U.S. GLOBAL ACCOLADE FUNDS
ANNUAL REPORT
OCTOBER 31, 1998
TABLE OF CONTENTS
LETTER TO SHAREHOLDERS ....................... 1
FUND MANAGERS' PERSPECTIVES .................. 5
PORTFOLIOS OF INVESTMENTS .................... 20
STATEMENTS OF ASSETS AND LIABILITIES ......... 38
STATEMENTS OF OPERATIONS ..................... 40
STATEMENTS OF CHANGES IN NET ASSETS .......... 42
NOTES TO FINANCIAL STATEMENTS ................ 46
FINANCIAL HIGHLIGHTS ......................... 51
REPORT OF INDEPENDENT ACCOUNTANTS ............ 55
<PAGE>
[Graphic: US GLOBAL INVESTORS LOGO]
US GLOBAL INVESTORS
P.O. Box 781234
San Antonio, Texas 78278-1234
Tel 1-800-US-FUNDS
Fax 210-308-1217
www.us-global.com
<PAGE>
U.S. GLOBAL ACCOLADE FUNDS
Dear Shareholder [Graphic: PICTURE OF FRANK HOLMES, CEO]
What a difference a year makes! At the beginning of the year, the economic
outlook was rosy both here and abroad. The global economy - particularly that of
the United States - was positively booming, and industry pundits were
pre-dicting continued growth and prosperity all the way to the next millennium.
Just a few months later, the entire picture changed....
Capital markets, domestic and overseas, have been rocked by turbulence, in many
cases reaching historical highs and lows within months of each other. On the
whole, however, the trend has been a decidedly negative one, especially for
emerging markets.
For those familiar with the presidential election market cycle theory, this
should come as no surprise. This hypothesis holds that the economy fluctuates in
fair-ly regular patterns over the course of each presidential term. The first
two years after an election tend to be weak, while years three (pre-election)
and four (elec-tion) offer strong returns for the stock market. In the past 50
years, market movements from high to low to high again have run almost uniformly
in four-year patterns, and next year looks great based on this cycle.
The proof of this theory may be found in the lingering effect of last year's
"Asian Flu" which led to the near collapse of several economies, including those
of Indonesia, Korea, Malaysia and Thailand. The devastation to these countries'
financial infrastructures has been enormous: The International Monetary Fund
(IMF) estimates that Japan's economy will contract by 2.5% this year, Korea's by
7.0%, and those of Indonesia, Malaysia, Singapore and Thailand even more so.
This economic virus has continued its inexorable spread and now threatens the
Latin American and European markets, as evidenced by the recent IMF bail-out of
Brazil, to the tune of $41.5 billion (as compared to the $50 billion aid
pack-age to Mexico three years ago). This summer's financial turmoil in Russia
caused more economic and psychological pain in three short months than did 30
years of Cold War hostilities and deprivations. Again, we see the lessons of
his-tory repeated: Macroeconomic financial cycles continue unabated, only the
names of the countries or regions change.
- -1-
<PAGE>
U.S. GLOBAL ACCOLADE FUNDS
As with all funds that allocate a significant portion of their holdings to
foreign investments or that have been impacted by capital market swings, our
Accolade Funds -- the Bonnel Growth Fund, the MegaTrends Fund, the Global Blue
Chip Fund, and the Regent Eastern European Fund -- were in varying degrees
subjected to the unpredictability and liquidity concerns of the markets.
For the Regent Eastern European Fund, market responses in the Czech Republic,
Hungary and Poland were exaggerated because of the economic tur-moil in Russia.
However, the fund had only limited exposure to the Russian market itself, and
management remains optimistic about potential future returns from the other
Eastern European countries in which it is invested.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
BONNEL GROWTH FUND RUSSELL 200
DATE VALUE VALUE
<S> <C> <C>
10/14/1994 $10,000.00
10/31/1994 $10,010.00 $10,000.00
11/30/1994 $10,030.00 $9,596.13
12/30/1994 $10,090.00 $9,853.95
1/31/1995 $9,859.31 $9,729.63
2/28/1995 $10,491.19 $10,134.37
3/31/1995 $10,942.53 $10,308.90
4/28/1995 $11,423.97 $10,538.13
5/31/1995 $11,594.47 $10,719.32
6/30/1995 $12,677.69 $11,275.40
7/31/1995 $14,121.99 $11,924.92
8/31/1995 $14,252.38 $12,171.61
9/29/1995 $14,874.22 $12,388.94
10/31/1995 $14,523.18 $11,834.87
11/30/1995 $14,804.02 $12,332.07
12/29/1995 $14,653.02 $12,657.48
1/31/1996 $14,442.94 $12,643.92
2/29/1996 $15,031.16 $13,037.96
3/29/1996 $15,734.93 $13,303.36
4/30/1996 $17,604.63 $14,014.67
5/31/1996 $19,085.69 $14,566.99
6/28/1996 $17,552.11 $13,968.83
7/31/1996 $15,734.93 $12,748.71
8/30/1996 $16,564.74 $13,488.93
9/30/1996 $18,014.29 $14,016.09
10/31/1996 $17,909.25 $13,800.07
11/29/1996 $18,746.40 $14,368.68
12/31/1996 $18,746.40 $14,745.24
1/31/1997 $18,884.24 $15,039.92
2/28/1997 $17,219.54 $14,675.25
3/31/1997 $16,318.27 $13,982.80
4/30/1997 $16,593.95 $14,021.76
5/30/1997 $18,385.89 $15,581.68
6/30/1997 $19,552.24 $16,249.48
7/31/1997 $21,386.58 $17,005.59
8/29/1997 $21,715.28 $17,394.67
9/30/1997 $23,178.52 $18,667.89
10/31/1997 $20,867.03 $17,847.80
11/28/1997 $20,873.45 $17,732.37
12/31/1997 $20,680.06 $18,042.73
1/30/1998 $20,821.88 $17,757.99
2/27/1998 $22,381.91 $19,071.07
3/31/1998 $23,323.09 $19,857.61
4/30/1998 $23,556.23 $19,967.49
5/29/1998 $22,295.22 $18,892.09
6/30/1998 $23,894.24 $18,931.84
7/31/1998 $23,218.23 $17,399.24
8/31/1998 $19,708.19 $14,020.66
9/30/1998 $21,216.21 $15,117.88
<FN>
- -8.47% AND 20.89% ARE THE FUND'S AVERAGE TOTAL RETURNS FOR THE 1-YEAR AND SINCE
INCEPTION (10/17/94) PERIODS ENDED 9/30/98, RESPECTIVELY. THE RUSSELL 2000 INDEX
IS AN UNMANAGED INDEX THAT CONSISTS OF 2,000 SMALL- AND MID-CAP, PUBLICLY TRADED
COMPANIES.
</FN>
</TABLE>
In times like these, liquidity often drives investor sentiment. Accordingly,
there has been the usual pronounced shift away from small-cap towards large-cap
stocks, but this time there is evidence of increased investor atten-tion to the
mid-cap market as well. As the above chart illustrates, this inter-est is
justified.
With recent low performance growth and declining P/E ratios for the S&P 500, the
logical step is to look for the best-performing sector: mid-caps, which have
outpaced their larger-cap brethren in recent years. For four years running,
total returns for the Bonnel Growth Fund, which specializes in small- and
mid-cap growth stocks, have outperformed the Russell 2000 Index, a standard
benchmark for this market.
- -2-
<PAGE>
U.S. GLOBAL ACCOLADE FUNDS
Regarding the other Accolade Funds, in October we brought the management of the
Adrian Day Global Opportunity Fund in-house, in the process renaming it the
Global Blue Chip Fund. Our management team has implemented a top-down macro
theme approach complemented by a bottom-up stock-selection strategy. This system
was designed to address market volatility and select stocks that have strong
growth potential and are undervalued relative to their peer groups. We believe
this strategy, combined with a focused buy/sell discipline, should deliver
superior fund performance when compared to other global blue chip funds.
In keeping with investor concerns, the MegaTrends Fund, managed by noted
newsletter editor Dr. Stephen Leeb, offers a conservative, balanced approach to
equity investing, and currently maintains its largest holdings in such
well-regarded stocks as Berkshire-Hathaway and Microsoft.
To maintain your portfolio for maximum returns, we suggest you give extra weight
to diversifying through asset allocation in accordance with your invest-ment
expectations and avoid overweighting in highly volatile sectors. We also urge a
cautious approach to emerging markets, with a single-digit weighting here, as
well as in the natural resources sector. A good basis for a well-diversi-fied
portfolio is usually no more than 5% in gold and between 5%-10% in emerging
markets and global resources.
In the pages that follow, you'll find a fund-by-fund analysis of the factors
that have impacted your investment's performance. You will also find reports on
portfolio holdings, information on fund diversification and financial
activities.
You can stay in touch with your investments by calling Portfolio Direct and
lis-tening to the insights of your fund manager. These recordings are updated
every month. And our Investor Alert gives you our weekly interpretation of the
week's happenings in the marketplace. These two services are available 24 hours
a day on our toll-free number, 1-800-US-FUNDS.
Keep in mind that the markets are unpredictable, so don't try to outguess them.
Instead, invest often and regularly, without regard to short-term market
fluctu-ations. For added discipline and easier investing, sign up for our ABC
Investment Plan (R), our personalized investing service designed to fit your
needs, budget, goals and schedule.
- -3-
<PAGE>
U.S. GLOBAL ACCOLADE FUNDS
If you have any questions or would like information on other investment
opportunities with U.S. Global Investors, please call an investor representative
at 1-800-US-FUNDS or visit our website at www.us-global.com. We look forward to
hearing from you.
Sincerely,
/s/FRANK E. HOLMES
Frank E. Holmes
Chairman & CEO
P.S. Don't forget U.S. Global Investors offers 15 no-load mutual funds,
cov-ering everything from investing in China to blue chip stocks. And our money
market funds offer free, unlimited checkwriting and competitive yields.
THIS REPORT MUST BE PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS. FOR
MORE INFOR-MATION, INCLUDING CHARGES AND EXPENSES, CALL 1-800-US-FUNDS.
PLEASE READ THE PROSPEC-TUS CAREFULLY BEFORE INVESTING. PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. INVESTMENT RETURNS AND PRINCIPAL VALUE
WILL FLUCTUATE. YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL SHARES. AN
INVESTMENT IN THE MONEY MARKET FUNDS IS NOT INSURED OR GUARANTEED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE MONEY MARKET FUNDS SEEK TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING
IN THE FUNDS. FOREIGN AND EMERGING MARKET INVEST-ING INVOLVES SPECIAL
RISKS SUCH AS CURRENCY FLUCTUATION, LESS PUBLIC DISCLOSURE, AS WELL AS
ECONOMIC AND POLITICAL RISKS.
- -4-
<PAGE>
BONNEL GROWTH FUND
FUND MANAGER'S PERSPECTIVE
A Message from Art Bonnel
INTRODUCTION
The Bonnel Growth Fund is now starting its fifth year. As before, the fund
con-tinues to focus on small-cap growth issues in three major sectors with high
growth potential: healthcare, technology, and retailing. The fund's objective is
long-term capital appreciation.
<chart to come>
PERFORMANCE
The stock market has had some dramatic swings these past twelve months. On a
value and growth comparative basis, the Russell 2000 stocks were, and still are,
more attrac-tive than the S&P 500 large-cap stocks. Over the past year, the fund
had an over-weighting of technology stocks which contributed to the fund
outperforming the Russell 2000 Index.
- -5-
<PAGE>
BONNEL GROWTH FUND
THE YEAR IN REVIEW - THE BIG PICTURE
ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE MARKETS
It is interesting to review the major news items which occurred over the past
twelve months. Yamaichi Securities of Japan failed, Russian President Boris
Yeltsin fired his entire cabinet, Citicorp and Travelers agreed to merge, India
exploded a nuclear device, GM went on strike, the Japanese Prime Minister
Hashimoto resigned, the IMF approved an emergency package for Russia, there was
a shooting in the U.S. Capitol, the U.S. Embassy was bombed in Africa, Russia's
currency was devalued, Clinton testified before a grand jury, the U.S. attacked
terrorist bases, Long-Term Capital Management was rescued, Japan took major
steps to reform its banking system, and then there was the reduction of interest
rates by the Federal Reserve. With all of this, the stock market is still alive
and well and there have been some market trading days in excess of a billion
shares.
In light of all this negative news, we did well in managing the portfolio by
focusing on companies with good earnings growth even though market senti-ment
shifted toward large-cap stocks.
INVESTMENT HIGHLIGHTS
The fund has attempted to maintain diversity while looking for quality growth
issues. We used a set investment approach which has given investors good solid
long-term results.
This has been an interesting year as many companies saw the value of their
shares drop by over fifty percent in a short period of time. For example, in
early October 1998, one of our larger holdings, Cisco Systems dropped to $42 per
share. By the end of the month, the share price had increased to just over $63.
Another holding that experienced market volatility was AVT Corporation. At the
end of September 1998, the stock was over $23 per share. In early October, the
price fell below $11. By the end of October, the stock price had rebounded to
$22.
As we approach 1999, this may provide us the opportunity to purchase some great
bargains. We will continue to search out what we consider good quality growth
issues for the fund.
- -6-
<PAGE>
BONNEL GROWTH FUND
CURRENT OUTLOOK
At the end of October, the leading economic indicators were stable. Inflation
remains under control. This is very positive for the economy and it should help
corporate profits as we go into 1999. The Federal Reserve Board is being very
accommodating in order to stabilize both the U.S. economy and the rest of the
world. The situation in Asia appears to be improving. This may just be the
result of advances in both technology and healthcare. These two industries are
in great demand and will continue to be so as the human race strives to better
itself. But do not be surprised to see acrimonious and heartwarming news items
which will confuse the novice investor.
As was noted in the recent issues of the SHAREHOLDER REPORT, the economic
fluctuations we've seen over the past year are classic examples of the
presidential election market cycle theory. Based on historical cycles, we expect
to see strong returns for the stock market for the next year. We will continue
to focus on small-cap growth issues.
- -7-
<PAGE>
BONNEL GROWTH FUND
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
WAL-MART STORES, INC 3.14%
RETAIL
- ------------------------------------------------------
CISCO SYSTEMS, INC 3.08%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
XEROX 2.76%
PHOTOGRAPHIC EQUIPMENT
- ------------------------------------------------------
WARNER-LAMBERT CO 2.68%
PHARMACEUTICALS
- ------------------------------------------------------
CITRIX SYSTEMS, INC 2.66%
COMPUTER SOFTWARE
- ------------------------------------------------------
SUN MICROSYSTEMS, INC 2.65%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
BIOGEN, INC 2.37%
HEALTHCARE EQUIPMENT & SERVICES
- ------------------------------------------------------
SCHERING-PLOUGH CORP 2.34%
PHARMACEUTICALS
- ------------------------------------------------------
LEXMARK INTERNATIONAL GROUP 2.23%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
CHARLES SCHWAB CORP 2.18%
FINANCIAL SERVICES
- ------------------------------------------------------
OTHER 73.91%
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
COMPUTERS & DATA PROCESSING 17.55%
HEALTHCARE EQUIPMENT & SERVICES 14.18%
COMPUTER SOFTWARE 11.97%
PHARMACEUTICALS 10.36%
ELECTRONICS & COMPONENTS 9.15%
- -8-
<PAGE>
MEGATRENDS FUND
FUND MANAGER'S PERSPECTIVE
A Message from Dr. Stephen Leeb
INTRODUCTION
The fund's portfolio primarily holds equity investments in order to maximize
growth potential, while having the flexibility to shift assets into bonds and
money market securities when we believe they offer better performance and a
higher level of safety than stocks.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
MEGATRENDS FUND S&P 500 LIPPER FLEX PORT FD INDEX
DATE VALUE VALUE VALUE
<S> <C> <C> <C>
10/21/1991 $10,000.00
10/31/1991 $9,990.00 $10,000.00 $10,000.00
11/29/1991 $9,880.00 $9,598.18 $9,784.60
12/31/1991 $10,423.30 $10,694.03 $10,624.72
1/31/1992 $10,373.14 $10,494.99 $10,567.45
2/28/1992 $10,503.56 $10,630.85 $10,683.28
3/31/1992 $10,413.27 $10,424.34 $10,455.52
4/30/1992 $10,503.56 $10,730.08 $10,478.30
5/29/1992 $10,533.65 $10,782.55 $10,605.84
6/30/1992 $10,550.31 $10,622.19 $10,495.22
7/31/1992 $10,723.43 $11,055.78 $10,809.53
8/31/1992 $10,703.06 $10,829.93 $10,704.76
9/30/1992 $10,845.63 $10,957.24 $10,831.00
10/28/1992 $10,947.47 $10,994.84 $10,831.65
11/30/1992 $11,039.12 $11,368.19 $11,070.48
12/31/1992 $11,071.08 $11,507.66 $11,226.65
1/29/1993 $11,122.43 $11,603.77 $11,414.72
2/26/1993 $11,142.97 $11,761.86 $11,442.05
3/31/1993 $11,214.86 $12,009.87 $11,682.83
4/30/1993 $11,112.16 $11,719.59 $11,563.09
5/28/1993 $11,204.59 $12,032.32 $11,797.36
6/30/1993 $11,266.21 $12,067.43 $11,887.81
7/30/1993 $11,266.21 $12,018.85 $11,932.71
8/31/1993 $11,390.93 $12,473.87 $12,338.78
9/30/1993 $11,401.33 $12,378.21 $12,384.98
10/29/1993 $11,370.15 $12,634.10 $12,564.59
11/30/1993 $11,266.21 $12,513.68 $12,390.84
12/31/1993 $11,388.75 $12,664.97 $12,655.69
1/31/1994 $11,675.33 $13,095.13 $13,000.59
2/28/1994 $11,473.66 $12,740.03 $12,716.21
3/31/1994 $11,378.14 $12,185.66 $12,206.68
4/29/1994 $11,208.31 $12,341.78 $12,254.83
5/31/1994 $11,325.07 $12,543.53 $12,297.78
6/30/1994 $11,096.87 $12,236.58 $12,039.44
7/29/1994 $11,183.14 $12,638.10 $12,325.76
8/31/1994 $11,323.33 $13,155.06 $12,675.21
9/30/1994 $11,215.49 $12,833.63 $12,454.61
10/31/1994 $11,247.85 $13,121.54 $12,544.41
11/30/1994 $10,902.75 $12,644.26 $12,243.12
12/30/1994 $11,037.55 $12,831.58 $12,317.30
1/31/1995 $11,114.51 $13,164.11 $12,414.26
2/28/1995 $11,444.32 $13,676.63 $12,775.43
3/31/1995 $11,631.21 $14,079.56 $13,045.49
4/28/1995 $11,895.05 $14,493.84 $13,290.17
5/31/1995 $12,279.83 $15,072.26 $13,712.50
6/30/1995 $12,450.23 $15,421.73 $13,994.27
7/31/1995 $12,583.98 $15,932.92 $14,358.04
8/31/1995 $12,617.42 $15,972.69 $14,479.73
9/29/1995 $12,751.18 $16,646.39 $14,744.58
10/31/1995 $12,795.76 $16,586.92 $14,635.91
11/30/1995 $13,263.90 $17,314.23 $15,063.45
12/29/1995 $13,710.52 $17,647.75 $15,223.53
1/31/1996 $13,939.22 $18,247.70 $15,518.32
2/29/1996 $13,984.96 $18,417.46 $15,599.01
3/29/1996 $13,973.53 $18,594.78 $15,709.64
4/30/1996 $14,293.71 $18,868.67 $15,945.86
5/31/1996 $14,568.15 $19,354.46 $16,148.24
6/28/1996 $14,579.35 $19,428.25 $16,123.51
7/31/1996 $13,764.36 $18,570.38 $15,622.44
8/30/1996 $14,165.39 $18,962.68 $15,892.50
9/30/1996 $14,631.10 $20,029.00 $16,494.44
10/31/1996 $15,355.54 $20,581.20 $16,792.48
11/29/1996 $16,015.29 $22,135.52 $17,605.91
12/31/1996 $15,821.25 $21,697.03 $17,370.34
1/31/1997 $16,651.17 $23,051.83 $17,871.41
2/28/1997 $16,308.66 $23,232.80 $17,846.03
3/31/1997 $15,952.98 $22,279.98 $17,307.22
4/30/1997 $16,203.28 $23,608.89 $17,761.44
5/30/1997 $17,309.84 $25,045.21 $18,515.65
6/30/1997 $17,745.88 $26,166.62 $19,060.97
7/31/1997 $18,931.57 $28,247.49 $20,133.40
8/29/1997 $18,312.38 $26,666.20 $19,500.88
9/30/1997 $19,300.46 $28,125.79 $20,326.67
10/31/1997 $18,312.38 $27,187.53 $19,899.13
11/28/1997 $18,378.25 $28,445.06 $20,259.65
12/31/1997 $18,287.35 $28,933.22 $20,539.47
1/30/1998 $18,364.44 $29,252.92 $20,661.61
2/27/1998 $19,382.12 $31,361.55 $21,663.17
3/31/1998 $20,214.77 $32,966.24 $22,393.96
4/30/1998 $20,538.57 $33,297.74 $22,534.46
5/29/1998 $19,705.93 $32,726.19 $22,309.10
6/30/1998 $19,736.77 $34,054.53 $22,739.31
7/31/1998 $18,379.86 $33,692.83 $22,503.35
8/31/1998 $15,666.06 $28,826.55 $20,293.62
9/30/1998 $16,591.22 $30,673.29 $21,101.06
10/30/1998 $17,500.96 $33,166.07 $22,101.13
</TABLE>
AVERAGE ANNUAL PERFORMANCE
Inception 5 Year 1 Year
MegaTrends Fund (INCEPTION 10/21/91) 8.29% 9.01% (4.43%)
- ----------------------------------------------------------------------------
S&P 500 18.67% 21.29% 21.99%
- ----------------------------------------------------------------------------
Lipper Flexible Portfolio Fund Index 11.99% 11.96% 11.07%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE MAY FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE LIPPER FLEXIBLE PORTFOLIO FUND INDEX
ALLOCATES INVESTMENTS ACROSS VARIOUS ASSET CLASSES, INCLUDING DOMESTIC COMMON
STOCKS, BONDS, AND MONEY MARKET INSTRUMENTS WITH A FOCUS ON TOTAL RETURNS.
PERFORMANCE
Over the past year, we significantly underperformed the broader equity markets,
as measured by the S&P 500. The fund had an overweighting in real estate, basic
materi-als, and energy. These sectors performed poorly over the past year,
largely in response to slower than expected economic growth. The fund has an
annualized return of 8.29% since inception compared to 11.99% for the Lipper
Flexible Portfolio Fund Index.
- -9-
<PAGE>
MEGATRENDS FUND
THE YEAR IN REVIEW - THE BIG PICTURE
ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE MARKETS
Watershed events became commonplace in 1998. During the summer, stocks fell more
than 10 percent. Historically, we've experienced many 10 percent drops. However,
this was the first to occur without rising interest rates or inflation. The
lesson is that our economy is very vulnerable to slowing growth.
The turbulent markets led to a major change in economic policy. For more than a
decade, fighting inflation had been the primary goal of economic policymakers
both here and in other developed economies. But on the heels of the sum-mer
swoon in stocks, promoting growth assumed center stage. For the first time ever,
the Federal Reserve aggressively lowered interest rates in the middle of an
ongoing economic expansion and lowered rates with all measures of money supply
growth well above the Fed's own target levels.
Stocks responded dramatically. During October, the market staged one of the most
powerful rallies in history. The only rallies in modern times of comparable
strength occurred at the beginning of 1975 in the summer of 1982, and at the
beginning of 1991. The October rally was different from the other three as it
occurred in the context of an ongoing economic expansion; whereas, the previous
three marked the end of a recession and beginning of an expansion.
INVESTMENT HIGHLIGHTS
Translating the necessity for worldwide growth into an investment strategy is
the mission of the MegaTrends Fund. The common denominator in the vast majority
of our investments is that they are clear beneficiaries of worldwide growth.
Exceptions are investments that provide protection in case policymakers err and
we fall into a deep recession. In this case, history shows only bonds and cash
do well. While our equity investments hurt our performance in 1998 because of
the growth scare, they are among the surest beneficiaries of world-wide growth.
Our largest position remains Berkshire Hathaway. This investment is not only
leveraged to worldwide growth by virtue of its large holdings in world class
franchises, but also provides protection against potential real and economic
storms. By the end of 1998, Berkshire will merge with giant reinsurer General
Re, which is another major holding. In terms of capital, Berkshire will then
become the world's largest reinsurer. Reinsurers have huge bond portfolios and,
therefore, may be sheltered against recessions. They also benefit from natural
disasters such as earthquakes, droughts and hurricanes, as disasters cause
insurance rates to rise.
- -10-
<PAGE>
MEGATRENDS FUND
The fund also has major positions in the real estate and energy sectors of the
market.
We hold a small position in zero coupon bonds and some cash. It is a measure of
our faith in policymakers that these positions are relatively small.
CURRENT OUTLOOK
The message for today's investors is that even a threat to growth will not be
tolerated. Also true is that a major decline in stocks will not be tolerated, as
such a decline would be considered a threat to growth itself. The reason is that
stocks have replaced homes as the most important source of wealth for consumers.
The reason a threat to growth is significant is that the world, and in
particular America, has never been as leveraged as it is today. We have made
remarkable progress toward reducing our government deficit. Consumer
indebtedness, however, has gone the other way. Personal bankruptcies are close
to an all time high. The typical bank in this country currently has loaned about
three times its net worth.
Clearly, investors cannot afford a recession. The necessity for growth also
explains our near obsession with Japan and its economy. For not only is our
economy highly leveraged, it is also inextricably and deeply interconnected with
all other economies in the world. In 1998, we pulled out all political stops to
force Japan into action. And Japan appears to have responded with an economic
stimulus package, which is focused on growth, approximates one trillion dollars.
By a wide margin, this is the most significant stimulus package ever undertaken
by any developed country. Again the message for investors is that growth, not
just in America but in all parts of the world, is no longer just desirable, but
a compelling necessity.
- -11-
<PAGE>
MEGATRENDS FUND
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
BERKSHIRE HATHAWAY, INC 9.31%
HOLDING COMPANY
- ----------------------------------------------------
SOTHEBY'S HOLDINGS, INC 6.76%
BUSINESS SERVICES
- ----------------------------------------------------
FANNIE MAE 5.54%
FINANCIAL SERVICES
- ----------------------------------------------------
GENERAL RE CO 4.76%
INSURANCE
- ----------------------------------------------------
CRESCENT REAL ESTATE EQUITIES CO 4.22%
REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------
NEW PLAN EXCEL REALTY TRUST 3.94%
REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------
MICROSOFT CORP 3.57%
COMPUTERS & DATA PROCESSING
- ----------------------------------------------------
INTEL CORP 3.43%
ELECTRONICS & COMPONENTS
- ----------------------------------------------------
SONY CORP 3.17%
COMMUNICATIONS EQUIPMENT
- ----------------------------------------------------
BRE PROPERTIES, INC 3.16%
REAL ESTATE INVESTMENT TRUST
- ----------------------------------------------------
OTHER 52.14%
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
REAL ESTATE INVESTMENT TRUST 11.32%
OIL & GAS EXTRACTION & SERVICES 10.24%
HOLDING COMPANY 9.31%
METAL MINING 7.31%
BUSINESS SERVICES 6.76%
- -12-
<PAGE>
GLOBAL BLUE CHIP FUND
MANAGEMENT TEAM'S PERSPECTIVE
A Message from Bin Shi, CFA, Ralph Aldis, CFA, and Rahim Kassim-Lakha
INTRODUCTION
On October 1, 1998, the management of the Adrian Day Global Opportunity Fund was
brought in-house and the fund was renamed the Global Blue Chip Fund. A new
portfolio team was established to revitalize the fund's performance and improve
its strategy. The fund's objective remains long-term growth through greater
exposure to international blue chip stocks.
The fund's new investment strategy is designed to address market volatility by
incorporating a disciplined top-down macro theme approach combined with a
bottom-up stock-selection strategy. We seek leading growth stocks that fit
with-in macroeconomic themes.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
GLOBAL BLUE CHIP FUND S&P 500 DOW JONES WORLD INDEX MSCI WORLD INDEX
DATE VALUE VALUE VALUE VALUE
<S> <C> <C> <C> <C>
2/19/1997 $10,000.00
2/28/1997 $9,940.00 $10,000.00 $10,000.00 $10,000.00
3/31/1997 $9,730.00 $9,589.88 $9,909.73 $9,787.90
4/30/1997 $9,550.00 $10,161.88 $10,091.42 $10,093.63
5/30/1997 $9,690.00 $10,780.11 $10,762.06 $10,702.19
6/30/1997 $9,670.00 $11,262.79 $11,281.10 $11,221.65
7/31/1997 $9,710.00 $12,158.45 $11,781.04 $11,724.36
8/29/1997 $9,590.00 $11,477.82 $11,027.08 $10,925.85
9/30/1997 $9,660.00 $12,106.07 $11,635.81 $11,505.17
10/31/1997 $8,960.00 $11,702.21 $10,848.28 $10,885.19
11/28/1997 $8,430.00 $12,243.49 $11,099.41 $11,063.43
12/31/1997 $8,297.00 $12,453.61 $11,224.40 $11,183.98
1/30/1998 $8,195.32 $12,591.22 $11,447.17 $11,481.28
2/27/1998 $8,398.68 $13,498.82 $12,248.00 $12,243.23
3/31/1998 $8,683.38 $14,189.52 $12,702.81 $12,745.44
4/30/1998 $8,642.71 $14,332.21 $12,879.88 $12,855.01
5/29/1998 $7,900.45 $14,086.20 $12,682.56 $12,679.01
6/30/1998 $7,361.55 $14,657.95 $12,920.38 $12,964.95
7/31/1998 $6,985.34 $14,502.26 $13,040.16 $12,929.18
8/31/1998 $5,785.53 $12,407.69 $11,520.66 $11,189.96
9/30/1998 $6,202.41 $13,202.58 $11,334.34 $11,372.67
10/30/1998 $6,171.91 $14,275.53 $12,396.13 $12,385.46
</TABLE>
AVERAGE ANNUAL PERFORMANCE
Inception 1 Year
Global Blue Chip Fund (INCEPTION 2/20/97) (24.80%) (31.12%)
- --------------------------------------------------------------------------------
S&P 500 23.78% 21.99%
- --------------------------------------------------------------------------------
Dow Jones World Index 13.74% 14.27%
- --------------------------------------------------------------------------------
MSCI World Index 13.68% 13.78%
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE MAY FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE MSCI WORLD INDEX IS BASED ON THE SHARE
PRICES OF APPROXIMATELY 1,600 COMPANIES LISTED ON STOCK EXCHANGES IN 22
COUNTRIES. THE DOW JONES WORLD STOCK INDEX IS A CAPITALIZATION-WEIGHTED INDEX
COMPRISED OF COMPANIES TRADED PUBLICLY IN SELECT COUNTRIES ALL OVER THE WORLD.
- -13-
<PAGE>
GLOBAL BLUE CHIP FUND
PERFORMANCE
As investors are well aware, the previously named Adrian Day Global Opportunity
Fund had significant exposure to the emerging markets and natural resource
sectors over the past twelve months. Both these areas have delivered very poor
performance, especially in the deflationary world economy. Consequently, the
fund continued to underperform relative to the Dow Jones World and MSCI World
indexes. The fund declined 31.12% over the fiscal year ended October 31, 1998.
Over the same time period the MSCI World Index increased 13.78% and the Dow
Jones World Index grew by 14.27%.
THE YEAR IN REVIEW - THE BIG PICTURE
ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE MARKETS
Throughout much of the past year, global markets, in particular, emerging
markets, were hit hard. The fund had significant exposure to the basic materials
sector, primarily gold mining and petroleum companies, which faced price
declines in the underlying commodities. As a result, the fund's performance
lagged behind its peer group.
INVESTMENT HIGHLIGHTS
We will continue to add to our current positions and seek stocks with growth
potential above their respective industry groups and which have low exposure to
the troubled economies in Russia, Asia and Latin America.
CURRENT OUTLOOK
The new management team has been restructuring the portfolio and will adhere to
a stringent buy/sell discipline. The fund will focus on countries with the
strongest economies as measured by GDP growth and invest in the best companies
in those countries.
The current outlook for the global markets is showing signs of improvement. On
January 1, 1999, the European Monetary Union (EMU) will bring three quarters of
Europe under one roof, diminishing country and currency factors and allowing us
to focus our efforts on sector and stock selection. The EMU will make up 19.4%
of world GDP (versus 19.6% for the U.S.). Increased competition and higher
efficiency from consolidation and restructuring will have the potential to
enhance shareholder value in the leading European stocks. We remain cautious
about Japan and its neighbors in Far East Asia.
- -14-
<PAGE>
GLOBAL BLUE CHIP FUND
Our goal is to outperform the Dow Jones World Index (DJWI), an index that has
consistently outperformed the Lipper International and Lipper Global indexes
on a one-, three-, and five-year basis. The fund will select stocks that have
strong growth potential and are undervalued relative to their respective peer
groups.
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
STANDARD & POOR'S DEPOSITARY RECEIPTS 2.66%
INVESTMENT TRUSTS
- ------------------------------------------------------
LOEWS CORP 1.98%
INSURANCE
- ------------------------------------------------------
CISCO SYSTEMS, INC 1.90%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
MICROSOFT CORP 1.82%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
GENERAL ELECTRIC CO 1.58%
DIVERSIFIED MANUFACTURING
- ------------------------------------------------------
WEBS-FRANCE 1.44%
INVESTMENT TRUSTS
- ------------------------------------------------------
NESTLE SA 1.41%
FOOD PROCESSING
- ------------------------------------------------------
INTEL CO 1.08%
SEMICONDUCTORS
- ------------------------------------------------------
WEBS-GERMANY 1.00%
INVESTMENT TRUSTS
- ------------------------------------------------------
INTERNATIONAL BUSINESS MACHINES CO 0.90%
COMPUTERS & DATA PROCESSING
- ------------------------------------------------------
OTHER 84.23%
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
COMPUTERS & DATA PROCESSING 5.84%
PHARMACEUTICALS 5.11%
INVESTMENT TRUSTS 5.10%
TELECOMMUNICATIONS 4.74%
PETROLEUM REFINING 4.28%
- -15-
<PAGE>
REGENT EASTERN EUROPEAN FUND
FUND MANAGER'S PERSPECTIVE
A Message from Dominic Bokor-Ingram
INTRODUCTION
The Regent Eastern European Fund invests in dynamic companies in the emerging
markets of Eastern Europe, including Russia and other countries within the
former Soviet Union. The fund seeks to achieve long-term growth of capital.
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
<TABLE>
<CAPTION>
REGENT EASTERN EUROPEAN FUND S&P 500 ING BARINGS EMERGING MKTS-EASTERN EUROPEAN CS FIRST BOSTON ROS 30 INDEX
DATE VALUE VALUE VALUE VALUE
<S> <C> <C> <C> <C>
3/27/1997 $10,000.00
3/31/1997 $10,000.00 $10,000.00 $10,000.00 $10,000.00
4/30/1997 $10,360.00 $10,596.46 $10,083.67 $10,423.00
5/30/1997 $10,440.00 $11,241.13 $10,275.93 $11,585.21
6/30/1997 $11,190.00 $11,744.45 $11,255.04 $13,535.12
7/31/1997 $11,950.00 $12,678.42 $12,429.98 $16,319.84
8/29/1997 $11,750.00 $11,968.68 $12,215.76 $15,563.85
9/30/1997 $12,480.00 $12,623.80 $12,762.88 $16,578.68
10/31/1997 $11,190.00 $12,202.67 $11,279.37 $14,326.56
11/28/1997 $10,190.00 $12,767.09 $9,425.59 $11,056.80
12/31/1997 $11,237.00 $12,986.19 $10,782.70 $13,211.45
1/30/1998 $10,272.11 $13,129.69 $8,797.18 $9,349.87
2/27/1998 $11,166.64 $14,076.11 $10,327.56 $11,000.84
3/31/1998 $11,508.38 $14,796.35 $10,846.78 $11,573.08
4/30/1998 $11,860.16 $14,945.14 $11,022.43 $11,352.95
5/29/1998 $9,960.53 $14,688.60 $7,991.34 $7,017.54
6/30/1998 $9,819.81 $15,284.81 $7,622.83 $5,428.60
7/31/1998 $10,453.02 $15,122.46 $8,173.51 $5,547.52
8/31/1998 $7,447.78 $12,938.32 $4,724.66 $2,254.45
9/30/1998 $7,266.86 $13,767.20 $4,445.17 $1,524.11
10/30/1998 $8,060.89 $14,886.04 $5,179.80 $2,225.07
</TABLE>
AVERAGE ANNUAL PERFORMANCE
Inception 1 Year
Regent Eastern European Fund (INCEPTION 3/31/97) (12.64%) (27.96%)
- --------------------------------------------------------------------------------
S&P 500 28.56% 21.99%
- --------------------------------------------------------------------------------
ING Barings Emerging Mkts-Eastern European (33.99%) (54.08%)
- --------------------------------------------------------------------------------
CS First Boston ROS 30 Index (61.29%) (84.47%)
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE MAY FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. THE CS FIRST BOSTON ROS 30 INDEX IS A
CAPITALIZATION-WEIGHTED INDEX BASED ON 30 STOCKS LISTED ON THE RUSSIAN STOCK
EXCHANGE. THE ING BARINGS EMERGING MARKETS-EASTERN EUROPEAN INDEX IS COMPRISED
OF INDIVIDUAL COMPANIES REPRESENTATIVE OF THE EASTERN EUROPEAN MARKETS.
PERFORMANCE
For the fiscal year ended October 31, 1998, the fund was down 27.96%. This
decline was much smaller than those experienced by the fund's benchmarks. ING
Barings Emerging Markets-Eastern European Index dropped 54.08% and the CS First
Boston ROS 30 Index fell 84.47% over the same period. The fund's relatively
better performance was largely due to its divestiture of Russian stocks.
- -16-
<PAGE>
REGENT EASTERN EUROPEAN FUND
THE YEAR IN REVIEW - THE BIG PICTURE
ECONOMIC AND POLITICAL ISSUES THAT AFFECTED THE MARKETS
At the end of July 1998, the cracks were already beginning to appear in Russian
equity and debt markets. Debt yields, following a brief reduction after the IMF
package, were increasing and rapidly ballooning to 150% per annum in local
currency terms. The equity market was continuing to fall. We have had a high
cash weighting because of our concern that any negative news from Russia would
be exaggerated and spread to other strong economies in Central Europe.
Given our long-held view that any major negative sentiment toward the Russian
market would have a short-term effect on Central Europe and other emerging
markets, the positive news was that we could capture opportunities in Poland,
Hungary and Eastern Europe created by negative sentiment toward Russia.
INVESTMENT HIGHLIGHTS
August 17, 1998, the day that Russia defaulted on its local currency debt, was
the key date in the emerging market collapse. This was the first such default
since China did so in 1947. In addition to defaulting on local currency debt,
Russia declared a 90-day debt moratorium for all local currency denominations
and foreign currency debt as well as a moratorium on Russian banks honoring
forward exchange contracts. This huge loss of capital, not just in Russia, but
the international investment community as well, precipitated a very sharp fall
in global emerging markets. People were forced to liquidate other positions in
order to pay margin calls on their Russian exposure. Investors' complete
reassessment of risk created a similar effect on other countries that were
unable to roll over their local currency debt. This in turn led to nervousness
about for-eign debt repayments and the ability for foreign debt to be serviced.
It also caused further erosion of assets and more margin calls, thereby
hastening the downward spiral of emerging debt and equity markets.
Currently, there is no economic plan in Russia. It is clear that any economic
plan that appeals to the Russian Duma will not appeal to the IMF. The only
option available to Russia is to keep the population under control by printing
money to pay wages. We have yet to see a large-scale printing of money, but we
believe that it is only a matter of time. When this occurs, it will most likely
degenerate into hyperinflation unless price controls, the other great communist
tool, are implemented.
- -17-
<PAGE>
REGENT EASTERN EUROPEAN FUND
We have significantly reduced the fund's exposure to Russia. The fund has
reduced its Russian holdings from 32% on October 31, 1997 and 28% on April 30,
1998, to 4% as of October 31, 1998. We do not expect to increase that exposure
in the coming months. If the technical rally in the Russian market continues, we
may reduce our position further.
CURRENT OUTLOOK
We will continue to focus on the Central European markets of Poland and Hungary.
Investors are paying a high premium for liquidity. We think it is prudent to
maintain liquidity both in terms of cash position and underlying investments.
We see the greatest opportunities in the Hungarian market. Hungary is ahead of
other Central European countries in terms of its ability to generate economic
growth and company earnings growth. Corporate governance and company management
is the best in the region. We believe this situation will continue. With the
diversified sectoral nature of the market, we can gain exposure to a broad
spectrum of Hungarian industries through large, liquid blue chip companies. Our
current weighting as of October 31, 1998 in Hungary is 30% of the fund, and we
are comfortable with this position.
The Polish market is the other Central European market where we see huge
potential. Polish economic growth has been very strong for the last two years.
However, there has been a failure to convert this economic growth into
share-holder value and company earnings growth. In order for the Polish market
to substantially perform, shareholder value needs to be created. As of October
31, 1998 we have a large position of 33% of the fund in Poland, and this will
remain a primary focus.
We will continue to avoid the Czech Republic because we expect the corporate
governance and corruption issues that have plagued the market for the last three
years will continue. It appears that of the five countries put on the fast track
towards European Monetary Union (EMU) membership, the Czech Republic is in fifth
place. While investors are putting a premium on transparency and liquidity, we
will continue to focus on those markets where there is a clear exit strategy
from emerging to developed markets.
- -18-
<PAGE>
REGENT EASTERN EUROPEAN FUND
TOP 10 HOLDINGS BASED ON TOTAL INVESTMENTS
MOL MAGYAR OLAJ-ES GAZIPARI RT 10.66%
OIL & GAS EXTRACTION
- ----------------------------------------------------
ELEKTRIM SPOLKA AKCYJNA 9.72%
CONGLOMERATES
- ----------------------------------------------------
KGHM POLSKA MIEDZ 6.54%
METALS MINING
- ----------------------------------------------------
BORSODCHEM RT 5.43%
CHEMICALS
- ----------------------------------------------------
BUDIMEX SA 4.65%
CONSTRUCTION
- ----------------------------------------------------
OTP BANK 4.12%
COMMERCIAL BANKS
- ----------------------------------------------------
BIG BANK GDANSKI 3.49%
COMMERCIAL BANKS
- ----------------------------------------------------
MAGYAR TAVKOZLESI RT 3.22%
COMMUNICATIONS
- ----------------------------------------------------
PRIMAGAZ HUNGARIA CO., LTD 2.42%
OIL & GAS EXTRACTION
- ----------------------------------------------------
EGIS PHARMACEUTICALS, LTD 2.10%
PHARMACEUTICALS
- ----------------------------------------------------
OTHER 47.65%
TOP 5 INDUSTRIES BASED ON TOTAL INVESTMENTS
OIL & GAS EXTRACTION 13.07%
COMMERCIAL BANKS 10.80%
CONGLOMERATES 9.72%
CONSTRUCTION 7.72%
METALS MINING 6.73%
- -19-
<PAGE>
BONNEL GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS 100.11% SHARES VALUE
AEROSPACE 1.58%
- -------------------------------------------------------------------------------
AlliedSignal, Inc. .......................... 20,000 $ 778,750
Cordant Technologies, Inc. .................. 15,000 610,313
----------
1,389,063
AIR TRANSPORTATION 0.54%
- -------------------------------------------------------------------------------
Southwest Airlines Co. ...................... 22,500 476,718
AIRCRAFT 0.53%
- -------------------------------------------------------------------------------
Sundstrand Corp. ............................ 10,000 469,375
APPLIANCES 0.36%
- -------------------------------------------------------------------------------
Premark International, Inc. ................. 10,000 316,875
BUILDING PRODUCTS 2.35%
- -------------------------------------------------------------------------------
Ecolab, Inc. ................................ 10,000 298,750
Lowe's Companies, Inc. ...................... 30,000 1,010,625
York International Co. ...................... 20,000 752,500
----------
2,061,875
BUSINESS SERVICES 4.40%
- -------------------------------------------------------------------------------
American Management Systems ................. 35,000 1,074,063*
Concord EFS, Inc. ........................... 55,000 1,567,500*
Paychex, Inc. ............................... 20,000 995,000
Pre-Paid Legal Services, Inc. ............... 10,000 239,375*
----------
3,875,938
CARPETS & RUGS 0.52%
- -------------------------------------------------------------------------------
Mohawk Industries, Inc. ..................... 15,000 452,812*
COMMERCIAL PRINTING 0.27%
- -------------------------------------------------------------------------------
Consolidated Graphics, Inc. ................. 5,000 237,187*
COMMERCIAL SERVICES 0.62%
- -------------------------------------------------------------------------------
Lason, Inc. ................................. 10,000 547,500
COMPUTER RESEARCH & ANALYSIS 0.41%
- -------------------------------------------------------------------------------
META Group, Inc. ............................ 15,000 360,000*
COMPUTER SOFTWARE 11.99%
- -------------------------------------------------------------------------------
AVT Co. ..................................... 50,000 1,093,750*
BMC Software, Inc. .......................... 38,000 1,826,375*
- -20-
<PAGE>
BONNEL GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
COMPUTER SOFTWARE (CONT'D)
- --------------------------------------------------------------------------------
Citrix Systems, Inc. ........................ 33,000 $ 2,338,875*
Keane, Inc. ................................. 5,000 166,250*
Legato Systems, Inc. ........................ 45,000 1,760,625*
Microsoft Corp. ............................. 10,000 1,058,750*
Rational Software Co. ....................... 30,000 671,250*
Symix Systems, Inc. ......................... 5,000 97,500*
Veritas Software Co. ........................ 30,000 1,503,750
-----------
10,517,125
COMPUTERS & DATA PROCESSING 17.58%
- --------------------------------------------------------------------------------
CDW Computer Centers, Inc. .................. 10,000 749,375*
Cisco Systems, Inc. ......................... 43,000 2,709,000*
Dell Computer Co. ........................... 20,000 1,312,500*
Fiserv, Inc. ................................ 20,000 930,000*
International Business Machines Co. ......... 10,000 1,484,375
International Network Services .............. 5,000 212,500*
Lexmark International Group, Class A ........ 28,000 1,958,250*
RWD Technologies, Inc. ...................... 15,000 283,125*
Sun Microsystems, Inc. ...................... 40,000 2,330,000*
Symbol Technologies, Inc. ................... 25,000 1,118,750
TSI International Software, Ltd. ............ 15,000 470,625*
Unisys Corp. ................................ 70,000 1,863,750*
-----------
15,422,250
COSMETICS & TOILETRIES 0.08%
- --------------------------------------------------------------------------------
Playtex Products, Inc. ...................... 5,000 65,938*
ELECTRONICS & COMPONENTS 9.16%
- --------------------------------------------------------------------------------
Aeroflex, Inc. .............................. 10,000 112,500*
American Power Conversion Corp. ............. 20,000 848,750*
EMC Co. ..................................... 20,000 1,287,500*
Etec Systems, Inc. .......................... 15,000 508,125*
Intel Co. ................................... 20,000 1,783,750
Power Integrations, Inc. .................... 25,000 400,000*
QLogic Co. .................................. 15,000 1,385,625*
Uniphase Corp. .............................. 15,000 742,500*
Vitesse Semiconductor Corp. ................. 30,000 967,500*
-----------
8,036,250
FABRICATED RUBBER PRODUCTS 0.25%
- --------------------------------------------------------------------------------
Safeskin Corp. .............................. 10,000 221,250*
- -21-
<PAGE>
BONNEL GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
FINANCIAL SERVICES 3.50%
- --------------------------------------------------------------------------------
A.G. Edwards, Inc. .............................. 20,000 $ 691,250
Charles Schwab Corp. ............................ 40,000 1,917,500
Profit Recovery Group International, Inc. ....... 15,000 460,313*
-----------
3,069,063
GLASS CONTAINERS & PRODUCTS 0.84%
- --------------------------------------------------------------------------------
Gentex Corp. .................................... 50,000 734,375*
HEALTHCARE EQUIPMENT & SERVICES 14.20%
- --------------------------------------------------------------------------------
Arterial Vascular Engineer, Inc. ................ 20,000 615,000*
Becton Dickinson & Co. .......................... 40,000 1,685,000
Biogen, Inc. .................................... 30,000 2,085,000*
Cerner Corp. .................................... 30,000 671,250*
DENTSPLY International, Inc. .................... 30,000 772,500
Genentech, Inc., Call/Put Common Shares ......... 15,000 1,074,375*
Genzyme Co. ..................................... 30,000 1,261,875*
Health Management Associates, Inc., Class A ..... 10,000 178,125*
Insight Enterprises, Inc. ....................... 15,000 435,000*
MedQuist, Inc. .................................. 50,000 1,346,875*
Omnicare, Inc. .................................. 15,000 518,437*
Pediatrix Medical Group, Inc. ................... 20,000 932,500*
Res-Care, Inc. .................................. 40,000 885,000*
-----------
12,460,937
HOME FURNISHINGS 0.25%
- --------------------------------------------------------------------------------
Furniture Brands International, Inc. ............ 10,000 215,000*
LEISURE & RECREATION 1.19%
- --------------------------------------------------------------------------------
International Game Technology ................... 40,000 902,500
Radica Games, Ltd. .............................. 10,000 144,375*
-----------
1,046,875
MACHINERY 0.77%
- --------------------------------------------------------------------------------
Gerber Scientific, Inc. ......................... 30,000 678,750
MANUFACTURING 1.32%
- --------------------------------------------------------------------------------
AO Smith Co. .................................... 10,000 204,375
United Technologies Corp. ....................... 10,000 952,500
-----------
1,156,875
- -22-
<PAGE>
BONNEL GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
MOTOR VEHICLES 1.58%
- --------------------------------------------------------------------------------
Fleetwood Enterprises, Inc. .............. 5,000 $ 161,250
Monaco Coach Corp. ....................... 5,000 151,875*
Winnebago Industries, Inc. ............... 100,000 1,068,750
------------
1,381,875
OFFICE EQUIPMENT 0.60%
- --------------------------------------------------------------------------------
United Stationers, Inc. .................. 20,000 530,000*
PHARMACEUTICALS 10.38%
- --------------------------------------------------------------------------------
Abbott Laboratories ...................... 40,000 1,877,500
Alpharma, Inc., Class A .................. 5,000 138,438
Amgen, Inc. .............................. 20,000 1,571,250*
Biovail, Corp. ........................... 20,000 623,750*
Jones Pharma, Inc. ....................... 15,000 484,687
Schering-Plough Corp. .................... 20,000 2,057,500
Warner-Lambert Co. ....................... 30,000 2,351,250
------------
9,104,375
PHOTOGRAPHIC EQUIPMENT 2.76%
- --------------------------------------------------------------------------------
Xerox .................................... 25,000 2,421,875
RESTAURANTS 0.55%
- --------------------------------------------------------------------------------
Brinker International, Inc. .............. 20,000 483,750*
RETAIL 5.25%
- --------------------------------------------------------------------------------
Gap, Inc. ................................ 20,000 1,202,500
Pacific Sunwear of California ............ 30,000 648,750*
Wal-Mart Stores, Inc. .................... 40,000 2,760,000
------------
4,611,250
SATELLITE NETWORKS 1.33%
- --------------------------------------------------------------------------------
Gilat Satellite Networks, Ltd. ........... 25,000 1,162,500*
SEMICONDUCTORS 0.52%
- --------------------------------------------------------------------------------
Level One Communications ................. 17,500 460,469*
SUPERMARKETS 0.32%
- --------------------------------------------------------------------------------
Kroger Co. ............................... 5,000 277,500*
TELECOMMUNICATIONS 1.83%
- --------------------------------------------------------------------------------
Lucent Technologies ...................... 20,000 1,603,750
- -23-
<PAGE>
BONNEL GROWTH FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
TRANSPORTATION 2.08%
- --------------------------------------------------------------------------------
Comair Holdings, Inc. .................... 45,000 $ 1,479,375
GATX Co. ................................. 10,000 345,000
------------
1,824,375
VETERINARY SERVICES 0.20%
- --------------------------------------------------------------------------------
Veterinary Centers of America, Inc. ...... 10,000 177,500*
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.11% ................ 87,851,250
- --------------------------------------------------------------------------------
(cost $81,100,789)
Other assets and liabilities, net ........ (0.11)% (100,274)
------------
NET ASSETS 100% ......................... $ 87,750,976
------------
* Non-income producing security
See accompanying notes to portfolios of investments.
- -24-
<PAGE>
MEGATRENDS FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS 91.62% SHARES VALUE
AIRCRAFT 1.99%
- --------------------------------------------------------------------------------
The Boeing Co. ................................ 11,000 $ 412,500
BEVERAGES 2.61%
- --------------------------------------------------------------------------------
The Coca-Cola Co. ............................. 8,000 541,000
BUILDING PRODUCTS 4.00%
- --------------------------------------------------------------------------------
International Comfort Products Corp. .......... 30,000 271,875*
Royal Group Technologies, Ltd. ................ 28,000 558,250*
----------
830,125
BUSINESS SERVICES 6.78%
- --------------------------------------------------------------------------------
Sotheby's Holdings, Inc., Class A ............. 65,000 1,405,625
COMMUNICATIONS EQUIPMENT 3.18%
- --------------------------------------------------------------------------------
Sony Corp., ADR ............................... 10,000 658,750
COMPUTERS & DATA PROCESSING 5.40%
- --------------------------------------------------------------------------------
Cisco Systems, Inc. ........................... 6,000 378,000*
Microsoft Corp. ............................... 7,000 741,125*
----------
1,119,125
ELECTRONICS & COMPONENTS 5.28%
- --------------------------------------------------------------------------------
Hitachi, Ltd., ADR ............................ 7,500 382,500
Intel Corp. ................................... 8,000 713,500
----------
1,096,000
ENTERTAINMENT 1.17%
- --------------------------------------------------------------------------------
Walt Disney Co. ............................... 9,000 242,437
FARMING 2.57%
- --------------------------------------------------------------------------------
Pioneer Hi-Bred International, Inc. ........... 19,000 532,000
FINANCIAL SERVICES 2.05%
- --------------------------------------------------------------------------------
Fannie Mae .................................... 6,000 424,875
FOOD STORES 0.70%
- --------------------------------------------------------------------------------
General Nutrition Co. ......................... 10,000 145,625*
- -25-
<PAGE>
MEGATRENDS FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
FORESTRY 2.26%
- --------------------------------------------------------------------------------
Weyerhaeuser Co. .............................. 10,000 $ 468,125
HEALTHCARE EQUIPMENT 4.99%
- --------------------------------------------------------------------------------
Pfizer, Inc. .................................. 6,000 643,875
ThermoTrex Corp. .............................. 30,000 391,875*
----------
1,035,750
HOLDING COMPANY 9.33%
- --------------------------------------------------------------------------------
Berkshire Hathaway, Inc., Class A ............. 30 1,935,000*
HOUSEHOLD APPLIANCES 2.11%
- --------------------------------------------------------------------------------
General Electric Co. .......................... 5,000 437,500
INSURANCE 4.77%
- --------------------------------------------------------------------------------
General Re Co. ................................ 4,500 988,594
METAL MINING 7.32%
- --------------------------------------------------------------------------------
Barrick Gold Corp. ............................ 14,000 299,250
Cyprus Amax Minerals Co. ...................... 30,000 373,125
Newmont Mining Corp. .......................... 24,000 510,000
Stillwater Mining Co. ......................... 7,500 242,813*
TVX Gold, Inc. ................................ 50,000 93,750*
----------
1,518,938
OIL & GAS EXTRACTION & SERVICES 10.25%
- --------------------------------------------------------------------------------
Apache Corp. .................................. 12,000 339,750
Diamond Offshore Drilling, Inc. ............... 15,000 460,312
ENSCO International, Inc. ..................... 10,000 134,375
Nabors Industries, Inc. ....................... 22,000 407,000*
Rowan Companies, Inc. ......................... 15,000 218,438*
Schlumberger, Ltd. ............................ 10,800 567,000
----------
2,126,875
PETROLEUM REFINING 1.96%
- --------------------------------------------------------------------------------
Chevron Corp. ................................. 5,000 407,500
- -26-
<PAGE>
MEGATRENDS FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
REAL ESTATE INVESTMENT TRUST 11.34%
- --------------------------------------------------------------------------------
BRE Properties, Inc., Class A ................ 27,200 $ 656,200
Crescent Real Estate Equities Co. ............ 35,000 877,187
New Plan Excel Realty Trust .................. 36,000 819,000
----------
2,352,387
UTILITIES 1.56%
- --------------------------------------------------------------------------------
Duke Energy Co. .............................. 5,000 323,437
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS .......................... 19,002,168
- --------------------------------------------------------------------------------
(cost $18,600,511)
PRINCIPAL
AMOUNT
UNITED STATES GOVERNMENT
AGENCY OBLIGATION 3.50%
Federal National Mortgage Association,
0%, due 10/09/19
(cost $661,567) ........................... $ 2,549,000 725,945
REPURCHASE AGREEMENT 5.06%
Joint Tri-Party Repurchase Agreement,
Donaldson, Lufkin & Jenrette, 10/30/98,
5.40%, due 11/02/98, repurchase price
$1,050,264, collateralized by U.S.
Treasury securities held in a joint
tri-party repurchase account
(cost $1,049,792) ......................... 1,049,792 1,049,792
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.18% ................... 20,777,905
- --------------------------------------------------------------------------------
(cost $20,311,870)
Other assets and liabilities, net(0.18)% .... (38,372)
------------
NET ASSETS 100% ............................. $ 20,739,533
------------
ADR - American Depository Receipt
* Non-income producing security
See accompanying notes to portfolios of investments.
- -27-
<PAGE>
GLOBAL BLUE CHIP FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS 52.18% SHARES VALUE
APPLIANCES 0.47%
- --------------------------------------------------------------------------------
Maytag Corp. .................................. 150 $ 7,416
AUTOMOBILES 1.15%
- --------------------------------------------------------------------------------
Daimler-Benz AG, ADR .......................... 80 6,305
Ford Motor Co. ................................ 100 5,425
General Motors Co. ............................ 100 6,306
-------
18,036
BANKS 2.60%
- --------------------------------------------------------------------------------
Allied Irish Banks plc, ADR ................... 90 7,813
BankAmerica Co. ............................... 100 5,744
Bank One Co. .................................. 100 4,887
Barclays plc, ADR ............................. 125 10,969
Chase Manhattan Co. ........................... 100 5,681
First Union Co. ............................... 100 5,800
-------
40,894
BASE METAL MININGS 0.00%
- --------------------------------------------------------------------------------
Yuma Copper Co. Units (RS) .................... 60,000 0*
BEVERAGES 2.23%
- --------------------------------------------------------------------------------
Anheuser-Busch Companies, Inc. ................ 130 7,727
Buenos Aires Embotelladora, ADR ............... 4,000 0*
The Coca-Cola Co. ............................. 200 13,525
Diageo plc, ADR ............................... 200 8,787
Pepsico, Inc. ................................. 150 5,063
-------
35,102
BUILDING PRODUCTS 0.94%
- --------------------------------------------------------------------------------
Home Depot, Inc. .............................. 240 10,440
Lowe's Companies, Inc. ........................ 130 4,379
-------
14,819
BUSINESS SERVICES 0.54%
- --------------------------------------------------------------------------------
Paychex, Inc. ................................. 170 8,458
- -28-
<PAGE>
GLOBAL BLUE CHIP FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
CHEMICALS 0.37%
- --------------------------------------------------------------------------------
E.I. DuPont de Nemours & Co. ...................... 100 $ 5,750
COMPUTERS & DATA PROCESSING 6.15%
- --------------------------------------------------------------------------------
Cisco Systems, Inc. ............................... 500 31,500*
Compaq Computer Co. ............................... 200 6,325
Dell Computer Co. ................................. 120 7,875*
Hewlett Packard Co. ............................... 100 6,019
International Business Machines Co. ............... 100 14,844
Microsoft Corp. ................................... 285 30,173*
-------
96,736
CONSUMER PRODUCTS 1.04%
- --------------------------------------------------------------------------------
Proctor & Gamble Co. .............................. 100 8,888
Unilever NV ....................................... 100 7,525
-------
16,413
DIVERSIFIED MANUFACTURING 3.33%
- --------------------------------------------------------------------------------
General Electric Co. .............................. 300 26,250
Minnesota Mining & Manufacturing Co. .............. 100 8,000
Tyco International Ltd. ........................... 100 6,194
United Technologies Corp. ......................... 125 11,906
-------
52,350
ELECTRIC PRODUCTS 0.48%
- --------------------------------------------------------------------------------
Endesa SA, ADR .................................... 300 7,631
FINANCIAL SERVICES 1.98%
- --------------------------------------------------------------------------------
American Express .................................. 100 8,837
Citigroup, Inc. ................................... 200 9,413
Fannie Mae ........................................ 100 7,081
Freddie Mac ....................................... 100 5,750
-------
31,081
FOOD PROCESSING 2.14%
- --------------------------------------------------------------------------------
Nestle SA, ADR .................................... 220 23,371
Philip Morris Co., Inc. ........................... 200 10,225
-------
33,596
- -29-
<PAGE>
GLOBAL BLUE CHIP FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
INSURANCE 2.63%
- --------------------------------------------------------------------------------
American International Group, Inc. ................. 100 $ 8,525
Loews Corp. ........................................ 350 32,878
-------
41,403
INVESTMENT TRUSTS 5.38%
- --------------------------------------------------------------------------------
Standard & Poor's Depositary Receipts .............. 400 44,050
WEBS-France ........................................ 1,200 23,925
WEBS-Germany ....................................... 800 16,600
-------
84,575
MEDICAL PRODUCTS 0.52%
- --------------------------------------------------------------------------------
Johnson & Johnson .................................. 100 8,150
MULTIMEDIA 0.93%
- --------------------------------------------------------------------------------
Time-Warner, Inc. .................................. 100 9,281
Walt Disney Co. .................................... 200 5,388
-------
14,669
PETROLEUM REFINING 4.51%
- --------------------------------------------------------------------------------
British Petroleum plc, ADR ......................... 90 7,959
Chevron Co. ........................................ 100 8,150
Exxon Co. .......................................... 200 14,250
Mobil Co. .......................................... 100 7,569
Phillips Petroleum Co. ............................. 185 8,001
Royal Dutch Petroleum Co. .......................... 200 9,850
Shell Transport & Trading Company, ADR ............. 250 9,188
Texaco, Inc. ....................................... 100 5,931
-------
70,898
PHARMACEUTICALS 5.38%
- --------------------------------------------------------------------------------
Abbott Laboratories ................................ 150 7,040
American Home Products ............................. 100 4,875
Bristol-Myers Squibb Co. ........................... 100 11,056
Eli Lilly & Co. .................................... 100 8,094
Glaxo Wellcome plc, ADR ............................ 180 11,205
Merck & Co., Inc. .................................. 100 13,525
Pfizer, Inc. ....................................... 100 10,731
Schering-Plough Co. ................................ 100 10,288
Warner-Lambert Co. ................................. 100 7,838
-------
84,652
- -30-
<PAGE>
GLOBAL BLUE CHIP FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON STOCKS SHARES VALUE
PHOTOGRAPHY 0.49%
- --------------------------------------------------------------------------------
Eastman Kodak ................................... 100 $ 7,750
RECRUITING & PLACEMENT AGENCY 0.48%
- --------------------------------------------------------------------------------
Adecco SA, ADR .................................. 150 7,500
RESTAURANTS 0.42%
- --------------------------------------------------------------------------------
McDonald's Co. .................................. 100 6,688
RETAIL 1.90%
- --------------------------------------------------------------------------------
Gap, Inc. ....................................... 135 8,117
Ito-Yokado Co., Ltd., ADR ....................... 135 7,965
Wal-Mart Stores, Inc. ........................... 200 13,800
-------
29,882
SEMICONDUCTORS 1.13%
- --------------------------------------------------------------------------------
Intel Co. ....................................... 200 17,838
TELECOMMUNICATIONS 4.99%
- --------------------------------------------------------------------------------
Ameritech Co. ................................... 100 5,394
AT&T Co. ........................................ 170 10,582
Bell Atlantic Co. ............................... 100 5,312
BellSouth Co. ................................... 100 7,981
GTE Co. ......................................... 100 5,869
Lucent Technologies, Inc. ....................... 120 9,623
MCI Worldcom, Inc. .............................. 200 11,050*
SBC Communications, Inc. ........................ 200 9,263
Vodafone Group plc, ADR ......................... 100 13,463
-------
78,537
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS ............................. 820,824
- --------------------------------------------------------------------------------
(cost $918,219)
- -31-
<PAGE>
GLOBAL BLUE CHIP FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
PRINCIPAL
REPURCHASE AGREEMENTS 53.16% AMOUNT VALUE
Joint Tri-Party Repurchase Agreements,
10/30/98, due 11/02/98, collateralized by
U.S. Treasury securities held in joint
tri-party repurchase accounts:
5.40%, Donaldson, Lufkin & Jenrette,
repurchase price $336,461 ................... $ 336,310 $ 336,310
5.38%, Morgan Stanley, Dean Witter & Co.,
repurchase price $250,112 ................... 250,000 250,000
5.40%, PaineWebber,
repurchase price $250,113 ................... 250,000 250,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS ................... 836,310
- --------------------------------------------------------------------------------
(cost $836,310)
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS 105.34% ..................... 1,657,134
- --------------------------------------------------------------------------------
(cost $1,754,529)
Other assets and liabilities, net(5.34)% ...... (83,971)
-----------
NET ASSETS 100% ............................... $ 1,573,163
-----------
ADR - American Depository Receipt
RS - Restricted Security, See Note 1A
* Non-income producing security
See accompanying notes to portfolios of investments.
- -32-
<PAGE>
REGENT EASTERN EUROPEAN FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON AND PREFERRED STOCKS 66.49% SHARES VALUE
AUTOMOTIVE 0.54%
- --------------------------------------------------------------------------------
KamAZ ........................................... 25,000 $ 6,625*
North American Bus Industries Rt ................ 2,870 24,030
--------
30,655
CHEMICALS 5.47%
- --------------------------------------------------------------------------------
BorsodChem Rt., GDR ............................. 12,552 310,662
COMMERCIAL BANKS 10.88%
- --------------------------------------------------------------------------------
Bank Handlowy W. Warszawie ...................... 10,650 117,458
BIG Bank Gdanski, GDR ........................... 12,418 199,309
OTP Bank, GDR ................................... 4,777 173,166
OTP Bank, Preferred Stock ....................... 3,503 62,386
Powszechny Bank Kredytowy ....................... 974 20,354
SKB Banka, GDR .................................. 6,225 44,976
--------
617,649
COMMUNICATIONS 4.43%
- --------------------------------------------------------------------------------
Magyar Tavkozlesi Rt., ADR ...................... 6,854 184,201
Rostelekom ...................................... 109,900 67,039*
--------
251,240
COMPUTERS & DATA PROCESSING 1.56%
- --------------------------------------------------------------------------------
Softbank SA, GDR ................................ 3,861 88,610
CONGLOMERATES 9.80%
- --------------------------------------------------------------------------------
Elektrim Spolka Akcyjna ......................... 46,734 556,115
CONSTRUCTION 7.77%
- --------------------------------------------------------------------------------
Budimex SA ...................................... 51,200 265,993*
Exbud SA, GDR ................................... 10,620 98,500*
Mostostal-Export ................................ 82,764 76,867
--------
441,360
ELECTRIC SERVICES 1.62%
- --------------------------------------------------------------------------------
Irkutskenergo ................................... 824,279 30,910*
Irkutskenergo, ADR .............................. 14,090 25,538
Nizhnovenergo ................................... 389 1,945*
Unified Energy Systems .......................... 910,285 29,129*
Unified Energy Systems, Preferred Stock ......... 330,000 4,637
--------
92,159
- -33-
<PAGE>
REGENT EASTERN EUROPEAN FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
COMMON AND PREFERRED STOCKS SHARES VALUE
GLASS & GLASSWARE 0.20%
- --------------------------------------------------------------------------------
Krosnienskie Huty Szkla Kros .................. 2,706 $ 11,388
INVESTMENT COMPANIES 0.88%
- --------------------------------------------------------------------------------
NFI Foksal SA ................................. 11,792 16,257*
NFI Fortuna SA ................................ 11,792 17,454*
NFI V Victoria SA ............................. 11,792 16,085*
---------
49,796
MANUFACTURING 1.27%
- --------------------------------------------------------------------------------
Graboplast Rt ................................. 4,076 28,848
Graboplast Rt., GDR ........................... 33,890 43,210
---------
72,058
METALS MINING 6.78%
- --------------------------------------------------------------------------------
Ashurst Technology, Ltd., Units ............... 93,470 4,240*
KGHM Polska Miedz ............................. 51,998 185,626*
KGHM Polska Miedz, GDR ........................ 24,535 188,306
Norilsk Nickel ................................ 12,000 6,540*
---------
384,712
OIL & GAS EXTRACTION 13.17%
- --------------------------------------------------------------------------------
MOL Magyar Olaj-es Gazipari Rt ................ 11,000 246,785
MOL Magyar Olaj-es Gazipari Rt., GDR .......... 15,948 362,817
Primagaz Hungaria Co., Ltd. ................... 13,270 138,114
---------
747,716
PHARMACEUTICALS 2.12%
- --------------------------------------------------------------------------------
EGIS Pharmaceuticals, Ltd. .................... 6,542 120,139
- --------------------------------------------------------------------------------
TOTAL COMMON AND PREFERRED STOCKS ............. 3,774,259
- --------------------------------------------------------------------------------
(cost $6,193,039)
- -34-
<PAGE>
REGENT EASTERN EUROPEAN FUND
PORTFOLIO OF INVESTMENTS OCTOBER 31, 1998
PRINCIPAL
REPURCHASE AGREEMENTS 34.26% AMOUNT VALUE
Joint Tri-Party Repurchase Agreements, 10/30/98,
due 11/02/98, collateralized by U.S. Treasury
securities held in joint tri-party repurchase
accounts:
5.40%, Donaldson, Lufkin, & Jenrette
repurchase price $1,345,282 ................... $ 1,344,677 $ 1,344,677
5.40%, PaineWebber
repurchase price $600,270 ..................... 600,000 600,000
- --------------------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS ..................... 1,944,677
- --------------------------------------------------------------------------------
(cost $1,944,677)
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS 100.75% ....................... 5,718,936
- --------------------------------------------------------------------------------
(cost $8,137,716)
Other assets and liabilities, net(0.75)% ........ (42,813)
-----------
NET ASSETS 100% ................................. $ 5,676,123
-----------
ADR - American Depository Receipt
GDR - Global Depository Receipt
* Non-income producing security
See accompanying notes to portfolios of investments.
- -35-
<PAGE>
NOTES TO PORTFOLIOS OF INVESTMENTS OCTOBER 31, 1998
GLOBAL PORTFOLIO SECURITIES BY COUNTRY
PERCENTAGE OF
COUNTRY VALUE TOTAL INVESTMENTS
- --------------------------------------------------------------------------------
GLOBAL BLUE CHIP FUND
- --------------------------------------------------------------------------------
United States ................................ $ 681,293 41.11%
United Kingdom ............................... 61,571 3.72
Switzerland .................................. 30,871 1.86
Netherlands .................................. 17,375 1.05
Japan ........................................ 7,965 0.48
Ireland ...................................... 7,813 0.47
Spain ........................................ 7,631 0.46
Germany ...................................... 6,305 0.38
United States - Repurchase Agreements ........ 836,310 50.47
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS ............................ $1,657,134 100.00%
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REGENT EASTERN EUROPEAN FUND
- --------------------------------------------------------------------------------
Poland ....................................... $1,858,322 32.50%
Hungary ...................................... 1,694,358 29.63
Russia ....................................... 217,339 3.80
Bermuda ...................................... 4,240 0.07
United States - Repurchase Agreements ........ 1,944,677 34.00
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS ............................ $5,718,936 100.00%
- --------------------------------------------------------------------------------
- -36-
<PAGE>
NOTES TO PORTFOLIOS OF INVESTMENTS OCTOBER 31, 1998
JOINT TRI-PARTY REPURCHASE AGREEMENTS (SEE ALSO NOTE 1 TO FINANCIAL STATEMENTS.)
The terms of the repurchase agreements and the securities held as collateral in
the tri-party joint repurchase agreements at October 31, 1998 were:
Donaldson, Lufkin & Jenrette repurchase agreement, 5.40%, 10/30/98, due 11/02/98
(with a market value of $86,553,924)
$49,160,000 U.S. Treasury Bond, 6.00%, 07/31/02
$22,978,000 U.S. Treasury Bond, 5.50%, 05/31/03
$5,303,000 U.S. Treasury Bond, 0.00%, 08/15/19
$4,971,000 U.S. Treasury Bond, 0.00%, 02/15/21
$4,954,000 U.S. Treasury Bond, 0.00%, 05/15/22
$4,174,000 U.S. Treasury Bond, 0.00%, 08/15/27
$4,106,000 U.S. Treasury Bond, 0.00%, 05/15/23
$2,477,000 U.S. Treasury Bond, 0.00%, 02/15/16
$2,348,000 U.S. Treasury Bond, 0.00%, 05/15/18
$1,397,000 U.S. Treasury Bond, 0.00%, 11/15/09
Total principal amount: $84,855,963; Total repurchase value: $84,894,148
PaineWebber repurchase agreement, 5.40%, 10/30/98, due 11/02/98
(with a market value of $29,635,558)
$9,060,000 U.S. Treasury Bond, 7.87%, 02/15/21
$6,654,000 U.S. Treasury Bond, 6.00%, 02/15/26
$6,605,000 U.S. Treasury Bond, 7.25%, 08/15/22
$1,145,000 U.S. Treasury Bond, 11.62%, 11/15/04
Total principal amount: $29,050,000; Total repurchase value: $29,063,073
Morgan Stanley, Dean Witter & Co. repurchase agreement, 5.38%, 10/30/98, due
11/02/98 (with a market value of $20,281,785)
$19,775,000 U.S. Treasury Bond, 6.25%, 08/31/00
Total principal amount: $20,250,000; Total repurchase value: $20,259,079
Other mutual funds managed by U.S. Global Investors, Inc. participate in the
tri-party joint repurchase agree-ments. Each owns an undivided interest in the
accounts.
- -37-
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
BONNEL GROWTH
FUND
<S> <C>
INVESTMENTS, AT IDENTIFIED COST ................................ $81,100,789
-----------
ASSETS
- --------------------------------------------------------------------------------
Investments, at value
Securities ................................................... $87,851,250
Repurchase agreement ......................................... --
Receivables:
Investments sold ............................................. 1,685,169
Capital shares sold .......................................... 85,847
Dividends .................................................... 16,400
Interest ..................................................... --
Other assets ................................................... 21,802
- --------------------------------------------------------------------------------
TOTAL ASSETS ................................................... 89,660,468
- --------------------------------------------------------------------------------
LIABILITIES
- --------------------------------------------------------------------------------
Payables:
Investments purchased ...................................... 29,106
Capital shares redeemed .................................... 256,483
To manager and affiliates .................................. 69,924
To custodian ............................................... 1,443,288
Accounts payable and accrued expenses ...................... 110,691
- --------------------------------------------------------------------------------
TOTAL LIABILITIES .............................................. 1,909,492
- --------------------------------------------------------------------------------
NET ASSETS ..................................................... $87,750,976
===========
NET ASSETS CONSIST OF:
- --------------------------------------------------------------------------------
Paid in capital ................................................ $79,848,964
Undistributed net investment income (loss) ..................... --
Accumulated net realized gain (loss)
on investments and foreign currencies ......................... 1,151,551
Net unrealized appreciation (depreciation) of
investments and other assets and liabilities
denominated in foreign currencies ............................. 6,750,461
-----------
Net assets applicable to capital shares outstanding ............ $87,750,976
===========
Capital shares outstanding, an unlimited number of
no par shares authorized ................................ 5,424,122
===========
NET ASSET VALUE, PER SHARE ..................................... $ 16.18
===========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
- -38-
<PAGE>
STATEMENTS OF ASSETS AND LIABILITIES OCTOBER 31, 1998
<TABLE>
<CAPTION>
MEGATRENDS GLOBAL BLUE REGENT EASTERN
FUND CHIP FUND EUROPEAN FUND
<S> <C> <C> <C>
INVESTMENTS, AT IDENTIFIED COST ..................... $ 20,311,870 $ 1,754,529 $ 8,137,716
================= ============== ==============
ASSETS
- -------------------------------------------------------------------------------------------------------------------------
Investments, at value
Securities ........................................ $ 19,728,113 $ 820,824 $ 3,774,259
Repurchase agreement .............................. 1,049,792 836,310 1,944,677
Receivables:
Investments sold .................................. 1,290,768 76,295 --
Capital shares sold ............................... 1,178 59 77
Dividends ......................................... 34,610 1,982 3,359
Interest .......................................... 315 251 424
Other assets ........................................ 6,230 16,432 20,459
- -------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS ........................................ 22,111,006 1,752,153 5,743,255
- -------------------------------------------------------------------------------------------------------------------------
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------------
Payables:
Investments purchased ........................... 1,297,260 137,625 --
Capital shares redeemed ......................... 19,989 505 5,475
To manager and affiliates ....................... 16,897 1,614 4,789
To custodian .................................... -- 965 6,691
Accounts payable and accrued expenses ........... 37,327 38,281 50,177
- -------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES ................................... 1,371,473 178,990 67,132
- -------------------------------------------------------------------------------------------------------------------------
NET ASSETS .......................................... $ 20,739,533 $ 1,573,163 $ 5,676,123
================= ============== ==============
NET ASSETS CONSIST OF:
- -------------------------------------------------------------------------------------------------------------------------
Paid in capital ..................................... $ 17,008,163 $ 2,818,047 $ 8,469,753
Undistributed net investment income (loss) .......... -- 1,499 --
Accumulated net realized gain (loss)
on investments and foreign currencies .............. 3,265,334 (1,149,990) (374,861)
Net unrealized appreciation (depreciation) of
investments and other assets and liabilities
denominated in foreign currencies .................. 466,036 (96,393) (2,418,769)
----------------- -------------- --------------
Net assets applicable to capital shares outstanding . $ 20,739,533 $ 1,573,163 $ 5,676,123
Capital shares outstanding, an unlimited number of ================= ============== ==============
no par shares authorized ..................... 1,827,918 259,293 707,854
================= ============== ==============
NET ASSET VALUE, PER SHARE .......................... $ 11.35 $ 6.07 $ 8.02
================= ============== ==============
</TABLE>
- -39-
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
BONNEL GROWTH
FUND
NET INVESTMENT INCOME
INCOME:
- --------------------------------------------------------------------------------
<S> <C>
Dividends $440,631
Foreign taxes withheld on dividends --
---------
Net dividends 440,631
Interest and other 215,398
---------
TOTAL INCOME 656,029
EXPENSES:
- --------------------------------------------------------------------------------
Management fee 1,017,148
Transfer agent fees and expenses 222,546
Accounting service fees and expenses 61,827
Legal and professional fees 160,256
Distribution plan expenses 254,288
Custodian fees 33,897
Shareholder reporting 34,261
Registration fees 45,071
Trustee's fees and expenses 13,901
Miscellaneous 34,463
-----------
Total expenses before reductions 1,877,658
Short-term trading fee (2,338)
Expenses offset (4,392)
Expenses reimbursed --
-----------
NET EXPENSES 1,870,928
- --------------------------------------------------------------------------------
Net Investment Income (Loss) (1,214,899)
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from:
Securities 2,500,611
Foreign currency transactions --
-----------
Net realized gain (loss) 2,500,611
-----------
Net change in unrealized appreciation (depreciation) of:
Investments 557,231
Other assets and liabilities denominated
in foreign currencies --
-----------
Net unrealized appreciation (depreciation) 557,231
------------
- --------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 3,057,842
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 1,842,943
===========
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
- -40-
<PAGE>
FOR THE YEAR ENDED OCTOBER 31, 1998
<TABLE>
<CAPTION>
MEGATRENDS GLOBAL BLUE REGENT EASTERN
FUND CHIP FUND EUROPEAN FUND
NET INVESTMENT INCOME
INCOME:
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividends $ 324,015 $ 42,954 $ 55,015
Foreign taxes withheld on dividends (723) (2,838) (6,351)
-------------- -------------- --------------
Net dividends 323,292 40,116 48,664
Interest and other 140,824 54,458 123,715
-------------- -------------- --------------
TOTAL INCOME 464,116 94,574 172,379
EXPENSES:
- ------------------------------------------------------------------------------------------------------------------------------
Management fee 240,829 34,337 100,560
Transfer agent fees and expenses 54,419 14,890 37,717
Accounting service fees and expenses 42,004 43,737 53,754
Legal and professional fees 35,978 53,512 65,226
Distribution plan expenses 60,206 6,870 20,112
Custodian fees 14,351 44,922 56,648
Shareholder reporting 12,656 7,133 6,555
Registration fees 16,698 18,527 23,364
Trustee's fees and expenses 9,184 7,039 8,208
Miscellaneous 10,844 10,668 27,439
-------------- ------------- -------------
Total expenses before reductions 497,169 241,635 399,583
Short-term trading fee -- -- (4,811)
Expenses offset (12) (449) (2,645)
Expenses reimbursed -- (35,354) (30,985)
-------------- ------------- -------------
NET EXPENSES 497,157 205,832 361,142
- ------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) (33,041) (111,258) (188,763)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Realized gain (loss) from:
Securities 3,311,828 (1,143,636) (370,870)
Foreign currency transactions -- (23,011) (17,440)
-------------- ------------- -------------
Net realized gain (loss) 3,311,828 (1,166,647) (388,310)
-------------- ------------- -------------
Net change in unrealized appreciation (depreciation) of: (4,265,251) 244,427 (1,935,107)
Investments -- 1,011 (7,811)
Other assets and liabilities denominated -------------- ------------- -------------
in foreign currencies (4,265,251) 245,438 (1,942,918)
-------------- ------------- -------------
Net unrealized appreciation (depreciation)
- ------------------------------------------------------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) (953,423) (921,209) (2,331,228)
ON INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ (986,464) $ (1,032,467) $ (2,519,991)
============== ============== ==============
</TABLE>
- -41-
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BONNEL GROWTH FUND
-----------------------------------------------------
YEAR ENDED MONTH ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997 SEPTEMBER 30, 1997
INCREASE (DECREASE)
IN NET ASSETS
FROM INVESTMENT OPERATIONS:
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income (loss) ............. $ (1,214,899) $ (136,075) $ (1,149,779)
Net realized gain (loss) ................. 2,500,611 5,716,293 17,376,123
Net unrealized appreciation (depreciation) 557,231 (17,312,394) 8,711,402
------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS .......... 1,842,943 (11,732,176) 24,937,746
DISTRIBUTIONS TO SHAREHOLDERS:
- -----------------------------------------------------------------------------------------------
From net investment income ............... -- -- --
In excess of net investment income ....... -- -- (896,933)
From net capital gains ................... (19,869,076) -- --
------------- ------------- -------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ... (19,869,076) -- (896,933)
FROM CAPITAL SHARE TRANSACTIONS:
- -----------------------------------------------------------------------------------------------
Proceeds from shares sold ................ 41,181,987 5,595,992 66,851,063
Distributions reinvested ................. 19,029,963 -- 863,247
Paid-in capital portion of
short-term trading fee ................. 35,700 4,962 40,392
------------- ------------- -------------
60,247,650 5,600,954 67,754,702
Cost of shares redeemed .................. (59,113,926) (7,116,832) (64,599,629)
------------- ------------- -------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... 1,133,724 (1,515,878) 3,155,073
- -----------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ....... (16,892,409) (13,248,054) 27,195,886
- -----------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period ......................... 104,643,385 117,891,439 90,695,553
- -----------------------------------------------------------------------------------------------
END OF PERIOD ............................... $ 87,750,976 $ 104,643,385 $ 117,891,439
- -----------------------------------------------------------------------------------------------
Undistributed net investment
income, end of period ..................... $ -- $ -- $ --
============= ============= =============
CAPITAL SHARE ACTIVITY
- -----------------------------------------------------------------------------------------------
Shares sold .............................. 2,421,759 265,753 3,724,404
Shares reinvested ........................ 1,148,488 -- 49,413
Shares redeemed .......................... (3,462,041) (342,582) (3,668,729)
------------- ------------- -------------
NET SHARE ACTIVITY .................... 108,206 (76,829) 105,088
============= ============= =============
</TABLE>
- -42-
<PAGE>
<TABLE>
<CAPTION>
MEGATRENDS FUND
INCREASE (DECREASE) --------------------------------------------------------
IN NET ASSETS YEAR ENDED FOUR MONTHS ENDED YEAR ENDED
FROM INVESTMENT OPERATIONS: OCTOBER 31, 1998 OCTOBER 31, 1997 JUNE 30, 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income (loss) ............. $ (33,041) $ 20,134 $ 21,854
Net realized gain (loss) ................. 3,311,828 967,675 3,046,765
Net unrealized appreciation (depreciation) (4,265,251) (130,945) 1,777,070
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS .......... (986,464) 856,864 4,845,689
DISTRIBUTIONS TO SHAREHOLDERS:
- ----------------------------------------------------------------------------------------------------------------
From net investment income ............... -- -- (21,909)
In excess of net investment income ....... (19,609) -- (426,654)
From net capital gains ................... (3,583,127) -- --
------------ ------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ...
(3,602,736) -- (448,563)
FROM CAPITAL SHARE TRANSACTIONS:
- ----------------------------------------------------------------------------------------------------------------
Proceeds from shares sold ................ 2,367,612 1,385,991 1,955,228
Distributions reinvested ................. 3,496,527 -- 437,124
Paid-in capital portion of 2,685 1,730 2,420
short-term trading fee ................. ------------ ------------ ------------
5,866,824 1,387,721 2,394,772
Cost of shares redeemed .................. (6,030,092) (2,362,695) (9,127,072)
------------ ------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... (163,268) (974,974) (6,732,300)
- ----------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ....... (4,752,468) (118,110) (2,335,174)
- ----------------------------------------------------------------------------------------------------------------
NET ASSETS
Beginning of period ......................... 25,492,001 25,610,111 27,945,285
- ----------------------------------------------------------------------------------------------------------------
END OF PERIOD ............................... $ 20,739,533 $ 25,492,001 $ 25,610,111
- ----------------------------------------------------------------------------------------------------------------
Undistributed net investment
income, end of period ..................... $ -- $ 20,079 ($ 55)
============ ============ ============
CAPITAL SHARE ACTIVITY
- ----------------------------------------------------------------------------------------------------------------
Shares sold .............................. 188,788 96,569 157,711
Shares reinvested ........................ 294,817 -- 36,380
Shares redeemed .......................... (489,698) (166,350) (769,632)
------------ ------------ ------------
NET SHARE ACTIVITY .................... (6,093) (69,781) (575,541)
============ ============ ============
</TABLE>
- -43-
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GLOBAL BLUE CHIP FUND
----------------------------
YEAR ENDED FEBRUARY 20, 1997 TO
OCTOBER 31, 1998 OCTOBER 31, 1997
INCREASE (DECREASE)
IN NET ASSETS
FROM INVESTMENT OPERATIONS:
- -------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income (loss) ............. $ (111,258) $ 31,527
Net realized gain (loss) ................. (1,166,647) 2,851
Net unrealized appreciation (depreciation) 245,438 (341,831)
----------- -----------
Net increase (decrease) in net assets
from investment operations .......... (1,032,467) (307,453)
DISTRIBUTIONS TO SHAREHOLDERS:
- -------------------------------------------------------------------------------------
From net investment income ............... -- --
In excess of net investment income ....... (50,314) --
From net capital gains ................... -- --
In excess of net capital gains ........... -- --
----------- -----------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ... (50,314) --
FROM CAPITAL SHARE TRANSACTIONS:
- -------------------------------------------------------------------------------------
Proceeds from shares sold ................ 785,849 4,505,667
Distributions reinvested ................. 48,478 --
Paid-in capital portion of
short-term trading fee ................. 1,216 218
----------- -----------
835,543 4,505,885
Cost of shares redeemed .................. (1,605,513) (772,518)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... (769,970) 3,733,367
- -------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ....... $(1,852,751) $ 3,425,914
- -------------------------------------------------------------------------------------
NET ASSETS
Beginning of period ......................... 3,425,914 --
- -------------------------------------------------------------------------------------
END OF PERIOD ............................... $ 1,573,163 $ 3,425,914
- -------------------------------------------------------------------------------------
Undistributed net investment
income, end of period ..................... $ 1,499 $ 34,585
=========== ===========
CAPITAL SHARE ACTIVITY
- -------------------------------------------------------------------------------------
Shares sold .............................. 100,488 463,365
Shares reinvested ........................ 5,941 --
Shares redeemed .......................... (229,537) (80,964)
----------- -----------
NET SHARE ACTIVITY ..................... (123,108) 382,401
=========== ===========
</TABLE>
- -44-
<PAGE>
<TABLE>
<CAPTION>
REGENT EASTERN EUROPEAN FUND
------------------------------------------
INCREASE (DECREASE) YEAR ENDED MARCH 31, 1997 TO
IN NET ASSETS OCTOBER 31, 1998 OCTOBER 31, 1997
FROM INVESTMENT OPERATIONS:
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income (loss) ............. $ (188,763) $ (11,759)
Net realized gain (loss) ................. (388,310) 49,079
Net unrealized appreciation (depreciation) (1,942,918) (475,851)
------------ ------------
Net increase (decrease) in net assets
from investment operations .......... (2,519,991) (438,531)
DISTRIBUTIONS TO SHAREHOLDERS:
- ---------------------------------------------------------------------------------------
From net investment income ............... -- --
In excess of net investment income ....... (6,642) --
From net capital gains ................... -- --
In excess of net capital gains ........... (40,682) --
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS ... (47,324) --
FROM CAPITAL SHARE TRANSACTIONS:
- ---------------------------------------------------------------------------------------
Proceeds from shares sold ................ 4,605,933 10,634,504
Distributions reinvested ................. 36,357 --
Paid-in capital portion of
short-term trading fee ................. 37,949 27,428
------------ ------------
4,680,239 10,661,932
Cost of shares redeemed .................. (5,215,039) (1,445,163)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ..... (534,800) 9,216,769
- ---------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS ....... (3,102,115) 8,778,238
- ---------------------------------------------------------------------------------------
NET ASSETS
Beginning of period ......................... 8,778,238 --
- ---------------------------------------------------------------------------------------
END OF PERIOD ............................... $ 5,676,123 $ 8,778,238
- ---------------------------------------------------------------------------------------
Undistributed net investment
income, end of period ..................... $ -- ($ 2,983)
============ ============
CAPITAL SHARE ACTIVITY
- ---------------------------------------------------------------------------------------
Shares sold .............................. 443,625 906,179
Shares reinvested ........................ 3,252 --
Shares redeemed .......................... (523,317) (121,885)
------------ ------------
NET SHARE ACTIVITY ..................... (76,440) 784,294
============ ============
</TABLE>
- -45-
<PAGE>
NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 1998
NOTE 1: SIGNIFICANT ACCOUNTING POLICIES
U.S. Global Accolade Funds (Trust), consisting of four separate funds (Funds),
is organized as a Massachusetts business trust. Each fund is a diversified,
open-end management investment company registered under the Investment Company
Act of 1940, as amended.
During 1997, Bonnel Growth Fund and MegaTrends Fund changed their fiscal year
ends from September 30 and June 30, respectively, to October 31. These changes
resulted in a reporting period of one month for Bonnel Growth Fund and four
months for MegaTrends Fund, both ended October 31, 1997. Global Blue Chip Fund,
formerly named Adrian Day Global Opportunity Fund through September 30, 1998,
commenced operations on February 20, 1997, and Regent Eastern European Fund
commenced operations on March 31, 1997.
Effective November 18, 1996, MegaTrends Fund was reorganized as a fund of the
Trust. The reorga-nization was a tax-free exchange, where shareholders received
one share of MegaTrends Fund for each share of The Leeb Personal Finance Fund,
the predecessor fund.
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles.
A. SECURITY VALUATIONS
The Funds value investments traded on national or international securities
exchanges or over-the-counter at the last sales price reported by the security's
primary exchange at the time of daily valuation. Securities for which no sale
was reported are valued at the mean between the last reported bid and ask prices
or using quotes provided by principal market makers. Short-term investments with
effective maturities of sixty days or less at the date of purchase are valued at
amortized cost, which approximates market value.
Securities for which market quotations are not readily available are valued at
their fair value as deter-mined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees. The trustees
valued the restricted security in Global Blue Chip Fund on October 31, 1998 at
$0 representing 0% of net assets. This security was acquired on July 2, 1997 at
$1.84 per share when the unrestricted security price was $2.99 per share. The
issuer bears the cost of registration, if any, involved in the disposition of
the security.
B. SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on trade date. Realized gains and losses
from security transac-tions are determined on an identified-cost basis. Dividend
income is recorded on the ex-dividend date or, for certain foreign securities,
when the information becomes available to the Funds. Interest income is recorded
on an accrual basis. Investment income is recorded net of foreign taxes withheld
where recov-ery of such taxes is uncertain.
- -46-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The Funds may purchase securities on a when-issued or delayed-delivery basis and
segregate on their books collateral with a value at least equal to the amount of
the commitment. Losses may arise due to the changes in the value of the
underlying securities or if the counterparty does not perform under the
contract.
C. REPURCHASE AGREEMENTS
The Funds may enter into repurchase agreements with recognized financial
institutions or registered broker/dealers and, in all instances, hold, as
collateral, underlying securities with a value exceeding the total repurchase
price, including accrued interest. The Funds use joint tri-party repurchase
agreement accounts with other Funds under common management where uninvested
cash is collectively invested in repurchase agreements, and each participating
Fund owns an undivided interest in the account.
D. FOREIGN CURRENCY TRANSACTIONS
Some Funds may invest in securities of foreign issuers. The accounting records
of these Funds are main-tained in U.S. dollars. At each net asset value
determination date, the value of assets and liabilities denomi-nated in foreign
currencies are translated into U.S. dollars using the current prevailing
exchange rate. Security transactions, income and expenses are converted at the
prevailing rate of exchange on the respec-tive dates of the transactions. The
effect of changes in foreign exchange rates on foreign denominated secu-rities
is included with the net realized and unrealized gain or loss on securities.
Other foreign currency gains or losses are reported separately.
E. OPTIONS
Some Funds may write or purchase options on securities to manage their exposure
to stock or commodi-ty markets as well as fluctuations in interest and currency
conversion rates. Written options include a risk of loss in excess of the option
premium. The use of options carries the risks of a change in value of the
underlying instruments, an illiquid secondary market, or failure of the
counterparty to perform its obligations. The option premium is the basis for
recognition of unrealized or realized gain or loss on the option. The cost of
securities acquired or the proceeds from securities sold through the exercise of
the option is adjusted by the amount of the premium. For the year ended October
31, 1998, transactions in options were as follows:
- -47-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
Bonnel Growth Fund Global Blue Chip Fund
---------------------------------------------
Number of Premiums Number of Premiums
Contracts Paid Contracts Received
<S> <C> <C> <C> <C>
Options outstanding at
November 1, 1997 ............. -- $ -- $ --
Options written ................ -- -- 223 22,189
Options purchased .............. 10 52,124 -- --
Options terminated in
closing purchase transactions -- -- (42) (6,592)
Options sold ................... (10) (52,124) -- --
Options expired ................ -- -- (181) (15,597)
----- -------- -------- -------
Options outstanding at
October 31, 1998 ............. -- -- -- --
</TABLE>
F. INCOME TAXES
The Funds intend to continue to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
substantially all of their taxable income to shareholders. Accordingly, no
provision for federal income taxes is required. Each Fund may be subject to
foreign taxes on income and gains on investments which are accrued based upon
the Fund's understanding of the tax rules and regulations in the foreign
markets.
G. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
The Funds record dividends and distributions to shareholders on the ex-dividend
date. Distributions are deter-mined in accordance with income tax regulations
which may differ from generally accepted accounting principles. Accordingly,
periodic reclassifications related to permanent book and tax basis differences
are made within the Funds' capital accounts to reflect income and gains
available for distribution under income tax regulations.
The Funds make distributions at least annually.
H. EXPENSES
Each Fund bears expenses incurred specifically on its behalf plus an allocation
of its share of Trust level expenses. Short-term trading fees collected from
temporary investors in the Funds are applied as a reduction of expenses to the
extent of such related costs; any excess of short-term trading fees is then
credited as paid-in capital. Expense offset arrangements have been made with the
Funds' custodian so the custodian fees may be paid indirectly by credits earned
on the Funds' cash balances. Such deposit arrangements are an alternative to
overnight investments.
I. USE OF ESTIMATES IN FINANCIAL STATEMENT PREPARATION
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 income and expenses during the reporting period. Actual
results could differ from those estimates.
- -48-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 2: RELATED PARTY TRANSACTIONS
U.S. Global Investors, Inc. (Manager), under an investment advisory agreement
with the Trust in effect through March 8, 1999, furnishes management and
investment advisory services and, subject to the supervision of the Trustees,
directs the investments of each Fund according to its investment objectives,
policies and limitations. The Manager also furnishes all necessary office
facilities, business equipment and personnel for administering the affairs of
the Trust. Frank E. Holmes, a trustee of the Funds, is the controlling owner of
the Manager.
For each fund, the Manager has contracted with and compensates Sub-Advisers to
serve in the execution of the Manager's investment responsibilities as follows:
Bonnel Growth Fund Bonnel, Inc.
MegaTrends Fund Money Growth Institute, Inc.
Global Blue Chip Fund Global Strategic Management, Inc. *
Regent Eastern European Fund Regent Fund Management, Ltd.
* Effective October 1, 1998 this sub-advisory agreement was terminated and the
Manager assumed invest-ment responsibilities.
For the services of the Manager, each fund pays a management fee at an annual
rate of 1.00% for Bonnel Growth Fund and MegaTrends Fund and 1.25% for Global
Blue Chip Fund and Regent Eastern European Fund based on their average net
assets. Fees are accrued daily and paid monthly.
For the period November 1, 1997 to January 31, 1998, the Manager agreed to limit
the annual expenses of Global Blue Chip Fund and Regent Eastern European Fund to
2.50% and 3.25% of their respective average net assets.
United Shareholder Services, Inc. (USSI), a wholly-owned subsidiary of the
Manager, is transfer agent for the Funds. Each Fund pays an annual fee based on
the number of shareholder accounts for transfer agency services. Certain account
fees are paid directly by shareholders to the transfer agent, which, in turn,
reduces its charge to the Funds. Additionally, the Manager is reimbursed at cost
for in-house legal services pertaining to each Fund. Effective November 1, 1997,
the Funds changed to Brown Brothers Harriman & Co. as the new custodian, fund
accounting and administration service agent with a fee structure based on
average net assets of the Funds.
Each Fund has adopted a Distribution Plan pursuant to Rule 12b-1 of the
Investment Company Act of 1940 that allows an annual fee of up to .25% of its
average net assets to be used for, or to reimburse the Manager for, expenditures
in connection with sales and promotional services related to the distribution of
each Fund's shares. Aportion of this fee may be reallowed to securities dealers,
banks and other financial institutions for the distribution of shares and
providing shareholder support services.
Brimberg & Co., L.P., a broker/dealer affiliate of Money Growth Institute, Inc.,
received $4,910, representing 15% of commissions paid by MegaTrends on purchases
and sales of securities during the year ended October 31, 1998.
During the year ended October 31, 1998, A& B Mailers, Inc., a wholly-owned
subsidiary of the Manager, was paid $9,748 for mailing services provided to the
Funds.
The three independent trustees each receive $8,000 annually as compensation for
serving on the board, plus $2,000 per each quarterly meeting attended. The fees
are allocated among the four funds.
- -49-
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3: INVESTMENTS
Purchases and sales of long-term securities for the year ended October 31, 1998
are summarized as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
- -----------------------------------------------------------------------------
<S> <C> <C>
Bonnel Growth ........................ $185,978,471 $205,580,752
MegaTrends ........................... 11,003,198 12,791,178
Global Blue Chip ..................... 2,717,501 2,877,744
Regent Eastern European .............. 5,585,804 5,948,870
</TABLE>
The following table presents the income tax basis of securities owned on October
31, 1998, and the tax basis components of net unrealized appreciation or
depreciation:
<TABLE>
<CAPTION>
GROSS GROSS NET UNREALIZED
AGGREGATE UNREALIZED UNREALIZED APPRECIATION
FUND COST APPRECIATION DEPRECIATION (DEPRECIATION)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Bonnel Growth ......... $83,084,933 $ 2,101,447 $ 6,867,764 $(4,766,317)
MegaTrends ............ 20,311,870 3,210,431 2,744,395 466,036
Global Blue Chip ...... 1,754,529 30,935 128,331 (97,396)
Regent Eastern European 8,137,716 241,065 2,659,845 (2,418,780)
</TABLE>
At October 31, 1998, Regent Eastern European Fund and Global Blue Chip Fund had
capital loss carry-overs of $374,861 and $1,149,990, respectively, each with an
expiration date of October 31, 2006.
Regent Eastern European Fund may be exposed to risks not typically associated
with investment in the United States due to its concentration of investments in
emerging markets. These risks include disrup-tive political or economic
conditions and the possible imposition of adverse governmental laws or cur-rency
exchange restrictions.
NOTE 4: REVOLVING DEMAND NOTES
On November 6, 1997, each of the Funds entered into revolving demand notes with
Brown Brothers Harriman & Co. as denoted below subject to the borrowing limits
as set forth in the Funds' registration statement. These notes are
collateralized by any or all of the securities held by Brown Brothers Harriman &
Co. as the Funds' custodian. Borrowings under these notes will be charged
interest at the current overnight Federal Funds Rate plus 1.75%. Each fund has
$5,000,000 available under the revolv-ing demand notes. There were no borrowings
under the revolving demand notes outstanding on October 31, 1998.
NOTE 5: SHARES OF BENEFICIAL INTEREST
At October 31, 1998, individual shareholders holding 5% or more of outstanding
shares comprised 8.86% of Global Blue Chip Fund and 5.65% of Regent Eastern
European Fund held by an affiliate of its Sub-Adviser.
- -50-
<PAGE>
FINANCIAL HIGHLIGHTS
BONNEL GROWTH FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE:
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED YEAR ENDED SEPTEMBER 30,
---------------------------------
OCT. 31, 1998 OCT. 31, 1997* 1997 1996 1995**
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 19.68 $ 21.86 $ 17.15 $ 14.81 $ 10.02
- -------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.23) (.03) (.21) (.14) (.07)
Net realized and
unrealized gain (loss) ...... .44 (2.15) 5.09 3.13 4.91
-------- --------- --------- --------- ---------
Total from investment
activities .................. .21 (2.18) 4.88 2.99 4.84
Distributions
From net
investment income ........... -- -- -- -- (.05)
From net realized gains ..... (3.71) -- (.17) -- --
In excess of net
realized gains .............. -- -- -- (.65) --
-------- --------- --------- --------- ---------
Total distributions ......... (3.71) -- (.17) (.65) (.05)
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE,
END OF PERIOD .................. $ 16.18 $ 19.68 $ 21.86 $ 17.15 $ 14.81
- -------------------------------------------------------------------------------------------------
TOTAL RETURN
(excluding account fees)(a) .... .80% (9.97)% 28.67% 21.27% 48.74%
Ratios to Average Net Assets(b):
Net investment income (loss) (1.19)% (1.43)% (1.18)% (1.32)% (1.46)%
Expenses .................... 1.85% 1.72% 1.77% 1.83% 2.50%
Expenses after
voluntary reimbursements .... 1.84% 1.72% 1.77% 1.83% 2.48%
Portfolio turnover rate ........ 190% 52% 239% 212% 145%
Net assets, end of period
(in thousands) ................. $ 87,751 $ 104,643 $ 117,891 $ 90,696 $ 24,673
<FN>
* For the month ended October 31, 1997.
** From October 17, 1994, commencement of operations.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. These amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>
- -51-
<PAGE>
FINANCIAL HIGHLIGHTS
MEGATRENDS FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE:
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED YEAR ENDED JUNE 30,
-------------------------------------------------------
OCT. 31, 1998 OCT. 31, 1997* 1997** 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD ............ $ 13.90 $ 13.45 $ 11.27 $ 11.17 $ 10.29 $ 10.84
- -----------------------------------------------------------------------------------------------------------------------
Investment Activities
Net investment income (loss) (.02) .01 .01 .17 .28 .19
Net realized and
unrealized gain (loss) ...... (.51) .44 2.39 1.72 .95 (.35)
---------- ---------- ---------- ---------- ---------- ----------
Total from investment
activities .................. (.53) .45 2.40 1.89 1.23 (.16)
Distributions
From net
investment income ........... -- -- (.01) (.17) (.28) (.19)
In excess of net
investment income ........... (.01) -- -- -- -- --
From net realized gains ..... (2.01) -- (.21) (1.61) -- (.20)
In excess of net
realized gains .............. -- -- -- (.01) (.07) --
---------- ---------- ---------- ---------- ---------- ----------
Total distributions ......... (2.02) -- (.22) (1.79) (.35) (.39)
- -----------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
END OF PERIOD .................. $ 11.35 $ 13.90 $ 13.45 $ 11.27 $ 11.17 $ 10.29
- -----------------------------------------------------------------------------------------------------------------------
TOTAL RETURN
(excluding account fees)(a) .... (4.43)% 3.34% 20.72% 17.10% 12.20% (1.50)%
Ratios to Average Net Assets b):
Net investment income (loss) (.14)% .23% .09% 1.30% 2.36% 1.65%
Expenses .................... 2.06% 1.76% 1.97% 2.10% 1.98% 1.81%
Expenses after
voluntary reimbursements .... 2.06% 1.76% 1.88% 1.50% 1.50% 1.50%
Portfolio turnover rate ........ 51% 13% 62% 115% 163% 143%
Net assets, end of period
(in thousands) ................. $ 20,740 $ 25,492 $ 25,610 $ 27,945 $ 32,976 $ 45,523
<FN>
* For the four months ended October 31, 1997.
** Effective November 18, 1996, the Fund changed to a new investment manager.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. These amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>
- -52-
<PAGE>
FINANCIAL HIGHLIGHTS
GLOBAL BLUE CHIP FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997*
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF YEAR ...................... $ 8.96 $ 10.00
- ----------------------------------------------------------------------------
Investment Activities
Net investment income (loss) ........ (.48) .08
Net realized and
unrealized gain (loss) .............. (2.27) (1.12)
--------- ---------
Total from investment
activities .......................... (2.75) (1.04)
Distributions
From net
investment income ................... -- --
In excess of net
investment income ................... (.14) --
From net realized gains ............. -- --
--------- ---------
Total distributions ................. (.14) --
- ----------------------------------------------------------------------------
NET ASSET VALUE,
END OF YEAR ............................ $ 6.07 $ 8.96
- ----------------------------------------------------------------------------
TOTAL RETURN
(excluding account fees)(a) ............ (31.12)% (10.40)%
Ratios to Average Net Assets(b):
Net investment income (loss) ........ (4.02)% 1.71%
Expenses ............................ 8.74% 5.63%
Expenses after voluntary
reimbursements ...................... 7.45% 2.50%
Portfolio turnover rate ................ 158% 13%
Net assets, end of year
(in thousands) ......................... $ 1,573 $ 3,426
<FN>
* From February 20, 1997, commencement of operations.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. These amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>
- -53-
<PAGE>
FINANCIAL HIGHLIGHTS
REGENT EASTERN EUROPEAN FUND
FOR A CAPITAL SHARE OUTSTANDING DURING THE:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
OCTOBER 31, 1998 OCTOBER 31, 1997*
<S> <C> <C>
NET ASSET VALUE,
BEGINNING OF YEAR ..................... $ 11.19 $ 10.00
- ----------------------------------------------------------------------------
Investment Activities
Net investment income (loss) ....... (.27) (.01)
Net realized and
unrealized gain (loss) ............. (2.84) 1.20
--------- ---------
Total from investment
activities ......................... (3.11) 1.19
Distributions
From net
investment income .................. -- --
In excess of net
investment income .................. (.01) --
From net realized gains ............ -- --
In excess of net
realized gains ..................... (.05) --
--------- ---------
Total distributions ................ (.06) --
- ----------------------------------------------------------------------------
NET ASSET VALUE,
END OF YEAR ........................... $ 8.02 $ 11.19
- ----------------------------------------------------------------------------
TOTAL RETURN
(excluding account fees)(a) ........... (27.96)% 11.90%
Ratios to Average Net Assets(b):
Net investment income (loss) ....... (2.38)% (.49)%
Expenses ........................... 5.03% 4.98%
Expenses after voluntary
reimbursements ..................... 4.55% 3.25%
Portfolio turnover rate ............... 97% 11%
Net assets, end of year
(in thousands) ........................ $ 5,676 $ 8,778
<FN>
* From March 31, 1997, commencement of operations.
(a) Total returns for periods less than one year are not annualized.
(b) Ratios are annualized for periods of less than one year. Expenses reimbursed
or offset reflect reductions to total expenses, as discussed in the notes to
the financial statements. These amounts would decrease the net investment
income ratio had such reductions not occurred.
</FN>
</TABLE>
- -54-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF U.S. GLOBAL
ACCOLADE FUNDS
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, 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 each of the funds constituting U.S.
Global Accolade Funds (the "Funds") at October 31, 1998, the results of each of
their operations for the year then ended, the changes in each of their net
assets and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' 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 generally
accepted auditing standards 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 October 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above. The MegaTrends financial statements for the year
ended June 30, 1996, including the financial highlights for each of the three
years in the period then ended, were examined by other independent accountants
whose report dated July 19, 1996 expressed an unqualified opinion on those
financial statements and financial highlights.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 17, 1998
- -55-
<PAGE>
ADDITIONAL FEDERAL TAX INFORMATION (UNAUDITED)
The percentage of ordinary income dividends paid by the Funds during the year
ended October 31, 1998, which qualify for the Dividends Received Deduction
available to corporate shareholders was:
Bonnel Growth 100.00%
MegaTrends 41.01%
The Funds hereby designate the following approximate amounts as capital gain
dividends for the purpose of the dividends paid deduction:
Bonnel Growth $2,844,315
MegaTrends 2,638,243
In January 1999, the Funds will report on Form 1099 the tax status of all
distributions made during the calendar year 1998. Shareholders should use the
information on Form 1099 for their income tax returns.NotesNotes
- -56-
<PAGE>
NOTES
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
NOTES
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
[BACK COVER]
U.S. Global Investors
1-800-US-FUNDS (1-800-873-8637)
P.O. Box 781234 San Antonio, TX 78278-1234
E-Mail: [email protected] Internet: www.us-global.com
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This financial data schedule contains summary financial information extracted
from the annual report filed on form N-SAR and is qualified in its entirety by
refernce to such annual report on form N-SAR.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> BONNEL GROWTH FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
<PERIOD-END> Oct-31-1998
<INVESTMENTS-AT-COST> 81100789
<INVESTMENTS-AT-VALUE> 87851250
<RECEIVABLES> 1787416
<ASSETS-OTHER> 21802
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 89660468
<PAYABLE-FOR-SECURITIES> 29106
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1880386
<TOTAL-LIABILITIES> 1909492
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 79848964
<SHARES-COMMON-STOCK> 5424122
<SHARES-COMMON-PRIOR> 5315916
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 1151551
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 6750461
<NET-ASSETS> 87750976
<DIVIDEND-INCOME> 440631
<INTEREST-INCOME> 215398
<OTHER-INCOME> 0
<EXPENSES-NET> (1870928)
<NET-INVESTMENT-INCOME> (1214899)
<REALIZED-GAINS-CURRENT> 2500611
<APPREC-INCREASE-CURRENT> 557231
<NET-CHANGE-FROM-OPS> 1842943
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (19869076)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 41217687
<NUMBER-OF-SHARES-REDEEMED> (59113926)
<SHARES-REINVESTED> 19029963
<NET-CHANGE-IN-ASSETS> (16892409)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 19734915
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1017148
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1870928
<AVERAGE-NET-ASSETS> 102194805
<PER-SHARE-NAV-BEGIN> 19.68
<PER-SHARE-NII> (0.23)
<PER-SHARE-GAIN-APPREC> 0.44
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (3.71)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 16.18
<EXPENSE-RATIO> 1.84
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This financial data schedule contains summary financial information extracted
from the annual report filed on form N-SAR and is qualified in its entirety by
refernce to such annual report on form N-SAR.
</LEGEND>
<SERIES>
<NUMBER> 2
<NAME> MEGATRENDS FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
<PERIOD-END> Oct-31-1998
<INVESTMENTS-AT-COST> 20311870
<INVESTMENTS-AT-VALUE> 20777905
<RECEIVABLES> 1326871
<ASSETS-OTHER> 6230
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 22111006
<PAYABLE-FOR-SECURITIES> 1297260
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 74213
<TOTAL-LIABILITIES> 1371473
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 17008163
<SHARES-COMMON-STOCK> 1827918
<SHARES-COMMON-PRIOR> 1834011
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 3265334
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 466036
<NET-ASSETS> 20739533
<DIVIDEND-INCOME> 323292
<INTEREST-INCOME> 140824
<OTHER-INCOME> 0
<EXPENSES-NET> (497157)
<NET-INVESTMENT-INCOME> (33041)
<REALIZED-GAINS-CURRENT> 3311828
<APPREC-INCREASE-CURRENT> (4265251)
<NET-CHANGE-FROM-OPS> (986464)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (19609)
<DISTRIBUTIONS-OF-GAINS> (3583127)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2370297
<NUMBER-OF-SHARES-REDEEMED> (6030092)
<SHARES-REINVESTED> 3496527
<NET-CHANGE-IN-ASSETS> (4752468)
<ACCUMULATED-NII-PRIOR> 20079
<ACCUMULATED-GAINS-PRIOR> 3569149
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 240829
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 497157
<AVERAGE-NET-ASSETS> 24163069
<PER-SHARE-NAV-BEGIN> 13.90
<PER-SHARE-NII> (0.02)
<PER-SHARE-GAIN-APPREC> (0.51)
<PER-SHARE-DIVIDEND> (0.01)
<PER-SHARE-DISTRIBUTIONS> (2.01)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 11.35
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This financial data schedule contains summary financial information extracted
from the annual report filed on form N-SAR and is qualified in its entirety by
refernce to such annual report on form N-SAR.
</LEGEND>
<SERIES>
<NUMBER> 3
<NAME> GLOBAL BLUE CHIP FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
<PERIOD-END> Oct-31-1998
<INVESTMENTS-AT-COST> 1754529
<INVESTMENTS-AT-VALUE> 1657134
<RECEIVABLES> 78587
<ASSETS-OTHER> 16432
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1752153
<PAYABLE-FOR-SECURITIES> 137625
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 41365
<TOTAL-LIABILITIES> 178990
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 2818047
<SHARES-COMMON-STOCK> 259293
<SHARES-COMMON-PRIOR> 382401
<ACCUMULATED-NII-CURRENT> 1499
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (1149990)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (96393)
<NET-ASSETS> 1573163
<DIVIDEND-INCOME> 40116
<INTEREST-INCOME> 54458
<OTHER-INCOME> 0
<EXPENSES-NET> (205832)
<NET-INVESTMENT-INCOME> (111258)
<REALIZED-GAINS-CURRENT> (1166647)
<APPREC-INCREASE-CURRENT> 245438
<NET-CHANGE-FROM-OPS> (1032467)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (50314)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 787065
<NUMBER-OF-SHARES-REDEEMED> (1605513)
<SHARES-REINVESTED> 48478
<NET-CHANGE-IN-ASSETS> (1852751)
<ACCUMULATED-NII-PRIOR> 34585
<ACCUMULATED-GAINS-PRIOR> (207)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 34337
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 205832
<AVERAGE-NET-ASSETS> 2754260
<PER-SHARE-NAV-BEGIN> 8.96
<PER-SHARE-NII> (.48)
<PER-SHARE-GAIN-APPREC> (2.27)
<PER-SHARE-DIVIDEND> .00
<PER-SHARE-DISTRIBUTIONS> (.14)
<RETURNS-OF-CAPITAL> .00
<PER-SHARE-NAV-END> 6.07
<EXPENSE-RATIO> 7.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> .00
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This financial data schedule contains summary financial information extracted
from the annual report filed on form N-SAR and is qualified in its entirety by
refernce to such annual report on form N-SAR.
</LEGEND>
<SERIES>
<NUMBER> 4
<NAME> REGENT EASTERN EUROPEAN FUND
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> Oct-31-1998
<PERIOD-START> Nov-01-1997
<PERIOD-END> Oct-31-1998
<INVESTMENTS-AT-COST> 8137716
<INVESTMENTS-AT-VALUE> 5718936
<RECEIVABLES> 3860
<ASSETS-OTHER> 20459
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 5743255
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 67132
<TOTAL-LIABILITIES> 67132
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 8469753
<SHARES-COMMON-STOCK> 707854
<SHARES-COMMON-PRIOR> 784294
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (374861)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2418769)
<NET-ASSETS> 5676123
<DIVIDEND-INCOME> 48664
<INTEREST-INCOME> 123715
<OTHER-INCOME> 0
<EXPENSES-NET> (361142)
<NET-INVESTMENT-INCOME> (188763)
<REALIZED-GAINS-CURRENT> (388310)
<APPREC-INCREASE-CURRENT> (1942918)
<NET-CHANGE-FROM-OPS> (2519991)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (6642)
<DISTRIBUTIONS-OF-GAINS> (40682)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4643882
<NUMBER-OF-SHARES-REDEEMED> (5215039)
<SHARES-REINVESTED> 36357
<NET-CHANGE-IN-ASSETS> (3102115)
<ACCUMULATED-NII-PRIOR> (2983)
<ACCUMULATED-GAINS-PRIOR> 40303
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100560
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 361142
<AVERAGE-NET-ASSETS> 8147241
<PER-SHARE-NAV-BEGIN> 11.19
<PER-SHARE-NII> (.27)
<PER-SHARE-GAIN-APPREC> (2.84)
<PER-SHARE-DIVIDEND> (.01)
<PER-SHARE-DISTRIBUTIONS> (.05)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.02
<EXPENSE-RATIO> 4.55
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
