SEMI-ANNUAL REPORT
May 31, 1999
OAK RIDGE FUNDS, INC.
Shareholder Services
1(800) 407-7298
OAK RIDGE INVESTMENTS, LLC
Investment Adviser
OAK RIDGE FUNDS
LETTER TO SHAREHOLDERS
JULY 1999
Dear Shareholder:
For most of the last six months, the market has not been conducive for stock
pickers seeking growth opportunities at attractive earnings multiples to beat
the averages. Until April the biggest, best recognized growth stocks continued
to surge to all-time record prices, and more importantly unprecedented
multiples.
The broadening of the market in April and May was mostly limited to low P/E
cyclical stocks which have been unable to grow earnings in a low inflationary
environment. This move highlighted the valuation disparity between the high
flyers, whose years of outperformance have inflated their multiples, and high
quality slow growth leaders. At the same time the Russell 2000 enjoyed an
exceptional, albeit narrow rally fueled primarily by Internet and other "story"
stocks. A Wall Street Journal article stated that through April 23rd, the 190
stocks in the Russell 2000 that were expected to lose money were up 24.2% in
1999, while the remainder of the index was down for the year. Most small
quality growth stocks had suffered double digit declines.
Recent activity suggests this trend is reversing. Broader participation has
occurred in the current market advance. This has been particularly evident in
smaller stocks. The earnings outlook remains favorable for continued upside
surprises in small and large growth stocks, and Year 2000 fears appear to be
greatly overblown. Recognition that moderate P/E companies with above average
growth prospects are the only segment not trading at historically record
valuations appears to have finally occurred.
Oak Ridge Small Cap investors have no doubt been frustrated by the Fund's
near break-even performance over the past 1-1/2 years. The market's large-cap
bias has ignored the portfolio's approximate 30% annual earnings growth, which
has reduced the portfolio's forward P/E multiple to only 20X earnings, despite
projections for 25% earnings increases. This substantial discount is a stunning
contrast to the S&P 500, which trades at approximately 30X earnings with current
projections for 10%-12% profit growth.
The newly created Oak Ridge Large-Cap Fund also emphasizes valuation in
evaluating growth companies. After an initial negative effect on performance
due to a high percentage of cash at inception, the Fund has done well and trades
at only a 40% premium to forward earnings. Both portfolios are well balanced
with meaningful exposure to technology, healthcare and financial services.
These sectors are important growth areas, with highly favorable demographics for
the new millennium.
The market should remain volatile for the remainder of the year. It may
experience short term reactions to emotional issues including Y2K computer
concerns, the 2000 election and foreign policy. The two major issues that will
affect the market are earnings growth and interest rates. At a multiple of over
30X trailing earnings, the S&P 500 is dependent on earnings growth of over 10%
and stable interest rates. This is a tricky proposition. The strong economy
has positively impacted earnings and sent the widely followed 30 year Treasury
yield to 6%. With consumer confidence at a more than 30 year high, it is
unclear what further steps Fed Chairman Greenspan may deem necessary to disarm
inflationary concerns brought on by such perceived prosperity. Weakness in
recent housing data indicates that some impact may have already taken effect by
rising rates, and it appears another Fed adjustment will not be necessary.
Many individual investors will lose substantial sums attempting to cash in on
the Internet hysteria. Oak Ridge portfolios contain a number of well run,
profitable companies providing the backbone and infrastructure for the expanding
influence of Internet activity in our society. Ten years from now, reflecting
back to the end of the 20th century, investors will discover that a handful of
new market leaders emerged through the growth of the Internet. This group
should include AOL and Yahoo, whose businesses are solely Internet based.
However, the greatest number of "winners" will be among those that rose to the
challenge of E-commerce and expanded market share. One example is Gap Stores.
The retailer enjoys 4.6% of all apparel sales, but a disproportionately high
percentage of online sales by progressively addressing the opportunities created
through the Internet.
Current market trends favor the fundamentally sound stock picking that has
created the highly successful past performance of the Oak Ridge management team.
We appreciate your confidence and patience, and believe the strong fundamental
characteristics of our portfolios will be greatly rewarded.
Sincerely,
/s/David M. Klaskin
David M. Klaskin
Chairman
AVERAGE ANNUAL TOTAL RETURN
For the period ended May 31, 1999
Since
One Year Five Year Inception
Oak Ridge Small Cap Equity Fund
- Class A (no load)(1)<F6> (15.0)% 14.8% 14.0%
Oak Ridge Small Cap Equity Fund
- Class A (load)(1)<F6> (18.6)% 13.8% 13.1%
Oak Ridge Small Cap Equity Fund
- Class C(2)<F7> (15.6)% n/a 4.4%
(1)<F6>January 3, 1994 inception.
(2)<F7>March 1, 1997 inception
Oak Ridge Oak Ridge
Small Cap Small Cap
Equity Fund Equity Fund Russell
Class A Class A 2000
No Load Load Index
------------- ---------------- --------------
1/94 10,000 10,000 10,000
2/94 10,870 10,870 10,276
5/94 10,160 10,150 9,682
11/94 10,480 10,480 9,562
5/95 11,121 11,121 10,679
11/95 14,360 14,360 12,286
5/96 17,485 16,737 14,512
11/96 17,358 16,618 14,315
5/97 18,846 18,042 15,523
11/97 22,218 21,268 17,665
5/98 23,858 22,837 18,821
11/98 20,038 19,181 16,496
5/99 20,273 19,405 18,316
AVERAGE ANNUAL TOTAL RETURN
For the period ended May 31, 1999
Since
Inception
Oak Ridge Large Cap Equity Fund - Class A (no load)(3)<F8> 0.9%
Oak Ridge Large Cap Equity Fund - Class A (load)(3)<F8> (3.4)%
Oak Ridge Large Cap Equity Fund - Class C(4)<F9> 1.1%
(3)<F8>March 1, 1999 inception.
(4)<F9>April 26, 1999 inception.
OAK RIDGE OAK RIDGE
LARGE CAP LARGE CAP
EQUITY FUND EQUITY FUND
CLASS A CLASS A S&P 500
NO LOAD LOAD INDEX
------------- ---------------- --------------
3/99 10,000 10,000 10,000
5/99 10,092 9,665 10,548
Each chart assumes an initial gross investment of $10,000 made upon inception.
Returns shown include the reinvestment of all dividends. For Class A shares, a
4.25% maximum sales load took effect January 1, 1996. The load performance for
Class A has been restated to reflect the impact of the sales load as if the
sales load had been imposed since inception. Performance reflects expense
reimbursements and fee waivers in effect. Absent expense reimbursements and fee
waivers, total returns would be reduced. Past performance is not predictive of
future performance. Investment return and principal value will fluctuate, so
that your shares, when redeemed, may be worth more or less than the original
cost.
Russell 2000 Index - A stock market index comprised of the 2,000 smallest U.S.
domiciled publicly traded common stocks that are included in the Russell 3000
Index. These common stocks represent approximately 11% of the U.S. equity
market. The Russell 3000 Index is comprised of the 3,000 largest U.S. domiciled
publicly-traded common stocks by market capitalization representing
approximately 98% of the U.S. publicly traded equity market.
S&P 500 Stock Index - An unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes in
the aggregate market value of the 500 stocks which represent all major
industries.
OAK RIDGE SMALL CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
MAY 31, 1999 (UNAUDITED)
NUMBER OF
SHARES OR
PRINCIPAL AMOUNT VALUE
- ---------------- --------
COMMON STOCK -- 94.84%
BANKING -- 3.06%
10,000 Astoria Financial Corporation $ 450,000
-----------
CHEMICALS -- 1.99%
13,000 Cambrex Corporation 292,500
-----------
COMMERCIAL SERVICES -- 3.29%
12,000 F.Y.I. Incorporated*<F2> 330,000
5,000 NCO Group, Inc.* <F2> 152,500
-----------
482,500
-----------
COMMUNICATIONS -- 12.37%
15,725 Cincinnati Bell, Inc. 380,348
9,300 Comverse Technology, Inc.* <F2> 628,331
11,250 Superior TeleCom, Inc. 333,281
8,000 Univision Communications, Inc.* <F2> 474,500
-----------
1,816,460
-----------
COMPUTERS - NETWORKING -- 0.12%
15,000 Data Systems Network Corporation*<F2> 16,875
-----------
COMPUTERS - SOFTWARE -- 3.58%
3,500 MindSpring Enterprises, Inc.* <F2> 259,000
19,000 Unify Corporation*<F2> 266,000
-----------
525,000
-----------
DATA PROCESSING - MANAGEMENT -- 2.98%
20,000 Reynolds and Reynolds Company -
Class A 437,500
-----------
DEFENSE ELECTRONICS -- 3.47%
6,000 Alliant Techsystems, Inc.* <F2> 510,000
-----------
DRUGS & MEDICAL -- 9.93%
6,000 Express Scripts, Inc.* <F2> 420,750
11,000 Mylan Laboratories, Inc. 279,125
12,000 Shire Pharmaceuticals Group
PLC - ADR*<F2>+<F3> 285,000
4,800 Waters Corporation*<F2> 473,400
-----------
1,458,275
-----------
ELECTRONICS -- 7.54%
7,500 Sanmina Corporation*<F2> 562,383
22,000 Universal Electronics, Inc.*<F2> 544,500
-----------
1,106,883
-----------
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL -- 5.77%
21,000 EarthCare Company*<F2> 322,875
6,000 Newpark Resources, Inc.*<F2> 54,000
20,000 Republic Services, Inc.*<F2> 470,000
-----------
846,875
-----------
FINANCIAL SERVICES -- 6.06%
14,000 Heller Financial, Inc. 416,500
14,000 Legg Mason, Inc. 473,375
-----------
889,875
-----------
FOOD - BAKING -- 2.12%
14,000 Flowers Industries, Inc. 311,500
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 0.88%
8,000 Coherent, Inc.*<F2> 129,000
-----------
HOSPITALS & HEALTH CARE -- 5.86%
15,000 America Service Group, Inc.*<F2> 178,125
24,200 Capital Senior Living Corporation*<F2> 263,175
20,000 Mariner Post-Acute Network, Inc.*<F2> 45,000
20,000 United Payors &
United Providers, Inc.*<F2> 373,750
-----------
860,050
-----------
INFORMATION MANAGEMENT SERVICES -- 4.17%
25,000 Convergys Corporation*<F2> 440,625
25,000 TeleSpectrum Worldwide, Inc.*<F2> 171,875
-----------
612,500
-----------
INSURANCE COMPANIES -- 2.83%
10,000 Reliastar Financial Corporation 415,625
-----------
INTERNET CONTENT -- 0.48%
11,000 Homeseekers.com, Inc.*<F2> 70,812
-----------
INVESTMENT COMPANIES -- 1.76%
13,000 Pilgrim America Capital Corporation*<F2> 258,375
-----------
METAL - DIVERSIFIED -- 0.79%
10,000 Lindberg Corporation 116,250
-----------
MISCELLANEOUS -- 6.08%
10,900 Aviation Sales Company*<F2> 419,650
5,674 Building One Services Corporation*<F2> 75,890
11,000 Thomas Group, Inc.*<F2> 96,938
10,000 United Rentals, Inc.*<F2> 300,000
-----------
892,478
-----------
OIL - FIELD SERVICES -- 2.84%
15,000 Hanover Compressor Company*<F2> 416,250
-----------
RETAIL - DISCOUNT -- 3.54%
20,000 BJ's Wholesale Club, Inc. 520,000
-----------
RETAIL - DRUGS -- 0.87%
4,000 Duane Reade, Inc.*<F2> 127,500
-----------
WHOLESALE -- 2.46%
14,250 Insight Enterprises, Inc.*<F2> 361,594
-----------
Total Common Stock
(Cost $12,547,815) 13,924,677
-----------
Short-Term Investments -- 5.26%
VARIABLE RATE DEMAND NOTES -- 5.26%
$143,070 General Mills, Inc. 143,070
200,668 Pitney Bowes, Inc. 200,668
207,324 Sara Lee 207,323
221,959 Warner-Lambert Co. 221,959
-----------
Total Short-Term Investments
(cost $773,020) 773,020
-----------
Total Investments -- 100.10%
(cost $13,320,835) 14,697,697
-----------
Liabilities, Less Other
Assets -- (.10%) (15,021)
-----------
NET ASSETS -- 100.00% $14,682,676
-----------
-----------
*<F2>Non-income producing security
+<F3>Foreign security
See Notes to the Financial Statements.
OAK RIDGE LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
MAY 31, 1999 (UNAUDITED)
NUMBER OF
SHARES OR
PRINCIPAL AMOUNT
- ----------------
COMMON STOCK -- 90.69%
AEROSPACE - DEFENSE -- 5.51%
775 Raytheon Company - Class B $ 52,748
780 United Technologies Corporation 48,409
-----------
101,157
-----------
BANKING -- 1.79%
800 Fleet Financial Group, Inc. 32,900
-----------
COMMERCIAL SERVICES -- 3.32%
3,300 Cendant Corporation*<F1> 60,844
-----------
COMMUNICATIONS -- 13.75%
900 AT&T Corporation 49,950
800 ALLTEL Corporation 57,350
1,000 Frontier Corporation 52,625
750 Lucent Technologies, Inc. 42,656
575 MCI WorldCom, Inc.*<F1> 49,666
-----------
252,247
-----------
COMPUTERS - MICRO -- 3.09%
950 Sun Microsystems, Inc.*<F1> 56,763
-----------
COMPUTERS - SOFTWARE -- 6.06%
650 Microsoft Corporation*<F1> 52,447
2,500 Novell, Inc.*<F1> 58,750
-----------
111,197
-----------
COSMETICS & TOILETRIES -- 4.79%
900 Kimberly-Clark Corporation 52,819
375 Procter & Gamble Company 35,016
-----------
87,835
-----------
DIVERSIFIED MANUFACTURING -- 6.26%
550 General Electric Company 55,928
675 Tyco International Ltd. 58,978
-----------
114,906
-----------
DRUGS & MEDICAL -- 13.85%
800 Cardinal Health, Inc. 48,300
775 Forest Laboratories, Inc.*<F1> 36,909
900 IMS Health, Inc. 22,163
550 Medtronic, Inc. 39,050
275 Pfizer, Inc. 29,425
775 Schering-Plough Corporation 34,923
700 Warner-Lambert Company 43,400
-----------
254,170
-----------
FINANCIAL SERVICES -- 2.36%
1,000 Household International, Inc. 43,375
-----------
FOOD - RETAIL -- 3.79%
750 Kroger Company 43,922
550 Safeway, Inc.*<F1> 25,575
-----------
69,497
-----------
HOUSEHOLD PRODUCTS -- 2.21%
1,000 Newell Rubbermaid, Inc. 40,500
-----------
INSURANCE COMPANIES -- 2.76%
700 American General Corporation 50,575
-----------
INVESTMENT COMPANIES -- 3.57%
500 Goldman Sachs Group, Inc.*<F1> 33,969
375 Merrill Lynch & Company 31,500
-----------
65,469
-----------
NON-HAZARDOUS WASTE DISPOSAL -- 2.81%
975 Waste Management, Inc. 51,553
-----------
OFFICE AUTOMATION & EQUIPMENT -- 1.83%
600 Xerox Corporation 33,712
-----------
OIL - INTEGRATED -- 3.36%
1,600 Coastal Corporation 61,700
-----------
PIPELINES -- 2.54%
900 Williams Companies, Inc. 46,631
-----------
RETAIL - DISCOUNT -- 1.86%
800 Wal-Mart Stores, Inc. 34,100
-----------
RETAIL - DRUGS -- 1.78%
1,400 Walgreen Company 32,550
-----------
RETAIL - OFFICE SUPPLIES -- 1.72%
1,100 STAPLES, INC.*<F1> 31,625
-----------
TOBACCO -- 1.68%
800 Philip Morris Companies, Inc. 30,850
-----------
TOTAL COMMON STOCK
(Cost $1,673,102) 1,664,156
-----------
SHORT-TERM INVESTMENTS -- 8.74%
VARIABLE RATE DEMAND NOTES -- 8.74%
$37,249 General Mills, Inc. 37,250
55,705 Pitney Bowes, Inc. 55,705
55,527 Warner-Lambert Co. 55,527
12,013 Wisconsin Corp Cent Credit Union 12,013
-----------
Total Short-Term Investments
(cost $160,495) 160,495
-----------
Total Investments -- 99.43%
(cost $1,833,597) 1,824,651
-----------
Other Assets and
Liabilities -- 0.57% 10,419
-----------
NET ASSETS -- 100.00% $1,835,070
-----------
-----------
*<F1>Non-income producing security
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 1999 (UNAUDITED)
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND
----------- -----------
ASSETS:
Investments, at market value*<F5> $14,697,697 $ 1,824,651
Receivable from Adviser 3,376 23,556
Interest and dividends receivable 8,210 1,622
Prepaid expenses 9,044 7,356
----------- -----------
Total Assets 14,718,327 1,857,185
----------- -----------
LIABILITIES:
Payable for 12b-1 fees 6,212 706
Payable for service fees 740 2
Accrued other expenses 28,699 21,407
----------- -----------
Total Liabilities 35,651 22,115
----------- -----------
NET ASSETS $14,682,676 $ 1,835,070
----------- -----------
----------- -----------
NET ASSETS CONSIST OF:
Capital stock $ 8,709 $ 1,515
Paid-in-capital in excess of par 12,870,437 1,844,868
Accumulated undistributed net
investment loss (120,439) (2,367)
Undistributed net realized
gain on investments 547,107 0
Net unrealized appreciation
(depreciation) on investments 1,376,862 (8,946)
----------- -----------
Net Assets $14,682,676 $ 1,835,070
----------- -----------
----------- -----------
CLASS A:
Net assets $12,918,793 $ 1,828,013
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 764,886 150,947
Net asset value and redemption price per share $16.89 $12.11
----------- -----------
Maximum offering price per share $17.64 $12.65
----------- -----------
----------- -----------
CLASS C:
Net assets $1,763,883 $7,057
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 106,017 583
Net asset value, redemption price
and offering price per share $16.64 $12.10
----------- -----------
----------- -----------
*<F5>Cost of Investments $13,320,835 $ 1,833,597
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 1999 (UNAUDITED)
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND*<F4>
INVESTMENT INCOME:
Interest $ 17,991 $ 2,897
Dividends 19,988 2,349
----------- -----------
37,979 5,246
----------- -----------
EXPENSES:
Investment advisory fees 66,684 2,286
Fund administration and accounting fees 37,492 15,470
Professional fees 33,442 3,731
Shareholder servicing fees and expenses 22,932 6,097
Reports to shareholders 3,458 455
Federal and state registration fees 6,426 2,093
Amortization of organizational expenses 601 0
Directors' fees 1,092 728
Custody fees 2,912 1,638
12b-1 fees -- Class A 16,874 950
12b-1 fees -- Class C 6,389 5
Service fees -- Class C 2,130 2
Other 1,092 0
----------- -----------
Total expenses before waiver 201,524 33,455
Less: Waiver of expenses by Adviser (43,106) (25,842)
----------- -----------
Net expenses 158,418 7,613
----------- -----------
NET INVESTMENT (LOSS) (120,439) (2,367)
----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 547,344 0
Change in unrealized depreciation on investments (325,898) (8,946)
----------- -----------
Net gain (loss) on investments 221,446 (8,946)
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 101,007 $ (11,313)
----------- -----------
----------- -----------
*<F4>Commenced operations May 1, 1999.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
OAK RIDGE
OAK RIDGE LARGE CAP
SMALL CAP EQUITY FUND EQUITY FUND
--------------------------- -----------
UNAUDITED UNAUDITED
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
MAY 31, 1999 NOVEMBER 30, MAY 31, 1999
1998
------------- ------------- -----------
<S> <C> <C> <C>
OPERATIONS:
Net investment (loss) $ (120,439)$ (156,945)$ (2,367)
Net realized gain on investments 547,344 44,069 0
Change in unrealized appreciation
on investments (325,898) (1,452,588) (8,946)
Net increase (decrease) in net assets
------------- ------------- ------------
resulting from operations 101,007 (1,565,464) (11,313)
------------- ------------- ------------
CAPITAL SHARE TRANSACTIONS:
Shares sold 2,496,266 5,962,931 1,903,476
Shares issued to holders in
reinvestment of dividends 29,855 744,988 0
Shares redeemed (2,384,850) (1,994,697) (57,093)
------------- ------------- ------------
Net increase in net assets resulting from
capital share transactions 141,271 4,713,222 1,846,383
------------- ------------- ------------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net realized gains (27,998) (748,752) 0
------------- ------------- ------------
Total distributions to Class A shareholders (27,998) (748,752) 0
------------- ------------- ------------
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net realized gains (2,833) (21,346) 0
------------- ------------- ------------
Total distributions to Class C shareholders (2,833) (21,346) 0
------------- ------------- ------------
TOTAL INCREASE IN NET ASSETS 211,447 2,377,660 1,835,070
NET ASSETS:
Beginning of period 14,471,229 12,093,569 0
------------- ------------- ------------
End of period $14,682,676 $14,471,229 $1,835,070
------------- ------------- ------------
------------- ------------- ------------
</TABLE>
See Notes to the Financial Statements.
OAK RIDGE SMALL CAP EQUITY FUND -- CLASS A
FINANCIAL HIGHLIGHTS
<TABLE>
UNAUDITED
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED JAN. 3, '94(1)<F11>
MAY 31,'99 NOV. 30,'98 NOV. 30,'97 NOV. 30,'96 NOV. 30,'95 NOV. 30,'94
---------- ------------ ----------- ------------ ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning
of period $16.73 $19.84 $16.57 $14.32 $10.48 $10.00
Income from investment operations:
Net investment income (loss) (0.13)(3)<F13>(0.18)(3)<F13> (0.22)(3)<F13> (0.16)(3)<F13> (0.13)(3)<F13> (0.07)(3)<F13>
Net realized and unrealized
gains (losses) on investments 0.33 (1.67) 4.58 3.01 4.00 0.55
------ ------ ------ ------ ------ ------
Total from investment operations 0.20 (1.85) 4.36 2.85 3.87 0.48
------ ------ ------ ------ ------ ------
Less distributions:
Distributions from capital gains (0.04) (1.26) (1.09) (0.60) (0.03) --
------ ------ ------ ------ ------ ------
Net asset value, end of period $16.89 $16.73 $19.84 $16.57 $14.32 $10.48
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return 1.2%(5)<F15>
(6)<F16> (9.8)%(6)<F16> 28.0%(6)<F16> 20.9%(6)<F16> 37.0% 4.8%(5)<F15>
Supplemental data and ratios:
Net assets, end of period $12,918,793 $13,215,299 $11,758,733 $7,725,072 $4,182,246 $2,708,546
Ratio of expenses to
average net assets:
Before expense waiver 2.6%(7)<F17> 2.7% 2.9% 3.5% 6.5% 9.0%(7)<F17>
After expense waiver 2.0%(7)<F17> 1.9% 2.0% 2.0% 2.0% 2.0%(7)<F17>
Ratio of net investment (loss)
to average net assets:
Before expense waiver (2.1)%(7)<F17> (1.9)% (2.2)% (2.7)% (5.8)% (8.1)%(7)<F17>
After expense waiver (1.5)%(7)<F17> (1.1)% (1.3)% (1.2)% (1.3)% (1.1)%(7)<F17>
Portfolio turnover rate(8)<F18> 37% 57% 55% 71% 109% 80%
</TABLE>
See Notes to the Financial Statements.
OAK RIDGE SMALL CAP EQUITY FUND -- CLASS C
UNAUDITED
SIX MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED
MAY 31, '99 NOV. 30, '98 NOV. 30, '97(2)<F12>
----------- ------------ -----------
$16.54 $19.75 $15.91
(0.18)(3)<F13> (0.34)(4)<F14> (0.13)(3)<F13>
0.32 (1.61) 3.97
------ ------ ------
0.14 (1.95) 3.84
------ ------ ------
(0.04) (1.26) --
------ ------ ------
$16.64 $16.54 $19.75
------ ------ ------
------ ------ ------
0.8%(5)<F15> (10.4)% 24.1%(5)<F15>
$1,763,883 $1,255,930 $334,836
3.3%(7)<F17> 3.4% 3.6%(7)<F17>
2.7%(7)<F17> 2.6% 2.8%(7)<F17>
(2.8)%(7)<F17> (2.6)% (3.0)%(7)<F17>
(2.2)%(7)<F17> (1.9)% (2.2)%(7)<F17>
37% 57% 55%
(1)<F11>Commencement of Operations
(2)<F12>Effective March 1, 1997, the Fund offered a second class of shares,
Class C.
(3)<F13>Net investment (loss) per share is calculated using the ending balance
of undistributed net investment (loss) prior to consideration of adjustments for
permanent book and tax differences.
(4)<F14>Net investment (loss) per share represents net investment (loss)
divided by the average shares outstanding throughout the year.
(5)<F15>Not annualized.
(6)<F16>Effective January 1, 1996, the Fund instituted a maximum 4.25% front
end sales load on Class A shares. The total return calculation does not reflect
the 4.25% sales load.
(7)<F17>Annualized.
(8)<F18>Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
See Notes to the Financial Statements.
OAK RIDGE LARGE CAP EQUITY FUND
FINANCIAL HIGHLIGHTS
UNAUDITED UNAUDITED
MARCH 1,'99(1)<F21> APRIL 26,'99(1)<F21>
(2)<F22>
THROUGH ENDED
MAY 31,'99 MAY 31,'99
-------------- --------------
CLASS A CLASS C
------- -------
Per share data:
Net asset value, beginning of period $12.00 $12.66
Income from investment operations:
Net investment (loss) (0.02)(3)<F23> (0.02)(3)<F23>
Net realized and unrealized
gains on investments 0.13 (0.54)
------ ------
Total from investment operations 0.11 (0.56)
------ ------
Less distributions:
Distributions from capital gains -- --
------ ------
Net asset value, end of period $12.11 $12.10
------ ------
------ ------
Total Return 0.9%(4)<F24>
(5)<F25> (1.7)%(4)<F24>
Supplemental data and ratios:
Net assets, end of period $1,828,013 $7,057
Ratio of expenses to average net assets:
Before expense waiver 8.8%(6)<F26> 8.4%(6)<F26>
After expense waiver 2.0%(6)<F26> 2.8%(6)<F26>
Ratio of net investment (loss) to
average net assets:
Before expense waiver (7.4)%(6)<F26> (7.3)%(6)<F26>
After expense waiver (0.6)%(6)<F26> (1.7)%(6)<F26>
Portfolio turnover rate(7)<F27> 0% 0%
(1)<F21>Commencement of Operations
(2)<F22>Effective April 26, 1999, the Fund offered a second class of shares,
Class C.
(3)<F23>Net investment (loss) per share is calculated using the ending balance
of undistributed net investment (loss) prior to consideration for permanent book
and tax differences.
(4)<F24>Not annualized.
(5)<F25>The total return calculation does not reflect the 4.25% sales load.
(6)<F26>Annualized.
(7)<F27>Calculated on the basis of the Fund as a whole without distinguishing
between the classes of shares issued.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
NOTES TO THE FINANCIAL STATEMENTS
MAY 31, 1999 (UNAUDITED)
1. ORGANIZATION
Oak Ridge Funds, Inc. (the "Corporation") was incorporated on October 15, 1993
as a Maryland corporation. The Corporation is an open-end diversified
management company under the Investment Company Act of 1940 (the "1940 Act") and
consists of two series of shares: the Oak Ridge Small Cap Equity Fund and the
Oak Ridge Large Cap Equity Fund which are registered . The Funds' investment
objectives are capital appreciation. Oak Ridge Investments, LLC (the "Adviser")
is the Funds' investment adviser. The Funds commenced operations on January 3,
1994 (Oak Ridge Small Cap Equity Fund) and March 3, 1999 (Oak Ridge Large Cap
Equity Fund).
Costs incurred in connection with the organization, initial registration and
public offering of shares aggregated $44,002. These costs are being amortized
over a period of not more than five years from the Funds commencement of
operations. The proceeds of any redemption of the initial shares by the
original shareholders 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.
The Funds have issued two classes of shares: Class A and Class C. The Class A
shares are subject to a 0.25% distribution fee pursuant to Rule 12b-1 and an
initial sales charge imposed at the time of purchase, in accordance with the
Funds' prospectus. The maximum sales charge is 4.25% of the offering price or
4.44% of the net asset value. The Class C shares are subject to a shareholder
servicing fee of 0.25% and distribution fees of 0.75% pursuant to Rule 12b-1.
Each class of shares of the Funds has identical rights and privileges except
that each class bears differing expenses and exclusive voting rights on matters
pertaining to the distribution plan for that class.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of the financial statements. These
policies are in conformity with generally accepted accounting principles.
a) Investment Valuation -- Common stocks and other equity-type securities are
valued at the last sales price on a national securities exchange or NASDAQ on
which such securities are primarily traded; provided, however, securities traded
on an exchange or NASDAQ for which there were no transactions on a given day,
and securities not listed on an exchange or NASDAQ, are valued at the most
recent bid price. Debt securities (other than short-term instruments) are
valued at prices furnished by a pricing service, subject to review by the
Adviser and determination of the appropriate price whenever a furnished price is
significantly different from the previous day's furnished price. Debt
securities having remaining maturities of 60 days or less when purchased are
valued by the amortized cost method. Any securities or other assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by the Board of Directors.
b) Federal Income Taxes -- It is each Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment company net taxable
income and net capital gains to shareholders. Therefore, no federal tax
provision is required.
c) Distributions to Shareholders -- The Funds pay dividends of net investment
income annually. Distributions of net and realized capital gains, if any, will
be declared at least annually. Distributions to shareholders are recorded on
the ex-dividend date.
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 the trade
date. The Funds determine the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. Each Fund's basis in investments is the same for income tax
and financial reporting purposes. Dividend income is recognized on the ex-
dividend date and interest income is recognized on an accrual basis. Generally
accepted accounting principles require that permanent differences between the
financial reporting and tax basis of each Fund's assets and liabilities be
reclassified in the capital accounts.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Funds were as follows:
OAK RIDGE SMALL CAP EQUITY FUND
CLASS A
---------------------------------
SIX MONTHS ENDED YEAR ENDED
MAY 31,1999 NOVEMBER 30, 1998
--------------- ----------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $1,733,665 101,358 $4,911,232 272,175
Shares issued to holders in
reinvestment of dividends 27,109 1,668 723,642 40,038
Shares redeemed (2,139,545)(128,092) (1,952,591) (114,855)
---------- -------- ---------- --------
Net increase (decrease) $ (378,771) (25,066) $3,682,283 197,358
---------- -------- ---------- --------
---------- -------- ---------- --------
CLASS C
---------------------------------
SIX MONTHS ENDED YEAR ENDED
MAY 31, 1999 NOVEMBER 30, 1998
--------------- ----------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 762,601 44,838 $1,051,699 59,962
Shares issued to holders in
reinvestment of dividends 2,746 170 21,346 1,187
Shares redeemed (245,305) (14,907) (42,106) (2,189)
---------- -------- ---------- --------
Net increase $ 520,042 30,101 $1,030,939 58,960
---------- -------- ---------- --------
---------- -------- ---------- --------
OAK RIDGE LARGE CAP EQUITY FUND
CLASS A CLASS C
---------------- ----------------
MAR. 1, 1999*<F10>APR. 26, 1999*<F10>
MAY 31, 1999 MAY 31, 1999
---------------- ----------------
AMOUNT SHARES AMOUNT SHARES
------ ------- ------ -------
Shares sold $1,896,095 155,579 $7,381 583
Shares issued to holder in
reinvestment of dividends 0 0 0 0
Shares redeemed (57,093) (4,632) 0 0
---------- -------- ---------- --------
Net increase $1,839,002 150,947 $7,381 583
---------- -------- ---------- --------
---------- -------- ---------- --------
*<F10>Commencement of operations
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Funds have entered into an agreement with the Adviser, with whom certain
officers and directors of the Funds are affiliated, to furnish investment
advisory services to the Funds. Under the terms of this agreement, the Small
Cap Fund pays the Adviser an annual management fee of 0.75% and the Large Cap
Fund pays the Adviser an annual fee of 0.60% of the respective Fund's average
daily net assets attributable to each class. The advisory fee is accrued daily
and paid monthly.
For the fiscal year ended November 30, 1999, the Adviser has voluntarily agreed
to waive its management fee and/or reimburse the Funds' operating expenses to
ensure 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) for (i) Class A shares do not
exceed 2.00% of the class' average daily net assets and (ii) Class C shares do
not exceed 2.75% of the class' average daily net assets.
For the six months ended May 31, 1999, Oak Ridge Small Cap Equity Fund and Oak
Ridge Large Cap Equity Fund paid Oak Ridge Investments, Inc. (the "Distributor")
$11,775 and $1,587, respectively, of brokerage commissions. The Funds were
advised that the Distributor also received front-end sales charges of Class A
shares for Oak Ridge Small Cap Equity Fund of $1,365 and for Oak Ridge Large Cap
Equity Fund of $610.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Oak Ridge Small Cap Equity Fund for the six months ended
May 31, 1999, were $5,381,473 and $5,592,699 respectively. The aggregate
purchases and sales of securities, excluding short-term investments, for the Oak
Ridge Large Cap Equity Fund for the period ended May 31, 1999, were $1,673,101
and $0 respectively. There were no purchases or sales of long-term U.S.
Government securities.
At May 31, 1999, cost and gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
NET APPRECIATION
COST APPRECIATION (DEPRECIATION) (DEPRECIATION)
--------- ------------ -------------- --------------
Oak Ridge Small
Cap Equity Fund 13,320,835 2,662,822 (1,285,960) 1,376,862
Oak Ridge Large Cap
Equity Fund 1,833,597 88,385 (97,331) (8,946)
6. DISTRIBUTION PLAN
The Fund has adopted a plan of distribution for each class of shares (the "Class
A Plan" and the "Class C Plan" in accordance with Rule 12b-1 under the 1940 Act
pursuant to which certain distribution and/or service fees are paid. Under the
Class A Plan, the Funds are required to pay the Distributor a distribution fee
of up to 0.25% of the average daily net assets of the Funds attributable to the
Class A shares computed on an annual basis, for the promotion and distribution
of the Class A shares. The Class C Plan requires the Funds to pay the
Distributor (i) a distribution fee of up to 0.75% of the average daily net
assets of the Funds attributable to the Class C shares, computed on an annual
basis, and (ii) a service fee for personal services provided to shareholder
accounts of up to 0.25% of the average daily net assets of the Funds
attributable to Class C shares, computed on an annual basis. Distribution fees
incurred by Oak Ridge Small Cap Equity Fund and Oak Ridge Large Cap Equity Fund
Class A shares for the period ended May 31, 1999 were $16,874 and $950,
respectively. Distribution fees incurred by Oak Ridge Small Cap Equity Fund and
Oak Ridge Large Cap Equity Fund Class C shares for the six months ended May 31,
1999 were $6,389 and $5, respectively. Service fees for the Oak Ridge Small Cap
Equity Fund and Oak Ridge Large Cap Equity Fund Class C shares for the six
period ended May 31, 1999 were $2,130 and $2, respectively.
TABLE OF CONTENTS
Page
Letter to Shareholders 1
Schedule of Investments 4
Statement of Assets and Liabilities 8
Statement of Operations 9
Statement of Changes in Net Assets 10
Financial Highlights 12
Notes to the Financial Statements 15
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
