<PAGE>
[LOGO]
ANNUAL REPORT
RESERVE PRIVATE EQUITY SERIES
BLUE CHIP GROWTH FUND
INFORMED INVESTORS
GROWTH FUND
INTERNATIONAL EQUITY
FUND
LARGE-CAP GROWTH
FUND
SMALL-CAP GROWTH FUND
STRATEGIC GROWTH FUND MAY 31, 2000
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE BLUE CHIP GROWTH FUND CLASS R
<TABLE>
<CAPTION>
BLUE CHIP CLASS R RETURN S&P 500 RETURN
<S> <C> <C>
10/28/1994 $10,000 $10,000
12/31/1994 $10,260 $9,858
12/31/1995 $13,944 $13,221
12/31/1996 $15,152 $15,900
12/31/1997 $19,014 $20,830
12/31/1998 $25,976 $26,385
12/31/1999 $41,057 $31,537
5/31/2000 $35,765 $30,493
</TABLE>
Blue Chip Class R Return--257.65% S&P 500 Return--204.93%
Total return represents the increase in value of an investment
over the period from October 28, 1994 (inception) to May 31,
2000. Past performance is not indicative of future results.
To the Shareholders of the Reserve Blue Chip Growth Fund:
The U.S. equity markets were down in the first half of 2000, for the first time
since 1994. The seemingly modest 0.4% decline in the S&P 500 Index belies the
severe individual stock volatility that occurred. The NASDAQ index was typical
of the "boom/bust" movement: rising double digits in the first three months, and
giving back all of the gain in the April-May period. We view the market
correction as a necessary event, removing the speculative excesses and paving
the way for the next advance upward in the market.
The U.S. economy is beginning to slow from clearly unsustainable levels of
growth, though the health of the economy is still generally sound. We see little
chance of a recession this year or next. Six increases in short-term interest
rates by Federal Reserve Board, along with tightening of lending standards by
commercial banks and dramatically higher energy prices, are among the causes of
the slowdown. Corporate profit comparisons will be likewise slowing, however
reported corporate profits should be relatively strong for the June quarter.
Therefore, while additional economic data in the next month could change things,
the odds now slightly favor the Fed not raising interest rates at its August
meeting, though it could still act after the presidential election in November.
Spending on technology is helping to offset the slowdown in the consumer sector;
70% of the growth in industrial production in the past year has come from
technology improving the efficiency of both the business and the consumer
sectors. As a result, there is increasing evidence that technology has smoothed
economic cycles, inventory-led recessions are less likely and increasing
productivity has helped to offset wage growth keeping inflation under control.
We are extremely positive on the fundamentals of the technology sector going
forward. Technology companies represent the Fund's largest sector investment,
over 45% of net assets.
In summary, the U.S. is still in remarkably good shape. Our longer-term thesis
of low inflation, sustained economic growth and corporate earnings growth
remains very much intact. We may look back on 2000 as a year of transition,
where earnings had the chance to catch up to high market valuations. Growth
companies, whose earnings have some independence from general economic trends,
tend to outperform the market in periods of slowing economic growth. Another
reason for optimism is the possibility that the Federal Reserve is finished
raising interest rates; in previous years the market has seen double-digit
increases following the last three periods of Fed tightening. Our focus
continues to be on high-quality, industry leading growth companies in
fundamentally attractive industries at reasonable prices with a focus on the top
100 of the S&P 500 Index.
<TABLE>
<CAPTION>
Class R Class I S&P 500
-------- -------- ---------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... 23.89% 24.66% 9.13%
</TABLE>
Robert Vile, Managing Director, Trainer, Wortham & Company, Inc., Sub-Advisor
2
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE INFORMED INVESTORS GROWTH FUND CLASS R
<TABLE>
<CAPTION>
INFORMED INVESTORS S&P 500 RETURN
CLASS R RETURN
<S> <C> <C>
12/28/1994 $10,000 $10,000
12/31/1995 $12,979 $13,364
12/31/1996 $13,143 $16,072
12/31/1997 $15,636 $21,056
12/31/1998 $19,854 $26,671
12/31/1999 $45,635 $31,879
5/31/2000 $38,632 $30,824
</TABLE>
Informed Investors Class R Return--286.32% S&P 500 Return--208.24%
Total return represents the increase in value of an investment
over the period from December 28, 1994 (inception) to May 31,
2000. Past performance is not indicative of future results.
To the Shareholders of the Reserve Informed Investors Growth Fund:
The U.S. equity markets limped through the second quarter reeling from weeks of
savagely volatile trading.
The tech-heavy NASDAQ Index suffered a -37% shellacing. . . . It's largest
decline in 25 years. In all, investors were clipped for a tidy $2 trillion
during these hectic months.
Leading the "hit" parade were the NASDAQ "Revolutionaries of the New
Economy" -- stocks that once traded at "price-to-fantasy" ratios. Most were
chainsawed almost beyond recognition: for instance, Etoys fell from $86 to $5,
down 94%; Ventro, from $243 to $21, down 91%; E. Piphany, from $325 to $43, off
87% and Liberate, from $149 to $21, down 86%. (Thankfully, none of these were
held by the fund). At the lows, the average internet stock had plummeted 74%
from its 52-week high as the carnage resulted in massive pile-ups of sellers
packed onto that tiny NASDAQ off-ramp.
It should be noted, however, that the NASDAQ gave up only about a third of the
100% gain this index achieved from its October 1999 lows, and only 23% of the
160% rise that occurred during the last two years. Thus, by definition, the
current drop, as painful as it has been, can be defined as a typical correction,
although within the widely accepted context of a true bear market. Market
history since the 1987 crash demonstrates that even the steepest fall can look
like a minor price adjustment in retrospect.
And now what of the future? What lies ahead for the U.S. equity market --
Nirvana or Apocalypse? The view from here remains unchanged: The long-term bull
market continues intact and, most especially, in the technology sector.
The fundamentals for U.S. equities remain solid. Strong operating performance
both here and abroad has resulted in a 24% gain in the first quarter profits,
setting the stage for what could become the most profitable year ever for the
S&P 500 companies. The U.S. is in the midst of a technology-driven up-turn that
is very bullish for future economic growth.
Near-term, the market will continue to be driven by a series of conflicting
currents -- fundamental, technical and emotional, which can trigger further
nerve-jangling price gyrations. Foremost among these crosscurrents is Wall
Street's obsessive preoccupation with the Federal Reserve's future interest-rate
decisions -- an on-going saga that has done more to unsettle all markets,
worldwide, than anything else in recent memory. (From a trader's standpoint,
trying to outguess the Fed is rather like playing Russian roulette. One might
easily forget the five chances for an empty chamber, it is a sixth possibility
that concentrates the mind).
Confidence in equities remains strong, with investors rotating between sectors
rather than reducing overall exposure. The upside potential for the balance of
the year remains quite promising, with an expectation of positive results.
<TABLE>
<CAPTION>
Class R Class I S&P 500
-------- -------- ---------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... 67.08% 68.07% 9.13%
</TABLE>
Thomas H. Fitzgerald, Jr., President, T.H. Fitzgerald & Co., Sub-Advisor
3
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE INTERNATIONAL EQUITY FUND CLASS R
<TABLE>
<CAPTION>
INTERNATIONAL EQUITY
CLASS R RETURN EAFE RETURN
<S> <C> <C>
7/13/95 $10,000 $10,000
12/31/95 $10,510 $10,201
12/31/96 $12,180 $10,649
12/31/97 $11,120 $10,674
12/31/98 $13,230 $12,621
12/31/99 $22,170 $15,809
5/31/00 $20,410 $14,526
</TABLE>
International Equity Class R Return--104.10% EAFE Return--45.26%
Total return represents the increase in value of an investment
over the period from July 13, 1995 (inception) to May 31, 2000.
Past performance is not indicative of future results.
To the Shareholders of the Reserve International Equity Fund:
The twelve months ended May 31, 2000, was an extraordinarily good period for
Reserve International Equity Fund Class R (the "Fund") with a gain of 60.33%.
Since we focus on companies that are growing much faster than their local
economies, we are in a strong position to have superior portfolio performance.
With a favorable interest rate environment worldwide, growth stocks benefited
from exploding earnings and expanding price/earnings multiples. Calendar 2000,
however, has been quite different with equity markets having to cope with rising
interest rates and rising oil prices.
Fortunately, oil price trends have reversed and, although they will remain high,
they are not forcing inflation to run to unacceptable levels. This has permitted
the Federal Reserve Board and the European Central Bank to plan for the end of
interest rate increases for this year. Steady and slightly downward trending
interest rates should be very helpful for equity prices.
We remain heavily weighted in Europe with Asia (excluding Japan) showing promise
of good economic performance this year. In the coming months, we look for equity
prices worldwide to once again start emphasizing fundamental earnings growth,
which should have a positive impact on the performance of your fund.
<TABLE>
<CAPTION>
Class R Class I EAFE
-------- -------- -------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... 60.33% 58.97% 15.70%
</TABLE>
Nicholas Reitenback, Chief Financial Officer, Pinnacle Associates, Ltd.,
Sub-Advisor
4
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE LARGE-CAP GROWTH FUND CLASS R
<TABLE>
<CAPTION>
LARGE-CAP GROWTH
CLASS R RETURN S&P 500 RETURN
<S> <C> <C>
1/1/1996 $10,000 $10,000
12/31/1996 $12,489 $11,933
12/31/1997 $16,576 $15,633
12/31/1998 $20,746 $19,802
12/31/1999 $23,497 $23,669
5/31/2000 $19,969 $22,885
</TABLE>
Large-Cap Growth Class R Return--99.69% S&P 500 Return--128.85%
Total return represents the increase in value of an investment
over the period from January 2, 1996 (inception) to May 31,
2000. Past performance is not indicative of future results.
To the Shareholders of the Reserve Large-Cap Growth Fund:
Since the first of March when we took over as the new sub-adviser to the Fund,
the markets have been very volatile, particularly for the technology sector, and
that volatility has been reflected to a degree in the Fund's performance year to
date. Having said that, we are pleased with the performance that the fund has
managed in the face of a very difficult environment. Looking forward, the fund
is well-positioned to benefit from what we foresee as a very constructive
environment for technology in particular and growth stocks in general.
We center the Fund's investments around durable, secular trends that we believe
will drive above average growth for the stocks and industries in which we
invest. The adoption of technology in all areas of the economy continues at a
very rapid pace, and is probably the defining trend of the global economy for
the next several years. We particularly favor the storage, wireless, and optical
networking industries within technology, as those industries address the current
bottlenecks in the technology infrastructure. Technology is also driving process
change in the discovery and the development of future drugs, spurring expanded
market opportunities for pharmaceutical, biotechnology and instrumentation
companies. Furthermore, we believe well-positioned communications services
companies will benefit from the surge in all forms of data traffic.
However, the boom in technology spending has a dark side. The proliferation of
technology has increased competition and decreased pricing power in many
industries, and many of these industries once were represented by premier growth
stocks. One example is the consumer staples sector, where companies have faced
dramatic slowdowns in earnings growth for what were once viewed as "safe" growth
stocks. In our view, technology is driving disinflation across the economy.
While this is a great benefit to the consumer, it has dire implications for
companies that cannot protect their identity. As such, we have focused the Fund
around companies and industries that have created a sustainable competitive
advantage, typically through R&D, brand, or content. If we invest in companies
that have not only these attributes, but that also serve rapidly growing end
markets, we believe we will do quite well over the long term and can afford to
ride through periods of volatility like the one we have just witnessed.
<TABLE>
<CAPTION>
Class R Class I S&P 500
-------- -------- ---------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... (10.95)% (10.61)% 9.13%
</TABLE>
Matt Griffin, Portfolio Manager, Harbor Capital Management, Sub-Advisor
5
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE SMALL-CAP GROWTH FUND CLASS R
<TABLE>
<CAPTION>
SMALL-CAP GROWTH RUSSELL 2000
CLASS R RETURN GROWTH RETURN
<S> <C> <C>
11/14/1994 $10,000 $10,000
12/31/1994 $10,090 $9,999
12/31/1995 $16,897 $12,829
12/31/1996 $17,362 $14,054
12/31/1997 $17,269 $15,965
12/31/1998 $20,751 $16,096
12/31/1999 $48,937 $22,940
5/31/2000 $50,049 $20,538
</TABLE>
Small-Cap Growth Fund Class R Return--400.49% S&P 500 Return--105.38%
Total return represents the increase in value of an investment
over the period from November 14, 1994 (inception) to May 31,
2000. Past performance is not indicative of future results.
To the Shareholders of the Reserve Small-Cap Growth Fund:
For the year ending May 31, 2000, the Reserve Small-Cap Growth Fund Class R
returned 105.00% while our small-cap growth benchmark, the Russell 2000 Growth
Index, returned 19.26%. Since inception, the Fund has returned 400.49%, nearly
four times the benchmark performance of 105.38% or a compounded annual rate of
return of 33.66%.
The investment philosophy and screening process we follow to identify
investments has not changed since the Fund began. Our core belief is that
earnings growth is the primary determinant of equity returns and that rigorous
fundamental research can identify those dynamic companies with outstanding
growth potential. The extraordinary performance of the past twelve months was
the result of an important commitment to technology and telecommunication
companies, areas which we believe will continue to be important in this coming
year. However, we have recently been building our commitments in areas outside
technologies and telecommunications, particularly in healthcare and related
services.
We think the recent pullback in the market, particularly in small-cap growth
stocks, sets the stage for strong performance for the balance of the year. The
pullback was caused by inflation fears and rising interest rates and the threat
of recession and earnings disappointments. Now in mid-July, inflation concerns
are subsiding and there is early evidence that the economy is slowing. While
industrial companies may experience some earnings pressure in this environment,
our portfolio of high growth companies should push through this type of slowdown
without any change in growth rates.
<TABLE>
<CAPTION>
Russell 2000
Class R Class I Growth
-------- -------- -------------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... 105.00% 106.02% 19.26%
</TABLE>
Edwin G. Vroom and Adele S. Weisman, Co-Portfolio Managers, Roanoke Asset
Management Corp., Sub-Advisor
6
<PAGE>
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
RESERVE STRATEGIC GROWTH FUND CLASS R
<TABLE>
<CAPTION>
STRATEGIC GROWTH
CLASS R RETURN S&P RETURN
<S> <C> <C>
6/1/1999 $10,000 $10,000
6/30/1999 $10,500 $10,546
9/30/1999 $9,950 $9,854
12/31/1999 $12,080 $11,287
3/31/2000 $13,500 $11,513
5/31/2000 $11,590 $10,913
</TABLE>
Strategic Growth Class R Return--15.90% S&P 500 Return--9.13%
Total return represents the increase in value of an investment
over the period from June 1, 1999 (inception) to May 31, 2000.
Past performance is not indicative of future results.
To the Shareholders of the Reserve Strategic Growth Fund:
The Reserve Strategic Growth Fund Class R (the "Fund") returned 15.90% for the
twelve-month period ended May 31, 2000, while the Standard & Poor's 500 Index,
the fund's primary benchmark, returned 9.13%. The Fund's performance was
primarily attributable to an overweighting in the technology sector and holding
of select financial and healthcare stocks.
The stock market experienced tremendous volatility, especially in technology and
other high growth sectors which saw fantastic price appreciation during the
first few months and a dramatic pull-back during the last quarter. We feel that
the market volatility can be substantially attributed to the struggle to
appropriately value rapidly growing companies and market reaction to policy
decisions by the Federal Reserve Board (i.e., increasing interest rates) to
control economic growth and inflation. At various times during the year, these
"new economy" stocks tended to battle back and forth with the rest of the
market, often dubbed "old economy", each tending to gain only at the other's
expense. In fact, this type of divergent performance is precisely the reason we
maintain exposure to a broad spectrum of companies in the fund. We believe that
certain "new-economy" and "old-economy" companies can be excellent long-term
investments.
The gyrations have provided us with opportunities to selectively purchase
companies that we feel have strong growth prospects over the next 3-5 years. We
foresee continued volatility in the market, but expect that earnings strength
and economic prosperity will allow the long-term bull market to proceed.
<TABLE>
<CAPTION>
Class R Class I S&P 500
-------- -------- ---------
<S> <C> <C> <C>
Fund Performance for the year ended
5/31/00.......................... 15.90% 16.40% 9.13%
</TABLE>
Kenneth Shapiro, President, Condor Capital Management, Inc., Sub-Advisor
7
<PAGE>
RESERVE PRIVATE EQUITY SERIES--BLUE CHIP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--100.6% (Note 1)
------ --------------------- --------
<C> <S> <C>
BANKS--3.7%
10,775 Bank of America Corp...................................... $ 598,686
-----------
BIO-TECHNOLOGY--7.0%
10,175 Amgen, Inc.*.............................................. 647,384
8,500 PE Corp.--PE Biosystems Group............................. 471,750
-----------
1,119,134
-----------
COMPUTER MEMORY DEVICES--3.7%
5,175 EMC Corp.*................................................ 601,917
-----------
COMPUTER MICROSYSTEMS--3.9%
8,050 Sun Microsystems, Inc.*................................... 616,831
-----------
COMPUTER NETWORKING--3.7%
10,448 Cisco Systems, Inc. *..................................... 595,536
-----------
COMPUTER SOFTWARE--3.5%
9,075 Microsoft Corp.*.......................................... 567,755
-----------
ELECTRONIC COMPONENTS--4.3%
10,825 Sanmina Corp.*............................................ 688,741
-----------
ELECTRONICS--4.1%
12,375 General Electric Company.................................. 651,234
-----------
FIBER OPTICS--3.5%
6,450 JDS Uniphase Corp.*....................................... 567,600
-----------
FINANCIAL SERVICES--7.4%
9,860 Citigroup, Inc............................................ 613,169
7,975 Morgan Stanley Dean Witter & Company...................... 573,701
-----------
1,186,870
-----------
INSURANCE--3.3%
4,625 American International Group, Inc......................... 520,602
-----------
INTERNET CONTENT--2.2%
8,300 DoubleClick, Inc.*........................................ 350,675
-----------
INTERNET MANAGEMENT--2.4%
8,200 CMGI, Inc.*............................................... 392,062
-----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
INTERNET SOFTWARE--3.6%
5,225 Inktomi Corp.*............................................ $ 583,241
-----------
MEDICAL INSTRUMENTS--3.4%
10,425 Medtronic, Inc............................................ 538,191
-----------
PHARMACEUTICALS--4.1%
5,350 Warner Lambert Company.................................... 653,369
-----------
RETAIL--2.9%
9,425 Home Depot, Inc........................................... 460,058
-----------
SEMICONDUCTORS--11.1%
6,300 Altera Corp.*............................................. 541,012
4,350 Broadcom Corp., Class A*.................................. 565,772
5,350 Intel Corp................................................ 667,078
-----------
1,773,862
-----------
TELECOMMUNICATION--13.8%
12,300 AT&T Corp. Liberty Media, Group A*........................ 546,581
13,075 Qwest Communications Int'l., Inc.*........................ 553,236
6,725 Time Warner, Inc.......................................... 530,855
15,225 WorldCom, Inc.*........................................... 572,841
-----------
2,203,513
-----------
TELECOMMUNICATIONS EQUIPMENT--9.0%
9,525 Lucent Technologies, Inc.................................. 546,497
10,125 Nokia Corp. SP ADR, Class A............................... 526,500
5,475 Qualcomm, Inc.*........................................... 363,403
-----------
1,436,400
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments (Cost $14,065,670)................ 100.6% 16,106,277
Liabilities, Less Other Assets...................... (0.6) (91,606)
-------- -----------
Net Assets.......................................... 100.0% $16,014,671
======== ===========
</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 May 31,
2000, was $14,153,510 the aggregate gross unrealized appreciation was $2,996,973
and the aggregate gross unrealized depreciation was $1,044,206.
See notes to financial statements.
8
<PAGE>
RESERVE PRIVATE EQUITY SERIES--BLUE CHIP GROWTH FUND
Statement of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value
(cost $14,065,670).................................................................... $16,106,277
Receivable for securities sold.......................................................... 128,622
Receivable for Fund shares sold......................................................... 87,462
Dividend and interest receivable........................................................ 9,181
-----------
Total Assets.......................................................................... 16,331,542
-----------
Liabilities:
Bank overdraft.......................................................................... 205,444
Payable for securities purchased........................................................ 109,519
Payable for Fund shares redeemed........................................................ 34
Other payables and accrued expenses..................................................... 1,874
-----------
Total Liabilities..................................................................... 316,871
-----------
Net Assets (Notes 1 & 5):
Net assets consisting of 647,417 Class R shares and 171,951 Class I shares outstanding
($.001 par value)..................................................................... $16,014,671
===========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($13,911,101/647,417)........................................................... $ 21.49
===========
Class I ($2,103,570/171,951)............................................................ $ 12.23
===========
Composition of Net Assets:
Capital Stock........................................................................... $ 819
Paid in surplus......................................................................... 11,695,989
Accumulated net realized gain on investments............................................ 2,277,256
Net unrealized appreciation on investments.............................................. 2,040,607
-----------
Net Assets................................................................................ $16,014,671
===========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends............................................................................... $ 57,329
Interest................................................................................ 1,723
Miscellaneous........................................................................... (153)
----------
Total Investment Income............................................................... 58,899
----------
Expenses:
Comprehensive fee (Note 3).............................................................. 168,253
Distribution fee (Note 3)............................................................... 32,770
Other expenses.......................................................................... 1,009
----------
Total Expenses........................................................................ 202,032
----------
Net Investment Loss................................................................... (143,133)
----------
Realized and Unrealized Gain/Loss
on Investments (Note 2):
Net realized gain on investments........................................................ 2,797,804
Net change in unrealized depreciation on investments.................................... (282,945)
----------
Net realized and unrealized gain on investments......................................... 2,514,859
----------
Net increase in net assets resulting from operations.................................... $2,371,726
==========
</TABLE>
Statement of Changes in Net Assets
For the Years Ended May 31, 2000 and May 31, 1999
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment loss...................................................... $ (143,133) $ (95,948)
Net realized gain from investment transactions........................... 2,797,804 2,917,573
Net change in unrealized appreciation (depreciation) on investments...... (282,945) 1,150,092
----------- -----------
Net increase in net assets resulting from operations..................... 2,371,726 3,971,717
----------- -----------
Distributions to Shareholders From:
Net realized gain on investments......................................... (2,728,377) (631,531)
----------- -----------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 9,442,969 2,209,195
Reinvestment of distributions............................................ 2,614,838 608,358
Cost of shares redeemed.................................................. (6,258,151) (4,118,126)
----------- -----------
Net increase (decrease) in net assets resulting from capital share
transactions........................................................... 5,799,656 (1,300,573)
----------- -----------
Net increase in net assets............................................... 5,443,005 2,039,613
Net Assets:
Beginning of year........................................................ 10,571,666 8,532,053
----------- -----------
End of year.............................................................. $16,014,671 $10,571,666
=========== ===========
</TABLE>
See notes to financial statements.
9
<PAGE>
RESERVE PRIVATE EQUITY SERIES--INFORMED INVESTORS GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--79.1% (Note 1)
------ -------------------- --------
<C> <S> <C>
BIO-TECHNOLOGY--1.6%
11,400 Immunex Corp.*............................................ $ 294,975
-----------
CAPACITORS--3.7%
10,100 Kemet Corp.*.............................................. 678,594
-----------
CIRCUITS--3.5%
13,500 Integrated Device Technology, Inc.*....................... 640,406
-----------
COMMERCIAL SERVICES--2.0%
7,500 Quanta Services, Inc.*.................................... 367,500
-----------
COMPUTER MEMORY DEVICES--3.2%
7,800 Silicon Storage Technologies, Inc.*....................... 579,150
-----------
ELECTRONIC CONNECTORS--1.0%
3,800 Amphenol Corp., Class A*.................................. 174,800
-----------
FIBER OPTICS--12.6%
5,000 Avanex Corp.*............................................. 340,000
4,100 Corning, Inc.............................................. 793,094
9,100 JDS Uniphase Corp.*....................................... 800,800
1,600 SDL, Inc.*................................................ 362,500
-----------
2,296,394
-----------
OIL EXPLORATION & PRODUCTION--12.1%
13,900 Apache Corp............................................... 846,163
5,300 Enron Corp................................................ 386,238
7,500 EOG Resources, Inc........................................ 243,281
9,100 Smith International, Inc.*................................ 719,469
-----------
2,195,151
-----------
PACKAGE SOFTWARE--5.5%
8,500 Siebel Systems, Inc.*..................................... 994,500
-----------
SEMICONDUCTOR--18.9%
4,600 Advanced Micro Devices, Inc.*............................. 374,613
7,300 Analog Devices, Inc.*..................................... 562,100
3,100 Applied Micro Circuits Corp.*............................. 307,675
2,100 Broadcom Corp.*........................................... 273,131
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
SEMICONDUCTOR--(Continued)
6,600 Burr-Brown Corp.*......................................... $ 375,788
2,700 Cree, Inc.*............................................... 328,008
5,200 LSI Logic Corp.*.......................................... 273,975
8,900 Novellus Systems, Inc.*................................... 428,869
3,300 Teradyne, Inc.*........................................... 283,800
2,500 Triquint Semiconductor, Inc.*............................. 235,938
-----------
3,443,897
-----------
TELECOMMUNICATIONS--2.8%
6,200 Copper Mountain Networks, Inc.*........................... 518,088
-----------
TELECOMMUNICATIONS EQUIPMENT--8.2%
12,700 ADC Telecommunications, Inc.*............................. 853,281
11,600 Nortel Networks Corp...................................... 630,022
-----------
1,483,303
-----------
WIRELESS EQUIPMENT--4.0%
13,500 Powerwave Technologies, Inc.*............................. 731,531
-----------
Total Common Stocks (Cost $16,340,255).................... 14,398,289
-----------
SHORT-TERM INVESTMENTS--7.2%
421,389 Reserve Institutional Trust:
U.S. Government Institutional Fund Class A................ 421,389
900,000 Primary Institutional Fund Class A........................ 900,000
-----------
Total Short-Term Investments
(Cost $1,321,389)......................................... 1,321,389
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments
(Cost $17,661,644).................................. 86.3% 15,719,678
Other Assets, Less Liabilities...................... 13.7 2,490,975
-------- -----------
Net Assets.......................................... 100.0% $18,210,653
======== ===========
</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 May 31,
2000, was $18,384,470, the aggregate gross unrealized appreciation was $274,957
and the aggregate gross unrealized depreciation was $2,939,749.
See notes to financial statements.
10
<PAGE>
RESERVE PRIVATE EQUITY SERIES--INFORMED INVESTORS GROWTH FUND
Statement of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value
(cost $17,661,644).................................................................... $15,719,678
Cash.................................................................................... 2,454,914
Receivable for Fund shares sold......................................................... 66,119
Dividend and interest receivable........................................................ 1,272
-----------
Total Assets.......................................................................... 18,241,983
-----------
Liabilities:
Payable for Fund shares redeemed........................................................ 29,881
Other payables and accrued expenses..................................................... 1,449
-----------
Total Liabilities..................................................................... 31,330
-----------
Net Assets (Notes 1 & 5):
Net assets consisting of 1,022,080 Class R shares and 100,389 Class I shares outstanding
($.001 par value)..................................................................... $18,210,653
===========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($16,807,063/1,022,080)......................................................... $ 16.44
===========
Class I ($1,403,590/100,389)............................................................ $ 13.98
===========
Composition of Net Assets:
Capital Stock........................................................................... $ 1,122
Paid in surplus......................................................................... 21,867,141
Accumulated net realized loss on investments............................................ (1,715,644)
Net unrealized depreciation on investments.............................................. (1,941,966)
-----------
Net Assets................................................................................ $18,210,653
===========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends............................................................................... $ 1,407
Interest................................................................................ 81,283
Miscellaneous........................................................................... 4,102
-----------
Total Investment Income............................................................... 86,792
-----------
Expenses:
Comprehensive fee (Note 3).............................................................. 139,980
Distribution fee (Note 3)............................................................... 25,233
Other expenses.......................................................................... 829
-----------
Total Expenses........................................................................ 166,042
-----------
Net Investment Loss................................................................... (79,250)
-----------
Realized and Unrealized Loss
on Investments (Note 2):
Net realized loss on investments........................................................ (1,290,367)
Net change in unrealized depreciation on investments.................................... (2,044,182)
-----------
Net realized and unrealized loss on investments......................................... (3,334,549)
-----------
Net decrease in net assets resulting from operations.................................... $(3,413,799)
===========
</TABLE>
Statement of Changes in Net Assets
For the Years Ended May 31, 2000 and May 31, 1999
<TABLE>
<CAPTION>
2000 1999
----------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment loss...................................................... $ (79,250) $ (37,083)
Net realized gain (loss) on investment transactions...................... (1,290,367) 1,068,145
Net change in unrealized appreciation (depreciation) on investments...... (2,044,182) 97,395
----------- -----------
Net increase (decrease) in net assets resulting from operations.......... (3,413,799) 1,128,457
----------- -----------
Distributions to Shareholders From:
Net realized gain on investments......................................... (1,695,746) (510,792)
----------- -----------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 29,980,596 2,948,622
Reinvestment of distributions............................................ 1,680,362 508,666
Cost of shares redeemed.................................................. (12,464,878) (4,285,126)
----------- -----------
Net increase (decrease) in net assets resulting from capital share
transactions........................................................... 19,196,080 (827,838)
----------- -----------
Net increase (decrease) in net assets.................................... 14,086,535 (210,173)
Net Assets:
Beginning of year........................................................ 4,124,118 4,334,291
----------- -----------
End of year.............................................................. $18,210,653 $ 4,124,118
=========== ===========
</TABLE>
See notes to financial statements.
11
<PAGE>
THE RESERVE PRIVATE EQUITY SERIES--INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--97.4% (Note 1)
------ -------------------- --------
<C> <S> <C>
BRAZIL--0.8%
117 Tele Norte Leste ADR...................................... $ 2,311
1,000 Telebras ADR.............................................. 115,563
-----------
117,874
-----------
CANADA--4.7%
6,600 Bombardier Inc. Class B................................... 175,088
3,200 PMC-Sierra Inc............................................ 490,600
-----------
665,688
-----------
DENMARK--7.9%
2,500 Tele Denmark A/S.......................................... 177,358
26,000 Vesta Wind Systems A/S.................................... 956,542
-----------
1,133,900
-----------
FINLAND--6.2%
14,700 Nokia Oyj Series A........................................ 768,255
2,300 Sonera Oyj................................................ 116,971
-----------
885,226
-----------
FRANCE--13.0%
5,375 Alcatel Alsthom........................................... 298,529
1,140 Altran Technologies SA.................................... 257,321
2,100 AXA-UAP................................................... 310,763
3,500 Banque Nationale de Paris................................. 317,156
600 Publicis SA............................................... 248,779
675 Television Francaise...................................... 436,221
-----------
1,868,769
-----------
GERMANY--3.3%
500 Allianz AG................................................ 181,232
1,400 Epcos AG.................................................. 170,461
1,190 Singulus Technologies..................................... 122,600
-----------
474,293
-----------
HONG KONG--8.5%
22,000 China Telecom Ltd......................................... 164,459
84,000 Giordano International Ltd................................ 131,516
19,200 Hutchinson Whampos Ltd.................................... 221,760
222,000 Legend Holdings Ltd....................................... 225,071
88,000 Li & Fung Ltd............................................. 364,774
18,891 Sun Hung Kai Properties Ltd............................... 115,156
-----------
1,222,736
-----------
INDIA--0.6%
600 Infosys Technology ADR.................................... 92,100
-----------
ITALY--10.4%
18,300 Banca Fideuram SpA........................................ 277,870
55,000 Bipop Carie SpA........................................... 504,312
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
15,200 Bulgari SpA............................................... $ 189,912
20,000 Mediolanum SpA............................................ 309,078
19,000 Telecom Italia Mobile..................................... 200,376
-----------
1,481,548
-----------
JAPAN--2.7%
400 Fast Retailing Co. Ltd.................................... 170,580
3,000 Taiyo Yuden Company Ltd................................... 227,749
-----------
398,329
-----------
KOREA--1.9%
6,800 SK Telecom Company Ltd. ADR............................... 274,125
-----------
MEXICO--1.2%
3,600 Telefondo de Mexico SA.................................... 175,275
-----------
NETHERLANDS--3.4%
2,900 Koninklijke............................................... 125,377
5,600 Nutreco Holdings N.V...................................... 218,452
4,264 Ordina Beheer N.V......................................... 139,778
-----------
483,607
-----------
NORWAY--4.9%
33,900 Tandberg-ASA.............................................. 615,386
3,800 Tomra Systems ASA......................................... 80,514
-----------
695,900
-----------
SINGAPORE--2.3%
25,000 Datacraft Asia Ltd........................................ 173,750
2,800 Flextronic International Ltd.............................. 152,425
-----------
326,175
-----------
SPAIN--3.3%
23,892 Banco Santander Central, SA............................... 235,184
11,500 Telefonica SA............................................. 236,959
-----------
472,143
-----------
SWEDEN--8.2%
20,000 Ericsson Lm Te............................................ 408,100
16,850 Europolitan Holding AB.................................... 271,245
7,700 Modern Times Group........................................ 346,462
2,000 NetCom AB................................................. 141,972
-----------
1,167,779
-----------
SWITZERLAND--5.2%
40 Kudelski SA PA............................................ 446,784
</TABLE>
See notes to financial statements.
12
<PAGE>
THE RESERVE PRIVATE EQUITY SERIES--INTERNATIONAL EQUITY FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
390 Saia-Burgess Electronics.................................. $ 158,932
150 Tecan Group AG............................................ 131,625
-----------
737,341
-----------
TAIWAN--1.7%
80,000 DBTel Inc................................................. 240,182
-----------
UNITED KINGDOM--4.8%
10,500 Cable & Wireless PLC...................................... 175,413
246 HSBC Holdings PLC......................................... 2,723
14,600 Logica PLC................................................ 391,347
16,800 Serco Group PLC........................................... 112,516
-----------
681,999
-----------
UNITED STATES--2.4%
1,800 Checkpoint Systems Inc.*.................................. 338,400
-----------
Total Common Stocks--97.4%
(Cost $9,310,777)......................................... 13,933,389
-----------
<CAPTION>
Value
Shares PREFERRED STOCKS--1.10% (Note 1)
------ ----------------------- --------
<C> <S> <C>
GERMANY
60 Porsche AG Pfd.(cost $114,037)............................ $ 157,685
-----------
WARRANTS--0.0%
FRANCE
500 Havas Advertising expires 5/13/2001* (cost $0)............ 6,635
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments
(Cost $9,424,814)................................... 98.5% 14,097,709
Other Assets, Less Liabilities...................... 1.5 212,133
-------- -----------
Net Assets.......................................... 100.0% $14,309,842
======== ===========
</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 May 31,
2000 was $9,560,747 aggregate gross unrealized appreciation was $5,153,871 and
the aggregate unrealized gross depreciation was $616,909.
INDUSTRY COMPOSITION
<TABLE>
<CAPTION>
INDUSTRY Percent
-------- -------
<S> <C>
Advertising....................................... 1.8%
Automobile........................................ 1.1
Commercial Banks.................................. 9.3
Communications.................................... 6.4
Computers......................................... 6.7
Consulting Services............................... 0.8
Diversified Operations............................ 1.6
Electronics....................................... 13.9
Engineering....................................... 1.8
Export Trading.................................... 2.6
Financial Services................................ 0.8
Food.............................................. 2.4
<CAPTION>
INDUSTRY Percent
-------- -------
<S> <C>
Insurance......................................... 6.8%
Machinery......................................... 0.9
Manufacturing..................................... 1.2
Medical Instruments............................... 0.9
Recycling......................................... 0.6
Retail............................................ 3.4
Software.......................................... 0.6
Telecom Equipment................................. 20.6
Telecom Services.................................. 14.3
Other Assets, Less Liabilities.................... 1.5
-----
Percent of Net Assets............................. 100.0%
=====
</TABLE>
See notes to financial statements.
13
<PAGE>
RESERVE PRIVATE EQUITY SERIES--INTERNATIONAL EQUITY FUND
Statement of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value
(cost $9,424,814)..................................................................... $14,097,709
Receivable for securities sold.......................................................... 1,150,561
Receivable for Fund shares sold......................................................... 1,140
Dividend and interest receivable........................................................ 11,650
-----------
Total Assets.......................................................................... 15,261,060
-----------
Liabilities:
Bank overdraft.......................................................................... 566,517
Payable for securities purchased........................................................ 363,497
Payable for Fund shares repurchased..................................................... 20,020
Other payables and accrued expenses..................................................... 1,184
-----------
Total Liabilities..................................................................... 951,218
-----------
Net Assets (Notes 1 & 5):
Net assets consisting of 675,359 Class R shares and 29,669 Class I shares outstanding
($.001 par value)..................................................................... $14,309,842
===========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($13,781,258/675,359)........................................................... $ 20.41
===========
Class I ($528,584/29,669)............................................................... $ 17.82
===========
Composition of Net Assets:
Capital Stock........................................................................... $ 705
Paid in surplus......................................................................... 6,378,627
Accumulated net investment income....................................................... 13,685
Accumulated net realized gain on investments and foreign currency transactions.......... 3,245,009
Net unrealized gain on investments and foreign currency transactions.................... 4,671,816
-----------
Net Assets................................................................................ $14,309,842
===========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends*.............................................................................. $ 79,949
Interest................................................................................ 66,874
----------
Total Investment Income............................................................... 146,823
----------
Expenses:
Comprehensive fee (Note 3).............................................................. 239,628
Distribution fee (Note 3)............................................................... 38,222
Other Expenses.......................................................................... 674
----------
Total Expenses........................................................................ 278,524
----------
Net Investment Loss................................................................... (131,701)
----------
Realized and Unrealized Gain/Loss
on Investments (Note 2):
Net realized gain on investment transactions............................................ 4,118,191
Net realized loss on foreign currency transactions...................................... (5,546)
Net change in unrealized appreciation on investments.................................... 2,736,254
Net unrealized loss on foreign currency transactions.................................... (265)
----------
Net realized and unrealized gain on investments......................................... 6,848,634
----------
Net increase in net assets resulting from
operations............................................................................ $6,716,933
==========
</TABLE>
* Dividends are net of foreign tax withholdings of $6,146
Statement of Changes in Net Assets
For the Years Ended May 31, 2000 and May 31, 1999
<TABLE>
<CAPTION>
2000 1999
------------ -----------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment loss...................................................... $ (131,701) $ (60,616)
Net realized gain on investment transactions............................. 4,118,191 674,062
Net realized loss on foreign currency transactions....................... (5,546) (2,623)
Net change in unrealized appreciation (depreciation) on investments...... 2,736,254 (1,053,819)
Net change in unrealized depreciation on foreign currency transactions... (265) (813)
------------ -----------
Net increase (decrease) in net assets resulting from operations.......... 6,716,933 (443,809)
------------ -----------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 51,774,675 9,092,144
Cost of shares redeemed.................................................. (56,497,784) (9,189,122)
------------ -----------
Net decrease in net assets resulting from capital share transactions..... (4,723,109) (96,978)
------------ -----------
Contribution from management............................................. -- 5,581
------------ -----------
Net increase (decrease) in net assets.................................... 1,993,824 (535,206)
Net Assets:
Beginning of year........................................................ 12,316,018 12,851,224
------------ -----------
End of year (includes accumulated net investment income (loss) of $13,685
and $(75,445) at May 31, 2000 and 1999, respectively).................. $ 14,309,842 $12,316,018
============ ===========
</TABLE>
See notes to financial statements.
14
<PAGE>
RESERVE PRIVATE EQUITY SERIES--LARGE-CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--94.0% (Note 1)
------ -------------------- --------
<C> <S> <C>
ADVERTISING--1.8%
1,300 Omnicon Group, Inc........................................ $ 109,119
----------
BIO-TECHNOLOGY--2.4%
1,200 Aclara Biosciences, Inc................................... 31,650
500 Genentech, Inc.*.......................................... 53,687
1,000 PE Corp-PE Biosystems Group............................... 55,500
----------
140,837
----------
COMPUTERS--1.0%
500 Hewlett-Packard Company................................... 60,062
----------
COMPUTER MEMORY DEVICES--4.6%
1,300 EMC Corp.*................................................ 151,206
1,050 Veritas Software Corp.*................................... 122,325
----------
273,531
----------
COMPUTER MICROSYSTEMS--4.4%
200 Apple Computer, Inc.*..................................... 16,800
500 Brocade Communications Systems, Inc.*..................... 58,969
4,400 Dell Computer Corp.*...................................... 189,750
----------
265,519
----------
COMPUTER SERVICES--0.3%
900 Palm, Inc................................................. 20,700
----------
COMPUTER SOFTWARE--5.2%
900 Citrix Systems, Inc.*..................................... 47,361
2,300 Microsoft Corp.*.......................................... 143,894
1,700 Oracle Corp.*............................................. 122,188
----------
313,443
----------
COMPUTER NETWORKING--5.4%
4,700 Cisco Systems, Inc.*...................................... 267,900
700 Network Appliance, Inc.*.................................. 45,194
400 Research In Motion Ltd.*.................................. 12,875
----------
325,969
----------
ELECTROMEDICAL APPARATUS--0.7%
800 Medtronic, Inc............................................ 41,300
----------
ELECTRONICS--6.8%
6,000 General Electric Company.................................. 315,750
2,800 Solectron Corp.*.......................................... 92,575
----------
408,325
----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
ENTERTAINMENT--5.1%
1,300 Time Warner, Inc.......................................... $ 102,619
4,800 Walt Disney Company....................................... 202,500
----------
305,119
----------
FIBER OPTICS--1.6%
800 Ciena Corp................................................ 95,750
----------
FINANCIAL SERVICES--3.8%
7,800 Charles Schwab Corp....................................... 224,250
----------
MANUFACTURING-DIVERSIFIED--5.0%
2,000 Flextronics International Ltd. ADR*....................... 108,875
4,000 Tyco International Ltd.................................... 188,250
----------
297,125
----------
MEDICAL SUPPLIES--1.4%
1,700 Guidant Corp.*............................................ 86,062
----------
OIL EXPLORATION AND PRODUCTION--4.7%
1,800 Enron Corp................................................ 131,175
1,700 Nabors Industries, Inc.................................... 73,100
1,600 Transocean Sedco Forex, Inc............................... 78,700
----------
282,975
----------
PACKAGED SOFTWARE--0.8%
400 Siebel Systems, Inc.*..................................... 46,800
----------
PHARMACEUTICALS--5.4%
4,900 Pfizer, Inc............................................... 218,356
2,100 Schering-Plough Corp...................................... 101,588
----------
319,944
----------
RETAIL--5.3%
1,600 Best Buy Company, Inc.*................................... 102,400
1,700 Circuit City Stores, Inc.................................. 84,681
1,100 Home Depot, Inc........................................... 53,694
1,300 Wal-Mart Stores, Inc...................................... 74,913
----------
315,688
----------
SCIENTIFIC INSTRUMENTS--2.1%
1,300 Waters Corp.*............................................. 122,850
----------
SEMICONDUCTOR--15.6%
1,600 Applied Materials, Inc.*.................................. 133,600
500 Applied Micro Circuits Corp.*............................. 49,625
300 Broadcom Corp.--Class A*.................................. 39,019
</TABLE>
See notes to financial statements.
15
<PAGE>
RESERVE PRIVATE EQUITY SERIES--LARGE-CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
SEMICONDUCTOR--(Continued)
900 Globespan, Inc.*.......................................... $ 79,537
500 I2 Technologies, Inc.*.................................... 53,187
1,200 Intel Corp................................................ 149,625
1,800 LSI Logic Corp.*.......................................... 94,838
2,000 Micron Technology, Inc.*.................................. 139,875
900 National Semiconductor Corp............................... 48,375
600 PMC-Sierra, Inc.*......................................... 91,950
600 Teradyne, Inc.*........................................... 51,600
----------
931,231
----------
TELECOMMUNICATIONS--6.5%
1,200 Nokia Corp., Class A SP ADR............................... 62,400
3,100 Qwest Communications International, Inc.*................. 131,169
2,000 Vodafone Airtouch Public Ltd. PLC SP ADR.................. 91,625
2,700 WorldCom, Inc.*........................................... 101,588
----------
386,782
----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
TELECOMMUNICATIONS EQUIPMENT--4.4%
1,000 Advanced Fibre Communications, Inc.*...................... $ 46,000
2,600 Nortel Networks Corp...................................... 141,213
1,200 Tellabs, Inc.*............................................ 77,925
----------
265,138
----------
Total Common Stocks (Cost $5,838,415)..................... 5,638,519
----------
SHORT-TERM INVESTMENTS--5.1%
306,968 Reserve Institutional Trust:
U.S. Government Fund Class A (cost $306,968).............. 306,968
----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments
(Cost $6,145,383)................................... 99.4% 5,945,487
Other Assets, Less Liabilities...................... 0.6 35,766
-------- ----------
Net Assets.......................................... 100.0% $5,981,253
======== ==========
</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 May 31,
2000 was $6,160,775; the aggregate gross unrealized appreciation was $488,068
and the aggregate unrealized gross unrealized depreciation was $703,356.
See notes to financial statements.
16
<PAGE>
RESERVE PRIVATE EQUITY SERIES--LARGE-CAP GROWTH FUND
Statement of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value
(cost $6,145,383)..................................................................... $5,945,487
Cash.................................................................................... 49,933
Dividends and interest receivable....................................................... 7,504
----------
Total Assets.......................................................................... 6,002,924
----------
Liabilities:
Payable for Fund shares redeemed........................................................ 21,237
Other payables and accrued expenses..................................................... 434
----------
Total Liabilities..................................................................... 21,671
----------
Net Assets (Notes 1 & 5):
Net assets consisting of 293,503 Class R shares and 98,970 Class I shares outstanding
($.001 par value)..................................................................... $5,981,253
==========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($5,084,168/293,503)............................................................ $ 17.32
==========
Class I ($897,085/98,970)............................................................... $ 9.06
==========
Composition of Net Assets:
Capital Stock........................................................................... $ 392
Paid in surplus......................................................................... 4,624,218
Accumulated net investment income....................................................... 22,951
Accumulated net realized gain on investments............................................ 1,533,588
Net unrealized depreciation on investments.............................................. (199,896)
----------
Net Assets................................................................................ $5,981,253
==========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends............................................................................... $ 174,328
Interest................................................................................ 25,479
Miscellaneous........................................................................... 15,798
----------
Total investment income............................................................... 215,605
----------
Expenses:
Comprehensive fee (Note 3).............................................................. 174,118
Distribution fee (Note 3)............................................................... 17,250
Other expenses.......................................................................... 1,286
----------
Total Expenses........................................................................ 192,654
----------
Net Investment Income................................................................. 22,951
----------
Realized and Unrealized Gain/Loss
on Investments (Note 2):
Net realized gain on investments........................................................ 1,530,422
Net change in unrealized depreciation on investments.................................... (1,868,955)
----------
Net realized and unrealized loss on investments......................................... (338,533)
----------
Net decrease in net assets resulting from operations.................................... $ (315,582)
==========
</TABLE>
Statement of Changes in Net Assets
For the Years Ended May 31, 2000 and the Year Ended May 31, 1999
<TABLE>
<CAPTION>
2000 1999
------------ ------------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment income (loss)............................................. $ 22,951 $ (14,249)
Net realized gain on investment transactions............................. 1,530,422 3,008,607
Net change in unrealized appreciation (depreciation) on investments...... (1,868,955) 106,911
------------ ------------
Net increase (decrease) in net assets resulting from operations.......... (315,582) 3,101,269
------------ ------------
Distribution to Shareholders From:
Net realized gain on investments......................................... (2,678,338) (541,732)
------------ ------------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 2,480,027 29,243,558
Reinvestment of distributions............................................ 2,648,674 522,649
Cost of shares redeemed.................................................. (16,324,211) (18,952,127)
------------ ------------
Net increase (decrease) in net assets resulting from capital share
transactions........................................................... (11,195,510) 10,814,080
------------ ------------
Contribution from management (Note 6).................................... 11,051 --
------------ ------------
Net increase (decrease) in net assets.................................... (14,178,379) 13,373,617
Net Assets:
Beginning of year........................................................ 20,159,632 6,786,015
------------ ------------
End of year (includes accumulated net investment income (loss) of $22,951
and $0 at May 31, 2000 and 1999, respectively)......................... $ 5,981,253 $ 20,159,632
============ ============
</TABLE>
See notes to financial statements.
17
<PAGE>
RESERVE PRIVATE EQUITY SERIES--SMALL-CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--88.5% (Note 1)
------ -------------------- --------
<C> <S> <C>
BIO-TECHNOLOGY--2.8%
25,000 Alkermes, Inc.*........................................... $ 915,625
-----------
COMPUTER SERVICES--1.8%
6,100 Sapient Corp.*............................................ 609,619
-----------
CONSUMER PRODUCTS--1.5%
25,000 Fossil, Inc.*............................................. 503,125
-----------
DENTAL LABORATORIES--0.5%
10,500 National Dentex Corp.*.................................... 161,438
-----------
ELECTRONIC PRODUCTS--8.2%
16,200 Alpha Industries, Inc.*................................... 746,213
30,800 California Amplifier, Inc.*............................... 696,850
7,600 Invivo Corp.*............................................. 76,950
20,000 Optimal Robotics Corp.*................................... 672,500
6,000 Orbotech, Ltd.*........................................... 507,000
-----------
2,699,513
-----------
ENTERPRISE SOFTWARE--18.1%
12,800 Business Objects S.A. ADR*................................ 1,024,000
11,100 Citrix Systems, Inc.*..................................... 584,138
18,000 HNC Software, Inc.*....................................... 738,000
21,570 Hyperion Solutions Corp.*................................. 676,760
22,800 Peregrine Systems, Inc.*.................................. 473,100
13,600 Project Software Development, Inc.*....................... 295,800
10,500 Rational Software Corp.*.................................. 769,781
35,300 Saga Systems, Inc.*....................................... 518,469
32,400 Serena Software, Inc.*.................................... 927,450
-----------
6,007,498
-----------
ENTERTAINMENT SOFTWARE--0.4%
20,600 Activision, Inc.*......................................... 127,463
-----------
FIBER OPTICS--4.7%
8,400 Harmonic, Inc.*........................................... 375,375
13,600 JDS Uniphase Corp.*....................................... 1,196,800
-----------
1,572,175
-----------
HUMAN RESOURCES--4.3%
54,600 On Assignment, Inc.*...................................... 1,419,600
-----------
INTERNET CONTENT--1.1%
10,200 CNET, Inc.*............................................... 351,263
-----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
INTERNET SOFTWARE--5.4%
9,750 Digex, Inc.*.............................................. $ 411,937
15,000 Documentum, Inc.*......................................... 825,938
7,800 Exodus Communications, Inc.*.............................. 550,388
-----------
1,788,263
-----------
MANAGED CARE--2.3%
125,000 Caremark Rx, Inc.*........................................ 757,813
-----------
MEDICAL INFORMATION SYSTEMS--4.4%
43,400 Dendrite International, Inc.*............................. 1,093,138
25,000 Trizetto Group, Inc.*..................................... 321,875
-----------
1,415,013
-----------
OIL EXPLORATION & PRODUCTION--4.2%
88,600 Canadian 88 Energy Corp.*................................. 177,200
19,800 Cross Timbers Oil Company................................. 402,188
19,200 Newfield Exploration Co.*................................. 804,000
14,422 Prize Energy, Inc......................................... 4,471
-----------
1,387,859
-----------
RETAIL--3.7%
9,000 BeBe Stores, Inc.*........................................ 79,875
6,400 Staples, Inc.*............................................ 94,400
18,000 Tiffany & Co.............................................. 1,096,876
-----------
1,271,151
-----------
SEMICONDUCTOR--16.7%
14,600 Applied Micro Circuits Corp.*............................. 1,449,050
34,700 ATMI, Inc.*............................................... 1,331,613
10,100 KLA-Tencor Corp.*......................................... 500,581
11,850 TranSwitch Corp.*......................................... 742,106
21,100 Vishay Intertechnology, Inc.*............................. 1,492,825
-----------
5,516,175
-----------
TELECOMMUNICATIONS & EQUIPMENT--8.4%
7,500 DSP Group, Inc.*.......................................... 335,625
21,400 ECI Telecommunications Ltd................................ 580,475
14,000 MDSI Mobile Data Solutions*............................... 281,750
30,000 P-Com, Inc.*.............................................. 220,313
7,000 Proxim, Inc.*............................................. 611,188
13,600 Scientific Atlanta, Inc................................... 766,700
-----------
2,796,051
-----------
Total Common Stocks (Cost $24,130,325).................... 29,299,644
-----------
</TABLE>
See notes to financial statements.
18
<PAGE>
RESERVE PRIVATE EQUITY SERIES--SMALL-CAP GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Value
Shares SHORT-TERM INVESTMENTS--6.9% (Note 1)
------ ---------------------------- --------
<C> <S> <C>
Reserve Institutional Trust:
1,966,046 Primary Institutional Fund Class A........................ $ 1,966,046
305,399 U.S. Government Institutional Fund Class A................ 305,399
-----------
Total short-term investments
(Cost $2,271,445)......................................... 2,271,445
-----------
<CAPTION>
<C> <S> <C>
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Investments
(Cost $26,401,770).................................. 95.4% $31,571,089
Liabilities, Less Other Assets...................... 4.6 1,528,904
-------- -----------
Net Assets.......................................... 100.0% $33,099,993
======== ===========
</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 May 31,
2000, was $26,417,723; the aggregate gross unrealized appreciation was
$7,862,032 and the aggregate unrealized gross unrealized depreciation was
$2,708,666.
See notes to financial statements.
19
<PAGE>
RESERVE PRIVATE EQUITY SERIES--SMALL-CAP GROWTH FUND
Statement of Assets and Liabilites
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value
(cost $26,401,770).................................................................... $31,571,089
Cash.................................................................................... 4,820,146
Receivable for Securities sold.......................................................... 41,999
Receivable for Fund shares sold......................................................... 34,754
Dividend and interest receivable........................................................ 6,210
-----------
Total Assets.......................................................................... 36,474,198
-----------
Liabilities:
Payable for Securities purchased........................................................ 2,709,879
Payable for Fund shares redeemed........................................................ 32,549
Other payables and accrued expenses..................................................... 631,777
-----------
Total Liabilities..................................................................... 3,374,205
-----------
Net Assets (Notes 1 & 5):
Net assets consisting of 643,835 Class R shares and 124,439 Class I shares outstanding
($.001 par value)..................................................................... $33,099,993
===========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($29,545,252/643,835)........................................................... $ 45.89
===========
Class I ($3,545,140/124,439)............................................................ $ 28.49
===========
Composition of Net Assets:
Capital Stock........................................................................... $ 768
Paid in surplus......................................................................... 26,413,748
Undistributed net realized gain on investments.......................................... 1,516,158
Net unrealized appreciation on investments.............................................. 5,169,319
-----------
Net Assets................................................................................ $33,099,993
===========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends............................................................................... $ 3,661
Interest................................................................................ 56,833
Miscellaneous........................................................................... 1,222
----------
Total Investment Income............................................................... 61,716
----------
Expenses:
Comprehensive fee (Note 3).............................................................. 227,522
Distribution fee (Note 3)............................................................... 40,243
Other expenses.......................................................................... 996
----------
Total Expenses........................................................................ 268,761
----------
Net Investment Loss................................................................... (207,045)
----------
Realized and Unrealized Gain
on Investments (Note 2):
Net realized gain on investments........................................................ 1,925,117
Net change in unrealized appreciation on investments.................................... 2,853,042
----------
Net realized and unrealized gain on investments......................................... 4,778,159
----------
Net increase in net assets resulting from
operations............................................................................ $4,571,114
==========
</TABLE>
Statement of Changes in Net Assets
For the Years Ended May 31, 2000 and May 31, 1999
<TABLE>
<CAPTION>
2000 1999
------------ -----------
<S> <C> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment loss...................................................... $ (207,045) $ (76,896)
Net realized gain on investment transactions............................. 1,925,117 736,974
Net change in unrealized appreciation on investments..................... 2,853,042 1,196,324
------------ -----------
Net increase in net assets resulting from operations..................... 4,571,114 1,856,402
------------ -----------
Distributions to Shareholders From:
Net realized gain on investments......................................... (851,873) --
------------ -----------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 43,951,931 2,288,700
Reinvestment of distributions............................................ 807,654 --
Cost of shares redeemed.................................................. (21,638,908) (3,426,129)
------------ -----------
Net increase (decrease) in net assets resulting from capital share
transactions........................................................... 23,120,677 (1,137,429)
------------ -----------
Net increase in net assets............................................... 26,839,918 718,973
Net Assets:
Beginning of year........................................................ 6,260,075 5,541,102
------------ -----------
End of year.............................................................. $ 33,099,993 $ 6,260,075
============ ===========
</TABLE>
See notes to financial statements.
20
<PAGE>
RESERVE PRIVATE EQUITY SERIES--STRATEGIC GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--83.6% (Note 1)
------ -------------------- --------
<C> <S> <C>
AUTO--0.7%
1,500 Ford Motor Company........................................ $ 72,844
-----------
BANKS--2.6%
2,000 Bank of America Corp...................................... 111,125
1,000 Chase Manhattan Corp...................................... 74,688
1,700 Wells Fargo Company....................................... 76,925
-----------
262,738
-----------
BEVERAGES--1.1%
2,000 Coca-Cola Company......................................... 106,750
-----------
CABLE TV--1.1%
3,000 Comcast Corp., Class A*................................... 113,625
-----------
COMPUTERS--5.9%
3,000 Compaq Computer Corp...................................... 78,750
2,500 Gateway, Inc.*............................................ 123,750
1,500 Hewlett-Packard Company................................... 180,187
2,000 International Business Machines Corp...................... 214,625
-----------
597,312
-----------
COMPUTER MEMORY DEVICES--4.9%
1,500 EMC Corp.*................................................ 174,469
4,000 SanDisk Corp.*............................................ 232,500
1,500 Seagate Technology, Inc,.................................. 87,000
-----------
493,969
-----------
COMPUTER NETWORKING--1.1%
2,000 Cisco Systems, Inc.*...................................... 114,000
-----------
COMPUTER PERIPHERAL EQUIPMENT--1.4%
4,000 American Power Conversion Corp.*.......................... 141,750
-----------
COMPUTER SOFTWARE--7.5%
2,000 Advent Software, Inc.*.................................... 75,250
3,000 Citrix Systems, Inc.*..................................... 157,875
3,800 Microsoft Corp.*.......................................... 237,738
4,000 Oracle Corp.*............................................. 287,500
-----------
758,363
-----------
CONSUMER PRODUCTS--3.9%
3,000 Colgate-Palmolive Company................................. 157,875
2,000 Gillette Company.......................................... 66,750
2,500 Proctor & Gamble Company.................................. 166,250
-----------
390,875
-----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
DIVERSIFIED--0.9%
2,000 Seagram Company Ltd....................................... $ 95,375
-----------
ELECTRIC UTILITIES--1.7%
2,000 AES Corp.*................................................ 174,500
-----------
ELECTRONICS--3.3%
4,500 General Electric Company.................................. 236,812
3,000 Solectron Corp............................................ 99,187
-----------
335,999
-----------
ENTERTAINMENT--1.6%
2,000 Walt Disney Company....................................... 84,375
1,000 Time Warner, Inc.......................................... 78,938
-----------
163,313
-----------
FINANCIAL SERVICES--6.1%
6,750 Charles Schwab Corp....................................... 194,062
2,000 Citigroup, Inc............................................ 124,375
1,000 Goldman Sachs Group, Inc.................................. 73,562
1,000 Morgan Stanley Dean Witter & Company...................... 71,938
10,000 T.D. Waterhouse Group, Inc................................ 154,375
-----------
618,312
-----------
FOOD--1.0%
1,200 Koninkljke Ahold NV-SP ADR................................ 33,600
4,000 Sara Lee Corp............................................. 72,000
-----------
105,600
-----------
INTERNET SERVICES--0.7%
2,000 KPNQwest N.V.............................................. 69,500
-----------
INTERNET SOFTWARE--2.6%
3,000 America Online, Inc....................................... 159,000
1,500 Covad Communications Group, Inc.*......................... 35,437
2,000 NorthPoint Communications Group, Inc...................... 31,250
2,000 Rhythms Netconnections, Inc............................... 33,000
-----------
258,687
-----------
INVESTMENT TRUST--4.4%
1,000 Internet Holders Trust*................................... 106,437
3,000 NASDAQ 100 Shares*........................................ 249,000
6,000 Ishares MSCI Japan Index Fund............................. 86,250
-----------
441,687
-----------
</TABLE>
See notes to financial statements.
21
<PAGE>
RESERVE PRIVATE EQUITY SERIES--STRATEGIC GROWTH FUND
SCHEDULE OF PORTFOLIO INVESTMENTS--MAY 31, 2000 (Continued)
<TABLE>
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
MACHINERY--1.2%
1,200 Black & Decker Corp....................................... $ 43,800
2,000 Grainger W.W., Inc........................................ 79,875
-----------
123,675
-----------
MANUFACTURING-DIVERSIFIED--3.2%
2,500 BP Amoco PLC ADR.......................................... 135,938
4,000 Tyco International Ltd.................................... 188,250
-----------
324,188
-----------
OIL EXPLORATION & PRODUCTION--1.6%
2,000 Exxon Mobil Corp.......................................... 166,625
-----------
PHARMACEUTICALS--3.2%
2,000 Bristol-Myers Squibb Company.............................. 110,125
700 Merck & Company, Inc...................................... 52,238
1,000 Pfizer, Inc............................................... 44,563
1,000 Warner-Lambert Company.................................... 122,125
-----------
329,051
-----------
RESTAURANTS--2.3%
3,000 McDonald's Corp........................................... 107,438
3,700 Starbucks Corp.*.......................................... 125,800
-----------
233,238
-----------
RETAIL--4.3%
2,000 Federated Department Stores, Inc.*........................ 77,000
2,000 GAP, Inc.................................................. 70,125
1,800 Home Depot, Inc........................................... 87,863
3,000 K-Mart Corp.*............................................. 25,500
1,200 Target Corp............................................... 75,225
1,800 Wal-Mart Stores, Inc...................................... 103,725
-----------
439,438
-----------
<CAPTION>
Value
Shares COMMON STOCKS--(Continued) (Note 1)
------ -------------------------- --------
<C> <S> <C>
SEMICONDUCTORS--2.5%
2,000 Intel Corp................................................ $ 249,375
-----------
TELECOMMUNICATIONS--7.0%
3,500 AT&T Corp................................................. 121,406
2,000 Bell Atlantic Corp.*...................................... 105,750
3,500 Qwest Communications International, Inc*.................. 148,094
300 US West, Inc.............................................. 21,600
2,500 Vodafone AirTouch PLC SP ADR.............................. 114,531
5,250 WorldCom, Inc.*........................................... 197,531
-----------
708,912
-----------
TELECOMMUNICATIONS EQUIPMENT--3.2%
4,000 Lucent Technologies, Inc.................................. 229,500
1,500 Qualcomm, Inc............................................. 99,562
-----------
329,062
-----------
TRANSPORTATION-AIR--0.9%
2,500 FDX Corp.*................................................ 88,437
-----------
TRANSPORTATION-RAIL--1.7%
2,500 Kansas City Southern Industries, Inc...................... 168,125
-----------
</TABLE>
<TABLE>
<C> <S> <C> <C>
Total Common Stocks
(Cost $7,951,860)................................... 83.6% 8,475,325
Other Assets, Less Liabilities...................... 16.4 1,660,525
-------- -----------
Net Assets.......................................... 100.0% $10,135,850
======== ===========
</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 May 31,
2000, was $7,951,860, the aggregate gross unrealized appreciation was $1,230,609
and the aggregate gross unrealized depreciation was $707,144.
See notes to financial statements.
22
<PAGE>
RESERVE PRIVATE EQUITY SERIES--STRATEGIC GROWTH FUND
Statement of Assets and Liabilities
May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Assets:
Investments in securities, at value (cost $7,951,860)................................... $ 8,475,325
Cash.................................................................................... 1,768,324
Receivable for Fund shares sold......................................................... 118,341
Dividend receivable..................................................................... 6,677
-----------
Total Assets.......................................................................... 10,368,667
-----------
Liabilities:
Payable for securities purchased........................................................ 232,238
Other payables and accrued expenses..................................................... 579
-----------
232,817
-----------
Net Assets (Notes 1 & 5):
Net assets consisting of 143,465 Class R shares and 728,147 of Class I shares
outstanding ($.001 par value)......................................................... $10,135,850
===========
Net Asset Value Per Share
(offering and redemption price per share):
Class R ($1,662,633/143,465)............................................................ $ 11.59
===========
Class I ($8,473,217/728,147)............................................................ $ 11.64
===========
Composition of Net Assets:
Capital Stock........................................................................... $ 872
Paid in surplus......................................................................... 9,682,301
Accumulated net realized loss on investments............................................ (70,788)
Net unrealized appreciation on investments.............................................. 523,465
-----------
Net Assets................................................................................ $10,135,850
===========
</TABLE>
Statement of Operations
For the Year Ended May 31, 2000
<TABLE>
<CAPTION>
<S> <C>
Investment Income:
Dividends............................................................................... $ 32,650
Interest................................................................................ 579
----------
Total Investment Income............................................................... 33,229
----------
Expenses:
Comprehensive fee (Note 3).............................................................. 55,684
Distribution fee (Note 3)............................................................... 3,457
Other expenses.......................................................................... 71
----------
Total Expenses........................................................................ 59,212
----------
Net Investment Loss................................................................... (25,983)
----------
Realized and Unrealized Gain (Loss)
on Investments (Note 2):
Net realized loss on investments........................................................ (70,788)
Net change in unrealized appreciation on investments.................................... 523,465
----------
Net realized and unrealized gain on investments......................................... 452,677
----------
Net increase in net assets resulting from
operations............................................................................ $ 426,694
==========
</TABLE>
Statement of Changes in Net Assets
For the Year Ended May 31, 2000
<TABLE>
<S> <C>
Increase (Decrease) in Net Assets From:
Investment Operations:
Net investment loss...................................................... $ (25,983)
Net realized loss on investments......................................... (70,788)
Net change in unrealized appreciation on investments..................... 523,465
-----------
Net increase in net assets resulting from operations..................... 426,694
-----------
From Capital Share Transactions (Note 4):
Net proceeds from sale of shares......................................... 10,366,966
Cost of shares redeemed.................................................. (657,810)
-----------
Net increase in net assets resulting from capital share transactions..... 9,709,156
-----------
Net increase in net assets............................................... 10,135,850
Net Assets:
Beginning of year........................................................ --
-----------
End of year.............................................................. $10,135,850
===========
</TABLE>
See notes to financial statements.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(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. As of May 31, 2000, the Trust was
comprised of six regulated investment companies (commonly called mutual
funds): Reserve Blue Chip Growth Fund, Reserve Informed Investors Growth
Fund, Reserve International Equity Fund, Reserve Large-Cap Growth Fund,
Reserve Small-Cap Growth Fund and Reserve Strategic Growth Fund (each a
"Fund" and collectively the "Funds"). Each Fund issues two classes of
shares designated as Class R and Class I. The Trust has the right, at its
discretion, to add other funds and classes if the situation warrants.
The Trust is registered under the Investment Company Act of 1940. Each Fund
in the Trust is a non-diversified open end investment company and has an
unlimited number of shares of beneficial interest of $.001 par value.
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
Board of 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.
Income and net realized capital gain distributions are determined in
accordinace with federal income tax regulations that may differ from
generally accepted accounting principles. Income dividends, if any, are
distributed on a calendar quarter. Distributions from net realized capital
gains are distributed annually in December, based on an October 31, year
end. These differences are primarily due to differing treatments for net
operating losses and the recognition of net realized gains and losses.
Accordingly, the effect of differing financial reporting and federal income
tax treatments have been reclassified among the components of net assets at
May 31, 2000, the Trust's fiscal year end, as follows:
<TABLE>
<CAPTION>
Increase (Decrease)
--------------------------------------------
Undistributed
Net
Investment Accumulated Realized
Reserve Fund Capital Income Gain
------------ ------- ------------- --------------------
<S> <C> <C> <C>
Blue Chip Growth Fund.............. -- 143,133 (143,133)
Informed Investors Growth Fund..... -- 79,250 (79,250)
International Equity............... -- 220,831 (220,831)
Large-Cap Growth fund.............. -- -- --
Small-Cap Growth Fund.............. (58,508) 207,045 (148,537)
Strategic Growth Fund.............. (25,983) 25,983 --
</TABLE>
These reclassifications had no effect on net investment income, net
realized gain on investments, or net assets.
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.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(1) Summary of Significant Accounting Policies (Continued)
--------------------------------------------------------------------------------
Federal Income Taxes
---------------------------------------------------------------------------
Each Fund intends to maintain its regulated investment company status under
the Internal Revenue Code of 1986, as amended, so that it will not be
liable for federal income taxes to the extent its taxable income and net
capital gains are distributed. Therefore, each Fund will distribute
substantially all of its taxable income, including net realized capital
gains, if any, to its shareholders. As such, no federal income tax
provision is required.
(2) Investment Activity
--------------------------------------------------------------------------------
For the year ended May 31, 2000, 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................... $16,384,327 $13,329,327
Informed Investors Growth Fund.......... 66,996,251 52,976,066
International Equity Fund............... 12,967,208 17,330,405
Large-Cap Growth Fund................... 11,389,178 24,506,070
Small-Cap Growth Fund................... 24,708,592 6,253,140
Strategic Growth Fund................... 8,115,664 93,016
</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
employee and customary operating expenses of the Trust, exclusive of
interest, taxes, brokerage fees, extraordinary legal and accounting fees,
and the fees of the disinterested Trustees for which each Fund pays its
direct or allocated share. For its services as Investment Adviser, RMCI
receives an annual fee, based on each class' average daily net assets, at
the following annual rates:
<TABLE>
<CAPTION>
Class R Class I
---------- ----------
<S> <C> <C>
Blue Chip Growth Fund................... 1.20% 0.90%
Informed Investors Growth Fund.......... 1.30 1.00
International Equity Fund............... 1.55 1.25
Large-Cap Growth Fund................... 1.20 0.90
Small-Cap Growth Fund................... 1.30 1.00
Strategic Growth Fund................... 1.20 0.90
</TABLE>
RMCI has entered into Sub-Investment Management Agreements with registered
investment advisers 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.
For their services, the Sub-Advisers of the Funds, with the exception of
Condor Capital Management ("Condor"), will receive a fee of up to one-half
of the Adviser's net profit for the year before taxes of the respective
Fund at the end of each quarter. Net profit is deemed to be the management
fee less direct and allocated fund expenses and all applicable sales and
marketing costs. For the services rendered by Condor, the Adviser shall pay
to Condor at the end of each calendar quarter an annualized fee equal to
0.30% of the Fund's assets. The Adviser may also pay a Sub-Adviser for
marketing assistance.
RMCI has entered into a Distribution Plan with Resrv Partners, Inc.
("RESRV"), a wholly-owned subsidiary of RMCI. As Distributor for the Funds,
RESRV is responsible for accepting Fund share purchases and redemptions on
behalf of the Funds, providing at its own
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(3) Advisory Fees and Other Transactions with Affiliates (Continued)
--------------------------------------------------------------------------------
expense financial consultants and compensating broker-dealers who supply
distribution assistance to RESRV. RESRV is also responsible for the
advertising and marketing efforts of the Funds. For its services as
distributor, RESRV receives an annual fee of 0.25% of the Class R average
daily net assets. Class I shares do not participate in the Plan.
<TABLE>
<CAPTION>
Distribution
Fee
------------
<S> <C>
Blue Chip Growth Fund............................. $32,770
Informed Investors Growth Fund.................... 25,233
International Equity Fund......................... 38,895
Large-Cap Growth Fund............................. 17,250
Small-Cap Growth Fund............................. 40,243
Strategic Growth Fund............................. 3,457
</TABLE>
Transactions with Affiliates
---------------------------------------------------------------------------
As of May 31, 2000, certain key officers of RMCI owned 28.3% of Blue Chip
Growth Fund, 13.4% of Informed Investors Growth Fund, 36.3% of Large-Cap
Growth Fund, 13.7% of Small-Cap Growth Fund, 2.5% of International Equity
Fund and 3.2% of Strategic Growth Fund.
(4) Capital Share Transactions
--------------------------------------------------------------------------------
For the year ended May 31, 2000, 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.......................... 306,218 $ 7,320,142 146,091 $ 2,122,827
Reinvested.................... 91,445 2,096,832 39,785 518,006
Redeemed...................... (257,372) (6,081,175) (14,047) (176,976)
---------- ------------ ---------- ------------
Net Increase (Decrease)....... 140,291 $ 3,335,799 171,829 $ 2,463,857
========== ============ ========== ============
<CAPTION>
Class R Class I
------------------------ ------------------------
RESERVE INFORMED INVESTORS GROWTH FUND Shares Amount Shares Amount
-------------------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 1,222,403 $ 28,720,927 84,745 $ 1,259,669
Reinvested........................ 81,669 1,419,408 17,704 260,954
Redeemed.......................... (615,022) (12,432,167) (2,198) (32,711)
---------- ------------ ---------- ------------
Net Increase...................... 689,050 $ 17,708,168 100,251 $ 1,487,912
========== ============ ========== ============
<CAPTION>
Class R Class I
------------------------ ------------------------
RESERVE INTERNATIONAL EQUITY FUND Shares Amount Shares Amount
--------------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 2,692,270 $ 51,184,534 32,313 $ 590,141
Redeemed.......................... (2,984,499) (56,448,051) (2,759) (49,733)
---------- ------------ ---------- ------------
Net Increase (Decrease)........... (292,229) $ (5,263,517) 29,554 $ 540,408
========== ============ ========== ============
<CAPTION>
Class R Class I
------------------------ ------------------------
RESERVE LARGE-CAP GROWTH FUND Shares Amount Shares Amount
----------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 46,542 $ 932,012 132,771 $ 1,548,015
Reinvested........................ 29,066 574,935 200,555 2,073,739
Redeemed.......................... (161,730) (3,350,259) (1,232,858) (12,973,952)
---------- ------------ ---------- ------------
Net Increase (Decrease)........... (86,122) $ (1,843,312) (899,532) $ (9,352,198)
========== ============ ========== ============
</TABLE>
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(4) Capital Share Transactions (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class R Class I
------------------------ ------------------------
RESERVE SMALL-CAP GROWTH FUND Shares Amount Shares Amount
----------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 882,365 $ 40,918,078 118,786 $ 3,033,853
Reinvested........................ 15,177 618,113 7,518 189,541
Redeemed.......................... (518,782) (21,581,735) (1,978) (57,173)
---------- ------------ ---------- ------------
Net Increase...................... 378,760 $ 19,954,456 124,326 $ 3,166,221
========== ============ ========== ============
<CAPTION>
Class R Class I
------------------------ ------------------------
RESERVE STRATEGIC GROWTH FUND Shares Amount Shares Amount
----------------------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 169,423 $ 1,779,036 758,230 $ 8,587,930
Redeemed.......................... (25,958) (277,725) (30,083) (380,085)
---------- ------------ ---------- ------------
Net Increase...................... 143,465 $ 1,501,311 728,147 $ 8,207,845
========== ============ ========== ============
</TABLE>
For the year ended May 31, 1999, the capital stock transactions of each
Fund was as follows:
<TABLE>
<CAPTION>
Class R Class I
----------------------- -----------------------
RESERVE BLUE CHIP GROWTH FUND Shares Amount Shares Amount
----------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold.......................... 120,237 $ 2,208,029 112 $ 1,166
Reinvested.................... 36,055 608,254 10 104
Redeemed...................... (214,503) (4,118,126) -- --
--------- ------------ --------- ------------
Net Increase (Decrease)....... (58,211) $ (1,301,843) 122 $ 1,270
========= ============ ========= ============
<CAPTION>
Class R Class I
----------------------- -----------------------
RESERVE INFORMED INVESTORS GROWTH FUND Shares Amount Shares Amount
-------------------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 239,436 $ 2,947,459 115 $ 1,166
Reinvested........................ 53,132 508,470 23 193
Redeemed.......................... (373,881) (4,285,126) -- --
--------- ------------ --------- ------------
Net Increase (Decrease)........... (81,313) $ (829,197) 138 $ 1,359
========= ============ ========= ============
<CAPTION>
Class R Class I
----------------------- -----------------------
RESERVE INTERNATIONAL EQUITY FUND Shares Amount Shares Amount
--------------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 699,763 $ 9,090,978 115 $ 1,166
Redeemed.......................... (703,928) (9,189,122) -- --
--------- ------------ --------- ------------
Net Increase (Decrease)........... (4,165) $ (98,144) 115 $ 1,166
========= ============ ========= ============
<CAPTION>
Class R Class I
----------------------- -----------------------
RESERVE LARGE-CAP GROWTH FUND Shares Amount Shares Amount
----------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 900,731 $ 16,910,071 1,033,943 $ 12,333,487
Reinvested........................ 27,901 522,595 5 54
Redeemed.......................... (922,682) (18,512,127 (35,446) (440,000)
--------- ------------ --------- ------------
Net Increase (Decrease)........... 5,950 $ (1,079,461) 998,502 $ 11,893,541
========= ============ ========= ============
</TABLE>
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(4) Capital Share Transactions (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class R Class I
----------------------- -----------------------
RESERVE SMALL-CAP GROWTH FUND Shares Amount Shares Amount
----------------------------- --------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Sold.............................. 107,988 $ 2,287,534 113 $ 1,166
Redeemed.......................... (175,495) (3,426,129) -- --
--------- ------------ --------- ------------
Net Increase (Decrease)........... (67,507) $ (1,138,595) 113 $ 1,166
========= ============ ========= ============
</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.
(6) Management Contribution
--------------------------------------------------------------------------------
The sub-adviser of the Large Cap Growth Fund purchased a non-eligible
security. The management company has reimbursed the Fund for the loss of
$11,051 due to this investment.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(7) Financial Highlights (for each share outstanding throughout each period)
--------------------------------------------------------------------------------
Contained below is per share operating performance for a share of each
Class for each of the periods indicated. The information should be read in
conjunction with the accompanying financial data and related notes.
<TABLE>
<CAPTION>
Class I
--------------------
Class R Fiscal
--------------------------------------------------- Year Period
Fiscal Years Ended May 31, Ended Ended
--------------------------------------------------- May 31, May 31,
2000 1999 1998 1997 1996 2000 1999(a)
------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RESERVE BLUE CHIP GROWTH FUND
------------------------------
Net asset value, beginning of
period...................... $ 20.84 $ 15.09 $15.46 $14.91 $12.03 $13.29 $10.00
------- ------- ------ ------ ------ ------ ------
Income from investment
operations
Net investment loss......... (.21) (.23) (.00) (.17) (.10) (.05) (.32)
Net realized and unrealized
gain...................... 5.48 7.02 2.82 0.91 3.62 3.61 4.65
------- ------- ------ ------ ------ ------ ------
Total from investment
operations.................. 5.27 6.79 2.82 0.74 3.52 3.56 4.33
Less distribution from net
realized capital gain....... (4.62) (1.04) (3.19) (.19) (.64) (4.62) (1.04)
------- ------- ------ ------ ------ ------ ------
Net asset value, end of
period...................... $ 21.49 $ 20.84 $15.09 $15.46 $14.91 $12.23 $13.29
======= ======= ====== ====== ====== ====== ======
Total Return.................. 23.89% 46.62% 19.70% 5.12% 30.10% 24.66% 32.90%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $13,911 $10,570 $8,532 $5,428 $5,130 $2,104 $ 2
Ratio of expenses to average
net assets.................. 1.45% 1.53% 1.75% 1.75% 1.75% .90% .88%(b)
Ratio of net investment loss
to average net assets....... (1.03)% (.96)% (.87)% (1.13)% (.94)% (.64)% (1.12)%(b)
Portfolio turnover rate....... 94% 144% 113% 109% 72% 94% 144%
</TABLE>
<TABLE>
<CAPTION>
Class I
--------------------
Class R Fiscal
----------------------------------------------------- Year Period
Fiscal Years Ended May 31, Ended Ended
----------------------------------------------------- May 31, May 31,
2000 1999 1998 1997 1996 2000 1999(a)
-------- ------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RESERVE INFORMED INVESTORS GROWTH FUND
------------------------------
Net asset value, beginning of
period...................... $ 12.38 $10.46 $11.48 $ 14.36 $11.99 $10.85 $10.00
------- ------ ------ ------- ------ ------ ------
Income from investment
operations
Net investment loss......... (.07) (.27) (.20) (.07) (.33) (.04) (.03)
Net realized and unrealized
gain (loss)............... 8.62 (4.12) 2.08 (1.66) 3.87 7.66 2.81
------- ------ ------ ------- ------ ------ ------
Total from investment
operations.................. 8.55 3.85 1.88 (1.73) 3.54 7.62 2.78
Less distribution from net
realized capital gain....... (4.49) (1.93) (2.90) (1.15) (1.17) (4.49) (1.93)
------- ------ ------ ------- ------ ------ ------
Net asset value, end of
period...................... $ 16.44 $12.38 $10.46 $ 11.48 $14.36 $13.98 $10.85
======= ====== ====== ======= ====== ====== ======
Total Return.................. 67.08% 42.22% 17.88% (11.35)% 29.75% 68.07% 8.50%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $16,807 $4,123 $4,334 $ 5,477 $6,393 $1,404 $ 1
Ratio of expenses to average
net assets.................. 1.55% 1.61% 1.75% 1.75% 1.75% 1.00% 1.06%(b)
Ratio of net investment loss
to average net assets....... (.74)% (1.04)% (.91)% (.57)% (1.57)% (.47)% (.59)%(b)
Portfolio turnover rate....... 629% 551% 410% 255% 132% 629% 551%
</TABLE>
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(7) Financial Highlights (for each share outstanding throughout each
period) (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class I
--------------------
Class R Fiscal
------------------------------------------------------- Year Period
Fiscal Years Ended May 31, Ended Ended
------------------------------------------------------- May 31, May 31,
2000 1999 1998 1997 1996(c) 2000 1999(a)
-------- -------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RESERVE INTERNATIONAL EQUITY FUND
------------------------------
Net asset value, beginning of
period...................... $ 12.73 $ 13.22 $ 12.59 $ 11.26 $10.00 $11.21 $10.00
------- ------- ------- ------- ------ ------ ------
Income from investment
operations
Net investment loss......... (.19) (.06) (.04) (.07) (.05) (.04) (.48)
Net realized and unrealized
gain (loss)............... 7.87 (.43) .67 1.40 1.31 6.65 1.69
------- ------- ------- ------- ------ ------ ------
Total from investment
operations.................. 7.68 (.49) .63 1.33 1.26 6.61 1.21
------- ------- ------- ------- ------ ------ ------
Net asset value, end of
period...................... $ 20.41 $ 12.73 $ 13.22 $ 12.59 $11.26 $17.82 $11.21
======= ======= ======= ======= ====== ====== ======
Total Return.................. 60.33% (3.78)% 5.00% 11.81% 12.60% 58.97% 12.00%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $13,781 $12,310 $12,699 $12,099 $3,578 $ 529 $ 1
Ratio of expenses to average
net assets before waiver.... 1.80% 1.87% 2.00% 2.00% 2.00%(b) 1.25% 1.29%(b)
Ratio of net investment loss
to average net assets....... (0.86)% (.50)% (.39)% (.82)% (.92)%(b) (.58)% (5.43)%(b)
Portfolio turnover rate....... 86% 174% 114% 52% 70% 86% 174%
</TABLE>
<TABLE>
<CAPTION>
Class I
--------------------
Class R Fiscal
---------------------------------------------------- Year Period
Fiscal Years Ended May 31, Ended Ended
---------------------------------------------------- May 31, May 31,
2000 1999 1998 1997 1996(d) 2000 1999(a)
-------- ------- ------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RESERVE LARGE-CAP GROWTH FUND
------------------------------
Net asset value, beginning of
period...................... $ 21.38 $18.16 $14.61 $10.95 $10.00 $ 12.06 $ 10.00
------- ------ ------ ------ ------ ------- -------
Income from investment
operations
Net investment income
(loss).................... .04 -- (.03) (.03) (.01) .11 (.01)
Net realized and unrealized
gain...................... (2.14) 3.76 3.89 3.69 .96 (1.15) 2.61
------- ------ ------ ------ ------ ------- -------
Total from investment
operations.................. (2.10) 3.76 3.86 3.66 .95 (1.04) 2.60
Less distributions from net
realized capital gain....... (1.96) (.54) (.31) -- -- (1.96) (.54)
------- ------ ------ ------ ------ ------- -------
Net asset value, end of
period...................... $ 17.32 $21.38 $18.16 $14.61 $10.95 $ 9.06 $ 12.06
======= ====== ====== ====== ====== ======= =======
Total Return with management
contribution................ (10.95)% 21.13% 26.71% 33.42% 9.50% (10.61)% 20.60%
Total Return without
management contribution..... (11.10)% (10.71)%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $ 5,084 $8,118 $6,786 $3,054 $1,231 $ 897 $12,042
Ratio of expenses to average
net assets.................. 1.45% 1.51% 1.75% 1.75% 1.75%(b) .90% .87%(b)
Ratio of net investment income
(loss) to average net
assets...................... .17% (.22)% (.36)% (.32)% (.32)%(b) .11% (.38)%(b)
Portfolio turnover rate....... 70% 69% 25% 18% 0% 70% 69%
</TABLE>
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS--(Continued)
(7) Financial Highlights (for each share outstanding throughout each
period) (Continued)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class I
--------------------
Class R Fiscal
----------------------------------------------------- Year Period
Fiscal Years Ended May 31, Ended Ended
----------------------------------------------------- May 31, May 31,
2000 1999 1998 1997 1996 2000 1999(a)
-------- ------- ------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RESERVE SMALL-CAP GROWTH FUND
------------------------------
Net asset value, beginning of
period...................... $ 23.61 $16.66 $15.52 $ 19.56 $12.21 $ 15.05 $10.00
------- ------ ------ ------- ------ ------- ------
Income from investment
operations
Net investment loss......... (.30) (.51) (.39) (.28) (.17) (.11) (.08)
Net realized and unrealized
gain (loss)............... 24.81 7.46 1.53 (3.76) 8.05 15.78 5.13
------- ------ ------ ------- ------ ------- ------
Total from investment
operations.................. 24.51 6.95 1.14 (4.04) 7.88 15.67 5.05
Less distribution from net
realized capital gain....... (2.23) -- -- -- (.53) (2.23) --
------- ------ ------ ------- ------ ------- ------
Net asset value, end of
period...................... $ 45.89 $23.61 $16.66 $ 15.52 $19.56 $ 28.49 $15.05
======= ====== ====== ======= ====== ======= ======
Total Return.................. 105.00% 41.72% 7.35% (20.65)% 65.55% 106.02% 50.50%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $29,545 $6,258 $5,541 $ 5,789 $6,657 $ 3,545 $ 2
Ratio of expenses to average
net assets.................. 1.55% 1.61% 1.75% 1.75% 1.75% 1.00% 1.00%(b)
Ratio of net investment loss
to average net assets....... (1.19)% (1.44)% (1.64)% (1.69)% (1.70)% (.77)% (.89)%(b)
Portfolio turnover rate....... 38% 26% 46% 28% 38% 38% 26%
</TABLE>
<TABLE>
<CAPTION>
Class R Class I
-------- --------
Fiscal Fiscal
Year Year
Ended Ended
May 31, May 31,
2000(e) 2000(e)
-------- --------
<S> <C> <C>
RESERVE STRATEGIC GROWTH FUND
------------------------------
Net asset value, beginning of
period...................... $ 10.00 $ 10.00
------- -------
Income from investment
operations
Net investment loss......... (.06) (.02)
Net realized and unrealized
gain...................... 1.65 1.66
------- -------
Total from investment
operations.................. 1.59 1.64
------- -------
Net asset value, end of
period...................... $ 11.59 $ 11.64
======= =======
Total Return.................. 15.90% 16.40%
Ratios/Supplemental Data
------------------------------
Net assets end of period
(thousands)................. $ 1,663 $ 8,473
Ratio of expenses to average
net assets.................. 1.45% 1.00%
Ratio of net investment loss
to average net assets....... (.63)% (.44)%
Portfolio turnover rate....... 2% 2%
</TABLE>
---------------
(a) From October 1, 1998 (Commencement of Operations) to May 31, 1999.
(b) Annualized.
(c) From July 13, 1995 (Commencement of Operations) to May 31, 1996.
(d) From January 2, 1996 (Commencement of Operations) to May 31, 1996.
(e) From June 1, 1999 (Commencement of Operations) to May 31, 2000.
31
<PAGE>
TAX INFORMATION (unaudited)
--------------------------------------------------------------------------------
For the fiscal year ended May 31, 2000, the amount of long-term capital gains
designated by the Trust were as follows:
<TABLE>
<CAPTION>
Fund Total
<S> <C>
------------------------------------------------------------------------
Blue Chip Growth Fund....................................... $ 756,241
Large Cap Growth Fund....................................... 2,023,755
Small-Cap Growth Fund....................................... 851,872
</TABLE>
32
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
--------------------------------------------------------------------------------
To the Shareholders and the Board of Trustees of Reserve Private Equity Series:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and financial highlights present fairly, in all material
respects, the financial position of Reserve Private Equity Series (comprising,
respectively, Reserve Blue Chip Fund, Reserve Informed Investors Fund, Reserve
International Equity Fund, Reserve Large-Cap Growth Fund, Reserve Strategic
Growth Fund and Reserve Small Cap Fund) (the "Trust") at May 31, 2000, and the
results of their operations for the year then ended, the changes in their net
assets and the financial highlights for the periods presented, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Trust's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at May 31, 2000 by correspondence with the custodian and brokers,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
New York, New York
July 31, 2000
33
