SEMI-ANNUAL
REPORT
May 31, 2000
OAK RIDGE
FUNDS, INC.
Shareholder Services
1(800) 407-7298
OAK RIDGE INVESTMENTS, LLC
Investment Adviser
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 11
Notes to the Financial Statements 14
This Report has been prepared for shareholders and may be distributed to others
only if preceded or accompanied by a current prospectus.
OAK RIDGE FUNDS
LETTER TO SHAREHOLDERS
JULY, 2000
Dear Investor,
The market is behaving in a more rational manner, as Y2K fears have passed
and momentum oriented trading activity has become treacherous due to unrealistic
valuations. This has allowed fundamentally biased "stock pickers" to shine.
The NASDAQ Composite advanced a measly 2% for the six months ending May 31st
despite continued strong fundamentals for technology stocks. Most of 1999's
hottest mutual funds employed a simple strategy of overweighting stocks with the
most exciting stories regardless of their valuations. Market recognition of
these risks is affecting many stocks as evidenced by the failure of several high
profile IPO's.
Wall Street analysts in their enthusiasm to support lucrative banking clients
have emphasized easily manipulated statistics such as multiples of sales and
distant earnings potential. More realistic expectations have improved the
performance of value stocks, which are defined as those most reasonably priced
based on P/E, book value or other tangible measures. Value stocks will not
necessarily outperform growth stocks over the next few years since earnings
growth drives long-term stock prices. There is no meaningful value in a
company's assets if it does not translate into future earnings. However, buying
overpriced and unproven stocks is not likely to succeed in the future as it has
the past few years.
The Oak Ridge Small and Large Cap Funds have been slightly underweighted in
technology stocks due to excessive valuations. Proper selection has aided
performance the past six months as technology holdings have considerably bested
NASDAQ returns. Large-Cap technology leaders have the most visible earnings, but
in a more tempered environment are likely to witness P/E contraction and
experience modest returns far below those of the past few years. It is
anticipated that both Oak Ridge Funds will increase technology exposure on
pullbacks to more reasonable levels.
The continued flow of money into equities must find new leadership. The
healthcare group enjoys favorable noncyclical demographics that should survive
election year rhetoric. Financial stocks are also attractively priced, as broad
sector weakness has created exceptionally good values in an area that will see
steady growth from retirement-oriented baby boomers. P/E multiple expansion is
most likely to occur in "old economy" businesses that are uniquely positioned
for sustainable acceleration in earnings.
Many investment plans have excluded or underweighted small-cap allocations.
The trend toward emphasizing stock selection should be particularly beneficial
for small and mid-cap names that are priced at or below their earnings growth
rates. The annual rebalancing of the Russell 2000 on June 30th reduced the index
weighting of technology stocks from approximately 23% to 19% and replaced a
record 682 names.
Corporate earnings have been spectacular. This has reduced the forward market
P/E to a more reasonable level of approximately 23 for the S&P 500. The Federal
Reserve seems determined to raise rates to slow the economy in an effort that
appears more interested in targeting the stock market than inflation.
Unfortunately for Mr. Greenspan, investor confidence remains high, maintaining
strong demand for goods and stocks. Market wealth has created a comfort in
spending top dollars for high priced items such as housing with limited concern
over the impact of higher rates. The Fed may initiate one more rate increase in
August, but will probably accomplish its objective through a market rotation
into more established companies. "New economy" stocks with limited debt
exposure, have maintained their appeal, but investors seem oblivious to their
dependence on financial markets to offset negative cash flow with stock
offerings. The odds still favor a soft landing as technological advancement has
improved productivity and efficiency to minimize inflation.
Reduced expectations are necessary for equities. Annual gains of 8% to 12%
are more reasonable and in line with historic performance and probable economic
expansion. Increased volatility and lower returns will whipsaw the active trader
in a manner similar to commodity trading during the post inflationary period of
the early 1980's. The oxymoron of "momentum investing" will be exposed as the
speculative activity it always has been. Professional managers are also prone to
significant underperformance should they continue to employ the strategies that
have been successful the past few years. Most individual and professional
investors underperform the averages because of impatience. Investors should
seriously contemplate their asset allocation and not adjust regularly due to
market conditions.
We look forward to the continuation of the trend toward a stock-picking
environment and appreciate your confidence.
Sincerely,
/s/David M. Klaskin
David M. Klaskin
Chairman
Oak Ridge Small Cap Oak Ridge Small Cap
Equity Fund - Class A - Equity Fund - Class A - Russell 2000
Date 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 20,272 19,405 18,316
11/99 23,524 22,518 19,081
5/00 21,108 20,205 20,131
Average Annual Total Return
For the period ended May 31, 2000
<TABLE>
Since
One Year Five Year Inception
-------- --------- ---------
<S> <C> <C> <C>
Oak Ridge Small Cap Equity Fund - Class A (no load)(1)<F1> 30.0% 18.8% 16.3%
Oak Ridge Small Cap Equity Fund - Class A (load)(1)<F1> 24.4% 17.8% 15.5%
Oak Ridge Small Cap Equity Fund - Class C(2)<F2> 29.0% n/a 11.4%
</TABLE>
(1)<F1> January 3, 1994 inception.
(2)<F2> March 1, 1997 inception.
Oak Ridge Large Cap Oak Ridge Large Cap
Equity Fund - Class A - Equity Fund - Class A -
Date No Load Load S&P 500 Index
---- ----------------------- ----------------------- --------------
3/99 10,000 10,000 10,000
5/99 10,092 9,665 10,548
11/99 10,376 9,937 11,324
5/00 11,059 10,591 11,653
Average Annual Total Return
For the period ended May 31, 2000
<TABLE>
Since
One Year Inception
-------- ---------
<S> <C> <C>
Oak Ridge Large Cap Equity Fund - Class A (no load)(3)<F3> 9.6% 8.4%
Oak Ridge Large Cap Equity Fund - Class A (load)(3)<F3> 4.9% 4.7%
</TABLE>
(3)<F3> March 1, 1999 inception.
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, 2000 (UNAUDITED)
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
--------- -----
COMMON STOCK -- 83.66%
BANKING -- 1.29%
8,000 Astoria Financial Corporation $ 218,000
-----------
CHEMICALS -- 3.24%
13,000 Cambrex Corporation 547,625
-----------
COMMERCIAL SERVICES -- 2.32%
12,000 F.Y.I. Incorporated*<F4> 391,500
-----------
COMMUNICATIONS -- 1.94%
9,100 Inter-Tel, Incorporated 130,244
19,500 Performance Technologies,
Incorporated*<F4> 197,438
-----------
327,682
-----------
COMPUTERS - SOFTWARE -- 3.24%
14,000 Peregrine Systems, Inc.*<F4> 290,500
10,000 SeaChange International, Inc.*<F4> 256,250
-----------
546,750
-----------
CONSULTING SERVICES -- 2.28%
15,000 Comdisco, Inc. 384,375
-----------
DATA PROCESSING - MANAGEMENT -- 4.16%
45,500 Informix Corporation*<F4> 329,875
17,000 Reynolds and Reynolds Company -
Class A 371,875
-----------
701,750
-----------
DRUGS & MEDICAL -- 11.16%
9,000 Albany Molecular Research, Inc.*<F4> 468,562
8,527 Jones Pharma, Inc. 310,702
8,000 Shire Pharmaceuticals Group
PLC - ADR*<F4>+<F5> 349,000
8,000 Waters Corporation*<F4> 756,000
-----------
1,884,264
-----------
ELECTRONICS -- 10.92%
8,050 Flextronics International Ltd. 438,222
18,000 In Focus Systems, Inc.*<F4> 502,875
9,000 Sanmina Corporation*<F4> 572,625
15,000 Universal Electronics, Inc.*<F4> 330,000
-----------
1,843,722
-----------
ENVIRONMENTAL SERVICES/
POLLUTION CONTROL -- 0.86%
21,000 EarthCare Company*<F4> 144,375
-----------
FINANCE - LEASING COMPANY -- 0.36%
15,000 SierraCities.com Inc.*<F4> 60,000
-----------
FINANCIAL SERVICES -- 5.22%
14,000 Heller Financial, Inc. 264,250
14,000 Legg Mason, Inc. 617,750
-----------
882,000
-----------
HEALTH CARE COST CONTAINMENT -- 2.40%
9,800 MedQuist, Inc.*<F4> 405,475
-----------
HEALTH CARE EQUIPMENT & SUPPLIES -- 5.35%
16,000 Coherent, Inc.*<F4> 904,000
-----------
HOSPITALS & HEALTH CARE -- 1.44%
15,000 America Service Group, Inc.*<F4> 243,750
-----------
INFORMATION MANAGEMENT SERVICES -- 5.98%
20,000 Convergys Corporation*<F4> 898,750
25,000 TeleSpectrum Worldwide, Inc.*<F4> 111,719
-----------
1,010,469
-----------
INSTRUMENTS - SCIENTIFIC -- 3.14%
15,000 Varian, Inc.*<F4> 529,688
-----------
MACHINERY - PRINT TRADE -- 2.13%
7,500 Zebra Technologies Corporation*<F4> 360,000
-----------
OIL - FIELD SERVICES -- 4.00%
11,500 Hanover Compressor Company*<F4> 674,906
-----------
RETAIL - DISCOUNT -- 2.20%
12,000 BJ's Wholesale Club, Inc.*<F4> 372,000
-----------
TELECOMMUNICATIONS EQUIPMENT -- 4.69%
4,700 MasTech, Inc.*<F4> 321,362
8,000 NICE Systems LTD. - ADR*<F4>+<F5> 471,000
-----------
792,362
-----------
WHOLESALE -- 5.34%
10,000 Insight Enterprises, Inc.*<F4> 453,750
14,000 United Stationers Inc. 448,000
-----------
901,750
-----------
Total Common Stock
(cost $11,001,461) 14,126,443
-----------
SHORT-TERM INVESTMENTS -- 16.57%
VARIABLE RATE DEMAND NOTES -- 16.57%
$616,003 American Family Financial
Services Inc. 616,003
716,289 General Mills, Inc. 716,289
673,282 Sara Lee, Inc. 673,282
275,620 Wisconsin Electric Power Co. 275,620
516,058 Wisconsin Corporate Central
Credit Union 516,058
-----------
Total Short-Term Investments
(cost $2,797,252) 2,797,252
-----------
Total Investments -- 100.23%
(cost $13,798,713) 16,923,695
-----------
Liabilities, less Other
Assets -- (0.23%) (38,806)
-----------
NET ASSETS -- 100.00% $16,884,889
-----------
-----------
*<F4> Non-income producing security.
+<F5> Foreign security.
See Notes to the Financial Statements.
OAK RIDGE LARGE CAP EQUITY FUND
SCHEDULE OF INVESTMENTS
MAY 31, 2000 (UNAUDITED)
NUMBER OF
SHARES OR
PRINCIPAL
AMOUNT VALUE
--------- -----
COMMON STOCK -- 84.10%
ADVERTISING -- 1.96%
800 TMP Worldwide Inc.*<F6> $ 44,200
-----------
COMMUNICATIONS -- 6.49%
800 ALLTEL Corporation 52,350
600 Univision Communications, Inc.*<F6> 61,800
862 WorldCom, Inc.*<F6> 32,433
-----------
146,583
-----------
COMPUTERS - MICRO -- 5.59%
1,650 Sun Microsystems, Inc.*<F6> 126,431
-----------
COMPUTERS - NETWORKING -- 2.52%
1,000 Cisco Systems, Inc.*<F6> 56,938
-----------
COMPUTERS - SOFTWARE -- 4.39%
825 Microsoft Corporation*<F6> 51,614
650 Rational Software Corporation*<F6> 47,653
-----------
99,267
-----------
COSMETICS & TOILETRIES -- 3.95%
900 Kimberly-Clark Corporation 54,450
525 Procter & Gamble Company 34,913
-----------
89,363
-----------
DIVERSIFIED MANUFACTURING -- 6.65%
1,650 General Electric Company 86,831
1,350 Tyco International Ltd.+<F7> 63,534
-----------
150,365
-----------
DRUGS & MEDICAL -- 18.26%
1,250 Amgen Inc.*<F6> 79,531
1,100 Cardinal Health, Inc. 71,363
1,275 Elan Corporation PLC - ADR*<F6>+<F7> 50,761
775 Forest Laboratories, Inc.*<F6> 68,588
1,100 Medtronic, Inc. 56,787
700 Warner-Lambert Company 85,487
-----------
412,517
-----------
ELECTRIC - GENERATION -- 3.48%
900 AES Corporation 78,525
-----------
ELECTRONIC COMPONENTS -- 7.26%
1,200 Atmel Corporation*<F6> 45,825
1,200 Celestica Inc.*<F6> 55,875
500 Intel Corporation 62,344
-----------
164,044
-----------
FINANCE - CREDIT CARD -- 2.50%
1,050 American Express Company 56,503
-----------
FINANCIAL SERVICES -- 4.06%
700 American General Corporation 44,844
1,000 Household International, Inc. 47,000
-----------
91,844
-----------
INVESTMENT COMPANIES -- 1.64%
375 Merrill Lynch & Company 36,984
-----------
MEDICAL PRODUCTS -- 2.38%
600 Johnson & Johnson 53,700
-----------
OIL - INTEGRATED -- 3.03%
2,400 Conoco, Inc. - Class B 68,400
-----------
PIPELINES -- 4.11%
1,275 Enron Corporation 92,916
-----------
RETAIL - DISCOUNT -- 2.04%
800 Wal-Mart Stores, Inc. 46,100
-----------
RETAIL - DRUGS -- 1.76%
1,400 Walgreen Company 39,725
-----------
TELECOMMUNICATIONS SERVICES -- 2.03%
1,000 Vodafone AirTouch PLC - ADR +<F7> 45,812
-----------
Total Common Stock
(cost $1,594,759) 1,900,217
-----------
SHORT-TERM INVESTMENTS -- 14.46%
VARIABLE RATE DEMAND NOTES -- 14.46%
$92,920 American Family Financial
Services Inc. 92,920
70,569 General Mills, Inc. 70,569
74,690 Sara Lee, Inc. 74,690
88,660 Wisconsin Corporate Central
Credit Union 88,660
-----------
Total Short-Term Investments
(cost $326,839) 326,839
-----------
Total Investments -- 98.56%
(cost $1,921,598) 2,227,056
-----------
Other Assets,
less Liabilities -- 1.44% 32,542
-----------
NET ASSETS -- 100.00% $2,259,598
-----------
-----------
*<F6> Non-income producing security.
+<F7> Foreign security.
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
MAY 31, 2000 (UNAUDITED)
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND
----------- -----------
ASSETS:
Investments, at market value (cost $13,798,713
and $1,921,598, respectively) $16,923,695 $ 2,227,056
Cash -- 42,075
Receivable from Adviser -- 8,522
Interest and dividends receivable 19,025 2,806
Prepaid expenses 5,905 2,842
Receivable for capital shares sold 1,916 --
----------- -----------
Total Assets 16,950,541 2,283,301
----------- -----------
LIABILITIES:
Payable to Adviser 9,579 --
Payable for 12b-1 fees 8,007 761
Accrued other expenses 48,066 22,942
----------- -----------
Total Liabilities 65,652 23,703
----------- -----------
NET ASSETS $16,884,889 $ 2,259,598
----------- -----------
----------- -----------
NET ASSETS CONSIST OF:
Capital stock $ 7,709 $ 1,703
Paid-in-capital in excess of par 10,816,564 2,078,860
Undistributed net realized gain (loss)
on investments 2,935,634 (126,423)
Net unrealized appreciation on investments 3,124,982 305,458
----------- -----------
Net Assets $16,884,889 $ 2,259,598
----------- -----------
----------- -----------
CLASS A:
Net assets $15,381,879 $ 2,259,598
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 700,801 170,252
Net asset value and redemption price per share $21.95 $13.27
------ ------
------ ------
Maximum offering price per share $22.92 $13.86
------ ------
------ ------
CLASS C:
Net assets $ 1,503,010 $ --
Shares authorized ($.01 par value) 50,000,000 50,000,000
Shares issued and outstanding 70,046 --
Net asset value, redemption price and
offering price per share $21.46 $ --
------ ------
------ ------
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED MAY 31, 2000 (UNAUDITED)
OAK RIDGE OAK RIDGE
SMALL CAP LARGE CAP
EQUITY FUND EQUITY FUND
----------- -----------
INVESTMENT INCOME:
Interest $ 53,259 $ 7,972
Dividends 16,956 5,809
---------- --------
70,215 13,781
---------- --------
EXPENSES:
Investment advisory fees 67,762 6,388
Fund administration and accounting fees 36,807 22,870
Professional fees 24,752 2,903
Shareholder servicing fees and expenses 22,742 9,949
Reports to shareholders 4,025 686
Federal and state registration fees 4,925 4,381
Directors' fees 1,500 1,264
Custody fees 2,508 1,405
12b-1 fees -- Class A 20,590 2,662
12b-1 fees -- Class C 5,992 --
Service fees -- Class C 1,997 --
Other 838 110
---------- --------
Total expenses before waiver 194,438 52,618
Less: Waiver of expenses by Adviser (8,059) (31,296)
---------- --------
Net expenses 186,379 21,322
---------- --------
NET INVESTMENT LOSS (116,164) (7,541)
---------- --------
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on investments 3,215,215 (18,005)
Change in unrealized appreciation/depreciation
on investments (1,272,686) 153,171
---------- --------
Net gain on investments 1,942,529 135,166
---------- --------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $1,826,365 $127,625
---------- --------
---------- --------
See Notes to the Financial Statements.
OAK RIDGE FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
OAK RIDGE OAK RIDGE
SMALL CAP EQUITY FUND LARGE CAP EQUITY FUND
----------------------------------- ----------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED PERIOD ENDED
MAY 31,2000 NOVEMBER 30, 1999 MAY 31,2000 NOVEMBER 30,1999
----------- ----------------- ----------- ----------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment loss $ (116,164) $ (234,084) $ (7,541) $ (7,686)
Net realized gain (loss) on investments 3,215,215 (163,418) (18,005) (108,418)
Change in unrealized appreciation/depreciation
on investments (1,272,686) 2,694,909 153,171 152,287
----------- ----------- ---------- ----------
Net increase in net assets resulting
from operations 1,826,365 2,297,407 127,625 36,183
----------- ----------- ---------- ----------
CAPITAL SHARE TRANSACTIONS:
Shares sold 758,966 2,796,013 280,295 1,927,992
Shares issued to holders in reinvestment
of dividends -- 29,855 -- --
Shares redeemed (1,199,339) (4,064,776) (3,805) (108,692)
----------- ----------- ---------- ----------
Net increase (decrease) in net assets resulting
from capital share transactions (440,373) (1,238,908) 276,490 1,819,300
----------- ----------- ---------- ----------
DISTRIBUTIONS TO CLASS A SHAREHOLDERS
FROM NET REALIZED GAINS -- (27,998) -- --
----------- ----------- ---------- ----------
DISTRIBUTIONS TO CLASS C SHAREHOLDERS
FROM NET REALIZED GAINS -- (2,833) -- --
----------- ----------- ---------- ----------
TOTAL INCREASE IN NET ASSETS 1,385,992 1,027,668 404,115 1,855,483
NET ASSETS:
Beginning of period 15,498,897 14,471,229 1,855,483 --
----------- ----------- ---------- ----------
End of period $16,884,889 $15,498,897 $2,259,598 $1,855,483
----------- ----------- ---------- ----------
----------- ----------- ---------- ----------
</TABLE>
See Notes to the Financial Statements.
OAK RIDGE SMALL CAP EQUITY FUND -- CLASS A
FINANCIAL HIGHLIGHTS
<TABLE>
SIX MONTHS
ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
MAY 31, 2000 NOV. 30, '99 NOV. 30, '98 NOV. 30, '97 NOV. 30, '96 NOV. 30, '95
------------ ------------ ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Per share data:
Net asset value, beginning
of period $19.60 $16.73 $19.84 $16.57 $14.32 $10.48
Income from investment operations:
Net investment loss (0.15)(1)<F8> (0.27)(1)<F8> (0.18)(1)<F8> (0.22)(1)<F8> (0.16)(1)<F8> (0.13)(1)<F8>
Net realized and unrealized
gains (losses) on investments 2.50 3.18 (1.67) 4.58 3.01 4.00
------ ------ ------ ------ ------ ------
Total from investment operations 2.35 2.91 (1.85) 4.36 2.85 3.87
------ ------ ------ ------ ------ ------
Less distributions:
Distributions from capital gains -- (0.04) (1.26) (1.09) (0.60) (0.03)
------ ------ ------ ------ ------ ------
Net asset value, end of period $21.95 $19.60 $16.73 $19.84 $16.57 $14.32
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
Total Return 12.0%(2)(3) 17.4%(2) (9.8)%(2) 28.0%(2) 29.0%(2) 37.0%
<F9><F10> <F9> <F9> <F9> <F9>
Supplemental data and ratios:
Net assets, end of period $15,381,879 $14,001,255 $13,215,299 $11,758,733 $7,725,072 $4,182,246
Ratio of expenses to
average net assets:
Before expense waiver 2.1%(4)<F11> 2.5% 2.7% 2.9% 3.5% 6.5%
After expense waiver 2.0%(4)<F11> 2.0% 1.9% 2.0% 2.0% 2.0%
Ratio of net investment loss
to average net assets:
Before expense waiver (1.3)%(4)<F11> (2.0)% (1.9)% (2.2)% (2.7)% (5.8)%
After expense waiver (1.2)%(4)<F11> (1.5)% (1.1)% (1.3)% (1.2)% (1.3)%
Portfolio turnover rate(5)<F12> 25% 64% 57% 55% 71% 109%
</TABLE>
(1)<F8> 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.
(2)<F9> 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.
(3)<F10> Not annualized.
(4)<F11> Annualized.
(5)<F12> 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 SMALL CAP EQUITY FUND -- CLASS C
FINANCIAL HIGHLIGHTS
<TABLE>
SIX MONTHS NINE MONTHS
ENDED YEAR ENDED YEAR ENDED ENDED
MAY 31, 2000 NOV. 30, '99 NOV. 30, '98 NOV. 30, '97(1)<F13>
------------ ------------ ------------ --------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Per share data:
Net asset value, beginning
of period $19.24 $16.54 $19.75 $16.20
Income from investment operations:
Net investment loss (0.14)(2)<F14> (0.46)(2)<F14> (0.34)(3)<F15> (0.13)(2)<F14>
Net realized and unrealized
gains (losses) on investments 2.36 3.20 (1.61) 3.68
------ ------ ------ ------
Total from investment operations 2.22 2.74 (1.95) 3.55
------ ------ ------ ------
Less distributions:
Distributions from capital gains -- (0.04) (1.26) --
------ ------ ------ ------
Net asset value, end of period $21.46 $19.24 $16.54 $19.75
------ ------ ------ ------
------ ------ ------ ------
Total Return 11.5%(4)<F16> 16.6% (10.4)% 21.9%(4)<F16>
Supplemental data and ratios:
Net assets, end of period $1,503,010 $1,497,642 $1,255,930 $334,836
Ratio of expenses to
average net assets:
Before expense waiver 2.9%(5)<F17> 3.3% 3.4% 3.6%(5)<F17>
After expense waiver 2.8%(5)<F17> 2.8% 2.6% 2.8%(5)<F17>
Ratio of net investment loss
to average net assets:
Before expense waiver (2.1)%(5)<F17> (2.7)% (2.6)% (3.0)%(5)<F17>
After expense waiver (2.0)%(5)<F17> (2.2)% (1.9)% (2.2)%(5)<F17>
Portfolio turnover rate(6) 25% 64% 57% 55%
</TABLE>
(1)<F13> Effective March 1, 1997, the Fund offered a second class of shares,
Class C.
(2)<F14> 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.
(3)<F15> Net investment loss per share represents net investment loss divided
by the average shares outstanding throughout the year.
(4)<F16> Not annualized.
(5)<F17> Annualized.
(6)<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
<TABLE>
CLASS A CLASS C
------------------------------------- -----------------------------
SIX MONTHS MARCH 1, '99(1)<F19> APRIL 26, '99(1)<F19>(2)<F20>
ENDED THROUGH THROUGH
MAY 31, 2000 NOV. 30, '99 NOV. 25, '99
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
Per share data:
Net asset value, beginning of period $12.45 $12.00 $12.66
Income from investment operations:
Net investment loss (0.04)(3)<F21> (0.05)(3)<F21> (0.10)(3)<F21>
Net realized and unrealized gains on investments 0.86 0.50 0.03
------ ------ ------
Total from investment operations 0.82 0.45 (0.07)
------ ------ ------
Net asset value, end of period $13.27 $12.45 $12.59
------ ------ ------
------ ------ ------
Total Return 6.6%(4)(5) 3.8%(4)(5) (0.6)%(4)
<F22><F23> <F22><F23> <F22>
Supplemental data and ratios:
Net assets, end of period $2,259,598 $1,855,483 --
Ratio of expenses to average net assets:
Before expense waiver 5.0%(6)<F24> 7.8%(6)<F24> 7.2%(6)<F24>
After expense waiver 2.0%(6)<F24> 2.0%(6)<F24> 2.8%(6)<F24>
Ratio of net investment loss to average net assets:
Before expense waiver (3.7)%(6)<F24> (6.4)%(6)<F24> (5.8)%(6)<F24>
After expense waiver (0.7)%(6)<F24> (0.6)%(6)<F24> (1.4)%(6)<F24>
Portfolio turnover rate(7)<F25> 16% 52% 52%
</TABLE>
(1)<F19> Commencement of Operations.
(2)<F20> Effective April 26, 1999, the Fund offered a second class of shares
(Class C). All Class C shareholders redeemed their shares on
November 25, 1999. The Fund has subsequently filed and distributed
to all shareholders, a supplement to the Prospectus dated March 1,
1999, as supplemented July 20, 1999, which noted that, effective
immediately (December 7, 1999), the Large Cap Equity Fund's Class C
shares are not currently available to investors. If the Fund should
decide to offer the Class C shares in the future, a shareholder
notification will be provided at that time.
(3)<F21> 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)<F22> Not annualized.
(5)<F23> The total return calculation does not reflect the 4.25% sales load.
(6)<F24> Annualized.
(7)<F25> 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, 2000 (UNAUDITED)
1. ORGANIZATION
Oak Ridge Funds, Inc. (the "Corporation") was incorporated on October 15, 1993
as a Maryland corporation. The Corporation is registered as an open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act") and consists of two series of portfolios: the Oak Ridge
Small Cap Equity Fund (formerly known as the Oak Ridge Growth Fund) and the Oak
Ridge Large Cap Equity Fund (the "Funds"). 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 1, 1999 (Oak Ridge Large Cap Equity
Fund).
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 Rule 12b-1 expenses and exclusive voting rights
on matters pertaining to the distribution plan for that class. Effective
December 7, 1999 and until further notice, the Oak Ridge Large Cap Equity Fund
discontinued issuing Class C shares.
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, if any, 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 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 income and expenses 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, 2000 NOVEMBER 30, 1999
-------------------- -------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 622,993 26,161 $ 2,017,616 117,504
Shares issued to holders in
reinvestment of dividends -- -- 27,109 1,668
Shares redeemed (909,830) (39,632) (3,320,277) (194,852)
--------- ------- ----------- --------
Net decrease $(286,837) (13,471) $(1,275,552) (75,680)
--------- -----------
--------- -----------
SHARES OUTSTANDING:
Beginning of Period 714,272 789,952
------- --------
End of Period 700,801 714,272
------- --------
------- --------
OAK RIDGE SMALL CAP EQUITY FUND
CLASS C
---------------------------------------------
SIX MONTHS ENDED YEAR ENDED
MAY 31, 2000 NOVEMBER 30, 1999
-------------------- -------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 135,973 5,712 $ 778,397 45,756
Shares issued to holders in
reinvestment of dividends -- -- 2,746 170
Shares redeemed (289,509) (13,519) (744,499) (43,989)
--------- ------- ----------- --------
Net (decrease) increase $(153,536) (7,807) $ 36,644 1,937
--------- -----------
--------- -----------
SHARES OUTSTANDING:
Beginning of Period 77,853 75,916
------- --------
End of Period 70,046 77,853
------- --------
------- --------
Total Net Decrease $(440,373) $(1,238,908)
--------- -----------
--------- -----------
OAK RIDGE LARGE CAP EQUITY FUND
CLASS A
---------------------------------------------
SIX MONTHS ENDED YEAR ENDED
MAY 31, 2000 NOVEMBER 30, 1999
-------------------- -------------------
AMOUNT SHARES AMOUNT SHARES
------ ------ ------ ------
Shares sold $ 280,295 21,490 $ 1,920,112 157,498
Shares redeemed (3,805) (299) (100,836) (8,437)
--------- ------- ----------- --------
Net increase $ 276,490 21,191 $ 1,819,276 149,061
--------- -----------
--------- -----------
SHARES OUTSTANDING:
Beginning of Period 149,061
-------
End of Period 170,252
-------
-------
CLASS C
---------------------------------------------
APRIL 26, 1999*<F26>
THROUGH
NOVEMBER 25, 1999
-------------------
AMOUNT SHARES
------ ------
Shares sold $ 7,880 624
Shares redeemed (7,856) (624)
----------- --------
Net increase $ 24 --
----------- --------
----------- --------
Total Net Increase $ 1,819,300
-----------
-----------
*<F26> 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 Oak
Ridge Small Cap Equity Fund pays the Adviser an annual management fee, effective
March 1, 1999, of 0.75% (prior to March 1, 1999, the fee was 1.00%) and the Oak
Ridge Large Cap Equity Fund pays the Adviser an annual fee of 0.60% of the
respective Fund's average daily net assets. The advisory fee is accrued daily
and paid monthly.
For the six months ended May 31, 2000, the Adviser 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 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. The Adviser has agreed to extend
these caps on the Funds' operating expenses through March 31, 2001. After this
date, the Adviser may elect to continue, modify or terminate the limitation on
Fund operating expenses. Further, under the terms of this agreement, any Fund
expenses waived or reimbursed after March 1, 1999 may be recouped by the Adviser
from the Fund to the extent actual operating expenses for a period are less than
the expense limitation caps, provided that the Adviser may only be entitled to
recoup such amounts for a period of three years from the fiscal year such
amounts were waived or reimbursed. At May 31, 2000, expense waivers and
reimbursements that may potentially be recouped by the Adviser through November
30, 2002 are $61,194 for the Oak Ridge Small Cap Equity Fund and $107,202 for
Oak Ridge Large Cap Equity Fund.
For the six months ended May 31, 2000, Oak Ridge Small Cap Equity Fund and Oak
Ridge Large Cap Equity Fund paid Oak Ridge Investments, Inc. (the "Distributor")
$2,482 and $411, respectively, of brokerage commissions. The Funds were advised
that the Distributor also received front-end sales charges on Class A shares of
$2,876 for the Oak Ridge Small Cap Equity Fund and $88 for the Oak Ridge Large
Cap Equity Fund.
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, 2000 were $4,050,247 and $6,743,004, respectively. The aggregate
purchases and sales of securities, excluding short-term investments, for the Oak
Ridge Large Cap Equity Fund for the six months ended May 31, 2000 were $511,769
and $295,551, respectively. There were no purchases or sales of long-term U.S.
Government securities.
At May 31, 2000, cost and gross unrealized appreciation and depreciation of
investments for federal income tax purposes were as follows:
<TABLE>
COST APPRECIATION (DEPRECIATION) NET APPRECIATION
------------ ------------ -------------- -----------------
<S> <C> <C> <C> <C>
Oak Ridge Small Cap Equity Fund $13,798,713 $4,924,106 $(1,799,124) $3,124,982
Oak Ridge Large Cap Equity Fund 1,921,598 406,637 (101,179) 305,458
</TABLE>
At November 30, 1999, the Oak Ridge Small Cap Equity Fund and Oak Ridge Large
Cap Equity Fund had capital loss carryforwards of $163,418 and $108,418,
respectively, which the Funds intend to use to reduce future net capital gains.
These carryforwards, if unused, expire on November 30, 2007.
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 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 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 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 the Oak Ridge Small
Cap Equity Fund and Oak Ridge Large Cap Equity Fund Class A shares for the six
months ended May 31, 2000 were $20,590 and $2,662, respectively. Distribution
fees incurred by the Oak Ridge Small Cap Equity Fund Class C shares for the six
months ended May 31, 2000 were $5,992. Service fees for the Oak Ridge Small Cap
Equity Fund Class C shares for the six months ended May 31, 2000 were $1,997.
