<PAGE> 1
Dear Fellow Shareholders
June 30, 1997
In mid-February 1997, the equity markets began a correction that resulted in a
14% decline. By late April, the market had reached its low and began to recover
its bull market momentum. This correction occurred as investors worried that
many stocks had become overvalued and that inflation was a potential problem as
the economy continued to grow. We believe the correction was necessary as many
stocks had become significantly overvalued.
When the recovery began, large cap stocks led the market while small cap
stocks recovered more slowly. This was not unexpected since large cap stocks --
especially the "nifty fifty" -- have been the major winners on Wall Street
during the last two years. There were signs, however, that the momentum might be
shifting from large cap to smaller cap stocks. This shift began as it became
more apparent that the profit growth for larger companies was slowing. It
appears this shift to small cap stocks will continue because they are
undervalued and have greater growth potential in comparison to many larger cap
stocks.
PERFORMANCE
For the six months ending June 30, 1997, the Pacific Advisors Small Cap
Fund had a total return of -2.49%. The return is based on shares purchased at
the offering price on January 1, 1997 and held through June 30, 1997. The return
reflects the deduction of the Fund's current maximum sales charge, reinvestment
of capital gains and expense reimbursements. By comparison, the NASDAQ and
Russell 2000 Indices, which are unmanaged indices of small company common
stocks, increased 11.70% and 9.31% respectively, for the same period.
PORTFOLIO MANAGEMENT
It is disappointing to report negative results for the first six months but we
believe the Fund's performance will continue to improve as second quarter
earnings are announced in July and August. While the Fund is impacted by overall
market conditions its total return depends primarily on the performance of the
individual stocks in the portfolio.
During the market correction we carefully reviewed the individual
performance of each stock and made adjustments as appropriate. We were able to
visit many of the 34 companies whose stock we have in the portfolio to review
their performance and growth projections for the year. Our ability to closely
monitor the performance of the Fund's equities gave us the confidence to
selectively buy more shares of stock in companies that were further undervalued
by the market correction.
For the first six months of 1997, the Fund's portfolio turnover rate was
13.11%. This low turnover rate is the result of the Fund's commitment to a buy
and hold strategy that does not attempt to time the market. As long as
individual companies perform as expected, the Fund will continue to hold their
stock even though there may be some price volatility. The lower turnover rate
may also have a tax-savings benefit for shareholders as we seek to minimize
capital gains distributions for the Fund.
A good example of the success of this strategy is Chips & Technology. This
company is a market leader in producing graphic chips for the personal computer
market. The Fund began buying the stock in January, 1997 after the stock
declined from a high of $26 to $14 due to lower than expected sales. The stock
appeared to be undervalued at a P/E of 8.
1
<PAGE> 2
Shortly after completing the Fund's purchase, the market corrected and the stock
price declined to under $9 per share. After confirming that there had been no
fundamental changes in the company we decided to hold the stock. By the end of
June, the stock was near the Fund's original purchase price. In July, Intel
announced their intent to buy Chips & Technology at $17.50 per share. The stock
has been tendered to Intel and the Fund will recognize a substantial profit on
the transaction.
Other new stocks added to the Fund in 1997 include Nature's Sunshine,
Q.E.P. Company, DSP Technology, Inc. and Chai-Na-Ta Corp. Nature's Sunshine is a
stock the Fund sold in 1996 after we believed it was becoming fully valued. In
early 1997, the stock price began to decline due to the market correction and
the announcement of a change in management. They are a market leader in the sale
of herbal products and their growth potential remains very strong. For these
reasons, the Fund began to reacquire this stock in the spring and it increased
over 30% as the market recovered. Q.E.P. Company is a leading manufacture of
flooring tools and sells through Home Depot and other hardware stores. Their
sales and profitability growth rates are in excess of 25% annually. DSP
Technology is a former defense contractor which has developed sophisticated
software for testing combustion engines. While this is a niche market, they have
become a market leader with limited competition and good profit margins.
Chai-Na-Ta is a vertically integrated company which grows and sells North
American ginseng. Entry into this market is very difficult because of the slow
and expensive process involved in growing ginseng. Demand for these products is
strong internationally and we believe they are well positioned to be a strong
market leader.
OUTLOOK
As we reported in the Fund's 1996 annual report, there appears to be no clear
market leadership, which is creating more volatility in the equity markets. We
continue to believe that the economy will experience moderate economic growth
with low inflation. Long-term interest rates may increase short term but should
resume a downward trend later in 1997. This relatively stable environment could
change if wage inflation becomes more significant or from a national or
international development that impacts the market.
It appears that the earnings potential for larger companies is slowing.
This is due in part to the fact that increased profits from productivity
improvements and selling unprofitable businesses have been largely realized.
Many large companies continue to pursue acquisitions to gain market share and
increased earnings. This investment strategy may increase earnings if the
acquisitions can be successfully integrated.
The potential growth for smaller companies remains very strong particularly
as they enter new and emerging markets that are too small for the larger
companies. The relatively low stock price for many of these companies make them
attractive and they should outperform larger cap stocks. While we attempt to
keep abreast of market trends, our primary focus continues to be on individual
companies and their potential for growth in value.
Please contact your financial adviser, or Pacific Advisors Fund, if you
have questions or would like more information on the Small Cap Fund.
Respectfully submitted,
/s/ George A. Henning /s/ Thomas H. Hanson
--------------------- --------------------
George A. Henning Thomas H. Hanson
Chairman Executive Vice President
2
<PAGE> 3
SCHEDULE OF INVESTMENTS
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Number of Shares Value
<S> <C> <C>
COMMON STOCK (97.93%)
Airlines (2.44%)
Mercury Air Group, Inc. 37,500 $ 236,719
- --------------------------------------------------------------------------------------------------------------
Building Materials (4.02%)
Elcor Corporation 5,300 147,737
Q.E.P. Company, Inc.* 32,000 242,000
- --------------------------------------------------------------------------------------------------------------
389,737
- --------------------------------------------------------------------------------------------------------------
Chemicals (3.13%)
Ocean Bio-Chem, Inc.* 100,000 200,000
Polymer Research* 46,000 103,500
- --------------------------------------------------------------------------------------------------------------
303,500
- --------------------------------------------------------------------------------------------------------------
Cosmetic / Personal Care (17.80%)
American Safety Razor Corp.* 23,000 416,875
Chai Na Ta Corporation* 20,000 120,000
Herbalife International 25,000 406,250
Natural Alternatives Corp.* 50,000 381,250
Nature's Sunshine 22,000 398,750
- --------------------------------------------------------------------------------------------------------------
1,723,125
- --------------------------------------------------------------------------------------------------------------
Electrical Components and Equipment (5.71%)
Transact Technologies, Inc.* 32,000 452,000
Tridex Corporation* 30,000 101,250
- --------------------------------------------------------------------------------------------------------------
553,250
- --------------------------------------------------------------------------------------------------------------
Factory Equipment (1.11%)
DSP Technology, Inc.* 20,000 107,500
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*Non-income producing
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
3
<PAGE> 4
<TABLE>
<CAPTION>
Number of Shares Value
<S> <C> <C>
Food (13.65%)
Armanino Foods of Distinction* 100,000 $ 106,250
Green Mountain Coffee, Inc.* 30,000 255,000
Western Beef, Inc.* 21,500 225,750
Worthington Foods, Inc. 30,000 735,000
- --------------------------------------------------------------------------------------------------------------
1,322,000
- --------------------------------------------------------------------------------------------------------------
Health Care Provider (5.89%)
American Service Group* 40,000 570,000
- --------------------------------------------------------------------------------------------------------------
Household Products (3.76%)
CPAC, Inc.* 30,000 363,750
- --------------------------------------------------------------------------------------------------------------
Industrial and Commercial Service (4.96%)
Healthcare Services Group* 40,000 480,000
- --------------------------------------------------------------------------------------------------------------
Industrial Diversified (1.82%)
Ceradyne, Inc.* 7,000 32,375
Global Industrial Technologies* 7,000 143,500
- --------------------------------------------------------------------------------------------------------------
175,875
- --------------------------------------------------------------------------------------------------------------
Insurance, Property and Casualty (0.87%)
Centris Group, Inc. 4,000 84,500
- --------------------------------------------------------------------------------------------------------------
Insurance - Specialty (13.86%)
Automobile Protection Corp.* 100,000 350,000
Interstate National Dealer Services* 75,000 525,000
Warrantech Corp.* 45,000 466,875
- --------------------------------------------------------------------------------------------------------------
1,341,875
- --------------------------------------------------------------------------------------------------------------
Medical Equip, Devices, & Supplies (3.22%)
Biosource Intl., Inc.* 33,000 202,125
Wyant Corporation* 25,000 109,375
- --------------------------------------------------------------------------------------------------------------
311,500
- --------------------------------------------------------------------------------------------------------------
Oilfield Equip / Services (1.91%)
Mitcham Industries, Inc.* 15,000 184,688
- --------------------------------------------------------------------------------------------------------------
</TABLE>
*Non-income producing
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 5
<TABLE>
<CAPTION>
Number of Shares Value
<S> <C> <C>
Railroads (3.84%)
Railamerica, Inc.* 85,000 $ 371,875
- --------------------------------------------------------------------------------------------------------------
Restaurants (2.27%)
Panchos Mexican Restaurants 130,000 219,375
- --------------------------------------------------------------------------------------------------------------
Semiconductor and Related (5.90%)
Cerprobe Corporation* 28,000 364,000
Chips and Technologies, Inc.* 20,000 207,500
- --------------------------------------------------------------------------------------------------------------
571,500
- --------------------------------------------------------------------------------------------------------------
Software and Processing (1.77%)
Quality Systems 25,000 171,875
- --------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCK (COST: $7,282,779) 9,482,644
----------
TOTAL INVESTMENT SECURITIES (97.93%) $9,482,644
SHORT-TERM INVESTMENTS (1.15%)
United Missouri Bank Money Market Fund 111,519
OTHER ASSETS LESS LIABILITIES (0.92%) 88,976
----------
TOTAL NET ASSETS (100%) $9,683,139
==============================================================================================================
</TABLE>
* Non-income producing
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 6
Statement of Assets and Liabilities
June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Assets
<S> <C>
Investment securities at market value (cost: $7,282,779) $9,482,644
Short-term investments, at cost, which is equivalent to market 111,519
Receivable from Investment Manager (Note 3) 42,625
Other Assets 20,355
Accrued income receivable 1,197
Receivable for investments sold 24,799
Organizational expenses, net of amortization (Note 1) 7,377
----------
Total assets 9,690,516
----------
Liabilities
Payable to Investment Manager (Note 1) 7,377
----------
Net Assets
(Equivalent to $16.06 per share on 603,116 shares of
Capital Stock outstanding - 100 million shares authorized) $9,683,139
==========
Summary of Shareholders' Equity
Paid-in-capital $7,659,567
Undistributed net capital gains 86,840
Accumulated net investment loss (263,133)
Unrealized appreciation of assets 2,199,865
----------
Net assets at June 30, 1997 $9,683,139
==========
Maximum offering price per share ($16.06/94.25%): $17.04
==========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 7
STATEMENT OF OPERATIONS
For the Period January 1, 1997 to June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Dividends $13,494
Interest 4,855
----------
Total Income 18,349
----------
EXPENSES
Investment Advisory Fees 35,312
Fund Accounting Fees 21,975
Transfer Agent Expense 21,758
Legal Expense 4,792
Amortization Expense 5,597
Registration Fees 8,809
Printing 10,155
Audit Fees 5,039
Custody Fees 2,489
Director Fees/Meetings 2,309
Distribution Fees (Note 3) 6,025
Other Expense 3,126
----------
Total Expenses, before reimbursements 127,386
Less Fees Waived and Expenses Reimbursed (Note 3) 17,036
----------
Net Expenses 110,350
----------
NET INVESTMENT LOSS ($92,001)
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain on investments
Proceeds from sales of investment securities (excluding
short-term investments with maturities of 60 days or less) $1,157,800
Cost of investment securities sold 1,070,589
----------
Net realized gain on investments 87,211
Net unrealized appreciation (depreciation) of investments
Beginning of period $2,405,289
End of period 2,199,865
----------
Net unrealized appreciation (depreciation) of investments (205,424)
---------
(118,213)
---------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($210,214)
=========
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 8
STATEMENTS OF CHANGES IN NET ASSETS
(Unaudited)
<TABLE>
<CAPTION>
For the period
January 1, 1997 For the year ended
to June 30, 1997 December 31, 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment loss ($92,001) ($127,609)
Net realized gain on investments 87,211 240,687
Net unrealized appreciation (depreciation) of investments (205,424) 2,004,355
--------------------------------
Increase (decrease) in net assets resulting from operations (210,214) 2,117,433
--------------------------------
FROM DISTRIBUTIONS TO SHAREHOLDERS
Net capital gains _ (242,210)
--------------------------------
Decrease in net assets resulting from distributions _ (242,210)
--------------------------------
FROM CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold (137,173 and 188,810 shares) 2,162,439 2,836,753
Proceeds from shares purchased by reinvestment
of dividends (0 and 13,164 shares) _ 207,993
Cost of shares repurchased (53,114 and 44,925 shares) (817,844) (650,370)
--------------------------------
Increase in net assets derived from capital share transactions
(84,059 and 157,049 shares) 1,344,595 2,394,376
--------------------------------
Increase in net assets 1,134,381 4,269,599
NET ASSETS
BEGINNING OF PERIOD
(includes no undistributed net investment income) 8,548,758 4,279,159
--------------------------------
END OF PERIOD
(includes no undistributed net investment income) $9,683,139 $8,548,758
================================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. ORGANIZATION
Pacific Advisors Fund Inc. (the "Company") is an open-end diversified
management investment company registered under the Investment Company Act of
1940, as amended. The Company was organized on May 18, 1992 as a Maryland
corporation and had no operations prior to February 8, 1993, other than those
relating to organizational matters including the sale of 2,778 shares of stock
of each of its four series ("Funds") at $9.00 per share to the Company's
investment manager, Pacific Global Investment Management Company ("Investment
Manager"). The Company currently offers four Funds: Small Cap Fund, Balanced
Fund, Income Fund, and Government Securities Fund. Each Fund is a separate
investment portfolio of the Company with a distinct investment objective,
investment program, policies, and restrictions. The Small Cap Fund seeks to
provide capital appreciation through investment in small capitalization
companies.
The Investment Manager paid the organizational and other initial
expenses of the Fund incurred prior to the initial offering of the Fund's
shares. However, the Fund has agreed to reimburse the Investment Manager for
such expenses. The organizational costs will be deferred and amortized by each
Fund over a period during which it is expected that a benefit will be realized,
but no longer than five years from the date of the Funds' commencement of
operations. Prepaid expenses will be amortized over a period not to exceed
twelve months.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
A. SECURITY VALUATION. Securities listed on a national securities
exchange and certain over-the-counter ("OTC") issues traded on the NASDAQ
national market system are valued at the last quoted sale price at the close of
the NYSE. OTC issues not quoted on NASDAQ system and other equity securities for
which no sale price is available, are valued at the last bid price as obtained
from published sources (including Quotron), where available, and otherwise from
brokers who are market makers for such securities. Debt securities with a
maturity of less than 60 days are valued on an amortized cost basis.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME. Security transactions
are accounted for on the trade date. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
Federal income tax purposes. Dividends are recorded on the ex-dividend date.
Interest income is recorded on an accrual basis.
C. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. The Small Cap Fund
declares and distributes dividends of its net investment income, if any,
annually. The Board of Directors will determine the amount and timing of such
payments.
D. FEDERAL INCOME TAXES. No provision is made for Federal taxes since
the Company intends to qualify as a regulated investment company and to make the
requisite distributions to its shareholders, which will be sufficient to relieve
it from Federal income and excise taxes.
E. ORGANIZATIONAL COSTS. Costs incurred by the Small Cap Fund in
connection with its organization, registration and initial public offering of
shares have been deferred and are being amortized using the straight-line method
over a five-year period.
F. USE OF ESTIMATES. The preparation of financial statements in
conformity with generally
9
<PAGE> 10
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.
NOTE 3. INVESTMENT MANAGEMENT, DISTRIBUTOR AND OTHER RELATED PARTY TRANSACTIONS
The Company and Small Cap Fund have entered into an investment
management agreement ("Management Agreement") with the Investment Manager. The
Management Agreement provides for investment management fees, payable monthly,
and calculated at the maximum annual rate of 0.75% of average net assets for the
Small Cap Fund.
From time to time, the Investment Manager may voluntarily waive its
management fees, and/or absorb certain expenses for the Small Cap Fund. Pursuant
to the voluntary waiver of fees and the assumption of expenses by the Investment
Manager, $17,036 was reimbursed by the Investment Manager for the period from
January 1, 1997 to June 30, 1997 for the Small Cap Fund.
Fund operating expenses may not fall below the current expense level in
subsequent years until the Investment Manager has fully recouped fees forgone
and expenses paid or assumed as the Fund will reimburse the Investment Manager
in subsequent years during which the Fund's total assets are greater than
$20,000,000. As of June 30, 1997, the cumulative amounts unrecouped by the
Investment Manager since the commencement of operations is $217,446.
For the period from January 1, 1997 to June 30, 1997, Pacific Global
Fund Distributors, Inc. ("PGFD"), the principal underwriter for the Company,
received $15,236 of commissions on sales of capital stock of the Small Cap Fund,
after deducting $74,408 allowed to authorized distributors as commissions. For
the period from January 1, 1997 to June 30, 1997 PGFD earned $24,070 in
introducing brokerage fees related to securities transactions for the Small Cap
Fund. PGFD is a wholly-owned subsidiary of the Investment Manager.
The Company and the Small Cap Fund have entered into an agreement with
Pacific Global Investor Services, Inc. ("PGIS") to provide fund accounting
services at the monthly fee of three basis points for the first million in net
assets or a minimum of $1,250. In addition, an agreement to provide transfer
agent services has also been entered into at a monthly fee based on the number
of accounts or a minimum of $1,250. PGIS is a wholly-owned subsidiary of the
Investment Manager.
Certain officers of the Company are also officers of the Investment
Manager, PGFD and PGIS.
The Fund has adopted a plan of distribution, whereby the Small Cap Fund
may pay a service fee in an amount up to 0.25% per annum of the Fund's average
daily net assets to qualified recipients. For the period from January 1, 1997 to
June 30, 1997, $6,025 was accrued or paid.
NOTE 4. PURCHASE AND SALES OF SECURITIES
For the period from January 1, 1997 to June 30, 1997, the Small Cap
Fund had purchases of securities, other than short-term investments of
$2,454,814. The cost of securities held is the same for Federal income tax and
financial reporting purposes.
Aggregate gross unrealized appreciation and aggregate gross unrealized
depreciation on securities were $2,588,581 and $388,716 respectively. Net
unrealized appreciation for tax purposes is $2,199,865.
10
<PAGE> 11
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout the period)
(Unaudited)
<TABLE>
<CAPTION>
For the period For the Year Ended
January 1, 1997 December 31,
to June 30, 1997 1996 1995 1994
---------------- ---- ---- ----
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period $ 16.47 $ 11.82 $ 10.35 $ 11.47
----------- -----------------------------------------------
Income from Investment Operations
Investment income 0.02 0.09 0.19 0.19
Expenses (0.13) (0.30) (0.27) (0.23)
----------- -----------------------------------------------
Net investment loss (0.11) (0.21) (0.08) (0.04)
Net realized and unrealized gain (loss) on securities (0.30) 5.35 1.89 (0.42)
----------- -----------------------------------------------
Total from investment operations (0.41) 5.14 1.81 (0.46)
Less Distributions
From net capital gains 0.00 (0.49) (0.34) 0.66
----------- -----------------------------------------------
Net Asset Value, End of Year $ 16.06 $ 16.47 $ 11.82 $ 10.35
=========== ===============================================
TOTAL INVESTMENT RETURN (4) (2.49%) 43.70% 17.27% (3.97%)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year $ 9,683 $ 8,549 $ 4,279 $ 3,169
Ratio of Expenses to Average Net Assets (1) 1.25% 2.91% 2.49% 2.45%
Ratio of Net Investment Income (Loss) to
Average Net Assets (1) (1.04%) (2.06%) (0.71%) (0.42%)
Portfolio Turnover Rate 13.11% 51.83% 44.95% 49.79%
Average Commission Per Share
Paid on Equity Transactions $0.0774 $0.0807 $ 0.0833 --
</TABLE>
<TABLE>
<CAPTION>
For the period
February 8, 1993 (3)
to December 31, 1993
<S> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period $ 9.00
-----------
Income from Investment Operations
Investment income 0.09
Expenses (0.12)
-----------
Net investment loss (0.03)
Net realized and unrealized gain (loss) on securities 2.50
-----------
Total from investment operations 2.47
Less Distributions
From net capital gains 0.00
Net Asset Value, End of Year $ 11.47
===========
TOTAL INVESTMENT RETURN (4) 29.94%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year $ 2,175
Ratio of Expenses to Average Net Assets (1) 2.20% (2)
Ratio of Net Investment Income (Loss) to
Average Net Assets (1) (0.32%)(2)
Portfolio Turnover Rate 5.91% (2)
Average Commission Per Share
Paid on Equity Transactions --
</TABLE>
1. Without the voluntary fee waivers and reimbursement of expenses, the ratio
of expenses to average daily net assets for the Small Cap Fund would have
been 1.44%, 3.24%, 3.64%, 5.40%, and 7.20%, for the years 1997 through
1993 respectively, and the ratio of net investment income (loss) to
average net assets would have been (1.23%), (2.39%), (1.88%), (3.37%), and
(5.32%), for the years 1997 through 1993 respectively.
2. Annualized.
3. Commencement of Operations.
4. The Fund's maximum sales charge is not included in the total return
computation.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
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<PAGE> 13
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13
<PAGE> 14
Pacific Advisors Fund Inc.
Directors This report is submitted for the
George A. Henning, Chairman general information of the
Victoria L. Breen shareholders of the Fund. It is not
Thomas M. Brinker authorized for distribution to
Kathleen M. Fishkin prospective investors unless
L. Michael Haller III accompanied or preceded by a
Siegfred S. Kagawa current effective prospectus of the
Takashi Makinodan, Ph.D. Fund, which contains information
Gerald E. Miller concerning the investment policies
Louise K. Taylor, Ph.D. of the Fund as well as other
pertinent information.
Officers
George A. Henning, President
Thomas H. Hanson, Vice President and Secretary
Victoria L. Breen, Assistant Secretary
Paul W. Henning, Treasurer
Investment Manager
Pacific Global Investment Management Company
206 North Jackson Street, Suite 201
Glendale, California 91206
Transfer Agent and Administrator
Pacific Global Investor Services, Inc.
206 North Jackson Street, Suite 201
Glendale, California 91206
Distributor
Pacific Global Fund Distributors, Inc.
206 North Jackson Street, Suite 201
Glendale, California 91206
(800) 989-6693
<PAGE> 15
[LOGO] Pacific Global Fund Distributors, Inc. BULK RATE
206 North Jackson Street, Suite 201 U. S. POSTAGE
Glendale, California 91206 PAID
GLENDALE, CA
PERMIT NO. 1090
SEMIANNUAL REPORT | june 30, 1997
[LOGO]
PACIFIC
ADVISORS
[LOGO]
FUND INC.
small cap
fund
