THE FLEX-PARTNERS
INTERNATIONAL EQUITY FUND
1999 SEMI-ANNUAL REPORT June 30, 1999
THE FLEX-PARTNERS
Distributed by Adviser Dealer Services, Inc.
P.O. Box 7177, Dublin OH 43017 (800)494-FLEX
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PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS. All performance figures
represents total returns and average annual total returns for the periods ended
6/30/99. Investment performance represents total return and assumes reinvestment
of all dividend and capital gain distributions. The investment value and
principal value of an investment will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than their original cost. The
Investment Adviser waived a portion of its management fees and/or reimbursed
expenses in order to reduce the operating expenses of the Fund during each
period shown above. To obtain a prospectus containing more complete information
about The International Equity Fund, including other fees and expenses that
apply to a continued investment in the Fund, you may call The Flex-Partners at
(800)494-3539 or write P.O. Box 7177, Dublin OH 43017. Please read the
prospectus carefully before investing. The Flex-Partners are distributed by
Adviser Dealer Services, Inc., which is affiliated with The Flex-Partners.
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The Flex-Partners 1999 Semi-Annual Report
INTERNATIONAL EQUITY FUND
Resurgence in emerging markets, rising yields in bond markets, and the
introduction of the Euro common currency all made headlines in the world
financial press during the first half of 1999. The International Equity Fund
returned 2.70% before sales charge for the first six months of 1999, as equity
markets were broadly positive around the world.
Global demand for commodities and raw materials strengthened as Japan and
emerging markets began to recover from last year's economic crisis. This also
produced a rally in cyclical and smaller-cap stocks. The shift in market
leadership -- from technology and pharmaceuticals to energy and cyclical stocks
- -- continued across Europe and in the U.K. Intense merger activity across many
sectors including finance, energy, and telecommunications added to the positive
performance of the global equity markets.
The Fund benefited by increasing its exposure to industrials in Britain,
moving allocations from financial stocks to energy on the continent, and
maintaining an underweighted position in commercial banks in Japan. Rising
yields in the global bond markets, especially during the second quarter,
adversely affected interest rate sensitive sectors, particularly financial
stocks.
[PHOTO] Charles Brand, Portfolio Manager
Across the regions, Japan proved to be the strongest of the developed
markets, thanks to much needed corporate restructuring and the impact of
government spending intended to jump-start the economy. A further spending
package, expected in the autumn, looks essential to sustain the recovers, which
remains quite fragile. In Europe, recovery is proceeding nicely. France and
Germany appear to be on the right track to resume growth, although Italy
continues to struggle. We remain watchful of our country allocations as we
proceed into the second half of 1999.
IN EXCHANGE FOR GREATER POTENTIAL REWARDS, FOREIGN INVESTMENTS INVOLVE
GREATER RISK THAN U.S. INVESTMENTS. THESE RISKS INCLUDE POLITICAL AND ECONOMIC
UNCERTAINTIES OF FOREIGN COUNTRIES AND CURRENCY FLUCTUATIONS. THESE RISKS MAY BE
MAGNIFIED IN COUNTRIES WITH EMERGING MARKETS, SINCE THOSE COUNTRIES MAY HAVE
RELATIVELY UNSTABLE GOVERNMENTS AND LESS ESTABLISHED ECONOMIES.
1999 PERFORMANCE UPDATE
-----------------------
PERIOD & AVERAGE ANNUAL TOTAL RETURNS
as of 6/30/99
before deduction of sales charges
---------------------------------
Year to Date........................2.70%
One Year............................6.71%
Life of Fund*......................10.44%
net of sales charges**
----------------------
Year to Date.......................-3.19%
One Year............................0.55%
Life of Fund*.......................6.93%
* Inception Date 9/2/97
** Reflects deduction of 5.75% maximum sales charges.
REGIONAL HOLDINGS as of 6/30/99:
[GRAPH] The following information was presented as a pie chart:
1) Europe (ex-U.K.) 49.04%
2) Japan 23.04%
3) United Kingdom 21.83%
4) Pacific Rim (ex-Japan) 3.57%
5) Australia/New Zealand 2.52%
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 3
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International Equity Fund
Portfolio of Investments as of June 30, 1999 (Unaudited)
INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
COMMON STOCKS - 100.0%
ADVERTISING - 0.5%
Telefonica Publicidad e
Informacion, SA # 3,550 $ 71,042
WPP Group plc 2,300 19,472
90,514
AEROSPACE/DEFENSE - 1.2%
Aerospatiale Matra # 4,400 101,703
British Aerospace plc 3,977 25,841
Finmeccanica SpA # 97,100 89,515
217,059
AGRICULTURAL OPERATIONS - 0.0%
Kuala Lumpur Kepong Bhd 2,000 2,737
AIR TRANSPORT - 0.4%
BAA plc 1,421 13,679
Cathay Pacific Airways 4,000 6,135
Japan Airlines Co. # 9,000 29,712
Singapore Airlines Ltd. 2,500 23,786
73,312
APPAREL - 0.6%
Alexon Group plc # 3,181 11,395
Castellum AB 5,700 53,896
Espirit Holdings Ltd. 12,000 8,120
Onward Kashiyama Co., Ltd. 3,000 32,930
106,341
AUTO & TRUCK - 3.6%
Aisin Seiki Co., Ltd. 2,000 21,079
Daimler Chrysler AG # 3,500 304,960
Honda Motor Co., Ltd. 3,000 127,017
Nissan Motor Co., Ltd. # 4,000 19,081
Toyota Motor Corp. 6,000 189,659
661,796
AUTOPARTS - 0.5%
Denso Corp. 2,000 40,606
GKN plc 2,904 49,630
90,236
BANKING - 13.9%
Abbey National plc 3,649 68,581
Allied Irish Banks plc 7,557 99,647
Argentaria, Caja Postal y Banco
Hipotecario de Espana, SA 4,000 91,382
Asahi Bank Ltd. 11,000 52,655
Australia & New Zealand Banking
Group Ltd. 3,300 24,439
Banca Nazionale del Lavoro # 31,440 99,432
Bank of Tokyo-Mitsubishi Ltd. 8,000 113,762
Banque Cantonale de Geneve 320 59,865
Banque Nationale de Paris 1,700 142,058
Barclays plc 3,991 116,261
Christiania Bank Og Kreditkasse 19,100 68,687
Credit Suisse Group 1,000 173,532
Credito Italiano 25,000 110,272
Dai-Ichi Kangyo Bank Ltd. 6,000 38,625
Den Danske Bank 400 43,460
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 4
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Development Bank of Singapore Ltd. 1,200 14,659
HSBC Holdings plc 6,319 224,064
Halifax plc 2,380 28,431
Hang Seng Bank Ltd. 3,600 40,252
ING Groep NV 2,796 151,810
Industrial Bank of Japan Ltd. 7,000 55,462
Julius Baer Holding AG 24 68,587
Malayan Banking Bhd 4,000 12,000
National Australia Bank Ltd. 3,060 50,999
National Bank of Greece SA 650 42,463
National Bank of Greece SA
(Rights Issue: exercise 07/12/99)# 130 4,741
National Westminster Bank plc 859 18,232
Overseas-Chinese Banking Corp., Ltd. 3,000 25,019
Royal Bank of Scotland Group plc 3,623 73,867
San Paolo - IMI SpA 5,600 76,599
Sanwa Bank Ltd. 4,000 39,318
Schroders plc 975 19,940
Sumitomo Bank Ltd. 6,000 74,328
Tokai Bank Ltd. 6,000 34,168
UBS AG # 600 179,596
United Overseas Bank Ltd. 1,000 6,989
2,544,182
BEVERAGE -- ALCOHOLIC - 1.1%
Bass plc 3,084 44,798
Diageo plc 8,000 83,637
Foster's Brewing Group Ltd. 8,300 23,560
Fraser & Neave Ltd. 1,000 4,434
Kirin Brewery Co., Ltd. 2,000 23,934
Scottich & Newcastle plc 1,462 15,238
195,601
BROADCASTING -- CABLE TV - 0.4%
British Sky Broadcasting Group plc 2,270 21,081
Reuters Holdings plc 4,248 55,941
77,022
BROADCASTING & PUBLISHING - 0.4%
News Corporation Ltd. 7,900 67,886
BUILDING & CONSTRUCTION - 2.4%
AMEC plc 3,000 12,238
Blue Circle Industries plc 4,658 31,019
Compagnie de Saint Gobain 400 63,914
Grupo Acciona Sa 1,500 71,717
Obayashi Corp. 15,000 75,393
RMC Group plc 1,064 17,151
Sekisui House Ltd. 3,000 32,336
Suez Lyonnaise des Eaux 500 90,441
Taisei Corp. 10,000 21,954
Tostem Corp. 1,000 19,189
435,352
BUILDING MATERIALS - 0.8%
CRH plc 5,730 101,865
Wolseley plc 4,385 33,042
134,907
CHEMICALS - 1.8%
Air Liquide 550 86,744
BTP plc 4,500 30,855
SGL Carbon AG # 1,000 78,392
Shin-Etsu Chemical Co., Ltd. 4,000 133,702
329,693
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 5
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
CHEMICALS -- DIVERSIFIED - 1.4%
BOC Group plc 555 10,860
Hoechst AG 4,400 199,766
Imperial Chemical Industries plc 1,300 12,863
Sekisui Chemical Co., Ltd. 4,000 23,175
Sumitomo Chemical Co., Ltd. 6,000 27,483
274,147
COMPUTERS & PERIPHERALS - 1.8%
Atos SA # 425 43,514
Cap Gemini 322 50,751
Equant NV # 1,000 92,457
Fujitsu Ltd. 5,000 100,483
Misys plc 1,082 9,271
The Sage Group plc 289 10,284
Tecnost SpA # 10,800 26,751
333,511
CONTAINER/PAPER & PLASTIC - 0.1%
Bunzl plc 2,900 14,393
CONSUMER DURABLES - 0.2%
Unilever plc 4,582 40,820
COSMETICS - 0.3%
Kao Corp. 2,000 56,122
DATA PROCESSING - 0.0%
Industri-Matematik International
Corp. ADR 2,000 5,375
DISTRIBUTION WHOLESALER - 0.8%
Marubeni Corp. 14,000 29,233
Mitsubishi Corp. 3,000 20,303
Mitsui & Co. 13,000 90,554
140,090
DIVERSIFIED - 2.5%
Arriva plc 146 861
Billiton plc 2,445 8,537
Bodycote International plc 1,407 8,804
Brambles Industries Ltd. 1,050 27,859
Broken Hill Proprietary Co., Ltd. 3,150 36,749
Granada Group plc 2,247 41,735
Hays plc 800 8,439
Hutchison Whampoa Ltd. 9,500 86,018
Invensys plc 10,398 49,267
Keppel Corp. Ltd. 2,000 6,813
Rio Tinto Ltd. 1,590 26,258
Swire Pacific Ltd. 3,000 14,848
Vivendi 1,700 138,102
454,290
DRUG - 2.8%
AstraZeneca Group plc 3,248 125,780
Pharmacia & Upjohn, Inc. 1,350 74,993
Rhone - Poulenc SA 1,400 64,156
Roche Holding AG 7 72,161
Smithkline Beecham plc 12,602 163,965
501,055
ELECTRIC PRODUCTION -- MISCELLANEOUS - 2.6%
British Energy plc 831 7,081
CLP Holdings Ltd. 5,500 26,725
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 6
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Chubu Electric Power Co., Inc. 2,800 46,796
EDP - Electricidade de Portugal, SA 3,500 63,200
Hitachi Ltd. 15,000 140,511
National Power plc 1,600 11,665
Scottish Power plc 1,383 11,960
Scottish & Southern Energy plc 3,600 36,870
Shandong International Power
Development Co., Ltd.# 12,000 2,469
Tenaga Nasional Bhd 3,000 6,908
Thomson CSF 2,500 87,131
Tokyo Electric Power Co. 1,400 29,868
471,184
ELECTRONIC COMPONENT -- MISCELLANEOUS - 3.8%
Hirose Electric Co., Ltd. 400 41,464
Johnson Electric Holdings Ltd. 2,000 8,249
Kyocera Corp. 1,000 58,598
Mabuchi Motor Co., Ltd. 900 83,564
Matsushita Electric Industrial
Co., Ltd. 4,000 77,580
NEC Corp. 1,000 12,421
Omron Corp. 3,000 51,995
Perlos Oyj # 9,600 140,982
Sony Corp. 1,000 107,704
Sumitomo Electric Industries 3,000 34,069
Toshiba Corp. 11,000 78,348
694,974
ENGINEERING RESEARCH & DEVELOPMENT - 0.5%
ABB Ltd. # 891 84,206
Sembcorp Industries Ltd. # 3,000 4,757
Singapore Technologies Engineering Ltd. 6,000 6,801
95,764
FINANCE - 2.8%
Acom Co., Ltd. 500 43,123
Credit Saison Co., Ltd. 2,900 60,554
Compagnie Financiere de Paribas 775 87,124
Daiwa Securities Group Inc. 4,000 26,740
Lend Lease Corp., Ltd. 1,300 17,977
Lloyds TSB Group plc 13,412 182,017
The Nikko Securities Co., Ltd. 6,000 38,625
Nomura Securities Co., Ltd. 4,000 46,779
502,939
FINANCIAL SERVICES - 0.4%
Legal & General Group plc 11,724 29,879
Unidanmark A/S 750 50,146
80,025
FOOD -- DIVERSIFIED - 2.3%
Cadbury Schweppes plc 4,120 26,266
Danone 300 77,565
J Sainsbury plc 1,758 11,097
Nestle SA 100 180,692
Royal Canin SA 1,800 104,247
Tesco plc 8,467 21,812
421,679
FOOD -- RETAIL - 0.4%
Nissin Food Products 3,000 73,041
Somerfield plc 1,500 7,042
80,083
HOTEL/GAMING - 0.8%
Accor SA 560 141,024
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 7
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Genting Bhd 1,400 5,342
Ladbroke Group plc 2,173 8,624
154,990
HOUSEHOLD PRODUCTS - 1.7%
Asahi Glass Co., Ltd. 6,000 38,873
Benckiser NV 1,912 102,330
Electrolux AB - Series B 4,000 84,153
Hunter Douglas NV 2,714 93,467
318,823
HUMAN RESOURCES - 0.4%
Vedior 4,051 69,127
INSURANCE -- MULTILINE - 1.9%
Allied Zurich AG # 4,896 61,616
AMP Limited 1,800 19,819
Axa 1,050 128,463
CNP Assurances # 1,500 41,094
ERGO Versicherungs Gruppe AG 570 67,173
Royal & Sun Alliance Insurance
Group plc 3,147 28,257
346,422
INSURANCE -- PROPERTY/CASUALTY - 0.5%
Allianz AG 300 83,801
INSURANCE - 3.6%
Assicurazioni Generali 4,356 151,547
Fortis AG # 2,500 78,728
Muenchener Rueckversicherungs -
Gesellschaft AG 800 148,925
Norwich Union plc 1,500 10,184
Prudential Corp., plc 3,625 53,429
Skandia Forsakrings AB 9,100 171,013
Sun Life and Provincial Holdings plc 2,601 18,604
Tokio Marine & Fire Insurance Co. 3,000 32,633
665,063
INVESTMENT COMPANIES - 0.5%
Cosco Pacific Ltd. 6,000 4,988
NH Hoteles, SA # 7,000 89,913
Sime Darby Bhd 4,000 5,242
100,143
MACHINERY - 3.1%
Amada Co., Ltd. 6,000 42,339
Kubota Corp. 20,000 59,753
Mannesmann AG 1,600 239,736
Schneider Electric SA 1,500 84,468
Sidel SA 750 91,449
Toshiba Machine Co., Ltd. # 23,000 49,544
567,289
MANUFACTURING - 1.2%
FKI plc 5,628 17,407
General Electric Co. plc 6,493 66,293
Mitsubishi Heavy Industries Ltd. 9,000 36,471
Siemens AG 1,200 92,954
213,125
MEDICAL PRODUCTS - 4.1%
Glaxo Wellcome plc 7,902 219,842
Novartis AG 250 366,094
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 8
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Takeda Chemical Industries 2,000 92,601
Yamanouchi Pharmaceutical Co., Ltd. 2,000 76,425
754,962
MINING - 0.7%
Mitsui Mining & Smelting Co., Ltd. 6,000 30,950
Rio Tinto plc 3,739 62,750
Sumitomo Metal Mining Co. 7,000 28,886
122,586
MULTIMEDIA & ENTERTAINMENT - 0.3%
Airtours plc 1,880 15,012
Pearson plc 2,146 43,652
58,664
OFFICE AUTOMATION & EQUIPMENT - 0.2%
Canon, Inc. 1,000 28,721
OIL & NATURAL GAS - 7.8%
Australia Gas & Light 1,300 7,964
BG plc 10,315 63,076
British Petroleum Co., plc 22,678 406,898
Centrica plc # 5,071 11,922
Elf Aquitain SA 1,200 176,600
ENI SpA # 17,000 100,566
Hong Kong & China Gas Co., Ltd. 8,800 12,760
Nippon Oil Co. 6,000 25,750
Repsol - YPF, SA 2,500 51,193
Royal Dutch Petroleum Co. 5,250 308,398
Shell Transport & Trading Co. 1,618 12,147
Tokyo Gas Co. 26,000 64,590
Total Fina SA # 1,400 181,130
1,422,994
OPTICAL SUPPLIES - 0.3%
Hoya Corp. 1,000 56,369
PAPER & FOREST PRODUCTS - 0.9%
Stora Kopparbergs Bergslags
Aktiebolag 14,877 161,769
PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 0.2%
Fuji Photo Film 1,000 37,800
PRINTING -- COMMERCIAL - 0.2%
Dai Nippon Printing Co., Ltd. 2,000 31,940
PROTECTION -- SAFETY EQUIPMENT - 0.6%
Secom Co., Ltd. 1,000 103,990
PUBLISHING - 0.8%
EMAP plc 550 9,634
Johnston Press plc 5,266 24,141
Reed International plc 815 5,443
Singapore Press Holdings Ltd. 946 16,112
South China Morning Post
Holdings Ltd. 9,000 5,046
Verenigde Nederlandse
Uitgeversbedrijven Verenigd Bezit 2,200 88,166
148,542
REAL ESTATE MANAGEMENT & INVESTMENT - 1.7%
British Land Co., plc 3,668 30,707
Chelsfield plc 1,620 7,644
Cheung Kong Holdings Ltd. 6,000 53,360
City Developments Ltd. 4,000 25,606
HKR International Ltd. 12,080 10,432
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 9
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Land Securities plc 1,094 14,726
Mitsubishi Estate Co., Ltd. 8,000 77,976
New World Development Co., Ltd. 4,000 11,987
Sun Hung Kai Properties Ltd. 5,000 45,595
Westfield Holdings Ltd. 4,200 25,927
303,960
RECREATION - 0.4%
Parques Reunidos, SA # 3,000 26,372
TAB Ltd. # 9,590 19,499
TABCORP Holdings Ltd. 2,800 19,002
64,873
RETAIL - 0.4%
Cafe De Coral Holdings 18,000 7,888
Coles Myer Ltd. 3,200 18,752
Cycle & Carriage Ltd. 1,000 5,756
Great Universal Stores plc 2,065 22,908
Next plc 1,300 15,807
Whitbread plc 563 8,733
79,844
RETAIL GROCERY - 0.9%
Ito-Yokado Co., Ltd. 1,000 66,851
Laurus NV 1,292 30,064
Superdiplo SA # 3,000 66,706
163,621
RETAIL STORE - 1.5%
Boots Co., plc 1,190 14,150
Debenhams plc 1,627 10,938
Family Mart Co., Ltd. 1,000 45,805
Karstadt AG 165 79,349
Kingfisher plc 5,207 59,983
Marui Co. 3,000 49,519
Uny Co., Ltd. 1,000 15,021
W.H. Smith Group plc 690 6,637
281,402
STEEL -- INTEGRATED - 0.9%
British Steel plc 10,900 28,252
Nippon Steel Corp. 30,000 69,575
Sumitomo Metal Industries Ltd. # 18,000 22,432
Usinor SA 3,500 52,305
172,564
TELECOMMUNICATIONS - 3.1%
Cable & Wireless plc 3,591 45,816
Nippon Telegraph & Telephone Corp. 25 292,989
PrimaCom AG # 1,500 67,482
Singapore Telecommunications Ltd. 12,000 20,579
Societe Europeenne des Satellites 500 73,428
Telecom Corporation of New Zealand Ltd. 6,900 29,798
Television Broadcasts Ltd. 1,000 4,692
Tokyo Broadcasting System, Inc. 2,000 28,886
563,670
TELECOMMUNICATION EQUIPMENT - 3.7%
Alcatel Alsthom 715 100,935
Nokia Oyj 2,000 175,814
Telefonaktiebolaget LM Ericsson 4,200 135,272
Telefonica de Espana # 40 1,932
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 10
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
Teleste Corp. 6,325 57,564
Vodafone AirTouch plc 10,666 210,394
681,911
TELECOMMUNICATION SERVICES - 3.8%
British Telecommunications plc 16,273 272,974
China Telecom Ltd. # 4,000 11,110
Debitel AG # 1,050 29,102
Hong Kong Telecommunications Ltd. 25,600 66,487
NetCom AB - B shares # 2,150 72,677
Sonera Group Oyj # 3,750 82,219
Telecel-Comunicacaoes Pessoais SA 350 45,246
Telegate AG # 1,500 51,193
Telekom Malaysia Bhd 2,000 7,474
Telestra Corp., Ltd. # 8,900 51,364
689,846
TEXTILE PRODUCTS - 0.1%
Toray Industries, Inc. 3,000 15,004
TIRE & RUBBER - 0.3%
Bridgestone Corp. 2,000 60,413
TOBACCO - 1.3%
British American Tobacco plc 2,220 20,897
Rothmans of Pall Mall Bhd 400 3,026
Swedish Match AB 15,000 53,719
Tabacalera SA 8,000 162,163
239,805
TRANSPORTATION - 1.6%
East Japan Railway Co. 9 48,504
Malaysia International Shipping Bhd 1,000 1,829
National Express Group plc 989 15,802
Nippon Yusen Kabushiki Kaisha 5,000 19,230
Peninsular and Oriental Steam
Navigation Co. 3,449 51,842
Railtrack Group plc 1,999 40,914
Stagecoach Holdings plc 2,700 9,683
TNT Post Group NV 1,109 26,551
Tokyu Corp. 7,000 17,621
Yamato Transport Co., Ltd. 4,000 69,657
301,633
WATER UTILITY - 0.2%
Kurita Water Industries Ltd. 1,000 17,909
Pennon Group plc 543 9,117
Severn Trent plc 568 8,394
35,420
TOTAL COMMON STOCKS
(Cost $16,487,053 ) 18,294,175
TOTAL INVESTMENTS - 100.0%
(Cost $16,487,053 ) 18,294,175
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 11
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INDUSTRIES/CLASSIFICATIONS SHARES OR FACE VALUE
AMOUNT
TRUSTEE DEFERRED COMPENSATION*
Flex-funds Highlands Growth Fund 134 3189
Flex-funds Muirfield Fund 158 1186
Flex-funds Total Return Utilities Fund 43 907
Flex Partners International Equity Fund 106 1541
TOTAL TRUSTEE DEFERRED COMPENSATION
(Cost $6,057 ) $6,823
ADR: American Depositary Receipt
* Assets of affiliates to the International Equity Fund held for the benefit
of the Portfolio's Trustee in connection with the Trustee Deferred
Compensation Plan.
Portfolio Composition by Country of Domicile as of 06/30/99.
Japan - 23.0% Hong Kong - 2.3%
United Kingdom - 21.8% Ireland - 1.1%
France - 12.7% Singapore - 0.9%
Germany - 7.9% Belgium - 0.8%
Switzerland - 6.6% Portugal - 0.6%
Netherlands - 4.6% Denmark - 0.5%
Sweden - 4.5% Malaysia - 0.4%
Italy - 3.5% Norway - 0.4%
Spain - 3.1% Greece - 0.3%
Australia - 2.4% New Zealand - 0.2%
Finland - 2.4%
See accompanying notes to financial statements.
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 12
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STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1999 (Unaudited)
INTERNATIONAL EQUITY FUND
Assets:
Investments, at value (cost $16,487,053) $18,294,172
Cash and foreign currency, at value 525,996
(cost $525,795)
Receivable for capital stock issued 31,561
Receivable for investments sold 403,492
Dividends, interest and tax reclaims
receivable, at value 98,467
Receivable from investment adviser 14,325
Unamortized organization costs 18,489
Trustee Deferred Compensation Plan asset, 6,822
at value ($6,057)
Other assets 4,185
Total Assets 19,397,509
Liabilites:
Payable for investments purchased 699,295
Payable for capital stock redeemed 775
Accrued management fees 15,271
Accrued fund accounting fees 2,239
Accrued transfer agent fees 1,427
Accrued administrative fees 1,179
Accrued 12b-1 distribution and shareholder 16,672
service fee
Trustee Deferred Compensation Plan, at value 6,822
Other accrued liabilities 22,841
Total Liabilities 766,521
Net Assets $18,630,988
Components of Net Assets:
Capital $15,856,702
Accumulated distributions in excess
of net investment income (25,369)
Accumulated undistributed net realized gains
from investment and foreign 1,006,748
currency transactions
Net unrealized appreciation of
investments and foreign currency 1,792,907
Total Net Assets $18,630,988
Net Assets: $18,630,988
Outstanding units of beneficial 1,253,356
interest (shares)
Net asset value -- redemption price per share: $14.86
Maximum sales charge 5.75%
Maximum offering price per share
(100%/(100% - sales charge) of net asset value
adjusted to nearest cent) $15.77
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1999 (Unaudited)
INTERNATIONAL EQUITY FUND
Investment Income:
Interest $2,759
Dividends 261,686
Foreign taxes withheld (27,126)
Total Investment Income 237,319
Expenses:
Investment management fees 91,172
Administration fees 4,559
Distribution (12b-1) fees 20,793
Fund accounting fees 14,876
Transfer agent fees 9,117
Audit fees 3,806
Legal fees 465
Custody fees 54,285
Trustees fees and expenses 3,498
Postage expense 479
Registration expense 4,904
Printing expense 994
Amortization of organizational costs 2,889
Other expenses 2,396
Total Expenses 214,233
Expenses reimbursed by investment adviser (31,684)
Net Expenses 182,549
NET INVESTMENT INCOME 54,770
NET REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS:
Net realized gains from investments
and foreign currency transactions 886,226
Net change in unrealized appreciation
of investments (426,704)
NET GAIN FROM INVESTMENTS 459,522
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $514,292
See accompanying notes to financial statements.
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 13
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STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended 6/30/99 Year ended
(Unaudited) 12/31/98
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $54,770 ($29,201)
Net realized gains from investments
and foreign currency transactions 886,226 381,420
Net change in unrealized appreciation
of investments (426,704) 2,333,615
Net increase in net assets
resulting from operations 514,292 2,685,834
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income --- (50,938)
In excess of net investment income --- (98,118)
From net realized gains --- (149,056)
CAPITAL TRANSACTIONS:
Issued 428,972 5,048,139
Reinvested --- 149,026
Redeemed (585,644) (1,650,643)
Net decrease in net assets resulting from
capital share transactions (156,672) 3,546,522
TOTAL INCREASE IN NET ASSETS 357,620 6,083,300
NET ASSETS - Beginning of period 18,273,368 12,190,068
NET ASSETS - End of period $18,630,988 $18,273,368
SHARE TRANSACTIONS:
Issued 30,114 376,007
Reinvested --- 10,299
Redeemed (39,912) (123,624)
Change in shares (9,798) 262,682
FINANCIAL HIGHLIGHTS
Six Months
Ended 6/30/99 Year ended 9/2/97* to
(Unaudited) Dec. 31, 1998 12/31/97
Net Asset Value, Beginning of Period $14.47 $12.18 $12.50
Income from Investment Operations:
Net investment income 0.04 (0.02) (0.02)
Net gains (losses) from investments 0.35 2.43 (0.30)
Total from investment operations 0.39 2.41 (0.32)
Less Dividends and Distributions:
In excess of net investment income --- (0.04) ---
From net realized gains --- (0.08) ---
Total distributions --- (0.12) ---
Net Asset Value, End of Period $14.86 $14.47 $12.18
Total Return 2.70%(1) 19.78% (2.56%)(1)
Ratios/Supplementary Data
Net assets, end of period ($000) $18,631 $18,273 $12,190
Ratio of expenses to
average net assets 2.00%(2) 2.00% 2.00%(2)
Ratio of net investment income to
average net assets 0.60%(2) -0.18% (0.43%)(2)
Ratio of expenses to average net assets
before waiver of fees 2.35%(2) 2.17% 2.68%(2)
Ratio of net investment income to average
net assets before waiver of fees 0.25%(2) -0.35% (1.11%)(2)
Portfolio turnover 32.11% 86.13% 12.71%
Date of commencement of operations
(1) Not Annualized
(2) Annualized
See accompanying notes to financial statements.
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 14
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Notes to Financial Statements
JUNE 30, 1999 (UNAUDITED)
1. ORGANIZATION
The Flex-Partners Trust (the "Trust") was organized in 1992 and is registered
under the Investment Company Act of 1940, as amended (the "Act"), as a
diversified, open-end management investment company. The Trust offers five
series, and it is presently comprised of five separate funds.
The investment objective of the International Equity Fund (the "Fund") is to
seek long-term growth from investing primarily in equity securities of foreign
issuers.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
VALUATION OF INVESTMENTS
Securities owned by the Fund are valued at 3:00 pm Eastern Time based on the
last sales price, or, lacking any sales, at the closing bid prices. The Fund
obtains prices from independent pricing services which use valuation techniques
approved by the Board of Trustees.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions whereby the Fund takes
possession of an underlying debt instrument subject to an obligation of the
seller to repurchase the instrument from the Fund and an obligation of the Fund
to resell the instrument at an agreed upon price and term. At all times, the
Fund maintains the value of collateral, including accrued interest, at least
100% of the amount of the repurchase agreement, plus accrued interest. If the
seller defaults or the fair value of the collateral declines, realization of the
collateral by the Fund may be delayed or limited.
DEFERRED TRUSTEE COMPENSATION
Under a Deferred Compensation Plan (the "Plan") non-interested Trustees may
elect to defer receipt of a portion of their annual compensation. Under the
Plan, deferred amounts are invested in the shares of the Flex-funds and
Flex-Partners Funds. Deferred amounts remain in the funds until distributed in
accordance with the Plan.
FOREIGN CURRENCY TRANSLATION
Accounting records of the Funds are maintained in U.S. dollars. The value of
securities, other assets and liabilities of the Fund denominated in foreign
currency are translated into U.S. dollars at the current exchange rate.
Purchases and sales of securities, income receipts and expense payments are
translated into U.S. dollars at the exchange rate on the dates of such
transactions. The Fund does not isolate that portion of the results of
operations resulting from changes in foreign exchange rates from those resulting
from changes in market prices of securities held.
FORWARD CURRENCY CONTRACTS
The Fund may enter into forward foreign currency exchange contracts ("forwards")
for purposes of hedging against either specific transactions or portfolio
positions. Forwards are agreements between two parties to exchange currencies at
a set price on a future date. The market value of forwards fluctuates with
changes in currency exchange rates. The forward is marked-to-market daily, and
the change in market value is recorded by the Fund as unrealized appreciation or
depreciation. When the forward is offset by entry into a closing transaction or
extinguished by delivery of the currency, the Fund records a realized gain or
loss equal to the fluctuation in value during the period the forward was open.
Risks may arise upon entering forwards from the potential inability of
counterparties to meet the terms of the forwards or from unanticipated
fluctuations in the value of the foreign currency relative to the U.S. dollar.
INCOME TAXES
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its investment company taxable income and net capital gains
to its shareholders. Therefore, no Federal income tax provision is required.
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 15
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DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders are recorded on the ex-dividend date. The Fund
declares dividends from net investment income on an annual basis and distributes
net capital gains, if any, on an annual basis.
Distributions from net investment income and from net capital gains are
determined in accordance with Federal income tax regulations which may differ
from generally accepted accounting principles. These differences are primarily
due to deferrals of certain losses, expiring capital loss carryforwards, and
differing treatment of gains and losses realized in transactions denominated in
foreign currency. Permanent book and tax basis differences have been
reclassified among the components of net assets.
ORGANIZATIONAL COSTS
The costs related to the organization of the Fund have been deferred and are
being amortized on a straight-line basis over a five-year period.
EXPENSES
The Fund accrues its own expenses. Expenses incurred by the Trust that do not
specifically relate to an individual fund of the Trust are allocated to the Fund
based on its relative net assets or other appropriate basis.
3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES
R. Meeder & Associates (RMA), a wholly-owned subsidiary of Muirfield Investors,
Inc. (MII), provides the Fund with investment management, research, statistical
and advisory services. Under an Investment Subadvisory Agreement with RMA,
Commercial Union Investment Management, LTD serves as subadviser of the Fund.
For such services, the Fund pays monthly fees at the annual rate of 1.00% of the
average daily net asset value of the Fund.
Mutual Funds Service Co. ("MFSCo"), a wholly-owned subsidiary of MII, serves as
stock transfer, dividend disbursing and shareholder services agent for the Fund.
In compensation for such services, the Fund pays MFSCo an annual fee equal to
the greater of $15 per active shareholder account or 0.10% of the Fund's average
daily net assets. MFSCo is entitled to receive an annual minimum fee of $4,000
from the Fund.
MFSCo provides the Trust with certain administrative services. In compensation
for such services, the Fund pays MFSCo an annual fee equal to 0.05% of the
Fund's average daily net assets.
RMA has voluntarily agreed to reimburse the Fund for the amount by which annual
expenses (excluding interest, taxes, brokerage fees, and extraordinary expenses)
exceed certain limitations. Such reimbursement is limited to the total of fees
charged to the Fund by RMA and MFSCo. The Fund currently has a 2.00% annual
expense limitation as a percentage of average daily net assets.
Certain officers and trustees of the Fund are also officers or directors of MII,
RMA and MFSCo.
Pursuant to Rule 12b-1 of the Act, the Fund has adopted a Distribution Plan with
Adviser Dealer Services (the "Distributor"). Under the provisions of the
Distribution Plan, the Fund pays the Distributor an annual fee, at a maximum
rate of 0.25% of average daily net assets to aid in the distribution of Fund
shares. Additionally, the Fund has adopted a Service Plan with the Distributor.
Under the provisions of the Service Plan, the Fund pays the Distributor an
annual fee, at a maximum rate of 0.25% of average daily net assets to reimburse
securities dealers for personal services or maintenance of shareholder accounts.
4. SECURITIES TRANSACTIONS
For the six months ended June 30, 1999, the cost of purchases and proceeds from
sales or maturities of long-term investments for the Fund were $6,586,701 and
$5,907,765, respectively. The cost of investments for federal income tax
purposes and for financial reporting purposes is substantially the same.
The Flex-Partners International Equity Fund 1999 Semi-Annual Report Page 16
