Semi-Annual Report
and Supplement to
Prospectus dated
January 31, 1997
April 30, 1997
OLD WESTBURY GROWTH OPPORTUNITY FUND
INVESTMENT ADVISOR'S REPORT
May 1997
- --------------------------------------------------------------------------------
The Old Westbury Growth Opportunity Fund's total return, for the
period from January 31, 1997 (commencement of operations), through
April 30, 1997, was (4.80)% based on net asset value.* The Fund's
portfolio is comprised of a well-diversified group of small- and
mid-cap stocks which generally have above-average growth opportunities
and are selling at attractive price/valuation levels. However, over
the past six months, small-and mid-cap stocks as a class
underperformed large capitalization stocks by a significant amount.
The underperformance was so significant that the relative multiples of
small- and mid-cap stocks were selling at the low end of their
historical range. Small- and mid-cap stocks normally have earnings
multiples that range between one- and two-times the multiple of the
S&P 500.** With the recent declines in prices, this relative multiple
fell below 1.2 times the S&P 500 multiple. Given this low multiple, we
believe the period of relative underperformance is most likely over.
Most of the stocks in the Fund's portfolio had earnings growth
rates that were higher than the S&P 500 and sold at earnings multiples
below their growth rates. Although investor interest has been focused
on large capitalization stocks over the past few years, periods of
such significant underperformance tend to run their course. Subsequent
to these periods, the stocks that have underperformed tend to reverse
and regain more normal relative valuation levels. Given the quality of
the companies in the Fund's portfolio, we believe the stocks should
improve as investors seek the stocks of companies that have low
relative prices and above-average rates of growth.
- ------------------
* Performance quoted represents past performance and is not
indicative of future results. Investment return and principal value
will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The Fund's total
return based on offering price for the period was (9.07)%.
** The S&P 500 is an unmanaged index comprising stocks in industry,
transportation, and financial and public utility companies. Investments
cannot be made in an index.
The results of the March quarterly earnings announcements
provided strong evidence of the quality of the companies in the Fund's
portfolio. The average increase in earnings per share of the companies
in the Fund's portfolio was 37% after eliminating one extraordinary
increase of 1200%. This compares to the average increase for the S&P
500 of 13% and about 9% for small- and mid-cap stocks as a class. The
stocks in the Fund's portfolio have been selling at a price earnings
multiple of 19.5 times the estimated 1997 earnings and we believe
these companies will continue to increase earnings throughout 1997.
A. Please insert the following Financial Highlights table as page 5 of the
Prospectus. In addition, please add the heading "Financial Highlights" to
the Table of Contents as the third entry.
OLD WESTBURY GROWTH OPPORTUNITY FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
FOR THE
PERIOD
ENDED
APRIL 30,
1997(A)
(UNAUDITED)
---------------
<S> <C>
Net asset value, beginning of period............................... $ 10.00
Income from investment operations:
Net investment loss.............................................. (0.01)
Net realized and unrealized gain (loss) on investments........... (0.47)
---------------
Total from investment operations................................. (0.48)
---------------
Net asset value, end of period..................................... $ 9.52
---------------
---------------
Total return*...................................................... (4.80%)
Ratios/Supplemental data:
Net assets, end of period (in 000's)............................. $ 2,982
Ratio of expenses to average net assets before waiver of
expenses...................................................... 14.97%**
Ratio of expenses to average net assets.......................... 1.50%**
Ratio of net investment loss to average net assets............... (0.55%)**
Portfolio turnover............................................... 25%
Average Commission rate paid..................................... 0.194
</TABLE>
- ------------------
* Total return is calculated without a sales charge assuming a
purchase of shares on the first day and a sale on the last day of
the period.
** Annualized.
(a) For the period from January 31, 1997 (commencement of operations)
to April 30, 1997.
See Notes to Financial Statements.
B. Please insert the following as the last sentence of the paragraph under
the subsection entitled "Portfolio Turnover" on page 12:
"For the period from January 31, 1997 (commencement of
operations) to April 30, 1997, the turnover rate of the Portfolio
was 25%."
C. Please insert the following as the last sentence of the third paragraph
under the section entitled "Calculation of Investment Performance" on page
28:
"The Portfolio's cumulative total return for the period from
January 31, 1997, (commencement of operations) to April 30, 1997,
was (4.80)%."
D. Please insert the following as the fourth paragraph under the section
entitled "General Information" on page 29:
"As of June 16, 1997, Naidot & Co. c/o Bessemer Trust Co., owned
91.28% of the voting securities of the Portfolio, and, therefore,
may, for certain purposes, be deemed to control the Portfolio and
be able to affect the outcome of certain matters presented for a
vote of shareholders."
E. Please insert the following Financial Statements after the
section entitled "Custodian, Transfer Agent and Dividend
Disbursing Agent" on page 30. In addition, please add the heading
Financial Statements" to the Table of Contents as the last entry.
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
- --------- --------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS--91.4%
BASIC INDUSTRY--3.9%
1,900 Newpark Resources, Inc. $ 85,262
1,110 OM Group, Inc. 30,664
-------------
TOTAL 115,926
-------------
CAPITAL GOODS--3.5%
4,850 Crompton & Knowles Corp. 105,488
-------------
CAPITAL GOODS--TECHNOLOGY--19.6%
1,850 ADC Telecommunications, Inc. 48,331
2,387 Burr Brown Corp. 70,417
1,400 Comdisco, Inc. 44,450
2,850 Digital Microwave Corp. 73,387
3,200 Fore Systems 48,800
3,600 Read-Rite Corp. 93,150
700 Sterling Commerce, Inc. 18,112
2,700 Trident Microsystems, Inc. 36,450
1,400 Univision Communications, Inc., Class A 47,600
2,100 Xilinx, Inc. 102,900
-------------
TOTAL 583,597
-------------
CONGLOMERATES &
MISCELLANEOUS--9.1%
2,500 Unifi, Inc. 77,500
2,600 USA Waste Services, Inc. 85,150
4,800 Royal Group Techs Ltd. Sub. Vtg. 107,400
-------------
TOTAL 270,050
-------------
CONSUMER CYCLICAL--10.4%
3,200 Borders Group, Inc. 68,000
3,900 Casey's General Stores, Inc. 73,612
2,200 Dominick's Supermarkets, Inc. 44,550
</TABLE>
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
- --------- --------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------
CONSUMER CYCLICAL (Continued)
3,500 Promus Hotel Corporation $ 123,375
-------------
TOTAL 309,537
-------------
CONSUMER GROWTH--2.1%
1,300 Electronic Arts 31,362
1,900 International Game Technology 30,163
-------------
TOTAL 61,525
-------------
DEFENSIVE CONSUMER STAPLES--7.1%
4,650 Flowers Industries, Inc. 113,344
3,550 Hormel Foods Corp. 86,975
600 Richfood Holdings, Inc. 12,225
-------------
TOTAL 212,544
-------------
ENERGY--8.4%
900 Barrett Resources 29,475
2,000 Ensco International, Inc. 95,000
2,350 Devon Energy Corp. Oklahoma 77,550
1,400 Nuevo Energy Co. 48,125
-------------
TOTAL 250,150
-------------
FINANCIAL--15.0%
1,200 Amresco, Inc. 17,475
1,600 Finova Group, Inc. 109,800
2,850 Financial Securities Assurance 92,269
1,050 Provident Cos., Inc. 58,669
6,700 Western National Corp. 172,525
-------------
TOTAL 450,738
-------------
PROFESSIONAL SERVICES--11.1%
2,000 Billing Info Concepts Corp. 47,750
2,925 Computer Learning Centers, Inc. 77,878
2,700 Health Care & Retirement 85,388
6,600 Novacare, Inc. 75,075
</TABLE>
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
- --------- --------------------------------------------------------- -------------
<C> <S> <C>
COMMON STOCKS--CONTINUED
- --------------------------------------------------------------------
PROFESSIONAL SERVICES (Continued)
3,500 Physio-Control International Corp. 43,750
-------------
TOTAL 329,841
-------------
TRANSPORTATION--1.2%
1,300 Swift Transportation, Inc. 37,050
-------------
TOTAL COMMON STOCKS (identified cost $2,737,776)(a)
2,726,446
-------------
CASH AND EQUIVALENTS AND OTHER
ASSETS NET OF LIABILITIES--8.6% 255,757
-------------
NET ASSETS--100.0% $ 2,982,203
-------------
-------------
</TABLE>
- ------------------
(a) The cost of investments for federal tax purposes amounts to
$2,737,776. The net unrealized depreciation of investments on a
federal tax basis amounts to $11,330 which is comprised of $94,181
appreciation and $105,511 depreciation at April 30, 1997.
See Notes to Financial Statements.
OLD WESTBURY GROWTH OPPORTUNITY FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at market value (identified cost $2,737,776)........... $ 2,726,446
Cash and equivalents............................................... 295,305
Income receivable.................................................. 2,306
-------------
Total assets................................................. 3,024,057
-------------
LIABILITIES:
Accrued expenses................................................... 41,854
-------------
NET ASSETS APPLICABLE TO 313,096 SHARES OF
CAPITAL STOCK OUTSTANDING.......................................... $ 2,982,203
-------------
-------------
Net Assets consist of:
Paid in capital.................................................... $ 3,040,162
Net investment loss................................................ (1,610)
Accumulated net realized loss on investments....................... (45,019)
Net unrealized depreciation on investments......................... (11,330)
-------------
Total Net Assets............................................. $ 2,982,203
-------------
-------------
NET ASSET VALUE, AND REDEMPTION PROCEEDS PER SHARE:
($2,982,203 / 313,096 SHARES OF CAPITAL STOCK OUTSTANDING)......... $9.52
MAXIMUM OFFERING PRICE PER SHARE ($9.52 / .955)...................... $9.97
</TABLE>
See Notes to Financial Statements.
OLD WESTBURY GROWTH OPPORTUNITY FUND
STATEMENT OF OPERATIONS
For the period ended April 30, 1997(a) (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends................................................ $ 1,134
Interest................................................. 1,611
----------
Total income....................................... $ 2,745
----------
EXPENSES:
Investment advisory...................................... 2,355
Custody.................................................. 589
Administration........................................... 442
Shareholder servicing.................................... 736
Registration............................................. 9,533
Distribution............................................. 882
Printing and postage..................................... 3,781
Legal.................................................... 2,520
Auditing................................................. 8,821
Insurance................................................ 3,781
Transfer agent........................................... 4,537
Directors................................................ 5,797
Miscellaneous............................................ 318
----------
Total expenses..................................... 44,092
Less fees waived and reimbursed:
Waiver of investment advisory fee.................. (2,355)
Reimbursement of other operating
expenses........................................ (37,382)
----------
Total waivers and reimbursement.................... (39,737)
----------
Net expenses....................................... 4,355
----------
NET INVESTMENT LOSS...................................... (1,610)
----------
NET REALIZED AND UNREALIZED LOSS:
Net realized loss on investments......................... (45,019)
Net change in unrealized depreciation
on investments........................................ (11,330)
----------
NET REALIZED AND UNREALIZED LOSS........................... (56,349)
----------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS.......................................... $ (57,959)
----------
----------
</TABLE>
(a) For the period from January 31, 1997 (commencement of operations)
to April 30, 1997.
See Notes to Financial Statements.
OLD WESTBURY GROWTH OPPORTUNITY FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD
ENDED
APRIL 30,
1997(A)
(UNAUDITED)
<S> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment loss................................................ $ (1,610)
Net realized loss on investments................................... (45,019)
Net change in unrealized depreciation.............................. (11,330)
-------------
Net decrease in net assets from operations......................... (57,959)
-------------
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital stock............................ 3,040,162
Reinvestment of dividends.......................................... --
Net cost of capital stock redeemed................................. --
-------------
Net increase in net assets resulting
from capital stock transactions................................. 3,040,162
-------------
NET INCREASE IN NET ASSETS......................................... 2,982,203
NET ASSETS:
Beginning of period................................................ 0
-------------
End of period...................................................... $ 2,982,203
-------------
-------------
</TABLE>
- ------------------
(a) For the period from January 31, 1997 (commencement of operations)
to April 30, 1997.
See Notes to Financial Statements.
OLD WESTBURY GROWTH OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Old Westbury
Growth Opportunity Fund (the "Portfolio") is a separate series of Old
Westbury Funds, Inc. (the "Fund"), a Maryland corporation registered
under the Investment Company Act of 1940 (the "Act"), as a
diversified, open-end management investment company. The Fund's
Articles of Incorporation permit the Directors to create an unlimited
number of series, each of which is a separate class of shares. At
April 30, 1997, the Fund consisted of the Portfolio and Old Westbury
International Fund. The Fund was incorporated under the laws of the
state of Maryland on August 26, 1993 and commenced operations on
October 22, 1993. The Portfolio's investment objective is to seek
capital appreciation.
The following is a summary of the significant accounting policies
followed by the Portfolio:
A. VALUATION OF INVESTMENTS. Securities listed on an exchange are
valued, except as indicated below, at the last sale price reflected at
the close of the regular trading session of the exchange on the
business day as of which such value is being determined. If there has
been no sale on such day, the securities are valued at the mean of the
closing bid and asked prices. If no bid or asked prices are quoted,
then the security is valued by such method as the Board of Directors
shall determine in good faith to reflect its fair market value.
Portfolio securities traded on more than one national securities
exchange are valued as the last sale price on the exchange
representing the principal market for such securities.
Securities traded in the over-the-counter market, including
listed securities whose primary market is believed by Bessemer Trust
Company, N.A. ("Bessemer"), the Portfolio's investment advisor (the
"Advisor"), to be over-the-counter, are valued at the mean of the last
reported bid and asked prices from such sources as the Board of
Directors deems appropriate to reflect their fair value.
Debt instruments having 60 days or less remaining until maturity
are valued at amortized cost. Debt instruments having a greater
remaining maturity will be valued at the bid price obtained from a
dealer maintaining an active market in that security or on the basis
of prices obtained from a pricing service approved as reliable by the
Board of Directors. All other investment assets, including restricted
and not readily marketable securities, are valued under procedures
established by and under the general supervision and responsibility of
the Board of Directors designed to reflect in good faith the fair
value of such securities.
OLD WESTBURY GROWTH OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security
transactions are accounted for on the trade date. Realized gains and losses on
security transactions are determined on the identified cost method. Dividend
income and other distributions from portfolio securities are recorded on the
ex-dividend date. Interest income is accrued daily.
C. FEDERAL TAXES. It is the Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income or excise tax provision is required.
D. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. The Portfolio
anticipates paying income dividends on an annual basis. Capital gains
distributions, if any, will be made on an annual basis. The treatment
for financial statement purposes of distributions made during the year
from net investment income or net realized gains may differ from their
ultimate treatment for federal income tax purposes. These differences
are caused primarily by: differences in the timing of the recognition
of certain components of income, expense, and capital gain. Where such
differences are permanent in nature, they are reclassified in the
components of net assets based on their characterization for federal
income tax purposes. Any such reclassifications will have no effect on
net assets, results of operations or net asset value per share of the
Portfolio.
2. TRANSACTIONS WITH AFFILIATES.
A. INVESTMENT ADVISORY FEES. Pursuant to an advisory contract,
dated August 8, 1996, the Fund has approved Bessemer to make
investment decisions for the Portfolio. The investment advisory fee
paid to the advisor is computed daily and paid monthly in accordance
with the following schedule: 0.80% of the first $100 million of the
Portfolio's average net assets, 0.75% of the second $100 million of
such assets and 0.70% of such assets exceeding $200 million.
B. ADMINISTRATION FEES. Federated Administrative Services ("FAS")
serves as administrator. FAS provides administrative services
necessary for the overall administration of the Portfolio including,
among other responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings of, the
independent contractors and agents of the Portfolios, the preparation
and filing of all documents required for compliance by the Portfolio
with applicable laws and regulations; providing equipment and
personnel necessary for maintaining the organization
OLD WESTBURY GROWTH OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
of the Portfolio; preparation of certain documents in connection with
meetings of the Board of Directors and shareholders; the maintenance
of books and records of the Portfolio; and paying the compensation of
the Portfolio's officers and Directors affiliated with FAS. For
providing these services, FAS receives from the Portfolio a fee
accrued daily and paid monthly at an annual rate equal to 0.15% of the
average daily net assets of the Portfolio up to $100 million; 0.10% of
such assets from $100 million to $250 million; and 0.05% of such
assets over $250 million.
C. DISTRIBUTION AND SERVICE PLAN AND DISTRIBUTION REIMBURSEMENT
FEES. The Directors adopted a distribution and service plan (the
"Plan") for the Portfolio pursuant to Rule 12b-1 of the Act, and
pursuant to the Plan, the Portfolio entered into a distribution
agreement and a shareholder servicing agreement with Edgewood
Services, Inc. and a shareholder servicing agreement with Bessemer.
Under its shareholder servicing agreement, Edgewood Services, Inc.
receives payments from the Portfolio to permit it to make payments to
broker-dealers for providing shareholder services. Under its
shareholder servicing agreement, Bessemer is permitted (i) to receive
a payment from the Portfolio attributable to Bessemer's clients (and
its affiliates) for providing shareholder services to such clients and
(ii) to receive payments to permit it to make payments to other
financial institutions as shareholder servicing agents. The total of
shareholder servicing fees in the aggregate payable to Edgewood
Services, Inc. and Bessemer will not exceed 0.25% per annum of the
Portfolio's average daily net assets.
The distribution agreement with Edgewood Services, Inc. provides
for reimbursement to Edgewood Services, Inc. by the Portfolio for its
distribution, promotional and advertising costs incurred in connection
with the distribution of the Portfolio's shares in an amount not to
exceed 0.10% per annum of the Portfolio's average daily net assets.
In addition, the Portfolio will pay for certain other expenses
under the Plan. These expenses shall not exceed an amount equal to
0.05% per annum of the Portfolio's average daily net assets.
D. DIRECTOR'S FEES. Each Director who is not an "interested person" (as
defined in the Act) of the Portfolio receives a $5,000 annual retainer and is
reimbursed for out-of-pocket expenses incurred in connection with committee or
board meetings.
E. CUSTODY FEES. The Fund has retained Bessemer to serve as the Portfolio's
custodian. Bessemer is responsible for maintaining the books
OLD WESTBURY GROWTH OPPORTUNITY FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
and records of the Portfolio's securities and cash. For providing
these services, Bessemer receives from the Portfolio a fee accrued and
paid monthly at an annual rate equal to 0.20% of the average daily net
assets of the Portfolio.
3. CAPITAL STOCK. The Portfolio has authorized a total of 20 billion shares of
common stock (par value $0.001 per share) and is permitted to issue 4 billion of
the authorized shares in the Portfolio. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
FOR THE
PERIOD
ENDED
APRIL 30,
1997(A)
<S> <C>
Common stock sold........................................................ 313,096
Reinvestment of dividends................................................ 0
Common stock redeemed.................................................... 0
---------
Net increase............................................................. 313,096
---------
---------
</TABLE>
(a) For the period from January 31, 1997 (commencement of operations)
to April 30, 1997.
4. PURCHASE AND SALES OF SECURITIES. For the period ended April 30, 1997,
purchases and sales of investment securities other than short-term investments
aggregated $3,141,793 and $358,498 respectively.
INVESTMENT ADVISOR:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
DISTRIBUTOR AND SHAREHOLDER
SERVICING AGENT:
Edgewood Services, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
ADMINISTRATOR:
Federated Administrative Services
Federated Investors Tower
Pittsburgh, PA 15222-3779
SHAREHOLDER SERVICING AGENT:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
Cusip 680414208
G01963-03 (6/97)
Semi-Annual Report
April 30, 1997
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT ADVISOR'S REPORT
May 1997
- --------------------------------------------------------------------------------
United States' interest rates were raised at the end of March,
1997, following a strong first quarter for the U.S. economy. More
recently, most indicators have suggested that the economy is slowing
and concern has shifted towards the outlook for corporate earnings.
Results seem to have been better-than-expected for the first quarter
of 1997, but individual company announcements have caused tremendous
volatility within a rising market. International markets have been
following the U.S. lead but with less volatility.+
PERFORMANCE
The Old Westbury International Fund's (the "Fund") total return
based on net asset value was 9.92% for the six-month period ended
April 30, 1997.* This compares with a total return of 1.6% in the
Morgan Stanley Capital International: Europe, Australia and Far East
Index** over the same period while the Morgan Stanley Capital
International Emerging Markets Free Index** which measures the
performance of the emerging markets, was 11.0%. The Fund benefitted
from overweight positions in Hong Kong, France, Spain, Argentina and
Brazil. Japan, in which the Fund had no investments until January,
1997, fell 16% over the six-month period but was down over 25% at its
lowest point.
- ------------------
+ Foreign investing involves special risks including currency risk,
increased volatility of foreign securities, and differences in
auditing and other financial standards.
* Performance quoted represents past performance and is not
indicative of future results. Investment return and principal value
will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The Fund's total
return based on offering price for the period was 4.94%.
** Morgan Stanley Capital International: Europe, Australia & Far East
Index is a market capitalization weighted foreign securities index,
which is widely used to measure the performance of European,
Australian and New Zealand and Far Eastern stock markets. Morgan
Stanley Capital International Emerging Markets Free Index is an
arithmetic, market value-weighted average of the performance of
over 500 securities listed on the stock exchange of 13 countries in
the Pacific and Asian regions. These indices are unmanaged, and
investments may not be made in an index.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT ADVISOR'S REPORT
May 1997 (Continued)
- --------------------------------------------------------------------------------
PORTFOLIO COMPOSITION
In January, 1997, following a very substantial fall in the
Japanese market, the Fund took a position there for the first time in
some years. This position was funded by sales in continental Europe,
Asia and Canada. The Fund also initiated investment in Chile and
Romania and sold its remaining positions in Korea, Portugal, Thailand
and Venezuela.
CONCLUSION
The Fund has performed well but we expect further market gains in
both developed and emerging markets. We believe that interest rates
are more likely to be cut than increased in Europe and Australia and
earnings are set to recover, which should support these markets. We
believe emerging markets continue to offer good value.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
May 1997
- --------------------------------------------------------------------------------
JAPAN
Following a collapse in the Japanese market and the Yen, the
valuations of certain companies now look attractive in our opinion.
The economy has been boosted by a strong recovery in exports following
the depreciation of the Yen and growth looks likely to slow only
modestly as a result of the tax increases of April 1, 1997. Since
industry tends to have high fixed costs, an increase in demand can
produce a strong recovery in profits. Also, some companies are at last
beginning to cut costs and improve corporate disclosure. We are
concentrating globally on competitive exporters and domestically
orientated companies which are restructuring. We continue to be
concerned about the problems in the financial sector and are avoiding
this sector.
PACIFIC BASIN
Australia, Hong Kong, New Zealand and Singapore are emerging from
periods of slow growth and should benefit from accelerating earnings
as their economies recover. The rest of the Pacific Rim has suffered
as exports have shown little recovery yet and the scale of the
problems in Thailand has caused concern about the property and banking
sectors in the whole of the region. The markets may not perform well
until the strength of the recoveries in Japan and China become more
clearly apparent but valuations suggest there is little further
downside.
EUROPE
The major economies in continental Europe are starting to recover
from strong exports due to the depreciation of their currencies.
Earnings estimates are being steadily increased and yet there appears
to be no risk of inflation picking up. This should continue to support
the stock markets. Moves by European companies to restructure their
operations and increased focus on shareholder value should enhance
profits. In the UK, the first steps taken by the new Labour
government, including raising interest rates to pre-empt inflationary
pressures and increasing the independence of the Bank of England, have
been encouraging and the market, which has underperformed compared
with the rest of Europe, is now looking attractive.
LATIN AMERICA
Latin America recovered strongly in 1996 after the economic problems
in 1995, and we are looking for a modest acceleration of growth in
1997. We believe that inflation looks well under control and interest
rates should remain around current levels. We feel that political
developments outside Mexico are encouraging and valuations continue to
look attractive relative to expected growth.
CURRENCY IMPACT
We now consider the U.S. dollar fairly valued relative to the European
currencies and have closed the hedge completely.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
May 1997 (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PORTFOLIO ALLOCATION AT
GEOGRAPHICAL AREA ----------------------- EAFE
4/30/97 10/31/96 INDEX
<S> <C> <C> <C>
Australia...................................... 10.0% 11.4% 3.1%
Hong Kong...................................... 9.5 9.5 3.6
Rest of Asia................................... 11.8 15.8 4.0
UK............................................. 9.6 8.9 19.6
France......................................... 6.4 6.4 7.2
Germany........................................ 4.5 4.0 8.9
Netherlands.................................... 3.5 3.6 5.0
Spain.......................................... 3.0 4.8 2.4
Switzerland.................................... 2.5 2.4 6.4
Italy.......................................... 1.1 1.3 3.2
Rest of Europe................................. 8.1 11.6 6.6
Japan.......................................... 12.4 -- 30.0
Latin America.................................. 12.1 10.8 --
South Africa................................... 0.9 3.0 --
Canada......................................... 1.0 2.1 --
Other assets and
liabilities, net*............................ 3.6 4.4 --
--------- ----------- -----------
100.0% 100.0% 100.0%
========= =========== ===========
</TABLE>
- ------------------
* Includes cash, pending trades and fund share transactions, interest
and dividends receivable and accrued expenses payable.
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--96.4%
ARGENTINA--1.5%
169,412 Banco De Galicia Y Buenos Aires (Banks) $ 1,025,096
53,370 YPF Sociedad Anunima--Class D (Energy) 1,486,578
----------------
TOTAL ARGENTINA 2,511,674
----------------
AUSTRALIA--10.0%
318,100 Amcor Ltd. (Materials) 2,095,270
108,800 Brambles Industries, Ltd. (Services) 1,970,864
185,900 Broken Hill Properties ORD (Materials) 2,624,325
680,500 CSR Ltd. (Materials) 2,518,525
351,777 News Corporation Ltd. (Services) 1,623,285
413,585 Western Mining Corporation (Materials) 2,454,246
330,300 Westpac Banking Corporation (Banks) 1,782,077
643,100 Woolworth ORD--Class C (Consumer Goods) 1,898,061
----------------
TOTAL AUSTRALIA 16,966,653
----------------
BRAZIL--6.1%
29,000 Bompreco Supermercados GDS (Consumer Goods) 667,000
4,688 (a)Electrobas (1,000 shares) (Utilities) 2,182,208
68,900 (a)Elevadores Atlas (Capital Goods) 828,692
9,210 Petrobras (1,000 shares) Preferred (Energy) 1,944,372
42,304 (a)Telebras (1,000 shares) Preferred (Services) 4,833,484
----------------
TOTAL BRAZIL 10,455,756
----------------
CANADA--1.0%
34,404 Canadian Imperial Bank of Commerce (Banks) 791,477
34,350 Canadian Pacific Ltd. (Diversified) 841,851
----------------
TOTAL CANADA 1,633,328
----------------
CHILE--0.6%
25,495 Banco De A Edwards ADR (Banks) 535,395
15,500 Chilgener S.A. Sponsored ADR (Utilities) 441,750
----------------
TOTAL CHILE 977,145
----------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
EASTERN EUROPE--0.5%
51,000 (a)First N.I.S. Regional Fund (Mutual Fund) $ 841,755
----------------
FINLAND--0.8%
22,760 Metra--Class B (Capital Goods) 622,109
10,900 Nokia--Class A (Electronics & Electrical Equipment) 674,549
----------------
TOTAL FINLAND 1,296,658
----------------
FRANCE--6.4%
3,673 Accor (Services) 527,044
2,844 Carrefour (Consumer Goods) 1,776,677
11,842 Cetelem (Financial Services & Property) 1,380,494
21,591 (a)Christian Dior--Warrants (Consumer Goods) 727,337
10,475 Lafarge (Materials) 687,405
31,527 Michelin (Capital Goods) 1,762,520
4,310 (a)Pinault au Printemps (Consumer Goods) 1,813,967
23,218 Schneider (Capital Goods) 1,309,548
16,708 Valeo (Consumer Goods) 1,031,163
----------------
TOTAL FRANCE 11,016,155
----------------
GERMANY--4.5%
13,291 Adidas (Consumer Goods) 1,386,159
18,094 (a)Daimler-Benz (Capital Goods) 1,344,478
16,094 Daimler-Benz--Rights (Capital Goods) 1,860
25,661 Deutsche Bank AG (Banks) 1,355,183
31,780 (a)Hoechst AG (Health Care) 1,248,651
1,924 Linde AG (Capital Goods) 1,406,287
17,005 (a)Siemens (Electronics & Electrical
Equipment) 921,632
----------------
TOTAL GERMANY 7,664,250
----------------
HONG KONG--9.5%
2,795,800 (a)Cafe De Coral Ltd. (Consumer Goods) 685,776
102,000 Cheung Kong Holdings (Financial Services &
Property) 895,430
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
HONG KONG (Continued)
1,493,700 China Merchants Hai Hong (Capital Goods) $ 1,600,531
2,716,300 China Travel (Services) 1,428,986
488,500 Citic Pacific Ltd. (Diversified) 2,642,415
2,676,400 Gold Peak (Consumer Goods) 1,796,705
652,600 Jardine Matheson Holdings (Singapore
Registered) (Diversified) 3,589,300
468,849 Swire Pacific Ltd.--Class A (Diversified) 3,616,541
----------------
TOTAL HONG KONG 16,255,684
----------------
INDIA--1.6%
10,000 Indian Rayon Industries GDR (Materials) 100,000
103,467 Mahindra & Mahindra GDR (Capital Goods) 1,285,573
31,000 State Bank of India (Banks) 754,075
32,500 Videsh Sanchar Nigam Ltd. GDR (Services) 636,188
----------------
TOTAL INDIA 2,775,836
----------------
INDONESIA--1.4%
1,328,000 Asahimas Flat Glass (Capital Goods) 724,413
10,300 Indonesia Satellite Corporate ADRs
(Services) 283,250
356,000 Semen Gresik (Materials) 868,382
57,800 Tigaraksa Satria (Consumer Goods) 77,337
1,002,000 Trias Sentosa (Materials) 433,141
----------------
TOTAL INDONESIA 2,386,523
----------------
IRELAND--2.7%
151,969 Allied Irish Banks (Banks) 1,055,589
110,400 Bank of Ireland (Banks) 1,143,660
69,600 Cement Roadstone Holdings (Materials) 677,243
60,400 Greencore Group PLC (Consumer Goods) 305,615
164,500 Irish Life (Financial Services & Property) 792,946
241,212 Smurfit (Jefferson) Group (Materials) 584,973
----------------
TOTAL IRELAND 4,560,026
----------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
ITALY--1.1%
382,100 Stet (Services) $ 1,814,908
----------------
JAPAN--12.4%
367,000 Fujitsu Ltd. (Electronics and Electrical Equipment) 3,813,887
241,000 Matsushita Electric Industrial Company (Electronics
and Electrical Equipment) 3,851,598
302,000 Mitsubishi Motor Company (Capital Goods) 2,092,269
57,000 Murata Manufacturing Company
(Electronics) 2,122,579
495 Nippon Telephone & Telegraph (Services) 3,487,836
1,598,000 NKK Corporation (Materials) 3,447,111
30,000 Ono Pharmaceutical Company (Health Care) 821,918
54,000 Sankyo Company Ltd. (Health Care) 1,445,442
----------------
TOTAL JAPAN 21,082,640
----------------
MALAYSIA--1.7%
924,100 Sime Darby (Diversified) 2,853,297
----------------
MEXICO--1.5%
169,489 Cementos Astsk--Class B (Materials) 623,670
44,880 (a)Empresas Ica Sociedad Controladora (Materials) 666,227
147,518 Grupo Cementos Chihuahua--Class B (Materials) 135,053
137,436 Nadro--Class L (Health Care) 466,823
341,673 Soriana--Class B (Consumer Goods) 743,608
----------------
TOTAL MEXICO 2,635,381
----------------
NETHERLANDS--3.5%
16,935 ABN Amro Holdings (Banks) 1,164,542
6,185 Akzo Nobel NLG20 (Chemicals) 797,265
36,203 IHC Caland (Capital Goods) 1,788,583
11,380 K.L.M. NLG 20 (Services) 336,631
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
NETHERLANDS (Continued)
15,385 Wolters Klower (Media) $ 1,824,362
----------------
TOTAL NETHERLANDS 5,911,383
----------------
NEW ZEALAND--2.0%
605,072 Air New Zealand--Class B (Services) 1,747,786
355,100 New Zealand Telecommunications
(Services) 1,591,476
----------------
TOTAL NEW ZEALAND 3,339,262
----------------
PERU--2.5%
938,634 Edegel New Shares (Utilities) 458,042
30,260 Luz Del Sur--Class A (Utilities) 556,028
478,958 Minsur--Class T (Materials) 1,972,285
698 Talleres Moyopampa--Class B (Utilities) 275
387,459 Telefonica De Peru--Class B (Services) 933,741
13,800 Telefonica De Peru--ADS (Services) 331,200
----------------
TOTAL PERU 4,251,571
----------------
PHILIPPINES--1.2%
256,800 Ayala Corporation (Diversified) 180,296
200,633 Bacnotan Consolidated Industries--Class B
(Materials) 494,921
104,000 (a)Jardine Davies, Inc. (Diversified) 144,061
20,440 Philippine Long Distance Telephone
(Services) 1,167,446
24,006 (a)Philippine National Bank (Banks) 157,609
----------------
TOTAL PHILIPPINES 2,144,333
----------------
POLAND--1.3%
8,000 Bank Slaski (Banks) 679,317
176,202 Elektrim (Capital Goods) 1,582,586
----------------
TOTAL POLAND 2,261,903
----------------
ROMANIA--0.2%
3,240 Societe Generale Romania Fund Ltd. (Mutual Fund) 335,340
----------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
SINGAPORE--3.8%
477,320 City Developments (Financial Services & Property) $ 3,860,264
543,000 Hotel Properties Ltd. (Financial Services &
Property) 863,275
157,945 Oversea Chinese Bank--Class F (Banks) 1,845,075
----------------
TOTAL SINGAPORE 6,568,614
----------------
SOUTH AFRICA--0.9%
78,031 Free State Consolidated Gold Mines Ltd. (Materials) 526,463
33,400 Kloof Gold Mining Company Ltd.
(Materials) 231,355
57,363 Sasol (Energy) 735,338
----------------
TOTAL SOUTH AFRICA 1,493,156
----------------
SPAIN--3.0%
21,755 Enher (Utilities) 497,108
4,830 Gas Natural (Utilities) 1,027,554
57,326 Sevillana De Electricdad (Utilities) 508,648
65,600 Telefonica De Espanol (Services) 1,683,262
55,095 Vallehermoso (Financial Services &
Property) 1,358,972
----------------
TOTAL SPAIN 5,075,544
----------------
SWEDEN--0.9%
54,950 (a)Nobel Biocare (Health Care) 805,585
45,350 Sparbanken Sverige (Banks) 809,378
----------------
TOTAL SWEDEN 1,614,963
----------------
SWITZERLAND--2.5%
1,053 ABB AG (Capital Goods) 1,269,889
284 Novartis Bearer (Health Care) 371,407
1,300 Novartis CHF20 (Health Care) 1,706,277
4,106 SBC--Registered (Banks) 888,913
----------------
TOTAL SWITZERLAND 4,236,486
----------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES SECURITY VALUE
<C> <S> <C>
- ----------- --------------------------------------------------- ----------------
COMMON AND PREFERRED STOCKS--continued
TURKEY--1.7%
4,912,800 AK Bank (Banks) 315,411
8,733,484 AK Bank Bonus Shares (Banks) 560,706
4,361,085 NETAS (Electronics) 1,206,853
8,730,000 Sarkuysan Elektrolitik Bakir (Materials) $ 837,503
----------------
TOTAL TURKEY 2,920,473
----------------
UNITED KINGDOM--9.6%
124,000 Allied Domecq (Consumer Goods) 878,465
156,400 British Airways (Services) 1,792,091
209,860 Cable & Wireless PLC (Electronics &
Electrical Equipment) 1,619,566
255,118 Carlton Communications PLC (Electronics &
Electrical Equipment) 2,090,981
145,080 Grand Metropolitan PLC (Consumer Goods) 1,214,999
58,000 (a)Pace Micro Technology (Consumer Goods) 76,248
179,500 Penninsula & Oriental DFD (Diversified) 1,749,428
325,300 Royal Sun Alliance ORD (Financial
Services & Property) 2,579,094
144,667 Siebe PLC (Diversified) 2,143,674
193,758 The Boots Company PLC (Health Care) 2,176,127
----------------
TOTAL UNITED KINGDOM 16,320,673
----------------
TOTAL INVESTMENTS--96.4%
(Identified Cost $139,612,969)(b) 164,201,370
----------------
CASH AND EQUIVALENTS AND OTHER ASSETS
NET OF LIABILITIES--3.6% 6,107,761
----------------
NET ASSETS--100% $ 170,309,131
----------------
----------------
</TABLE>
- ------------------
(a) Non-income producing security.
(b) The cost of investments for federal tax purposes amounts to
$139,612,969. The net unrealized appreciation of investments on a
federal tax basis amounts to $24,588,401 which is comprised of
$29,616,570 appreciation and $5,028,169 depreciation at April 30,
1997.
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
The following acronyms are used in this portfolio:
ADR--American Depositary Receipts
GDR--Global Depositary Receipts
ORD--Ordinary Shares
PLC--Public Limited Company
Note: The categories of investments are shown as a percentage of net assets
($170,309,131) at April 30, 1997.
See Notes to Financial Statements
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at market value (identified cost $139,612,969)..... $ 164,201,370
Cash and equivalents............................................ 9,047,343
Receivables for:
Investments sold.......................................... 1,134,089
Fund shares sold.......................................... 150,000
Dividends................................................. 296,676
Interest.................................................. 27,550
Withholding taxes--dividends.............................. 180,533
Deferred organization expense................................... 26,830
Prepaid insurance............................................... 7,840
----------------
Total assets.............................................. 175,072,231
----------------
LIABILITIES:
Payables for:
Investments purchased..................................... 4,054,217
Fund shares redeemed...................................... 273,000
Accrued expenses.......................................... 435,883
----------------
Total liabilities......................................... 4,763,100
----------------
NET ASSETS APPLICABLE TO 14,063,420.815 SHARES OF
CAPITAL STOCK OUTSTANDING....................................... $ 170,309,131
----------------
----------------
Net Assets consist of:
Paid-in capital................................................. $ 149,413,293
Distributions in excess of net income........................... (213,937)
Accumulated net realized loss on investments and
foreign currency transactions................................ (3,461,299)
Net unrealized appreciation on investments and
foreign currency translations................................ 24,571,074
----------------
NET ASSETS........................................................ $ 170,309,131
----------------
----------------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE ($170,309,131 /
14,063,420.815 SHARES OF CAPITAL STOCK OUTSTANDING)............. $12.11
MAXIMUM OFFERING PRICE PER SHARE ($12.11 / .955).................. $12.68
</TABLE>
See Notes to Financial Statements.
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF OPERATIONS
For the six months ended April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding
tax of $182,020)............................... $ 1,338,815
Interest.......................................... 178,958
-------------
Total income................................ $ 1,517,773
--------------
EXPENSES:
Investment Advisory............................... 612,524
Custody........................................... 154,149
Administration.................................... 101,782
Shareholder Servicing............................. 192,686
Registration...................................... 18,776
Amortization of organization costs................ 9,134
Distribution...................................... 3,090
Printing and Postage.............................. 9,251
Legal............................................. 8,101
Audit............................................. 18,715
Insurance......................................... 7,654
Transfer Agent.................................... 18,427
Directors......................................... 10,500
Miscellaneous..................................... 1,003
-------------
Total expenses.............................. 1,165,792
Less fees waived by Advisor....................... (9,686)
-------------
Net expenses................................ 1,156,106
--------------
NET INVESTMENT INCOME............................... 361,667
--------------
NET REALIZED AND UNREALIZED GAIN:
NET REALIZED GAIN ON:
Investments.................................... 3,822,070
Foreign currency transactions.................. 1,523,237 5,345,307
------------- --------------
NET CHANGE IN UNREALIZED
APPRECIATION ON:
Investments.................................... 7,538,417
Translations of assets and liabilities
in foreign currencies and foreign
currency contracts.......................... 330,069 7,868,486
------------- --------------
NET REALIZED AND UNREALIZED GAIN.................... 13,213,793
--------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS................................... $ 13,575,460
--------------
--------------
</TABLE>
See Notes to Financial Statements.
OLD WESTBURY INTERNATIONAL FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FISCAL YEAR
APRIL 30, 1997 ENDED
(UNAUDITED) OCTOBER 31, 1996
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
OPERATIONS:
Net investment income......................... $ 361,667 $ 1,500,669
Net realized gain/(loss) on investments and
foreign currency transactions.............. 5,345,307 (2,108,945)
Net change in unrealized appreciation on
investments and foreign currency
translations............................... 7,868,486 17,667,965
---------------- ----------------
Net increase in net assets from operations.... 13,575,460 17,059,689
---------------- ----------------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income.................... (1,851,779) (1,459,800)
---------------- ----------------
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital
stock...................................... 24,391,800 45,618,132
Reinvestment of dividends..................... 1,347,247 1,100,982
Net cost of capital stock redeemed............ (2,948,049) (30,719,037)
---------------- ----------------
Net increase in net assets resulting from
capital stock transactions................. 22,790,998 16,000,077
---------------- ----------------
NET INCREASE IN NET ASSETS.................... 34,514,679 31,599,966
NET ASSETS:
Beginning of period........................... 135,794,452 104,194,486
---------------- ----------------
End of period................................. $ 170,309,131 $ 135,794,452
---------------- ----------------
---------------- ----------------
</TABLE>
See Notes to Financial Statements.
OLD WESTBURY INTERNATIONAL FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
APRIL 30,
1997 YEAR ENDED OCTOBER 31,
(UNAUDITED) 1996 1995 1994 1993(A)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................. $ 11.16 $ 9.80 $ 10.81 $ 10.14 $ 10.00
Income from investment
operations:
Net investment income..... 0.03 0.13 0.14 0.10 0.00
Net realized and
unrealized gain (loss)
on investments.......... 1.07 1.37 (1.07) 0.57 0.14
----------- --------- --------- --------- ---------
Total from investment
operations.............. 1.10 1.50 (0.93) 0.67 0.14
----------- --------- --------- --------- ---------
Less distributions:
Distributions from net
investment income....... (0.15) (0.14) (0.08) -- --
----------- --------- --------- --------- ---------
Net asset value, end of
period.................... $ 12.11 $ 11.16 $ 9.80 $ 10.81 $ 10.14
----------- --------- --------- --------- ---------
----------- --------- --------- --------- ---------
Total return*............. 9.92% 15.5% (8.6%) 6.6% 1.4%
Ratios/Supplemental data:
Net assets, end of period
(in 000's).............. $ 170,309 $ 135,794 $ 104,194 $ 104,529 $ 11,957
Ratio of expenses to
average net assets
before waiver of
expenses................ 1.51%** 1.52% 1.60% 1.70% 2.50%**+
Ratio of expenses to
average net assets...... 1.50%** 1.50% 1.50% 1.50% 1.50%**
Ratio of net investment
income (loss) to average
net assets.............. 0.47%** 1.19% 1.40% 0.90% (0.91%)**
Portfolio turnover........ 25% 55% 32% 23% 0%
Average Commission rate
paid.................... 0.0080 0.0080 0.0100 -- --
</TABLE>
- ------------------
* Total return is calculated without a sales charge assuming a
purchase of shares on the first day and a sale on the last day of
the period.
** Computed on an annualized basis.
The calculation takes state expense limitations into consideration.
(a) For the period October 22, 1993 (commencement of operations) to October 31,
1993.
Note: Per share values calculated using average shares outstanding.
See Notes to Financial Statements.
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Old Westbury
International Fund (the "Portfolio") is a separate series of Old
Westbury Funds, Inc. (the "Fund"), a Maryland corporation registered
under the Investment Company Act of 1940 (the "Act"), as a
diversified, open-end management investment company. The Fund's
Articles of Incorporation permit the Directors to create an unlimited
number of series, each of which is a separate class of shares. At
April 30, 1997, the Fund consisted of the Portfolio and Old Westbury
Growth Opportunity Fund. The Fund was incorporated under the laws of
the state of Maryland on August 26, 1993 and commenced operations on
October 22, 1993. The Portfolio's investment objective is to seek
long-term growth of capital.
The following is a summary of the significant accounting policies
followed by the Portfolio:
A. VALUATION OF INVESTMENTS. Securities listed on an exchange are
valued, except as indicated below, at the last sale price reflected at
the close of the regular trading session of the exchange on the
business day as of which such value is being determined. If there has
been no sale on such day, the securities are valued at the mean of the
closing bid and asked prices. If no bid or asked prices are quoted,
then the security is valued by such method as the Board of Directors
shall determine in good faith to reflect its fair market value.
Portfolio securities traded on more than one national securities
exchange are valued at the last sale price on the exchange
representing the principal market for such securities.
Securities traded in the over-the-counter market, including
listed securities whose primary market is believed by Bessemer Trust
Company, N.A. ("Bessemer"), the Portfolio's investment advisor (the
"Advisor"), to be over-the-counter, are valued at the mean of the last
reported bid and asked prices from such sources as the Board of
Directors deems appropriate to reflect their fair value.
Debt instruments having 60 days or less remaining until maturity
are valued at amortized cost. Debt instruments having a greater
remaining maturity will be valued at the bid price obtained from a
dealer maintaining an active market in that security or on the basis
of prices obtained from a pricing service approved as reliable by the
Board of Directors. All other investment assets, including restricted
and not readily marketable securities, are valued under procedures
established by and under the general supervision and responsibility of
the Board of Directors designed to reflect in good faith the fair
value of such securities.
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
B. FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are
maintained in United States dollars. Foreign currency amounts are translated
into United States dollars on the following basis:
(i) value of investment securities, other assets and liabilities--at
the current rates of exchange.
(ii) purchases and sales of investment securities, income
and expenses--at the rates of exchange prevailing on the
respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign
exchange rates and values at the close of the period, the Fund does
not isolate that portion of the results of operations arising as a
result of changes in the foreign exchange rates from the fluctuations
arising from changes in the value of securities held at the end of the
period. Similarly, the Fund does not isolate the effect of changes in
foreign exchange rates from the fluctuations arising from changes in
the value of portfolio securities sold during the period.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S.
companies as a result of, among other factors, the level of
governmental supervision and regulation of foreign securities markets
and the possibility of political and economic instability.
C. FORWARD FOREIGN CURRENCY CONTRACTS. The Fund enters into
forward foreign currency contracts in order to hedge its exposure to
changes in foreign currency exchange rates on its foreign portfolio
holdings. A forward foreign currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated
forward rate. Risks may arise upon entering into these contracts from
the potential inability of the counterparties to meet the terms of
their contracts. There were no forward foreign currency contracts open
at April 30, 1997.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security
transactions are accounted for on the trade date. Realized gains and
losses on security transactions are determined on the identified cost
method. Dividend income and other distributions from portfolio
securities are recorded on the ex-dividend date except that, if the
ex-dividend date has passed, certain dividends from foreign securities
are recorded as soon as the Portfolio is informed of the ex-dividend
date. Dividend income is recorded net of foreign taxes withheld where
recovery of such taxes is not assured. Interest income is accrued
daily.
E. DEFERRED ORGANIZATION EXPENSES. Expenses incurred by the
Portfolio in connection with its organization and the initial public
offering of the Portfolio's shares are being amortized on a
straight-line basis over a five-year period. The amount paid by the
Portfolio on any redemption of the Portfolio's initial shares will be
reduced by the pro rata portion of any unamortized organization
expense which the number of the initial shares redeemed bears to the
total number of initial shares outstanding immediately prior to such
redemption.
F. FEDERAL TAXES. It is the Portfolio's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, no federal income or excise tax provision is required.
For the years ended October 31, 1996, 1995, and 1994, the
Portfolio had for Federal income tax purposes unused capital loss
carryovers of approximately $2,148,175, $1,878,354, and $3,600,004,
which will expire in 2004, 2003, and 2002, respectively.
G. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. The Portfolio
anticipates paying income dividends on an annual basis. Capital gains
distributions, if any, will be made on an annual basis. The treatment
for financial statement purposes of distributions made during the year
from net investment income or net realized gains may differ from their
ultimate treatment for federal income tax purposes. These differences
are caused primarily by: differences in the timing of the recognition
of certain components of income, expense, and capital gain; and the
recharacterization of foreign exchange gains or losses to either
ordinary income or realized capital gain for federal tax purposes.
Where such differences are permanent in nature, they are reclassified
in the components of net assets based on their characterization for
federal income tax purposes. Any such reclassifications will have no
effect on net assets, results of operations or net asset value per
share of the Portfolio.
2. TRANSACTIONS WITH AFFILIATES.
A. INVESTMENT ADVISORY FEES. Pursuant to an advisory contract,
dated October 12, 1993, the Fund has retained Bessemer to make
investment decisions for the Portfolio. The investment advisory fee
paid to the advisor is computed daily and paid monthly in accordance
with the following schedule: 0.80% of the first $100 million of the
Portfolio's average net assets, 0.75% of the second $100 million of
such assets and 0.70% of such assets exceeding $200 million.
B. ADMINISTRATION FEES. Federated Administrative Services ("FAS")
serves as administrator. Edgewood Services, Inc. serves as distributor
and shareholder servicing agent. FAS provides administrative services
necessary for the overall administration of the Portfolio including,
among other responsibilities, the negotiation of contracts and fees
with, and the monitoring of performance and billings of, the
independent contractors and agents of the Portfolio; the preparation
and filing of all documents required for compliance by the Portfolio
with applicable laws and regulations; providing equipment and
personnel necessary for maintaining the organization of the Portfolio;
preparation of certain documents in connection with meetings of the
Board of Directors and shareholders; the maintenance of books and
records of the Portfolio; and paying the compensation of the
Portfolio's officers and Directors affiliated with FAS. For providing
these services, FAS receives from the Portfolio a fee accrued daily
and paid monthly at an annual rate equal to 0.15% of the average daily
net assets of the Portfolio up to $100 million; 0.10% of such assets
from $100 million to $250 million; and 0.05% of such assets over $250
million.
C. DISTRIBUTION AND SERVICE PLAN AND DISTRIBUTION REIMBURSEMENT
FEES. The Directors adopted a distribution and service plan (the
"Plan") for the Portfolio pursuant to Rule 12b-1 of the Act, and
pursuant to the Plan, the Portfolio entered into a distribution
agreement and a shareholder servicing agreement with Edgewood
Services, Inc. and a shareholder servicing agreement with Bessemer.
Under its shareholder servicing agreement, Edgewood Services, Inc.
receives payments from the Portfolio to permit it to make payments to
broker-dealers for providing shareholder services. Under its
shareholder servicing agreement, Bessemer is permitted (i) to receive
a payment from the Portfolio attributable to Bessemer's clients (and
its affiliates) for providing shareholder services to such clients and
(ii) to receive payments to permit it to make payments to other
financial institutions as shareholder servicing agents. The total of
shareholder servicing fees in the aggregate payable to Edgewood
Services, Inc. and Bessemer will not exceed 0.25% per annum of the
Portfolio's average daily net assets.
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
The distribution agreement with Edgewood Services, Inc. provides
for reimbursement to Edgewood Services, Inc. by the Portfolio for its
distribution, promotional and advertising costs incurred in connection
with the distribution of the Portfolio's shares in an amount not to
exceed 0.10% per annum of the Portfolio's average daily net assets.
In addition, the Portfolio will pay for certain other expenses
under the Plan. These expenses shall not exceed an amount equal to
0.05% per annum of the Portfolio's average daily net assets.
D. DIRECTORS' FEES. Each Director who is not an "interested person" (as
defined in the Act) of the Fund receives a $5,000 annual retainer and is
reimbursed for out-of-pocket expenses incurred in connection with committee or
board meetings.
E. CUSTODY FEES. The Fund has retained Bessemer to serve as the Portfolio's
custodian. Bessemer is responsible for maintaining the books and records of the
Portfolio's securities and cash. For providing these services, Bessemer receives
from the Portfolio a fee accrued and paid monthly at an annual rate equal to
0.20% of the average daily net assets of the Portfolio.
3. CAPITAL STOCK. The Portfolio has authorized a total of 20 billion shares of
common stock (par value $0.001 per share) and is permitted to issue 4 billion of
the authorized shares in the Portfolio. Transactions in shares of capital stock
were as follows:
<TABLE>
<CAPTION>
SIX MONTHS FISCAL YEAR
ENDED ENDED
APRIL 30, OCTOBER 31,
1997 1996
<S> <C> <C>
Common stock sold....................................... 2,027,263 4,294,507
Reinvestment of dividends............................... 114,953 108,364
Common stock redeemed................................... (244,727) (2,871,960)
----------- ------------
Net increase............................................ 1,897,489 1,530,911
----------- ------------
----------- ------------
</TABLE>
4. PURCHASES AND SALES OF SECURITIES. For the period ended April 30, 1997,
purchases and sales of investment securities other than short-term investments
aggregated $59,534,975 and $36,569,935, respectively.
5. DISTRIBUTIONS AND FOREIGN TAXES WITHHELD. The following information
summarizes per share distributions paid by the Fund for the year ended October
31, 1996.
OLD WESTBURY INTERNATIONAL FUND
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NET FOREIGN FOREIGN TAXES
RECORD PAYABLE SOURCE PAID OR LONG TERM
DATE DATE INCOME PER SHARE WITHHELD PER SHARE CAPITAL GAINS
<S> <C> <C> <C> <C>
12/23/96 1/3/97 $0.15 $0.03 None
</TABLE>
The foreign taxes paid or withheld represent taxes incurred by
the Fund on dividends received by the Fund from foreign sources.
Foreign taxes paid or withheld should be included in taxable income
with an offsetting deduction from gross income or as a credit for
taxes paid to foreign governments. You should consult your tax advisor
regarding the appropriate treatment of foreign taxes paid.
INVESTMENT ADVISOR:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
DISTRIBUTOR AND SHAREHOLDER
SERVICING AGENT:
Edgewood Services, Inc.
Federated Investors Tower
Pittsburgh, PA 15222-3779
ADMINISTRATOR:
Federated Administrative Services
Federated Investors Tower
Pittsburgh, PA 15222-3779
SHAREHOLDER SERVICING AGENT:
Bessemer Trust Company, N.A.
630 Fifth Avenue
New York, New York 10111
(212) 708-9100
Cusip 680414109
G01963-02 (6/97)
