<PAGE> 1
SEMI-ANNUAL
REPORT
[MAGNET LOGO]
TOTAL MARKET GROWTH FUND
OCTOBER 31, 2000
<PAGE> 2
LETTER FROM JORDAN KIMMELL
Dear Fellow Shareholders:
First of all, I would like to welcome you as a shareholder in the Magnet Total
Market Growth Fund. We are pleased to present the first shareholder semi-annual
report for the Fund for the period ended October 31, 2000. In this report you'll
find details of the holdings, financial highlights, and performance results of
the Fund.
For the period from September 15, 2000 (inception) to October 31, 2000 the
Investor Shares' total return was 2.10% compared to a return of -2.9% for the
benchmark Dow Jones U.S. Total Market Index (the "Index"). For the period from
October 25, 2000 (inception) to October 31, 2000 the Adviser Shares' total
return was 1.79% compared to a return of 4.7% for the Index.(1)
The Magnet Total Market Growth Fund utilizes the MAGNET(R) proprietary stock
selection process that provides full market coverage among U.S. large-cap,
mid-cap and small-cap stocks. The unique mathematical and proprietary process
combines aspects of growth, value, and momentum investing.
M MANAGEMENT MUST BE OUTSTANDING
MOMENTUM MUST BE INCREASING
A ACCELERATING EARNINGS, REVENUE AND MARGINS
G GROWTH RATE MUST EXCEED CURRENT VALUATION
N NEW MANAGEMENT, PRODUCT, INDUSTRY, ETC.
E EMERGING INDUSTRY, TECHNOLOGY, ETC.
T TIMING MUST BE TECHNICALLY FAVORABLE
THE UNDERLYING PHILOSOPHY IS SIMPLE, YET COMPELLING
Since the financial industry tends to scrutinize earnings estimates and
histories obsessively, it is difficult to add value in stock selection. And,
such factors tend to focus attention on short-term events.
In contrast, the MAGNET(R) stock selection process concentrates on factors that
demonstrate consistency in providing information about future growth and
stability. Our mathematical models provide intensive revenue stream analyses
that are combined with other fundamental and technical factors in order to
provide effective methods for valuing early-stage companies alongside more
mature ones. Our quantitative approach will not anticipate major market moves,
but instead it identifies the best MAGNET(R) stocks at the time.
1
<PAGE> 3
LETTER FROM JORDAN KIMMELL (CONTINUED)
The Fund has started with a high concentration in technology companies. When I
wrote this letter, the market was very unforgiving and maintained a negative
bias to the technology sector. Rather than simply rotating our portfolio into
"what is going up at the moment," we will maintain discipline based on the
MAGNET(R) process.
See the enclosed information for additional holdings and information. You can
also learn more by visiting www.magnetfunds.com where we post my upcoming TV
appearances on CNN, CNBC, and Bloomberg TV or call 1-877-677-6949 to speak with
a shareholder services representative.
We are pleased to make the MAGNET(R) stock selection process available to retail
investors and we thank you for your investment in the Magnet Total Market Growth
Fund.
Very truly yours,
/s/ JORDAN L. KIMMEL
Jordan L. Kimmel
(1) Total returns reflect reinvestment of all dividends, capital gains
distributions and all fee waivers. Without the fee waivers, the total return
figures would have been lower. Past performance is not indicative of future
results. Principal value may fluctuate and shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE> 4
FUND OVERVIEW
INVESTMENT OBJECTIVE
The Magnet Total Market Growth Fund seeks long-term capital appreciation.
INCEPTION DATE
Investor Shares - September 15, 2000
Adviser Shares - October 25, 2000
TICKER SYMBOL
Investor Shares - MTMIX
Adviser Shares - MTMAX
TEN LARGEST HOLDINGS (% OF TOTAL NET ASSETS) - OCTOBER 31, 2000
<TABLE>
<S> <C>
Analog Devices Inc. 4.6%
Altera Corp. 2.9
Elantec Semiconductor Inc. 2.8
Broadcom Corp.- Class A 2.8
Adobe Systems Inc. 2.7
Xilinx Inc. 2.7
CYTYC Corp. 2.7
CDW Computer Centers Inc. 2.6
Silicon Valley Group Inc. 2.5
Safeway Inc. 2.5
----
Top Ten* 28.8%
====
</TABLE>
SECTOR DIVERSIFICATION (% OF TOTAL NET ASSETS) - OCTOBER 31, 2000
<TABLE>
<CAPTION>
FUND
----
<S> <C>
Capital Goods................................................ 4.4%
Consumer Cyclicals........................................... 5.1
Consumer Staples............................................. 7.5
Energy....................................................... 11.6
Financial.................................................... 2.3
Healthcare................................................... 6.3
Technology................................................... 52.9
Utilities.................................................... 9.2
</TABLE>
* The top 10 equity holdings are presented to illustrate examples of the
equity securities that the Fund has bought and may not be representative
of the Fund's current or future investments.
3
<PAGE> 5
FUND OVERVIEW (CONTINUED)
DEFINITION OF INDICES
The DOW JONES U.S. TOTAL MARKET INDEX is a float-adjusted market capitalization
weighted U.S. index that measures the aggregate performance of companies from
all ten U.S. economic sectors. As of October 31, 2000, the index's 1838
component stocks had a total market capitalization of $13.925 trillion. This
index provides approximately 95% coverage of the U.S. equity market and covers
100%, 100% and 50% of the Large, Mid and Small-Cap universes respectively. The
Small-Cap Index covers a smaller percentage of its universe-(50%) - to avoid
adding very small, little-traded stocks. Eliminating the smallest and least
liquid stocks assures sufficient index liquidity. The index is reviewed
quarterly.
"Dow Jones" and "Dow Jones U.S. Total Market Index(SM)" are service marks of Dow
Jones & Company, Inc. and have been licensed for use for certain purposes by
Revqual Index-Plus Investors, LLC ("Revqual"). Revqual's Magnet Total Market
Growth Fund (the "Fund") is based on a strategy related to the Dow Jones U.S.
Total Market Index(SM), and is not sponsored, endorsed, sold or promoted by Dow
Jones, and Dow Jones makes no representation regarding the advisability of
investing in such Fund.
4
<PAGE> 6
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED)
October 31, 2000
<TABLE>
<CAPTION>
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
COMMON STOCKS (99.3%)
CAPITAL GOODS (4.4%)
ELECTRICAL EQUIPMENT (1.9%)
Power-One Inc.*................................... 127 $ 9,009
MANUFACTURING (DIVERSIFIED) (2.5%)
Tyco International Ltd............................ 206 11,678
----------
TOTAL CAPITAL GOODS 20,687
----------
CONSUMER CYCLICALS (5.1%)
PUBLISHING (2.5%)
Penton Media Inc.................................. 389 11,889
----------
RETAIL (COMPUTERS/ELECTRONICS) (2.6%)
CDW Computer Centers Inc.*........................ 188 12,114
----------
TOTAL CONSUMER CYCLICALS 24,003
----------
CONSUMER STAPLES (7.5%)
DISTRIBUTORS (FOOD & HEALTH) (5.0%)
McKesson HBOC Inc................................. 418 11,730
Priority Healthcare Corp. - Class B*.............. 219 11,771
----------
23,501
----------
RETAIL STORES - FOOD CHAINS (2.5%)
Safeway Inc.*..................................... 219 11,977
----------
TOTAL CONSUMER STAPLES 35,478
----------
ENERGY (11.6%)
OIL (DOMESTIC INTEGRATED) (2.3%)
Phillips Petroleum Co............................. 176 10,868
----------
OIL (INTERNATIONAL INTEGRATED) (2.3%)
Exxon Mobil Corp.................................. 125 11,148
----------
OIL & GAS (EXPLORATION & PRODUCTION) (4.7%)
Kerr-McGee Corp................................... 169 11,038
Tom Brown Inc.*................................... 480 10,980
----------
22,018
----------
OIL & GAS (REFINING & MANUFACTURING) (2.3%)
Valero Energy Corp................................ 328 10,844
----------
TOTAL ENERGY 54,878
----------
FINANCIAL (2.3%)
FINANCIAL (DIVERSIFIED) (2.3%)
Security Capital Group Inc. - Class B*............ 575 10,961
----------
TOTAL FINANCIAL 10,961
----------
</TABLE>
5
<PAGE> 7
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
October 31, 2000
<TABLE>
<CAPTION>
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
HEALTHCARE (6.3%)
BIOTECHNOLOGY (2.1%)
Immunex Corp.*.................................... 236 $ 10,045
----------
DRUGS (4.2%)
Dura Pharmaceuticals Inc.*........................ 320 11,020
Noven Pharmaceuticals Inc.*....................... 197 8,779
----------
19,799
----------
TOTAL HEALTHCARE.................................. 29,844
----------
TECHNOLOGY (52.9%)
COMMUNICATIONS EQUIPMENT (2.1%)
ADC Telecommunications Inc.*...................... 459 9,811
----------
COMPUTERS (PERIPHERALS) (6.9%)
Drexler Technology Corp.*......................... 652 11,247
Nyfix Inc.*....................................... 286 11,297
Vertex Interactive Inc.* ......................... 682 10,230
----------
32,774
----------
COMPUTERS (SOFTWARE & SERVICES) (5.1%)
Adobe Systems Inc.*............................... 167 12,702
Oracle Corp.*..................................... 344 11,352
----------
24,054
----------
ELECTRONICS (INSTRUMENTS) (7.2%)
Aurora Biosciences Corp.*......................... 184 11,213
CYTYC Corp.*...................................... 212 12,588
Tollgrade Communications Inc.*.................... 106 10,149
----------
33,950
----------
ELECTRONICS (SEMICONDUCTORS) (21.3%)
Altera Corp.*..................................... 331 13,550
Analog Devices Inc.*.............................. 337 21,905
Elantec Semiconductor Inc.*....................... 121 13,461
Integrated Device Technology Inc.*................ 143 8,053
Micrel Inc.*...................................... 229 10,362
Semtech Corp.*.................................... 325 10,481
Silicon Storage Technology Inc.*.................. 465 10,579
Xilinx Inc.*...................................... 175 12,677
----------
101,068
----------
EQUIPMENT (SEMICONDUCTORS) (7.8%)
Applied Materials Inc.*........................... 222 11,794
Broadcom Corp. - Class A*......................... 59 13,120
Silicon Valley Group Inc.*........................ 364 11,989
----------
36,903
----------
PHOTOGRAPHY/IMAGING (2.5%)
Concord Camera Corp.*............................. 378 11,694
----------
TOTAL TECHNOLOGY.................................. 250,254
----------
</TABLE>
6
<PAGE> 8
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF INVESTMENTS (UNAUDITED) (CONTINUED)
October 31, 2000
<TABLE>
<CAPTION>
SHARES MARKET VALUE
------ ------------
<S> <C> <C>
UTILITIES (9.2%)
NATURAL GAS-DISTRIBUTION-PIPE LINE (4.7%)
Equitable Resources Inc........................... 192 $ 11,136
Keyspan Corp...................................... 312 10,979
----------
22,115
----------
POWER PRODUCERS (INDEPENDENT) (4.5%)
AES Corp.*........................................ 198 11,187
Calpine Corp.*.................................... 131 10,341
----------
21,528
----------
TOTAL UTILITIES................................... 43,643
----------
TOTAL COMMON STOCKS.................................. 11,446 469,748
(Cost $461,232) ----------
MUTUAL FUNDS (0.6%)
Firstar Treasury Money Market Fund................... 3,001 3,001
----------
TOTAL MUTUAL FUNDS................................... 3,001
(Cost $3,001) ----------
TOTAL INVESTMENTS (99.9%)............................... 472,749
(Cost $464,233)
OTHER ASSETS IN EXCESS OF LIABILITIES (0.1%)............ 500
----------
NET ASSETS (100.0%)..................................... $ 473,249
==========
</TABLE>
*Non-income producing security
See notes to financial statements.
7
<PAGE> 9
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
October 31, 2000
<TABLE>
<S> <C>
ASSETS:
Investments, at value (Cost- $464,233)...................................... $472,749
Receivable for investments sold............................................. 264,233
Receivable from adviser..................................................... 9,983
Interest receivable......................................................... 433
--------
Total assets........................................................... 747,398
--------
LIABILITIES:
Payable for investments purchased........................................... 264,135
Accrued fund accounting fee................................................. 3,870
Accrued transfer agent fee.................................................. 3,197
Accrued 12b-1 fee........................................................... 63
Other payables and accrued expenses......................................... 2,884
--------
Total liabilities...................................................... 274,149
--------
Net Assets.................................................................. $473,249
========
COMPOSITION OF NET ASSETS:
Paid in capital............................................................. $464,440
Undistributed net investment income......................................... 293
Net unrealized appreciation on investments.................................. 8,516
--------
Net Assets.................................................................. $473,249
========
NET ASSET VALUE PER SHARE:
Net Assets
Investor Shares........................................................ $209,126
Adviser Shares......................................................... $264,123
Shares Outstanding
Investor Shares........................................................ 20,474
Adviser Shares......................................................... 25,856
Net Asset Value Per Share
Investor Shares........................................................ $10.21
Adviser Shares......................................................... $10.21
</TABLE>
See notes to financial statements.
8
<PAGE> 10
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF OPERATIONS (UNAUDITED)
For the period September 15, 2000 (inception) to October 31, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 524
--------
Total Income 524
--------
EXPENSES:
Investment advisory fee (Note 4) 125
Fund accounting fee 3,870
Transfer agency fee 3,397
Custodian fee 645
12b-1 Fee (Note 4) 63
Other 2,239
--------
Total Expenses 10,339
Waiver of Expenses (Note 4) (10,108)
--------
Net Expenses 231
--------
NET INVESTMENT INCOME 293
--------
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 0
Net change in unrealized appreciation/depreciation on investments 8,516
--------
NET REALIZED AND UNREALIZED GAIN 8,516
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 8,809
========
</TABLE>
See notes to financial statements.
9
<PAGE> 11
MAGNET TOTAL MARKET GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
For the period September 15, 2000 (inception) to October 31, 2000
<TABLE>
<S> <C>
INCREASE IN NET ASSETS:
OPERATIONS:
Net investment income ...................................... $ 293
Net realized gain on investments ........................... 0
Net change in unrealized appreciation/depreciation
on investments ............................................. 8,516
--------
Net increase in net assets from operations ................. 8,809
--------
DISTRIBUTIONS: .................................................... 0
--------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sale of shares ............................... 464,440
Reinvested dividends ....................................... 0
Cost of shares redeemed .................................... 0
--------
Net increase in net assets from share transactions ......... 464,440
--------
NET INCREASE IN NET ASSETS ........................................ 473,249
--------
NET ASSETS:
Beginning of period ........................................ 0
--------
End of period (includes undistributed net investment
income of $293) ............................................ $473,249
========
</TABLE>
See notes to financial statements.
10
<PAGE> 12
MAGNET TOTAL MARKET GROWTH FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
Selected data for a share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
INVESTOR SHARES ADVISER SHARES
-------------------- --------------------
For the Period For the Period
September 15, 2000* October 25, 2000*
to October 31, 2000 to October 31, 2000
-------------------- --------------------
<S> <C> <C>
SELECTED PER-SHARE DATA:
Net asset value - beginning of period $ 10.00 $ 10.03
-------------------- --------------------
Income from investment operations:
Net investment income 0.01 0.00
Net realized and unrealized gain 0.20 0.18
-------------------- --------------------
Total income from investment operations 0.21 0.18
-------------------- --------------------
Distributions 0.00 0.00
-------------------- --------------------
Net asset value - end of period $ 10.21 $ 10.21
==================== ====================
TOTAL RETURN 2.10% 1.79%
==================== ====================
RATIOS AND SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 209 $ 264
==================== ====================
Ratio of expenses to average net assets(1) 1.60% 2.35%
==================== ====================
Ratio of net investment income/(loss) to average net assets(1) 3.15% 0.74%
==================== ====================
Ratio of expenses to average net assets without fee waivers(1) 113.78% 20.96%
==================== ====================
Ratio of net investment income/(loss) to average net assets
without fee waivers(1) (109.03)% (17.87)%
==================== ====================
Portfolio turnover rate(2) 0% 0%
==================== ====================
</TABLE>
(1) Annualized
(2) A portfolio turnover rate is, in general, the percentage computed by taking
the lesser of purchases or sales of portfolio securities (excluding securities
with a maturity date of one year or less at the time of acquisition) for a
period and dividing it by the monthly average of the market value of the such
securities during the period. Purchases and sales of investment securities
(excluding short-term securities) for the period from September 15, 2000
(inception) to October 31, 2000 were $461,232 and $0, respectively.
* Inception
See notes to financial statements.
11
<PAGE> 13
MAGNET TOTAL MARKET GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Financial Investors Trust (the "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 Magnet Total Market Growth Fund (the "Fund"). The financial statements of
the remaining portfolios of the Trust are presented separately.
The Fund offers two Classes of shares (Investor Shares and Adviser
Shares). Each Class of Shares has equal rights as to earnings, assets and
voting priveleges. Each Class has exclusive voting rights with respect to its
Distribution Plan. Income, expenses (other than expenses incurred under each
Class' Distribution Plan and other class specific expenses) and realized gains
or losses on investments are allocated to each Class based upon their relative
net assets.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATION: Securities of the Fund are valued as of the close
of regular trading on the New York Stock Exchange, normally 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 Fund's policy to comply with the provisions
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders. Therefore, no federal
income tax provision is required.
DIVIDENDS: The Fund will declare and pay dividends from net investment
income, if any, quarterly. Dividends from net realized gains, if any, are
declared at least once a year. Dividends to shareholders are recorded on the
ex-dividend date.
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 Fund uses 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 and disclosures in the financial
statements. Actual results could differ from these estimates.
12
<PAGE> 14
MAGNET TOTAL MARKET GROWTH FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST
On October 31, 2000, there was an unlimited number of no par value
shares of beneficial interest authorized. Transactions in shares of beneficial
interest for the period ended October 31, 2000 were as follows:
<TABLE>
<CAPTION>
AMOUNT SHARES
-------- ------
<S> <C> <C>
INVESTOR SHARES
Shares sold $205,100 20,474
Shares redeemed 0 0
-------- ------
Net increase $205,100 20,474
======== ======
ADVISER SHARES
Shares sold $259,340 25,856
Shares redeemed 0 0
-------- ------
Net increase $259,340 25,856
======== ======
</TABLE>
3. UNREALIZED APPRECIATION AND DEPRECIATION ON INVESTMENTS (TAX BASIS)
<TABLE>
<S> <C>
As of October 31, 2000:
Gross appreciation (excess of value over tax cost) $ 22,879
Gross depreciation (excess of tax cost over value) (14,363)
--------
Net unrealized appreciation $ 8,516
========
Cost of investments for income tax purposes $464,233
========
</TABLE>
4. INVESTMENT ADVISORY FEES, DISTRIBUTION PLAN, AND OTHER RELATED PARTY
TRANSACTIONS
Revqual Index-Plus Investors, LLC (the "Adviser") serves as investment
adviser to the Fund pursuant to an investment advisory and management agreement
(the "Advisory Agreement") with the Trust. For its services, the Adviser is
entitled to receive a fee, computed daily and payable monthly, at the annual
rate of 1.00% of the Fund's average daily net assets.
The Trustees have adopted a Distribution Plan on behalf of each class
of shares of the Fund pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended. ALPS Mutual Funds Services, Inc. ("ALPS") serves as the
distributor to the Fund. The Distribution Plans provide for payment of a fee to
ALPS at the annual rate of up to 0.25% of the average net assets of the
Investor Shares, and up to 1.00% of the average net assets of the
Adviser Shares, although the Trustees may limit such fees from time-to-time for
each class of shares.
Shareholders holding more than 10% of the Fund's outstanding shares
as of October 31, 2000 constituted 21.54% of the Fund.
13
<PAGE> 15
MAGNET TOTAL MARKET GROWTH FUND
This Fund is neither insured nor guaranteed by the U.S. Government, the FDIC,
the Federal Reserve Board or any other governmental agency or insurer.
INVESTMENT ADVISER
Revqual Index-Plus Investors, LLC
1201 Sussex Turnpike
Randolph, New Jersey 07869
DISTRIBUTOR, TRANSFER AGENT & FUND ACCOUNTANT
ALPS Mutual Funds Services, Inc.
370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
LEGAL COUNSEL
Davis, Graham & Stubbs LLP
370 Seventeenth Street
Suite 4700
Denver, Colorado 80202
INDEPENDENT AUDITORS
Deloitte & Touche LLP
555 Seventeenth Street
Suite 3600
Denver, Colorado 80202
CUSTODIAN
Firstar Bank N.A.
425 Walnut Street
Cincinnati, Ohio 45202
ALPS
[LOGO]
MUTUAL FUNDS SERVICES
MEMBER NASD
MUST BE ACCOMPANIED OR PRECEDED BY A CURRENT PROSPECTUS.
FOR MORE INFORMATION, PLEASE CALL 1-877-677-9649 OR
VISIT www.magnetfunds.com.
