<PAGE>
- ---- ----
WSIS SERIES TRUST
Wertheim Equity
Value Fund
Wertheim Small
Capitalization Value
Fund
Wertheim High Yield
Income Fund
Wertheim Investment
Grade Income Fund
Wertheim Short-Term
Investment
Fund
WSIS Series Trust
P.O. Box 8507
Boston, Mass. 02266
1-800-464-3108
1095WS
ANNUAL REPORT
October 31, 1995
<PAGE>
WSIS SERIES TRUST
ANNUAL REPORT
OCTOBER 31, 1995
WSIS SERIES TRUST
INVESTMENT MANAGER
Schroder Wertheim Investment Services, Inc. (SWIS) is a wholly owned subsidiary
of Schroders plc. Founded in 1927 as Wertheim & Co., the firm was renamed in
1995 following integration with the Schroder Investment Management Group which
manages in excess of $100 billion for clients globally. The new organization now
has an expanded capital base as well as total global representation in financial
markets. As of October 31, 1995, Schroder Wertheim Investment Services, Inc. had
over $4 billion in assets under management.
December 15, 1995
Dear Shareholder:
We are pleased to present the audited financial statements for WSIS Series Trust
for the fiscal year ended October 31, 1995. This past fiscal year has been one
providing extraordinary investment returns in U.S. common stocks and bonds with
the S & P 500 up 26.4% and the Lehman Brothers Government/Corporate Index up
16.16% over the year to October 1995. The reason for this lies in the favorable
economic environment for financial assets and the restructuring of U.S.
corporations which has provided a strong impetus to earnings. Specific
discussion of performance for each fund is included in its respective section of
the annual report.
The five funds in the WSIS Series Trust family provide a diversity of investment
opportunity bound together by a common thread -- a conservative investment
philosophy which emphasizes undervalued and generally out of favor securities
carefully selected through rigorous fundamental research. This is a process
which habitually demonstrates its optimum results in difficult market
environments. Our goal in momentum driven bull-markets is competitive
performance. In down and stable market periods our objective is to seek to
produce very much above average results.
By way of background, the U.S. economy ended 1994 on a strong note, with real
GDP growing at a 5.1% annual rate in the fourth quarter. Early in 1995, a series
of factors coincided to dampen the rate of economic growth. These included the
cumulative effect of tighter monetary policy on the credit sensitive areas of
the economy, the impact of Mexico's economic crisis on U.S. exports, large tax
payments owed by upper income individuals, and delayed payment of income tax
refunds to the bulk of individual filers. The upshot was that growth slowed
precipitously, and business found itself with too much inventory at a time of
more sluggish demand. The consequent inventory adjustment exacerbated the
economic slowdown through the middle part of 1995. The Federal Reserve reduced
short term interest rates by 25 basis points in early July in
<PAGE>
response to weakening economic activity. Subsequently, however, the economy
firmed, helped by the beneficial impact of lower long term interest rates on
housing and other credit sensitive areas of the economy. Other positive
influences have been ongoing strength in capital spending, diminution of import
growth, and a waning of the temporary negative influences of income tax payments
and the Mexican fiscal crisis.
We remain optimistic that the current economic cycle will continue through 1996
and beyond, as imbalances which normally herald recessions are notably absent.
Inflation has been well controlled by a pro-active Federal Reserve and by fierce
international competition in many key industries. Importantly, we do not believe
that consumer debt is nearly as serious a problem as conventional wisdom would
have it. Currently debt service costs are well below past peaks and the broad
measures of delinquency rates remain subdued. Real GDP growth is forecast at
2.5% to 3.0% in 1996, moderate enough to prevent a material increase in
inflation. Furthermore, the economic backdrop ought to be enhanced at some stage
in the not too distant future by a budget package which will put fiscal policy
on a more sustainable path and which would give the Federal Reserve room to
implement another modest reduction in interest rates.
All of these factors lead us to believe that the long term investor will be
rewarded, though we would not expect either index to perform as strongly in the
next 12 months as in the past. Our investment style leads us constantly to
reappraise the correct risk/reward strategy, based on fundamental analysis
utilizing the extensive research resources of the investment adviser.
In connection with the investment managers integration with the Schroder
Investment Management Group, Laura Luckyn-Malone, Managing Director of Schroder
Capital Management International, Inc. and Director of Schroder Wertheim
Investment Services, Inc., was appointed President of the Trust.
We thank you for your continued support of and interest in WSIS Series Trust.
Sincerely,
E. William Smethurst, Jr. Laura E. Luckyn-Malone
Chairman President
2
WSIS SERIES TRUST
<PAGE>
WERTHEIM EQUITY VALUE FUND
PORTFOLIO AND STRATEGY REVIEW
Strong corporate profits and lower long-term interest rates combined to propel
the equity market higher over both the six month and twelve month periods ended
October 31, 1995. The Wertheim Equity Value Fund rose 8.70% for the six month
period as compared with a 14.46% increase in the S & P 500 Index over the same
period. For the year ended October 31, net assets were $38,088,350 and the Fund
was up 18.63% versus 26.44% for the S & P 500. The principal reason for the
underperformance was that the Fund began the fiscal year with a large cash
position and subsequently an underweighting in healthcare and an overweighting
in insurance rather than banking stocks at a time of consolidation in the
banking sector.
We began the year with the belief that economic growth would slow in response to
earlier Federal Reserve Bank monetary tightening, but that the pre-conditions
for a recession were absent and that there was a strong likelihood of achieving
a "soft landing". As indicated in the Letter to the Shareholders, our outlook
remains unchanged. Accordingly, for both the six month and twelve month periods,
the Fund's portfolio has been positioned with an overweighting in economically
sensitive sectors of the market, most notably capital goods and consumer
cyclicals. Most recently, however, two issues have begun to worry equity market
participants. The first concern is the increasingly high valuations being placed
on technology stocks which have been the leaders of the market. Several of our
technology holdings hit target prices during the quarter and we sold them. Our
weighting in this sector is therefore lower than at mid-year. The second issue
is the extent to which slower economic growth will affect corporate earnings,
which have been strong thus far in 1995. Investors are focused on how protracted
the inventory reduction cycle will be and the impact it will have on profits in
the manufacturing sector of the economy. In anticipation of some earnings
weakness, we modestly reduced weightings in the basic industry and capital goods
sectors and redeployed the proceeds into consumer staple and energy stocks. We
believe, nevertheless, that the inventory correction has mostly run its course.
In addition, we are seeing the beginning signs of a pick up in final demand.
This should, in turn, lead to an improvement in manufacturing activity, although
growth is not likely to be as strong as in 1994. We remain overweight in
cyclical stocks based on their reasonable valuations and in anticipation of an
increase in manufacturing activity. This emphasis, however, is less extreme than
earlier as the earnings growth may not be as rapid as earlier in the cycle.
Technology, financial, and consumer staples were the three best performing
sectors of the market over the six month and twelve month periods. Falling
interest rates and bank consolidations spurred performance in the financial
sector, while both secular and cyclical earnings growth rates have driven
technology stocks higher. Consumer staples also outperformed the broad market as
investors sought earnings consistency in the face of slower economic growth in
the second and third calendar quarters. Overall, fund performance relative to
the benchmark suffered moderately from cash holdings early in the year, from a
concentration in insurance rather than bank stocks in the financial sector, and
underweighting in the consumer staples area, particularly healthcare. Strong
performance of our technology stocks and a mid-year overweighting in this sector
benefited performance.
Of particular note in this area was the purchase last fall of CISCO SYSTEMS,
INC., a computer networking company. Investor concern regarding the direction of
network hardware solutions had led to a significant decline in the company's
stock price.
3
WSIS SERIES TRUST
<PAGE>
Analysis of the company's business prospects as well as confidence in the
strength of the overall economy indicated that the stock offered an extremely
attractive value relative to the market and a compelling investment opportunity.
Through October 31, 1995 the stock has gained over 200% from its initial
purchase price in September 1994.
MANAGEMENT DISCUSSION
GIVEN THAT U.S. ECONOMIC GROWTH HAS PROCEEDED OVER THE PAST YEAR AS ANTICIPATED,
WHY HAS THE FUND'S PERFORMANCE TRAILED THAT OF ITS BENCHMARK?
As mentioned earlier, the Fund was underweight in the healthcare sector and
overweight in the insurance sector, rather than banking which performed more
strongly. Both the extent of the negative impact of the inventory correction on
third quarter profits for manufacturing companies and the market's negative
reaction to those companies' fourth quarter earnings prospects, felt most
heavily in October, were greater than expected. Additionally, the valuation of
the preponderance of consumer staple and health care companies over the course
of the entire year has not fit our strict valuation discipline. As the economy
softened and interest rates continued to decline, the market valued the earnings
of consumer staple companies more highly than we anticipated.
IS A MORE DEFENSIVE POSTURE CURRENTLY WARRANTED?
As indicated above, we trimmed our holdings in companies whose earnings for the
fourth quarter and beyond were especially vulnerable to slower U.S. and European
economic growth and modestly increased our exposure to energy and consumer
staples companies. We believe, however, that it is necessary to be extremely
selective in making investments in the consumer staple segment of the market
especially given the sector's high valuation and strong performance over the
past twelve months. Many of these stocks are trading at a significant premium to
the market based on the multiple of current price to projected 1996 earnings.
Among less cyclical issues, we find a more persuasive case for investment in
major oil companies due to historically high relative yields, reasonable P/E
multiples, and individual restructuring efforts. We still believe though that
the consumer will be positive for economic growth and that the economy will
return to a rate of growth moderately above trend-line for both 1996 and 1997.
The combination of currently attractive valuations and an improving domestic
economy lead us to believe that economically sensitive issues offer greater
potential for outperformance and therefore are well represented in the Fund's
portfolio.
4
WSIS SERIES TRUST
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN WERTHEIM EQUITY VALUE
FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WERTHEIM EQUITY VALUE FUND
<S> <C> <C>
Fund Monthly S&P 500 Monthly
Feb-94 $10,000 $10,000
Feb-94 $9,960 $9,901
Mar-94 $9,450 $9,469
Apr-94 $9,510 $9,591
May-94 $9,730 $9,748
Jun-94 $9,400 $9,509
Jul-94 $9,700 $9,821
Aug-94 $9,980 $10,224
Sep-94 $9,490 $9,974
Oct-94 $9,450 $10,199
Nov-94 $9,080 $9,827
Dec-94 $9,214 $9,973
Jan-95 $9,426 $10,231
Feb-95 $9,890 $10,630
Mar-95 $10,051 $10,944
Apr-95 $10,313 $11,265
May-95 $10,575 $11,716
Jun-95 $10,787 $11,988
Jul-95 $11,200 $12,388
Aug-95 $11,331 $12,417
Sep-95 $11,522 $12,941
Oct-95 $11,210 $12,894
</TABLE>
The S & P 500 Index is a composite of the prices of 500 widely held U.S. stocks.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995*
----------------- -------------------
<S> <C> <C>
Wertheim Equity Value Fund......... 18.63% 6.92%
</TABLE>
* Average annual total return from commencement of operations (February 16,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
BOTH WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
5
WSIS SERIES TRUST
<PAGE>
WERTHEIM SMALL CAPITALIZATION VALUE FUND
PORTFOLIO AND STRATEGY REVIEW
On October 31, 1995 the net assets of the Wertheim Small Capitalization Value
Fund were $47,928,954. The Fund rose 7.49% for the six month period ended
October 31, 1995, as compared with a 12.30% increase in the Russell 2000 Index
over the same period. For the fiscal year ended October 31, 1995, the Fund rose
10.27%, also underperforming the Russell 2000 Index which appreciated 18.35% for
the period.
This year's spectacular overall equity market performance has been led by
traditional large cap growth companies, particularly multinational consumer
non-durable and technology issues. Small cap companies tend not to be global,
and small cap value benchmarks tend to be overweighted in financial and interest
rate sensitive issues which have performed exceptionally well in 1995. The
Russell 2000 Index, for example has a 30% weighting in interest sensitive
sectors such as financial services, utilities and REITS. Thus, it is not a
wholly representative unmanaged benchmark for your Fund which is research
intensive and focused on a narrow range of attractively priced equities. The top
ten holdings account for 35.9% of the portfolio. Over the past year, small cap
value names in general have become progressively cheaper on an absolute and on a
relative basis. We have been buying well managed, small companies at steep
multiple discounts to larger companies within their industry segment with higher
expected earnings growth rates and generally stronger financial characteristics.
Many of the Fund's investments lack Wall Street research sponsorship. Some are
not easily categorized within an industry while others belong to industries
which have fallen out of favor. Before investing, we try to identify a catalyst,
which might spur great investor interest within a six to twelve month time
frame. We are confident that our approach will deliver above average returns
over a full market cycle.
We recently added TJX COMPANIES to the portfolio. TJX is a leader in domestic
off-price retailing and came into our buying range when the retail sector
collapsed in October because of unexpected bankruptcies. We are currently
overweighted in the technology and capital goods sectors against the Russell
2000 Index and we remain underweighted in interest sensitive issues. We are
neutrally weighted in consumer, basic industry and energy issues. Based on our
expectations of future earnings growth, we believe that the Fund's portfolio is
well positioned to deliver above average returns over the next 12 to 24 months.
MANAGEMENT DISCUSSION
HOW DO YOU VIEW PROSPECTS FOR SMALL CAPITALIZATION EQUITIES OVER THE NEXT 12 TO
18 MONTHS?
We think that we are in the middle of a normal 6 - 8 year small cap cycle, when
small companies outperform large company equities. The first leg of the current
cycle began in late 1990 and ended in February 1994 when the Federal Reserve
Bank began tightening U.S. interest rates. We believe the "soft economic
landing" being orchestrated by the Federal Reserve will stimulate the second leg
of the current small cap cycle. Typically the second phase of a small cap cycle
tends to be more powerful than the first because of price earnings ratio
expansion in the second phase.
6
WSIS SERIES TRUST
<PAGE>
HOW DO SMALL COMPANIES FARE IN A SLOW GROWTH ECONOMY?
A slow growth economy has historically favored small companies which have been
able to demonstrate superior earnings growth versus mature companies because
they tend to be highly efficiently run, and more focused to exploit market
niches. Low inflation and lower interest rates also benefit small companies to a
greater degree than large ones as it is an easier environment for them to borrow
and grow. The U.S. dollar appears to have bottomed, strengthening somewhat from
its lows, which could make earnings comparisons for large multinational
companies more difficult. Finally, favorable capital gains legislation could
occur this year. Historically, capital gains cuts have favored small stocks
because their total returns are derived more heavily from capital gains rather
than dividends.
WHY ARE YOU OVERWEIGHTED IN TECHNOLOGY?
Technology is not monolithic. It comes in all sizes, shapes and varieties, but
its common theme is enhancement of global productivity. We invest from the
bottom up, not the top down. Our overweighting is a consequence of our selection
process to find quality companies with strong niche positions in markets that
can demonstrate above average growth where we can buy that growth at below
average valuation parameters.
7
WSIS SERIES TRUST
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT
IN WERTHEIM SMALL CAPITALIZATION VALUE FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WERTHEIM SMALL
CAPITAL
<S> <C> <C>
Fund Monthly Russell 2000 Monthly
Feb-94 $10,000 $10,000
Feb-94 $9,880 $9,982
Mar-94 $9,880 $9,455
Apr-94 $9,800 $9,511
May-94 $9,690 $9,404
Jun-94 $9,460 $9,084
Jul-94 $9,520 $9,233
Aug-94 $9,800 $9,748
Sep-94 $9,810 $9,716
Oct-94 $9,770 $9,678
Nov-94 $9,300 $9,287
Dec-94 $9,490 $9,537
Jan-95 $9,210 $9,416
Feb-95 $9,540 $9,808
Mar-95 $9,743 $9,977
Apr-95 $10,023 $10,198
May-95 $10,383 $10,374
Jun-95 $10,643 $10,912
Jul-95 $11,194 $11,541
Aug-95 $11,354 $11,780
Sep-95 $11,364 $11,990
Oct-95 $10,774 $11,454
</TABLE>
The Russell 2000 Index is a broad based measure of small capitalization U.S.
equity market performance.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995*
----------------- -------------------
<S> <C> <C>
Wertheim Small Capitalization Value
Fund.............................. 10.27% 4.46%
</TABLE>
* Average annual total return from commencement of operations (February 16,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
BOTH WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
8
WSIS SERIES TRUST
<PAGE>
WERTHEIM HIGH YIELD INCOME FUND
PORTFOLIO AND STRATEGY REVIEW
On October 31, 1995, the net assets of the Wertheim High Yield Income Fund were
$20,488,945. Over the past 6 and 12 months, the Fund's total return was 2.53%
and 9.16% compared with the Salomon Brothers High Yield Market Index which
returned 7.51% and 16.78%, respectively. The underperformance was primarily due
to significant declines in value of three holdings which accounted for
approximately 6.5% of the Fund's assets.
In reviewing the investment approach to the Fund and consistent with our
economic overview, management's focus is to increase the relative weighting of
higher quality 'BB' securities in the portfolio in order to raise average credit
quality. In January the Fund held approximately 17.3% of its assets in 'BB'
securities, but by October this weighting had increased to 33.9%. Consequently,
as of October 31, the percentage of the Fund invested in 'CCC' or non-rated
securities had dropped from more than 30% to less than 7%. Also, there has been
an underweighting of consumer sensitive sectors such as retailing and
restaurants owing to management's expectations for continuing disappointment
over profitability levels. The exposure to sectors which perform poorly in low
inflation environments such as grocery stores has also been tightly controlled.
The sharp reduction in interest rates over the course of the fiscal year
resulted in the 'BB' sector of the High Yield market outperforming the 'B'
sector by over 400 basis points in the index. At the same time a perception of a
slowdown in the economy has produced a bias toward a "flight to quality" within
the sector wherein weaker credits have underperformed markedly. The perceived
slowdown has also resulted in greater pricing volatility in cyclical sectors as
recent gains in some commodity prices have been judged by some investors to be
short lived. Another factor has been the rise in equity values within the media
sectors where deregulation and growing penetration rates have raised
expectations of future profitability.
The High Yield Index outperformed the High Grade Index by over 100 basis points
over the last 12 months. During the period, larger, higher quality issues
generally outperformed the Index averages. For example, the Fund's two largest
holdings, NORTHWEST AIRLINES TRUST (13.875% subordinated notes due 6/21/08) and
MOBILE TELECOMMUNICATION TECH CORP. (13.50% senior notes due 12/15/02)
appreciated by 15% and 13% respectively since purchased during the fiscal year.
Clearly the past year's performance has been disappointing. However, management
believes that the focus on higher quality credits has now positioned the Fund
well for the new fiscal year. During the year, the investment adviser has made
additional research resources available to your management team, which, we
believe, will help us to achieve more competitive long term returns.
9
WSIS SERIES TRUST
<PAGE>
MANAGEMENT DISCUSSION
HOW DOES SCHRODERS' OUTLOOK FOR THE ECONOMY IMPACT OUR EXPECTATIONS FOR THE HIGH
YIELD MARKET IN 1996?
In our opinion, the U.S. economy is likely to be a little more robust in 1996
than the current market consensus would have it. The consumer sector remains
relatively buoyant and the export side of the economy should be aided by the
competitiveness of the U.S. dollar in the world market. This should augur well
for the corporate sector in the U.S. and, in turn, for the High Yield market. In
addition, we expect the asset class to continue to experience inflows of new
investment given the attractive yield available compared with other fixed income
alternatives.
HOW DO YOU RESEARCH HIGH YIELD SECURITIES?
Our approach to researching High Yield credits begins with a "top down" analysis
of the economy. At this stage, we assess both the general state of key variables
(such as growth and inflation) and any trends in factors (such as commodity
prices) which are likely to leave an impact upon individual sectors of the
economy. This results in our industrial sector weightings within the portfolio.
We then review the individual companies within each sector, identifying those
which appear fundamentally over or under-valued. This process includes a
thorough review of financial statements, discussions with management and
preparation of financial projections. The final stage in the research process is
an analysis of the outstanding debt securities of the companies we follow,
taking into account the specific structure of each security.
Sell recommendations arise when we conclude that a security has lost relative
attractiveness due to simple price appreciation or to a more fundamental review
of the outlook for the company.
10
WSIS SERIES TRUST
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN WERTHEIM HIGH YIELD
INCOME FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WERTHEIM HIGH YIELD
<S> <C> <C>
Fund Monthly Salomon High Yield Index
Feb-94 $10,000 $10,000
Feb-94 $9,977 $9,957
Mar-94 $9,565 $9,587
Apr-94 $9,424 $9,499
May-94 $9,265 $9,533
Jun-94 $9,332 $9,543
Jul-94 $9,362 $9,637
Aug-94 $9,362 $9,691
Sep-94 $9,363 $9,665
Oct-94 $9,341 $9,667
Nov-94 $9,260 $9,561
Dec-94 $9,169 $9,665
Jan-95 $9,295 $9,807
Feb-95 $9,585 $10,134
Mar-95 $9,723 $10,239
Apr-95 $9,945 $10,480
May-95 $9,885 $10,792
Jun-95 $9,885 $10,869
Jul-95 $10,080 $10,999
Aug-95 $10,112 $11,067
Sep-95 $10,101 $11,195
Oct-95 $10,197 $11,290
</TABLE>
The Salomon Brothers High Yield Market Index is a composite of issues with
short, medium and long term maturities and quality ratings by S&P between BB and
CCC.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995*
----------------- -------------------
<S> <C> <C>
Wertheim High Yield Income Fund.... 9.16% 1.14%
</TABLE>
* Average annual total return from commencement of operations (February 16,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
BOTH WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
11
WSIS SERIES TRUST
<PAGE>
WERTHEIM INVESTMENT GRADE INCOME FUND
PORTFOLIO AND STRATEGY REVIEW
On October 31, 1995, the net assets of the Wertheim Investment Grade Income Fund
were $23,703,963. The Fund returned 15.62% for the fiscal year compared with the
Lehman Brothers Government/Corporate Index which returned 16.16%. For the six
months to October 31, 1995 the Fund's return was 7.95% compared to 8.61% from
the index.
Throughout the fiscal year, management has believed that the most attractive
relative values were evident in the corporate sector at a time when corporate
profits were growing rapidly. Our economic forecast suggested that year over
year economic growth was to be moderate with modestly increasing levels of
inflation. Our growth expectations have been accurate while inflation has been
less than expected. In this environment, corporate profits would continue to
exhibit strong growth. Based on the assessment of management's internal research
capability, both money center and regional bank and finance issues were
identified as offering particularly good value. Not only was restructuring well
underway because of consolidation of the industry, but banks have been
witnessing an upturn in loan demand and improvement in asset quality. By October
1995, the Fund reached a weighting of 49% in corporates with 25% in the
financial sector. By contrast, prepayments were volatile in the mortgage sector,
thereby creating difficulty in determining the correct average life.
Consequently the Fund's weighting in mortgages at the end of the fiscal year was
only 1%.
In 1995, parts of the U.S. Agency sector came into our buying range as they
offered relative value. Discount callable agency notes offered attractive yields
relative to alternative U.S. Treasury or very high quality corporate notes.
Therefore the Fund's weighting in this sector was built up to 8% of assets over
the fiscal year. As the movement of interest rates has been difficult to
forecast this past year, management's focus has been on security selection as
opposed to interest rate timing, with a result that the Fund's modified duration
(statistical measure of price volatility) of 4.8 years is not dissimilar from
that of the benchmark.
<TABLE>
<CAPTION>
WERTHEIM LEHMAN BROTHERS
INVESTMENT GRADE GOVERNMENT/
INCOME FUND CORPORATE INDEX
---------------- ---------------
<S> <C> <C>
Modified duration.................. 4.8 years 5.1 years
Average Maturity................... 6.7 years 9.6 years
Sectors
U.S. Treasury/Agency............. 41% 76%
Corporates....................... 49% 24%
Mortgages........................ 1% 0%
Cash Equivalents................. 9% 0%
</TABLE>
12
WSIS SERIES TRUST
<PAGE>
MANAGEMENT DISCUSSION
DOES THE FUND INVEST IN DERIVATIVE SECURITIES?
We manage the Wertheim Investment Grade Income Fund conservatively with a focus
on preservation of capital, so we seek to avoid any security we view as
excessively risky. The only securities the Fund normally holds that might be
considered "derivatives" are high quality collateralized mortgage obligations
and other asset-backed securities. Investment in such securities at October 31,
represents less than 2% of the portfolio's total net assets. The Fund invests in
these securities because they tend to produce higher current income than many
other fixed-income securities and because they can be useful in adjusting the
Fund's duration. Such securities may be subject to prepayment or other risks
described more fully in the Fund's prospectus.
LOOKING OUT TO 1996, WHAT IS YOUR VIEW ON INTEREST RATES?
For 1996, our outlook on interest rates remains cautious. As mentioned in the
Letter to the Shareholders, the Federal Reserve may implement another modest
rate reduction dependent upon the budget package that is passed. At the same
time, continued GDP expansion could increase the potential for inflation. While
inflation could lead to higher rates, we do not believe inflationary pressure
will be strong enough to significantly impact yields. We will continue to
monitor the effect these factors have on rates and make any necessary
adjustments to the portfolio duration accordingly.
13
WSIS SERIES TRUST
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN WERTHEIM INVESTMENT
GRADE INCOME FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WERTHEIM INVESTMENT GRADE
<S> <C> <C>
Lehman Bros.
Fund Monthly Gov't./Corp.
Feb-94 $10,000 $10,000
Feb-94 $9,968 $9,945
Mar-94 $9,708 $9,701
Apr-94 $9,578 $9,621
May-94 $9,548 $9,604
Jun-94 $9,502 $9,581
Jul-94 $9,696 $9,773
Aug-94 $9,689 $9,777
Sep-94 $9,526 $9,629
Oct-94 $9,511 $9,619
Nov-94 $9,492 $9,601
Dec-94 $9,567 $9,665
Jan-95 $9,727 $9,850
Feb-95 $9,983 $10,079
Mar-95 $10,047 $10,146
Apr-95 $10,186 $10,288
May-95 $10,626 $10,720
Jun-95 $10,700 $10,805
Jul-95 $10,643 $10,763
Aug-95 $10,771 $10,890
Sep-95 $10,859 $11,001
Oct-95 $10,996 $11,163
</TABLE>
The Lehman Brothers Government/Corporate Index is a composite of investment
grade issues with maturities greater than one year.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995*
----------------- -------------------
<S> <C> <C>
Wertheim Investment Grade Income
Fund.............................. 15.62% 5.77%
</TABLE>
* Average annual total return from commencement of operations (February 22,
1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
BOTH WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
14
WSIS SERIES TRUST
<PAGE>
WERTHEIM SHORT-TERM INVESTMENT FUND
PORTFOLIO AND STRATEGY REVIEW
For the fiscal year ended October 31, 1995 the Wertheim Short-Term Investment
Fund realized a 5.02% total return compared with 5.95% return from 90 day U.S.
Treasuries, and for the six months ended October 31, 1995 the return was 2.40%
compared with the Treasury Bill's 2.82%. The Fund underperformed the Treasury
Bill in the 6 and 12 month periods due to the very small incremental yields
available in alternative securities. Net assets at the end of the fiscal year
were $33,935,878.
Management's strategy has been to take advantage of the positive yield curve to
increase the yield on each security. The positive yield curve (the additional
yield obtained by longer maturities) allowed for a modest extension of maturity
with a small pick up in yield. For example, on January 1, 1995 the six month
Treasury Bill yielded 6.5% versus only 5.7% on the 90 day T-Bill. As securities
matured, new issues at the longer end of the maturity ladder were purchased.
Secondly, part of the portfolio was invested in the corporate or government
agency sectors, utilizing management's extensive internal research resources to
identify attractively valued securities. These offered at least 25 basis points
additional yield over U.S. Treasuries in the past 12 months. Valuations of
mortgage backed securities were insufficiently attractive to merit inclusion in
the portfolio. At the end of October, the Fund's structure was:
<TABLE>
<S> <C>
U.S. Agency Notes.................. 62%
AAA................................ 33%
AA................................. 5%
</TABLE>
15
WSIS SERIES TRUST
<PAGE>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN WERTHEIM SHORT-TERM
INVESTMENT FUND
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WERTHEIM SHORT-TERM INVESTMENT
<S> <C> <C>
90-Day Treasury
Fund Monthly Bill
Jan-94 $10,000 $10,000
Jan-94 $10,015 $10,018
Feb-94 $9,995 $10,045
Mar-94 $9,998 $10,075
Apr-94 $9,957 $10,107
May-94 $10,006 $10,144
Jun-94 $10,047 $10,180
Jul-94 $10,067 $10,218
Aug-94 $10,114 $10,257
Sep-94 $10,143 $10,298
Oct-94 $10,183 $10,340
Nov-94 $10,203 $10,387
Dec-94 $10,246 $10,436
Jan-95 $10,292 $10,489
Feb-95 $10,348 $10,541
Mar-95 $10,382 $10,593
Apr-95 $10,445 $10,645
May-95 $10,497 $10,697
Jun-95 $10,538 $10,747
Jul-95 $10,572 $10,799
Aug-95 $10,625 $10,648
Sep-95 $10,656 $10,897
Oct-95 $10,695 $10,949
</TABLE>
The 90 Day U.S. Treasury Bill return is an average return on three month U.S.
Treasury Bills.
PERFORMANCE INFORMATION
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
OCTOBER 31, 1995 OCTOBER 31, 1995*
----------------- -------------------
<S> <C> <C>
Wertheim Short-Term Investment
Fund.............................. 5.02% 3.79%
</TABLE>
* Average annual total return from commencement of operations (January 11, 1994)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN THE FUND AND THE RETURN ON INVESTMENT
BOTH WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN
INVESTOR'S ORIGINAL COST.
16
WSIS SERIES TRUST
<PAGE>
PERFORMANCE INFORMATION
The following figures represent performance through the calendar quarter ended
September 30, 1995.
<TABLE>
<CAPTION>
YEAR LIFE OF
ENDED FUND ENDED
SEPTEMBER 30, 1995 SEPTEMBER 30, 1995*
------------------- ---------------------
<S> <C> <C>
Wertheim Equity Value Fund......... 21.42% 9.13%
Wertheim Small Capitalization Value
Fund.............................. 15.84% 8.20%
Wertheim High Yield Income Fund.... 7.88% 0.62%
Wertheim Investment Grade Income
Fund.............................. 13.99% 5.27%
Wertheim Short-Term Investment
Fund.............................. 5.02% 3.75%
</TABLE>
* Average annual total returns from commencement of operations (February 16,
1994 for Wertheim Equity Value Fund, Wertheim Small Capitalization Value Fund
and Wertheim High Yield Income Fund; February 22, 1994 for Wertheim Investment
Grade Income Fund and January 11, 1994 for Wertheim Short-Term Investment Fund)
"TOTAL RETURN" IS CALCULATED INCLUDING REINVESTMENT OF ALL DIVIDENDS AND
DISTRIBUTIONS. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. THE VALUE OF AN INVESTMENT IN A FUND AND THE RETURN ON INVESTMENT BOTH
WILL FLUCTUATE AND REDEMPTION PROCEEDS MAY BE HIGHER OR LOWER THAN AN INVESTOR'S
ORIGINAL COST.
17
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM EQUITY VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS - 91.4%
BASIC INDUSTRY - (6.2%)
Ferro Corporation..................................................................... 27,000 $ 624,375
James River Corporation of Virginia................................................... 30,300 973,387
LTV Corporation New (1)............................................................... 55,000 770,000
-----------
2,367,762
CAPITAL GOODS - (14.5%)
Allied Signal, Incorporated........................................................... 26,300 1,117,750
General Electric Company.............................................................. 18,600 1,176,450
General Signal Corporation............................................................ 30,900 984,937
Minnesota Mining & Manufacturing Company.............................................. 15,500 881,562
Textron, Incorporated................................................................. 16,900 1,161,875
Trinova Corporation................................................................... 7,300 205,313
-----------
5,527,887
CONSUMER CYCLICAL - (16.4%)
Charming Shoppes, Incorporated........................................................ 71,600 205,850
Dillard Department Stores, Incorporated............................................... 23,800 645,575
General Motors Corporation............................................................ 25,600 1,120,000
May Department Stores Company......................................................... 27,700 1,087,225
Time Warner, Incorporated............................................................. 30,900 1,127,850
Toys "R" Us, Incorporated (1)......................................................... 43,900 960,312
Wal Mart Stores, Incorporated......................................................... 51,000 1,102,875
-----------
6,249,687
</TABLE>
See notes to financial statements.
18
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM EQUITY VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS
CONSUMER STAPLES - (11.0%)
Colgate Palmolive Company............................................................. 18,100 $ 1,253,425
General Mills, Incorporated........................................................... 20,000 1,147,500
Heinz H J Company..................................................................... 23,400 1,088,100
Kimberly Clark Corporation............................................................ 9,500 689,938
-----------
4,178,963
ENERGY - (9.4%)
Amoco Corporation..................................................................... 18,200 1,162,525
Chevron Corporation................................................................... 23,100 1,079,925
Mobil Corporation..................................................................... 13,200 1,329,900
-----------
3,572,350
FINANCE - (12.9%)
Aetna Life & Casualty Company......................................................... 16,100 1,133,038
American International Group, Incorporated............................................ 17,100 1,442,812
BankAmerica Corporation............................................................... 17,600 1,012,000
General Reinsurance Corporation....................................................... 9,200 1,332,850
-----------
4,920,700
TECHNOLOGY - (9.9%)
BMC Software, Incorporated (1)........................................................ 22,100 787,313
Cisco Systems, Incorporated (1)....................................................... 11,900 922,250
International Business Machines....................................................... 12,100 1,176,725
Novell, Incorporated (1).............................................................. 52,800 871,200
-----------
3,757,488
TRANSPORTATION - (2.3%)
Conrail, Incorporated................................................................. 12,700 873,125
-----------
</TABLE>
See notes to financial statements.
19
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM EQUITY VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS
UTILITIES - (8.8%)
GTE Corporation....................................................................... 37,700 $ 1,555,125
Northeast Utilities................................................................... 32,200 796,950
Public Service Enterprise Group....................................................... 34,500 1,013,438
-----------
3,365,513
-----------
TOTAL COMMON STOCKS - (COST $32,112,226) 34,813,475
-----------
</TABLE>
<TABLE>
<CAPTION>
Interest Repurchase Repurchase
Rate Date Price
---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT - 6.4%
REPURCHASE AGREEMENT - (6.4%)
State Street Bank and Trust Company........... 5.250% 11/01/1995 $2,419,353 2,419,000
-----------
(Dated 10/31/95, collateralized by a
$2,330,000 United States Treasury Note,
7.125%, 2/29/00)
TOTAL SHORT TERM INVESTMENT - (COST $2,419,000) 2,419,000
-----------
TOTAL INVESTMENTS - (COST $34,531,226) 97.8 % 37,232,475
OTHER ASSETS LESS LIABILITIES 2.2 % 855,875
----- -----------
NET ASSETS 100.0% $38,088,350
----- -----------
----- -----------
</TABLE>
(1) Non-income producing security.
See notes to financial statements.
20
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SMALL CAPITALIZATION VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS - 95.4%
AEROSPACE - (7.6%)
Whittaker Corporation (1)............................................................. 83,000 $ 1,649,625
Wyman Gordon Company (1).............................................................. 154,800 1,973,700
-----------
3,623,325
APPAREL & TEXTILES - (2.0%)
Fieldcrest Cannon, Incorporated (1)................................................... 50,000 962,500
-----------
BANKS - (6.4%)
Great Financial Corporation........................................................... 22,500 461,250
Hibernia Corporation.................................................................. 115,000 1,135,625
Roosevelt Financial Group, Incorporated............................................... 29,000 467,625
Union Planters Corporation............................................................ 33,000 1,010,625
-----------
3,075,125
BUSINESS SERVICES - (7.8%)
Banyan Systems, Incorporated (1)...................................................... 126,000 984,375
Interim Services, Incorporated (1).................................................... 45,800 1,362,550
Jacobs Engineering Group, Incorporated (1)............................................ 64,000 1,400,000
-----------
3,746,925
CHEMICALS - (3.0%)
Om Group Incorporated................................................................. 48,900 1,418,100
-----------
COMPUTERS & BUSINESS EQUIPMENT - (7.6%)
Data General Corporation (1).......................................................... 150,000 1,725,000
Stratus Computer, Incorporated (1).................................................... 62,000 1,929,750
-----------
3,654,750
</TABLE>
See notes to financial statements.
21
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SMALL CAPITALIZATION VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS
ELECTRONICS - (9.4%)
Augat, Incorporated................................................................... 75,000 $ 1,181,250
Dynatech Corporation (1).............................................................. 80,000 1,200,000
LTX Corporation (1)................................................................... 172,000 2,128,500
-----------
4,509,750
FOOD & BEVERAGES - (5.6%)
ACX Technologies, Incorporated (1).................................................... 68,000 1,054,000
Universal Foods Corporation........................................................... 47,000 1,609,750
-----------
2,663,750
GAS EXPLORATION - (5.9%)
Parker & Parsley Petroleum Company.................................................... 78,000 1,443,000
Seagull Energy Corporation (1)........................................................ 82,000 1,404,250
-----------
2,847,250
HOTELS & RESTAURANTS - (3.4%)
Marcus Corporation.................................................................... 47,500 1,644,687
-----------
HOUSEHOLD APPLIANCES & HOME FURNISHINGS - (3.2%)
First Alert, Incorporated (1)......................................................... 98,000 1,519,000
-----------
INDUSTRIAL MACHINERY - (8.4%)
Gerber Scientific, Incorporated....................................................... 88,000 1,485,000
Measurex Corporation.................................................................. 43,000 1,322,250
Watts Industries, Incorporated........................................................ 60,000 1,237,500
-----------
4,044,750
</TABLE>
See notes to financial statements.
22
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SMALL CAPITALIZATION VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Value
and Title of Issue Shares -
- ------------------------------------------------------------------------------------------ -----------
<S> <C> <C>
COMMON STOCKS
INSURANCE - (4.2%)
Protective Life Corporation........................................................... 54,000 $ 1,539,000
Western National Corporation.......................................................... 35,000 481,250
-----------
2,020,250
MEDICAL PRODUCTS - (4.2%)
Allied Healthcare Products, Incorporated.............................................. 28,900 549,100
Gelman Sciences, Incorporated (1)..................................................... 68,000 1,453,500
-----------
2,002,600
OFFICE FURNISHINGS & SUPPLIES - (2.5%)
New England Business Service, Incorporated............................................ 62,900 1,210,825
-----------
PETROLEUM SERVICES - (3.1%)
Input/Output, Incorporated (1)........................................................ 39,000 1,457,625
-----------
PUBLISHING - (3.3%)
Interleaf, Incorporated (1)........................................................... 180,000 1,594,688
-----------
RETAIL TRADE - (3.1%)
TJX Companies, Incorporated........................................................... 110,900 1,497,150
-----------
SOFTWARE - (2.2%)
Keane, Incorporated (1)............................................................... 38,200 1,031,400
-----------
</TABLE>
See notes to financial statements.
23
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SMALL CAPITALIZATION VALUE FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
COMMON STOCKS
TRANSPORTATION - (2.5%)
Wisconsin Central Transport Corporation (1)........................................... 20,000 $ 1,205,000
-----------
TOTAL COMMON STOCKS - (COST $40,868,358) 45,729,450
-----------
</TABLE>
<TABLE>
<CAPTION>
Interest Repurchase Repurchase
Rate Date Price
---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT - 5.2%
REPURCHASE AGREEMENT - (5.2%)
State Street Bank and Trust Company........... 5.250% 11/01/1995 $2,470,360 2,470,000
-----------
(Dated 10/31/95, collateralized by a
$2,375,000 United States Treasury Note,
7.125%, 2/29/00)
TOTAL SHORT TERM INVESTMENT - (COST $2,470,000) 2,470,000
-----------
TOTAL INVESTMENTS - (COST $43,338,358) 100.6 % 48,199,450
LIABILITIES IN EXCESS OF OTHER ASSETS (0.6 )% (270,496)
------ -----------
NET ASSETS 100.0 % $47,928,954
------ -----------
------ -----------
</TABLE>
(1) Non-income producing security.
See notes to financial statements.
24
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM HIGH YIELD INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Name of Issuer
and Title of Issue Shares Value
- ------------------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
WARRANTS - 0.0%
AEROSPACE - (0.0%)
Sabreliner Corporation................................................................ 115 $ 1,150
-----------
AIR TRANSPORT - (0.0%)
CHC Helicopter Corporation............................................................ 800 1,000
-----------
CONGLOMERATES - (0.0%)
Chatwins Group, Incorporated.......................................................... 300 300
-----------
GAMING - (0.0%)
Hemmeter Enterprises, Incorporated.................................................... 9,490 949
-----------
STEEL - (0.0%)
Gulf States Steel Incorporated Alabama (1)............................................ 325 1,625
-----------
TOTAL WARRANTS - (COST $32,399) 5,024
-----------
</TABLE>
<TABLE>
<CAPTION>
Interest Maturity Principal
Rate Date Amount
---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
BOND UNIT - 1.9%
DIRECT BROADCAST SATELLITE TV - (1.9%)
Echostar Communications Corporation (2)....... 12.875% 06/01/2004 $620,000 393,700
-----------
TOTAL BOND UNIT - (COST $355,729) 393,700
-----------
</TABLE>
See notes to financial statements.
25
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM HIGH YIELD INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- -------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 90.0%
AEROSPACE - (1.9%)
Sabreliner Corporation........................ 12.500% 04/15/2003 $425,000 $ 397,375
-----------
AIR TRANSPORT - (10.9%)
CHC Helicopter Corporation.................... 11.500% 07/15/2002 775,000 685,875
Northwest Airlines Trust...................... 13.875% 06/21/2008 925,000 1,063,750
United Air Lines, Incorporated................ 9.000% 12/15/2003 450,000 475,047
-----------
2,224,672
APPAREL & TEXTILES - (3.1%)
Guess, Incorporated........................... 9.500% 08/15/2003 625,000 625,000
-----------
BANKS - (0.2%)
California Federal Bank Los Angeles........... 10.000% 01/03/2003 45,000 47,250
-----------
BUILDING PRODUCTS - (3.0%)
Schuller International Group, Incorporated.... 10.875% 12/15/2004 550,000 613,250
-----------
CABLE TELEVISION - (11.2%)
CAI Wireless Systems, Incorporated............ 12.250% 09/15/2002 675,000 718,875
Heartland Wireless Commerce, Incorporated
(1)......................................... 13.000% 04/15/2003 725,000 808,375
Videotron Group Limited....................... 10.625% 02/15/2005 735,000 777,262
-----------
2,304,512
CHEMICALS - (6.0%)
Indspec Chemical Corporation (2).............. 11.500% 12/01/2003 975,000 689,813
TransResources, Incorporated.................. 11.875% 07/01/2002 575,000 546,250
-----------
1,236,063
</TABLE>
See notes to financial statements.
26
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM HIGH YIELD INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- -------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
COMPUTERS & BUSINESS EQUIPMENT - (5.4%)
Dell Computer Corporation..................... 11.000% 08/15/2000 $550,000 $ 610,500
Genicom Corporation........................... 12.500% 02/15/1997 495,000 499,950
-----------
1,110,450
CONGLOMERATES - (2.3%)
Chatwins Group, Incorporated.................. 13.000% 05/01/2003 550,000 459,250
-----------
GAMING - (4.4%)
Pioneer Finance Corporation................... 13.500% 12/01/1998 250,000 202,500
Showboat, Incorporated........................ 9.250% 05/01/2008 700,000 690,375
-----------
892,875
GAS EXPLORATION - (3.8%)
TransTexas Gas Corporation.................... 11.500% 06/15/2002 750,000 785,625
-----------
HOMEBUILDERS - (1.3%)
Forecast Group................................ 11.375% 12/15/2000 475,000 270,750
-----------
HOTELS & RESTAURANTS - (3.6%)
Host Marriot Travel Plazas, Incorporated (1).. 9.500% 05/15/2005 750,000 736,875
-----------
LIFE INSURANCE - (1.8%)
Presidential Life Corporation................. 9.500% 12/15/2000 365,000 375,950
-----------
MEDICAL PRODUCTS - (3.6%)
Abbey Healthcare Group, Incorporated.......... 9.500% 11/01/2002 700,000 733,250
-----------
MEDICAL TECHNOLOGY - (3.0%)
Wright Medical Technology, Incorporated....... 10.750% 07/01/2000 600,000 615,000
-----------
</TABLE>
See notes to financial statements.
27
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM HIGH YIELD INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- -------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
METALS - (3.8%)
Carbide/Graphite Group, Incorporated.......... 11.500% 09/01/2003 $725,000 $ 777,562
-----------
PAPER - (4.3%)
Malette, Incorporated......................... 12.250% 07/15/2004 650,000 731,250
Repap New Brunswick, Incorporated............. 9.875% 07/15/2000 150,000 153,750
-----------
885,000
PUBLISHING - (2.9%)
K-III Communications Corporation.............. 10.625% 05/01/2002 545,000 584,513
-----------
STEEL - (3.0%)
Gulf States Steel Incorporated Alabama........ 13.500% 04/15/2003 325,000 294,125
Sheffield Steel Corporation................... 12.000% 11/01/2001 345,000 310,500
-----------
604,625
TELECOMMUNICATIONS - (7.5%)
Mobile Telecommunication Tech Corp............ 13.500% 12/15/2002 775,000 875,750
Paging Network, Incorporated.................. 8.875% 02/01/2006 650,000 651,625
-----------
1,527,375
</TABLE>
See notes to financial statements.
28
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM HIGH YIELD INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- -------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
TRANSPORTATION - (3.0%)
Sea Containers Limited Series A............... 12.500% 12/01/2004 $150,000 $ 162,750
Sea Containers Limited Series B............... 12.500% 12/01/2004 425,000 457,937
-----------
620,687
-----------
TOTAL CORPORATE BONDS - (COST $17,927,427) 18,427,909
-----------
<CAPTION>
Repurchase Repurchase
Date Amount
----------- ----------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT - 2.5%
REPURCHASE AGREEMENT - (2.5%)
State Street Bank and Trust Company........... 5.250% 11/01/1995 $516,075 516,000
-----------
(Dated 10/31/95, collateralized by a $500,000
United States Treasury Note, 7.125%, 2/29/00)
TOTAL SHORT TERM INVESTMENT - (COST $516,000) 516,000
-----------
TOTAL INVESTMENTS - (COST $18,831,555) 94.4 % 19,342,633
OTHER ASSETS LESS LIABILITIES 5.6 % 1,146,312
----- -----------
NET ASSETS 100.0% $20,488,945
----- -----------
----- -----------
</TABLE>
(1) Pursuant to Rule 144A of Securities Act of 1933, these securities may be
resold in transactions exempt from registration, normally to qualified
institutional buyers. At October 31, 1995, these securities aggregated
$1,546,875 or 7.5% of net assets of the Fund.
(2) For zero coupon bonds, coupon amount represents the yield to maturity.
See notes to financial statements.
29
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM INVESTMENT GRADE INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ---------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY SECURITIES - 41.7%
COLLATERALIZED MORTGAGE OBLIGATION - (1.0%)
Federal Home Loan Mortgage Corporation.... 6.000% 05/15/2008 $ 250,000 $ 244,450
-----------
FEDERALLY CHARTERED - (7.9%)
Federal National Mortgage Association..... 6.320% 12/23/2003 500,000 494,945
Federal National Mortgage Association..... 6.360% 08/16/2000 330,000 334,709
Federal National Mortgage Association..... 6.400% 09/27/2005 725,000 729,161
Federal National Mortgage Association..... 6.480% 02/18/2004 325,000 319,248
-----------
1,878,063
U.S. GOVERNMENT SECURITIES - (32.8%)
United States Treasury Notes.............. 6.125% 05/15/1998 1,990,000 2,011,054
United States Treasury Notes.............. 6.125% 07/31/2000 400,000 405,120
United States Treasury Notes.............. 6.250% 05/31/2000 415,000 422,395
United States Treasury Notes.............. 6.500% 05/15/2005 500,000 517,575
United States Treasury Notes.............. 7.250% 08/15/2004 1,250,000 1,353,588
United States Treasury Notes.............. 7.375% 11/15/1997 900,000 929,817
United States Treasury Notes.............. 7.500% 10/31/1999 950,000 1,007,618
United States Treasury Notes.............. 8.250% 07/15/1998 330,000 350,948
United States Treasury Bonds.............. 7.125% 02/15/2023 700,000 763,063
-----------
7,761,178
-----------
TOTAL GOVERNMENT AND AGENCY SECURITIES - (COST $9,443,176) 9,883,691
-----------
</TABLE>
See notes to financial statements.
30
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM INVESTMENT GRADE INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ---------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS - 49.2%
FINANCE & BANKING - (24.7%)
Associates Corporation North America...... 6.400% 10/20/2002 $350,000 $ 349,986
Chase Manhattan Corporation............... 6.500% 01/15/2009 400,000 379,600
Chemical New York Corporation............. 9.750% 06/15/1999 525,000 585,207
Chrysler Financial Corporation............ 7.310% 03/24/1998 400,000 409,692
Citicorp.................................. 7.125% 09/01/2005 500,000 514,655
Dean Witter Discover & Company............ 6.875% 03/01/2003 500,000 508,400
Ford Motor Credit Company................. 7.750% 03/15/2005 635,000 678,021
Ford Motor Credit Company................. 9.250% 06/15/1998 200,000 215,000
General Electric Capital Corporation...... 7.875% 12/01/2006 500,000 555,325
General Motors Acceptance Corporation..... 6.750% 07/18/2003 300,000 301,386
General Motors Acceptance Corporation..... 6.750% 10/06/2003 250,000 250,483
Household Finance Corporation............. 8.000% 08/01/2004 400,000 436,136
NCNB Corporation.......................... 10.200% 07/15/2015 100,000 128,774
Security Pacific Corporation.............. 9.750% 05/15/1999 490,000 541,891
-----------
5,854,556
INDUSTRIALS - (9.4%)
American General Corporation.............. 7.700% 10/15/1999 235,000 246,668
Eli Lilly & Company....................... 8.125% 12/01/2001 225,000 247,714
Nabisco Incorporated...................... 7.050% 07/15/2007 500,000 500,715
Pulte Corporation......................... 7.000% 12/15/2003 665,000 631,643
Reebok International Limited.............. 6.750% 05/15/2000 200,000 203,572
Western National Corporation.............. 7.125% 02/15/2004 400,000 401,248
-----------
2,231,560
LEISURE TIME - (5.3%)
Carnival Cruise Lines, Incorporated....... 6.150% 10/01/2003 650,000 630,207
Royal Caribbean Cruises Limited........... 8.250% 04/01/2005 575,000 616,918
-----------
1,247,125
</TABLE>
See notes to financial statements.
31
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM INVESTMENT GRADE INCOME FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ---------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
CORPORATE BONDS
OIL - (1.2%)
Chevron Corporation....................... 8.110% 12/01/2004 $ 265,000 $ 294,272
-----------
RETAIL STORES - (4.0%)
Penney J C Incorporated................... 6.500% 06/15/2002 600,000 603,138
Sears Roebuck & Company................... 9.250% 04/15/1998 325,000 348,104
-----------
951,242
TRANSPORTATION - (4.6%)
Federal Express Corporation............... 9.875% 04/01/2002 475,000 559,930
Southwest Airlines Company................ 7.875% 09/01/2007 300,000 320,085
Southwest Airlines Company................ 9.250% 02/15/1998 200,000 212,026
-----------
1,092,041
-----------
TOTAL CORPORATE BONDS - (COST $11,115,099) 11,670,796
-----------
<CAPTION>
Repurchase Repurchase
Date Amount
----------- ----------
<S> <C> <C> <C> <C> <C>
SHORT TERM INVESTMENT - 9.3%
REPURCHASE AGREEMENT - (9.3%)
State Street Bank and Trust Company....... 5.250% 11/01/1995 $2,200,321 2,200,000
-----------
(Dated 10/31/95, collateralized by a
$2,115,000 United States Treasury Note,
7.125%, 2/29/00)
TOTAL SHORT TERM INVESTMENT - (COST $2,200,000) 2,200,000
-----------
TOTAL INVESTMENTS - (COST $22,758,275) 100.2% 23,754,487
LIABILITIES IN EXCESS OF OTHER ASSETS (0.2)% (50,524)
----- -----------
NET ASSETS 100.0% $23,703,963
----- -----------
----- -----------
</TABLE>
See notes to financial statements.
32
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SHORT-TERM INVESTMENT FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ------------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
ASSET BACKED SECURITY - 1.3%
AUTO LOAN - (1.3%)
General Motors Acceptance Corporation Grantor
Trust............................................ 4.150% 03/15/1998 $ 450,649 $ 445,250
-----------
TOTAL ASSET BACKED SECURITY - (COST $449,873) 445,250
-----------
GOVERNMENT AND AGENCY SECURITIES - 57.6%
COLLATERALIZED MORTGAGE OBLIGATIONS (1) - (1.0%)
Federal National Mortgage Association REMIC (2).... 5.000% 03/25/2023 136,987 135,188
Federal National Mortgage Association REMIC (2).... 5.750% 07/25/2009 209,448 205,224
-----------
340,412
FEDERAL AGENCIES - (21.8%)
Federal Home Loan Bank Consolidated Discount
Notes............................................ 5.470% 04/11/1996 1,500,000 1,464,158
Federal Home Loan Bank Consolidated Discount
Notes............................................ 5.470% 04/18/1996 1,500,000 1,462,609
Federal Home Loan Bank Consolidated Discount
Notes............................................ 5.500% 12/26/1995 1,500,000 1,487,396
Federal Home Loan Bank Consolidated Discount
Notes............................................ 5.500% 01/25/1996 1,500,000 1,481,087
Federal Home Loan Bank Consolidated Discount
Notes............................................ 5.550% 01/11/1996 1,500,000 1,484,202
-----------
7,379,452
</TABLE>
See notes to financial statements.
33
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SHORT-TERM INVESTMENT FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ------------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
GOVERNMENT AND AGENCY SECURITIES
FEDERALLY CHARTERED - (34.8%)
Federal National Mortgage Association Discount
Notes............................................ 5.450% 04/29/1996 $1,500,000 $ 1,460,700
Federal National Mortgage Association Discount
Notes............................................ 5.460% 03/13/1996 1,500,000 1,470,574
Federal Home Loan Mortgage Discount Notes.......... 5.480% 02/05/1996 1,500,000 1,478,760
Federal National Mortgage Association Discount
Notes............................................ 5.480% 03/05/1996 1,500,000 1,472,344
Federal National Mortgage Association Discount
Notes............................................ 5.500% 02/20/1996 1,500,000 1,475,441
Federal National Mortgage Association Discount
Notes............................................ 5.540% 01/18/1996 1,500,000 1,482,645
Federal National Mortgage Association Discount
Notes............................................ 5.550% 12/15/1995 1,500,000 1,489,825
Federal National Mortgage Association Discount
Notes............................................ 5.550% 12/29/1995 1,500,000 1,486,587
-----------
11,816,876
-----------
TOTAL GOVERNMENT AND AGENCY SECURITIES - (COST $19,531,905) 19,536,740
-----------
CORPORATE NOTES - 8.8%
FINANCE & BANKING - (4.4%)
International Bank For Reconstruction & Development
Discount Note.................................... 5.570% 12/04/1995 1,500,000 1,492,341
-----------
INDUSTRIALS - (4.4%)
Smithkline Beecham, Plc............................ 5.250% 01/26/1996 1,500,000 1,498,395
-----------
TOTAL CORPORATE NOTES - (COST $2,975,796) 2,990,736
-----------
</TABLE>
See notes to financial statements.
34
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
WERTHEIM SHORT-TERM INVESTMENT FUND
SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Name of Issuer Interest Maturity Principal
and Title of Issue Rate Date Amount Value
- ------------------------------------------------------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER - 30.6%
FINANCIAL SERVICES - (30.6%)
American Express Company........................... 5.850% 11/20/1995 $1,500,000 $ 1,495,369
CIT Group Holdings, Incorporated................... 5.500% 03/11/1996 1,500,000 1,469,324
Ford Motor Credit Company.......................... 5.620% 02/23/1996 1,500,000 1,473,305
General Electric Capital Corporation............... 5.580% 04/01/1996 1,500,000 1,464,407
General Motors Acceptance Corporation.............. 5.810% 12/08/1995 1,500,000 1,491,043
John Deere Capital Corporation..................... 5.700% 11/07/1995 1,500,000 1,498,575
Prudential Funding Corporation..................... 5.700% 11/14/1995 1,500,000 1,496,912
-----------
TOTAL COMMERCIAL PAPER - (COST $10,389,844) 10,388,935
-----------
<CAPTION>
Repurchase Repurchase
Date Amount
----------- ----------
<S> <C> <C> <C> <C> <C>
OTHER SHORT TERM INVESTMENT - 1.7%
REPURCHASE AGREEMENT - (1.7%)
State Street Bank and Trust Company................ 5.250% 11/01/1995 $ 581,085 581,000
-----------
(Dated 10/31/95, collateralized by a
$560,000 United States Treasury Note,
7.125%, 2/29/00)
TOTAL OTHER SHORT TERM INVESTMENT - (COST $581,000) 581,000
-----------
TOTAL INVESTMENTS - (COST $33,928,418) 100.0% 33,942,661
LIABILITIES IN EXCESS OF OTHER ASSETS 0.0% (6,783)
----- -----------
NET ASSETS 100.0% $33,935,878
----- -----------
----- -----------
</TABLE>
(1) For collateralized mortgage obligations, the period of time that the Fund
expects to receive all scheduled principal payments may be shorter than the
stated maturity of the obligation.
(2) For zero coupon bonds, coupon amount represents the yield to maturity
See notes to financial statements.
35
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<CAPTION>
Small
Equity Capitalization High Yield Investment Short-Term
Value Value Income Grade Income Investment
Fund Fund Fund Fund Fund
------------ ---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments in securities, at value
- Note 2.......................... $ 37,232,475 $ 48,199,450 $ 19,342,633 $23,754,487 $ 33,942,661
Cash................................ 237 728 989 566 780
Dividends receivable................ 31,730 12,784 0 0 0
Interest receivable................. 353 360 638,439 373,475 21,697
Receivable for securities sold...... 1,411,023 167,119 681,200 322,474 0
Receivable for trust shares sold.... 21,812 63,332 3,120 66 1,014
Deferred organizational costs....... 35,080 35,080 35,080 35,420 32,986
Prepaid expenses.................... 10,119 10,944 8,943 9,086 9,695
Due from Schroder Wertheim
Investment Services, Inc. - Note
3................................. 0 0 9,319 6,530 1,611
------------ ---------------- ------------ ------------ ------------
TOTAL ASSETS...................... 38,742,829 48,489,797 20,719,723 24,502,104 34,010,444
LIABILITIES
Payable for securities purchased.... 563,066 294,009 158,153 732,121 0
Payable for trust shares redeemed... 5,467 163,440 3,879 2,926 11,515
Advisory fee payable - Note 3....... 27,048 40,733 16,312 11,087 10,028
Accounts payable and accrued
expenses.......................... 58,898 62,661 48,487 47,407 52,933
Dividends payable................... 0 0 3,947 4,600 90
------------ ---------------- ------------ ------------ ------------
TOTAL LIABILITIES................. 654,479 560,843 230,778 798,141 74,566
------------ ---------------- ------------ ------------ ------------
NET ASSETS........................ $ 38,088,350 $ 47,928,954 $ 20,488,945 $23,703,963 $ 33,935,878
------------ ---------------- ------------ ------------ ------------
------------ ---------------- ------------ ------------ ------------
NET ASSETS
CAPITAL PAID-IN..................... $ 32,165,352 $ 43,044,976 $ 21,560,738 $22,413,024 $ 33,959,075
UNDISTRIBUTED (OVERDISTRIBUTED) NET
INVESTMENT INCOME................. 339,842 0 (429) (4,600) 89,297
ACCUMULATED NET REALIZED GAIN (LOSS)
ON INVESTMENTS.................... 2,881,907 22,886 (1,582,442) 299,327 (126,737)
NET UNREALIZED APPRECIATION OF
INVESTMENTS....................... 2,701,249 4,861,092 511,078 996,212 14,243
------------ ---------------- ------------ ------------ ------------
NET ASSETS........................ $ 38,088,350 $ 47,928,954 $ 20,488,945 $23,703,963 $ 33,935,878
------------ ---------------- ------------ ------------ ------------
------------ ---------------- ------------ ------------ ------------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE........ $ 11.12 $ 10.77 $ 8.72 $ 9.93 $ 9.88
TOTAL SHARES OUTSTANDING AT END OF
YEAR.............................. 3,425,424 4,448,479 2,349,693 2,388,152 3,433,768
COST OF SECURITIES.................. $ 34,531,226 $ 43,338,358 $ 18,831,555 $22,758,275 $ 33,928,418
</TABLE>
See notes to financial statements.
36
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<CAPTION>
Small
Equity Capitalization High Yield Investment Short-Term
Value Value Income Grade Income Investment
Fund Fund Fund Fund Fund
------------ ---------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividend income........................ $ 771,894 $ 283,467 $ 14,342 $ 0 $ 0
Interest income........................ 117,172 183,054 2,157,981 1,428,953 1,928,255
------------ ---------------- ------------ ------------ ------------
TOTAL INCOME......................... 889,066 466,521 2,172,323 1,428,953 1,928,255
EXPENSES
Investment advisory fees - Note 3...... 252,615 349,672 176,520 98,478 131,121
Administrative fees.................... 55,376 60,374 33,721 33,690 55,267
Custodian fees......................... 39,309 47,901 41,767 37,369 35,744
Audit fees............................. 21,000 21,000 21,000 21,000 19,000
Legal fees............................. 21,049 21,049 21,050 21,049 20,000
Printing expenses...................... 8,000 8,000 8,000 8,000 8,000
Trustees fees.......................... 7,600 7,600 7,600 7,600 7,600
Transfer agent fees.................... 47,086 47,393 43,516 40,419 43,036
Organizational expenses................ 9,647 9,647 9,647 9,647 9,647
Registration fees...................... 18,287 17,984 16,530 15,348 21,352
Insurance.............................. 1,189 1,189 1,189 1,189 1,189
Other.................................. 1,812 2,376 2,313 2,292 2,502
Expenses borne by Schroder Wertheim
Investment Services, Inc. - Note 3... (16,285) (22,164) (93,036) (88,653) (42,642)
------------ ---------------- ------------ ------------ ------------
TOTAL EXPENSES....................... 466,685 572,021 289,817 207,428 311,816
------------ ---------------- ------------ ------------ ------------
NET INVESTMENT INCOME/(LOSS)......... 422,381 (105,500) 1,882,506 1,221,525 1,616,439
------------ ---------------- ------------ ------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
NET REALIZED GAIN (LOSS) ON
INVESTMENTS.......................... 2,987,577 226,635 (1,236,881) 396,597 (76,414)
CHANGE IN NET UNREALIZED APPRECIATION
OF INVESTMENTS....................... 2,957,170 4,156,231 1,163,750 1,226,836 104,005
------------ ---------------- ------------ ------------ ------------
NET GAIN (LOSS)...................... 5,944,747 4,382,866 (73,131) 1,623,433 27,591
------------ ---------------- ------------ ------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM
OPERATIONS $ 6,367,128 $ 4,277,366 $ 1,809,375 $ 2,844,958 $ 1,644,030
------------ ---------------- ------------ ------------ ------------
------------ ---------------- ------------ ------------ ------------
</TABLE>
See notes to financial statements.
37
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
SMALL CAPITALIZATION
EQUITY VALUE FUND VALUE FUND
-------------------------- --------------------------
YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED
10/31/95 10/31/94(1) 10/31/95 10/31/94(1)
----------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS
From operations:
Net investment income/(loss)........ $ 422,381 $ 132,970 $ (105,500) $ 10,391
Net realized gain (loss) on
investments....................... 2,987,577 (105,670) 226,635 (185,520)
Change in net unrealized
appreciation (depreciation) of
investments....................... 2,957,170 (255,921) 4,156,231 704,861
----------- ------------ ----------- ------------
Net increase (decrease) in net
assets resulting from
operations........................ 6,367,128 (228,621) 4,277,366 529,732
Net equalization credits - Note 2..... 0 0 0 0
Dividends and distributions to
Shareholders:
From net investment income.......... (217,293) 0 (11,130) 0
In excess of net investment
income............................ 0 0 0 0
Tax return of capital............... 0 0 0 0
Net increase from trust share
transactions........................ 10,629,016 21,518,120 22,469,797 20,643,189
----------- ------------ ----------- ------------
TOTAL INCREASE...................... 16,778,851 21,289,499 26,736,033 21,172,921
Net Assets
Beginning of period................. 21,309,499 20,000 21,192,921 20,000
----------- ------------ ----------- ------------
End of period (a)................... $38,088,350 $ 21,309,499 $47,928,954 $ 21,192,921
----------- ------------ ----------- ------------
----------- ------------ ----------- ------------
(a) Including undistributed
(overdistributed) net investment
income................................ $ 339,842 $ 132,970 $ 0 $ 10,391
</TABLE>
(1) For the period February 16, 1994 (commencement of investment operations)
through October 31, 1994.
(2) For the period February 22, 1994 (commencement of investment operations)
through October 31, 1994.
(3) For the period January 11, 1994 (commencement of investment operations)
through October 31, 1994.
See notes to financial statements.
38
WSIS SERIES TRUST
<PAGE>
<TABLE>
<CAPTION>
HIGH YIELD INVESTMENT GRADE SHORT-TERM
INCOME FUND INCOME FUND INVESTMENT FUND
-------------------------- -------------------------- --------------------------
YEAR PERIOD YEAR PERIOD YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/95 10/31/94(1) 10/31/95 10/31/94(2) 10/31/95 10/31/94(3)
----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS
From operations:
Net investment income/(loss)........ $ 1,882,506 $ 469,541 $ 1,221,525 $ 226,910 $ 1,616,439 $ 522,157
Net realized gain (loss) on
investments....................... (1,236,881) (266,898) 396,597 (88,586) (76,414) (4,524)
Change in net unrealized
appreciation (depreciation) of
investments....................... 1,163,750 (652,672) 1,226,836 (230,624) 104,005 (89,762)
----------- ------------ ----------- ------------ ----------- ------------
Net increase (decrease) in net
assets resulting from
operations........................ 1,809,375 (450,029) 2,844,958 (92,300) 1,644,030 427,871
Net equalization credits - Note 2..... 7,770 85,325 17,649 24,789 0 0
Dividends and distributions to
Shareholders:
From net investment income.......... (1,875,254) (469,541) (1,238,821) (226,910) (1,617,411) (521,908)
In excess of net investment
income............................ 0 (15,022) 0 (353) 0 0
Tax return of capital............... 0 (70,263) 0 (24,436) 0 0
Net increase from trust share
transactions........................ 4,591,461 16,855,123 9,174,957 13,204,430 3,137,885 30,845,411
----------- ------------ ----------- ------------ ----------- ------------
TOTAL INCREASE...................... 4,533,352 15,935,593 10,798,743 12,885,220 3,164,504 30,751,374
Net Assets
Beginning of period................. 15,955,593 20,000 12,905,220 20,000 30,771,374 20,000
----------- ------------ ----------- ------------ ----------- ------------
End of period (a)................... $20,488,945 $ 15,955,593 $23,703,963 $ 12,905,220 $33,935,878 $ 30,771,374
----------- ------------ ----------- ------------ ----------- ------------
----------- ------------ ----------- ------------ ----------- ------------
(a) Including undistributed
(overdistributed) net investment
income................................ $ (429) $ (15,022) $ (4,600) $ (353) $ 89,297 $ 249
</TABLE>
39
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
<TABLE>
<CAPTION>
SMALL CAPITALIZATION
EQUITY VALUE FUND VALUE FUND
--------------------------- ---------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994(1) 1995 1994(1)
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD................... $ 9.45 $ 10.00 $ 9.77 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income/(Loss)
(4)....................... 0.11 0.06 (0.03) 0.00
Net Realized and Unrealized
Gain (Loss) on
Investments............... 1.63 (0.61) 1.03 (0.23)
------------ ------------ ------------ ------------
TOTAL FROM INVESTMENT
OPERATIONS................ 1.74 (0.55) 1.00 (0.23)
------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
From Net Investment
Income.................... (0.07) 0.00 0.00 0.00
In Excess of Net Investment
Income.................... 0.00 0.00 0.00 0.00
Tax Return of Capital....... 0.00 0.00 0.00 0.00
------------ ------------ ------------ ------------
Total Distributions......... (0.07) 0.00 0.00 0.00
------------ ------------ ------------ ------------
NET ASSET VALUE AT END OF
PERIOD...................... $ 11.12 $ 9.45 $ 10.77 $ 9.77
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
TOTAL RETURN.................. 18.63% (5.50)%(5) 10.27% (2.30)%(5)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period
(000's)................... $ 38,088 $ 21,309 $ 47,929 $ 21,193
Ratio of Operating Expenses
to Average Net Assets
(4)....................... 1.40% 1.30%(6) 1.56% 1.45%(6)
Ratio of Net Investment
Income to Average Net
Assets.................... 1.27% 1.37%(6) (0.29)% 0.17%(6)
Portfolio Turnover Rate..... 83.15% 102.56% 45.74% 18.53%
</TABLE>
(1) For the period February 16, 1994 (commencement of investment operations)
through October 31, 1994.
(2) For the period February 22, 1994 (commencement of investment operations)
through October 31, 1994.
(3) For the period January 11, 1994 (commencement of investment operations)
through October 31, 1994.
Notes to Financial Highlights continued on page 41.
See notes to financial statements.
40
WSIS SERIES TRUST
<PAGE>
<TABLE>
<CAPTION>
HIGH YIELD INVESTMENT GRADE SHORT-TERM
INCOME FUND INCOME FUND INVESTMENT FUND
--------------------------- --------------------------- ---------------------------
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994(1) 1995 1994(2) 1995 1994(3)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE AT BEGINNING
OF PERIOD................... $ 8.79 $ 10.00 $ 9.14 $ 10.00 $ 9.88 $ 10.00
INCOME FROM INVESTMENT
OPERATIONS:
Net Investment Income/(Loss)
(4)....................... 0.84 0.48 0.59 0.34 0.49 0.30
Net Realized and Unrealized
Gain (Loss) on
Investments............... (0.07) (1.14) 0.79 (0.83) 0.00 (0.12)
------------ ------------ ------------ ------------ ------------ ------------
TOTAL FROM INVESTMENT
OPERATIONS................ 0.77 (0.66) 1.38 (0.49) 0.49 0.18
------------ ------------ ------------ ------------ ------------ ------------
LESS DISTRIBUTIONS:
From Net Investment
Income.................... (0.84) (0.47) (0.59) (0.34) (0.49) (0.30)
In Excess of Net Investment
Income.................... 0.00 (0.01) 0.00 0.00 0.00 0.00
Tax Return of Capital....... 0.00 (0.07) 0.00 (0.03) 0.00 0.00
------------ ------------ ------------ ------------ ------------ ------------
Total Distributions......... (0.84) (0.55) (0.59) (0.37) (0.49) (0.30)
------------ ------------ ------------ ------------ ------------ ------------
NET ASSET VALUE AT END OF
PERIOD...................... $ 8.72 $ 8.79 $ 9.93 $ 9.14 $ 9.88 $ 9.88
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
TOTAL RETURN.................. 9.16% (6.60)%(5) 15.62% (4.90)%(5) 5.02% 1.83%(5)
RATIOS & SUPPLEMENTAL DATA
Net Assets at End of Period
(000's)................... $ 20,489 $ 15,956 $ 23,704 $ 12,905 $ 33,936 $ 30,771
Ratio of Operating Expenses
to Average Net Assets
(4)....................... 1.48% 1.30%(6) 1.06% 0.87%(6) 0.95% 0.78%(6)
Ratio of Net Investment
Income to Average Net
Assets.................... 9.67% 9.67%(6) 6.35% 6.39%(6) 4.91% 4.48%(6)
Portfolio Turnover Rate..... 149.58% 59.30% 113.50% 155.63% 27.86% 71.38%
</TABLE>
(4) Net Investment Income is after reimbursement of certain expenses by Schroder
Wertheim Investment Services, Inc. (See Note 3
to the Trust's financial statements.) Had the Investment Adviser not
undertaken to pay or reimburse expenses related to the Funds, the Net
Investment Income per share and Ratio of Operating Expenses to Average Net
Assets would have been as follows: Wertheim Equity Value Fund: 1995 - $0.11
and 1.45%; 1994 - $0.02 and 2.17%; Wertheim Small Capitalization Value Fund:
1995 - ($0.03) and 1.62%; 1994 - ($0.04) and 3.15%; Wertheim High Yield
Income Fund: 1995 - $0.80 and 1.96%; 1994 - $0.44 and 3.59%, Wertheim
Investment Grade Income Fund: 1995 - $0.56 and 1.50%; 1994 - $0.21 and
3.98%; and Wertheim Short-Term Investment Fund: 1995 - $0.47 and 1.08%; 1994
- $0.24 and 1.66%, respectively.
(5) Not annualized.
(6) Annualized.
41
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
NOTE 1 -- ORGANIZATION
WSIS Series Trust (the "Trust") is a diversified open-end series management
investment company registered under the Investment Company Act of 1940, as
amended. The Trust was organized as a business trust under the laws of The
Commonwealth of Massachusetts on May 6, 1993. The Trust has an unlimited number
of authorized shares, which are divided into five separate investment portfolios
- --Wertheim Equity Value Fund, Wertheim Small Capitalization Value Fund, Wertheim
High Yield Income Fund, Wertheim Investment Grade Income Fund and Wertheim
Short-Term Investment Fund (collectively, the "Funds").
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS: Equity securities traded on a national securities
exchange are valued at their last reported sale price on the principal exchange;
or, if traded in the over-the-counter market or on a national securities
exchange for which no sales took place on the day of valuation, at the last
available bid price. Debt securities are valued on the basis of valuations
provided by a pricing service that determines valuations for normal
institutional size trading units of debt securities, or through obtaining
independent quotes from market makers. Short-term debt instruments with a
remaining maturity of 60 days or less are valued at amortized cost, which
approximates market value. Securities for which current market quotations are
not readily available are valued at fair value as determined in accordance with
procedures approved by the Trust's Board of Trustees.
REPURCHASE AGREEMENTS: Funds enter into repurchase agreements with approved
institutions and are collateralized by U.S. Government securities. The Trust's
custodian takes possession of the underlying securities, the market value of
which at the time of purchase at least equals the resale price, principal amount
plus interest, of the repurchase transaction. To the extent that any repurchase
transaction exceeds one business day, the value of the underlying securities is
marked-to-market on a daily basis to ensure the adequacy of the underlying
securities. Schroder Wertheim Investment Services, Inc. ("Schroder"), investment
adviser to the Trust, is responsible for determining that the value of the
underlying securities is at all times at least equal to the resale price. In the
event of default by the seller to repurchase the securities, a Fund could
realize a loss on the sale of the underlying securities to the extent that the
proceeds of sale, including accrued interest, is less than the resale price of
the repurchase agreement. If the seller should be involved in bankruptcy or
insolvency proceedings, realization and/or retention of the underlying
securities, or proceeds may be subject to legal proceedings.
INVESTMENT TRANSACTIONS: Investment security transactions are recorded as of
trade date. Realized gains and losses on sales of investments are determined on
the basis of identified cost.
42
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
INVESTMENT INCOME: Dividend income is recorded on the ex-dividend date. Interest
income is recorded on an accrual basis.
EXPENSES: Expenses are recorded on an accrual basis. Most of the expenses of the
Trust can be directly attributed to a specific Fund. Expenses not directly
attributed to a specific Fund are allocated among the Funds in such a manner as
deemed equitable by the Trustees.
DISTRIBUTIONS TO SHAREHOLDERS: Distributions to shareholders from net investment
income are declared and distributed at least annually for Wertheim Equity Value
Fund and Wertheim Small Capitalization Value Fund; declared and distributed
monthly for Wertheim High Yield Income Fund and Wertheim Investment Grade Income
Fund; and declared daily and distributed monthly for Wertheim Short-Term
Investment Fund. Distributions from net realized capital gains, if any, are
declared and distributed at least annually. Distributions are recorded on the
ex-dividend date.
DEFERRED ORGANIZATION COSTS: Costs and expenses of the Trust paid by Schroder
and its affiliates in connection with the organization of the Trust and the
initial public offering of its shares have been deferred by the Trust and are
being amortized on a straight-line basis from the date operations commenced over
a period that it is expected a benefit will be realized, not to exceed five
years.
Schroder has agreed with respect to each of the Funds that, if any of the
initial shares of a Fund are redeemed during such amortization period by any
holder thereof, the redemption proceeds will be reduced for any unamortized
organization expenses in the same ratio as the number of shares redeemed bears
to the number of initial shares held at the time of redemption.
EQUALIZATION: Wertheim High Yield Income Fund and Wertheim Investment Grade
Income Fund follow an accounting practice known as equalization by which a
portion of the proceeds from sales and costs of redemptions of Fund shares
equivalent, on a per share basis, to the amount of undistributed net investment
income on the date of the transaction is credited or charged to undistributed
net investment income. As a result, undistributed net investment income per
share is unaffected by sales and redemptions of the above listed Fund's shares.
FEDERAL INCOME TAXES: It is the intention of the Trust for each Fund to qualify
as a "regulated investment company" by complying with the requirements of
Subchapter M of the Internal Revenue Code of 1986, as amended. By so qualifying,
the Funds will not be subject to federal income taxes to the extent that, among
other things, they distribute substantially all
43
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
of their taxable income, including realized capital gains, for the fiscal year.
In addition, by distributing during each calendar year substantially all of
their net investment income, capital gains and certain other amounts, if any,
the Funds will not be subject to a federal excise tax.
As of October 31, 1995, realized capital loss carryforwards, for Federal income
tax purposes, available to be used to offset future realized capital gains are
as follows: Wertheim High Yield Income Fund has $1,582,442 ($247,397 expiring on
October 31, 2002 and $1,335,045 expiring on October 31, 2003); and Wertheim
Short-Term Investment Fund has $126,737 ($4,524 expiring on October 31, 2002 and
$122,213 expiring on October 31, 2003).
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for market discount,
losses deferred due to wash sales and excise tax regulations.
At October 31, 1995, the Trust reclassified the following amounts between
paid-in capital, accumulated undistributed net realized gain (loss) and
accumulated undistributed net investment income
<TABLE>
<CAPTION>
Increase/(Decrease)
Increase/(Decrease) Accumulated
Increase/(Decrease) Undistributed Net Realized
Paid-in Capital Investment Income Gain/(Loss)
------------------ ------------------ ------------------
<S> <C> <C> <C>
Wertheim Equity Value Fund......................... $ (1,045) $ 1,045 $ 0
Wertheim Small Capitalization Value Fund........... (87,271) 105,500 (18,229)
Wertheim High Yield Income Fund.................... 79,092 (429) (78,663)
Wertheim Investment Grade Income Fund.............. 13,284 (4,600) (8,684)
Wertheim Short-Term Investment Fund................ (43,498) 89,297 (45,799)
</TABLE>
These reclassifications had no impact on the net asset value of the Funds and
are designed to present each Fund's capital accounts on a tax basis.
NOTE 3 -- INVESTMENT ADVISORY FEES AND ADMINISTRATION AGREEMENT
The Trust has entered into an investment advisory agreement with Schroder. Under
the agreement, Schroder provides investment management services, and receives
for its services compensation monthly at the following annual rates based on
44
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
average daily net assets of each Fund taken separately: 0.75% for Wertheim
Equity Value Fund; 0.95% for Wertheim Small Capitalization Value Fund; 0.90% for
Wertheim High Yield Income Fund; 0.50% for Wertheim Investment Grade Income
Fund; and 0.40% for Wertheim Short-Term Investment Fund.
The Trust has also entered into an Administration Agreement with State Street
Bank and Trust Company ("State Street"). Under the Administration Agreement, the
Trust pays compensation to State Street at the following annual rates based on
the average daily net assets of each Fund taken separately: 0.08% of the first
$125 million of each Fund's average daily net assets, 0.06% of the next $125
million of each Fund's average daily net assets and 0.04% of each Fund's average
daily net assets in excess of $250 million, subject to certain minimum
requirements.
In order to limit the Funds' expenses, Schroder voluntarily agreed to reduce its
compensation and, if necessary, to pay certain expenses of each of the Funds
until March 1, 1995, with respect to each of the Funds to the extent that a
Fund's expenses, other than Schroder's compensation, brokerage, interest, taxes,
deferred organizational expenses, and extraordinary expenses exceed the
following annual rates: 0.55% of average daily net assets of Wertheim Equity
Value Fund; 0.50% of average daily net assets of Wertheim Small Capitalization
Value Fund; 0.40% of average daily net assets of Wertheim High Yield Income
Fund; 0.37% of average daily net assets of Wertheim Investment Grade Income
Fund; and 0.38% of average daily net assets of Wertheim Short-Term Investment
Fund. Schroder has voluntarily agreed to extend the limitation until October 31,
1996, at the following annual rates: 0.80% of average daily net assets of
Wertheim Equity Value Fund; 0.75% of average daily net assets of Wertheim Small
Capitalization Value Fund; 0.65% of average daily net assets of Wertheim High
Yield Income Fund; 0.62% of average daily net assets of Wertheim Investment
Grade Income Fund; and 0.63% of average daily net assets of Wertheim Short-Term
Investment Fund. The Trust pays all expenses not assumed by Schroder, including
Trustees' fees, auditing, legal, custodial, and investor servicing and
shareholder reporting expenses.
NOTE 4 -- TRANSACTIONS WITH AFFILIATES
BROKERAGE COMMISSIONS: Brokerage commissions received by affiliates of the
Trust's investment adviser, from portfolio transactions conducted with the Funds
during the year ended October 31, 1995, amounted to $7,732.
TRUSTEES' FEES: The Trust pays no compensation to Trustees who are employees of
Schroder. Trustees who are not Schroder employees receive an annual fee of
$5,000 and an additional fee of $1,500 for each Trustees' meeting attended.
45
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
NOTE 5 -- INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for each Fund, for the year ended October 31, 1995 were as
follows:
<TABLE>
<CAPTION>
Non- Non-
Government Government Government Government
Purchases Purchases Sales Sales
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Wertheim Equity Value Fund........................ $34,732,072 $ 0 $25,884,564 $ 0
Wertheim Small Capitalization Value Fund.......... 37,194,710 0 15,329,651 0
Wertheim High Yield Income Fund................... 30,970,119 0 27,234,448 0
Wertheim Investment Grade Income Fund............. 12,465,486 16,837,158 10,263,150 10,693,230
Wertheim Short-Term Investment Fund............... 2,993,280 0 3,819,462 15,072,673
</TABLE>
The identified cost for federal income tax purposes of investments owned by each
Fund and their respective gross unrealized appreciation and depreciation at
October 31, 1995 were as follows:
<TABLE>
<CAPTION>
Gross Unrealized Net Unrealized
Identified Appreciation Appreciation
Cost (Depreciation) (Depreciation)
------------ ----------------------- ---------------
<S> <C> <C> <C> <C>
Wertheim Equity Value Fund.......................... $34,577,510 $3,687,734 ($1,032,769) $ 2,654,965
Wertheim Small Capitalization Value Fund............ 43,341,246 7,097,964 (2,239,760) 4,858,204
Wertheim High Yield Income Fund..................... 18,831,566 839,683 (328,616) 511,067
Wertheim Investment Grade Income Fund............... 22,758,621 1,004,369 (8,503) 995,866
Wertheim Short-Term Investment Fund................. 33,928,418 23,835 (9,592) 14,243
</TABLE>
46
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
NOTE 6 -- SHAREHOLDERS' TRANSACTIONS
Following is a summary of shareholder transactions for each Fund:
<TABLE>
<CAPTION>
Period from February 16,
Year Ended 1994
October 31, 1995 to October 31, 1994
Shares Dollars Shares Dollars
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
WERTHEIM EQUITY VALUE FUND
Shares sold....................................... 2,234,169 $ 21,323,054 4,996,170 $ 48,195,340
Shares issued to shareholders in reinvestment..... 23,861 216,153 0 0
Shares redeemed................................... (1,087,443) (10,910,191) (2,743,333) (26,677,220)
---------- ------------ ---------- ------------
Net increase...................................... 1,170,587 $ 10,629,016 2,252,837 $ 21,518,120
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
<CAPTION>
Period from February 16,
Year Ended 1994
October 31, 1995 to October 31, 1994
Shares Dollars Shares Dollars
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
WERTHEIM SMALL CAPITALIZATION VALUE FUND
Shares sold....................................... 3,098,020 $ 30,759,624 2,308,194 $ 22,011,948
Shares issued to shareholders in reinvestment..... 1,129 10,971 0 0
Shares redeemed................................... (820,811) (8,300,798) (140,053) (1,368,759)
---------- ------------ ---------- ------------
Net increase...................................... 2,278,338 $ 22,469,797 2,168,141 $ 20,643,189
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
<CAPTION>
Period from February 16,
Year Ended 1994
October 31, 1995 to October 31, 1994
Shares Dollars Shares Dollars
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
WERTHEIM HIGH YIELD INCOME FUND
Shares sold....................................... 1,003,992 $ 8,719,371 1,909,620 $ 17,802,573
Shares issued to shareholders in reinvestment..... 201,685 1,754,861 57,625 515,036
Shares redeemed................................... (671,847) (5,875,001) (153,382) (1,377,161)
Income equalization received...................... 0 (7,770) 0 (85,325)
---------- ------------ ---------- ------------
Net increase...................................... 533,830 $ 4,591,461 1,813,863 $ 16,855,123
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
47
WSIS SERIES TRUST
<PAGE>
WSIS SERIES TRUST
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
-CONTINUED-
<TABLE>
<CAPTION>
Period from February 22,
Year Ended 1994
October 31, 1995 to October 31, 1994
Shares Dollars Shares Dollars
---------- ------------ ---------- ------------
WERTHEIM INVESTMENT GRADE INCOME FUND
<S> <C> <C> <C> <C>
Shares sold....................................... 1,636,204 $ 15,312,312 2,269,033 $ 21,290,294
Shares issued to shareholders in reinvestment..... 124,830 1,193,295 24,801 230,657
Shares redeemed................................... (785,028) (7,313,001) (883,688) (8,291,732)
Income equalization received...................... 0 (17,649) 0 (24,789)
---------- ------------ ---------- ------------
Net increase...................................... 976,006 $ 9,174,957 1,410,146 $ 13,204,430
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
<CAPTION>
Period from January 11,
Year Ended 1994
October 31, 1995 to October 31, 1994
Shares Dollars Shares Dollars
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
WERTHEIM SHORT-TERM INVESTMENT FUND
Shares sold....................................... 2,016,637 $ 19,914,676 6,613,581 $ 65,551,871
Shares issued to shareholders in reinvestment..... 162,019 1,599,931 44,254 437,876
Shares redeemed................................... (1,860,847) (18,376,722) (3,543,876) (35,144,336)
---------- ------------ ---------- ------------
Net increase...................................... 317,809 $ 3,137,885 3,113,959 $ 30,845,411
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>
NOTE 7 -- BENEFICIAL INTEREST
The following schedule shows the number of shareholders each owning 5% or more
of a Fund and the total percentage of the Fund held by such shareholders.
<TABLE>
<CAPTION>
5% or Greater Shareholders
------------------------------
Number % of Fund Held
------------- ---------------
<S> <C> <C>
Wertheim Equity Value Fund...................................................... 2 27.04%
Wertheim Small Capitalization Value Fund........................................ 2 19.80%
Wertheim High Yield Income Fund................................................. 2 22.94%
Wertheim Investment Grade Income Fund........................................... 4 54.86%
</TABLE>
48
WSIS SERIES TRUST
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and
Board of Trustees of WSIS Series Trust:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of WSIS Series Trust (a Massachusetts business
trust comprising, respectively, the Wertheim Equity Value Fund, Wertheim Small
Capitalization Value Fund, Wertheim High Yield Income Fund, Wertheim Investment
Grade Income Fund and Wertheim Short-Term Investment Fund) as of October 31,
1995 and the related statements of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for the year
then ended and the period ended October 31, 1994. These financial statements and
financial highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting the WSIS Series Trust as of October 31,
1995 the results of their operations for the year then ended, and the changes in
their net assets and the financial highlights for the year then ended and the
period ended October 31, 1994 in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
New York, New York
December 14, 1995
49
WSIS SERIES TRUST
<PAGE>
(This page has been left blank intentionally.)
50
WSIS SERIES TRUST
<PAGE>
INVESTMENT MANAGER
Schroder Wertheim Investment Services, Inc.
OFFICERS
E. William Smethurst, Jr., Chairman
Laura E. Luckyn-Malone, President
David Gibson, Vice President
Jane P. Lucas, Vice President
Mark J. Smith, Vice President
Catherine A. Mazza, Clerk
Robert Jackowitz, Treasurer
Barbara Gottlieb, Assistant Clerk
TRUSTEES
E. William Smethurst, Jr.
Peter S. Knight
Michael R. Steed
David N. Dinkins
TRANSFER AND SHAREHOLDER SERVICING AGENT
Boston Financial Data Services, Inc.
CUSTODIAN
State Street Bank and Trust Company
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
The information contained in this report is intended for the general
information of the shareholders of the Trust. This report is not authorized
for distribution to prospective investors unless preceded or accompanied by a
current Trust prospectus which contains important information concerning the
Trust.
51
WSIS SERIES TRUST
