OLD WESTBURY
FUNDS, INC.
Semi-Annual Report
April 30, 1998
Bessemer Trust
----------------
INVESTMENT ADVISOR
OLD WESTBURY CORE EQUITIES FUND
INVESTMENT ADVISOR'S REPORT
May 1998
- -------------------------------------------------------------------------------
On a total return basis, the Old Westbury Core Equities Fund before fees and
expenses, was up 2.9%* since its inception on March 2, 1998 through April 30,
1998, compared to a 6.2% increase in the S&P 500.** Because the fund is so
small, performance is easily distorted by the flow of monies into the fund. In
particular, large share purchases made near an interim peak in the stock market
can negatively affect a small fund over a short time period should the market
subsequently decline as it did at the end of April. These problems should vanish
as the fund grows larger.
As this is the first report to shareholders, we thought it would be helpful to
outline our investment approach and strategy. Our investment philosophy is quite
simple and straightforward. We believe security prices are driven by changes in
corporate earnings. Rising earnings tend to lead to higher stock prices.
Consequently, our portfolio is honed in on companies with strong earnings
growth. Our minimum hurdle rate is 15% per year; however, in recent years, the
companies in our portfolio have been increasing their earnings, on average, by
more than 20%. We project a similar gain in 1998 despite what we feel will be a
tough environment for many companies to achieve earnings growth of more than
5-7%.
The portfolio is structured on the basis of long term investment themes. We
search for worldwide trends which will enable certain industries to reap the
benefits of above-average growth. Then, we look for the major corporate
beneficiaries of these trends in the belief they will provide superior earnings
performance. Typically, these companies are the industry leaders with a proven
record of successful operation over a longer period of time; we are not in the
business of buying troubled companies. As we put it: "we buy the best and forget
the rest."
The significant themes in the portfolio today are the aging of the
population and its need for health care and wealth accumulation, the
undervaluation of financial intermediaries, the increasing size of the
workforce and its rising income levels, reaching the consumer in an
increasingly competitive world, and the growing dominance of the U.S.
multinational corporations. In subsequent reports, we will discuss these
trends in more detail.
- -----------
*Performance quoted is based on net asset value, 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 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.
OLD WESTBURY CORE EQUITIES FUND
INVESTMENT ADVISOR'S REPORT
May 1998 (Continued)
- -------------------------------------------------------------------------------
The stock market has been locked in a relatively narrow 500 point trading
range since the middle of March. Serving to constrain the market is the slowing
of corporate earnings increases, while supporting the market are declining
interest rates and public purchases of equity shares. This tug-of- war may
continue for a while, but our stocks should move higher as their net income
rises.
We appreciate your initial support of this fund and believe everyone should be
well rewarded over time as the earnings dynamics may lead to higher valuations.
OLD WESTBURY GROWTH OPPORTUNITY FUND
INVESTMENT ADVISOR'S REPORT
May 1998
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The performance of the Old Westbury Growth Opportunity Fund ("Growth
Opportunity"), before fees and expenses, for the six month reporting period
ended April 30, 1998 was 13.8%* which compares favorably with the return of the
Russell 2500** of 13.3%*. The returns before fees and expenses, for any given
month during the past twelve months have been very volatile. Growth Opportunity
provided a 41.4% total return for the twelve-month reporting period.* Returns
were extremely good in February 1998 after an unchanged January, and March was a
relatively weak month while April performance was good. The volatility of
returns over the past year or so has been affected by rapidly changing
preferences of market participants for large versus small stocks and growth
versus value stocks. Since mid-1994, generally, large capitalization stocks and
value stocks have outperformed smaller capitalization stocks and growth stocks.
Despite the fact that Growth Opportunity is a small and mid-cap growth stock
vehicle, returns have been very competitive over a longer period in spite of the
volatile months and quarters. This volatility is likely to remain as the market
favors one class of stocks versus another, and as perceptions change about the
economic outlook and relative valuation of these different classes. Growth
Opportunity will remain focused on attractively valued stocks whose managements'
incentive is to reward the shareholder over the long term.
During the past six months, several sectors were eliminated or sharply reduced
and many new positions initiated. Several factors have contributed to the high
turnover. The reduction in the technology weighting which began in August 1997
continued during the first quarter of calendar 1998. The Asian crisis, in
addition to affecting technology, caused a reassessment and reduction in the
energy sector, some of which carried over to the first quarter. Additionally,
several stocks reached levels that fully discounted their positive fundamentals
and were sold or the position reduced significantly. Also, three positions were
closed out as a result of takeover or rumored takeover. Finally, there were
three stocks whose fundamentals deteriorated and were sold.
The stocks that are replacing the recently sold issues have the following
characteristics in common: a catalyst which acts to increase revenue and
earnings growth and a price which is attractive compared to
- -----------
*Performance quoted is based on net asset value, reflects 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. Total return does not reflect the sales charge
that was in effect prior to March 1, 1998. The fund's total return for the
period from February 28, 1997 (date of inception) to April 30, 1998 was 27%.
**Russell 2500 Index measures the performance of the 2,500 smallest companies in
the Russell 3000 Index, which represents approximately 23% of the total market
capitalization of the Russell 3000 Index. This index is unmanaged and
investments cannot be made in an index.
OLD WESTBURY GROWTH OPPORTUNITY FUND
INVESTMENT ADVISOR'S REPORT
May 1998 (Continued)
- -------------------------------------------------------------------------------
the sustainable growth rate. Additionally, the officers and/or directors in
four of the companies have purchased stock for themselves.
In view of the extraordinary returns of common stocks during the past few
years, especially the most recent twelve months, the fund has a somewhat more
defensive posture. Short-term investments are at a higher level than normal and
will be re-deployed as attractive purchase candidates appear.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT ADVISOR'S REPORT
May 1998
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International markets saw strong rises over the first half of the fiscal year
with performance varying widely.+ European markets performed consistently well.
Asia suffered continued falls until the World Economic Forum at the end of
January, when it appeared that the United States and international bodies were
going to adopt more supportive policies. Strong rallies in February then petered
out as it became clear that there was no quick fix available. Latin America
rallied strongly at the beginning of the fiscal year before being dragged down
as Asia's troubles soured sentiment towards emerging markets.
PERFORMANCE
The fund benefited from the underweighting in Japan but was held back by the
exposure to emerging markets. Old Westbury International Fund rose to 10.1%,
before fees and expenses, over the six-month reporting period.* This compares
with a rise in the EAFE Index of 15.4% and in the emerging market EMF Index of
3.6% for the same period.**
PORTFOLIO COMPOSITION
The portfolio saw further reductions in Asia as most of the holdings in
Singapore were sold, with the proceeds being invested in Europe. The portfolio
now has 20% in Asia, 65% in Europe and 11% in Latin America.
CONCLUSION
We believe that international markets represent reasonable value. European
markets should see continued strong earnings growth and the benefits of
rationalization. Japan will be held back until the government introduces
sensible reforms but some exporters should benefit from the weaker currency.
Brazil, Eastern Europe, India and South Africa look the best of the emerging
markets.
- -----------
*Performance quoted is based on net asset value, 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. Total return does not reflect the sales charge
that was in effect prior to March 1, 1998.
**The EAFE Index is a weighted index comprised of approximately 1,100 securities
listed on the stock exchanges of Europe. Australia and the Far East. The EMF
Index is a weighted index comprised of approximately 1,100 securities in 20
"free" emerging markets. A free market is defined as a market with no
restrictions on foreign investors. These indices are unmanaged, and investments
cannot be made in an index.
+Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
May 1998
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JAPAN
The first six months of the fiscal year was dominated by concern over the
outlook for growth in Japan, and when the government was going to do anything
about it. The belated announcement of action to protect depositors and provide
funds to recapitalize the banking system, combined with the extension of
personal tax deductions at the end of 1997, seemed to show some recognition of
the scale of the problems. In January, a number of leading politicians started
to discuss openly the need for tax cuts, suggesting some movement towards
recognition that the only way out for Japan is some sort of supply side
revolution. The warning in April by the chairman of Sony Corporation that the
economy was on the verge of collapsing and the statement by the governor of the
Bank of Japan that tax cuts must be looked at seriously, are important
indicators that the consensus is moving in the right direction. The reality has
been more disappointing packages suggesting that news must get worse before its
gets better. The result was that the market fell back towards its lows at the
start of the year and the Yen also weakened. News on the economy shows that it
has fallen back into recession and the poor performance of the stock market over
the fiscal year will ensure plenty of writeoffs during the results season
providing more ammunition for reformers. Pessimism is now so widespread that we
believe that share prices in a number of sectors discount a lot of the bad news.
We do, therefore, see good opportunities for quality exporters and selected well
run domestic companies to appreciate. We remain underweighted.
PACIFIC BASIN
The World Economic Forum in Davos at the end of January saw the beginning of a
more active commitment by the United States and the International Monetary Fund
(IMF) to try to stabilize the situation in Asia. This resulted in a surge in the
currencies and markets in the region with the weakest companies and countries
regarded as the major beneficiaries. The failure of governments in most of these
countries, with the possible exception of Thailand and Korea, to follow through
with the required restructuring packages and the scale of recapitalization
required, suggests that there will be no quick recovery. Zhu Rongji, the new
premier of China, is undertaking a radical restructuring program which should
transform the banking and state industrial sectors. We continue to believe that
Hong Kong companies are the best vehicles to benefit from China's
transformation.
OLD WESTBURY INTERNATIONAL FUND
INVESTMENT OUTLOOK
May 1998 (Continued)
- -------------------------------------------------------------------------------
In India, we expect that the economy will start to accelerate now that the
election is over and that this will feed through into solid rises in corporate
earnings.
EUROPE
European markets have continued to benefit from a cyclical recovery in
earnings and growing evidence of a new commitment to profitability and
restructuring. Earnings estimates continue to be upgraded on the back of
accelerating economic growth and we believe that restructuring could ensure
earnings growth of at least 15% per annum for the next few years. The liquidity
of these markets is also improving as private sector pension schemes become more
widespread and private sector savings are increasingly mobilized into the stock
market. Thus, although these markets look expensive relative to historic ranges,
they still appear to have the most attractive prospects of the developed
markets.
LATIN AMERICA
Latin America has shown a disappointing performance as economists and analysts
have revised down forecasts for economic growth and earnings. However with
valuations ranging between 10 and 15 times 1998 earnings we think these markets
do not look expensive.
OLD WESTBURY FIXED INCOME FUND
INVESTMENT ADVISOR'S REPORT
May 1998
- -------------------------------------------------------------------------------
The total return of the Old Westbury Fixed Income Fund, before fees and
expenses, since its inception on March 12, 1998 through April 30, 1998 was
0.1%,* versus 0.3% for the Lehman Brothers Government/Corporate Bond Index.**
We plan to keep the portfolio's duration somewhat longer than the benchmark.
This strategy is consistent with the view that yields are high relative to
inflation and that U.S. fiscal and monetary policies are leaning against the
risk of rising inflation in the future. Until the portfolio grows in size, we
will concentrate investments in the government sector. Government securities
are very liquid, and will be used to fund other investments as attractive
opportunities arise.
- -----------
*Performance quoted is based on net asset value, 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.
**Lehman Brothers Government/Corporate Bond Index is composed of all bonds that
are investment grade rated Baa or higher by Moody's or BBB or higher by
Standard & Poor's, if unrated by Moody's. Issues must have at least one year to
maturity. Total return comprises price appreciation/depreciation and income as
a percentage of the original investment. This index is unmanaged and
investments cannot be made in an index.
OLD WESTBURY MUNICIPAL BOND FUND
INVESTMENT ADVISOR'S REPORT
May 1998
- -------------------------------------------------------------------------------
The total return of the Old Westbury Municipal Bond Fund, before fees and
expenses, since its inception on March 6, 1998 through April 30, 1998, was
0.5%.* This compared to the Lehman Brothers Municipal Bond Index which had a
total return for the same period of (0.4)%.**
The Municipal Bond Fund initially benefited from a high percentage of shorter
term securities in March when municipal interest rates increased due to large
volumes of new issue supply that depressed this market.+ Two events transpired
in April to alter this strategy and make us extend the fund's average life.
First, municipal supply concerns began to abate making prospects for relative
appreciation in the municipal market greater (relative to Treasury securities).
The second reason was our belief that U.S. inflation would remain low allowing
interest rates to experience further declines in the second quarter. Looking
forward, we intend to maintain a bias towards a longer duration portfolio
(average maturity) relative to our benchmark as prospects for both interest
rates and greater relative appreciation in the municipal market will remain as
the primary drivers in this market.
- -----------
*Performance quoted is based on net asset value, 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.
**Lehman Brothers Municipal Bond Index are broad market performance benchmarks
for the tax-exempt bond market. As of March 31, 1998, approximately 42,021
bonds were included in the Municipal Bond Index with a market value of $631
billion. To be included in the Lehman Brothers Municipal Bond Index, bonds must
have a minimum credit rating of at least Baa. They must have an outstanding par
value of at least $3 million and be issued as part of a transaction of at least
$50 million. The Index includes both zero coupon bonds and bonds subject to the
alternative minimum tax. This index is unmanaged, and investments cannot be
made in an index.
+Income may be subject to the federal alternative minimum tax and state and
local taxes.
SHAREHOLDER MEETING RESULTS
- -------------------------------------------------------------------------------
A Special Meeting of the shareholders of Old Westbury Growth Opportunity Fund
and Old Westbury International Fund, series of Old Westbury Funds, Inc. was held
on February 9, 1998. On December 2, 1997, the record date for determination of
shareholders entitled to vote at the meeting, there were 19,236,696 total
outstanding shares. The following items were considered by shareholders and the
results of their voting is as follows:
AGENDA ITEM
- -----------
1. To elect three Directors of the funds to serve until the election and
qualification of their successors.
<TABLE>
<CAPTION>
FOR AGAINST WITHHELD AUTHORITY TO VOTE
--- ------- --------------------------
<S> <C> <C> <C>
Robert M. Kaufman 18,304,890 0 6,151
Howard D. Graves 18,304,890 0 6,151
Eugene P. Beard 18,304,890 0 6,151
</TABLE>
2. To ratify or reject the selection of the firm Deloitte & Touche LLP as
Independent Auditors of the funds.
<TABLE>
<S> <C> <C> <C>
18,303,462 0 7,579
</TABLE>
OLD WESTBURY CORE EQUITIES FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ ------------------------------------- ----------
<C> <S> <C>
COMMON STOCKS--85.1%
CONGLOMERATES--4.6%
1,500 General Electric Co. $ 127,688
2,250 Tyco International Ltd. 122,625
----------
TOTAL 250,313
----------
CONSUMER NON-CYCLICAL--12.5%
1,100 Clorox Co. 92,263
1,100 Coca-Cola Company 83,463
2,950 Coca-Cola Enterprises Inc. 111,363
1,200 Colgate-Palmolive Co. 107,625
950 Gillette Co. 109,666
2,100 Mattel Inc. 80,456
1,150 Procter & Gamble Co. 94,516
----------
TOTAL 679,352
----------
FINANCIAL--12.5%
1,050 Bankamerica Corporation 89,512
300 Beneficial Corp. 39,112
800 Chase Manhattan Corp. 110,850
750 Citicorp 112,875
1,800 Federal National Mortgage Association 107,775
1,400 Merrill Lynch & Co. 122,850
1,350 Washington Mutual Inc. 94,584
----------
TOTAL 677,558
----------
HEALTHCARE--9.1%
1,850 (a)Health Management Association Inc. 58,275
850 Johnson & Johnson 60,669
1,850 Medtronic Inc. 97,356
800 Merck & Co. 96,400
1,100 Pfizer Inc. 125,194
1,150 (a)Quintiles Transnational Corp. 55,775
----------
TOTAL 493,669
----------
INSURANCE--0.3%
350 Unum Corp. 18,813
----------
PRINTING & PUBLISHING--2.2%
1,550 Time Warner Inc. 121,675
----------
</TABLE>
OLD WESTBURY CORE EQUITIES FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
------ ------------------------------------ ----------
<C> <S> <C>
PROFESSIONAL SERVICES--5.5%
1,850 (a)Chancellor Media Corp. $ 87,759
940 (a)Clear Channel Communications Inc. 88,595
950 Interpublic Group Cos. Inc. 60,681
1,150 Omnicom Group Inc. 54,481
----------
TOTAL 291,516
----------
RECREATIONAL--4.1%
1,600 Carnival Corp. 111,300
900 Disney (Walt) Holding Co. 111,881
----------
TOTAL 223,181
----------
RETAIL--17.1%
1,800 (a)Bed Bath & Beyond Inc. 88,650
1,300 CVS Corp. 95,875
1,100 Dayton-Hudson Corp. 96,044
2,350 Family Dollar Stores Inc. 79,900
1,750 Home Depot Inc. 121,844
3,100 (a)Kohl's Corp. 128,069
2,150 (a)Kroger Co. 90,031
3,400 (a)Safeway Inc. 130,050
2,700 Walgreen Co. 93,150
----------
TOTAL 923,613
----------
TECHNOLOGY--11.6%
2,550 (a)Analog Devices 99,290
1,500 (a)Cisco Systems Inc. 109,875
2,650 (a)EMC Corp. 122,231
1,850 HBO & Co. 110,653
1,000 (a)Microsoft Corp. 90,125
1,350 (a)Tellabs Inc. 95,681
----------
TOTAL 627,855
----------
TELECOMMUNICATIONS--2.0%
2,100 MCI Communications Corp. 105,656
----------
UTILITIES--3.6%
2,000 (a)AES Corp. 110,375
1,750 Enron Corp. 86,078
----------
TOTAL 196,453
----------
</TABLE>
OLD WESTBURY CORE EQUITIES FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------------- ----------
<C> <S> <C>
TOTAL
INVESTMENTS
(Identified
Cost
$4,552,699)(b) $4,609,654
----------
CASH AND OTHER
ASSETS NET OF
LIABILITIES--
14.9% 804,889
----------
NET ASSETS--100% $5,414,543
==========
</TABLE>
See Notes to Portfolios of Investments on Page 27.
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------------ ------------
<C> <S> <C>
COMMON STOCKS--94.7%
BASIC MATERIALS--5.3%
139,400 Crompton & Knowles Corp. $ 4,173,287
56,600 OM Group, Inc. 2,508,087
------------
TOTAL 6,681,374
------------
CAPITAL GOODS--8.0%
42,950 Martin Marietta Material Corp. 2,015,966
23,943 McDermott International, Inc. 990,642
109,300 (a)Newpark Resources, Inc. 2,630,031
141,400 (a)Royal Group Techs Ltd. Sub. Vtg. 4,392,238
------------
TOTAL 10,028,877
------------
COMMUNICATION SERVICES--2.1%
137,300 (a)Vanguard Cellular Systems, Inc. 2,608,700
------------
CONSUMER CYCLICAL--13.1%
87,700 (a)Borders Group, Inc. 2,817,362
84,269 Casey's General Stores, Inc. 1,379,905
59,200 Dollar Tree Stores 3,211,600
44,656 Hudson Bay Company 970,647
87,800 (a)Promus Hotel Corporation 3,967,463
90,700 Southam, Inc. 1,657,678
45,600 Stage Stores, Inc. 2,345,550
------------
TOTAL 16,350,205
------------
CONSUMER STAPLES--7.2%
51,600 (a)Dominick's Supermarkets, Inc. 2,067,225
10,651 Flowers Industries, Inc. 227,665
89,700 Hormel Foods Corp. 3,049,800
96,200 (a)Univision Communications, Inc., Class A 3,685,663
------------
TOTAL 9,030,353
------------
ENERGY--5.9%
40,384 Devon Energy Corp. Oklahoma 1,610,312
43,600 Ensco International, Inc. 1,231,700
74,700 (a)Noble Drilling Corp. 2,413,744
207,000 (a)Santa Fe Energy Resources 2,134,688
------------
TOTAL 7,390,444
------------
</TABLE>
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------------------------------- ------------
<C> <S> <C>
FINANCE--24.9%
40,700 Allmerica Financial Corp. $ 2,548,837
115,800 Comdisco, Inc. 5,124,150
8,000 (c)Fairfax Financial Holding Ltd. 3,002,516
61,700 Financial Securities Assurance 3,694,287
79,200 Finova Group, Inc. 4,638,150
37,121 Penncorp Financial Group, Inc. 965,146
38,170 PMI Group, Inc. 3,101,312
94,600 Provident Cos., Inc. 3,695,313
61,700 S & P Midcap 400 Trust 4,463,609
------------
TOTAL 31,233,320
------------
HEALTHCARE--7.2%
71,155 Biogen, Inc. 3,157,503
59,200 (a)Health Care & Retirement 2,412,400
67,200 Ligand Pharmaceuticals, Inc., Class B 974,400
60,889 Pathogenesis Corp. 2,412,727
------------
TOTAL 8,957,030
------------
MISCELLANEOUS--3.9%
61,100 (a)Billing Info Concepts Corp. 1,710,800
74,200 EFTC Corporation 1,270,675
72,200 Viad Corp. 1,863,663
------------
TOTAL 4,845,138
------------
TECHNOLOGY--14.3%
85,200 Information Resources, Inc. 1,592,175
88,200 (a)Innova Corp. 1,510,425
172,400 Integrated Device Technology, Inc. 2,079,575
63,050 Kla-Tencor Corp. 2,541,703
40,500 Networks Associates, Inc. 2,774,250
54,300 Novellus Systems, Inc. 2,599,612
38,580 (a)Sterling Commerce, Inc. 1,642,061
55,100 (a)Synopsys, Inc. 2,369,300
36,289 USWEB Corp. 827,843
------------
TOTAL 17,936,944
------------
</TABLE>
OLD WESTBURY GROWTH OPPORTUNITY FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES OR
PRINCIPAL
AMOUNT VALUE
---------- ----------------------------------------- ------------
<C> <S> <C> <C>
TRANSPORTATION--2.8%
55,700 Expeditors International of Washing $ 2,367,250
43,700 Southwest Airlines Co. 1,199,018
------------
TOTAL 3,566,268
------------
TOTAL COMMON STOCKS (identified cost $105,804,775) 118,628,653
------------
CONVERTIBLE BONDS--2.1%
$2,677,000 (c)Candescent Technology, 7.00%, 5/1/2003
(at amortized cost) 2,677,000
------------
TOTAL INVESTMENTS (Identified cost $108,481,775)(b) $121,305,653
------------
CASH AND OTHER ASSETS NET OF LIABILITIES--3.2% 3,965,808
------------
NET ASSETS--100.0% $125,271,461
============
</TABLE>
See Notes to Portfolios of Investments on Page 27.
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- -------------------------------------------------- ------------
<C> <S> <C>
COMMON AND PREFERRED STOCKS--96.0%
ARGENTINA--1.6%
180,649 Banco De Galicia Y Buenos Aires (Banks) $ 1,093,071
30,410 Telecom Argentina ADR (Services) 1,094,760
20,905 YPF Sociedad Anunima--Class D (Energy) 728,425
------------
TOTAL ARGENTINA 2,916,256
------------
AUSTRALIA--2.6%
76,899 Brambles Industries, Ltd. (Services) 1,579,276
40,020 Broken Hill Properties Co. ORD (Diversified) 390,015
230,800 Westpac Banking Corporation (Banks) 1,544,493
364,800 Woolworth ORD (Consumer Goods) 1,251,416
------------
TOTAL AUSTRALIA 4,765,200
------------
BRAZIL--5.9%
53,370 Bompreco Supermercados GDS (Consumer Goods) 1,027,373
37,001 Cia Vale Do Rio Doce Pn (Materials) 873,657
48,000 Companhia Paranaense ADR Preferred--
Class B (Utilities) 684,000
17,886 Eletrobas Preferred B (1000 shares) (Utilities) 803,971
51,330 Elevadores Atlas S.A. ORD (Capital Goods) 807,993
2,379 Light Servicios Electricidade Preferred (1000
shares) (Utilities) 957,009
5,013 Petrol Brasileiros (1,000 shares) Preferred
(Utilities) 1,271,422
29,362 (a)Telebras Telec Brasileiras (1,000 shares)
Preferred (Services) 3,584,543
2,195 Telesp (1000 shares) Preferred (Services) 746,703
------------
TOTAL BRAZIL 10,756,671
------------
CHILE--0.5%
53,680 Banco De A Edwards ADR (Banks) 862,235
------------
EASTERN EUROPE--0.1%
965 Baltic Republics Fund Ltd. Preferred (Mutual Fund) 199,755
------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------------------- ------------
<C> <S> <C>
FINLAND--1.9%
15,007 Metra--Class B (Capital Goods) $ 377,580
46,000 Nokia--Class A (Electronics & Electrical Equipment) 3,083,506
------------
TOTAL FINLAND 3,461,086
------------
FRANCE--8.7%
9,637 Alcatel (Electronics & Electrical Equipment) 1,785,371
38,701 Banque National De Paris (Banks) 3,260,182
16,574 Compagnie Fin Paribas (Financial Services &
Property) 1,762,459
17,613 Elf Aquitaine (Energy) 2,308,990
11,286 Lafarge S.A. (Materials) 1,065,092
940 Lafarge Rights (Materials) 24,688
3,154 (a)Pinault au Printemps (Consumer Goods) 2,346,700
13,488 Schneider S.A. ORD (Capital Goods) 1,008,490
23,771 Valeo (Consumer Goods) 2,361,894
------------
TOTAL FRANCE 15,923,866
------------
GERMANY--5.5%
8,262 Allianz AG Holdings--Class D (Financial Services &
Property) 2,540,171
17,112 Daimler-Benz AG (Capital Goods) 1,669,835
26,697 Deutsche Bank AG ORD (Banks) 2,053,501
3,152 Linde AG (Capital Goods) 2,175,186
26,963 Siemens AG (Electronics & Electrical Equipment) 1,576,871
------------
TOTAL GERMANY 10,015,564
------------
HONG KONG--4.9%
2,976,610 Cafe De Coral Hldg. ORD (Consumer Goods) 733,780
23,767,810 Champion Technology (Services) 1,380,423
312,850 Citic Pacific Ltd. (Diversified) 961,000
940,965 Glorious Sun (Consumer Goods) 229,533
2,173,892 Gold Peak (Consumer Goods) 953,954
410,206 (a)Gold Peak Warrants (Consumer Goods) 21,177
5,612,000 Guangzhou Investments (Diversified) 1,014,042
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
438,114 Jardine Matheson Holdings ORD (Singapore Registered)
(Diversified) $ 1,848,841
2,546,817 Kantone Holdings Ltd. ORD (Services) 124,909
1,371,213 Union Bank of Hong Kong ORD (Banks) 1,566,241
------------
TOTAL HONG KONG 8,833,900
------------
HUNGARY--0.2%
2,975 Gedeon Richter GDR "S' (Health Care) 316,838
------------
INDIA--2.8%
212,466 Mahindra & Mahindra GDR (Capital Goods) 1,566,934
113,516 States Bank of India GDR (Banks) 2,156,804
117,832 Videsh Sanchar Nigam Ltd. GDR (Services) 1,443,442
------------
TOTAL INDIA 5,167,180
------------
IRELAND--2.1%
144,061 Allied Irish Banks (Banks) 1,980,047
90,154 Bank of Ireland (Banks) 1,827,072
------------
TOTAL IRELAND 3,807,119
------------
ITALY--3.9%
158,000 IST San Paulo (Banks) 2,318,730
626,300 INA (Services) 1,867,590
385,400 Telecom Italia (Services) 2,902,462
------------
TOTAL ITALY 7,088,782
------------
JAPAN--11.3%
276,939 Bank of Tokyo Mutsubishi Bank (Banks) 3,416,915
1,086 DDI Corporation (Services) 2,738,708
423,000 Fujitsu Ltd. ORD (Electronics and Electrical
Equipment) 4,919,715
162 Murata Manufacturing Company ORD (Electronics &
Electrical Equipment) 4,646
82,787 Mycal Corporation ORD (Consumer Goods) 564,004
638 Nippon Telephone & Telegraph Co. (Services) 5,571,214
41,383 Sony Corporation (Electronics & Electrical
Equipment) 3,429,892
------------
TOTAL JAPAN 20,645,094
------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- ---------------------------------------------------- ------------
<C> <S> <C>
MEXICO--3.0%
71,212 Apasco ORD (Materials) $ 484,983
201,117 Banamex (Banks) 623,233
689,650 Controlador Comercial Mexicana S.A. (Consumer Goods) 853,224
175,770 Corp. Geo S.A.--Series B (Capital Goods) 1,211,564
313,880 Empresas Ica Sociedad Controladora (Materials) 648,693
326,850 Kimberly Clark De Mexico--Class A (Consumer Goods) 1,586,688
------------
TOTAL MEXICO 5,408,385
------------
NETHERLANDS--3.9%
112,740 ABN Amro Holdings (Banks) 2,744,043
8,891 Akzo Nobel NLG20 (Health Care) 1,807,757
15,604 IHC Caland (Capital Goods) 907,802
12,152 Wolters Klower (Consumer Goods) 1,587,683
------------
TOTAL NETHERLANDS 7,047,285
------------
PERU--1.1%
37,000 Luz Del Sur--Class A (Utilities) 591,075
676,239 Telefonica De Peru--Class B (Services) 1,487,869
------------
TOTAL PERU 2,078,944
------------
PHILIPPINES--0.0%
30,095 Bacnotan Consolidated Industries--Class B
(Materials) 44,975
85,051 (a)Jardine Davies, Inc. (Diversified) 41,837
------------
TOTAL PHILIPPINES 86,812
------------
POLAND--2.9%
18,926 Bank Slaski S.A. ORD (Banks) 1,622,706
228,902 Elektrim S.A. ORD (Capital Goods) 3,270,992
7,920 KGHM Polska Miedz (Materials) 36,172
10,000 Powszechny Bank Kredytowy (Banks) 335,887
------------
TOTAL POLAND 5,265,757
------------
PORTUGAL--1.6%
46,307 Electricidade De Portugal S.A. (Services) 1,207,692
32,695 Portugal Telecom S.A. ORD (Services) 1,747,488
------------
TOTAL PORTUGAL 2,955,180
------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
--------- ------------------------------------------------ ------------
<C> <S> <C>
ROMANIA--0.5%
11,287 Societe Generale Romania Fund Ltd. (Mutual Fund) $ 959,395
------------
RUSSIA--0.5%
73,000 First N.I.S. Regional Fund (Mutual Fund) 912,500
------------
SINGAPORE--0.3%
4,573 Development Bank of Singapore (Banks) 30,342
813,518 Hotel Properties Ltd. ORD (Financial Services &
Property) 426,679
------------
TOTAL SINGAPORE 457,021
------------
SOUTH AFRICA--2.8%
54,480 South African Breweries ORD (Consumer Goods) 1,822,470
335,900 CG Smith Ltd. (Consumer Goods) 1,662,213
215,001 Capital Alliance Holdings (Services) 1,617,189
------------
TOTAL SOUTH AFRICA 5,101,872
------------
SPAIN--3.3%
9,883 Bank Inter ORD (Banks) 667,595
24,677 Gas Natural S.A. ORD (Utilities) 1,579,535
41,970 Telefonica De Espana ORD (Services) 1,750,585
3,088 Telefonica De Espana Rights (Services) 27,544
49,275 Vallehermoso (Financial Services & Property) 1,906,627
------------
TOTAL SPAIN 5,931,886
------------
SWEDEN--1.0%
57,550 Foreningssparbanken (Banks) 1,797,208
------------
SWITZERLAND--6.2%
1,217 ABB AG SF 50 ORD (Capital Goods) 1,996,172
1,397 Nestle (Consumer Goods) 2,699,067
1,550 Novartis CHF20 Reg S.A. ORD (Health Care) 2,564,057
153 Roche Holdings (Health Care) 1,539,684
7,075 SBC--Registered ORD (Banks) 2,436,892
------------
TOTAL SWITZERLAND 11,235,872
------------
</TABLE>
OLD WESTBURY INTERNATIONAL FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
---------- --------------------------------------------- ------------
<C> <S> <C>
TURKEY--0.9%
2,656,626 NETAS ORD (Consumer Goods) $ 989,056
9,298,400 Sabanci TRL 1000 (Banks) 679,327
------------
TOTAL TURKEY 1,668,383
------------
UNITED KINGDOM--16.0%
297,700 British Airways ORD (Services) 3,129,003
181,260 Cable & Wireless PLC ORD (Electronics &
Electrical Equipment) 2,083,852
249,185 Carlton Communications PLC ORD (Electronics &
Electrical Equipment) 2,310,950
195,242 Diageo PLC (Consumer Goods) 2,322,374
138,760 Land Securities ORD (Financial Services &
Property) 2,476,350
223,000 Peninsula & Oriental DFD (Diversified) 3,288,486
251,250 Royal Sun Alliance ORD (Financial Services &
Property) 2,788,779
114,800 RIO Tinto (Materials) 1,649,745
333,500 Scottish Power ORD (Utilities) 3,063,639
136,416 Siebe PLC (Diversified) 3,100,136
119,208 The Boots Company PLC ORD (Health Care) 1,845,556
27,561 Zeneca Group (Health Care) 1,188,204
------------
TOTAL UNITED KINGDOM 29,247,074
------------
TOTAL INVESTMENTS (Identified cost $145,211,799)(b) $174,913,120
------------
CASH AND OTHER ASSETS NET OF LIABILITIES--4.0% 7,203,424
------------
NET ASSETS--100% $182,116,544
============
</TABLE>
See Notes to Portfolios of Investments on Page 27.
OLD WESTBURY FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- --------------------------------------- --------
<C> <S> <C>
BONDS--82.1%
$580,000 U.S. Treasury Notes, 5.875%, 11/15/2005 $583,988
--------
TOTAL INVESTMENTS
(Identified Cost $586,727)(b) 583,988
--------
CASH AND OTHER ASSETS NET OF LIABILITIES--17.9% 127,633
--------
NET ASSETS--100% $711,621
========
</TABLE>
See Notes to Portfolios of Investments on Page 27.
OLD WESTBURY MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ------------------------------------------------------- ----------
<C> <S> <C>
LONG-TERM MUNICIPALS--94.5%
ARIZONA--4.4%
125,000 Phoenix Civic Improvement Corp. Water Systems Revenue
Bonds, 5.00%, 7/1/2002 $ 128,619
----------
CALIFORNIA--3.4%
100,000 Turlock California Irrigation District Revenue
Refunding Bonds, 5.000%, 1/1/2012 (MBIA INS) 99,947
----------
ILLINOIS--11.3%
100,000 Chicago Park District Illinois GO UT Refunding Bonds,
5.10% (Original Issue Yield: 5.200%), 1/1/2011 (AMBAC
INS) 101,342
210,000 Kane County Community Unit School District Number 304 GO UT
Refunding Bonds, 6.10%, 6/1/2006 (FGIC INS) 229,779
----------
TOTAL 331,121
----------
MICHIGAN--14.4%
100,000 Michigan Municipal Bond Authority Revenue Refunding
Bonds (Series A), 5.00%, 10/1/2000 102,058
100,000 Michigan State Hospital Finance Authority Revenue
Refunding Bonds, 5.00% (Original Issue Yield:
5.150%), 2/15/2012 (MBIA INS) 98,974
115,000 Michigan State Underground Storage Tank Financial
Assurance Authority Revenue Refunding Bonds (Series
I), 5.00%, 5/1/2000 (AMBAC INS) 117,030
100,000 Petoskey Michigan Public School District, 5.25%
(Original Issue Yield: 5.300%), 5/1/2006 104,302
----------
TOTAL 422,364
----------
NEW YORK--13.6%
100,000 New York City NY GO UT (Series 95D), 6.00% (Original
Issue Yield: 6.200%), 2/15/2020 103,430
100,000 New York St. Environmental Facility Corp. Pollution
Control Revenue Bonds (Series A), 4.70%, 2/15/2004 101,906
</TABLE>
OLD WESTBURY MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- ------------------------------------------------------ ----------
<C> <S> <C>
NEW YORK (Continued)
100,000 New York State Power Authority Revenue & General
Purpose Refunding Bonds (Series C), 5.00% (Original
Issue Yield: 5.150%), 2/15/2018 $ 96,297
100,000 North Hempstead NY GO UT (Series A), 5.00% (Original
Issue Yield: 5.150%), 1/15/2014 (FGIC INS) 98,827
----------
TOTAL 400,460
----------
NORTH CAROLINA--4.2%
120,000 Durham, NC Certificate of Participation, 5.00%,
6/1/2004 122,941
----------
OHIO--5.3%
150,000 Ohio State Building Authority Revenue Refunding Bonds,
5.00%, 9/1/2004 154,527
----------
OKLAHOMA--4.3%
125,000 Tulsa County Oklahoma Independent School District
Number 9 Union Board of Education GO UT, 4.50%,
6/1/2000 126,181
----------
PENNSYLVANIA--3.6%
100,000 Montgomery County Pennsylvania GO UT (Series A), 6.10%
(Original Issue Yield: 6.150%), 10/15/2025 104,529
----------
TEXAS--14.7%
120,000 Austin Texas Utility System Revenue Refunding Bonds,
5.875% (Original Issue Yield: 7.050%), 5/15/2021
(AMBAC INS) 125,556
200,000 Beaumont Texas UT GO, 5.00% (Original Issue Yield:
5.125%), 3/1/2015 (MBIA INS) 195,418
125,000 Mission Texas Independent School District GO UT, 4.50%
(Original Issue Yield: 5.450%), 2/15/2018 110,625
----------
TOTAL 431,599
----------
</TABLE>
OLD WESTBURY MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
--------- --------------------------------------------------- ----------
<C> <S> <C> <C>
SOUTH CAROLINA--3.7%
100,000 Piedmont Municipal Power Agency, SC, Electric
Revenue Refunding Bonds, 6.30% (Original Issue
Yield: 6.490%), 1/1/2022 (MBIA INS) $ 109,596
----------
WISCONSIN--4.3%
125,000 Milwaukee Wisconsin UT GO Refunding Bonds, 4.80%
(Original Issue Yield: 4.950%), 12/1/2000 127,193
----------
PUERTO RICO--7.3%
100,000 Puerto Rico Commonwealth Aqueduct & Sewer Authority
Revenue Refunding Bonds, 6.00%, 7/1/2009 (AMBAC
GTD) 107,638
100,000 Puerto Rico Commonwealth UT GO, 5.75% (Original
Issue Yield: 4.820), 7/1/2012 (MBIA INS) 107,914
----------
TOTAL 215,552
----------
TOTAL INVESTMENTS
(Identified Cost $2,781,541)(b) 2,774,629
----------
CASH AND OTHER ASSETS NET OF LIABILITIES--5.5% 162,941
----------
NET ASSETS--100.0% $2,937,570
==========
</TABLE>
See Notes to Portfolios of Investments on Page 27.
OLD WESTBURY FUNDS, INC.
NOTES TO PORTFOLIOS OF INVESTMENTS
April 30, 1998 (unaudited)
- -------------------------------------------------------------------------------
(a) Non-income producing security.
(b) At April 30, 1998, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes.
<TABLE>
<CAPTION>
NET AGGREGATE AGGREGATE
UNREALIZED GROSS GROSS
APPRECIATION/ UNREALIZED UNREALIZED
(DEPRECIATION) APPRECIATION DEPRECIATION
FOR FEDERAL FOR FEDERAL FOR FEDERAL TOTAL NET
OLD WESTBURY FUNDS TAX PURPOSES TAX PURPOSES TAX PURPOSES ASSETS*
----------------------- -------------- ------------ ------------- ------------
<C> <S> <C> <C> <C>
Core Equities Fund $ 56,955 $ 111,996 $ 55,041 $ 5,414,543
Growth Opportunity Fund 12,823,878 14,090,189 1,266,311 125,271,461
International Fund 29,701,321 37,960,004 8,258,683 182,116,544
Fixed Income Fund (2,739) 0 2,739 711,621
Municipal Bond Fund (6,912) 8,423 15,335 2,937,570
</TABLE>
* The categories of investments are shown as a percentage of net assets at
April 30, 1998.
(c) Denotes a restricted security which is subject to restrictions on resale
under federal and international securities laws. At the end of the period,
these securities amounted to $5,679,516, which represents 4.5% of Growth
Opportunity Fund's net assets.
The following acronyms are used in these portfolios:
ADR--American Depositary Receipts AMBAC--American Municipal Bond Assurance
Company FGIC--Financial Guaranty Insurance Company GO--General Obligation
GDR--Global Depositary Receipts GTD--Guaranty INS--Insured MBIA--Municipal Bond
Investors Assurance ORD--Ordinary Shares PLC--Public Limited Company
UT--Unlimited Tax
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE GROWTH
EQUITIES OPPORTUNITY INTERNATIONAL
FUND FUND FUND
---------- ------------ -------------
<S> <C> <C> <C>
ASSETS:
Investments, at market value........ $4,609,654 $121,305,653 $174,913,120
Cash................................ 570,347 2,927,559 5,312,201
Accrued income receivable........... 6,308 49,731 1,089,272
Receivable for investments sold..... 271,716 2,424,432 1,842,585
Receivable for withholding taxes-- -- -- 181,670
dividends...........................
Deferred organization expense....... 18,179 22,375 8,540
Prepaid Insurance................... -- 4,537 10,738
---------- ------------ ------------
Total assets....................... 5,476,204 126,734,287 183,358,126
---------- ------------ ------------
LIABILITIES:
Operating expenses payable.......... 3,864 469,924 856,230
Payable for investments purchased... 39,011 992,902 355,862
Organization costs.................. 18,786 -- --
Receivable for fund shares redeemed. -- -- 29,490
---------- ------------ ------------
Total liabilities.................. 61,661 1,462,826 1,241,582
---------- ------------ ------------
NET ASSETS........................... $5,414,543 $125,271,461 $182,116,544
========== ============ ============
Net Assets consist of:
Paid in capital..................... $5,366,980 $113,474,597 $165,487,768
Undistributed net investment
income/Accumulated net investment
loss............................... 3,380 (417,167) (184,418)(a)
Accumulated net realized gain/(loss)
on investments and foreign currency
translations....................... (12,772) (609,847) (12,870,409)
Net unrealized
appreciation/(depreciation) on
investments and foreign currency
translations....................... 56,955 12,823,878 29,683,603
---------- ------------ ------------
NET ASSETS........................... $5,414,543 $125,271,461 $182,116,544
========== ============ ============
NET ASSET VALUE, MAXIMUM OFFERING
PRICE AND REDEMPTION PROCEEDS PER
SHARE............................... $10.28 $13.38 $11.74
========== ============ ============
SHARES OF CAPITAL STOCK OUTSTANDING.. 526,703 9,362,491 15,505,922
========== ============ ============
INVESTMENTS, AT IDENTIFIED COST...... $4,552,699 $108,481,775 $145,211,799
========== ============ ============
</TABLE>
(a) Represents distributions in excess of net investment income.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED MUNICIPAL
INCOME BOND
FUND FUND
-------- ----------
<S> <C> <C>
ASSETS:
Investments, at market value............................. $583,988 $2,774,629
Cash..................................................... 112,277 929,266
Accrued income receivable................................ 15,928 39,637
Receivable for investments sold.......................... -- --
Receivable for withholding taxes--dividends.............. -- --
Deferred organization expense............................ 18,272 18,210
Prepaid Insurance........................................ -- --
-------- ----------
Total assets............................................ 730,465 3,761,742
-------- ----------
LIABILITIES:
Operating expenses payable............................... 58 1,698
Payable for investments purchased........................ -- 803,688
Organization costs....................................... 18,786 18,786
Receivable for fund shares redeemed...................... -- --
-------- ----------
Total liabilities....................................... 18,844 824,172
-------- ----------
NET ASSETS................................................ $711,621 $2,937,570
======== ==========
Net Assets consist of:
Paid in capital.......................................... $712,000 $2,940,249
Undistributed net investment income/Accumulated
net investment loss..................................... 2,360 6,365
Accumulated net realized gain/(loss) on investments and
foreign currency translations........................... -- (2,132)
Net unrealized appreciation/(depreciation) on investments
and
foreign currency translations........................... (2,739) (6,912)
-------- ----------
NET ASSETS................................................ $711,621 $2,937,570
======== ==========
NET ASSET VALUE, MAXIMUM OFFERING PRICE AND
REDEMPTION PROCEEDS PER SHARE............................ $10.00 $10.05
======== ==========
SHARES OF CAPITAL STOCK OUTSTANDING....................... 71,152 292,384
======== ==========
INVESTMENTS, AT IDENTIFIED COST........................... $586,727 $2,781,541
======== ==========
</TABLE>
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF OPERATIONS
For the six months ended April 30, 1998 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE GROWTH
EQUITIES OPPORTUNITY INTERNATIONAL
FUND(A) FUND FUND
-------- ----------- -------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.............................. $ 3,467 $ 156,773 $ 1,938,768(b)
Interest............................... 4,384 122,855 215,915
-------- ----------- ------------
Total income.......................... 7,851 279,628 2,154,683
-------- ----------- ------------
EXPENSES:
Investment Advisory.................... 2,504 331,311 623,885
Custody................................ 537 63,214 161,549
Administration......................... 12,123 63,133 121,008
Shareholder servicing.................. 894 105,356 201,936
Registration........................... 9,221 11,741 20,459
Amortization of organization costs..... 607 2,954 9,091
Distribution........................... 2,051 422 3,730
Printing and Postage................... 2,428 4,657 9,604
Legal.................................. 2,428 8,777 19,186
Audit.................................. 8,498 17,356 21,572
Insurance.............................. -- 4,537 4,462
Transfer Agent......................... 4,273 10,241 23,215
Directors.............................. 838 4,277 3,842
Miscellaneous.......................... 243 496 10,219
-------- ----------- ------------
Total expenses........................ 46,645 628,472 1,233,758
Less fees waived and reimbursed:
Waiver of investment advisory fee...... (2,504) -- (8,609)
Waiver of administration fee........... -- (12,635) (24,079)
Reimbursement of other operating
expenses.............................. (39,670) -- --
-------- ----------- ------------
Total waivers.......................... (42,174) (12,635) (32,688)
-------- ----------- ------------
Net expenses.......................... 4,471 615,837 1,201,070
-------- ----------- ------------
NET INVESTMENT INCOME (LOSS)........... 3,380 (336,209) 953,613
-------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS):
Net realized gain (loss) on
investments........................... (12,772) (220,298) (13,167,961)
Net realized gain (loss) on foreign
currency transactions................. -- -- (13,983)
Net change in unrealized
appreciation/(depreciation) on
investments........................... 56,955 11,674,456 25,848,573
Net change in unrealized
appreciation/(depreciation) on
translations of assets and liabilities
in foreign currencies and foreign
currency contracts.................... -- -- (11,853)
-------- ----------- ------------
NET REALIZED AND UNREALIZED GAIN........ 44,183 11,454,158 12,654,776
-------- ----------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.............. $ 47,563 $11,117,949 $ 13,608,389
======== =========== ============
</TABLE>
(a) For the period March 2, 1998 (commencement of operations) to April 30, 1998.
(b) Net of foreign withholding tax of $145,302.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF OPERATIONS
For the six months ended April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED MUNICIPAL
INCOME BOND
FUND(A) FUND(B)
-------- ---------
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $ 2,932 $ 8,639
-------- --------
Total income............................................. 2,932 8,639
-------- --------
EXPENSES:
Investment Advisory....................................... 245 975
Custody................................................... 82 325
Administration............................................ 10,069 11,301
Shareholder servicing..................................... 136 541
Registration.............................................. 7,912 8,861
Amortization of organization costs........................ 515 576
Distribution.............................................. 1,761 1,972
Printing and Postage...................................... 2,084 2,334
Legal..................................................... 2,084 2,334
Audit..................................................... 7,292 8,166
Transfer Agent............................................ 3,667 4,106
Directors................................................. 719 805
Miscellaneous............................................. 209 234
-------- --------
Total expenses........................................... 36,775 42,530
Less fees waived and reimbursed:
Waiver of investment advisory fee......................... (245) (518)
Reimbursement of other operating expenses................. (35,958) (39,738)
-------- --------
Total waivers............................................. (36,203) (40,256)
-------- --------
Net expenses............................................. 572 2,274
-------- --------
NET INVESTMENT INCOME..................................... 2,360 6,365
-------- --------
NET REALIZED AND UNREALIZED GAIN/(LOSS):
Net realized gain (loss) on investments................... -- (2,132)
Net change in unrealized appreciation/(depreciation) on
investments.............................................. (2,739) (6,912)
-------- --------
NET REALIZED AND UNREALIZED GAIN/(LOSS).................... (2,739) (9,044)
-------- --------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS........................................... $ (379) $ (2,679)
======== ========
</TABLE>
(a) For the period March 12, 1998 (commencement of operations) to April 30,
1998.
(b) For the period March 6, 1998 (commencement of operations) to April 30, 1998.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE
EQUITIES GROWTH
FUND OPPORTUNITY FUND
----------- -------------------------
PERIOD SIX MONTHS
ENDED ENDED PERIOD
APRIL 30, APRIL 30, ENDED
1998(A) 1998 OCTOBER 31,
(UNAUDITED) (UNAUDITED) 1997(B)
----------- ------------ -----------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income/(loss)........... $ 3,380 $ (336,209) $ (80,958)
Net realized gain/(loss) on investments
and
foreign currency transactions......... (12,772) (220,298) (389,549)
Net change in unrealized appreciation
on investments and foreign currency
translations.......................... 56,955 11,674,456 1,149,422
---------- ------------ -----------
Net increase in net assets from
operations............................ 47,563 11,117,949 678,915
---------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income............. -- -- --
From capital gains..................... -- -- --
---------- ------------ -----------
Net decrease in net assets from
distributions......................... -- -- --
---------- ------------ -----------
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital
stock................................. 5,367,380 66,470,346 50,921,316
Reinvestment of dividends.............. -- -- --
Net cost of capital stock redeemed..... (400) (3,844,584) (72,481)
---------- ------------ -----------
Net increase in net assets
resulting from capital stock
transactions.......................... 5,366,980 62,625,762 50,848,835
---------- ------------ -----------
NET INCREASE IN NET ASSETS............. 5,414,543 73,743,711 51,527,750
---------- ------------ -----------
NET ASSETS:
Beginning of period.................... -- 51,527,750 --
---------- ------------ -----------
End of period.......................... $5,414,543 $125,271,461 $51,527,750
========== ============ ===========
Undistributed net investment income
included in net assets at
end of period.......................... $ 3,380 $ -- $ --
========== ============ ===========
</TABLE>
(a) For the period March 2, 1998 (commencement of operations) to April 30, 1998.
(b) For the period February 28, 1997 (commencement of operations) to October 31,
1997.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
(Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIXED MUNICIPAL
INCOME BOND
INTERNATIONAL FUND FUND FUND
-------------------------- ----------- -----------
SIX MONTHS FISCAL PERIOD PERIOD
ENDED YEAR ENDED ENDED
APRIL 30, ENDED APRIL 30, APRIL 30,
1998 OCTOBER 31, 1998(A) 1998(B)
(UNAUDITED) 1997 (UNAUDITED) (UNAUDITED)
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income....... $ 953,613 $ 1,739,956 $ 2,360 $ 6,365
Net realized gain/(loss) on
investments and foreign
currency transactions...... (13,181,944) 18,327,726 -- (2,132)
Net change in unrealized
appreciation/(depreciation)
on investments and foreign
currency translations...... 25,836,720 (12,855,684) (2,739) (6,912)
------------ ------------ -------- ----------
Net increase (decrease) in
net assets from operations. 13,608,389 7,211,998 (379) (2,679)
------------ ------------ -------- ----------
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income.. (2,302,398) (1,851,779) -- --
From capital gains.......... (9,209,591) -- -- --
------------ ------------ -------- ----------
Net decrease in net assets
from distributions......... (11,511,989) (1,851,779) -- --
------------ ------------ -------- ----------
FROM CAPITAL STOCK
TRANSACTIONS:
Net proceeds from sale of
capital stock.............. 38,473,402 57,423,331 712,000 3,039,000
Reinvestment of dividends... 8,611,100 1,347,247 -- --
Net cost of capital stock
redeemed................... (40,857,766) (26,131,841) -- (98,751)
------------ ------------ -------- ----------
Net increase in net assets
resulting from capital
stock transactions......... 6,226,736 32,638,737 712,000 2,940,249
------------ ------------ -------- ----------
NET INCREASE IN NET ASSETS.. 8,323,136 37,998,956 711,621 2,937,570
------------ ------------ -------- ----------
NET ASSETS:
Beginning of period......... 173,793,408 135,794,452 -- --
------------ ------------ -------- ----------
End of period............... $182,116,544 $173,793,408 $711,621 $2,937,570
============ ============ ======== ==========
Undistributed net investment
income included in net
assets at end of period..... $ -- $ 1,164,367 $ 2,360 $ 6,365
============ ============ ======== ==========
</TABLE>
(a) For the period March 12, 1998 (commencement of operations) to April 30,
1998.
(b) For the period March 6, 1998 (commencement of operations) to April 30, 1998.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
NET REALIZED
NET ASSET NET AND DISTRIBUTIONS DISTRIBUTIONS
PERIOD VALUE, INVESTMENT UNREALIZED TOTAL FROM FROM NET FROM
ENDED BEGINNING INCOME/ GAIN/(LOSS) ON INVESTMENT INVESTMENT CAPITAL
OCTOBER 31, OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS
- ----------- --------- ---------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
CORE EQUITIES FUND
1998
(a) $10.00 0.01 0.27 0.28 -- --
GROWTH OPPORTUNITY FUND
1997
(b) $10.00 (0.06) 1.88 1.82 -- --
1998
(f) $11.82 (0.04) 1.60 1.56 -- --
INTERNATIONAL FUND
1993
(c) $10.00 0.00 0.14 0.14 -- --
1994 $10.14 0.10 0.57 0.67 -- --
1995 $10.81 0.14 (1.07) (0.93) (0.08) --
1996 $ 9.80 0.13 1.37 1.50 (0.14) --
1997 $11.16 0.12 0.62 0.74 (0.15) --
1998
(f) $11.75 0.09 0.80 0.89 (0.18) (0.72)
FIXED INCOME FUND
1998
(d) $10.00 0.07 (0.07) 0.00 -- --
MUNICIPAL BOND FUND
1998
(e) $10.00 0.04 0.01(g) 0.05 -- --
- ---------------------------------------------------------------------------------------
</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.
+ The calculation takes state expense limitations into consideration.
(a) For the period from March 2, 1998 (commencement of operations) to April
30, 1998.
(b) For the period from February 28, 1997 (commencement of operations) to
October 31, 1997.
(c) For the period from October 22, 1993 (commencement of operations) to October
31, 1993.
(d) For the period from March 12, 1998 (commencement of operations) to April 30,
1998.
(e) For the period from March 6, 1998 (commencement of operations) to April 30,
1998.
(f) Six months ended April 30, 1998 (unaudited).
(g) The amount shown for a share outstanding does not correspond with the
aggregate net gain (loss) on investments for the period ended due to the
timing of sales and purchases of fund shares in relation to fluctuating
market values of the investments of the Municipal Bond Fund.
Note:Per share values calculated using average shares outstanding.
See Notes to Financial Statements.
OLD WESTBURY FUNDS, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
RATIOS TO AVERAGE NET ASSETS
-------------------------------- NET ASSETS, AVERAGE
NET ASSET EXPENSES NET END COMMISSION PORTFOLIO
TOTAL VALUE, END TOTAL BEFORE NET INVESTMENT OF PERIOD RATE TURNOVER
DISTRIBUTIONS OF PERIOD RETURN* WAIVER EXPENSES INCOME (000 OMITTED) PAID RATE
- ------------- ---------- ------- -------- -------- ---------- ------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- $10.28 2.8% 13.04%** 1.25%** 0.95%** $ 5,415 0.1992 19%
-- $11.82 18.2% 2.58%** 1.50%** (0.79%)** $ 51,528 0.1410 46%
-- $13.38 13.2% 1.50%** 1.46%** (0.80%)** $125,271 0.0886 49%
-- $10.14 1.4% 2.50%**+ 1.50%** (0.91%)** $ 11,957 -- 0%
-- $10.81 6.6% 1.70% 1.50% 0.90% $104,529 -- 23%
(0.08) $ 9.80 (8.6%) 1.60% 1.50% 1.40% $104,194 0.0100 32%
(0.14) $11.16 15.5% 1.52% 1.50% 1.19% $135,794 0.0080 55%
(0.15) $11.75 6.6% 1.52% 1.50% 0.98% $173,793 0.0077 58%
(0.90) $11.74 8.6% 1.53%** 1.49%** 1.18%** $182,117 0.0070 47%
-- $10.00 0.0% 67.49%** 1.05%** 4.33%** $ 712 -- 0%
-- $10.05 0.5% 19.63%** 1.05%** 2.94%** $ 2,938 -- 29%
- --------------------------------------------------------------------------------------------------------
</TABLE>
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited)
- -------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES. Old Westbury Funds, Inc.
(the "Fund"), is 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 Board of Directors (the
"Directors") to create an unlimited number of series, each of which is a
separate class of shares. At April 30, 1998, the Fund consisted of five separate
investment portfolios (each portfolio individually referred to as a "Portfolio"
and collectively as the "Portfolios") which are presented herein:
<TABLE>
<CAPTION>
PORTFOLIO NAME INVESTMENT OBJECTIVE <S> <C> Old Westbury Core
Equities Fund Long-term capital appreciation.
("Core Equities Fund")
Old Westbury Growth Opportunity Fund Capital appreciation.
("Growth Opportunity Fund")
Old Westbury International Fund Long-term growth of capital.
("International Fund")
Old Westbury Fixed Income Fund Total return.
("Fixed Income Fund")
Old Westbury Municipal Bond Fund High level of current income
("Municipal Bond Fund") exempt from federal regular
income tax.
</TABLE>
The Fund was incorporated under the laws of the state of Maryland on August
26, 1993 and commenced operations on October 22, 1993.
The following is a summary of the significant accounting policies followed by
the Portfolios:
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 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,
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
N.A. ("Bessemer"), the Fund'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 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 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 Directors
designed to reflect in good faith the fair value of such securities.
B. FOREIGN CURRENCY TRANSLATION. The books and records of the International
Fund are maintained in United States dollars. Foreign currency amounts are
translated into United States dollars on the following basis:
(i) value on 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 International Fund are presented at the foreign
exchange rates and values at the close of the period, the International 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 the securities held at the end of the period. Similarly,
the International 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
stability.
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
C. FORWARD FOREIGN CURRENCY CONTRACTS. The International 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, 1998.
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 Portfolios are 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 each 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 Portfolios 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 Portfolios' policy to comply with the requirements
of the Internal Revenue Code (the "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.
At October 31, 1997, Growth Opportunity Fund, for federal income tax purposes,
had a capital loss carryforward of $367,778, which will expire in the year 2005.
The capital loss carryforward will reduce the Portfolio's taxable income arising
from future net realized gains on investments, if any, to the extent permitted
by the Code, and thus will reduce the amount of the distributions to
shareholders which would otherwise be necessary to relieve the Portfolio of any
liability for federal tax.
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
G. DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS. The Portfolios anticipate 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 Portfolios.
H. RESTRICTED SECURITIES. Restricted securities are securities that may only
be resold upon registration under federal securities laws or in transactions
exempt from such registration. In some cases, the issuer of restricted
securities has agreed to register such securities for resale, at the issuer's
expense either upon demand by the Fund or in connection with another registered
offering of the securities. Many restricted securities may be resold in the
secondary market in transactions exempt from registration. Such restricted
securities may be determined to be liquid under criteria established by the
Directors. The Fund will not incur any registration costs upon such resales. The
Fund's restricted securities are valued at the price provided by dealers in the
secondary market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
Additional information on each restricted security held in Growth Opportunity
Fund at April 30, 1998 is as follows:
<TABLE>
<CAPTION>
SECURITY ACQUISITION DATE ACQUISITION COST
-------- ---------------- ----------------
<S> <C> <C>
Fairfax Financial Holding Ltd. 3/20/1998-3/26/1998 $2,711,317
Candescent Technology 4/17/1998 2,677,000
</TABLE>
2. TRANSACTIONS WITH AFFILIATES.
A. INVESTMENT ADVISORY FEES. Pursuant to an investment advisory contract, the
Fund has retained Bessemer to make investment decisions for the Portfolios. The
investment advisory fee paid to the adviser is computed daily and paid monthly
in accordance with the following schedule:
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
Core Equities Fund--0.70% of the first $100 million of the Portfolio's average
net assets, 0.65% of the second $100 million of such assets and 0.60% of such
assets exceeding $200 million.
Growth Opportunity Fund and International Fund--0.80% of the first $100
million of the Portfolios' average net assets, 0.75% of the second $100
million of such assets and 0.70% of such assets exceeding $200 million.
Fixed Income Fund and Municipal Fund--0.45% of the first $100 million of the
Portfolios' average net assets, 0.40% of the second $100 million of such
assets and 0.35% 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 Portfolios 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
Portfolios with applicable laws and regulations; providing equipment and
personnel necessary for maintaining the organization of the Portfolios;
preparation of certain documents in connection with meetings of the Directors
and shareholders; the maintenance of books and records of the Portfolios; and
paying the compensation of the Portfolios' officers and Directors affiliated
with FAS. For providing these services, FAS received from the Portfolios a fee
accrued daily and paid monthly at an annual rate equal to 0.15% of the average
daily net assets of the Fund up to $250 million; .125% of such assets from $250
million to $500 million; 0.10% of such assets from $500 million to $750 million;
and 0.75% of such assets over $750 million.
C. DISTRIBUTION AND SERVICE PLAN AND DISTRIBUTION REIMBURSEMENT FEES. The
Directors adopted a distribution and service plan (the "Plan") for the
Portfolios pursuant to Rule 12b-1 of the Act, and pursuant to the Plan, the
Portfolios 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, Bessemer received
payments from the Portfolios to permit it to make payments to broker-dealers for
providing shareholder services. Under
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
its shareholder servicing agreement, Edgewood Services, Inc. receives payments
for the Portfolios 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 Portfolios 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 Portfolios' average daily net assets.
The distribution agreement with Edgewood Services, Inc. provides for
reimbursement to Edgewood Services, Inc. by the Portfolios for its distribution,
promotional and advertising costs incurred in connection with the distribution
of the Portfolios' shares in an amount not to exceed 0.10% per annum of the
Portfolios' average daily net assets.
In addition, the Portfolios will pay for certain other expenses under the
Plan. These expenses shall not exceed an amount equal to 0.05% per annum of the
Portfolios' 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 plus $250 per
meeting 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 Portfolios'
custodian. Bessemer is responsible for maintaining the books and records of the
Portfolios' securities and cash. For providing these services, Bessemer receives
from all Portfolios, except the International Fund, a fee accrued and paid
monthly at an annual rate equal to 0.15% of the average daily net assets of the
Portfolios. Bessemer receives from the International Fund a fee accrued and paid
monthly at an annual rate equal to 0.20% of the average daily net assets.
3. CAPITAL STOCK. The Fund 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 each Portfolio. Transactions in shares of capital stock
were as follows:
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CORE EQUITIES FUND
------------------
FOR THE
PERIOD ENDED
APRIL 30, 1998(A)
------------------
<S> <C>
Common stock sold............................................ 526,742
Reinvestment of dividends.................................... --
Common stock redeemed........................................ (39)
-------
Net increase................................................. 526,703
=======
</TABLE>
<TABLE>
<CAPTION>
GROWTH OPPORTUNITY FUND
----------------------------------
SIX MONTHS FISCAL YEAR
ENDED ENDED
APRIL 30, 1998 OCTOBER 31, 1997(B)
-------------- -------------------
<S> <C> <C>
Common stock sold............................ 5,304,179 4,366,770
Reinvestment of dividends.................... -- --
Common stock redeemed........................ (302,583) (5,875)
--------- ---------
Net increase................................. 5,001,596 4,360,895
========= =========
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND
-------------------------------
SIX MONTHS FISCAL YEAR
ENDED ENDED
APRIL 30, 1998 OCTOBER 31, 1997
-------------- ----------------
<S> <C> <C>
Common stock sold............................... 3,486,119 4,533,069
Reinvestment of dividends....................... 803,275 114,952
Common stock redeemed........................... (3,569,025) (2,028,400)
---------- ----------
Net increase.................................... 720,369 2,619,621
========== ==========
</TABLE>
<TABLE>
<CAPTION>
FIXED INCOME FUND
-----------------
FOR THE
PERIOD ENDED
APRIL 30, 1998(C)
-----------------
<S> <C>
Common stock sold............................................. 71,152
Reinvestment of dividends..................................... --
Common stock redeemed......................................... --
------
Net increase.................................................. 71,152
======
</TABLE>
OLD WESTBURY FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
April 30, 1998 (unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BOND FUND
-------------------
FOR THE
PERIOD ENDED
APRIL 30, 1998(D)
-------------------
<S> <C>
Common stock sold........................................... 302,240
Reinvestment of dividends................................... --
Common stock redeemed....................................... (9,856)
-------
Net increase................................................ 292,384
=======
</TABLE>
(a) For the period March 2, 1998 (commencement of operations) to April 30,
1998.
(b) For the period February 28, 1997 (commencement of operations) to October
31, 1997.
(c) For the period March 12, 1998 (commencement of operations) to April 30,
1998.
(d) For the period March 6, 1998 (commencement of operations) to April 30,
1998.
4. PURCHASE AND SALES OF SECURITIES. For the period ended April 30, 1998
purchases and sales of investment securities other than short-term investments
were as follows:
<TABLE>
<CAPTION>
FUND PURCHASES SALES
---- ------------ -----------
<S> <C> <C>
Core Equities Fund $ 4,979,616 $ 414,144
Growth Opportunity Fund 100,353,659 40,437,243
International Fund 72,274,469 74,125,644
Fixed Income Fund 586,727 0
Municipal Bond Fund 3,089,976 306,303
</TABLE>
5. YEAR 2000. Similar to other financial organizations, the Fund could be
adversely affected if the computer systems used by the Fund's service providers
do not properly process and calculate date-related information and data from and
after January 1, 2000. The Fund's Advisor and administrator are taking measures
that they believe are reasonably designed to address the Year 2000 issue with
respect to computer systems that they use and to obtain reasonable assurances
that comparable steps are being taken by each of the Fund's other service
providers. At this time, however, there can be no assurance that these steps
will be sufficient to avoid any adverse impact to the Funds.
INVESTMENT ADVISOR: Bessemer Trust Company, N.A. 630
Fifth Avenue New York, NY 10111 (212) 708-9100
DISTRIBUTOR AND SHAREHOLDER SERVICING AGENT: Edgewood
Services, Inc. 5800 Corporate Drive Pittsburgh, PA
15237-5829
TRANSFER AGENT: Fundamental Shareholder Services, Inc.
11 West 25th Street--7th Floor New York, NY 10010-2001
ADMINISTRATOR: Federated Administrative Services
Federated Investors Tower1001 Liberty Avenue
Pittsburgh, PA 15222-3779
SHAREHOLDER SERVICING AGENT: Bessemer Trust Company,
N.A. 630 Fifth Avenue New York, NY 10111 (212) 708-
9100
INDEPENDENT AUDITORS: Deloitte & Touche LLP Two World
Financial Center New York, NY 10281-1414
Cusip 680414307 Cusip 680414208 Cusip 680414109 Cusip 680414406 Cusip 680414505
G01963-05 (6/98)
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risks,
including possible loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus.
