<PAGE>
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[LOGO] LINDNER(R)
F U N D S
ADVISED BY RYBACK MANAGEMENT CORPORATION
CONTENTS
7711 Carondelet Avenue, Suite 700 * St. Louis, Missouri 63105 *
Tel: 314-727-5305 * Fax: 314-727-9306
Statements of Assets & Liabilities p.2
LINDNER GROWTH FUND
Letter from the Fund Managers p.6
Schedules of Investments p.8
LINDNER DIVIDEND FUND
Letter from the Fund Manager p.11
Schedules of Investments p.13
LINDNER UTILITY FUND
Letter from the Fund Manager p.17
Schedules of Investments p.19
LINDNER/RYBACK SMALL-CAP FUND
Letter from the Fund Manager p.21
Schedules of Investments p.23
LINDNER INTERNATIONAL FUND
Letter from the Fund Manager p.25
Schedules of Investments p.26
LINDNER HIGH-YIELD BOND FUND
Letter from the Fund Manager p.28
Schedules of Investments p.29
LINDNER BULWARK FUND
Letter from the Fund Manager p.31
Schedules of Investments p.33
LINDNER GOVERNMENT
MONEY MARKET FUND
Letter from the Fund Manager p.36
Schedules of Investments p.37
Statements of Operations p.38
Statements of Changes in Net Assets p.41
Notes to Financial Statements p.45
Financial Highlights p.56
TO OUR SHAREHOLDERS
1998 proved to be a disappointing year for the Lindner Funds. A trend
that began in 1996 continued with even greater intensity: the narrowing
of the stock market. The Standard and Poor's 500 Index was up over 28%
in 1998, yet eight of the ten largest companies in the Index were up an
average of 101%, while the remaining 492 stocks were up only 7.9% on
average. Although Lindner Funds' value-focused style of investing has
been left behind in the chase for a few companies trading at ever higher
multiples of earnings, we remain steadfast in our belief that value will
eventually win out.
We sincerely appreciate your ongoing support of our efforts. We have
never been more earnest than we are now in working to improve our
investment results. After meticulously reviewing the investment process
and security selection criteria for each of our funds, we have made a
number of significant changes based on that analysis, which are detailed
on the pages that follow.
The changes we began implementing in 1998 should have a positive impact
on our funds in 1999. The best possible scenario would be that our
value-focused style of investing comes back in favor and our relative
results become a source of pride once again.
The prudent investor, of course, diversifies a portfolio among value and
growth offerings. That's because value and growth stocks tend to take
turns leading the market. Growth funds have dominated the huge market
run-up of the past few years. However, value funds outperformed growth
funds from 1992 to 1994
Right now, value investments are lagging those in the growth category.
However, we true value investors will once again enjoy our day in the
sun.
/s/ Eric E. Ryback
Eric E. Ryback
President
<PAGE>
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<TABLE>
- -----------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER GROWTH FUND LINDNER DIVIDEND FUND
------------------------ ------------------------
<S> <C> <C>
ASSETS
Investment securities, at value:
Unaffiliated issuers (identified cost of
$377,368,681, $1,206,956,453 $27,616,759,
$38,064,346 $2,105,909 and $2,564,918,
respectively) $412,243,180 $1,120,012,018
Affiliated issuers (identified cost $179,939,710,
$44,694,819, $0, $2,009,228, $0, and $0,
respectively) (Note 5) 199,486,318 20,819,440
Cash 292,518 513,261
Receivables:
Investments sold - long 9,488,737 9,209,233
Dividends and interest 1,246,050 20,963,677
Fund shares sold 1,579 236,351
Unamortized organizational expense (Note 4) -- --
Receivable for expenses reimbursed by advisor -- --
Other assets 48,149 57,541
------------------------ ------------------------
Total assets 622,806,531 1,171,811,521
------------------------ ------------------------
LIABILITIES
Accounts payable and accrued liabilities:
Investment securities purchased 4,175,581 2,093,750
Fund shares redeemed 1,701,034 15,557,161
Other liabilities:
Management fee (Note 3) 933,211 1,671,640
Organizational expense (Note 4) -- --
Other 230,931 222,087
------------------------ ------------------------
Total liabilities 7,040,757 19,544,638
------------------------ ------------------------
NET ASSETS $615,765,774 $1,152,266,883
======================== ========================
NET ASSETS CONSIST OF:
Capital (par value, $.01 per share, and additional
paid-in capital) $553,657,768 $1,214,037,718
Undistributed net investment income 959,546 6,397,233
Accumulated net realized gain (loss) on investments
and foreign currency transactions 6,723,384 42,651,746
Net unrealized appreciation (depreciation) on
investments and translation of assets and
liabilities in foreign currency 54,425,076 (110,819,814)
------------------------ ------------------------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $615,765,774 $1,152,266,883
======================== ========================
NET ASSET VALUE PER SHARE
Investor Shares:
NET ASSETS $615,508,472 $1,151,383,078
SHARES OUTSTANDING 38,119,953 48,925,519
------------------------ ------------------------
$16.15 $23.53
======================== ========================
Institutional Shares:
NET ASSETS $257,302 $883,805
SHARES OUTSTANDING 16,031 37,687
======================== ========================
$16.05 $23.45
======================== ========================
2 See Notes to Financial Statements
</TABLE>
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<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER/RYBACK LINDNER HIGH-YIELD
LINDNER UTILITY FUND SMALL-CAP FUND LINDNER INTERNATIONAL FUND BOND FUND
- ------------------------ ------------------------ -------------------------- ------------------------
<S> <C> <C> <C>
$28,183,955 $40,880,113 $1,334,508 $2,287,841
-- 2,800,000 -- --
50,030 94,936 41,396 10,492
549,933 698,460 -- --
218,885 51,751 1,190 59,314
-- 16,890 -- --
-- -- 6,756 17,424
-- -- -- 7,059
2,187 1,933 420 --
- ------------------------ ------------------------ ------------------------ ------------------------
29,004,990 44,544,083 1,384,270 2,382,130
- ------------------------ ------------------------ ------------------------ ------------------------
470,062 -- -- --
200,706 97,361 -- 15,715
18,340 26,321 1,389 1,575
4,625 4,208 8,972 18,478
10,992 15,667 3,073 1,242
- ------------------------ ------------------------ ------------------------ ------------------------
704,725 143,557 13,434 37,010
- ------------------------ ------------------------ ------------------------ ------------------------
$28,300,265 $44,400,526 $1,370,836 $2,345,120
======================== ======================== ======================== ========================
$29,011,067 $42,054,703 $2,290,248 $2,682,442
6,932 -- -- 2,632
(1,284,974) (1,260,716) (148,080) (62,876)
567,240 3,606,539 (771,332) (277,078)
- ------------------------ ------------------------ ------------------------ ------------------------
$28,300,265 $44,400,526 $1,370,836 $2,345,120
======================== ======================== ======================== ========================
$28,300,107 $44,225,091 $1,370,590 $2,344,985
2,359,701 5,840,896 219,644 278,451
- ------------------------ ------------------------ ------------------------ ------------------------
$11.99 $7.57 $6.24 $8.42
======================== ======================== ======================== ========================
$158 $175,435 $246 $135
13 23,175 40 16
======================== ======================== ======================== ========================
$12.14 $7.57 $6.15 $8.43
======================== ======================== ======================== ========================
See Notes to Financial Statements 3
</TABLE> <PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER BULWARK FUND
------------------------
<S> <C>
ASSETS
Investment securities, at value:
Unaffiliated issuers (identified cost of $20,078,002) $17,802,651
Affiliated issuers (identified cost $928,141) 2,117,575
Cash 85,918
Receivables:
Dividends and interest 55,258
Investments sold - short 8,612,560
Deposits with brokers for securities sold short 4,295,883
Unamortized organizational expense (Note 4) 586
Other assets 1,884
------------------------
Total assets 32,972,315
------------------------
LIABILITIES
Accounts payable and accrued liabilities:
Investments sold short, at value (proceeds $8,612,560) 8,282,587
Short sales covered 508,413
Fund shares redeemed 226,723
Other liabilities:
Management fee (Note 3) 22,009
Organizational expense (Note 4) 8,976
Other 8,824
------------------------
Total liabilities 9,057,532
------------------------
NET ASSETS $23,914,783
========================
NET ASSETS CONSIST OF:
Capital (par value, $.01 per share, and additional paid-in capital) $50,493,122
Undistributed net investment income 13,953
Accumulated net realized loss on investments and
foreign currency transactions (25,318,179)
Net unrealized depreciation on investments and
translation of assets and liabilities in foreign currency (1,274,113)
------------------------
NET ASSETS APPLICABLE TO OUTSTANDING SHARES $23,914,783
========================
NET ASSET VALUE PER SHARE
Investor Shares:
NET ASSETS $23,914,674
SHARES OUTSTANDING 4,231,828
------------------------
$5.65
========================
Institutional Shares:
NET ASSETS $108
SHARES OUTSTANDING 18
========================
$6.03
========================
4 See Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER GOVERNMENT
MONEY MARKET FUND
------------------------
<S> <C>
ASSETS
Investment securities, at value $51,336,793
Cash 1,952,556
Interest receivable 153,731
Unamortized organizational expense (Note 4) 12,751
Other assets 13,880
------------------------
Total assets 53,469,711
------------------------
LIABILITIES
Accounts payable and accrued liabilities:
Fund shares redeemed 150,444
Dividends 55,412
Organizational expense 13,910
Administrator fee 8,512
Management fee (Note 3) 6,384
Other 16,137
------------------------
Total liabilities 250,799
------------------------
NET ASSETS $53,218,912
========================
NET ASSETS CONSIST OF:
Paid-in capital $53,218,912
========================
SHARES OF BENEFICIAL INTEREST, $1.00 PAR VALUE
UNLIMITED SHARES AUTHORIZED, OUTSTANDING 53,218,912
========================
NET ASSET VALUE PER SHARE $1.00
========================
See Notes to Financial Statements 5
</TABLE>
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
The Lindner Growth Fund declined 15.80% for the calendar year 1998 as
compared to the Russell 2000 Index decline of 2.24%. On a six-month
basis, the Fund declined 13.61% while the Russell Index dropped 7.13%.
What happened? Our investments in developing nations, commodity-related
firms and small-capitalization stocks came under selling pressure during
a period of declining world economies, low inflation and an obsession
for liquidity. Currently, markets across the globe have regained some
degree of stability and allowed many investors to recoup a portion of
their paper losses.
Unfortunately, a few key areas where the Fund invested did not recover
as anticipated. More specifically, emerging markets continue to
demonstrate an inability to effectively manage diversity. Consequently,
we have begun divesting ourselves of these securities and will utilize
the losses to improve our tax efficiency. Going forward, our focus
internationally will be directed towards developed regions of the world,
such as Western Europe.
Due to continued prospects for benign inflation and a growing lack of
faith in gold as a store of value, we will eliminate this asset class
over time. With regard to uranium mining, original prospects for
increasing foreign demand and rapid consolidation in the industry did
not materialize. Global efforts in power generation focused on natural
gas as a cleaner, albeit more expensive, energy resource. Therefore,
with great humility, we are discontinuing our exposure in this area as
well.
A different mind set is needed to analyze our future prospects in the
oil and gas sector. Natural gas is rapidly becoming a cleaner, more
environmentally acceptable source of energy; however, unusually warm
weather let the steam out of this very important commodity. Therefore,
we will hold on and let mother nature take her course. In time, normal
weather patterns should resurface to bolster the long-term value of
these uniquely positioned companies.
Without question, Asia's economic downturn significantly reduced demand
and depressed world oil prices to historically low levels. This created
a cascading effect on the economies and securities of major oil-
exporting countries. There is anecdotal evidence a slow recovery has
begun in the Asian hemisphere. This should reverse the decline in oil
prices and fortunes of shipping firms that depend on prosperity in the
oil patch. Since we believe in the value of oil and shipping firms
supporting this industry, our commitment remains firm in these sectors.
We will utilize market volatility to upgrade the mix of our exposure
during this period of consolidation.
Beyond this, being in small-capitalization value stocks simply did not
work in 1998. The majority of investors focused on
(continued on next page)
LINDNER GROWTH FUND
FUND PROFILE
This diversified fund seeks long-term capital appreciation through
investments in common stocks or securities convertible into common
stocks. Income is a secondary objective.
Portfolio composition by industry
December 31, 1998
[GRAPH]
6
<PAGE>
<PAGE>
actively traded large companies and gambled on Internet-related firms.
Compared to our universe of companies, these securities were not
appropriately shellacked for earnings disappointments and awarded too
much credit for meeting or exceeding expectations.
Despite these difficulties, there were several success stories
supporting our unique approach to value investing. They include Alliant
Techsystems, Inc. (ATK), CPI Corporation (CPY), Juno Lighting, Inc.
(JUNO), NCR Corporation (NCR), Quixote Corporation (QUIX) and Unisys
Corporation (UIS). Each of these companies rewarded our convictions by
materially improving their operations, competitive positions and, most
importantly, share prices!
We are currently invested in 74 companies, down from 100 and 173 firms
as of June 30, 1998 and December 31, 1997, respectively. The typical
company in the portfolio has the following salient features:
Market capitalization of $357 million
Trailing twelve P/E of 10.1 times
Annual earnings growth of 9.2%
Price-to-cash flow multiple of 5.7 times
Price-to-sales ratio of .75 times
Debt-to-capital ratio of 36.4%
Return on average equity of 12.8%
Two specialty retailers and a steel producer were added to the portfolio
during the latest market downturn and represent compelling long-term
values. Each position is currently profitable and will be increased over
time.
Our mix of undervalued companies has improved immensely. Several firms
are operating in consolidating industries and buying back their shares
with excess cash flow at extremely low equity valuations. At some point,
Wall Street or larger competitors should recognize the inherent value of
these enterprises and provide us with the benefits of long-term value
investing.
In closing, we wish to thank you for your continued support and look
forward to a profitable year.
Sincerely,
/s/ Eric E. Ryback /s/ Robert A. Lange
Eric E. Ryback Robert A. Lange
President Portfolio Manager
7
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER GROWTH FUND
- -------------------
COMMON STOCKS (91.48%)
Aerospace/Defense (7.59%)
Alliant Techsystems, Inc. <Fa>, <F*> 567,000 $46,742,062
----------------
Automobiles and Parts (0.89%)
Jason, Inc. <F*> 655,800 $5,492,325
----------------
Brewery (0.19%)
SUN Brewing, Ltd. - GDR <F*> 448,000 $1,176,000
----------------
Business Services (5.41%)
Cendant Corporation <F*> 1,000,000 $19,062,500
InaCom Corporation <Fa>, <F*> 955,900 14,219,012
----------------
$33,281,512
----------------
Chemicals and Allied Products (3.78%)
Lawter International, Inc. <Fa> 2,000,000 $23,250,000
----------------
Computers and Electronic Equipment (7.93%)
Adaptec, Inc. <F*> 815,000 $14,313,437
Oak Technology, Inc. <Fa>, <F*> 2,979,900 10,429,650
Unisys Corporation <F*> 700,000 24,106,250
----------------
$48,849,337
----------------
Construction and Real Estate (0.08%)
Blagovno Trgovinski Center - GDR - Rule 144A <Fr>
(Acquired 7/25/97 - 5/7/98, Cost $795,500) 95,000 $514,900
----------------
Environmental Services (1.74%)
Recycling Industries, Inc. <Fa>, <F*> 1,300,000 $1,300,000
Saftey-Kleen Corp. (formerly Laidlaw Environmental
Services, Inc.) <F*> 665,250 9,396,656
----------------
$10,696,656
----------------
Financial Services (10.19%)
Bank Inicjatyw Gospodarczych,
Common Stock <Ff> 2,300,000 $2,064,161
Common Stock - GDR 208,000 2,818,400
Banque Libanaise pour le Commerce SAL
GDR - Rule 144A <F*>, <Fr> (Acquired
12/11/96 - 12/31/96, Cost $1,982,300) 166,000 3,095,900
CORUS Bankshares, Inc. 608,558 19,625,996
Eesti Uhispank - GDR - Rule 144A <F*>, <Fr> (Acquired
3/6/98 - 11/5/98, Cost $5,448,231) 535,500 2,581,110
International Bancshares Corporation 377,375 19,104,609
Union Planters Corporation 296,900 13,453,281
----------------
$62,743,457
----------------
Healthcare (1.87%)
Comprehensive Care Corporation - Rule 144A <Fa>,
<F*>, <Fr> (Acquired 2/3/95 - 7/14/95, Cost
$1,410,000) 250,000 $984,375
Hyseq, Inc.,
Common Stock <F*> 600,000 3,150,000
Rule 144A <F*>, <Fr> (Acquired 10/16/97,
Cost $1,642,800) 120,000 534,000
RightChoice Managed Care, Inc. <F*> 596,300 6,857,450
----------------
$11,525,825
----------------
Hotel Operator (0.58%)
Orbis S. A. <Ff>, <F*> 450,000 $3,538,562
----------------
Industrial Products and Services (6.11%)
Mark IV Industries, Inc. 400,000 $5,200,000
Quixote Corporation <Fa> 732,400 9,017,675
Tecumseh Products Company - Class B 159,800 7,230,950
TransTechnology Corporation <Fa> 352,200 7,308,150
Vitro, Sociedad Anonima - ADR <F*> 1,944,200 8,870,413
----------------
$37,627,188
----------------
See Notes to Financial Statements
8
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER GROWTH FUND
- -------------------
Insurance (8.12%)
Catalana Occidente S.A. <Ff> 119,318 $3,116,055
Hilb, Rogal and Hamilton Company <Fa> 900,000 17,887,500
Old Republic International Corporation 1,000,000 22,500,000
W.R. Berkley Corporation 190,000 6,471,875
----------------
$49,975,430
----------------
Investments (2.67%)
Antofagasta Holdings P.L.C. <Ff> 950,000 $2,805,740
PICO Holdings, Inc. <F*> 218,464 2,894,651
Siem Industries, Inc., (formerly Norex Industries,
Inc.) <Fa>, <F*> 1,256,850 10,720,931
----------------
$16,421,322
----------------
Manufacturing - Commercial Uniforms (1.27%)
Superior Uniform Group, Inc. <Fa> 537,600 $7,795,200
----------------
Manufacturing - Consumer Goods (2.08%)
National Presto Industries, Inc. 301,000 $12,830,125
----------------
Metals Processing (0.06%)
Seversky Tube Works - ADR <F*> 137,054 $342,635
----------------
Mining (1.07%)
Ashanti Goldfields Company, Ltd. - GDR 232,910 $2,183,531
Energy Resources of Australia Ltd <Ff> 233,532 217,719
Southernera Resources, Ltd. <F*> 700,300 3,784,420
Uranium Resources, Inc. <Fa>, <F*> 827,525 413,763
----------------
$6,599,433
----------------
Oil & Gas Exploration/Production (3.85%)
Bitech Petroleum Corporation
Common stock <Ff>, <F*> 2,440,595 $2,002,181
Common stock - Rule 144A <Ff>, <F*>, <Fr> (Acquired
5/23/97, Cost $3,062,787) 2,000,000 1,640,732
Cabot Oil & Gas Corporation 639,300 9,589,500
Harken Energy Corporation <F*> 3,272,700 6,340,856
Sasol, Ltd. <Ff> 1,100,000 4,160,575
----------------
$23,733,844
----------------
Oil Refining and Marketing (0.27%)
DOR Energy - GDR - Rule 144A <Fa>, <F*>, <Fr>
(Acquired 6/19/98 - 11/20/98, Cost $2,980,616) 572,100 $1,691,528
----------------
Oilfield Services (0.49%)
Pride International, Inc. <F*> 431,100 $3,044,644
----------------
Paper, Printing and Publishing (1.55%)
American Media, Inc. - Class A <F*> 1,715,900 $9,544,694
----------------
Real Estate Investment Trust (0.45%)
Novastar Financial, Inc. <Fa> 449,900 $2,783,756
----------------
Retail Trade (6.91%)
CPI Corporation <Fa> 812,500 $21,531,250
The Dress Barn, Inc. <F*> 575,100 13,442,963
Juno Lighting, Inc. 500,000 7,593,750
----------------
$42,567,963
----------------
Steel Production (0.75%)
USX-U.S. Steel Group 200,000 $4,600,000
----------------
Telecommunications (1.18%)
Vertex Communications Corporation <Fa>, <F*> 456,000 $7,239,000
----------------
<PAGE>
Transportation (6.09%)
Anangel-American Shipholdings Ltd. <Fa>, <F*> 881,400 $4,517,175
Frontline Ltd. - ADR <F*> 415,000 1,569,240
MIF Ltd., ADR - Rule 144A <F*>, <Fr>
(Acquired 12/20/96 - 4/10/97, Cost $4,250,000) 312,732 6,157,111
Oglebay Norton Company 138,644 3,431,439
OMI, Inc. <Fa> 2,341,100 7,608,575
Overseas Shipholding Group, Inc. 791,300 12,710,256
Wah Kwong Shipping Holdings Ltd. <Ff> 4,931,759 1,511,931
----------------
$37,505,727
----------------
Transportation Services (1.76%)
Airborne Freight Corporation 300,000 $10,818,750
----------------
See Notes to Financial Statements
9
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER GROWTH FUND
- -------------------
Utilities (3.70%)
El Paso Electric Company <F*> 1,873,200 $16,390,500
UniSource Energy Corporation 475,000 6,412,500
----------------
$22,803,000
----------------
Miscellaneous (2.85%) $17,563,000
----------------
Total Common Stocks (Cost $504,085,755) $563,297,875
----------------
PREFERRED STOCKS (1.78%)
Airline (0.92%)
Trans World Airlines, Inc., $4.625 - Rule 144A <Fr>
(Acquired 6/24/98 - 6/26/98, Cost $10,176,625) 135,000 $5,686,875
----------------
Healthcare (0.20%)
Comprehensive Care Corp., 4% convertible - Rule 144A
<Fr> (Acquired 4/29/97, Cost $4,336,838) 41,260 $1,230,373
----------------
Mining (0.66%)
Westmoreland Coal Company, 8.50% voting convertible
<Fa>, <F#> 227,984 $4,046,716
----------------
Total Preferred Stocks (Cost $15,980,698) $10,963,964
----------------
NON-CONVERTIBLE BONDS (1.48%)
Financial Services (0.94%)
Beal Financial Corporation, 12.75%, due 2000 $5,675,000 $5,816,875
----------------
Oil Refining and Marketing (0.54%)
Huntway Partners L.P., 12%, due 2005 - Rule 144A <Fr>
(Acquired 5/19/94 - 12/16/97, Cost $3,503,059) $3,328,062 $3,328,062
----------------
Total Non-Convertible Bonds (Cost $9,049,611) $9,144,937
----------------
CONVERTIBLE BONDS (0.47%)
Computer and Electronic Equipment (0.47%)
Quantum Corporation, 7%, due 2004 $3,000,000 $2,868,750
----------------
Total Convertible Bonds (Cost $2,738,355) $2,868,750
----------------
U.S. GOVERNMENT AGENCY SECURITIES (4.13%)
FHLB, 1/04/99 $100,000 $99,958
FMCDN, 1/14/99 20,700,000 20,662,656
FNDN, 1/13/99 2,100,000 2,096,444
FNDN, 1/15/99 2,600,000 2,594,914
----------------
(Cost $25,453,972) $25,453,972
----------------
Total Investments (Cost $557,308,391) 99.34% $611,729,498
Excess of Other Assets over Liabilities 0.66% $4,036,276
-------------- ----------------
Net Assets 100.00% $615,765,774
============== ================
<FN>
<F*> Non-income producing
<Fa> Denotes security is affiliated (See Note 6)
<Ff> Denotes security primarily traded in foreign markets
<F#> Dividends are in arrears.
<Fr> Denotes security is restricted as to resale. The aggregate value of restricted
securities at December 31, 1998 was $27,444,966 which represented 4.46% of net assets.
ADR American Depository Receipts
GDR Global Depository Receipts
FHLB = Federal Home Bank Board
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
FNDN = Federal National Mortgage Association Discount Note
See Notes to Financial Statements
</TABLE>
10
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<PAGE>
PERFORMANCE SUMMARY
The Lindner Dividend Fund finished the calendar year ended December 31,
1998 with a total return of negative 4.01% compared to a total return of
28.33% for the S&P 500. I would like to address what happened, and the
steps we are taking in an effort to improve the future performance of
the Fund.
As stated in the prospectus, the Fund has two objectives. The primary
objective is to generate current income. The secondary goal, where the
Fund failed miserably, is capital appreciation.
At the beginning of the year, we reduced the number of non-income
producing securities in the Fund to enhance current income for
shareholders. Non-income producing securities amounted to over 12% of
the portfolio in October 1997. By early January 1998, that percentage
was reduced to 5.2%. Proceeds from the sales of these securities were
used to purchase high-yielding convertible preferred stocks and high-
yielding corporate bonds.
The Fund's portfolio composition by investment category at the beginning
of 1998 was:
Common Stock 33%
Convertible Preferred Stock 30%
Straight Bonds 17%
Convertible Bonds 6%
Preferred Stock 6%
Miscellaneous and Cash 8%
During 1998, the Fund changed its portfolio composition to focus on
delivery of its primary goal - enhanced current yield. We continued to
reduce non-income producing securities from the portfolio during the
first six months of the year. These securities represented only 4.3% of
the total portfolio by July of 1998, and were reduced to 2% by year end.
By reducing the number of non-income producing securities in the
portfolio, the Fund achieved its goal of increasing income for
shareholders. In attaining this goal, the composition of the Fund
changed by the end of the year to:
Common Stock 17%
Convertible Preferred Stock 48%
Straight Bonds 19%
Convertible Bonds 8%
Preferred Stock 6%
Miscellaneous and Cash 2%
In addition, foreign holdings, which were 4% of the portfolio at the end
of 1997, were completely eliminated by December 31, 1998.
(continued on next page)
LINDNER DIVIDEND FUND
FUND PROFILE
This fund's primary objective is to generate current income; capital
appreciation is a secondary goal. Investments include common stocks,
convertible and non-convertible preferred stocks and corporate bonds,
and debt securities issued or guaranteed by the U.S. government or its
agencies.
Portfolio composition by
investment category
December 31, 1998
[GRAPH]
11
<PAGE>
<PAGE>
The highest yields are found in convertible preferreds, convertible
bonds and straight bonds. As a result, we increased convertible bonds by
2% and convertible preferred stocks by 17%, while straight bonds
remained relatively unchanged. Because of the increased yield, the Fund
did not participate in the double-digit returns of the S&P 500.
The Fund was up 6.34% by the end of March and moved sideways through
June. The market started to drift down ending in a dramatic sell off in
October. By then, the Fund was a negative 5.06% for the year and
gaining very little, so by year end the total return was negative 4.01%.
What happened?
The Fund had a 17% exposure to energy securities at the beginning of the
year. At that time, oil was trading for $17.50 a barrel. However, due
to the recession in Asia and Russian economic collapse, oil declined to
$12.00 a barrel by the end of the year, which did not help the Fund.
Believing this to be only a temporary situation, given that the world
has not weaned itself from oil, we elected to keep our energy securities
and, in some instances, add to already established positions. We believe
it is only a matter of time before the oil glut ends and prices, along
with stocks, will rise. In the meantime, the Fund is receiving interest
and dividends.
The second blow to the Fund occurred with the hedge fund debacle, namely
Long Term Capital Management. This caused liquidity and prices to dry
up in bonds and convertible preferreds as hedge funds like to borrow, or
hedge, their portfolios with these types of securities. Once hedge
funds were forced to cover margin calls, they needed to raise capital.
Thus, severe downward pressure was placed on the 50% of the portfolio
invested in convertible preferreds and high-yield bonds. These sectors
never recovered before the end of the year, thus preventing the Fund
from participating in the dramatic market rise during the last two
months of 1998.
The third and final difficulty the Fund experienced was the historically
high price/earning ratios of stock, which makes finding companies
trading below intrinsic value extremely difficult. The S&P 500
price/earnings ratio at the beginning of 1998 was 24 and reached a
historic high of 33 by the end of the year.
In some instances, the Fund paid too much for securities only to watch
them go down. Conversely, we sold several stocks such as Cablevision
Systems Corporation and NTL Inc. with uncomfortably high prices too
early, only to watch them double again in price. During the year, we
"raised the band" on the price/earnings ratio limit for buy candidates
from 10 to 15. This will allow us to purchase securities in popular
areas of growth investing, such as technology and telecommunications,
the next time the market drops.
Utilities remained the largest industry in the portfolio in 1998,
beginning the year at 21% and ending at 16%. The Fund has slowly reduced
the portfolio weighting of this industry, seeking higher yields and
greater growth potential.
After adding to existing positions, energy remains near 16% of the
portfolio, even after significantly depressed prices. We feel it is
only a matter of time before the Fund benefits from a rebound in the
price of oil. Computer electronics and telecommunications began the year
at 10% of the portfolio and slowly increased to 17% by year end. We
intend to find other companies in this growth area to enhance the total
return of the Fund. 1998 was a very unfortunate year in the Fund's
history. By enhancing the current yield and being in the wrong
industries, the Fund's total return did not fare well. However, during
this transition phase, the Fund became much more defensively positioned
for the next market down phase and became the nation's highest SEC-
Yielding Hybrid Fund in Morningstar's national database at 8.29% as of
November 30, 1998.
This leads us back to a discussion of the Fund's primary objective -
producing current income. The Fund was successful in achieving this goal
in 1998, as interest rates on one year Treasury Bills declined from 5.5%
to 4.5% and the 30-year Treasury Bond went from a high of 6% to 5.1%
during the year.
The Fund began the year with a portfolio 30-day SEC yield of 5.75% and,
after paying quarterly dividends of 45cent, 46cent, 50cent and 55cent,
increased the yield to 8.5%, which it currently maintains. Now that the
Fund has achieved its primary objective, we are focusing on ways to
enhance total return and growth without jeopardizing yield. The Fund is
ahead of the S&P 500 and the Russell 2000 indexes year to date.
We need your continued support and investments in the Fund to achieve
this goal. I will do everything possible to improve the growth component
of the Fund without incurring undue risk, and while continuing to
provide you with a steady source of income.
I wish to thank you for your continued interest in the Lindner Dividend
Fund.
Sincerely,
/s/ Eric E. Ryback
Eric E. Ryback
President
12
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER DIVIDEND FUND
- ---------------------
COMMON STOCKS (17.33%)
Financial Services (0.20%)
IMH Commercial Holdings, Inc. 431,200 $2,317,700
----------------
Healthcare (0.18%)
Hyseq, Inc. <F*> 402,000 $2,110,500
----------------
Mining (0.04%)
Atlas Corporation <F*> 157,500 $11,025
Uranium Resources, Inc.
Common stock <Fa>, <F*> 339,000 169,500
Common stock <Fa>, <F*>, <Fr> (Acquired
5/19/94 - 12/22/95, Cost $2,000,000) 500,000 250,000
----------------
$430,525
----------------
Oil & Gas Exploration and Production (1.18%)
Harken Energy Corporation <Fa>, <F*> 7,020,000 $13,601,250
----------------
Real Estate Investment Trusts (0.74%)
Hanover Capital Mortgage Holdings, Inc., <Fa> 469,700 $2,054,938
Novastar Financial, Inc.,
Common stock <Fa> 100,000 618,750
Common stock - Rule 144A <Fr> <Fa> (Acquired
5/19/94 - 12/6/96, Cost $9,020,004) 666,667 4,125,002
Ramco-Gershenson Properties Trust 118,475 1,717,887
----------------
$8,516,577
----------------
Utilities (Gas, Electric & Water) (13.83%)
Ameren Corporation (formerly Union Electric Company) 600,000 $25,612,500
El Paso Electric Company <F*> 2,921,000 25,558,750
Northern States Power Company 402,900 11,180,475
Potomac Electric Power Company 1,000,000 26,312,500
Public Service Enterprise Group, Inc. 800,000 32,000,000
Puget Sound Energy, Inc. 600,000 16,725,000
Western Resources, Inc. 659,700 21,935,025
----------------
$159,324,250
----------------
Miscellaneous (1.16%) $13,388,000
----------------
Total Common Stocks (Cost $197,438,282) $199,688,802
----------------
PREFERRED STOCKS (53.85%)
Airline (3.08%)
Trans World Airlines, Inc.,
$4.625 convertible - Rule 144A <Fr> (Acquired
11/26/97 - 7/7/98, Cost $8,876,562) 150,000 $6,318,750
8% convertible 1,242,400 29,196,400
----------------
$35,515,150
----------------
Computer and Electronic Equipment (8.50%)
The Titan Corporation, $1.00 convertible 28,600 $323,538
Unisys Corporation, $3.75 convertible 1,497,000 87,948,750
Vanstar Financing Trust, 6.75% convertible 366,000 9,607,500
----------------
$97,879,788
----------------
Consumer Services (4.92%)
Cendant Corporation, 7.5% convertible 1,700,000 $56,737,500
----------------
Energy (3.63%)
ICO, Inc., $1.6875 convertible 442,500 $5,641,875
Lasmo PLC, Series A, 10% 492,600 11,514,525
Maxus Energy Corporation, 10% 200,000 5,087,500
Unocal Corporation, $3.125 convertible 400,000 19,550,000
----------------
$41,793,900
----------------
<PAGE>
Financial Services (2.49%)
Community Bank, Series B, 13% 196,500 $5,330,062
Credit Lyonnais Capital S.C.A., 9.5% - Rule 144A <Fr>
(Acquired 7/12/93, Cost $15,000,000) 600,000 13,500,000
Nuevo Financing Trust, 5.75% convertible 305,300 9,807,763
----------------
$28,637,825
----------------
See Notes to Financial Statements
13
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER DIVIDEND FUND
- ---------------------
Food Distribution (1.83%)
Chiquita Brands International, Inc.,
Series A $2.875 600,000 $21,075,000
----------------
Health and Beauty Aids (1.08%)
Herbalife International, Inc., 8.75% 1,000,000 $12,500,000
----------------
Healthcare (0.19%)
NeoRX Corporation, $2.475 convertible 139,277 $2,158,793
----------------
Insurance (0.86%)
AICI Capital Trust, 9% 400,000 $9,950,000
----------------
Metals Processing (4.63%)
Armco Inc., $3.625 convertible 434,000 $18,879,000
USX Corporation, 6.5% convertible 823,300 34,527,144
----------------
$53,406,144
----------------
Mining (2.90%)
Coeur d'Alene Mines Corporation, 7% convertible 1,284,600 $8,671,050
Pittston Company, $3.125 convertible - Rule 144A <Fr>
(Acquired 1/11/94 - 5/21/98, Cost $34,407,975) 839,200 24,756,400
----------------
$33,427,450
----------------
Natural Gas Pipeline (5.08%)
Western Gas Resources, Inc., $2.65 convertible 1,601,200 $58,543,875
----------------
Oilfield Services (1.71%)
Hvide Marine, Inc., 6.5% convertible 600,000 $10,350,000
Weatherford International, Inc., 5% convertible 300,000 9,337,500
----------------
$19,687,500
----------------
Real Estate Investment Trusts (0.85%)
Prime Retail, Inc.,
$2.125 convertible 202,600 $3,368,225
$2.625 preferred 260,000 6,459,388
----------------
$9,827,613
----------------
Specialty Chemical (1.13%)
LSB Industries, Inc., $3.25 convertible 423,900 $13,034,925
----------------
Steel Production (3.27%)
Bethlehem Steel Corporation, $3.50 convertible - Rule
144A <Fr> (Acquired 8/1/97 - 11/5/98, Cost $41,198,275) 958,200 $37,729,125
----------------
Telecommunications (3.19%)
Nextlink Communications, Inc.,
6.50% convertible - Rule 144A <Fr> (Acquired
3/31/98 - 6/24/98, Cost $40,884,020) 855,000 $36,765,000
----------------
Transportation (1.60%)
Union Pacific Corporation, 6.25%, convertible 300,000 $13,800,000
Union Pacific Corporation, 6.25%, convertible - Rule
144A <Fr> (Acquired 7/30/98 - 7/31/ 98, Cost
$4,518,750) 100,000 4,600,000
----------------
$18,400,000
----------------
Utilities (Gas, Electric & Water) (1.49%)
Cleveland Electric Illuminating Company, Series S, 9% 16,000 $17,120,000
----------------
Miscellaneous (1.42%) $16,374,000
----------------
Total Preferred Stocks (Cost $682,745,411) $620,563,588
----------------
See Notes to Financial Statements
14
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER DIVIDEND FUND
- ---------------------
NON-CONVERTIBLE BONDS (18.76%)
Aerospace/Defense (0.93%)
Alliant Techsystems, Inc., 11.375%, due 2003 $10,000,000 $10,725,000
----------------
Airline (2.54%)
Canadian Airlines Corporation, 10%, due 2005 $14,975,000 $13,103,125
Trans World Airlines, Inc.,
11.375%, due 2006 - Rule 144A <Fr> (Acquired
2/26/98, Cost $10,000,000) 10,000,000 6,350,000
12%, due 2002 10,750,000 9,836,250
----------------
$29,289,375
----------------
Apparel & Other Textile Products (1.36%)
Hartmarx Corporation, 10.875%, due 2002 $15,555,000 $15,632,775
----------------
Computer and Electronic Equipment (0.01%)
Streamlogic Corporation, 14%, due 1998 <F##> $832,976 $166,595
----------------
Environmental Services (0.19%)
Recycling Industries, Inc.
13%, due 2005 - Rule 144A <Fr> (Acquired
5/22/98, Cost $688,147) $685,000 $599,375
13%, due 2005 - Rule 144A <Fr> (Acquired
6/4/98 - 7/30/98, Cost $1,833,063) 1,820,000 1,592,500
----------------
$2,191,875
----------------
Financial Services (3.84%)
Beal Financial Corporation, 12.75%, due 2000 $27,500,000 $28,187,500
Mego Mortgage Corporation
12 1/2%, due 2001 - Rule 144A <Fr> (Acquired
12/27/96 - 11/11/97, Cost $5,993,674) 6,000,000 4,410,000
12 1/2%, due 2001 - Rule 144A <Fr> (Acquired
10/15/97, Cost $5,041,412) 5,000,000 3,675,000
TeleBanc Financial Corporation, 11.5%, due 2004 1,500,000 1,500,000
Ocwen Asset Investment Corporation, 11.5%,
due 2005 - Rule 144A <Fr> (Acquired
11/10/98 -11/24/98, Cost $3,296,317) 4,500,000 $3,487,500
Wilshire Financial Services Group, 13%, due 2004 10,000,000 3,000,000
----------------
$44,260,000
----------------
Manufacturing - Consumer Goods (0.25%)
Decora Industries, Inc., 11%, due 2005 $2,960,000 $2,826,800
----------------
Mining (2.20%)
Kaiser Aluminum & Chemical Corporation, 9.875%, due
2002 $25,500,000 $25,372,500
----------------
Satellite Communications (2.62%)
Iridium World Communications Ltd.,
13%, due 2005 $12,000,000 $11,040,000
14%, due 2005 20,000,000 19,100,000
----------------
$30,140,000
----------------
Transportation (2.90%)
Global Ocean Carriers Ltd., 10.25%, due 2007 $20,000,000 $10,900,000
Transportacion Maritima Mexicana, S.A. de C.V.,
9.25%, due 2003 26,560,000 22,576,000
----------------
$33,476,000
----------------
Utilities (Gas, Electric & Water) (1.49%)
Gascart, 9%, due 1999 - Rule 144A <Fr> (Acquired
1/13/94 - 9/11/96, Cost $10,797,645) $10,816,000 $10,816,000
Texas-New Mexico Power Company, 9.25%, due 2000 6,000,000 6,337,998
----------------
$17,153,998
----------------
Miscellaneous (0.43%) $4,908,750
----------------
Total Non-Convertible Bonds (Cost $242,983,742) $216,143,668
----------------
See Notes to Financial Statements
15
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER DIVIDEND FUND
- ---------------------
CONVERTIBLE BONDS (8.21%)
Computer and Electronic Equipment (2.17%)
Intevac, Inc., 6.50%, due 2004 - Rule 144A <Fr>
(Acquired 1/22/98 - 2/18/98, Cost $2,552,576) $3,098,000 $1,920,760
Network Equipment Technologies, Inc., 7.25%, due 2014 2,360,000 1,994,200
Quantum Corporation, 7%, due 2004 15,000,000 14,343,750
Reptron Electronics, Inc., 6.75%, due 2004 13,500,000 6,750,000
----------------
$25,008,710
----------------
Engineering & Manufacturing (0.49%)
Intermagnetics General Corporation,
5.75%, due 2003 - Rule 144A <Fr> (Acquired 7/22/97
- 11/25/97, Cost $7,823,362) $8,225,000 $5,664,969
----------------
Healthcare (0.06%)
Atrix Laboratories, Inc., 7%, due 2004 - Rule 144A
<Fr> (Acquired 12/4/98 - 12/8/98, Cost $890,239) $1,050,000 $742,875
----------------
Mining (0.34%)
Uranium Resources, Inc., 6.5%, due 2000 - Rule 144A
<Fr> (Acquired 5/22/95, Cost $4,500,000) $4,500,000 $3,915,000
----------------
$3,915,000
----------------
Real Estate Investment Trust (0.61%)
Sizeler Property Investors, Inc., 8%, due 2003 $7,300,000 $7,053,625
----------------
Retail Trade (2.27%)
Charming Shoppes, 7.5%, due 2006 $28,025,000 $26,098,281
----------------
Telecommunications (0.75%)
Metricom Inc., 8%, due 2003 - Rule 144A <Fr>
(Acquired 8/21/96, Cost $15,000,000) $15,000,000 $8,625,000
----------------
Miscellaneous (1.52%) $17,456,240
----------------
Total Convertible Bonds (Cost $118,613,137) $94,564,700
----------------
U.S. GOVERNMENT AGENCY SECURITIES (0.86%)
FHDN, 1/25/99 $8,700,000 $8,672,914
FMCDN, 1/14/99 1,200,000 1,197,786
----------------
(Cost $9,870,700) $9,870,700
----------------
Total Investments (Cost $1,251,651,272) 99.01% $1,140,831,458
Excess of Other Assets over Liabilities 0.99% $11,435,425
-------------- ----------------
Net Assets 100.00% $1,152,266,883
============== ================
<FN>
<F*> Non-income producing
<Fa> Denotes security is affiliated (See Note 6)
<Fr> Denotes security is restricted as to resale. The aggregate value of restricted
securities at December 31, 1998 was $179,843,256 which represented 15.60% of net assets.
<F##> Denotes bond is in default
FHDN = Federal Home Discount Note
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
See Notes to Financial Statements
</TABLE>
16<PAGE>
<PAGE>
PERFORMANCE SUMMARY
The Lindner Utility Fund had a total return of -12.5% for the six months
ended December 31, 1998. We substantially under-performed the total
return of +8% for the Dow Jones Utility Index and +18% for New York
Stock Exchange Utility Index for the same period.
We would like to review where the problems existed and what we are doing
to rectify the situation going forward.
At the beginning of the period, we held a number of Russian utility
stocks that became very illiquid. They were eliminated slowly and,
although statistically cheap by any standards, it is obvious in
hindsight that securities in any nation with even a hint of instability
are ultimately not worth the risk. Likewise, our investments in
commodity industries fared poorly. Uranium Resources (URIX) declined
precipitously and we liquidated this once promising value play from the
portfolio. As a value investor, it was painful to watch inexpensive
companies in other fields like energy and energy service decline
throughout the year.
For example, Harken Energy (HEC) is a company we still hold and feel has
tremendous upside potential. Harken suffered the double punishment of
being an energy company in a world seemingly awash in petroleum and
having the majority of its energy assets located in Columbia, which
while relatively stable, suffers from worry about the Latin American
economy. While the fundamentals of the company improved, Harken began
the period at nearly $5 and ended the year just under $2. However, we
believe there will be a slow rebound in oil prices as Asia stabilizes,
demand begins to rise and supplies are reduced by the severe curtailment
in drilling, which should draw the market into balance.
Two non-fundamental phenomena also existed in this last six months of
1998 which exacerbated the situation. First, due to the worldwide credit
scare, there was a "flight to quality" (primarily U.S. Treasuries)
causing the market for debt instruments and hybrid securities to weaken.
This hurt us in the area of convertible securities for reasons not tied
to fundamentals of the underlying companies but rather perceptions of
this market segment. Second, because other sectors of the market (i.e.
top 20 stocks in the S&P 500) did very well, investors unloaded
securities with paper losses to offset gains. And there was no easing of
selling pressure until the end of the year. As a result, stocks that
under-performed were driven further below intrinsic value.
During the last six months of 1998, we redirected our focus for the
Lindner Utility Fund while adhering to our value investing principles.
We eliminated companies that failed to perform even though they were
value stocks and increased holdings for companies where we had a great
comfort level at reduced valuations to lower our cost basis. Because of
market turmoil, we were able to buy industry leaders at reduced prices
and move up the financial food chain.
(continued on next page)
LINDNER UTILITY FUND
FUND PROFILE
The investment objective of the Utility Fund is to produce a total
return through current income and long-term capital appreciation that
outperforms its peers and the representative market indices by investing
in securities of domestic and foreign regulated public utility companies
and companies involved in businesses that are related to public utility
companies, such as suppliers of raw materials.
Portfolio composition by industry
December 31, 1998
[GRAPH]
17
<PAGE>
<PAGE>
The flight to quality helped traditional utilities which are
historically interest-rate sensitive. Utilities increased in value as
bond yields came down. We used this opportunity to sell electric
utilities we felt had surpassed our target values. The strategy is to
own two extremes in the traditional utility market.
We continue to seek growth utilities, which will benefit by ongoing
merger activity through combinations of similar companies (electric with
electric) and convergence (electric with gas or other combinations).
Names in this category include Texas Utilities (TXU), Pacificorp (PPW)
and Western Resources (WR). The second type of utility we want to own
are "turn around" or "event driven" stocks. We had great success with El
Paso Electric (EE) which doubled in value following a reorganization and
see similar opportunities with Niagara Mohawk (NMK), Unisource (UNS) and
Equitable Resources (EQT).
We are less confident about large future short-term gains in the
traditional utility area as the bond market may have already experienced
its biggest gains. Because of this and the fact many companies we owned
reached our fair-value targets, we reduced our exposure in traditional
utilities to about 30%.
We remain optimistic about the entire energy sector but are particularly
bullish on domestic (North American) natural gas for a variety of
reasons. Despite a large surplus going into the heating season and a
mild winter thus far, the price of natural gas has held up well. That's
because of drastically reduced exploration and production budgets for
1999, growth in U.S. demand of 2% to 3% per year (non-weather related)
and the domestic nature of the business (a closed market between the
U.S. and Canada). With inflation adjusted prices for energy and related
stocks at or near all-time lows, we are committing approximately 30% of
the portfolio to these true value stocks through names like Cabot Oil
and Gas (COG), Kerri McGee (KMG), Schlumberger (SLB), Williams Co. (WMB)
and Enron (ENE).
The remainder of the portfolio is dedicated to industries we call
"telecommunications and content." This is arguably the growth industry
of the New Millennium. While we do not consider Internet stocks to be
value stocks, the phenomena associated with them is evident everywhere
you look.
We feel there will be continuing demand for networks providing these
services and believe there is a new paradigm in technology. We will
seek to participate in this growth by owning the best companies that
service and equip the industry. In telephony, we are convinced the
companies that will prosper are those providing the high-speed
connectivity consumers and businesses want, such as MCI Worldcom (WCOM),
QWEST Communication (QWST), Williams and Enron.
Solving the "last mile" problem of delivering service into a customer's
home or business is an invaluable asset with tremendous potential.
Companies like Nextlink (NXLK), Teligent (TGNT) and Liberty Media
(LBTYA) could profit handsomely in the future.
The world continues to look for wireless solutions, not only for voice
transmission, but data and video as well. We feel companies like Sprint
PCS (PCS), Iridium (IRIDF), Western Wireless (WWCA) and Omnipoint (OMPT)
are positioned for continuing growth at reasonable prices. For these
reasons, we feel this sector, comprising about 35% of the portfolio,
offers tremendous growth potential. In many cases, we have invested in
these companies via convertible securities and are being compensated as
we wait for the future to unfold.
In conclusion, we feel the portfolio is positioned to take advantage of
these opportunities for shareholders:
Traditional Utilities Stability and Income
Energy Value and Income
Telecommunication Growth
This letter is lengthier than usual but we feel deeply that you must
know: 1) Why our performance was lacking last year, 2) What will be
different next year and going into the next century and 3) Why you will
want to remain a shareholder and trust us to bring you the returns you
deserve and expect from the entire Lindner Funds family of funds.
As always, we appreciate your continued confidence in us.
Sincerely
/s/ Rick Eckenrodt, Jr.
Rick Eckenrodt, Jr.
Portfolio Manager
18
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER UTILITY FUND
- --------------------
COMMON STOCKS (68.63%)
Broadcast/Media (4.07%)
Tele-Communications, Inc. - Liberty Media Group,
Series A 25,000 $1,151,563
----------------
Electrical Generation (1.43%)
Cogeneration Corp. (formerly NRG Generating) <F*> 45,000 $405,000
----------------
Natural Gas Pipeline (3.50%)
El Paso Energy Corporation 15,000 $522,187
Williams Companies, Inc. 15,000 467,812
----------------
$989,999
----------------
Oil and Gas Exploration and Production (9.91%)
Cabot Oil & Gas Corporation, Class A 50,000 $750,000
Energy Capital Investment Company, PLC <F*>, <Ff> 165,000 204,534
Harken Energy Corporation <F*> 525,000 1,017,187
International Rochester Energy Corporation <F*>, <Ff> 320,700 68,905
Kerr-McGee Corporation 20,000 765,000
----------------
$2,805,626
----------------
Oilfield Services (4.58%)
Santa Fe International Corporation 35,000 $511,875
Schlumberger Ltd. 17,000 784,125
----------------
$1,296,000
----------------
Telecommunication Equipment (2.45%)
Sprint Corporation <F*> 30,000 $693,750
----------------
Telecommunications (12.43%)
MCI/Worldcom, Inc. <F*> 35,000 $2,511,250
Teligent, Inc., Class A <F*> 35,000 1,006,250
----------------
$3,517,500
----------------
Utilities (Gas, Electric & Water) (26.17%)
Ameren Corporation (formerly Union Electric Company) 20,000 $853,750
Conectiv 20,000 490,000
El Paso Electric Company <F*> 150,000 1,312,500
Equitable Resources, Inc. 20,000 582,500
Niagara Mohawk Power Corporation 40,000 645,000
Northern States Power Company 20,000 555,000
Pacificorp 30,000 631,875
Pudget Sound Energy, Inc. 20,000 557,500
Texas Utilities Company 20,000 933,750
UniSource Energy Corporation 30,000 405,000
Western Resources, Inc. 13,200 438,900
----------------
$7,405,775
----------------
Miscellaneous (4.09%) $1,157,188
----------------
Total Common Stocks (Cost $17,945,205) $19,422,401
----------------
PREFERRED STOCKS (24.53%)
Natural Gas Pipeline (4.91%)
Western Gas Resources, Inc., $2.625 convertible 38,000 $1,389,375
----------------
Oil and Gas Exploration and Production (3.20%)
Belco Oil & Gas Corporation, 6.5% convertible 35,000 $525,000
Maxus Energy, 10% 15,000 381,563
----------------
$906,563
----------------
Telecommunication Equipment (5.50%)
Qwest Trends Trust, 5.75% convertible - Rule 144A
<Fr> (Acquired 12/14/98 - 12/15/98, Cost
$1,349,252) 32,000 $1,556,000
----------------
See Notes to Financial Statements
19
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER UTILITY FUND
- --------------------
Telecommunications Services (10.92%)
Nextlink Communications, Inc., 6.50% convertible -
Rule 144A <Fr> (Acquired 3/26/98 - 6/02/98,
Cost $1,825,500) 37,000 $1,591,000
Omnipoint Corporation, 7% convertible 35,000 875,000
Omnipoint Corporation, 7% convertible - Rule 144A
<Fr> (Acquired 7/7/98 - 7/15/98, Cost $1,193,125) 25,000 625,000
----------------
$3,091,000
----------------
Total Preferred Stocks (Cost $7,575,114) $6,942,938
----------------
NON-CONVERTIBLE BONDS (5.22%)
Environmental Services (1.24%)
Recycling Industries, Inc.
13%, due 2005 - Rule 144A <Fr> (Acquired
5/22/98, Cost $252,250) $250,000 $218,750
13%, due 2005 - Rule 144A <Fr> (Acquired
6/4/98, Cost $150,750) 150,000 131,250
----------------
$350,000
----------------
Oil and Gas Exploration and Production (0.59%)
Seven Seas Petroleum, Inc., 12.50%, due 2005 - Rule
144A <Fr> (Acquired 5/5/98 - 9/14/98, Cost
$242,175) $245,000 $167,825
----------------
Satellite Communications (3.39%)
Iridium World Communications Ltd.,
13%, due 2005 $1,000,000 $920,000
Operating, 10.875%, due 2005 45,000 38,475
----------------
$958,475
----------------
Total Non-Convertible Bonds (Cost $1,667,912) $1,476,300
----------------
CONVERTIBLE BONDS (0.86%)
Miscellaneous (0.86%) $242,500
----------------
Total Convertible Bonds (Cost $328,712) $242,500
----------------
U.S. GOVERNMENT AGENCY OBLIGATION (0.35%)
FMCDN, 1/14/99 $100,000 $99,816
----------------
(Cost $99,816)
Total Investments (Cost $27,616,759) 99.59% $28,183,955
Excess of Other Assets over Liabilities 0.41% $116,310
-------------- ----------------
Net Assets 100.00% $28,300,265
============== ================
<FN>
<F*> Non-income producing
<Ff> Denotes security primarily traded in foreign markets
<Fr> Denotes security is restricted as to resale. The aggregate value of restricted
securities at December 31, 1998 was $4,289,825 which represented 15.160 of net assets.
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
See Notes to Financial Statements
</TABLE>
20
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
For the year ended December 31, 1998, the Lindner/Ryback Small-Cap
Fund's total return declined 6.1%, compared to the Russell 2000 Index
total return of negative 2.2%. This disappointing performance is
contrary to expectations given our value-based investment style.
Typically, we expect returns to lag somewhat in a strongly advancing
market while outperforming in down markets. Our goal is for returns to
exceed the market over a full cycle.
Given 1998's performance, we conducted our ritual year-end postmortem
with heightened scrutiny to understand why we under-performed and to
hopefully prevent a reoccurrence. Our review revealed the following:
1) Several of the mistakes we made in the past year were the result of
being too complacent and too patient with many of our largest
positions. For example, Fairfield Communities, one of the largest
timeshare operators in the U.S., is typical of the type of business
we like to own. Fairfield, a company we have been involved with
since 1996, has good returns on capital, generates significant free
cash flow and has a management team that has historically allocated
capital intelligently. Exceptional 1996 and 1997 returns on this
investment lulled us into a false sense of security.
In December of 1997, Fairfield bought a struggling competitor to
expand into the largest geographic area where timeshares are sold.
The integration of the acquired company proved to be a disaster and,
despite some early warning signs, we held onto our entire position
in the stock. Why? We believed the low stock valuation and long-term
potential for the merged company would override the short-term
issues we saw on the horizon. While we believe this is generally a
prudent strategy, in this instance, it backfired. When the company
reported lower earnings than expected, the stock plummeted and
dragged down our performance.
Another example was Cogeneration Corp of America (previously named
NRG Generating) which I talked about at length in my letter to you
six months ago. The dispute with Pennsylvania Electric over a power
purchase agreement has not yet been resolved even though
Cogeneration is collecting the cash at stipulated rates. In
addition, NRG Energy, a subsidiary of Northern States Power which
owns 45% of the company, was forced to wage a proxy fight to oust
the CEO of Cogeneration Corp. NRG believed he was not executing the
strategic plan as they had envisioned. The accompanying negative
publicity read like a bad soap opera plot - driving the stock price
down.
Despite being bruised by the experience, we remain a large
shareholder for several reasons. First, we believe the two
aforementioned issues will be resolved without impairing long-term
value. In fact, one problem has already been settled with the
firing of the CEO. Second, the extremely cheap valuation compared
to the quality of the assets and
(continued on next page)
LINDNER/RYBACK
SMALL-CAP FUND
FUND PROFILE
The investment objective of this fund is long-term capital appreciation
through investments in common stocks or convertible securities of
companies with market capitalization of $750 million or less. Income is
a secondary objective.
Portfolio composition by industry
December 31, 1998
[GRAPH]
21
<PAGE>
<PAGE>
free cash flow they generate makes it attractive. Finally, Northern
States Power, now firmly in control, will maximize the value of this
asset as originally planned.
These examples highlight instances where we should have trimmed the size
of our position at the first sign of trouble instead of trying to ride
out the storm with a full position intact.
2) As value investors, we attempt to buy businesses at a significant
discount to what we estimate they are worth. We assume buying
businesses at low valuations will provide a margin of safety in case
we are wrong. In 1998, this proved a false assumption. Those stocks
that were cheap and reported disappointments, got cheaper. Stocks
that were expensive got more so. As a result, we were hit with a
double whammy on some of our businesses - lower than expected
earnings and a lower valuation on the lower earnings.
For example, Aviall, the worldwide leader in the distribution of new
airplane parts, was one of the largest positions in the Fund. In the
second half of 1998, the company reported a slowing in its business
and lower than expected results. Free cash flow estimates for 1998
fell from $1.55 to $1.45, a decline of 6-1/2%. The multiple on the
stock, which we believed to be very cheap at 9x free cash flow, fell
to 7x free cash flow or a decline of 23%. We believed investing in
the business at 9x free cash flow for an 11% cash on cash return was
sufficient to provide downside protection - it wasn't.
To complete the picture consider a) 1998 free cash flow of $1.45 was
up 16% from 1997, b) we estimate 1999's free cash flow to grow
roughly 10%, c) the company has a 19% return on its invested
capital, d) it is the dominant company in its industry with a market
share in excess of 20% or almost 3x its nearest competitor. While we
consider the valuation absurd, the market is the final arbiter and
its judgment was painful. As long as this phenomenon lasts, we must
operate in a market where low initial valuation may no longer
provide the margin of safety it historically has.
What are we doing to improve results?
First, we are reducing the overall concentration of the Fund. In 1998,
the Fund was more concentrated than usual with fewer than 30 positions
as compared to 35 in the past. This occurred because we couldn't find
businesses at prices we wanted to pay and negative asset flows caused us
to sell smaller holdings. Reducing our concentration should be an
important step in limiting our downside risk in the event we are wrong
on our large positions as we were in 1998.
Second, high valuations on stocks inhibited us from buying any new
businesses from March to October of last year. However, after the
small-cap market fell 40% from its highs, it created some new
opportunities. We were able to identify and purchase five new
businesses in the past few months. We are optimistic about the
prospects for these businesses and hope they contribute meaningfully to
1999 results, given the bargain prices we paid.
In summary, 1998 was a disappointing year; however, our approach to
valuing and owning businesses is unchanged. Given the three-year
performance of the fund, we do not think our approach is flawed, rather
our execution of it was poor during the past year. We are committed to
improving our execution throughout 1999.
It is important for you to know that I shared in the disappointment
alongside you during the past year. I do not invest outside the Fund -
it is the only place I have invested my own money. Moreover, it is a
substantial portion of my net worth. As such, I am reluctant to repeat
1998's performance and instead, look forward to improved results in
1999.
Thank you for patience and support.
/s/ Donald Wang
Donald Wang
Portfolio Manager
22
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER/RYBACK SMALL-CAP FUND
- -----------------------------
COMMON STOCKS (92.75%)
Commerical Services (3.34%)
Pharmaceutical Marketing Services, Inc. <F*> 103,100 $1,482,062
----------------
Computer and Electronic Equipment (4.27%)
Anacomp, Inc. <F*> 101,700 $1,894,162
----------------
Consumer (5.92%)
Fairfield Communities, Inc. <F*> 237,500 $2,627,344
----------------
Distributors (6.65%)
Aviall, Inc. <F*> 54,000 $634,500
Hawkins Chemical, Inc. 185,000 1,850,000
SunSource, Inc. 25,000 470,313
----------------
$2,954,813
----------------
Energy (9.04%)
Castle Energy Corporation <Fa> 160,000 $2,800,000
Plains Resources, Inc. <F*> 86,300 1,213,594
----------------
$4,013,594
----------------
Healthcare (5.60%)
National Dentex Corporation <F*> 75,000 $1,256,250
Utah Medical Products, Inc. 187,500 1,230,469
----------------
$2,486,719
----------------
Industrial Products and Services (8.51%)
Optek Technology, Inc. <F*> 89,800 $1,694,975
Quixote Corporation 109,000 1,342,063
TransTechnology Corporation 35,700 740,775
----------------
$3,777,813
----------------
Insurance (13.36%)
Cotton States Life Insurance Company 87,500 $1,301,562
Hilb, Rogal and Hamilton Company 96,100 1,909,987
Mid Atlantic Medical Services, Inc. <F*> 277,400 2,721,988
----------------
$5,933,537
----------------
Paper, Printing and Publishing (2.97%)
American Media, Inc., Class A <F*> 237,000 $1,318,312
----------------
Pipeline Services (2.84%)
Kaneb Services, Inc. <F*> 310,000 $1,259,375
----------------
Real Estate Investment Trust (5.92%)
Lexford Residential Trust <F*> 70,500 $1,304,250
Tanger Factory Outlet Centers, Inc. 62,500 1,324,219
----------------
$2,628,469
----------------
Real Estate Services (0.00%)
Resurgence Properties, Inc. <F*> 38,900 $1,945
----------------
Restaurants (4.05%)
Host Marriott Services Corporation <F*> 64,400 $668,150
Scott's Restaurants, Inc. <F*>, <Ff> 244,500 1,130,249
----------------
$1,798,399
----------------
Retail Trade (4.72%)
Brauns Fashions Corporation <F*> 190,000 $1,805,000
Today's Man, Inc. <F*> 137,600 292,400
----------------
$2,097,400
----------------
Tobacco Products (7.14%)
M & F Worldwide Corporation <F*> 315,000 $3,169,688
----------------
<PAGE>
Utilities (Gas, Electric & Water) (8.42%)
Cogeneration Corp. (formerly NRG Generating) <F*> 243,300 $2,189,700
El Paso Electric Company <F*> 177,000 1,548,750
----------------
$3,738,450
----------------
Total Common Stocks (Cost $37,575,543) $41,182,082
See Notes to Financial Statements
23
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER/RYBACK SMALL-CAP FUND
- -----------------------------
U.S. GOVERNMENT AGENCY OBLIGATION (5.63%)
FHLB, 1/4/99 $1,700,000 $1,699,283
FMCDN, 1/8/99 300,000 299,704
FMCDN, 1/14/99 200,000 199,631
FNDN, 1/15/99 300,000 299,413
----------------
(Cost $2,498,031) $2,498,031
----------------
Total Investments (Cost $40,073,574) 98.38% $43,680,113
Excess of Other Assets over Liabilities 1.62% $720,413
-------------- ----------------
Net Assets 100.00% $44,400,526
============== ================
<FN>
<F*> Non-income producing
<Ff> Denotes security primarily traded in foreign markets
<Fa> Denotes security is affiliated (See Note 6)
FHLB = Federal Home Bank Board
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
FNDN = Federal National Mortgage Association Discount Note
See Notes to Financial Statements
</TABLE>
24
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
During the six-month period ended December 31, 1998, many stocks in the
Lindner International Fund experienced substantial declines resulting in
the Fund delivering a return of -32.91% versus 18.23% for the EAFE
Index for the year.
While a few of the larger and more expensive European markets advanced,
the majority of global markets declined as many governments defaulted on
their obligations. Among these was Russia, where we had significant
exposure. However, liquidity is coming back to some Russian stocks
after a period of inactivity and I believe it is prudent to
differentiate between Russian companies and Government.
Approximately 14.43% of the Fund's portfolio was invested in oil and gas
exploration and production in 1998. The Fund suffered a set back when
oil prices hit a 14-year low, worldwide inventories climbed by almost
5%, and demand decreased in many troubled Asian economies.
While we owned some favored European stocks such as Grupo Anaya, a
Spanish publisher of educational and multi-media products, we also
sought values--like other value investors--in emerging markets.
However, unforeseen factors including the devaluation of many
international currencies in 1998 fueled a market downturn. This
downturn looks like it ended in late August when the Fund hit its low
net asset value of $5.94. Since that time, there has been minimal
activity in these markets and expensive markets have become even more
expensive.
There were a few highlights for the Fund's holdings:
* The BIG Bank of Poland began building a commercial branch system
in partnership with a Portuguese bank, which recently completed
a similar project in its own country.
* The Blagovno Trgovinski Center real estate development company
bought back 103,000 of its ADRs and had earnings exceeding
expectations.
* Our two holdings in Mexico, Vitro S.A. and Transportacion
Maritime Mexicana, withstood a weak Peso and Brazilian
devaluation without hitting lows.
One of the main tenets of value investing is patience. Kurt Lindner
stayed the course during the bear market of 1973-1974 and I believe the
past year had much in common with that period. We will continue to seek
out value during turbulent times overseas, while pursuing opportunities
to lower our cost basis on holdings we believe represent solid portfolio
holdings. We paid a heavy price for knowledge in 1998, and will try to
use that to good advantage in 1999.
I remain grateful for your patience and support during this past year.
Sincerely,
/s/ Robert A. Lange
Robert A. Lange
Portfolio Manager
LINDNER INTERNATIONAL FUND
FUND PROFILE
This fund seeks capital appreciation through investments in common
stocks or convertible securities of companies whose principal business
activities are outside the United States. Income is a secondary
objective.
Portfolio composition by country
December 31, 1998
[GRAPH]
25
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Country Principal Amount
Name of Issuer and Title of Issue of Origin of Bonds Value
- ------------------------------------- ----------- ------------------ ----------------
<S> <C> <C> <C>
LINDNER INTERNATIONAL FUND
- --------------------------
COMMON STOCKS (97.35%)
Construction and Real Estate (6.53%)
Blagovno Trgovinski Center -
GDR - Rule 144A <Fr>
(Acquired 6/6/97 - 5/7/98,
Cost $149,435) Slovenia 16,500 $89,430
------------
Financial Services (20.76%)
Bank Inicjatyw Gospodarczych Poland 87,000 $78,079
Banque Libanaise pour le
Commerce SAL GDR - Rule 144A
<Fr> (Acquired 12/11/96, Cost
$47,023) Lebanon 3,985 74,320
Cie Financiere de Paribas France 800 69,563
Eesti Uhispank - GDR - Rule
144A <F*>, <Fr> (Acquired
3/6/ 98 - 10/28/98, Cost
$148,825) Estonia 13,000 62,660
------------
$284,622
------------
Food and Beverage (1.58%)
Foster's Brewing Group, Ltd. Australia 8,000 $21,688
------------
Foreign Telecommunications (3.01%)
AI Uralsvyazinform - ADR Russia 22,000 $41,250
------------
Industrial Products and Services (10.48%)
Buderus AG Germany 150 $54,665
FAG Kugelfischer Gerog Schafer
AG Germany 2,800 23,772
Vitro, Sociedad Anonima - ADR Mexico 14,300 65,244
------------
$143,681
------------
Insurance (5.08%)
Catalana Occidente S.A. Spain 2,666 $69,624
------------
Metals Processing (5.27%)
Seversky Tube Works - ADR <F*> Russia 3,000 $7,500
Zindart Limited - ADR <F*> Hong Kong 9,000 64,688
------------
$72,188
------------
Mining (4.15%)
Meridian Gold, Inc. <F*> Canada 10,000 $56,875
------------
Oil Refining and Marketing (2.80%)
DOR Energy - GDR - Rule 144A
<F*>, <Fr> (Acquired
6/19/98, Cost $93,600) Israel 13,000 $38,437
------------
Oil and Gas Production and Exploration
(14.43%)
Bitech Petroleum Corp. <F*> Canada 69,068 $56,661
Probe Exploration, Inc. <F*> Canada 60,000 87,896
Rao Gazprom - ADR - Rule 144A
<Fr> (Acquired 10/22/96, Cost
$23,625) Russia 1,500 13,312
South
Sasol, Ltd. - ADR Africa 10,000 40,000
------------
$197,869
------------
Transportation (14.97%)
Guangshen Railway Company Ltd. China 540,000 $62,734
United
Teekay Shipping Corporation States 3,000 56,438
Transportacion Maritima
Mexicana - ADR Mexico 16,000 86,000
------------
$205,172
------------
<PAGE>
Utilities (Gas, Electric & Water) (6.57%)
Irkutskenergo - ADR Russia 35,500 $79,875
Unified Energy Systems - Reg S - ADR <Fr>
(Acquired 6/11/97 - 6/11/98,
Cost $85,053) Russia 3,130 10,172
------------
$90,047
------------
See Notes to Financial Statements
26
<PAGE>
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Country Principal Amount
Name of Issuer and Title of Issue of Origin of Bonds Value
- ------------------------------------- ----------- ------------------ ----------------
<S> <C> <C> <C>
LINDNER INTERNATIONAL FUND
- --------------------------
Miscellaneous (1.72%) $23,625
------------
Total Common Stocks (Cost
$2,105,909) $1,334,508
------------
Total Investments (Cost
$2,105,909) 97.35% $1,334,508
Excess of Other Assets over
Liabilities 2.65% 36,328
---------------- ------------
Net Assets 100.00% $1,370,836
================ ============
<FN>
<F*> Non-income producing
<Fr> Denotes security is restricted as to resale. The aggregate value of
restricted securities at December 31, 1998 was $288,331 which represented
21.03% of net assets.
ADR American Depository Receipts
GDR Global Depository Receipts
See Notes to Financial Statements
</TABLE>
27
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
The Lindner High-Yield Bond Fund was launched April 13, 1998 with
$100,000 in capital, and has grown to $2.3 million as of December 31,
1998.
The total return of the Fund from inception was negative 9.9%. This
compares to the Merrill Lynch High-Yield Bond Index total return of
negative 10.2% for the same period.
Since inception, the Fund has remained well diversified in over a dozen
industries and 25 or more securities. The Fund also maintained a 75% to
25% ratio of bonds, both convertible and straight, to convertible
preferreds.
It was a difficult first year in light of the fact interest rates
continued to drift lower throughout the period. Traditionally bonds move
in the opposite direction of interest rates, increasing in value when
rates decline. Unfortunately, the gap between government bonds and
corporate high-yield bonds widened during 1998, causing a mark down of
the bonds in the portfolio.
The disruption of hedge funds, Long-Term Capital Management in
particular, only increased the downward pressure on high-yield bonds.
High-yield bonds' liquidity dried up as hedge funds were forced to meet
margin calls, causing a sell off in these issues.
I stated in our Annual Report on June 30, 1998 my intention to keep the
portfolio's yield close to 10%. I am pleased to report that the Fund's
level 30-day portfolio and SEC yield at the end of the year was 12.9%.
Going forward, I intend to replace bonds that are deteriorating in asset
quality and seek to maintain a 75% to 25% ratio in bonds to convertible
preferreds. Normally, the convertible preferreds provide more capital
appreciation. However, last year they were also dragged down by the
hedge funds.
I will make every effort to try to provide you with a steady source of
income without incurring undue risk.
Sincerely,
/s/ Eric E. Ryback
Eric E. Ryback
President
LINDNER HIGH-YIELD
BOND FUND
FUND PROFILE
The investment objective of this fund is to produce maximum current
income. Investments include a diversified range of high-yield, high-risk
corporate bonds and notes.
Portfolio composition by industry
December 31, 1998
[GRAPH]
28
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER HIGH-YIELD BOND FUND
- ----------------------------
PREFERRED STOCKS (23.42%)
Airline (2.31%)
Trans World Airlines, Inc., 8% convertible 2,300 $54,050
----------------
Food Distribution (4.05%)
Chiquita Brands International, Inc., $2.875 Series A 2,700 $94,838
----------------
Health and Beauty Aids (3.09%)
Herbalife International, Inc., 8.75% 5,800 $72,500
----------------
Mining (1.84%)
Coeur d'Alene Mines Corporation, 7% convertible 6,400 $43,200
----------------
Retail Trade (6.26%)
Cendant Corp., 7.5% convertible 4,400 $146,850
----------------
Telecommunications Services (4.03%)
Nextlink Communications, Inc., 6.50% convertible 2,200 $94,600
----------------
Miscellaneous (1.84%) $43,125
----------------
Total Preferred Stocks (Cost $641,397) $549,163
----------------
NON-CONVERTIBLE BONDS (62.33%)
Airline (4.00%)
Canadian Airlines Corporation, 10%, due 2005 $60,000 $52,500
Trans World Airlines, Inc., 11.375%, due
2006 - Rule 144A <Fr> (Acquired 4/13/98 -
5/15/98, Cost $64,987) 65,000 41,275
----------------
$93,775
----------------
Computer and Electronic Equipment (7.28%)
Moog, Inc., 10%, due 2006 $45,000 $46,997
Zilog, Inc., 9.5%, due 2005 150,000 123,750
----------------
$170,747
----------------
Construction and Real Estate (3.34%)
Wickes, Inc., 11.625%, due 2003 $90,000 $78,300
----------------
Energy (2.23%)
Envirodyne Industries, Inc., 10.25% due 2001 $65,000 $52,325
----------------
Environmental Services (3.54%)
Recycling Industries, Inc., 13%, due 2005 - Rule 144A
<Fr> (Acquired 5/22/98, Cost $65,325) $65,000 $56,875
Recycling Industries, Inc., 13%, due 2005 - Rule 144A
<Fr> (Acquired 7/30/98, Cost $30,300) 30,000 26,250
----------------
$83,125
----------------
Leisure/Entertainment (3.02%)
Trump Atlantic City Associates, 11.25%,
due 2006 $80,000 $70,800
----------------
Natural Gas Exploration & Production (3.07%)
Seven Seas Petroleum, Inc., 12.50%, due
2005 - Rule 144A <Fr> (Acquired 5/5/98 -
9/14/98, Cost $105,450) $105,000 $71,925
----------------
Real Estate Investment Trust (0.47%)
Mego Mortgage Corporation, 12.50%, due 2001 - Rule
144A <Fr> (Acquired 4/13/98, Cost $12,318) $15,000 $11,025
----------------
Retail Trade (15.78%)
Decora Industries, Inc., 11%, due 2005 $65,000 $62,075
Homeland Stores, Inc., 10%, due 2003 70,000 62,650
The Musicland Group, 9%, due 2003 55,000 53,350
See Notes to Financial Statements
29
<PAGE>
<PAGE>
<CAPTION>
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER HIGH-YIELD BOND FUND
- ----------------------------
Retail Trade (continued)
Pamida Holdings Corporation, 11.75%, due 2003 100,000 $94,500
Pathmark Stores, Inc., 11.625% due 2002 100,000 97,500
----------------
$370,075
----------------
Satellite Communications (4.74%)
Iridium World Communications Ltd., Operating,
10.875%, due 2005 $130,000 $111,150
----------------
Security Systems (3.00%)
Mosler, Inc., 11%, due 2003 $80,000 $70,400
----------------
Telecommunications (6.91%)
Globalstar L.P., 11.375%, due 2004 $100,000 $76,000
USA Mobile Telecommunications Inc. II, 9.25%, due
2004 95,000 85,975
----------------
$161,975
----------------
Transportation (4.95%)
Global Ocean Carriers Ltd., 10.25%, due 2007 $65,000 $35,425
Transportacion Maritima Mexicana, S.A. de C.V.,
9.25%, due 2003 95,000 80,750
----------------
$116,175
----------------
Total Non-Convertible Bonds ($1,626,866) $1,461,797
----------------
CONVERTIBLE BONDS (7.55%)
Computer and Electronic Equipment (7.55%)
Intevac Inc., 6.5%, due 2004 $70,000 $43,400
Network Equipment Technologies, Inc., 7.25%, due 2014 45,000 38,025
Quantum Corporation, 7%, due 2004 100,000 95,625
----------------
$177,050
----------------
Total Convertible Bonds (Cost $196,824) $177,050
----------------
U.S. GOVERNMENT AGENCY OBLIGATION (4.26%)
FMCDN, 1/14/99 (Cost $99,831) $100,000 $99,831
----------------
Total Investments (Cost $2,564,918) 97.56% $2,287,841
Excess of Other Assets over Liabilities 2.44% $57,279
-------------- ----------------
Net Assets 100.00% $2,345,120
============== ================
<FN>
<Fr> Denotes security is restricted as to resale. The aggregate value of restricted
securities at December 31, 1998 was $207,350 which represented 8.84% of net assets.
FMCDN Federal Home Loan Mortgage Corporation Discount Note
See Notes to Financial Statements
</TABLE>
30
<PAGE>
<PAGE>
PERFORMANCE SUMMARY
The Lindner Bulwark Fund had a total return of 3.0% in the six months
ended December 31, 1998. This compares to the Dow Jones Industrial
Average and the Russell 2000 which had returns of 3.5% and -7.1%,
respectively for the same time period. The Fund appreciated nicely
during the market's downturn and held on to most of its gains when the
market sprung back from its lows.
Throughout the last half of 1998 the Fund maintained its short exposure
(holdings on which we benefit from a decline in price) close to the
maximum 25%, while allocating the remaining capital between various long
positions (holdings on which we benefit from gains in price) such as
common stocks, preferred stocks, and bonds.
Our method of picking companies to own and those to short is simple. We
want to own excellent companies at reasonable prices and short
questionable companies at unreasonable prices. In my opinion, an
excellent company is a leader today and likely to be a leader many years
from now. The company has a sustainable competitive advantage, such as
great brand equity or technology which is difficult to copy, and
generates higher than average returns on assets and free cash flow. We
try to identify these companies, buy them when they are cheap and hold
on to them for as long as possible.
We take short positions in companies we believe are either "frauds,
fads, or failures," to borrow a phrase. "Frauds" are companies that
overstate financial results through accounting gimmicks. "Fads" are
companies which are driven to abnormal valuations by frantic investors.
"Failures" are companies suffering operational difficulties unrecognized
by most investors.
LONG POSITIONS
On December 31, 1998, the Fund held 32 positions. We eliminated 15 long
positions and added 18 in the second half of 1998. This restructuring
included eliminating several gold mining companies, which materially
reduced the Fund's exposure to gold.
The most notable contributor to returns among the longs was our
Westmoreland Coal preferred stock, which advanced 264.1% during the last
half of 1998. Other companies providing solid returns were recently
acquired Mercury Computer, Hooper Holmes, and Liberty Media, which were
up 98%, 50%, and 28%, respectively, since their additions. These are
great examples of leaders acquired at attractive prices.
However, we were not without disappointments. Harken Energy declined 60%
from $4-7/8 to $1-15/16. We continue to believe Harken Energy is worth
many times its current price, even with oil and natural gas at today's
low prices. Uranium Resources and Pluma Inc. were also disappointments,
falling 89% and 84%, respectively before being disposed. Both were
troubled companies attempting to execute turnarounds that were
unsuccessful.
(continued on next page)
LINDNER BULWARK FUND
FUND PROFILE
This non-diversified fund is designed to preserve capital in times of
economic adversity, with current income as a secondary objective.
Investments include undervalued securities and precious metals, which
have historically maintained their value when fixed income and equity
markets are generally declining.
Portfolio composition by industry
December 31, 1998
[GRAPH]
31
<PAGE>
<PAGE>
SHORT POSITIONS
On the short side of the portfolio, we ended the period with 31
positions, a net gain of 2 positions from June 30. We were very
successful with some of the positions eliminated, such as Daou Systems,
Smartalk Teleservices, and Integrated Health Services, which declined by
84%, 67%, and 61%, respectively, between June 30 and their disposals.
Our greatest successes have come from troubled companies using
aggressive accounting practices to hide their problems. This continues
to be our specialty, in part, because a troubled company almost always
falls apart without regard to the stock market, Internet frenzies, etc.
We are continuing to find good short ideas in this raging bull market.
We believe recent additions to our shorts to be some of the best we have
seen in a long time.
RECENT PROSPECTUS CHANGES
As you may know, we recently received approval from shareholders to
change the Fund's prospectus. This change is expected to be effective
in early March at which time the Fund will become the Lindner Market-
Neutral Fund.
A market-neutral fund allocates roughly equal portions of assets to
owning stocks and to shorting stocks. We will attempt to own great
companies at reasonable prices while shorting inferior companies at
unreasonably high prices. Using this method, we hope to generate modest
returns with no correlation to the overall stock market. Put simply, we
want to make money every year regardless of what the stock market does.
Our goal is to exceed the return on 3-month U.S. Treasury Bills, which
recently has been about 5% a year.
The prospectus change is the last step in a process started almost a
year ago to turn around the Fund's performance. Recent results have far
exceeded the Fund's 1997 performance and returns of some of its
"contrarian" peers. Previous steps in the process included the reduction
of our exposure to precious metals, ending our use of put options on
various indexes and increasing the quality and liquidity of our common
stocks.
Today, the Fund has a much improved strategy and the quality of the
companies we own is higher than ever before. We are excited about the
future prospects of the Fund.
Thank you for your continued support.
Sincerely,
/s/ Andrew Boord
Andrew Boord
Portfolio Manager
32
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER BULWARK FUND
- --------------------
COMMON STOCKS (36.69%)
Broadcast/Media (2.50%)
Tele-Communications, Inc. - Liberty Media Group,
Class A <F*> 13,000 $598,813
----------------
Computer and Electronic Equipment (5.17%)
Applied Materials, Inc. <F*> 4,000 $170,750
Intevac, Inc. <F*> 72,500 462,187
Mercury Computer Systems, Inc. <F*> 10,000 281,250
Quantum Corporation <F*> 15,200 323,000
----------------
$1,237,187
----------------
Consumer (1.16%)
Fairfield Communities, Inc. <F*> 25,000 $276,563
----------------
Distributors (1.38%)
Hand Technologies, Inc., - Rule 144A <F*>, <Fr>
(Acquired 4/25/97, Cost $330,000) 528,000 $330,000
----------------
Financial Services (1.96%)
Equifax, Inc. 5,900 $201,706
MGIC Investment Corporation 6,700 266,744
----------------
$468,450
----------------
Food and Beverage (1.01%)
Archer-Daniels-Midland Company 14,000 $240,625
----------------
Healthcare (1.82%)
Hooper Holmes, Inc. 15,000 $435,000
----------------
Industrial Products and Services (4.93%)
Blount International, Inc., Class A 15,000 $374,062
Dover Corporation 7,000 256,375
Kaydon Corporation 5,000 200,313
Snap-On, Inc. <F*> 10,000 348,125
----------------
$1,178,875
----------------
Investments (2.20%)
Energy Capital Investment Company PLC <Ff> 100,000 $123,960
Siem Industries, Inc., (formerly Norex Industries,
Inc.) <F*> 47,150 402,190
----------------
$526,150
----------------
Leisure/Entertainment (2.05%)
The Todd-AO Corporation, Class A 61,300 $490,400
----------------
Manufacturing - Industrial Products (0.62%)
Lindsay Manufacturing Company 10,000 $148,125
----------------
Medical Services (0.71%)
American Physicians Service Group, Inc. <F*> 38,000 $171,000
----------------
Oil and Gas Exploration and Production (1.62%)
Harken Energy Corporation <F*> 200,000 $387,500
----------------
Real Estate - Non REIT (1.08%)
The St. Joe Company 11,000 $257,812
----------------
Software (2.70%)
Periphonics Corporation <F*> 49,000 $646,187
----------------
Tobacco Products (3.74%)
M & F Worldwide Corporation <F*> 88,900 $894,556
----------------
Transportation (2.04%)
Simon Transportation Services, Inc. <F*> 83,800 $487,088
----------------
Total Common Stocks ($9,844,810) $8,774,331
----------------
PREFERRED STOCKS (12.72%)
Consumer Services (2.09%)
Cendent Corporation, 7.5% convertible 15,000 $500,625
----------------
Health and Beauty (1.15%)
Herbalife International, Inc., 8.75% 22,000 $275,000
----------------
See Notes to Financial Statements
33
<PAGE>
<PAGE>
<CAPTION>
</TABLE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER BULWARK FUND
- --------------------
Mining (9.48%)
Coeur d'Alene Mines Corporation, 7% convertible 22,000 $148,500
Westmoreland Coal Company, 8.50% voting convertible
<Fa>, <F#> 119,300 2,117,575
----------------
$2,266,075
----------------
Total Preferred Stocks ($2,114,827) $3,041,700
----------------
NON-CONVERTIBLE BONDS (2.56%)
Industrial Products (1.67%)
Blount International, Inc., 7%, due 6/15/2005 $400,000 $400,130
----------------
Mining (0.89%)
South American Gold and Copper Company, Ltd., 10%,
due 1998 - Rule 144A <Ff>, <Fr>
(Acquired 7/10/96, Cost $949,251) CAD $1,300,000 $211,602
----------------
Total Non-Convertible Bonds (Cost $1,343,252) $611,732
----------------
CONVERTIBLE BONDS (5.46%)
Mining (5.46%)
Uranium Resources Inc., 6.5% Senior Secured, due 2000
- Rule 144A <Fr> (Acquired 5/25/95 - 6/25/97,
Cost $1,515,791) $1,500,000 $1,305,000
----------------
Total Convertible Bonds (Cost $1,515,791) $1,305,000
----------------
U.S. GOVERNMENT AGENCY OBLIGATION (25.87%)
FHDN, 1/20/99 $2,900,000 $2,892,163
FHLB, 1/04/99 1,000,000 999,576
FMCDN, 1/14/99 1,200,000 1,197,798
FNDN, 1/15/99 500,000 499,022
FNMA DISC, 1/14/99 600,000 598,904
----------------
(Cost $6,187,463) $6,187,463
----------------
Total Investments (Cost $21,006,143) 83.29% $19,920,226
Cash Deposits with Broker for Securities Sold Short 17.96% $4,295,883
Receivable from Brokers for Securities Sold Short 36.01% $8,612,560
Securities Sold Short -34.63% ($8,282,587)
Excess of Other Liabilities over Assets -2.63% ($631,299)
-------------- ----------------
Net Assets 100.00% $23,914,783
============== ================
See Notes to Financial Statements
</TABLE>
34
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Number of Shares -
Principal Amount
Name of Issuer and Title of Issue of Bonds Value
- ------------------------------------------------------- ------------------ ----------------
<S> <C> <C>
LINDNER BULWARK FUND
- --------------------
Schedule of Securities Sold Short - Common Stocks
Action Performance Companies, Inc. 14,000 $495,250
AGCO Corp. 20,000 157,500
Altair Corporation 11,500 77,625
Alydaar Software 22,500 185,625
American Technology Corporation 15,700 66,725
Bally Total Fitness Holding Corporation 16,000 398,000
BioTime, Inc. 4,500 78,188
Carrier Access Corporation 8,500 292,719
Case Corporation 6,500 141,781
Catepillar, Inc. 12,800 588,800
Cerner Corporation 8,000 214,000
Coyote Network Systems, Inc. 16,000 118,000
Elan Corporation PLC - ADR 4,100 285,206
Finning International, Inc. 37,000 263,787
GK Intelligent Systems, Inc. 10,000 34,375
Geltex Pharmaceuticals, Inc. 13,000 294,125
Intelligroup, Inc. 20,000 357,500
Metris Companies, Inc. 6,500 327,031
The PMI Group, Inc. 5,200 256,750
Pillowtex Corporation 11,900 318,325
Polaroid Corporation 13,200 246,675
The Profit Recovery Group International, Inc. 16,400 613,975
Provident Financial Group, Inc. 13,000 490,750
Province Healthcare Company 15,000 538,125
Recoton Corporation 10,000 179,375
SVI Holdings, Inc. 2,500 18,281
Siebel Systems, Inc. 14,000 475,125
Signature Resorts, Inc. 6,000 90,000
Software AG Systems, Inc. 20,000 362,500
Sylvan Learning Systems, Inc. 7,000 213,500
Tandy Corporation 2,500 102,969
----------------
$8,282,587
================
<FN>
<F*> Non-income producing
<Fa> Denotes security is affiliated (See Note 6)
<Ff> Denotes security primarily traded in foreign markets
<Fr> Denotes security is restricted as to resale. The aggregate value of restricted
securities at December 31, 1998 was $1,846,602 which represented 7.72% of net assets.
<F#> Denotes dividend in arrears
FHDN = Federal Home Discount Note
FHLB = Federal Home Bank Board
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
FNDN = Federal National Mortgage Association Discount Note
FNMA = Federal National Mortgage Association
See Notes to Financial Statements
</TABLE>
35
<PAGE>
<PAGE>
PERFORMANCE
SUMMARY
During the past six months, numerous market dislocations provided many
investors with a new perspective on risk. The return of worldwide
financial turmoil during the summer, such as the recession in Asia,
default of Russian debt and stresses in Latin America, gave rise to a
crisis in confidence.
The Federal Reserve clearly needed to quickly move interest rates lower.
Thus, short-term interest rates were lowered by a total of 75 basis
points between September and November 1998. The market responded with
one-year Treasury Bill yields declining from approximately 5.5% to 4.5%
by the end of November.
Due to the anticipation of continued low inflation and Asian weakness,
we envisioned lower interest rates in 1998. Interest rates were
expected to decline and the Fund was positioned to take advantage of
this opportunity. We therefore lengthened the portfolio's average
maturity early in the year to "lock-in" relatively high yields.
Another factor impacting investment performance was the type of
securities purchased. The Fund invests exclusively in dollar
denominated securities issued or guaranteed by the United States
Government. These bonds are considered to have the least credit risk of
all securities and are easily purchased and sold because of the vast
size of the market. During this period of turmoil, these investments
provided an excellent combination of safety, liquidity and yield for
investors in money market assets.
Although its yield declined due to lower market levels, the Fund
maintained competitive yields as compared to its peer group throughout
the second half of 1998. Once again, the Lindner Government Money
Market Fund finished in the top quarter (25%) of its peer group during
1998 with a total return of 5.07%.
To help determine the timing and extent of the next monetary easing, the
Fed has identified five key areas to monitor: GDP growth prospects,
unemployment rate, inflation trends, financial liquidity and world
economies. We are assuming that Gross Domestic Product will slow;
liquidity will need a boost; and world economies will struggle, leaving
room for the Fed to lower rates.
/s/ Eric E. Ryback
Eric E. Ryback
President
LINDNER GOVERNMENT
MONEY MARKET FUND
FUND PROFILE
This very low-risk fund invests in short-term debt securities guaranteed
by the U.S. government or its agencies. Investors can expect a moderate
level of current income, with liquidity and stability of capital. The
fund is neither insured nor guaranteed by the U.S. Government, and there
can be no assurance that it will be able to maintain a stable net asset
value.
36
<PAGE>
<PAGE>
<TABLE>
- -------------------------------------------------------------------------
LINDNER INVESTMENTS
- -------------------------------------------------------------------------
SCHEDULES OF INVESTMENTS - DECEMBER 31, 1998
(Unaudited)
<CAPTION>
Name of Issuer and Title of Issue Face Amount Value
- --------------------------------------- ----------- ----------------
<S> <C> <C>
LINDNER GOVERNMENT MONEY MARKET FUND
- ------------------------------------
U.S. GOVERNMENT AGENCY SECURITIES (58.48%)
FCDN, 1/14/99 $974,000 $972,280
FFCB, 5.30%, 2/2/99 500,000 499,920
FFCB, 6.60%, 6/14/99 500,000 502,142
FHLB, 1/4/99 4,000,000 3,998,303
FHLB, 5.385%, 1/22/99 100,000 99,983
FHLB, 6.22%, 3/15/99 100,000 100,113
FHLB, 5.50%, 3/26/99 205,000 204,725
FHLB, 5.63%, 4/9/99 500,000 500,011
FHLB, 5.605%, 4/27/99 120,000 119,983
FHLB, 5.705%, 5/5/99 500,000 500,080
FHLB, 4.92%, 10/27/99 2,000,000 2,000,000
FHLB, 5.0%, 10/27/99 1,000,000 1,000,000
FHLMC, 5.505%, 3/12/99 500,000 499,708
FHLMC, float, 5/19/99 1,000,000 999,460
FMCDN, 1/7/99 680,000 679,422
FMCDN, 1/8/99 1,000,000 999,006
FMCDN, 1/11/99 3,000,000 2,996,050
FMCDN, 2/16/99 2,000,000 1,987,146
FMCDN, 2/26/99 2,000,000 1,984,196
FNMA, Discount Note, 1/7/99 380,000 379,029
FNMA, Discount Note, 1/11/99 3,000,000 2,997,567
FNMA, 5.50%, 2/12/99 2,000,000 2,000,000
FNMA, Discount Note, 2/25/99 1,000,000 992,163
FNMA, 5.37%, 2/26/99 500,000 499,845
FNMA, 8.70%, 6/10/99 605,000 612,661
SLMA, 5.10%, 10/15/99 1,000,000 1,000,000
SLMA, 4.90%, 10/27/99 2,000,000 2,000,000
----------------
$31,123,793
----------------
TEMPORARY CASH INVESTMENTS (37.98%)
Repurchase Agreements (Collateralized
by U.S. Government Agency
Obligations)
Dean Witter Reynolds dated 12/31/98,
4.85% due 1/4/99 $5,000,000 $5,000,000
Donaldson, Lufkin & Jenrette
Corporation dated 12/31/98, 5.00%
due 1/4/99 6,213,000 6,213,000
Merrill Lynch and Company, Inc. dated
12/31/98, 4.80% due 1/4/99 3,000,000 3,000,000
Swiss Bank Corporation dated
12/31/98, 4.75% due 1/4/99 6,000,000 6,000,000
----------------
$20,213,000
----------------
Total Investments
(Cost $51,336,793) 96.46% $51,336,793
Excess of Other Assets over Liabilities 3.54% 1,882,119
----------- ----------------
Net Assets 100.00% $53,218,912
=========== ================
<FN>
FCDN = Federal Farm Credit Bank Discount Note
FFCB = Federal Farm Credit Bank
FHLB = Federal Home Loan Banks
FHLMC = Federal Home Loan Mortgage Corporation
FMCDN = Federal Home Loan Mortgage Corporation Discount Note
FNMA = Federal National Mortgage Association
SLMA = Student Loan Marketing Association
See Notes to Financial Statements
</TABLE>
37
<PAGE>
<PAGE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- -----------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER GROWTH FUND LINDNER DIVIDEND FUND
------------------------ ------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends
Unaffiliated issuers (net of withholding taxes of
$46,505, $330,645, $1,202, $3,514, $997 and $0,
respectively) $2,951,282 $36,702,864
Affiliated issuers (Non-controlled) 1,450,094 479,123
Amortization 920,323 1,778,519
Interest (net of withholding taxes of $0, $4,066,
$0, $0, $0, and $0, respectively) 884,832 20,179,377
------------------------ ------------------------
Total income 6,206,531 59,139,883
------------------------ ------------------------
Expenses:
Management fees (Note 3) 1,732,039 3,538,962
Administrator fees -- --
Registration and regulatory fees 16,904 16,243
Professional fees 100,081 109,422
Custodian fees 87,252 56,910
Transfer agent fees (Note 3) 172,325 255,930
Shareholder communications 107,942 153,180
Organizational expense (Note 4) -- --
Other expenses 113,407 161,875
12b-1 fees - Institutional shares 377 1,539
------------------------ ------------------------
Total expenses 2,330,327 4,294,061
Fees paid indirectly (Note 6) (10,513) (21,702)
------------------------ ------------------------
Net expenses 2,319,814 4,272,359
------------------------ ------------------------
Net investment income/(loss) 3,886,717 54,867,524
------------------------ ------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on investments of
unaffiliated issuers 12,366,587 44,945,006
Net realized loss on investments of affiliated
issuers
(Non-controlled) (3,415,264) (2,974,457)
Net realized loss on foreign currency transactions (8,765) (9,794)
------------------------ ------------------------
Net realized gain (loss) on investments and foreign
currency transactions 8,942,558 41,960,755
------------------------ ------------------------
Change in unrealized appreciation on investments (144,677,156) (238,474,884)
Change in unrealized appreciation on translation of
assets and liabilities in foreign currencies 3,968 --
------------------------ ------------------------
Change in unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies (144,673,188) (238,474,884)
------------------------ ------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($131,843,913) ($141,646,605)
======================== ========================
38 See Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER/RYBACK LINDNER HIGH-YIELD
LINDNER UTILITY FUND SMALL-CAP FUND LINDNER INTERNATIONAL FUND BOND FUND
- ------------------------ ------------------------ -------------------------- ------------------------
<S> <C> <C> <C>
$470,933 $255,142 $8,145 $28,569
-- 48,000 -- --
36,352 87,041 1,070 8,838
139,524 -- 7 92,484
- ------------------------ ------------------------ ------------------------ ------------------------
646,809 390,183 9,222 129,891
- ------------------------ ------------------------ ------------------------ ------------------------
119,408 160,025 9,349 1,263
-- -- -- 2,080
11,682 11,566 10,698 4,972
4,441 5,726 653 431
2,358 1,223 2,568 71
14,328 18,261 5,512 1,166
6,411 9,073 939 609
1,254 2,954 3,669 2,062
7,512 8,039 2,239 383
4 187 -- --
- ------------------------ ------------------------ ------------------------ ------------------------
167,398 217,054 35,627 13,037
(527) (737) (15) (35)
- ------------------------ ------------------------ ------------------------ ------------------------
166,871 216,317 35,612 13,002
- ------------------------ ------------------------ ------------------------ ------------------------
479,938 173,866 (26,390) 116,889
- ------------------------ ------------------------ ------------------------ ------------------------
(1,268,585) (1,228,334) (151,271) (62,875)
-- -- -- --
(109) (203) (128) --
- ------------------------ ------------------------ ------------------------ ------------------------
(1,268,694) (1,228,537) (151,399) (62,875)
- ------------------------ ------------------------ ------------------------ ------------------------
(4,657,477) (2,460,308) (439,405) (279,104)
43 -- 69 --
- ------------------------ ------------------------ ------------------------ ------------------------
(4,657,434) (2,460,308) (439,336) (279,104)
- ------------------------ ------------------------ ------------------------ ------------------------
($5,446,190) ($3,514,979) ($617,125) ($225,090)
======================== ======================== ======================== ========================
See Notes to Financial Statements 39
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER BULWARK FUND
------------------------
<S> <C>
INVESTMENT INCOME
Income:
Dividends
Unaffiliated issuers $107,263
Amortization 149,942
Interest 428,529
------------------------
Total income 685,734
------------------------
Expenses:
Management fees (Note 3) 136,319
Registration and regulatory fees 10,398
Dividend expense - short sales 20,862
Professional fees 3,518
Custodian fees 374
Transfer agent fees (Note 3) 12,452
Shareholder communications 4,675
Organizational expense (Note 4) 6,424
Other expenses 5,514
------------------------
Total expenses 200,536
Fees paid indirectly (Note 6) (330)
------------------------
Net expenses 200,206
------------------------
Net investment income 485,528
------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on investments of unaffiliated
issuers (7,710,482)
Net realized gain on securities sold short 4,823,175
Net realized loss on option transactions (485,128)
Net realized loss on foreign currency transactions (791)
------------------------
Net realized loss on investments and foreign currency
transactions (3,373,226)
------------------------
Change in unrealized appreciation on investments 3,860,042
Net unrealized depreciation on securities sold short (188,171)
Change in unrealized appreciation on translation of
assets and liabilities in foreign currencies (23)
------------------------
Change in unrealized appreciation on investments and
translation of assets and liabilities in foreign
currencies 3,671,848
------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $784,150
========================
40 See Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ---------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER GOVERNMENT
MONEY MARKET FUND
------------------------
<S> <C>
INVESTMENT INCOME
Interest $1,288,328
------------------------
Expenses:
Administrator fees (Note 3) 45,688
Management fees (Note 3) 36,264
Registration and regulatory fees 10,417
Shareholder communications 8,275
Transfer agent fees (Note 3) 8,142
Organizational expense (Note 4) 2,319
Custodian expense 2,015
Other expenses 9,529
------------------------
Total expenses 122,649
Fees paid indirectly (Note 6) (842)
------------------------
Net expenses 121,807
------------------------
Net Investment Income $1,166,521
========================
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31, 1998
AND THE PERIOD ENDED JUNE 30, 1998
(Unaudited)
<CAPTION>
LINDNER GOVERNMENT MONEY MARKET FUND
----------------------------------------------------------
DECEMBER 31, 1998 JUNE 30, 1998
------------------------ ------------------------
<S> <C> <C>
INCREASE IN NET ASSETS:
Net investment income $1,166,521 $2,102,273
------------------------ ------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (1,166,521) (2,102,273)
------------------------ ------------------------
FUND SHARE TRANSACTIONS:
Net increase in net assets resulting from fund shares
transactions (Note 7) 10,256,479 3,746,289
------------------------ ------------------------
TOTAL INCREASE IN NET ASSETS 10,256,479 3,746,289
Net Assets at the Beginning of the Period 42,962,433 39,216,144
------------------------ ------------------------
Net Assets at the End of the Period $53,218,912 $42,962,433
======================== ========================
See Notes to Financial Statements 41
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER GROWTH FUND LINDNER DIVIDEND FUND
----------------------------- ------------------------------
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1998 <F2> 1998 1998 <F2> 1998
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income (loss) $3,886,717 $17,289,831 $54,867,524 $112,573,428
Net realized gain (loss) on investments and
foreign currency transactions 8,942,558 135,020,698 41,960,755 52,875,233
Net (decrease) increase in unrealized
appreciation on investments and
translation of assets and liabilities in
foreign currencies (144,673,188) (125,655,231) (238,474,884) 84,476,187
------------- -------------- -------------- --------------
Net (Decrease) Increase in Net Assets (131,843,913) 26,655,298 (141,646,605) 249,924,848
------------- -------------- -------------- --------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income:
Investors shares (12,403,272) (17,507,539) (54,244,976) (104,805,174)
Institutional shares (4,770) (11,745) (39,389) (148,548)
From net realized gain on investments and
foreign currency transactions:
Investors shares (99,667,783) (181,608,041) (26,512,843) (152,584,398)
Institutional shares (45,353) (131,660) (18,030) (206,827)
------------- -------------- -------------- --------------
Net decrease in net assets from
distributions to shareholders (112,121,178) (199,258,985) (80,815,238) (257,744,947)
------------- -------------- -------------- --------------
FUND SHARE TRANSACTIONS (NOTE 7):
Investors shares (143,701,904) (319,448,363) (242,802,150) (392,674,791)
Institutional shares (11,847) 420,275 (1,676,319) 796,552
------------- -------------- -------------- --------------
Net (Decrease) Increase in Fund Share
Transactions (143,713,751) (319,028,088) (244,478,469) (391,878,239)
------------- -------------- -------------- --------------
TOTAL (DECREASE) INCREASE IN NET ASSETS (387,678,842) (491,631,775) (466,940,312) (399,698,338)
Net Assets at the Beginning of the Period 1,003,444,616 1,495,076,391 1,619,207,195 2,018,905,533
------------- -------------- -------------- --------------
Net Assets at the End of the Period $615,765,774 $1,003,444,616 $1,152,266,883 $1,619,207,195
============= ============== ============== ==============
Undistributed Net Investment Income (Loss)
Included in Net Assets at the End of the
Period $959,546 $9,480,871 $6,397,233 $5,814,077
============= ============== ============== ==============
<FN>
<F1> Operations commenced on April 13, 1998
<F2> Unaudited
42 See Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- -------------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER/RYBACK LINDNER HIGH-YIELD
LINDNER UTILITY FUND SMALL-CAP FUND LINDNER INTERNATIONAL FUND BOND FUND <F1>
- ---------------------------- ---------------------------- ---------------------------- ----------------------------
DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30, DECEMBER 31, JUNE 30,
1998 <F2> 1998 1998 <F2> 1998 1998 <F2> 1998 1998 <F2> 1998
- ---------------------------- ---------------------------- ---------------------------- ----------------------------
<C> <C> <C> <C> <C> <C> <C> <C>
$479,938 $992,000 $173,866 $510,226 ($26,390) ($43,059) $116,889 $20,483
(1,268,694) 5,763,235 (1,228,537) 2,072,221 (151,399) 73,981 (62,875) 3,609
(4,657,434) (375,347) (2,460,308) 1,698,097 (439,336) (816,771) (279,104) 2,027
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(5,446,190) 6,379,888 (3,514,979) 4,280,544 (617,125) (785,849) (225,090) 26,119
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(519,174) (977,050) (510,045) (204,160) -- -- (115,723) (19,008)
(1) (397) (1,854) (910) -- -- (7) (2)
(5,463,199) (2,523,984) (1,766,308) (1,478,918) (74,182) (81,079) (3,609) --
(28) (439) (6,257) (8,066) (11) (8) -- --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(5,982,402) (3,501,870) (2,284,464) (1,692,054) (74,193) (81,087) (119,339) (19,010)
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(3,165,583) (6,692,877) (4,167,063) 26,792,123 (524,461) (1,257,243) 1,043,521 1,638,763
(6,654) (47,963) 36,749 139,307 10 7 5 151
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(3,172,237) (6,740,840) (4,130,314) 26,931,430 (524,451) (1,257,236) 1,043,526 1,638,914
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
(14,600,829) (3,862,822) (9,929,757) 29,519,920 (1,215,769) (2,124,172) 699,097 1,646,023
42,901,094 46,763,916 54,330,283 24,810,363 2,586,605 4,710,777 1,646,023 --
- ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
$28,300,265 $42,901,094 $44,400,526 $54,330,283 $1,370,836 $2,586,605 $2,345,120 $1,646,023
============ ============ ============ ============ ============ ============ ============ ============
$6,932 $46,169 ($27,443) $310,592 ($72,929) ($46,539) $2,632 $1,472
============ ============ ============ ============ ============ ============ ============ ============
See Notes to Financial Statements 43
</TABLE>
<PAGE>
<PAGE>
<TABLE>
- ----------------------------------------------------------------------------------------------
LINDNER INVESTMENTS
- ----------------------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998
(Unaudited)
<CAPTION>
LINDNER BULWARK FUND
----------------------------
December 31, June 30,
1998 <F1> 1998
----------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $485,528 $741,936
Net realized loss on investments and foreign currency
transactions (3,373,226) (13,686,482)
Net increase in unrealized appreciation on investments
and translation of assets and liabilities in foreign
currencies 3,671,848 7,075,212
------------ ------------
Net Increase (Decrease) in Net Assets 784,150 (5,869,334)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
Investors shares (735,088) (2,703,161)
Institutional shares (3) --
From net realized gain on investments and foreign
currency transactions:
Investors shares -- --
Institutional shares -- --
------------ ------------
Net decrease in net assets from distributions to
shareholders (735,091) (2,703,161)
------------ ------------
FUND SHARE TRANSACTIONS (NOTE 7):
Investors shares (4,399,168) (31,774,601)
Institutional shares 2 (1,468,360)
------------ ------------
Net Decrease in Fund Share Transactions (4,399,166) (33,242,961)
------------ ------------
TOTAL DECREASE IN NET ASSETS (4,350,107) (41,815,456)
Net Assets at the Beginning of the Period 28,264,889 70,080,345
------------ ------------
Net Assets at the End of the Period $23,914,782 $28,264,889
============ ============
Undistributed Net Investment Income Included in Net Assets
at the End of the Period $13,953 $263,514
============ ============
<FN>
<F1> Unaudited
44 See Notes to Financial Statements
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. Organization and Significant Accounting Policies
Lindner Investments, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. Eight series of shares are currently
issued by the Trust: (1) Lindner Growth Fund, (2) Lindner Dividend Fund,
(3) Lindner Utility Fund, (4) Lindner/Ryback Small-Cap Fund, (5) Lindner
Bulwark Fund, (6) Lindner International Fund, (7) Lindner Government Money
Market Fund, and (8) Lindner High-Yield Bond Fund (collectively, the
"Funds"). Lindner Growth, Lindner Dividend, Lindner Utility, Lindner/Ryback
Small-Cap, Lindner Bulwark, Lindner International and Lindner High-Yield
Bond Funds offer both Investor and Institutional classes of shares. Investor
shares are sold without a 12b-1 fee. Institutional shares are sold with a
12b-1 fee. Institutional shares sold have their own distribution/
administrative service plan and certain expenses are directly allocated
to that class.
The following is a summary of significant accounting policies followed by
the Funds.
Security Valuation
The Lindner Growth, Lindner Dividend, Lindner Utility, Lindner/Ryback
Small-Cap, Lindner Bulwark, Lindner International and Lindner High-Yield
Bond Funds value investments in securities traded on a national
securities exchange or in the NASDAQ Stock Market at the last reported
sales price as of the close of the New York Stock Exchange; securities
traded in the over-the-counter market and listed securities for which no
sale was reported on the day are valued at the mean between the last
reported bid and asked prices. Short term securities with a maturity of
sixty days or less are valued using amortized cost. The value of foreign
securities is translated from the local currency into U.S. dollars at
the rate of exchange prevailing on the valuation date. When market
quotes are not readily available, such securities are valued at fair
value as determined in good faith by the Board of Trustees.
The Lindner Government Money Market Fund values investment securities
using the amortized cost method, whereby investments purchased at
discount or premium are valued by amortizing the difference between the
original purchase cost and maturity value of the issue over the period
to maturity, which approximates current value.
Investment Income
Dividend income is recognized on the ex-dividend date. Interest income
is recognized on the accrual basis. Dividend and interest income is
recorded net of foreign taxes where recovery of such taxes is not
assured. For the Lindner Government Money Market Fund, premiums and
discounts, if any, on securities purchases are amortized over the life
of the respective securities.
Foreign Currency Translation
The books and records of the Funds are maintained in U.S. dollars as
follows: (1) the foreign currency market value of investment securities
is translated at the current exchange rates; and (2) purchases, sales,
income, and expenses are translated at the rate of exchange prevailing
on the respective dates of such transactions.
Reported net realized foreign currency gains or losses arise from
currency gains or losses realized between the trade and settlement dates
on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the
Funds' books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign currency gains or losses arise
from changes in the value of assets and liabilities other than
investments in securities, resulting from changes in the exchange rate
between transaction recording dates and period end.
45
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies (continued)
Income Taxes
It is the policy of the Funds to distribute all taxable income to
shareholders and to otherwise continue to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
Accordingly, no provision has been made for federal or state taxes.
Repurchase Agreements
The Lindner Government Money Market Fund may invest in Repurchase
Agreements. Securities pledged as collateral for repurchase agreements
are held by the Federal Reserve Bank and are designated as being held on
the Fund's behalf by its custodian under a book-entry system. The Fund
monitors the adequacy of the collateral daily and can require the seller
to provide additional collateral in the event the market value of the
securities pledged falls below the value of the repurchase agreement.
Short Sales
The Lindner Bulwark series may invest in short sales of securities in
order to profit from declines in stock prices. When a Fund engages in a
short sale, an amount equal to the proceeds received by the Fund is
reflected as an asset and equivalent liability. The amount of the
liability is subsequently marked to market to reflect the market value
of the short sale. The Fund maintains a segregated account of securities
and cash as collateral for the short sales. The Fund is exposed to
market risk based on the amount, if any, that the market value of the
stock exceeds the proceeds received. Other Funds may engage in short
sales of securities if they own or have the right to acquire, without
the payment of further consideration, an approximately equal amount of
such securities ("short sales against the box").
Dividends and Distributions to Shareholders
The Lindner Government Money Market Fund declares dividends daily from
the total of net investment income on portfolio securities, and
distributes monthly. The Lindner Growth, Lindner Bulwark, Lindner/Ryback
Small-Cap, and Lindner International Funds declare annual dividends from
net investment income in December, following the end of the fiscal year
for these funds. The Lindner Dividend, Lindner Utility, and Lindner
High-Yield Bond Funds distribute substantially all of their net
investment income through the payment of quarterly dividends generally
declared in March, June, September, and December. Net realized capital
gains, if any, will be distributed by all Funds in December, following
the end of the fiscal year for these funds. Designation of sources of
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments in the recognition
of income and expense items for financial statement and tax purposes.
Dividends and distributions to shareholders are recorded on the
ex-dividend date.
Use of Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires that management make certain
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements. The reported amounts of revenues and
expenses during the reporting period may also be affected by the
estimates and assumptions management is required to make. Actual results
may differ from those estimates.
46
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
1. Organization and Significant Accounting Policies (continued)
Allocation of Income, Expenses and Gains and Losses
The Funds allocate income, expenses (other than class specific expenses) and
gains and losses daily to each class of shares based upon the relative
proportion of shares represented by each class. Operating expenses directly
attributable to a specific class are charged against the operation of that
class.
2. Investment Transactions
For the six months ended December 31, 1998, aggregate purchases and sales of
investment securities, other than options, securities sold short, U.S.
Government Securities, and short-term obligations were as follows:
<TABLE>
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
LINDNER GROWTH FUND $136,630,802 $385,874,392
LINDNER DIVIDEND FUND 176,387,579 389,298,770
LINDNER UTILITY FUND 24,834,295 34,563,457
LINDNER/RYBACK
SMALL-CAP FUND 10,370,724 15,106,507
LINDNER INTERNATIONAL FUND 139,220 973,677
LINDNER HIGH-YIELD BOND FUND 1,239,913 316,437
LINDNER BULWARK FUND 6,199,131 13,655,453
- ------------------------------------------------------------------------------------------------------
</TABLE>
For the six months ended December 31, 1998, aggregate purchases and sales of
U.S. Government securities were as follows:
<TABLE>
- ------------------------------------------------------------------------------------------------------
<CAPTION>
Purchases Sales
--------- -----
<S> <C> <C>
LINDNER GROWTH FUND $297,672,852 $303,477,134
LINDNER DIVIDEND FUND 235,819,832 254,889,989
LINDNER UTILITY FUND 23,700,585 23,626,063
LINDNER/RYBACK
SMALL-CAP FUND 22,192,023 24,770,400
LINDNER INTERNATIONAL FUND 797,133
LINDNER HIGH-YIELD BOND FUND 1,095,960 997,197
LINDNER BULWARK FUND 46,018,826 42,977,567
LINDNER GOVERNMENT MONEY
MARKET FUND 67,296,715 67,624,770
- ------------------------------------------------------------------------------------------------------
</TABLE>
For the six months ended December 31, 1998, aggregate purchases and sales of
options in the Lindner Bulwark Fund were $0 and $559,125, respectively.
For the six months ended December 31, 1998, the cost of investments
purchased to cover short sales and the proceeds from investments sold short
in the Lindner Bulwark Fund were $14,833,752 and $10,829,881, respectively.
47
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
2. Investment Transactions (continued)
On December 31, 1998, the composition of unrealized appreciation and
(depreciation) of investment securities based on the aggregate cost of
investments for federal income tax purposes was as follows:
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
Appreciation (Depreciation) Net Federal Tax Cost
------------ -------------- ------------- ----------------
<S> <C> <C> <C> <C>
LINDNER GROWTH FUND $156,057,145 $(101,636,037) $ 54,421,108 $ 557,308,391
LINDNER DIVIDEND FUND 70,566,586 (181,386,400) (110,819,814) 1,251,651,272
LINDNER UTILITY FUND 3,272,002 (2,704,806) 567,196 27,616,759
LINDNER/RYBACK
SMALL-CAP FUND 6,118,801 (2,512,262) 3,606,539 40,073,574
LINDNER BULWARK FUND 3,171,747 (4,445,836) (1,274,089) 21,006,143
LINDNER INTERNATIONAL FUND 81,809 (853,210) (771,401) 2,105,909
LINDNER HIGH-YIELD
BOND FUND 53,829 (330,907) (277,078) 2,564,918
- --------------------------------------------------------------------------------------------------------------
</TABLE>
On December 31, 1998, Lindner Bulwark Fund had capital loss carryforwards
which will reduce future capital gains. These loss carryforwards, which
aggregate approximately $23,838,443, expire as follows: $1,349,000 in 2003,
$7,563,000 in 2004, $1,792,000 in 2005, $9,762,000 in 2006, and $3,372,443
in 2007.
3. Fees and Other Transactions with Affiliates
The management fee for Lindner Growth Fund is payable to Ryback Management
Corporation (the "Adviser") (before reimbursement of expenses to the Funds,
if any) at the annual rate of 0.7% of average net assets up to $50 million,
0.6% of the next $350 million and 0.5% of the excess over $400 million.
Depending on Lindner Growth Fund's performance compared to the Russell 2000
Composite Index (the "RTY"), the fee may be increased or decreased by up to
0.2%. For the six months ended December 31, 1998, the Lindner Growth Fund
under performed the RTY. Accordingly, the basic management fee of $2,096,616
was reduced by a performance penalty of 0.1% of average net assets, or
$364,577. This resulted in a net management fee of $1,732,039.
The management fee for Lindner Dividend Fund is payable quarterly to the
Adviser (before reimbursement of expenses to the Fund, if any) at the annual
rate of 0.7% of average net assets up to $50 million, 0.6% of the next $150
million and 0.5% of the excess over $200 million.
The management fee is payable monthly to the Adviser by Lindner Utility Fund
and Lindner/Ryback Small-Cap Fund according to the following annual
percentage rate of daily net asset values averaged monthly (before
reimbursement of expenses to the Funds, if any) of each of the Funds: 0.7%
on the first $50 million, 0.6% on the next $150 million and 0.5% of the
excess of $200 million.
The management fee for Lindner High-Yield Bond Fund is payable monthly to
the Adviser at the annual percentage rate of 0.80% of daily net asset values
averaged monthly (before reimbursement of expenses to the Fund, if any) of
the Fund.
The management fee for Lindner Bulwark Fund and Lindner International Fund
is payable monthly to the Adviser at the annual percentage rate of 1% of
daily net asset values averaged monthly (before reimbursement of expenses to
the Funds, if any) of each of the Funds.
The management fee for the Lindner Government Money Market Fund is payable
monthly to the Adviser at the annual percentage rate of 0.15% of the Fund's
daily net asset values averaged monthly (before reimbursement of expenses to
the Fund, if any).
48
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
3. Fees and Other Transactions with Affiliates (continued)
As administrator, Ryback Management administers the Funds' corporate
affairs, subject to the supervision of the Funds' Trustees and, in
connection therewith, furnishes the Funds' with office facilities, together
with ordinary clerical and shareholder services. An administrator fee for
the Lindner High-Yield Bond and Lindner Government Money Market Funds is
payable monthly to Ryback Management Corporation at the annual percentage
rate of 0.20% of daily net asset values averaged monthly of the Funds. The
adviser has voluntarily agreed to waive its administrative service fees to
the extent necessary to cause annual total operating expenses to be not more
than 1.25% of average net assets for investor shares and 1.50% of average
net assets for institutional shares for the Lindner High-Yield Bond Fund and
not more than 0.50% of average net assets during the year for the Lindner
Government Money Market Fund.
Annual operating and management expenses for the Lindner Growth Fund and
Lindner Dividend Fund, excluding taxes and interest, may not exceed 1.5% of
the first $30 million of average net assets plus 1% of average net assets in
excess of $30 million of the respective funds.
Ryback Management Corporation, acting as stock transfer agent and dividend
disbursing agent for the Funds, is compensated at a rate of 92 cents (83
cents for the Lindner Government Money Market Fund) per shareholder account
per month. During the six months ended December 31, 1998, the following
transfer agent fees were paid to Ryback Management Corporation: Lindner
Growth Fund ($152,988), Lindner Dividend Fund ($113,852), Lindner Utility
Fund ($9,214), Lindner/Ryback Small-Cap Fund ($12,558), Lindner
International Fund ($1,339), Lindner High-Yield Bond Fund ($1,161), Lindner
Bulwark Fund ($7,361), and Lindner Government Money Market Fund ($8,120).
Certain officers and directors of the Funds are affiliates of Ryback
Management Corporation.
4. Organizational Expense
The following is a schedule of expenses in connection with the organization
and registration of the Funds which are being amortized and reimbursed to
the Adviser on a straight line basis over a period of five years:
<TABLE>
- ------------------------------------------------------------------------------------------------------------
<CAPTION>
Accumulated
Original Amortization at 1998
Expense December 31, 1998 Expense
-------- ----------------- -------
<S> <C> <C> <C>
LINDNER UTILITY FUND $32,377 $32,377 $1,254
LINDNER/RYBACK
SMALL-CAP FUND 29,182 29,182 2,954
LINDNER INTERNATIONAL FUND 35,889 29,133 3,669
LINDNER HIGH-YIELD
BOND FUND 20,170 2,746 2,062
LINDNER BULWARK FUND 62,831 62,245 6,424
LINDNER GOVERNMENT MONEY
MARKET FUND 23,865 11,114 2,319
- ------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
5. Transactions with Affiliates
Issuers of whose voting stock the Funds own more than 5% but less than 25%
are classified as "affiliates (Non-controlled"). Following is an analysis of
transactions for the six months ended December 31, 1998, with "affiliated
companies" as defined by the Investment Company Act of 1940:
<TABLE>
<CAPTION>
Gain (Loss)
Realized on
Dividend Sale
Security Name Activity Income of Shares
- ------------------------------------------ ------------------------------------------------------- ---------- -----------
Value at Purchases, Sales, Value at
Beginning Additions Reductions End of
of Period at Cost at Cost Period
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
LINDNER GROWTH FUND
Alliant Techsystems, Inc. $ 52,029,450 $ 5,421,033 $ 46,742,062 $13,025,554
Anagel - American Shipholdings Ltd. -ADR 5,893,525 $ 368,081 4,517,175
Comprehensive Care Corporation - Rule 144A 2,453,125 984,375
CPI Corporation 19,573,875 263,563 408,100 21,531,250 $ 224,000 176,530
DOR Energy - GDR - Rule 144A <F#> 1,979,816 1,691,528
Frontline Ltd. - ADR (formerly London &
Overseas Freighters Ltd. - ADR) 3,193,313 37,575 <F##>
Gainsco, Inc. 8,294,344 10,822,852 0 (3,366,106)
Gradco Systems, Inc. 5,238,000 2,865,353 0 (923,807)
Hilb, Rogal and Hamilton Company 15,625,000 1,202,813 17,887,500 304,000 691,124
Huntway Refining Company 1,947,511 3,506,614 0 (2,279,526)
Hyseq, Inc. - Rule 144A 6,645,600 2,500,000 <F##> 0
InaCom Corporation <F#> 8,378,673 14,219,012
Lawter International, Inc. <F#> 3,443,831 474,770 23,250,000 370,440 (112,302)
Marine Transport Corporation Inc.<F*> 907,969 0 0 441,733
Novastar Financial, Inc. 7,367,113 2,783,756 157,465
Oak Technology, Inc. 11,232,875 1,627,146 38,619 10,429,650 (116,628)
OMI, Inc. 17,880,000 423,004 7,608,575
Quixote Corporation 8,734,250 240,075 9,017,675 99,820
Ramco-Gershenson Properties Trust 8,776,100 7,226,072 0 81,942 634,896
Recycling Industries, Inc. 6,462,500 403,470 1,300,000
Republic Engineered Steels, Inc. 4,907,625 6,831,488 0 483,888
SED International Holdings, Inc. 8,125,000 12,023,040 0 (7,320,637)
Siem Industries, Inc. 21,837,800 85,549 10,720,931 209,418
Scientific Software-Intercomp, Inc. 338,520 1,837,750 0 (1,455,830)
Southernera Resources Ltd. 5,615,031 5,331,897 <F##> (2,979,193)
Superior Uniform Group (formerly Superior
Surgical Mfg. Company, Inc.) 8,076,250 780,743 332,500 7,795,200 134,296 28,738
TransTechnology Corporation 8,117,250 792,391 7,308,150 41,080
Uranium Resources, Inc. 1,844,769 284,510 413,763 (278,412)
Vertex Communications Corporation 10,528,000 146,333 7,239,000
Westmoreland Coal Company, 8.50% Voting
Convertible Preferred 1,111,422 4,046,716
Wolohan Lumber Company 6,913,981 26,538 6,949,625 0 37,051 (274,704)
------------ ----------- ----------- ------------ ---------- -----------
$259,670,198 $18,911,239 $68,142,585 $199,486,318 $1,450,094 $(3,415,264)
============ =========== =========== ============ ========== ===========
LINDNER DIVIDEND FUND
American Bank of Connecticut $ 6,665,350 $ 2,250,363 $ 0 $ 37,940 $ 2,802,969
El Paso Electric Company 34,000,181 3,736,328 <F##> 3,141,136
Hanover Capital Mortgage Holdings, Inc. 4,462,150 2,054,938 131,516
</TABLE>
50
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Gain (Loss)
Realized on
Dividend Sale
Security Name Activity Income of Shares
- ------------------------------------------ ------------------------------------------------------- ---------- -----------
Value at Purchases, Sales, Value at
Beginning Additions Reductions End of
of Period at Cost at Cost Period
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
LINDNER DIVIDEND FUND (CONTINUED)
Harken Energy Corporation $ 33,783,750 $ 13,601,250
Novastar Financial, Inc.
Common stock 1,637,500 618,750 $ 35,000
Common stock - Rule 144A<F**> 10,916,670 4,125,002 266,667
Redwood Trust, Inc. 14,050,000 $20,902,162 0 8,000 $(8,918,562)
Uranium Resources, Inc.
Common stock 730,988 169,500
Common stock - Rule 144A 1,078,150 250,000
------------ ----------- ----------- ------------ ---------- -----------
$107,324,739 $ 0 $26,888,853 $ 20,819,440 $ 479,123 $(2,974,457)
============ =========== =========== ============ ========== ===========
LINDNER/RYBACK SMALL-CAP FUND
Castle Energy Corporation<F^> <F#> $ 0 $ 0 $ 2,800,000 $ 48,000 $ 0
============ =========== =========== ============ ========== ===========
LINDNER BULWARK FUND
Scientific Software Intercomp, Inc. $ 336,180 $ 1,204,873 $ 0 $ (825,593)
Westmoreland Coal Company 8.50% Voting
Convertible Preferred 581,588 2,117,575
------------ ----------- ----------- ------------ ---------- -----------
$ 917,768 $ 0 $ 1,204,873 $ 2,117,575 $ 0 $ (825,593)
============ =========== =========== ============ ========== ===========
<FN>
<F#> -At June 30, 1998, was not affiliated.
<F^> -Affiliated due to decreased number of shares outstanding as a result of
stock buy back program conducted by the company.
<F##> -At December 31, 1998, was not affiliated.
<F*> -Received in a spin-off at no cost.
<F**> -Received from conversion of preferred at no additional cost.
</TABLE>
6. Expense Offset Arrangements
The Funds have an arrangement whereby custodian expenses are reduced by
maintaining a compensating balance with the custodian. The Funds could have
invested the assets used by the custodian in an income-producing asset if it
had not agreed to a reduction in fees under the expense offset arrangement.
In the Statements of Operations and the ratio of expenses to average net
assets in the Financial Highlights, total expenses include the expense which
had been offset. The following are the aggregate amounts for the six months
ended December 31, 1998, by which expenses have been increased for financial
statement presentation:
<TABLE>
- --------------------------------------------------------------------------------
<S> <C>
LINDNER GROWTH FUND $10,513
LINDNER DIVIDEND FUND 21,702
LINDNER UTILITY FUND 527
LINDNER/RYBACK
SMALL-CAP FUND 737
LINDNER INTERNATIONAL FUND 15
LINDNER HIGH-YIELD
BOND FUND 35
LINDNER BULWARK FUND 330
LINDNER GOVERNMENT MONEY
MARKET FUND 842
- --------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
7. Capital Stock
The Lindner Growth, Lindner Dividend, Lindner Utility, Lindner/Ryback
Small-Cap, Lindner Bulwark, Lindner International and Lindner High-Yield
Bond Funds have authorized unlimited shares of $.01 par value Investor
shares and Institutional shares. The Lindner Government Money Market Fund
has authorized unlimited shares of $1 par value investor shares.
Transactions in shares of capital stock for the six months ended December
31, 1998 and the periods ended June 30, 1998, were as follows:
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1998 Periods Ended June 30, 1998
----------------- ---------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
LINDNER GROWTH FUND
Investor shares
---------------
Sold 4,489,622 $ 81,634,930 5,426,366 $ 136,110,587
Dividends and Distributions reinvested 6,326,934 102,882,284 8,184,099 183,241,854
Redeemed (17,739,540) (328,219,118) (26,109,623) (638,800,804)
----------- ------------- ------------ -------------
Net decrease (6,922,984) $(143,701,904) (12,499,158) $(319,448,363)
=========== ============= ============ =============
Institutional shares
--------------------
Sold 2,639 $ 45,885 39,941 $ 1,042,902
Dividends and Distributions reinvested 3,097 50,118 6,416 143,404
Redeemed (6,328) (107,850) (33,650) (766,031)
----------- ------------- ------------ -------------
Net (decrease) increase (592) $ (11,847) 12,707 $ 420,275
=========== ============= ============ =============
LINDNER DIVIDEND FUND
Investor shares
---------------
Sold 4,430,680 $ 112,167,955 6,426,515 $ 180,290,348
Dividends and Distributions reinvested 2,704,670 65,121,917 8,028,267 215,661,998
Redeemed (16,801,385) (420,092,022) (28,055,378) (788,627,137)
----------- ------------- ------------ -------------
Net decrease (9,666,035) $(242,802,150) (13,600,596) $(392,674,791)
=========== ============= ============ =============
Institutional shares
--------------------
Sold 5,426 $ 141,937 27,452 $ 769,200
Dividends and Distributions reinvested 2,392 57,416 13,153 353,051
Redeemed (71,026) (1,875,672) (11,740) (325,699)
----------- ------------- ------------ -------------
Net (decrease) increase (63,208) $ (1,676,319) 28,865 $ 796,552
=========== ============= ============ =============
LINDNER UTILITY FUND
Investor shares
---------------
Sold 972,094 $ 14,259,027 704,960 $ 11,459,416
Dividends and Distributions reinvested 448,738 5,440,147 202,703 3,159,583
Redeemed (1,617,325) (22,864,757) (1,317,416) (21,311,876)
----------- ------------- ------------ -------------
Net decrease (196,493) $ (3,165,583) (409,753) $ (6,692,877)
=========== ============= ============ =============
Institutional shares
--------------------
Sold -- $ -- 457 $ 7,561
Dividends and Distributions reinvested 2 20 52 389
Redeemed (493) (6,674) (3,423) (55,913)
----------- ------------- ------------ -------------
Net decrease (491) $ (6,654) (2,914) $ (47,963)
=========== ============= ============ =============
LINDNER/RYBACK SMALL-CAP FUND
Investor shares
---------------
Sold 1,125,473 $ 8,715,746 5,816,203 $ 50,042,896
Dividends and Distributions reinvested 299,365 2,173,049 194,743 1,600,791
Redeemed (1,961,624) (15,055,858) (2,867,441) (24,851,564)
----------- ------------- ------------ -------------
Net increase (536,786) $ (4,167,063) 3,143,505 $ 26,792,123
=========== ============= ============ =============
52
<PAGE>
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
Six Months Ended
December 31, 1998 Periods Ended June 30, 1998
----------------- ---------------------------
Shares Amount Shares Amount
------ ------ ------ ------
<S> <C> <C> <C> <C>
LINDNER/RYBACK SMALL-CAP FUND (CONTINUED)
Institutional shares
--------------------
Sold 7,699 $ 57,733 34,120 $ 280,579
Dividends and Distributions reinvested 1,053 7,643 1,094 8,973
Redeemed (3,679) (28,627) (17,136) (150,245)
----------- ------------- ------------ -------------
Net increase 5,073 $ 36,749 18,078 $ 139,307
=========== ============= ============ =============
LINDNER INTERNATIONAL FUND
Investor shares
---------------
Sold 52,970 $ 393,542 276,398 $ 3,017,454
Dividends and Distributions reinvested 11,027 72,776 8,418 79,130
Redeemed (141,199) (990,779) (408,939) (4,353,827)
----------- ------------- ------------ -------------
Net decrease (77,202) $ (524,461) (124,123) $ (1,257,243)
=========== ============= ============ =============
Institutional shares
--------------------
Sold -- $ -- -- $ --
Dividends and Distributions reinvested 2 10 -- 7
Redeemed -- -- -- --
----------- ------------- ------------ -------------
Net increase 2 $ 10 -- $ 7
=========== ============= ============ =============
LINDNER HIGH-YIELD BOND FUND<F1>
Investor shares
---------------
Sold 206,890 $ 1,854,588 166,496 $ 1,675,191
Dividends and Distributions reinvested 10,638 90,790 1,275 12,839
Redeemed (101,969) (901,857) (4,879) (49,267)
----------- ------------- ------------ -------------
Net increase 115,559 $ 1,043,521 162,892 $ 1,638,763
=========== ============= ============ =============
Institutional shares
--------------------
Sold -- $ -- 15 $ 150
Dividends and Distributions reinvested 1 5 -- 1
Redeemed -- -- -- --
----------- ------------- ------------ -------------
Net increase 1 $ 5 15 $ 151
=========== ============= ============ =============
LINDNER BULWARK FUND
Investor shares
---------------
Sold 1,430,476 $ 8,293,760 5,372,688 $ 34,105,013
Dividends and Distributions reinvested 121,616 693,210 433,245 2,517,155
Redeemed (2,322,879) (13,386,138) (11,028,984) (68,396,769)
----------- ------------- ------------ -------------
Net decrease (770,787) $ (4,399,168) (5,223,051) $ (31,774,601)
=========== ============= ============ =============
Institutional shares
--------------------
Sold -- $ -- 19,355 $ 120,000
Dividends and Distributions reinvested -- 2 -- --
Redeemed -- -- (254,614) (1,588,360)
----------- ------------- ------------ -------------
Net increase (decrease) -- $ 2 (235,259) $ (1,468,360)
=========== ============= ============ =============
LINDNER GOVERNMENT MONEY MARKET FUND
Investor shares
---------------
Sold 75,942,702 $ 75,942,702 234,509,504 $ 234,509,504
Dividends and Distributions reinvested 821,342 821,342 1,283,867 1,283,867
Redeemed (66,507,565) (66,507,565) (232,047,082) (232,047,082)
----------- ------------- ------------ -------------
Net increase 10,256,479 $ 10,256,479 3,746,289 $ 3,746,289
----------- ------------- ------------ -------------
<FN>
<F1> Operations commenced on April 13, 1998.
</TABLE>
53
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
8. Shareholder Vote
Special meetings of shareholders were held on December 17 and 22, 1998, to
vote on several matters:
1. Approve changes to the fundamental investment policies and restrictions
of certain Funds, as follows:
(a) Amend the fundamental restriction concerning borrowings and senior
securities.
(b) Eliminate the fundamental restriction prohibiting each Fund from
investing to exercise control.
2. Approve a change in the following fundamental investment policies and
restrictions to make them non-fundamental policies and restrictions:
(a) Restriction on purchasing securities on margin.
(b) Restriction on short sales.
(c) Restriction on writing or selling put and call options.
3. Approve changes to the investment objective, concentration policy,
sub-classification and certain fundamental investment policies of Lindner
Bulwark Fund in order to permit it to be managed as a "market neutral"
equity fund.
(a) Permit the Bulwark Fund to be managed as a "market neutral" equity
fund.
(b) Provide that the Fund may not invest more than 25% of its total
assets in securities of issuers within any one industry.
(c) Permit the Fund to maintain a short position or engage in short sales
without limitations and to provide that this policy is an operating
policy and not a fundamental policy.
(d) Change the sub-classification of the Fund under the 1940 Act to that
of a diversified mutual fund (if proposals 3(a), 3(b), 3(c) and 3(d)
are all approved, the Fund's name will change to Lindner Market
Neutral Fund).
4. Approval of an amendment to the Agency Agreement between Ryback
Management Corporation and the Trust for all Funds other than the
High-Yield Bond Fund to increase the annual fee payable by such Funds for
transfer agent services from $9.00 per shareholder account to $11.00 per
shareholder account.
5. Approval of an amendment to the Advisory and Service Contract between the
Trust and Ryback Management Corporation relating to the Lindner Growth
Fund to change the index for judging the performance of the Lindner
Growth Fund from the Standard & Poor's 500 Composite Stock Index to the
Russell 2000 Index.
Shareholders adopted all proposals. The voting on each proposal was as
follows:
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 1(a) For Against Abstain
------------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 20,904,418 4,772,410 1,587,930
GROWTH FUND 14,409,773 3,496,846 1,056,584
UTILITY FUND 919,501 154,550 59,767
SMALL-CAP FUND 2,455,134 386,036 147,139
BULWARK FUND 1,940,941 338,604 59,904
INTERNATIONAL FUND 127,365 4,716 1,947
HIGH-YIELD BOND FUND 128,267 14,372 4,634
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
LINDNER INVESTMENTS
- --------------------------------------------------------------------------------
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 1(b) For Against Abstain
------------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 21,698,067 3,966,983 1,599,707
GROWTH FUND 15,007,401 2,882,599 1,073,203
UTILITY FUND 941,597 135,252 56,968
SMALL-CAP FUND 2,553,639 281,382 153,288
BULWARK FUND 2,022,452 260,438 56,559
INTERNATIONAL FUND 130,976 1,631 1,421
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 2(a) For Against Abstain
------------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 20,197,810 5,459,483 1,607,464
GROWTH FUND 13,836,259 4,101,372 1,025,571
UTILITY FUND 889,866 186,656 57,294
SMALL-CAP FUND 2,113,922 866,817 169,067
BULWARK FUND 1,934,251 342,349 62,849
INTERNATIONAL FUND 120,926 7,954 5,147
HIGH-YIELD BOND FUND 126,085 17,163 4,026
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 2(b) For Against Abstain
------------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 20,406,310 5,205,100 1,653,347
GROWTH FUND 13,984,593 3,893,660 1,084,949
UTILITY FUND 890,053 165,436 78,328
SMALL-CAP FUND 2,030,583 795,763 161,963
BULWARK FUND 2,033,266 239,733 66,350
INTERNATIONAL FUND 123,499 5,771 4,758
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 2(c) For Against Abstain
------------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 20,499,803 5,073,075 1,691,879
GROWTH FUND 14,114,881 3,776,242 1,072,080
UTILITY FUND 902,159 170,676 60,892
SMALL-CAP FUND 2,026,002 820,256 142,050
INTERNATIONAL FUND 121,363 7,862 4,803
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 3(a)-(d) For Against Abstain
----------------- ---------- --------- ---------
<S> <C> <C> <C>
BULWARK FUND 2,094,149 189,705 55,594
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 4 For Against Abstain
---------- ---------- --------- ---------
<S> <C> <C> <C>
DIVIDEND FUND 19,228,231 6,290,989 1,745,538
GROWTH FUND 12,903,273 4,916,298 1,143,631
UTILITY FUND 846,778 223,806 63,233
SMALL-CAP FUND 2,290,560 540,300 157,449
BULWARK FUND 1,795,384 461,148 82,916
INTERNATIONAL FUND 118,826 12,525 2,696
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- -----------------------------------------------------------------------------------------------------------------
<CAPTION>
Proposal 5 For Against Abstain
---------- ---------- --------- ---------
<S> <C> <C> <C>
GROWTH FUND 14,214,562 3,559,719 1,188,921
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(FOR AN INVESTOR SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<CAPTION>
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------------- ----------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER GROWTH FUND <F1>
------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $22.32 $0.38 $0.71 $1.09 $0.46 $0.53 $0.99
1995 $22.42 $0.43 $2.66 $3.09 $0.34 $1.84 $2.18
1996 $23.33 $0.40 $4.47 $4.87 $0.47 $1.34 $1.81
1997 $26.39 $0.36 $2.72 $3.08 $0.39 $3.10 $3.49
1998 $25.98 $0.38 ($0.27) $0.11 $0.34 $3.48 $3.82
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $22.27 $0.13 ($3.19) ($3.06) $0.32 $2.74 $3.06
<CAPTION>
LINDNER DIVIDEND FUND <F2>
--------------------------
Period Ended February 28,
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $27.01 $1.88 $1.06 $2.94 $1.74 $0.58 $2.32
1995 $27.63 $1.93 ($2.13) ($0.20) $1.90 $0.57 $2.47
<CAPTION>
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $24.96 $0.95 $1.05 $2.00 $0.96 $0.00 $0.96
1996 $26.00 $1.80 $2.29 $4.09 $1.79 $0.23 $2.02
1997 $28.07 $1.63 $0.70 $2.33 $1.68 $0.78 $2.46
1998 $27.94 $1.83 $2.02 $3.85 $1.71 $2.49 $4.20
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $27.59 $1.08 ($3.59) ($2.51) $1.05 $0.50 $1.55
<CAPTION>
LINDNER UTILITY FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $10.00 $0.05 ($0.01) $0.04 $0.02 $0.00 $0.02
1995 $10.02 $0.39 $0.84 $1.23 $0.39 $0.09 $0.48
1996 $10.77 $0.35 $3.42 $3.77 $0.34 $0.00 $0.34
1997 $14.20 $0.39 $1.60 $1.99 $0.42 $0.02 $0.44
1998 $15.75 $0.37 $1.96 $2.33 $0.37 $0.93 $1.30
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $16.78 $0.21 ($2.37) ($2.16) $0.22 $2.41 $2.63
<CAPTION>
LINDNER/RYBACK SMALL-CAP FUND <F3>
----------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $5.00 $0.01 ($0.22) ($0.21) $0.00 $0.00 $0.00
1995 $4.79 ($0.03) $0.71 $0.68 $0.01 $0.00 $0.01
1996 $5.46 $0.00 $1.30 $1.30 $0.00 $0.61 $0.61
1997 $6.15 $0.04 $1.49 $1.53 $0.01 $0.00 $0.01
1998 $7.67 $0.09 $1.07 $1.16 $0.04 $0.30 $0.34
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $8.49 $0.03 ($0.55) ($0.52) $0.09 $0.31 $0.40
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
---------------------------------------------------------------------
Ratio of Net
Investment Net
Net Asset Ratio of Income Assets,
Value, Expenses to Portfolio End of
End of Total to Average Average Turnover Period
Period Return <F8> Net Assets Net Assets Rate (In Millions)
--------- ----------- ---------- ------------ --------- -------------
LINDNER GROWTH FUND <F1>
------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1994 $22.42 4.83% 0.65% 1.69% 37.92% $1,528
1995 $22.33 14.89% 0.54% 1.89% 24.94% $1,446
1996 $26.39 21.95% 0.63% <F9> 1.53% 39.49% $1,446
1997 $25.98 12.50% 0.44% 1.39% 36.39% $1,495
1998 $22.27 0.31% 0.44% 1.29% 44.43% $1,003
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $16.15 -13.61% 0.32% 0.53% 19.49% $616
<CAPTION>
LINDNER DIVIDEND FUND <F2>
--------------------------
Period Ended February 28,
<S> <C> <C> <C> <C> <C> <C>
1994 $27.63 11.19% 0.64% 7.01% 43.20% $1,532
1995 $24.96 -0.44% 0.61% 7.76% 29.79% $1,697
<CAPTION>
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $26.00 8.12% 0.21% 2.43% 11.00% $1,903
1996 $28.07 16.14% 0.60% <F9> 6.62% 30.24% $2,293
1997 $27.94 8.75% 0.60% 5.74% 40.32% $2,017
1998 $27.59 14.75% 0.61% 6.29% 28.56% $1,616
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $23.53 -9.10% 0.32% 4.05% 13.23% $1,152
<CAPTION>
LINDNER UTILITY FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1994 $10.02 0.39% 1.30% 0.76% 44.95% $11
1995 $10.77 12.51% 1.04% 3.02% 190.70% $18
1996 $14.20 35.39% 0.95% <F9> 2.87% 98.58% $32
1997 $15.75 14.29% 0.89% 2.81% 86.44% $47
1998 $16.78 15.53% 0.91% 2.21% 99.37% $43
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $11.99 -12.77% 0.50% 1.44% 76.04% $28
<CAPTION>
LINDNER/RYBACK SMALL-CAP FUND <F3>
----------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1994 $4.79 -4.20% 0.96% 0.52% 5.03% $5
1995 $5.46 14.32% 1.65% -0.57% 158.62% $8
1996 $6.15 25.70% 1.22% <F9> -0.04% 103.05% $10
1997 $7.67 24.96% 0.96% 0.46% 49.49% $25
1998 $8.49 15.24% 0.87% 1.13% 24.52% $54
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $7.57 -5.97% 0.48% 0.38% 24.46% $44
56
<PAGE>
<PAGE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------------- ----------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER INTERNATIONAL FUND <F4>
-------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1995 $9.00 $0.07 $0.02 $0.09 $0.00 $0.00 $0.00
1996 $9.09 ($0.01) $0.86 $0.85 $0.05 $0.00 $0.05
1997 $9.89 ($0.01) $1.45 $1.44 $0.00 $0.14 $0.14
1998 $11.19 ($0.15) ($2.11) ($2.26) $0.00 $0.22 $0.22
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $8.71 ($0.18) ($1.99) ($2.17) $0.00 $0.30 $0.30
<CAPTION>
LINDNER HIGH-YIELD BOND FUND <F6>
---------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 $10.00 $0.13 $0.09 $0.22 $0.12 $0.00 $0.12
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $10.10 $0.47 ($1.67) ($1.20) $0.47 $0.01 $0.48
<CAPTION>
LINDNER BULWARK FUND <F5>
-------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1994 $7.00 $0.01 $0.16 $0.17 $0.00 $0.00 $0.00
1995 $7.17 $0.11 ($0.10) $0.01 $0.05 $0.04 $0.09
1996 $7.09 $0.26 $1.32 $1.58 $0.31 $0.00 $0.31
1997 $8.36 $0.29 ($1.81) ($1.52) $0.14 $0.00 $0.14
1998 $6.70 $0.23 ($0.89) ($0.66) $0.39 $0.00 $0.39
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $5.65 $0.12 $0.05 $0.17 $0.17 $0.00 $0.17
<CAPTION>
LINDNER GOVERNMENT MONEY MARKET FUND <F7>
-----------------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 $1.00 $0.05 $0.00 $0.05 $0.05 $0.00 $0.05
1998 $1.00 $0.05 $0.00 $0.05 $0.05 $0.00 $0.05
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F10> $1.00 $0.02 $0.00 $0.02 $0.02 $0.00 $0.02
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------
Ratio of Net
Investment Net
Net Asset Ratio of Income Assets,
Value, Expenses to Portfolio End of
End of Total to Average Average Turnover Period
Period Return <F8> Net Assets Net Assets Rate (In Millions)
--------- ----------- ---------- ------------ --------- -------------
LINDNER INTERNATIONAL FUND <F4>
-------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1995 $9.09 1.00% 1.26% 1.02% 0.00% $0.3
1996 $9.89 9.41% 2.57% <F9> 0.05% 48.40% $1.2
1997 $11.19 14.76% 1.96% -0.14% 37.79% $4.7
1998 $8.71 -20.31% 2.25% -1.14% 44.25% $2.6
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $6.24 -25.13% 1.94% -1.44% 7.81% $1.4
<CAPTION>
LINDNER HIGH-YIELD BOND FUND <F6>
---------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1998 $10.10 2.20% 0.76% 4.90% 5.97% $1.6
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $8.42 -11.85% 0.62% 5.58% 13.11% $2.3
<CAPTION>
LINDNER BULWARK FUND <F5>
-------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1994 $7.17 2.43% 0.66% 0.26% 0.89% $31
1995 $7.09 0.10% 1.27% 2.45% 122.64% $65
1996 $8.36 23.44% 1.24% <F9> 2.45% 139.82% $62
1997 $6.70 -18.43% 1.20% 3.86% 457.57% $68
1998 $5.65 -10.08% 1.23% 1.66% 109.32% $28
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $5.65 3.02% 0.75% 1.82% 69.60% $24
<CAPTION>
LINDNER GOVERNMENT MONEY MARKET FUND <F7>
-----------------------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 $1.00 5.02% 0.43% 5.45% -- $39
1998 $1.00 5.21% 0.50% 5.08% -- $43
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F10> $1.00 2.46% 0.25% 2.37% -- $53
<FN>
<F1> Historical performance information is for Lindner Fund, Inc. ("LGFI"),
the predecessor of the Lindner Growth Fund series of the Trust. The
Lindner Growth Fund series of the Trust succeeded to all of the assets
and liabilities of LGFI on June 30, 1995, pursuant to a reorganization
approved by the shareholders of LGFI on June 29, 1995.
<F2> Historical performance information is for Lindner Dividend Fund, Inc.
("LDFI"), the predecessor of the Lindner Dividend Fund series of the
Trust. The Lindner Dividend Fund series of the Trust succeeded to all of
the assets and liabilities of LDFI on June 30, 1995, pursuant to a
reorganization approved by the shareholders of LDFI on June 29, 1995.
<F3> Operations commenced on January 24, 1994.
<F4> Operations commenced on January 1, 1995.
<F5> Operations commenced on February 11, 1994.
<F6> Operations commenced on April 13, 1998.
<F7> Operations commenced on July 6, 1996.
<F8> Total return for periods of less than one year are not annualized. Total
return is the percentage increase in value for a period, assuming initial
investment at the net asset value on the day before the start of the
period and assuming all dividends and distributions were reinvested and a
redemption at the net asset value on the last day of the period.
<F9> Expense ratio for periods after September 1, 1995, are computed using
gross expenses which include fees reduced in connection with specific
agreements.
<F10> Unaudited.
</TABLE>
57
<PAGE>
<PAGE>
<TABLE>
(FOR AN INSTITUTIONAL SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<CAPTION>
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------------- ----------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER GROWTH FUND
-------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F1> $26.39 $0.34 $2.68 $3.02 $0.37 $3.10 $3.47
1998 $25.94 $0.35 ($0.30) $0.05 $0.31 $3.48 $3.79
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $22.20 $0.13 ($3.23) ($3.10) $0.31 $2.74 $3.05
<CAPTION>
LINDNER DIVIDEND FUND
---------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F2> $28.07 $1.61 $0.66 $2.27 $1.66 $0.78 $2.44
1998 $27.90 $1.78 $2.00 $3.78 $1.66 $2.49 $4.15
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $27.53 $1.08 ($3.61) ($2.53) $1.05 $0.50 $1.55
<CAPTION>
LINDNER UTILITY FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F3> $14.20 $0.27 $1.59 $1.86 $0.31 $0.02 $0.33
1998 $15.74 $0.26 $2.03 $2.29 $0.26 $0.93 $1.19
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $16.84 $0.08 ($2.28) ($2.20) $0.09 $2.41 $2.50
<CAPTION>
LINDNER/RYBACK SMALL-CAP FUND
-----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F4> $6.15 $0.04 $1.49 $1.53 $0.01 $0.00 $0.01
1998 $7.67 $0.08 $1.06 $1.14 $0.03 $0.30 $0.33
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $8.48 $0.03 ($0.55) ($0.52) $0.08 $0.31 $0.39
<CAPTION>
LINDNER BULWARK FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F5> $8.36 $0.26 ($1.81) ($1.55) $0.14 $0.00 $0.14
1998 $6.67 ($0.16) ($0.49) ($0.65) $0.00 $0.00 $0.00
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $6.02 $0.12 $0.06 $0.18 $0.17 $0.00 $0.17
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------
Ratio of Net
Investment Net
Net Asset Ratio of Income Assets,
Value, Expenses to Portfolio End of
End of Total to Average Average Turnover Period (In
Period Return <F7> Net Assets Net Assets Rate Thousands)
--------- ----------- ---------- ------------ --------- ----------
LINDNER GROWTH FUND
-------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F1> $25.94 15.36% 0.46% 1.29% 36.39% $102
1998 $22.20 0.08% 0.75% 1.05% 44.43% $369
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $16.05 -13.85% 0.48% 0.45% 19.49% $257
<CAPTION>
LINDNER DIVIDEND FUND
---------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F2> $27.90 9.84% 0.85% 5.69% 40.32% $2,010
1998 $27.53 14.49% 0.88% 6.14% 28.56% $2,777
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $23.45 -9.19% 0.50% 3.94% 13.23% $884
<CAPTION>
LINDNER UTILITY FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F3> $15.74 14.52% 0.75% 2.42% 86.44% $54
1998 $16.84 15.23% 1.22% 1.99% 99.37% $9
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $12.14 -13.00% 0.66% 1.38% 76.04% $0.2
<CAPTION>
LINDNER/RYBACK SMALL-CAP FUND
-----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F4> $7.67 21.21% 0.59% 0.26% 49.49% $0.2
1998 $8.48 15.02% 1.31% 0.99% 24.52% $154.0
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $7.57 -5.91% 0.61% 0.26% 24.46% $175
<CAPTION>
LINDNER BULWARK FUND
--------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F5> $6.67 -18.61% 1.37% 4.45% 457.57% $1.6
1998 $6.02 -9.75% 1.86% 16.68% 109.32% $0.1
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $6.03 3.00% 0.46% 1.69% 69.60% $0.1
58
<PAGE>
<PAGE>
<CAPTION>
INCOME (LOSS) FROM INVESTMENT OPERATIONS DISTRIBUTIONS
------------------------------------------------------- ----------------------------------------------
Net Realized Distributions
and from Net
Net Asset Unrealized Total Dividends Realized
Value, Net Gains from from Net Gains from
Beginning Investment (Losses) on Investment Investment Investment Total
of Period Income Investments Operations Income Transactions Distributions
--------- ---------- ------------ ---------- ---------- ------------- -------------
LINDNER INTERNATIONAL FUND
--------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1997 <F6> $9.89 ($0.04) $1.45 $1.41 $0.00 $0.14 $0.14
1998 $11.16 ($0.15) ($2.16) ($2.31) $0.00 $0.22 $0.22
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $8.63 ($0.18) ($2.00) ($2.18) $0.00 $0.30 $0.30
<CAPTION>
LINDNER HIGH-YIELD BOND FUND
----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F8> $10.09 $0.12 $0.02 $0.14 $0.11 $0.00 $0.11
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C> <C>
1998 <F9> $10.12 $0.46 ($1.68) ($1.22) $0.46 $0.01 $0.47
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------
Ratio of Net
Investment Net
Net Asset Ratio of Income Assets,
Value, Expenses to Portfolio End of
End of Total to Average Average Turnover Period (In
Period Return <F7> Net Assets Net Assets Rate Thousands)
--------- ----------- ---------- ------------ --------- ----------
LINDNER INTERNATIONAL FUND
--------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1997 <F6> $11.16 17.06% 1.48% -0.13% 37.79% $0.4
1998 $8.63 -20.82% 2.67% -1.47% 44.25% $0.3
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $6.15 -25.48% 2.17% -1.64% 7.81% $0.2
<CAPTION>
LINDNER HIGH-YIELD BOND FUND
----------------------------
Period Ended June 30,
<S> <C> <C> <C> <C> <C> <C>
1998 <F8> $10.12 1.39% -0.09% 0.53% 5.97% $0.1
<CAPTION>
Period Ended December 31,
<S> <C> <C> <C> <C> <C> <C>
1998 <F9> $8.43 -12.03% 0.95% 5.25% 13.11% $0.1
<FN>
<F1> For the period July 12, 1996 (initial purchase) to June 30, 1997.
<F2> For the period July 9, 1996 (initial purchase) to June 30, 1997.
<F3> For the period October 31, 1996 (initial purchase) to June 30, 1997.
<F4> For the period November 1, 1996 (initial purchase) to June 30, 1997.
<F5> For the period July 11, 1996 (initial purchase) to June 30, 1997.
<F6> For the period November 1, 1996 (initial purchase) to June 30, 1997.
<F7> Total return for periods of less than one year are not annualized. Total
return is the percentage increase in value for a period, assuming initial
investment at the net asset value on the day before the start of the
period and assuming all dividends and distributions were reinvested and a
redemption at the net asset value on the last day of the period.
<F8> For the period June 16, 1998 (initial purchase) to June 30, 1998.
<F9> Unaudited.
</TABLE>
59
<PAGE>
<PAGE>
LINDNER INVESTMENTS
7711 Carondelet Avenue, Suite 700
St. Louis, Missouri 63105
Tel: 314-727-5305
Fax: 314-727-9306
BOARD OF TRUSTEES
Robert L. Byman
Terence P. Fitzgerald
Marc P. Hartstein
Peter S. Horos
Donald J. Murphy
Dennis P. Nash
Eric E. Ryback
Doug T. Valassis
INVESTMENT ADVISER
Ryback Management Corporation
CUSTODIANS
Star Bank, N.A.
The Chase Manhattan Bank, N.A.
COUNSEL
Dykema Gossett PLLC
INDEPENDENT AUDITORS
Deloitte & Touche LLP
TRANSFER AGENT
Ryback Management Corporation
[LOGO] LINDNER(R)
F U N D S
ADVISED BY RYBACK MANAGEMENT CORPORATION
www.lindnerfunds.com
LINDNER FUNDS
SEMI-ANNUAL REPORT
[LOGO]
PERIOD
ENDED
DECEMBER 31,
1998
