--------------------------------------------------------------------------------
Maxus Laureate Fund
--------------------------------------------------------------------------------
Semi-Annual Report
June 30, 2000
--------------------------------------------------------------------------------
<PAGE>
Dear Shareholders,
For the first six months of 2000, the Maxus family of funds has continued their
exceptional performance relative to their respective market indices and
competing mutual funds. It was a difficult period for both bond and equity
funds. Rising interest rates and a re-emphasis on earning expectations were the
culprits.
Leading our effort in absolute performance was the Maxus Income Fund. Within a
universe of 525 domestic taxable bond funds, Maxus Income was the number one
mutual fund in the country during the first half of the year according to Lipper
Financial Services. During this period alone your Fund produced an 11% total
return, against an average of less than 1% for competing funds and 5.46% for the
Ryan Index.
The Maxus Equity Fund also had an outstanding first six months producing a
return of 11.61% against the Russell 3000 which returned 0.98%, the S&P 500
which returned a negative 0.47% and the Lipper Multi-Cap Value Index which
returned a negative 0.77%. Maxus Equity once again has proven that persistency
and consistency are desirable characteristics for a mutual fund.
After significantly outperforming the competition in 1999, the Maxus Aggressive
Value Fund produced a more modest 4.72% %, exactly in line with the average
micro-cap value fund (4.96%), but behind the average micro-cap fund which
returned 8.55%. In my estimation, micro-cap value is the most compelling market
sector today, and my expectation are exceptionally high for Maxus Aggressive
Value in the next 3 to 5 years.
Starting to show renewed signs of life since the year began were companies
headquartered in Ohio. Reflecting this trend was the Maxus Ohio Heartland Fund.
MOH returned 5.84% during this period.
Finally, our star performer in 1999 found the going a little rougher in the six
months of 2000. Maxus Laureate produced a return of 0.93% against the negative
2.56% return on the Morgan Stanley World Index, an excellent relative
performance nevertheless.
A major characteristic of the stock market during the past five years has been
what I call "sector rotation/correction." Rather than periodic corrections
devastating the entire market, each market sector has run through its own
corrective phase, on its own time, leaving the rest of the market relatively
unchanged. For example, during the first half of 2000, the dot.coms and
overvalued technology issues were taken down, along with auto related and
certain other cyclical stocks, while much of the entire market remained
unchanged.
Investors across the board have been the beneficiaries of this phenomenon as
market psychology has remained unequivocally positive in spite of rising
interest rates and major earnings disappointments. For the remainder of 2000 and
beyond, I am looking for much of the same.
Sincerely,
Richard Barone
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
June 30, 2000 (unaudited)
SHARES / PRINCIPAL AMOUNT MARKET VALUE % ASSETS
<S> <C> <C>
MUTUAL FUNDS EQUITY
46,716 Acorn Foreign 40 $ 918,910
21,322 Acorn International 699,777
27,649 Artisan International 833,896
204 Artisan Mid Cap 5,626
5,176 Brandywine 248,551
6,371 Brandywine Blue 248,025
25,552 Dresdner RCM Biotechnology 888,426
37,878 Dresdner RCM Global Healthcare 833,308
334 Excelsior Pacific Asia 3,538
14,580 FMI Focus 502,712
13,960 Firsthand Technology Leaders 746,044
6,605 Firsthand Technology Value 755,566
14 Fremont Emerging Markets 133
109 Fremont US Micro Cap 5,298
201 Fremont US Small Cap 4,482
68 Heartland Value 2,228
159 Henlopen 4,519
85,737 Information Age (The) 3,372,888
16,062 Invesco Health Sciences 1,023,340
17,572 Invesco Worldwide Communications 985,451
18,919 Janus Enterprise 1,498,233
38,988 Janus Global Life Sciences 790,278
26,104 Janus Mercury 1,103,673
9,857 Janus Overseas 372,317
49,245 Janus Worldwide 3,852,915
37,141 Lexington Small Cap Asia Growth 297,498
79,806 Lexington Worldwide Emerging Markets 948,093
15,969 Masters' Select International 312,828
425 Montgomery Emerging Asia 4,279
20,087 Montgomery Emerging Markets 241,851
14,738 Montgomery Global Communications 503,602
17,852 Montgomery Global Long-Short 548,758
12,943 Mutual Series European 225,858
8,528 Navellier Mid Cap Growth 263,174
14,080 Neuberger & Berman Manhattan 267,669
7,463 Neuberger & Berman Millennium 260,533
131,234 Prudential Bear 500,000
35,761 Robertson Stephens Emerging Growth 2,305,123
34,155 Robertson Stephens Microcap Growth 940,618
54,615 Rydex Arktos 1,000,000
60,526 Rydex Banking 395,842
47,557 Rydex Biotechnology 1,524,194
50,826 Rydex Financial Services 461,499
45,398 Rydex Healthcare 543,874
15,510 Rydex Nova 611,083
43,635 Rydex OTC 1,208,690
124,378 Rydex Ursa 1,000,000
189 Strong Asia Pacific 1,787
133 Turner Micro Cap Growth 5,700
417 Turner Small Cap Growth 19,204
11,860 Ultra Bear Profund 250,000
8,875 Ultrashort Profund 250,000
21,704 Van Wagoner Emerging Growth 1,096,937
6,358 Van Wagoner Post Venture 255,459
22,056 Vanguard Value Index Trust 471,777
9,926 Vanguard Windsor II 243,375
84 Warburg Pincus Global 5,918
164 Warburg Pincus Global Post 4,843
37 Warburg Pincus Japan Growth 749
156 Warburg Pincus Japan Small Company 2,453
-----------
36,673,402 73.9%
CASH EQUIVALENTS
13,539,712 Firstar Treasury Fund 4.54% 13,539,712 27.3%
TOTAL INVESTMENTS (Cost - $42,034,078) 50,213,114 101.2%
OTHER ASSETS LESS LIABILITIES (612,613) -1.2%
NET ASSETS $ 49,600,501 100.0%
</TABLE>
<PAGE>
--------------------------------------------------------------------------------
Statement of Assets & Liabilities
--------------------------------------------------------------------------------
Maxus Laureate Fund June 30, 2000 (unaudited)
Laureate
Fund
Assets:
Investment securities at market value $ 50,213,114
(Identified cost - $42,034,078)
Cash 5,834
Receivables:
Receivable for investment securities sold 4,485,003
Dividends and interest receivable 74,640
----------
Total Assets 54,778,591
----------
Liabilities:
Payable for investment securities purchased 5,000,302
Payable for shareholder redemptions 103,570
Accrued expenses 74,218
----------
Total Liabilities 5,178,090
----------
Net Assets $ 49,600,501
==========
Net Assets Consist Of:
Capital paid in 42,841,115
Accumulated undistributed net investment income (loss) (288,112)
Accumulated undistributed realized gain (loss) on investments (1,131,538)
Unrealized appreciation in value
of investments based on identified cost - net 8,179,036
----------
Net Assets 49,600,501
==========
Net Assets:
Investor shares 48,235,892
Institutional shares 1,364,609
----------
Total 49,600,501
==========
Shares of Capital Stock
Investor shares 2,584,412
Institutional shares 72,600
----------
Total 2,657,012
==========
Net Asset Value per Share
Investor shares $ 18.66
Institutional shares $ 18.80
<PAGE>
--------------------------------------------------------------------------------
Statement of Operations
--------------------------------------------------------------------------------
Maxus Laureate Fund June 30, 2000 (unaudited)
Laureate
Fund
Investment Income:
Dividend income $ 36,053
Interest income 149,473
----------
Total Income 185,526
----------
Expenses:
Investment advisory fees (Note 2) 233,069
Distribution fees (investor shares) 113,809
Transfer agent fees/accounting 19,805
Audit 5,000
Custodial fees 10,439
Registration and filing fees 6,206
Legal 7,592
Trustee fees 1,800
Taxes 75,052
Miscellaneous 866
----------
Total Expenses 473,638
Net investment income (loss) (288,112)
Realized and Unrealized Gain (Loss) on Investments:
Realized gain (loss) on investments 810,523
Unrealized gain (loss) from appreciation
(depreciation) on investments (611,409)
----------
Net realized and unrealized gain (loss) on investments 199,114
----------
Net increase (decrease) in net assets from operations $ (88,998)
==========
<PAGE>
--------------------------------------------------------------------------------
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
Maxus Laureate Fund June 30, 2000 (unaudited)
Maxus Laureate Fund
01/01/00 01/01/99
to to
06/30/00 12/31/99
From Operations:
Net investment income (288,112) (88,018)
Net realized gain (loss) on investments 810,523 1,465,840
Net unrealized appreciation (depreciation) (611,409) 7,654,002
---------- ----------
Increase (decrease) in net assets from operations (88,998) 9,031,824
---------- ----------
Distributions to Investor Shareholders:
Net investment income - -
Net realized gain (loss) from security
transactions (1,893,929) (1,325,042)
Distributions to Institutional Shareholders:
Net investment income - -
Net realized gain (loss) from security
transactions (51,187) (49,724)
---------- ----------
Change in net assets from distributions (1,945,116) (1,374,766)
---------- ----------
From Capital Share Investor Transactions:
Proceeds from sale of shares 23,857,844 20,167,724
Dividend reinvestment 1,809,352 1,316,761
Cost of shares redeemed (7,760,551) (4,743,183)
From Capital Share Institutional Transactions:
Proceeds from sale of shares 180,558 1,037,951
Dividend reinvestment 51,187 49,724
Cost of shares redeemed (57,859) (24)
---------- ----------
Change in net assets from capital transactions 18,080,531 17,828,953
---------- ----------
Change in net assets 16,046,417 25,486,011
Net Assets:
Beginning of period 33,554,084 8,068,073
---------- ----------
End of period (including accumulated
undistributed net investment income (loss) 49,600,501 33,554,084
of $(288,112) and $0 respectively.) ========== ==========
Investor Share Transactions:
Issued 1,235,427 1,297,316
Reinvested 85,615 70,228
Redeemed (421,309) (289,429)
---------- ----------
Net increase (decrease) in shares 899,733 1,078,115
Shares outstanding beginning of period 1,684,679 606,564
---------- ----------
Shares outstanding end of period 2,584,412 1,684,679
========== ==========
Institutional Share Transactions:
Issued 9,619 60,405
Reinvested 2,408 2,633
Redeemed (3,132) (1)
---------- ----------
Net increase (decrease) in shares 8,895 63,037
Shares outstanding beginning of period 63,705 668
---------- ----------
Shares outstanding end of period 72,600 63,705
========== ==========
<PAGE>
--------------------------------------------------------------------------------
Financial Highlights
--------------------------------------------------------------------------------
Maxus Laureate Fund (unaudited) Investor Shares
Selected data for a share of capital stock outstanding throughout
the period indicated
<TABLE>
<CAPTION>
01/01/00 01/01/199 01/01/98 01/01/97 01/01/96
to to to to to
06/30/00 12/30/99 12/30/98 12/31/97 12/31/96
<S> <C> <C> <C> <C> <C>
Net Asset Value -
Beginning of Period 19.19 13.29 10.38 10.82 9.82
Net investment income (0.33) (0.07) (0.12) 0.52 (0.08)
Net gains (losses) on securities,
realized and unrealized 0.60 6.78 3.76 0.07 2.14
------ ------ ------ ------ ------
Total from investment operations 0.27 6.71 3.64 0.59 2.06
Distributions
Net investment income - - - (0.52) -
Capital gains (0.80) (0.81) (0.73) (0.51) (1.06)
Return of capital - - - - -
------ ------ ------ ------ ------
Total distributions (0.80) (0.81) (0.73) (1.03) (1.06)
------ ------ ------ ------ ------
Net Asset Value -
End of Period $ 18.66 $ 19.19 $ 13.29 $ 10.38 $ 10.82
====== ====== ====== ====== ======
Total return 0.93% 50.58% 35.14% 5.49% 21.03%
Ratios/Supplemental Data:
Net assets at end of period (thousands) 48,236 32,324 8,059 3,395 3,156
Ratio of expenses to average net assets * 2.03% 1.92% 2.63% 2.49% 3.92%
Ratio of net income to average net assets * -1.23% -0.49% -1.10% 4.19% -0.73%
Portfolio turnover rate * 1524% 1172% 2792% 1511% 1267%
</TABLE>
(unaudited) Institutional Shares
--------------------------------------------------------------------------------
01/01/00 01/01/99 2/1/98**
to to to
06/30/00 12/31/99 12/31/98
Net Asset Value -
Beginning of Period 19.30 13.30 10.38
Net investment income (0.30) 0.03 (0.11)
Net gains (losses) on securities,
realized and unrealized 0.60 6.78 3.76
------ ------ ------
Total from investment operations 0.30 6.81 3.65
Distributions
Net investment income - - -
Capital gains (0.80) (0.81) (0.73)
Return of capital - - -
------ ------ ------
Total distributions (0.80) (0.81) (0.73)
------ ------ ------
Net Asset Value -
End of Period $ 18.80 $ 19.30 $13.30
====== ====== ======
Total return 1.08% 51.29% 35.24%
Ratios/Supplemental Data:
Net assets at end of period (thousands) 1,365 1,230 9
Ratio of expenses to average net assets * 1.53% 1.42% * 2.13%
Ratio of net income to average net assets * -0.73% 0.01% * -0.6%
Portfolio turnover rate * 1524% 1172% * 2792%
*annualized
**commencement of operations
<PAGE>
NOTES TO FINANCIAL STATEMENTS
MAXUS LAUREATE FUND
JUNE 30, 2000 (UNAUDITED)
1.)SIGNIFICANT ACCOUNTING POLICIES
The Fund is a diversified, open-end management investment company,
organized as a Trust under the laws of the State of Ohio by a Declaration
of Trust dated February 10, 1993. Shares of the Fund are divided into two
classes, Investor shares and Institutional shares. Each share represents an
equal proportionate interest in the Fund with other shares of the same
class. Investor shares incur a distribution expense. The Fund has an
investment objective of achieving a high total return, a combination of
capital appreciation and income, consistent with reasonable risk. This fund
pursues its objective by investing exclusively in shares of other open-end
registered investment companies, commonly called mutual funds. Significant
accounting policies of the Fund are presented below.
SECURITY VALUATION
The Fund intends to invest exclusively in other open-end management
investment companies (mutual funds). The investments in mutual funds are
carried at market value. The market quotation used for mutual funds is the
net asset value on the date on which the valuation is made.
SECURITY TRANSACTION TIMING
Security transactions are recorded on the dates transactions are entered
into (the trade dates). Dividend income and distributions to shareholders
are recorded on the ex-dividend date. Interest income is recorded as
earned. The fund uses the identified cost basis in computing gain or loss
on sale of investment securities. Discounts and premiums on securities
purchased are amortized over the life of the respective securities.
INCOME TAXES
It is the Fund's policy to distribute annually, prior to the end of the
calendar year, dividends sufficient to satisfy excise tax requirements of
the Internal Revenue Service. This Internal Revenue Service requirement may
cause an excess of distributions over the book year-end accumulated income.
In addition, it is the Fund's policy to distribute annually, after the end
of the fiscal year, any remaining net investment income and net realized
capital gains. The Fund incurred an excise tax of $75,052 for the
six-months ending June 30, 2000.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
2.)INVESTMENT ADVISORY AGREEMENT
The Fund has entered into an investment advisory and administration
agreement with Maxus Asset Management Inc., a wholly owned subsidiary of
Resource Management Inc. The Investment Advisor receives from the Fund as
compensation for its services to the Fund an annual fee of 1% on the first
$150,000,000 of the Fund's net assets, and 0.75% of the Fund's net assets
in excess of $150,000,000.
<PAGE>
3.)RELATED PARTY TRANSACTIONS
Resource Management Inc. has two wholly owned subsidiaries that provide
services to the Fund. These subsidiaries are Maxus Asset Management Inc.
and Maxus Securities Corp. Maxus Asset Management was paid $233,069 in
investment advisory fees during the six months ending June 30, 2000. The
Fund has adopted a Distribution and Shareholder Servicing Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Maxus Securities has
served as the national distributor of the Fund's shares. The Fund has
entered into a distribution agreement to which the Fund pays Maxus
Securities a fee, accrued daily and payable monthly at an annual rate of
.50%, based on the average daily net assets for Investor class only. Maxus
Securities was reimbursed $113,809 for distribution expenses for the six
months ending June 30, 2000. Resource Management Inc. owns 49% of Mutual
Shareholder Services. Mutual Shareholder Services performs fund accounting
and transfer agency services for the Fund. Mutual Shareholder Services
received fees totaling $19,805 for services rendered to the Fund for the
six months ending June 30, 2000. Maxus Securities is a registered
broker-dealer. Maxus Securities effected substantially all of the
investment portfolio transactions for the Fund. The fees collected by Maxus
Securities represent transaction charges imposed by the custodian. Maxus
Securities pays these charges to the custodian without a mark-up.
At June 30, 2000, Maxus Securities Corp. owned 10,000 shares in the Fund.
Certain officers and/or trustees of the Fund are officers and/or directors
of the Investment Advisor and Administrator.
4.) CAPITAL STOCK AND DISTRIBUTION
At June 30, 2000 an indefinite number of shares of capital stock ($.10 par
value) were authorized, and paid-in capital amounted to $42,841,115.
Distributions to shareholders are recorded on the ex-dividend date.
Payments in excess of net investment income or of accumulated net realized
gains reported in the financial statements are due primarily to book/tax
differences. Payments due to permanent differences have been charged to
paid in capital. Payments due to temporary differences have been charged to
distributions in excess of net investment income or realized gains.
5.)PURCHASES AND SALES OF SECURITIES
During the six months ending June 30, 2000 purchases and sales of
investment securities other than U.S. Government obligations and short-term
investments aggregated $295,445,739 and $291,039,158 respectively.
6.)SECURITY TRANSACTIONS
For Federal income tax purposes, the cost of investments owned at June 30,
2000 was the same as identified cost.
At June 30, 2000, the composition of unrealized appreciation (the excess of
value over tax cost) and depreciation (the excess of tax cost over value)
was as follows:
Appreciation (Depreciation) Net Appreciation (Depreciation)
$8,383,487 $(204,451) $8,179,036
<PAGE>
Investment Adviser
Maxus Asset Management, Inc.
1301 East Ninth Street
Cleveland, OH 44114
Transfer Agent
Mutual Shareholder Services, LLC.
1301 E. 9th St., Suite 1005
Cleveland, OH 44114
Custodian
Firstar Bank, NA
425 Walnut Street
P.O. Box 1118
Cincinnati, OH 45201
Legal Counsel
Benesch, Friedlander, Coplan & Aronoff
2300 BP America Building
200 Public Square
Cleveland, OH 44114
Auditors McCurdy & Associates,
CPA's, Inc.
27955 Clemens Road
Westlake, OH 44145
Board of Trustees
Denis J Amato
Richard A Barone
Kent W Clapp
Steven M Kasarnich
Joseph H Smith
Burton D Morgan
Michael A Rossi
