OFFITBANK INVESTMENT FUND INC, N-30D, 1996-08-08

OFFITBANK INVESTMENT FUND INC
N-30D, 1996-08-08

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OFFITBANK High Yield Fund

OFFITBANK Emerging Markets Fund

OFFITBANK New York Municipal Fund

OFFITBANK Latin America Total Return Fund

---------------------------

SEMI-ANNUAL REPORT

JUNE 30, 1996

THE

[OFFITBANK LOGO]

INVESTMENT FUND, INC.
<PAGE>
PRESIDENT'S LETTER
- --------------------------------------------------------------------------------

Dear Shareholders:

We are very pleased to present you with the semi-annual report for The OFFITBANK
Investment Fund, Inc. for the six month period ended June 30, 1996. This spring
we added a new portfolio, the Latin America Total Return Fund to our three
existing portfolios, the New York Municipal Fund, the High Yield Fund and the
Emerging Markets Fund. All of the Funds continue to increase their net assets.
At mid-year end the new Latin America Total Return Fund had net assets of $4.9
million, the High Yield Fund had net assets of $623.2 million, the Emerging
Markets Fund had net assets of $89.1 million and the New York Municipal Fund had
net assets of $18.7 million. We anticipate launching the California Municipal
Fund after Labor Day for our California clients.

We have also recently launched the CVO Greater China Fund which is a mutual fund
which will invest in publicly traded equities of the Greater China Region: Hong
Kong, People's Republic of China, Singapore and Taiwan. The Fund is a joint
venture with ChinaVest, a highly regarded equity investor in the China Region
with offices in Hong Kong, Taipei, Beijing and San Francisco. The Fund's
investment objective is to achieve capital appreciation from investment in
publicly-traded equity securities of companies which will benefit from the
economic development and growth of the People's Republic of China, Hong Kong,
Taiwan, and Singapore, collectively the "Greater China Region". In our view, the
Greater China Region offers long-term investment opportunities because it will
remain the engine of growth in East Asia and is projected to sustain one of the
fasted GDP growth rates in the global economy.

The Funds have performed well in spite of unexpected higher interest rates
during the first six months of the year. The specific results of our Funds,
along with an investment and market commentary from each portfolio manager are
part of this report. I believe that each of these commentaries provides useful
and informative insights into our Funds as well as their markets, and I hope you
find them helpful.

We greatly value your participation in the Fund. If you have any questions
regarding the portfolio structure or investment outlook, please do not hesitate
to call.

Sincerely,

[SIGNATURE]
Morris W. Offit

July 22, 1996
<PAGE>
OFFITBANK
HIGH YIELD FUND

- --------------------------------------------------------------------------------

The 1996 first half performance of the Fund reflects continued strong investor
demand for high yield debt securities weighed down by price pressure from higher
interest rates. The total return for the first six months of 1996 was 3.36%. The
June 30th NAV price of $9.80 is slightly lower than the $9.92 at year end 1995.
The 30 day SEC yield of 9.34% for the month ending June 1996 is slightly higher
than the year end level of 9.14%.

The Fund continues to grow as net assets increased from $479 million at year end
to $623 million on June 30th. The larger asset base has allowed us to reduce the
expense ratio in several ways. The bank custodial fees have been reduced more
than 50% since year end. Additionally, we are voluntarily reducing the
investment management fee by 10 basis points for assets in excess of $600
million.

So far in 1996, the dominant trends in the domestic fixed income markets have
been the move to higher yields and the compression of yield spreads. The
narrowing of credit spreads is a result of the better than expected economic
growth registered since year end. The change in the economy has created upward
pressure on interest rates resulting in negative total returns for intermediate
and long dated Treasury portfolios. Investment grade and near investment grade
bonds are rate sensitive and have moved lower in price with the Treasury
markets.
The high yield sector has dramatically outperformed the Treasury and high grade
corporate markets. Within the high yield sector, lower quality bonds have
produced better returns than the more interest sensitive higher quality issues.
Since year end, the yield spread between Double-B rated issues and Single-B
rated issues has narrowed 50 basis points. The improving economy and rising
equity market have provided support to the lower quality sector which is more
sensitive to conditions affecting credit.

The positive credit environment for the high yield market can be seen in several
measures. Credit upgrades are approximately equal to downgrades after falling
behind in 1995. Downgrades to below B have declined indicating fewer probable
defaults. The 1996 default rate is less than 1995's and below beginning of the
year expectations. We continue to believe that the better average credit quality
of today's high yield market will keep default rates well below the long term
historic levels.

The technicals of the high yield market have been excellent with over $23
billion of new securities issued during the recent quarter and approximately $40
billion year to date. Mutual fund inflows remain strong and obviously there is
good demand as the high yield market has shown impressive stability in the face
of the record pace of supply and difficult interest rate volatility. Given the
huge supply of new issues in 1996, quality has been pretty good, although there
has been some decline. Single-B issuance has increased to 70% of the new supply
as Single-B spreads have contracted. Additionally, zero coupon and step up bonds
are showing up more frequently and totaled approximately 25% of the new issues,
primarily for telecommunication infrastructure credits.

Despite the superior performance of lower quality high yield bonds since the
beginning of 1996, we intend to maintain our strategy of investing in the better
quality high yield securities. At approximately 44% of Fund holdings, Double-B
rated issues constitute a solid base for the portfolio. 70% of the Fund holdings
are rated at least B1/B+. Many of the lower rated issues are either senior in
the issuer's capital structure or secured.

We continue to believe that better quality high yield bonds offer compelling
long term investment value. Institutional barriers between the investment grade
(Triple-B) and high yield (Double-B) markets have resulted in a yield spread
between the two that is too wide given the historic loss experience. Earning and
compounding the spread available in better quality high yield bonds will provide
superior returns over time. In today's high yield market, there are many issuers
that offer both the quality and yields that we believe are attractive.

Stephen T. Shapiro

July 22, 1996

2
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
AEROSPACE/DEFENSE (2.47%)
CORPORATE BONDS
Moog Inc. Sr Sub Notes, 10.00%, 05/01/06 (144A)............................ $ 2,000,000(2) $ 1,995,000
Sequa Corp. Sr Notes, 8.75%, 12/15/01...................................... 5,800,000 5,439,000
Sequa Corp. Sr Sub Notes, 9.375%, 12/15/03................................. 1,000,000 962,500
Tracor, Inc. Sr Sub Notes, 10.875%, 08/15/01............................... 2,000,000 2,130,000
UNC, Inc. Sr Notes, 9.125%, 07/15/03....................................... 5,000,000 4,850,000
-------------
15,376,500
-------------
BROADCAST/TELECOMMUNICATIONS (8.09%)
CORPORATE BONDS
Centennial Cellular Corp. Sr Notes, 8.875%, 11/01/01....................... 5,500,000 5,115,000
Centennial Cellular Corp. Sr Notes, 10.125%, 05/15/05...................... 2,500,000 2,406,250
Granite Broadcasting Corp. Sr Sub Notes, 9.375%, 12/01/05 (144A)........... 5,000,000(2) 4,575,000
MFS Communications Sr Notes, 0/9.375%, 01/15/04............................ 10,000,000(3) 7,550,000
MobileMedia Communications Sr Sub Notes, 9.375%, 11/01/07.................. 6,000,000 5,370,000
Paging Network Sr Sub Notes, 10.125%, 08/01/07............................. 6,500,000 6,402,500
Panamsat, L.P. Sr Sub Notes, 0/11.375%, 08/01/03........................... 3,500,000(3) 3,045,000
SCI Television Inc. 1st Secured Loan Fac., 7.50/9.50%, 06/30/98............ 3,087,800(3) 3,087,800
Sinclair Broadcast Group Sr Sub Notes, 10.00%, 09/30/05.................... 4,000,000 3,880,000
Teleport Communications Sr Notes, 0/11.125%, 07/01/07...................... 10,000,000(3) 5,825,000
Vanguard Cellular Systems Sr Debs., 9.375%, 04/15/06....................... 3,250,000 3,152,500
-------------
50,409,050
-------------
CABLE (9.36%)
CORPORATE BONDS
Adelphia Communications Sr Notes, 9.50%, 02/15/04.......................... 4,289,512(5) 3,710,428
Cablevision Industries Corp. Sr Sub Notes, 9.25%, 11/01/05................. 7,000,000 6,510,000
Century Communications Corp. Sr Notes, 9.75%, 02/15/02..................... 4,500,000 4,477,500
Comcast Corp. Sr Sub Debs., 9.375%, 05/15/05............................... 8,000,000 7,740,000
CS Wireless Unit Sr Discount Notes, 0/11.375%, 03/01/06.................... 1,500,000(3) 772,500
Fundy Cable Ltd. Sr Notes, 11.00%, 11/15/05................................ 3,000,000 3,037,500
Le Groupe Videotron Ltee. Sr Notes, 10.625%, 02/15/05...................... 1,000,000 1,047,500
Jones Intercable Sr Sub Debs., 10.50%, 03/01/08............................ 4,500,000 4,747,500
Rogers Cablesystems Ltd. Sr Secured 2nd Priority Notes, 9.625%, 08/01/02... 3,000,000 2,962,500
Rogers Cablesystems Ltd. Sr Secured 2nd Priority Notes, 9.65%, 01/15/14.... 2,000,000(a) 1,290,323
Rogers Cablesystems Ltd. Sr Secured 2nd Priority Notes, 10.00%, 03/15/05... 3,000,000 2,977,500
Rogers Communications Inc Sr. Notes, 9.125%, 01/15/06...................... 2,000,000 1,845,000
Storer Communications Inc. Sub Debs., 10.00%, 05/15/03..................... 3,000,000 3,007,500
TeleWest plc Debs., 0/11.00%, 10/01/07..................................... 10,000,000(3) 5,900,000
Videotron Holdings Sr Notes, 0/11.125%, 07/01/04........................... 5,000,000(3) 3,662,500
Videotron Ltee Sr Sub Notes, 10.25%, 10/15/02.............................. 2,500,000 2,587,500

PREFERRED STOCKS
Cablevision Systems Corp. Pfd., 11.75% Series G............................ 21,226(5) 2,069,535
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58,345,286
-------------
CHEMICALS (3.79%)
CORPORATE BONDS
Borden Chemicals & Plastics Sr Notes, 9.50%, 05/01/05...................... 3,250,000 3,209,375
Freeport-McMoran Resource Partners, L.P. Sr Sub Notes, 8.75%, 02/15/04..... 2,000,000 2,020,600
Harris Chemical North America, Inc. Sr Notes, 0/10.25%, 07/15/01........... 6,000,000(3) 5,985,000
Sifto Canada Inc. Sr Notes, 8.50%, 07/15/00................................ 3,500,000 3,430,000
Terra Industries Inc. Sr Notes, 10.50%, 06/15/05........................... 3,000,000 3,135,000
Uniroyal Chemical Co., Inc. Sr Notes, 9.00%, 09/01/00...................... 2,750,000 2,784,375
Viridian Inc Ltd Notes, 9.75%, 04/01/03.................................... 3,000,000 3,082,500
-------------
23,646,850
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
3
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER GROUPS (7.29%)
CORPORATE BONDS
AMF Group Inc. Sr Sub Notes, 10.875%, 03/15/06 (144A)...................... $ 2,000,000(2) $ 1,970,000
Beverly Enterprises Sr Notes, 9.00%, 02/15/06.............................. 7,000,000 6,475,000
Chiquita Brands International Sr Notes, 9.125%, 03/01/04................... 5,000,000 4,775,000
Ekco Group Inc. Sr Notes, 9.25%, 04/01/06.................................. 2,500,000 2,387,500
Host Marriott Travel Plaza Sr Notes, 9.50%, 05/15/05....................... 7,000,000 6,693,750
Revlon Consumer Products Sr Notes, 9.375%, 04/01/01........................ 6,500,000 6,370,000
Revlon Inc. Sr Debs., 10.875%, 07/15/10.................................... 4,500,000 4,550,625
Samsonite Corp. Sr Notes, 11.125%, 07/15/05................................ 1,500,000 1,545,000
Sealy Corp Sr Sub Notes, 9.50%, 05/01/03................................... 2,200,000 2,156,000
Tultex Corp. Sr Notes, 10.625%, 03/15/05................................... 1,400,000 1,452,500
Unilab Corp Sr Notes, 11.00%, 04/01/06..................................... 1,500,000 1,410,000
Westpoint Stevens, Inc. Sr Notes, 8.75%, 12/15/01.......................... 2,500,000 2,475,000
PREFERRED STOCKS
Foxmeyer Health Corp. Pfd. $4.20 Series A.................................. 79,576(5) 2,148,564
Pantry Pride Inc. Pfd. $14.875 Series B.................................... 10,000 1,030,000
-------------
45,438,939
-------------
FINANCIAL SERVICES/INSURANCE (4.26%)
CORPORATE BONDS
Americo Life Inc. Sr Notes, 9.25% 06/01/05................................. 3,000,000 2,820,000
First City Financial Sr Sub Notes, 9.00%, 09/30/97......................... 2,539,700 2,539,700
Keystone Group Inc. Sr Secured Notes, 9.75%, 09/01/03...................... 1,000,000 990,000
Navistar Financial Corp. Sr Sub Notes, 8.875%, 11/15/98.................... 2,500,000 2,512,500
Penn Central Corp. Sr Notes, 10.625%, 04/15/00............................. 3,500,000 3,762,500
Presidential Life Corp. Sr Notes, 9.50%, 12/15/00.......................... 3,500,000 3,517,500
Reliance Group Holdings, Inc. Sr Sub Notes, 9.75%, 11/15/03................ 10,500,000 10,421,250
-------------
26,563,450
-------------
FOREST & PAPER PRODUCTS (10.05%)
CORPORATE BONDS
Crown Paper Co. Sr Sub Notes, 11.00%, 09/01/05............................. 3,500,000 3,325,000
Doman Industries Ltd. Sr Notes, 8.75%, 03/15/04............................ 2,500,000 2,281,250
Fort Howard Corp. Pass Thru Cert., 11.00%, 01/02/02........................ 2,271,866 2,357,061
Fort Howard Corp. Sr Notes, 9.25%, 03/15/01................................ 2,500,000 2,506,250
Fort Howard Corp. Sr Sub Notes, 10.00%, 03/15/03........................... 2,000,000 2,000,000
Fort Howard Corp. Sr Sub Notes, 9.00%, 02/01/06............................ 3,000,000 2,887,500
Fort Howard Corp. Variable Term Loan, 8.66%, 12/31/02...................... 3,876,788(4)(6) 3,878,788
Maxxam Group Inc. Sr Notes, 0/12.25%, 08/01/03............................. 2,500,000(3) 1,900,000
Maxxam Group Inc. Sr Secured Notes, 11.25%, 08/01/03....................... 3,000,000 3,000,000
Rainy River Forest Products Sr Notes, 10.75%, 10/15/01..................... 2,000,000 2,100,000
Repap New Brunswick Sr Notes Floating Rate Bonds, 9.25%, 07/15/00.......... 2,000,000(6) 1,980,000
Repap New Brunswick Sr Notes, 9.875%, 07/15/05............................. 3,000,000 2,970,000
Repap New Brunswick Sr Notes, 10.625%, 04/15/05............................ 3,000,000 2,827,500
Repap Wisconsin Inc., 1st Priority Sr Secured Notes, 9.25%, 02/01/02....... 8,000,000 7,540,000
Stone-Consolidated Corp. Sr Secured Notes, 10.25%, 12/15/00................ 5,500,000 5,678,750
Stone Container Corp. Sr Notes, 9.875%, 02/01/01........................... 4,000,000 3,885,000
Stone Container Corp. Sr Secured Notes, 10.75%, 10/01/02................... 5,000,000 5,050,000
Stone Container Corp. Sr Sub Notes, 11.00%, 08/15/99....................... 3,500,000 3,535,000
Tembec Finance Corp. Sr Notes, 9.875%, 09/30/05............................ 2,000,000 1,860,000
CONV. CORPORATE BONDS
Repap Enterprise Conv. Debs., 9.00%, 06/30/98.............................. 1,500,000(a) 1,088,710
-------------
62,650,809
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</TABLE>

The accompanying notes are an integral part of the financial statements.
4
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
GENERAL INDUSTRIES/MANUFACTURING (11.52%)
CORPORATE BONDS
AAF McQuay Inc. Sr Notes, 8.875%, 02/15/03................................. $ 1,500,000 $ 1,410,000
American Standard Sr Sub Notes, 0/10.50%, 06/01/05......................... 8,000,000(3) 6,920,000
Calmar Inc. Sr Sub Notes, 11.50%, 08/15/05................................. 2,500,000 2,437,500
Communication and Power Industries Sr Sub Notes, 12.00%, 08/01/05.......... 2,500,000 2,643,750
Computervision Industries Sr Notes, 11.375%, 08/15/99...................... 1,000,000 1,030,000
Dal-Tile Sr Secured Notes, 0.00%, 07/15/98................................. 3,695,000 3,103,800
Dominion Textile (USA) Inc. Guaranteed Sr Notes, 9.25%, 04/01/06........... 7,000,000 6,772,500
Envirosource Inc. Sr Notes, 9.75%, 06/15/03................................ 2,500,000 2,287,500
Essex Group Sr Notes, 10.00%, 05/01/03..................................... 4,000,000 3,970,000
Exide Corp Sr Notes, 10.75%, 12/15/02...................................... 3,000,000 3,438,750
G-I Holdings Sr Notes, Series B, 0.00%, 10/11/98........................... 4,950,000 3,984,750
Harvard Industries Sr Notes, 11.125%, 08/01/05............................. 2,000,000 1,890,000
Howmet Corp. Sr Sub Notes, 10.00%, 12/01/03 (144A)......................... 1,000,000(2) 1,052,500
Lone Star Industries, Inc. Sr Notes, 10.00%, 07/31/03...................... 3,000,000 3,030,000
Nortek Inc. Sr Sub Notes, 9.875%, 03/01/04................................. 2,500,000 2,375,000
Scotsman Group Sr Notes, 9.50%, 12/15/00................................... 4,500,000 4,522,500
Southdown Inc. Sr Sub Notes, 10.00%, 03/01/06.............................. 5,000,000 4,925,000
Talley Manufacturing & Technology Inc. Sr Notes, 10.75%, 10/15/03.......... 2,500,000 2,606,250
Unisys Corp. Sr Notes, 13.50%, 07/01/97.................................... 1,000,000 1,062,500
Unisys Corp. Sr Notes, 10.625%, 10/01/99................................... 5,000,000 5,025,000
Walbro Corp. Sr Notes, 9.875%, 07/15/05.................................... 2,000,000 1,960,000
World Color Press, Inc. Sr Sub Notes, 9.125%, 03/15/03..................... 5,400,000 5,319,000
-------------
71,766,300
-------------
HOTELS & GAMING (6.59%)
CORPORATE BONDS
Alliance Gaming Sr Sec. Notes, 12.875%, 06/30/03........................... 2,000,000 1,995,000
Bally Park Place Funding 1st Mtg. Notes, 9.25%, 03/15/04................... 4,000,000 4,260,000
Four Seasons Hotel Sr Notes, 9.125%, 07/01/00 (144A)....................... 3,000,000(2) 2,985,000
Host Marriott Properties Sr Notes, 9.50%, 05/15/05......................... 7,000,000 6,650,000
John Q Hammons Hotel 1st Mtg. Notes, 9.75%, 10/01/05....................... 6,000,000 5,820,000
Prime Hospitality Corp. Sr Notes, 8.25%, 01/15/06.......................... 4,500,000 4,252,500
Prime Hospitality Corp. Sr Secured Notes, 10.00%, 07/31/99................. 2,847,687 2,847,687
Red Roof Inns Inc. Sr Notes, 9.625%, 12/15/03.............................. 4,500,000 4,286,250
Station Casinos Sr Sub Notes, 10.125%, 03/15/06............................ 2,000,000 1,955,000
Trump Atlantic City, 1st Mtg. Notes, 11.25%, 05/01/06...................... 6,000,000 6,030,000
-------------
41,081,437
-------------
INDEPENDENT POWER (1.64%)
CORPORATE BONDS
California Energy Sr Discount Notes, 0/10.25%, 01/15/04.................... 4,500,000(3) 4,387,500
California Energy Co. Sr Sec. Notes, 9.875%, 06/30/03...................... 1,800,000 1,840,500
Calpine Corp Sr Notes, 10.50%, 05/15/06 (144A)............................. 4,000,000(2) 4,000,000
-------------
10,228,000
-------------
METALS/MINING/IRON/STEEL (3.97%)
CORPORATE BONDS
Armco Inc. Sr Notes, 9.375% 11/01/00....................................... 5,000,000 4,900,000
GS Technologies Corp. Sr Notes, 12.25%, 10/01/05........................... 2,000,000 2,050,000
Jorgensen Earle M. Co. Sr Notes, 10.75%, 03/01/00.......................... 3,100,000 3,053,500
Northwestern Steel & Wire Co. Sr Notes, 9.50%, 06/15/01.................... 2,500,000 2,406,250
Oregon Steel Mills 1st Mtg. Notes, 11.00%, 06/15/03........................ 6,000,000 5,131,250
WCI Steel Inc. Sr Notes, 10.50%, 03/01/02.................................. 3,000,000 3,037,500
Wheeling-Pittsburgh Corp. Sr Notes, 9.375%, 11/15/03....................... 4,500,000 4,173,750
-------------
24,752,250
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
5
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OIL/GAS (7.02%)
CORPORATE BONDS
Clark R & M Holdings Sr Notes, 0.00%, 02/15/00............................. $ 10,500,000 $ 7,205,625
Cliffs Drilling Sr Notes, 10.25%, 05/15/03 (144A).......................... 2,000,000(2) 1,985,000
Crown Central Petroleum Sr Notes, 10.875%, 02/01/05........................ 2,400,000 2,418,000
Ferrellgas Partners L.P. Sr Notes, 9.375%, 06/15/06........................ 3,500,000 3,377,500
Giant Industries Inc. Guaranteed Sr Sub Notes, 9.75%, 11/15/03............. 1,800,000 1,759,500
Gulf Canada Resources, Ltd. Sr Sub Debs., 9.25%, 01/15/04.................. 4,000,000 3,880,000
KCS Energy Inc. Sr Notes, 11.00%, 01/15/03................................. 1,000,000 1,055,000
Maxus Energy Medium Term Notes, 11.02%, 05/15/01........................... 1,000,000 995,000
Maxus Energy Sr Notes, 9.875%, 10/15/02.................................... 1,000,000 980,000
Nuevo Energy Co. Sr Sub Notes, 9.50%, 04/15/06............................. 3,000,000 2,966,250
Presidio Oil Co. Sr Notes, 11.50%, 09/15/00................................ 1,200,000(1) 1,260,000
Presidio Oil Co. Sr Sub Notes, 0.00%, 07/15/02............................. 1,000,000(1) 700,000
TransTexas Gas Corp. Sr Notes, 11.50%, 06/15/02............................ 4,500,000 4,488,750
Triton Energy Corp. Sr Sub Notes, 0/9.75%, 12/15/00........................ 4,000,000(3) 3,880,000
Tuboscope Vetco Sr Sub Notes, 10.75%, 04/15/03............................. 1,500,000 1,545,000
Wainoco Oil Corp. Sr Notes, 12.00%, 08/01/02............................... 2,500,000 2,525,000
CONV. EURODOLLAR BONDS
Reading & Bates Energy Co. Conv. Eurobonds, 8.00%, 12/31/98................ 1,971,000 2,712,950
-------------
43,733,575
-------------
PACKAGING/CONTAINERS (4.18%)
CORPORATE BONDS
Container Corp. Sr Notes, 9.75%, 04/01/03.................................. 5,000,000 4,900,000
Gaylord Container Sr Notes, 11.50%, 05/15/01............................... 6,500,000 6,662,500
Owens-Illinois Corp. Sr Sub Notes, 10.00%, 08/01/02........................ 4,000,000 4,080,000
Owens-Illinois Corp. Sr Sub Notes, 10.50%, 06/15/02........................ 6,500,000 6,662,500
Riverwood International Corp. Sr Notes, 10.25%, 04/01/06................... 3,750,000 3,721,875
-------------
26,026,875
-------------
REAL ESTATE (3.41%)
CORPORATE BONDS
Granite Development Partners L.P. Sr Notes, 10.83%, 11/15/03............... 1,000,000 910,000
Rockefeller Center Properties Floating Rate Sr Notes, 13.00%, 12/31/00..... 4,325,000(6) 4,341,219
Rockefeller Center Properties Sr Notes, 0.00%, 12/31/00.................... 9,500,000 5,700,000
Trizec Finance Sr Notes, 10.875%, 10/15/05................................. 4,500,000 4,612,500
MORTGAGE BACKED SECURITIES
RTC Mtg. Tr. Series 1993-N2 CL 4 Mtg. Ln. Bkd.Bonds, 10.00%, 12/15/04
(144A).................................................................... 2,000,000(2) 2,005,000
RTC Mtg. Tr. Series 1994-C1 CL F Mtg. Ln. Bkd.Bonds, 8.00%, 06/25/26....... 2,549,090 2,141,235
RTC Mtg. Tr. Series 1994-C2 CL G Mtg. Ln. Bkd.Bonds, 8.00%, 12/25/25....... 1,742,954 1,516,370
-------------
21,226,324
-------------
RETAIL (3.21%)
CORPORATE BONDS
Grand Union Co. Sr Notes, 12.00%, 09/01/04................................. 1,500,000 1,400,625
National Convenience Realty Co. Secured Notes, 9.50%, 04/30/03............. 2,347,536 2,464,913
Pathmark Stores Inc. Sr Sub Notes, 9.625%, 05/01/03........................ 7,000,000 6,571,250
Penn Traffic Co. Sr Notes, 10.25%, 02/15/02................................ 4,000,000 3,640,000
Ralph's Grocery Sr Notes, 10.45%, 06/15/04................................. 2,500,000 2,393,750
TLC Beatrice International Holdings Sr Notes, 11.50%, 10/01/05............. 3,500,000 3,543,750
-------------
20,014,288
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
6
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRANSPORTATION (4.44%)
CORPORATE BONDS
Eletson Holdings Inc. 1st Pfd. Mtg. Notes, 9.25%, 11/15/03................. $ 3,000,000 $ 2,838,750
GPA Delaware Inc. Guaranteed Notes, 8.75%, 12/15/98........................ 4,000,000 3,980,000
Moran Transportation Co. 1st Pfd. Mtg. Notes, 11.75%, 07/15/04............. 1,500,000 1,492,500
Sea Containers Ltd. Sr Notes, 9.50%, 07/01/03.............................. 3,000,000 2,992,500
Stena AB Sr Notes, 10.50%, 12/15/05........................................ 4,000,000 3,970,000
Viking Star Shipping 1st Pfd. Mtg. Notes, 9.625%, 07/15/03................. 2,000,000 2,030,000
TRUST CERTIFICATES
Piedmont Aviation Inc. Equipment Trust Certificates 1988 Series A, 9.80%,
01/15/00.................................................................. 942,000 911,385
Piedmont Aviation Inc. Equipment Trust Certificates 1988 Series F, 10.15%,
03/28/03.................................................................. 1,000,000 962,500
U.S. Air Inc. Equipment Trust Certificates 1988 Series B, 9.80%,
01/15/00.................................................................. 654,000 631,110
U.S. Air Inc. Equipment Trust Certificates 1988 Series B, 10.00%,
01/15/02.................................................................. 1,334,000 1,277,305
U.S. Air Inc. Equipment Trust Certificates 1990 Series A, 11.20%,
03/19/05.................................................................. 4,025,527 4,045,654
U.S. Air Inc. Equipment Trust Certificates 1990 Series B, 10.33%,
06/27/02.................................................................. 803,000 778,910
U.S. Air Inc. Equipment Trust Certificates 1990 Series D, 10.28%,
06/27/01.................................................................. 837,000 813,983
U.S. Air Inc. Equipment Trust Certificates 1990 Series D, 10.43%,
06/27/04.................................................................. 1,014,000 983,580
-------------
27,708,177
-------------
UTILITIES -- ELECTRIC (4.12%)
CORPORATE BONDS
Beaver Valley Funding Corp. Debs., 8.625%, 06/01/07........................ 1,550,000 1,325,250
Cleveland Electric Illum. Medium Term Notes, 8.16%, 11/30/98............... 3,500,000 3,438,750
Cleveland Electric Illum. Medium Term Notes, 9.25%, 07/29/99............... 1,000,000 1,003,750
Cleveland Electric Illum. Medium Term Notes, 9.50%, 05/15/05............... 4,000,000 3,880,000
CTC Mansfield Funding Corp. Secured Lease Obligation Bonds, 10.25%,
03/30/03.................................................................. 4,237,000 4,258,354
Long Island Lighting Co. Debs., 7.125%, 06/01/05........................... 4,000,000 3,519,664
Tucson Electric Power Company, Springerville Unit 1 Series B-6, 10.21%,
01/01/09.................................................................. 2,548,534 2,421,107
Tucson Electric Power Company, Springerville Unit 1 Series B-5, 10.21%,
01/01/09.................................................................. 1,128,441 1,072,019
Tucson Electric Power Company, Springerville Unit 1 Series B-7, 10.21%,
01/01/09.................................................................. 698,465 663,542
Tucson Electric Power Company, Springerville Unit 1 Series B-4, 10.21%,
01/01/09.................................................................. 533,836 507,145
Tucson Electric Power Company, Springerville Unit 1 Series B-2, 10.21%,
01/01/09.................................................................. 370,554 352,026
Tucson Electric Power Company, Springerville Unit 1 Series B-1, 10.21%,
01/01/09.................................................................. 246,185 233,875
PREFERRED STOCKS
Long Island Lighting Co. Pfd., 7.95%, 06/01/00 Series AA................... 80,000 1,900,000
Public Service Co. of New Hampshire Pfd., 10.60%, 06/30/97................. 45,000 1,096,875
-------------
25,672,357
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
7
<PAGE>
OFFITBANK
HIGH YIELD FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
SHORT TERM INVESTMENTS (0.48%)
Brazilian Real Put Option, Expires 09/02/96................................ $ 3,000,000 $ 4,800
Chase CC5 LTN Notes, 09/02/98.............................................. 2,991,000(b) 2,964,027
-------------
2,968,827
-------------
TOTAL INVESTMENTS (COST $594,500,575) (95.89%)............................. 597,609,294
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (4.11%)..................... 25,627,807
-------------
TOTAL NET ASSETS (100.00%)................................................. $ 623,237,101
-------------
-------------
</TABLE>

- ---------------
(a) Canadian Dollar

(b) Brazilian Real

(1) Issuer in default.

(2) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

(3) Step up bond.

(4) Illiquid Security.

(5) Paid in Kind Security.

(6) Interest rate reflected is rate in effect at June 30, 1996.

The accompanying notes are an integral part of the financial statements.
8
<PAGE>
OFFITBANK
EMERGING MARKETS FUND

- --------------------------------------------------------------------------------

The year-to-date total return of the OFFITBANK Emerging Markets Fund, net of all
fees and expenses, was 11.65%. At June 30, 1996, the net asset value per share
of the Fund was $10.69, compared to $9.91 at year end 1995. As of July, the
current yield on the portfolio is over 14% (as of this date the 30 day SEC yield
is 14.48%).

The strategic focus of the Fund continues to be to expand the portfolio's
allocation to U.S. dollar-denominated corporate bonds of well-managed,
globally-competitive companies in the Emerging Markets. Today, we see the best
risk-adjusted value in U.S. dollar-denominated Eurobonds issued by strong
corporate credits in Latin America. These bonds represented approximately 44% of
the portfolio as of June 30, 1996, and we expect to increase this allocation
over time.

As of June 30, 1996 over 95% of the portfolio was allocated to Latin America.
During the first half of 1996 investor confidence toward the political
leadership and economic stability of the region continued to improve, as
governments throughout the region reconfirmed and extended their commitment to
private sector initiatives, free trade, and less state intervention. Economic
growth in the region has also resumed after the deep regional recession in 1995.
Decelerating inflation, lower real interest rates, higher levels of exports, and
increased foreign direct investment should all begin to contribute to higher
levels of economic growth later in 1996 and in 1997. The strongest evidence of
investors' renewed confidence has been the successful placement of over $20
billion of new sovereign and corporate debt at spreads of between 250 and 600
basis points over the equivalent duration U.S. Treasury bond.

As a consequence of this renewed investor confidence Latin American fixed income
instruments experienced significant credit spread tightening and decoupling from
the sudden rise in U.S. interest rates during the first half of 1996.
Expectations of stronger U.S. economic growth caused a steepening of the U.S.
yield curve and higher long term interest rates. As a result, the total returns
on the 10 year and 30 year U.S. Treasury bonds were approximately -4.62% and
- -8.62%, respectively, for the period. In contrast, the Latin American bond
markets performed well during the first half of this year, as positive economic
and political developments for sovereign issues, and lower debt levels and
higher cash flows for corporate issues, drove a tightening of spreads. (As of
July 1, average Latin American market bond spreads over U.S. Treasuries were
approximately 700 bps versus approximately 1,000 bps at year end 1995.)

As discussed above, at June 30, 1996, approximately 44% of the Fund was invested
in U.S. dollar-denominated Eurobonds; 22% in locally (within the respective
domestic capital markets of the region) issued and traded fixed income
instruments; and 31% in dollar-denominated sovereign Brady bonds and pre-Brady
loans. Total currency exposure of the Fund was approximately 15%, while
approximately 85% was dollar-denominated, or dollar-indexed. As of quarter end,
the portfolio maintained its principal country allocations in Brazil (29%),
Mexico (21%), and Argentina (26%).

We believe the improving fundamentals of the countries and of the corporate
credits in which the Fund is invested will continue to drive a narrowing of
spreads on these instruments over U.S. Treasuries. We believe that the best
risk-adjusted value in the market place will continue to be found in U.S.
dollar-denominated bonds of good quality corporates in Latin America.
Additionally, we expect there to be selective opportunities in U.S.
dollar-denominated Brady bonds and pre-Bradys, as well as in short dated
domestic capital markets instruments.

Richard M. Johnston Wallace Mathai-Davis

July 22, 1996

9
<PAGE>
OFFITBANK
EMERGING MARKETS FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
SOVEREIGN DEBT
ARGENTINA (19.89%)
Argentina Peso Bocon Pre-1 Floating Rate Bonds, 3.3588%, 04/01/01.......... $ 4,500,000(d)(4) $ 4,781,250
Argentina Bocon Pre-2 Floating Rate Bonds, 5.42188%, 04/01/01.............. 2,750,000(4) 3,148,750
Argentina Peso Bocon Pre-3 Floating Rate Bonds, 3.3588%, 09/01/02.......... 250,000(d)(4) 191,875
Argentina Bocon Pre-4 Floating Rate Bonds, 5.42188%, 09/01/02.............. 250,000(4) 238,000
Argentina Brady Discount Floating Rate Bonds, 6.4375%, 03/31/23............ 3,100,000(4) 2,166,125
Argentina Brady Floating Rate Bonds, 6.3125%, 03/31/05..................... 4,603,500(4) 3,590,730
Argentina Brady Par Step-Up Bonds, 4.00/6.00%, 03/31/23.................... 250,000(3) 137,187
Argentina Global Bonds, 8.375%, 12/20/03................................... 275,000 239,250
Republic of Argentina Bonds, 10.25%, 02/06/03.............................. 2,600,000(c) 1,726,049
Republic of Argentina Bonds, 10.50%, 11/14/02.............................. 2,200,000(c) 1,495,174
-------------
17,714,390
-------------
BRAZIL (16.05%)
Bonus Do Banco Central Discount Notes 07/17/96............................. 2,497,000 2,442,739
Brazil Brady Capitalization Step-Up Bonds, 4.00/8.00%, 04/15/14............ 1,677,767(3) 1,033,924
Brazil Brady DCB Floating Rate Bonds, 6.5625%, 04/15/12.................... 4,500,000(4) 3,076,875
Brazil Brady EI Floating Rate Bonds, 6.50%, 04/15/06....................... 1,000,000(4) 803,750
Brazil Brady NMBL Floating Rate Bonds, 6.5625%, 04/15/09................... 1,250,000(4) 900,000
Brazil Brady Par Z Step-Up Bonds, 4.00/6.00%, 04/15/24..................... 800,000(3) 444,000
Brazil Discount Z Floating Rate Bonds, 6.50%, 04/15/24..................... 2,000,000(4) 1,417,500
Brazilian NTN-D Dollar Indexed, 03/01/97................................... 539,000(a) 526,598
Brazilian NTN-D Dollar Indexed, 03/17/97................................... 1,600(a) 1,529,194
Chase CC5 LTN Notes, 09/02/96.............................................. 2,143,550(a) 2,124,220
-------------
14,298,800
-------------
DOMINICAN REPUBLIC (0.75%)
Dominican Republic Brady PDI Floating Rate Bonds, 6.0625%, 08/30/09........ 1,000,000(4) 670,000
-------------
ECUADOR (4.56%)
Ecuador Brady Discount Floating Rate Bonds, 6.0625%, 02/28/25.............. 5,000,000(4) 2,856,250
Ecuador Brady PDI Step-Up Capitalization Bonds, 3.00/3.75%, 02/27/15....... 2,655,316(3) 1,201,530
-------------
4,057,780
-------------
MEXICO (1.92%)
BNCE Global Bonds, 7.25%, 02/02/04......................................... 250,000 204,095
United Mexican States Bonds, 10.375%, 01/29/03............................. 2,000,000 1,338,893
United Mexican States Brady Par Bonds, 6.25%, 12/13/19..................... 250,000 161,875
-------------
1,704,863
-------------
PANAMA (4.88%)
Panama Loan 1989 (When & If Issued Security)............................... 2,250,000(2) 2,324,671
Panama IRB (When Issued)................................................... 2,000,000 1,107,500
Panama PDI (When Issued)................................................... 1,500,000 913,125
-------------
4,345,296
-------------
PERU (2.81%)
Peru Citi-Loan............................................................. 2,750,000(2) 2,502,500
-------------
AUTOMOBILE PARTS (1.10%)
MEXICO
Corporacion Industrial Sanluis 9.125%, 11/16/98............................ 1,000,000 979,840
-------------
BANKS (11.45%)
ARGENTINA
Banco de Galicia, Callable Convertible Notes, 7.00%, 08/01/02.............. 1,270,000 1,352,550
Banco de Galicia Callable, 9.00%, 11/01/03................................. 500,000 448,125
Banco Republica S.A. 12.125%, 12/22/97..................................... 250,000 250,625
Banco Roberts, 11.75%, 11/16/00............................................ 300,000 315,000
-------------
2,366,300
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
10
<PAGE>
OFFITBANK
EMERGING MARKETS FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BANKS (CONTINUED)
CHILE
Citibank Chilean Peso-Linked Time Deposit, UF+5.10%, 08/19/96.............. $ 303,004,278(b)(2) $ 780,167
Citibank Chilean Peso-Linked Time Deposit, UF+5.10%, 08/21/96.............. 306,000,000(b)(2) 767,821
Citibank Chilean Peso-Linked Time Deposit, UF+5.10%, 12/19/96.............. 508,750,000(b)(2) 1,271,673
Citibank Chilean Peso-Linked Time Deposit, UF+5.10%, 01/16/97.............. 532,223,778(b)(2) 1,301,678
-------------
4,121,339
-------------
MOROCCO
Morocco Tranche A Loan, 6.4375%, 01/01/09.................................. 5,150,000(2) 3,708,000
-------------
COMMUNICATIONS (0.17%)
COLUMBIA
Occidente Y Caribe Step-Up Callable Bonds, 0/14.00%, 05/15/08 (144A)....... 300,000(1)(3) 153,000
-------------
CONGLOMERATE (0.56%)
BRAZIL
Companhia Vale Do Rio Doce, Callable and Putable 10.00%, 04/02/04 (144A)... 500,000(1) 498,125
-------------
CONSTRUCTION (2.26%)
MEXICO
Empresas ICA Sociedad, 11.875%, 05/30/01 (144A)............................ 2,000,000(1) 2,012,500
-------------
INDUSTRIAL (6.42%)
ARGENTINA
Mastellone Hermanos S.A. 11.75%, 05/11/98 (144A)........................... 1,250,000(1) 1,262,500
-------------
MEXICO
Alfa Convertible Callable Notes, 8.00%, 09/15/00 (144A).................... 1,300,000(1) 1,378,000
Alfa Convertible Callable Notes, 8.00%, 09/15/00........................... 750,000 795,000
Bufete Industrial, 11.375%, 07/15/99 (144A)................................ 1,250,000(1) 1,253,125
DESC Sociedad de Fomento Bonds, 11.00%, 12/15/97 (144A).................... 1,000,000(1) 1,032,500
-------------
4,458,625
-------------
IRON/STEEL (3.40%)
BRAZIL
Metalurgica Gerdau S.A. Putable Callable 11.125%, 05/24/04 (144A).......... 150,000(1) 149,437
-------------
MEXICO
Hylsa 11.00%, 02/23/98 (144A).............................................. 1,400,000(1) 1,430,828
Tubos de Acero de Mexico, Putable 13.75%, 12/08/99......................... 1,330,000 1,443,050
-------------
2,873,878
-------------
MANUFACTURING (1.94%)
MEXICO
AXA S.A. 8.50%, 10/01/98................................................... 1,800,000 1,728,000
-------------
MEDIA (5.34%)
BRAZIL
RBS Participacoes S.A., Putable 14.00%, 12/15/03........................... 1,730,000 1,816,500
-------------
MEXICO
Grupo Televisa S.A. 11.875%, 05/15/06 (144A)............................... 1,050,000(1) 1,071,000
Grupo Televisa S.A. Step-Up Callable Bonds, 0/13.25%, 05/15/08 (144A)...... 3,500,000(1)(3) 1,872,500
-------------
2,943,500
-------------
MUNICIPAL (4.32%)
BRAZIL
State of Minas Gerais, 7.875%, 02/10/99 (x-warrants), (144A)............... 2,000,000(1) 1,844,920
State of Minas Gerais, 8.25%, 02/10/00..................................... 2,220,000 2,004,727
-------------
3,849,647
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
11
<PAGE>
OFFITBANK
EMERGING MARKETS FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
PAPER/PULP (1.11%)
BRAZIL
Klabin Fabricadora de Papel, Putable 10.00%, 12/20/01 (144A)............... $ 750,000(1) $ 739,545
-------------
MEXICO
Grupo Industrial Durango, 12.00%, 07/15/01................................. 250,000 250,073
-------------
PETROCHEMICALS (2.24%)
BRAZIL
Opp Petroquimica Putable 11.50%, 02/23/04 (144A)........................... 2,000,000(1) 1,995,000
-------------
RETAIL (2.24%)
MEXICO
Controladora Commercial Mexicana, 8.75%, 04/21/98.......................... 2,040,000 1,994,100
-------------
TELECOMMUNICATIONS (2.41%)
ARGENTINA
Telecom Argentina, Putable 12.00%, 11/15/02................................ 1,000,000 1,069,190
Telefonica de Argentina, 11.875%,11/01/04.................................. 1,000,000 1,074,300
-------------
2,143,490
-------------
TEXTILES (0.84%)
VENEZUELA
Sudamtex de Venezuela Convertible Callable Bonds, 11.00%, 03/19/01
(144A).................................................................... 750,000(1) 750,000
-------------
TOBACCO (0.58%)
MEXICO
Empresas La Moderna, 11.375%, 01/25/99 (144A).............................. 500,000(1) 516,875
-------------
UTILITY (4.03%)
BRAZIL
Centrais Electricas Brasileiras, Putable, 10.00%, 07/06/04 (144A).......... 1,000,000(1) 993,000
Comp Energetica Sao Paul 9.25%, 05/10/01................................... 4,000,000(c) 2,593,736
-------------
3,586,736
-------------
OPTIONS (0.00%)
Brazilian Real Put Option, 09/02/96........................................ 2,150,000 3,440
-------------
TOTAL INVESTMENTS (COST $85,127,401) (101.27%)......................... 90,194,079
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS (-1.27%)................ (1,136,343)
-------------
TOTAL NET ASSETS (100.00%)............................................. $ 89,057,736
-------------
-------------
</TABLE>

- ---------------
Principal denominated in the following currencies.

(a) Brazilian Real (b) Chilean Peso (c) German
Deutschemark (d) Argentina Peso

(1) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.

(2) Illiquid Security.

(3) Step up bond.

(4) Interest rate reflected is the rate in effect at June 30, 1996.

The accompanying notes are an integral part of the financial statements.
12
<PAGE>
OFFITBANK
NEW YORK MUNICIPAL FUND

- --------------------------------------------------------------------------------

As Treasury yields increased by 100 basis points from year end 1995 to June 30,
1996, municipal yields also drifted higher, albeit at a slower pace, with most
yields increasing by approximately 50 basis points. In a rising interest rate
environment, our objective is to protect the portfolio value without
jeopardizing our longer term yield and return objectives. During this difficult
first half, the OFFITBANK New York Municipal Fund achieved a total return which
was a modest loss of -0.12%, compared to a 5.40% return for the last 12 months.
By way of comparison, the Lehman Brothers Five Year Municipal Index earned 0.54%
for the first half of 1996, and 5.05% for the last 12 months. Since the Fund's
inception in April 1995, the return is 8.00% which compares to the Index's 7.86%
return.

The net asset value as of June 30th was $10.24 and the 30-day SEC yield was
4.51%. We continue to have unrealized gains in the portfolio and are pleased
that some gains earned in 1995 were realized in the first few months of 1996
when we shortened the portfolio to become more defensive.

At June 30, 1996, the portfolio's effective average maturity was 6 years and the
duration 4.8 years. The shortening of the portfolio was completed shortly after
year end when the maturity and duration were 6.9 and 5.5 years, respectively.
Today approximately 20% of the portfolio is invested in maturities that are two
years or less; 56% is invested in maturities less than seven years. The
liquidity provided by these shorter positions will allow us to extend when
yields become more attractive and when New York municipals start to come to
market again now that the state budget was finally passed in early July.

In the first six months of 1996, the increase in Treasury yields depressed
prices in all fixed income sectors. However, the municipal bond market benefited
from a number of factors unique to it, including the fading of tax reform
discussions, as well as job growth, and higher tax revenue which have resulted
in more upgrades than downgrades in certain sectors and regions. Also, the rise
in rates has suppressed the volume of new refunding issues at a time when record
numbers of bonds are being called leaving investors with large sums of cash to
reinvest. This technical situation is exacerbated in specialty states such as
New York where bonds are not being issued as rapidly as they are being called or
maturing.

The typical measurement of municipal bond valuation is through the yield ratio
which is simply the municipal bond yield of a specific maturity divided by the
Treasury yield of the same maturity. When the yield ratio declines, the
municipal is performing better than the Treasury, and conversely, when the yield
ratio increases, the municipal is underperforming the Treasury. For example,
today one can purchase a high grade five year municipal with a yield of 4.60%;
the comparable Treasury would have a yield of 6.68%. The yield ratio
(4.60%/6.68%) is 69%. Approximately one year ago, yield ratios had increased
dramatically in response to the unveiling of a multitude of tax reform
proposals. A five year municipal could then be purchased at a yield ratio of
77%. While the ratios are not expected to go lower, at these levels high tax
bracket taxpayers can still achieve a significant after-tax yield pickup over
Treasuries and other taxable high grade bonds.

In today's environment, our most important consideration is credit. The
creditworthiness of a municipal issuer may be affected by tax cuts, changes in
Federal entitlement programs, and a general disenchantment on the part of the
public with taxes and bond issuance. We continue to concentrate the portfolio in
issuers for which there is an identifiable stream of revenues. With current
yield ratios, we must stick to our valuation discipline. We will be patient in
making portfolio changes and investing new cash only as securities that meet our
parameters become available.

Carolyn N. Dolan
July 22, 1996

The accompanying notes are an integral part of the financial statements.
13
<PAGE>
OFFITBANK
NEW YORK MUNICIPAL FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1996

<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
MUNICIPAL OBLIGATIONS (90.97%)
EDUCATION REVENUE (4.11%)
New York State Dormitory Authority Revenue Bonds Columbia University Series
A, 4.60%, 07/01/06........................................................ $100,000(4) $ 94,625
New York State Dormitory Authority Revenue Bonds Cornell University Series
A, 5.25%, 07/01/07........................................................ 350,000(4) 322,481
New York State Dormitory Authority Revenue Bonds New York University Series
A, 5.50%, 07/01/04........................................................ 315,000(4) 351,313
-------------
768,419
-------------
GENERAL OBLIGATIONS (22.15%%)
Dutchess County General Obligation Bonds 4.90%, 08/01/04................... 215,000 213,925
Hempstead General Obligation Bonds Series B, (FGIC), 5.625%, 02/01/01...... 245,000(2) 254,188
Hempstead General Obligation Bonds Series B, (FGIC), 5.625%, 02/01/04...... 140,000(2) 145,600
Islip General Obligation Bonds, (FGIC), 6.00%, 11/01/05.................... 100,000(2) 105,750
Monroe County General Obligation Bonds, (MBIA), 6.00%, 03/01/98............ 350,000(4) 359,188
New Castle General Obligation Bonds 4.75%, 06/01/08........................ 210,000 194,512
New York State Environmental Quality Bonds, 5.00%, 01/15/03................ 225,000 224,438
New York State General Obligation Bonds 5.50%, 11/15/01.................... 200,000 206,500
New York State General Obligation Bonds 5.75%, 09/15/02.................... 425,000 444,125
Onondaga County General Obligation Bonds, 5.40%, 04/01/01.................. 150,000 154,687
Onondaga County General Obligation Bonds, 5.00%, 05/01/08.................. 260,000 253,500
Onondaga County General Obligation Bonds Series B, 5.85%, 02/15/00......... 500,000 521,875
Ontario County General Obligation Bonds, (FGIC), 5.00%, 08/15/02........... 250,000(2) 253,438
Oyster Bay General Obligation Bonds 5.20%, 02/15/05........................ 370,000 370,462
Syracuse General Obligation Bonds, (MBIA), 6.00%, 12/01/04................. 250,000(4) 266,875
Syracuse General Obligation Bonds Series A, 5.00%, 02/15/06................ 175,000 170,187
-------------
4,139,250
-------------
HEALTH CARE (0.82%)
New York Medical Care Facility Finance Authority, (FHA), 6.20%, 08/15/14... 150,000(3) 153,188
-------------
HOUSING (4.74%)
New York State Mortgage Agency Revenue Bonds Series 37-A, 5.80%,
10/01/06.................................................................. 200,000 205,750
New York State Mortgage Agency Revenue Bonds Series 37-A, 5.85%,
10/01/06.................................................................. 125,000 130,938
New York State Mortgage Agency Revenue Bonds Series 37-A, 5.35%,
04/01/07.................................................................. 240,000 240,300
New York State Mortgage Agency Revenue Bonds Series 37-A, 5.95%,
04/01/07.................................................................. 100,000 104,750
New York State Mortgage Agency Revenue Bonds Series 46, 5.75%, 04/01/04.... 200,000 203,250
-------------
884,988
-------------
PREREFUNDED/ESCROWED TO MATURITY (8.99%)
Grand Central District Management Association Inc. Special Assessment
Bonds, 6.20%, 01/01/00.................................................... 120,000 125,700
Grand Central District Management Association Inc. Special Assessment
Bonds, 5.10%, 01/01/08.................................................... 200,000 190,000
Grand Central District Management Association Inc. Special Assessment
Bonds, 5.125%, 01/01/09................................................... 250,000 235,000
Grand Central District Management Association Inc. Special Assessment
Bonds, 6.50%, 01/01/22.................................................... 150,000 164,063
Monroe County General Obligation Bonds (MBIA), 6.00%, 03/01/98............. 55,000(4) 56,719
New York City Municipal Water Financing Authority Water & Sewer System
Revenue Bonds Series B, 6.375%, 06/15/22.................................. 100,000 108,250
New York City Municipal Water Financing Authority Water & Sewer System
Revenue Bonds Series B, 5.375%, 06/15/07.................................. 350,000 350,437
Niagara Falls Bridge Commission New York Revenue Bonds 6.125%, 10/01/19.... 415,000 449,237
-------------
1,679,406
-------------
PUBLIC POWER (3.53%)
New York State Power Authority Revenue Bonds Series BB, 6.30%, 01/01/07.... 175,000 185,062
New York State Power Authority Revenue Bonds Series CC, 4.80%, 01/01/05.... 180,000 175,050
New York State Power Authority Revenue Bonds Series CC, (MBIA), 4.90%,
01/01/08.................................................................. 200,000(4) 194,250
New York State Power Authority Revenue Bonds Series Y, 6.25%, 01/01/05..... 100,000 105,875
-------------
660,237
-------------
RESOURCE RECOVERY (1.46%)
Dutchess County Resource Recovery Agency Solid Waste Management
Revenue Bonds Series A, (FGIC), 7.20%, 01/01/02.......................... 250,000(2) 273,125
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
14
<PAGE>
OFFITBANK
NEW YORK MUNICIPAL FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MUNICIPAL OBLIGATIONS (CONTINUED)
SALES TAX REVENUE (11.41%)
Government Assistance Corp. Revenue Bonds Series D, 6.375%, 04/01/00....... $100,000 $ 105,625
Government Assistance Corp. Revenue Bonds Series D, 4.50%, 04/01/02........ 250,000 243,437
Government Assistance Corp. Revenue Bonds Series A, 6.75%, 04/01/02........ 315,000 343,350
Government Assistance Corp. Revenue Bonds Series D, 4.75%, 04/01/04........ 100,000 96,875
Government Assistance Corp. Revenue Bonds Series E, 4.80%, 04/01/05........ 180,000 172,125
Government Assistance Corp. Revenue Bonds Series A, 5.00%, 04/01/06........ 100,000 96,750
Government Assistance Corp. Revenue Bonds Series D, 6.75%, 04/01/07........ 250,000 270,938
Municipal Assistance Corp. for City of New York Revenue Bonds Series 61,
5.75%, 07/01/08........................................................... 300,000 303,576
Municipal Assistance Corp. for City of New York Revenue Bonds Series D,
5.00%, 07/01/03........................................................... 250,000 252,188
Municipal Assistance Corp. for City of New York Revenue Bonds Series D,
5.20%, 07/01/07........................................................... 250,000 248,125
-------------
2,132,989
-------------
TELECOMMUNICATIONS (0.80%)
Puerto Rico Telephone Authority Revenue Bonds Series M, (AMBAC), 5.05%,
01/01/04.................................................................. 150,000(1) 149,625
-------------
TRANSPORTATION REVENUE (21.08%)
New York State Bridge Authority Bonds, 7.00%, 01/01/00..................... 250,000 257,773
New York State Thruway Highway & Bridge Trust Fund Bonds Series B (FGIC),
6.40%, 04/01/04........................................................... 200,000(2) 217,750
New York State Thruway Highway & Bridge Trust Fund Bonds Series B (MBIA),
5.75%, 04/01/06........................................................... 200,000(4) 208,250
New York State Thruway Highway & Bridge Trust Fund Bonds Series B 5.80%,
04/01/07.................................................................. 600,000 619,500
New York State Thruway Highway & Bridge Trust Fund Bonds Series A 6.00%,
04/01/99.................................................................. 300,000 310,875
Port Authority of New York & New Jersey Bonds NC, 5.00%, 09/01/98.......... 200,000 203,000
Port Authority of New York & New Jersey Bonds Series 86, 5.80%, 07/15/03... 200,000 211,000
Port Authority of New York & New Jersey Bonds Series 86, 5.00%, 07/01/06... 250,000 246,250
Port Authority of New York & New Jersey Bonds Series 86, 5.70%, 08/01/07... 270,000 278,437
Port Authority of New York & New Jersey Bonds Series 88, 4.50%, 10/01/04... 250,000 239,688
Triborough Bridge & Tunnel Authority General Purpose Bonds, Series A,
4.50%, 01/01/03........................................................... 250,000 245,000
Triborough Bridge & Tunnel Authority General Purpose Bonds, 5.75%,
01/01/05.................................................................. 170,000 178,712
Triborough Bridge & Tunnel Authority General Purpose Bonds, Series A,
4.70%, 01/01/07........................................................... 380,000 359,100
Triborough Bridge & Tunnel Authority General Purpose Bonds, Series X,
6.00%, 01/01/07........................................................... 350,000 364,437
-------------
3,939,772
-------------
WATER/SEWER (11.88%)
Erie County, Water Authority Improvement & Extension Revenue Bonds, 5.75%,
12/01/08.................................................................. 450,000 461,250
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds, 5.20%, 06/15/05............................................ 350,000 348,250
New York City Municipal Water Finance Authority Water & Sewer System
Revenue Bonds, 7.00%, 06/15/07............................................ 105,000 115,106
New York City Municipal Water Finance Authority, Series A, 4.90%,
06/15/02.................................................................. 200,000 199,250
New York City Municipal Water and Sewer Revenue Unrefunded Bonds, 7.00%,
06/15/07.................................................................. 95,000 105,094
New York State Environmental Facilities Corporation Pollution Control
Revenue Bonds, 6.40%, 06/15/03............................................ 200,000 215,500
New York State Environmental Facilities Corporation Pollution Control
Revenue Bonds, 6.50%, 06/15/04............................................ 150,000 162,000
New York State Environmental Facilities Corporation Pollution Control
Revenue Bonds, Series E, 6.60%, 06/15/05.................................. 100,000 108,375
New York State Environmental Facilities Corporation Pollution Control
Revenue Bonds, 5.40%, 05/15/06............................................ 250,000 254,687
Suffolk County Water Revenue Bonds, (MBIA), 5.10%, 06/01/05................ 250,000(4) 251,250
-------------
2,220,762
-------------
TOTAL MUNICIPAL OBLIGATIONS (COST $17,029,528)......................... 17,001,761
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
15
<PAGE>
OFFITBANK
NEW YORK MUNICIPAL FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)(CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
MARKET
PRINCIPAL VALUE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
VARIABLE RATE DEMAND NOTES (6.42%)
Muniyield New York Select Quality Auction Rate Preferred Series W, 7-Day
Notes..................................................................... $300,000 $ 300,000
New York City Municipal Water Financing Authority Water & Sewer System
Revenue Bonds Series G,
Variable Rate Bonds, 06/15/24, 1-Day Note................................ 200,000 200,000
New York City Municipal Water Financing Authority Water & Sewer System
Revenue Bonds Series A,
Variable Rate Bonds, 06/15/25, 1-Day Note................................ 400,000 400,000
Van Kampen New York IN2 Insured Auction Rate Preferred Series A, 7-Day
Notes..................................................................... 300,000 300,000
-------------
TOTAL VARIABLE RATE DEMAND NOTES (COST $1,200,000)..................... 1,200,000
-------------
TOTAL INVESTMENTS (COST $18,229,528) (97.39%).......................... 18,201,761
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (2.61%)................. 487,324
-------------
NET ASSETS (100.00%)................................................... $ 18,689,085
-------------
-------------
</TABLE>

- ---------------
(1) Insured as to principal and interest by the American Municipal Bond
Assurance Corporation.

(2) Insured as to principal and interest by the Financial Guarantee Insurance
Corporation.

(3) Insured by the Federal Housing Administration.

(4) Insured as to principal and interest by the Municipal Bond Insurance
Association.

The accompanying notes are an integral part of the financial statements.
16
<PAGE>
OFFITBANK
LATIN AMERICA TOTAL RETURN FUND

- --------------------------------------------------------------------------------

The OFFITBANK Latin America Total Return Fund took advantage of the strong
performance of the Latin equity and fixed income markets through the first half
of the year with a total return of 8.68% as of June 30, 1996 since its inception
on February 13, 1996.

The net asset value of the Fund at June 30th was $10.78. The Fund's performance
compares favorably to our benchmark, a 75%/25% composite of the ING Barings
Latin American Equity Index and the J.P. Morgan Latin American Eurobond Index,
whose combined return from February 13th through June 30th was 3.91%. The 30 day
SEC yield is 4.19% as of month end June 30, 1996.

During the first half of 1996 investor confidence toward the political
leadership and economic stability of the Latin American region continued to
improve, as the region reconfirmed and extended its commitment to private sector
initiatives, free trade, and less state intervention. Economic growth in the
region has also resumed after the deep regional recession in 1995. Decelerating
inflation, lower real interest rates, higher levels of exports, and increased
foreign direct investment should all begin to contribute to higher levels of
economic growth later in 1996 and in 1997. The strongest evidence of investors'
renewed confidence has been the successful placement of over $20 billion of new
sovereign and corporate debt at spreads of between 250 and 500 basis points over
the equivalent duration U.S. Treasury bond.

The Fund's performance from its February 13th initiation date through the second
quarter was driven by our overweight allocation to the Brazilian, Mexican and
Argentine equity markets, which were the best performing in the region in the
first half of the year. These markets have benefited the most from improved
economic and political conditions following their deep recessions in 1995 and
have been fueled by a significant increase in foreign capital flows. The robust
performance of the Brazilian market was led by our largest equity holding,
Telebras, the largest telecommunications company in Latin America, whose share
price rose 23% over the period supported by very strong earnings growth, an
extremely attractive valuation, and growing prospects for privatization. Another
highlight over the period was the Fund's participation in the Peruvian
government's public sale of its remaining ownership in Telefonica del Peru. The
successful placement of over $1.2 billion in stock in a New York Stock Exchange
listed ADS issue (at $20.50 per ADS) was a significant vote of confidence for
President Fujimori's economic reform program.

The Fund also invested in several new Latin corporate Eurobond issues. With
yield spreads of 500 to 600 basis points over Treasuries for well managed,
globally competitive firms, we see significant value in these investments. Our
corporate Eurobond positions have served well to reduce overall volatility in
the portfolio, while adding significant current yield. We expect to continue to
position the portfolio with approximately 20% to 30% in fixed income
investments.

In our opinion, the positive economic and political trends accelerating
throughout the region will translate into positive return performance on the
Latin American equity and debt. Although the markets may experience some near
term volatility, due to fears of a rise in U.S. interest rates, we believe that
the favorable economic growth, positive political developments, and improving
corporate competitiveness will inevitably lead to a strong upward revaluation of
asset prices. We expect to continue to maintain between 70% and 80% allocation
to Latin growth and value stocks.

Eric H. Anderson Richard M. Johnston

July 22, 1996

The accompanying notes are an integral part of the financial statements.
17
<PAGE>
OFFITBANK
LATIN AMERICA TOTAL RETURN FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES (60.17%)
AUTO PARTS/RELATED (1.88%)
COMMON STOCK
ARGENTINA
Compania Interamericana de Automobiles S.A................................ $ 7,500(d) $ 53,250
-------------
MEXICO
Corporacion Sanluis S.A. de C.V........................................... 7,000(a) 39,749
-------------
BANKS (7.53%)
COMMON STOCK
ARGENTINA
Banco Frances del Rio de la Plata S.A. -- ADR............................. 1,600(1) 46,000
-------------
CHILE
Banco BHIF -- ADR......................................................... 3,000(1) 60,375
-------------
COLOMBIA
Banco Industrial Colombiano -- ADR........................................ 1,200(1) 20,250
-------------
PREFERRED STOCK
BRAZIL
Banco Bradesco S.A........................................................ 12,450(c) 101,693
Uniao de Bancos Brasileiros S.A........................................... 5,360(c) 145,172
-------------
246,865
-------------
BEVERAGES (0.45%)
COMMON STOCK
UNITED STATES
Panamerican Beverages, Inc................................................ 500 22,375
-------------
BREWERY (1.07%)
COMMON STOCK
BRAZIL
Companhia Cervejaria Brahma............................................... 90(c) 53,252
-------------
BUILDING MATERIALS (3.62%)
COMMON STOCK
MEXICO
Cementos Apasco S.A. de C.V............................................... 17,000(a) 94,289
Cementos Mexicanos S.A. de C.V............................................ 24,000(a) 85,256
-------------
179,545
-------------
CHEMICALS (0.71%)
COMMON STOCK
CHILE
Sociedad Quimica y Minera de Chile S.A. -- ADR............................ 650(1) 35,263
-------------
CONSTRUCTION (0.98%)
COMMON STOCK
MEXICO
Empresas ICA Sociedad Controladora S.A. de C.V. -- ADR.................... 3,500(1) 48,563
-------------
FOOD PROCESSING (1.34%)
COMMON STOCK
MEXICO
Gruma S.A. -- Cl. B....................................................... 14,350(a) 66,515
-------------
HOLDING COMPANIES (4.68%)
COMMON STOCK
MEXICO
Grupo Alfa S.A. -- Cl. A.................................................. 31,114(a) 140,317
Grupo Carso S.A. -- Cl. A................................................. 13,000(a) 91,502
-------------
231,819
-------------
HOUSING (0.91%)
COMMON STOCK
MEXICO
Corporacion Geo S.A. -- Cl. B............................................. 10,000(a) 45,295
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
18
<PAGE>
OFFITBANK
LATIN AMERICA TOTAL RETURN FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES (CONTINUED)
IRON/STEEL (2.85%)
COMMON STOCK
BRAZIL
Companhia Siderurgica Nacional -- ADR..................................... $ 800(1) $ 20,808
Companhia Vale de Rio Doce -- ADR......................................... 2,200(1) 44,066
Tubos de Acero de Mexico S.A. -- ADR...................................... 5,800(1) 54,738
Usinas Siderurgicas de Minas Gerais S.A. -- ADR (144A).................... 2,000(1)(3) 21,720
-------------
141,332
-------------
MANUFACTURING (2.35%)
COMMON STOCK
BRAZIL
Ericsson Telecommunicacoes S.A............................................ 7,500(a) 116,545
-------------
MEDIA (2.23%)
COMMON STOCK
MEXICO
Grupo Televisa S.A. -- GDS................................................ 3,600(2) 110,700
-------------
MINING (1.51%)
COMMON STOCK
PERU
Compania de Minas Buenaventura S.A. -- ADR................................ 2,500(1) 49,688
-------------
UNITED KINGDOM
Antofagasta Holdings plc.................................................. 5,000(b) 25,068
-------------
OIL/GAS (3.28%)
COMMON STOCK
ARGENTINA
Perez Companc S.A. -- ADR................................................. 10,700(1) 140,170
YPF Sociedad Anonima S.A. -- ADR.......................................... 1,000(1) 22,500
-------------
162,670
-------------
PAPER PRODUCTS/PULP (0.35%)
COMMON STOCK
COLUMBIA
Papeles Nacionales -- ADR................................................. 2,500(1) 17,500
-------------
REAL ESTATE (0.55%)
COMMON STOCK
ARGENTINA
IRSA Inversiones y Representaciones S.A. -- GDS........................... 800(2) 27,000
-------------
RETAIL (0.83%)
COMMON STOCK
BRAZIL
Globex Utilidades S.A..................................................... 2,500(c) 41,214
-------------
TELECOMMUNICATIONS (20.33%)
COMMON STOCK
ARGENTINA
Telefonica de Argentina S.A. -- ADR....................................... 700(1) 20,738
-------------
BRAZIL
Telecomunicacoes Brasileiras S.A. -- ADR.................................. 9,200(1) 640,550
Telecomunicacoes de Minas Gerais.......................................... 1,510(c) 155,693
-------------
796,243
-------------
CHILE
Cia de Telecomunicaciones de Chile S.A. -- ADR............................ 210(1) 20,606
-------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
19
<PAGE>
OFFITBANK
LATIN AMERICA TOTAL RETURN FUND
- -------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (UNAUDITED) (CONTINUED)
JUNE 30, 1996

<TABLE>
<CAPTION>
PRINCIPAL/SHARE MARKET
AMOUNT VALUE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EQUITY SECURITIES (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
PREFERRED STOCK
BRAZIL
Telecomunicacoes de Minas Gerais.......................................... $ 15(c) $ 1,528
Telecomunicacoes de Rio de Janeiro S.A.................................... 1,500(c) 168,841
-------------
170,369
-------------
UTILITIES (2.72%)
COMMON STOCK
BRAZIL
Cia Energetica de Minas Gerais -- ADR..................................... 1,600(1) 45,440
Companhia Paulista de Forca e Luz......................................... 1,000(c) 89,650
-------------
135,090
-------------
TOTAL EQUITY SECURITIES................................................. 2,983,879
-------------
DEBT SECURITIES (18.19%)
CORPORATE DEBT (16.05%)
BANKS
ARGENTINA (1.78%)
Banco de Galicia, 7.00%, 08/01/02......................................... 80,000 88,200
-------------
COMMUNICATIONS (2.06%)
COLUMBIA
Occidente Y Caribe Step-Up Bonds, 0/14.00%, 03/15/04 (144A)............... 200,000(3)(4) 102,000
-------------
CONSTRUCTION (5.07%)
MEXICO
Empresas ICA Sociedad, 11.875%, 05/30/01 (144A)........................... 250,000(3) 251,563
-------------
IRON/STEEL (0.65%)
MEXICO
Tubos de Acero, 13.75%, 12/08/99.......................................... 30,000 32,550
-------------
MANUFACTURING (1.26%)
MEXICO
AXA S.A. de C.V., 8.50%, 10/01/98......................................... 65,000 62,400
-------------
MEDIA (4.22%)
BRAZIL
RBS Participacos S.A., 12/15/03........................................... 100,000 105,000
-------------
MEXICO
Grupo Televisa, 11.875%, 05/15/06 (144A).................................. 50,000(3) 51,000
Grupo Televisa Step-Up Bonds, 0/13.25%, 05/15/08 (144A)................... 100,000(3)(4) 53,500
-------------
104,500
-------------
PETROCHEMICALS (1.01%)
BRAZIL
OPP Petroquimica S.A., 11.50%, 02/23/04 (144A)............................ 50,000(3) 49,875
-------------
TOTAL CORPORATE DEBT.................................................... 796,088
-------------
SOVEREIGN DEBT (2.14%)
ARGENTINA
Argentina Bocon Pre-1, Floating Rate Bonds, 3.3588%, 04/01/01............. 100,000(d)(5) 106,250
-------------
TOTAL DEBT SECURITIES................................................... 902,338
-------------
TOTAL INVESTMENTS (COST $3,669,652) (78.36%)........................ 3,886,217
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES (21.64%)............. 1,073,172
-------------
TOTAL NET ASSETS (100.00%).......................................... $ 4,959,389
-------------
-------------
</TABLE>

- ---------------
Principal denominated in the following currencies.
(a) Mexican Peso (b) British Pound (c) Brazilian Real (d) Argentine
Peso
(1) American Depository Receipts.
(2) Global Depository Shares.
(3) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
(4) Step-up bond.
(5) Interest rate reflected in the rate in effect at June 30, 1996.

The accompanying notes are an integral part of the financial statements.
20
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1996
HIGH YIELD FUND

<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (Cost -- $594,500,575) (Note
1a)...................................................... $ 597,609,294
Cash...................................................... 22,633,205
Receivable for investments sold........................... 9,669,318
Interest and dividends receivable......................... 13,090,510
Unrealized appreciation as foreign currency contracts
(Note 5)................................................. 14,473
Prepaid expenses.......................................... 18,561
---------------
Total Assets............................................ $ 643,035,361
LIABILITIES:
Payable for investments purchased......................... 14,483,288
Income distribution payable............................... 4,719,278
Investment advisory fee payable (Note 2).................. 396,146
Accrued expenses.......................................... 199,548
---------------
Total Liabilities....................................... 19,798,260
---------------
NET ASSETS.................................................. $ 623,237,101
---------------
---------------
Net assets consist of:
Shares of capital stock, $.001 par value per share;
63,616,624 issued and outstanding (Note 4)............... $ 63,617
Additional paid-in-capital................................ 615,466,843
Accumulated dividends in excess of net investment
income................................................... (170,306)
Accumulated net realized gain on investments and foreign
currency transactions.................................... 4,753,780
Net unrealized appreciation on investments and foreign
currency transactions.................................... 3,123,167
---------------
NET ASSETS.................................................. $ 623,237,101
---------------
---------------
NET ASSET VALUE PER SHARE................................... $9.80
---------------
---------------
</TABLE>

EMERGING MARKETS FUND

<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (Cost -- $85,127,401) (Note
1a)...................................................... $ 90,194,079
Cash...................................................... 1,282,240
Receivable for investments sold........................... 2,298,553
Interest receivable....................................... 1,479,399
Prepaid expenses.......................................... 2,605
Unrealized appreciation on forward currency contracts
(Note 5)................................................. 93,855
---------------
Total Assets............................................ $ 95,350,731
LIABILITIES:
Payable for investments purchased......................... 4,789,980
Income distribution payable............................... 1,346,297
Investment advisory fee payable (Note 2).................. 65,040
Accrued expenses.......................................... 91,678
---------------
Total Liabilities....................................... 6,292,995
---------------
NET ASSETS.................................................. $ 89,057,736
---------------
---------------
Net assets consist of:
Shares of capital stock, $.001 par value per share;
8,332,839 issued and outstanding (Note 4)................ $ 8,333
Additional paid-in-capital................................ 83,288,792
Accumulated dividends in excess of net investment
income................................................... (1,075,398)
Accumulated net realized gain on investments and foreign
currency transactions.................................... 1,631,208
Net unrealized appreciation on investments and foreign
currency transactions.................................... 5,204,801
---------------
NET ASSETS.................................................. $ 89,057,736
---------------
---------------
NET ASSET VALUE PER SHARE................................... $10.69
---------------
---------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
21
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED) (CONTINUED)
JUNE 30, 1996

NEW YORK MUNICIPAL FUND

<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (Cost -- $18,229,528) (Note
1a)...................................................... $ 18,201,761
Cash...................................................... 262,069
Interest receivable....................................... 287,142
Receivable from advisor (Note 2).......................... 9,089
Deferred organization expense............................. 20,676
----------------
Total Assets............................................ $ 18,780,737
LIABILITIES:
Income distribution payable............................... 65,844
Accrued expenses.......................................... 25,808
----------------
Total Liabilities....................................... 91,652
----------------
NET ASSETS.................................................. $ 18,689,085
----------------
----------------
Net assets consist of:
Shares of capital stock, $.001 par value per share;
1,825,061 issued and outstanding (Note 4)................ $ 1,825
Additional paid-in-capital................................ 18,693,364
Accumulated net realized gain on investments.............. 21,663
Net unrealized depreciation on investments................ (27,767)
----------------
NET ASSETS.................................................. $ 18,689,085
----------------
----------------
NET ASSET VALUE PER SHARE................................... $10.24
----------------
----------------
</TABLE>

LATIN AMERICA TOTAL RETURN FUND

<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
ASSETS:
Investments, at market value (Cost $3,669,652) (Note
1a)...................................................... $ 3,886,217
Cash...................................................... 1,213,570
Receivable for securities sold............................ 32,363
Interest and dividends receivable......................... 11,014
Receivable from advisor (Note 2).......................... 11,477
Deferred organization expense............................. 11,732
---------------
Total Assets............................................ $ 5,166,373
LIABILITIES:
Payable for securities purchased.......................... 187,903
Income distribution payable............................... 8,055
Accrued expenses.......................................... 11,026
---------------
Total Liabilities....................................... 206,984
---------------
NET ASSETS.................................................. $ 4,959,389
---------------
---------------
Net assets consist of:
Shares of capital stock, $0.001 par value per share;
460,176 issued and outstanding (Note 4).................. $ 460
Additional paid-in capital................................ 4,755,370
Net realized loss on investments and foreign currency
transactions............................................. (13,006)
Net unrealized appreciation on investments................ 216,565
---------------
NET ASSETS.................................................. $ 4,959,389
---------------
---------------
NET ASSET VALUE PER SHARE................................... $10.78
</TABLE>

The accompanying notes are an integral part of the financial statements.
22
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
HIGH YIELD FUND

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest.................................................. $ 27,449,547
Dividend.................................................. 588,920
----------------
Total income............................................ $ 28,038,467
EXPENSES:
Advisory fee (Note 2)..................................... 2,185,055
Administrative services (Note 2).......................... 417,436
Custodian fees and expenses............................... 176,068
Registration fees......................................... 63,515
Professional.............................................. 43,668
Printing.................................................. 28,800
Insurance................................................. 19,400
Fund accounting fee and expenses (Note 2)................. 19,195
Transfer and shareholder servicing agent fees (Note 2).... 17,427
Trustees' fees............................................ 8,733
Miscellaneous............................................. 40,518
----------------
Total expenses/fees before waivers...................... 3,019,815
Less: expenses/fees waived (Note 2)..................... (208,718)
----------------
Net expenses............................................ 2,811,097
----------------
NET INVESTMENT INCOME....................................... 25,227,370
----------------
Net realized and unrealized gain (loss): (Note 5)
Net realized gain on investments.......................... 4,420,239
Net realized gain on foreign currency transactions........ 338,813
Net change in unrealized depreciation on investments...... (10,722,559)
Net change in unrealized depreciation on foreign currency
transactions............................................. (1,978,798)
----------------
Net realized and unrealized loss on investments and foreign
currency transactions.................................... (7,942,305)
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 17,285,065
----------------
----------------
</TABLE>

EMERGING MARKETS FUND

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest.................................................. $ 3,404,949
----------------
Total income............................................ $ 3,404,949
EXPENSES:
Advisory fee (Note 2)..................................... 316,105
Administrative services (Note 2).......................... 52,684
Custodian fees and expenses............................... 37,855
Professional.............................................. 23,439
Fund accounting fee and expenses (Note 2)................. 15,000
Registration fees......................................... 8,150
Transfer and shareholder servicing agent fees (Note 2).... 4,332
Printing.................................................. 3,600
Trustees' fees............................................ 2,988
Insurance................................................. 1,929
Miscellaneous............................................. 40,830
----------------
Total expenses/fees before waivers...................... 506,912
Less: expenses/fees waived (Note 2)..................... (26,342)
----------------
Net expenses............................................ 480,570
----------------
NET INVESTMENT INCOME....................................... 2,924,379
----------------
Net realized and unrealized gain (loss): (Note 5)
Net realized gain on investments.......................... 2,120,692
Net realized loss on foreign currency transactions........ (262,316)
Net change in unrealized appreciation on investments...... 2,378,437
Net change in unrealized gain on foreign currency
transactions............................................. 93,855
----------------
Net realized and unrealized gain on investments and foreign
currency transactions..................................... 4,330,668
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 7,255,047
----------------
----------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
23
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED) (CONTINUED)

NEW YORK MUNICIPAL FUND

<TABLE>
<CAPTION>
FOR THE
SIX MONTHS ENDED
JUNE 30, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest.................................................. $ 372,975
---------------
Total income............................................ $ 372,975
EXPENSES:
Advisory fee (Note 2)..................................... 31,120
Fund accounting fee and expenses (Note 2)................. 20,815
Professional.............................................. 12,042
Administrative services (Note 2).......................... 11,671
Custodian fees and expenses............................... 5,743
Amortization of organization expenses..................... 2,746
Trustees' fees............................................ 2,388
Printing.................................................. 2,100
Transfer and shareholder servicing agent fees (Note 2).... 1,602
Registration fees......................................... 610
Insurance................................................. 546
Miscellaneous............................................. 3,372
---------------
Total expenses/fees before waivers/reimbursements....... 94,755
Less: expenses/fees waived/reimbursed (Note 2).......... (51,880)
---------------
Net expenses............................................ 42,875
---------------
NET INVESTMENT INCOME....................................... 330,100
---------------
Net realized and unrealized gain/(loss): (Note 5)
Net realized gain on investments.......................... 15,952
Net change in unrealized depreciation on investments...... (327,685)
---------------
Net realized and unrealized loss on investments............. (311,733)
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 18,367
---------------
---------------
</TABLE>

LATIN AMERICA TOTAL RETURN FUND

<TABLE>
<CAPTION>
FOR THE PERIOD FROM
FEBRUARY 13, 1996*
THROUGH JUNE 30, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest.................................................. $ 20,071
Dividend (net of foreign withholding tax of $854)......... 5,762
---------------
Total income............................................ $ 25,833
EXPENSES:
Fund accounting fee and expenses (Note 2)................. 13,050
Advisory fee (Note 2)..................................... 7,026
Professional.............................................. 4,313
Trustees' fees............................................ 1,890
Registration fees......................................... 1,375
Administrative services (Note 2).......................... 1,052
Amortization of organization expenses..................... 972
Printing.................................................. 750
Custodian fees and expenses............................... 471
Transfer and shareholder servicing agent fees (Note 2).... 280
Miscellaneous............................................. 1,908
---------------
Total expenses/fees before waivers/reimbursements....... 33,087
Less: expenses/fees waived/reimbursed (Note 2).......... (19,124)
---------------
Net expenses............................................ 13,963
---------------
NET INVESTMENT INCOME....................................... 11,870
---------------
Net realized and unrealized gain/(loss): (Note 5)
Net realized loss on investments.......................... (11,231)
Net realized loss on foreign currency transactions........ (1,775)
Net unrealized appreciation on investments................ 231,861
Net unrealized depreciation on foreign currency
transactions............................................. (15,296)
---------------
Net realized and unrealized gain on investments............. 203,559
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 215,429
---------------
---------------
</TABLE>

* Commencement of operations.

The accompanying notes are an integral part of the financial statements.
24
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
HIGH YIELD FUND

<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED
ENDED JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................... $ 25,227,370 $ 33,584,415
Net realized gain on investments and foreign currency
transactions............................................. 4,759,052 528,822
Net change in unrealized appreciation/(depreciation) on
investments and foreign currency transactions............ (12,701,357) 22,091,958
---------------- ----------------
Net increase in net assets resulting from operations...... 17,285,065 56,205,195
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... (25,335,187) (33,572,903)
0 (316,224)
Realized gains............................................
---------------- ----------------
Total dividends and distributions to shareholders......... (25,335,187) (33,889,127)
CAPITAL STOCK TRANSACTIONS (NOTE 4):
Net increase in net assets from capital share
transactions............................................. 152,196,842 234,457,225
---------------- ----------------
Total increase in net assets.............................. 144,146,720 256,773,293
NET ASSETS:
Beginning of period....................................... 479,090,381 222,317,088
---------------- ----------------
End of period............................................. $623,237,101 $479,090,381
---------------- ----------------
---------------- ----------------
</TABLE>

EMERGING MARKETS FUND

<TABLE>
<CAPTION>
FOR THE SIX FOR THE YEAR
MONTHS ENDED
ENDED JUNE 30, DECEMBER 31,
1996 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................... $ 2,924,379 $ 3,457,366
Net realized gain on investments and foreign currency
transactions............................................. 1,858,376 227,117
Net change in unrealized appreciation on investments and
foreign currency transactions............................ 2,472,292 4,073,099
---------------- ----------------
Net increase in net assets resulting from operations...... 7,255,047 7,757,582
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... (2,462,184) (2,305,453)
0 (1,151,913)
Return of capital.........................................
---------------- ----------------
Total dividends and distributions to shareholders......... (2,462,184) (3,457,366)
---------------- ----------------
CAPITAL STOCK TRANSACTIONS (NOTE 4):
Net increase in net assets from capital share
transactions............................................. 35,014,428 16,833,223
---------------- ----------------
Total increase in net assets.............................. 39,807,291 21,133,439
NET ASSETS:
Beginning of period....................................... 49,250,445 28,117,006
---------------- ----------------
End of period............................................. $ 89,057,736 $ 49,250,445
---------------- ----------------
---------------- ----------------
</TABLE>

The accompanying notes are an integral part of the financial statements.
25
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) (CONTINUED)

NEW YORK MUNICIPAL FUND

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
APRIL 3, 1995*
FOR THE THROUGH
SIX MONTHS ENDED DECEMBER 31,
JUNE 30, 1996 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................... $ 330,100 $ 247,371
Net realized gain on investments.......................... 15,952 11,983
Net change in unrealized appreciation/(depreciation) on (327,685) 299,919
investments..............................................
---------------- ----------------
Net increase in net assets resulting from operations...... 18,367 559,273
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income..................................... (330,100) (250,088)
0
Realized gains............................................ (3,555)
---------------- ----------------
Total dividends and distributions to shareholders......... (330,100) (253,643)
CAPITAL STOCK TRANSACTIONS (NOTE 4):
Net increase in net assets from capital share
transactions............................................. 6,484,911 12,210,237
---------------- ----------------
Total increase in net assets.............................. 6,173,178 12,515,867

NET ASSETS:
Beginning of period....................................... 12,515,907 40
---------------- ----------------
End of period............................................. $18,689,085 $12,515,907
---------------- ----------------
---------------- ----------------
</TABLE>

LATIN AMERICA TOTAL RETURN FUND

<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
FEBRUARY 13,
1996*
THROUGH JUNE 30,
1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income..................................... $ 11,870
Net realized loss on investments and foreign currency
transactions............................................. (13,006)
216,565
Net unrealized appreciation on investments and foreign
currency transactions....................................
----------------
Net increase in net assets resulting from operations...... 215,429
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income..................................... (11,870)
----------------
CAPITAL SHARE TRANSACTIONS (NOTE 4):
Net increase in net assets from capital share
transactions............................................. 4,755,810
----------------
Total increase in net assets.............................. 4,959,369
NET ASSETS:
Beginning of period....................................... 20
----------------
End of period............................................. $ 4,959,389
----------------
----------------
</TABLE>

- ---------------
* Commencement of operations.

The accompanying notes are an integral part of the financial statements.
26
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
HIGH YIELD FUND

<TABLE>
<CAPTION>
SELECTED RATIOS AND DATA FOR A SHARE OF
CAPITAL STOCK FOR THE SIX MONTHS FOR THE YEAR
OUTSTANDING THROUGH THE PERIOD: ENDED JUNE 30, 1996 ENDED DECEMBER 31, 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.92 $ 9.25
-------- --------
Net investment income..................... 0.45 0.90
Net realized and unrealized gain/(loss)... (0.12) 0.67
-------- --------
Total from investment operations.......... 0.33 1.57
-------- --------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income..................... (0.45) (0.89)
Realized gains............................ 0 (0.01)
-------- --------
Total dividends and distributions........... (0.45) (0.90)
-------- --------
NET ASSET VALUE, END OF PERIOD.............. $ 9.80 $ 9.92
-------- --------
-------- --------
TOTAL INVESTMENT RETURN+:................... 3.36% 17.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................... $623,237 $479,090
Ratios to average net assets:
Expenses.................................. 1.01%(1)(2) 1.05%(2)
Net investment income..................... 9.08%(1) 9.38%
PORTFOLIO TURNOVER RATE..................... 26% 34%
</TABLE>

- ---------------
(1)Annualized

(2)If the Fund had borne all expenses that were assumed or waived by the
Administrator, the above annualized expense ratio would have been 1.09% and
1.13% for the six months ended June 30, 1996, and year ended December 31,
1995, respectively.

+ Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions.

EMERGING MARKETS FUND

<TABLE>
<CAPTION>
SELECTED RATIOS AND DATA FOR A SHARE OF
CAPITAL STOCK FOR THE SIX MONTHS FOR THE YEAR
OUTSTANDING THROUGH THE PERIOD: ENDED JUNE 30, 1996 ENDED DECEMBER 31, 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 9.91 $ 8.84
------- -------
Net investment income..................... 0.43 0.90
Net realized and unrealized (gain)........ 0.72 1.07
------- -------
Total from investment operations.......... 1.15 1.97
------- -------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income..................... (0.37) (0.60)
Return of capital......................... 0 (0.30)
------- -------
Total dividends and distributions........... (0.37) (0.90)
------- -------
NET ASSET VALUE, END OF PERIOD.............. $ 10.69 $ 9.91
------- -------
------- -------
TOTAL INVESTMENT RETURN+:................... 11.65% 23.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................... $ 89,058 $ 49,250
Ratios to average net assets:
Expenses.................................. 1.36%(1)(2) 1.50%(2)
Net investment income..................... 7.53%(1) 9.97%
PORTFOLIO TURNOVER RATE..................... 55% 60%
</TABLE>

- ---------------
(1)Annualized.

(2)If the Fund had borne all expenses that were assumed or waived by the
Advisor and Administrator, the above annualized expense ratio would have
been 1.43% and 1.73% for the six months ended June 30, 1996 and year ended
December 31, 1995, respectively.

+ Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions.

The accompanying notes are an integral part of the financial statements.
27
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED) (CONTINUED)

NEW YORK MUNICIPAL FUND

<TABLE>
<CAPTION>
SELECTED RATIOS AND DATA FOR A SHARE OF FOR THE PERIOD FROM
CAPITAL STOCK FOR THE SIX MONTHS APRIL 3, 1995*
OUTSTANDING THROUGH THE PERIOD: ENDED JUNE 30, 1996 THROUGH DECEMBER 31, 1995
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 10.47 $ 10.00
------- -------
Net investment income..................... 0.22 0.33
Net realized and unrealized gain/(loss)... (0.23) 0.47
------- -------
Total from investment operations.......... (0.01) 0.80
------- -------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income..................... (0.22) (0.32)
Realized gains............................ 0 (0.01)
------- -------
Total dividends and distributions........... (0.22) (0.33)
------- -------
NET ASSET VALUE, END OF PERIOD.............. $ 10.24 $ 10.47
------- -------
------- -------
TOTAL INVESTMENT RETURN+:................... (0.12)% 8.13%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................... $ 18,689 $ 12,516
Ratios to average net assets:
Expenses.................................. 0.55%(1)(2) 0.54%(1)(2)
Net investment income..................... 4.23%(1) 4.20%(1)
PORTFOLIO TURNOVER RATE..................... 12% 35%
</TABLE>

- ---------------
* Commencement of operation.

(1)Annualized

(2)If the Fund had borne all expenses that were assumed or waived by the
Advisor and Administrator, the above annualized expense ratios would have
been 1.21% and 2.09% for the periods ended June 30, 1996, and December 31,
1995, respectively.

+ Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions.

LATIN AMERICA TOTAL RETURN FUND

<TABLE>
<CAPTION>
SELECTED RATIOS AND DATA FOR A SHARE OF FOR THE PERIOD FROM
CAPITAL STOCK FEBRUARY 13, 1996*
OUTSTANDING THROUGH THE PERIOD: THROUGH JUNE 30, 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD........ $ 10.00
------
Net investment income..................... 0.08
Net realized and unrealized gain.......... 0.78
------
Total from investment operations.......... 0.86
------
LESS DIVIDENDS AND DISTRIBUTIONS FROM:
Net investment income..................... (0.08)
------
Total dividends and distributions......... (0.08)
------
NET ASSET VALUE, END OF PERIOD.............. $ 10.78
------
------
TOTAL INVESTMENT RETURN+.................... 8.68%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in
thousands)............................... $ 4,959
RATIOS TO AVERAGE NET ASSETS:
Expenses.................................. 2.00%(1)(2)
Net investment income..................... 1.67%(1)
PORTFOLIO TURNOVER RATE..................... 43%
</TABLE>

- ---------------
* Commencement of operations.

(1)Annualized

(2)If the Fund had borne all expenses that were assumed or waived by the
Advisor and Administrator, the above annualized expense ratio would have
been 4.66%.

+ Total return is based on the change in net asset value during the period
and assumes reinvestment of all dividends and distributions.

The accompanying notes are an integral part of the financial statements.
28
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- -----------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES. The OFFITBANK Investment Fund, Inc. (the
"Company") was incorporated in Maryland on September 8, 1993. The Company is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). Each Fund operates as a non-diversified, open-end management investment
company. The Company consists of seven separately managed funds. OFFITBANK High
Yield Fund, OFFITBANK Emerging Markets Fund, OFFITBANK Latin America Total
Return Fund, OFFITBANK National Municipal Fund, OFFITBANK California Municipal
Fund, OFFITBANK New York Municipal Fund and OFFITBANK Global Convertible Fund.
Of these, only the High Yield, Emerging Markets, New York Municipal and Latin
America Total Return Funds have commenced operations on March 2, 1994, March 8,
1994, April 3, 1995, and February 13, 1996, respectively.

The following are significant accounting policies followed by the Company in the
preparation of its financial statements:

a. VALUATION OF SECURITIES. Equity securities held by a Fund are valued at the
last sale price on the exchange or in the principal over-the-counter market in
which such securities are traded, as of the close of business on the day the
securities are being valued or, lacking any sales, at the last available bid
price. Other securities held by a Fund generally are valued based on quoted bid
prices. Short-term debt investments having maturities of 60 days or less are
amortized to maturity based on their cost, and if applicable, adjusted for
foreign exchange translation. Securities for which market quotations are not
readily available are valued at fair value determined in good faith by or under
the direction of the Company's Board of Directors. Securities quoted in foreign
currencies initially are valued in the currency in which they are denominated
and then are translated into U.S. dollars at the prevailing foreign exchange
rate. Securities may be valued by independent pricing services which use prices
provided by market-makers or estimates of market values obtained from yield data
relating to instruments or securities with similar characteristics.

b. FOREIGN EXCHANGE TRANSACTIONS. The books and records of the Fund are
maintained in U.S. dollars as follows:

i. market value of investment securities and other assets and liabilities at the
exchange rate on the valuation date.

ii. purchases and sales of investment securities, income and expenses at the
exchange rate prevailing on the respective date of such transactions.

The resultant exchange gains and losses are included in the Statement of
Operations.

c. ORGANIZATIONAL EXPENSES. Costs incurred in connection with the organization
and initial registration of the New York Municipal and Latin America Total
Return Funds have been deferred and are being amortized on a straight-line basis
over sixty months beginning with each Fund's commencement of operations.
OFFITBANK assumed the organizational expenses for the High Yield and Emerging
Markets Funds.

d. ALLOCATION OF EXPENSES. Expenses directly attributable to a Fund are charged
to that Fund. Other expenses are allocated proportionately among each Fund in
relation to the net assets of each Fund or on another reasonable basis.

e. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on a trade date basis. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of premium and accretion of discount on investments, is
accrued daily.

f. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends from net investment
income are declared daily and paid quarterly in the cases of the Latin America
Total Return and Emerging Markets Funds and monthly for the High Yield and New
York Municipal Funds. Distributions of net realized gains are normally declared
and paid at least annually by each Fund. The Funds record dividends and
distributions to shareholders on the ex-dividend date.

The amount of dividends and distributions from net investment income and net
realized capital gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either temporary or permanent in nature. To the
extent these differences are permanent in nature, such amounts are reclassified
within the capital accounts based on their federal tax-basis treatment;
temporary differences do not require a reclassification. Dividends and
distributions which exceed net investment income and net realized capital gains
for financial reporting purposes but not for tax purposes are reported as
dividends in excess of net investment income or distributions in excess of net
realized capital gains. To the extent they exceed net investment income and net
realized capital gains for tax purposes, they are reported as distributions of
paid-in capital.

g. USE OF ESTIMATES. Estimates and assumptions are required to be made regarding
assets, liabilities and changes in net assets resulting from operations when
financial statements are prepared. Actual results could differ from these.

h. FEDERAL INCOME TAXES. Each Fund intends to continue to qualify as a
"regulated investment company"

29
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- -----------------------------------------------------------------------------
under Subchapter M of the Internal Revenue Code and distribute all of its
taxable income to its shareholders. Therefore, no federal income tax provision
is required.

2. INVESTMENT ADVISORY, ADMINISTRATION AND DISTRIBUTION AGREEMENTS. The Company
has entered into an investment advisory agreement (the "Investment Advisory
Agreement") with the Advisor. The Investment Advisory Agreement provides that
each Fund pays the Advisor an investment advisory fee that is calculated and
paid monthly at the annual rates of 1.00% of net assets for the Latin America
Total Return Fund, .40% of net assets for the New York Municipal Fund, .85% on
the first $200,000,000 of net assets, .75% on amounts in excess thereof up to
$600,000,000 and .65% on amounts over $600,000,000 in the case of the High Yield
Fund, and .90% on the first $200,000,000 and .80% on amounts in excess thereof
in the case of the Emerging Markets Fund, of each Fund's average daily net
assets. The Advisor provides portfolio management and certain administrative,
clerical and bookkeeping services for the Company. For the six months ended June
30, 1996, the Advisor was entitled to fees of $2,185,055 for the High Yield
Fund, $316,105 for the Emerging Markets Fund, $31,120 for the New York Municipal
Fund, $7,026 for the Latin America Total Return Fund. The Advisor waived fees of
$31,120 for the New York Municipal Fund and 6,595 for the Latin America Total
Return Fund.

Furman Selz LLC ("Furman Selz") provides the Company with administrative, fund
accounting, dividend disbursing and transfer agency services pursuant to an
administration agreement (the "Administration Agreement"). The services under
the Administration Agreement are subject to the supervision of the Company's
Board of Directors and officers and include day-to-day administration of matters
related to the corporate existence of the Company, maintenance of its records,
preparation of reports, supervision of the Company's arrangements with its
custodian and assistance in the preparation of the Company's registration
statements under federal and state laws. Pursuant to the Administration
Agreement, the Company pays Furman Selz a monthly fee for its services which on
an annualized basis will not exceed .15% of the average daily net assets of the
Company. The fees are allocated among the Funds on the basis of their relative
net assets. For the six months ended June 30, 1996, Furman Selz was entitled to
fees of $417,436 for the High Yield Fund, $52,684 for the Emerging Markets Fund,
$11,671 for the New York Municipal Fund and $1,052 for the Latin America Total
Return Fund. Furman Selz waived fees of $208,718 for the High Yield Fund,
$26,342 for the Emerging Markets Fund, $11,671 for the New York Municipal Fund
and $1,052 for the Latin America Total Return Fund.

As Administrator, Furman Selz provides the Funds with fund accounting related
services. For these services Furman Selz is paid a fee of $2,500 per month per
Fund. For the six months ended June 30, 1996, Furman Selz earned fees, including
reimbursement of out of pocket expenses, of $19,195, $15,000, $20,815 and
$13,050 for the High Yield, Emerging Markets Fund, New York Municipal Fund and
Latin America Total Return Fund, respectively.

Furman Selz acts as Transfer Agent for the Fund and receives reimbursement of
certain expenses plus a per account fee of $15.00 per year. For the six months
ended June 30, 1996, Furman Selz was entitled to fees of $17,427 for the High
Yield Fund, $4,332 for the Emerging Markets Fund, $1,602 for the New York
Municipal Fund and $280 for the Latin America Total Return Fund.

OFFITBANK has voluntarily agreed to cap the expense ratio for the New York
Municipal and Latin America Funds at 0.55% and 2.00%, respectively. In order to
maintain these ratios, the Advisor has agreed to reimburse the Funds $9,089 and
$11,477, respectively.

The Company has entered into a distribution agreement (the "Distribution
Agreement") with OFFIT Funds Distributor, Inc. an affiliate of Furman Selz.
Under the Distribution Agreement, the Distributor, as agent of the Company,
agrees to use its best efforts as sole distributor of the Company's shares.
Under the Plan of Distribution, each Fund is authorized to spend up to 0.25% of
its average daily net assets to compensate the Distributor for its services. The
Distribution Agreement provides that the Company will bear the costs of the
registration of its shares with the Commission and various states and the
printing of its prospectuses, statements of additional information and reports
to shareholders. For the six months ended June 30, 1996, no distribution costs
were incurred.

3. INVESTMENTS. Purchases and sales of securities for the six months ended June
30, 1996, other than short-term securities, aggregated $310,006,942 and
$130,834,403 for the High Yield Fund, $67,271,013 and $33,321,370 for the
Emerging Markets Fund, $7,055,833 and $1,688,422 for New York Municipal Fund,
and $4,456,228 and $682,378 for the Latin America Total Return Fund. The cost of
securities is substantially the same for Federal income tax purposes as it is
for financial reporting purposes.

<TABLE>
<CAPTION>
EMERGING NEW YORK LATIN AMERICA
HIGH YIELD MARKETS MUNICIPAL TOTAL RETURN
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Aggregate cost.......... $ 594,500,575 $ 85,127,401 $ 18,229,528 $ 3,669,652
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
Gross unrealized
appreciation........... $ 10,622,224 $ 5,339,837 $ 81,283 $ 263,072
Gross unrealized
depreciation........... (7,513,505) (273,159) (109,050) (46,507)
-------------- ------------- ------------- -------------
Net unrealized
appreciation/
(depreciation)......... $ 3,108,719 $ 5,066,678 $ (27,767) $ 216,565
-------------- ------------- ------------- -------------
-------------- ------------- ------------- -------------
</TABLE>

30
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- -----------------------------------------------------------------------------

The Funds may purchase instruments from financial institutions, such as banks
and broker-dealers, subject to the seller's agreement to repurchase them at an
agreed upon time and price ("repurchase agreements"). The seller under a
repurchase agreement is required to maintain the value of the securities subject
to the agreement at not less than the repurchase price. Default by the seller
would, however, expose the relevant Fund to possible loss because of adverse
market action or delay in connection with the disposition of the underlying
obligations.

A Fund's net investment income from foreign issuers may be subject to non-U.S.
withholding taxes, thereby reducing the Fund's net investment income.

4. CAPITAL STOCK TRANSACTIONS. The Company's Articles of Incorporation, permit
the Company to issue ten billion shares (par value $0.001). Transactions in
shares of common stock for the six months ended June 30, 1996 and year ended
December 31, 1995, were as follows:

<TABLE>
<CAPTION>
HIGH YIELD FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Beginning balance...... 48,310,714 $468,070,086 24,029,315 $233,612,861
---------- ------------ ---------- ------------
Shares sold............ 18,676,933 185,566,999 26,556,487 256,321,969
Shares issued in
reinvestment of
dividends and
distributions......... 1,378,409 13,691,911 2,237,907 21,843,278
Shares redeemed........ (4,749,432) (47,062,068) (4,512,995) (43,708,022)
---------- ------------ ---------- ------------
Net increase........... 15,305,910 152,196,842 24,281,399 234,457,225
---------- ------------ ---------- ------------
Ending balance......... 63,616,624 $620,266,928 48,310,714 $468,070,086
---------- ------------ ---------- ------------
---------- ------------ ---------- ------------
</TABLE>

<TABLE>
<CAPTION>
EMERGING MARKETS FUND
------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1996 DECEMBER 31, 1995
---------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
Beginning balance......... 4,968,891 48,282,697 3,180,297 $ 31,449,474
--------- ----------- ---------- ------------
Shares sold............... 3,982,363 41,323,363 2,699,458 25,099,840
Shares issued in
reinvestment of dividends
and distributions........ 72,065 732,182 231,369 2,172,548
Shares redeemed........... (690,480) (7,041,117) (1,142,233) (10,439,165)
--------- ----------- ---------- ------------
Net increase.............. 3,363,948 35,014,428 1,788,594 16,833,223
--------- ----------- ---------- ------------
Ending balance............ 8,332,839 $83,297,125 4,968,891 $ 48,282,697
--------- ----------- ---------- ------------
--------- ----------- ---------- ------------
</TABLE>

<TABLE>
<CAPTION>
NEW YORK MUNICIPAL FUND
----------------------------------------------
SIX MONTHS ENDED PERIOD ENDED
JUNE 30, 1996 DECEMBER 31, 1995
---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- --------- -----------
<S> <C> <C> <C> <C>
Beginning balance.......... 1,195,830 $12,210,277 4 $ 40
--------- ----------- --------- -----------
Shares sold................ 818,910 8,472,045 1,507,243 15,433,921
Shares issued in
reinvestment of dividends
and distributions......... 19,774 204,043 19,264 198,979
Shares redeemed............ (209,453) (2,191,177) (330,681) (3,422,663)
--------- ----------- --------- -----------
Net increase............... 629,231 6,484,911 1,195,826 12,210,237
--------- ----------- --------- -----------
Ending balance............. 1,825,061 $18,695,188 1,195,830 $12,210,277
--------- ----------- --------- -----------
--------- ----------- --------- -----------
</TABLE>

<TABLE>
<CAPTION>
LATIN AMERICA FUND
---------------------
PERIOD ENDED
JUNE 30, 1996
---------------------
SHARES AMOUNT
--------- ----------
<S> <C> <C>
Beginning balance....................................... 2 $ 20
--------- ----------
Shares sold............................................. 459,780 4,751,995
Shares issued in reinvestment of net investment
income................................................. 394 3,815
--------- ----------
Net increase............................................ 460,174 4,755,810
--------- ----------
Ending balance.......................................... 460,176 $4,755,830
--------- ----------
--------- ----------
</TABLE>

In connection with the transfer of assets of the High Yield Fund described in
Note 1, $4,736,468 was credited to unrealized appreciation, representing
unrealized appreciation on the portfolio securities received from the
partnership on the transfer date.

5. DERIVATIVE INSTRUMENTS. The Funds may invest in various financial instruments
including positions in forward currency contracts, currency swaps and purchased
foreign currency options. The Funds enter into such contracts for the purpose of
hedging exposure to changes in foreign currency exchange rates on their
portfolio holdings.

Each of the Funds is also permitted to enter into swap agreements to manage
interest rate or currency exposure. Swap agreements involve the commitment to
exchange with another party cash flows which are based upon the application of
interest rates, currency movements or other financial indices to a notional
principal amount. Gains and losses associated with currency swap transactions
entered into by the Emerging Markets Fund are included in realized gains and
losses on foreign currency transactions.

A forward foreign exchange contract is a commitment to sell or buy a foreign
currency at a future date at a negotiated exchange rate. The Fund bears the
market risk which arises from possible changes in foreign exchange values. Risks
may arise from the potential inability of counterparties to meet the terms of
their contracts and from unanticipated movements in the value of the foreign
currency relative to the U.S. dollar. Forward foreign exchange contracts may
involve market or credit risk in excess of the amounts reflected on the Fund's
statement of assets and liabilities.

The gain or loss from the difference between the cost of original contracts and
the amount realized upon the closing of such contracts is included in net
realized gain on foreign exchange. Fluctuations in the value of forward
contracts held at June 30, 1996 are recorded for financial reporting purposes as
unrealized gains and losses by the Funds.

31
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- -----------------------------------------------------------------------------

The tables below indicate the High Yield Fund's and Emerging Markets Fund's
outstanding forward currency contract positions at June 30, 1996.

HIGH YIELD FUND

<TABLE>
<CAPTION>
VALUE ON
ORIGI- VALUE AT
CONTRACT MATURITY NATION JUNE 30, UNREALIZED
CURRENCY AMOUNTS DATE DATE 1996 APPRECIATION
----------- ----------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
SELL CAD $(3,652,000) 8-22-96 $(2,692,733) $2,678,260 $ 14,473
</TABLE>

EMERGING MARKETS FUND

<TABLE>
<CAPTION>
VALUE ON UNREALIZED
ORIGI- VALUE AT APPRECIATION
CONTRACT MATURITY NATION JUNE 30, (DEPREC-
CURRENCY AMOUNTS DATE DATE 1996 IATION)
----------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
SELL DEM $ (105,000) 7-25-96 $ (71,361) $ (69,003) $ 2,358
SELL DEM (2,385,000) 7-25-96 (1,629,655) (1,567,350) 62,305
SELL DEM (1,280,000) 8-23-96 (849,370) (842,662) 6,708
SELL DEM (2,696,000) 8-23-96 (1,772,518) (1,774,858) (2,340)
SELL DEM (1,025,000) 8-23-96 (677,015) (674,788) 2,227
SELL DEM (1,795,000) 8-23-96 (1,178,595) (1,181,702) (3,107)
SELL DEM (2,150,000) 8-23-96 (1,441,114) (1,415,410) 25,704
-------------
NET UNREALIZED APPRECIATION............................................... $ 93,855
-------------
-------------
</TABLE>

A purchased option contract gives the Fund the right to sell (puts) or purchase
(calls) a specified amount of foreign currency at a fixed price. The maximum
exposure to loss for any purchased option is limited to the premium initially
paid for the option. Such options are reflected at value in the Fund's portfolio
of investments.

The Emerging Markets Fund also is invested in indexed securities whose value is
linked directly to changes in foreign currencies, interest rates and other
financial indices. Indexed securities may be more volatile than the underlying
instrument but the risk of loss is limited to the amount of the original
investment.

6. OTHER MATTERS. The Emerging Markets Fund, the Latin America Total Return Fund
and the High Yield Fund invest in obligations of foreign entities and securities
denominated in foreign currencies that involve risk not typically involved in
domestic investments. Such risks include fluctuations in foreign exchange rates,
ability to convert proceeds into U.S. dollars, less publicly available
information about foreign financial instruments, less liquidity resulting from
substantially less trading volume, more volatile prices and generally less
government supervision of foreign securities markets and issuers.

32
<PAGE>
THE OFFITBANK INVESTMENT FUND, INC.

- -----------------------------------------------------------------------------

OFFICERS AND DIRECTORS
Morris W. Offit
CHAIRMAN OF THE BOARD, PRESIDENT AND
DIRECTOR

Edward J. Landau
DIRECTOR

The Very Reverend
James Parks Morton
DIRECTOR

Dr. Wallace Mathai-Davis
SECRETARY AND TREASURER

John J. Pileggi
ASSISTANT TREASURER

Joan V. Fiore
ASSISTANT SECRETARY

Sheryl Hirschfeld
ASSISTANT SECRETARY

Gordon Forrester
ASSISTANT TREASURER

INVESTMENT ADVISOR
OFFITBANK
520 Madison Avenue
New York, NY 10022-4213

DISTRIBUTOR
OFFIT Funds Distributor, Inc.
237 Park Avenue
New York, NY 10017

CUSTODIAN
The Chase Manhattan Bank, N.A.
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245

LEGAL COUNSEL
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017-3909

ADMINISTRATOR, TRANSFER AND DIVIDEND DISBURSING
AGENT
Furman Selz LLC
230 Park Avenue
New York, NY 10169
<PAGE>
The OFFITBANK Investment Fund, Inc.
237 Park Avenue Suite 910 New York NY 10017
212 758 9600