[LOGO]
NOAH FUND
1-800-794-6624
1-800-794-NOAH
SEMI-ANNUAL REPORT
APRIL 30, 2000
<PAGE>
May 2000
Dear Fellow Shareholder:
Thank you for your confidence in and, therefore, investment in the NOAH FUND. We
are pleased to present the Fund's investment results and semi-annual report for
the period ending April 30, 2000.
Since the Fund's inception on May 17, 1996, to April 30, 2000, the NOAH FUND
obtained a cumulative total return of 178.24%. The Fund's annualized total
returns, which assume reinvestment of dividends, for the one- and three-year
periods ending April 30, 2000, were 17.11% and 32.00%, respectively.
In recent months, the stock market has been subject to increased volatility, in
large part, we believe, by repeated increases in the discount rate by the
Federal Reserve Board. Nevertheless, the large capitalization companies in which
the Fund invests generally have positive earnings reports and the resources and
management depth to take advantage of new opportunities in turbulent markets. We
continue to believe that, despite the current volatility in the market, the Fund
remains a good core holding for investors who seek long-term growth with lower
than average long-term risk.
We are also happy to report that the NOAH FUND is gaining recognition among
investors and in the media. As of April 30, 2000, net assets in the NOAH FUND
had grown to $18.3 million, and the Fund had more than 1,500 shareholders of
record. We enjoyed meeting some of you at our NOAH FUND booth at the recent CNBC
Investing Conference in Boston and hope that you have read the on-line article,
"Go With God and Cisco" at www.CNNfn.com. By virtue of the NOAH FUND's total
return for the three year period ending March 31, 2000, CNNfn ranked the Fund #1
among faith-based funds.* If you would like to read the article, you can visit
NOAH's website, www.noahfund.com, where the article is posted, or call us at
610-561-0460, and we will mail you a copy. The NOAH FUND is now listed in the
financial pages of many national newspapers, including The Wall Street Journal
and Barron's. This will allow you to better track your investment in the Fund by
referring to the Fund's ticker symbol, NOAHX.
Polestar Management Company, the NOAH FUND's investment adviser, is proud of its
commitment to donate 10% of its 1% management fee to missions, discipleship and
needs of the poor, as a charitable contribution. The 1999 tithe went to World
Vision, Inc., Campus Crusade for Christ International, Inc., Urban Family
Council, the Salvation Army, the Modesto Pregnancy Center and Prison Fellowship
Ministries. Because the adviser, NOT the Fund, makes this charitable
contribution it has no effect on the monetary value of your investment.
We thank you again for your continued confidence in the NOAH FUND. Please call
me with any questions you may have at 610-651-0460.
In Jesus' Name,
/S/ WILLIAM L. VAN ALEN, JR.
----------------------------
William L. Van Alen, Jr.
President
<PAGE>
* "Go with God and Cisco," CNNfn.com (April 21, 2000). CNNfn's source for its
performance data was Weisenberger, a subsidiary of Thomson Financial.
Past performance is no guarantee of future results. Investment return and
principal value of mutual funds will vary with market conditions. When you
redeem your shares, they may be worth more or less than when you purchased them.
Investing in socially responsible companies is subject to risk such as
competitive industry conditions limited earnings history and a reliance on one
or a limited number if products. For a complete discussion of risks, fees and
expenses associated with investing in the Fund, please obtain a copy of the
Fund's prospectus by calling 1-800-794-6624. You should read it carefully before
you invest or send money. NOAH FUND is distributed by AmeriMutual Fund
Distributors, Inc.
3
<PAGE>
<TABLE>
<CAPTION>
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Market
Shares Value (Note 1)
------------------------
COMMON STOCKS - 91.19%
ADVERTISING - 0.84%
<S> <C> <C>
Interpublic Group of Companies, Inc. ........... 1,400 $ 57,400
Omnicom Group, Inc. ............................ 900 81,956
TMP Worldwide, Inc.* ........................... 200 13,075
----------
152,431
----------
AEROSPACE - 0.14%
United Technologies Corporation ................ 400 24,875
----------
AIRLINES - 0.25%
Southwest Airlines Co. ......................... 2,100 45,544
----------
AUTOMOTIVE & RELATED - 0.17%
Harley Davidson, Inc. .......................... 800 31,850
----------
BROADCASTING - 0.34%
RF Micro Devices, Inc.* ........................ 600 62,437
----------
COMMERCIAL SERVICES - 0.21%
Concord EFS, Inc.* ............................. 1,100 24,612
Convergys Corporation* ......................... 200 8,800
MarchFirst, Inc.* .............................. 259 5,520
----------
38,932
----------
COMMUNICATION SERVICES - 0.05%
Adelphia Communications Corporations* .......... 200 9,913
----------
COMPONENTS - 3.03%
JDS Uniphase Corp.* ............................ 3,650 378,688
Metromedia Fiber Network, Inc.* ................ 1,200 37,050
Microchip Technology, Inc.* ................... 400 24,825
Millipore Corporation .......................... 400 28,675
PE Biosystems Group ............................ 1,400 84,000
----------
553,238
----------
COMPUTER HARDWARE - 7.23%
Dell Computer Corporation ...................... 5,930 297,241
EMC Corporation* ............................... 1,100 152,831
Hewlett-Packard Company ........................ 1,400 189,000
Linear Technology Corp.* ....................... 1,400 79,975
Sun Microsystems, Inc.* ........................ 3,350 307,991
Symbol Technologies, Inc. ...................... 1,200 66,900
Veritas Software Corp.* ........................ 2,100 225,258
----------
1,319,196
----------
See notes to financial statements
4
<PAGE>
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Market
Shares Value (Note 1)
----------------------
COMPUTER SERVICES - 5.19%
Bea Systems, Inc.* ............................. 1,800 $ 86,850
CMGI, Inc.* .................................... 950 67,688
Comverse Technology, Inc.* ..................... 1,890 168,564
First Data Corporation ......................... 200 9,737
Go2Net, Inc.* .................................. 1,800 107,100
InfoSpace.com, Inc.* ........................... 650 46,678
Lycos, Inc.* ................................... 300 13,950
Mercury Interactive Corporation* ............... 1,800 162,000
SEI Investments Company ........................ 200 23,875
Safeguard Scientifics, Inc.* ................... 300 12,525
VeriSign, Inc.* ................................ 470 65,506
Yahoo!, Inc.* .................................. 1,400 182,350
----------
946,823
----------
COMPUTER SOFTWARE - 14.88%
Adobe Systems, Inc. ............................ 400 48,375
America Online, Inc.* .......................... 7,560 452,182
BroadVision, Inc.* ............................. 3,900 171,356
Computer Associates International, Inc. ........ 1,400 78,138
Exodus Communications, Inc.* ................... 800 70,750
I2 Technologies, Inc.* ......................... 400 51,700
Inktomi Corp.* ................................. 500 76,969
Intuit, Inc.* .................................. 600 21,563
Micromuse, Inc.* ............................... 550 53,969
Microsoft Corporation* ......................... 12,300 857,925
Oracle Corporation* ............................ 8,950 715,441
Rational Software Corporation* ................. 1,000 85,125
Scient Corporation* ............................ 100 5,400
Symantec Corporation* .......................... 200 12,487
Vignette Corporation* .......................... 300 14,456
----------
2,715,836
----------
COMPUTER SYSTEMS - 0.34%
Brocade Communication Systems, Inc.* ........... 200 24,800
Redback Networks, Inc.* ........................ 200 15,875
VerticalNet, Inc.* ............................. 400 21,600
----------
62,275
----------
DIVERSIFIED CONGLOMERATES - 1.08%
Corning, Inc. .................................. 1,000 197,500
----------
ELECTRONIC EQUIPMENT - 1.07%
Maxim Integrated Products, Inc.* ............... 1,300 84,256
Motorola, Inc. ................................. 412 49,054
Vitesse Semiconductor Corporation* ............. 920 62,617
----------
195,927
----------
See notes to financial statements
5
<PAGE>
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Market
Shares Value (Note 1)
-----------------------
ELECTRONIC-SEMICONDUCTORS - 20.74%
Altera Corporation* ............................ 700 $ 71,575
Analog Devices, Inc.* .......................... 2,000 153,625
Applied Materials, Inc.* ....................... 3,660 372,634
Applied Micro Circuits Corporation* ............ 2,200 283,525
Atmel Corporation* ............................. 800 39,150
Broadcom Corporation Cl-A* ..................... 680 117,215
Intel Corporation .............................. 10,600 1,344,213
KLA-Tencor Corporation* ........................ 600 44,925
LSI Logic Corporation* ......................... 800 50,000
Micron Technology, Inc.* ....................... 100 13,925
Novellus Systems, Inc.* ........................ 800 53,350
PMC-Sierra, Inc.* .............................. 2,050 393,344
QLogic Corporation* ............................ 1,600 160,500
SDL, Inc.* ..................................... 800 156,000
Texas Instruments, Inc. ........................ 2,100 342,037
Xilinx, Inc.* .................................. 2,600 190,450
----------
3,786,468
----------
ENTERTAINMENT & LEISURE - 0.44%
Liberty Media Group Cl A* ...................... 1,600 79,900
----------
FINANCIAL SERVICES - 2.24%
American Express Company ....................... 700 105,044
Charles Schwab Corporation ..................... 1,900 84,550
Citigroup, Inc. ................................ 2,012 119,588
MBNA Corporation ............................... 1,150 30,547
Paychex, Inc. .................................. 1,000 52,625
Providian Financial Corporation ................ 185 16,292
----------
408,646
----------
FOOD & BEVERAGE - 0.92%
Keebler Foods Co. .............................. 200 6,288
Pepsico, Inc. .................................. 3,200 117,400
SYSCO Corporation .............................. 1,200 45,150
----------
168,838
----------
MACHINERY, GENERAL/INDUSTRIAL - 0.25%
Zebra Technologies Corporation* ................ 800 45,600
---------
MEDICAL - DRUGS - 3.83%
IVAX Corporation* .............................. 450 12,319
Merck & Co, Inc. ............................... 3,930 273,135
Pfizer, Inc. ................................... 9,800 412,825
----------
698,279
----------
See notes to financial statements
6
<PAGE>
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Market
Shares Value (Note 1)
-----------------------
MEDICAL PRODUCTS - 2.17%
Affymetrix, Inc.* .............................. 200 $ 27,012
Allergan, Inc. ................................. 1,100 64,762
Amgen, Inc.* ................................... 2,000 112,000
Biomet, Inc. ................................... 600 21,413
Human Genome Sciences, Inc.* ................... 1,600 122,500
Medtronic, Inc. ................................ 925 48,042
----------
395,729
----------
NETWORKING PRODUCTS - 8.67%
3Com Corporation* .............................. 500 19,719
Adaptec, Inc.* ................................. 200 5,400
Cisco Systems, Inc.* ........................... 20,768 1,439,806
Network Appliances, Inc.* ...................... 1,600 118,300
----------
1,583,225
----------
OIL, ENERGY & NATURAL GAS - 0.04%
BJ Services Co.* ............................... 100 7,025
-----------
PHARMACEUTICALS - 0.85%
Andrx Corporation* ............................. 200 10,237
Forest Laboratories, Inc.* ..................... 400 33,625
Millennium Pharmaceuticals, Inc.* .............. 1,400 111,125
----------
154,987
----------
PIPELINES - 0.29%
Dynegy, Inc. Cl A .............................. 69 4,515
Enron Corporation .............................. 700 48,781
----------
53,296
----------
PRINTING - 0.19%
Electronics for Imaging, Inc.* ................. 200 10,450
Valassis Communications, Inc.* ................. 700 23,844
----------
34,294
----------
RETAIL STORES - 8.64%
BJ's Wholesale Club, Inc.* ..................... 900 31,894
Bed Bath & Beyond, Inc.* ....................... 900 33,019
CVS Corporation ................................ 1,850 80,475
Circuit City Stores- Circuit City Group ........ 400 23,525
Costco Wholesale Corporation* .................. 2,000 108,125
Dollar Tree Stores, Inc.* ...................... 400 23,150
Family Dollar Stores, Inc. ..................... 400 7,625
The Gap, Inc. .................................. 1 18
Home Depot, Inc. ............................... 7,850 440,091
Kohl's Corporation* ............................ 800 38,400
Lowe's Companies, Inc. ......................... 1,400 69,300
See notes to financial statements
7
<PAGE>
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Market
Shares Value (Note 1)
------------------------
RETAIL STORES - 8.64% (con't)
Ross Stores, Inc. .............................. 2,400 $ 49,800
Staples, Inc.* ................................. 1,175 22,398
Tandy Corporation .............................. 1,300 74,100
Tiffany & Co. .................................. 100 7,269
Wal-Mart Stores, Inc. .......................... 10,250 567,594
----------
1,576,783
----------
TELECOMMUNICATIONS - 7.10%
ADC Telecommunications, Inc.* .................. 1,800 109,350
Advanced Fibre Communications, Inc.* ........... 700 31,981
Allegiance Telecom, Inc.* ...................... 600 42,450
Level 3 Communications, Inc.* .................. 1,250 111,250
MCI WorldCom, Inc. ............................. 5,740 260,811
Nextel Communications, Inc. - Cl A* ............ 1,100 120,381
Nortel Networks Corporation .................... 1,600 181,200
QUALCOMM, Inc.* ................................ 2,400 260,250
SBC Communications, Inc. ....................... 2,950 129,247
VoiceStream Wireless Corporation* .............. 400 39,600
Western Wireless Corporation* .................. 200 9,938
----------
1,296,458
----------
TOTAL COMMON STOCKS (Cost $13,164,377) ......... 16,646,305
----------
MISCELLANEOUS ASSETS - 7.97%
Evergreen Money Market Trust Cl Y
(Cost $1,455,469) 1,455,469 1,455,469
----------
TOTAL INVESTMENTS (Cost $14,619,846) ...... 99.17% 18,101,774
Other Assets less Liabilities ............. 0.83% 151,875
------ ----------
NET ASSETS ................................100.00% $18,253,649
====== ==========
<FN>
* Non-income producing investment.
</FN>
See notes to financial statements
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
THE NOAH FUND
STATEMENT OF ASSETS AND LIABILITIE
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
Assets:
<S> <C>
Investments, at market
(identified cost $14,619,846) (Note 1) $ 18,101,774
Receivables:
Investment securities sold .................................. 169,024
Funds shares sold ........................................... 113,039
Dividends and interest ...................................... 4,165
Deferred organization costs (Note 1) ........................ 1,832
Prepaid expenses ............................................ 46,954
------------
Total assets ................................................ 18,436,788
------------
Liabilities:
Cash overdraft .............................................. 10,000
Payables:
Investment securities purchased ............................. 136,193
Due to advisor (Note 4) ..................................... 14,613
Accrued expenses ............................................ 22,333
------------
Total liabilities ........................................... 183,139
------------
Net Assets .................................................. $ 18,253,649
============
Net Assets Consist of:
Common stock ................................................ 727
Additional capital paid-in .................................. 15,514,216
Accumulated net investment loss ............................. (112,366)
Accumulated realized loss on investments .................... (630,856)
Net unrealized gain on investments .......................... 3,481,928
------------
Total Net Assets ............................................ $ 18,253,649
============
Share outstanding (500,000,000 shares of $0.001 par value authorized) 726,974
============
Net Asset Value, offering and redemption price per share ............ $ 25.11
============
See notes to financial statements
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
THE NOAH FUND
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
INVESTMENT INCOME:
<S> <C>
Interest ............................................................. $ 19,736
Dividends ............................................................ 20,631
-----------
Total investment income .............................................. 40,367
-----------
EXPENSES:
Management fees (Note 4) ............................................. 76,757
Administration fee ................................................... 11,729
Distribution fees (Note 4) ........................................... 19,189
Accounting fee ....................................................... 9,232
Custodian fees ....................................................... 2,418
Amortization of organizational expenses (Note 1) ..................... 881
Professional fees .................................................... 8,056
Registration fees .................................................... 9,934
Transfer agency fees ................................................. 9,232
Reports to shareholders .............................................. 1,572
Other ................................................................ 3,733
-----------
Total expenses ....................................................... 152,733
-----------
Net investment loss .................................................. (112,366)
-----------
REALIZED & UNREALIZED GAIN ON INVESTMENTS:
Net realized loss on investments ..................................... (629,183)
Net change in unrealized appreciation on investments ................. 2,330,279
-----------
Net realized & unrealized gain on investments ........................ 1,701,096
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ......................... $ 1,588,730
===========
See notes to financial statements
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
THE NOAH FUND
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
APRIL 30, 2000 OCTOBER 31, 1999
-------------- ----------------
(UNAUDITED)
Operations:
<S> <C> <C>
Net investment loss ..................... $ (112,366) $ (100,678)
Net realized gain (loss) on investments . (629,183) 739,622
Net change in unrealized appreciation
on investments ..................... 2,330,279 695,503
Net increase in net assets resulting
from operations .................... 1,588,730 1,334,447
Distributions to shareholders from:
Net realized gains ...................... (697,670) (68,298)
Capital Share Transactions:
Proceeds from shares sold ............... 7,439,989 6,727,306
Proceeds from shares issued to
holders in reinvestment of dividends 672,006 66,275
Cost of shares redeemed ................. (847,240) (552,301)
Net increase in net assets from fund
share transactions .............. 7,264,755 6,241,280
Increase in net assets .................. 8,155,815 7,507,429
Net Assets:
Beginning of period ............................. 10,097,834 2,590,405
End of period ................................... $ 18,253,649 $ 10,097,834
See notes to financial statements
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
THE NOAH FUND
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The table below sets forth financial data for a share of capital stock
outstanding throughout each period presented.
May 17, 1996(1)
Six months ended Year Ended Year Ended Year Ended through
April 30, 2000 October 31, October 31, October 31, October 31,
1999 1998 1997 1996
---------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ... $ 23.17 $ 17.31 $ 13.23 $ 10.59 $ 10.00
------- ------- -------- ------- -------
Investment Operations:
Net investment income (loss) ........... (0.19)(2) (0.13)(2) (0.10)(2) (0.01)(2) 0.04
Net realized and unrealized
gain on investments ............ 3.72 6.43 4.27 2.69 0.55
------- ------- -------- ------- -------
Total from investment operations 3.53 6.30 4.17 2.68 0.59
------- ------- -------- ------- -------
Distributions:
From net investment income ............. 0.00 0.00 0.00 (0.04) 0.00
From net realized capital gains ........ (1.59) (0.44) (0.09) 0.00 0.00
------- ------- -------- ------- -------
Total distributions ............ (1.59) (0.44) (0.09) (0.04) 0.00
------- ------- -------- ------- -------
Net asset value, end of period ......... $ 25.11 $ 23.17 $ 17.31 $ 13.23 $ 10.59
======= ======= ======== ======= =======
Total Return ........................... 16.10%(3) 37.06% 31.65% 25.41% 5.90%(3)
Ratios/supplemental data:
Net assets, end of period (in 000's) ... $18,254 $10,098 $ 2,590 $ 961 $ 466
Ratio of expenses
to average net assets(4) ....... 1.98% 2.15% 1.75% 1.75% 1.42%
Ratio of net investment loss to
average net assets(4) .......... (1.46)% (1.56)% (0.86)% (0.18)% 0.86%
Portfolio turnover rate ................ 33.46% 81.53% 66.49% 27.07% 21.61%
<FN>
(1) Commencement of operations.
(2) Net investment loss per share is calculated using ending balances prior to
the consideration of adjustments for permanent book and tax differences
(3) Not annualized
(4) Without expense waivers of $36,853, $51,285, $94,353 and $47,931 for the
periods ending October 31, 1999, 1998, 1997 and 1996, respectively, the
ratio of expenses to average net assets would have been 2.72%, 4.73%, 16.08%
and 49.81% and the ratio of net investment loss to average net assets would
have been (2.13)%, (3.85)%, (14.51)% and (47.52)%. There was no expense
waiver for the six months ended April 30, 2000.
See notes to financial statements
</FN>
</TABLE>
12
<PAGE>
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2000
(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 primary 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 Securities and Exchange Commission (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 his 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 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.
13
<PAGE>
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (continued)
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
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 additional capital
paid-in.
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 on trade date.
The Fund determines the gain or loss realized from the investment
transactions utilizing an identified cost basis. 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 were as follows:
Six Months Ended Year Ended
April 30, October 31,
2000 1999
---------------- -----------
(Unaudited)
Shares sold ............................... 293,990 307,489
Shares issued to holders in
reinvestment of dividends ......... 30,148 3,596
Shares redeemed ........................... (32,923) (24,987)
--------- ---------
Net increase .............................. 291,215 286,098
========= =========
14
<PAGE>
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (continued)
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the six months ended April 30, 2000,
were as follows:
Purchases.......... $10,821,519
Sales.............. $ 4,823,517
At April 30, 2000, gross unrealized appreciation and depreciation of investments
for tax purposes were as follows:
Appreciation....... $ 4,168,281
Depreciation....... (686,353)
------------
Net appreciation on
investments........ $ 3,481,928
============
At April 30, 2000, the cost of investments for federal income tax purposes was
$14,619,846.
4. ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
The Fund has entered into a Management Agreement with Polestar Management
Company (the "Manager"). 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 2.20% of the net assets of the Fund, computed on a daily basis.
This voluntary reimbursement may be terminated upon approval of the Board of
Directors. Prior to February 1, 1999, the Manager agreed to reimburse its
management fee and other expenses to the extent that total operating expenses
exceeded the annual rate of 1.75%.
Geewax, Terker & Company (the "sub-advisor") serves as the Fund's sub-investment
advisor. The Manager compensates the sub-advisor under the terms of a
sub-advisor agreement at a fee of $1.00 per annum until the average net assets
of the Fund exceed $20,000,000. Upon reaching that level the sub-advisor will
receive a monthly fee at the annual rate of 0.75% of the average daily net
assets in excess of $20 million to $50 million; 0.50% of such assets in excess
of $50 million to $100 million; and 0.35% of such assets in excess of $100
million.
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.
15
<PAGE>
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (continued)
APRIL 30, 2000
(UNAUDITED)
--------------------------------------------------------------------------------
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. For
the six months ended April 30, 2000, distribution fees incurred amounted to
$19,189 which is 0.25% of the Fund's average daily net assets.
Martin V. Miller, Esq., an Officer of the Fund, furnishes legal services to the
Fund. For the six months ended April 30, 2000, there were no such fees incurred
by the Fund.
Certain directors and officers of the Fund are directors and officers of the
Manager.
16
<PAGE>
INVESTMENT AND MANAGEMENT SERVICES
POLESTAR MANAGEMENT COMPANY
GEEWAX TERKER & COMPANY
CUSTODIAN
FIRST UNION NATIONAL BANK
TRANSFER, DIVIDEND DISBURSING
AND ACCOUNTING SERVICES AGENT
AMERICAND ATA SERVICES, INC.
AUDITORS
SANVILLE & COMPANY
