(NOAH FUND LOGO)
1-800-794-6624
1-800-794-NOAH
SEMI-ANNUAL REPORT
APRIL 30, 1997
THE NOAH FUND
A PORTFOLIO OF THE NOAH INVESTMENT GROUP, INC.
(NOAH FUND LOGO)
June 12, 1997
Dear Shareholder:
Thank you for your confidence in and, therefore, investment in the NOAH FUND. We
are proud to announce the results of operations for the period ending April 30,
1997.
The NOAH FUND, which started investing on May 17, 1996, has obtained a 20.97%
return from the Fund's commencement of operations through April 30, 1997. This
year from January 1st to April 30th, the NOAH FUND was up 12.41%, while the
NASDAQ Composite Index was down 1.46% and the S&P 500 was up 9.36%. So the NOAH
FUND beat the S&P 500 by 3.05% and the NASDAQ Composite Index by 13.87%.
The NOAH FUND's sub-advisor, Rittenhouse Financial Services, Inc. generally
follows, for its clients, a philosophy of Large Cap Growth with low risk. NOAH
FUND is managed with this same philosophy. Rittenhouse has been ranked by PIPER
(Pension Investment Performance Evaluation Report)1<F1> as the NUMBER ONE Large
Cap Growth stock investment advisor out of 70 such advisors, when taking risk
into consideration for the period of January 1983 to December 31, 1996. We are
fortunate indeed to have Rittenhouse actively involved with the management of
the NOAH FUND portfolio.
Since it's inception on May 17, 1996, the NOAH FUND has had a total return to
May 31, 1997 of 26.79% and from January 1, 1997, the NOAH FUND is up 17.82%.
This means that if you had invested $10,000 on May 17, 1996 it would now be
worth $12,679, or if invested on January 1, 1997, it would be worth
$11,702.2<F2>
Your management company charges a 1% fee and is proud of its commitment of
donating 10% of its 1% management fee to missions as a charitable contribution.
This past year World Vision, Inc. and Campus Crusade for Christ International,
Inc. were the recipients. Naturally, this is from the management company not
---
from the FUND so it has no effect on the monetary value of your investment.
We are grateful to be able to serve you and believe our Large Cap Low Risk
Growth Stock strategy will continue to bring excellent results with very low
risk. We are happy to have you as an investor and hope to retain your confidence
by producing such results over the long term with a minimum of risk. We want you
---------
to know that you can check the NOAH FUND net asset value each evening after 8
P.M. Eastern Time by calling 1-800-794-NOAH then pressing 2 when the voice comes
on. For the NOAH FUND website, which is under construction, you will be able to
get it on the internet at http:\\www.NOAHFUND.com.
For those of you who did not invest as much as you could, we are disappointed
that our excellent results did not fully benefit you. However, all is not lost.
There is no time like the present to get involved even on a dollar cost
averaging basis.3<F3> If you need to know about anything further, please call
(610)651-0460.
Very truly yours,
/s/ William L. Van Alen, Jr.
William L. Van Alen, Jr.
President
NOAH FUND
1.<F1> PIPER is a joint venture formed by Rogers, Casey and Associates, Inc. of
Darien Connecticut and Crain Communications, Inc. publisher of Pensions and
Investments Magazine to track investment managers.
2.<F2> Past performance is, of course, no guarantee of future results. An
investor's investment return and principal value will fluctuate so that an
investor's shares, when redeemed, may be more or less than their original cost.
3.<F3> Dollar cost averaging is putting money in over a period of time in equal
monthly installments. By always investing the same amount, you will be
purchasing more shares when the price is low and fewer shares when the price is
high.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
ASSETS:
Investments, at value (cost $509,165) $591,682
Deferred organization charges
(net of amortization) 7,137
Receivable from Manager 61,675
Dividends receivable 602
Interest receivable 119
Other assets 6,424
--------
Total Assets 667,639
--------
LIABILITIES:
Accrued expenses and other liabilities 74,858
--------
NET ASSETS $592,781
========
NET ASSETS CONSIST OF:
Capital stock $507,675
Accumulated undistributed net investment income 182
Accumulated undistributed net realized gain
on investments 2,407
Net unrealized appreciation on investments 82,517
--------
Total Net Assets $592,781
========
Shares outstanding (500,000,000
shares of $0.001 par value authorized) 49,181
Net Asset Value, Redemption Price and
Offering Price Per Share $12.05
========
See notes to the financial statements.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
INVESTMENT INCOME:
Dividend income $ 3,693
Interest income 372
-------
Total investment income 4,065
-------
EXPENSES:
Management fee 2,475
Administration fee 12,396
Shareholder servicing and accounting costs 20,332
Custody fees 1,688
Federal and state registration 7,595
Professional fees 6,447
Amortization of deferred organization charges 1,151
Reports to shareholders 1,984
Distribution expense 402
Other 1,193
-------
Total expenses before reimbursement 55,663
Less: Reimbursement from Manager (51,331)
-------
Net Expenses 4,332
-------
NET INVESTMENT LOSS (267)
-------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments 2,256
Change in unrealized appreciation on investments 67,201
-------
Net realized and unrealized
gain on investments 69,457
-------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $69,190
=======
See notes to the financial statements.
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS MAY 17, 1996(1)<F4>
ENDED THROUGH
APRIL 30, 1997 OCTOBER 31, 1996
-------------- ----------------
(UNAUDITED)
OPERATIONS:
Net investment income (loss) $ (267) $ 854
Net realized gain on investments 2,256 151
Change in unrealized appreciation
on investments 67,201 15,316
-------- --------
Net increase in net assets
from operations 69,190 16,321
-------- --------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 130,400 449,558
Shares issued to holders in
reinvestment of dividends 1,662 --
Cost of shares redeemed (72,487) --
-------- --------
Net increase in net assets from
capital share transactions 59,575 449,558
-------- --------
DISTRIBUTIONS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME (1,863) --
-------- --------
TOTAL INCREASE IN NET ASSETS 126,902 465,879
-------- --------
NET ASSETS:
Beginning of period 465,879 0
-------- --------
End of period (including
undistributed net investment
income of $182 and $1,712,
respectively) $592,781 $465,879
======== ========
(1)<F4>Commencement of operations.
See notes to the financial statements.
FINANCIAL HIGHLIGHTS
SIX MONTHS MAY 17, 1996(1)<F5>
ENDED THROUGH
APRIL 30, 1997 OCTOBER 31, 1996
-------------- ----------------
(UNAUDITED)
PER SHARE DATA:
Net asset value, beginning of period $10.59 $10.00
Income from investment operations:
Net investment income (loss) (0.01)(2)<F6> 0.04
Net realized and unrealized gain
on investments 1.51 0.55
------ ------
Total from investment operations 1.50 0.59
------ ------
Less distributions from net investment income (0.04) --
------ ------
Net asset value, end of period $12.05 $10.59
====== ======
Total Return (3)<F7> 14.23% 5.90%
Supplemental data and ratios:
Net assets, end of period $592,781 $465,879
Ratio of expenses to average
net assets (4)<F8>(5)<F9> 1.75% 1.42%
Ratio of net investment income (loss)
to average net assets (4)<F8>(5)<F9> (0.11%) 0.86%
Portfolio turnover rate 24.72% 21.61%
Average commission rate paid $0.2470 $0.2173
(1)<F5> Commencement of operations.
(2)<F6> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the period.
(3)<F7> Not annualized.
(4)<F8> Annualized.
(5)<F9> Without expense waivers of $51,331 and $47,931 for the periods ending
April 30, 1997 and October 31, 1996, respectively, the ratio of net expenses
to average net assets would have been 22.49% and 49.81% and the ratio of net
investment (loss) to average net assets would have been (20.84)% and (47.52)%.
See notes to the financial statements.
SCHEDULE OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
NUMBER
OF SHARES MARKET VALUE
- --------- -------------
COMMON STOCKS -- 98.1%
BANKING -- 5.1%
500 NationsBank Corporation $ 30,188
--------
BUSINESS SERVICES -- 8.3%
700 Automatic Data Processing, Inc. 31,675
500 First Data Corporation 17,250
--------
48,925
--------
COSMETICS & SOAP -- 14.4%
200 Colgate-Palmolive Company 22,200
300 Gillette Company 25,500
300 The Procter & Gamble Company 37,725
--------
85,425
--------
DRUGS -- 22.4%
700 Abbott Laboratories 42,700
500 Merck & Co., Inc. 45,250
300 Pfizer, Inc. 28,800
200 Schering-Plough Corporation 16,000
--------
132,750
--------
ELECTRICAL EQUIPMENT -- 6.9%
800 Emerson Electric Company 40,600
--------
ELECTRONICS -- 4.4%
500 Hewlett-Packard Company 26,250
--------
ENTERTAINMENT & LEISURE -- 4.5%
500 McDonald's Corporation 26,812
--------
FINANCIAL SERVICES -- 4.2%
600 Fannie Mae 24,675
--------
FOOD & BEVERAGES -- 10.6%
400 The Coca-Cola Company 25,450
200 CPC International, Inc. 16,525
600 PepsiCo, Inc. 20,925
--------
62,900
--------
INSURANCE -- 7.2%
200 American International Group, Inc. 25,700
100 General Re Corporation 16,725
--------
42,425
--------
OIL-INTERNATIONAL -- 3.0%
100 Royal Dutch Petroleum Company - NYS 18,025
--------
RETAIL -- 2.9%
300 Home Depot, Inc. 17,400
--------
SAVINGS & LOAN -- 2.7%
500 Federal Home Loan Mortgage Corporation 15,938
--------
TELECOMMUNICATIONS -- 1.5%
200 GTE Corporation 9,175
--------
Total Common Stock (Cost $498,971) 581,488
--------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 1.7%
VARIABLE RATE DEMAND NOTES -- 1.7%
$10,094 Johnson Controls, Inc. 10,094
100 Wisconsin Electric Power Co. 100
--------
Total Short-Term Investments (Cost $10,194) 10,194
--------
Total Investments -- 99.8% (Cost $509,165) 591,682
--------
Other Assets and Liabilities -- 0.2% 1,099
--------
TOTAL NET ASSETS -- 100.0% $592,781
========
NYS - New York Shares
See notes to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Noah Investment Group, Inc. (the "Company") was incorporated under the laws
of the state of Maryland on December 16, 1992, and consists solely of The Noah
Fund (the "Fund"). The Company is registered as a no-load, open-end diversified
management investment company of the series type under the Investment Company
Act of 1940 (the "1940 Act"). The principle investment objective of the Fund is
to seek capital appreciation consistent with the preservation of capital, as
adjusted for inflation, and current income. The Fund will not invest in and may
not acquire the securities of businesses that are engaged, directly or through
subsidiaries, in the alcoholic beverage, tobacco, pornographic and gambling
industries or companies in the business of aborting life before birth. The Fund
became effective with the SEC on May 10, 1996 and commenced operations on May
17, 1996.
The costs incurred in connection with the organization, initial registration and
public offering of shares, aggregating $17,797, have been paid by the Manager
and will be reimbursed by the Fund. These costs are being amortized over the
period of benefit, but not to exceed sixty months from the Fund's commencement
of operations. The proceeds of any redemption of the initial shares (seed money)
by the original stockholder or any transferee will be reduced by a pro-rata
portion of any then unamortized organizational expenses in the same proportion
as the number of initial shares being redeemed bears to the number of initial
shares outstanding at the time of such redemption. On December 12, 1996, one of
the original stockholders redeemed their shares which consisted of 50 percent of
the seed money. This stockholder's proceeds were reduced by 50 percent of the
unamortized deferred organization asset ($15,756 at that time). The unamortized
deferred organization asset was reduced to $7,878 after the adjustment. The
adjusted balance will be amortized over the remaining amortization period, not
to exceed sixty months from the Fund's commencement of operations.
The following is a summary of significant accounting policies consistently
followed by the Fund.
a) Investment Valuation -- Common stocks and other equity-type securities
listed on a securities exchange are valued at the last quoted sales price on the
day of the valuation. Price information on listed stocks is taken from the
exchange where the security is primarily traded. Securities that are listed on
an exchange but which are not traded on the valuation date are valued at the
most recent bid prices. Unlisted securities for which market quotations are
readily available are valued at the latest quoted bid price. Other assets and
securities for which no quotations are readily available are valued at fair
value as determined in good faith by the Investment Manager under the
supervision of the Board of Directors. Short-term instruments (those with
remaining maturities of 60 days or less) are valued at amortized cost, which
approximates market.
b) Federal Income Taxes -- No provision for federal income taxes has been made
since the Fund has complied to date with the provisions of the Internal Revenue
Code applicable to regulated investment companies and intends to so comply in
the future and to distribute substantially all of its net investment income and
realized capital gains in order to relieve the Fund from all federal income
taxes.
c) Distributions to Shareholders -- Dividends from net investment income and
distributions of net realized capital gains, if any, will be declared and paid
at least annually. Income and capital gain distributions are determined in
accordance with income tax regulations that may differ from generally accepted
accounting principles. The Fund's primary financial reporting and tax difference
relates to the differing treatment for the amortization of deferred organization
expenses. Permanent financial reporting and tax differences are reclassified to
capital stock.
d) Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
e) Other -- Investment and shareholder transactions are recorded no later than
the first business day after the trade date. The Fund determines the gain or
loss realized from the investment transactions by comparing the original cost of
the security lot sold with the net sales proceeds. Dividend income is recognized
on the ex-dividend date or as soon as information is available to the Fund, and
interest income is recognized on an accrual basis.
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund for the six months ended April 30, 1997, were
as follows:
Shares sold 11,717
Shares issued to holders in
reinvestment of dividends 151
Shares redeemed (6,688)
-------
Net increase 5,180
=======
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the six months ended April 30, 1997, were as
follows:
Purchases:
U.S. Government $ 6,885
Other 176,680
Sales:
U.S. Government 3,682
Other 118,959
At April 30, 1997, gross unrealized appreciation and depreciation of investments
for tax purposes were as follows:
Appreciation $84,865
(Depreciation) (3,491)
-------
Net appreciation on investments $81,374
=======
At April 30, 1997, the cost of investments for federal income tax purposes was
$510,308.
4. AGREEMENTS
The Fund has entered into a Management Agreement with Polestar Management
Company ("Polestar Management"). Pursuant to its Management Agreement with the
Fund, the Manager is entitled to receive a fee, calculated daily and payable
monthly, at the annual rate of 1.00% as applied to the Fund's daily net assets.
The Manager voluntarily agrees to reimburse its management fee and other
expenses to the extent that total operating expenses (exclusive of interest,
taxes, brokerage commissions and other costs incurred in connection with the
purchase or sale of portfolio securities, and extraordinary items) exceed the
annual rate of 1.75% of the net assets of the Fund, computed on a daily basis.
This voluntary reimbursement shall be in effect for a period of one year from
the Fund's commencement of operations and may be terminated thereafter under the
approval of the Board of Directors.
Rittenhouse Financial Services, Inc. ("Rittenhouse") has been retained by
Polestar Management to serve as the Fund's sub-investment adviser. In
recognition of the religious and moral practices of the Fund, Rittenhouse will
not charge a sub-investment adviser fee until such time as the net assets of the
Fund reach $100 million. Thereafter, an annual fee of 0.25% of the Fund's
average daily net assets will be charged by Rittenhouse on assets in excess of
$100 million. The Fund will have no responsibility to pay any such fees to
Rittenhouse.
The Fund has adopted a distribution plan (the "Distribution Plan"), pursuant to
which the Fund may incur distribution expenses of up to 0.25% per annum of the
Fund's average daily net assets. The Distribution Plan provides that the Fund
may finance activities which are primarily intended to result in the sale of the
Fund's shares, including but not limited to, advertising, printing of
prospectuses and reports for other than existing shareholders, preparation and
distribution of advertising materials and sales literature, and payments to
dealers and shareholder servicing agents. The Distribution Plan expired on March
1, 1997 as it was not renewed by the Board of Directors of the Fund. At April
30, 1997, the amount accrued but unpaid pursuant to the Distribution Plan
amounted to $402.
Firstar Trust Company, a subsidiary of Firstar Corporation, a publicly held bank
holding company, serves as custodian, transfer agent, administrator and
accounting services agent for the Fund.
5. RELATED PARTY TRANSACTIONS
Martin V. Miller, Esq., an Officer of the Fund, furnishes legal services to the
Fund. For the six months ended April 30, 1997, the Fund incurred $2,480 for such
services.
Investment and Management Services
POLESTAR MANAGEMENT COMPANY
RITTENHOUSE FINANCIAL SERVICES, INC.
Custodian
FIRSTAR TRUST COMPANY
Transfer, Dividend Disbursing
And Accounting Services Agent
FIRSTAR TRUST COMPANY
