<PAGE> 1
[LOGO]
THE
RESERVE
FUNDS
Founders of
"America's First
Money Fund"
810 Seventh Avenue, New York, NY 10019-5868
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700 M www.reservefunds.com
This literature is not authorized for distribution to prospective investors
unless
preceded or accompanied by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
RPES/SEMI-ANNUAL 01/99
[LOGO]
THE
RESERVE
FUNDS
Founders of
"America's First
Money Fund"
------------------------------------------------------------------------
----------
SEMI-ANNUAL REPORT
-------------------------------------------------------------------------
----------
RESERVE PRIVATE EQUITY SERIES
RESERVE BLUE CHIP GROWTH FUND
RESERVE CONVERTIBLE SECURITIES FUND
RESERVE INFORMED INVESTORS GROWTH FUND
RESERVE INTERNATIONAL EQUITY FUND
RESERVE LARGE-CAP GROWTH FUND
RESERVE MID-CAP EQUITY FUND
RESERVE SMALL-CAP GROWTH FUND
NOVEMBER 30, 1998
<PAGE> 2
RESERVE PRIVATE EQUITY SERIES--RESERVE BLUE CHIP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
VALUE
SHARES COMMON STOCKS -- 99.9% (NOTE 1)
- ------ ---------------------- --------
BANKS -- 7.1%
6,150 Bank America Corp........................ $ 400,903
9,475 Wells Fargo & Co......................... 341,100
-----------
742,003
-----------
BEVERAGES -- 2.5%
3,650 Coca Cola Company........................ 255,728
-----------
CABLE--TV -- 3.4%
8,875 U.S. West Inc.,--Media Group*............ 359,438
-----------
COMPUTER MEMORY DEVICES -- 4.4%
6,425 EMC Corp................................. 465,813
-----------
COMPUTER MICROSYSTEMS -- 7.9%
11,050 Compaq Computers Corp.................... 359,125
7,700 Dell Computer Corp.*..................... 468,256
-----------
827,381
-----------
COMPUTER NETWORKING -- 5.1%
7,112 Cisco Systems, Inc.*..................... 536,067
-----------
COMPUTER SOFTWARE -- 8.9%
5,300 America Online, Inc.*.................... 464,081
3,875 Microsoft Corp.*......................... 472,750
-----------
936,831
-----------
DRUGS -- 3.6%
5,000 Warner Lambert Company................... 377,500
-----------
ELECTRONICS -- 5.8%
4,299 General Electric Company................. 380,100
3,350 Medtronic, Inc........................... 226,544
-----------
606,644
-----------
FINANCIAL SERVICES -- 3.0%
4,250 Federal Nat'l Mortgage Assn. ............ 309,188
-----------
INSURANCE -- 6.6%
3,125 American International Group, Inc. ...... 293,750
7,112 Citigroup, Inc.*......................... 400,245
-----------
693,995
-----------
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
MANUFACTURING DIVERSIFIED -- 3.6%
5,625 Soletron Corp.*.......................... $ 372,305
-----------
MEDICAL SUPPLIES -- 3.8%
3,600 Pfizer Inc.*............................. 401,850
-----------
OFFICE AND BUSINESS EQUIPMENT -- 2.8%
8,325 Staples, Inc.*........................... 290,855
-----------
OIL/GAS EQUIPMENT & SERVICES -- 2.4%
3,300 Exxon Corp.*............................. 247,706
-----------
PACKAGED SOFTWARE -- 3.1%
7,275 Computer Associates International........ 321,919
-----------
PHARMACEUTICALS -- 9.1%
2,550 Johnson & Johnson........................ 207,188
3,500 Lilly (Eli) & Company.................... 313,906
2,825 Merck & Company.......................... 437,522
-----------
958,616
-----------
RADIO, TV & BROADCAST COMMUNICATION
EQUIPMENT -- 2.6%
5,800 Clear Channel Comm.*..................... 271,150
-----------
RETAIL--SPECIALTY -- 2.6%
5,000 Walgreen Company*........................ 268,438
-----------
SEMICONDUCTORS -- 3.2%
3,075 Intel Corp.*............................. 330,945
-----------
TELECOMMUNICATION -- 4.0%
7,175 WorldCom, Inc.*.......................... 423,325
-----------
TELECOMMUNICATIONS EQUIPMENT -- 4.4%
5,375 Lucent Technologies, Inc................. 462,586
-----------
TOTAL INVESTMENTS (Cost
$8,423,375)........................ 99.9% 10,460,283
OTHER ASSETS, LESS LIABILITIES...... .1% 15,529
---- --------
NET ASSETS.......................... 100% $10,475,812
---- --------
---- --------
</TABLE>
- ------------
Value of investments are shown as a percentage of Net Assets.
* Non-income producing.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $8,423,375; the aggregate gross unrealized appreciation was
$2,188,836 and the aggregate gross unrealized depreciation was $151,928.
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 3
RESERVE PRIVATE EQUITY SERIES--RESERVE BLUE CHIP GROWTH FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $8,423,375).................... $10,460,283
Cash................................... 22,903
Receivable for securities sold......... 231,926
Dividend and interest receivable....... 7,490
-----------
Total Assets......................... 10,722,602
-----------
LIABILITIES:
Payable for securities purchased....... 233,179
Payable for Fund shares repurchased.... 13,172
Other payables and accrued expenses.... 439
-----------
Total Liabilities.................... 246,790
-----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 605,555 of
Class R shares and 100 of Class I
shares outstanding ($.001 par
value)............................... $10,475,812
===========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R................................ $ 17.30
===========
Class I................................ $ 11.36
===========
COMPOSITION OF NET ASSETS:
Capital Stock.......................... 606
Paid in surplus........................ 7,922,450
Accumulated net realized gain on
investments.......................... 719,600
Accumulated net investment loss........ (203,752)
Net unrealized appreciation on
investments.......................... 2,036,908
-----------
NET ASSETS............................... $10,475,812
===========
</TABLE>
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends............................... $ 31,080
Interest................................ 2,011
----------
Total Investment Income............... 33,091
----------
EXPENSES:
Comprehensive fee (Note 3).............. 64,287
Distribution fee (Note 3)............... 11,610
----------
Total Expenses........................ 75,897
----------
Net Investment Loss..................... (42,806)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized gain on investments........ 510,371
Net change in unrealized appreciation on
investments........................... 863,448
----------
Net realized and unrealized gain on
investments........................... 1,373,819
----------
Net Increase in Net Assets Resulting
from Operations....................... $1,331,013
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (42,806) $ (60,696)
Net realized gain from investment transactions.......... 510,371 551,668
Net change in unrealized appreciation on investments.... 863,448 671,426
----------- -----------
Net increase in net assets resulting from operations.... 1,331,013 1,162,398
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments........................ -- (1,176,380)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 950,305 2,637,887
Reinvestment of distributions........................... -- 1,120,379
Cost of shares redeemed................................. (337,559) (686,091)
----------- -----------
Net increase in net assets resulting from capital share
transactions........................................... 612,746 3,072,175
----------- -----------
Net increase in net assets.............................. 1,943,759 3,058,193
NET ASSETS:
Beginning of period..................................... 8,532,053 5,473,860
----------- -----------
End of period........................................... $10,475,812 $ 8,532,053
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
RESERVE PRIVATE EQUITY SERIES--RESERVE CONVERTIBLE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (NOTE 1)
------ --------
<C> <S> <C>
CONVERTIBLE BONDS -- 51.2%
BASIC INDUSTRIAL COMMODITY -- 1.8%
$ 450,000 First South Africa Corp., Ltd., 9.00%, 06/15/04............. $ 315,000
-----------
COMMERCIAL SERVICES -- 7.1%
500,000 Data Processing Res. Corp., 5.25%, 04/01/05................. 449,166
400,000 Interim Services, 4.50%, 06/01/05........................... 352,292
550,000 Metamor Worldwide, Inc., 2.94%, 08/15/04.................... 417,656
-----------
1,219,114
-----------
COMPUTER SOFTWARE -- 7.4%
500,000 Activision, Inc., 6.75%, 01/01/05........................... 456,250
650,000 Aspen Technology, 5.25%, 06/15/05........................... 434,687
350,000 Safeguard Scientific, 6.00%, 02/01/06....................... 367,500
-----------
1,258,437
-----------
COMPUTER STORAGE DEVICES -- 2.3%
500,000 Cirrus Logic, Inc., Series 144A, 6.00%, 12/15/03............ 387,396
-----------
GOLD MINING -- 2.3%
650,000 Coeur D'Alene Mines Corp., 7.25%, 0/31/05................... 392,031
-----------
LEISURE & ENTERTAINMENT -- 4.9%
400,000 Family Golf Centers, Inc., 5.75%, 10/15/04.................. 364,000
500,000 Unapix Entertainment, Inc., Series 144A, 10.00%, 06/30/04... 475,000
-----------
839,000
-----------
HOTEL/MOTEL -- 2.2%
600,000 Signature Resorts, Inc., 5.75%, 01/15/07.................... 373,813
-----------
MANAGED CARE -- 9.8%
400,000 Alternative Living Services, 5.25%, 12/15/02................ 428,000
500,000 American Retirement Corp., 5.75%, 10/01/02.................. 426,875
300,000 Sunrise Assisted Living, 5.50%, 06/15/02.................... 389,723
400,000 Total Renal Care Holdings, 7.00%, 05/15/09.................. 415,875
-----------
1,660,473
-----------
OFFSHORE DRILLING -- 1.9%
350,000 Diamond Offshore Drilling, Inc., 3.75%, 02/15/07............ 316,350
-----------
OIL AND GAS EQUIPMENT SERVICES -- 6.1%
500,000 Halter Marine, 144A, 4.50%, 09/15/04........................ 317,916
500,000 Key Energy Group, Inc., 5.00%, 09/15/04..................... 286,980
500,000 Offshore Logistics, 6.00%, 12/15/03......................... 433,439
-----------
1,038,335
-----------
POLLUTION CONTROL -- 2.3%
350,000 USA Waste Services, Inc., 4.00%, 02/01/02................... 391,891
-----------
RETAIL AND APPAREL -- 2.1%
400,000 Charming Shoppes, 7.50%, 07/15/06........................... 355,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
RESERVE PRIVATE EQUITY SERIES--RESERVE CONVERTIBLE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
FACE VALUE
AMOUNT (NOTE 1)
------ --------
<C> <S> <C>
CONVERTIBLE BONDS (CONTINUED)
SEMICONDUCTOR AND RELATED DEVICES -- 1.0%
$ 150,000 Analog Devices, Inc., 3.50%, 12/01/00....................... $ 170,344
-----------
TOTAL CONVERTIBLE BONDS (Cost $9,533,107)................... 8,717,184
-----------
SHARES CONVERTIBLE PREFERRED STOCKS -- 41.5%
- ----------
AUTO PARTS -- ORIG. EQUIPMENT -- 2.2%
7,500 Tower Auto Capital Trust, 6.75%............................. 375,000
-----------
BIO-TECHNOLOGY -- 1.3%
5,000 Monsanto, 6.5%, ACES........................................ 226,250
-----------
COMMERCIAL SERVICES -- 2.4%
12,500 Cendant Corp., 7.50%........................................ 420,312
-----------
ELECTRONICS COMPONENTS -- 2.3%
30,000 Peak Trends Trust, 9.00%.................................... 386,250
-----------
ENERGY -- 2.3%
7,500 Unocal Cap Trust, 6.50%..................................... 398,627
-----------
FOOD -- 2.1%
7,000 Ralston Purina, 7.00%....................................... 367,500
-----------
GOLD MINING -- 2.1%
21,400 Freeport McMoran Corp., 7.00%, Series A..................... 363,800
-----------
HOTEL/MOTEL -- 2.3%
8,500 Host Marriott Corp., 6.75%, Series 144A..................... 366,387
-----------
INSURANCE -- 2.6%
6,000 Aetna Inc., 6.25%........................................... 441,375
-----------
MANAGED CARE -- 2.4%
60,000 MedPartners, Inc., 6.50%, TAPS.............................. 416,250
-----------
OIL AND GAS EQUIPMENT SERVICES -- 2.2%
12,500 EVI Inc., 5.00%, Series 144A................................ 370,312
-----------
OIL EXPLORATION AND PRODUCTION -- 2.0%
17,500 Range Resources, $2.03, Series C............................ 336,333
-----------
RAILROADS -- 2.8%
10,000 Union Pacific Cap. Trust, 6.25%............................. 475,313
-----------
</TABLE>
<TABLE>
RENTAL EQUIPMENT -- 2.3%
<C> <S> <C>
10,000 United Rentals, 6.50%....................................... 400,000
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
RESERVE PRIVATE EQUITY SERIES--RESERVE CONVERTIBLE SECURITIES FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ --------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS (CONTINUED)
RESTAURANTS -- 2.1%
15,000 US Restaurants, 7.72%, Series A............................. $ 352,500
-----------
REAL ESTATE -- 5.0%
15,000 Camden Property Trust, 2.25%, Series A...................... 361,875
9,000..... Vornado Realty Trust, 6.50%................................. 485,437
-----------
847,312
-----------
WATER TREATMENT SYSTEMS -- 3.1%
17,500 Laidlaw One Inc., 5.75%..................................... 525,000
-----------
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $7,984,556)........ 7,068,521
-----------
COMMON STOCKS -- 5.4%
MISCELLANEOUS MANUFACTURING -- .2%
85,000 Disc Graphics, Inc., Wts. Cl. A 11/1/99*.................... 31,875
-----------
OIL WELL SERVICES -- 2.3%
8,000 Seacor Smit Inc.*........................................... 382,000
-----------
REAL ESTATE -- 2.9%
25,000 Fortress Inv. Corp. ........................................ 500,000
-----------
TOTAL COMMON STOCKS (Cost $964,679)......................... 913,875
-----------
SHORT-TERM INVESTMENTS -- 1.8%
Vista U. S. Government Money Market Fund (Cost $300,000).... 300,000
-----------
TOTAL INVESTMENTS (Cost $18,782,342).................. 99.9% 16,999,580
OTHER ASSETS, LESS LIABILITIES......................... .1% 12,678
----- --------
NET ASSETS............................................100.0% $17,012,258
----- --------
----- --------
</TABLE>
- ------------
Value of investments are shown as a percentage of net assets.
* Non-income producing security.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $18,782,342; the aggregate gross unrealized appreciation was
$637,044 and the aggregate gross unrealized depreciation was $2,419,806.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
RESERVE PRIVATE EQUITY SERIES--RESERVE CONVERTIBLE SECURITIES FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $18,782,342)................... $16,999,580
Receivable for securities sold......... 241,722
Dividend and interest receivable....... 239,686
-----------
Total Assets......................... 17,480,988
-----------
LIABILITIES:
Cash overdraft......................... 467,767
Other payables and accrued expenses.... 963
-----------
Total Liabilities.................... 468,730
-----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 1,893,143
Class R shares and 100 Class I shares
outstanding ($.001 par value)........ $17,012,258
===========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R................................ $ 8.99
===========
Class I................................ $ 10.41
===========
COMPOSITION OF NET ASSETS:
Capital stock.......................... 1,893
Paid in surplus........................ 20,430,090
Accumulated net realized loss on
investments.......................... (1,833,525)
Undistributed net investment income.... 196,562
Net unrealized depreciation on
investments.......................... (1,782,762)
-----------
NET ASSETS............................... $17,012,258
===========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends.............................. $ 315,256
Interest............................... 435,164
-----------
Total Investment Income.............. 750,420
-----------
EXPENSES:
Comprehensive fee (Note 3)............. 95,708
Distribution fee (Note 3).............. 26,010
-----------
Total expenses....................... 121,718
-----------
Net Investment Income.................. 628,702
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized loss on investments....... (2,431,620)
Net change in unrealized depreciation
on investments....................... (1,633,164)
-----------
Net realized and unrealized loss on
investments.......................... (4,064,784)
-----------
Net Decrease in Net Assets Resulting
from Operations...................... $(3,436,082)
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment income................................... $ 628,702 $ 1,061,434
Net realized gain (loss) from investment transactions... (2,431,620) 1,725,903
Net change in unrealized depreciation on investments.... (1,633,164) (1,520,425)
----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................. (3,436,082) 1,266,912
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income................................... (571,069) (1,093,502)
Net realized gain on investments........................ -- (1,348,604)
----------- -----------
Total distributions to shareholders..................... (571,069) (2,442,106)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 1,590,296 3,876,464
Reinvestment of distributions........................... 341,075 1,979,389
Cost of shares redeemed................................. (5,570,544) (593,337)
----------- -----------
Net increase (decrease) in net assets resulting from
capital share transactions............................. (3,639,173) 5,262,516
----------- -----------
Net increase (decrease) in net assets (7,646,324) 4,087,322
NET ASSETS:
Beginning of period..................................... 24,658,582 20,571,260
----------- -----------
End of period (including undistributed net investment
income of $196,562 and $138,613, respectively)......... $17,012,258 $24,658,582
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
RESERVE PRIVATE EQUITY SERIES--RESERVE INFORMED INVESTORS GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS -- 91.0% (NOTE 1)
- ------ ---------------------- --------
<C> <S> <C>
BANKS -- .6%
Firstar Corp............................. $ 16,700
228
----------
BIO-TECHNOLOGY -- 8.8%
Amgen Inc.*.............................. 120,400
1,600
Biogen, Inc.*............................ 53,113
700
Genzyme Corp.*........................... 79,919
1,900
Genzyme-Molecular Oncology*.............. 984
281
----------
254,416
----------
BUSINESS FINANCIAL SERVICES -- 8.5%
American Diversified Holdings*........... 30,800
7,700
Capital One Financial Corp............... 55,000
500
Charles Schwab Corp...................... 107,113
1,900
Lehman Brothers Holdings, Inc............ 54,931
1,100
----------
247,844
----------
COMPUTERS -- 3.6%
Gateway 2,000, Inc.*..................... 106,638
1,900
----------
COMPUTER MEMORY DEVICES -- 3.5%
EMC Corp................................. 101,500
1,400
----------
COMPUTER MICROSYSTEMS -- 8.0%
Sun Microsystems, Inc.*.................. 125,906
1,700
Apple Computer, Inc.*.................... 108,588
3,400
----------
234,494
----------
COMPUTER NETWORKING -- 3.9%
Cisco Systems, Inc.*..................... 113,063
1,500
----------
COMPUTER SOFTWARE -- 16.1%
America Online, Inc.*.................... 122,588
1,400
Excite, Inc.*............................ 53,831
1,100
Microsoft Corp.*......................... 61,000
500
Oracle Corp.*............................ 78,775
2,300
Yahoo!, Inc.*............................ 153,600
800
----------
469,794
----------
FOOD -- .9%
Safeway, Inc.*........................... 26,405
500
----------
MEDICAL -- HMO -- 2.0%
WellPoint Health Network................. 57,444
700
----------
MEDICAL INSTRUMENTS -- 2.6%
Guidant Corporation...................... 77,231
900
----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
MEDICAL SUPPLIES -- 2.6%
Pfizer, Inc.............................. $ 78,138
700
----------
PHARMACEUTICAL AND HOSPITAL
SUPPLIES -- 5.2%
Eli Lilly & Company...................... 116,594
1,300
Johnson & Johnson........................ 24,375
300
Schering-Plough Corp..................... 10,638
100
----------
151,607
----------
POWER CONVERSION/SUPPLY EQUIPMENT -- 1.8%
American Power Conversion*............... 53,788
1,300
----------
RADIO & BROADCAST COMMUNICATION
EQUIPMENT -- .9%
Clear Channel Comm.*..................... 28,050
600
----------
RETAIL SPECIALTY AND APPAREL -- 14.6%
Albertson's, Inc......................... 51,355
900
Nike, Inc................................ 76,000
1,900
Best Buy Company, Inc.*.................. 126,775
2,200
Walgreen Company......................... 112,744
2,100
Wal-Mart Stores, Inc..................... 60,250
800
----------
427,124
----------
TELECOMMUNICATIONS -- 4.8%
SBC Communications, Inc.................. 110,255
2,300
WorldCom, Inc.*.......................... 29,500
500
----------
139,755
----------
TELECOMMUNICATIONS EQUIPMENT -- 2.6%
Lucent Technologies, Inc................. 77,456
900
----------
TOTAL COMMON STOCKS (Cost $2,459,342).... 2,661,447
----------
SHORT-TERM INVESTMENTS -- 8.3%
-----------------------------------------
Vista U.S. Government Money Market Fund
(Cost $245,000).......................... 245,000
245,000
----------
TOTAL INVESTMENTS (Cost
$2,704,342)........................ 99.3% 2,906,447
OTHER ASSETS, LESS LIABILITIES...... .7% 20,558
----- -------
NET ASSETS.........................100.0% $2,927,005
----- -------
----- -------
</TABLE>
- ------------
Value of investments are shown as a percentage of net assets.
* Non-income producing security.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $2,704,342; the aggregate gross unrealized appreciation was
$247,145 and the aggregate gross unrealized depreciation was $45,040.
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
RESERVE PRIVATE EQUITY SERIES--RESERVE INFORMED INVESTORS GROWTH FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $2,704,342)..................... $2,906,447
Cash.................................... 44,547
Receivable for securities sold.......... 173,527
Dividend and interest receivable........ 965
----------
Total Assets.......................... 3,125,486
----------
LIABILITIES:
Payable for securities purchased........ 197,726
Other payables and accrued expenses..... 755
----------
Total Liabilities..................... 198,481
----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 264,451 Class R
shares and 100 Class I shares
outstanding ($.001 par value)......... $2,927,005
==========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R............................... $ 11.06
==========
Class I............................... $ 9.89
==========
COMPOSITION OF NET ASSETS:
Capital Stock........................... 264
Paid in surplus......................... 2,262,910
Accumulated net realized gain on
investments........................... 747,904
Accumulated net investment loss......... (286,178)
Net unrealized appreciation on
investments........................... 202,105
----------
NET ASSETS................................ $2,927,005
==========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends............................... $ 4,607
Interest................................ 9,754
----------
Total Investment Income............... 14,361
----------
EXPENSES:
Comprehensive fee (Note 3).............. 23,687
Distribution fee (Note 3)............... 4,121
----------
Total Expenses........................ 27,808
----------
Net Investment Loss..................... (13,447)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized gain on investments........ 30,862
Net change in unrealized Appreciation on
investments........................... 197,284
----------
Net realized and unrealized gain on
investments........................... 228,146
----------
Net Increase in Net Assets Resulting
from Operations....................... $ 214,699
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (13,447) $ (53,234)
Net realized gain from investment transactions.......... 30,862 1,534,443
Net change in unrealized depreciation on investments.... 197,284 (460,178)
----------- -----------
Net increase in net assets resulting from operations.... 214,699 1,021,031
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments........................ -- (1,379,149)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 1,551,543 928,647
Reinvestment of distributions........................... -- 1,007,930
Cost of shares redeemed................................. (3,173,528) (2,734,101)
----------- -----------
Net decrease in net assets resulting from capital share
transactions........................................... (1,621,985) (797,524)
----------- -----------
Net decrease in net assets.............................. (1,407,286) (1,155,642)
NET ASSETS:
Beginning of period..................................... 4,334,291 5,489,933
----------- -----------
End of period........................................... $ 2,927,005 $ 4,334,291
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
RESERVE PRIVATE EQUITY SERIES--RESERVE INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
VALUE
SHARES COMMON STOCKS -- 94.2% (NOTE 1)
- ------ ---------------------- --------
FINLAND -- 5.9%
4,500 Nokia Oyj Series A...................... $ 441,613
7,100 TT Tieto Oy............................. 256,515
-----------
698,128
-----------
FRANCE -- 10.9%
280 Altran Technologies SA.................. 65,223
1,100 AXA-UAP................................. 142,567
2,500 Banque Nationale de Paris............... 191,765
900 Cap Gemini.............................. 132,040
120 Carrefour............................... 85,170
190 Castorama Dubois........................ 38,529
1,460 Dassault Systems SA..................... 57,153
400 Groupe Danone........................... 117,086
10 Havas Advertising....................... 1,736
658 Societe Industrielle.................... 163,600
910 Societe Generale - A.................... 143,777
700 Vivendi................................. 158,737
-----------
1,297,383
-----------
GERMANY -- 4.5%
9 Daimler Benz AG......................... 182,260
800 Deutsche Pfandbrief Bank................ 66,115
700 Mannesmann AG........................... 75,826
900 Sixt. AG Ord. Shares.................... 209,858
-----------
534,059
-----------
HONG KONG -- 10.0%
16,000 Cheung Kong Holdings Ltd. .............. 115,205
58,000 China Telecom - (Hong Kong)............. 115,734
36,400 Dah Sing Financial Group................ 90,501
9,900 Hang Seng Bank Ltd. .................... 87,266
86,049 Hong Kong & China Gas Co. .............. 114,470
5,682 HSBC Holdings HKD....................... 145,669
138,600 New World Infrastructure................ 207,648
20,669 Sun Hung Kai Properties................. 148,156
60,000 Wing Hang Bank HKD...................... 166,608
-----------
1,191,257
-----------
ITALY -- 7.0%
16,300 Banca Commerciale Italiana.............. 111,792
52,000 Telecom Italia Mobile SpA............... 342,163
29,100 Telecom Italia SpA...................... 235,835
25,700 Unicredito Italiano SpA................. 145,329
-----------
835,119
-----------
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
JAPAN -- 7.3%
34,800 Fuji Bank Ltd. ......................... $ 137,500
3,000 Honda Motor Co. ........................ 107,581
3,500 Itoen, Ltd. ............................ 148,797
8,000 Mitsubishi Trust & Banking.............. 57,766
8,000 Olympus Optical Co., Ltd. .............. 87,493
10,700 Terumo Corporation...................... 237,432
1,800 Union Tools............................. 79,591
-----------
856,160
-----------
NETHERLAND -- 11.5%
2,966 Aegon NV................................ 317,802
3,770 Ahold................................... 130,898
2,504 Fortis Amev NV.......................... 184,243
4,556 Heineken................................ 231,689
1,700 Hunter Douglas NV....................... 58,580
2,750 VNU-Verenigde NV........................ 94,619
1,872 Wolters Kluwer NV....................... 357,341
-----------
1,375,172
-----------
NORWAY -- 1.5%
6,200 Tomra Systems........................... 180,867
-----------
PORTUGAL -- .6%
316 Banco Commercial Portuges............... 9,627
521 Banco Pinta Baby Shares................. 11,840
1,300 Portugal Telecom S.A. .................. 52,186
-----------
73,653
-----------
SINGAPORE -- 5.5%
34,800 City Developments Ltd. ................. 165,684
110,000 DBS Land................................ 156,780
18,700 Dev Bank Singapore...................... 141,769
31,000 Overseas Chinese Bank................... 189,897
-----------
654,130
-----------
SPAIN -- 1.5%
5,100 Banco Bilbao Vizcaya, SA................ 80,721
6,260 Banco Santander, SA..................... 101,807
-----------
182,528
-----------
SWEDEN -- 2.5%
Ericsson Telefonaktiebolaget, Series
3,700 B....................................... 102,632
635 Europolitan Holdings AB................. 58,297
3,600 Netcom Systems AB - Series B............ 138,743
-----------
299,672
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
RESERVE PRIVATE EQUITY SERIES--RESERVE INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
SWITZERLAND -- 10.9%
100 Nestle SA............................... $ 207,810
130 Novartis AG............................. 244,070
5 Roche Holdings.......................... 58,760
100 Schweizerische Rueck Ges................ 252,812
250 Selecta Group - Reg..................... 64,493
620 UBS Ag-Registered....................... 186,599
450 Zurich Versicherung..................... 286,996
-----------
1,301,540
-----------
THAILAND -- .1%
10,000 Central Pattana Public Co., Ltd. ....... 4,990
-----------
UNITED KINGDOM -- 12.6%
12,700 Allied Irish Bank plc................... 196,339
41 Barclays plc............................ 929
6,300 Bank of Ireland......................... 130,860
16,100 Capita Group plc........................ 150,523
4,890 CMG plc................................. 120,661
26,700 Compass Group plc....................... 281,323
8,400 Logica plc.............................. 58,865
17,985 Misys plc............................... 126,628
22,900 Rentokil Initial plc.................... 152,986
5,000 Serco Group plc......................... 84,093
11,316 Smithkline Beecham plc.................. 138,822
6,081 Standard Charted plc.................... 64,573
-----------
1,506,602
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
UNITED STATES -- 1.9%
1,700 Elan Corp. plc ADR...................... $ 115,830
3,600 Telefonica de Argentina SA, ADR......... 116,550
-----------
232,380
-----------
TOTAL COMMON STOCKS (Cost $9,348,964)... 11,223,640
-----------
PREFERRED STOCKS -- 2.4%
GERMANY -- 2.4%
60 Porsche AG Pfd.......................... 133,532
300 SAP AG Pfd.............................. 156,375
-----------
TOTAL PREFERRED STOCKS (Cost
$302,146)............................... 289,907
-----------
WARRANTS -- .0%
FRANCE -- .0%
10 Havas Advertising, 5/14/01*............. 1,058
-----------
TOTAL INVESTMENTS (Cost
$9,651,110)....................... 96.6% 11,514,605
OTHER ASSETS, LESS LIABILITIES..... 3.4% 405,933
----- --------
NET ASSETS........................100.0% $11,920,538
----- --------
----- --------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
RESERVE PRIVATE EQUITY SERIES--RESERVE INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)(CONTINUED)
INDUSTRY COMPOSITION
<TABLE>
<CAPTION>
INDUSTRY PERCENT
-------- -------
<S> <C>
Auto/Truck Manufacturers................... 3.5%
Bio-Tech & Medical Devices................. 2.0
Building & Housing......................... 1.5
Cellular Telephone......................... 2.0
Commercial Banks........................... 19.7
Computers Software......................... 2.8
Construction & Engineering................. 1.7
Consumer Products.......................... 1.5
Diversified Operations..................... 1.3
Drugs & Health Care........................ 4.6
Financial Services......................... 1.9
Food & Drink............................... 4.1
IT Service................................. 4.6
</TABLE>
<TABLE>
<CAPTION>
INDUSTRY PERCENT
-------- -------
<S> <C>
Insurance Companies........................ 8.9%
Lodging & Restaurants...................... 2.3
Machinery.................................. 1.3
Photo Equipment & Film..................... .7
Pollution Control.......................... 1.3
Public Utilities........................... 1.0
Publishing................................. 3.7
Real Estate Development.................... 4.8
Retailing.................................. 6.1
Service Companies.......................... 4.0
Telecommunications......................... 9.7
Telephone Utilities........................ 1.6
Other Assets, Less Liabilities............. 3.4
-----
PERCENT OF NET ASSETS...................... 100.0%
=====
</TABLE>
- ------------
Value of investments are shown as a percentage of net assets.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $9,651,110, the aggregate gross unrealized appreciation was
$2,056,350 and the aggregate unrealized gross depreciation was $192,855.
* Non-income producing.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 13
RESERVE PRIVATE EQUITY SERIES--RESERVE INTERNATIONAL EQUITY FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $9,651,110).................... $11,514,605
Cash................................... 303,709
Receivable for securities sold......... 109,467
Dividend and interest receivable....... 36,698
-----------
Total Assets......................... 11,964,479
-----------
LIABILITIES:
Payable for securities purchased....... 43,334
Other payables and accrued expenses.... 607
-----------
Total Liabilities.................... 43,941
-----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 940,016 of
Class R shares and 100 of Class I
shares outstanding ($.001 par
value)............................... $11,920,538
===========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R.............................. $ 12.68
===========
Class I.............................. $ 11.13
===========
COMPOSITION OF NET ASSETS:
Capital Stock.......................... 940
Paid in surplus........................ 10,898,011
Accumulated net realized loss on
investments and foreign currency
transactions......................... (700,836)
Accumulated net investment loss........ (141,072)
Net unrealized gain on investments and
foreign currency transactions........ 1,863,495
-----------
NET ASSETS............................... $11,920,538
===========
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends*............................. $ 77,893
Interest............................... 23,799
-----------
Total Investment Income.............. 101,692
-----------
EXPENSES:
Comprehensive fee (Note 3)............. 100,562
Distribution fee (Note 3).............. 13,344
-----------
Total Expenses....................... 113,906
-----------
Net Investment Loss.................... (12,214)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized gain on investments
transactions......................... 625,382
Net realized loss from foreign currency
transactions......................... (4,609)
Net change in unrealized depreciation
on investments....................... (1,126,900)
Net realized loss from foreign currency
transactions......................... 943
-----------
Net realized and unrealized gain on
investments.......................... (505,184)
-----------
Net Decrease in Net Assets Resulting
from Operations...................... $ (517,398)
===========
</TABLE>
* Dividends are net of foreign tax withholdings of $43,138.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (12,214) $ (43,943)
Net realized gain (loss) from investment transactions... 625,382 (975,769)
Net realized loss from foreign currency transactions.... (4,609) (1,308)
Net change in unrealized appreciation on investments.... (1,126,900) 1,271,564
Net change in unrealized depreciation from foreign
currency transactions.................................. 943 (63)
----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................. (517,398) 250,481
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 1,520,174 3,581,943
Cost of shares redeemed................................. (1,933,462) (3,110,454)
----------- -----------
Net increase (decrease) in net assets resulting from
capital share transactions............................. (413,288) 471,489
----------- -----------
Net increase (decrease) in net assets................... (930,686) 721,970
NET ASSETS:
Beginning of period..................................... 12,851,224 12,129,254
----------- -----------
End of period........................................... $11,920,538 $12,851,224
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 14
RESERVE PRIVATE EQUITY SERIES--RESERVE LARGE-CAP GROWTH FUND*
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS -- 93.5% (NOTE 1)
------ ---------------------- --------
<C> <S> <C>
BANKS -- 3.0%
17,000 Wells Fargo & Company.................... $ 612,000
-----------
BEVERAGES -- 4.8%
13,700 Coca-Cola Company........................ 959,856
-----------
COMPUTER SOFTWARE -- 4.0%
6,600 Microsoft Corp. ......................... 805,200
-----------
COMPUTERS -- 2.7%
8,500 Hewlett-Packard Company.................. 533,375
-----------
CONSUMER PRODUCTS -- 8.4%
8,300 Clorox Company........................... 921,819
16,400 Gillette Company......................... 753,375
-----------
1,675,194
-----------
DRUGS -- 8.8%
17,300 Abbott Laboratories...................... 830,400
6,000 Merck & Company, Inc. ................... 929,250
-----------
1,759,650
-----------
FINANCIAL/BUSINESS SERVICES -- 8.6%
9,000 American Express Company................. 900,562
14,500 Charles Schwab Corp. .................... 817,437
-----------
1,717,999
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
------ ------------------------- --------
<C> <S> <C>
FOOD -- 13.6%
9,000 Campbell Soup Company.................... $ 514,125
13,000 Hershey Foods Corp. ..................... 874,250
11,500 Quaker Oats Company...................... 705,812
7,000 Wrigley (Wm.) Jr. Company................ 616,875
-----------
2,711,062
-----------
MEDICAL PRODUCTS -- 18.0%
11,700 Becton Dickinson & Company............... 497,250
6,100 Bristol-Myers Squibb Company............. 747,631
11,500 Johnson & Johnson........................ 934,375
7,000 Pfizer, Inc. ............................ 781,375
7,000 Eli Lilly & Company...................... 627,813
-----------
3,588,444
-----------
MISCELLANEOUS MANUFACTURING -- 3.6%
9,000 Minnesota Mining & Manufacturing......... 722,813
-----------
PHOTOGRAPHY -- 2.4%
6,500 Eastman Kodak Company.................... 471,656
-----------
PUBLISHING -- 4.4%
7,800 Gannett Company, Inc. ................... 503,588
12,000 New York Times Company................... 372,750
-----------
876,338
-----------
RESTAURANTS -- 4.7%
13,500 McDonald's Corp. ........................ 945,844
-----------
RETAIL -- 3.0%
15,000 Nike, Inc. .............................. 600,000
-----------
SEMICONDUCTOR -- 3.5%
6,500 Intel Corp. ............................. 699,563
-----------
TOTAL COMMON STOCKS (Cost $16,304,768)... 18,678,994
-----------
SHORT-TERM INVESTMENTS -- 6.0%
-----------------------------------------
1,200,000 Vista U.S. Government Money Market Fund
(Cost $1,200,000)........................ 1,200,000
-----------
TOTAL INVESTMENTS (Cost
$17,504,768)....................... 99.5% 19,878,994
OTHER ASSETS, LESS LIABILITIES...... .5% 90,770
----- --------
NET ASSETS........................ 100.0% $19,969,764
----- --------
----- --------
</TABLE>
- ------------
* Formerly Large-Cap Value Fund.
Value of investments are shown as a percentage of net assets.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $17,504,768; the aggregate gross unrealized appreciation was
$2,598,877 and the aggregate gross unrealized depreciation was $224,651.
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 15
RESERVE PRIVATE EQUITY SERIES--RESERVE LARGE-CAP GROWTH FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $17,504,768)................... $19,878,994
Cash................................... 1,544,022
Receivable for securities sold......... 64,333
Dividends and interest receivable...... 21,468
-----------
Total Assets......................... 21,508,817
-----------
LIABILITIES:
Payable for securities purchased....... 1,516,894
Payable for Fund shares redeemed....... 21,345
Other payables and accrued expenses.... 814
-----------
Total Liabilities.................... 1,539,053
-----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 1,027,099
Class R shares and 100 of Class I
shares outstanding ($.001 par
value)).............................. $19,969,764
===========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R.............................. $ 19.44
===========
Class I.............................. $ 11.17
===========
COMPOSITION OF NET ASSETS:
Capital Stock.......................... 1,026
Paid in surplus........................ 17,052,236
Accumulated net realized gain on
investments.......................... 573,267
Accumulated net investment loss........ (30,991)
Net unrealized appreciation on
investments.......................... 2,374,226
-----------
NET ASSETS............................... 19,969,764
===========
</TABLE>
<TABLE>
<S> <C>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends.............................. $ 52,960
Interest............................... 17,980
-----------
Total Investment Income.............. 70,940
-----------
EXPENSES:
Comprehensive fee (Note 3)............. 63,316
Distribution fee (Note 3).............. 11,877
-----------
Total Expenses....................... 75,193
-----------
Net Investment Loss.................... (4,253)
-----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (NOTE 2):
Net realized gain on investments....... 329,817
Net change in unrealized appreciation
on investments....................... 812,078
-----------
Net realized and unrealized gain on
investments.......................... 1,141,895
-----------
Net Increase in Net Assets resulting
from Operations...................... $ 1,137,642
===========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED AND THE YEAR ENDED MAY 31,
1998)
<TABLE>
<CAPTION>
1998 1998
----------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (4,253) $ (18,080)
Net realized gain from investment transactions.......... 329,817 333,591
Net change in unrealized appreciation on investments.... 812,078 805,172
----------- ----------
Net increase in net assets resulting from operations.... 1,137,642 1,120,683
----------- ----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net realized gain on investments........................ -- (111,520)
----------- ----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 15,014,970 3,717,183
Reinvestment of distributions........................... -- 110,918
Cost of shares redeemed................................. (2,968,863) (1,161,229)
----------- ----------
Net increase in net assets resulting from capital share
transactions........................................... 12,046,107 2,666,872
----------- ----------
Net increase in net assets.............................. 13,183,749 3,676,035
NET ASSETS:
Beginning of period..................................... 6,786,015 3,109,980
----------- ----------
End of period........................................... $19,969,764 $6,786,015
=========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 16
RESERVE PRIVATE EQUITY SERIES--RESERVE MID-CAP EQUITY FUND+
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
VALUE
SHARES COMMON STOCKS -- 84.0% (NOTE 1)
- ------ ---------------------- --------
ADVERTISING -- 6.0%
4,100 Ha-Lo Industries, Inc.*................... $ 130,944
----------
BANKS -- 5.9%
5,000 Hibernia Corp., Class A................... 84,375
1,320 First Tennessee National Corp. ........... 44,220
----------
128,595
----------
BUILDING PRODUCTS -- 1.4%
1,750 Watsco, Inc. ............................. 31,391
----------
CAPITAL GOODS INDUSTRIAL -- 3.3%
5,000 Vishay Intertechnology, Inc. ............. 70,937
----------
COMMUNICATIONS -- 3.1%
3,500 Scientific-Atlanta........................ 67,812
----------
COMPUTERS & COMPUTER SOFTWARE -- 3.9%
4,800 Computer Management Sciences, Inc. ....... 84,900
----------
COMPUTER--PERIPHERAL EQUIPMENT -- 3.8%
2,000 American Power Conversion Corp. .......... 82,750
----------
DRUGS -- 2.2%
5,000 North American Vaccine.................... 48,125
----------
ELECTRONICS -- 5.6%
3,000 Pentair Industries, Inc. ................. 113,062
600 Kopin Corp. .............................. 8,550
----------
121,612
----------
HOSPITAL SUPPLIES -- 2.7%
2,500 Pall Corp. ............................... 58,125
----------
INSURANCE -- 7.1%
4,000 Protective Life Corp. .................... 155,750
----------
OFFSHORE DRILLING -- 1.2%
3,500 Pride International, Inc. ................ 26,469
----------
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
OPTICAL INSTRUMENTS AND LENSES -- 2.6%
3,600 Sola International, Inc. ................. $ 57,150
----------
POLLUTION CONTROL -- 2.5%
7,280 Newpark Resources, Inc.*.................. 53,690
----------
RESTAURANTS -- 4.7%
Cracker Barrel Old Country Stores,
4,400 Inc. ..................................... 102,300
----------
RETAIL -- 16.4%
4,000 Autozone, Inc.*........................... 120,500
4,000 Fingerhut Companies, Inc. ................ 44,500
8,250 Pier 1 Imports, Inc. ..................... 88,688
7,000 Stein Mart, Inc.*......................... 60,156
1,273 Metris Companies.......................... 42,486
----------
356,330
----------
SPECIAL INDUSTRIAL MACHINERY -- 2.5%
3,000 Quanex.................................... 53,813
----------
TELECOMMUNICATIONS -- 3.0%
1,100 WorldCom, Inc. ........................... 64,900
----------
TRANSPORTATION -- 6.1%
6,050 Swift Transportation Co., Inc.*........... 132,722
----------
TOTAL COMMON STOCKS (Cost $1,830,049)..... 1,828,315
----------
SHORT-TERM INVESTMENTS -- 18.2%
------------------------------------------
Vista U.S. Government Money Market Fund
(Cost $395,000)........................... 395,000
----------
TOTAL INVESTMENTS
(Cost $2,225,049)...................102.2% 2,223,315
LIABILITIES, LESS OTHER ASSETS...... (2.2) (47,680)
----- -------
NET ASSETS..........................100.0% $2,175,635
----- -------
----- -------
</TABLE>
- ------------
Value of investments are shown as a percentage of net assets.
+ Formerly Mid-Cap Growth Fund.
* Non-income producing security.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $2,225,049 the aggregate gross unrealized appreciation was
$252,486 and the aggregate gross unrealized depreciation was $254,220.
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 17
RESERVE PRIVATE EQUITY SERIES--RESERVE MID-CAP EQUITY FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $2,225,049)..................... $2,223,315
Dividend and interest receivable........ 198
----------
Total Assets.......................... 2,223,513
----------
LIABILITIES
Cash overdraft.......................... 43,705
Other payables and accrued expenses..... 4,173
----------
Total Liabilities..................... 47,878
----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 206,264 Class R
shares and 100 of Class I shares
outstanding ($.001 par value)......... $2,175,635
==========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R............................... $ 10.54
==========
Class I............................... $ 10.64
==========
COMPOSITION OF NET ASSETS:
Capital Stock........................... 209
Paid in surplus......................... 2,087,882
Accumulated net realized gain on
investments........................... 245,727
Accumulated net investment loss......... (156,449)
Net unrealized appreciation on
investments........................... (1,734)
----------
NET ASSETS................................ $2,175,635
==========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends............................... $ 4,229
Interest................................ 5,291
----------
Total Investment Income............... 9,520
----------
EXPENSES:
Comprehensive fee (Note 3).............. 17,341
Distribution fee (Note 3)............... 3,021
----------
Total Expenses........................ 20,362
----------
Net Investment Loss..................... (10,842)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized gain on investments........ 119,495
Net change in unrealized depreciation on
investments........................... (656,634)
----------
Net realized and unrealized gain on
investments........................... (537,139)
----------
Net Decrease in Net Assets Resulting
from Operations....................... $ (547,981)
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (10,842) $ (55,592)
Net realized gain from investment transactions.......... 119,495 550,984
Net change in unrealized (depreciation) appreciation on
investments............................................ (656,634) 15,787
----------- -----------
Net increase (decrease) in net assets resulting from
operations............................................. (547,981) 511,179
----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net realized gain on investments........................ -- (485,972)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 45,902 1,341,995
Reinvestment of distributions........................... -- 480,743
Cost of shares redeemed................................. (702,845) (2,469,521)
----------- -----------
Net decrease in net assets resulting from capital share
transactions........................................... (656,943) (646,783)
----------- -----------
Net decrease in net assets.............................. (1,204,924) (621,576)
NET ASSETS:
Beginning of period..................................... 3,380,559 4,002,135
----------- -----------
End of period........................................... $ 2,175,635 $ 3,380,559
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 18
RESERVE PRIVATE EQUITY SERIES--RESERVE SMALL-CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--NOVEMBER 30, 1998--(UNAUDITED)
VALUE
SHARES COMMON STOCKS -- 94.5% (NOTE 1)
- ------ ---------------------- --------
COMMERCIAL SERVICES -- 6.0 %
International Telecomm Data Systems,
Inc.*.................................... $ 166,219
6,750
Memberworks, Inc.*....................... 126,750
5,200
----------
292,969
----------
COMMUNICATION EQUIPMENT -- 2.9 %
ECI Telecommunications Ltd............... 143,000
4,000
----------
COMPUTER-NETWORKING -- 10.3 %
Ascend Communications, Inc.*............. 213,512
3,800
CNET, Inc.*.............................. 84,900
1,600
Legato Systems, Inc.*.................... 205,593
4,300
----------
504,005
----------
COMPUTER SERVICES -- 3.0 %
HNC Software, Inc.*...................... 148,500
4,500
----------
COMPUTER SOFTWARE -- 21.6 %
Activision, Inc.*........................ 199,287
14,900
Business Objects S.A. ADR*............... 184,300
9,700
Citrix Systems, Inc.*.................... 174,300
2,100
Dendrite International, Inc.*............ 192,500
10,000
Excite, Inc.*............................ 97,875
2,000
Hyperion Solutions Corp.*................ 112,341
3,470
Sapient Corp.*........................... 92,500
2,000
----------
1,053,103
----------
DRUGS AND HEALTH CARE -- 4.4 %
Centocor, Inc.*.......................... 129,600
3,200
National Dentex Corp.*................... 85,625
5,000
----------
215,225
----------
ENERGY -- 1.8 %
Cross Timbers Oil Company................ 85,312
7,500
----------
FIBER OPTICS -- 1.2 %
Harmonic Lightwaves, Inc.*............... 60,600
4,800
----------
OFFICE BUSINESS EQUIPMENT -- 3.1 %
HBO & Company............................ 149,625
6,000
----------
<TABLE>
<CAPTION>
<C> <S> <C>
VALUE
SHARES COMMON STOCKS (CONTINUED) (NOTE 1)
- ------ ------------------------- --------
<C> <S> <C>
OFFSHORE DRILLING -- 1.2 %
Newfield Exploration Co.*................ $ 58,500
3,000
----------
OPTICAL INSTRUMENTS & LENSES -- 1.4 %
KLA-Tencor Corp.*........................ 68,125
2,000
----------
RETAILS -- 14.6 %
BeBe Stores, Inc.*....................... 135,150
5,100
Borders Group, Inc.*..................... 121,250
5,000
Corporate Express, Inc.*................. 102,225
17,400
Staples, Inc.*........................... 209,625
6,000
Williams-Sonoma, Inc.*................... 141,900
4,800
----------
710,150
----------
SEMICONDUCTOR & RELATED SERVICES -- 14.8%
Applied Micro Circuits Corp.*............ 184,250
5,500
ETEC Systems, Inc.*...................... 88,765
2,700
Transwitch Corp.*........................ 334,500
12,000
Uniphase Corp.*.......................... 113,794
2,100
----------
721,309
----------
TELECOMMUNICATIONS & EQUIPMENT -- 2.9 %
MDSI Mobile Data Solutions*.............. 140,175
8,900
----------
MISCELLANEOUS -- 5.3 %
Central Garden & Pet Corp.*.............. 80,469
5,000
On Assignment, Inc.*..................... 177,812
5,000
----------
258,281
----------
TOTAL COMMON STOCKS (Cost $3,288,877).... 4,608,879
----------
SHORT-TERM INVESTMENTS -- 3.3 %
-----------------------------------------
Vista U.S. Government Money Market Fund
(Cost $160,000).......................... 160,000
160,000
----------
TOTAL INVESTMENTS (Cost
$3,448,877)........................ 97.8% 4,768,879
OTHER ASSETS, LESS LIABILITIES...... 2.2% 107,773
----- -------
NET ASSETS.........................100.0% $4,876,652
----- -------
----- -------
</TABLE>
- ------------
Value of investments are shown as a percentage of net assets.
* Non-income producing security.
For Federal income tax purposes the tax basis for investments owned at November
30, 1998, was $3,448,877; the aggregate gross unrealized appreciation was
$1,702,608 and the aggregate gross unrealized depreciation was $382,606.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 19
RESERVE PRIVATE EQUITY SERIES--RESERVE SMALL-CAP GROWTH FUND
<TABLE>
<S> <C>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998 (UNAUDITED)
ASSETS:
Investments in securities, at value
(cost $3,448,877)..................... $4,768,879
Cash.................................... 111,637
Dividend and interest receivable........ 550
----------
Total Assets.......................... 4,881,066
----------
LIABILITIES:
Payable for Fund share repurchased...... 4,200
Other payables and accrued expenses..... 214
----------
Total Liabilities..................... 4,414
----------
NET ASSETS (NOTES 1 & 5):
Net assets consisting of 274,872 Class R
shares and 100 Class I shares
outstanding (.001 par value).......... $4,876,652
==========
NET ASSET VALUE PER SHARE (offering and
redemption price per share):
Class R............................... $ 17.74
==========
Class I............................... $ 11.28
==========
COMPOSITION OF NET ASSETS:
Capital Stock........................... 275
Paid in surplus......................... 3,818,405
Accumulated net realized gain on
investments........................... 57,235
Accumulated net investment loss......... (319,265)
Net unrealized appreciation on
investments........................... 1,320,002
----------
NET ASSETS................................ $4,876,652
==========
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME:
Dividends............................... $ 1,163
Interest................................ 3,410
----------
Total Investment Income............... 4,573
----------
EXPENSES:
Comprehensive fee (Note 3).............. 35,242
Distribution fee (Note 3)............... 6,192
----------
41,434
----------
Net Investment Loss..................... (36,861)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 2):
Net realized gain on investments........ 150,572
Net change in unrealized appreciation on
investments........................... 200,049
----------
Net realized and unrealized gain on
investments........................... 350,621
----------
Net Increase in Net Assets Resulting
from Operations....................... $ 313,760
==========
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED) AND THE YEAR ENDED MAY
31, 1998
<TABLE>
<CAPTION>
1998 1998
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
INVESTMENT OPERATIONS:
Net investment loss..................................... $ (36,861) $ (102,604)
Net realized gain from investment transactions.......... 150,572 431,594
Net change in unrealized appreciation on investments.... 200,049 143,667
----------- -----------
Net increase in net assets resulting from operations.... 313,760 472,657
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net proceeds from sale of shares........................ 143,798 502,230
Cost of shares redeemed................................. (1,122,008) (1,443,491)
----------- -----------
Net decreases in net assets resulting from capital share
transactions........................................... (978,210) (941,261)
----------- -----------
Net decrease in net assets.............................. (664,450) (468,604)
NET ASSETS:
Beginning of period..................................... 5,541,102 6,009,706
----------- -----------
End of period........................................... $ 4,876,652 $ 5,541,102
=========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Reserve Private Equity Series (the "Trust") was formed as a business trust
under the laws of the state of Delaware. Currently, the Trust is comprised of
seven regulated investment companies (commonly called mutual funds): Reserve
Blue Chip Growth Fund, Reserve Convertible Securities Fund, Reserve Informed
Investors Growth Fund, Reserve International Equity Fund, Reserve Large-Cap
Growth Fund (formerly Reserve Large-Cap Value Fund), Reserve Mid-Cap Equity
Fund (formerly Reserve Mid-Cap Growth Fund), and Reserve Small-Cap Growth
Fund (collectively the "Funds"). The Trust has the right, at its discretion,
to add other funds if the situation warranted.
The Trust is registered under the Investment Company Act of 1940, as a
non-diversified open-end investment company. Each Fund in the Trust has an
unlimited number of shares of beneficial interest of $.001 par value.
On June 24, 1998, the Board of Trustees ("Trustees") of the Trust agreed to
add an institutional class ("Class I") to each Fund, and designate the
existing Fund shares as a retail class ("Class R"). The Trustees further
agreed to set the Class I minimum initial investment at $250,000, and to also
set a low expense ratio to compete with other institutional accounts. The
Trustees also voted to change the names of Reserve Large-Cap Value Fund and
Reserve Mid-Cap Growth Fund to Reserve Large-Cap Growth Fund and Reserve
Mid-Cap Equity Fund, respectively. The change in name has no bearing on
either Fund's current investment objectives and policies.
The accounting policies summarized below are consistently followed in
preparation of the financial statements in conformity with generally accepted
accounting principles.
SECURITY VALUATION
Portfolio securities are stated at value. Securities listed or traded on an
exchange are valued at the last sales price on the exchange in which the
security is principally traded or, lacking any sales, at the mean between the
closing bid and asked price. Securities traded in the over-the-counter market
are valued at the mean between the quoted bid and asked price. Where market
quotations are not readily available, the securities are valued at their fair
value as determined in good faith by or under direction of the Trustees.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on a trade date basis. Dividend income
and distributions to shareholders are recorded on the ex-dividend dates.
Interest income is accrued daily. Realized gains and losses from securities
transactions are recorded on the identified cost basis for both financial
statement and federal income tax purposes.
FOREIGN CURRENCY TRANSLATION
With respect to the Reserve International Equity Fund, assets and liabilities
denominated in foreign currencies are translated into U.S. dollars using
exchange rates on the valuation date. Purchases and sales of securities,
expense payments and income receipts are translated into U.S. dollars using
the exchange rate on the transaction date. The Fund does not segregate that
portion of the results of operations resulting from changes in foreign
exchange rates from the portion resulting from changes in market prices of
securities held; both are included in net realized and unrealized gains or
losses on investments and foreign currency transactions.
FEDERAL INCOME TAXES
It is the Trust's policy for each Fund to continue to qualify as a regulated
investment company under the Internal Revenue Code of 1986, as amended, by
complying with the requirements of the Internal Revenue Code applicable to
regulated investment companies, and to distribute substantially all of its
taxable income, including net realized capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
20
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
At May 31, 1998, the Trust's fiscal year end, the following Funds had capital
loss carryforwards for federal income tax purposes, which are available to
offset future net realized capital gains, if any:
<TABLE>
<CAPTION>
CAPITAL LOSS EXPIRATION
CARRYFORWARD YEAR
------------ ----------
<S> <C> <C>
Reserve International Equity Fund........................... $ 71,968 2004
Reserve International Equity Fund........................... 273,130 2005
Reserve International Equity Fund........................... 975,769 2006
Reserve Small-Cap Growth Fund............................... 145,524 2005
</TABLE>
2. INVESTMENT ACTIVITY
For the six months ended November 30, 1998, the aggregate cost of purchases
and proceeds from sales of investments (excluding short-term investments)
were as follows:
<TABLE>
<CAPTION>
AGGREGATE AGGREGATE
PURCHASES SALES
--------- ---------
<S> <C> <C>
Blue Chip Growth Fund....................................... $ 5,764,222 $ 5,478,260
Convertible Securities Fund................................. 5,426,791 18,639,047
Informed Investors Growth Fund.............................. 7,199,742 10,066,078
International Equity Fund................................... 11,822,638 11,461,217
Large-Cap Growth Fund....................................... 12,025,965 1,361,741
Mid-Cap Equity Fund......................................... 568,097 1,441,633
Small-Cap Growth Fund....................................... 454,938 1,614,770
</TABLE>
3. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Reserve Management Company, Inc. (RMCI), serves as the Trust's investment
adviser subject to the direction of the Trustees. Under the Investment
Management Agreement, RMCI is responsible for the day-to-day operations,
including monitoring investment programs, portfolio valuation, compliance,
administration, or any other functions as required by the Trust. RMCI pays
substantially all of the operating expenses of the Trust, exclusive of
interest, taxes, brokerage, distribution fees, and any extraordinary fees.
For its services as investment adviser, RMCI receives the following annual
fee of each class' average daily net assets;
<TABLE>
<CAPTION>
CLASS R CLASS I
------- -------
<S> <C> <C>
Blue Chip Growth Fund....................................... 1.20% .90%
Convertible Securities Fund................................. 1.30 1.00
Informed Investors Growth Fund.............................. 1.30 1.00
International Equity Fund................................... 1.55 1.25
Large-Cap Growth Fund....................................... 1.20 .90
Mid-Cap Equity Fund......................................... 1.30 1.00
Small-Cap Growth Fund....................................... 1.30 1.00
</TABLE>
The rates above went into effect October 1, 1998, the day the Class I became
active. Prior to October 1, 1998, RMCI received an annual fee at a rate of
1.50% of each Fund's average daily net assets, except International Equity
Fund that paid an annual rate of 1.75%.
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
RMCI has entered into an Investment Sub-Advisory Agreement with investment
managers to serve as the Funds' sub-advisers (the "Sub-Advisers"). Under the
general supervision of RMCI, the Sub-Advisers are responsible for the
day-to-day investment decisions. The fees paid to the Sub-Advisers are paid
by RMCI as follows:
<TABLE>
<CAPTION>
SUB-ADVISER FEE
----------- ---
<S> <C> <C>
Blue Chip Growth Fund Trainer, Wortham & Company, Inc. .750%
Convertible Securities Fund New Vernon Advisors, Inc. .750%
Informed Investors Growth Fund T. H. Fitzgerald & Company .750%
International Equity Fund Pinnacle Associates Limited .875%
Large-Cap Growth Fund Siphron Capital Management .750%
Mid-Cap Equity Fund Pekin, Singer & Schapiro Asset Management .750%
Small-Cap Growth Fund Roanoke Asset Management .750%
</TABLE>
RMCI has entered into a Distribution Plan with Resrv Partners, Inc. ("RPI") a
wholly-owned subsidiary of RMCI. As distributor for the Funds, RPI is
responsible for accepting Fund share purchases and redemptions on behalf of
the Funds, providing at its own expense financial consultants and
compensating broker-dealers who supply distribution assistance to RPI. The
distributor also is responsible for the marketing efforts of the Funds. For
its services as distributor, RPI receives an annual fee of .25 of 1% the
Class R average daily net assets.
<TABLE>
<CAPTION>
DISTRIBUTION FEE
----------------
<S> <C>
Blue Chip Growth Fund....................................... $11,610
Convertible Securities Fund................................. 26,010
Informed Investors Growth Fund.............................. 4,121
International Equity Fund................................... 13,344
Large-Cap Growth Fund....................................... 11,877
Mid-Cap Equity Fund......................................... 3,021
Small-Cap Growth Fund....................................... 6,192
</TABLE>
TRANSACTIONS WITH AFFILIATES
As of November 30, 1998, Trainer, Wortham & Company, Inc. owns 23.8% of
Reserve Blue Chip Growth Fund and New Vernon Advisors, Inc. own 55.3% of
Reserve Convertible Securities Fund.
4. CAPITAL SHARE TRANSACTIONS
For the six months ended November 30, 1998, and the year ended May 31, 1998,
the capital stock transactions of each Fund were as follows:
<TABLE>
<CAPTION>
CLASS R CLASS I
----------------------- ----------------
RESERVE BLUE CHIP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold........................................................ 61,956 $ 955,407 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (21,318) (337,559) 0 0
-------- ----------- --- ------
Net Increase................................................ 40,638 $ 617,848 100 $1,000
======== =========== === ======
</TABLE>
22
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
CLASS R CLASS I
----------------------- ----------------
RESERVE CONVERTIBLE SECURITIES FUND SHARES AMOUNT SHARES AMOUNT
----------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold........................................................ 194,916 $ 1,589,296 100 $1,000
Reinvested.................................................. 36,405 341,075 0 0
Redeemed.................................................... (679,789) (5,572,382) 0 0
-------- ----------- --- ------
Net Increase (Decrease)..................................... (448,468) $(3,642,011) 100 $1,000
======== =========== === ======
CLASS R CLASS I
----------------------- ----------------
RESERVE INFORMED INVESTORS FUND SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------ -------- ----------- ------ ------
Sold........................................................ 132,892 $ 1,550,543 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (281,712) (3,171,667) 0 0
-------- ----------- --- ------
Net Increase (Decrease)..................................... (148,820) $(1,621,124) 100 $1,000
======== =========== === ======
CLASS R CLASS I
----------------------- ----------------
RESERVE INTERNATIONAL EQUITY FUND SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------ -------- ----------- ------ ------
Sold........................................................ 121,793 $ 1,520,174 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (152,413) (1,933,462) 0 0
-------- ----------- --- ------
Net Increase (Decrease)..................................... (30,620) $ (413,288) 100 $1,000
======== =========== === ======
CLASS R CLASS I
----------------------- ----------------
RESERVE LARGE-CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------ -------- ----------- ------ ------
Sold........................................................ 812,308 $15,013.970 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (158,761) (2,966,455) 0 0
-------- ----------- --- ------
Net Increase................................................ 653,547 $12,047,515 100 $1,000
======== =========== === ======
CLASS R CLASS I
----------------------- ----------------
RESERVE MID-CAP EQUITY FUND SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------ -------- ----------- ------ ------
Sold........................................................ 3,923 $ 44,902 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (58,884) (712,649) 0 0
-------- ----------- --- ------
Net Increase (Decrease)..................................... (54,961) $ (667,747) 100 $1,000
======== =========== === ======
</TABLE>
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
CLASS R CLASS I
----------------------- ----------------
RESERVE SMALL-CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold........................................................ 8,621 $ 142,798 100 $1,000
Reinvested.................................................. 0 0 0 0
Redeemed.................................................... (66,113) (1,118,286) 0 0
-------- ----------- --- ------
Net Increase (Decrease)..................................... (57,492) $ (975,488) 100 $1,000
======== =========== === ======
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE BLUE CHIP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 178,836 $ 2,689,325 152 $ 2,500
Reinvested.............................................. 79,403 1,120,379 -- --
Redeemed................................................ (44,001) (685,503) (3,128) (54,526)
--------- ----------- -------- -----------
Net Increase (Decrease)................................. 214,238 $ 3,124,201 (2,976) $ (52,026)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE CONVERTIBLE SECURITIES FUND SHARES AMOUNT SHARES AMOUNT
----------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 357,328 $ 3,895,085 21 $ 235
Reinvested.............................................. 181,967 1,979,389 -- --
Redeemed................................................ (53,071) (591,997) (1,683) (20,195)
--------- ----------- -------- -----------
Net Increase (Decrease)................................. 486,224 $ 5,282,477 (1,662) $ (19,960)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE INFORMED INVESTORS GROWTH FUND SHARES AMOUNT SHARES AMOUNT
-------------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 83,790 $ 928,647 -- $ --
Reinvested.............................................. 101,914 1,007,930 -- --
Redeemed................................................ (249,698) (2,734,101) (1,141) (16,355)
--------- ----------- -------- -----------
Net Decrease............................................ (63,994) $ (797,524) (1,141) $ (16,355)
========= =========== ======== ===========
</TABLE>
24
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE INTERNATIONAL EQUITY FUND SHARES AMOUNT SHARES AMOUNT
--------------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 287,467 $ 3,588,183 752 $ 9,550
Reinvested.............................................. -- -- -- --
Redeemed................................................ (276,380) (3,085,673) (3,187) (40,571)
--------- ----------- -------- -----------
Net Increase (Decrease)................................. 11,087 $ 502,510 (2,435) $ (31,021)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE LARGE-CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 225,263 $ 3,764,562 3,604 $ 55,870
Reinvested.............................................. 6,906,501 110,918 -- --
Redeemed................................................ (67,510) (1,147,646) (7,445) (116,831)
--------- ----------- -------- -----------
Net Increase (Decrease)................................. 7,064,254 $ 2,727,834 (3,841) $ (60,961)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE MID-CAP EQUITY FUND SHARES AMOUNT SHARES AMOUNT
--------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 207,717 $ 3,061,184 50,380 $ 685,878
Reinvested.............................................. 40,095 480,743 -- --
Redeemed................................................ (152,046) (2,069,981) (190,095) (2,805,123)
--------- ----------- -------- -----------
Net Increase (Decrease)................................. 95,766 $ 1,471,946 (139,715) $(2,119,245)
========= =========== ======== ===========
</TABLE>
<TABLE>
<CAPTION>
CLASS D
CLASS A -----------------------
------------------------ FOR THE PERIOD
YEAR ENDED JUNE 1, 1998 TO
MAY 31, 1998 SEPTEMBER 30, 1998
------------------------ -----------------------
RESERVE SMALL-CAP GROWTH FUND SHARES AMOUNT SHARES AMOUNT
----------------------------- ------ ------ ------ ------
<S> <C> <C> <C> <C>
Sold.................................................... 41,002 $ 727,314 2,838 $ 45,650
Reinvested.............................................. -- -- -- --
Redeemed................................................ (81,450) (1,410,761) (17,221) (312,464)
--------- ----------- -------- -----------
Net Decrease............................................ (40,448) $ (683,447) (14,383) $ (266,814)
========= =========== ======== ===========
</TABLE>
5. MANAGEMENT'S USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities 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.
25
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
6. SUPPLEMENTAL PROXY INFORMATION
The Special Meeting of Shareholders of the Trust was held on Thursday,
December 17, 1998 at the offices of The Reserve Funds, 810 Seventh Avenue,
New York, NY. The meeting was held for the following purposes:
PROPOSAL
1. To provide for the election of Trustees
2. To approve new Investment Management Agreements
3. To approve new Sub-Advisory Agreements
4. To approve the following proposed amendments:
A. To amend the Trust's Declaration of Trust to provide dollar-based
voting rights;
B. To change the designation of the Funds' fundamental investment policy
on investing for control or portfolio companies
5. To approve changes to the Funds' Fundamental Investment Policies to
Permit a Master Fund/Feeder Fund Structure
6. To approve the authorization of the Board of Trustees to appoint,
replace or terminate Sub-Advisers recommended by the adviser or amend
the terms of any Sub-Advisory Agreement for the Funds without
shareholder approval
7. To ratify the selection of PricewaterhouseCoopers LLP as independent
public accountants for the fiscal year ending May 31, 1999 and
A Quorum of the shares of the Trust and the Funds, with exception of the
Reserve Convertible Securities Fund, was present at the Meeting.
The results of the proxy solicitation on the above matters were as follows:
<TABLE>
<CAPTION>
VOTES WITHHELD/
BOARD OF TRUSTEES VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
- --------------------------------------------------- -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Bruce R. Bent.................................. 2,143,190 -- 13,003 --
Edwin Ehlert, Jr............................... 2,143,184 -- 13,009 --
Vincent J. Mattone............................. 2,143,191 -- 13,002 --
Donald J. Harrington........................... 2,143,184 -- 13,009 --
Henri W. Emmet................................. 2,142,098 -- 14,095 --
Diana P. Herrmann.............................. 2,142,105 -- 14,088 --
William E. Viklund............................. 2,141,600 -- 14,593 --
Bruce R. Bent II............................... 2,139,857 -- 16,336 --
Richard Bassuk................................. 2,143,191 -- 13,002 --
</TABLE>
<TABLE>
<CAPTION>
VOTES WITHHELD/
INVESTMENT MANAGEMENT AGREEMENT VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
- --------------------------------------------------- -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Reserve Blue Chip Growth....................... 434,313 407 -- 1,311
Reserve Informed Investors Growth.............. 149,974 18 -- 216
Reserve International Equity................... 659,519 22 -- 4
Reserve Large-Cap Growth....................... 491,565 18,528 -- 41,360
Reserve Mid-Cap Equity......................... 153,698 12 -- 376
Reserve Small-Cap Growth....................... 154,013 876 -- 1,296
</TABLE>
26
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
VOTES WITHHELD/
SUB-ADVISORY AGREEMENT VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
- --------------------------------------------------- -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Reserve Blue Chip Growth....................... 432,045 14 -- 3,971
Reserve Informed Investors Growth.............. 149,970 20 -- 219
Reserve International Equity................... 659,063 477 -- 4
Reserve Large-Cap Growth....................... 491,404 18,690 -- 41,359
Reserve Mid-Cap Equity......................... 148,904 416 -- 4,765
Reserve Small-Cap Growth....................... 154,694 611 -- 880
</TABLE>
<TABLE>
<CAPTION>
VOTES WITHHELD/
VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
(4) -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
(A) Dollar-based Voting............................ 1,888,136 54,589 166,224 47,244
(B) Investing for Control
Reserve Blue Chip Growth....................... 398,421 4,463 29,223 3,925
Reserve Informed Investors Growth.............. 141,030 1,100 7,862 217
Reserve International Equity................... 658,243 394 901 7
Reserve Large-Cap Growth....................... 402,976 22,715 84,557 41,206
Reserve Mid-Cap Equity......................... 124,483 936 28,246 421
Reserve Small-Cap Growth....................... 146,851 2,064 6,698 573
</TABLE>
<TABLE>
<CAPTION>
VOTES WITHHELD/
MASTER FEEDER/FEEDER FUND VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
- --------------------------------------------------- -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Reserve Blue Chip Growth....................... 401,186 3,974 29,223 1,649
Reserve Informed Investors Growth.............. 141,655 475 7,862 217
Reserve International Equity................... 658,257 380 901 7
Reserve Large-Cap Growth....................... 398,056 27,371 84,557 41,470
Reserve Mid-Cap Equity......................... 125,004 459 28,246 377
Reserve Small-Cap Growth....................... 146,904 1,700 6,698 884
</TABLE>
<TABLE>
<CAPTION>
VOTES WITHHELD/
TRUSTEE AUTHORIZATION VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
- --------------------------------------------------- -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
Reserve Blue Chip Growth....................... 430,207 4,513 -- 1,311
Reserve Informed Investors Growth.............. 149,971 20 -- 217
Reserve International Equity................... 622,429 37,110 -- 5
Reserve Large-Cap Growth....................... 496,864 14,157 -- 40,432
Reserve Mid-Cap Equity......................... 153,147 520 -- 418
Reserve Small-Cap Growth....................... 154,988 314 -- 883
</TABLE>
<TABLE>
<CAPTION>
VOTES WITHHELD/
VOTE FOR VOTES AGAINST BROKER NON-VOTES ABSTENTIONS
(7) -------- ------------- ---------------- -----------
<S> <C> <C> <C> <C>
PricewaterhouseCoopers LLP.................... 2,113,146 4,162 -- 38,883
</TABLE>
Due to the absence of a quorum for the Reserve Convertible Securities Fund,
the Chairman adjourned the meeting with respect to the Reserve Convertible
Securities Fund until Friday, January 15, 1999.
27
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
7. FINANCIAL HIGHLIGHTS:
Contained below is per share operating performance data for a share of
beneficial interest for each of the periods as indicated. The information
should be read in conjunction with accompanying financial data and related
notes.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, -------------------------------------
RESERVE BLUE CHIP GROWTH FUND 1998 1998 1997 1996 1995(A)
- ----------------------------- ------------ ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period........................ $ 15.09 $15.46 $14.91 $12.03 $ 10.00
------- ------ ------ ------ -------
Income from investment operations
Net investment income (loss).............................. (.05) (.00) (.17) (.10) (.03)
Net realized and unrealized gain (loss)................... 2.26 2.82 0.91 3.62 2.06
------- ------ ------ ------ -------
Total from investment operations............................ 2.21 2.82 0.74 3.52 2.03
Less distribution from net realized income and net capital
gain...................................................... -- (3.19) (.19) (.64) --
------- ------ ------ ------ -------
NET ASSET VALUE, end of period.............................. $ 17.30 $15.09 $15.46 $14.91 $ 12.03
======= ====== ====== ====== =======
Total Return................................................ 14.65% 19.70% 5.12% 30.10% 20.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)....................... $10,475 $8,532 $5,428 $5,130 $ 1,993
Ratio of expenses to average net assets..................... 1.63%(c) 1.75% 1.75% 1.75% 1.73%(c)
Ratio of net investment income (loss) to average net
assets.................................................... (.92)%(c) (.87)% (1.13)% (.94)% (.70)%(c)
Portfolio turnover rate..................................... 68% 113% 109% 72% 68%
Average commission per share on portfolio transactions...... $ .05 $ .05 $ .04 $ .06 N/A
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEARS ENDED
ENDED MAY 31,
NOVEMBER 30, ------------------
RESERVE CONVERTIBLE SECURITIES FUND 1998 1998 1997(B)
- ----------------------------------- ------------ ---- -------
<S> <C> <C> <C>
NET ASSET VALUE, beginning of period........................ $ 10.53 $ 11.08 $ 10.00
------- ------- -------
Income from investment operations
Net investment income (loss).............................. .27 .59 .34
Net realized and unrealized gain (loss)................... (1.57) .13 .99
------- ------- -------
Total from investment operations............................ (1.30) .72 1.33
Less distribution from net realized income and net capital
gain...................................................... (.24) (1.27) (.25)
------- ------- -------
NET ASSET VALUE, end of period.............................. $ 8.99 $ 10.53 $ 11.08
======= ======= =======
Total Return................................................ (11.35%) 6.44% 13.53%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)....................... $17,012 $24,656 $20,553
Ratio of expenses to average net assets..................... 1.17% .83%(d) .52%(c)(d)
Ratio of net investment income (loss) to average net
assets.................................................... 6.05% 4.69%(d) 5.52%(c)(d)
Portfolio turnover rate..................................... 51% 168% 113%
Average commission per share on portfolio transactions...... $ .07 $ .07 $ .06
</TABLE>
28
<PAGE> 29
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, -------------------------------------------
RESERVE INFORMED INVESTORS GROWTH FUND 1998 1998 1997 1996 1995(E)
- -------------------------------------- ------------ ---- ---- ---- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period................. $10.46 $11.48 $14.36 $11.99 $ 10.00
------ ------ ------ ------ -------
Income from investment operations
Net investment loss................................ (.07) (.20) (.07) (.33) (.07)
Net realized and unrealized gain (loss)............ .67 2.08 (1.66) 3.87 2.06
------ ------ ------ ------ -------
Total from investment operations..................... .60 1.88 (1.73) 3.54 1.99
Less distribution from net realized net capital
gain............................................... -- (2.90) (1.15) (1.17) --
------ ------ ------ ------ -------
NET ASSET VALUE, end of period....................... $11.06 $10.46 $11.48 $14.36 $ 11.99
====== ====== ====== ====== =======
Total Return......................................... 5.74% 17.88% (11.35)% 29.75% 19.90%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (thousands)................. $2,927 $4,334 $5,477 $6,393 $ 6,837
Ratio of expenses to average net asset............... 1.69%(c) 1.75% 1.75% 1.75% 1.75%(c)
Ratio of net investment loss to average net assets... (.82)%(c) (.91)% (.57)% (1.57)% (1.62)%(c)
Portfolio turnover rate.............................. 287% 410% 255% 132% 59%
Average commission per share on portfolio
transactions....................................... $ .06 $ .06 $ 0.06 $ 0.05 N/A
</TABLE>
29
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------
RESERVE INTERNATIONAL EQUITY FUND 1998 1998 1997 1996(F)
--------------------------------- ------------ ---- ---- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period....................... $ 13.22 $ 12.59 $ 11.26 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment loss...................................... (.02) (.04) (.07) (.05)
Net realized and unrealized gain (loss).................. (.52) .67 1.40 1.31
------- ------- ------- -------
Total from investment operations........................... (.54) .63 1.33 1.26
------- ------- ------- -------
NET ASSET VALUE, end of period............................. $ 12.68 $ 13.22 $ 12.59 $ 11.26
======= ======= ======= =======
Total Return............................................... (4.08%) 5.00% 11.81% 12.60%
RATIOS/SUPPLEMENTAL DATA
Net assets in thousands, end of period..................... $11,921 $12.699 $12,099 $ 3,578
Ratio of expenses to average net assets before waiver...... 1.91%(c) 2.00% 2.00% 2.00%(c)
Ratio of net investment loss to average net assets......... (.20)%(c) (.39)% (.82)% (.92)%(c)
Portfolio turnover rate.................................... 106% 110% 52% 70%
Average commission per share on portfolio transactions $ .03 $ .03 $ .03 $ .02
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------
RESERVE LARGE-CAP GROWTH FUND 1998 1998 1997 1996(G)
- ----------------------------------------------------------- ------------ ------- ------- -------
NET ASSET VALUE, beginning of period....................... $ 18.16 $ 14.61 $ 10.95 $ 10.00
------- ------- ------- -------
Income from investment operations
Net investment loss...................................... -- (.03) (.03) (.01)
Net realized and unrealized gain......................... 1.28 3.89 3.69 0.96
------- ------- ------- -------
Total from investment operations........................... 1.28 3.86 3.66 0.95
------- ------- ------- -------
Less distributions from net realized gain.................. -- (.31) -- --
------- ------- ------- -------
NET ASSET VALUE, end of period............................. $ 19.44 $ 18.16 $ 14.61 $ 10.95
======= ======= ======= =======
Total Return............................................... 4.18% 26.71% 33.42% 9.50%
RATIOS/SUPPLEMENTAL DATA
Net assets end of period (thousands)....................... $19,970 $ 6,786 $ 3,054 $ 1,231
Ratio of expenses to average net assets.................... 1.57%(c) 1.75% 1.75% 1.75%(c)
Ratio of net investment loss to average net assets......... (.09)%(c) (.36) (.32)% (.32)%(c)
Portfolio turnover rate.................................... 14% 25% 18% 0%
Average commission per share on portfolio transactions..... $ .07 $ .07 $ .07 $ .08
</TABLE>
30
<PAGE> 31
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)(CONTINUED)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ---------------------------------
RESERVE MID-CAP EQUITY FUND 1998 1998 1997 1996(H)
- --------------------------- ------------ ---- ---- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period........................ $ 12.98 $ 13.20 $ 12.29 $10.94
------- ------- ------- ------
Income from investment operations
Net investment loss....................................... (.20) (.26) (.11) (.01)
Net realized and unrealized gain (loss)................... (2.24) 1.50 1.02 1.36
------- ------- ------- ------
Total from investment operations............................ (2.44) 1.24 0.91 1.35
Less distribution from net realized gains................... -- (1.46) -- --
------- ------- ------- ------
NET ASSET VALUE, end of period.............................. $ 10.54 $ 12.98 $ 13.20 $12.29
======= ======= ======= ======
Total Return................................................ (18.80)% 10.31% 7.40% 12.34%(c)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (thousands)....................... $ 2,176 $ 3,381 $ 2,174 $ 131
Ratio of expenses to average net assets 1.69% (c)) 1.75% 1.75% 1.74%(c)
Ratio of net investment loss to average net assets (.90)%(c) (1.21)% (1.31)% (.97)%(c)
Portfolio turnover rate..................................... .26% 73% 102% 85%
Average commission per share on portfolio transactions...... $ .05 $ .05 $ .05 $ .04
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, ------------------------------------------
RESERVE SMALL-CAP GROWTH FUND 1998 1998 1997 1996 1995
----------------------------- ------------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, beginning of period........................ $16.66 $15.52 $19.56 $12.21 $10.00
------ ------ ------ ------ ------
Income from investment operations
Net investment loss....................................... (.31) (.39) (.28) (.17) (.09)
Net realized and unrealized gain (loss)................... 1.39 1.53 (3.76) 8.05 2.30
------ ------ ------ ------ ------
Total from investment operations............................ 1.08 1.14 (4.04) 7.88 2.21
Less distribution from net realized gain.................... -- -- -- (.53) --
------ ------ ------ ------ ------
NET ASSET VALUE, end of period.............................. $17.74% $16.66 $15.52 $19.56 $12.21
====== ====== ====== ====== ======
Total Return................................................ 6.49% 7.35% (20.65)% 65.55% 22.10%(2)
RATIOS/SUPPLEMENTAL DATA
Net assets in thousands, end of period...................... $4,877 $5,541 $5,789 $6,657 $1,241
Ratio of expenses to average net assets..................... 1.66%(c) 1.75% 1.75% 1.75% 1.75%(c)
Ratio of net investment loss to average net assets.......... (1.48)%(c) (1.64)% (1.69)% (1.70)% (1.62)%(c)
Portfolio turnover rate..................................... 10% 46% 28% 38% 43%
Average commission per share on portfolio transactions...... $ .03 $ .01 $ .01 $ .01 N/A
</TABLE>
- ---------------
(a) From October 28, 1994 (Commencement of Operations) to May 31, 1995.
(b) From September 3, 1996 (Commencement of Operations) to May 31, 1997
(c) Annualized.
(d) Net of fees waived and expenses reimbursed. Had RMCI not pursued such
undertakings, ratios of expenses and net investment income would have
amounted as follow:
<TABLE>
<CAPTION>
EXPENSE NET INVESTMENT
RATIOS INCOME
------- --------------
<S> <C> <C>
Year ended May 31, 1998..................................... 1.75% 4.69%
Period ended May 31, 1997................................... 1.75 3.67
</TABLE>
(e) From November 14, 1994 (Commencement of Operations) to May 31, 1995
(f) From July 13, 1995 (Commencement of Operations) to May 31, 1996
(g) From March 13, 1996 (Commencement of Operations) to May 31, 1996.
(h) From November 14, 1994 (Commencement of Operations) to May 31, 1995.
31
