THE HENLOPEN FUND
(THE HENLOPEN FUND LOGO)
ANNUAL REPORT
JUNE 30, 2000
To My Fellow Shareholders:
For the Quarter ending June 30, The Henlopen Fund decreased 15.2%. Annualized
returns for the Fund for 1, 3 and 5 years are 53.7%, 33.4% and 28.1%,
respectively. Since our inception on December 2, 1992, the Fund has an
annualized return of 24.8%.
As we highlighted in our last shareholder letter, we have been operating within
what is perhaps the best investment climate most of us have seen in our careers.
Strong domestic economic growth driven by productivity gains, modest inflation,
an increased pace of global economic development and rapid technological
innovation have combined to create this positive environment. However, excesses
inevitably occur, highlighted by the stunning valuations bestowed upon immature
companies with little revenues, large losses, and, in many cases, uneconomic
business plans. Such excesses spread even to the leading growth companies,
where valuations had sprinted to levels unsustainable in the very short-term.
The ensuing widespread correction, while painful, was vital to maintaining the
health of what we feel is a continuing, powerful bull market.
As you will notice in the enclosed report, we have maintained a significant
investment in many technology related industries that have considerable growth
potential. We have also added to several non-technology holdings, especially in
the area of natural gas exploration. This group appears to have a sustained
period of growth ahead as domestic energy demand exceeds the industry's current
ability to supply this efficient natural resource.
As of July 27, 2000, the Board of Trustees has declared distributions of
$0.02123 from short-term realized capital gains which will be treated as
ordinary income and $0.06635 from net long-term capital gains, payable July 28,
2000 to shareholders of record on July 26, 2000.
Volatility is part of the investment world within which we operate. Market
setbacks, such as the one we have just experienced, are both normal and
necessary; we believe they allow the stocks of rapidly growing, market-leading
companies to purge excessive speculation before resuming their strong
appreciation. Our long-term record seems to support this belief.
Sincerely,
/s/ Michael L. Hershey
Michael L. Hershey
President
ONE YEAR COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE HENLOPEN FUND, LIPPER GROWTH FUND INDEX AND S&P 500 INDEX
THE HENLOPEN FUND LIPPER GROWTH FUND INDEX S&P 500 INDEX
6/30/99 $10,000 $10,000 $10,000
9/30/99 $9,840 $9,480 $9,380
12/31/99 $14,120 $11,433 $10,778
3/31/00 $18,116 $12,267 $11,026
6/30/00 $15,363 $11,752 $10,728
* Ending value represents increases of 53.7%, 17.6% and 7.2%, respectively.
MANAGED BY LANDIS ASSOCIATES LLC
WWW.HENLOPENFUND.COM
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The Henlopen Fund invests in market-leading growth companies across a broad
spectrum of industries. Relying on internal research and judgement, the Fund
looks for companies that have competitive products and services, have strong
management teams and are generating strong revenue and earnings growth.
Artificial capitalization restraints are avoided so that growing companies,
regardless of size, are included in the portfolio. The Fund strives to be fully
invested and to maintain a balanced, diversified approach, investing across many
industries and market sectors. This investment approach is based upon our
conviction that growing businesses create capital, and that the best way for an
investor to increase capital is to own shares of growing businesses.
Fiscal 2000 was the seventh consecutive year of growth for The Henlopen Fund.
For the year ending 6/30/00, the Fund appreciated 53.7%, while over the last
three years the Fund appreciated at an annual rate of 33.4%.
Fiscal 2000 began with the Federal Reserve raising interest rates for the first
time since 1995. A series of rate increases and the debate as to their
necessity and effect caused the stock market to mark time for the next four
months. By October, strong earnings growth in technology companies and investor
interest in the growing impact of the Internet resulted in a prolonged advance
centered on those sectors. While the heavy concentration of those companies in
the NASDAQ drove that Index up 100% in the next six months, the Dow Jones and
S&P averages, which are heavily weighted in more cyclical sectors of the
economy, lagged far behind. Sectors that contributed to the Fund's strong
showing during that time included semiconductors, semiconductor capital
equipment, communications equipment and software. In March 2000, the markets
corrected much of the prior six months strong advance. It is our belief,
however, that the combination of strong earnings and low inflation continues to
provide attractive growth opportunities in the technology sector and other
industries such as natural gas exploration.
SINCE INCEPTION COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
THE HENLOPEN FUND, S&P 500 INDEX AND LIPPER GROWTH FUND INDEX
THE HENLOPEN FUND S&P 500 INDEX LIPPER GROWTH FUND INDEX
12/2/92*<F1> $10,000 $10,000 $10,000
6/30/93 $11,562 $10,643 $10,661
6/30/94 $12,126 $10,792 $10,841
6/30/95 $15,493 $13,600 $13,350
6/30/96 $21,442 $17,140 $16,109
6/30/97 $22,519 $23,088 $19,916
6/30/98 $29,908 $30,081 $25,942
6/30/99 $34,813 $36,909 $31,572
6/30/00 $53,507 $39,567 $37,128
*<F1> DECEMBER 2, 1992 INCEPTION DATE
AVERAGE ANNUAL TOTAL RETURN
SINCE INCEPTION
1-YEAR 5-YEAR 12/2/92
------ ------ ---------------
53.7% 28.1% 24.8%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
STATEMENT OF NET ASSETS
June 30, 2000
SHARES OR
PRINCIPAL
AMOUNT COST MARKET VALUE
------ ---- ------------
LONG-TERM INVESTMENTS -- 97.4% (A)<F3>
COMMON STOCKS -- 97.4% (A)<F3>
BASIC RESOURCES -- 1.0%
80,000 Alcoa Inc. $ 2,581,775 $ 2,320,000
------------ ------------
COMMUNICATIONS -- 18.8%
100,000 Cabletron Systems, Inc.*<F2> 2,509,700 2,525,000
90,000 California Amplifier, Inc.*<F2> 2,560,470 4,117,500
20,000 Ditech Communications*<F2> 1,865,626 1,891,250
50,000 F5 Networks, Inc.*<F2> 1,710,311 2,728,125
40,000 Lucent Technologies Inc. 2,519,500 2,370,000
50,000 Natural MicroSystems*<F2> 1,074,903 5,621,875
30,000 Nokia Corp. "A" ADR 1,651,500 1,498,125
50,000 Nortel Networks Corp. 1,212,612 3,412,500
130,000 Optibase Ltd.*<F2> 2,004,689 2,283,125
45,000 Polycom, Inc.*<F2> 992,747 4,234,216
70,000 REMEC, Inc.*<F2> 1,627,052 2,931,250
210,000 Science Dynamics Corp.*<F2> 2,371,616 2,428,125
50,000 Tekelec*<F2> 1,441,438 2,409,375
50,000 Tollgrade Communications*<F2> 564,188 6,625,000
------------ ------------
24,106,352 45,075,466
------------ ------------
COMMUNICATIONS SERVICES -- 2.4%
140,000 CTN Media Group, Inc.*<F2> 1,210,967 752,500
250,000 FVC.COM, Inc.*<F2> 2,506,647 1,937,500
20,000 Nextel Communications*<F2> 1,319,688 1,223,750
51,472 NEXTLINK
Communications, Inc.*<F2> 2,179,688 1,952,719
------------ ------------
7,216,990 5,866,469
COMPUTER SYSTEMS -- 8.6%
200,000 Blue Wave Systems Inc.*<F2> 2,308,252 2,062,500
75,000 Compaq Computer Corp. 2,090,762 1,917,187
250,000 Concurrent Computer
Corp.*<F2> 2,235,056 3,281,250
32,000 EMC Corp. (Mass.)*<F2> 1,299,650 2,462,000
27,000 Network Appliance, Inc.*<F2> 2,123,875 2,173,500
40,000 RadiSys Corp.*<F2> 1,797,266 2,270,000
40,000 SanDisk Corp.*<F2> 2,779,688 2,447,500
33,000 Seagate Technology, Inc.*<F2> 1,489,311 1,815,000
25,000 Sun Microsystems, Inc.*<F2> 1,572,625 2,273,438
------------ ------------
17,696,485 20,702,375
DISTRIBUTION -- 0.3%
57,500 D & K Healthcare
Resources, Inc.*<F2> 846,281 600,156
ELECTRONICS/EQUIPMENT MANUFACTURING -- 9.8%
75,000 Aeroflex Inc.*<F2> 2,815,412 3,726,562
53,000 Applied Films Corp.*<F2> 1,474,970 1,941,125
20,000 Corning Inc. 3,148,635 5,397,500
15,000 E-Tek Dynamics, Inc.*<F2> 2,718,181 3,957,188
30,000 Flextronics International Ltd.*<F2> 2,137,188 2,060,625
20,000 Keithley Instruments, Inc. 1,531,830 1,742,500
90,000 KEMET Corp.*<F2> 3,199,164 2,255,625
12,000 Newport Corp. 1,345,126 1,288,500
30,000 Vishay Intertechnology, Inc.*<F2> 1,870,850 1,138,125
------------ ------------
20,241,356 23,507,750
ENERGY/SERVICES -- 7.9%
100,000 AstroPower, Inc.*<F2> 1,281,937 2,712,500
500,000 Grey Wolf, Inc.*<F2> 2,423,975 2,500,000
60,000 Nabors Industries, Inc.*<F2> 2,323,263 2,493,750
80,000 National-Oilwell, Inc.*<F2> 2,195,060 2,630,000
130,000 Ocean Energy Inc.*<F2> 1,865,815 1,844,375
60,000 Universal Compression
Holdings, Inc.*<F2> 1,980,707 2,010,000
75,000 USX-Marathon Group 2,053,845 1,879,687
60,000 Valero Energy Corp. 1,835,376 1,905,000
50,000 Western Gas Resources, Inc. 1,051,232 1,050,000
------------ ------------
17,011,210 19,025,312
FINANCIAL SERVICES -- 1.7%
99,000 Philadelphia Consolidated
Holding Corp.*<F2> 1,517,558 1,664,438
125,000 U.S. Bancorp. 2,784,815 2,406,250
------------ ------------
4,302,373 4,070,688
FOOD & BEVERAGES -- 0.8%
60,000 Albertson's, Inc. 2,184,210 1,995,000
HEALTHCARE PRODUCTS -- 5.2%
500,000 Antex Biologics Inc.*<F2> 1,197,389 875,000
105,000 Gene Logic Inc.*<F2> 819,135 3,747,188
200,000 IGEN International, Inc.*<F2> 3,446,274 3,312,500
70,000 Immunomedics, Inc.*<F2> 1,054,991 1,701,875
140,000 PharmaNetics, Inc.*<F2> 1,831,938 2,782,500
------------ ------------
8,349,727 12,419,063
MISCELLANEOUS MANUFACTURING -- 1.9%
50,000 Boeing Co. 2,043,065 2,090,625
60,000 Tredegar Corp. 1,391,302 1,140,000
100,000 Unifi, Inc.*<F2> 1,426,670 1,237,500
------------ ------------
4,861,037 4,468,125
OIL & GAS EXPLORATION -- 4.3%
80,000 EOG Resources, Inc. 2,232,225 2,680,000
250,000 Santa Fe Snyder Corp.*<F2> 2,586,242 2,843,750
220,000 Union Pacific Resources
Group Inc. 3,263,613 4,840,000
------------ ------------
8,082,080 10,363,750
RETAILING -- 2.9%
40,000 Wal-Mart Stores, Inc. 2,247,113 2,305,000
150,000 Whitehall Jewellers, Inc.*<F2> 2,272,535 2,793,750
50,000 Zale Corp.*<F2> 2,013,425 1,825,000
------------ ------------
6,533,073 6,923,750
SEMICONDUCTORS/RELATED -- 20.8%
30,000 Advanced Micro
Devices, Inc.*<F2> 2,056,749 2,317,500
24,000 Altera Corp.*<F2> 857,750 2,446,500
60,000 Asyst Technologies, Inc.*<F2> 2,104,218 2,055,000
50,000 ATMI, Inc.*<F2> 1,447,338 2,325,000
40,000 Brooks Automation, Inc.*<F2> 1,877,187 2,557,500
250,000 Catalyst Semiconductor, Inc.*<F2> 2,412,697 2,148,450
10,000 Cree, Inc.*<F2> 1,723,125 1,335,000
75,000 Electroglas, Inc.*<F2> 2,032,189 1,612,500
30,000 Electro Scientific
Industries, Inc.*<F2> 1,645,625 1,320,936
60,000 Fairchild Semiconductor
Corp.*<F2> 2,298,540 2,430,000
60,000 Ibis Technology Corp.*<F2> 3,935,312 3,622,500
20,000 KLA-Tencor Corp.*<F2> 1,562,188 1,171,250
42,000 Kulicke & Soffa
Industries, Inc.*<F2> 1,235,380 2,493,750
35,000 National Semiconductor
Corp.*<F2> 2,295,850 1,986,250
40,000 Novellus Systems, Inc.*<F2> 1,268,463 2,262,500
15,000 PMC-Sierra, Inc.*<F2> 2,978,125 2,665,312
40,000 Rambus Inc.*<F2> 2,363,125 4,120,000
190,200 Symmetricom, Inc.*<F2> 1,965,156 4,802,550
8,400 Taiwan Semiconductor
Manufacturing Co. Ltd.*<F2> 436,879 325,500
25,000 Teradyne, Inc.*<F2> 2,327,025 1,837,500
25,000 Texas Instruments Inc. 1,044,533 1,717,188
30,000 Xilinx, Inc.*<F2> 1,794,063 2,476,875
------------ ------------
41,661,517 50,029,561
SOFTWARE & RELATED SERVICES -- 9.7%
250,000 Bitstream Inc.*<F2> 2,354,060 1,578,125
24,000 Business Objects
S.A.- SP ADR*<F2> 2,715,312 2,115,000
25,000 Entrust Technologies Inc.*<F2> 1,562,500 2,068,750
80,000 Exchange Applications, Inc.*<F2> 1,388,361 2,130,000
25,000 Extended Systems Inc.*<F2> 1,101,625 2,400,000
120,000 Information Resources
Engineering, Inc.*<F2> 2,499,124 3,030,000
20,000 ISS Group, Inc.*<F2> 1,995,000 1,974,686
100,000 Level 8 Systems, Inc.*<F2> 1,599,644 2,106,250
100,000 Novadigm, Inc.*<F2> 1,919,005 1,975,000
60,000 Sonic Foundry, Inc.*<F2> 1,235,013 1,260,000
100,000 Systems & Computer
Technology Corp.*<F2> 1,402,174 2,000,000
139,500 Versant Corp.*<F2> 658,105 680,063
------------ ------------
20,429,923 23,317,874
TRANSPORTATION -- 0.5%
200,000 RailAmerica, Inc.*<F2> 1,352,643 1,275,000
UTILITIES -- 0.8%
60,000 IDACORP, Inc. 1,991,925 1,935,000
------------ ------------
Total common stocks 189,448,957 233,895,339
------------ ------------
Total long-term
investments 189,448,957 233,895,339
SHORT-TERM INVESTMENTS -- 2.3% (A)<F3>
VARIABLE RATE DEMAND NOTE
$5,587,769 Firstar Bank U.S.A., N.A. 5,587,769 5,587,769
------------ ------------
Total short-term
investments 5,587,769 5,587,769
------------ ------------
Total investments $195,036,726 239,483,108
------------
------------
Cash and receivables, less
liabilities - 0.3% (A)<F3> 622,615
------------
NET ASSETS $240,105,723
------------
------------
Net Asset Value Per Share
(No par value, unlimited
shares authorized), offering
and redemption price
($240,105,723 / 8,458,266
shares outstanding) $ 28.39
------------
------------
*<F2> Non-income producing security.
(a)<F3> Percentages for the various classifications relate to net assets.
The accompanying notes to financial statements are an integral part of this
statement.
STATEMENT OF OPERATIONS
For the Year Ended June 30, 2000
INCOME:
Dividends $ 272,717
Interest 272,598
-----------
Total income 545,315
-----------
EXPENSES:
Investment management fees 1,358,274
Administrative services 165,826
Transfer agent fees 125,680
Registration fees 92,488
Custodian fees 37,559
Professional fees 33,289
Printing and postage expense 25,441
Board of Trustees fees 1,250
Other expenses 21,293
-----------
Total expenses 1,861,100
-----------
NET INVESTMENT LOSS (1,315,785)
-----------
NET REALIZED GAIN ON INVESTMENTS 3,928,602
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS 31,859,447
-----------
NET GAIN ON INVESTMENTS 35,788,049
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $34,472,264
-----------
-----------
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended June 30, 2000 and 1999
<TABLE>
2000 1999
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment loss $ (1,315,785) $ (275,707)
Net realized gain on investments 3,928,602 4,197,831
Net increase in unrealized appreciation on investments 31,859,447 4,409,534
------------ -----------
Net increase in net assets resulting from operations 34,472,264 8,331,658
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gains ($1.37964 per share) (4,755,935) --
------------ -----------
Total distributions (4,755,935)*<F4> --
------------ -----------
FUND SHARE ACTIVITIES:
Proceeds from shares issued (6,205,615 and 1,374,542 shares, respectively) 174,917,477 24,034,448
Net asset value of shares issued in distributions (245,972 shares) 4,623,971 --
Cost of shares redeemed (1,169,043 and 544,079 shares, respectively) (32,160,868) (9,322,815)
------------ -----------
Net increase in net assets derived from Fund share activities 147,380,580 14,711,633
------------ -----------
TOTAL INCREASE 177,096,909 23,043,291
NET ASSETS AT THE BEGINNING OF THE YEAR 63,008,814 39,965,523
------------ -----------
NET ASSETS AT THE END OF THE YEAR $240,105,723 $63,008,814
------------ -----------
------------ -----------
</TABLE>
*<F4> See Note 7.
The accompanying notes to financial statements are an integral part of these
statements.
FINANCIAL HIGHLIGHTS
(Selected data for each share of the Fund outstanding throughout each year)
<TABLE>
FOR THE YEARS ENDED JUNE 30,
--------------------------------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 19.84 $ 17.04 $ 15.83 $ 17.47 $ 14.68
Income from investment operations:
Net investment loss (a)<F5> (0.25) (0.11) (0.03) (0.08) (0.05)
Net realized and unrealized gains on investments 10.18 2.91 4.55 0.58 5.10
------- ------- ------- ------- -------
Total from investment operations 9.93 2.80 4.52 0.50 5.05
Less distributions:
Dividend from net investment income -- -- -- -- --
Distributions from net realized gains (1.38) -- (3.31) (2.14) (2.26)
------- ------- ------- ------- -------
Total from distributions (1.38) -- (3.31) (2.14) (2.26)
------- ------- ------- ------- -------
Net asset value, end of year $ 28.39 $ 19.84 $ 17.04 $ 15.83 $ 17.47
------- ------- ------- ------- -------
------- ------- ------- ------- -------
TOTAL INVESTMENT RETURN 53.7% 16.4% 32.8% 5.0% 38.4%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's $) 240,106 63,009 39,966 28,979 26,972
Ratio of expenses to average net assets 1.4% 1.5% 1.5% 1.6% 1.8%
Ratio of net investment loss to average net assets (1.0)% (0.6)% (0.7)% (0.7)% (1.3)%
Portfolio turnover rate 156.9% 162.1% 116.3% 140.6% 177.5%
</TABLE>
(a)<F5> In 2000 and 1999, net investment loss per share is calculated using
average shares outstanding. In prior years, net investment loss per
share is calculated using ending balances prior to consideration of
adjustments for permanent book and tax differences.
The accompanying notes to financial statements are an integral part of this
statement.
NOTES TO FINANCIAL STATEMENTS
June 30, 2000
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES --
The following is a summary of significant accounting policies of The
Henlopen Fund (the "Fund"), which is organized as a Delaware Business Trust
and is registered as an open-end management company under the Investment
Company Act of 1940, as amended. The Fund commenced operations on December
2, 1992. The investment objective of the Fund is long-term capital
appreciation.
(a) Each security, excluding short-term investments, is valued at the
last sale price reported by the principal security exchange on which
the issue is traded, or if no sale is reported, the latest bid price.
Securities which are traded over-the-counter are valued at the latest
bid price. Securities for which quotations are not readily available
are valued at fair value as determined by the investment adviser under
the supervision of the Board of Trustees. Short-term investments are
valued at cost which approximates market value. For financial reporting
purposes, investment transactions are recorded on trade date. Cost
amounts, as reported on the statement of net assets, are substantially
the same for Federal income tax purposes.
(b) Net realized gains and losses on sales of securities are computed
on the identified cost basis.
(c) Provision has not been made for Federal income taxes since the
Fund has elected to be taxed as a "regulated investment company" and
intends to distribute substantially all net investment company taxable
income and net capital gains to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code applicable to
regulated investment companies. The Fund has utilized $1,320,915 of
post-October losses from the prior year to offset current year net
capital gains, as provided by tax regulations.
(d) Dividend income is recorded on the ex-dividend date. Interest
income is recorded on the accrual basis.
(e) The Fund has investments in short-term variable rate demand notes,
which are unsecured instruments. The Fund may be susceptible to credit
risk with respect to these notes to the extent the issuer defaults on
its payment obligation. The Fund's policy is to monitor the
creditworthiness of the issuer and nonperformance by these
counterparties is not anticipated.
(f) Generally accepted accounting principles require that permanent
differences between income for financial reporting and tax purposes be
reclassified in the capital accounts.
(g) 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 these estimates.
(2) INVESTMENT ADVISER AND MANAGEMENT AGREEMENT AND TRANSACTIONS WITH RELATED
PARTIES --
The Fund has a management agreement with Landis Associates, Inc. (the
"Adviser"), with whom certain officers and trustees of the Fund are
affiliated, to serve as investment adviser and manager. Under the terms of
the agreement, the Fund will pay the Adviser a monthly management fee at
the annual rate of 1% on the daily net assets of the Fund.
The Fund has an administrative agreement with Fiduciary Management, Inc.
("FMI"), with whom an officer of the Fund is affiliated, to supervise all
aspects of the Fund's operations except those performed by the Adviser.
Under the terms of the agreement, the Fund will pay FMI a monthly
administrative fee at the annual rate of 0.2% on the first $30,000,000 of
the daily net assets of the Fund and 0.1% on the daily net assets of the
Fund over $30,000,000.
(3) DISTRIBUTION TO SHAREHOLDERS --
Net investment income and net realized gains, if any, are distributed to
shareholders. On July 27, 2000, the Fund distributed $182,963 from net
short-term realized gains ($0.02123 per share) and $571,950 from long-term
realized gains ($0.06635 per share). The distributions were paid on July
28, 2000, to shareholders of record on July 26, 2000.
(4) INVESTMENT TRANSACTIONS --
For the year ended June 30, 2000, purchases and proceeds of sales of
investment securities (excluding short-term securities) were $343,185,539
and $206,501,533, respectively.
(5) ACCOUNTS PAYABLE AND ACCRUED LIABILITIES --
As of June 30, 2000, liabilities of the Fund included the following:
Payable to brokers for investments purchased $ 3,587,316
Payable to the Adviser for management fees 168,041
Other liabilities 112,956
(6) SOURCES OF NET ASSETS --
As of June 30, 2000, the sources of net assets were as follows:
Fund shares issued and outstanding $194,924,374
Net unrealized appreciation on investments 44,446,382
Accumulated net realized gain 734,967
------------
$240,105,723
------------
------------
Aggregate net unrealized appreciation as of June 30, 2000, consisted of the
following:
Aggregate gross unrealized appreciation $ 59,483,963
Aggregate gross unrealized depreciation (15,037,581)
------------
Net unrealized appreciation $ 44,446,382
------------
------------
(7) REQUIRED FEDERAL INCOME TAX DISCLOSURES (UNAUDITED) --
In early 2000, shareholders received information regarding all
distributions paid to them by the Fund during the fiscal year ending June
30, 2000. The Fund hereby designates $8,784 as long-term capital gain
distributions.
REPORT OF INDEPENDENT ACCOUNTANTS
100 East Wisconsin Avenue Telephone 414 212 1600
Suite 1500
Milwaukee, WI 53202
(PRICEWATERHOUSECOOPERS LOGO)
July 28, 2000
To the Shareholders and Trustees
of The Henlopen Fund
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
The Henlopen Fund (the "Fund") at June 30, 2000, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with accounting principles generally
accepted in the United States. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with auditing standards
generally accepted in the United States, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits, which included confirmation of securities at June 30,
2000 by correspondence with the custodian and brokers, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
BOARD OF TRUSTEES
ROBERT J. FAHEY, JR.
Senior Director
Cushman & Wakefield
Philadelphia, Pennsylvania
STEPHEN L. HERSHEY, M.D.
President, First State
Orthopaedic Consultants, P.A.
Newark, Delaware
MICHAEL L. HERSHEY
Chairman,
Landis Associates, Inc.
Kennett Square, Pennsylvania
JOHN A. KROL
Chairman/CEO (Retired)
E.I. DuPont de Nemours
Wilmington, Delaware
P. COLEMAN TOWNSEND, JR.
Chairman,
Townsends, Inc.
Wilmington, Delaware
FIRSTAR BANK, N.A.
Custodian
FIRSTAR MUTUAL FUND
SERVICES, LLC
Transfer Agent and
Dividend Disbursing Agent
LANDIS ASSOCIATES LLC
Investment Adviser
PRICEWATERHOUSECOOPERS LLP
Independent Accountants
FOLEY & LARDNER
Legal Counsel
THE HENLOPEN FUND
LONGWOOD CORPORATE CENTER SOUTH
415 MCFARLAN ROAD, SUITE 213
KENNETT SQUARE, PENNSYLVANIA 19348
(610-925-0400) WWW.HENLOPENFUND.COM
This report is not authorized for use as an offer of sale or a solicitation of
an offer to buy shares of The Henlopen Fund unless accompanied or preceded by
the Fund's current prospectus.
