of:
Par value, $.001 per share................ $ 820
Paid-in capital in excess of par value.... 8,385,178
Accumulated undistributed net realized
gain on investments..................... 1,015,108
Net unrealized appreciation on
investments............................. 3,163,688
Undistributed net investment income....... 111
-----------
Net assets at market value.................. $12,564,905
===========
Shares outstanding.......................... 820,109
Net asset value per share................... $ 15.32
===========
Maximum offering price per share
($15.32/95%).............................. $ 16.13
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 187,401
Dividends.................................. 98,279
----------
Total investment income.................. 285,680
----------
Expenses:
Management fees (note 3)................... 62,987
12b-1 fees (note 6)........................ 31,498
Custodian fees (note 3).................... 5,201
Directors' fees (note 3)................... 2,747
Professional fees.......................... 9,524
Transfer agent & accounting fees........... 57,368
Filing fees................................ 14,600
Printing, proxy and postage fees........... 4,824
Other...................................... 412
----------
Total expenses........................... 189,161
Less expenses voluntarily reduced or
reimbursed (note 3).................... (18,889)
----------
Net expenses............................. 170,272
----------
Net investment income.................... 115,408
----------
Realized & unrealized gain (loss) on
investments:
Net realized gain from investments......... 2,166,692
Net decrease in unrealized appreciation on
investments.............................. (808,974)
----------
Net gain on investments................ 1,357,718
----------
Net increase in net assets from
operations.......................... $1,473,126
==========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------------------
2000 1999
----------------- -------------
<S> <C> <C>
From operations:
Net investment income..................................... $ 115,408 $ 322,778
Realized gain on investments.............................. 2,166,692 903,416
Unrealized loss on investments............................ (808,974) (662,035)
----------- -----------
Net increase in assets from operations................ 1,473,126 564,159
----------- -----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (115,297) (323,003)
Capital gains distributions............................... (1,455,499) (622,486)
----------- -----------
Total dividends and distributions..................... (1,570,796) (945,489)
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 928,691 1,753,433
Received from dividends reinvested........................ 830,235 564,557
Paid for shares redeemed.................................. (2,392,046) (4,695,463)
----------- -----------
Decrease in net assets derived from capital share
transactions......................................... (633,120) (2,377,473)
----------- -----------
Decrease in net assets............................. (730,790) (2,758,803)
Net Assets:
Beginning of period....................................... 13,295,695 16,054,498
----------- -----------
End of period............................................. $12,564,905 $13,295,695
=========== ===========
Includes undistributed net investment income of........... $ 346 $ 225
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
------------------------------------------------------
2000 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..................................... 0.14 0.35 0.42 0.38 0.38
Net realized & unrealized gain on investments............. 1.64 0.33 1.73 2.39 1.27
------ ------ ------ ------ ------
Total income from investment operations................. 1.78 0.68 2.15 2.77 1.65
------ ------ ------ ------ ------
Less distributions:
Dividends from net investment income...................... (0.14) (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..................................... (1.97) (1.02) (1.19) (0.66) (0.44)
------ ------ ------ ------ ------
Net asset value, end of period.............................. $15.32 $15.51 $15.85 $14.89 $12.78
====== ====== ====== ====== ======
Total return................................................ 12.58% 4.73% 14.77% 22.34% 14.50%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.35% 1.30% 1.20% 1.12% 0.89%
Net investment income..................................... 0.91% 2.33% 2.65% 2.77% 3.10%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.50% 1.45% 1.35% 1.31% 1.14%
Portfolio turnover rate..................................... 64% 49% 39% 14% 7%
Net assets at end of period (millions)...................... $ 12.6 $ 13.3 $ 16.1 $ 13.1 $ 10.8
</TABLE>
---------------
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets for the Income & Growth portfolio, but it may cease that waiver,
in whole or in part, without prior notice.
The accompanying notes are an integral part of these financial statements.
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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 31.56% 24.98%
Three-year 14.37% 12.44%
Five-year 17.06% 15.89%
Since inception
(8/18/92) 15.84% 15.17%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The Growth Portfolio has gone through a major transformation over the last
twelve months and this has drastically improved results for shareowners. New
management was brought in to improve performance at this time last year and the
new strategy is paying off. Through the first six months in 2000, the fund is up
15.28% vs. -0.42% for the S&P 500. Over the last twelve months, the fund is up
31.56% vs. 7.25% for the S&P 500. As stated in last year's comments, the fund
has been re-positioned to reflect the higher valuations that the market has
placed on faster-growing companies. Much larger weightings have been given to
the technology sector and this has improved the fund's performance.
Telecommunications Equipment and Electronics/Semiconductors have taken a much
larger role in the fund's investments and will continue to do so in the future.
Current management believes strongly in the outlook for these industries as well
as the Computer & Related Industry. These areas will continue to be
over-weighted to benefit from the spending that businesses are doing to increase
their information infrastructure needs.
We have under-weighted the Basic Materials and Financial Sectors. We will
continue to monitor them and others as well to capture any potential. Much of
the opportunity that is available will be dependent on the monetary policy of
the Federal Reserve and we will be positioned accordingly.
We will continue to be fully invested while keeping a minimal amount of cash
available for opportunities that present themselves. We thank you for your
continued support and look to report further success in the future.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
GROWTH PORTFOLIO (WITH MAX. SALES
CHARGE)|(COMMENCED OPERATIONS
AUGUST 18, 1992) RUSSELL 3000
--------------------------------- ------------
<S> <C> <C>
'92 9500 10000
10178.3 10847
'93 11227.7 11390.4
11917.1 12027.2
'94 11547.6 11504
11987.6 12048.1
'95 13927.2 14371
15367.3 16483.5
'96 17017.7 18108.8
18098.3 20079
'97 20197.7 23645.1
21126.8 26442.3
'98 23051.5 30411.3
21677.6 32753
'99 22978.3 36473.7
26222.8 44093
'00 30229.7 44511.9
</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.
Neither the portfolio nor the index is open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. ADC Telecomm. Inc. 6.1
2. EMC Corp./Mass 4.7
3. Texas Instruments Inc 4.5
4. Cisco Systems Inc 4.4
5. Scientific-Atlanta 3.6
6. Altera Corporation 3.3
7. Viacom Inc-CL B 3.3
8. Tyco International 3.3
9. Intel Corp 3.3
10. Sun Microsystems 3.2
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Computer & Related 16.4
2. Electronics/Semiconductors 15.9
3. Telecommunications Equipment 13.0
4. Communications 11.1
5. Oil, Energy & Natural Gas 5.7
</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 JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
AEROSPACE (1.4%)
5,000 Honeywell.......................... $ 168,438
-----------
AUTOMOTIVE & RELATED (2.1%)
3,000 *General Motors Corp CL H.......... 263,250
-----------
BANKING (1.1%)
6,420 Firstar Corp....................... 135,221
-----------
BROADCAST RADIO & TV (2.9%)
10,000 *Infinity Broadcasting Corp........ 364,375
-----------
COMMUNICATIONS (11.1%)
9,000 *ADC Telecommunications Inc........ 754,875
6,000 Nokia Oyj Spon-ADR................. 299,625
6,825 *Worldcom Inc...................... 313,096
-----------
1,367,596
-----------
COMPUTER & RELATED (16.4%)
5,000 *Citrix Systems Inc................ 94,687
8,500 *Cisco Systems Inc................. 540,281
7,600 *EMC Corp. Mass.................... 584,725
1,500 Hewlett Packard Co................. 187,313
2,000 International Business Machines.... 219,125
4,400 *Sun Microsystems Inc.............. 400,125
-----------
2,026,256
-----------
COMPUTER SOFTWARE (2.3%)
3,500 *Microsoft Corp.................... 280,000
-----------
CONGLOMERATE (2.7%)
6,300 General Electric Co................ 333,900
-----------
ELECTRONICS/SEMICONDUCTORS (15.9%)
572 *Aglient Technologies.............. 42,185
4,000 *Altera Corp....................... 407,750
6,000 CTS Corp........................... 270,000
3,000 Intel Corp......................... 401,063
7,000 *Solectron Corp.................... 293,125
8,000 Texas Instruments Inc.............. 549,500
-----------
1,963,623
-----------
FINANCIAL SERVICES (2.7%)
5,500 Citigroup Inc...................... 331,375
-----------
HEALTH CARE PRODUCTS (2.5%)
3,000 Johnson & Johnson.................. 305,625
-----------
INSURANCE SERVICES (2.4%)
2,500 American Intl. Group............... 293,750
-----------
MEDICAL & RELATED (3.2%)
2,500 Baxter International............... 175,781
3,000 *MedImmune Inc..................... 222,000
-----------
397,781
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
MULTIMEDIA (3.3%)
5,967 *Viacom Inc. CL B.................. $ 406,875
-----------
OIL, ENERGY & NATURAL GAS (5.7%)
3,000 Apache Corp........................ 176,438
2,000 Haliburton Co...................... 94,375
2,950 Schlumberger Ltd................... 220,144
5,000 Williams Cos. Inc.................. 208,437
-----------
699,394
-----------
RETAIL (4.6%)
5,000 Circuit City Group................. 165,938
5,250 Home Depot Inc..................... 262,172
3,000 Radioshack Corp.................... 142,125
-----------
570,235
-----------
SECURITY SYSTEMS & SERVICES (3.3%)
8,500 Tyco International Ltd............. 402,687
-----------
TELECOMMUNICATIONS EQUIPMENT (13.0%)
5,000 *Commscope Inc..................... 205,000
10,500 *Mcleod USA Inc.................... 217,219
6,000 Scientific-Atlanta Inc............. 447,000
3,000 Telefonos De Mexico ADR............ 171,375
5,000 *Tellabs Inc....................... 342,188
4,000 *Western Wireless Corp. CL A....... 218,000
-----------
1,600,782
-----------
TOTAL COMMON STOCK (96.6%) (COST
$6,873,007)....................... $11,911,163
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (3.8%)
$223,000 American Express Credit 6.780%
07/05/00............................ $ 222,832
248,000 Associates Corp. 6.510% 07/03/00..... 247,910
-----------
TOTAL SHORT-TERM NOTES (3.8%) (COST
$470,742)........................... $ 470,742
-----------
TOTAL HOLDINGS (100.4%) (COST
$7,343,749)(a)...................... $12,381,905
-----------
LIABILITIES, NET OF CASH &
RECEIVABLES (-0.4%)................. (51,520)
-----------
TOTAL NET ASSETS (100.0%)............ $12,330,385
===========
</TABLE>
---------------
(a) Also represents cost for Federal income tax purposes.
* Non-income producing securities.
The accompanying notes are an integral part of these financial statements.
16
<PAGE> 18
ONE FUND, INC.
GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $7,343,749).............. $12,381,905
Cash in bank.............................. 857
Receivable for fund shares sold........... 3,361
Dividends & accrued interest receivable... 2,210
Other..................................... 2,001
-----------
Total assets............................ 12,390,334
-----------
Liabilities:
Payable for fund shares redeemed.......... 14,100
Payable for investment management services
(note 3)................................ 3,539
Accrued 12b-1 fees (note 6)............... 7,267
Other accrued expenses.................... 35,043
-----------
Total liabilities....................... 59,949
-----------
Net assets at market value.................. $12,330,385
===========
Net assets consist of:
Par value, $.001 per share................ $ 601
Paid-in capital in excess of par value.... 5,952,454
Accumulated undistributed net realized
gain on investments..................... 1,339,174
Net unrealized appreciation on
investments............................. 5,038,156
-----------
Net assets at market value.................. $12,330,385
===========
Shares outstanding.......................... 600,849
Net asset value per share................... $ 20.52
===========
Maximum offering price per share
($20.52/95%).............................. $ 21.60
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 32,450
Dividends.................................. 46,810
----------
Total investment income.................. 79,260
----------
Expenses:
Management fees (note 3)................... 56,747
12b-1 fees (note 6)........................ 28,450
Custodian fees (note 3).................... 5,098
Directors' fees (note 3)................... 2,289
Professional fees.......................... 7,936
Transfer agent & accounting fees........... 53,524
Filing fees................................ 13,000
Printing, proxy and postage fees........... 4,024
Other...................................... 356
----------
Total expenses........................... 171,424
Less expenses voluntarily reduced or
reimbursed (note 3).................... (16,917)
----------
Net expenses............................. 154,507
----------
Net investment loss...................... (75,247)
----------
Realized & unrealized gain on investments:
Net realized gain from investments......... 2,455,497
Net increase in unrealized appreciation on
investments.............................. 806,976
----------
Net gain on investments................ 3,262,473
----------
Net increase in net assets from
operations.......................... $3,187,226
==========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (75,247) $ (14,187)
Realized gain on investments.............................. 2,455,497 158,409
Unrealized gain (loss) on investments..................... 806,976 (382,289)
----------- -----------
Net increase (decrease) in assets from operations..... 3,187,226 (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................................. 699,619 1,390,243
Received from dividends reinvested........................ 627,265 607,828
Paid for shares redeemed.................................. (2,031,433) (4,100,808)
----------- -----------
Decrease in net assets derived from capital share
transactions........................................... (704,549) (2,102,737)
----------- -----------
Increase (decrease) in net assets.................. 1,416,632 (3,296,041)
Net Assets:
Beginning of period....................................... 10,913,753 14,209,794
----------- -----------
End of period............................................. $12,330,385 $10,913,753
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------------------------------------
2000 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).............................. (0.12) (0.02) 0.00 0.07 0.14
Net realized & unrealized gain (loss) on investments...... 5.26 (0.12) 2.41 2.73 2.72
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... 5.14 (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.............................. $20.52 $17.14 $18.68 $17.52 $15.47
====== ====== ====== ====== ======
Total return................................................ 31.56% (0.32)% 14.13% 18.68% 22.22%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.36% 1.36% 1.24% 1.13% 0.90%
Net investment income (loss).............................. (0.66)% (0.13)% 0.02% 0.43% 0.99%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.51% 1.51% 1.39% 1.32% 1.15%
Portfolio turnover rate..................................... 66% 53% 40% 27% 22%
Net assets at end of period (millions)...................... $ 12.3 $ 10.9 $ 14.2 $ 13.3 $ 11.8
</TABLE>
---------------
(a) The advisor has elected to waive management fees equal to 0.15% of average
net assets for the Growth portfolio, but it may cease that waiver, in whole
or in part, without prior notice.
The accompanying notes are an integral part of these financial statements.
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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 5.32% .06%
Three-year (0.55)% (2.24)%
Five-year 7.16% 6.09%
Since inception
(11/1/94) 7.75% 6.77%
</TABLE>
The maximum sales charge is 5%. All returns represent past performance and
neither predict nor guarantee future investment results. Your investment return
and principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost. The advisor is currently waiving fees of
.15% for this portfolio. Had the fees not been waived, returns would have been
lower.
COMMENTS
The Small Cap Portfolio has gone through a major transformation over the last
six months and this has improved results for shareowners. New management was
brought in during mid-year to improve performance and the new strategy is
beginning to pay off. Through the first six months in 2000, the fund is up 4.53%
vs. 3.06% for the Russell 2000 Index. However, over the last twelve months, the
fund is up 5.32% vs. 14.33% for the Russell 2000. The fund has been repositioned
to reflect the higher valuations that the market has placed on faster-growing
companies. Much larger weightings have been given to the technology sector and
this has improved the fund's performance. In addition, the portfolio now has
more investments spread across more names to reduce the volatility of individual
positions. The smaller-capitalized companies have more volatility than large
companies and more positions within the fund are designed to mitigate this risk.
Telecommunications Equipment and Electronics/Semiconductors have taken a larger
role in the fund's investments and will continue to do so in the future. Current
management believes strongly in the outlook for these industries as well as the
Computer & Related Industry. These areas will continue to be over-weighted to
benefit from the spending that businesses are doing to increase their
information infrastructure needs.
We have under-weighted the Basic Materials and Financial Sectors. Despite the
income stream that financials provide, they have been pruned down because of the
current interest rate environment. We will continue to monitor them and others
as well to capture any potential. Much of the opportunity that is available will
be dependent on the monetary policy of the Federal Reserve and we will be
positioned accordingly.
We will continue to be fully invested while keeping a minimal amount of cash
available for opportunities that present themselves. We thank you for your
continued support and look to report further success in the future.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO (WITH MAX. SALES
CHARGE) (COMMENCED OPERATIONS
NOVEMBER 1, 1994) RUSSELL 2000 INDEX
------------------------------------ ------------------
<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
'00 14501.3 22017.4
</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. It
is not open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Sanmina Corp. 4.7
2. Plexus Corp. 4.5
3. Map Info Corp. 4.3
4. Louis Dreyfus 3.7
5. TranSwitch Corp. 3.1
6. Biovail Corp. 2.9
7. Mastec Inc. 2.6
8. Stericycle Inc. 2.5
9. Xircom Inc. 2.5
10. Metris Companies Inc 2.5
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<S> <C>
1. Electronics/Semiconductors 18.9
2. Computer & Related 12.4
3. Business Services 8.3
4. Networking Products 8.1
5. Telecommunications 8.1
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE> 21
ONE FUND, INC.
SMALL CAP PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
AUDIO/VIDEO PRODUCTS (2.5%)
1,000 *Polycom Inc.......................... $ 94,094
----------
BROADCAST RADIO & TV (2.5%)
3,500 *Cumulus Media Inc.................... 31,938
3,000 *Spanish Broadcasting Systems CL A.... 61,688
----------
93,626
----------
BUSINESS SERVICES (8.3%)
3,000 *Maximus Inc.......................... 66,375
1,500 *Plexus Corp.......................... 169,500
5,000 *Source Information Management........ 76,250
----------
312,125
----------
CHEMICALS (1.6%)
5,000 *W.R. Grace........................... 60,625
----------
COMPUTER & RELATED (12.4%)
1,000 *Bisys Group Inc...................... 61,500
1,500 *Cybex Computer Products Corp......... 64,500
1,000 *Kronos Inc........................... 26,000
4,000 *Map Info Corp........................ 162,500
1,000 *McAfee.com Corp...................... 26,063
1,000 *Micros Systems Inc................... 18,562
1,500 *National Instruments Corp............ 65,438
2,000 *Pinnacle Systems..................... 44,969
----------
469,532
----------
CONSUMER PRODUCTS (1.9%)
2,000 *Salton Inc........................... 73,750
----------
DISTRIBUTION & WHOLESALE (1.5%)
1,500 *Scan Source Inc...................... 58,313
----------
DRUGS (7.3%)
2,000 *Biovail Corp......................... 110,875
2,000 Jones Pharmaceutical Inc.............. 79,875
1,500 *Medicis Pharmaceutical............... 85,500
----------
276,250
----------
ELECTRONICS/SEMICONDUCTORS (18.9%)
1,500 *Act Manufacturing Inc................ 69,656
1,700 CTS Corp.............................. 76,500
1,000 *Cymer Inc............................ 47,750
2,000 Dallas Semiconductor Corp............. 81,500
2,100 *Sanmina Corp......................... 179,550
1,000 *Semtech Corp......................... 76,484
1,500 *TranSwitch Corp...................... 115,781
1,000 *Zoran Corp........................... 65,937
----------
713,158
----------
FINANCIAL SERVICES (3.7%)
1,000 Eaton Vance Corp...................... 46,250
3,750 Metris Companies Inc.................. 94,219
----------
140,469
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
FOOD & RELATED (2.2%)
4,000 *International Home Foods............. $ 83,750
----------
HOTEL/LODGING (2.3%)
4,700 *Guest Supply Inc..................... 85,481
----------
INSTRUMENTS-SCIENTIFIC (2.1%)
2,000 *Mettler-Toledo Intl.................. 80,000
----------
MEDICAL & RELATED (3.6%)
5,000 Hooper Holmes Inc..................... 40,000
1 *Quorum Health Group Inc.............. 5
4,000 *Stericycle Inc....................... 96,000
----------
136,005
----------
NETWORKING PRODUCTS (8.1%)
1,000 *Black Box Corp....................... 79,172
1,500 *JNI Corp............................. 47,437
3,000 *Stratos Lightwave Inc................ 83,625
2,000 *Xircom Inc........................... 95,000
----------
305,234
----------
OIL, ENERGY & NATURAL GAS (5.2%)
3,000 *Global Industries.................... 56,625
4,500 *Louis Dreyfus Natural Gas Corp....... 140,906
----------
197,531
----------
RETAIL (1.5%)
3,000 Claires Stores Inc.................... 57,750
----------
REAL ESTATE & LEASING (2.0%)
3,000 Reckson Assoc. Realty................. 76,313
----------
TELECOMMUNICATIONS (8.1%)
2,000 *C-COR.net Corp....................... 54,000
1,000 *Gilat Satellite Networks Ltd......... 69,375
2,530 *Mastec Inc........................... 96,613
200 *Powerwave Technologies............... 88,000
----------
307,988
----------
TOTAL COMMON STOCK (95.7%)
(COST $2,763,469)..................... $3,621,994
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (4.7%)
$176,000 American Express Credit 6.880%
07/03/00............................. $ 175,933
----------
TOTAL SHORT-TERM NOTES (4.7%)
(COST $175,933)...................... $ 175,933
----------
TOTAL HOLDINGS (100.4%)
(COST $2,939,402)(a)................. $3,797,927
----------
LIABILITIES, NET OF
CASH & RECEIVABLES (-0.4%)........... (16,136)
----------
TOTAL NET ASSETS (100.0%)............. $3,781,791
==========
</TABLE>
---------------
* Non income producing security.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
20
<PAGE> 22
ONE FUND, INC.
SMALL CAP PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $2,939,402)............... $3,797,927
Cash in bank............................... 621
Receivable for fund shares sold............ 96
Dividends & accrued interest receivable.... 91
Other...................................... 1,496
----------
Total assets............................. 3,800,231
----------
Liabilities:
Payable for fund shares redeemed........... 2,000
Payable for investment management services
(note 3)................................. 2,607
Accrued 12b-1 fees (note 6)................ 1,739
Other accrued expenses..................... 11,697
Dividends payable.......................... 397
----------
Total liabilities........................ 18,440
----------
Net assets at market value................... $3,781,791
==========
Net assets consist of:
Par value, $.001 per share................. $ 341
Paid-in capital in excess of par value..... 3,856,038
Accumulated net realized loss on
investments.............................. (933,113)
Net unrealized appreciation on
investments.............................. 858,525
----------
Net assets at market value................... $3,781,791
==========
Shares outstanding........................... 341,392
Net asset value per share.................... $ 11.08
==========
Maximum offering price per share
($11.08/95%)............................... $ 11.66
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 16,378
Dividends................................... 15,059
---------
Total investment income................... 31,437
---------
Expenses:
Management fees (note 3).................... 23,231
12b-1 fees (note 6)......................... 8,831
Custodian fees (note 3)..................... 4,959
Directors' fees (note 3).................... 758
Professional fees........................... 2,623
Transfer agent & accounting fees............ 31,355
Filing fees................................. 4,211
Printing, proxy and postage fees............ 1,320
Organizational expense (note 1)............. 172
Other....................................... 126
---------
Total expenses............................ 77,586
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (15,387)
---------
Net expenses.............................. 62,199
---------
Net investment loss....................... (30,762)
---------
Realized & unrealized gain (loss) on
investments:
Net realized loss from investments.......... (128,597)
Net increase in unrealized appreciation on
investments............................... 345,025
---------
Net gain on investments................... 216,428
---------
Net increase in net assets from
operations.............................. $ 185,666
=========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-------------------------
2000 1999
---------- -----------
<S> <C> <C>
From operations:
Net investment income (loss).............................. $ (30,762) $ 9,841
Realized loss on investments.............................. (128,597) (804,516)
Unrealized gain (loss) on investments..................... 345,025 (139,644)
---------- -----------
Net increase (decrease) in assets from operations..... 185,666 (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................................. 402,100 464,602
Received from dividends reinvested........................ 0 133,949
Paid for shares redeemed.................................. (558,645) (1,446,253)
---------- -----------
Decrease in net assets derived from capital share
transactions......................................... (156,545) (847,702)
---------- -----------
Increase (decrease) in net assets.................. 29,121 (2,073,584)
Net Assets:
Beginning of period....................................... 3,752,670 5,826,254
---------- -----------
End of period............................................. $3,781,791 $ 3,752,670
========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
------------------------------------------------
2000 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).............................. (0.09) 0.02 0.06 0.11 0.26
Net realized & unrealized gain (loss) on investments...... 0.65 (2.09) 1.30 1.67 2.26
------ ------ ------ ------ ------
Total income (loss) from investment operations.......... 0.56 (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.............................. $11.08 $10.52 $13.32 $13.30 $12.82
====== ====== ====== ====== ======
Total return................................................ 5.32% (15.54)% 10.56% 14.82% 24.10%
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (a):
Expenses.................................................. 1.74% 1.74% 1.67% 1.35% 0.94%
Net investment income..................................... (0.86)% 0.23% 0.47% 0.89% 2.21%
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.17% 2.07% 1.82% 1.62% 1.27%
Portfolio turnover rate..................................... 111% 48% 77% 34% 34%
Net assets at end of period (millions)...................... $ 3.8 $ 3.8 $ 5.8 $ 5.2 $ 4.5
</TABLE>
---------------
(a) 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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 67.47% 59.10%
Three-year 11.96% 10.07%
Five-year 13.82% 12.66%
Since inception
(5/1/93) 15.65% 14.82%
</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
So far in 2000, investors saw a difficult environment for technology, media and
telecommunication (TMT) stocks. An overdue mean reversion between old and new
economy shares coupled with heightened interest rate fears, hurt the performance
of high beta companies. More specifically, Asian markets fell in countries like
Hong Kong, Korea, Singapore and Japan due to U.S. interest rate fears, the TMT
correction and fears of an economic slowdown (specifically for Japan). Western
European markets saw a rotation into previously depressed sectors like food and
beverage while the Euro continued to weaken against the U.S. and Japanese
bourses.
The annual performance ending June 30, 2000, for the One Fund International
Portfolio was 67.47%, which outperformed the return of the Morgan Stanley
Capital International Europe, Australia & Far East Index of 17.16%.
Due to Fed tightening a U.S. soft landing is a likely near term outcome.
However, a possible peaking in U.S. interest rates provides a good backdrop for
global equity markets for the 2nd half of 2000 and remains bullish on
international equity markets. On a regional basis, we still find good value
across Europe in technology, oil & gas and capital goods, but on a select basis,
driven by sustainable earnings growth, differentiation and valuation. In Asia,
we believe that Japan provides good potential if consumption can start to show
signs of recovery. Near-term opportunities in Korea, once the Chaebol
restructuring is cleared, and Hong Kong also provide good long-term value. The
wild card in these export driven economies is a chance of economic slowdown in
the U.S.
Finally, some of our top holdings included, Alcatel, a telecom infrastructure
corporation; Cable and Wireless, a telecom operator; and Total Fina Elf, a
producer and distributor of oil and chemicals.
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
'00 27714.7 20393.9
</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 JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Alcatel 2.5
2. Diageo PLC 2.3
3. Philips Electronics 2.1
4. Cable & Wireless 1.9
5. Intershop Comm AG 1.8
6. Siemens AG 1.7
7. British Aerospace PLC 1.7
8. Total Fina Elf 1.6
9. Royal Bank of Scotland 1.6
10. Infineon Technologies 1.5
</TABLE>
TOP 5 COUNTRIES/REGIONS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Japan 17.0
2. United Kingdom 15.9
3. France 13.1
4. Germany 10.1
5. Netherlands 5.8
</TABLE>
The accompanying notes are an integral part of these financial statements.
23
<PAGE> 25
ONE FUND, INC.
INTERNATIONAL PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
JAPAN (17.0%)
8,000 Amada Co Ltd. (20)................... $ 67,819
19,000 Asahi Bank Ltd. (4).................. 79,819
11,000 Asahi Glass Co. Ltd. (5)............. 122,780
1,000 Bandai Co. Ltd. (10)................. 36,923
2,000 Canon Inc. (1)....................... 99,468
7,500 Daiwabo Info. System Co. Ltd. (9).... 135,638
6 DDI Corp. (29)....................... 57,646
5,000 Fuji Oil (15)........................ 44,506
600 Hirose Electric C. Ltd. (11)......... 93,307
13,000 JGC Corp. (34)....................... 52,409
2,000 Katokichi (15)....................... 50,582
500 Kyocera Corp. (11)................... 84,727
29,000 Mitsubishi Heavy Inds. Ltd. (11)..... 128,385
5,600 NEC Corp. (11)....................... 175,651
7,000 Nikko Securities Co. Ltd. (14)....... 69,232
3,000 Nikon Corp. (11)..................... 111,054
4,000 Nippon Electric Glass Co. (11)....... 92,309
80 Nippon Television Network (22)....... 51,995
160 Nippon TV -- New Shares (22)......... 104,290
7 *NTT Corp. (29)...................... 92,968
2 *NTT Docomo NPV (34)................. 54,067
1,400 Paris Miki Inc. (27)................. 90,990
1,800 Sony Corp. (11)...................... 167,852
1,000 *Taiyo Yuden Co. (11)................ 62,544
3,000 Tokyo Electric Poser Co. (32)........ 73,047
3,000 *Tokyo Securities Co. Ltd. (14)...... 11,247
11,000 Toshiba Corp. (11)................... 124,024
6,000 *Yaskawa Electric Corp. (11)......... 71,606
8,000 Yamaha Motor Co. Ltd. (3)............ 73,094
-----------
2,479,979
-----------
UNITED KINGDOM (15.9%)
1,572 *ARM Holdings PLC ADR (11)........... 51,680
15,700 BAA PLC (31)......................... 125,096
11,800 Bass PLC (15)........................ 132,220
39,900 British Aerospace PLC (1)............ 249,102
43,500 British Energy PLC (32).............. 115,919
16,550 Cable & Wireless (29)................ 281,554
26,800 Diageo PLC (15)...................... 330,045
3,500 EMI Group PLC (22)................... 32,531
2,000 *Energis PLC (29).................... 74,721
600 *GEO Interactive Media (9)........... 11,463
3,000 Pace Micro Technology (11)........... 43,441
9,572 Prudential Corp. PLC (19)............ 140,491
5,100 Psion PLC (9)........................ 49,219
12,900 Railtrack Group PLC (31)............. 200,193
13,600 Royal Bank of Scotland (4)........... 227,243
4,450 *Shire Pharmaceuticals Grp PLC
(23)................................ 77,189
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
UNITED KINGDOM, CONTINUED
17,450 TI Group PLC (6)..................... $ 94,325
20,601 Vodafone Airtouch (29)............... 83,712
-----------
2,320,144
-----------
FRANCE (13.1%)
730 AXA (19)............................. 115,132
5,470 Alcatel (11)......................... 359,198
171 Bouygues (29)........................ 114,415
250 *Canal Plus (22)..................... 42,057
660 Christian Dior (10).................. 149,829
675 *Compagnie De Saint -- Gobain (6).... 91,360
450 *France Telecom SA (29).............. 62,971
600 *Groupe Danone (15).................. 79,718
1,300 *Lagardere S.C.A. (22)............... 99,408
150 *Liberty Surf Group (9).............. 4,873
800 M-6 Metropole Television (22)........ 48,634
3,010 STMicroelectronics (11).............. 189,889
1,170 Tf1 Television Francaise (22)........ 81,639
2,650 *Thomson-CSF (1)..................... 104,512
1,550 Total Fina Elf (12).................. 237,940
1,455 *Vivendi Ex Gen Des Faux (32)........ 128,576
-----------
1,910,151
-----------
GERMANY (10.1%)
100 *Adva AG Optical Networking (11)..... 56,491
3,285 Baader Wertpapierhandelsbank
AG(14).............................. 102,049
6,100 Bayersche Motoren Werke AG (3)....... 185,999
350 DIS Deutsche Industries Service
(28)................................ 41,718
500 *Epcos AG (11)....................... 50,756
430 *GFK AG (22)......................... 20,962
2,750 *Infineon Technologies AG (11)....... 224,481
580 *Intershop Communications AG (9)..... 265,554
600 Medion AG (27)....................... 61,021
2,730 Schering AG (23)..................... 148,870
1,700 Siemens AG (33)...................... 254,791
2,200 Wella AG -- PFD (10)................. 67,923
-----------
1,480,615
-----------
NETHERLANDS (5.8%)
1,250 *ASM Lithography Holding(9).......... 53,790
3,250 *ASM Lithography Holding ADR (9)..... 143,406
1,250 *ASM International (11).............. 32,857
5,800 *BE Semiconductor Industries (11).... 90,643
4,900 *Koninklijke Ahold (27).............. 144,397
6,600 Koninklijke (Royal) Philips
Electronis (11)..................... 311,645
200 *Open TV Corp. (9)................... 8,975
2,100 *United Pan-Europe Communications
(29)................................ 54,979
1,000 *United Pan-Europe Communications
ADR (29)............................ 6,966
-----------
847,658
-----------
CANADA (5.2%)
1,000 *C-MAC Industries Inc. (11).......... 47,268
2,397 *Descartes Systems Group Inc. (9).... 71,219
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.
24
<PAGE> 26
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
CANADA, CONTINUED
10,200 *Mosaic Group Inc. (9)............... $ 123,979
2,760 *Nortel Networks Corp. (29).......... 191,405
3,650 *Quebecor World (22)................. 88,853
1,950 *Rogers Communications CL B (22)..... 55,238
4,850 *Talisman Energy Inc. (12)........... 160,640
2,000 *Ulster Petroleums Ltd. (12)......... 18,365
-----------
756,967
-----------
SWEDEN (4.1%)
10,600 Ericsson LM-B (29)................... 210,438
13,200 Gambro AB-A Shares (23).............. 108,126
3,350 SKF AB-B Shares (24)................. 56,216
2,000 *Modern Times Group CL B (22)........ 95,566
20,490 *Readsoft AB (9)..................... 125,881
-----------
596,227
-----------
SOUTH KOREA (2.8%)
175 *Daelim Industrial Co. (5)........... 833
7,250 *Hyundai Electronics Ind. Co. (11)... 143,046
250 Samsung SDI Co. Ltd. (11)............ 81,568
250 Samsung Electronics Co. (11)......... 82,733
300 *SK Telecom (29)..................... 98,204
-----------
406,384
-----------
AUSTRALIA (2.4%)
11,100 *E.R.G. Ltd. (11).................... 86,114
4,200 News Corp. Ltd. ADR (22)............. 228,900
2,800 News Corp. Ltd. (22)................. 38,521
-----------
353,535
-----------
TAIWAN (2.2%)
2,400 *Advanced Semiconductor Engineering
Inc. GDR (11)....................... 40,800
621 *Macronix Intl. Co. Ltd. SP ADR
(11)................................ 15,876
1,900 *Mosel Vitelic Inc GDR (11).......... 46,835
5,649 *Taiwan Semiconductor ADR (11)....... 218,899
-----------
322,410
-----------
HONG KONG (2.1%)
63,600 Amoy Properties Ltd. (26)............ 42,832
167,000 Beijing Datang Power (32)............ 37,489
30,000 *Brilliance China Automotive (3)..... 5,167
34,000 *China Unicom (29)................... 72,182
37,000 Cosco Pacific Ltd. (28).............. 29,190
11,500 Television Broadcasts Ltd. (22)...... 76,710
88,000 *Yanzhou Coal Mining Co. (24)........ 18,174
187,000 *Zhejiang Expressway Co.(31)......... 31,904
-----------
313,648
-----------
ITALY (1.3%)
9,050 Bulgari SPA (10)..................... 121,106
4,200 *Pininfarina SPA (3)................. 70,897
-----------
192,003
-----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES FOREIGN COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
PORTUGAL (1.2%)
15,600 Portugal Telecom SA (29)............. $ 175,356
-----------
NORWAY (1.0%)
2,400 *Petroleum Geo Services ADR (12)..... 40,950
1,000 Smedvig ASA-A Shares (12)............ 18,088
2,150 Smedvig ASA-B Shares (12)............ 35,126
2,100 Tomra Systems ASA (34)............... 55,752
-----------
149,916
-----------
BELGIUM (0.8%)
2,770 *Lernout & Hauspie Speech (11)....... 122,053
-----------
SWITZERLAND (0.8%)
30 *Agefi Groupe SA (22)................ 9,020
148 Publicitas Holding SA (22)........... 110,797
-----------
119,817
-----------
DENMARK (0.8%)
650 Novo-Nordisk CL B (23)............... 110,784
-----------
THAILAND (0.7%)
13,900 Hana Microelectronics (11)........... 109,242
-----------
FINLAND (0.7%)
1,000 Nokia Oyj (29)....................... 51,090
800 Nokia Corp. Spon. ADR (29)........... 39,950
613 *Sanitec Oyj (10).................... 6,152
200 *Satama Interactive OYJ (9).......... 774
-----------
97,966
-----------
SINGAPORE & MALAYSIAN (0.6%)
10,200 *Chartered Semiconductor (11)........ 89,106
-----------
SPAIN (0.5%)
700 *Amadeus Global Travel (28) 7,996
1,960 *Sogecable (22)...................... 69,730
-----------
77,726
-----------
BRAZIL (0.5%)
2000 *Unibanco Uniao de Bancos
Brazileriros SA ADR (4)............. 57,500
3,700 *Usinas Siderurgicas de M Preference
(25)................................ 17,168
-----------
74,668
-----------
MEXICO (0.5%)
1,200 *Telefonos De Mexico -SP ADR (29).... 68,550
-----------
GREECE (0.1%)
94 *Commercial Bank of Greece (4)....... 4,067
910 *Tiletipos S.A. (29)................. 10,954
-----------
15,021
-----------
IRELAND (0.1%)
786 *Icon PLC ADR (23)................... 13,067
-----------
TOTAL FOREIGN COMMON STOCK (90.3%)
(COST $11,343,328).................. $13,202,993
-----------
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.
25
<PAGE> 27
ONE FUND, INC.
INTERNATIONAL PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES US COMMON STOCK VALUE
-----------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS (0.0%)
350 *Infonet Services Corp. CL B......... $ 4,178
-----------
CONSUMER PRODUCTS (1.1%)
14,300 *Reckitt & Coleman 159,148
-----------
TOTAL US COMMON STOCK (1.1%) (COST
$165,360)........................... $ 163,326
-----------
TOTAL COMMON STOCK (91.4%) (COST
$11,508,688)........................ $13,366,319
-----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES (2.9%)
$429,000 State Street Bank 3.500% due 07/03/00
repurchase price $429,410
collateralized by U.S. Treasury Bond
due 11/15/04 (Cost $429,000)........ $ 429,000
-----------
TOTAL REPURCHASE AGREEMENTS (2.9%)
(COST $429,000)..................... $ 429,000
-----------
TOTAL HOLDINGS (94.3%) (COST
$11,937,688)(a)..................... $13,795,319
-----------
CASH & RECEIVABLES, NET OF
LIABILITIES (5.7%).................. 832,812
-----------
TOTAL NET ASSETS (100.0%)............ $14,628,131
===========
</TABLE>
---------------
* Non-income producing securities.
ADR (American depository receipt) represents ownership of foreign securities.
(a) Also represents cost for Federal income tax purposes.
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) Capital Goods (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) Textile
(14) Finance (31) Transportation
(15) Food & Beverage (32) Utilities
(16) Forest & Paper Products (33) Diversified
(17) Governmental (34) 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
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $11,937,688)............. $13,795,319
Cash in bank.............................. 751,183
Unrealized gain on forward currency
contracts (note 5)...................... 4,009
Receivable for securities sold............ 360,385
Receivable for fund shares sold........... 238
Dividends & accrued interest receivable... 28,602
Other..................................... 2,500
-----------
Total assets............................ 14,942,236
-----------
Liabilities:
Unrealized loss on forward currency
contracts (note 5)...................... 27,517
Payable for fund shares redeemed.......... 300
Payable for investment management services
(note 3)................................ 6,059
Payable for securities purchased.......... 243,545
Accrued 12b-1 fees (note 6)............... 9,761
Other accrued expenses.................... 26,923
-----------
Total liabilities....................... 314,105
-----------
Net assets at market value.................. $14,628,131
===========
Net assets consist of:
Par value, $.001 per share................ $ 807
Paid-in capital in excess of par value.... 9,416,489
Accumulated undistributed net realized
gain on investments (note 1)............ 3,396,014
Net unrealized appreciation (depreciation)
on:
Investments (note 1).................... 1,857,631
Foreign currency related transactions... (3,312)
Forward currency contracts (note 5)..... (23,508)
Accumulated net investment income......... (15,990)
-----------
Net assets at market value.................. $14,628,131
===========
Shares outstanding.......................... 807,442
Net asset value per share................... $ 18.12
===========
Maximum offering price per share
($18.12/95%).............................. $ 19.07
===========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 27,743
Dividends (net of $6,231 foreign taxes
withheld)................................ 60,803
----------
Total investment income.................. 88,546
----------
Expenses:
Management fees (note 3)................... 104,919
12b-1 fees (note 6)........................ 30,859
Custodian fees (note 3).................... 89,650
Directors' fees (note 3)................... 2,060
Professional fees.......................... 2,788
Transfer agent & accounting fees........... 52,996
Filing fees................................ 4,821
Printing, proxy and postage fees........... 5,473
Other...................................... 173
----------
Total expenses........................... 293,739
Less expenses voluntarily reduced or
reimbursed (note 3).................... (45,937)
----------
Net expenses............................. 247,802
----------
Net investment loss...................... (159,256)
----------
Realized & unrealized gain (loss) on
investments & foreign currency:
Net realized gain (loss) from:
Investments.............................. 4,838,898
Forward currency related transactions.... (89,227)
Net increase in unrealized appreciation on:
Investments............................ 1,551,485
Foreign currency related
transactions........................ 15,991
----------
Net gain on investments................ 6,317,147
----------
Net increase in net assets from
operations.......................... $6,157,891
==========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------------
2000 1999
----------- -------------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (159,256) $ (31,684)
Realized gain (loss) on investments and foreign currency
related transactions.................................... 4,749,671 (1,969,286)
Unrealized gain on investments and foreign currency
related transactions.................................... 1,567,436 149,338
----------- -----------
Net increase (decrease) in assets from operations..... 6,157,891 (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................................. 503,427 507,008
Received from merger (note 7)............................. 3,615,625 0
Received from dividends reinvested........................ 0 271,907
Paid for shares redeemed.................................. (2,537,193) (6,315,910)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 1,581,679 (5,536,995)
----------- -----------
Increase (decrease) in net assets.................. 7,739,570 (7,674,244)
Net Assets:
Beginning of period....................................... 6,888,561 14,562,805
----------- -----------
End of period............................................. $14,628,131 $ 6,888,561
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------------------------------
2000 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).............................. (0.22) (0.04) 0.12 0.14 0.10
Net realized and unrealized gain (loss) on investments and
foreign currency transactions........................... 7.52 (1.74) (0.63) 1.92 2.24
------ ------- ------ ------ ------
Total income (loss) from investment operations.......... 7.30 (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.............................. $18.12 $ 10.82 $12.92 $15.45 $14.47
====== ======= ====== ====== ======
Total return................................................ 67.47% (13.90)% (4.84)% 14.76% 18.65%
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor (a):
Expenses.................................................. 2.04% 2.13% 2.10% 1.87% 1.72%
Net investment income (loss).............................. (1.31)% (0.32)% 0.85% 0.99% 0.70%
Ratios assuming no fees reimbursed by advisor:
Expenses.................................................. 2.42% 2.56% 2.20% 1.98% 1.72%
Portfolio turnover rate..................................... 234% 217% 12% 9% 20%
Net assets at end of period (millions)...................... $ 14.6 $ 6.9 $ 14.6 $ 19.3 $ 15.1
</TABLE>
---------------
(a) The advisor has elected to reimburse certain operating expenses of the
International Portfolio, but it may cease that waiver, in whole or in part,
without prior written notice.
The accompanying notes are an integral part of these financial statements.
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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
One-year 102.02% 91.92%
Three-year 33.97% 33.12%
Since inception
(11/1/96) 27.70% 26.58%
</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 102.02% for the 12 months ended June
30, 2000. This compares with the Russell Mid Cap Growth Index return of 48.6%
over the same period.
The most significant event for the equity markets during the first half of 2000
was volatility. Whether it was caused by an aggressively restrictive Federal
Reserve or valuation levels that were unsustainable by mid-March, volatility
ruled the day. This was especially evident in the technology sector that
experienced both the biggest run up over the last 18 months and the biggest
correction during the two month sell-off. Overall though, the first half of 2000
turned out to be a very good period for reasons other than just performance.
First, fundamentals of many aggressive growth companies continued to be strong
and actually improved throughout the half. Second, rational thinking returned to
the market. Investors began to scrutinize business models and we are now passed
the days when companies attained stratospheric valuations with only a semblance
of a business strategy, no real track record, and no visible path to
profitability. We believe this is not only healthy for the stock market in the
long run, but necessary in order for those companies that possess improving
fundamentals and executed business plans to come to the forefront.
Several factors led to the favorable results in the last twelve months. First,
growth stocks outperformed value stocks across mid and large capitalization
stocks. This is evidenced by the return of the Russell Mid Cap Growth Index of
48.6% vs. -7.9% for the Russell Mid Cap Value Index for the trailing 12 months.
Second, we were overweighted the Technology and Energy sectors when they had
among the best returns in the market. Third, the individual stocks in the
Technology and Health Care sectors of the Fund outperformed the stocks held in
the benchmark. And lastly, the companies in the Fund experienced a minimal
number of earnings disappointments the past year.
The Fund continues to have a large weighting in Technology, representing nearly
64% of the total. Health Care and Energy represent the next largest areas of
focus as the Consumer and Services sectors have declined. The portfolio is
dominated by fewer sectors today then what has been the case historically. This
reflects an economy that is very narrow in its underlying strengths. For these
reasons, the Fund is potentially more volatile than prior quarters. Having said
that, it would be tough to imagine a six month period more volatile than what we
just experienced. As other sectors become more attractive we will attempt to
provide more diversification.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
CORE GROWTH PORTFOLIO (WITH MAX.
SALES CHARGE)|(COMMENCED OPERATIONS
NOVEMBER 1, 1995) RUSSELL 3000 INDEX
----------------------------------- ------------------
<S> <C> <C>
'95 9500 10000
'96 9389.8 10614
'97 9359.8 12499
8789.7 13977.7
'98 10061.6 16075.7
9387.5 17313.6
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. VERISIGN INC 4.2
2. REDBACK NETWORKS INC 3.8
3. Art Technology Group 3.1
4. MRV Communications 3.0
5. GLOBESPAN INC 2.9
6. NEWPORT CORP 2.8
7. EXTREME NETWORKS INC 2.5
8. TEVA PHARMACEUTICALS 2.4
9. VITRA TECHNOLOGY INC 2.3
10. Celgene Corp 2.2
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Network Products & Services 11.3
2. Internet Software 10.9
3. Electronics/Semiconductors 9.1
4. Internet & Related 8.8
5. Oil, Energy, & Natural Gas 8.8
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE> 31
ONE FUND, INC.
CORE GROWTH PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
ADVERTISING (2.0%)
3,600 *Getty Images, Inc..................... $ 133,425
900 *Lamar Advertising Co.................. 38,981
----------
172,406
----------
AUDIO VIDEO (1.0%)
900 Polycom Inc............................ 84,684
----------
BANKING (0.5%)
1,800 Banc One Corp.......................... 47,812
----------
BROADCAST TV & RADIO (0.7%)
600 Univision Communications............... 62,100
----------
CAPACITORS (0.7%)
2,600 Kemet Corp............................. 65,162
----------
COMMERCIAL SERVICES (1.0%)
1,700 Convergys Corp......................... 88,187
----------
COMPUTER & RELATED (6.0%)
2,100 *Bea Systems Inc....................... 103,819
1,000 Brocade Communications................. 183,484
800 Mercury Interactive Corp............... 77,400
1,200 Sandisk Corp........................... 73,425
800 *Veritas Software Corp................. 90,413
----------
528,541
----------
COMPUTER SOFTWARE (3.4%)
800 Micromuse Inc.......................... 132,388
1,200 Quest Software Inc..................... 66,450
2,200 Smartforce............................. 105,600
----------
304,438
----------
DRUGS (8.0%)
3,300 Celgene Corp........................... 194,287
2,200 Incyte Genomics Inc.................... 41,094
2,200 *Medicis Pharmaceutical CL A........... 125,400
1,800 *Medimmune Inc......................... 133,200
3,800 *Teva Pharmaceuticals.................. 210,663
----------
704,644
----------
ELECTRONICS/SEMICONDUCTORS (9.1%)
1,700 ATMI Inc............................... 79,050
1,100 Celestica Inc.......................... 54,587
1,300 *Cypress Semiconductor................. 54,925
2,100 Globespan Inc.......................... 256,364
800 *QLogic Corp........................... 52,850
1,800 *TriQuint Semiconductor Inc............ 172,238
1,700 Xilinx Inc............................. 140,356
----------
810,370
----------
ENTERTAINMENT & LEISURE (0.7%)
2,700 *Premier Parkes Inc.................... 61,425
----------
FIBER OPTICS (8.7%)
800 *C-COR.net Corp........................ 21,600
500 *Cienna Corp........................... 83,344
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
FIBER OPTICS, CONTINUED
1,900 Finisar Corp........................... $ 49,756
1,300 *JDS Uniphase Corp..................... 155,838
3,900 *MRV Communications Inc................ 262,275
300 SDL Inc................................ 85,556
1,000 *Sycamore Networks Inc................. 110,375
----------
768,744
----------
INSTRUMENTS/CONTROLS (7.8%)
2,200 Credence Systems Corp.................. 121,412
2,100 Cytyc Corp............................. 112,087
3,900 *Mettler-Toledo Intl. Inc.............. 156,000
1,000 *Microchip Technology.................. 58,266
2,300 Newport Corp........................... 246,963
----------
694,728
----------
INTERNET & RELATED (8.8%)
1,400 *Ariba Inc............................. 137,266
1,800 China.com Corp. CL A................... 36,788
3,500 *Infospace.com Inc..................... 193,375
3,000 *Rare Medium Group..................... 47,438
2,090 *Verisign Inc.......................... 368,885
----------
783,752
----------
INTERNET SOFTWARE (10.9%)
2,700 *Art Technology Group Inc.............. 272,531
1,400 Clarent Corp........................... 100,100
1,700 *Commerce One Inc...................... 77,164
3,900 Niku Corp.............................. 131,625
3,400 *Vignette Corp......................... 176,853
3,400 Vitra Technology Inc................... 207,825
----------
966,098
----------
NETWORK PRODUCTS & SERVICES (11.3%)
400 *Check Point Software.................. 84,700
700 *Emulex Corp........................... 45,981
2,100 Extreme Networks Inc................... 221,550
600 Foundry Networks Inc................... 66,300
1,000 *Juniper Networks Inc.................. 145,563
1,900 *Redback Networks Inc.................. 338,200
600 Turnstone Systems...................... 99,403
----------
1,001,697
----------
RETAIL (2.0%)
1,000 Tiffany & Co........................... 67,500
3,000 *Zale Corp............................. 109,500
----------
177,000
----------
OIL, ENERGY & NATURAL GAS (8.8%)
1,000 Baker Hughes Inc....................... 32,000
1,400 BJ Services Co......................... 87,500
2,400 Cooper Cameron Corp.................... 158,400
2,500 Diamond Offshore Drilling Inc.......... 87,813
4,400 Ensco International.................... 157,575
2,600 EOG Resources Inc...................... 87,100
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.
30
<PAGE> 32
ONE FUND, INC.
CORE GROWTH PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
------------------------------------------------------------
<C> <S> <C>
1,300 Global Marine.......................... $ 76,106
2,700 Santa Fe International................. 94,331
----------
780,825
----------
TELECOMMUNICATIONS & WIRELESS (6.1%)
1,400 Advanced Fibre Communications.......... 63,436
600 Audicodes Ltd.......................... 72,000
1,200 *Ditech Communications Corp............ 113,475
500 Natural MicroSystems................... 56,219
1,300 Netro Corp............................. 74,588
700 Sonus Networks Inc..................... 110,513
1,100 Tekelec................................ 53,007
----------
543,238
----------
TOTAL COMMON STOCK (97.5%)
(COST $6,418,017)..................... $8,645,851
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT REPURCHASE AGREEMENTS VALUE
-------------------------------------------------------------
<C> <S> <C>
FINANCIAL (2.7%)
$239,000 Firstar Bank 4.25% due 07/03/00
repurchase price $239,083
collateralized by GNMA certificates
pool # 837 due 02-20-24
(cost $239,000)...................... $ 239,000
----------
TOTAL REPURCHASE AGREEMENTS (2.7%)
(COST $239,000)...................... $ 239,000
----------
TOTAL HOLDINGS (100.2%)
(COST $6,657,017)(a)................. $8,884,851
----------
LIABILITIES, NET OF CASH & RECEIVABLES
(-0.2%).............................. (14,191)
----------
TOTAL NET ASSETS (100.0%)............. $8,870,660
==========
</TABLE>
---------------
* Non income producing security.
(a) Also represents cost for Federal income tax purposes.
The accompanying notes are an integral part of these financial statements.
31
<PAGE> 33
ONE FUND, INC.
CORE GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $6,657,017)............... $8,884,851
Cash in bank............................... 546
Receivable for securities sold............. 201,190
Dividends & accrued interest receivable.... 2,119
Other...................................... 3,687
----------
Total assets............................. 9,092,393
----------
Liabilities:
Payable for fund shares redeemed........... 2,000
Payable for securities purchased........... 205,594
Payable for investment management services
(note 3)................................. 6,226
Accrued 12b-1 fees (note 6)................ 4,441
Other accrued expenses..................... 3,472
----------
Total liabilities........................ 221,733
----------
Net assets at market value................... $8,870,660
==========
Net assets consist of:
Par value, $.001 per share................. $ 427
Paid-in capital in excess of par value..... 4,290,170
Accumulated net realized gain on
investments.............................. 2,352,229
Net unrealized appreciation on
investments.............................. 2,227,834
----------
Net assets at market value................... $8,870,660
==========
Shares outstanding........................... 426,922
Net asset value per share.................... $ 20.78
==========
Maximum offering price per share
($20.78/95%)............................... $ 21.87
==========
</TABLE>
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest................................... $ 6,238
Dividends.................................. 5,602
----------
Total investment income.................. 11,840
----------
Expenses:
Management fees (note 3)................... 62,935
12b-1 fees (note 6)........................ 16,562
Custodian fees (note 3).................... 4,950
Directors' fees (note 3)................... 1,212
Professional fees.......................... 3,572
Transfer agent & accounting fees........... 33,669
Filing fees................................ 4,991
Printing, proxy and postage fees........... 1,758
Other...................................... 205
----------
Total expenses........................... 129,854
----------
Net investment loss...................... (118,014)
----------
Realized & unrealized gain on investments:
Net realized gain from investments......... 3,659,823
Net increase in unrealized appreciation on
investments.............................. 1,057,317
----------
Net gain on investments.................. 4,717,140
----------
Net increase in net assets from
operations............................. $4,599,126
==========
</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
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
--------------------------
2000 1999
----------- -----------
<S> <C> <C>
From operations:
Net investment loss....................................... $ (118,014) $ (78,400)
Realized gain on investments.............................. 3,659,823 484,943
Unrealized gain on investments............................ 1,057,317 118,174
----------- -----------
Net increase in assets from operations................ 4,599,126 524,717
----------- -----------
Dividend and distribution to shareholders:
Capital gains distributions............................... (1,154,380) 0
----------- -----------
From capital share transactions (note 4):
Received from shares sold................................. 966,087 692,176
Received from dividends reinvested........................ 379,135 0
Paid for shares redeemed.................................. (474,588) (1,983,265)
----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 870,634 (1,291,089)
----------- -----------
Increase (decrease) in net assets.................. 4,315,380 (766,372)
Net Assets:
Beginning of period....................................... 4,555,280 5,321,652
----------- -----------
End of period............................................. $ 8,870,660 $ 4,555,280
=========== ===========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30, NOVEMBER 1, 1996
---------------------------- TO
2000 1999 1998 JUNE 30, 1997
------ ------ ------ ----------------
<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....................................... (0.30) (0.18) (0.16) (0.08)
Net realized & unrealized gain (loss) on investments...... 11.86 1.71 0.90 (0.06)
------ ------ ------ ------
Total income (loss) from investment operations.......... 11.56 1.53 0.74 (0.14)
------ ------ ------ ------
Less distributions:
Distributions from net realized capital gains............. (2.91) 0.00 0.00 0.00
------ ------ ------ ------
Net asset value, end of period.............................. $20.78 $12.13 $10.60 $ 9.86
====== ====== ====== ======
Total return................................................ 102.02% 14.43% 7.51% (1.40)%(b)
Ratios and supplemental data:
Ratio net of fees waived or reimbursed by advisor (c):
Expenses.................................................. 2.00% 1.98% 2.06% 1.35% (a)
Net investment loss....................................... (1.82)% (1.81)% (1.65)% (0.87)%(a)
Ratios assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 2.00% 2.42% 2.12% 1.40% (a)
Portfolio turnover rate..................................... 247% 148% 116% 80%
Net assets at end of period (millions)...................... $ 8.9 $ 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 JUNE 30, 2000
AVERAGE ANNUAL TOTAL RETURNS:
<TABLE>
<CAPTION>
Without With max.
sales charge sales charge
<S> <C> <C>
Since inception
(12/15/99) 3.49% (3.61)%
</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 second quarter of 2000 was a difficult one for the U.S. equity markets.
Strong economic growth continued to cause the markets to be concerned about
aggressive Fed tightening, which the Fed delivered on May 16. Despite the 2.7%
decline in the S&P 500 index in the second quarter and relatively flat
performance year to date, the S&P 500 index generated a 7.25% total return year
over year. With S&P 500 earnings continuing to grow but returns negative in the
latest quarter and year to date, the entire decline is attributable to P/E
compression. Forward earnings by companies in the S&P 500 grew by 14% year over
year, which we believe will result in improved performance in the second half of
2000 and into fiscal year 2001.
Company contribution to the S&P 500 index performance continued to narrow. Year
over year, only five of the S&P 500 companies needed to be held according to
their weights to match the index returns. The other 495 companies cancelled each
other out in terms of performance contribution. Four of those five companies -
Intel, Cisco, Oracle, and Nortel - are technology companies and they contributed
88% of the index return. Technology was again the best performing sector year
over year with a return of 45%. However, we are committed to maintaining a
diversified portfolio so fund shareholders will benefit from a variety of market
conditions.
CHANGE IN VALUE OF $10,000 INVESTMENT
<TABLE>
<CAPTION>
S&P 500 INDEX S&P 500 INDEX
------------- -------------
<S> <C> <C>
'99 9500 10000
10060.5 10400
'00 9831.1 10355.3
</TABLE>
Hypothetical illustration based on past performance. Future performance will
vary. All returns reflect reinvested dividends. The portfolio's holdings may
differ significantly from the securities in the index. The index is unmanaged
and therefore does not reflect the cost of portfolio management or trading. It
is not open to direct investment.
TOP 10 STOCKS AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Intel Corp 4.1
2. S&P 500 Depositary 3.8
3. Microsoft Corp 2.9
4. Cisco Systems Inc 2.9
5. Dell Computer Corp 2.7
6. American Express Co 2.5
7. SBC Communications 2.5
8. General Electric Co 2.3
9. Intl Business Mach 2.2
10. Johnson & Johnson 2.0
</TABLE>
TOP 5 INDUSTRIES AS OF JUNE 30, 2000
<TABLE>
<CAPTION>
% of Net Assets
<C> <S> <C>
1. Computer & Related 7.7
2. Computer Software 5.6
3. Electronics/Semiconductors 5.2
4. Financial Services 4.4
5. Medical & Related 4.4
</TABLE>
The accompanying notes are an integral part of these financial statements.
34
<PAGE> 36
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
AEROSPACE (0.6%)
800 Boeing Co............................. $ 33,450
----------
AUTOMOTIVE & RELATED (0.6%)
700 Ford Motor Corp. ..................... 30,100
91 Visteon Corp. ........................ 1,111
----------
31,211
----------
BANKING (3.6%)
1,700 Bank One Corp. ....................... 45,156
2,100 Chase Manhattan....................... 96,731
1,700 Fleet Boston Financial Corp. ......... 57,800
----------
199,687
----------
CHEMICALS (0.4%)
500 Du Pont (E.I.) De Nemours............. 21,875
----------
COMMUNICATIONS (3.6%)
1,000 *Qualcomm Inc. ....................... 60,000
3,200 SBC Communications Inc. .............. 138,400
----------
198,400
----------
COMPUTER & RELATED (7.7%)
2,500 *Cisco Systems Inc. .................. 158,906
3,000 *Dell Computer Corp. ................. 147,938
1,100 Intl. Business Machines 120,519
----------
427,363
----------
COMPUTER SOFTWARE (5.6%)
1,000 Computer Associates Intl. Inc......... 51,188
2,000 *Microsoft Corp. ..................... 160,000
1,200 *Oracle Corp.......................... 100,875
----------
312,063
----------
CONSUMER PRODUCTS (1.1%)
800 Philip Morris Co Inc. ................ 21,250
700 Procter & Gamble Co. ................. 40,075
----------
61,325
----------
DRUGS (2.1%)
1,375 Pfizer Inc. .......................... 66,000
1,000 Pharmacia Corp. ...................... 51,687
----------
117,687
----------
ELECTRICAL EQUIPMENT (4.2%)
1,800 Edison Intl........................... 36,900
550 Emerson Electric Co. ................. 33,206
2,400 General Electric Co. ................. 127,200
1,800 Thomas & Betts Corp. ................. 34,425
----------
231,731
----------
ELECTRONICS/SEMICONDUCTORS (5.2%)
300 *Applied Materials Inc. .............. 58,906
1,700 Intel Corp. .......................... 227,269
----------
286,175
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
ENTERTAINMENT & LEISURE (1.5%)
2,200 The Walt Disney Co. .................. $ 85,388
----------
FINANCIAL SERVICES (4.4%)
2,700 American Express Co. ................. 140,738
1,200 Associates First Capital Corp. ....... 26,775
500 Citigroup Inc. ....................... 30,125
500 Lehman Bros. Holdings Inc. ........... 47,281
----------
244,919
----------
FOOD & RELATED (2.2%)
500 Campbell Soup Co. .................... 14,562
1,000 Coca-Cola Co. ........................ 57,437
800 *Kroger Co. .......................... 17,650
1,500 Sara Lee Corp. ....................... 28,969
----------
118,618
----------
HEALTH CARE PRODUCTS (2.0%)
1,100 Johnson & Johnson..................... 112,063
----------
INSURANCE SERVICES (1.1%)
500 American Intl. Group.................. 58,750
----------
INTERNET SOFTWARE (0.5%)
500 *America Online Inc. ................. 26,375
----------
MANUFACTURING (1.9%)
2,200 Tyco Intl. Ltd........................ 104,225
----------
MEDICAL & RELATED (4.4%)
600 *Amgen Inc. .......................... 42,150
1,800 *Boston Scientific Corp. ............. 39,487
1,100 Merck & Co. Inc. ..................... 84,288
1,500 Schering-Plough Corp. ................ 75,750
----------
241,675
----------
OFFICE EQUIPMENT (0.1%)
300 Xerox Co. ............................ 6,225
----------
OIL, ENERGY & NATURAL GAS (3.5%)
800 Exxon Mobil Corp. .................... 62,800
1,700 Royal Dutch Petroleum................. 104,656
1,000 USX-Marathon Group.................... 25,062
----------
192,518
----------
RETAIL (2.8%)
300 GAP Inc. ............................. 9,375
1,200 Home Depot Inc. ...................... 59,925
1,300 Target Corp. ......................... 75,400
200 Wal Mart Stores....................... 11,525
----------
156,225
----------
RESTAURANTS (0.4%)
700 McDonalds Corp. ...................... 23,056
----------
TELECOMMUNICATIONS EQUIPMENT (3.5%)
1,900 AT&T Corp. ........................... 60,087
500 Lucent Technologies Inc. ............. 29,625
</TABLE>
(continued)
The accompanying notes are an integral part of these financial statements.
35
<PAGE> 37
ONE FUND, INC.
S&P 500 INDEX PORTFOLIO (CONTINUED)
SCHEDULE OF INVESTMENTS JUNE 30, 2000
<TABLE>
<CAPTION>
MARKET
SHARES COMMON STOCK VALUE
-------------------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS EQUIPMENT, CONTINUED
1,250 MCI Worldcom Inc. .................... $ 57,344
700 Nortel Networks Corp. ................ 47,775
----------
194,831
----------
TOTAL COMMON STOCK (63.0%) (COST
$3,381,678).......................... $3,485,835
----------
</TABLE>
<TABLE>
<CAPTION>
MARKET
SHARES DEPOSITORY RECEIPTS VALUE
-----------------------------------------------------------
<S> <C> <C>
1,465 S&P 500 Depository Receipt......... $212,837
----------
TOTAL DEPOSITORY RECEIPTS (3.8%)
(COST $214,146)................... $212,837
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
------------------------------------------------------------
<C> <S> <C>
AUTOMOTIVE & RELATED (4.9%)
$274,000 Daimler Chrysler N.A. 6.54%
07/12/00.......................... $ 273,453
----------
FINANCIAL SERVICES (6.3%)
208,000 Associates Corp. 6.540% 07/03/00... 207,924
142,000 Heller Financial 6.650% 07/11/00... 141,738
----------
349,662
----------
INSURANCE SERVICES (2.7%)
150,000 Prudential Funding 6.630%
07/07/00.......................... 149,834
----------
</TABLE>
<TABLE>
<CAPTION>
FACE MARKET
AMOUNT SHORT-TERM NOTES VALUE
------------------------------------------------------------
<C> <S> <C>
MACHINERY (2.7%)
$147,000 John Deere Capital Corp. 6.650%
07/05/00.......................... $ 146,891
----------
OIL (2.3%)
129,000 Texaco 6.540% 07/06/00............. 128,883
----------
RETAIL (4.5%)
249,000 Sears Roebuck Acceptance Corp.
6.850% 7/10/00.................... 248,574
----------
TOTAL SHORT-TERM NOTES (23.4%)
(COST $1,297,297)(a).............. $1,297,297
----------
TOTAL HOLDINGS (90.2%) (COST
$4,893,121)(b).................... $4,995,969
----------
CASH & RECEIVABLES, NET OF
LIABILITIES (9.8%)................ 543,254
----------
TOTAL NET ASSETS (100.0%).......... $5,539,223
==========
</TABLE>
---------------
* Non income producing security.
(a) The short-term notes are pledged as collateral for the S&P 500 Futures
Contracts.
(b) Also represents cost for Federal income tax purposes.
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
June 30, 2000
<TABLE>
<S> <C>
Assets:
Investments in securities at market value
(note 1) (Cost $4,893,121)............... $4,995,969
Cash in bank............................... 731
Receivable for securities sold............. 61,700
Variation margins on future contracts (note
1)....................................... 498,509
Dividends & accrued interest receivable.... 4,509
----------
Total assets............................. 5,561,418
----------
Liabilities:
Payable for investment management services
(note 3)................................. 1,272
Accrued 12b-1 fees (note 6)................ 3,419
Other accrued expenses..................... 8,882
Dividends payable.......................... 8,622
----------
Total liabilities........................ 22,195
----------
Net assets at market value................... $5,539,223
==========
Net assets consist of:
Par value, $.001 per share................. $ 537
Paid-in capital in excess of par value..... 5,376,783
Accumulated net realized gain on
investments.............................. 94,939
Net unrealized appreciation (depreciation)
on:
Investments (note 1)..................... 102,848
Futures contracts (note 1)............... (36,500)
Undistributed net investment income........ 616
----------
Net assets at market value................... $5,539,223
==========
Shares outstanding........................... 536,968
Net asset value per share.................... $ 10.32
==========
Maximum offering price per share
($10.32/95%)............................... $ 10.86
==========
</TABLE>
STATEMENT OF OPERATIONS
For the period December 15, 1999 to June 30, 2000
<TABLE>
<S> <C>
Investment income:
Interest.................................... $ 43,740
Dividends................................... 19,079
---------
Total investment income................... 62,819
---------
Expenses:
Management fees (note 3).................... 11,760
12b-1 fees (note 6)......................... 7,350
Custodian fees (note 3)..................... 2,816
Directors' fees (note 3).................... 1,216
Professional fees........................... 3,944
Transfer agent & accounting fees............ 15,594
Filing fees................................. 1,628
Printing, proxy and postage fees............ 2,429
Other....................................... 218
---------
Total expenses............................ 46,955
Less expenses voluntarily reduced or
reimbursed (note 3)..................... (553)
---------
Net expenses.............................. 46,402
---------
Net investment income..................... 16,417
---------
Realized and unrealized gain (loss) on
investments:
Net realized gain on investments............ 94,939
Net increase (decrease) in unrealized
appreciation on:
Investments............................. 102,848
Futures contracts....................... (36,500)
---------
Net gain on investments................. 161,287
---------
Net increase in net assets from
operations........................... $ 177,704
=========
</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(d)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
DECEMBER 15, 1999
TO
JUNE 30, 2000
-----------------
<S> <C>
From operations:
Net investment income..................................... $ 16,417
Realized gain on investments.............................. 94,939
Unrealized gain on investments and futures contracts...... 66,348
----------
Net increase in assets from operations................ 177,704
----------
Dividends and distributions to shareholders:
Dividends paid from net investment income................. (15,801)
----------
From capital share transactions (note 4):
Received from shares sold................................. 5,476,759
Received from dividends reinvested........................ 815
Paid for shares redeemed.................................. (100,254)
----------
Increase in net assets derived from capital share
transactions............................................ 5,377,320
----------
Increase in net assets............................. 5,539,223
Net Assets:
Beginning of period....................................... 0
----------
End of period............................................. $5,539,223
==========
Includes undistributed net investment income of........... $ 615
==========
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
DECEMBER 15, 1999
TO
JUNE 30, 2000
-----------------
<S> <C>
Per share data:
Net asset value, beginning of period........................ $10.00
Income from investment operations:
Net investment income..................................... 0.03
Net realized and unrealized gain on investment and futures
contracts............................................... 0.32
------
Total income from investment operations................. 0.35
------
Less distributions:
Net investment income..................................... (0.03)
------
Net asset value, end of period.............................. $10.32
======
Total return................................................ 3.49%(b)
Ratios and supplemental data:
Ratios net of fees reimbursed by advisor(c):
Expenses.................................................. 1.59%(a)
Net investment income..................................... 0.56%(a)
Ratio assuming no fees waived or reimbursed by advisor:
Expenses.................................................. 1.61%(a)
Portfolio turnover rate..................................... 247%
Net assets at end of period (millions)...................... $ 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 S&P
Index Portfolio, but it may cease that waiver, in whole or in part, without
prior written notice.
(d) Commenced operations December 15, 1999.
The accompanying notes are an integral part of these financial statements.
38
<PAGE> 40
ONE FUND, INC. June 30, 2000
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.
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 at 4:00 p.m. eastern time. Short-term investments
(investments with remaining maturities of 60 days or less) are valued at
amortized cost and fixed income securities are valued by using market
quotations, or independent pricing services which use prices provided by
market makers or estimates of market value obtained from yield data relating
to instruments or securities with similar characteristics. 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 valuation.
Foreign currency exchange rates are generally determined prior to 4:00 p.m.
eastern time. Occasionally, events affecting the value of foreign investments
and such exchange rates occur between the time at which they are determined
and the time of valuation, which in the case of the International 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,
(continued)
39
<PAGE> 41
ONE FUND, INC. June 30, 2000
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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
collateralized with commercial paper, cash on deposit with broker and
receivable for securities sold. The futures contracts in the S&P 500 Index
Portfolio at June 30, 2000 are as follows:
<TABLE>
<CAPTION>
EXPIRATION UNDERLYING FACE UNDERLYING CASH DEPOSITED AS
PORTFOLIO PURCHASED DATE AMOUNT AT VALUE GAIN/LOSS MARGIN REQUIREMENTS
--------- --------- ---------- --------------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
S&P 500 5 S&P 500 Index Contracts Sept '00 1,871,625 ($36,500) 157,032
</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. June 30, 2000
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 wash sales and net
operating losses. The character of distributions made during the period from
net investment income or net realized gains, if any, may differ from their
ultimate characterization for federal income tax purposes. On the statement
of assets and liabilities, as a result of permanent book-to-tax differences,
the following reclassification was made in the International Portfolio:
accumulated net investment loss has been decreased by $806,379 resulting in a
reclassification adjustment to decrease Paid-in capital in excess of par
value by $806,379. On the statement of assets and liabilities, as a result of
temporary book-to-tax differences, accumulated undistributed net realized
gain on investments was increased by $16,675 resulting in a reclassification
adjustment to Paid-in capital in excess of par of $16,675 for the Core Growth
Portfolio. These reclassifications had no effect on net assets or net asset
values per share.
For federal income tax purposes, the Small Cap Portfolio had net capital
losses of $128,597 at June 30, 2000. In addition, the Income Portfolio had a
capital loss carryover at June 30, 2000. If not offset by subsequent capital
gains, $23,310 will expire June 30, 2001 in the Income Portfolio, and
$804,516 and $128,597 will expire June 30, 2004 and June 30, 2005
respectively, in the Small Cap Portfolio. The Board of Directors does not
intend to authorize a distribution of any net realized gain for the
portfolios until the capital loss carryovers have been offset or expire.
It is the policy of the Fund to distribute to its shareholders substantially
all of its taxable income, thus gaining relief from federal income taxes
under provisions of current tax regulations applicable to investment
companies of this type. Accordingly, no provision for federal income taxes
has been made.
Expenses directly attributable to a portfolio are charged to that portfolio.
Expenses not directly attributable to a portfolio are allocated on the basis
of relative net assets.
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America 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.
(continued)
41
<PAGE> 43
ONE FUND, INC. June 30, 2000
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The gross unrealized appreciation and depreciation on investments in each
portfolio as of June 30, 2000 were 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................... 20,728 3,654,082 5,270,713 1,152,344 2,276,173 2,714,619 418,311
Depreciation................... (304,459) (490,394) (232,557) (293,819) (418,541) (486,785) (315,462)
Net unrealized:
Appreciation................... 0 3,163,688 5,038,156 858,525 1,857,631 2,227,834 102,848
Depreciation................... (283,731) 0 0 0 0 0 0
</TABLE>
(2) INVESTMENT TRANSACTIONS
Purchases and sales of investment securities (excluding short-term
securities) from July 1, 1999 to June 30, 2000 were as follows:
<TABLE>
<CAPTION>
INCOME & SMALL INTER- CORE
INCOME GROWTH GROWTH CAP NATIONAL GROWTH S&P 500
------- --------- --------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Stocks & Bonds:
Purchases....................... 547,242 7,654,126 7,083,823 3,789,550 27,659,266 15,780,785 4,091,351
Sales........................... 751,190 9,883,645 8,958,942 3,631,173 25,962,544 16,400,692 555,573
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.
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 mil................................... 0.30% 0.50% 0.50% 0.50% 0.65% 0.40%
Next $150 mil.................................... 0.25% 0.40% 0.40% 0.40% 0.55% 0.40%
Over $250 mil.................................... 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.
(continued)
42
<PAGE> 44
ONE FUND, INC. June 30, 2000
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
ONI is presently waiving management fees equal to 0.15% of average net assets
for certain portfolios. Management fees waived by ONI for the year ended June
30, 2000 were $24,374, $9,408, $18,889, $16,917 and $5,569 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 year ended June 30, 2000, the reimbursement was $9,818, and $45,937 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 Firstar Bank, N.A., 425 Walnut Street, Cincinnati,
Ohio. The custodian for the International Portfolio is State Street
Bank-Kansas City, 801 Pennsylvania, Kansas City, Missouri. For assets held
outside the United States, Firstar Bank and State Street Bank-Kansas City
enter into subcustodial agreements, subject to approval by the Board of
Directors.
Certain directors and officers of the Fund are also directors and officers of
ONI and ONLIC.
(4) CAPITAL SHARE TRANSACTIONS
Capital share transactions for the years ended June 30, 2000 and 1999 were as
follows:
<TABLE>
<CAPTION>
MONEY MARKET INCOME INCOME & GROWTH
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6-30-00 6-30-99 6-30-00 6-30-99 6-30-00 6-30-99
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales................. 15,978,796 21,575,304 1,659 32,840 61,114 118,333
Capital shares issued in merger................ 0 0 658,001 0 0 0
Capital shares issued on reinvested
dividends.................................... 522,996 485,752 6,953 6,655 58,543 38,380
Capital shares redeemed........................ 18,332,581 21,656,382 696,044 75,391 156,546 312,346
</TABLE>
<TABLE>
<CAPTION>
GROWTH SMALL CAP INTERNATIONAL
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
6-30-00 6-30-99 6-30-00 6-30-99 6-30-00 6-30-99
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Capital shares issued on sales................. 39,030 84,824 38,683 41,741 64,839 47,020
Capital shares issued in merger................ 0 0 0 0 278,375 0
Capital shares issued on reinvested
dividends.................................... 35,660 37,590 0 12,745 0 23,927
Capital shares redeemed........................ 110,767 246,309 54,151 135,052 172,374 561,187
</TABLE>
<TABLE>
<CAPTION>
S&P 500 INDEX
CORE GROWTH ----------------------
------------------------ 12-15-99
YEAR ENDED YEAR ENDED TO YEAR ENDED
6-30-00 6-30-99 6-30-00 6-30-99
---------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Capital shares issued on sales............... 60,671 78,273 546,501 NA
Capital shares issued on reinvested
dividends.................................. 22,554 0 79 NA
Capital shares redeemed...................... 31,881 204,796 9,612 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 year ended June 30, 2000 were approximately $679, $23,230, $16,812,
$6,840, $13,285, $9,870 and $4,185 for the Income, Income & Growth, Growth,
Small Cap, International, Core Growth, and S&P 500 Index Portfolios,
respectively.
(continued)
43
<PAGE> 45
ONE FUND, INC. June 30, 2000
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 June 30, 2000, 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 06/30/00 AMOUNT TYPE 06/30/00 GAIN LOSS
---------- ---------- ------------- -------- ---------- ------------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
10/05/01 388,000 New Zealand $182,185 186,046 U.S. Dollar $186,046 $3,861 --
10/05/01 206,455 U.S. Dollar 206,455 388,000 New Zealand 182,185 -- $(24,270)
11/13/00 11,720,000 Japanese Yen 113,057 109,810 U.S. Dollar 109,810 -- (3,247)
11/13/00 112,909 U.S. Dollar 112,909 11,720,000 Japanese Yen 113,057 148 --
-------- -------- ------ --------
$614,606 $591,098 $4,009 $(27,517)
======== ======== ====== ========
</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.
(7) PORTFOLIO MERGERS
Shareholders of the Global Contrarian Portfolio became shareholders of the
International Portfolio upon consummation of the planned reorganization on
November 3, 1999. The assets and liabilities of the Global Contrarian
Portfolio were transferred to the International Portfolio.
<TABLE>
<CAPTION>
BEFORE MERGER AFTER MERGER
---------------------------------- -------------
GLOBAL CONTRARIAN INTERNATIONAL INTERNATIONAL
PORTFOLIO PORTFOLIO PORTFOLIO
----------------- ------------- -------------
<S> <C> <C> <C>
Shares...................................................... 378,510 558,191 836,566
Net Assets.................................................. $3,615,625 $7,250,029 $10,865,654
Net Asset Value............................................. $ 9.55 $ 12.99 $ 12.99
Unrealized Appreciation..................................... $ 751,181 $1,450,426 $ 2,201,607
</TABLE>
(continued)
44
<PAGE> 46
ONE FUND, INC. June 30, 2000
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Shareholders of the Tax-Free Income Portfolio became shareholders of the
Income Portfolio upon consummation of the planned reorganization on December
3, 1999. The assets and liabilities of the Tax-Free Income Portfolio were
transferred to the Income Portfolio.
<TABLE>
<CAPTION>
BEFORE MERGER AFTER MERGER
----------------------------- ------------
TAX-FREE INCOME INCOME INCOME
PORTFOLIO PORTFOLIO PORTFOLIO
--------------- ---------- ------------
<S> <C> <C> <C>
Shares...................................................... 612,730 638,204 658,011
Net Assets.................................................. $6,231,363 $6,046,755 $12,278,118
Net Asset Value............................................. $ 10.17 $ 9.47 $ 9.47
Unrealized Appreciation..................................... $ 751,181 $1,450,426 $ 2,201,607
</TABLE>
The reorganized International and Income Portfolios retained their respective
investment objectives and financial history.
(continued)
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ONE FUND, INC.
INDEPENDENT AUDITORS' REPORT
The Shareholders and Board of Directors of
ONE Fund, Inc.:
We have audited the accompanying statements of assets and liabilities of ONE
Fund, Inc. (comprised of Money Market, Income, Income and Growth, Growth, Small
Cap, International, Core Growth and S&P 500 Index Portfolios, collectively the
ONE Fund), including the schedules of portfolio investments, as of June 30,
2000, and the related statements of operations for the periods indicated herein,
and the statements of changes in net assets and the financial highlights for
each of the periods indicated herein. These financial statements and the
financial highlights are the responsibility of ONE Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included verification of
securities owned as of June 30, 2000, by examination, correspondence with
brokers and other appropriate audit procedures. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds comprising the ONE Fund, Inc. as of June 30, 2000,
the results of their operations for the periods indicated herein, and the
changes in their net assets and the financial highlights for each of the periods
indicated herein, in conformity with accounting principles generally accepted in
the United States of America.
KPMG LLP
Columbus, Ohio
August 16, 2000
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ONE Fund, Inc.
Post Office Box 371
Cincinnati, Ohio 45201
Form 5837 Rev. 8/00
