THE SANTA BARBARA GROUP OF MUTUAL FUNDS
BENDER GROWTH FUND
ANNUAL REPORT TO SHAREHOLDERS
AS OF MARCH 31, 1998
<PAGE>
LETTER TO SHAREHOLDERS
FROM THE CHAIRMAN OF THE SANTA BARBARA GROUP OF MUTUAL FUNDS
Dear Shareholder,
As I look over my forty years in the investment industry, I can not recall being
involved with a Fund and fund managers where the performance was as good as the
fiscal year just turned in by the Bender Growth Fund managed by Bob and Reed
Bender. The Bender Growth Fund's Class C shares were up 65.17%. According to the
Lipper organization, this placed it in the top forty funds for the period. Many
of the funds that outperformed it were specialty funds. For a "broad spectrum
fund", the Bender Growth Fund's performance was extraordinary. Our hats off to
Reed and Bob.
What do we foresee happening for the 1999 fiscal year? Will it be a continuation
of 1998? No one can predict, but as we look at today's remarkably changed
investment climate we do not have a sense of fear and trepidation about the
level of the market. Just to cite several reasons. Interest rates have nothing
to drive them upward. The impetus is for interest rates to remain steady or
decline. Inflation has disappeared. Money flows into the market from retirement
plans and foreign sources will not abate. Our continuing improving efficiency of
our economy resulting from events of the eighties and early nineties are long
term and also will not abate. Finally, the strong competitive nature of today's
international or global economy will continue to keep prices down. The economic
picture for the 1999 fiscal year is a good one. We certainly would not run from
equities.
The forthcoming year for the Santa Barbara Group of Mutual Funds will be a
pivotal one. The concept of the Santa Barbara Group of Mutual Funds, is to have
a fund group of individual funds managed by the very best investment managers
one can find--organizations such as Bob and Reed's. Actually we have such an
organization and another Fund--The Starbuck Tisdale Fund. If it were open for
public investing, its past fiscal year would rank it as one of the top funds in
Lipper's Growth and Income category. It is a shame not to get this fund and
other capable fund manager's further exposure in the public marketplace. Our
intention is to do that or recognize such effort dilutes our commitment to the
Bender Fund.
On behalf of the Board of Directors, we thank you for participating with us in a
year that has proven to be truly noteworthy. We are confident there will be more
in the future.
Very truly yours,
/S/Signature
Stephen Y. Ascher
Chairman
<PAGE>
LETTER FROM THE INVESTMENT ADVISOR
TO THE SHAREHOLDERS OF THE BENDER GROWTH FUND:
The first quarter of 1998 was an outstanding period for growth stocks. Moderate
economic growth and minimal inflation has kept interest rates in check and
driven equity prices higher. Starting this quarter, we will report statistics
that measure the performance of the Bender Growth Fund against the S&P 500. We
will also report on where the Fund stands in terms of the price being paid for
expected growth.
The Bender Growth Fund Class C shares grew 13.65% during the first quarter
versus a 13.95% gain for the S&P 500. Over the last 12 months the Fund's Class C
shares grew 65.17% versus a 48% gain for the S&P 500. This places the Bender
Growth Fund among the top 1% of all mutual funds for the period.
It is interesting to note that your Fund's performance was led by companies in
distinctly different industries. Legato Systems, a provider of data back-up and
restoration software and CBT Group, the leader in computer based training led
the technology group. Arterial Vascular Engineering continues to make inroads in
the U.S. stock market and Watson Pharmaceuticals posted strong results to lead
our medical stocks. Retailing stocks outperformed as Bed Bath and Beyond and
Kohl's Corporation continue to expand and report high levels of profitability.
Worldwide economic growth remains sluggish, and we believe that current low
levels of inflation will continue for several quarters. Productivity growth and
deregulation have had a downward effect on pricing, and the strength of the U.S.
dollar has provided the U.S. with cheap imported goods. This has left very
little room for companies to raise prices. We remain convinced of the long-term
attractiveness of growth stocks, and the Bender Growth Fund in particular. The
biggest argument favoring growth stocks is one of valuation. Robert Bender and
Associates' premium to the S&P 500 has ranged between 1.09 times and 2.50 times
since 1988. The current level of 1.25 indicates that growth stocks could have an
impressive run in the near future.
Thank you for your continued support.
Sincerely,
/S/Signature /S/Signature
Reed G. Bender Robert L. Bender
Portfolio Manager Portfolio Manager
<PAGE>
COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE BENDER GROWTH
FUND, CLASS C AND Y, VERSUS THE S&P 500 COMPOSITE INDEX
[Line graph omitted -- Plot points as follows:]
<TABLE>
<CAPTION>
S&P Composite Index Bender Growth Fund, Class C Bender Growth Fund, Class Y
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
12/96 $10,000 $10,000 $10,000
3/97 10,268 8,315 8,335
3/98 15,193 13,733 13,864
</TABLE>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
One Annualized
Year Inception to Date
- --------------------------------------------------------------------------------
Bender Growth Fund, Class Y 66.34% 27.52%
- --------------------------------------------------------------------------------
Bender Growth Fund, Class C 65.17% 26.66%
- --------------------------------------------------------------------------------
Bender Growth Fund, Class C w/load* 64.17% 26.66%
- --------------------------------------------------------------------------------
*Return figures reflect the impact of the maximum 1.00% sales charge.
For the period ended March 31, 1998. Past performance of the period is not
predictive of future performance. The investment return and principal value of
an investment will fluctuate, so an investor's share, when redeemed, may be
worth more or less than their original cost. Class Y shares commenced operations
on December 9, 1996, and Class C shares commenced operations on December 10,
1996.
<PAGE>
STATEMENT OF NET ASSETS THE SANTA BARBARA GROUP OF MUTUAL FUNDS
March 31, 1998
BENDER GROWTH FUND
Market
Shares Value
------------ ------------
COMMON STOCKS (93.2%)
COMMUNICATIONS (12.9%)
Advanced Fibre Communication* 7,270 $ 264,446
Ascend Communications* 5,230 198,086
CIENA* 3,450 147,056
Hummingbird Communications* 4,310 147,887
P-COM* 11,090 221,800
Sawtek* 7,465 189,425
- --------------------------------------------------------------------------------
1,168,700
- --------------------------------------------------------------------------------
COMPUTER & SERVICES (36.0%)
CBT Group PLC ADR* 6,136 317,538
Checkpoint Software* 6,540 298,796
Cisco Systems* 3,985 272,474
Gartner Group, Class A* 4,380 163,703
Genesys Telecom Labs* 6,290 239,020
Intel 1,860 145,196
Legato Systems* 7,130 423,344
Microsoft* 2,300 205,850
Network Appliance* 8,190 290,745
Networks Associates* 2,680 177,550
Oracle* 5,500 173,594
Smallworldwide ADR* 10,000 195,000
Sun Microsystems* 4,200 175,219
Synopsys* 5,500 180,125
- --------------------------------------------------------------------------------
3,258,154
- --------------------------------------------------------------------------------
MEDICAL (13.8%)
Arterial Vascular Engineering* 12,040 440,965
PSS World Medical* 12,268 288,286
Quintiles Transnational* 5,680 273,705
Watson Pharmaceuticals* 6,840 246,240
- --------------------------------------------------------------------------------
1,249,196
- --------------------------------------------------------------------------------
OIL FIELD MACHINE & EQUIPMENT (1.3%)
Dril-Quip * 3,610 117,325
- --------------------------------------------------------------------------------
RETAIL (17.1%)
Autozone* 6,320 214,090
Bed Bath and Beyond* 5,935 274,123
CDW Computer Centers* 3,880 232,315
Fastenal 2,350 101,931
Home Depot 3,430 231,310
Kohl's* 3,020 246,885
Starbucks* 5,330 241,516
- --------------------------------------------------------------------------------
1,542,170
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF NET ASSETS THE SANTA BARBARA GROUP OF MUTUAL FUNDS
March 31, 1998
BENDER GROWTH FUND Shares/ Market
Face Amount Value
------------- ----------
SERVICES (12.1%)
Abacus Direct* 6,050 $ 316,112
Cendant* 5,030 199,314
CKS Group* 6,050 113,816
Forrester Research* 6,500 230,750
Paychex 4,030 232,481
- --------------------------------------------------------------------------------
1,092,473
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $5,966,185) 8,428,018
- --------------------------------------------------------------------------------
CASH EQUIVALENT (6.5%)
United Missouri Bank AFM (Cost $583,266) $583,266 583,266
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (99.7%)
(Cost $6,549,451) 9,011,284
- --------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES, NET (0.3%) 28,871
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Shares of Y Class ($.001 par value - unlimited
shares authorized) based on 168,215 outstanding shares 1,683,825
Portfolio Shares of C Class ($.001 par value - unlimited
shares authorized) based on 494,314 outstanding shares 5,073,270
Accumulated net realized loss on investments (178,773)
Net unrealized appreciation on investments 2,461,833
- --------------------------------------------------------------------------------
Total Net Assets: (100.0%) $9,040,155
- --------------------------------------------------------------------------------
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE - Y CLASS $13.74
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE
PER SHARE - C CLASS (SEE FOOTNOTE 2) $13.61
================================================================================
* Non-income producing security
ADR - American Depository Receipt
AFM - Automated Funds Management
PLC - Public Limited Company
The accompanying notes are an integral part of the financial statements.
<PAGE>
STATEMENT OF OPERATIONS THE SANTA BARBARA GROUP OF MUTUAL FUNDS
For the Period Ended March 31, 1998
Bender
Growth
Fund
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest Income $ 13,364
Dividend Income 2,041
- --------------------------------------------------------------------------------
Total Investment Income 15,405
- --------------------------------------------------------------------------------
EXPENSES:
Investment Advisory Fees 76,604
Administrator Fees 60,000
Custodian Fees 11,386
Transfer Agent Fees 42,419
Professional Fees 15,330
Director Fees 6,770
Registration Fees 43,499
Distribution Fees - Class Y 4,006
Distribution Fees - Class C 45,235
Printing Fees 1,749
Amortization of Deferred Organizational Costs 8,225
Miscellaneous Expenses 104
- --------------------------------------------------------------------------------
Total Expenses before Waiver of Investment Advisory Fees
and Contribution from Advisor 315,327
- --------------------------------------------------------------------------------
Waiver of Investment Advisory Fees (76,604)
Contribution from Advisor (36,355)
- --------------------------------------------------------------------------------
Total Expenses, Net 202,368
- --------------------------------------------------------------------------------
Net Investment Loss (186,963)
- --------------------------------------------------------------------------------
Net Realized Loss on Investments (144,608)
Change in Net Unrealized Appreciation of Investments 3,111,816
- --------------------------------------------------------------------------------
Net Realized and Unrealized Gain on Investments 2,967,208
- --------------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations $2,780,245
================================================================================
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS THE SANTA BARBARA GROUP OF MUTUAL FUNDS
Bender
Growth
Fund
- ---------------------------------------------------------------------------------------------------------------------
4/1/1997 12/10/1996(1)
to to
3/31/1998 3/31/1997
------------- ------------
<S> <C> <C>
INVESTMENT ACTIVITIES:
Net Investment Loss $ (186,963) $ (24,037)
Net Realized Loss on Investments (144,608) (34,165)
Net Unrealized Appreciation (Depreciation) of Investments 3,111,816 (649,983)
- ---------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets Resulting From Operations 2,780,245 (708,185)
- ---------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
Class Y:
Proceeds from Shares Issued (84,043 and 114,467 shares, respectively) 915,570 1,127,565
Cost of Shares Redeemed (29,360 and 11,435 shares, respectively) (301,972) (108,371)
- ---------------------------------------------------------------------------------------------------------------------
Total Class Y Transactions 613,598 1,019,194
- ---------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from Shares Issued (245,728 and 333,060 shares, respectively) 2,774,788 3,283,062
Cost of Shares Redeemed (71,888 and 12,586 shares, respectively) (705,432) (122,115)
- ---------------------------------------------------------------------------------------------------------------------
Total Class C Transactions 2,069,356 3,160,947
- ---------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets from Capital Share Transactions 2,682,954 4,180,141
- ---------------------------------------------------------------------------------------------------------------------
TOTAL INCREASE IN NET ASSETS 5,463,199 3,471,956
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS:
Beginning of Period (434,006 and 10,500 shares, respectively) 3,576,956 105,000
- ---------------------------------------------------------------------------------------------------------------------
NET ASSETS:
End of Period (662,529 and 434,006 shares, respectively) $9,040,155 $3,576,956
=====================================================================================================================
<FN>
(1) The Bender Growth Fund commenced operations on December 10, 1996.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS THE SANTA BARBARA GROUP OF MUTUAL FUNDS
For the periods ended March 31, 1998
For a share outstanding throughout the periods
Ratio of
Expenses to
Realized and Net Average Net
Net Asset Unrealized Asset Ratio of Ratio of Assets
Value Net Gains or Value Expenses to Income to (Excluding
Beginning of Investment Losses on End of Total Net Assets End Average Net Average Net Waivers and
Period Income Securities Period Return of Period Assets Assets Contributions)
====================================================================================================================================
- --------------------------
Bender Growth Fund
- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class Y
1998 $ 8.26 (0.224) 5.704 $13.74 66.34% $2,312,027 2.75% (2.50%) 4.59%
1997* $10.00 (0.044) (1.696) $ 8.26 (17.4%) 937,321 2.75% (2.16%) 7.88%
Class C
1998 $ 8.24 (0.276) 5.646 $13.61 65.17% $6,728,128 3.50% (3.25%) 5.34%
1997* $10.00 (0.059) (1.701) $ 8.24 (17.6%) 2,639,635 3.50% (2.88%) 8.70%
- ------------------------------------------------------------------------------------------------------------------------------------
Ratio of Net
Income to
Average Net
Assets
(Excluding Portfolio Average
Waivers and Turnover Commission
Contributions) Rate Rate(A)
=====================================================
- --------------------------
Bender Growth Fund
- --------------------------
Class Y
<S> <C> <C> <C>
1998 (4.34%) 7.44% $0.0971
1997* (7.29%) 3.00% $0.0893
Class C
1998 (5.09%) 7.44% $0.0971
1997* (8.08%) 3.00% $0.0893
- -----------------------------------------------------
<FN>
* The Bender Growth Fund commenced on December 10, 1996. All ratios for
the period have been annualized.
Total return is for the period indicated and has not been annualized.
(A) Average commission rate paid per share for the security purchases and sales
made during the period.
</FN>
</TABLE>
The accompanying notes are an integral part of the financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
================================================================================
BENDER GROWTH FUND -- MARCH 31, 1998
1. ORGANIZATION
The Santa Barbara Group of Mutual Funds, Inc. (the "Company"), was organized as
a Maryland corporation under Articles of Incorporation dated December 30, 1992.
The Company is registered under the Investment Company Act of 1940, as amended,
as a diversified open-end management investment company with two funds: the
Bender Growth Fund and the Starbuck Tisdale Growth and Income Fund (the
"Funds"). The assets of each Fund are segregated, and a shareholder's interest
is limited to the Fund in which shares are held. The financial statements of the
Bender Growth Fund (the "Fund") are included herein. The Starbuck Tisdale Growth
and Income Fund is presented separately. The Company is registered to offer two
classes of shares, Class Y and Class C. Each Fund's prospectus provides a
description of the Fund's investment objectives, policies and strategies.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund.
SECURITY VALUATION -- Investment securities which are listed on a national
securities exchange or on the NASDAQ National Market System for which market
quotations are available are valued by an independent pricing service at the
last reported sale price for such security as of the close of business on the
date of valuation. Securities traded on a national securities exchange or on the
NASDAQ National Market System for which there were no sales on the date of
valuation and securities traded on the over-the-counter market are valued at the
mean between the most recently quoted bid and asked prices. Short-term
investments that mature in 60 days or less are valued at amortized cost, unless
the Board of Directors determines that such valuation does not constitute fair
value.
SECURITY TRANSACTION AND INVESTMENT INCOME -- Security transactions are
accounted for on the trade date of the security purchase or sale. Costs used in
determining net realized capital gains and losses on the sale of securities will
be those of the specific securities sold. Dividend income is recorded on the
ex-dividend date, and interest income is recorded on the accrual basis. Purchase
discounts and premiums on securities held by the Fund are accreted and amortized
to maturity using the scientific interest method, which approximates the
effective interest method.
FEDERAL INCOME TAXES -- The Company's policy is to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Accordingly, no provision
for Federal income taxes is required in the financial statements.
EXPENSES -- Expenses that are directly related to the Fund are charged to the
Fund. Other operating expenses of the Company are prorated to the Funds on the
basis of relative net assets. Expenses, income and gains and losses are
allocated daily among share classes of each Fund based on the relative
proportion of net assets represented by each class.
DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income are
declared and paid at least annually. Any net realized capital gains on sales of
securities are distributed annually.
The amounts of distributions from net investment income and net realized capital
gains are determined in accordance with federal income tax regulations, which
may differ from those amounts determined under generally accepted accounting
principles. To the extent these book/tax differences are permanent, they are
charged or credited to paid-in capital in the period that the difference arises.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
================================================================================
BENDER GROWTH FUND -- MARCH 31, 1998
NET ASSET VALUE PER SHARE -- The net asset value per share of the Fund is
calculated each business day by dividing the total value of the Fund's assets,
less liabilities, by the number of shares outstanding. Class C shares redeemed
within one year of purchase may be subject to a contingent deferred sales charge
equal to one-percent. The redemption price disclosed in the financial statements
for Class C shares does not reflect the contingent deferred sales charge.
ORGANIZATIONAL COSTS -- Organizational costs have been deferred in the account
of the Fund and are being amortized on a straight line basis over a period of
sixty months commencing with operations. In the event any of the initial shares
of the Fund are redeemed by any holder thereof during the period that the Fund
is amortizing its organizational costs, the redemption proceeds payable to the
holders thereof by the Fund will be reduced by the pro rata share (based on the
proportionate share of the original shares redeemed to the total number of
shares outstanding at the time of such redemption) of the unamortized deferred
organizational costs as of the date of such redemption.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The financial
statements have been prepared in conformity with generally accepted accounting
principles which requires management to make certain estimates and assumptions
that affect the reported amount of 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.
3. SERVICE AGREEMENTS
Pursuant to an investment advisory agreement, investment advisory services are
provided to the Company by SBG Capital Management (the "Advisor"). The Advisor
receives a monthly fee at an annual rate of 1.25% of the average daily net
assets of the Fund. The Advisor has agreed to waive a portion of their fees and
reimburse the Fund for other expenses as necessary in order to limit the
operating expenses to 2.75% and 3.50% of average daily net assets of the Class Y
and Class C shares, respectively.
Sub-Advisory services are provided to the Advisor for the Fund by Robert Bender
& Associates, Inc. (the "Sub-Advisor") pursuant to a sub-advisory agreement.
Under terms of the agreement, the Sub-Advisor receives a monthly fee at an
annual rate of 0.50% of the average daily net assets of the fund and is paid by
the Advisor. The Advisor is responsible for the supervision and payment of fees
to the Sub-Advisor in connection with its services.
Ascher/Decision Services, Inc. (an affiliate of the Advisor) serves as
Distributor to the Fund pursuant to a Service and Distribution Plan (the
"Plan"). Under terms of the Plan, the Distributor is paid a distribution fee at
an annual rate of 0.25% and 0.75% of the average daily net assets of the Class Y
and C shares respectively. Class C shares are subject to a shareholder services
fee which is paid to the Distributor, at an annual rate of 0.25% of the average
daily net assets of the Class C shares of the Fund.
SEI Fund Resources (the "Administrator") serves as Administrator to the Fund
pursuant to an administration agreement. Under terms of such agreement the
Administrator is paid an annual fee equal to the greater of 0.15% of the first
$50 million in average daily net assets, 0.125% for the next $50 million in
average daily net assets and 0.10% for such daily net assets in excess of $100
million or a minimum of $60,000.
The Fund and United Missouri Bank (the "Custodian") are parties to a custodial
agreement under which the Custodian holds cash, securities and other assets of
the Fund as required by the Investment Company Act of 1940. The Custodian plays
no role in determining the investment policies of the Fund or which securities
are to be purchased or sold by the Fund.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (concluded)
================================================================================
BENDER GROWTH FUND -- MARCH 31, 1998
The Fund and National Financial Data Services (the "Transfer Agent") are parties
to a servicing agreement, under which the Transfer Agent provides transfer
agency and dividend disbursing services for the Fund.
4. INVESTMENT TRANSACTIONS
The cost of security purchases and the proceeds from the sale of securities,
other than temporary cash investments for the period from April 1, 1997 to March
31, 1998, were $2,569,275 and $434,982, respectively.
As of March 31, 1998, net unrealized appreciation on investment securities for
book and federal income tax purposes aggregated $2,461,833 of which $2,765,423
related to appreciated securities and $303,590 related to depreciated
securities. There was no difference between book and tax realized gains on
securities for the period from April 1, 1997 to March 31, 1998.
- --------------------------------------------------------------------------------
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE
GENERAL INFORMATION OF THE SHAREHOLDERS OF THE COMPANY. THE REPORT IS NOT
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE COMPANY, UNLESS
PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. ASCHER/DECISION SERVICES,
INC., THE DISTRIBUTOR, AND UNITED MISSOURI BANK, THE CUSTODIAN, ARE NOT
AFFILIATED.
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders of the Bender Growth Fund:
We have audited the accompanying statement of net assets of the Bender Growth
Fund (the "Fund") as of March 31, 1998 and the related statements of operations
for the year then ended, and the statements of changes in net assets and
financial highlights for the year ended March 31, 1998 and for the period from
December 10, 1996 to March 31, 1997. 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 includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned at March
31, 1998 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 the
Bender Growth Fund at March 31, 1998, the results of its operations for the year
then ended, and the changes in net assets and financial highlights for the year
ended March 31, 1998 and for the period from December 10, 1996 to March 31, 1997
in conformity with generally accepted accounting principles.
Los Angeles, California
May 13, 1998
