<PAGE> 1
DIAZ-VERSON
AMERICAS EQUITY FUND
- --------------------------------------------------------------------------------
Dear Fellow Shareholder: February 9, 1996
We are pleased to present the Diaz-Verson Americas Equity Fund's (the
"Fund") annual report, including audited financial statements and the Fund's
portfolio of investments.
1995 tested the concept of a Western Hemisphere fund. Given that the Fund
faced a negative investment environment in Latin America, we responded by moving
significant assets into Canada in the first half of the year. The Canadian
market performed well in 1995, finishing the year up 14.93% in US dollar terms.
This had the effect of protecting the Fund from the decline in the markets of
Latin America. This strategy allowed the Fund to finish the year with an actual
total return of 2.52%, versus a return of -20.56% for pure Latin American funds
as reported by Lipper Analytical Services, Inc.
As we wrap up 1995 we are more bullish than ever on prospects for the
Western Hemisphere; investor expectations have been tempered, capital flows have
stabilized, and asset values are attractive. We believe that 1996 could be a
very positive year for the emerging markets of the Western Hemisphere.
Over the long term we continue to believe that democratic participation in
government, economic and market reform, and most importantly, free trade, will
serve to advance countries of the Western Hemisphere. It is indeed an opportune
time to invest in the Americas.
Sincerely yours,
/s/ Salvador Diaz-Verson, Jr.
------------------------------
Salvador Diaz-Verson, Jr.
Past performance does not guarantee future results. Investment returns will vary
and, when
redeemed, shares may be worth more or less than their original cost.
<PAGE> 2
DIAZ-VERSON AMERICAS EQUITY FUND
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
NET ASSETS $5,640,950
The Diaz-Verson Americas Equity Fund provides investors the opportunity to
participate in the growth of Latin American countries. The volatility associated
with Latin America is tempered by investment in the U.S. and Canada. The Fund is
suited for investors who desire long-term growth in principal and who can accept
higher short-term market fluctuations.
ASSET ALLOCATION DECEMBER 31, 1995
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED)
<S> <C>
ARGENTINA 18.40%
CANADA 50.19%
CHILE 14.26%
MEXICO 1.14%
VENEZUELA .34%
CASH* 15.67%
</TABLE>
Notes: *Cash includes an 11.29% investment in repurchase agreements and 4.38% in
receivables in excess of liabilities due to the Fund.
TOP TEN HOLDINGS, DECEMBER 31, 1995
<TABLE>
<CAPTION>
PERCENTAGE OF INVESTMENTS
-------------------------
<S> <C>
Campbell Resources, Inc. 5.21%
Donohue, Inc., Cl A 4.65%
BCE, Inc. 4.56%
Bruncor, Inc. 4.54%
Compania Interamericana de Automobile 4.33%
Cognos, Inc. 4.23%
YPF Sociedad Anonima Cl D--ADR 4.09%
Doman Industries Ltd. Cl B 3.94%
Hollinger, Inc. 3.34%
Comercial del Plata S.A. 2.90%
</TABLE>
1
<PAGE> 3
DIAZ-VERSON AMERICAS EQUITY FUND
- --------------------------------------------------------------------------------
The following graph illustrates the total return based on a $10,000
investment in the Diaz-Verson Americas Equity Fund at the current no-load status
made at the trading commencement date of March 29, 1993, and held through
December 31, 1995, as well as the performance of the S & P 500 and the US$
Mexican Bolsa Index and the US$ TSE 300 over the same period. Past results are
not predictive of future performance.
<TABLE>
<CAPTION>
Diaz-Verson
Measurement Period Americas Eq- US$ Mexican US$ TSE 300
(Fiscal Year Covered) uity Fund* S & P 500 Bolsa Index Index
<S> <C> <C> <C> <C>
3/29/93 10000 10000 10000 10000
6/30/93 9500 10067 9343 10765
12/31/93 12950 10564 14666 11346
6/30/94 10920 10205 11675 10124
12/31/94 9942 10675 8196 10459
6/30/95 9692 12830 6162 11482
12/31/95 10193 14065 5756 12021
</TABLE>
<TABLE>
<S> <C>
Mexico 66.74%
United States 9.40%
Argentina 7.78%
Mexico 56.44%
Argentina 10.55%
United States 7.55%
Mexico 64.44%
United States 8.76%
Chile 5.96%
Mexico 48.07%
Canada 17.49%
United States 11.65%
Mexico 32.44%
United States 17.01%
Canada 15.44%
Canada 56.47%
Mexico 19.67%
Venezuela 3.95%
Canada 50.19%
Argentina 18.40%
Chile 14.26%
</TABLE>
The percentages presented below the chart indicate the market value of net
assets invested in each country over time.
*Total return is aggregate since inception on March 29, 1993, has not been
annualized, and reflects fee reimbursements.
2
<PAGE> 4
DIAZ-VERSON AMERICAS EQUITY FUND
QUESTION & ANSWER SESSION WITH SALVADOR DIAZ-VERSON, JR., THE FUND'S PORTFOLIO
ADVISER
- --------------------------------------------------------------------------------
Q: ARE YOU STILL BULLISH ON LATIN AMERICA?
A: In my view prospects for Latin America remain bright. The region faced a
period of distress following the Mexican Peso devaluation in December 1994. This
shouldn't continue. The region is rich in natural resources, demographically
very young, and continuing its democratization and privatization efforts.
Because of these factors, I believe that GDP growth could be above average well
into the next decade.
Q: WILL CANADIAN & U.S. EQUITIES BE A SIGNIFICANT PART OF THE FUND'S PORTFOLIO
THIS YEAR?
A: To be clear, at the end of 1995 the Fund had no equity investments in
the United States. We're seeing things improve in Latin America. As these
improvements continue we are shifting assets from Canada into Latin America, and
expect that trend to continue.
Q: SAL, YOU'VE HAD BIG POSITIONS IN MEXICO AND CANADA BEFORE, WHAT ARE YOUR
VIEWS ON BRAZIL?
A: It is often said that Brazil is the land of opportunity and always will
be. We watch Brazil very closely. Brazil has made some substantial changes
recently and the financial markets have taken notice. Long-term we think that
Brazil could become an economic powerhouse, but in the short-term we would
really like to see the reform efforts there expand with more consistency.
- --------------------------------------------------------------------------------
Diaz-Verson Capital Investments, Inc. is the investment adviser to the
Diaz-Verson Americas Equity Fund. Hispanic owned, the firm seeks to consistently
deliver solid, long-term returns by applying a balanced, disciplined approach to
value-oriented investing, and a unique insight into markets in all regions of
the Western Hemisphere.
Salvador Diaz-Verson, Jr. is President and Chief Executive Officer of
Diaz-Verson Capital Investments, Inc. He was born in Havana, Cuba and is a
finance graduate of Florida State University. Mr. Diaz-Verson has had over
twenty years experience managing global equity and fixed income portfolios.
3
<PAGE> 5
DIAZ-VERSON AMERICAS EQUITY FUND
PORTFOLIO OF INVESTMENTS -- DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Value
Shares Cost (note 1)
- ----------- ---------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- 84.33%
SOUTH AMERICA
ARGENTINA -- 18.40%
4,000 Buenos Aires Embotellado -- ADR+............................... $ 98,360 $ 82,500
(Bottler & marketer of Pepsi-Cola beverages)
45,000 ++Compania Interamericana de Automobile........................ 206,632 233,766
(Automaker)
59,000 Comercial del Plata S.A. ...................................... 154,797 156,194
(Oil and public services company)
33,000 Nobleza Piccardo S.A. ......................................... 148,105 125,275
(Tobacco producer and cigarette maker)
4,400 Telefonica de Argentina -- ADR+................................ 105,960 119,900
(Telecommunications)
7,700 Transportadora Gas Sur -- ADR+................................. 84,518 99,137
(Transporter of natural gas)
10,200 YPF Sociedad Anonima Cl D -- ADR+ ............................. 210,680 220,575
(Producer & developer of natural gas)
---------- ----------
Total Argentina................................................ 1,009,052 1,037,347
---------- ----------
CHILE -- 14.26%
4,200 A.F.P. Provida S.A. -- ADR+.................................... 100,053 116,025
(Financial services)
5,000 Chile Fund, Inc. .............................................. 111,075 130,000
(Regulated investment company)
1,400 Compania Telecommunicacion de Chile S.A. -- ADR+............... 98,126 116,025
(Telecommunications)
3,100 Embotelladora Andina S.A. -- ADR+.............................. 97,154 111,987
(Tobacco producer and cigarette maker)
4,900 Empresa Nacional de Electridad S.A. -- ADR+.................... 99,178 111,475
(Utilities)
3,900 Enersis S.A. -- ADR+........................................... 98,827 111,150
(Utilities)
4,000 Madeco S.A. -- ADR+............................................ 89,798 108,000
(Metal fabricator)
---------- ----------
Total Chile.................................................... 694,211 804,662
---------- ----------
VENEZUELA -- 0.34%
50,000 Siderurgica Venezolana Sivensa, Saica Saca .................... 17,450 19,056
(Conglomerate -- steel; automotive parts; wire products)
---------- ----------
Total Venezuela................................................ 17,450 19,056
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 6
DIAZ-VERSON AMERICAS EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market
Value
Shares Cost (note 1)
- ----------- ---------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
NORTH AMERICA
CANADA -- 50.19%
6,800 Abitibi Price, Inc. ........................................... $ 118,696 $ 97,766
(Forest products & paper)
2,600 Agnico Eagle Mines, Ltd. ...................................... 34,307 32,619
(Mining)
8,200 Atco, Ltd. Cl 1 ............................................... 86,377 112,637
(Utilities -- telecommunications)
7,100 BCE, Inc. ..................................................... 236,511 245,769
(Telecommunications)
10,400 Bombardier, Inc. Cl A ......................................... 89,739 139,048
(Manufacturing)
8,200 Brascan, Ltd. Cl A ............................................ 139,880 144,176
(Telecommunications)
15,200 Bruncor, Inc. ................................................. 264,650 244,982
(Telecommunications)
290,500 ++Campbell Resources, Inc. .................................... 191,388 280,923
(Mining)
6,300 Canadian Utilities, Ltd. Cl A ................................. 116,349 120,000
(Utilities)
5,100 ++Cognos, Inc. ................................................ 90,705 228,379
(Computer software/services)
10,800 Dofasco, Inc. ................................................. 138,081 136,484
(Iron/steel producer)
30,500 Doman Industries Ltd. Cl B..................................... 281,366 212,271
(Forest products & paper)
21,400 Donohue, Inc., Cl A............................................ 238,411 250,842
(Manufacturer of newsprint, market pulp, & lumber)
40,900 ++Emco, Ltd. .................................................. 201,729 145,322
(Manufacturer & distributor of building & home
improvement products)
1,600 Fletcher Challenge Canada, Ltd., Cl A.......................... 25,729 25,495
(Energy & forest products)
4,700 Fortis, Inc.................................................... 89,286 93,828
(Utilities -- electric)
16,300 Glamis Gold, Ltd. ............................................. 110,531 105,980
(Mining)
24,300 Hollinger, Inc................................................. 219,948 180,247
(Publishing/printing)
4,400 ++International Forest Products, Ltd., Cl A.................... 41,198 34,652
(Forest products & paper)
---------- ----------
Total Canada................................................... 2,714,881 2,831,420
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 7
DIAZ-VERSON AMERICAS EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/ Market
Face Value
Amount Cost (note 1)
- ----------- ---------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- (CONTINUED)
NORTH AMERICA -- (CONTINUED)
MEXICO -- 1.14%
36,119* ++Aristos Cl B (a)............................................. $ 138,800 $ 61,698
(Conglomerate)
748 *Video Prima CP................................................ 4,109 2,760
(Retailer of videocassettes)
---------- ----------
Total Mexico................................................... 142,909 64,458
---------- ----------
Total Common Stocks............................................ 4,578,503 4,756,943
---------- ----------
Total Investments in Securities................................ 4,578,503 4,756,943
---------- ----------
REPURCHASE AGREEMENTS -- 11.29%
637,000 State Street Bank & Trust Co., Repo 2.25%, due 01/02/96........ 637,000 637,000
Proceeds at maturity, $637,159 (collateralized by: $585,000
U.S. Treasury Note 8.00%, 08/15/1999)
---------- ----------
Total Repurchase Agreements.................................... 637,000 637,000
---------- ----------
TOTAL INVESTMENTS -- 95.62%.................................... $5,215,503+++ 5,393,943
=========
CASH AND OTHER ASSETS, NET OF LIABILITIES -- 4.38%............. 247,007
----------
NET ASSETS -- 100.00%.......................................... $5,640,950
=========
NET ASSET VALUE PER SHARE (603,556 SHARES OUTSTANDING)......... $9.35
=====
- ---------------
* Illiquid securities.
++ Non-income producing security.
(a)Fair value as determined by the Board of Directors.
+ American Depository Receipts.
+++ For Federal Income Tax purposes:
Aggregate cost............................................................. $5,215,503
=========
Gross unrealized appreciation.............................................. $ 515,999
Gross unrealized depreciation.............................................. (337,559)
----------
Net unrealized appreciation................................................ $ 178,440
=========
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 8
DIAZ-VERSON AMERICAS EQUITY FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value
(Cost $4,578,503) (note 1)................................................ $4,756,943
Repurchase agreements (cost $637,000)........................................ 637,000
Cash (including foreign currency)............................................ 738
Receivable from adviser (note 3)............................................. 238,830
Dividends receivable......................................................... 16,262
Interest receivable.......................................................... 277
Deferred organizational expenses (note 1).................................... 56,034
Other assets................................................................. 9,405
----------
TOTAL ASSETS......................................................... 5,715,489
----------
LIABILITIES:
Payable for fund shares redeemed............................................. 982
Organizational expenses payable.............................................. 5,070
Administration fee payable (note 3).......................................... 2,000
Other accrued expenses....................................................... 66,487
----------
TOTAL LIABILITIES.................................................... 74,539
----------
NET ASSETS........................................................... $5,640,950
==========
NET ASSETS CONSIST OF:
Shares of Capital Stock, $0.001 par value,
603,556 issued and outstanding (note 2)................................... $ 604
Additional paid-in capital................................................... 6,034,737
Undistributed net investment income.......................................... 291
Net realized loss on investments............................................. (573,049)
Net unrealized appreciation on investments and foreign currency.............. 178,367
----------
NET ASSETS........................................................... $5,640,950
==========
$9.35
NET ASSET VALUE PER SHARE ($5,640,950 / 603,556)..................... ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE> 9
DIAZ-VERSON AMERICAS EQUITY FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $9,665)........................ $ 97,659
Interest...................................................................... 21,931
Income from affiliates........................................................ 9,648
----------
TOTAL INCOME.......................................................... 129,238
----------
EXPENSES:
Custodian fees and expenses................................................... 59,656
Investment management fees (note 3)........................................... 54,726
Reports to shareholders....................................................... 52,070
Legal fees.................................................................... 47,343
Insurance..................................................................... 44,225
Fund accounting fees and expenses (note 3).................................... 31,562
Audit fees.................................................................... 28,000
Amortization of organizational expenses (note 1).............................. 25,185
Administration services fees (note 3)......................................... 24,000
Registration fees............................................................. 21,900
Distribution expenses (note 3)................................................ 19,222
Directors' fees............................................................... 17,000
Transfer agent fees and expenses (note 3)..................................... 7,254
Miscellaneous................................................................. 3,737
----------
TOTAL EXPENSES........................................................ 435,880
----------
LESS FUND EXPENSES REIMBURSED BY ADVISER (note 3)..................... (298,751)
----------
NET EXPENSES.......................................................... 137,129
----------
NET INVESTMENT LOSS................................................... (7,891)
----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain on investments.............................................. 527,001
Net realized loss on foreign currency transactions............................ (974,525)
----------
Net realized loss............................................................. (447,524)
NET CHANGE IN UNREALIZED APPRECIATION ON:
Investments:
Net change in unrealized appreciation on investments....................... 539,359
Translation of other assets denominated in foreign currencies.............. 147
----------
Net realized and unrealized gain on investments and foreign currency
transactions............................................................... 91,982
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 84,091
==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE> 10
DIAZ-VERSON AMERICAS EQUITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Operations:
Net investment loss......................................... $ (7,891) $ (85,151)
Net realized gain/(loss) on investments and foreign currency
transactions............................................... (447,524) 353,254
Net increase/(decrease) in unrealized appreciation on
investments and foreign currency.......................... 539,506 (1,822,413)
---------- -----------
Net increase/(decrease) in net assets resulting from
operations.................................................. 84,091 (1,554,310)
Dividends and distributions to shareholders from:
Realized gain on investments................................ -- (450,060)
---------- -----------
TOTAL DIVIDENDS AND DISTRIBUTIONS...................... -- (450,060)
---------- -----------
Increase/(decrease) in net assets from capital share
transactions (note 2)........................................ (5,190) 1,225,520
---------- -----------
Net increase/(decrease) in net assets.......................... 78,901 (778,850)
NET ASSETS:
Beginning of period............................................ 5,562,049 6,340,899
---------- -----------
End of period.................................................. $5,640,950 $ 5,562,049
========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE> 11
DIAZ-VERSON AMERICAS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES. Diaz-Verson Americas Equity Fund (the
"Fund") is a portfolio of The Diaz-Verson Funds Inc., an open-end, diversified,
series management investment company organized as a Maryland corporation on
November 18, 1992. Prior to March 23, 1993, the Fund had no operations other
than the sale of 10,000 shares of common stock for $100,000 to Diaz-Verson
Capital Investments, Inc. (the "Adviser") on March 1, 1993. The Fund seeks to
provide long-term capital growth through investments primarily in common stocks
of issuers located in the Americas (defined as North America, Central America,
South America and island nations adjacent to those continents).
The following is a summary of the significant accounting policies followed
by the Fund in preparation of the financial statements.
Security Valuation: Portfolio securities and option positions for which
market quotations are readily available are stated at the last sale price
reported by the principal exchange for each such security as of the
exchange's close of business. Securities and options for which no sale has
taken place during the day and securities which are not listed on an
exchange are valued at the mean of the current bid and asked prices. Foreign
market closing prices are translated into U.S. dollar values using a
composite of particular foreign currencies last quoted on the valuation
date. Short-term investments denominated in U.S. dollars that will mature in
60 days or less are stated at amortized cost; short-term investments
denominated in foreign currencies are stated at the amortized cost as
determined in the foreign currency, translated to U.S. dollars at the
current day's exchange rate. Securities for which quotations are not readily
available are valued at their fair value as determined in good faith by the
Board of Directors, although the actual calculations may be made by persons
acting pursuant to or at the direction of the Board of Directors. The assets
of the Fund may also be valued on the basis of valuations provided by a
pricing service approved by the Board of Directors.
Investment Securities Transactions and Investment Income: Securities
transactions are recorded on the trade date. Realized gains and losses on
sales of investments are calculated on the identified cost basis. Dividend
income is recorded on the ex-dividend date, or as soon thereafter when the
information becomes publicly available. Interest income is recorded on an
accrual basis. Such dividend income and interest income is recorded before
non-U.S. withholding tax. Non-U.S. withholding tax is recorded as a
reduction of income.
Foreign Currency Transactions: The books and records of the Fund are
maintained in U.S. dollars as follows:
(i) market value of investment securities and other assets and liabilities
at the exchange rate on the valuation date, and
(ii) purchases and sales of investment securities, income and expenses at
the exchange rate prevailing on the respective date of such
transactions.
The resultant exchange gains and losses are included as net realized and
unrealized gains and losses in the Statement of Operations.
Dividends to Shareholders: Dividends from net investment income are declared
and paid annually. Distributions of net realized gains are normally declared
and paid at least annually.
Federal 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 taxable income to its
shareholders. Therefore, no Federal income tax provision is required.
At December 31, 1995, the Fund has a capital loss carryover of approximately
$568,129 which will expire at December 31, 2003. The capital loss carryover
will be available to offset future realized gains on securities transactions
to the extent provided for in the Internal Revenue Code.
Dividends and interest from non-U.S. sources received by the Fund are
generally subject to non-U.S. withholding taxes at rates ranging up to 25%.
Such withholding taxes may be reduced or eliminated under the
10
<PAGE> 12
DIAZ-VERSON AMERICAS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
terms of applicable U.S. income tax treaties, and the Fund undertakes those
procedural steps required to claim the benefits of such treaties. If more
than 50% in value of the Fund's total assets at the close of any taxable
year consists of stocks or securities of non-U.S. issuers, the Fund is
permitted and may elect to treat any non-U.S. taxes paid or accrued by it as
though it were paid by its shareholders.
In accordance with Statement of Position 93-2 Determination, Disclosure, and
Financial Statement Presentation of Income, Capital Gain, and Return of
Capital Distributions by Investment Companies, book and tax basis
differences relating to shareholder distributions and other permanent book
and tax differences are reclassified to undistributed net investment income.
As of December 31, 1995, the cumulative effect of such differences, is
represented by a decrease in paid in capital of $64,614, an increase in
undistributed net investment income of $93,333 and an increase in
accumulated net realized loss of $28,719. Net investment income, net
realized gains, and net assets were not affected by this change.
Deferred Organization Costs: The Fund incurred expenses of $126,000 in
connection with the organization of the Fund. These costs have been deferred
and are being amortized ratably on a straight line basis over a period of
sixty months from the date the Fund commenced investment operations.
Use of Estimates: Estimates and assumptions are required to be made
regarding assets, liabilities, and changes in net assets resulting from
operations when financial statements are prepared. Changes in the economic
environment, financial markets and any other parameters used in determining
these estimates could cause actual results to differ from these amounts.
2. CAPITAL STOCK TRANSACTIONS. The Diaz-Verson Funds Inc. has an authorized
capitalization of 100 million shares of $0.001 par value common stock.
Transactions were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
-------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------- ---------- ------- ----------
<S> <C> <C> <C> <C>
Beginning balance........... 609,828 $6,118,528 489,550 $4,893,008
------- ---------- ------- ----------
Shares sold................. 74,446 654,522 161,979 1,750,071
Shares redeemed............. (80,718) (659,712) (41,701) (524,551)
------- ---------- ------- ----------
Net increase/(decrease)..... (6,272) (5,190) 120,278 1,225,520
------- ---------- ------- ----------
Ending balance.............. 603,556 $6,113,338 609,828 $6,118,528
======= ========= ======= =========
</TABLE>
3. COMMITMENTS AND RELATED AGREEMENTS. Adviser: Diaz-Verson Capital
Investments, Inc. (the "Adviser") serves as the Adviser for the Fund and directs
investments of the Fund pursuant to the Investment Advisory Agreement dated
March 2, 1993 (the "Advisory Agreement"). Under the Advisory Agreement with the
Fund, the Adviser also provides order placement facilities for the Fund and pays
all compensation of Directors and officers of the Fund who are affiliated with
the Adviser. The Adviser or its affiliates also furnish the Fund without charge,
management supervision and assistance and office facilities and provides persons
satisfactory to the Fund's Board of Directors to serve as the Fund's officers
and managers of day-to-day operations. The Fund pays the Adviser fees at the
annual rate of 1% of the average daily net assets of the Fund. The Fund incurred
$54,726 in investment management fees for the year ended December 31, 1995.
The Advisory Agreement also provides that the Adviser will make arrangements to
limit the Fund's total annual expense ratio to no more than 2.50% (prior to June
9, 1994, expense ratio was 2.25%). Pursuant to this agreement,
11
<PAGE> 13
DIAZ-VERSON AMERICAS EQUITY FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995
- --------------------------------------------------------------------------------
for the year ended December 31, 1995, $298,751 (less distribution expenses of
$19,222) was reimbursed by the Adviser.
Certain of the states in which the shares of the Fund are qualified for sale
impose limitations on the expenses of funds. If, in any fiscal year, the total
expenses of the Fund (excluding taxes, interest, distribution expenses,
brokerage commissions, certain portfolio transaction expenses, other
expenditures which are capitalized in accordance with generally accepted
accounting principles and extraordinary expenses, but including the advisory and
administrative services fees) exceed the expense limitations applicable to the
Fund imposed by the securities regulations of any state, the Adviser will pay or
reimburse the Fund to the extent of advisory earned fees. Due to the expense cap
of 2.50%, no such amounts were required to be reimbursed for the year ended
December 31, 1995.
Administrator: Furman Selz LLC (the "Administrator") serves as the Fund's
administrator under an Administration Contract. The Administrator's services
include day-to-day administration of matters related to the corporate existence
of the Fund, maintenance of the records and preparation of reports, subject to
the supervision of the officers and the Directors of the Fund. For these
services, the Fund pays a monthly fee, at the annual rate of .15% of the average
daily net assets of the Fund, subject to a minimum fee of $24,000 annually. For
the year ended December 31, 1995, the Administrator earned a fee of $24,000. As
of January 1, 1996 the minimum annual fee to be paid to the Administrator was
increased to $150,000, which includes fund accounting and transfer agent
services.
Shareholder Servicing Agent, Dividend Paying Agent and Registrar: Furman Selz
LLC acts as the Fund's transfer agent. In addition to acting as the Shareholder
Servicing Agent for the Fund, Furman Selz LLC also acts as Dividend Paying Agent
and Registrar for the Fund. For these services, the Fund paid Furman Selz LLC a
fee of $15.00 per shareholder account per year, plus out-of-pocket expenses.
Fund Accounting Agreement: The Fund has approved a Fund Accounting Agreement
with Furman Selz LLC whereby Furman Selz LLC keeps current accounting records,
including calculation of net asset value. For these services, the Fund pays
Furman Selz LLC $30,000 annually, payable monthly. The Fund incurred $31,562 in
fund accounting fees and expenses for the year ended December 31, 1995.
Distribution Services Agreement: Pursuant to Rule 12b-1 of the Investment
Company Act of 1940, the Fund has entered into a Distribution Services Agreement
(the "Distribution Agreement") with Performance Funds Distributor, Inc. (the
"Distributor"), an affiliate of Furman Selz LLC. The Fund may pay a distribution
services fee to the Distributor at an annual rate of .25 (prior to May 1, 1995
the rate was .50) of 1% of the aggregate average daily net assets of the Fund.
For the year ended December 31, 1995, the Fund incurred $19,222 in distribution
expenses.
4. REPURCHASE AGREEMENTS. The Fund is permitted to enter into repurchase
agreements pertaining to U.S. Government securities with member banks of the
Federal Reserve System or with primary dealers (as designated by the Federal
Reserve Bank of New York) of such securities. The Fund must maintain with its
Custodian for its account in the Federal Treasury Book Entry System, collateral
in an amount equal to, or in excess of, the resale price. In the event of a
counterparty's bankruptcy, the Fund may be delayed in, or prevented from,
selling the collateral for the Fund's benefit.
5. PURCHASES AND SALES OF SECURITIES. The cost of purchases and proceeds from
sales of securities, other than short-term investments, for the year ended
December 31, 1995 were $7,535,083 and $6,583,628, respectively.
6. CONCENTRATION OF RISK. The Fund invests in obligations of foreign entities
and securities denominated in foreign currencies that involve risk not typically
involved in domestic investments. Such risks include fluctuations in foreign
exchange rates, ability to convert proceeds into U.S. dollars, less publicly
available information about foreign financial instruments, less liquidity
resulting from substantially less trading volume, more volatile prices and
generally less government supervision of foreign securities markets and issuers.
12
<PAGE> 14
DIAZ-VERSON AMERICAS EQUITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
MARCH 23, 1993
FOR THE FOR THE (COMMENCEMENT OF
YEAR ENDED YEAR ENDED OPERATIONS) THROUGH
PER SHARE OPERATING PERFORMANCE DECEMBER 31, 1995 DECEMBER 31, 1994 DECEMBER 31, 1993
- --------------------------------------- ----------------- -------------------- --------------------
<S> <C> <C> <C>
Net asset value, beginning of period... $ 9.12 $12.95 $10.00
----------------- -------- --------
Income (loss) from investment
operations:
Net investment loss+................. (0.01) (0.16) (0.05)
Dividends and distributions to
shareholders from:
realized gain on investments+........ -- (0.87) --
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions......................... 0.24 (2.80) 3.00
----------------- -------- --------
Total income (loss) from investment
operations........................... 0.23 (3.83) 2.95
----------------- -------- --------
Net asset value, end of period......... $ 9.35 $ 9.12 $12.95
=============== ================= =================
Total return......................... 2.52% (26.68)% 29.50%++
Net assets, end of period (in
000's)............................ $ 5,641 $5,562 $6,341
Ratios to average net
assets/supplemental data:
Net investment (loss)................ (0.14)% (1.37)% (0.63)%
Expenses net of reimbursement........ 2.50%+++ 2.44% 2.25%*
Portfolio turnover rate.............. 142% 164% 82%
</TABLE>
- ---------------
+ Per share data based upon average monthly shares outstanding.
++ Not annualized.
+++Ratios of expenses before effect of reimbursements were 7.96%, 6.52% and
7.34% (annualized), respectively.
* Annualized.
13
<PAGE> 15
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of
Diaz-Verson Americas Equity Fund
We have audited the accompanying statement of assets and liabilities of
Diaz-Verson Americas Equity Fund, including the portfolio of investments, as of
December 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the two years in the
period then ended and for the period from March 23, 1993 (commencement of
operations) through December 31, 1993. These financial statements and financial
highlights are the responsibility of the 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 generally accepted auditing
standards. 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 incudes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. 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
Diaz-Verson Americas Equity Fund as of December 31, 1995, and the results of its
operations for the year then ended, and 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 two years in the period then ended and for the period from March 23, 1993
(commencement of operations) through December 31, 1993, in conformity with
generally accepted accounting principles.
KPMG PEAT MARWICK LLP
New York, New York
February 16, 1996
<PAGE> 16
ADVISER
Diaz-Verson Capital Investments,
Inc.
1200 Brookstone Centre Parkway,
Suite 105
Columbus, Georgia 31904
Tel: 1-800-343-5133
ADMINISTRATOR AND SHAREHOLDER
SERVICING AGENT
Furman Selz LLC
230 Park Avenue
New York, New York 10169
(formerly known as Furman Selz
Incorporated)
CUSTODIAN
State Street Bank and Trust Company
P.O. Box 1713
Boston, Massachusetts 02105-1713
LEGAL COUNSEL
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
DISTRIBUTOR
Performance Funds Distributor, Inc.
230 Park Avenue
New York, New York 10169
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
345 Park Avenue
New York, NY 10154
BOARD OF DIRECTORS AND OFFICERS
<TABLE>
<S> <C>
Salvador Diaz-Verson, Jr. Michael K. Majure, Esq.
Chairman of the Director, Vice President,
Board of Directors and Treasurer and Secretary
President
The Honorable Otto J. Reich Wendy Rudolph, Esq.
Director Director
Scott M. Koser Sheryl Hirschfeld
Assistant Secretary Assistant Secretary
Gordon M. Forrester
Assistant Treasurer
</TABLE>
[LOGO]
ANNUAL REPORT
DECEMBER 31, 1995
