<PAGE> 1
LETTER FROM THE INVESTMENT ADVISER
================================================================================
Dear Fellow Shareholders:
We are pleased to report the fiscal mid-year results and current investments for
the Aristata Mutual Funds as of October 31, 1999. At month-end the Dow Jones
Industrial Average and the Standard and Poor's 500 Index closed within 5% of
their all-time highs, whereas, the technology-dominated, over-the-counter
(NASDAQ) index actually posted a new record high. During the past six months
bond prices declined as both short and long-term interest rates pushed modestly
higher.
HIGHLIGHTS OF INVESTMENT RESULTS
We suggested last April, in the Aristata Annual Report, that 1999 could be bumpy
due to the maturing economic expansion, growing investor nervousness, and an
aging bull market for stocks and bonds. Indeed it has been. After a significant
respite in summer, the stock market has returned to its old ways -- favoring
only a few stocks while ignoring most stocks and punishing (often severely)
companies that fail to meet earnings expectations. During the past quarter the
majority of the market traveled a rough road that was littered with some very
big potholes.
The past six months was a challenging time for the great majority of stocks and
certainly for bonds, as market prices gyrated in the face of the Federal
Reserve's two interest rate hikes. The investment total returns, ending October
31, were impacted by these higher interest rates, and by a stock market
performance that was heavily weighted toward a few large capitalization stocks.
The total return investment results, ended October 31st, are summarized below:
<TABLE>
<CAPTION>
TOTAL RETURNS ENDING OCTOBER 31, 1999(1)
3 MONTHS 6 MONTHS 12 MONTHS
-------- -------- ----------
<S> <C> <C> <C>
ARISTATA EQUITY FUND -7.01% -4.71% 9.70%
Standard & Poor's 500 Index 2.88 2.68 25.60
Value Line Composite Index -8.11 -6.14 -3.49
ARISTATA QUALITY BOND FUND 0.99% -0.09% 0.26%
Lehman Brothers Government/Corp Bond Index 1.08 -0.55 -0.66
Lehman Brothers Government/Corp Intermediate Bond Index 1.27 0.47 0.99
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND -0.47% -1.41% -0.30%
Lipper Municipal Intermediate Bond Fund Index -1.10 -2.57 -1.23
Lipper Colorado Municipal Bond Fund Average -2.85 -4.93 -3.78
Lehman Brothers Municipal Bond Index -1.84 -3.46 -1.77
</TABLE>
Bond results provided better returns than stocks in the most recent three and
six-month periods, and bonds offered stability in what was a volatile equity
market. Our short-term equity results did not keep up with most of the popular
indexes and benchmarks, and offset some, but certainly not all, of the stronger
results we reported to you in the April report. From our perspective, and I am
sure yours too,
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LETTER FROM THE INVESTMENT ADVISER
================================================================================
---------------------------
Parallels between
energy stocks in the
1980's and big-cap
tech stocks today are real.
---------------------------
we would prefer more orderly increases each quarter. But that is not what
financial markets are offering this year. We remain confident in our investment
approach and are encouraged that our investment discipline of focusing on good
quality stocks and bonds that are priced at reasonable levels will produce
successful long-term investment results for our shareholders.
In recent months we have seen financial markets gripped by fear about interest
rate hikes, and the hope for a broader market advance that we outlined six
months ago seems to have evaporated. Instead, as in all of 1998, a few large
capitalization stocks were all that seemed to be doing well during the most
recent months. The investor herd seems to be chasing fewer and fewer stocks,
ignoring or even punishing everything else.
A GLASS HALF FULL OR HALF EMPTY?
As we've said in the past, there is good news in all this. It means that good
values are still represented within the stock market. As Cliff Ransom, head of
research at State Street Research, so cleverly phrased it, there are many stocks
suffering from "irrational indifference" (a wonderful verbal twist on Alan
Greenspan's "irrational exuberance" statement several years ago). Due to the
myopic nature of this market of stocks, it's surprising how many shares sell at
very reasonable multiples (1 to 2 times revenues and 10 to 15 times earnings).
Yet, no one cares. Are the prospects of so many high priced technology stocks so
superior that valuations should be 5 to 20 times as expensive? We remain
skeptical. Even solid future relative growth (which is a big assumption) does
not make them attractive at today's expensive prices. Yet stocks and industries
outside the big-cap, tech limelight are ignored. Irrational indifference is
rampant.
The tech sector now represents about 25% of the S&P 500, up from only 7% in
1992! The last sector to be this large was energy back in 1980 when everyone
thought the world was going to run out of oil. As readers well know, since then
that sector collapsed, going from 27% of the S&P in 1980 to a lowly 6% today.
---------------------
"Irrational
indifference" creates
opportunity.
---------------------
We are not so sure that the current infatuation with technology is all that
different from the mania over energy twenty years ago. But both are commodities.
If you don't think so, just look at the prices of computer chips, disk drives,
software, and computers themselves. They have become commodities. We doubt we
are going to run out of computers and software. Their supply is limitless and
the prices keep plummeting. Why should these silicon-based commodities be that
much different from fossil-fuel based commodities? Even the mighty can fall when
coming from such a point of fashionable infatuation and "sure-fire" thinking.
A good dose of indifference also applies to bonds. The rise in long-term
interest rates last year and
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LETTER FROM THE INVESTMENT ADVISER
================================================================================
earlier this year has stabilized during the past few months. But because of the
rise in rates from 4.8% a year ago to 6.2% today, bonds under performed stocks
over the past year by a very wide margin. According to Jim Moltz, economist of
the firm International Strategy & Investment, history strongly suggests that
bonds are due for a rebound versus stocks. He notes that on two prior occasions
(1980 and 1987), bonds similarly lagged stocks very badly. In both cases, the
following year bonds played catch-up and outperformed stocks by a very wide
margin. It is worth noting that bonds did, in fact, provide better returns than
the broader stock indices during recent months, and they provided much needed
stability to balanced portfolios.
THE FLIP SIDE OF THE WEALTH EFFECT -- AN INCREASING CONCERN
There is more and more evidence that high stock prices are fueling consumer
spending and thus economic growth -- the so-called "wealth effect." The
correlation between consumer spending and the rise and fall of stocks is
becoming almost a lock-step proposition, much more so than in the past. Recent
evidence certainly suggests that due to the increased effect of the wealth
effect, stock markets now lead the economy rather than the other way around.
Economists estimate that the wealth effect may have accounted for as much as
1.5% of the 4% GDP growth over the past year. That being the case, what will be
the impact of lower stock markets on consumers and the economy? What are the
implications for the economy if the NASDAQ (dominated by a few big cap tech
stocks) declines significantly? Remember, just three stocks (CISCO, Microsoft
and Intel) account for 25% of that index. We note the Conference Board Consumer
Confidence Index recently slipped lower for the fourth month in a row. It is
very likely that this deterioration in consumer confidence is a function of the
volatile stock market during recent months. The "Stealth Bear Market" may be
impacting consumer spending more than is realized.
..................................................
"....the stock market today is more important
to the economy than the economy is to the stock
market." -- Bob Farrell, Strategist at Merrill Lynch
..................................................
Offsetting this is some good news. Foreign economies seem to be gaining
strength. This may be doubly important if the U.S. economy does slow.
On behalf of our partners and our entire organization, I want to thank you for
the trust and confidence you have placed with us as investment adviser to the
Aristata Funds. As investors with you in these Funds, we are dedicated to
providing you with long-term successful investment returns.
Sincerely,
/s/ H. DAVID LANSDOWNE
H. David Lansdowne, CFA
President
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc.
================================================================================
3
<PAGE> 4
FUND REVIEW
================================================================================
ARISTATA EQUITY FUND
PERFORMANCE
Current high market levels belie the wide price swings and abrupt shifts in
investor sentiment that have buffeted the financial markets during the past six
months. During this time most market averages experienced price declines of over
10%, officially qualifying for a market correction, from their highs registered
earlier in the summer. The price declines of a broader list of stocks was even
greater. During the market correction the average New York Stock Exchange stock
fell 16% from their earlier highs, and more than 80% of the NASDAQ stocks were
down more than 20% from their 52-week highs. However, in spite of a lot of
positive market commentary on the six-o'clock news, in reality recent months saw
a "Stealth Bear Market." Consequently, the typical stock, or any
well-diversified portfolio, struggled during the past several months.
The Aristata Equity Fund total return for the six-month period ending October
31, 1999 was (4.71)%. The Standard & Poor's 500 Index returned 2.68% and the
broader Value Line Composite Index had a negative 6.14% return.
Net assets of the Fund as of October 31, 1999 were $82.6 million.
EQUITY MARKET OVERVIEW
The financial markets registered mixed results during the past six months, and
this experience reflects the many crosscurrents within the economy. For the six
months ended October 31st, the Standard & Poor's 500 Index recorded one of the
stronger showings with a total return of 2.68%. The strength of this index
reflects the importance of large, technology related companies (approximately
25% of the index weight) to the index. In contrast, the Dow Jones Industrial
Average returned only .25% and the broader Value Line Composite Index actually
declined 6.14% during the past six months.
Important influences on the financial markets include the ongoing U.S.
economic
ARISTATA EQUITY FUND
SECTOR PROFILE
[PIE CHART]
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4
<PAGE> 5
FUND REVIEW
================================================================================
ARISTATA EQUITY FUND (CON'T.)
expansion, increasing corporate profits, and encouraging signs that growth is
returning for many international economies. However, this good news has raised
concerns about inflation and interest rates. The Federal Reserve's Chairman Mr.
Greenspan has raised interest rates twice as a result of these concerns, and
this action has heightened the anxiety level for many investors. The Chairman is
committed to fostering non-inflationary growth, and to stopping speculative
activity on Wall Street. So far, these Federal Reserve braking actions (a
tapping on the interest rate pedal) have produced their intended results. We do
not expect Greenspan to slam on the brakes, but we are certain he is monitoring
closely the economy and the financial markets. The Federal Reserve is taking
action because it has concluded that the elevated stock market creates some
risks for the economy.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA EQUITY FUND,
THE S&P 500 AND THE VALUE LINE COMPOSITE.
[CHART]
-------------------------------
PERFORMANCE
AS OF OCTOBER 31, 1999
-------------------------------
AVERAGE ANNUAL TOTAL RETURN(1)
-------------------------------
1 Year 9.70%
Since Inception 5.29%
-------------------------------
-----------------------------------------------
FUND VALUE VS. INDEX VALUE
AT OCTOBER 31, 1999
-----------------------------------------------
Aristata Equity Fund $10,897
-----------------------------------------------
S&P 500 $13,290
-----------------------------------------------
Value Line Composite $ 8,864
-----------------------------------------------
================================================================================
5
<PAGE> 6
FUND REVIEW
================================================================================
ARISTATA EQUITY FUND (CON'T.)
PORTFOLIO UPDATE
Our investment goal is to invest in good quality companies that are selling at
reasonable (bargain) prices. The current portfolio is invested in 62 companies
and it is diversified across approximately 20 industries. The portfolio's ten
largest investments are summarized below:
TEN LARGEST EQUITY HOLDINGS
<TABLE>
<CAPTION>
% OF DIVIDEND PRICE
PORTFOLIO YIELD EARNINGS RATIO
<S> <C> <C> <C>
Atlantic Richfield Company 4.5% 3.5% 20.8x
Texaco Inc. 3.7% 3.0% 18.5
ABBLtd.-(144a) 3.1% 2.5% 24.2
New Century Energies 3.0% 7.0% 10.0
IBM 3.0% 0.5% 20.8
American Home Products 2.8% 1.7% 27.9
Ingersoll Rand 2.8% 1.4% 12.6
GTECorporation 2.7% 2.6% 18.8
BellSouth 2.7% 1.6% 21.3
Northwest Natural Gas 2.6% 4.6% 15.9
TEN LARGEST HOLDINGS 30.9% AVERAGE 2.8% 19.1x
</TABLE>
Diversification is an investment discipline that is important in controlling and
managing the risks for a portfolio. The above ten investments offer
diversification across several industries. These ten holdings represent
approximately 31% of total portfolio investments.
The valuation benchmarks of these ten investments and for the portfolio
generally are attractive when compared to the Standard & Poor's 500 Index. The
above investments sell at an average, estimated price earnings ratio (PE) of
19.1x, and the companies have an average dividend yield of 2.8% in comparison to
the Standard & Poor's higher PE of 25 and its lower yield of 1.2%.
We continue to seek out high quality companies that are reasonably priced. As
the above summary indicates, the Aristata Equity Fund is comprised of
investments that seem much more reasonably priced in comparison to the
expensively priced growth and technology influenced market index of the Standard
& Poor's 500. History supports the case that companies bought with relatively
low price earnings ratios have provided attractive long-term returns with less
risk as well.
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6
<PAGE> 7
FUND REVIEW
================================================================================
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
PERFORMANCE
The Aristata Quality Bond Fund's total return for the six-month period ending
October 31, 1999 was (0.09)%. The Lehman Brothers Government/Corporate Bond
Index and the Lehman Brothers Government/Corporate Intermediate Bond Index
registered comparable returns of (0.55)% and 0.47% respectively. Net assets of
the Aristata Quality Bond Fund were $47.2 million as of October 31st. The
Aristata Colorado Quality Tax-Exempt Fund had net assets of $15.8 million for
the same ending period, while its 6 month total return was (1.41)%. Comparable
returns for the Lipper Municipal Intermediate Bond Fund Index and the Lehman
Brothers Municipal Bond Index were (2.57)% and (3.46)% respectively.
FIXED INCOME MARKET REVIEW
During the past six months, the fixed income markets experienced an increase in
market volatility. Uncertainty over the Federal Reserve's monetary policy
actions led to a rise in interest rates. Tight labor markets and the possibility
of higher wages have remained a concern for the Federal Reserve. A number of
factors, such as the rise in gold, and rise in oil prices have also caused bond
yields to move higher.
While the economy is now in its ninth year of economic growth, its overall
inflation rate has been remarkably good. Competition has prevented many
companies from raising prices despite a good economy.
ARISTATA QUALITY BOND FUND
SECTOR PROFILE
as of October 31, 1999
[PIE CHART]
ARISTATA QUALITY BOND FUND
QUALITY PROFILE (2)
as of October 31, 1999
[PIE CHART]
================================================================================
7
<PAGE> 8
FUND REVIEW
================================================================================
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
We believe the fixed income markets now offer value. However, evidence of a
slowing of the economy is needed for a sustained drop in yields. In the months
ahead, the Federal Reserve will need to evaluate additional information on the
direction of the economy.
PORTFOLIO UPDATE
ARISTATA QUALITY BOND FUND
Throughout the six-month period under review, issuance of corporate bonds
continued at a strong pace. Many companies have rushed to the debt markets to
raise money before the fourth quarter to avoid any Y2K concerns. The issuance of
agency securities has also been increasing.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA QUALITY BOND
FUND, THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX AND THE LEHMAN
BROTHERS GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX.
[CHART]
-------------------------------
PERFORMANCE
AS OF OCTOBER 31, 1999
-------------------------------
AVERAGE ANNUAL TOTAL RETURN (1)
1 Year 0.26%
Since Inception 3.63%
-------------------------------
------------------------------------------------------
FUND VALUE VS. INDEX VALUE
AT OCTOBER 31, 1999
------------------------------------------------------
Aristata Quality Bond Fund $10,612
------------------------------------------------------
Lehman Bros. Gov't/Corp. Bond Index $10,655
------------------------------------------------------
Lehman Bros. Gov't/Corp. Interm. Bond Index $10,779
------------------------------------------------------
================================================================================
8
<PAGE> 9
FUND REVIEW
================================================================================
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
As issuance increased, the widening of agency and corporate bond yields provided
us with an opportunity to capture higher yielding securities. Long-term Treasury
yields fluctuated between 5.65% and 6.40%, ending the six-month period at 6.15%.
The Fund's strategy continues to emphasize high quality, intermediate bonds. The
Fund's average maturity on October 31st was 6.2 years. The Fund held 61% in
corporate bonds and 37% in U.S. Government and agency obligations.
PORTFOLIO UPDATE
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
Municipal issuance has been strong during the past few months, resulting in
lower prices and higher yields. Long-term municipal yields have approached
levels that are over 95% of taxable treasury yields. The abundant supply offered
us an opportunity to increase the Fund's holdings with higher yields.
The Fund's average maturity on October 31st was 7.8 years. Despite the overall
uncertainty in bonds, and with municipal yields at two-year highs, we believe
municipal bonds are an attractive investment. While providing tax-free income to
our shareholders, our strategy continues to focus on the high quality sectors of
the municipal market.
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
SECTOR PROFILE
as of October 31, 1999
[PIE CHART]
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
QUALITY PROFILE (2)
as of October 31, 1999
[PIE CHART]
================================================================================
9
<PAGE> 10
FUND REVIEW
================================================================================
ARISTATA QUALITY BOND FUND AND ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
(CON'T.)
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE ARISTATA COLORADO
QUALITY TAX-EXEMPT FUND, THE LIPPER MUNICIPAL INTERMEDIATE BOND FUND INDEX, AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX.
[CHART]
-------------------------------
PERFORMANCE
AS OF OCTOBER 31, 1999
-------------------------------
AVERAGE ANNUAL TOTAL RETURN (1)
1 Year (0.30)%
Since Inception 2.47%
-------------------------------
---------------------------------------------------------
FUND VALUE VS. INDEX VALUE
AT OCTOBER 31, 1999
---------------------------------------------------------
Aristata Colorado Quality Tax-Exempt Fund $10,414
---------------------------------------------------------
Lipper Municipal Interm. Bond Fund Index $10,286
---------------------------------------------------------
Lehman Brothers Municipal Bond Index $10,288
---------------------------------------------------------
(1) Total return is the change in the value of an investment in the Fund after
reinvesting all income and capital gains. It is calculated by dividing the
change in total investment value by the initial value of the investment. Total
return figures are net of all fund expenses and reflect all fee waivers. Without
these fee waivers, total return would have been lower. The inception date of
each Fund is March 2, 1998. The investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. The total return figures represent
past performance and are not indicative of future results.
(2) Quality profile based on each security's highest rating from Moody's or S&P.
The views expressed in this Adviser Update reflect the adviser's view only
through October 31, 1999. The Adviser's views are subject to change at any time
based on market and other conditions.
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10
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FUND REVIEW
================================================================================
DEFINITION OF INDICES
The LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX and the LEHMAN BROTHERS
GOVERNMENT/CORPORATE INTERMEDIATE BOND INDEX are unmanaged indices which are a
broad measure of bond performance that reflect the reinvestment of income
dividends and capital gain distributions, if any, but do not reflect fees,
brokerage commissions, or other expenses of investing. Intermediate indices
include bonds with maturities of up to ten years.
The LEHMAN BROTHERS MUNICIPAL BOND INDEX is an unmanaged index which is a broad
measure of tax-exempt bond performance that reflects the reinvestment of income
dividends and capital gain distributions, if any, but does not reflect fees,
brokerage commissions, or other expenses of investing.
The LIPPER COLORADO MUNICIPAL BOND FUND AVERAGE is an unmanaged index which
measures the performance of bond funds which are exempt from taxation of the
state of Colorado. The index return reflects the reinvestment of income
dividends and capital gain distributions, if any.
The LIPPER MUNICIPAL INTERMEDIATE BOND FUND INDEX is an unmanaged index which
measures the performance of intermediate municipal debt funds (i.e. those with
dollar-weighted average maturities of 5 to 10 years). The index return reflects
the reinvestment of income dividends and capital gain distributions, if any.
The STANDARD & POOR'S 500 INDEX (S&P 500) is an unmanaged index containing
common stocks of 500 industrial, transportation, utility and financial
companies, regarded as generally representative of the U.S. stock market. The
index return reflects the reinvestment of income dividends and capital gain
distributions, if any, but does not reflect fees, brokerage commissions, or
other expenses of investing.
The VALUE LINE COMPOSITE INDEX is an unmanaged equally weighted geometric
average composed of approximately 1700 stock traded on the New York Stock
Exchange, American Stock Exchange, and over-the-counter that are tracked by the
Value Line Investment Survey. The index return reflects the reinvestment of
income dividends and capital gain distributions, if any, but does not reflect
fees, brokerage commissions, or other expenses of investing.
================================================================================
11
<PAGE> 12
ARISTATA FUNDS
================================================================================
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
COMMON STOCKS - 94.90%
BASIC MATERIALS - 2.32%
CHEMICALS - 1.72%
Hanna (M. A.) Co. 55,000 $ 587,812
Sigma Aldrich Corp. 29,200 832,200
------------
1,420,012
------------
METALS - 0.60%
Worthington Industries, Inc. 30,000 498,750
------------
TOTAL BASIC MATERIALS 1,918,762
------------
BUILDING/REAL ESTATE - 7.82%
BUILDING MATERIALS - 4.45%
Lafarge Corp. 57,000 1,692,188
Vulcan Materials Co. 48,000 1,983,000
------------
3,675,188
------------
R.E.I.T./REAL ESTATE - 3.37%
Archstone Community Trust 51,000 1,020,000
Duke Realty Investments, Inc. 90,000 1,766,250
------------
2,786,250
------------
TOTAL BUILDING/REAL ESTATE 6,461,438
------------
CONSUMER DURABLES - 5.41%
AUTOMOTIVE - 0.89%
Delphi Automotive Systems Corp. 45,000 739,687
------------
HOUSEHOLD GOODS - 4.52%
Eastman Kodak Co. 23,500 1,620,031
La Z Boy, Inc. 55,000 1,003,750
Leggett & Platt, Inc. 50,000 1,109,375
------------
3,733,156
------------
TOTAL CONSUMER DURABLES 4,472,843
------------
CONSUMER SERVICES - 0.80%
RESTAURANTS - 0.80%
Bob Evans Farms, Inc. 48,000 660,000
------------
TOTAL CONSUMER SERVICES 660,000
------------
CONSUMER STAPLES - 8.25%
FOOD/BEVERAGE - 3.55%
Corn Products Int'l, Inc. 17,000 $ 553,562
Earthgrains Co. 50,000 1,140,625
Riviana Foods, Inc. 66,000 1,237,500
------------
2,931,687
------------
PACKAGED GOODS - 2.13%
Avon Products, Inc. 38,000 1,225,500
Helen of Troy Corp, Ltd.** 60,000 536,250
------------
1,761,750
------------
RETAIL - 2.57%
Dayton Hudson Corp. 16,000 1,034,000
May Department Stores Co. 31,500 1,092,656
------------
2,126,656
------------
TOTAL CONSUMER STAPLES 6,820,093
------------
ENERGY - 12.58%
OIL FIELD SERVICES - 3.02%
Baker Hughes, Inc. 49,000 1,368,938
Halliburton Co. 30,000 1,130,625
------------
2,499,563
------------
OIL & GAS - 9.56%
Atlantic Richfield Co. 40,000 3,727,500
Royal Dutch Petroleum Co. 19,200 1,150,800
Texaco, Inc. 49,200 3,019,650
------------
7,897,950
------------
TOTAL ENERGY 10,397,513
------------
FINANCIAL - 6.68%
BANKS/S & L/FINANCE/LEASE - 4.07%
Morgan J. P. & Co., Inc. 12,000 1,570,500
PNC Bank Corp. 30,000 1,788,750
------------
3,359,250
------------
BROKERS/FINANCIAL SERVICES - 1.91%
Marsh & McLennan Cos., Inc. 20,000 1,581,250
------------
INSURANCE - 0.70%
Allstate Corp. 20,020 575,575
------------
TOTAL FINANCIAL 5,516,075
------------
</TABLE>
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12
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ARISTATA FUNDS
================================================================================
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
HEALTHCARE - 8.23%
DRUGS - 5.16%
American Home Products Corp. 45,000 $ 2,351,250
AMGEN, Inc.** 24,000 1,914,000
------------
4,265,250
------------
HEALTHCARE SERVICES - 1.76%
United Healthcare Corp. 28,200 1,457,588
------------
MEDICAL PRODUCTS - 1.31%
Bausch & Lomb, Inc. 20,000 1,080,000
------------
TOTAL HEALTHCARE 6,802,838
------------
INDUSTRIAL PRODUCTS - 24.84%
AEROSPACE - 1.84%
AAR Corp. 47,000 784,312
B.F. Goodrich & Co. 31,000 734,312
------------
1,518,624
------------
ELECTRICAL PRODUCTS - 7.91%
ABB AB Sponsored ADR 25,109 2,529,470
Emerson Electric Co. 23,000 1,381,438
Molex, Inc. 40,000 1,460,000
Motorola, Inc. 12,000 1,169,250
------------
6,540,158
------------
INDUSTRIAL COMPONENTS - 6.72%
Hussmann International, Inc. 50,000 800,000
Ingersoll Rand Co. 45,000 2,351,250
Kennametal, Inc. 37,000 1,063,750
Pall Corp. 61,000 1,338,187
------------
5,553,187
------------
OFFICE EQUIPMENT/E.D.P. - 7.21%
Electronic Data Systems Corp. 25,000 1,462,500
Hewlett-Packard Co. 17,500 1,296,094
International Business
Machines Corp. 25,000 2,459,375
Seagate Technology, Inc.** 25,000 735,938
------------
5,953,907
------------
SOFTWARE - 1.16%
JD Edwards & Co.** 40,000 957,500
------------
TOTAL INDUSTRIAL PRODUCTS 20,523,376
------------
INDUSTRIAL SERVICES- 0.98%
BUSINESS INFORMATION - 0.98%
Robert Half International, Inc.** 30,000 $ 811,875
------------
TOTAL INDUSTRIAL SERVICES 811,875
------------
TRANSPORTATION - 2.15%
RAILS/TRUCKS/MARINE - 2.15%
Roadway Express, Inc. 85,000 1,774,375
------------
TOTAL TRANSPORTATION 1,774,375
------------
UTILITIES - 14.84%
COMMUNICATIONS - 5.39%
BellSouth Corp. 49,000 2,205,000
GTE Corp. 30,000 2,250,000
------------
4,455,000
------------
ELECTRIC UTILITIES - 4.58%
Duke Energy Corp. 23,000 1,299,500
New Century Energies, Inc. 76,150 2,479,634
------------
3,779,134
------------
GAS UTILITIES - 4.87%
Northwest Natural Gas Co. 81,750 2,115,282
Questar Corp. 106,100 1,909,800
------------
4,025,082
------------
TOTAL UTILITIES 12,259,216
------------
TOTAL COMMON STOCKS 78,418,404
------------
(Cost $47,789,277)
CLOSED-END FUNDS - 2.82%
FOREIGN - 2.82%
Asia Tigers Fund 135,000 1,164,375
Morgan Stanley Asia-Pac. Fund 120,000 1,162,500
------------
TOTAL CLOSED-END FUNDS 2,326,875
------------
(Cost $1,994,993)
</TABLE>
================================================================================
13
<PAGE> 14
ARISTATA FUNDS
================================================================================
ARISTATA EQUITY FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
SHARES VALUE*
------ ------
<S> <C> <C>
SHORT-TERM INVESTMENTS - 2.21%
MUTUAL FUNDS - 2.21%
Fifth Third C/P Fund 827,707 $ 827,707
Fifth Third U.S. Treasury Fund 1,000,000 1,000,000
-----------
TOTAL SHORT-TERM INVESTMENTS 1,827,707
===========
(Cost $1,827,707)
TOTAL INVESTMENTS 99.93% 82,572,986
(Cost $51,611,977)
Other Assets in Excess
of Liabilities 0.07% 53,949
---------- -----------
NET ASSETS 100.00% $82,626,935
========== ===========
</TABLE>
* See note 1 to financial statements.
** Denotes non-income producing security.
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY OBLIGATIONS - 36.32%
U.S. TREASURY NOTES - 7.20%
08/15/05 6.500% Aaa $1,900,000 $ 1,935,032
07/15/06 7.000% Aaa 1,400,000 1,462,563
-----------
3,397,595
-----------
U.S. TREASURY BONDS - 7.12%
02/15/07 7.625% Aaa 1,367,000 1,415,699
11/15/07 7.875% Aaa 920,000 963,413
05/15/10 10.000% Aaa 840,000 982,275
-----------
3,361,387
-----------
FEDERAL FARM CREDIT BANK - 1.00%
01/22/08 6.120% Aaa 500,000 472,854
-----------
FEDERAL HOME LOAN BANK - 8.38%
07/27/07 7.000% Aaa 800,000 785,337
11/14/07 7.000% Aaa 300,000 294,195
08/19/09 7.050% Aaa 250,000 247,955
01/07/13 7.010% Aaa 500,000 477,290
10/29/13 6.150% Aaa 250,000 225,710
02/25/14 6.540% Aaa 250,000 230,895
03/10/14 6.730% Aaa 250,000 233,638
08/25/14 8.010% Aaa 250,000 247,668
09/23/14 8.000% Aaa 250,000 248,372
11/17/14 8.040% Aaa 500,000 496,158
06/08/18 7.000% Aaa 500,000 466,018
-----------
3,953,236
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 4.43%
11/05/12 7.115% Aaa 800,000 773,570
03/18/13 6.650% Aaa 500,000 469,884
07/08/13 6.850% Aaa 500,000 472,533
03/03/14 6.800% Aaa 200,000 187,753
04/14/14 6.950% Aaa 200,000 189,282
-----------
2,093,022
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 8.19%
06/30/04 6.930% Aaa 200,000 199,245
</TABLE>
================================================================================
14
<PAGE> 15
ARISTATA FUNDS
================================================================================
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT &
AGENCY OBLIGATIONS (CONTINUED)
FEDERAL NATIONAL MORTGAGE ASSOCIATION (CONTINUED)
06/26/07 7.170% Aaa $ 500,000 $ 493,529
01/29/08 6.460% Aaa 500,000 479,431
05/05/08 6.780% Aaa 250,000 242,373
02/04/09 6.030% Aaa 500,000 463,480
10/16/12 7.080% Aaa 400,000 384,935
12/03/12 6.920% Aaa 800,000 770,211
01/22/13 6.440% Aaa 500,000 466,329
10/16/14 8.000% Aaa 250,000 249,309
03/10/16 8.200% Aaa 105,000 118,284
-----------
3,867,126
===========
TOTAL U.S GOVERNMENT &
AGENCY OBLIGATIONS 17,145,220
===========
(Cost $16,758,432)
CORPORATE BONDS - 60.78%
COMMUNICATIONS - 3.91%
AT&T Corp.
03/15/09 6.000% A1/AA- 250,000 231,718
New York Telephone Co.
02/15/04 6.250% A2/A+ 500,000 489,628
Southern New England Telephone Co.
12/15/03 6.125% Aa3/AA 700,000 684,419
Southwestern Bell Telephone Co.
06/01/03 5.875% Aa3/AA 145,000 141,558
06/01/08 6.750% Aa3/AA 300,000 297,191
-----------
TOTAL COMMUNICATIONS 1,844,514
===========
ELECTRIC UTILITIES - 2.27%
Consolidated Edison Co.
02/01/02 6.625% A1/A+ 800,000 801,172
Gulf Power Co.
08/15/04 7.050% A2/A 270,000 269,049
-----------
TOTAL ELECTRIC UTILITIES 1,070,221
===========
FINANCIAL - 20.52%
AGRICULTURE - 0.89%
John Deere Capital Corp.
10/23/01 5.35% A2/A+ $ 430,000 $ 420,211
-----------
AUTOMOBILE - 1.05%
Ford Motor Credit Co.
06/30/03 6.625% A1/A 500,000 496,440
-----------
BANKS/S & L/FINANCE/LEASE - 8.01%
Bank of America Corp.
05/12/05 7.125% Aa2/A+ 500,000 498,690
Bankers Trust New York Corp.
03/01/01 9.400% A3/A+ 350,000 360,641
01/15/02 7.500% A3/A+ 300,000 303,296
Citicorp
08/15/05 6.750% A1/A+ 700,000 686,903
First Bank System
10/15/03 6.000% A1/A 500,000 483,813
Heller Financial, Inc.
03/15/00 5.625% A3/A- 550,000 549,020
NCNB Corp.
08/01/02 7.750% A2/A+ 200,000 200,131
Nationsbank Corp.
04/15/00 5.375% Aa2/A+ 700,000 698,016
-----------
3,780,510
===========
BROKERS/FINANCIAL SERVICES - 7.99%
Associates Corp. of North America
03/15/00 6.000% Aa3/AA- 800,000 799,946
Bear Stearns Cos., Inc.
04/13/03 6.750% A2/A 750,000 741,202
03/01/07 7.000% A2/A 250,000 242,650
Dean Witter Discover Co.
03/01/03 6.875% Aa3/A+ 350,000 349,216
Merrill Lynch & Co.
04/27/08 7.000% Aa3/AA- 700,000 688,185
Morgan Stanley Dean Witter & Co.
10/15/01 8.875% Aa3/A+ 400,000 416,799
01/15/07 8.330% Aa3/A+ 500,000 532,191
-----------
3,770,189
===========
</TABLE>
================================================================================
15
<PAGE> 16
ARISTATA FUNDS
================================================================================
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
FINANCIAL (CONTINUED)
INSURANCE - 2.58%
Allstate Insurance Corp.
06/15/03 6.750% A1/A $ 550,000 $ 542,993
CNA Financial Corp.
11/15/03 6.250% A3/A- 700,000 675,162
-----------
1,218,155
-----------
TOTAL FINANCIAL 9,685,505
-----------
INDUSTRIAL - 34.08%
AEROSPACE - 1.04%
Boeing Co.
06/15/03 6.350% A1/AA- 500,000 493,296
-----------
AUTOMOBILE - 1.79%
Ford Motor Co.
09/15/01 9.000% A1/A 350,000 365,067
General Motors Corp.
05/01/05 6.250% A2/A 500,000 482,782
-----------
847,849
-----------
BROADCASTING/ENTERTAINMENT - 1.06%
Walt Disney Co.
03/30/06 6.750% A2/A 500,000 498,661
-----------
BUILDING MATERIALS - 2.10%
Hanson Trust PLC
01/15/03 7.375% A3/A 300,000 303,677
Martin Marietta Corp.
04/15/03 6.500% Baa1/BBB 700,000 688,098
-----------
991,775
-----------
BUSINESS INFORMATION/SERVICES - 2.88%
WMX Technologies
11/15/99 8.250% Baa3/BBB 200,000 199,867
12/01/03 6.375% Ba1/BBB 500,000 437,310
Xerox Corp.
04/15/02 8.125% A2/A 700,000 723,559
-----------
1,360,736
-----------
CHEMICALS - 1.51%
E. I. duPont de Nemours & Co.
03/15/04 8.125% Aa3/AA- 200,000 211,095
ICI Wilmington, Inc.
01/15/02 7.500% Baa1/A- $ 500,000 $ 504,198
-----------
715,293
-----------
DRUGS - 0.86%
American Home Products Corp.
02/15/00 7.700% A2/A 200,000 200,907
Eli Lilly & Co.
12/01/01 8.125% Aa3/AA 200,000 206,864
-----------
407,771
-----------
FOOD/BEVERAGE - 3.06%
Albertson's Inc.
08/01/09 6.950% A2/A 150,000 148,986
Archer Daniels Midland Co.
05/15/03 6.250% Aa3/AA- 700,000 690,977
Philip Morris Cos., Inc.
05/15/02 7.625% A2/A 600,000 603,507
-----------
1,443,470
-----------
HOTEL/RESORT - 1.20%
Carnival Corp.
04/15/08 6.150% A2/A 600,000 565,107
-----------
HOUSEHOLD GOODS - 2.76%
Colgate Palmolive Co.
12/01/99 6.860% A1/A 700,000 700,843
Hasbro, Inc.
07/15/08 6.150% A2/A 300,000 286,374
Whirlpool Corp.
03/01/03 9.000% Baa1/BBB+ 300,000 315,538
-----------
1,302,755
-----------
INDUSTRIAL COMPONENTS - 1.06%
Ingersoll Rand Co.
08/07/00 6.540% A3/A- 500,000 500,944
-----------
METALS - 2.74%
Alcan Aluminum Ltd.
04/01/00 5.875% A2/A- 700,000 702,065
11/01/08 6.250% A2/A- 630,000 589,735
-----------
1,291,800
-----------
</TABLE>
================================================================================
16
<PAGE> 17
ARISTATA FUNDS
================================================================================
ARISTATA QUALITY BOND FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
OFFICE EQUIPMENT/E.D.P. - 1.52%
International Business Machines Corp.
11/01/02 7.250% A1/A+ $ 700,000 $ 716,174
-----------
OIL & GAS - 1.53%
British Petroleum Co.
05/15/02 7.875% Aa1/AA+ 700,000 722,954
-----------
OIL FIELD SERVICES - 1.49%
Dresser Industries, Inc.
06/01/00 6.250% Aa3/AA- 700,000 701,876
-----------
PACKAGED GOODS - 1.02%
Fortune Brands, Inc.
04/01/08 6.250% A2/A 500,000 479,554
-----------
PAPER/PACKAGING - 1.67%
Avery Dennison Corp.
04/15/05 6.750% A2/A 800,000 789,335
-----------
RESTAURANTS - 1.48%
McDonalds Corp.
09/01/05 6.625% Aa2/AA 700,000 697,450
-----------
RETAIL - 3.31%
Dillard's, Inc.
06/01/06 7.375% Baa1/BBB 500,000 492,392
JC Penney,Inc.
11/15/03 6.125% A3/BBB+ 750,000 721,098
Wal-Mart Stores, Inc.
08/10/01 6.150% Aa2/AA 350,000 349,892
-----------
1,563,382
-----------
TOTAL INDUSTRIAL 16,090,182
-----------
TOTAL CORPORATE BONDS 28,690,422
-----------
(Cost $28,780,136)
SHORT-TERM INVESTMENTS - 2.67%
MUTUAL FUNDS - 2.67%
Fifth Third C/P Fund $ 1,072,999 $ 1,072,999
Fifth Third U.S. Treasury Fund 189,670 189,670
-----------
TOTAL SHORT-TERM INVESTMENTS 1,262,669
-----------
(Cost $1,262,669)
TOTAL INVESTMENTS 99.77% 47,098,311
(Cost $46,801,237)
Other Assets in Excess
of Liabilities 0.23% 109,885
---------- -----------
NET ASSETS 100.00% $47,208,196
========== ===========
</TABLE>
* See note 1 to financial statements.
** Ratings - The Moody's and S&P ratings are believed to be the most recent
ratings at October 31, 1999.
================================================================================
17
<PAGE> 18
ARISTATA FUNDS
================================================================================
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
COLORADO MUNICIPAL OBLIGATIONS - 93.36%
PREREFUNDED - 19.70%
Arapahoe County, GO
School District #5
12/15/10 7.125% Aa2/AA $ 400,000 $ 418,020
Denver City & County
School District #1
Certificates of Participation
12/01/06 6.600% A/A 500,000 535,345
Fort Collins Storm Drainage, Rev
12/01/11 6.625% A1/NR 300,000 317,451
Greeley Water, GO
12/01/11 6.600% A1/AA- 400,000 419,480
Platte River Power Authority, Rev
06/01/18 5.750% Aaa/A+ 900,000 901,332
South Suburban, Rev
Park & Recreation District, FGIC
12/15/10 6.700% Aaa/AAA 500,000 530,470
----------
TOTAL PREREFUNDED 3,122,098
----------
(Cost $2,761,591)
GENERAL OBLIGATION BONDS - 36.91%
Adams County
School District #12, FGIC
12/15/09 5.250% Aaa/AAA 500,000 503,210
Adams County
School District #50
12/01/10 5.250% A1/AA- 500,000 496,245
Boulder County Library
10/01/06 5.900% Aa1/AA+ 300,000 310,887
Boulder County Open Space
06/15/08 5.100% NR/AA 500,000 500,280
Boulder Valley
School District #Re-2
10/15/08 6.250% A1/AA 500,000 516,900
Boulder Valley
School District #Re-2, FGIC
12/01/13 5.000% Aaa/AAA 150,000 140,745
Douglas County
School District #Re-1, MBIA
12/15/03 5.650% Aaa/AAA 400,000 416,532
Fort Collins Water
12/01/02 6.000% Aa1/AA $ 200,000 $ 209,268
Highlands Ranch
Metropolitan District #4
12/01/01 5.200% Aa1/AA+ 250,000 255,090
12/01/03 5.375% Aa1/AA+ 250,000 258,265
Morgan County
School District #Re-3, AMBAC
12/01/18 4.800% Aaa/AAA 250,000 215,092
San Miguel County
School District #R-1, MBIA
12/01/06 5.200% Aaa/AAA 500,000 509,170
South Suburban Park &
Recreation District, FGIC
12/15/06 5.050% Aaa/AAA 500,000 505,140
Summit County
School District #Re-1, FGIC
12/01/07 5.250% Aaa/AAA 500,000 506,730
Thornton, FSA
12/01/07 5.150% Aaa/AAA 500,000 505,250
----------
TOTAL GENERAL OBLIGATION BONDS 5,848,804
----------
(Cost $5,777,017)
REVENUE BONDS - 36.75%
EDUCATION - 1.60%
Colorado State Colleges
Western State College, MBIA
05/15/03 5.000% Aaa/AAA 250,000 253,802
----------
FINANCE - 7.50%
Aurora
Certificates of Participation
12/01/00 5.600% A1/A 250,000 252,172
Douglas County, MBIA
Certificates of Participation
11/01/09 5.500% Aaa/AAA 500,000 512,760
El Paso County School District #38
Certificates of Participation
12/01/05 6.750% A1/NR 400,000 423,268
----------
1,188,200
----------
</TABLE>
================================================================================
18
<PAGE> 19
ARISTATA FUNDS
================================================================================
ARISTATA COLORADO QUALITY TAX-EXEMPT FUND
STATEMENT OF INVESTMENTS
OCTOBER 31, 1999 (UNAUDITED) (CONTINUED)
<TABLE>
<CAPTION>
Due Bond Rating** Principal
Date Coupon Moody's/S&P Amount Value*
- ---- ------ ----------- --------- -----------
<S> <C> <C> <C> <C>
HOSPITAL - 1.36%
University of Colorado
Hospital Authority, AMBAC
11/15/09 5.000% Aaa/NR $ 220,000 $ 216,249
-----------
HOUSING - 1.84%
Colorado Housing Finance Authority
Single Family Housing
11/01/14 7.150% Aa1/AAA 225,000 230,085
Colorado Housing Finance Authority
Multi-Family Housing
10/01/19 6.000% Aa2/AA+ 15,000 15,019
Commerce City
Single Family Housing
03/01/12 6.875% Aaa/NR 45,000 45,804
-----------
290,908
-----------
POWER - 2.77%
Adams County
Pollution Control, MBIA
04/01/08 5.625% Aaa/AAA 300,000 305,796
Pueblo County
Pollution Control, AMBAC
01/01/19 5.100% Aaa/AAA 150,000 133,214
-----------
439,010
-----------
SPECIAL TAX - 10.23%
Aspen Sales/Use Tax
11/01/10 5.000% NR/A- 120,000 115,000
Boulder Sales/Use Tax
08/15/02 5.350% Aa3/A+ 500,000 512,325
Boulder Sales/Use Tax, AMBAC
08/15/13 5.150% Aaa/AAA 100,000 95,790
Broomfield Sales/Use Tax, AMBAC
06/01/05 6.000% Aaa/AAA 300,000 311,514
Douglas County Sales/Use Tax, MBIA
10/15/07 5.250% Aaa/AAA 300,000 304,533
Durango Sales/Use Tax, FGIC
12/01/16 5.500% Aaa/AAA 200,000 193,748
Jefferson County Open Space
Sales/Use Tax, FGIC
11/01/19 5.000% Aaa/AAA 100,000 87,806
-----------
1,620,716
TRANSPORTATION - 1.61%
Arapahoe County
Highway E-470, MBIA
08/31/05 5.150% Aaa/AAA $ 250,000 $ 254,517
-----------
UTILITY - 9.84%
Colorado Springs Utilities
11/15/15 6.500% Aa2/AAA 15,000 15,954
11/15/15 6.500% Aa2/AA 235,000 247,450
Colorado Water Reservoir & Power
Development Authority, FGIC
11/01/06 6.550% Aaa/AAA 500,000 526,645
Colorado Water Reservoir & Power
Development Authority
09/01/07 5.250% Aaa/AAA 250,000 254,158
09/01/15 4.750% Aaa/AAA 125,000 110,209
Fountain Valley Authority
Water Treatment
12/01/07 5.200% Aa2/AA 400,000 404,648
-----------
1,559,061
-----------
TOTAL REVENUE BONDS 5,822,466
-----------
(Cost $5,728,468)
TOTAL COLORADO MUNICIPAL
OBLIGATIONS 14,793,368
-----------
(Cost $14,267,076)
TOTAL INVESTMENTS 93.36% 14,793,368
(Cost $14,267,076)
Other Assets in Excess
of Liabilities 6.64% 1,051,978
--------- -----------
NET ASSETS 100.00% $15,845,346
========= ===========
</TABLE>
* See Note 1 to financial statements
** Ratings - The Moody's and S&P ratings are believed to be the most recent
ratings at October 31, 1999.
The Aristata Colorado Quality Tax-Exempt Fund had the following insurance
concentration greater than 10% at October 31, 1999 (as a percentage of net
assets):
FGIC 18.9%
MBIA 16.1%
================================================================================
19
<PAGE> 20
ARISTATA FUNDS
================================================================================
STATEMENTS OF ASSETS AND LIABILITIES
OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
COLORADO QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
-------------- -------------- ----------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (Cost - see below) $ 82,572,986 $ 47,098,311 $ 14,793,368
Cash 0 0 790,949
Dividends receivable 101,166 0 0
Interest receivable 9,243 869,015 299,436
Receivable for portfolio shares sold 8,171 5,655 33,000
Organizational costs, net of accumulated amortization 25,855 17,715 6,584
Prepaid and other assets 4,462 2,122 524
-------------- -------------- ----------------
Total Assets 82,721,883 47,992,818 15,923,861
-------------- -------------- ----------------
LIABILITIES:
Payable for investments purchased 8,171 509,842 0
Payable for portfolio shares redeemed 0 3,500 0
Accrued investment advisory fee 58,175 19,161 1,399
Accrued administration fee 14,036 8,102 5,096
Dividends payable 0 243,963 63,672
Other payables 14,566 54 8,348
-------------- -------------- ----------------
Total Liabilities 94,948 784,622 78,515
-------------- -------------- ----------------
NET ASSETS $ 82,626,935 $ 47,208,196 $ 15,845,346
============== ============== ==============
COST OF INVESTMENTS $ 51,611,977 $ 46,801,237 $ 14,267,076
============== ============== ==============
COMPOSITION OF NET ASSETS:
Paid-in capital $ 38,235,766 $ 47,023,420 $ 15,197,724
Un (Over)-distributed net investment income 47,554 19,640 (616)
Accumulated net realized gain (loss) on investments 13,382,606 (131,938) 121,946
Net unrealized appreciation in value of investments 30,961,009 297,074 526,292
-------------- -------------- ----------------
NET ASSETS $ 82,626,935 $ 47,208,196 $ 15,845,346
============== ============== ==============
NET ASSET VALUE PER SHARE:
Net Assets $ 82,626,935 $ 47,208,196 $ 15,845,346
Shares of beneficial interest outstanding 7,845,718 4,927,965 1,664,596
Net asset value and redemption price per share $ 10.53 $ 9.58 $ 9.52
</TABLE>
See notes to financial statements.
================================================================================
20
<PAGE> 21
ARISTATA FUNDS
================================================================================
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED OCTOBER 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
COLORADO QUALITY
EQUITY QUALITY BOND TAX-EXEMPT
------------ ------------ ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest $ 27,892 $ 1,657,873 $ 443,927
Dividends 964,454 0 0
------------ ------------ ------------
Total Income 992,346 1,657,873 443,927
------------ ------------ ------------
EXPENSES:
Investment advisory fee 388,177 123,887 42,137
Administration fee 91,336 49,555 29,917
Registration 3,065 2,756 0
Amortization of organization costs 3,820 2,448 806
Insurance 1,783 1,212 418
Other 6,079 5,379 5,664
------------ ------------ ------------
Total Expenses Before Waiver 494,260 185,237 78,942
Expenses waived by investment adviser (45,439) (19,925) (39,589)
------------ ------------ ------------
Net Expenses 448,821 165,312 39,353
------------ ------------ ------------
NET INVESTMENT INCOME 543,525 1,492,561 404,574
------------ ------------ ------------
Net realized gain (loss) on investments 2,004,331 (131,996) (31,346)
Change in net unrealized appreciation/depreciation (6,600,291) (1,443,790) (612,236)
------------ ------------ ------------
Net loss on investments (4,595,960) (1,575,786) (643,582)
------------ ------------ ------------
NET DECREASE IN NET ASSETS FROM OPERATIONS $ (4,052,435) $ (83,225) $ (239,008)
============ ============ ============
</TABLE>
See notes to financial statements.
================================================================================
21
<PAGE> 22
ARISTATA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY FUND
---------------------------------
For the For the
Six Months Ended Year Ended
October 31, 1999 April 30, 1999
---------------- --------------
(Unaudited)
<S> <C> <C>
OPERATIONS:
Net investment income $ 543,525 $ 1,319,576
Net realized gain on investments 2,004,331 11,378,470
Change in net unrealized appreciation/depreciation (6,600,291) (4,767,687)
-------------- --------------
Net increase (decrease) in net assets from operations (4,052,435) 7,930,359
-------------- --------------
DISTRIBUTIONS:
From net investment income (488,973) (1,335,710)
From net realized gain 0 (1,236,442)
-------------- --------------
Net decrease in net assets from distributions (488,973) (2,572,152)
-------------- --------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sale of shares 2,573,022 4,205,574
Reinvested dividends 353,776 1,905,608
Cost of shares redeemed (10,131,202) (18,710,476)
-------------- --------------
Net decrease in net assets from share transactions (7,204,404) (12,599,294)
-------------- --------------
NET DECREASE IN NET ASSETS (11,745,812) (7,241,087)
-------------- --------------
NET ASSETS:
Beginning of period 94,372,747 101,613,834
-------------- --------------
End of period* $ 82,626,935 $ 94,372,747
============== ==============
*Includes un (over)-distributed net investment income of $ 47,554 $ (6,998)
</TABLE>
See notes to financial statements.
================================================================================
22
<PAGE> 23
ARISTATA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
QUALITY BOND FUND
---------------------------------
For the For the
Six Months Ended Year Ended
October 31, 1999 April 30, 1999
---------------- --------------
(Unaudited)
<S> <C> <C>
OPERATIONS:
Net investment income $ 1,492,561 $ 3,417,107
Net realized gain (loss) on investments (131,996) 45,793
Change in net unrealized appreciation/depreciation (1,443,790) (474,807)
-------------- --------------
Net increase (decrease) in net assets from operations (83,225) 2,988,093
-------------- --------------
DISTRIBUTIONS:
From net investment income (1,492,561) (3,397,538)
From net realized gain 0 (96,912)
-------------- --------------
Net decrease in net assets from distributions (1,492,561) (3,494,450)
-------------- --------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sale of shares 3,183,431 6,356,700
Reinvested dividends 1,005,511 2,771,436
Cost of shares redeemed (7,385,184) (14,151,265)
-------------- --------------
Net decrease in net assets from share transactions (3,196,242) (5,023,129)
-------------- --------------
NET DECREASE IN NET ASSETS (4,772,028) (5,529,486)
-------------- --------------
NET ASSETS:
Beginning of period 51,980,224 57,509,710
-------------- --------------
End of period* $ 47,208,196 $ 51,980,224
============== ==============
*Includes undistributed net investment income of $ 19,640 $ 19,640
</TABLE>
See notes to financial statements.
================================================================================
23
<PAGE> 24
ARISTATA FUNDS
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
COLORADO QUALITY TAX-EXEMPT FUND
---------------------------------
For the For the
Six Months Ended Year Ended
October 31, 1999 April 30, 1999
---------------- --------------
(Unaudited)
<S> <C> <C>
OPERATIONS:
Net investment income $ 404,574 $ 958,847
Net realized gain (loss) on investments (31,346) 323,738
Change in net unrealized appreciation/depreciation (612,236) (207,450)
-------------- --------------
Net increase (decrease) in net assets from operations (239,008) 1,075,135
-------------- --------------
DISTRIBUTIONS:
From net investment income (404,574) (959,483)
From net realized gain 0 (166,233)
-------------- --------------
Net decrease in net assets from distributions (404,574) (1,125,716)
-------------- --------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sale of shares 648,958 710,520
Reinvested dividends 49,285 118,629
Cost of shares redeemed (1,711,153) (6,657,337)
-------------- --------------
Net decrease in net assets from share transactions (1,012,910) (5,828,188)
-------------- --------------
NET DECREASE IN NET ASSETS (1,656,492) (5,878,769)
-------------- --------------
NET ASSETS:
Beginning of period 17,501,838 23,380,607
-------------- --------------
End of period* 15,845,346 $ 17,501,838
============== ==============
*Includes over-distributed net investment income of $ (616) $ (616)
</TABLE>
See notes to financial statements.
================================================================================
24
<PAGE> 25
ARISTATA FUNDS
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding
throughout the period indicated:
<TABLE>
<CAPTION>
EQUITY FUND
------------------------------------------------------
For the
Six Months Ended For the For the Period
October 31, 1999 Year Ended March 2, 1998
(Unaudited) April 30, 1999 to April 30, 1998
---------------- -------------- -----------------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA:
Net asset value - beginning of period $ 11.11 $ 10.44 $ 10.00
------------ ------------ ------------
Income from investment operations:
Net investment income 0.07 0.14 0.01
Net realized and unrealized gain (loss) on investments (0.59) 0.81 0.44
------------ ------------ ------------
Total income (loss) from investment operations (0.52) 0.95 0.45
------------ ------------ ------------
Distributions:
From net investment income (0.06) (0.14) (0.01)
From net realized gain -- (0.14) --
------------ ------------ ------------
Total distributions (0.06) (0.28) (0.01)
------------ ------------ ------------
Net asset value - end of period $ 10.53 $ 11.11 $ 10.44
============ ============ ============
TOTAL RETURN (4.71)% 9.39% 4.54%
============ ============ ============
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 82,627 $ 94,373 $ 101,614
============ ============ ============
Ratio of expenses to average net assets 0.98%(1) 0.95% 0.95%(1)
============ ============ ============
Ratio of net investment income to
average net assets 1.19%(1) 1.41% 0.84%(1)
============ ============ ============
Ratio of expenses to average net
assets without fee waivers 1.08%(1) 1.11% 1.17%(1)
============ ============ ============
Ratio of net investment income to
average net assets without fee waivers 1.09%(1) 1.25% 0.62%(1)
============ ============ ============
Portfolio turnover rate 11.71%(1) 25.26% 14.20%(1)
============ ============ ============
</TABLE>
(1) Annualized
See notes to financial statements.
================================================================================
25
<PAGE> 26
ARISTATA FUNDS
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
QUALITY BOND FUND
------------------------------------------------------
For the
Six Months Ended For the For the Period
October 31, 1999 Year Ended March 2, 1998
(Unaudited) April 30, 1999 to April 30, 1998
---------------- -------------- -----------------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA:
Net asset value - beginning of period $ 9.88 $ 9.97 $ 10.00
------------ ------------ ------------
Income from investment operations:
Net investment income 0.29 0.62 0.10
Net realized and unrealized loss on investments (0.30) (0.08) (0.03)
------------ ------------ ------------
Total income (loss) from investment operations (0.01) 0.54 0.07
------------ ------------ ------------
DISTRIBUTIONS:
From net investment income (0.29) (0.61) (0.10)
From net realized gain -- (0.02) --
------------ ------------ ------------
Total distributions (0.29) (0.63) (0.10)
------------ ------------ ------------
Net asset value - end of period $ 9.58 $ 9.88 $ 9.97
============ ============ ============
TOTAL RETURN (0.09)% 5.49% 0.69%
============ ============ ============
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 47,208 $ 51,980 $ 57,510
============ ============ ============
Ratio of expenses to average net assets 0.67%(1) 0.65% 0.65%(1)
============ ============ ============
Ratio of net investment income to
average net assets 6.01%(1) 6.10% 6.00%(1)
============ ============ ============
Ratio of expenses to average net
assets without fee waivers 0.75%(1) 0.76% 0.83%(1)
============ ============ ============
Ratio of net investment income to
average net assets without fee waivers 5.93%(1) 5.99% 5.82%(1)
============ ============ ============
Portfolio turnover rate 11.40%(1) 9.79% 11.44%(1)
============ ============ ============
</TABLE>
(1) Annualized
See notes to financial statements.
================================================================================
26
<PAGE> 27
- --------------------------------------------------------------------------------
ARISTATA FUNDS
================================================================================
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
COLORADO QUALITY TAX-EXEMPT FUND
----------------------------------------------------
For the
Six Months Ended For the For the Period
October 31, 1999 Year Ended March 2, 1998
(Unaudited) April 30, 1999 to April 30, 1998
---------------- -------------- -----------------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA:
Net asset value - beginning of period $ 9.89 $ 9.94 $ 10.00
-------------- ---------- -----------
Income from investment operations:
Net investment income 0.23 0.49 0.08
Net realized and unrealized gain (loss) on investments (0.37) 0.04 (0.06)
-------------- ---------- -----------
Total income (loss) from investment operations (0.14) 0.53 0.02
-------------- ---------- -----------
Distributions:
From net investment income (0.23) (0.49) (0.08)
From net realized gain -- (0.09) --
-------------- ---------- -----------
Total distributions (0.23) (0.58) (0.08)
-------------- ---------- -----------
Net asset value - end of period $ 9.52 $ 9.89 $ 9.94
============== ========== ===========
TOTAL RETURN (1.41)% 5.40% 0.22%
============== ========== ===========
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 15,845 $ 17,502 $ 23,381
============== ========== ===========
Ratio of expenses to average net assets 0.47%(1) 0.45% 0.45%(1)
============== ========== ===========
Ratio of net investment income to
average net assets 4.79%(1) 4.85% 5.00%(1)
============== ========== ===========
Ratio of expenses to average net
assets without fee waivers 0.93%(1) 0.91% 0.92%(1)
============== ========== ===========
Ratio of net investment income to
average net assets without fee waivers 4.32%(1) 4.40% 4.53%(1)
============== ========== ===========
Portfolio turnover rate 15.49%(1) 7.86% 17.64%(1)
============== ========== ===========
</TABLE>
(1) Annualized
See notes to financial statements.
================================================================================
27
<PAGE> 28
ARISTATA FUNDS
================================================================================
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Financial Investors Trust, a Delaware business trust, is registered
under the Investment Company Act of 1940, as amended, as an open-end management
investment company. The financial statements included herein relate to the
Trust's Aristata Family of Funds. The Aristata Family of Funds includes the
Equity Fund, Quality Bond Fund and Colorado Quality Tax-Exempt Fund. The
financial statements of the remaining portfolios of the Trust are presented
separately.
The following is a summary of significant accounting policies
consistently followed by the Funds in the preparation of their financial
statements. The policies are in conformity with generally accepted accounting
principles.
INVESTMENT VALUATION: Securities of the Funds are valued at 4:00 p.m.
(Eastern time) on each trading day. Listed and unlisted securities for which
such information is regularly reported are valued at the last sales price of the
day or, in the absence of sales, at values based on the average closing bid and
asked price. Securities for which market quotations are not readily available
are valued under procedures established by the Board of Trustees to determine
fair value in good faith. Short-term securities having a remaining maturity of
60 days or less are valued at amortized cost which approximates market value.
FEDERAL INCOME TAXES: It is the Funds' policy to comply with the
provisions of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of their taxable income to shareholders.
Therefore, no federal income tax provision is required.
DIVIDENDS: The Aristata Equity Fund will declare and pay dividends
from net investment income, if any, quarterly. Dividends from net investment
income are declared daily and paid monthly for the Aristata Quality Bond and
Colorado Quality Tax-Exempt Funds. Dividends from net realized gains, if any,
are declared at least once a year. Dividends to shareholders are recorded on the
ex-dividend date.
ORGANIZATION COSTS: The Funds have deferred certain costs incurred in
connection with the organization, initial registration and public offering of
Fund shares. Such costs are being amortized over a 60 month period from the
commencement of operations. As of October 31, 1999, the remaining period of
amortization was 40 months.
OTHER: Investment transactions are accounted for on the date the
investments are purchased or sold (trade date). Dividend income is recorded on
the ex-dividend date. Interest income is accrued and recorded daily. Realized
gains and losses from investment transactions and unrealized appreciation and
depreciation of investments are reported on an identified cost basis which is
the same basis the Funds use for federal income tax purposes.
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 these estimates.
================================================================================
28
<PAGE> 29
ARISTATA FUNDS
================================================================================
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST
On October 31, 1999, there was an unlimited number of no par value
shares of beneficial interest authorized for each fund. Transactions in shares
of beneficial interest for the period ended October 31 were as follows:
<TABLE>
<CAPTION>
ARISTATA COLORADO QUALITY
ARISTATA EQUITY FUND ARISTATA QUALITY BOND FUND TAX-EXEMPT FUND
-------------------------------- -------------------------------- --------------------------------
For the For the Year For the For the Year For the For the Year
Six Months Ended Ended Six Months Ended Ended Six Months Ended Ended
October 31, April 30, October 31, April 30, October 31, April 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999 1999 (Unaudited) 1999
---------------- -------------- ---------------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 231,106 421,685 329,531 632,574 66,835 71,070
Shares issued as
reinvestment of dividends 32,326 189,946 104,165 275,733 5,093 11,855
Shares redeemed (915,908) (1,845,964) (767,397) (1,413,235) (177,654) (663,763)
-------------- -------------- -------------- -------------- -------------- --------------
Net Decrease (652,476) (1,234,333) (333,701) (504,928) (105,726) (580,838)
============== ============== ============== ============== ============== ==============
</TABLE>
3. UNREALIZED GAINS AND LOSSES ON INVESTMENTS
<TABLE>
<CAPTION>
ARISTATA
ARISTATA ARISTATA COLORADO QUALITY
EQUITY FUND QUALITY BOND FUND TAX-EXEMPT FUND
-------------- ----------------- ----------------
<S> <C> <C> <C>
As of October 31, 1999
Gross appreciation (excess of
value over cost) 32,291,556 1,155,042 617,913
Gross depreciation (excess of
cost over value) (1,330,547) (857,968) (91,621)
-------------- ------------ ------------
Net unrealized appreciation 30,961,009 297,074 526,292
============== ============ ============
</TABLE>
4. INVESTMENT ADVISORY FEES, ADMINISTRATION FEES AND OTHER RELATED PARTY
TRANSACTIONS
Tempest, Isenhart, Chafee, Lansdowne & Associates, Inc. (the
"Adviser") serves as investment adviser to each Fund pursuant to separate
investment advisory agreements (the "Advisory Agreements") with the Trust. For
its services, the Adviser is entitled to receive a fee, computed daily and
payable monthly, at the annual rate of 0.85%, 0.50% and 0.50% of the average net
assets for the Aristata Equity Fund, Aristata Quality Bond Fund and Aristata
Colorado Quality Tax-Exempt Fund, respectively. The Adviser has agreed to
voluntarily waive a portion of its fees so that the total annual expenses of
each Fund will not exceed the voluntary expense limitations adopted by the
Adviser. Fee waivers by the Adviser are voluntary and may be terminated at any
time.
ALPSMutual Funds Services, Inc. ("ALPS") serves as the administrator
to each Fund. ALPS is entitled to receive a fee from each Fund, computed daily
and payable monthly, at the annual rate of .20% of the average net assets of
each Fund, subject to a minimum monthly fee of $15,000 for the Aristata Equity
Fund, $7,500 for the Aristata Quality Bond Fund and $5,000 for the Aristata
Colorado Quality Tax-Exempt Fund. In addition to administration services, the
administration fee also covers the costs of fund accounting, custody,
shareholder servicing, transfer agency, audit and Trustees' fees.
29
================================================================================
<PAGE> 30
ARISTATA FUNDS
================================================================================
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
As of October 31, 1999, one shareholder owned 39 percent and 43
percent of the outstanding shares of the Aristata Equity Fund and Aristata
Quality Bond Fund, respectively.
5. INVESTMENT TRANSACTIONS
The cost of securities purchased and proceeds from the sale of
securities, other than temporary cash investments, during the six months ended
October 31, 1999 were as follows:
<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES ALL OTHER TOTAL
--------------- ------------ -----------
<S> <C> <C> <C>
ARISTATA EQUITY FUND
Purchases $ 0 $ 5,232,523 $ 5,232,523
Sales $ 0 $ 12,788,577 $12,788,577
ARISTATA QUALITY BOND FUND
Purchases $ 1,700,000 $ 1,019,880 $ 2,719,880
Sales $ 4,115,434 $ 1,500,940 $ 5,616,374
ARISTATA COLORADO QUALITY
TAX-EXEMPT FUND
Purchases $ 0 $ 1,244,806 $ 1,244,806
Sales $ 0 $ 2,331,671 $ 2,331,671
</TABLE>
6. CONVERSION OF COMMINGLED POOLS
Each Fund, at its inception date (March 2, 1998), issued shares at
$10.00 per share in a tax-free conversion to acquire the net assets of certain
unregistered commingled pools of Colorado State Bank and Trust. The following is
a summary of shares issued, net assets acquired and unrealized appreciation as
of March 2, 1998:
<TABLE>
<CAPTION>
ARISTATA COLORADO QUALITY
ARISTATA EQUITY FUND ARISTATA QUALITY BOND FUND TAX-EXEMPT FUND
-------------------- -------------------------- -------------------------
<S> <C> <C> <C>
Shares issued 9,855,292 5,759,904 2,472,885
Net assets acquired $98,552,917 $57,599,038 $24,728,848
Unrealized appreciation $39,252,218 $ 2,425,692 $ 1,470,209
</TABLE>
================================================================================
30
<PAGE> 31
================================================================================
Intentionally
Left Blank
================================================================================
================================================================================
31
<PAGE> 32
These Funds are neither insured nor guaranteed by the U.S. Government, the
FDIC, the Federal Reserve Board or any other governmental agency or
insurer.
INVESTMENT ADVISER
Tempest, Isenhart, Chafee, Lansdowne &
Associates,
Inc. 1380 Lawrence Street
Suite 1050
Denver, CO 80204
ADMINISTRATOR, DISTRIBUTOR, TRANSFER AGENT
& FUND ACCOUNTANT
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, CO 80202
LEGAL COUNSEL
Davis, Graham & Stubbs LLP
370 Seventeenth Street
Suite 4700
Denver, CO 80202
INDEPENDENT AUDITORS
Deloitte & Touche LLP
555 Seventeenth Street
Suite 3600
Denver, Colorado 80202
CUSTODIAN
Fifth Third Bank, N.A.
Fifth Third Center
38 Fountain Square Plaza
Cincinnati, Ohio 45263
MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
FOR MORE INFORMATION, PLEASE CALL 1-800-644-8595 OR VISIT www.aristata.com
[ALPS LOGO]
SPONSOR AND DISTRIBUTOR
MEMBER NASD
[ARISTATA LOGO]
A CLASS ABOVE
SEMI-ANNUAL REPORT
OCTOBER 31, 1999
