ANNUAL
REPORT
November 30, 1998
OAK RIDGE
GROWTH
FUND
Shareholder Services
1(800) 407-7298
OAK RIDGE INVESTMENTS, LLC
Investment Adviser
OAK RIDGE GROWTH FUND
LETTER TO SHAREHOLDERS
NOVEMBER 1998
Dear Shareholder:
The Oak Ridge Growth Fund finished a highly volatile fiscal year by
recovering much of its losses, ending the twelve months down 9.8% for class A
shares on a no-load basis. The Russell 2000 benchmark of comparable stocks was
off 6.6% for the same period.
It should now be apparent to Oak Ridge Growth Fund shareholders that there is
a significant difference between those stocks consistent with their fund's
objectives and the Dow Industrials and S&P 500. Small cap stocks have
historically outperformed large companies due to better long-term growth
prospects. Over the past ten years, one hundred fold returns have been
generated on previous small cap companies such as Cisco Systems, Dell Computer
and Worldcom. Yet despite their superior potential, the stocks comprising the
Russell 2000 index have underperformed the S&P 500 for each of the past 5 years,
and trade at approximately 18 times 1999 earnings, while the S&P 500 is valued
at over 30 times likely 1999 profits.
While frustrating to many small cap investors, it is easy to understand why
this phenomenon has prevailed to such historic proportions. Continued global
uncertainty has created substantial demand for U.S. securities, typically
government bonds and large-cap stocks. Low interest rates have increased the
flow of 401k plans and large pension assets into stocks, with the majority
buying index funds and blue chip equity names. Many fund managers, pressured to
perform and faced with larger pools to invest, have abandoned smaller names.
The resulting disparity has created an exceptional buying opportunity for
many small companies' shares. This value will either be recognized by
investors, or large companies, who will find it challenging to grow in a
difficult global environment and will likely accelerate the pace of small cap
acquisitions. A company such as Lucent Technologies trades at over 40 times
fiscal 1999 earnings, and can use its stock as inexpensive currency to make
several strategic acquisitions that would be immediately accretive to earnings.
The Oak Ridge Growth Fund has increased exposure in fast growing technology
stocks and certain healthcare companies with favorable demographics and industry
trends. The fall market selloff created an opportunity to participate in these
fast growing sectors at unusually low earnings multiples. The ensuing recovery
has not lifted these stocks to fair value, given their 5 year earnings outlook,
and they look particularly cheap compared to their large-cap equivalents.
The only small stocks attracting significant attention are those creating
Internet hype, regardless of reality. The Internet is not a fad, and
bellweather companies such as Amazon.com and Yahoo have excellent business plans
for long-term survival. However, with market caps in excess of $10 billion,
their valuations are unjustifiable, far exceeding those of the biotech industry
at their 1991 peak. Unlike a biotech concern, which can experience years of
clinical trials for a promising product many years in the future, an Internet
business must show quarterly growth. With little institutional sponsorship,
this group is the ultimate example of speculative excess in the market.
Neither the Dow's effort to reach 10,000, nor the spectacle of President
Clinton's ongoing play on words will be the story of 1999. The countdown is on
for the year 2000. It is nearly impossible to believe that the world will shut
down completely, but stories of such frightening prospects should dominate the
media. A more likely scenario is that somewhat disruptive glitches will occur,
having a greater impact on opportunistic legal departments than posing a
meaningful threat to society. As a result of worldwide preparation, a
technologically advanced global economy will emerge with the new millennium.
The new Euro currency symbolizes the commitment to global unity in the
financial markets. There will likely be an acceleration of blockbuster mergers
such as Daimler Benz and Chrysler in 1999. The stability of the U.S. currency
and financial markets in an uncertain world bodes well for stock prices, but
suggests that foreign investing will provide little shelter from the normal
corrections in U.S. share prices.
True small cap stocks in less exciting but profitable businesses should enjoy
better relative performance this year. Interest rates will likely remain low,
allowing for continued new commitment to equity markets. Large stocks
experiencing poor earnings results, will find little support at historically
high multiples. Either investor attention will turn to smaller stocks or large
stocks will aggressively acquire small companies at less than 2/3 their P/E with
more than twice the growth prospects. The patient investor will ultimately be
rewarded.
We appreciate your confidence through a rather challenging period. While
relative performance to our peer group has been good, it has paled in comparison
to the S&P 500. It is illogical to expect slow growing leaders to continue to
expand their record high P/E ratios. The Oak Ridge Growth Fund is well
positioned to capitalize on the long anticipated success of the small cap
market.
Sincerely,
/s/ David M. Klaskin
David M. Klaskin
Chairman
Average Annual Total Return*<F1>
For the period ended November 30, 1998
Since
One Year Inception**<F2>
Oak Ridge Growth Fund - Class A (no load) (9.8)% 15.2%
Oak Ridge Growth Fund - Class A (load) (13.7)% 14.2%
Oak Ridge Growth Fund - Class C (10.4)% 14.9%
*<F1> Periods less than a year are not annualized.
**<F2> Class A - January 3, 1994 inception. Class C - March 1, 1997
inception.
Oak Ridge Oak Ridge
Growth Fund - Growth Fund - S&P 500 Russell
date Class A - No Load Class A - Load Stock Index 2000 Index
1/94 10,000 10,000 10,000 10,000
2/94 10,870 10,870 10,059 10,276
5/94 10,160 10,160 9,904 9,682
11/94 10,480 10,480 9,984 9,562
5/95 11,121 11,121 11,904 10,679
11/95 14,360 14,360 13,677 12,286
5/96 17,485 16,737 15,289 14,512
11/96 17,359 16,616 17,488 14,315
5/97 18,848 18,042 19,788 15,523
11/97 22,218 21,268 22,475 17,665
5/98 23,858 22,837 25,859 18,821
11/98 20,038 19,181 27,791 16,496
This 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 GROWTH FUND
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1998
NUMBER OF
SHARES VALUE
---------- ------
COMMON STOCK -- 96.15%
BANKING -- 3.74%
10,000 Astoria Financial Corporation $ 450,000
3,500 Kankakee Bancorp, Inc. 91,438
----------
541,438
----------
BUSINESS SERVICE -- 0.93%
15,000 Access Worldwide, Inc.*<F3> 135,000
----------
CHEMICALS -- 3.85%
13,000 Cambrex Corporation 364,000
10,000 Crompton & Knowles Corporation 193,750
----------
557,750
----------
COMMERCIAL SERVICES -- 2.61%
12,000 F.Y.I. Incorporated*<F3> 378,000
----------
COMMUNICATIONS -- 7.30%
6,200 Comverse Technology, Inc.*<F3> 356,500
9,000 Superior TeleCom, Inc. 391,500
11,000 Univision Communications, Inc.*<F3> 308,000
----------
1,056,000
----------
COMPUTERS -- NETWORKING -- 1.39%
10,000 Comdisco, Inc. 182,500
15,000 Data Systems Network Corporation*<F3> 19,219
----------
201,719
----------
COMPUTERS -- PERIPHERAL -- 2.69%
9,400 American Power Conversion
Corporation*<F3> 388,925
----------
COMPUTERS -- SOFTWARE -- 5.49%
7,500 Compuware Corporation*<F3> 466,875
4,777 Sterling Commerce, Inc.*<F3> 173,166
6,000 Sterling Software, Inc.*<F3> 154,500
----------
794,541
----------
DEFENSE ELECTRONICS -- 3.16%
6,000 Alliant Techsystems, Inc.*<F3> 457,125
----------
DRUGS & MEDICAL -- 13.59%
3,000 Boron, LePore & Associates, Inc. *<F3> 92,250
11,000 Express Scripts, Inc. *<F3> 605,000
11,000 Mylan Laboratories, Inc. 365,062
12,000 Shire Pharmaceuticals Group PLC*<F3> 264,000
4,800 Waters Corporation*<F3> 370,200
5,000 Watson Pharmaceuticals, Inc.*<F3> 269,375
----------
1,965,887
----------
ELECTRONICS -- 4.22%
7,500 Sanmina Corporation*<F3> 373,594
22,000 Universal Electronics, Inc.*<F3> 236,500
----------
610,094
----------
ENTERTAINMENT & LEISURE -- 1.60%
16,000 Racing Champions Corporation*<F3> 232,000
----------
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL -- 7.26%
21,000 EarthCare Company*<F3> 322,875
6,000 Newpark Resources, Inc.*<F3> 44,250
20,000 Republic Services, Inc.*<F3> 372,500
14,062 United States Filter Corporation*<F3> 311,122
----------
1,050,747
----------
FINANCIAL SERVICES -- 4.27%
14,000 Legg Mason, Inc. 417,375
10,000 Oak Hill Financial, Inc. 200,000
----------
617,375
----------
HEALTH CARE EQUIPMENT &
SUPPLIES -- 0.70%
8,000 Coherent, Inc.*<F3> 101,000
----------
HOSPITALS & HEALTH CARE -- 5.21%
15,000 America Service Group, Inc. *<F3> 148,125
20,000 Mariner Post-Acute Network, Inc.*<F3> 86,250
20,000 United Payors &
United Providers, Inc. *<F3> 520,000
----------
754,375
----------
HOUSEHOLD PRODUCTS -- 1.60%
8,500 Nortek, Inc.*<F3> 232,156
----------
INFORMATION MANAGEMENT
SERVICES -- 1.93%
3,500 Convergys Corporation*<F3> 64,094
25,000 TeleSpectrum Worldwide, Inc.*<F3> 215,625
----------
279,719
----------
INSURANCE COMPANIES -- 3.25%
10,000 ReliaStar Financial Corporation 470,000
----------
INVESTMENT COMPANIES -- 2.00%
13,000 Pilgrim America Capital Corporation*<F3> 289,250
----------
METAL - DIVERSIFIED -- 0.91%
10,000 Lindberg Corporation 131,875
----------
MISCELLANEOUS -- 10.70%
10,000 Aviation Sales Company*<F3> 370,000
14,000 Building One Services Corporation*<F3> 238,000
13,300 Personnel Group of America, Inc.*<F3> 219,450
12,000 RCM Technologies, Inc.*<F3> 217,500
11,000 Thomas Group, Inc. *<F3> 110,000
15,000 United Rentals, Inc.*<F3> 393,750
----------
1,548,700
----------
RETAIL - DISCOUNT -- 2.66%
10,000 BJ's Wholesale Club, Inc.*<F3> 385,625
----------
RETAIL - DRUGS -- 2.22%
8,000 Duane Reade, Inc.*<F3> 321,000
----------
UTILITIES -- 1.41%
6,500 Calenergy Company, Inc.*<F3> 203,531
----------
WHOLESALE -- 1.46%
5,000 Insight Enterprises, Inc.*<F3> 210,625
----------
Total Common Stock
(cost $12,211,698) 13,914,457
----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS -- 7.19%
VARIABLE RATE DEMAND NOTES -- 7.19%
$240,729 American Family 240,729
488,070 General Mills, Inc. 488,070
61,086 Pitney Bowes, Inc. 61,086
250,445 Warner-Lambert Co. 250,445
----------
Total Short-Term Investments
(cost $1,040,330) 1,040,330
----------
Total Investments -- 103.34%
(cost $13,252,028) 14,954,787
----------
Liabilities, less
Other Assets -- (3.34%) (483,558)
----------
NET ASSETS -- 100.00% $14,471,229
----------
----------
*<F3> Non-income producing security
See Notes to the Financial Statements.
OAK RIDGE GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1998
ASSETS:
Investments, at market value (cost $13,252,028) $14,954,787
Receivable for capital shares sold 247,463
Receivable from Adviser 8,794
Interest and dividends receivable 7,946
Prepaid expenses 3,705
Organizational expenses, net of accumulated amortization 601
-----------
Total Assets 15,223,296
-----------
LIABILITIES:
Payable for securities purchased 664,283
Payable for 12b-1 fees 6,305
Payable for capital shares purchased 3,864
Payable for service fees 429
Accrued other expenses 77,186
-----------
Total Liabilities 752,067
-----------
NET ASSETS $14,471,229
-----------
-----------
NET ASSETS CONSIST OF:
Capital stock $ 8,659
Paid-in-capital in excess of par 12,729,216
Undistributed net realized gain on investments 30,595
Net unrealized appreciation on investments 1,702,759
-----------
Net Assets $14,471,229
-----------
-----------
CLASS A:
Net assets $13,215,299
Shares authorized ($.01 par value) 50,000,000
Shares issued and outstanding 789,952
Net asset value and redemption price per share $16.73
------
------
Maximum offering price per share $17.47
------
------
CLASS C:
Net assets $ 1,255,930
Shares authorized ($.01 par value) 50,000,000
Shares issued and outstanding 75,916
Net asset value, redemption price and offering price per share $16.54
------
------
See Notes to the Financial Statements.
OAK RIDGE GROWTH FUND
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1998
INVESTMENT INCOME:
Interest $ 57,334
Dividends 45,752
----------
103,086
----------
EXPENSES:
Investment advisory fees 135,506
Fund administration and accounting fees 70,815
Professional fees 49,363
Shareholder servicing fees and expenses 44,240
Reports to shareholders 7,249
Federal and state registration fees 14,671
Amortization of organizational expenses 8,800
Directors' fees 2,006
Custody fees 4,991
12b-1 fees -- Class A 17,916
12b-1 fees -- Class C 1,382
Service fees -- Class C 4,147
Other 1,781
----------
Total expenses before waiver 362,867
Less: Waiver of expenses by Adviser (102,836)
----------
Net expenses 260,031
----------
NET INVESTMENT (LOSS) (156,945)
----------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments 44,069
Change in unrealized appreciation on investments (1,452,588)
----------
Net loss on investments (1,408,519)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(1,565,464)
----------
----------
See Notes to the Financial Statements.
OAK RIDGE GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
----------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment (loss) $ (156,945) $ (130,974)
Net realized gain on investments 44,069 895,701
Change in unrealized appreciation on investments (1,452,588) 1,610,223
---------- ----------
Net increase (decrease) in net assets
resulting from operations (1,565,464) 2,374,950
---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 5,962,931 2,932,978
Shares issued to holders in reinvestment of dividends 744,988 476,916
Shares redeemed (1,994,697) (907,674)
---------- ----------
Net increase 4,713,222 2,502,220
---------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS:
From net realized gains (748,752) (508,673)
---------- ----------
DISTRIBUTIONS TO CLASS C SHAREHOLDERS:
From net realized gains (21,346) --
---------- ----------
TOTAL INCREASE IN NET ASSETS 2,377,660 4,368,497
NET ASSETS:
Beginning of year 12,093,569 7,725,072
---------- ----------
End of year $14,471,229 $12,093,569
---------- ----------
---------- ----------
</TABLE>
See Notes to the Financial Statements.
OAK RIDGE GROWTH FUND
FINANCIAL HIGHLIGHTS
<TABLE>
NINE JAN. 3, '94(1)<F3>
YEAR ENDED YEAR ENDED YEAR ENDED MONTHS ENDED YEAR ENDED YEAR ENDED TO
NOV.30,'98 NOV.30,'98 NOV.30,'97 NOV.30,'97(2)<F4> NOV.30,'96 NOV.30,'95 NOV.30,'94
---------- ---------- ---------- ---------------- ---------- ---------- ------------
CLASS A CLASS C CLASS A CLASS C CLASS A CLASS A CLASS A
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share data:
Net asset value,
beginning of period $19.84 $19.75 $16.57 $15.91 $14.32 $10.48 $10.00
Income from investment
operations:
Net investment (loss) (0.18)(3)<F5> (0.34)(4)<F6> (0.22)(3)<F5> (0.13)(3)<F5> (0.16)(3)<F5> (0.13)(3)<F5> (0.07)(3)<F5>
Net realized and unrealized
gains (losses)
on investments (1.67) (1.61) 4.58 3.97 3.01 4.00 0.55
------- ------- ------- ------- ------- ------- -------
Total from investment
operations (1.85) (1.95) 4.36 3.84 2.85 3.87 0.48
------- ------- ------- ------- ------- ------- -------
Less distributions:
Distributions from
capital gains (1.26) (1.26) (1.09) -- (0.60) (0.03) --
------- ------- ------- ------- ------- ------- -------
Net asset value,
end of period $16.73 $16.54 $19.84 $19.75 $16.57 $14.32 $10.48
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total Return (9.8)%(6)<F8>(10.4)% 28.0%(6)<F8> 24.1%(5)<F7> 20.9%(6)<F8> 37.0% 4.8%(5)<F7>
Supplemental data
and ratios:
Net assets,
end of period $13,215,299 $1,255,930 $11,758,733 $334,836 $7,725,072 $4,182,246 $2,708,546
Ratio of expenses to
average net assets:
Before expense waiver 2.7% 3.4% 2.9% 3.6%(7)<F9> 3.5% 6.5% 9.0%(7)<F9>
After expense waiver 1.9% 2.6% 2.0% 2.8%(7)<F9> 2.0% 2.0% 2.0%(7)<F9>
Ratio of net investment (loss)
to average net assets:
Before expense waiver (1.9)% (2.6)% (2.2)% (3.0)%(7)<F9> (2.7)% (5.8)% (8.1)%(7)<F9>
After expense waiver (1.1)% (1.9)% (1.3)% (2.2)%(7)<F9> (1.2)% (1.3)% (1.1)%(7)<F9>
Portfolio turnover rate(8)<F10> 57% 57% 55% 55% 71% 109% 80%
(1)<F3> Commencement of operations.
(2)<F4> Effective March 1, 1997, the Fund offered a second class of shares, Class C.
(3)<F5> 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)<F6> Net investment (loss) per share represents net investment (loss) divided by the average shares outstanding throughout the
year.
(5)<F7> Not annualized.
(6)<F8> 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% front end sales load.
(7)<F9> Annualized.
(8)<F10> Calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued.
</TABLE>
See Notes to the Financial Statements.
OAK RIDGE GROWTH FUND
NOTES TO THE FINANCIAL STATEMENTS
NOVEMBER 30, 1998
1. ORGANIZATION
Oak Ridge Funds, Inc. (the "Corporation") was incorporated on October 15, 1993
as a Maryland corporation. The Oak Ridge Growth Fund (the "Fund") is a series
of the Corporation and is registered as an open-end diversified management
investment company under the Investment Company Act of 1940 ("1940 Act"). The
Fund's investment objective is capital appreciation. Oak Ridge Investments, LLC
(the "Adviser") is the Fund's investment adviser. The Fund commenced operations
on January 3, 1994.
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 Fund's 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 Fund has 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
Fund's 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 Fund 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 Fund in the preparation of its 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 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 the Fund's policy to meet the requirements of
the Internal Revenue Code applicable to regulated investment companies and the
Fund intends to distribute investment company net taxable income and net capital
gains to shareholders. Therefore, no federal income tax provision is required.
c) Distribution to Shareholders -- The Fund pays dividends of net investment
income annually. Distributions of net 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 Fund determines the gain or loss realized from investment
transactions by comparing the original cost of the security lot sold with the
net sale proceeds. The 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 the Fund's assets and liabilities be
reclassified in the capital accounts.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
CLASS A
------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
------------------ ------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $4,911,232 272,175 $2,578,553 144,595
Shares issued to holders in
reinvestment of dividends 723,642 40,038 476,916 30,262
Shares redeemed (1,952,591) (114,855) (865,801) (48,465)
---------- -------- ---------- --------
Net increase $3,682,283 197,358 $2,189,668 126,392
---------- -------- ---------- --------
---------- -------- ---------- --------
CLASS C
------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, 1998 NOVEMBER 30, 1997
------------------ ------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $1,051,699 59,962 $354,425 18,955
Shares issued to holders in
reinvestment of dividends 21,346 1,187 -- --
Shares redeemed (42,106) (2,189) (41,873) (1,999)
---------- -------- ---------- --------
Net increase $1,030,939 58,960 $312,552 16,956
---------- -------- ---------- --------
---------- -------- ---------- --------
4. INVESTMENT ADVISORY AND OTHER AGREEMENTS
The Fund has entered into an agreement with the Adviser, with whom certain
officers and directors of the Fund are affiliated, to furnish investment
advisory services to the Fund. Under the terms of this agreement, the Fund will
pay the Adviser a monthly fee at the annual rate of 1.00% on average daily net
assets.
For the fiscal year ending November 30, 1998, the Adviser voluntarily waived its
management fee 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 did not exceed 2.00% of the class' average daily net assets and (ii)
Class C shares did not exceed 2.75% of the class' average daily net assets.
For the year ended November 30, 1998, the Fund paid Oak Ridge Investments, Inc.
(the "Distributor") $14,767 of brokerage commissions. The Fund was advised that
the Distributor also received front-end sales charges on Class A shares of
$19,757 for the year ended November 30, 1998.
5. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments, for the Fund for the year ended November 30, 1998 were $11,850,545
and $7,226,430, respectively. There were no purchases or sales of long-term
U.S. Government securities.
At November 30, 1998, gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
Appreciation $2,524,792
(Depreciation) (822,033)
-----------
Net unrealized appreciation on investments $1,702,759
-----------
-----------
At November 30, 1998, the cost of investments for federal income tax purposes
was $13,252,028.
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 Fund is required to pay the Distributor a distribution fee of
up to 0.25% of the average daily net assets of the Fund 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 Fund to pay the
Distributor (i) a distribution fee of up to 0.75% of the average daily net
assets of the Fund 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 Fund attributable
to the Class C shares, computed on an annual basis. Distribution fees incurred
by Class A shares for the year ended November 30, 1998 were $17,916.
Distribution and service fees incurred by Class C shares for the year ended
November 30, 1998 were $4,147 and $1,382, respectively.
7. DISTRIBUTION
On December 15, 1998, a distribution of $0.03500 per share (entirely applicable
to long-term capital gains), aggregating $27,994 and $2,833 for Class A and
Class C, respectively, was paid to the shareholders of record on December 14,
1998.
OAK RIDGE GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
Oak Ridge Funds, Inc.
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Oak Ridge Funds, Inc. (comprised of
the Oak Ridge Growth Fund, the "Fund") at November 30, 1998, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
November 30, 1998 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
/s/ PricewaterhouseCoopers LLP
Milwaukee, Wisconsin
December 29, 1998
TABLE OF CONTENTS
Page
----
Letter to Shareholders 1
Schedule of Investments 3
Statement of Assets and Liabilities 5
Statement of Operations 6
Statement of Changes in Net Assets 7
Financial Highlights 8
Notes to the Financial Statements 9
Report of Independent Accountants 13
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
